GfK: High Prices at the Gas Pump Boost Interest in Compact Cars

Compact cars appear to be in higher demand, nearly double, than vehicles powered by alternative energy, or AEVs, including electric and hybrid cars.

The prolonged period of high gas prices has prompted consumers to reconsider their choice of cars, and they are increasingly looking to purchase vehicles with improved levels of fuel efficiency that are also cost-effective.

The Automotive research division at GfK found that, despite an increased demand of compact cars, subcategories such as AEVs and sub-compacts do not benefit from the same kind of interest.

The research points out that while 18.1 percent of the demand of light vehicles over six months was for compact vehicles, the sub-compacts accounted for only 3.6 percent. Hybrids and electric cars fared slightly better than sub-compacts, representing 9.4 percent of the demand for light vehicles.

Despite expectations of increased sales of hybrid and electric vehicles in times of high gas prices, consumers appear to steer clear of AEVs. GfK identified three main detractors – lack of convenience, high purchase prices and low familiarity with these vehicles.

GfK Automotive senior VP for consulting, Doug Scott, said that customers see the value of downgrading to a compact car in times when gas prices are high, but they are not willing to sacrifice the convenience and comfort of a compact in favor of sub-compacts. He added that AEV sales will not increase if automakers do not address the challenges that the purchase of AEVs poses to the average customer – cost, familiarity and convenience.


Model Year 2012: Audi Unveils Audi R8 GT, Limited Issue of 333 Cars

A limited-edition, very special R8 GT is coming from Audi for the model year 2012. The new R8 combines the best features of the Audi Spyder and R8 Coupe, and it is intended to represent the peak of Audi performance.

This is a historic step for Audi as the new R8 GT is the first ever limited-edition vehicle produced by the company. The new R8 GT will be built worldwide, and in a total of 333 units, 90 of which will be dedicated to the US market. The gear shift of each limited-edition R8 GT will display the production number.

The starting price for the limited-edition Audi R8 GT is 196,800 dollars. The 333 buyers will enjoy a car with increased power and lightweight advanced materials. The car outputs 560 hp, 0-60 acceleration in a stunning 3.6 seconds, torque of 398 lb-ft, 198.84 miles per hour top speed, and an 8,700 rpm red line, powered by a 5.2 liter V10 engine.

The car will have suspensions tuned for performance, a Quattro permanent all-wheel drive and an R tronic sequential gearbox.

The performance of the new Audi R8 GT will also benefit from aerodynamic improvements and the use of carbon fiber. Carbon fiber components are used strategically in order to reduce the weight of the car. Virtually all body parts and components have undergone weight optimization. The car’s total weight is lesser than that of R8 V10 by some 180 lb.

Small Cars Retain Consumer Focus as Gas Prices Remained High in May

Used and new cars have had their prices increased in May in the context of increased demand for cars of smaller size with increased fuel efficiency.

Despite the fact that the end of May brought a decline in gas prices, the still-high costs made car buyers focus on fuel-efficient vehicles, as opposed to the usual selection of SUVs or trucks. The monthly report from, Trend Engine, indicated that May trends were very similar to those in April. According to the report, which analyzes on-site consumer behavior, the interest for small cars continued to be present, and it led to an increase in the asking price for a wide variety of new and used cars alike.

The average asking prices on the website continued to grow, posting some of the highest growths year-on-year. In the top 20 most searched cars, 13 vehicles saw their prices spike. In the used cars category, 12 models out of the top 20 have also had the asking price rise. The largest year-on-year growth in the asking price was 21 percent for the new Kia Optima, which jumped from 20,202 dollars in May last year to 24,422 last month. Hyundai Elantra also posted significant year-over-year price increase, from 17,373 dollars to 20,223 dollars, representing an increase of 16 percent.

The list of the top 10 most searched new cars suffered almost no change from April, with the exception of the new Ford Focus, which made the top 10 in April and gained two positions since. In top 20, the most spectacular evolution was that of Hyundai Sonata, which jumped from position 19 to 14 from April to May.

While Kia Optima, Volkswagen Jetta and Chevrolet Cruze retained their positions on 17, 9 and 8, respectively, Hyundai Elantra and Ford fiesta had light slides. Nonetheless, their year-on-year performance remains very strong. Hyundai Elantra managed to jump 55 positions up since May 2010, while Ford Fiesta climbed 183 points.

