Accelerate Mpls

Ford announced yesterday morning that all the major parts of a deal to sell Volvo to Geely have been settled.  They made it clear that details will not be made public yet, but that the deal will be signed in Q1 of 2010 and the sale will be done in Q2.

Many have speculated that Volvo would be sold to Geely and now it is a reality.  Some people seemed concerned about Geely’s resources for the future of Volvo.  When people raised concerns to Ford they responded with “the prospective sale would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise.”  Geely is a Chinese car manufacturer and that worries some people as well.  Not known for quality or safety, many question what Geely brings to Volvo.  It seems Volvo brings things for Geely, mainly the safety technology.

With new product just arriving from Volvo (2010 XC60) and more coming soon (new S60) Geely bought Volvo at a decent time.  Some of the model line just received a face lift or is new/coming.  Chinese car companies have not made it into the U.S. and many are afraid this is the beginning to a bad thing.  While that is a valid concern as I mentioned earlier Geely is not known for safety or reliability.  Two things that many car shoppers care about these days.

Twitter was a buzz yesterday morning when the news of the sale hit.  Many Volvo fanatics were angered and saddened.  I even heard some say “There went Volvo.”  We have to examine what happened in a similar situation with Jaguar/Land Rover.  Tata bought the brands from Ford and really did not make many changes.  They liked what planned.  Deciding to take a wait and see approach is not a terrible idea.  So far it has worked for Tata and Jaguar/Land Rover is rolling out refreshed or new product.  Sales are up, and everyone seems to be happy.  If Geely plays things smart, they will let Volvo be themselves and stay somewhat hands off.  If left alone and not interfered with, Volvo could become profitable.

Something to keep in mind about this whole deal is platforms.  Many Fords ride on Volvo platforms.  They share so many, the deal must have clauses in place for platform sharing for at least the foreseeable future until new models arrive.  I assume the platform sharing will cease at in the future.  Other things are shared such as BLIS.  BLIS is Volvo’s blind spot detection system that Volvo developed and uses.  Ford has stated that they intend to work “closely” with Geely in the future.  For how long no one really knows but it can easily be assumed it is because of all the sharing of technology and platforms.

Ford has to be happy right now.  They have no off loaded all the brands in their premier portfolio including Aston Martin, Jaguar/Land Rover, and now Volvo.  They have been trying to sell all of these and have now accomplished just that.  Letting them get the focus back on Ford, Mercury, and Lincoln.

Ford’s press release is below-

PRESS RELEASE:

DEARBORN, Mich., Dec. 23, 2009 – Ford Motor Company [NYSE: F] confirmed today that all substantive commercial terms relating to the potential sale of Volvo Car Corporation have been settled between Ford and Zhejiang Geely Holding Group Company Limited.

While some work still remains to be completed before signing – including final documentation, financing and government approvals – Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010, with closing of the sale likely to occur in the second quarter 2010, subject to appropriate regulatory approvals.

The prospective sale would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement its core ONE Ford strategy.

While Ford would continue to cooperate with Volvo Cars in several areas after a possible sale, the company does not intend to retain a shareholding in the business post-sale.

More details will be made available once the expected definitive sale agreement is signed in the first quarter of 2010.

2010 Buick LaCrosse

I have heard the “New GM” say over and over again that any product launch can not be just a launch, it has to be a success.  The new LaCrosse for Buick is no exception, and in fact, this is the car that is helping to “reinvent” the Buick brand.  The Enclave that debuted two years ago went in the reinvention direction, it was however, less reinvention and more a new segment for the brand.  The Enclave was the vehicle that started generating younger foot traffic into Buick showrooms.  That is a good start, and this new LaCrosse looks to keep that momentum going.  So how is the car?  Well this is not your grandpa’s Buick.

The last generation LaCrosse was a curvy affair that had four headlights and the bland styling of white bread.  Buick has set its sights upon some new comers and some industry leaders ranging from the new Lincoln MKZ and Acura TL to the recently updated Lexus ES350 and let’s not forget the aging, and not gracefully I might add, Toyota Avalon.  These are the “main competitors” in GM’s view.  The list makes sense to me, although I believe, the main direct competitor is the Lexus ES350.  The advertising is poking at Lexus and the Buick is actually better looking.

The exterior design of the new LaCrosse has a very strong sweep spear line down the side.  The character line goes continuously from the headlights all the way down the side to the tail lights, creating a long and flowing line that helps to give the sides character.  This, along with curves toward the bottom of the doors, keep the car from appearing slab sided.  The front has a new modernized interpretation on the Buick waterfall grille.  Following the current trend, this car has a high belt line and the result is down right good looking.  No yawn inducing smoothed out jelly bean here.  The bland styling from the previous generation LaCrosse has been kicked to the curb for LED tail lights and that bold character line down the side.  With dual exhaust and finishers, the whole outside screams “I have style”.

