TrueDelta

Nissan launched it’s 480-horsepower GT-R supercar with a price of $69,850 plus $625 destination. A lot for a Nissan, but even in the current economy demand has been very strong–most of the 2009s have already been spoken for.

Sales are down and raw materials costs are up for all major automakers. So Nissan needs to find a few extra bucks anywhere it can. With the GT-R, this means a revised MSRP of $76,840, place an even $1,000 for destination.

GT-Rs have been changing hands for even more than the revised price, so I wouldn’t be surprised if additional price increases follow. But, at over $7,000, this one is already the largest I’ve come across.

Automotive News reports this morning that General Motors is “postponing nearly all of its product development spending in 2009 and 2010″ to avoid running out of cash next year.

Among many depressing stories to come out of Detroit lately, this is the most depressing yet. I remember the last time they took such a drastic step, in the early 1990s. It took over a decade to get product development back on track. In the interim all of General Motors’ products were at least a half-generation behind the competition.

Remember the 1995 Aurora? Stylistically, it was way ahead of its time even when introduced. Well, it was supposed to be a 1993, and would have been even farther ahead then. Same for everything else in the 1990s. The 1997 Corvette was also originally planned for 1993.

Beyond the impact on products, stopping product development programs is hugely expensive in the long-run. Much of the work that has already been done will now have to be redone, because market conditions will change in the interim. And there’s always a huge cost to starting anything that involves hundreds of people. So you don’t want to have to do it more than once if you can avoid it.

They said this would never happen again, that the long-term effects were so pervasive that just about any other steps should be taken first.

One very confusing bit: aren’t the federal loans supposed to be for new product development? If everything is stopped, where is that money going?

One thing I always gave GM vice chairman Lutz credit for was maintaining Chrysler’s product development spending through the early 1990s, when that soon to be dissolved company was last on the brink and he was second-in-command there. Not this time, apparently.

Since at least the 1980s we’ve heard about how American cars lag on “fit and finish.” Namely, that the paint often doesn’t look as flawless, the interior plastics look cheaper, and the various gaps aren’t as tight and precise as those in the best foreign models.

In recent years, the domestics have caught up, at least in specific cases. But why should it matter, anyway, how well the hood aligns with the fender, or whether the parting lines on interior plastics (where the halves of the mold came together) are smooth and nearly invisible? There’s a point for those interested in the finest craftsmanship as an end in itself.

But what about those merely seeking a reliable car? What do these things have to do with reliability? A poorly aligned hood isn’t more likely to require replacement than a perfectly aligned one.

Well, the problem is that the things that directly affect long-term durability aren’t visible to the naked eye. Panel gaps and such are the only clues we have unless we disassembled the car. But if the car company didn’t put in the effort necessary to make the things we can see perfect, why would they have put in the effort with the things we can’t see?

So it makes more than a little sense to infer subpar reliability from fit and finish issues. If panel fits and interior trim are shoddy, then the rest of the car’s engineering was also probably less than thorough.

The opposite is less likely to be true, though. Even if a car company puts in the effort to get the fit and finish right, they still might have cut corners on the things we can’t see. After all, it’s human nature to put a bit more effort into things others can see.

Every so often in browsing auto forums I come across a list of problems someone has had with their car, after which the owner concludes, “but these are all minor. I haven’t had any major problems.”

Or they’ll simply post, “I haven’t had any major problems with the car.”

Or, in critiquing reliability information from TrueDelta and elsewhere: “But they count a power window regulator the same as an automatic transmission failure.”

TrueDelta doesn’t simply ask members to report only “problems you considered serious,” as others do, because definitions of what counts as “serious” vary too much. Some would report a rattle, others wouldn’t report anything that didn’t keep them from getting to work. Instead, TrueDelta’s survey includes some questions that will enable us to separate minor problems from major ones as objectively as possible. 

