European Automakers' U.S. Sales Fall as Luxury Buyers Rein In

European automakers' U.S. sales fell 1.2 percent in March, the third consecutive monthly decline, as recession-wary consumers shied away from luxury vehicles.

Sports-car maker Porsche SE had the biggest drop, 25 percent from a year earlier. Sales fell 5.4 percent at Bayerische Motoren Werke AG, the largest seller of luxury autos in the U.S., and 3.7 percent at Daimler AG's Mercedes-Benz. Volkswagen AG's namesake brand rose 13 percent, while its Audi sales slid 0.4 percent.

With record high gasoline prices and consumer sentiment at the lowest in 16 years, industrywide U.S. sales of cars and light trucks dropped 12 percent, according to Bloomberg data. The market is ``gripped by recession fears,'' Porsche said.

Makers of luxury vehicles ``are not completely immune,'' said Tom Libby, an automotive analyst at J.D. Power & Associates in Troy, Michigan. ``It is significant that a high-end brand like Porsche is down by so much.''

The March decline for the 16 European brands, to 97,743 cars and light trucks, came as sales skidded 19 percent at General Motors Corp. and 10 percent at Toyota Motor Corp. The Europeans fell 9.8 percent in January and 4.9 percent in February and were down 3.4 percent for the quarter, according to Autodata Corp.

The March drop at Stuttgart, Germany-based Porsche included a 43 percent plunge for its 911 line of sports cars. Sales of its Cayenne sport-utility vehicle rose 33 percent.

Porsche Chief Executive Officer Wendelin Wiedeking had said he was reducing North American inventory in anticipation of slumping sales.

BMW

BMW sold 27,404 vehicles last month, with a decline of 8.7 percent to 23,115 for the namesake brand and a 17 percent increase to 4,289 for the Mini brand, the Munich-based company said in a statement.

Sales of BMWs have softened in major markets such as California and Florida because of a weakened real estate market, said Tom Purves, chairman of BMW North America, in a March 19 interview in New York. He said the company's U.S. sales are being hurt by short supply, which may continue until midyear.

The Mini brand benefited from its new Clubman model, a slightly larger version of its small sports car.

Volkswagen, Europe's largest automaker, reported sales at its namesake brand of 19,587 vehicles, an increase from 17,355 a year earlier, with gains of 20 percent for the Jetta sedan and 17 percent for the Eos small convertible.

The Wolfsburg, Germany-based automaker is introducing five new models this year and has set a sales goal of 800,000 vehicles in the U.S. by 2018, after reaching 230,600 last year.

Volkswagen's Audi luxury-vehicle division's sales decreased to 7,987 from 8,020. Audi, based in Ingolstadt, Germany, posted declines of 32 percent for the Q7 sport-utility vehicle and 25 percent for the A3 sport compact.

Daimler's Mercedes sales fell to 20,808 from 21,612, the Stuttgart-based company said in a statement. Its E-Class models declined 24 percent. Mercedes reported a 50 percent gain for its entry-level C-Class line.

Daimler also said its Smart USA unit sold 1,734 of its two- seat cars, which went on sale in the U.S. in mid-January.

SOURCE: BLOOMBERG.COM, APRIL 2, 2008

Cars So Hip That It Hurts

By EZRA DYER

TOYOTA’S creation of the Scion brand seemed like a great idea. While Lexus caters to the rich and Toyota sates the masses’ appetite for mainstream transportation, Scion is supposed to tap into a contingent of young buyers with short money and a penchant for the funky. Then (goes the theory) when those Scion buyers eventually get better jobs and have their face tattoos removed, they move up the ladder to Toyota. Or to Lexus.

That’s the general game plan, but in the fifth year of young Scion’s existence, there already seems to be some confusion over the brand’s direction. A caveman could explain the difference between Toyota and Lexus (“Lexus nicer! More expensive!”), yet increasingly it takes someone with a Ph.D. in marketing to explain the difference between Scion and Toyota.

For example, the 2008 Scion xD is a five-door hatchback with a 128-horsepower 1.8-liter 4-cylinder engine and a standard five-speed manual transmission. My test car had a few options including XM Satellite Radio and cost $17,732.

The base 2009 Toyota Matrix is a five-door hatchback with the same engine (albeit with four more horsepower) and a five-speed manual transmission. Add a cold weather package and XM radio, and it retails for $17,608.

The Scion seemingly gives you more more for your money (power windows, power door locks and keyless entry are standard on the xD, optional on the Matrix), while the Toyota is better looking and has rear disc brakes instead of the Scion’s drums. Then again, Scion embraces a no-bargaining dealership policy (like Saturn), while you can haggle on Toyotas.

Driving an xD versus a Matrix doesn’t mark you as antiestablishment any more than wearing an Old Navy sweater instead of one from the Gap.

The xD is pragmatic transportation. It is relatively light (about 2,500 pounds), so the small engine feels perky and frenetic. It gets good mileage (rated 27 m.p.g. city, 33 m.p.g. highway) while offering useful interior space for four people and their belongings. The Pioneer head unit for the stereo looks kind of old school in this age of the artfully integrated automotive media system, but it allows for plenty of expandability through extra amps and subwoofers, and it sounds fine for a car at this price.

