GM chief says public is past anger over bailout

DETROIT — The American public has gotten past its animosity toward General Motors for taking a government bailout in 2009, the company's top executive said Thursday.

Chairman and CEO Dan Akerson said a poll taken last summer for GM by Washington public opinion firm Peter Hart Research Associates shows that more than 70 percent of Americans have a positive opinion of the company. When the same poll was taken in July of 2009, more than 70 percent had a negative opinion, Akerson said.

"I think America loves a competitor. I think General Motors, Chevrolet in particular, is part of Americana," Akerson said during an appearance at the Detroit Economic Club.

In 2009, GM, saddled with high debt and expensive labor costs, needed $49.5 billion in government loans to survive a trip through bankruptcy court.

The U.S. government got a stake in the restructured company, part of which was sold in an initial public stock offering about one year ago on Nov. 18, 2010. The government's remaining 500 million shares would have to sell for around $53 per share for the U.S. to break even. Such a sale probably won't come anytime soon. GM shares are trading around one-third less than the $33 IPO price.

The summer before the IPO, then-GM Chairman and CEO Ed Whitacre said government ownership was hurting the company's sales. Whitacre said GM didn't want to be known as "Government Motors."

But Akerson said on Thursday that the new GM is now making money and has passed that stage.

"I do think that we've kind of gotten over that," he said.

GM made a net profit of just over $7.1 billion in the first nine months of the year.

Akerson said the government doesn't get involved in running GM. But he's concerned about government pay limits for companies that took bailout money. GM, he said, won't be able to give bonuses to its 25 highest-paid executives — even though it could make $8 billion or $9 billion this year.

"We've got some very, very good people that could do well at other companies who are doing this one for the home team," he said.

Akerson pinned the drop in GM's stock price on the broader economy, not automaker's performance. Shares of General Motors Co. were down 96 cents, or 4.2 percent, to $21.69 in afternoon trading Thursday. They're down about 41 percent for the year, slightly worse than the 40 percent drop in shares of Ford Motor Co.

Akerson also said GM will take actions to right its money-losing European operations. He referred to French competitor Peugeot Citroen SA's plan cut 6,000 jobs because of flat demand in Europe, although he stopped short of saying there would be plant closures or layoffs at GM.

He said the government debt crisis in Europe could have a larger impact on the U.S. than the 2008 financial meltdown and recession, because Europe is "a hugely and important cultural and economic center of gravity for the world."

Last week GM said its third-quarter net income fell 15 percent from a year earlier to $1.7 billion, partly because of a pretax loss of $292 million in Europe. The loss forced GM to back off an earlier forecast of breaking even in Europe this year.

"Clearly you can't have a unit as important as Opel is to General Motors chronically unprofitable," he said. "It's not sustainable and it's not good for the company."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Automakers race to lose weight

SANT'AGATA BOLOGNESE, Italy — Beneath the high ceilings of a factory in the wheat fields of Emilia-Romagna in northern Italy, Lamborghini engineers are building a new supercar. Called the Aventador, it has been described as the closest thing to a stealth fighter jet you'll see on the road. It's also a high-profile symbol of a strategic battle taking shape in the auto industry.

Silhouetted against grey walls, workers in black polo shirts adorned with Lamborghini's gold raging bull logo guide sheets of black material into a vacuum-controlled cutting machine, before pressing and shaping the pieces into huge moulds. These parts will make the chassis of the Aventador, which is one of the first cars to have its entire body built of carbon fiber composites, an alternative to metals prized by plane makers for their lightweight malleability and strength. The materials give designers "freedom to design aggressively," says Lamborghini's Technology Manager Massimiliano Corticelli.

The materials -- plastics reinforced by synthetic fibers -- will also allow the kind of performance so important to Lamborghini drivers: 0-62 miles per hour in 2.9 seconds with a top speed of around 217 miles per hour. But their potential value lies beyond the handful of people who can pay a starting price of 263,000 euros ($355,000) for a car that rolls off the assembly line at just 20 a week.

Partly as a consequence of emissions reduction targets, mass-market auto-makers need to produce lighter cars. For the next few years, auto-makers such as Peugeot, Fiat, Volkswagen and Daimler expect weight reductions to come largely from using aluminum. But composites are 30 percent lighter than aluminum and 50 percent lighter than steel. If car makers can get the price down -- composites currently cost at least 10 times as much as aluminum and 30 times as much as steel, according to Volkswagen -- they hope to be able to use them in the mass-market.

"We have been working on making cars lighter for several years, but the tightening up of regulation for reducing emissions by 2020 makes it necessary in reality to move toward breakthrough solutions," says Louis David, materials expert at French car maker PSA Peugeot Citroen.

There is progress. Peugeot and other carmakers already make some small parts out of composite material but do not yet use the technology for large parts. But BMW, which plans by the end of 2013 to roll out electric cars with entire passenger cabins made from a composite known as carbon fiber reinforced plastic (CFRP), is leading the race.

Helped by Germany's richest woman, Susanne Klatten, the luxury auto maker has been building close ties with Europe's only supplier of carbon fiber technology; it consolidated its hold this week with a share purchase.

"So far, there is no carmaker that is banking on carbon fibers quite like BMW," says Reto Hess, who coordinates global car industry analysis for Credit Suisse's private banking arm.

Too pricey
Taking composites mass market won't be easy. The European Union wants to cut average carbon dioxide emissions of cars manufactured in the region by 33 percent by 2020 -- to 95 g per km. Most mainstream European automakers say the cost of composites is too high to use them in whole cars any time soon.

Volkswagen's VW brand has the material in a prototype, but Ulrich Hackenberg, head of development of the VW brand, says finished parts cost between 30 and 50 euros per kg. That compares with only 1 euro for steel and 3 euros for aluminum. He thinks a reasonable target for the industry could be to bring this cost down to 15-20 euros.

Fiat has long been using composite technology -- its Alfa Romeo 8C contains about 90 kg of the stuff -- but like other car makers, it is still exploring what the technology can do on a larger scale. "In recent years mass production has had the opportunity to push materials like high-strength steel that have won the challenge with composites," says Fiat materials expert Rosanna Serra. But "we know these traditional materials cannot support the challenge in the future. They have limits."

Daimler has since April 2010 had a joint venture with Toray Industries of Japan, the world's largest manufacturer of carbon fibers, to build parts for its high-end, convertible coupe SL class. Toray has said branching out further into automotive uses is a top priority. It plans to speed up molding carbon fabrics into car parts to provide a new generation of components for Daimler by 2013.

Cars built from carbon fiber parts will have to meet the same safety criteria as conventional ones; composites can potentially cut a car's mass by half, says PSA's David. But on costs, he is blunt: "Today we believe that composites that are competitive for the automotive industry in terms of cost and production rhythm do not exist," he says. The company is taking "baby steps" in using the materials in vehicles that should be in showrooms by 2014-15, and he expects the technology to be much more widespread by 2018.

Secure supply
BMW isn't waiting. It won't disclose its investment, but according to German weekly Der Spiegel it has spent more than a billion euros on developing the technology and its new range of "i" electric vehicles and plug-in hybrids. Whole cars made of carbon fiber composites will be available from 2013.

Its strategy is based on the view that trendsetting car buffs with deep pockets will develop a taste for electric cars, especially if prodded by government incentives such as exemptions from city-center congestion charges. The company says the i3's bodywork will be 250-350 kg (550-770 pounds) lighter than that of a conventional car of the same size. With a much lighter chassis, it hopes its traditional clientele of drivers could even desire a premium electric vehicle for city driving.

BMW finance chief Friedrich Eichiner says the company is already working to cut costs to a point where they will be level with aluminum. It's a goal that can only be achieved with economies of scale. "Costs are a function of the volumes -- that remains the driver," Eichiner says.

To this end, BMW has already secured fiber production capacity which industry experts say is equivalent to what the entire car industry consumed last year. Since 2011, the company has sourced its carbon fiber reinforced plastics through a joint venture with Europe's only major producer of carbon fibers, German-based SGL Carbon signed in 2009.

To get an idea of the scale, it's worth a glance at SGL's production chain. Based in Wiesbaden, southwest Germany, the company gets precursor fibers, similar to those used in fleece clothing, from a joint venture with Mitsubishi Rayon in Japan. They are shipped for treatment - including baking at temperatures as high as 1,400 Celsius (2,550 Fahrenheit) -- to the United States. Then they go to Germany, for finishing.

SGL says its U.S. plant will eventually be able to churn out 3,000 tonnes of fiber per year. That compares with an estimated 2-3,000 tonnes used in all cars globally last year and about 35,000 tonnes across all industries.

Klatten clincher
SGL is already majority-owned by Klatten, who is worth an estimated 8.9 billion euros according to German monthly Manager Magazin. Heiress to the fortune of German industrialist Herbert Quandt, she and her family also have a combined 46.7 percent of BMW.

The car company's pact with SGL was signed a few months after Klatten, who is Germany's richest woman, had emerged as the largest shareholder in SGL, too. It was a strategic move, and one BMW appeared to seal on Friday when it said it had bought a 15.2 percent stake in the carbon fiber producer.

The carbon-fiber industry suffered a meltdown when demand for expensive defense technology waned after the end of the Cold War, and now only about half a dozen makers globally are capable of producing on an industrial scale. SGL is the only major European player, with main rivals in Japan -- Toray, Teijin and Mitsubishi Chemical's Rayon division - and the United States: Zoltek and Hexcel.

Fiber technology requires high expertise. The slightest tweaks in the process can alter the fibers' molecular structure, potentially compromising the safety of the parts they go into. At a test production site for fibers in Meitingen, Bavaria, SGL measures no fewer than 2,400 parameters every five seconds to monitor the process. "It may be easy to build a production site for carbon fibers but it's certainly extremely complicated to operate one," says CSFB's Hess.

