950 horses! Mustang puts focus on muscle cars

The Detroit Bureau

The Shelby 1000 boasts 950 horsepower on the street, 1,100 hp in the track edition.

By Paul A. Eisenstein, msnbc.com contributor

Carroll Shelby has never shied away from a challenge – especially one he’s set for himself.  And ever since teaming up with one-time Ford President Lee Iacocca back in the mid-1960s, Shelby continually has found ways to pump more power out of the back wheels of a Mustang. 

His latest effort, on display at the NY Auto Show at the Jacob Javits Convention Center, is the Shelby 1000, which makes a cool 950 horsepower on the street, 1,100 hp in the track edition.

Shelby isn’t alone. The halls of the Javits Center are filled with an array of high-performance models, including the new Mercedes-Benz SL65 AMG, at 621 hp, and the 593 hp McLaren MP4-12C. Barely two decades ago, a top-line performer such as the Porsche 911 could barely squeeze out 200 ponies. Today, there are more than 70 models making at least 500, and a baker’s dozen top 600 hp.

While the spotlight is on high-mileage products, especially those using alternative propulsion systems, a sizable number of American buyers remain fixated on cars that can go fast, faster, fastest. And while many makers now offer high-mileage “eco” versions of their mainstream products, just as many are introducing performance variants, such as the 2013 Ford Focus ST.

But today’s high-performance cars have some significant differences from those of decades past. Significantly, they’re delivering not only more power but also substantially better mileage. And a new generation of advanced, battery-based propulsion systems could yield a line-up of cars that might best be described as mean and green.

“Even people who can afford today’s performance cars don’t like to admit they’re just getting 12 miles a gallon,” says Jess Toprak, the senior automotive analyst with TrueCar.com.

That’s driving luxury and performance automakers into a frantic search for ways to deliver more power, lower emissions and improved mileage all at the same time. 

The new Porsche 911 Carrera S, the seventh generation of the iconic German sports car, boosted its power from 385 to 400 horsepower – even while the new model delivers about 19 percent better fuel economy than the old 911.

Porsche has taken a number of steps to get there. Among other things, the new model is about 100 pounds lighter than the Gen-six 911. 

“Lightweighting” has become a mantra in today’s auto industry because it not only can yield better mileage but improved performance and handling, as well.

Of course, some of the biggest changes can be found under the hood, where manufacturers have discovered an assortment of ways to improve the time-tested internal combustion engine. That includes direct injection – where the air-fuel mixture is squirted right into each individual cylinder, resulting in a cleaner and more efficient ignition process. 

Then there’s turbocharging, a system that forces more of the air fuel mixture into the engine when the driver’s foot is pressing the floorboards but minimizes fuel consumption when cruising. That permits a maker to switch to a smaller displacement engine.

The old Mercedes-Benz SL63 AMG used a 6.3-liter naturally aspirated V-8. The new model delivers substantially more power out of a 5.5-liter, twin-turbo V-8 that also makes about 30 percent better mileage.

The latest-generation Bentley Continental GT is delivering nearly the same level of performance as its classic V-12 out of a smaller, far more efficient V-8.

And then there are the diesels.  Porsche is pushing well into 30 mpg territory with the new Cayenne diesel also debuting at this month’s NY Auto Show.  Yet the “oil burner” has enough torque to launch the big SUV from 0 to 60 in just 7.4 seconds.

German manufacturers have been big proponents of diesel power. BMW introduced a line-up of high-performance models, including the M550d, which is only an eye-blink slower than the gas-powered 2013 M5, at about 4.5 seconds 0 to 60.  For the moment, unfortunately, there are no plans to bring the super-diesel to the U.S.

Vehicles like that, suggests analyst Toprak, “You don’t feel guilty about it.”

And the next generation of performance cars might make one feel downright proud. Among the most notable debuts in New York City this month, was the Infiniti LE Concept.  That’s “LE,” as in “Luxury Electric.” 

Based on the same underlying platform as the Nissan Leaf, the prototype features a decidedly more sleek body and its electric drive system has been re-tuned to deliver substantially better performance, declared Carlos Ghosn, CEO of Infiniti’s parent, Nissan Motor Co.

As a result, driving a car like the LE – which will go into production by early 2013, said Ghosn – “Will be both desirable and sustainable.”

Nissan is not alone.  Audi is developing a plug-in hybrid version of its R8 supercar, which will be the first in a line of battery-based performance models to go by the designation etron. BMW has a new brand-within-a-brand that will market products like the plug-in i9 sports car – which Tom Cruise drove in the most recent installment of the Mission Impossible movie franchise.  And Mercedes is finishing development of a battery-electric version of its gull-winged SLS supercar.

While performance cars might not rule the road the way they did in the days of the classic ‘60s muscle cars, there still are plenty of drivers with a need for speed. For them – and perhaps the rest of us – the good news is that today’s performance cars can deliver a lot more power while sucking down a lot less fuel.

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Sticker shock: New car prices hit record high

By Paul A. Eisenstein, The Detroit BureauRemember “sticker shock”?  After several years of heavily discounting their products in a desperate bid to keep assembly lines rolling, automakers are finding themselves back in the driver’s seat again – pushing prices to record levels.

And it’s “not a blip,” warns one senior analyst, who expects the trend to continue for several years. The good news for shoppers is that trade-ins are also yielding better prices – and while that new car, truck or crossover may command more money than ever before it’s also likely to include significantly more features and markedly better fuel economy than the vehicle it replaces.

How much do you expect to spend on your next new car?

The average new vehicle sold in the U.S. in March cost $30,748, according to data tracking service TrueCar.com.  That was up 6.9 percent from $28,771 a year earlier and marks an all-time record.

“It’s not a blip. It’s a trend we’ve been seeing for months,” said Jesse Toprak, TrueCar’s chief automotive analyst.  That’s despite the fact, he says, that “this might seem counterintuitive at a time you might expect to see people buying cheaper cars because fuel costs are rising so fast.”

But there have been a number of counterintuitive trends in the industry in recent months. One is the surge in overall car sales, which have been rebounding faster than the U.S. economy – despite the fuel price spike that, in decades past, might have been expected to result in a sharp downturn in demand.

There are a number of reasons why new car prices are spiking.  A key reason is “There’s a better equilibrium between supply and demand,” noted Toprak, “which means discounting isn’t needed as much.”

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While March saw vehicle sales surge to an annualized rate of around 14.5 million, that’s a long way from the decade-old industry peak of around 17.1 million.  In years past, makers would’ve been tacking on massive rebates and other incentives to boost sales. But in a significant move during the recent recession, many makers slashed production capacity, especially Detroit’s Big Three.

And so, with the remaining plants operating at, near and sometimes above their rated capacity, carmakers don’t need to be so generous. March incentives, according to TrueCar, slipped 1.8 percent, year-over-year, to an average $2,440 per vehicle.

There’s another reason why the run-up in pricing might seem unlikely. There’s been a significant upturn in the small car market with motorists trading big SUVs for compact crossovers and full-size sedans for subcompacts.  Nearly one in four vehicles sold in March fell into the small car category, up from barely one in six as recently as December, according to industry data.

Ford, Nissan Abandon Key Hybrid Programs

But don’t think of them as the classic “econoboxes” that proved so popular – briefly – in the wake of the twin oil shocks of the 1970s. Products like the 2012 Ford Focus and the latest-generation Hyundai Accent are far more stylish and well-equipped.

Consumers, meanwhile, “are upgrading the vehicles they’re buying,” no matter what class they fall into, noted Art Spinella, lead researcher at CNW Marketing.

In the decades that CNW has tracked automotive buying patterns, the typical vehicle will fall into the 50th percentile — almost exactly halfway between the base price of a specific nameplate and the most heavily loaded version. In other words, if the entry model was $20,000 and a fully loaded version was $40,000, the typical buyer would spend $30,000.

But now, said Spinella, the average vehicle is falling into the 82nd percentile.  Using the same example, the typical shopper now drives off in a vehicle costing $36,400.

U.S. Fuel Economy Tops 24 MPG for 1st Time

“People are trying to stuff all the bells and whistles they can in a car” in part, Spinella explained, because “they plan to keep it longer.”  Prior to the Great Recession, buyers told CNW they plan to hold onto a new vehicle, on average, about 42 months. That’s now up to 57 months.

The good news is that buyers aren’t necessarily spending a lot more out-of-pocket. That’s because used car prices have also surged over the last several years.  During the first quarter of 2012, the price of the average previously owned vehicle sold through a franchised new car dealer rose 12.5 percent, or about $1,400.  For the consumer, that meant a bigger trade-in allowance to apply to a new vehicle.

The upward trend in pricing is almost certain to continue, at least barring a sharp setback to the economy, industry analysts agree.

“The long-term trend is gradual price increases continuing for several more years as sales recover to 15 million and even 16 million,” forecast TrueCar’s Toprak.  “But the pace (of the increase) we’ve seen over the last several years isn’t sustainable.”

He anticipates prices will start to level off as they reach an average $31,000.

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Mazda's CX-5 at the head of its class

Kevork Djansezian / Getty Images

Actor Patrick Dempsey, right, and Mazda CEO Takashi Yamanouchi pose next to the Mazda CX-5 at the LA Auto Show last year.

By Dan Carney, msnbc.com contributor

The first word in the SUV acronym is “sport,” but you’d be hard-pressed to tell from the recent crop of compact crossover dullmobiles that serve as modern suburban station wagons.  It used to be that parents would put fussy babies in the car for a ride around the block to rock them to sleep.  Now they just prop them in the front window and force them to look at the Honda CR-V or Toyota RAV4 in the driveway to send them to the land of nod.

Sales in the segment are booming as consumers who previously would have bought mid-size SUVs like the Ford Explorer or Jeep Grand Cherokee have moved down a segment to burn less $4 gas.  This year more than 1.3 million Americans will drive home from the dealer in a compact SUV, and that number is growing every year, reports Tim Barnes, Mazda’s director of product planning.

