Chrysler disbands ENVI electric car group

At last year’s LA and Detroit auto show, back when it was owned by Cerberus Capital Management, Chrysler’s concept cars were all electric, including a battery-powered Town & Country minivan, 200C sedan, Dodge sports car, and Jeep Patriot. The message was clear: electric cars would were to play a key role in the company’s future.
 
Now that the company has been bought by Fiat, it has announced new product plans that  focus on improving its conventional cars. (See "Chrysler’s business plan: The Fiat platforms.") Consumer Reports was not able to recommend a single Chrysler model from 2007 or 2008. For 2009, we were finally able to recommend the redesigned Dodge Ram pickup. (See “Detroit report cards.”)
 
Now Chrysler has emphasized its fresh product plans by disbanding its electric vehicle division, ENVI (short for environmental), announced last year. Chrysler says its electric car development will now be rolled into its standard product development, according to Reuters.

In Chrysler’s future product plan presentation earlier this month, company Chairman Sergio Marchionne said electric cars are expected to account for less than two percent of Chrysler’s sales by 2014, far less than the 300,000 envisioned under ENVI.
 
—Eric Evarts

Chrysler’s business plan: The Fiat platforms

Fiat-based platforms will have a big influence on Chrysler’s small and midsized products, based on a multi-hour presentation given today to the industry, media, and anyone else who wanted to monitor. Chrysler currently has no small cars, but by 2014, they will have three models based on two Fiat platforms, one being the 500.
 
The biggest platform shift is in the larger segments. According to Chrysler, this now has eight different platforms: 

• Wrangler
• PT Cruiser
• Compass/Caliber/Patriot
• Liberty/Nitro
• Sebring/Avenger
• Journey
• Dakota
• Viper

Click the links above for model overview pages featuring ratings and road tests, available to online subscribers.

By 2014, nine different products will stem from just two platforms – and one of those platforms is exclusive to the Wrangler. The Wrangler’s product line and reach will be extended, with major product modifications in both 2010 and 2011. Wranglers have an iconic image, they sell well, and their low-tech design is likely provides a handsome profit. While they perform well off-road, Wrangler’s don’t perform well on the road or in CR’s Ratings; the Wrangler is currently our lowest-scoring vehicle.

Wrangler aside, this means that eight products, covering vital products like midsized sedans and small and crossover SUVs, will all come from one Fiat Group platform. (Given that Dodge said that the Viper will be redesigned, perhaps this slide shown here from the presentation is short a platform for that low-volume street rocket.) While the decision isn’t finalized, the midsized Dakota may move to a unibody platform, like the Honda Ridgeline.
 
Moving to larger products, things remain pretty much status quo. Those platforms will continue to be sourced from Chrysler, with a large sedan platform (300, Charger, Challenger), a minivan platform, and another midsized SUV platform (Grand Cherokee, Durango). The Ram brand keeps its own platform—no surprise.
 
The first domestic-badged Fiat-based product is expected in 2012, a compact sedan sold by Dodge. That year will also bring Ram-badged large and small commercial vans, filling the big hole left from the Mercedes/Freightliner-shared Sprinter.
 
—Tom Mutchler

Should I buy a Saturn car?

General Motors stopped building Saturn cars and SUVs immediately following the announcement that Penske Automotive Group would not to buy the rights to the brand. GM now plans to sell off the remaining 12,000 Saturns by the end of January 2010, shutting down the brand, much like it is with Pontiac right now. Saturn dealers are watching the calendar closely, and it is a safe bet that there will be significant incentives offered on these last vehicles. But should you purchase a Saturn now? In a word, no.
 
There are five Saturn models for 2009, but only the Aura has both performed well enough and been reliable enough to earn our Recommendation. (See all Recommended cars.)
 
Beyond our assessment of the product line, buying from a retiring brand carries certain inherent risks. For instance, upfront savings will most assuredly be offset by significant depreciation. (If you typically drive your cars into the ground, this may not matter much.) It is not uncommon to see GM vehicles carry $1,500 or more in rebates. How much more will they put on the hood to move the Saturns than the nearby Chevrolets? Another one to two thousand? It is very safe to assume the same amount is cut from the eventual trade-in value right from the start. We saw this with Oldsmobile and are witnessing it with Pontiac. Same will hold true for Saturn; it isn’t that different of a car company in the end.
 
General Motors has said it will honor Saturn warranty claims, maintenance, and repair needs at other, surviving GM franchises. However, best corporate intentions won’t make those dealerships more convenient, better stocked with parts, or better trained.
 
As we found in our investigations during the so-called auto crisis, while dealerships may perform work on models from other brands, there are practical limitations to parts inventory and technician training. Simple work like a routine service call is not a problem. For example, a Chevrolet mechanic who works on a Chevy Traverse or Malibu will find a Saturn Outlook or Aura familiar, they may not have the experience to tackle a problem with the Opel-sourced Astra or the low-volume Sky roadster. In such cases, even a warranty request would be deferred to another dealership.
 