But those are all rational attributes. What’s missing is the attitude that was supposed to underpin all Scions — the subtle digs at the Toyota master, the “You don’t understand me, Dad!” vibe.

Whatever the xD’s redeeming qualities, nobody will look at you behind the wheel and assume you’re driving back from an all-night cemetery rave where you set your hair on fire as a performance piece and danced to your signature mashup of jackhammer noise and whale songs. The xD is about as outrageous as a share of Microsoft stock.

And what’s wrong with that? Nothing, per se. But Scion is supposed to be more than a Chevy to Toyota’s Buick. It’s supposed to be the place where Toyota can unleash its creativity, come what may. And these days, that responsibility seems to rest primarily with the xB, now in its larger, Americanized second generation.

I’ll confess: I don’t get it. I don’t understand the appeal of the blocky, willfully ugly xB. But if I don’t understand the attraction, perhaps the xB is right on target, because I don’t have piercings or tattoos. I use proper grammar in text messages. I once attended a Dave Matthews acoustic concert. Frankly, Scion doesn’t want me. The xB is for people who don’t care what anybody thinks, which means fauxhawk-wearing 21-year-olds or grumpy retirees.

The original xB that touched down in California in 2003 was a wee wagon with surprising interior space, thanks to styling heavy on right angles. It had a 1.5-liter 4 with only 108 horsepower, but then it weighed less than 2,500 pounds.

The new one is a behemoth by comparison: about 550 pounds heavier and a foot longer. The sharp edges of the old shape have been buffed and chamfered into something softer and less assertive. There’s a 62 percent bigger engine with 50 more horsepower. The whole car is scaled up to American size, for American roads and American drivers. Toyota spends a lot of money on research, and research undoubtedly told them that Americans wanted a bigger car.

Well, of course. Whoever took part in a focus group and said, “You know, I’d really like less room in my car”?

The price, too, has grown, by $1,770 with an automatic and $1,620 with the manual. That kind of dough isn’t a big deal when you’re buying a Lexus, but $1,770 is a major hit when you’re shopping for a sub-$20,000 car.

•

At least the xB still delivers a lot of bang for the buck. My test car, with the automatic transmission, carried a sticker price of $17,180, and that includes an impressive complement of safety equipment (side-curtain air bags, four-wheel disc brakes, traction and stability control with brake assist) and convenience items — air-conditioning, cruise control, power windows and locks, remote keyless entry. It also had a few options, like alloy wheels, that pushed the price to $20,010. You could get that number back below 20 grand, though, and save yourself some embarrassment by forgoing the $480 TRD sport muffler.

On that front, here’s a rule of thumb for prospective street tuners: When your car has the aerodynamic profile of Joba Chamberlain’s hat, you should not install a sport muffler. The five extra horsepower you might unleash will not justify the added noise and will only increase your humiliation when you’re dusted by a ’94 Chevy Corsica.

Also, save your money and skip the four-speed automatic transmission. It smothers whatever fun might lurk within this package and further hampers an engine that already has its work cut out.

As I said, I don’t get the xB. Perhaps this is supposed to be the Volkswagen bus for a new generation, the counterculture car that develops a cult following and eventually dominates high-school parking lots. But I never saw the Volkswagen bus as anything other than a good source of dune-buggy parts, and I can’t see the xB as the offbeat cool choice for the trend-setting crowd it is trying to capture.

Maybe that’s the operative word: trying. Cool, by my definition, isn’t contrived, and that’s where the xB’s self-conscious quirks — from its strange but not-quite-strange-enough styling to dubious options like cup holders illuminated by L.E.D.’s — run it off the tracks.

Both the xB and xD are marketed to an audience that prizes authenticity; the original Scions were genuinely wacky Japan-market wagons imported to establish the brand.

These new cars, on the other hand, were designed with the American market in mind, but funkiness is something that happens by accident. The xB, in particular, is faster, more spacious, more refined than its predecessor; in most quantifiable ways it’s a better car.

And yet, when you’re behind the wheel, merging into traffic on the lazy wave of torque from that big Camry motor, there’s no way you can imagine your car transposed to the streets of Tokyo. In a globalized car market where Opels are Saturns and Subarus become Saabs, that first xB was a surprise success because it was refreshingly, honestly of a place. A foreign place.

The old xB was like a newly arrived Japanese exchange student who dresses like Max Headroom and pulls live sea urchins out of his lunch bag, blissfully naïve about his lack of assimilation.

The new xB is like the same kid six months later, still unquestionably the product of a different culture, but now self-conscious of that fact and beginning to temper his perceived eccentricities with trips to the Hollister store and the occasional McRib sandwich for lunch.

He’s tailoring his persona, but to what end? Is it better to have a smaller group of fiercely loyal friends, or a wide swath of indifferent acquaintances? Is it worse to be polemic or forgettable? That’s what Scion has to figure out.

SOURCE: NEW YORK TIMES, 3/30/08