TrueDelta

Operating TrueDelta, it would be in my interest to assert that Consumer Reports’ results are incorrect. But I’ve never made this argument, nor do I believe that their results are generally incorrect. Instead, I’ve repeatedly found that people’s interpretations of Consumer Reports’ results are often incorrect. A current example could have serious consquences…

In a recent Detroit Free Press article, a leading automotive journalist writes that Chrysler’s “dismal showing” in Consumer Reports’ latest reliability ratings “raises serious questions about Cerberus’ management of the automaker it acquired in 2007.” An industry consultant concurs, wondering what Chrysler gained from all of the changes it claims to have made last year to improve quality.

Both have misread Consumer Reports’ results.

It is true that Chrysler does poorly in Consumer Reports’ latest results, and worse than it did in the previous set of results. But what both the journalist and the consultant don’t realize is that the results are based on a survey conducted nearly a year ago, and are no different than the reliability results Consumer Reports first released last Fall.

Consequently, any improvements due to Cerberus’ management would not show up in these results, but would instead show up in the next set of results, in October. Note that there isn’t a single 2009 Chrysler product in the current results, and the 2008s were introduced before Cerberus could have had any impact.

The likely reason for this misperception: Consumer Reports publicizes these results as “new,” even though the reliability data on which they are based were mostly collected in April 2008.

Normally this long lag between the time Consumer Reports collects its data and the release of the Annual Auto Issue doesn’t have huge consequences. It simply results in people buying cars without knowing how these cars have been performing for the last year or so. But in Chrysler’s case, this misperception could provide fatal. These people won’t be the only ones to reach these conclusions after reading Consumer Reports’ latest press release, not by a long shot. Washington might do the same.

Unjustly so? This would depend on whether or not Cerberus has improved Chrysler’s product reliability. With prompt updates four times a year, TrueDelta’s research process could answer this question–except that few members have been buying 2009 Chryslers. Many dealers probably still have 2008s on their lots.

Even so, we do have results for the 2009 Dodge Journey, which happens to be the only new product introduced since Cerberus started making changes.

So, how is the Dodge Journey faring? Not well, with a reported repair rate of 136 repair trips per 100 cars per year, about 2.5 times the average.

This provides some evidence that Cerberus’ changes aren’t working. But this evidence is far from conclusive. The Journey was introduced just a few months after Cerberus took over. And it’s just one model. In other words, even with the most up-to-date car reliability data it’s probably too soon to render a verdict on Cerberus’ attempts to improve Chrysler’s product reliability.

We’ve been asked why it matters that TrueDelta’s car reliability information is, on average, over nine months ahead of the information provided by other sources. The plight of the domestic auto industry provides the most significant answer yet. These companies are fighting for their lives. They continue to have trouble selling cars because of lingering perceptions, sometimes well-founded, more often not, that domestic cars are unreliable. If these companies are making improvements in the reliability of their products, getting awareness of this improvement to the public up to fourteen months months earlier could make the difference between surviving, and not surviving.

While these companies don’t deserve to survive indefinitely simply because it would be costly in the short run to have them fail, they do deserve to have their products evaluated based on the most current information possible. TrueDelta’s Car Reliability Survey is uniquely designed to provide this information.

General Motors recently announced that it had disbanded its High Performance Vehicle Operations (HPVO) team. This is more of the same thinking that has essentially bankrupted them. The thinking: the government wants GM to focus on fuel efficiency, not performance, rendering HPVO a political liability. Disbanding HPVO is flawed on two levels.

First off, gas is back under $2/gallon, and even if it wasn’t many of HPVO’s products were reasonably fuel efficient. The 260-horsepower Cobalt SS was rated for 22 MPG city, 30 MPG highway. Supposedly, the first order of business is making GM profitable. Well, killing profitable products in pursuit of a greener image won’t help achieve this goal.

But even if there was no longer a market for high-performance vehicles, disbanding this team was a mistake. What many people outside and (especially)inside GM fail to realize is that interpersonal relationships are just as necessary, and harder to develop, than individual talent for developing great cars. I wrote a Ph.D. thesis on this topic. Why? Because talent can only realize its potential when other people recognize this talent, and listen to it. Without great teams, any talent that is present tends to get frustrated.

Judging from its products, HPVO was an effective team. No need for high-performance cars at the moment? Then have this team work on something that is needed. Don’t disband it.

Over at TheTruthAboutCars.com, Steven Lang has posted an interesting analysis based on the percentage of trade-ins with over 150,000 miles on the clock. The assumption: the higher the percentage of trades with so many miles, the more durable the model.

A rough analysis, to be sure, but it does mean something that Hondas and Toyotas seem more likely to last so long. It doesn’t hurt these the brands retain their value better as very old cars, so it takes a more expensive problem to kill them. But how much is this a cause, and how much an effect?

On the flip side, a member reported today that he had junked a 2001 Chrysler minivan with 98,000 miles because it had problems that would cost too much to repair.

What we really want to know, of course, is how long a given car is likely to last, and perhaps what problem is most likely to finally kill it. Going further, perhaps also whether better maintenance would have extended the life of the car.

Here at TrueDelta, most of the cars in the panel are too young to answer this question. But an increasing number are older, and we’re getting to the point where this information might be provided.

So, look for some mortality stats in the future.

As it stands, TrueDelta’s Gas Mileage Survey goes well beyond other such surveys to capture key information about how and where a car is driven. But it could be better still.