It turns out that, with cars during the warranty period, nearly all problems these days are minor, if by “major” you mean something that renders the car unsafe or undriveable, or that costs over $1,000 to fix.  So, if you’re only concerned about avoiding such major problems during the first 50,000 miles, even the first 100,000 miles, then buy just about anything.

But some people want to avoid anything that requires that they do without their car for a day or two while the dealer fixes it. Even these people should look beyond the usual reliability information to the repair rates reported by TrueDelta. Usually the differences between one model and another are under a repair trip per year. But not always.

We’ve got the system in place to provide the most up-to-date, most ”real world” vehicle reliability information. Now we just need more participants. The 35,700 vehicles signed up so far are a great start. But 100,000 would be better. How to get there? Well, media coverage would help. But it has proved surprisingly difficult to obtain this coverage.

A major source of this difficulty: much of the media believes that the best possible mousetrap has already been invented as far as vehicle reliability research is concerned. So there’s no point–and no story–in what TrueDelta has achieved. As much as I’d like to “run my own race,” this belief must be directly challenged if we’re to grow like we need to grow.

Perhaps some in the media are aware that Consumer Reports could do a better job. But this has been overridden by the integrity of that organization. That Consumer Reports doesn’t accept advertising apparently places them above critique. I also hear that Consumer Reports simply has so many survey responses–they emphasize this point themselves–and they’ve been around for so long. But being big and old hasn’t placed General Motors and Ford above critique. So why should these be the end all with regard to Consumer Reports?

Consumer Reports’ refusal of advertising and other such entanglements is admirable. As is their independence and integrity. For similar reasons, TrueDelta solicits no ads from anyone with a stake in our results. (We have no control over the ads supplied by Google, and no direct contact with those advertisers.)

But should this refusal to accept advertising be everything? Shouldn’t the timliness and transparency of the information also matter? I’ve never called Consumer Reports’ integrity into question. Instead, I’ve focused on two major shortcomings that led me to develop a better research process, because I personally wanted better information.

The result: TrueDelta posts actual repair rates, not just dots, to make the size of the differences between clear. And it posts this information as much as 14 months sooner than Consumer Reports.

For example, we had initial reliability information on the Jaguar XF in August, and will have a full result in November (with a preview already available for members). Consumer Reports won’t have a result for the car until October 2009.

Consumer Reports recent release of its latest results was covered by hundreds of media outlets. None of the stories I’ve seen have stepped outside the bounds set by Consumer Reports’ press release. None have noted the age of the data on which the results are based or that only relative ratings are provided.

Many journalists enjoy nothing more than having a story first, to have a “scoop.” For some, if they’re a day late, they might as well not publish the story at all.

So I’ve often wondered why TrueDelta doesn’t receive recognition for being not just a day or two ahead of any other source of vehicle reliability information, but months ahead, even a year ahead. The message: if Consumer Reports doesn’t have a result yet, then car buyers should simply wait until they do, or simply do without reliability information when buying a car.

Does the media even help Consumer Reports in the long run by not taking a close look at its research and reporting process, and by ignoring alternatives? History makes it quite clear what happens to an organization when it is left uncritiqued and unchallenged. The outcome is rarely good for organization, much less those it serves.

At some point, we’ll get large enough that at least some media coverage will follow. Until then, TrueDelta’s growth depends on word-of-mouth. Anyone who wants the better, quicker vehicle reliability information TrueDelta’s process provides: we’re counting on you to help make it happen.

A few days ago someone emailed me, saying that, as far as they could tell, TrueDelta did not offer anything that many other auto sites did not already offer. So what’s the point?

This perception baffles me, since the information TrueDelta offers is unlike that available anywhere else. Yet it is also quite common. So we clearly have a major disconnect on our hands.

Maybe it will help to provide a brief list of how what we do is different–and better–than the content of any other auto site.

Vehicle Reliability Research

1. Actual repair rates posted, not just dots. So it’s clear how often a car is likely to require a repair (usually less often than people think), and how much this differs from other cars (again, usually less than people think).