There are a lot of these buyers, but they don’t have high expectations.  “Entry into the segment is motivated by practical reasons and not by emotional desires,” Barnes said.

Obviously many of these buyers don’t prioritize sportiness, but those who do can turn to Mazda for relief.  The new Mazda CX-5 is at the head of the class in expressive styling and crisp handling.  The long-hood proportions are a classic way to convey sporting intent, while the front suspension geometry was optimized to provide road feel and feedback to the drive through the steering wheel.

A clever repositioning of rear suspension geometry lets Mazda use stiffer suspension bushings for sharper response without inflicting the customary bad ride that would otherwise result.

As per Mazda’s Zoom-Zoom brand promise, the feel of the steering wheel, the touch of the brake pedal and the engine’s throttle response all tell the in-the-know shopper that the CX-5 was developed by fellow car enthusiasts.  Too many other companies’ cars look good on paper and sometimes even in the metal, but they don’t feel good on the road, as parts are specified by people who don’t really understand the nuances that make cars feel right.  No brand in the mainstream does this better than Mazda.

In the past, touting sporty attributes might also imply a thirst for fuel, but Mazda’s new SkyActiv suite of fuel-saving technologies lends the CX-5 the ability to tiptoe past more gas stations than you’d expect for family wagon of it ilk.

I saw an honest 25 mpg in around-town suburban soccer dad carpool service, which is the same as the EPA city rating, so that’s probably a pretty realistic number for everyday use.

The 155-hp 2.0-liter four cylinder engine and six-speed automatic transmission each benefit from an impressive raft of fuel-saving technologies.  Many of the parts that make the CX-5’s SkyActiv engine innovative look familiar to hot-rodders, right down to the complex exhaust header that snakes through the engine compartment. 

Just like back in the days when high compression, fuel injection and headers were the hot setup at the track, modern direct fuel injection and even more carefully tuned exhaust pipes help wring the most from the engine, only now the main goal is to go farther, rather than faster, on a gallon of gas.

Maybe the SkyActiv moniker comes from the sky-high 13:1 engine compression that would astound racers of old by running on regular octane gas.  In Europe, where consumers are more willing to pay for higher-octane fuel, Mazda runs at an even-higher 14:1 ratio on premium gas. 

Unlike the old days, this modern hot-rodding doesn’t produce a raucous ride.  The CX-5 is smooth and quiet enough that customers coming out of V6 vehicles shouldn’t be put off by its four-cylinder engine.  And the six-speed automatic transmission does a good job of picking the right gears to sip fuel and keep the engine from screaming.

Despite all this focus on the driving experience, Mazda hasn’t forgotten that such vehicles are bought for practicality.  Class-leading back seat room, a middle pass-through in the back seat from the cargo area and a back seat that folds flat show that Mazda knows that SUV buyers want useable space for passengers and cargo.

A nice touch in the back: windows that open all the way, giving back-seaters full automotive citizenship in the CX-5.

The tested Grand Touring trim level produces a pretty high sticker price for this segment, which is why the slightly cheaper Touring model will be the high volume configuration for the CX-5.  The Grand Touring adds goodies like bigger wheels, leather, sunroof and a Bose satellite radio sound system.

The Tech Package added to the price tag, with a Tom Tom navigation system, fantastic xenon high- and low-beam headlights, and active headlights that steer into turns.  Like most of the hand-held nav systems adapted to in-car use, the graphics are cartoonish and the interface is annoying on the larger in-dash screen.

But the Bose stereo is just the ticket for blasting your favorite tunes from college, even if it does prevent back-seaters from falling asleep.  At least you’ll be awake at the wheel thanks to Mazda’s more exciting interpretation of the usually somnolent compact SUV.

2013 Mazda CX-5 Grand Touring All Wheel Drive

Base price: $28.295Price as tested: $30,415 (including $795 delivery fee)

EPA gas mileage: 25 mpg city, 31 mpg highway, 28 mpg combined

Pros: Expressive styling, interactive handling, thrifty fuel consumption

Cons: Lame seat heaters wouldn’t cut it in a real winter, Sponge Bob-worthy navigation graphics, excessive road and wind noise

Verdict: Mazda has the home run product it needs, if only customers will notice.

Standard equipment: 155-hp, 2.0-liter I-4 engine, 6-speed transmission, automatic windows and door locks, aluminum wheels, keyless start.

Safety equipment: electronic stability control, traction control, anti-lock brakes, blind spot warning, front, side and curtain air bags.

Major options: Navigation, xenon headlights, adaptive headlights.

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U.S. fuel economy tops 24 mpg for first time

By Paul A. Eisenstein, The Detroit BureauThe fuel economy of the average new vehicle sold in the United States has topped 24 miles per gallon for the first time ever, according to researchers at the University of Michigan Transportation Research Institute.

Using the numbers shown in the “Monroney” window sticker, the average fuel economy of the cars, light trucks, minivans and SUVs purchased in March rose to 24.1 mpg, up from 23.9 in February and 23.6 in January. 

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The typical vehicle sold in March 2012 was 20 percent, or four miles per gallon, higher than the industry average in October 2007, the first month UMTRI researchers Michael Sivak and Brandon Schoettle began tracking vehicle mileage.

The surge in fuel economy should be no surprise to those who have been tracking recent sales trends.  Small cars have enjoyed a major surge as gas prices have begun their latest push towards record levels.  Compact and smaller models now account for nearly a quarter of the market, up from less than 18 percent as recently as last December.

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Meanwhile, hybrid-electric vehicles have also enjoyed a big burst of interest, the Toyota Prius achieving record sales in March.

In addition to reporting on the average fuel economy numbers, researchers Sivak and Schoettle issued their monthly update of their national Eco-Driving Index, which estimates the average monthly emissions generated by an individual U.S. driver. The EDI takes into account both vehicle fuel economy and distance driven—the latter relying on data that are published with a two-month lag.

During January, the EDI stood at 0.83, an improvement from 0.86 in December (the lower the value, the better). The index currently shows that emissions of greenhouse gases per driver of newly purchased vehicles are down 17 percent, overall, since October 2007.

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In addition, Sivak and Schoettle reported the unadjusted Corporate Average Fuel Economy performance for the first time. That figure is not the same as the number consumers see because it is based on a different set of EPA ratings.  Nonetheless, it also showed a substantial improvement For March.  The unadjusted CAFE figure rose to 29.6 mpg, an increase of 20 percent, or 4.9 mpg, since October 2007.

What remains to be seen is whether the surge in fuel economy will continue once fuel prices level off. Most analysts believe the trend will continue, however, if for no other reason than the tough new fuel economy standards automakers are facing. That has led the industry to make major shifts in powertrain technology that will continue to have an impact for years to come.

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Study: Hybrid owners unlikely to buy another

AP

According to a survey, 41 percent of Prius owners bought another gas-electric model, whether from Toyota or another brand.

By Paul A. Eisenstein, The Detroit BureauHybrid sales have been surging as fuel prices take their latest run towards record levels.  But the news might not be nearly as good as it would seem if a new study by R.L. Polk is any indication.

Despite previous sales surges tied to past petroleum price hikes the U.S. hybrid vehicle market hasn’t been able to maintain its momentum and the Polk study apparently explains why. After living with the high-mileage technology, nearly two of three hybrid owners wind up returning to a more conventional vehicle when it’s time to trade in.

“Having a hybrid in the product lineup can certainly give a brand a competitive edge when it comes to attracting new customers,” noted Brad Smith, director of Polk’s Loyalty Management Practice.   “The repurchase rates of hybrid vehicles are an indication that consumers are continuing to seek alternative solutions to high fuel prices.”

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According to Polk tracking data, only 35 percent of hybrid vehicle owners purchased another gas-electric model when trading in during 2011.

The number varied significantly depending on the hybrid owned.  Less than 20 percent of Honda hybrid owners returned to purchase another gas-electric vehicle – whether from Honda or another brand.  For the world’s most-popular hybrid, the Toyota Prius, 41 percent bought another gas-electric model, whether from Toyota or another brand.  But it’s significant that even then, nearly three of every five Prius owners did not go back for another hybrid.

Hybrid loyalty rates have also varied significantly from year to year.  During the third quarter of 2011, when fuel prices were reasonably stable, only 30.9 percent of owners traded in on another hybrid.  But when fuel prices started to surge during the final three months of last year, the loyalty rate rose to 40.1 percent.

American Teens Waiting Longer to Drive

Polk officials suggested the technology is having a hard time because of the high cost for hybrids.  Analysts note it can take as long as seven to 10 years to recover the added cost through savings on fuel. The industry is struggling to lower that so-called “payback period,” but gains haven’t come quite as quickly as forecast.

There are other factors that limit loyalty.  For one thing, there are a growing number of alternatives, including diesels – which are being offered in growing numbers – and advanced versions of conventional gasoline technology.  The 2013 Nissan Altima, for example, is expected to deliver 38 mpg on the highway, Ford’s next-generation Fusion close behind at 37 – both yielding only slightly less than the current Camry Hybrid.  Hyundai, meanwhile, boasts five different models now getting over 40 mpg on the highway.

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Toyota hopes to boost loyalty rates with its expanded Prius “family,” which now includes the smaller Prius C and big Prius V – those being joined later this year by the Prius Plug-in.

But despite continued optimism by hybrid proponents, the technology has shown little forward momentum.

Demand for the technology – especially the dedicated Toyota hybrid line has traditionally soared and then sunk along with fuel prices, and last month saw a huge surge in Prius sales.  Whether that trend will hold when pump prices peak remains to be seen.  On an annual basis, it peaked at 2.9 percent in 2008 – the year gas hit its all-time record.  Hybrid sales slipped to 2.4 percent of the U.S. market in 2011.