SGL's position in Europe was underlined in a headline-grabbing tussle between Klatten and Volkswagen over the carbon-fiber maker in March. Volkswagen, Europe's biggest carmaker and Lamborghini's owner, acquired an 8 percent stake in SGL, and Klatten responded by saying she was observing VW's actions "with a distance and with vigilance".

Since May she has lifted her holding to around 29 percent, which gives her the right to veto strategic decisions at the supplier. That, combined with BMW's purchase, would bring the BMW camp's holding of the company to around 44 percent.

If Germany's financial regulator ruled that Klatten and BMW are acting in concert, their combined holding of more than 30 percent in SGL would trigger a mandatory complete takeover offer. A spokesman for Klatten said on Friday she had not been involved with, nor informed in advance, of BMW's purchase.

Volkswagen now holds almost 10 percent. A spokesman for Klatten says she is "comfortable" with her current stake and that her stance toward VW has not changed.

SGL has said it does not rule out collaboration agreements with other carmakers; but its stock has spiraled to its highest in more than three years on speculation that it will be the target of a takeover bid. It's now trading at almost 30 times estimated earnings -- the average multiple for European industrial stocks is nearer 11, Thomson Reuters StarMine data shows.

SGL's Chief Executive Robert Koehler says only that "VW has made it clear that they are keen for SGL to remain independent," and that "BMW is working under high pressure on its CFRP concept for the 'i' series. We are on a tight schedule."

Even so, BMW's CEO Norbert Reithofer has his sights set further into the future. The electric model range has an "enabling job to deliver because we want to use parts of this technology for our future models" in the series development, he says.

Copyright 2011 Thomson Reuters.

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Hybrids safer than conventional cars, research shows

Yuriko Nakao / Reuters

Prius hybrid vehicles are shown near a Toyota plant in central Japan.

If the fuel-saving benefits weren’t enough, now there’s another good reason for buying a hybrid vehicle instead of a conventional gas-only model.

Research by an affiliate of the Insurance Institute for Highway Safety shows hybrid vehicles are safer than their conventional counterparts when it comes to shielding their occupants from injuries in crashes.

On average, the odds of being injured in a crash are 25 percent lower for people in hybrids than people traveling in comparable non-hybrid vehicles, the research found.

“Weight is a big factor,” said Matt Moore, vice president of the Highway Loss Data Institute and an author of the report. “Hybrids on average are 10 percent heavier than their standard counterparts. This extra mass gives them an advantage in crashes that their conventional twins don’t have.”

Hybrid cars are heavier than cars that only use an internal combustion engine because they have large, heavy batteries and two engines. They save on fuel by storing the energy produced when braking and using it to power the vehicle at low speeds.

Moore points to other possible factors for the better safety record for hybrid vehicles, such as how, when and by whom hybrids are driven. Researchers said they included controls to account for these factors.

The study estimated the odds that a crash would result in injuries if people were riding in a hybrid vs. the conventional version of the same vehicle. The analysis used data from more than 25 hybrid-conventional vehicle pairs from the 2003-11 model years.

The study’s findings are good news for green-minded drivers who are also looking for safety in their cars. But it’s worth noting that hybrid vehicles still pose a risk to pedestrians.

At low speeds in densely built areas, hybrid cars and pure electric vehicles rely on electric propulsion. That makes them much quieter than gas-powered cars, posing a risk to pedestrians.

A 2009 report by the National Highway Traffic Safety Administration found a higher rate of pedestrian crashes for hybrids than for conventional gas-powered cars, especially when the vehicles were turning.

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Car-by-car guide to the L.A. auto show

Danny Moloshok / Reuters

The new 2013 Chevrolet Spark is unveiled at the 2011 Los Angeles auto show.

By Paul A. Eisenstein, the Detroit Bureau

The U.S. auto show season gets underway this week with the opening of the 2011 Los Angeles International Auto Show.  There’ll be plenty for just about everyone at the annual event, from a subcompact Honda battery car to the fastest muscle car Detroit has ever built.

Small cars are clearly gaining strength but it should be no surprise that, with California the world’s largest luxury car market, there will be a disproportionate number of high-line models, from the new Jaguar XKR-S to the seventh-generation Porsche 911. That sports car underscores the significant gains manufacturers are making as they adopt new technologies like direct injection and Auto Stop/Start.  Though the new 911 is significantly more powerful it’s also expected to get as much as 15% better mileage.

We’ll see plenty of awards handed out, including one for the year’s greenest cars.  And there’ll be more models falling into that category than ever before, including the Honda Fit EV, the Japanese maker’s first battery-electric vehicle.

Here’s a look at the models making their debut at L.A.’s Staples Center:

Audi – Will stage the North American debut of three new performance models, the S6, S7 and S8, all of which originally appeared at the Frankfurt Motor Show two months ago.

Bentley – The British marque reveals the updated version of its Continental GTC Convertible.

BMW – Look for the all-new M5, the latest in the maker’s vaunted high-performance brand-within-a-brand. You’ll also find the first offerings from another new sub-brand, the i3 battery-powered city car and the more performance-oriented i8 plug-in hybrid.

Buick – The maker’s new LaCrosse GL Concept is intended to serve as a high-styled antidote to the many plain vanilla sedans that many manufacturers offer.

Cadillac – GM’s most exclusive brand gets a new flagship in the form of the XTS premium luxury sedan, which replaces the old and largely unloved STS and DTS models. Caddy also unveils Cue, an infotainment system that can be operated with plain English commands.

Chevrolet – Covers some wide range when it introduces the new, Korean-made Spark, the smallest Chevy ever, but one aiming to position itself as a value proposition, not the traditional domestic econobox. Then there’s the striking ZL1 Convertible, the ragtop version of the fastest Camaro ever.

Dodge – Yep, Californians may like green machines but Chrysler’s performance brand is betting there’s still plenty of demand for a car that can spin tires as fast as the Challenger SRT8 392 Yellowjacket Edition. Yep, it’s a Hemi.

Fiat – The Italian partner to Chrysler has seen its little Cinquecento struggle in the market so it’s hoping the performance-oriented Abarth 500 edition will pump some adrenaline into the microcar.

Ford – The second largest of the Detroit makers will be busy in LA. It’s got an all-new Shelby GT500 and the 2013 model will be the first muscle car ever to break the 200 mph barrier. The rest of the Mustang line will be tweaked, as well.  The sporty Focus ST will share the stage with an ST concept version of the smaller Fiesta.  And Ford will wrap up a busy schedule with the newly redesigned Escape SUV, migrating to a more stylish, car-based, rather than truck-like platform.

Honda – The Japanese automaker will challenge Ford with the fourth generation of its CR-V, the model that create the compact crossover segment 15 years ago.  And Honda will launch its first battery-electric vehicle, the Fit EV.

Hyundai – The Korean maker wraps up its promised 24/7 program with the seventh new model in 24 months, the large Azera sedan, the latest to adopt its so-called Fluidic Sculpture design language.

Infiniti – Provided a tease of its new 3-row, 7-passenger JX crossover during a preview at the Pebble Beach Concours d’Elegance in August. Now it’s rolling out the final production version.

Jaguar  – The British marque presents us with a look at its present and future, starting with the new XKR-S Convertible, its fastest-ever ragtop, and then providing the North American debut of the C-X16 plug-in hybrid concept which is likely to get the go for production later this year, including its high-performance plug-in hybrid drivetrain.

Jeep – The SUV brand hopes to blaze new trails with its Wrangler and Liberty Arctic Editions.

Kia – The GT concept has been gaining momentum since its European preview at the Frankfurt Motor Show.  Will the Koreans come up with a production version?

Land Rover – The DC100 concepts show what a future version of the maker’s big Defender SUV might look like. The show cars are very modern interpretations of the classic Land Rover form-follows-function philosophy.

Lincoln – Ford’s upscale brand wants to re-launch itself and will reveal an all-new design theme when it pulls the wraps off the newly-updated MKS sedan and MKT crossover vehicle.

Lotus – With the Exige R-GT, the British maker intends to take a serious shot at becoming a contender in the newly-created FIA GT rally car class.

Mastretta – The name’s not familiar? No surprise, but the Mexican maker will weigh in with its new sports car, the MXT.

Mazda – Mazda has traditionally zigged when most makers zag and the Mazda3 SkyActiv is the latest example, the new drivetrain in the compact model delivering hybrid-like fuel efficiency without the added complexity – or cost – of a battery-electric model.

Mercedes – The fast-beating heart of the 2012 ML63 is an updated 5.5-liter biturbo V8 making 518 horsepower and 516 lb-ft of torque.

Porsche – The new, seventh-generation 911 Carrera is longer, lower, wider – and a lot more powerful than the sports car it replaces – yet new technology like Auto Stop/Start help it get about 15% better mileage.

Subaru – The maker will be pulling the wraps off the BRZ Concept STI, the prototype Miata-fighting sports car it developed in partnership with Toyota.

Volkswagen – The German giant rounds out our list with an updated version of what is arguably its most stylish model, the CC coupe-like sedan, as well as the sporty new Beetle R.

Volvo – Americans will get their first look at Concept You, a hint of the more luxurious direction the Swedish maker intends to take going forward, Also on hand: the new the new C70 Inscription Edition, described as the world’s first 4-seat convertible with a 3-piece folding hardtop.

 

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General Motors to cut Chevy Cruze production

DETROIT — General Motors Co. will shut down the plant that makes the Chevrolet Cruze compact car for a week because sales have slowed and Japanese competitors now have ample supplies of competing small cars.