2. Results updated promptly, four times a year. This permits rapid results for new models, and information that is always up-to-date. The “other guys” are between five and 17 months behind. Do you want to know how reliable a car was a year ago, when it was a year newer, or how reliable it has been recently?

Real-World Fuel Economy

1. Includes information on driving style and driving conditions, with both clearly defined in real-world terms. No other fuel economy site provides this essential information.

2. Results can be filtered by the above variables, to find those that match your own driving.

“Why (Not) This Car?” Reviews

1. Focuses on what many people want to learn from an auto review: the reasons to buy one car, and not another.

2. Owner comments focused on specific aspects of the car, and clearly structured so no digging required.

Vehicle Prices and Price Comparisons

1. No need to select trim levels (LX, GT, Limited, etc.) or option packages. These are selected automatically based on feature selections. So people who know very little about a car can quickly configure it.

2. Can configure two cars based on a single set of feature selections, for quick, thorough price and feature comparisons that no one else offers.

3. Comparisons are both before and after adjusting for remaining feature differences. No one else adjusts for remaining feature differences.

4. Converts all figures in the results table to monthly payments, almost instantly.

And this is just the beginning. More on the way.

The challenge, clearly, is how to better communicate these advantages. It’s not easy, since the general perception is that a site like Edmunds or cars.com already includes EVERYTHING, so any other auto site is necessarily redundant. The general perception is incorrect, but very hard to break through.

Any suggestions?

It hasn’t been easy gathering together enough car owners to get TrueDelta’s vehicle reliability research off the ground. For many models, a forum dedicated to the car has been essential in getting the word out.

Unfortunately, truly great automotive forums are increasingly rare. As Greg Childs of NICOClub, a forum for Nissan and Infiniti owners, notes in a recent editorial, the landscape of automotive forums is changing. An increasing number of forums that were started by enthusiasts are being bought out by a couple of profit-minded organizations. As a result, the quality of forums has suffered.

We’ve run up against this ourselves. The dozens of forums that have been active in getting the word out (list here — please support them) are independent and focused on creating a fun, informative community (or at least they were when they started lending a hand).

Those that are corporate-owned much more often want us to show them the money. Which is their right, but since we don’t charge for access to the results there’s no money to show. In the future there might be a little to share, after we open up the alternative of paying for access for those who refuse to participate in the surveys. But there probably won’t be much. We’ll continue to focus on providing the most useful information possible, so revenue will remain secondary. (If TrueDelta were owned and operated by a large corporation, and even if it simply had outside investors, this probably wouldn’t be possible.)

When forums have been unwilling to lend a hand, or even let me post about the research, our information on the car models the cover is not as comprehensive or as good as it could be. Who suffers? Car owners.

There are exceptions on both sides. AudiWorld, an Audi forum, starting helping out while still independent. They’ve since been purchased by Internet Brands (parent of CarsDirect). But Jason Teller, the former owner, has remained active, and AudiWorld has remained both an excellent resource for Audi owners and very helpful to TrueDelta.

Of course, the initial barriers to starting a new car forum are low. (Though, as Greg notes, creating a good, active forum poses major challenges.) So if a corporation buys a forum and runs it into the ground, anyone who wants a better forum can start one. If you do, and would like our help getting the word out, please contact us.

Well, the pricing database now has its first 2010 model, the Chevrolet Camaro. The first Camaros won’t reach dealers until next March, but dealers started taking orders today. The 300-horsepower V6 starts just under $23,000 (with “heritage steel” wheels), and the 422-horsepower SS V8–with standard 20-inch higher performance tires–starts just under $31,000.

Both prices are surprisingly competitive. The Camaro V6 lists for about $1,300 less than the Dodge Challenger V6 when both are similarly equipped. Adjusting for remaining feature differences reduces the price difference to about $700. And the Camaro’s V6 kicks out another 50 horsepower.  