“The lineup of alternate-drive vehicles and their premium price points just aren’t appealing enough to consumers to give the segment the momentum it once anticipated, especially given the growing strength of fuel economy among compact and midsize competitors,” according to Lacey Plache, Edmunds.com chief economist.

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Car of the future has wings - and $279,000 price tag

Terrafugia

With as little as 20 hours of flight instruction – and a check for $279,000 – the Transition will let a motorist leapfrog traffic – and potentially pull hours off longer trips – by taking to the air.

By Paul A. Eisenstein, msnbc.com contributor

Anyone who has ever had to deal with New York traffic will likely drool over the unusual offering making its debut at the city's annual auto show this week.

The Terrafugia Transition isn’t your typical automotive entry, something immediately obvious even with its wings neatly folded up.  With the completion of its maiden flight last month, and a sign-off by both federal air and automotive regulators, the Transition is set to deliver on a dream that has haunted dreamers since the days of Henry Ford.

With as little as 20 hours of flight instruction – and a check for $279,000 – the Transition will let a motorist leapfrog traffic – and potentially cut hours from longer trips – by taking to the air.

Flying cars roll a little closer to takeoff

“Don’t think of it as a car that flies. Think of it as a plane that drives,” said Carl Dietrich, CEO of Massachusetts-based Terrafugia and one of five former MIT graduate students who came up with the idea for the car/plane, er, plane/car six years ago.

The idea of combining automobile and airplane has been around since the first Flivver rolled out of Henry Ford’s assembly plant in Detroit. Ford devoted what would today be millions of dollars to the concept, only giving up when the corporate test pilot, a close friend of the automotive pioneer's, crashed and was killed in one of the prototypes.

Since then a variety of flying car projects have surfaced, typically capturing plenty of headlines but never making the flight into production. But it may be an idea whose time has come, with the help of advances in materials, powertrain and computer technologies to overcome the many hurdles. 

Even the federal government is getting into the act. The Defense Department’s research arm recently commissioned a program aimed at developing a sort of flying sport-utility vehicle that would allow soldiers to race to the front lines but avoid ambushes along the way.

For now, Terrafugia appears to have a jump on its competition. The firm’s March 21 test flight in Plattsburgh, N.Y., was a critical step forward, winning it preliminary certification – though the final design of the Transition is still in development for a vehicle expected to hit the market in 2013.

Winning approval has not been easy.  The Transition has had to meet potentially conflicting demands that satisfy both the Federal Aviation Administration and National Highway Traffic Safety Administration. But the results may actually appeal to potential buyers.  The craft will feature automotive-level safety features normally not found in a private airplane, including force-limiting seatbelts, airbags and a crumple zone to absorb the force of a front-end collision.

AP

The Terrafugia Transition is pictured shortly after a takeoff.

There are also such niceties as a GPS navigation system.

The Transition is powered by a 100-horsepower Rotax aircraft engine and can run on conventional premium unleaded fuel, rather than aviation gasoline, which could be hard to find, never mind extremely expensive.

In airplane mode, the engine drives a rear-facing “pusher” propeller. Hit the switch that electrically folds up the wings and a transmission shifts power to the rear wheels. In the air, the vehicle will make about 100 knots, or 116 mph, all day, while developers claim Transition can comfortably cruise at up to 80 mph on the highway. 

The vehicle is rated at 35 mpg on the highway and will burn about 5 gallons an hour when flying – around 23 mpg.  Range is 600 miles with the wings spread, although "you are going to want to land before the plane needs to," said Richard Gersh, the company’s business development manager.

The Terrafugia Transition is only 19 feet long, with a wingspan of 27 feet.  Fold the wings and the vehicle readily fits into a garage that can handle a big SUV like a Cadillac Escalade, said Gersh.

And at $279,000, a buyer is likely to own something in the luxury class, he acknowledged. The high cost is due to a variety of factors, including years of development as well as the use of extremely light – and extremely costly – carbon fiber. 

While the price tag might be high, Terrafugia Chief Operating Officer Anna Dietrich, Carl's wife, said she believes the plane/car will prove particularly appealing to those who’ve always wanted to fly but were unwilling to go through the extensive training traditionally required for a pilot’s license.

Flying car lands at New York Auto Show

The project was enabled, she added, by a shift in strategy at the FAA, which created a sport pilot category that cuts training requirements in half, to as little as 20 hours of instruction, although 28 hours is more typical, said Gersh.

The Transition doesn’t completely live up to the dream of leapfrogging traffic jams by quickly taking to the air. An owner would still have to use an airport for take-off and landing.

"Tthe biggest obstacle for a private pilot is weather,” said Carl Dietrich.  And where the owner of a regular small plane might be trapped for days, he insisted “You’ll never be stuck” with Transition. In a storm, a pilot/driver could simply fold up its wings and head out on the highway.

Another flying car concept could prove even more appealing to city motorists who might want to jump over traffic. A Dutch firm has just made its own maiden flight of the PAL-V, which is more of a cross between a motorcycle and a gyrocopter.  That firm hopes to begin deliveries in 2014, about a year later than Terrafugia believes it will launch sales of the Transition.

CNBC's Phil LeBeau has the details on the flying car named "Terrafugia," meaning "escape to Earth," outside CNBC in Englewood Cliffs, New Jersey.

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Best new-car values for 2012

AFP/Getty Images

The all-electric Nissan Leaf has a range of 100 miles per charge and a top speed of 90 mph.

Volkswagen of America delivers the most value-packed new-vehicle product line among all automakers for 2012, followed closely in overall marks by Hyundai Motor America and Ford Motor Company, according to the results of a study by the research company Strategic Vision.

While as in recent model years the two top-rated carmakers in the 2012 Total Value Index survey remain imports, domestic brands, specifically Ford and General Motors, now command a majority of top picks in specific model categories. “An important ‘time marker’ in this year’s study is that for the first time in over 10 years American manufacturers lead the number of Total Value winners with 11 segment leaders,” says Chris Chaney, Strategic Vision’s vice president and head of automotive research. “This is an important milestone toward the ‘domestic comeback.’”

For its part, General Motors took top segment positions with such models as the midsize Cadillac CTS and CTS Coupe, Chevrolet Corvette sport coupe, the full-size GMC Yukon SUV and the Chevrolet Volt extended range electric vehicle. Ford boasted category leaders with the midsize Lincoln MKZ Hybrid, Mustang Convertible, the seven-passenger Flex crossover SUV and the F150 and F250/350 pickup trucks.

Forbes.com slideshow: See the best new-car values

For the first time, four hybrid and electric-powered models were cited by Strategic Vision as being top values in their respective categories, including the Chevrolet Volt, Honda Civic Hybrid, Nissan Leaf and Lincoln MKZ Hybrid. Strategic Vision attributes their recognition to wider marketplace acceptance and desirability for alternative-fuel vehicles, along with the perception that they are becoming better values as fuel prices continue to rise.

“Even though the median price of a Chevy Volt was $43,000, owners believe that for every dollar spent, they got more than did buyers of other vehicles,” says Strategic Vision president Alexander Edwards. “Customers had tremendous value appreciation for Volt’s technical innovation, warranty, standard equipment and certainly fuel economy.”

Among upscale vehicles, so-called “smart luxury” cars that deliver value for the money as well as certified brand cache dominated the segment leaders in Total Value Index scores. These include such models as the Audi A8 sedan and Q7 sport-utility vehicle, BMW Z4 roadster and the Volvo C70 convertible and XC60 crossover SUV.

“Smart luxury is the new trend for those segments that are premium, but within the reach of more customers who appreciate innovation, an exceptional array of standard equipment and present a strong value-equation,” says Chaney. “You will be hearing about smart luxury more and more in the near future, even if the economy takes sure-footed positive steps.”

Strategic Vision’s Total Value Index ratings are computed on a 1,000-point scale. They’re based on extensive owner surveys that consider 442 separate new-car attributes, including a vehicle’s negotiated transaction price, standard equipment, fuel economy, warranty, reliability, resale value and operating costs and various aspects of customer satisfaction. Also noted is a model’s degree of technical innovation which, to quote the company’s news release, “must be impactful, intuitive and true to what owners desire.”

The company claims its Total Value Index study is the most inclusive in the industry, perhaps to the point of sounding a bit intrusive. “In addition to vehicle perceptions, we know what political party the owner claims, their personal media habits and hobbies, as well as what ethnicity they claim,” Chaney explains.

Perhaps at some point they’ll let us know what models, say, Republican Irish Catholic Facebook users who collect cookie jars are driving these days.

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Feds freeze executive pay at General Motors

By Paul A. Eisenstein, The Detroit BureauPity poor Dan Akerson.  He’s delivered the sort of financial turnaround seldom seen in the business world, taking once-bankrupt General Motors to multi-billion-dollar profitability.  But that won’t be enough to earn him a pay hike this year, according to the U.S. Treasury Dept., which has the final say on compensation for the maker’s top 25 executives.

Don’t pity Akerson too much.  He’ll still take home about $9 million this year, including $1.7 million in salary and another $7.3 million in various forms of stock compensation.  But that’s significantly less than his crosstown counterparts.  Ford Motor Co. CEO Alan Mulally got a $29.5 million pay package, the maker announced last week, on top of more than $57 million in long-term stock compensation.

Hybrid Owners Unlikely to Buy Another

The federal government began overseeing the salaries of GM executives in 2009 along with those at other companies who received bailout funds under the so-called TARP program.  Most of those firms have since paid off their loans and are no longer subject to the review of a federal pay overseer.  But GM — which is still 26.5% owned by the Treasury – is still covered, as are Ally Financial, the former GMAC, and giant AIAG.

 The controls remain in place because they are “necessary to ensure that compensation … satisfies the public interest standard,” according to Patricia Geoghegan, office of the special master for TARP executive compensation.