The factory in Lordstown, Ohio, had been running around the clock with overtime shifts on Saturdays to keep up with strong Cruze sales during the summer. Sales of the compact rose with two of its main competitors, the Honda Civic and Toyota Corolla, in short supply because of parts shortages from the March earthquake in Japan.

GM spokesman Chris Lee said in an email that the Lordstown plant, about 50 miles (80 kilometers) southeast of Cleveland, will be shut down the week of Nov. 28. It will return to around-the-clock operations the following week.

The Cruze was the top-selling small car in the U.S. from May through September, with sales in most of those months topping 20,000, according to Autodata Corp. But sales dropped to just more than 14,000 in October, and the Cruze was passed by the Civic and Corolla as production and dealer inventories started to return to normal.

GM said it had about 39,000 Cruzes at its dealers at the end of October. At the current selling rate, it would take about 70 days to sell all of them. A 60-day supply is considered optimal.

Small-car sales typically drop in the final quarter of the year. Gas prices also have fallen from around $4 per gallon ($1.05 a liter) earlier in the year.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Hot new sports cars tout green credentials

Porsche via AP

The new Porsche 911 Carrera goes from zero to 60 in a screaming 4 seconds, but the maker is also promising improved fuel economy.

Considering the endless congestion on Southern California roadways it’s little wonder the region has become the nation's largest market for hybrids and other “green” machines. Yet the greater Los Angeles region is also the world’s single largest market for high-performance products like the Porsche 911 making its North American debut at this week’s Los Angeles Auto Show.

The seventh-generation Porsche 911 is already winning early raves. The iconic car is slightly longer, lower and wider than previous versions and delivers significant improvement in the numbers sports car fans like – starting with the 350-horsepower performance of the base 911 Carrera and 400 hp of the Carrera S.  The new model launches from 0 to 60 in just over 4 seconds, with the more powerful Carrera S reaching a top speed of 189 miles per hour.

Yet Porsche officials are also promoting another impressive figure: Preliminary testing suggests the 2013 911 will get an estimated 15 percent better mileage than the outgoing model thanks to a variety of steps,  taken to improve engine efficiency, such as direct injection. Porsche engineers also focused on reducing aerodynamic drag and lowering tire friction.

And Porsche isn’t alone.  While the Los Angeles show will see the launch of a number of new luxury and high-performance products, many are delivering the sort of fuel economy and CO2 emissions figures that just a few years ago would have been impressive on a compact economy car.

“Fuel economy is becoming more and more important in every segment of the market,” said August Achleitner, director of the 911 product line.

TheDetroitBureau.com

The new Mercedes-Benz ML63 AMG improves fuel economy through an automatic stop-start feature.

The new 911 shares a groundbreaking new technology with another high-performance model debuting at L.A.’s Staples Center, a system commonly referred to as Auto Stop/Start.  The 2013 Mercedes-Benz ML63 AMG pumps out as much as 550 horsepower with its optional performance package but delivers an estimated 16 mpg in the EPA's combined city/highway test – a surprisingly good figure for a large, high-performance SUV.

One way it gets there is by automatically shutting off its engine when the vehicle would otherwise waste fuel idling. When the driver’s foot lifts off the brake the engine seamlessly restarts. The technology is expected to become commonplace over the coming decade after starting out in the luxury market where motorists are more willing to pay the premium – and where the improvements in fuel economy are most noticeable.

The annual L.A. show is one of the biggest events of its kind in the U.S. and for good reason, considering the size of the local Southern California car market.

Jaguar/Land Rover will use the event not only to reveal the Indian-owned company’s super-high-performance Jaguar XKR-S sports car but also to gauge consumer reaction to a trio of concept vehicles -- including a pair of prototypes that could eventually morph into a new Land Rover Defender, as well as the Jaguar CX-16 a sports car concept bearing more than a hint of the design DNA of the legendary Jaguar E-Type.

The Land Rover model, if it goes into production, will almost certainly feature an optional high-mileage diesel as well as a hybrid-electric driveline.  Jaguar is studying an even more advanced gas-electric powertrain option for the CX-16, according to the maker’s global brand boss Adrian Hallmark.

The plug-in hybrid system “would have three different modes,” he explains, noting it could handle daily commuting on battery power alone, operate as a more conventional hybrid-electric vehicle or deliver an outsized performance punch. In that mode its lithium-ion driveline would act like an electric turbocharger – briefly kicking in about 90 horsepower and several 100 pound-feet of torque on top of the 380 horsepower of its base V6.

There are several reasons why luxury and high-performance automakers are so keenly interested in electric propulsion.  A new Consumer Reports study shows that 93 percent of American motorists are demanding better mileage – and research shows that even the most affluent drivers are looking for improved fuel economy.  Meanwhile tough new regulations here and abroad will require significant improvements in mileage and sharp cuts in CO2 emissions.

That’s led BMW to launch an entirely new brand-within-a-brand dedicated to battery propulsion systems.  The new i3 city car and i8 performance car show the range of options possible for alternative power.  The two models made their European preview at the Frankfurt Motor Show and will now make their first appearance in the U.S.

The L.A. Auto Show isn’t entirely green. There’ll be a significant presence by more conventional muscle cars and exotics, including the Mustang-based 2013 Ford Shelby GT500, the first American muscle car to break the 200 mph barrier. Chevrolet will fire back with the unveiling of the most powerful Camaro ragtop ever, the Camaro ZL1 Convertible. And Dodge will spin some wheels with the Challenger SRT8 392 Yellowjacket Edition.

But few products will be able to avoid the green revolution, even in the upper reaches of the luxury market.  The new Cadillac XTS will debut in L.A. this week with a conventional gas engine but the premium luxury sedan, Caddy’s new flagship, will eventually get a hybrid driveline, as well.  The General Motors brand recently won approval for a more luxurious version of the Chevrolet Volt plug-in hybrid – which may be on the Cadillac stand for the 2012 L.A. Auto Show.

You've heard a ton about electric cars being the future of the auto industry, but the real growth is coming from internal combustion engine vehicles, reports CNBC's Phil LeBeau.

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Car dealers see unusual November sales surge

DETROIT — Car dealers are getting a surprise end-of-the-year bonus: More Americans are replacing old cars and trucks, enlivening a normally sleepy time for auto sales and putting November on track to be the industry's strongest month of the year.

Dealers and analysts say people are finally getting rid of cars and trucks they've held onto for more than a decade. That demand, plus attractive lease deals, an ample supply of Japanese models and promotions on remaining 2011 models have drawn buyers to showrooms in large numbers the last two weeks.

"We're seeing the most showroom traffic that we've seen all year," said Ed Williamson, part-owner of two Miami-area GM Buick-Cadillac-GMC dealerships.

The spike in activity comes after months of sputtering sales. Consumers have been reluctant to take on major debt such as car payments because of the uncertain job market. Unemployment has been around 9 percent for more than two years with no sign of significant improvement.

Sales also suffered when Honda Motor Co. and Toyota Motor Corp. ran short of models during the summer and early fall because of factory disruptions caused by the earthquake in Japan and flooding in Thailand.

Now supplies are starting to return to normal, and customers have a better selection.

So far this year, sales have been better than 2010, an annual rate of 12.6 million compared with 11.5 million, but that's still far short of the 2005 peak of 17 million.

Recent sales have been so strong that General Motors' top sales executive predicts that November figures will hit an annual rate of around 13.8 million light vehicles in the U.S. That's a big step up from last November, when the auto industry was just starting to recover from the economic meltdown. Back then, the sales rate was only 12.3 million.

After years of holding off on purchases, people are tiring of their old cars and trucks. So despite a volatile stock market, high unemployment and worries that the European debt crisis could destabilize the global financial system, people are buying, said Jesse Toprak, vice president of industry trends for the TrueCar.com auto pricing website.

The average age of a car on U.S. roads is now a record 10.6 years, according to the Polk auto industry research firm. Vehicles are so old that people's lives have changed and they need different models, or their cars are just worn out, he said.

"They just simply couldn't wait any longer," he said.

In Houston, physician David Vener was among those who kept an old car for a long time. But he parted Monday with his 1999 Lexus sport utility vehicle, which had 135,000 miles. He traded it in at River Oaks Jeep for a new Grand Cherokee.

The Lexus, he said, had been almost trouble-free for the last 13 years, but it was facing some expensive repairs. Also, it didn't have side air bags and other safety features that newer cars have, he said.

"After three teenage boys and a lot of miles, it was beginning to show its wear and tear," Vener said. "It was getting a little long in the tooth."

Lease deals also are drawing people into showrooms, Toprak said, with November leases approaching an annual high. Leases had been just above 20 percent of the U.S. market during the year, but this month they're running about 25 percent.

Low interest rates and strong resale values after leases have ended help car companies offer deals.

This month, GM has deals that require no money down. A Cadillac CTS luxury sports sedan is leasing for $399 per month, down from $429 to $439 in October, Williamson said.

Also, dealers are clearing out the remaining 2011 models. And by this time of year, automakers normally offer good discounts to get them sold. Numerous 2012 models are attracting buyers, too, Toprak said.

But even the usual discounts on older models don't normally bring out so many customers in November, when sales nearly always slow down as temperatures drop and people get caught up in the holidays.

Don Johnson, vice president of sales for General Motors Corp., told industry analysts Tuesday that recent data show some strengthening in the U.S. economy.

"We continue to believe that the industry will grow," Johnson said. "It will grow slowly with the economy."

At Chuck Eddy Jr.'s Chrysler-Dodge-Jeep-Ram and Fiat dealership near Youngstown, Ohio, November sales are on pace to beat October, when Eddy sold 95 new cars and trucks.