Would you be able to fix a Saturn for years to come? Absolutely. It just may not be as convenient or inexpensive as in years past. What once may have been a quick service visit before work may require a day off work to travel to a neighboring town or county. And the likelihood to needing a repair is higher than average with the Outlook, Sky, and Vue, according to our reliability surveys.
 
In theory, parts will remain available, yet with the supplier network struggling during the recession and many vendors closing or going through bankruptcy proceedings, there are no guaranties. Parts that were once stocked by your local Saturn dealership may become scarce. Despite GM assurances about parts availability, remember that just last month, we all thought Saturn would continue for many years to come. Hard to say definitively what a Saturn ownership experience will be like in the next decade.
 
As always, consumers should enter the buying process with eyes wide open. With Saturn, there are simply better alternatives that are more reliable, have lower owner costs, and do not carry undue risks.
 
—Jeff Bartlett
 
Related:
Unplugged: Saturn dealerships to close in four months
No Penske deal means end of the road for Saturn

Unplugged: Saturn dealerships to close in four months

Within hours after the collapse of the agreement to sell Saturn last week, General Motors built its last Saturn. GM says it plans to sell the remaining 12,000 cars on dealers’ lots by the end of January 2010. (Read “No Penske deal means end of the road for Saturn.”)

Saturn has been known for its customer-friendly dealerships, but when they sell their final cars, it will mark the end of the vaunted Saturn dealer network, following Pontiac into the history books.
 
General Motors has said that other GM franchises will be able to service Saturns and will honor Saturn warranties. But some Saturn owners have reported problems with other GM-brand dealerships not having parts or training to work on Saturns and not having access to Saturn’s computer system for warranty repairs.
 
If it’s going to sell 12,000 cars in four months, GM will likely offer sizeable incentives to buy them. But of the five Saturn models for 2009, only the Aura XR V6 performed well enough and was reliable enough to earn our Recommendation.
 
Our earlier concerns about what the future might hold for those buying a vehicle from a discontinued brand remain. (Read: “Should you buy a Hummer, Saab, or Saturn?”) Even with significant incentives, buying a Saturn now carries additional risks and there are simply better alternatives from other, more stable brands, including those within the remaining GM portfolio.
 
—Eric Evarts

No Penske deal means end of the road for Saturn

General Motors has announced that it will wind down its Saturn division, rather than sell it. GM had been in negotiations to sell Saturn to the Penske Automotive Group, a dealer conglomerate run by auto racing magnate Roger Penske.
 
The move reportedly comes after Penske was unable to secure new products beyond the proposed contract with GM to continue building Saturn cars through 2011.
 
The news may be a blow to current Saturn owners who now may face the closure of all Saturn dealerships and will have to find other GM dealers to service existing vehicles.
 
The breakdown of this deal marks the latest failure of the dedicated contract manufacturing business model in car sales. Since several large dealership groups have incorporated as public companies over the past dozen years, several of these dealer bodies have looked for an automaker with excess factory capacity to build cars for it. So far, none have borne fruit.

Among the Saturn Astra, Aura, Outlook, Sky, and Vue, only the Aura XR V6 meets Consumer Reports' standards to be recommended.

Sadly, Saturn is sharing its fate with Pontiac. We will watch with interest to see what the future holds for Hummer and Saab.

—Eric Evarts

Chrysler changes stance, it will accept product liability claims

In a reversal of its earlier position, Chrysler Group LLC has announced it will accept product liability claims for vehicles manufactured before Italian automaker Fiat took a controlling interest in the new company June 10. (See "Chrysler out of bankruptcy.")
 
The move has the potential to affect owners of millions of vehicles built before Chrysler filed for bankruptcy on April 30, 2009 and idled its factories.
 
As part of the bankruptcy agreement that led to formation of the new company, Chrysler Group LLC was absolved of liability for defects in vehicles built by the “old” Chrysler that might have led to accidents or injuries.
 
Company officials say the reason for the change is they now feel the business is more viable than originally thought, and that they want the public to feel more confident about buying their vehicles. (Read: "Chrysler bankruptcy leaves injured consumers without recourse" and "Chrysler bankruptcy affecting lemon-law payments.")

The company also says the new arrangement is more consistent with policy of General Motors following their bankruptcy. (Read: "What post-bankruptcy GM means to you.") 

Learn more about the auto crisis in our special guide.

 
—Jim Travers

No Nissans coming to Chrysler’s rescue

Chrysler’s deal with Nissan to share development of upcoming models has been canceled. The partnership would have provided Chrysler with its first small car since becoming independent from German conglomerate Daimler in 2007. That car was supposed to be based on Nissan’s relatively pleasant small Versa, itself based on a Renault platform. In exchange, Chrysler would have produced a full-sized pickup truck for Nissan based on the Dodge Ram, which likely would have replaced the aging Titan.
 