Midsize Makers Set for Shoot-out

GM’s top 23 executives earn, on average, about $1.2 million apiece in total compensation.  While several top execs, such as Vice Chairman Tom Stephens, have recently left the company, 14 who remain will receive 0.5% pay hikes and 8.4% increases in overall compensation when stocks and other benefits are included.

But nine of the company’s top managers – who joined GM in 2011 – will receive, on average, 45.5% less than the executives they replaced.

The ongoing pay limits post problems for GM in an environment where it has to compete against other auto manufacturers – and company’s not in the automotive business – for talent, the Detroit maker complains.

American Teens Waiting Longer to Drive

“There are some people who haven’t worked in the auto industry their whole lives, people that want to try something different that pays,” Mark Reuss, GM’s president of North American operations, told reporters earlier this year.

Akerson did manage to take home more than Sergio Marchionne received from Chrysler – which also received a 2009 bailout but last year’s paid off its remaining government loans. For the second year, Marchionne chose to receive nothing for his work at Chrysler.  However, he did get $22.2 million from Fiat, the Italian automaker that currently owns a 58.5% stake in the U.S. maker.

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Ford recalls more than 140,000 Focus cars

Ford Motor Co is recalling 140,310 Focus cars from model year 2012 in the United States to repair a potential problem with the passenger-side windshield wiper motor, according to U.S. safety regulators.

A seal plug in the wiper motor electrical connector may be missing, allowing water into the motor's electrical connection, according to documents filed with the National Highway Traffic Safety Administration. That could result in an inoperative wiper on the passenger side, reducing visibility and increasing the risk of a crash.

Ford said no accidents or injuries had been reported related to the issue. Owners will be notified the week of May 21, and the wiper motor connector will be cleaned and sealed as needed, NHTSA said.

In separate NHTSA documents, Chrysler, which is controlled by Fiat, is recalling 1,689 2012 model Jeep Patriot and Compass sport utility vehicles that may have been built with a fuel tank assembly containing a damaged rollover valve. In an accident or rollover, fuel could leak and increase the risk of a fire, NHTSA said.

Chrysler said in a NHTSA filing that it was not aware of any accidents, leaks, fires or injuries related to the issue. The recall is expected to begin by June.

Copyright 2012 Thomson Reuters.

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Revamped Dodge Viper makes a big splash

Richard Drew / AP

The SRT Viper is unveiled at the New York International Auto Show earlier this week.

By Dan Carney, msnbc.com contributor

At a recent Manhattan party with faithful Viper owners, Ralph Gilles, the man responsible for the return of Chrysler's iconic sports car, described how it earned the reprieve that led to its resurrection at the New York International Auto Show this week.

It was all CEO Sergio Marchionne’s fault. After a test drive of the Viper, he winked and said, "It’s not too easy to drive, is it?” That wink was the clue for the team that was hoping to resurrect the company's discontinued Viper. The project had a chance — if the team made some significant improvements.

To start, they had to shed the Viper's kit-car image among the Ferrari, Lamborghini and Porsche faithful, reported Ralph Gilles, president and CEO of Chrysler's Street and Racing Technology (SRT) brand, which is responsible for the Viper. "They were very frank with us," he said of those competitors' customers. "They said it was too crude, too brutal."

This week, as the Viper roared onstage with its engine revving, the refreshed car was the hit of the show -- at least for people who weren't more focused on the debut of Nissan's new New York taxicab design. 

All the familiar parts are still there: the front-mounted V10 engine, a minimal two seats way back behind a long hood, and massive wheels. But underneath, Gilles' team toiled to tame the beast. That's because, as Marchionne observed somewhat understatedly, the old Viper did not suffer fools gladly. It would toss them into the nearest ditch at the slightest provocation.

The 2013 Viper hasn't been emasculated, however. Power has been boosted to 640 horsepower and the frame is 50 percent stiffer than before.  But the suspension has been upgraded to make the car more forgiving and easier to toss around casually on the track. Viper owners love to take their cars to the racetrack, but its unforgiving character required laser focus.

So behind its even-fiercer visage, the new Viper is more friendly, letting drivers play but with less fear of catastrophe. And there is a new, unseen backup: electronic stability control, which was never a part of the Viper's recipe before, but which is required by the government now.

The Viper team added the required stability software, but rolled it into a suite of applications that let the Viper mirror the kind of driver-adjustability common on many top racing cars. Even though there is now a computer watching over the driver's shoulder (unless you want to turn it off), the driver can feel even more like a racing hero by making adjustments to the car's systems using the computer.

In the past, acceleration runs at the drag strip were challenging. The car had so much power that it took just the right touch (and maybe a bit of luck) to match the engine speed and clutch release to launch the car as quickly as possible without accidentally vaporizing the rear tires into a cloud of rubber smoke. 

Smoky burnouts may look dramatic, but while a car is spinning its tires that way, the car in the other lane is accelerating away to win the race. The new Viper has a computerized launch control system that promises a perfect match of revs and clutch every time, avoiding any embarrassing drag strip defeats at the hands of some kid in a clapped-out Mustang.

The voluptuous bodywork is a clear return to the original car's organic shape rather than the second-generation's crisper, but less-distinctive lines. Underneath, previous Vipers suffered from less-than-premium cabin appointments, in the bare-bones tradition of the Shelby Cobra, which was the Viper's inspiration.

Today's customers demand more, so the Viper team turned to partners, such as the same company that provides seats for Ferraris, to give Viper buyers the luxurious cockpit they can find in competitive models. "The Viper has the finest interior we've ever put into a car," Gilles said.

Does returning the Viper to showrooms mean that Chrysler will rake in the dough now?  No, that’s for models like the new Dodge Dart.  The Viper has another purpose.  "This is not a car that is going to make a lot of money for us," Gilles conceded.  "It shows we still have a soul."

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Drivers grumble, naturally, over NYC's new cabs

Nissan has unveiled New York City's "Taxi of Tomorrow" - featuring sliding doors, anitbacterial seats and outlets to charge your phone. Take a ride through taxi cab history, including the original Electrobat, horse-drawn cabs and the iconic Checker. 

By Paul A. Eisenstein, msnbc.com contributor

Like most New York taxi drivers, Hakan Karakas has a ready opinion on everything – especially when you ask him about the “Taxi of Tomorrow.”

“It’s like the communists have taken over,” he laments.  “This is a free market, and I should be able to choose what I drive.”

But the fact is Hakkan and the rest of the Big Apple’s independent and fleet taxi owners won’t have a choice. This week they’re getting a first look at the vehicles that will replace the aging Ford Crown Victoria sedans that have long served as the majority of New York’s yellow cabs.

Slideshow: A brief history of NYC taxi cabs

The winner of a city-sponsored shoot-out for the contract was Nissan, which will begin supplying a specially modified version of its NV200 commercial van to New York hacks next year. By sometime in 2018, New York taxi regulators expect the Taxi of Tomorrow to replace all 13,000 vehicles plying the city's concrete canyons today.

At a price of $29,700 the Nissan yellow cab won’t come cheap, prompting some grumbling by operators.  But at a news conference this week to reveal the final design, Mayor Michael Bloomberg insisted the new model “was designed for those who matter most: the passengers and the hard-working drivers.”

Among the many advantages: Nissan conducted extensive safety testing with all the taxi hardware – including the glass partition between driver and passengers – in place.  It has developed special airbag systems to further enhance safety.

Stan Honda / AFP - Getty Images

Marvin Wasserman (R) and Jean Ryan (L) of the Taxis for All campaign protest outside the unveiling of the Nissan NV200.

The NV200 will be powered by a modest and reasonably fuel-efficient four-cylinder engine, rather than the big V-8 in the Crown Vic. That might frustrate drivers jockeying for position on crowded streets but will save plenty of money on fuel considering the time the typical yellow cab spends stuck in midtown traffic or crawling along the Brooklyn-Queens Expressway on the way to LaGuardia Airport.

The new model also will be “the most comfortable taxi ever to hit our streets,” said Bloomberg, pointing to amenities including better interior lighting, USB and 12-volt power ports for cellphones and iPads, and even carbon ceiling covers and anti-microbial floor mats to keep things cleaner and minimize odors.

The Taxi of Tomorrow will offer 10 more inches of legroom than current cabs and there will be no hump down the middle of the floor that makes it so unpleasant, today, to get stuck with the center seat.

Spencer Platt / Getty Images

Nissan CEO Carlos Ghosn, left, and New York Mayor Michael Bloomberg enjoy the roomy back seat of the new taxi prototype.

“Sounds great to me,” said Robin Milstein, a Manhattan bank clerk, as she struggled to exit gracefully from an old Crown Victoria on her way home to city's SoHo neighborhood.  “It’s such a pain getting in and out, especially when you get one of the smaller cabs they have these days.”

Not everyone is pleased.  A small group of protestors gathered outside the news conference holding hand-lettered signs criticizing Nissan for not making the NV200 handicap accessible. Nissan says it has designed the new taxi to include a rear ramp for wheelchairs, though it is unclear whether that will be a requirement or just one of the options for taxi owners to choose from.

The debut of the Taxi of Tomorrow coincides with the opening of the 2012 New York Auto Show.  For many city residents, it may be as close as they get to an automobile in day-to-day life. The Big Apple –- and Manhattan, in particular -- has the lowest per capita car ownership rate in the country. The yellow cab is the automobile for people who have no interest in cars.

Since the days when motorized hacks took over from horse-drawn carriages, the yellow cab has become an integral part of the city fabric, says New York-based writer Kate McLeod, and not just for locals.

“For many people who come to New York, riding in a yellow cab is a part of their to-do list,” she says.

That experience will be just a bit different – and notably more sightseer-friendly – starting in 2013.

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Ferdinand Porsche, sports car designer, dies

Hoep / AP

Ferdinand Alexander Porsche is photographed in 1963 with a Porsche 901.