"I'm on track to do 125, 130 this month," Eddy said. That will be "the biggest November I've ever had."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Revenge of the internal combustion engine

ANN ARBOR, Mich — At the Chevrolet dealership here, customers want to see and touch the Volt, the gasoline-electric hybrid hailed by enthusiasts as the kind of innovation that could secure the future of General Motors.

But they usually kick the Volt's tires and move on, often to a Cruze. The compact Chevy gets up to 42 miles per gallon, and you can buy two of them for the cost of one $40,000 Volt.

Call it the revenge of the internal combustion engine.

Major automakers and the Obama administration have bet heavily on hybrids and pure electric vehicles. But new and more efficient gas engines are winning on the showroom floor, an inconvenient truth that could slow the acceptance of electric cars.

"They come in to look at a Cruze. They drive a Volt. They go back to the Cruze. It really helps us with sales of the Cruze," said Michael Mosser, general manager of Suburban Chevrolet of Ann Arbor.

The plug-in Volt has become General Motors Co's high-mileage halo car. But the hybrid has also been outsold by its simpler sibling by 200 to 1. Globally, GM has sold about 5,000 Volts versus 1 million Cruzes.

"It's naive to think that the world is going to switch tomorrow to EVs," said Larry Nitz, GM's executive director for vehicle electrification.

Meanwhile, new cars with traditional engines are showing striking fuel efficiency gains thanks to technologies such as turbochargers, direct injection, and engines that shut down when the vehicle stops, then spring back to life when the driver presses the accelerator.

Turbochargers compress the air flowing into engines, allowing more fuel into the cylinders, while direct injection provides improved delivery of the fuel needed in each engine cylinder so it burns cleaner and more efficiently.

The average fuel economy for new vehicles is now 2.5 more miles per gallon than four years ago. And emissions of greenhouse gases per new car are down 14 percent since late 2007, according to the University of Michigan Transportation Research Institute.

At the same time, the number of gas-powered models in U.S. dealer showrooms boasting 40 miles per gallon or better in highway driving has tripled in the last five years.

That has made winners of cars like the Cruze, Ford Motor Co's Focus and Hyundai Motor Co's Elantra.

Every automaker is focused on improving fuel efficiency, including BMW, which just reintroduced a four-cylinder engine in the U.S. market for the first time in a dozen years, and Honda Motor Co Ltd, which offers a 41-mpg automatic version of its 2012 Civic.

Increased fuel efficiency also has put pressure on battery makers and possibly the U.S. Department of Energy, which has used $2.5 billion of taxpayer money to help pay for the development of electric car technology.

Having watched rival Toyota Motor Corp seize the mantle as the world's greenest automaker with its Prius hybrid, GM says it plans to push its advantage with the rechargeable Volt and hopes consumer preferences catch up.

Estimates vary on how fast consumers will accept electric vehicles. At the bullish extreme, Nissan Motor Co Ltd, which sells the all-electric Leaf car, is forecasting that EVs will make up 10 percent of global sales by 2020, compared with virtually nothing now.

But GM and other automakers are also looking to boost the performance of the gas engine.

"You've reached the maximum return in the internal combustion engine," said Mark Perry, director of product planning for Nissan Americas. "Just the pure physics, there's a limit."

Even so, most automakers believe no single approach will solve the fuel economy problem. "There is no silver bullet answer," Perry said. "It's more like silver buckshot."

'Just the little toe' in the water
One major incentive driving fuel-economy gains is the new federal requirement that an automaker's fleet average 54.5 miles per gallon by 2025.

Ford offers its Ecoboost technology -- a combination of fuel injection and turbocharging aimed at giving smaller gas engines more power and greater efficiency. The No. 2 U.S. automaker also is rolling out a Focus EV.

"Until electric does have the ubiquity of plugging, it's not going to have an appeal to 100 percent of the customers," Ford Chairman Bill Ford said last month. "While that's happening, we want to make our other technologies as fuel-efficient as we possibly can."

Toyota, which will roll out a plug-in version of the Prius next year, remains skeptical of the pure EV push.

"Pure battery electric cars will most likely remain a niche for some time to come," said Bill Reinert, Toyota's U.S. national manager for advanced technology. "The market for these products is nearly all regulatory push, not market pull."

Jack Hollis, head of Toyota's Scion brand, added, "Everyone is really just putting a toe in the water when it comes to EVs. And for most companies it's just the little toe in the water."

Surveys support the view that most consumers do not want to pay extra for electric vehicles. The better fuel economy gets, the less interested in EVs they are.

"At 50 miles per gallon, the majority of consumers around the world lose interest in electric vehicles," said Joe Vitale, head of Deloitte Touche Tohmatsu Ltd's automotive practice

Deloitte found in a survey that global expectations for driving range and charging time for electric vehicles far outpace reality. More than half of respondents were unwilling to pay any price premium for an EV.

Toyota's Reinert said the industry will likely reach the theoretical maximum efficiency on gas engines over the next decade. But with hybrid technology and next-generation biofuels, gasoline engines could get to 95 percent of the benefits offered by EVs, he said.

In the meantime, improvements will come from dozens of small tweaks, like reduced friction and heat loss, and electrification of parts like the oil, water and power steering pumps. Enhanced transmissions, lighter materials -- like stronger steel and alloys -- and more aerodynamic designs also will be key.

"As long as the person driving doesn't feel like the car is struggling, he doesn't care what's under the hood," said David Champion, senior director of Consumer Reports.

Even proponents say consumers will need time to get used to electric cars.

"When people switched from the horse, the gas car solved so many problems," said Chris Paine, whose documentary "Revenge of the Electric Car" looking at EV development at GM, Nissan and Tesla Motors Inc debuted last month.

"What it really was was a new paradigm," added the filmmaker, who five years ago criticized GM in another documentary, "Who Killed the Electric Car?"

"It sometimes takes people a little while to figure out things are changing for the better."

Copyright 2011 Thomson Reuters.

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Tough economy gives boost to auto ‘aftermarket’

Handout / Reuters

A Camaro concept car was among the new models introduced at last week's trade show for the automotive "aftermarket."

By Paul A. Eisenstein

Car manufacturers might still be struggling to emerge from the depths of the industry’s worst downturn since the Great Depression, but the so-called “aftermarket” is firing on all cylinders — perhaps in part because of the weak economy.

Forced to hang on to their cars longer than normal, American motorists are spending more on maintenance, and that’s a big portion of the estimated $30 billion in annual revenues generated by some 6,700 car parts manufacturers, distributors and retailers who make up the Specialty Equipment Market Association.

Car owners can shake off their boredom by dressing up their old car with some new features, perhaps some new alloy wheels, a custom grille, sports seats or even an entirely new, high-performance crate motor, like the one introduced by Chevrolet at this year’s SEMA trade show.

The annual event is a showcase of just about everything automotive — everything from air fresheners to wild (and sometimes wacky) concept vehicles.

Nearly 2,000 different exhibitors crammed into the sprawling Las Vegas Convention Center last week to pitch their wares to more than 135,000 wide-eyed attendees from over 100 countries.

“It certainly demonstrates there’s a reason to be optimistic about the future of the auto industry,” said Peter McGillivray, the trade group’s vice president of marketing, as he stared out at one of the convention center’s crowded halls.

With one of the largest stands at the million-square-foot show, Chevrolet created a life-size “Hot Wheels” track to show off a custom Camaro painted in an eye-popping metallic green. Dubbed the “Chevy Hot Wheels Camaro Concept,” it’s currently a one-off for the annual automotive extravaganza, though executives of the carmaker hinted they could find a place for it in the growing Camaro line-up.

The Chevrolet display also featured a dozen different concepts based on its new Sonic subcompact — from the Sonic All Activity Vehicle, designed by racing great Ricky Carmichael, to the Sonic Boom, a prototype featuring two large subwoofers and 10 six-inch midrange speakers mounted in the rear hatch in a pair of turbine engine-like clusters.

The annual SEMA show was originally designed as a showcase for automotive suppliers and vendors, and sure enough there were plenty of exhibitors who’ve come up with a great idea, cobbled together a prototype in their garage and showed up hoping to sell some of their new widgets.

But automakers like Chevrolet have also ramped up their presence in recent years.

Chris Perry, Chevy’s vice president of marketing, suggests the show provides “a great canvas” to pitch its products to those who influence market trends. Indeed, SEMA’s McGillivray contends that the show and other organization events “can influence as (many) as one million vehicle purchases a year.”

That’s why the roll call for automakers has steadily expanded over the years, with 11 manufacturers attending this year’s event, including Chevrolet, Ford and Toyota.

The Japanese automaker’s luxury brand, Lexus, used the 2011 SEMA Show to reveal its all-new GS F Sport. In years past, that introduction would likely have been staged at a more traditional event, like the upcoming Los Angeles auto show.

Hyundai, meanwhile, unveiled a half-dozen concept vehicles, including the ARK Performance Veloster, a prototype of the turbocharged hatchback that it will bring to market next year.

“SEMA is a place where two worlds collide,” said John Krafcik, chief executive of Hyundai Motor America. “And when they do some amazing things happen.”

Officials at Kia, the Korean carmaker’s sibling brand, agree, suggesting that appearing at SEMA has helped transform the maker’s image, putting an emphasis on styling and performance, rather than just rock-bottom pricing.

The SEMA Show has evolved in other ways.

While performance parts — like fast-shifting gearboxes and supercharged motors — were the show’s original focus, there has also been what McGillivray calls a “mind-boggling” growth in the number of vendors showing off their mobile electronics gear.

That’s no surprise. With roads more crowded than ever, fuel prices hovering just below record levels and tough new mileage standards going into effect, motorists are looking for other ways to improve the performance of their cars.

Like completely updating a car’s interior.

“We’ll manufacture the interior in a day” and install it a day later, suggested Brooks Mayberry, the CEO of Katzkin — a SEMA member that produces customized replacement leather seats and finishes for more than 2,000 different vehicles.