Everyone that got in the interior commented on how nice the Lexus was.  That is until I told them it was the new Buick.  It took their breath away.  Once you get past that you are in a Buick, you have to stop yourself because suddenly you want to admit you like this Buick.  It is ok, someday it will be the cool thing, and this is the big first step toward that day.  The interior was designed with input from the Chinese division within GM.  Why would they do that you ask?  The answer is because Buick is a smash hit over in China, so they decided to have the market where Buick sells best design the interior.  Lets just say, bravo.  The gauge cluster looks great, probably one of the best in any GM vehicle.  The whole entire dash is covered in soft material which is how it should be.  The bottom, by your knees and where the glove box is, continues to be made of hard plastic.  It does look good, and you will rarely touch it.  The steering wheel both tilts and telescopes to help find the perfect driving position.

The car I had was a top tier CXS model with no additional options other then special paint for $195.  The sticker price was $33,960.  Equipped with an auxiliary jack and a USB port you could listen to your music from your iPhone or iPod through the Harmon Kardon branded sound system which sounded great.  I would even venture to say it rivals the Mark Levinson sound system in the Lexus ES350.  The wheels were 18″ with chrome plating.  I really liked the CXS standard heated steering wheel.

The car comes with three different engines.  The top shelf CXS I had came with a one choice 3.6 liter V6 featuring direct injection putting out 280 hp and 259 lb-ft to the front wheels.  Rated at 17/27 mpg, the car averaged 21.5 mpg with a mix of city/highway driving.  If you step down one trim level to the CXL you can get all wheel drive as a option, but you can not get the 3.6 V6, you have one choice, a 3.0 liter with 255 hp and 217 lb-ft.  The base CX model comes in front wheel drive with the 3.0 V6 standard though a 2.4 liter four cylinder with 182 hp and 172 lb-ft is optional.  I was surprised with how well the torque steer was in check with front wheel drive and the larger 3.6 liter V6.

So it seems all cheers here right?  Buick hit a home run with no flaws.  Well not exactly.  The car uses old goose neck hinges for the trunk which significantly eat into the trunk room.  Though the arms are covered so they can not crush luggage, that does not stop them from eating trunk space in a large way.  Yes the Lexus ES350 uses them too, but that is not an excuse.  Also, the seat tracks in the front have a very open design that, in theory, could easily devour a long evening gown while moving back or forth.  Also, as I have mentioned, I am not a huge fan of this high belt line trend.  Sure I am being nit picky I will admit that, but they did that good of a job.  My biggest complaint is simple.  You can not see the rear end when backing up.  This thing needs a back up camera stat!  The only way to get the back up camera is to have the optional navigation package.  When the back up camera is standard on the GMC Terrain, which has a base price less then this CXS, something is not right.

The new LaCrosse certainly is not your grandpa’s Buick anymore.  This cars main target are the people shopping for a Lexus ES350.  It hits that target while being a better value, having more character, and is overall better looking.  Certainly a few things I mentioned could use tweaking, but overall this is a nice execution on General Motors part.  Buick’s new marketing slogan is “The new class of world class”, and for the first time this brand has a car that is world class.

“Go big or go home.”  This saying was something I learned at a early age as ‘the American way.’ The American way has had many trends, and many of these trends move over to the auto industry.  The winds are changing at our doors again.

1984 Dodge Caravan

In 1984 Dodge introduced the world to the Dodge Caravan.  These were an instant success as they were a better option than driving around in a station wagon.  The concept of a minivan appealed to families hauling the kids with lots of gear.  With decent fuel economy and the ability to haul lots of people and luggage, it is no wonder why the minivan was a hit.  Once the initial fad wore off, the minivan started getting the soccer mom name plate.

1991 Ford Explorer

Once the minivan was no longer the ‘cool’ vehicle to be pulling up to soccer practice in, something had to took its place.  This was the birth of the SUV fad.  Having a vehicle that sat up higher made people feel like they were the king of the road.  The higher seating position and the four wheel drive capability gave people the sense of safety and security.  With poor fuel economy and un-necessary running costs for most people, the SUV was truly a symbol of what Americans thought they needed.

1999 Cadillac Escalade

In 1999, Ford’s premium brand, Lincoln, introduced the Navigator. The Navigator was essentially a rebadged Ford Expedition.  Sales were successful enough that General Motors felt it was necessary to rush something into production that would compete with the Cadillac badge.  General Motors immediately rebadged the GMC Yukon Denali to become what was known as the first generation Escalade.  This is when SUV’s became the status symbol in America.  It was no longer cool to just have a SUV. You needed a large, premium badged SUV.

Now we skip forward to last summer.  Gas prices hit an all time high in the U.S. and people stopped their love affair with SUV’s as quickly as it started.  People started switching the SUV status symbol to hybrids.  It is always amazing to see how short term American’s memories are.  Now that gas prices have gone down significantly from last summers, we are getting back into buying SUV’s.  That said, something else has happened since last year and it is larger then just the auto industry.  The economy has been hit hard and so have people’s pocket books.  This has hurt auto sales across the board. Everything from the Toyota Prius to the Chevrolet Suburban, no one was immune to the down turn.  Sales are starting to pick up again, and people are going back slowly.  The main factor seems to be that people still like SUV’s but they want them more fuel efficient.  The new 2010 Chevrolet Equinox is rated at 32mpg on the highway.  This is very good milage for a crossover SUV since the first SUV’s were averaging 17mpg on the highway.

It seems the tides have turned once again, and people are now in love with SUV’s and good fuel mileage.  The old adage “go big or go home” seems to have turned “go green or go home”.