FRANKFURT, Germany — He designed Porsche's classic 911 sports car — the sleek model that evokes power, wealth and envy among aficionados — cementing his grandfather's name into the modern psyche

Ferdinand Alexander Porsche died Thursday in Salzburg, Austria at age 76, Porsche AG said. No cause was provided.

Porsche, known as F.A. to his colleagues, was head of the Porsche design studio in the early 1960s when the company developed the 911 model that remains its brand-defining product. The car, now in its seventh version, remains recognizably the same vehicle, with its sloping roofline, long, low hood and prominent headlights.

Hoep / AP

"The creator of the Porsche 911 has founded a culture of design in our company that distinguishes our sports cars even today," Porsche CEO Matthias Mueller said.

Porsche was the son of former Porsche Chairman Ferry Porsche, who died in 1998, and the grandson of Ferdinand Porsche, who started the company as a design and engineering firm in the 1930s.

Born in Stuttgart on Dec. 11, 1935, F.A. Porsche was initiated into the family business while still a boy, spending time in his grandfather's workshops and design facilities. He studied at the Hochschule fuer Gestaltung in Ulm and joined the company in 1958, taking over the design studio in 1962.

In the 911, he created a larger, less cramped replacement for the company's first model, the four-cylinder Porsche 356. The new car, with a rear-mounted, six-cylinder engine, was originally designated the 901, but the number was changed because French competitor Peugeot claimed a patent on car names formed with a zero in the middle.

Porsche left the operational part of the company with other family members in the early 1970s and in 1972 founded a design business, Porsche Design Studio, where he created eyeglasses, watches and pens.

As a designer, he had a reputation as a functionalist.

"A formally harmonious product needs no decoration, it should be elevated through pure form," he once said — a motto reflected in the lean lines of the 911.

He served as chairman of Porsche AG from 1990 to 1993 and helped steer the family firm through a crisis as sales plunged in the late 1980s under pressure from global competition and a strong German mark that hindered exports.

Under his chairmanship, the company brought in a new CEO, Wendelin Wiedeking, who is credited with turning the company around.

Porsche was to be buried in a private ceremony in the chapel at Schuettgut, the Porsche family's estate in Zell am See, Austria.  

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

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Volkswagen Up! named World Car of the Year

The Detroit Bureau

Lead designer Oliver Stefani holds the World Car of the Year award for the Volkswagen Up!

By Paul A. Eisenstein, The Detroit BureauThe pint-sized Volkswagen Up! has nabbed a big honor, winning the sought-after World Car of the Year trophy during a morning session at the 2012 New York Auto Show.

The victory took many observers by surprise, especially considering the minicar was going up for the award against the widely-hailed and more universally available updates of the BMW 3-Series and Porsche 911.

“Our goal was always to make something small great,” said Olivier Stefani, the lead  designer on the Up! program, which has become one of the centerpieces of VW’s push to go green – in many ways serving as the modern-day alternative to the legendary Volkswagen Beetle.

 The World Car awards, now in their sixth year, are the result of voting by 64 motoring journalists based on every continent short of Antarctica, and “reflect the worldwide realities of making (vehicles) successful in the global auto industry,” said Matt Davis, one of the program’s chief organizers.

Along with the main World Car of the Year award, there were three other trophies to be distributed, including World Green Car, which went to the Mercedes-Benz S250 CDI Blue Efficiency diesel sedan.

That marks a significant shift in the industry, suggested the maker’s Christopher Horn, who added that the idea “of a 4-cylinder engine in a Mercedes S-Class was something unheard of a few years ago.”

Like the VW Up!, the S250 is not currently available in the U.S. market, Horn noted, but he said the underlying powertrain will appear in the 2013 update of the Mercedes-Benz GLK crossover-utility vehicle.

Land Rover, meanwhile, received some much-welcomed support for its shift in strategy, the World Design of the Year award going to the maker’s new Range Rover Evoq – its first-ever crossover-based utility vehicle.

“I like to say that great design is the gateway to customer desirability because it makes an emotional connection,” said Land Rover chief designer Gerry McGovern.

Porsche might have lost the World Car trophy but its seventh-generation 911 sports car didn’t leave empty-handed, so to speak, the 2013 remake being named World Performance Car of the Year.

“The car has become an icon over the past 50 years,” said Porsche Cars North America CEO Detlev von Platen.  “This is encouragement to continue for another 50.”

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Help wanted: Automakers have trouble filling all the jobs

Charlie Riedel / AP

After years of cutting back production – closing dozens of plants and eliminating an estimated 88,000 jobs during the Great Recession – that means automakers are racing to build back up production capacity.

By Paul A. Eisenstein, The Detroit Bureau

The jobs were there, more than 1,000, according to the Engineering Society of Detroit, with everyone from the Detroit automakers to Korea’s Hyundai looking to hire. What was missing were the job-seekers.

March was another great month for the U.S. auto industry, which reported double-digit, year-over-year sales gains on Tuesday. After years of cutting back production – closing dozens of plants and eliminating an estimated 88,000 jobs during the Great Recession – automakers are racing to rebuild production capacity.  They’re also looking to fill empty slots in design, engineering and other departments cut to the bone during the industry’s worst downturn in decades.

Detroit makers alone have created tens of thousands of jobs since hitting bottom in 2009 with the bankruptcy of Chrysler and General Motors.  And their foreign-owned rivals are also putting out the “Help Wanted” signs.  Volkswagen is already planning a second round of hiring at its new assembly plant in Chattanooga, Tenn.  BMW is expanding at its factory in South Carolina.  Hyundai’s Alabama assembly line needs more help to meet booming demand.

And the search is especially frantic in suburban Detroit. Some of the new jobs are coming at places like Chrysler’s Jefferson North Assembly plant, along the Detroit River, which will soon be running three shifts building products like the Jeep Grand Cherokee.  But the real rush is to find trained engineers.

Virtually every major automaker – indeed, plenty of minor ones, including some not selling products in the U.S. – has an engineering center in metro Detroit.  With key government testing facilities and an entrenched knowledge base, everyone needs to be there, explains the Engineering Societys Della Cassia.  She recalls when Chrysler, pre-bankruptcy, let go of 3,000 engineers and support staff, “and our phones wouldn’t stop ringing with people looking for jobs.  Many had families and were desperate.”

But at recent job fairs, like the one on March 31, employers were the ones lined up waiting.

Neil De Koker, the president and CEO of the Original Equipment Suppliers Association, tells a similar tale.  Two years ago, Altair Engineering, one of OESA’s 410 member companies, “had plenty of applications and no jobs.”  A few months ago, they put out the word that “they had 700 engineering slots and no one to fill them.”

Part of the problem is that the industry now needs to attract a largely new workforce as engineering schools are struggling to fill slots and turn out fresh talent.

The bulk of the engineering employees released by the struggling Detroit makers over the last five years were older workers nearing the end of their careers.  They were often given buyouts that helped nudge them into a less painful retirement.  “And now,” laments De Koker, “they just aren’t interested in coming back.”

Detroit isn’t the only place where the industry is hiring.  While the Motor City may have the lead when it comes to issues like homologation – bringing products into compliance with federal mileage, emissions and safety laws – there’s a growing automotive presence on the West Coast.  Silicon Valley has seen a rapid expansion of carmaker engineering facilities focused on infotainment and related in-car technologies, as well as research into autonomous driving.

Ford just opened a new R&D center near Stanford University, a hotbed of such technological research.  It follows other established auto manufacturers including General Motors, the Renault-Nissan Alliance, BMW, Volkswagen and Mercedes-Benz.  That’s where the engineers skilled in high-tech work reside, explains Dr. Dieter Zetsche, CEO of Mercedes’ parent Daimler AG.  But as with Detroit, industry officials say it’s been tough filling the jobs.

Even when older workers are there they don’t necessarily qualify, cautions Dr. David Cole, chairman-emeritus of the Center for Automotive Research, in Ann Arbor, Michigan.  “The changes in technology are happening so fast that in many cases, the skills set is missing.”

Cole, long associated with U of M, has helped create a non-profit called “Building America’s Tomorrow,” which aims to not only increase the number of students who go into engineering but also lure them, along with established engineers, to Michigan.  Ford CEO Alan Mulally is among the project’s advisors.

In the meantime, the situation is becoming ever more serious for those with an empty desk.  “Three years ago they were paying people to leave. Now we have to put even more money on the table to get them back,” says Gerd Kleinert, chief executive of KSPG Automotive, a supplier of cylinder heads, pumps, valves and pistons.

One of the biggest concerns right now, says ESD Executive Vice President Darlene Trudell, is that companies are raiding each other in a desperate bid to hire the necessary talent, further driving up labor costs.  That’s a serious challenge for lowly suppliers when they are competing against the deep pockets of major auto manufacturers, like GM, Ford or Toyota.

For the engineers who got pink-slipped when the auto industry was in dire straits, the situation is very different today.  If they’re still looking for work and have the right skills it would be difficult not to find a job.  But for those who had been cutting engineering operations three years ago the challenge today is finding the necessary talent.  And that equation isn’t likely to change any time soon.

What do you think the U.S. should do to graduate more engineers? Let us know on Facebook.

Rock Center traveled to Flint, Michigan where the graveyard shift has returned at a General Motors plant, adding 750 jobs and giving hope that the auto industry's turnaround will be long lasting. Flint, nicknamed 'Vehicle City,' has often been emblematic of the auto industry.  The return of the third shift has rippled throughout the town, boosting jobs at suppliers and local restaurants.  Nationwide, the third shift has returned at other GM plants and plants belonging to other automakers like Chrysler and Ford.  NBC News Correspondent Mike Taibbi reports.

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Auto sales record best quarter since 2008

David Zalubowski / AP

A line of 2012 Focus sedans at a Ford dealership in the south Denver suburb of Littleton, Colo.

By msnbc.com staff and wire reports

Updated at 2:04 p.m. ET: The auto industry looks set to ride the appeal of smaller cars to its best quarterly performance in almost four years.