The firm recently signed a deal with national dealer chain CarMax to offer both used and new car buyers the chance to upgrade their vehicles. And the company was at SEMA hoping to drum up even more business.

Insight on the automaker's plan to bring back the Chevy Colorado pick-up truck, adding jobs, with Daniel Akerson, General Motors chairman/CEO and CNBC's Phil LeBeau. Ackerson adds GM is cautiously optimistic about 2012 projects.

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Nightmare roads identified in congestion study

SAN ANTONIO — Mario Garibay knows exactly what to expect every morning when he noses his pickup onto Interstate 35 between San Antonio and Austin on his way to his construction industry job.

"I'm not going anywhere," he said with an air of resigned certainty. "Not for a long time."

The road Garibay drives on every morning is one of the 328 stretches of highway listed as the most seriously congested in the country in a report released on Tuesday by the Texas Transportation Institute at Texas A&M University. (See the report here.)

"This is the first nationwide effort that we have had to really identify reliability problems on specific stretches of highway," Bill Eisele, one of the research engineers who compiled the report, told Reuters.

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"Up until now we have identified average congestion levels, but people know that congestion isn't just an average problem."

The single most congested stretch of highway in the United States, according to the researchers, is on the Harbor Freeway in Los Angeles, specifically the three-mile stretch of northbound California Highway 110 near Dodger Stadium.

The report estimates more than 1.4 million person hours are wasted each year by people sitting in traffic at that one intersection, using 2.1 million gallons of gasoline.

A person hour is an hour spent by one person; if six people are in a car stuck for an hour in a traffic jam, that's six person hours lost.

The second-worst stretch of highway is just a few miles to the south, where the Harbor Freeway intersects with Interstate 10 just south of downtown Los Angeles near the Staples Center. In that six-and-a-half-mile corridor, 1.1 million person hours are wasted and 3.6 million gallons of fuel are lost each year.

Six of the seven most congested stretches of highway in the country are in Los Angeles; the other is New York City's Van Wyck Expressway just outside John F. Kennedy International Airport.

Nightmare roads
Farther down the list, it seems every big city has its nightmare road, including:

San Francisco: Eastbound Interstate 80 at the Bay Bridge.Houston: Eastbound Interstate 10 at T.C. Jester Boulevard.Chicago: The Stevenson Expressway at State Street.Seattle: Southbound Interstate 405 at Coal Creek Parkway.

And Mario Garibay's Interstate 35 in San Antonio. "It's horrible," Garibay said. "Such a waste of time every day."

People who drive those highways on a daily basis know where the brake lights start, and where they will end.

"It happens religiously, the same places and the same times of the day," says Megan Bishop, who does traffic reports for several San Antonio radio stations. "It can be a clear day on a stretch of highway with plenty of exits and no entrances and still the traffic backs up."

The 328 corridors identified as congestion leaders account for only 6 percent of the nation's total freeway lane miles and 10 percent of the traffic, but account for 36 percent of the country's freeway congestion, Eisele said.

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"Our hope is that this report will shed some light on those areas around the country that are causing the most congestion, and the areas around the country where added investment would mean real improvements," he said.

In addition, the study looks at roads that are the most congested on weekends, roads that are more congested during after-work commutes than in the mornings and roads where backups are most likely due to a large number of big trucks.

Eisele said the data can be used by local officials to address traffic problems through building roads, adding aggressive responses to crashes to keep traffic flowing, and providing incentives to employers in the area to offer telecommuting and flexible work schedules.

"It is certainly frustrating when we're all sitting in it in our cars," he said. "No matter where you are, it's a painful experience."

Copyright 2011 Thomson Reuters.

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Regulators probing gear shift in GM cars

By The Associated Press

Federal safety regulators are investigating problems with the automatic shift levers on several General Motors Co. cars that have caused at least seven crashes.

The National Highway Traffic Safety Administration said on its website Monday that the probe began with complaints about the Saturn Aura midsize car from the 2007 and 2008 model years, affecting nearly 89,000 vehicles.

But the agency said it is now checking to see if the problems extend to other GM vehicles. The Chevrolet Malibu from the 2004 to 2008 model years and the Pontiac G6 from the 2005 to 2008 model years have similar shifting systems, the agency said in documents filed on its website.

NHTSA said the protective jacket around cables connecting the floor shift lever to the transmission can deteriorate, exposing the cables to the elements. Cables can corrode and weaken, and the shift lever position may not match the car's gear. That means a driver could put the car in park but the transmission could be in drive or reverse. In some cases, the car may not shift at all.

The agency said it received three reports of crashes caused by the problem, while GM reported four, with one person hurt. In that crash, the driver put the gearshift in park, got out of the car, and was hit when the car unexpectedly rolled backward, NHTSA said in documents filed on its website. No details were given on whether the driver was seriously hurt.

In another case, a driver put the car in park, but the transmission stayed in reverse. "When the driver exited with the engine running, the vehicle continued (accelerated) in reverse and struck a building," NHTSA said.

GM told the agency that the problem affects mainly models with four-speed transmissions, but not six-speed transmissions.
Company spokesman Alan Adler said GM is cooperating in the investigation.

NHTSA said it has upgraded the investigation to an analysis that will check how many times the cables have failed, the consequences "and the scope of vehicles that may be affected, including the models, model years and transmission types."

An investigation doesn't necessarily mean that the vehicles will be recalled.

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Hyundai is placing big bets on the Super Bowl

DETROIT — Hyundai Motor Co. is hoping that five television spots before and during the Feb. 5 Super Bowl will help to bolster its rising brand recognition and continue big sales gains from the past few years.

North American CEO John Krafcik says the fast-growing brand is working on a 60-second spot that will run right before kickoff, plus two ads on the pregame show and two during the first and third quarters of the game.

He wouldn't say how much the Korean automaker is spending on the ads, which will compete with most creative spots American companies have to offer during one of television's highest-rated and most expensive sporting events. Last year Super Bowl ads cost companies about $3 million for 30 seconds.

Chrysler Group LLC's two-minute spot featuring rapper Eminem was among those that created the most Super Bowl buzz this past February, and it helped kick off what has been a strong sales year for the recovering company. The cinematic third-quarter ad showed Eminem driving through Detroit and introduced a new car, the Chrysler 200 sedan, amid gritty scenes of the city. A voiceover talked about how the city has survived going through "hell and back."

Krafcik said Hyundai hopes to have standout spots as well, but it will focus more on a brand message rather than going for entertainment value.

"We're competing with Doritos and Pepsi and Anheuser-Busch," he said Friday at an auto show briefing for reporters at a technical center near Ann Arbor, Mich. "Those are tough competitors from an entertainment point of view."

Hyundai, he said, might have a little more fun with its ads this year and try to make them more memorable than in the past. But it's also trying to sway about a third of the auto market that has a neutral view of the brand, which sells the Elantra compact, Sonata midsize car and Tucson crossover SUV, among other models.

Hyundai has had huge sales growth in a lackluster U.S. auto market. Through October, the company has sold more than 545,000 vehicles, already passing last year's record sales of 538,000, according to Autodata Corp. Hyundai's U.S. market share has risen from 4.2 percent in 2009 to 5.2 percent so far this year, and analysts believe the company has taken sales mainly from Honda Motor Co. and Toyota Motor Corp., both of which have experienced declines.

Hyundai's sales are so strong that it's having trouble supplying cars and crossovers to its dealers, Krafcik said. It has raised the annual output at its Montgomery, Ala., factory to around 330,000 this year, and will produce more cars in North America in 2012, he said. But he wouldn't comment when asked if the company plans to build a new factory in the U.S.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Testers may have caused Chevy Volt fire, GM says

A Chevrolet Volt is shown at a GM plant in Flint, Mich., last year. GM says a battery fire in a test vehicle could have been prevented.

By Paul A. Eisenstein, TheDetroitBureau.com

The spotlight is on the Chevrolet Volt following word that one of the plug-in hybrids caught fire while being tested by the National Highway Traffic Safety Administration. But TheDetroitBureau.com has learned that the fire was readily preventable had a few simple steps been taken after a Volt was put through a series of tests three weeks earlier.

Federal regulators have promised a full investigation of the spring incident in which the Volt caught fire and burned several nearby vehicles. That has raised serious questions about the safety of its batteries, though GM officials say it may instead require adapting federal crash tests -– as well as what happens in the field in the event of a real collision.

The fire occurred at a private facility in Wisconsin where NHTSA conducts crash tests on new vehicles. On May 12, the battery car was subject to a so-called “pole” test, where it was rammed into a barrier at 20 mph to simulate a side impact.  The vehicle was then subject to what is known informally as the “rotisserie test,” where it is rolled over into various positions to test for leaks that might have occurred during the crash.

Ironically, the Volt did well enough to earn a five-star rating, the best possible.

The wrecked vehicle was subsequently moved to what GM spokesman Rob Peterson called “the boneyard,” where it was left unattended, no action taken to deal with either the vehicle’s charged lithium-ion battery or the coolant fluid that had, in fact, leaked out after the crash test. The gas tank used to power Volt’s back-up gas engine was drained.

Preliminary evidence indicates that over time the normally inert coolant came into contact with some of the LIon battery cells.  In liquid form that would not be a problem, but it eventually “crystallized” as the Wisconsin weather turned cold at night, according to Peterson. That eventually led to the battery shorting out and catching fire, apparently, though a formal cause has not been announced by safety regulators.

So, was the fire the cause of negligence by NHTSA? Maybe yes, maybe no, according to the GM spokesman.

“NHTSA didn’t follow our protocol,” which would have required the agency to “de-energize the battery after the crash test," Peterson said. But, Peterson quickly added that it appears NHTSA employees “didn’t know our protocol,” which was developed after GM conducted its own crash tests.