The car could have been a shot in the arm for the ailing U.S. automaker, which today has not a single model reliable enough and with good enough performance for us to recommend. Without a version of the Versa to fill the gap, Chrysler will have to wait for a Fiat-based design in order to offer a small car larger than the tiny Fiat 500. Fiat is reportedly working on other small and midsized vehicles that promise to further revitalize and balance Chrysler’s truck-heavy product portfolio.
 
With a dated lineup, Chrysler will face marketplace challenges until this happens. The next new models in their pipeline are the Grand Cherokee SUV and the updated Chrysler 300/Dodge Charger large sedans.  The disbanded alliance with Nissan means that new small cars from Chrysler will have a longer wait.
 
—Eric Evarts

Cash for clunkers: The final results

Final numbers are in for the so-called “cash for clunkers” program, and by most measures, the program looks like a roaring success:
 

• 690,114 cars were purchased under the program; two-thirds of those bought by consumers were passenger cars

• The average rebate was $4,170.18, for a total of $2.878 billion. The rest of the $3 billion budget will cover administrative expenses.

• The average new car bought with the rebates got 9.2 mpg more than the average clunker traded in, for an annual average fuel savings per driver of 277 gallons of fuel or about $720.

• The Department of Transportation credits the program with saving 42,000 jobs in the auto industry and says it expects those jobs will be sustainable, because automakers have ramped up production to meet the clunkers demand.

• Notably, 690,114 older cars were taken off the road, including 450,778 SUVs and other light trucks that likely lacked electronic stability control and other modern safety equipment. The National Highway Traffic Safety Administration has estimated that making ESC standard on new cars would save as many as 10,000 lives a year. This program has taken a significant step toward that goal.

 
The program closed to new transactions Monday night, and dealers had until last night to enter all their paperwork for reimbursement. For more the effects of the cash for clunkers program, check out our earlier blog.

Have you traded in a clunker? Share your experience in our cash for clunkers forum.

Also see "Cash for clunkers: Top 10 most popular new cars and trade ins."

—Eric Evarts

Updated 8/27/09

Cash for clunkers: Who is getting a bigger piece of the sales pie?

The Car Allowance Rebate System (CARS) program created a sales frenzy fueled by $3 billion in federally funded incentives, stimulating the economy from the local dealership to the factory. But which automakers benefited most?

Figures released yesterday from the Department of Transportation, based on 635,186 sales, show Toyota was the clear winner. With a broad product portfolio of fuel-efficient models, including the Scion vehicles, and a large dealer network, Toyota was poised to benefit from the so-called “cash for clunkers” program. General Motors is close behind, trailed by Ford. Chrysler trailed its domestic competitors by a significant margin, limited by its diminished dealer body and few product offerings that met the fuel economy requirements for the CARS program.

Cash for clunkers new-car sales

19.2% Toyota
17.7% General Motors
15.0% Ford    
13.2% Honda    
8.3% Chrysler
7.8% Nissan   
6.8% Hyundai
3.8% Kia
2.4% Subaru  
2.3% Mazda   
1.9% Volkswagen   
0.5% Suzuki   
0.4% Mitsubishi  
0.4% Mini  
0.2% Smart
0.1% Volvo    
<0.1% All other

Have you traded in a clunker? Share your experience in our cash for clunkers forum.

Also see "Cash for clunkers: Top 10 most popular new cars and trade ins."

—Jeff Bartlett

Cash for clunkers: The end is near – 8 pm EST

Attention last-minute shoppers: The opportunity window for taking advantage of the Car Allowance Rebate System (CARS) program slams shut tonight at 8 pm EST.

Due to intense interest, the allocated $3 billion dollars in federal funds are estimated to be drained before this evening’s primetime television programming begins. Based on numbers previously released by the National Highway Safety Administration (NHTSA), about 700,000 new car sales may be directly credited to the program.

In addition to stimulating the auto industry, CARS has helped reduce fuel consumption, with an early NHTSA report showing an average 9.6 mpg improvement made between the clunker and new vehicle. If that figure holds true, the 700,000 new vehicles could save 875 million gallons per year, assuming 12,000 annual miles driven. For individuals, this would mean about $3,300 a year saved in fuel cost. (Of course, this may be offset by increased insurance premiums and likely finance charges.)

While buyers officially have until 8 p.m. (Eastern) tonight, to consummate a deal, it is likely already too late for many deals. The New York State Auto Dealers Association reports that about half of its dealers have already pulled out of the program. And even among dealers still participating, the inventory levels and choices of qualifying cars to buy are reported to be running low.

If cash for clunkers adds up for you, don’t delay. And if you’re not, watch this space for final results of the cash-for-clunkers program.

For further information, visit our cash for clunkers resource center, where you’ll find FAQs, recommended cars lists, and the latest CARS news.

Have you traded in a clunker? Share your experience in our cash for clunkers forum

—Jeff Bartlett