Auto sales rose sharply in March, boosted by consumers with more confidence in a recovering U.S. economy who want to buy fuel-efficient cars and trucks in the face of rising gasoline prices.

Strong sales in March are the most convincing evidence yet this year of a sustained recovery in the U.S. auto sector. Analysts said unseasonably warm weather last month drew out American car shoppers. The rise in gas prices to near $4 a gallon coupled with high used car prices also prompted some consumers to buy new vehicles earlier than planned.

Ford's U.S. sales rose 5 percent from a year earlier. Ford, No. 2 in the U.S. market, reported its best March for new auto sales in five years on strong sales of small cars such as its Focus sedan and its F-Series pickup trucks.

Chrysler, No. 4 in U.S. sales, reported a 34 percent increase, led by its Chrysler brand, which had a sales increase of 70 percent.

It was the 24th consecutive month that Chrysler showed a year-on-year sales gain.

Don Johnson, GM VP of U.S. sales operations, offers insight on GM's March automobile sales, with CNBC's Phil LeBeau.

General Motors, the No. 1 automaker in U.S. and global sales, said its U.S. sales rose 12 percent in March on solid demand for cars and small crossovers that achieve 30 miles per gallon or better on the highway.

Nissan said its sales in March rose 12.5 percent, and Volkswagen said its March sales soared 35 percent -- its best U.S. March sales since 1973.

Toyota, No. 3 in U.S. sales, saw a 15 percent rise in March sales.

South Korea's Hyundai, which has the best fleet-wide fuel economy ratings in the market, said it expected to have record monthly sales.

"The current level of gas prices will further accelerate the release of pent-up demand as consumers lean towards significantly more fuel-efficient new vehicles while used prices are still strong," Morgan Stanley analyst Adam Jonas said.

Consumer confidence rose in March to its highest level since February 2011, the Thomson Reuters/University of Michigan reading of consumer sentiment showed.

Consumers who held off purchases during the economic downturn -- which led to the worst U.S. auto sales since World War II adjusted for population -- are returning to the market, said Edmunds.com analyst Jessica Caldwell.

In February, auto sales rose to their highest level in four years.

"Vehicle trade-in rates have achieved sustained highs in recent months, which suggests that consumers have decided that they've held on to their cars for too long," Caldwell said. "And with the average credit score for new car buyers at its lowest level since the first half of 2008, the market is clearly becoming a friendlier place for all buyers."

Toyota released its March sales numbers at an increase of 15.4 percent, below the estimated 21 percent increase. CNBC's Phil LeBeau and Jim Lentz, Toyota's U.S. president/CEO, discuss Toyota increasing U.S. RAV4 production and March sales.

As sales rise, automakers are also getting more profit per vehicle. Incentives continued to trend downward in March while the average transaction prices per new vehicle rose, autos consultant TrueCar.com said on Tuesday.

Auto analysts surveyed by Thomson Reuters expect an annualized sales rate for March of 14.74 million vehicles, which would be a rise from last March's 13.1 million sales rate. Analysts say pent-up demand, easier credit, more fuel-efficient product offerings and mild weather helped boost March sales.

Mike Jackson, chief executive of the nation's largest auto retailer, AutoNation Inc., told CNBC on Monday that the company raised its 2012 sales forecast to about 14.5 million from 14 million, based on the strongest quarter for auto sales since before the sales downturn that began in late 2008.

Incentive spending in March fell about 2 percent industry-wide, rising only for Chrysler, Nissan and Volkswagen, TrueCar.com said. Major automakers are expected to show gains on year-ago sales, led by Chrysler Group LLC, GM and Toyota Motor Corp.

"Automakers have hit the sweet spot this month with lowered incentives and double-digit sales increases, which signifies underlying strength in consumer demand," said analyst Kristen Andersson of TrueCar.com.

Truck sales continue to improve, but the improvements in car sales are relatively stronger, reflecting increased appetite for smaller, more fuel-efficient models, analysts said.

Is this a sign that the recovery is here to stay? Share your thoughts on Facebook.

Reuters and The Associated Press contributed to this report.

CNBC's Phil LeBeau reports March auto sales saying, "while they are strong, they are not as strong as many were hoping, in part because they're being driven by strong fleet/rental orders."

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Demand surging for highest-mileage GM models

Handout / Getty Images

Autoworker Maurice Vauss inspects the fit and finish of the 2013 Chevrolet Malibu Eco during final inspection on the assembly line.

By Joseph Szczesny , The Detroit BureauThe surge in fuel prices has led to a huge shift in buyer demand, according to General Motors, the maker reporting it sold more high-mileage models than ever last month.

Demand for products delivering 30 mpg or better has grown so much GM recently had to up incentives on less efficient V-6 versions of several crossover-utility vehicles because it was running out of higher-mileage four-cylinder models.

“GM’s strategic investments in four-cylinder and turbocharged engines, advanced transmissions and vehicle electrification have been very well timed,” said Mark Reuss, president of GM North America.

With the industry set to report March sales later today, GM gave a hint of what is happening as the market responds to $4 gas.  Sales of the 12 models it offers in the U.S. getting at least 30 mpg will total more than 100,000 for the month, an all-time record, the company said.

“Three years ago, about 16 percent of the vehicles GM sold achieved at least 30 mpg on the highway. Today, that number is about 40 percent,” noted Reuss, “and we have more new fuel-economy leaders on the way, including the Chevrolet Spark, Cadillac ATS and the Buick Encore.”

The dozen current models include the 2012 Chevrolet Sonic, Chevrolet Cruse, Chevrolet Volt, Chevrolet Malibu, Chevrolet Malibu Eco, Chevrolet Camaro, Chevrolet Impala, Chevrolet Equinox and 2012 Buick Verano, according to the U.S. Environmental Protection Agency’s ratings.

The automaker offers multiple powertrain offerings on many of those products, such as the Chevrolet Equinox and its near-twin, the GMC Terrain.  Demand for the higher-mileage I-4 models has now exceeded capacity – prompting the maker to recently add another $1,000 in incentives to try to get some potential buyers to opt for the V-6 models.

But the trend appears to be well-entrenched, according to most industry analysts, few expecting to see a significant return to lower-mileage models barring a wholesale collapse in fuel prices.  As a result, manufacturers are expecting to continue adding to their high-mileage offerings.

In GM’s case, it will add still more all-new or significantly freshened 30 mpg-plus Chevrolet, Buick, GMC and Cadillac cars and crossovers by the end of 2012.  Collectively, they will flesh out  segments that
represent 60% of the U.S. light vehicle industry.

The new models include the all-new 2013 Cadillac ATS 2.5-liter and 2.0-liter turbo I-4s, the all-new Chevrolet Spark and the four-cylinder 2013 Chevrolet Malibu, all of which are expected to achieve EPA estimates of 30 mpg highway or better when the ratings are released later this year, Reuss said.

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Hail to the new NYC taxi; Nissan cab unveiled

Richard Drew / AP

Medallion owners will be required to buy the Nissan NV 200 at a cost of about $29,000 starting in late 2013.

The iconic New York City taxi cab is getting a new look. And some new functionality.

In a cab and your cellphone just died? No problem. Just plug it in.

New cabs hitting the streets of New York City next year will have charging ports for riders' electronics. They'll also have more leg room, a large skylight roof to gaze at the city skyscrapers and even odor-reducing and anti-microbial fabric to help deal with, well, you know, anything you might smell in the backseat of a cab.

A prototype of the Nissan NV200 will be unveiled Tuesday. The model was selected from among three finalists in a city competition.

With a boxy shape and painted a brighter yellow than the city's current taxis, the cab offers a different experience for riders — starting with a flat, hump-less floor that makes shifting from one side to the other a simple task.

City Taxi and Limousine Commissioner David Yassky said busy New Yorkers looking to get from point A to point B would find plenty to appreciate about the rides that get them there.

"New Yorkers are pragmatic but they also appreciate quality. This is a higher-quality taxi ride than what they're getting today," he said Monday.

The doors on the vehicles slide open, so no more risk of hitting a passing bicycle messenger, and they'll all come with a navigation system, so no more getting lost in the outer boroughs. There are floor lights, to help find anything that may have fallen to the floor, as well as overhead lights for reading. Luggage can go into the cargo space in the rear.

The Nissan van, which beat out proposals from Ford Motor Co. and Turkey's Karsan, will be phased in beginning in October 2013 as older taxis age out of service. All current taxis, including the city's hybrid cabs, will be off the streets by 2018. Nissan spokesman Steven Oldham said the company would be undertaking a pilot program with the Nissan Leaf electric car to see if it would be feasible to make the taxis electric in the coming years.

The vehicles will sell for about $29,000, and will come with the partitions included, Yassky said. Meters and the medallions will be the responsibilities of the buyers.

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Blind driver takes Google car for a spin

 

A video released by Google shows Steve Mahan, who is 95 percent blind, behind the wheel of its experimental self-driving car.

By Dan Carney, msnbc.com contributor

A blind guy driving a car? That was the latest step in Google's two-year-old program to develop a self-driving car.

A video released last week on YouTube shows Steve Mahan, who is almost totally blind, behind the wheel of a Toyota Prius, running errands to Taco Bell and the dry cleaners.

"Look Ma, no hands, and no feet!" Mahan says as the car steers autonomously along a carefully planned route. "This is some of the best driving I've ever done."

Google announced its self-driving car project in 2010, building on research started by a Stanford University that won a $2 million Defense Advanced Research Projects Agency challenge.

Although the Google demonstration followed a preplanned route, it shows the potential for such cars to work without extensive preparation, said spokesman Jay Nancarrow. But he said the company was not prepared to detail the vehicle's capabilities and limitations.

Autonomous cars outfitted with radar and laser sensors like the Prius would be liberating to people such as Mahan, who cannot drive on his own. “Where this would change my life would be to give me the independence and the flexibility to go to the places I both want to go and need to go, when I need to do those things,” Mahan said after his day in the car, which took place in January.