The federal agency has since been advised what to do when crashing a battery car, which apparently would include other electric vehicles besides the Chevrolet Volt, particularly those using liquid cooling systems. (The Nissan Leaf uses an air cooling system, though it is unclear whether the maker will also be recommending that the battery be de-energized after an accident.)

“I want to make this very clear: the Volt is a safe car,” Jim Federico, the chief engineer on GM’s small and battery-powered vehicles, said in a statement. “We are working cooperatively with NHTSA as it completes its investigation. However, NHTSA has stated that based on available data, there’s no greater risk of fire with a Volt than a traditional gas-powered car.”

Repeated efforts to reach an NHTSA spokesperson failed as the federal government was closed on Friday for Veterans Day.

With electric propulsion capturing a disproportionate share of the headlines lately – at least compared to the minuscule market for battery-based vehicles, which will this year account for barely a 3 percent share of the U.S. market – world of the Chevy Volt fire has generated widespread headlines.

GM officials are worried that the incident could scuttle demand for the vehicle, which is just beginning to see a ramp-up in sales.  And the impact could spread beyond Chevy showrooms.

The Obama administration is looking to put 1 million battery cars on the road by 2015 and virtually every major automaker now has a plug-in hybrid or battery-electric vehicle in late development.

Lithium technology is already in widespread use.  And there have already been serious concerns raised about the use of lithium-ion technology, which has been linked to a number of fires involving laptop computers, mobile phones and other portable electronic devices.  That has led to restrictions on carrying or shipping the batteries on airplanes, for examples.

But automakers like GM have insisted they are using safer versions of the LIon chemistry than is often used in consumer goods, where it is critical to maximize energy density – or stored power.

While NHTSA may eventually give the Volt a clean bill of health, the Chevy plug-in was previously involved in an unexplained garage fire – though preliminary testing indicated the vehicle was not the cause of the problem.

Looking ahead, GM spokesman Peterson said GM plans to spread the word on the proper procedures for handling a Volt after a collision. It is currently sending a corporate “SWAT team” out to any such incidents to try to learn as much as possible about what happens and how to respond.

The maker has been training first responders around the U.S. and one of the first steps involves disconnecting the battery.

By early next year, said Peterson, the maker expects to distribute a special device specifically designed to de-energize the battery after a collision.

 

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U.S. probes battery safety after Chevy Volt fire

WASHINGTON — A Chevrolet Volt that caught fire three weeks after its lithium-ion battery was damaged in a government crash test has regulators taking a harder look at the safety of electric car batteries, federal officials said Friday.

Based on testing so far, however, regulators believe the batteries are safe and do not pose a greater fire risk than gasoline-powered engines, a National Highway Traffic Safety Administration official told The Associated Press. The official requested anonymity in order to speak freely.

The car that caught fire was tested May 12 by an agency contractor at a Wisconsin facility using a relatively new side-impact test intended to replicate crashing into a pole or a tree, the official said. Three weeks later, while the car was parked at the test facility, it caught fire and set several nearby vehicles on fire. A NHTSA investigation concluded the crash test damaged the battery, which later led to the fire.

Lithium-ion batteries, which are used in a vast array of consumer electronics, have a history of sometimes catching fire when damaged.

General Motors spokesman Greg Martin said the test did not follow procedures developed by GM engineers for handling the Volt after a crash. The engineers tested the Volt's battery pack for more than 300,000 hours to come up with the procedures, which include discharge and disposal of the battery pack, he said.

"Had those protocols been followed after this test, this incident would not have occurred," he said.

The company had not told the government of its protocols at the time of the test, another GM spokesman said.

Martin said the Volt is safe.

After the Volt fire, NHTSA and GM each replicated the crash test and waited three weeks, but in neither case did the cars catch fire, officials said. Nor were the cars' batteries damaged in those tests, officials said.

The NHTSA official said the agency has been unable to explain why the Volt's battery was damaged in one test but not in two others conducted in exactly the same manner. NHTSA, along with the Department of Energy, plans to conduct more tests next week on Volt batteries and is continuing to monitor cars already in use. Government and GM officials said they are unaware of any similar fires among the 5,000 Volts now on the road.

Nissan Motor Co., which has more than 8,000 all-electric Leaf models on U.S. roads, and Tesla Motors Inc., with 2,000 cars sold worldwide, said their cars are extensively tested and have not started any fires after crashes.

NHTSA also is asking manufacturers who currently have electric cars on the market, or who plan to introduce electric vehicles in the near future, for more detailed information on their battery testing as well as what procedures they have established for discharging and handling batteries, including recommendations for reducing fire risks.

"NHTSA is focused on identifying the best ways to ensure that consumers and emergency responders are aware of any risks they may encounter in electric vehicles in post-crash situations," the agency said in a statement.

"Ultimately, we hope the information we gather will lay the groundwork for detailed guidance for first-responders and tow truck operators for use in their work responding to incidents involving these vehicles," the agency said.

After the crash test, NHTSA found a coolant leak and moved the damaged Volt to a back lot, where it was exposed to the elements, said Rob Peterson, a GM spokesman who specializes in electric cars. Exposure to the weather caused the coolant to crystalize, and that, combined with the remaining charge in the battery, were factors, he said.

NHTSA did not drain the battery of energy as recommended by GM's crash procedures. At the time, GM had not told the agency of its protocols, Peterson said. NHTSA normally drains fuel from gasoline-powered cars after crash tests, he said.

In a real-world crash, GM would be notified through its OnStar safety communications system and would send a team out to remove the battery for research purposes, he said.

The safety of the Volt, which earned a top five-star crash safety rating from NHTSA, "really isn't being questioned," Peterson said. "What they're investigating is how do you handle the vehicles longer-term; tow truck drivers, salvage yards, body shops, things like that."

In the event of a crash, NHTSA's advice to consumers is to do the same thing they would do in a gasoline-powered car: get out of the vehicle and move a safe distance away. The agency also recommends against storing a severely damaged electric car in a garage or near other vehicles.

Lithium-ion batteries have been the subject of several recalls of consumer electronics. Millions of laptop batteries made by Sony Corp. for Apple Inc., Dell Inc., Lenovo Group Ltd. and other PC makers were recalled in 2006 and 2007 after it was discovered that they could overheat and ignite.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Review: Little Chevy Sonic boasts style, pep

 

Brian Konoske (Photographer) / GM

The 2012 Chevrolet Sonic hatchback.

By Dan Carney

Only a block from the media introduction of the 2012 Chevrolet Sonic, the San Francisco Museum of Modern Art hosted an exhibit of products created for the Braun electronics company.

The exhibit demonstrated how the designs, by Dieter Rams boosted the appeal of consumer products and  influenced today’s paragon of industrial design: Apple.

This is relevant to the new Sonic because if carmakers from time to time lose focus on the importance of the styling of their vehicles, they especially seem to think that people who buy low-priced subcompact cars have no taste, style or aspirations.

Subcompact cars, outside a few niche premium products like the Mini Cooper and Fiat 500, have been doomed to wear dull, indifferent styling.

But Braun, and then Apple, showed that it is possible to design affordable, mainstream, high-volume products that look like they belong in a museum. I wouldn’t necessarily predict that the 2012 Sonic is museum-ready, but the car’s adventurous, expressive styling does offer small-car shoppers some redemption from the too-often invisible style of cars in the segment.

The vivid flair of sport motorcycles provided the Sonic’s inspiration inside and out. The influence is most apparent in the quad circular headlamps and in the instrument binnacle atop the steering column. 

Elsewhere, well, it’s hard to find much else on a compact car that resembles the spare appearance of a sportbike. But a prominent exhaust or faux handgrips molded into the steering wheel would have been an overwrought interpretation of the theme.

Some un-motorcycle-like details: Engineers sought to make the Sonic as safe as possible with a profusion of airbags. It’s hard to imagine where they could fit 10 airbags in such a small car, but that fact certainly cultivates the mental image of the entire cabin stuffed with pillowy cushions in the event of a disaster.

Of course, those cushions are no good if the metal box around them is flimsy, so the Sonic is reinforced with high-strength steel that yields a body shell 77 percent stiffer than that of the outgoing Aveo model.

Some other upgrades? How about available sunroof, heated seats and remote start? Here is some substance to support the Sonic’s style that lets customers escape the feeling that they’ve shortchanged themselves by buying a subcompact.

One miss: the outgoing Aveo model offered a lumbar adjuster for the driver’s seat that is absent from the Sonic. We brothers of chronic lower back pain beg for its return.

Also un-motorcycle-like: sluggish, indifferent throttle response that lags disappointingly on the application and churns onward after lifting off the gas with the inertia of a temporary government program.

The tiny 1.4-liter four-cylinder engine produces an impressive 138 horsepower and a more surprising 148 pound-feet of torque thanks to a turbocharger. Once a shibboleth connoting maximum performance, turbocharging is now a tool applied to improve fuel economy because it lets small engines do the work of big ones. Seeing a torque number that’s bigger than the horsepower rating is the proof Chevy’s engineers have accomplished that feat because in small engines that order is normally reversed.

But it seems that tuning engines to sip gas like espresso rather than to gulp it like Gatorade saps them of the crisp response epitomized by the zing of sportbikes. Even the masters of small engine tuning at Honda struggle with this. Hopefully GM's tuners can continue to improve this detail.

Of course it’s a detail that matters only to us unreformed enthusiasts who insist on choosing the Sonic's superb six-speed manual transmission, with its precise shifter and smooth clutch take-up. Most Sonic buyers will choose the automatic, which masks the engine's throttle response characteristics.

