The Automotive News over the past week or so includes some vaguely interesting stories. First there is the rumor that VW will finally leave its headquarters outside Detroit and head to greener pastures in NC or DC. Now, these rumors have been going for nearly two years now, but now with a new CEO (Stefan Jacoby) about to take the reins, it seems like this time it may have a bit more credibility. Apparently the company figures the best way to re-establish itself in the US as a major player while thinning out and rebuilding its own ranks, is it simply cut all ties with MI and see who decides to hang on for the ride.
Also, Ford Motor Company announced again that it would be reducing its sales to rental fleets, which goes very well with a topic I have been kicking around on what I consider the “rental effect.” Sure, fleet sales are a good way to prop up volumes if you are into numbers and they do provide some cash even though they are at very small margins, but at what cost does this short-term revenue come?
The trade-off goes like this. On the one hand, you do get your vehicle out there quite literally in the hands of many drivers who may not otherwise ever consider your brand. That is a good thing. On the other hand, it is no secret what type of a licking rental cars take on a regular basis and do you really want to run the risk of those people first experiencing your cars when they are definitely not at their best. Additionally, with a flood of cars finding their way at least temporarily into rental agencies comes a unique perception among consumers, which may or may not be warranted.
First, one figures, well, only mediocre cars would make into a rental company because who would pay that much extra to nicer fleet cars if there wasn’t any chance of recouping the investment, and they know they are going to get trashed anyway. The other more empirical evidence comes in the form of residual values. When thousands of extra Mustangs begin showing up in post-rental condition on the auction block, you can surely bet that lease of the new Mustangs will certainly suffer.
It is this equation that the OEMs have wrestled with for years and all three have curtailed or at least become more selective in their fleet sales for concern of what it may do to reputations. This last announcement from Ford emphasizes specifically that they will continue to look to government agencies for example, who still purchase a decent volume of cars, but may not have such a direct and immediate impact on public perception. Only time will tell if they can actually have their gravy and eat it too.
So, as far as manufacturer news there really wasn’t much on the radar. Sure, Steve McQueen’s Ferrari sold, and Ralph Nadar is looking at GM some more, but until Bob Nardelli settles in and starts making some real waves, nothing terribly groundbreaking.
This past week in Auto was really about two events, the Woodward Dream Cruise and the number of individual shows, and auctions that lead up to the Pebble Beach Concours d’Elegance. Now, here are two unique perennial automotive gatherings that could not be more different if they tried. Really, that they both focus around the automobile and take place at roughly the same time is about all they have in common. Think less peanut butter and jelly and more Caviar and Krispy Kreme.
One event is invite only, and takes place on one of the most prestigious and isolated swaths of real estate in the country, while the other personifies the more the merrier attitude and uses one of the most public and accessible stretches of road anywhere in the world. Also, one event focuses around the “drive” whereas the others’ vehicles arrive via trailer where they sit idle and are occasionally wiped down with a diaper.
Like economy versus first-class these two take opposite ways to arrive at similar destinations. Where one rewards owners for being the same, the other applauds being different. One is for a few, the other is for many. It is actually quite an interesting study of how the automobile is engrained in all parts of our society.
So whether you eat Guilden’s or Grey Poupon, frequent the Opera or Grand Ole Opry, or drive a Chevy or a Cadillac, you can bet that these people get a charge out of all things cars and probably have more in common than we think.
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