Archive for April, 2008

For six previous sets of results, the response rate has been just over 40 percent–much higher than the average survey. So when this month began, the goal was again a response rate of 40 percent.

Response to the initial email was strong, but that to first and second follow-ups was not. So a week ago I feared this would be the first quarter with a response rate below 40 percent. We were a couple percent behind the same point in January.

But response to yesterday’s deadline email was tremendous, and today the response rate passed 40 percent. Thanks, guys.

All that remains is to get those models within a response or two of the minimum to the minimum. This morning there was a record number of such models: 16.

I very much want to avoid a situation where 24 members participate, but the result of their responses cannot be shown to the general public because a number of other members have each decided not to participate. So those on the sidelines have been getting some extra emails.

So far today we’ve gotten four of those 16 to the minimum (for a total of 113 model / model years in the May results). Hopefully more will get there tomorrow.

When I first set up the pricing database, it distinguished only between partial leather and leather.

But the database now includes all non-exotic luxury cars, and manufacturers have been adding more leather to their luxury car interiors. In the last year or so leather-upholstered instrument panels
have become increasingly available in the segment. At a lower price point, first Mercedes and now Cadillac offer models with leatherette upholstery covering the IP–the latter refers to this treatment, sourced from the same company that supplies Mercedes, as “cut and sew.”

It might seem frivolous to upholster an instrument panel, but the interior can feel much more upscale as a result.

In a related vein, alcantara headliners are standard or optional in more and more luxury cars.

So the database has been upgraded to track these features, and (for model years beginning with 2008) leather door panels as well.

In adding the last, I was surprised by how rare leather on the door panels seems to be (if the sources I used are accurate). It seems that the stuff on the doors is often leatherette rather than leather.

Finally, the database will now track (for 2008+ cars) the number of rows covered in leather.

I’d like to get even more specific, and track the grade of leather, but as far as I can tell there’s no standard way to grade leather, and this information simply isn’t available. So this will remain one of those things not adjusted for.

It has irked me for some time that TrueDelta’s price comparison tool does not make finer distinctions in two areas: wheels and upholstery. So a few weeks ago I decided to undertake what I thought would be a minor task, and upgrade the features database to include finer distinctions in these areas and a few additional features that have only recently become common (and so weren’t in the original database).

This turned out to be an extremely time-consuming task that swallowed up a good chunk of my time for a few weeks. But it’s now done, and I can move on to pricing the 2009s.

In the next few blog entries I’ll discuss the upgrades. Today: wheels.

To date there have been essentially two levels of wheels: regular / machined and polished / chrome. Not only was I never comfortable with combining polished wheels and chrome wheels, but there are two types of chrome wheels. Some wheels are actually chrome-plated. Others are regular alloy wheels with a fake chrome plastic face attached, essentially a full-face hubcap that looks like a chrome-plated wheel. In industry parlance, these are “chrome-clad” wheels.

To further complicate matters, GM (and others to come) now offers a spoked steel wheel that uses a plastic cover to make it look very much like an alloy wheel. Most steel wheels do not have spokes, so that they were visible through the holes of any hubcap styled like an alloy wheel. GM refers to these much more convincing simulations as “fascia spoke” steel wheels. TrueDelta will initially refer to them as “alloy-look steel wheels.”

So beginning with the 2008 model year TrueDelta will classify wheels in the following ways:

1. Regular steel (no wheel listed)

2. Chromed steel (rare, on some trucks)

3. Alloy-look steel (spoked steel wheel with plastic cover)

4. Chrome-clad steel wheel (above with a fake chrome on plastic cover)

5. Regular alloy (painted, including those painted to be “ultra-bright”)

6. Machined alloy (alloy wheel with face machined to make it shiny; paint is a clearcoat)

7. Polished alloy (like above, but finely polished to make it almost as shiny as chrome)

8. Chrome-clad alloy (alloy wheel with fake chrome plastic face)

9. Chrome-plated alloy (alloy plated with real chrome)

Still not dinguished: cast alloy vs. forged alloy. Most alloy wheels are cast. They are formed by pouring molten aluminum alloy into a mold. Others are forged, formed by stamping and/or machining them out of a solid block of aluminum alloy. Forging yields a stronger, lighter wheel, but is more expensive. Maybe next time…

When members of TrueDelta’s panel sell an enrolled car and buy a new one, they email me so I can make the change. In recent months, I’ve noted many cases where a large, powerful vehicle was traded for a smaller, more efficient one. And very few cases of the opposite.

It seems that size and power are on the way out, in the face of rising gas prices and a probable economic downturn.

This week leading industry trade journal Automotive News also noted this trend with a front page story, “Downsizing arrives – with a vengeance.” Apparently, Ford executives are calling the current shift in consumer preferences “seismic.”

In other words, it’s not expected to be momentary. The age of the 268-horsepower Toyota Camry may be at an end. Sales of four-cylinder cars are surging, while Chrysler’s HEMI is just so 2006.

The hottest car in TrueDelta’s panel right now? The tiny, three-cylinder Smart ForTwo. The car only recently became available in the United States, yet already nearly 50 are enrolled in the panel. We’ll even have an initial result for the car in May.

The opposite can be seen in the number of Chrysler 300s, Dodge Chargers, and Dodge Magnums enrolled: 75 2005s, 140 2006s (when the Charger and SRT8s arrived), 28 2007s, and only 6 2008s.

Expected to get hurt the most: Detroit auto makers, who over the course of the 1990s and the first few years of this decade relied more and more on large trucks for sales and profits.

I performed some research for my Ph.D. inside GM back in 1996 and 1997. Back then, and probably still today, GM spoke of having a “product portfolio.” I suggested that they manage this portfolio the same as they would a stock portfolio, and diversify. By having a broad range of products and the ability to flexibly shift production among them, they wouldn’t always be one step behind the market. Instead, wherever the market shifted to, they’d already be there.

But this isn’t what they did. And so, once again, they–along with Ford and Chrysler–are a step or two behind.

I’ve uploaded incentive information for April, and at nearly every mainstream make rebates are higher and special interest rates are lower. General Motors is an exception–widespread bonus cash went away–but as in many previous months they’ll probably load on the bonus cash in the latter half of the month.

I did come across one curious exception. The rebate on the Toyota Yaris was reduced (in the Chicago region at least, the one I post incentives for) from $500 to $100. A $100 rebate? On a car? Surely they can’t be serious. Maybe they left off a zero?

From time to time someone will suggest to me that TrueDelta’s results might be distorted by the popularity of vehicle modifications–mods–among forum members. After all, many people learn about TrueDelta’s research through my forum posts.

In response, I’ve been planning to ask panel members about how much they’ve modified their cars, and adjust the analysis accordingly. The resulting questions were added to the survey this month.

Anyone care to venture a guess as to how common yesses will be to each of these?