Behind the wheel the driver's eye falls on a vast expanse of plastic. What did you expect in a subcompact, Terrazzo tile? But Chevy's designers wisely chose not to pretend otherwise.

"We do have a plastic dashboard," noted design manager Kathy Sirvio. "Instead of trying to make it look like something it is not, we put a nice technical grain on it."

If you have ever wondered what a reviewer means when discussing "good" vs. "cheap" plastic, this is it. Good plastic is honest enough to not pretend it is something else, without surrendering all pretense of style so that it looks like something found at the bottom of your kid's toy box.

The high-strength steel in the body shell contributes to the Sonic's solid feeling, both on the road and when closing doors. Standard aluminum wheels trim away a couple decibels of road noise, further refining the drive. 

Both motorcycles and subcompact cars are supposed to get good fuel economy, and the EPA says the Sonic is superlative, with a 40 mpg highway rating for the tested manual transmission. But fuel economy depends substantially on how the car is driven, and a few days of fun driving pushed my test car's mileage down to an un-motorcycle-like 25 mpg.

I'll take the blame for that this time, but it was surprising to see such a low number. Drivers who were born to be mild but appreciate motorcycle-influenced style can aim for the EPA's 40 mpg rating with their own Chevy Sonic.

Vital stats: 2012 Chevrolet Sonic

Base price: $16,495

As tested: $17,195

EPA fuel economy (city/highway): 29/40

Pros: The only subcompact made in America, 10 standard airbags, premium options, such as seat heaters.

Cons: A sluggish, disconnected throttle response.

Verdict: Not just GM's first great subcompact; the Sonic is the first one that’s good.

Standard equipment: 138-hp, 1.4-liter turbocharged four-cylinder engine, aluminum wheels, tilting and telescoping steering, power windows and door locks, heated outside mirrors.

Major options: Six-speed manual transmission.

Safety equipment: Electronic stability control, 10 standard airbags, antilock brakes.

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Suzuki goes wild and wacky at Tokyo show

DETROIT — For a brief moment, following Japan’s March 11 earthquake and tsunami, there were fears this year’s Tokyo Motor Show might not happen. It didn’t help that even before the disaster most foreign manufacturers said they’d pull out of the event citing routinely weak import car sales.

The biennial even is back on the calendar, it turns out, and when it opens its doors, early next month, the 2011 Tokyo Motor Show will do what it is often best known for: showcase some of the wildest and wacky concept vehicles ever put on wheels — such as the new Suzuki Regina concept.

Though it clearly adopts some modern aerodynamic detailing, the compact Suzuki show car strikes the sort of retro-futuristic theme that has often fascinated designers preparing for the Tokyo Motor Show — and led to such distinctive designs as the old Nissan Figaro and snail-like S-Cargo.

Not surprisingly, small cars are at a premium in Japan’s crowded capital, with makers looking for ways to make them desirable, both visually and in terms of features and comfort. But fuel economy is also critical, Suzuki noting that its “vision of a next-generation global compact car” will get about 75 miles a gallon in Japanese government testing.

Along with wind-efficient details like the minimalist grille mounted below the front bumper, the Suzuki Regina also makes extensive use of new lightweight materials to hold mass down to a mere 1,609 pounds.

Suzuki will have another quirky concept to reveal in the form of the bright orange Q – which resembles some of the strangely pod-like Nissan Pivo concepts of years past. The 8-foot-long city vehicle is designed to carry two tandem style, which redefines the concept of backseat driving. Described as “ideal for everyday journeys within a radius of about 10 km,” it appears to be battery-powered, though the maker isn’t offering up details yet.

Suzuki focuses on the small car market, so the Regina likely does provide a few hints of what it might have in mind for the future. Lightweighting and aerodynamics will be critical with the maker’s push into battery car technology, Suzuki also planning to show a hybrid version of its tiny Swift model on the Tokyo Motor Show stage.

The plug-in reportedly will deliver battery range of as much as 18 miles before the Swift EV Hybrid switches on its small internal combustion engine.

Copyright 2011 The Detroit Bureau. All rights reserved.

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The best-selling vehicles of 2011

New car sales in October recovered from a summertime lull, fueled by pent-up demand for new models and a better selection of Japanese brand cars following last spring’s devastating earthquake. If the rebound continues, car makers will finish the year with their best sales since 2008.

Unlike in previous years, however, when import-brand vehicles dominated the list of best-selling cars in America, this year has seen a surge in popularity for domestic models. Six of the 10 most popular vehicles in America through October are made by General Motors, Ford Motor or Chrysler Group, compared to just three last year.

Tumbling out of the Top 10 are the Honda Civic and CR-V, two perennial favorites whose sales have been hurt by natural disasters in Asia, and the Hyundai Sonata, which was nudged out by more popular vehicles from Ford and GM. Pushing their way into the Top 10 are the Ford Fusion and Escape, and GM’s new compact, the Chevrolet Cruze.

There’s no doubt the Detroit car companies benefited from the woes of their Japanese rivals. Toyota has been reeling for nearly two years — first because of quality recalls and then because of parts shortages caused by the earthquake and tsunami in Japan last March. While Toyota was struggling, Honda seemed adrift, offering uninspiring vehicles that failed to capitalize on the market opportunity. Then, it too was forced to suspend North American production because of supply chain issues following the earthquake. The disaster struck just as Honda was launching a redesigned Civic. Now it’s getting ready to launch a new CR-V, but that could be delayed because of parts shortages caused by monsoons in Thailand.

Stepping into the void, of course, were GM, Ford and Chrysler, with fuel-efficient vehicles that had improved quality and more appealing styling and features. GM’s Chevy Cruze is a good example. It hit the market in late 2010 with a starting price of $16,525 and has turned into a barn-burner for GM, selling more than 202,000 so far this year. It features 10 air bags, stability control and traction control, and gets 38 mpg on the highway with its optional 1.4-liter turbo-charged Ecotec engine.

Sales of the Toyota Corolla, meanwhile, are down 11 percent so far this year. Toyota’s compact still outsells Cruze, but only by about 1,000 vehicles, and the Cruze could overtake Corolla by the end of the year to become the country’s best-selling compact car.

Likewise, the Ford Fusion mid-sized sedan and even the Escape utility vehicle, which is due for a makeover next year, have found a larger audience during the market turmoil.

The seasonally adjusted sales rate for October was 13.3 million vehicles, according to Autodata of Woodcliff Lake, N.J., with strong double-digit gains posted by Chrysler, Volkswagen, Nissan, Hyundai, Kia, Mercedes-Benz and BMW. Ford Motor and General Motors saw more modest gains (6 percent and 2 percent, respectively). Toyota Motor’s sales fell 8 percent, while Honda’s dipped 0.5 percent.

Ford’s F-series pickups (No.1), and GM’s Chevrolet Silverado (No.2) are America’s sales champs, as they have been for years. The best-selling passenger car remains the Toyota Camry, although sales of this aging model are off 8.5 percent so far this year because of earthquake-related disruptions. A redesigned 2012 Camry just went on sale, which could help Toyota get back on track.

© 2011 Forbes.com

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Europe drags down General Motors' 3Q profit

DETROIT — The fragile European economy is dragging down General Motors' profits, forcing its management to look harder for cost cuts and ways to boost revenue in the struggling region.

GM said Wednesday that its third-quarter net income fell 15 percent from a year earlier, pulled down by losses in Europe and South America and weak earnings in all areas except North America and China.

The company's shares fell over 10 percent to $22.31 Wednesday as GM executives were backed off an earlier prediction that the company would break even before taxes in Europe this year.

Europe faces a financial crisis and could slip into recession. Growth is slow is several key nations. Italy, the region's third-biggest economy, is bucking under the weight of government debt. Greece faces default unless it can accept a new debt deal, and the region also is dealing with high unemployment, stingy bank lending and declining exports. General Motors Co. is among the first U.S. corporations to forecast lower earnings due to the problems.

GM CEO Dan Akerson told industry analysts that the company's performance in Europe is due in part to slower sales "which itself is a manifestation of Europe's economic morass." He said the results in Europe and South America are "not sustainable and not acceptable" and said GM must look for more ways to control costs. But Akerson stopped short of giving specifics.

Sales in Europe are about 18 percent of GM's 2.2 million global total, but they are expected to weaken as the economy slows in the fourth quarter.

Citi Investment Research analyst Itay Michaeli said other automakers have hinted at difficulties in Europe, but GM was sounding a louder alarm based on the third-quarter performance.

Michaeli said he thought GM would have been able to remove more costs in Europe by now. Third-quarter costs at GM Europe were about even with a bad quarter a year ago, so that means more cuts will have to be made, probably by cutting factory capacity with plant closures, he said.

"These guys just aren't going to sit around and let Europe lose a bunch of money," he said. "I imagine they're working on plans to rightsize capacity to make money on lower (sales) volume."

In the third quarter, GM's net income fell to $1.7 billion, or $1.03 per share, compared with $2 billion, or $1.20 per share, a year earlier. The quarter's figures also included $200 million in dividends paid on preferred stock that didn't exist a year earlier.

GM posted a pretax loss of $292 million in Europe. Its profit rose slightly in North America to $2.2 billion, but earnings at its international operations, including China, fell 29 percent to $365 million. South American operations also swung to a loss of $44 million for the quarter.

Without the loss in Europe and the preferred stock payment, GM's net income would have increased.

Chief Financial Officer Dan Ammann said GM had a solid quarter, but needs to improve its profit margins in all regions. The company also needs to take better advantage of its global scale, building the same cars for all markets to cut engineering and research costs, he said.

Ammann said that in Europe, GM will follow the formula used to turn around the company's North American operations. GM cut its break-even point in North America by closing 16 factories since 2008. It also won concessions from the United Auto Workers union, and it rolled out new vehicles that are selling well. But Ammann wouldn't say for certain if plant closures are coming in Europe.