The Camaro V6 costs about $1,600 more than the 210-horsepower Mustang V6 when both are similarly equipped. Adjusting for remaining feature differences–such as the Camaro’s standard side curtain airbags and stability control–makes the two nearly dead even. Yet the Camaro V6 has as much power as the Mustang V8, an independent rear suspension, and significantly larger rims.

The V8 (which will arrive after the V6) comes in about $2,000 below the 376-horsepower Dodge Challenger R/T with six-speed manual and 20-inch wheels, despite being nearly as powerful as the much pricier SRT8. Compared to the 300-horsepower Ford Mustang GT, with 18-inch wheels and an antiquated live axle rear suspension, the Camaro SS lists for about $3,000 more, but only about $1,000 more after adjusting for feature differences.

So if you’ve been wanting a new Camaro, the list price shouldn’t get in your way.

For a couple of years now I’ve contributed car reviews to The Truth About Cars. But I’ve never penned one of that site’s signature “General Motors Death Watch” or “Ford Death Watch” pieces, partly because I felt (or at least hoped) that the domestic manufacturers would muddle through without declaring bankruptcy…somehow.

This now appears unlikely. General Motors and Ford were already struggling when both SUV sales and the economy were fairly strong. When truck sales took a hit this year, their revenue plunged. Looking at just the second quarter, GM’s revenue in North America fell from $29.7 billion in 2007 to $19.8 billion in 2008. A gain of about two billion outside North America only partially compensated.

Yes, both General Motors and Ford have more efficient, better-designed cars coming. And GM also has the serial hybrid Chevrolet Volt on the way. But even if these sell well, they won’t be nearly as profitable as the SUVs were. GM will probably lose money on every Volt sold for at least the first few years.

Even if GM could somehow adjust its cost structure to such a drop in revenue, and larger drop is now clearly coming given the financial crisis, and not just in North America. The credit rating agencies recognize this, and have placed GM on “credit watch,” with yet another credit rating downgrade likely. In reaction, the price of GM stock has fallen below $5, it’s lowest point since the 1929 market crash. 

Ford is in similar shape, and its stock has fallen to $2, its lowest point since the early 1980s.

Now, this does not mean that General Motors and Ford are going away. Instead, they’ll likely use bankruptcy to restructure their debt and rewrite contacts with creditors, suppliers, and the unions. In a few years they’d emerge from the bankruptcy process as smaller, hopefully leaner companies.

What does this mean for you? If you own stock in one of these companies, you’ll likely lose your investment. If you own part of their debt, you’ll likely lose part of your investment.

And if you own one of their cars, the resale value might suffer for as long as they’re in the bankruptcy process. Resale values would suffer most if the car’s brand is discontinued. With GM, Chevrolet and Cadillac will certainly survive, while with Ford neither the Ford brand nor Lincoln is likely to go away.

One common misconception: that warranties on their cars would not be honored if General Motors or Ford declared bankruptcy. Unless these companies simply folded up shop and went away–which would make no sense–then warranties will continue to be honored. Since this is a key reason resale values would suffer, then that also doesn’t make sense. But it would happen anyway.

No word has been more abused by the auto industry than “Limited.”

The implication–that the manufacturer will be producing only a small, fixed number of vehicles, so it’s special–has rarely if ever actually been the case.

Instead, production is limited to the number they can sell. And, in the case of the Chrysler Aspen Limited, which inspired this post, perhaps a few thousand more than they can sell.

So why keep abusing using the term? Apparently it still has an allure for many car buyers. More often than not the “Limited” is at least an upper-level trim. The Aspen is an exception: until the Hybrid was introduced, the Limited was the only trim level.

Some cars are produced in strictly limited numbers. But in these cases you’ll usually have a plaque attesting that your car is, say, ”579 out of 1,500.” Or at least a piece of paper.

Why does this matter? It’s just a word, after all. But if a manufacturer shows so little regard for a word, then what else are they disregarding? If their use of this word is so obviously false, then which of their claims should be believed?