Under consideration: questions about fuel type (percent ethanol, biofuel), roof racks, and the date of the fillup. Maybe also questions on mods, so cars with heavy mods can be included. In all cases, these questions would be optional, because the survey is already pushing the length limit for many participants.

So, any comments or suggestions? Would you like to see something added or done differently?

Car sales are off by over 40 percent, and for some car models there are bound to be too many 2008s still on lots. Which might explain why, even though it is almost March and some 2010s have already reached dealers, prices have yet to be released for a surprising number of 2009 models.

These include:

• BMW Z4 (late intro redesign)
• Hyundai Entourage, Santa Fe, and Veracruz
• Infiniti EX35
• Kia Amanti, Sedona, and Sorento
• Mitsubishi Endeavor (dead?) and Evo
• Toyota Sequoia and Solara (dead?)

I’m eager to wrap up the 2009 model year and move onto the 2010s. So hopefully these get released soon.

Shopping for a new car can easily become an emotional process. You might fall in love. Or you might simply want to get the whole thing over with. If either happens, you could easily end up paying hundreds or even thousands more dollars for the car.

One possible solution: take a friend along when you go to the dealer to negoiate. A good friend will let you know when it’s time to walk out because your emotions are gaining the upper hand.

So the Genesis Coupe is much less expensive than the Infiniti G37 it so strongly resembles. What about compared to Nissan’s own cut-rate G37 imitator, the Altima coupe?

This is just the sort of question TrueDelta’s Car price comparison tool was designed for.

First, base 2.0T vs. base 2.5–which is down 35 horsepower, but the closest comparison for the 2.0T.

Result: even after a $1,000 rebate the Nissan is only $1,305 less. Adjust for different levels of standard equipment, and the Nissan’s advantage shrinks to $200. Easy choice here for anyone who cares about driving, since the Altima drives like a sedan with two fewer doors while the Genesis should benefit from rear-wheel-drive.

Second, 3.8 Track vs. loaded 3.5 SE with Premium Package and stability control. Even after the $1,000 rebate, the Altima is only $280 less. The Genesis has $300 in additional features even without factoring in the Brembos and 19s–making them about dead even after a basic features adjustment.

An even easier decision for an enthusiast on a budget.

Neither comparison includes an adjustment for the Hyundai’s longer warranty. Both end up so close to zero after the $1,000 rebate that I suspect Hyundai targeted the Nissan with its pricing.

Conclusion: unless someone really cares about the difference in brand name, I don’t see a point in buying the Altima.

Car price comparisons

At the Chicago Auto Show Hyundai also announces that a few months after the introduction of the Genesis Coupe they will be offering a variant equipped for enthusiasts on a budget, the R-Spec. The R-Spec includes all of the performance-oriented content of the Track model, including 19-inch performance rubber, torsen differential, Brembo brakes, and sport suspension, for $3,000 less than the Track. Great value, right?

TrueDelta’s pricing tool helps evaluate the differences between trim levels as well as the differences between models. Just price a Hyundai Genesis coupe with the turbo four and select the sport suspension. This will yield two trim level in the results, the regular 2.0T with the Track Package, and the R-Spec.

You give up a lot of amenities with the R-Spec. Not only other Track Package contents like sunroof, xenon headlights, power seat, Infinity audio, and partial leather upholstery, but also some features standard on the base 2.0T, including cruise control and Bluetooth. The program assigns default values to all of these (members can also specify their own values), and they total up to $3,500. This figure doesn’t include the Infinity audio system, since this isn’t easy to quantify.

Figure about $500 for the audio system, and you lose about $4,000 in content in order to save $3,000 with the R-Spec. So in pure value terms it’s not such a great value. But, if you only care about the performance bits, then it’s clearly the way to go, and a lot of car for $24,500.

If they offered the same in a four door, or even better in a five-door hatch, I’d personally be interested. No one currently offers an affordable, compact RWD sedan.

Car price comparisons

Hyundai just released the pricing for the Genesis coupe–the V6 starts at $25,000 and tops out at $31,750.

I rushed the price and features info for the car into TrueDelta’s database, so you can now run quick, thorough comparisons here–note that the Genesis Coupe (listed separately from the Genesis Sedan) is a 2010:

Car price comparisons

I ran a comparison with the G37, loading both up (Track on the Genesis, Sport+Premium+spoiler on the G37). At MSRP the Genesis is $11,315 less. The Infiniti includes about $2,300 in extra features, things like a power passenger seat, power lumber, power tilt-and-telescope steering wheel, power recline for the driver seat, driver seat memory. Even after adjusting for these, we have a $9,015 price difference.

For reasons that now escape me, I failed to check out the interior of this car during media days at NAIAS. Photos suggest lower-grade materials than in the G37. So this accounts for some of the remaining price difference.

One thing is clear: with the Genesis Sedan and even more with the Genesis Coupe Hyundai has been much less lavish with feature content than they have been in the past. The rear-wheel-drive hardware must make it much harder to offer these new models at a Hyundai price.

Hyundai Genesis Coupe vs. Infiniti G37 price comparison

For the past few years VW has often charged a bit more at invoice than they do at MSRP for automatic transmissions. In other words, the dealer has a smaller margin when this option is added. Why? No idea.

Volkswagen has gone a bit further with the 4Motion AWD option in the CC. This system adds $1,100 to the list price–quite reasonable for AWD–but adds $1,203 to the invoice. What’s the logic for reducing dealer margins by $103 when all-wheel-drive is added to the CC?