"There's nothing that's off the table," he said.

Ammann said the company has made significant progress in Europe and is more than $1 billion ahead of last year's pretax earnings.

Cutting costs appears to be a bigger challenge than trying to sell more cars in the region. It's difficult for GM to close plants and cut staff in Europe because of strong unions and laws that protect jobs.

European sales rose 4.6 percent during the third quarter. But the growth rate was about half the 9 percent increase GM reported worldwide.

In South America, Ammann said GM is revamping an aging car and truck lineup to try to boost sales. It also offered buyouts to employees that resulted in a 4 percent reduction in the work force there to deal with cost inflation, he said. GM is coming out with nine new vehicles in the next year in South America, including the Chevrolet Cruze compact and a subcompact named the Cobalt, he said.

Ammann said GM plans actions companywide to improve profit margins. Its profit margin, or pretax profit as a percentage of revenue, is around 6 percent, a full percentage point lower than its closest global competitors, Volkswagen AG and Ford Motor Co.

While the company plans to cut costs further, it mainly will boost profit margins by increasing revenue, he said.

"You can't cost-cut your way to prosperity in the business. You've got to grow the business, get the right vehicles on the road," he said.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Toyota recalls 550,000 cars for steering issue

TOKYO — Toyota Motor Corp. said Wednesday it is recalling about 550,000 vehicles worldwide — mostly in the United States — for problems that could make it harder to steer.

The recall affects 447,000 vehicles in North America, as well as 38,000 in Japan and another 25,000 in Australia and New Zealand, said Toyota spokesman Dion Corbett. In Europe some 14,000 vehicles are being recalled along with 10,000 in the Middle East and 14,000 in Asia outside Japan.

Toyota has received a total of 79 reports about the defect dating back to 2007, said Corbett. There have been no reports of accidents or injuries related to the problems, he said.

Toyota's reputation has taken a hit over the last two years due to a string of huge recalls that have ballooned to 14 million vehicles over that time, including millions recalled last year for acceleration problems. It faces damage lawsuits and lingering doubts in the U.S. about whether it had been transparent enough about the recall woes.

Japan's largest automaker has been trying to communicate better with customers and empower regional operations outside Japan to make safety decisions.

The news comes a day after Toyota said its July-September profit slid 18.5 percent to 80.4 billion yen ($1 billion) on plunging sales caused by parts shortages from the tsunami disaster in northeastern Japan.

It now faces such uncertainties from flooding in Thailand, where it has many suppliers and three assembly plants, that it declined to release an earnings forecast for the full year through March.

The latest recall is due to the possibility that the outer ring of the engine's crankshaft pulley may become misaligned with the inner ring, causing noise or a warning signal to light up, the company's U.S. sales unit said in a press release. If the problem isn't corrected, the belt for the power steering pump may become detached from the pulley, making it suddenly more difficult to turn the steering wheel.

In the United States, the automaker is recalling 283,200 Toyota brand cars, including the 2004 and 2005 Camry, Highlander, Sienna and Solara, the 2004 Avalon and the 2006 Highlander HV. Its recall of 137,000 Lexus vehicles includes the 2004 and 2005 ES330 and RX330 and 2006 RX400h.

Those affected elsewhere include certain models of the Alphard, Highlander, Highlander hybrid and some Lexus models, Corbett said.

The recall notification process varies from country to country.

In the U.S., Toyota will mail owners a notification to make an appointment with an authorized dealer to have their car inspected once replacement parts have been produced in sufficient quantities.

If needed, parts will be replaced for no charge, the company's American sales unit said. Notifications will be mailed starting in January.

In the meantime, if an abnormal noise is heard coming from the engine compartment, the owner is asked to make an appointment with any Toyota or Lexus dealer to have the vehicle inspected for this condition, the release said.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Toyota’s profit hit by floods, strong yen

Toyota said Tuesday its quarterly profit tumbled 18.5 percent on plunging sales caused by parts shortages from the tsunami disaster that hit northeastern Japan earlier this year.

Japan’s top automaker said that vehicle sales plunged in the key markets of Japan and North America, but it also said it was making up for some of the losses by strong sales in countries such as India and Indonesia.

Toyota also warned that it faces a new challenge from flooding in Thailand, declining to give a forecast for the full financial year ending March 2012, citing uncertainties stemming from the recent Thai floods which have disrupted supplies of parts and prompted it to cut some car production.

All the Japanese automakers are suffering after the March 11 earthquake and tsunami in Japan that damaged the operations of their key parts suppliers. That meant they made and sold fewer cars than normal.

The Thai floods, which began in July and now threaten central Bangkok, are compounding the production damage. The country is the Southeast Asian base for several automakers. Toyota said production cuts in Japan, which began last month, will continue through Nov. 18.

Also battering Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, is the surging value of the yen.

The automaker’s President Akio Toyoda said earlier this week that the strong yen has reached levels “far beyond what is tolerable,” threatening to make it necessary to move production out of Japan.

He asked the government to do more to prop up the dollar, stressing that manufacturing in Japan could be “destroyed.” Toyota said the unfavorable exchange rate erased 80 billion yen ($1 billion) from its latest quarterly net income.

Toyota was the world’s biggest automaker in annual vehicle sales last year, but it sank to No. 3 in the first half of this year, trailing U.S. rival General Motors and Volkswagen AG of Germany.

Toyota had shown tremendous ability to bounce back after the March disaster, reaching pre-tsunami levels of global production in September, faster than its initial expectation of recovering by the end of this year.

But then the floods in Thailand struck and are expected to cost Toyota tens of thousands of vehicles in lost production.

For the first half spanning April 1 through Sept. 30, Toyota’s profit nose-dived nearly 72 percent to 81.6 billion yen ($1 billion). It had eked out a tiny profit in the April-June first quarter. First-half sales fell 17 percent to 8.01 trillion yen ($103 billion).

The Associated Press contributed to this report.

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Ford to upgrade glitch-prone Touch system

DEARBORN, Mich. — Ford Motor Co., stung by falling quality ratings because of its glitch-prone MyFord Touch system, is planning a major upgrade that it hopes will fix the problems — and repair its own reputation.

Early next year, Ford is sending flash drives with a software upgrade to approximately 250,000 U.S. customers with MyFord Touch and MyLincoln Touch, the equivalent system in Ford's luxury Lincoln brand. Owners can do the upgrade themselves in about 45 minutes, or dealers will do it for free. Ford is still deciding how it will offer the upgrade to 200,000 buyers outside of the U.S.

Ford knows of no other car company that has given owners the option of upgrading their own software on this scale. The unprecedented step underscores the urgency of the problem for Ford, which last month fell from 10th place to 20th place in Consumer Reports' annual reliability rankings largely because of MyFord Touch. Ford also plummeted in a J.D. Power quality survey earlier this year.

MyFord Touch, which debuted last year on the Ford Edge, replaces traditional dashboard knobs and buttons with a touch screen. Drivers control climate, navigation, entertainment, phone calls and other functions using touch or voice commands. It's a $750 option on lower trim levels, but comes standard on higher-end ones. Ford quickly rolled out the system on the Ford Explorer, Ford Focus and other models.

Dealer phone lines and Internet chat rooms were soon buzzing with complaints. The system shut down without warning and took too long to reboot. It didn't understand voice commands and didn't always respond to owners' touch. Some owners found the information-packed screens overwhelming.

Ford had dealers perform four software updates and paid dealers to hold owner clinics. But it soon realized it had to do more. The latest upgrade makes significant changes. Screens are now simpler and cleaner, with larger text and shading to outline buttons. Voice recognition is improved. Ford says the new system responds to touch commands more quickly and is less likely to shut down.

New models due out next year, including the redesigned Ford Escape and Ford Taurus, will automatically get the upgraded system.

Ford won't say how much it's spending on the upgrade.

Ford is unapologetic about the system, saying MyFord Touch is an advanced technology that's drawing new customers to the brand. Sales of the new Ford Explorer have more than doubled so far this year, for example. But the company also learned quickly that buyers aren't as forgiving with glitches in their cars as they are with their phones or computers.

"People's expectation of what's in the car is totally different than what they brought home from Best Buy," Gary Jablonski, Ford's manager of Sync platform development, told The Associated Press in a recent interview. Sync, a four-year-old voice command system that Ford designed with Microsoft Corp., serves as the platform for the more advanced MyFord Touch.

Forrest Brown, a Ford dealer in Dyersville, Iowa, got a barrage of complaints last winter when customers were unable to defrost their windshields or turn up the heat because their screens were going blank. But the problems have become less frequent as Ford updates the software. Brown has also started inviting customers back to the dealership so he can answer questions about the system.

"We've come to the realization that this type of technology is going to be in almost all vehicles in the future, so you might as well get used to it and understand it and make your customers aware of it," Brown said.

Jablonski insists MyFord Touch was thoroughly tested and not brought to the market too soon, as some critics contend. The problem, he said, is that not everything is testable. The system syncs up to more than 70 different kinds of mobile phones, for example, which are constantly getting updates of their own. Customers may blame the car for something that is really the fault of the phone.

But Ford realizes it may have gone further than its customers wanted to go. The company is planning to bring back volume and tuning knobs, for example, because it found people didn't like using a touch screen for those functions.

Jeremy Anwyl, the chief executive of auto information site Edmunds.com, once watched a MyFord Touch screen freeze up during a Ford demonstration. Still, he gives Ford credit for taking a chance on new technology, even at the expense of its quality scores. Vehicle quality is getting so good that customers are increasingly basing their buying decisions on high-tech options, he said.

"I'd rather have MyFord Touch and Sync and take the heat from than not have it at all," he said.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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