Even those without vision loss could benefit from the automation of driving because  computer-controlled cars would be able to drive in close formation to increase the traffic capacity of existing roads, said Google project leader Sebastian Thrun. This would save Americans 4 billion hours of wasted time and 2.4 billion gallons of gasoline, he estimated.

Thrun spoke at the TED conference last year about his personal motivation to develop a self-driving car. “As a boy I loved cars,” he said.  “When I turned 18 I lost my best friend to a car accident. Then I decided I would dedicate my life to saving 1 million people every year."

Tangi Quemener / AFP/Getty Images

Junior, a 2006 Volkswagen Passat, heavily modified and robotized by a team of Stanford University, crosses the finish line in first place of the DARPA Grand Challenge on Nov. 3, 2007, in Victorville, Calif.

His effort started with Stanley, a Volkwagen station wagon outfitted with sensors, which in 2005 was the first vehicle to complete DARPA’s challenge course.

“Since then our work has focused on building cars that can drive anywhere by themselves,” he said.

“Our cars have sensors with which they magically can see everything around them and make decisions about every aspect of driving. It is the perfect driving mechanism. We’ve driven in cities, like in San Francisco here. We’ve driven from San Francisco to Los Angeles on Highway 1.  And even crooked Lombard Street in San Francisco.”

Another video shows the Google autonomous Prius ripping through a snaking course of orange cones in a parking lot. This capability suggests the autonomous car need not proceed at the pace of a driver's ed student. 

Finally drivers would be able to focus on things they’ve already shown are more important to them than watching the road, like talking on the phone, texting friends, checking Facebook, eating and personal grooming. Maybe they could watch the YouTube video of the blind guy in the driver's seat.

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NHTSA investigating fires in Cruze, Wrangler

DETROIT — The government said Sunday it is investigating reports of engine fires in the Chevrolet Cruze small car and Jeep Wrangler SUV.

The fires haven't caused any injuries but have destroyed at least six vehicles. NHTSA is investigating the 2011 model year Cruze and the 2010 model year Wrangler.

The National Highway Traffic Safety Administration has received two reports of fires in the 2011 Cruze. In both cases, owners reported that the fires began while the cars were moving, and in both cases the cars were destroyed.

According to complaints filed on NHTSA's Web site, a driver with a 2011 Cruze Eco was 30 miles into a 43-mile trip last month when smoke started coming out from under the hood. As soon as the driver stopped, flames began shooting out from the car.

"The car was totally engulfed within five minutes of stopping, and it was only after the first sign of fire was visible that the warning light on the dashboard illuminated," the driver told NHTSA. NHTSA doesn't post drivers' identifications on its site.

General Motors Co. spokesman Alan Adler says the company knows of no deaths or injuries related to the issue. GM is cooperating with the investigation. The company sold approximately 177,000 Chevrolet Cruzes from the 2011 model year.

NHTSA also has received eight reports of fires in 2010 model year Wranglers. Most began when the vehicles were moving, and four owners reported that their vehicles were destroyed.

The owner of a 2010 Wrangler told NHTSA that the vehicle was parked and running when it suddenly turned off. The owner was attempting to restart the vehicle when someone outside the vehicle began yelling that it was on fire.

"Once out of the Jeep I looked under it and saw and unknown liquid burning down to the ground from the engine area. I attempted to extinguish the fire with water but I was unsuccessful. Within minutes it was a total loss," the owner said, according to NHTSA's documents.

Chrysler Group spokesman Nick Cappa says the company is aware of the incidents but knows of no accidents or injuries related to the issue. Chrysler is cooperating with the investigation. The company sold 131,000 Wranglers from the 2010 model year.

Cappa said that vehicle fires are complex and can happen for various reasons, including some that have nothing to do with the vehicle itself. Poor maintenance, improper vehicle use or the installation of aftermarket equipment can all cause fires, he said.

"The 2010 Jeep Wrangler meets or exceeds all applicable federal safety standards and has an excellent safety record," Chrysler said in a statement.

NHTSA investigations can lead to vehicle recalls.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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10 cool cars with great gas mileage

Not long ago Zack O’Malley Greenburg had a problem.

His parents had finally decided to replace the 1991 Nissan Sentra he had driven in high school and still used occasionally to make the trip from Hastings-on-Hudson, N.Y., back to Manhattan.

The Sentra, among other foibles, lacked air-conditioning and a side mirror. It rattled and hummed at any speed approaching 80 miles per hour. Thing is, the elder Greenburg wanted to replace it with something affordable and fuel efficient, such as a Honda Civic or Chevy Cruze. Greenburg the younger wanted — nay, needed — something cool.

“When I heard what they were looking at, I kind of groaned and thought that I would be doomed to be borrowing rental cars from them for the rest of my life,” he said.

Fortunately for Zack — a music reporter here at Forbes — his sense of style won out. After weeks of debating the relative merits of reliability, maintenance costs, safety scores and, most importantly, fuel economy, he convinced his parents to choose a cherry red, black-roofed Mini Cooper. With rally-car handling and an impressive 37 miles per gallon on the highway, the iconic coupe proved the perfect compromise between efficiency and style.

“In the end they decided to buy the Mini because it had personality and spunk,” he told me. “It was fun to drive — and got good gas mileage.”

Fighting the bulge at the pump

In this instance, Zack’s sense of style prevailed. But his parents weren’t totally wrong to insist on something fuel efficient. Gas prices currently average $3.59 per gallon nationally, with analysts at Kelley Blue Book saying they will surpass $4.00 per gallon sometime this year.

Alec Gutierrez, the senior market analyst of automotive insights at KBB, said the change won’t cost consumers that much. Assuming 12,000 annual miles driven on a 20-mpg car, even a $1 raise in prices from $3.60 to $4.60 per gallon would result in paying $11.50 more per week. In short, he says, don’t assume high gas prices mean you’ll get a special discount on a high-efficiency car this year.

But wanting to save money on gas doesn’t necessarily mean you’ll be stuck with a Toyota Prius. Consider the 2012 Subaru Impreza. The $20,295 2.0i Sport Premium edition gets 36 miles per gallon on the highway and is renowned for its dexterity in the snow. It also has 17-inch gunmetal alloy wheels, roof rails and fog lights; standard, too, is an all-weather package that will do wonders on weekend trips up to the mountain.

Or try a more luxurious hatchback, the Audi A3. This $30,250 diesel gets 30 miles per gallon and 40 on the highway — and has fantastic electronics like speed-sensitive steering, quattro all-wheel drive, ambient interior lighting and electronic brake stabilization. Plus a leather-clad interior and halogen headlights.

For a more urban environment, consider the Mercedes-Benz E350 BlueTEC. Mercedes is known for its progressive technology and posh interiors. The E Class doesn’t disappoint: It has advanced sound and comfort technology in the cabin paired with burnished trim and wooden veneers. It also has LED daytime lights and enough stability programs to ensure a smooth ride in even the most pockmarked of Manhattan streets. The $51,690 BlueTEC diesel edition gets 32 miles per gallon on the highway.

And for likely the best overall value on this list, consider something from Hyundai.

“Veloster is one of my favorites,” says Jake Fisher, the head automotive tester for Consumer Reports.

He’s right: The $17,300 hatchback is distinctive because it has three passenger doors rather than two or four — one side of the car has a second side door while the other has only a driver-side door. Veloster combines an aggressively styled front grill with a 1.6-liter engine that sips fuel with the best of them (40 mpg on the highway). But it drives with spunk, thanks in part to the fact that it weighs about as much as a Mazda Miata.

Electric Avenue

The ultimate high-mpg status symbol, though, requires nothing less than electricity. Fisker’s plug-in Karma sedan, with a buttery smooth ride and exotic good looks — plus 300-mile driving range — has received rave reviews.

And the Tesla Model S, due out in July, combines progressive technology inside with a 0-60mph time on par with the Porsche Panamera.

A 40 kWh version of the seven-passenger sedan will cost just under $50,000 with federal rebates; the higher performing will cost more: $59,900 for a 60 kWh (230-mile-range) model and $69,900 for an 85 kWh (300-mile-range) model. The 85 kWh performance Model S, which comes with additional equipment like Nappa leather interior and performance wheels, will cost $79,900 after federal tax rebates.

The dashing good looks and cool personality of both these sedans are nearly as electric as their motors. Of course, if you drive a green car like one of these, you may miss the sound of a rumbling engine and the challenge of changing gears.

It’s no small thing. Just ask Zack.

“I’m really thrilled because with the Mini because I get to drive a car that actively excites me,” he says. “But I still wish they had gotten a stick shift!”

© 2012 Forbes.com

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Mazda may have lost some of its 'zoom-zoom'

Fabrice Coffrini / AFP - Getty Images

Visitors play a videogame at the Japanese carmaker's booth Mazda during the second press day ahead of the 82nd Geneva Motor Show on March 7, 2012, in Geneva.

By Paul A. Eisenstein, The Detroit Bureau

The “zoom-zoom” company may be running out of gas.

Hammered by last year’s Japanese earthquake and tsunami, all but abandoned by long-time partner Ford Motor Co., and largely ignored by American buyers, Mazda has been struggling to reverse its waning momentum.  Profits are down -- even though sales in the key U.S. market are running ahead of the overall American automotive recovery -- forcing the maker to begin a series of “substantial” employment cuts later this week.

Hoping to stand out in an increasingly crowded and competitive market, Mazda is doubling down on a new technology, dubbed SkyActiv, that it claims can deliver most of the benefits of a hybrid at a fraction of the cost. 

It may be too little too late.  With Ford having sold off all but a minimal stake in its Japanese partner and no longer sharing the hefty cost of developing new products, some observers fear that Mazda can no longer go it alone -- something even its CEO grudgingly admits may force it to share the SkyActiv system to get some much-needed assistance.

“It’s a very serious situation because they don’t have a Ford to fall back on or another partner in the wings,” said George Peterson, chief auto analyst with AutoPacific, Inc. He describes the cuts set to begin at Mazda’s U.S. headquarters in California this week as “substantial.”

The maker isn’t yet saying how many of its employees will be offered voluntary buyouts, but it is expected to follow with additional, involuntary cuts in the coming weeks.

The news has taken few by surprise.  From its global headquarters in Hiroshima, Mazda Motor Corp. has predicted a dismal 100 billion yen loss -- or $1.2 billion at current exchange rates -- for the current fiscal year.  The company plans to raise 151.2 billion yen in a record share sale in hopes of offsetting what will almost certainly be its worst loss in 11 years.

A sizable share of that red ink is due to the impact of Japan’s natural disaster last March.  It reportedly cost the maker 80,000 units of production and $433.2 million in overall losses -- the fourth-largest figure among all Japanese makers.

But the situation has been complicated by lopsided exchange rates, which fell as low as 76 yen to the dollar earlier this year. Rates have now rebounded only slightly to about 83 yen to the dollar.

Yet ironically, Mazda is now more dependent upon its cost-disadvantaged Japanese production base than any other manufacturer.  And the situation is going to get worse when it walks out of a decades-long joint venture in Michigan, dubbed Auto Alliance, where it is currently producing the midsize Mazda6 alongside Ford’s Mustang.

Mazda hopes to offset that by building a new plant in Mexico to handle smaller models, such as the Mazda3, that are especially sensitive to exchange rates. Peterson says the company simply doesn’t have the money to open that plant right now, however.

“It’s not the first time Mazda has been in trouble,” the analyst points out. Indeed, Mazda nearly folded in the 1970s when it turned out that the maker’s distinctive Wankel rotary engine had serious quality problems. It slowly dug itself out of that crisis but fell into another financial hole barely a decade later. 

Salvation came from Ford, a long-time affiliate, which began building up equity in the small Japanese firm. Eventually, Ford held a 33 percent stake and, under Japanese law, was able to appoint its own management team, which at one point included Mark Fields, now Ford’s President of the Americas.

After joining the U.S. maker in 2006, however, new CEO Alan Mulally decided to draw down that stake. Ford now holds a minimal 4 percent and is largely severing product and powertrain development ties.

Mazda officials have put on a game face, insisting that this has freed them up to follow their own path without the compromises inherent in an alliance.  The payoff has been SkyActiv. 

The comprehensive system involves the transformation of just about every element of the automobile, from chassis design to the smallest water pump. But the key features are a lighter yet stronger body and more efficient gasoline and diesel powertrains.

The first full example of the new approach is the CX-5 crossover which recently began rolling into U.S. showrooms. With highway fuel economy of up to 32 mpg, the new model is nearly as efficient as comparably sized hybrids -- but at a base MSRP of $21,490, the CX-5 has a significant cost advantage.

If anything is being spared Mazda’s budget-cutting knife, it’s the marketing department which is heavily advertising the new technology. The good news for the maker is that U.S. sales are up 48 percent for the first two months of 2012. Product chief Robert Davis noted, during a recent interview, that 60 percent of the initial buyers traded in other brands.

While an automaker might hope to leverage such a high-tech system to its own advantage, Mazda CEO Takashi Yamanouchi recently acknowledged the maker might have to offer SkyActiv up as a bargaining chip as it “actively” searches for a partner to replace Ford.

“We are considering every option,” the executive acknowledged last month.

Part of the problem is that as good as Mazda claims SkyActiv is, the company also concedes it will eventually need to add hybrids to its powertrain line-up due to ever tightening fuel economy mandates in Japan, Europe and the U.S.

“It’s partner or die,” said David Cole, chairman-emeritus of the Center for Automotive Research, in Ann Arbor, Mich. 

Mazda has shown a surprising ability to maneuver itself out of trouble over the years, and SkyActiv could be the weapon it needs to battle back.  But the situation is “tenuous at best,” adds Peterson. There is little room for mistakes -- or more losses.

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Volkswagen boldly enters crossover SUV market

Volkswagen

Volkswagen's Cross Coupe was unveiled at the Geneva Motor Show.

By Dan Carney, msnbc.com contributor

Remember how Volkswagen rocketed back into the national consciousness a year or so ago with an ultra-cheap edition of the Jetta, a spacious, comfortable new Passat and a viral video hit with its “The Force” Superbowl commercial featuring a pint-sized Darth Vader?

The company aims to keep that momentum rolling along when it targets the next largest-selling class of cars: compact SUVs.  Having already reentered the discussion in the compact and mid-sized sedan markets, compact crossover SUVs like the Honda CR-V, Toyota RAV4 and Ford Escape will be Volkwagen’s next target.

We got a preview of its next-generation contender in that market with the unveiling at the Geneva Motor Show of the Cross Coupe, which could replace today’s Tiguan compact SUV.

“The next obvious opportunity is the SUV segment that the Tiguan participates in,”  said Volkwagen Group of America president and CEO Jonathan Browning.  “The Tiguan can definitely grow further.”

How will it do that?  “Look at the Cross Coupe,” Browning said.  The concept has a stretched hood and a lowered roofline that is a bit reminiscent of the Range Rover Evoque that has wowed shoppers recently, so that bodes well for the future model’s ability to grab attention.

Another matter is how VW will outfit this lower-cost Tiguan successor.  The Cross Coupe concept vehicle was equipped with an opulent interior in the best Volkswagen tradition.  Recently the cost-cutter Jetta has cheapened the cabin so severely as to earn harsh criticism from reviewers.

Browning explains that as a consequence of the company’s desire for the entry model Jetta to hit a very low price target.  The Passat, he points out, was equipped to fall more squarely in the middle of its market rather than at the bottom, and as a result it has a better interior.

“The Tiguan will have the same philosophy of going into the heart of the segment,” Browning said.  The idea is to make German engineering accessible to mainstream consumers, while with older VW models like the current Tiguan that might be out of reach.

As proof of his dedication to preserving VW’s engineering credentials, Browning points to his decision to import the hot-rod Golf R to America.  The move cheered VW enthusiasts, but more importantly, it underscored the fact that VW can still offer the real German driving experience.   “The Golf R represents the best of what Volkswagen does,” he explained.  “It is as important as the Beetle and the Jetta,” even though it sells in minuscule volume.

If, through the Cross Coupe, VW can preserve that autobahn-grade driving feel in an affordably priced, excitingly styled compact SUV, it is likely to enjoy sales success and good reviews, a balance it struggled with when it introduced the low-cost Jetta.  “The Tiguan is a huge opportunity for the brand,” Browning predicted.

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Shelby rolls out a 950-horsepower Mustang

The Detroit Bureau

The Shelby 1000 makes 950 hp on the street, 1,100 on the track.

By Paul A. Eisenstein, The Detroit BureauWhen Carroll Shelby says he’s got a new muscle car on tap, take him seriously.  The legendary automotive raconteur’s latest take on the Mustang will deliver enough tire-squealing torque and horsepower to make gold-chained Ferraristas duck for cover.

That’s 950 hp, to be precise, only slightly less than the $1.4 million Bugatti Veyron ultracar makes.  And that’s for the street legal version of the Shelby 1000 that will take its bow at the New York Auto Show next week.  The track-ready pony car bumps the number all the way up to 1,100 horsepower.

Since the former race car driver-cum-automotive entrepreneur first teamed up with Lee Iacocca, back in the mid-‘60s, Shelby has never shied away from the challenge of pumping a little more power out of a Mustang.  The latest offering takes things one very large step beyond the last Mustang upgrade from Shelby American, the GT500 Super Snake “only” able to make a measly 800 hp.

Says Shelby American CEO John Luft, the Shelby 1000 targets “anybody who has need for speed.”

Make that anybody who has the need – and the bank account to put that power to the pavement.  The street version of the Shelby 1000 will set you back $149,995.  That doesn’t cover speeding tickets, insurance – or the 2012 Shelby GT500 you’ll need to own in the first place.

The GT500 rolls off a conventional Ford assembly line and will cost you a seemingly paltry $48,810.  But then you ship or drive it out to the Nevada desert, about 20 miles from Las Vegas, where Shelby American runs a conversion shop.

What eventually rolls out may look a lot like what you came in with but there’s really not much left over from the original car.  The factory-stock 5.4-liter V-8 is completely torn down and reassembled using new rods, piston and crankshaft.  About the only thing left is the original block.

Other updates focus on improved handling and stopping capabilities with 6 pistons in front and 4 pistons in the rear, while the suspension includes new struts, sway bars and bushings.  The new solid driveshaft is connected to a 9-inch rear end.  Exterior cues incorporate aerodynamics while maintaining a stealthy appearance.  The hood, rear panel and splitter are functional pieces.

The Shelby 1000 project was launched almost on a whim, the 89-year-old Carroll Shelby pronouncing his desire to build a Mustang with 1,000 horsepower.  Luft and his team have long known better than to say no.

“Carroll Shelby is a visionary who has pushed the boundaries of performance his entire life,” said Luft.  “He challenged the Shelby American team to develop the Shelby 1000 and wanted to unveil this amazing new Shelby at the New York Auto Show celebrating 50 years since he unveiled the very first Shelby Cobra that changed the face of high performance.”

Both the very first Shelby Cobra and the first Shelby 1000 will be on display at the upcoming NY Auto Show.

It’s no surprise Shelby American has designated the more powerful model for track use only, but what sort of road might one run a “street” car making 950 hp down?  Not a problem, Luft suggested to USA Today’s Chris Woodyard, insisting that in traffic, the Shelby 1000 is “stealth and below the radar.”

Shelby American plans to produce about 1,000 of the monsters, which are more like Clydesdales than ponies.  According to Luft, about a quarter of them have already been claimed.

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