AAA Warns: Repealing Helmet Law Will Lead to Increased Number of Fatalities, Higher Costs

A recent piece of legislation, voted by the Transportation Committee in the Senate, generates opposition from AAA Michigan on the grounds that it would repeal the law which makes motorcycle helmets mandatory in the state of Michigan.

Wearing a helmet while driving a motorcycle has been mandatory for the past four decades. The new law – the Senate bill 291, if approved, would remove the obligation to wear a helmet for 21-year old or older individuals, if they had a motorcycle driving endorsement for at least two years or if they passed a safety course.

Another law being considered is House Bill 4008, which also allows motorcycle drivers to be on the road without helmets, if their insurance coverage was at least 20,000 dollars.

According to AAA Michigan, both laws will lead to a spike in motorcycle injuries and fatalities, and an insurance policy of 20,000 dollars would barely scratch the surface of the medical bills incurred by a motorcycle accident.

A recent poll, conducted by marketing research company MRG with the participation of 600 adults from Michigan, revealed that 81 percent of the people in Michigan strongly believed that wearing a helmet should be mandatory and that the current law should not be repealed. Only a small share of the participants in the poll, 16 percent, said that motorcycle drivers should not be forced to wear helmets. AAA Michigan members – some 90 percent – granted overwhelming support to keeping the current law in place, as well.

Estimates show that repealing the helmet law would lead to at least 30 more fatalities resulted from motorcycle accidents, as well as 127 more potentially incapacitating injuries each year. These are predicted to generate additional costs to citizens of up to 129 million dollars.

The results of striking down laws on mandatory helmets had grim results in the states that took this step before. Official figures show that there was an 81 percent increase in the number of fatalities three years after the mandatory helmet law was repealed. Studies have shown that Kentucky also posted a 50 percent increase in fatalities, while motorcycle fatalities Louisiana doubled.

The Top New Vehicles by Fuel Economy from Consumer Reports

The most effective way to cut spending on gas is buying a new, fuel-efficient car, an investment that becomes more attractive as gas prices continue to climb, suggests Consumer Reports.

The recommendation comes with a list of the most fuel-efficient vehicles, which includes Ford Escape Hybrid, Volkswagen Golf TDI and Honda Fit.

According to Consumer Reports, these three vehicles are the best in their class in terms of real-world fuel efficiency.

The Senior Director of Consumer Reports’ East Haddam test center, David Champion, explained that, while hybrid and diesel vehicles provide increased fuel efficiency, they are also more expensive. Nonetheless, he added, with the continuous increase of gas prices, these cars become a viable alternative, as the return on investment will come in a less time. David Champion added that the fuel efficiency of a car could also be improved by 1-2 miles per gallon through the use of manual transmission.

Following real-world tests, the best subcompact vehicle in terms of fuel efficiency is Honda Fit, with 30 miles per gallon, which costs around 16,020 dollars, while the worst in this class is Chevrolet Aveo LT, with 25 miles per gallon.

In the small wagons class, the best fuel economy was achieved by Volkswagen Golf TDI, with manual transmission and Diesel engine. The car achieved an efficiency performance of 38 miles per gallon. Prices are around 24,764 dollars. At the opposite end, with 23 miles per gallon, sit Subaru Impreza and Scion xB.

For families, the best car appears to be Toyota Prius IV, with a performance of 44 miles per gallon, while Mazda 6 V6, Chevrolet Impala, and Ford Fusion achieved less than half that performance – 20 miles per gallon.

The full list of vehicles is available in the July issue of the magazine, starting with June 7, and to website subscribers of Consumer Reports.

Production Restarted at the Saab Automobile Plant in Trollhattan

Saab assembly line in SwedenThe Saab Automobile facility in Trollhattan, Sweden, restarted production on Friday, after the shutdown that lasted since April 6. The first production day was planned to roll out a batch of 100 cars, and the company plans to increase production over the following weeks, as well as to re-establish the chain of supply.

A convertible Saab 9-3 Independence and a 9-5 Aero XWS were the first ones to roll off the production line. The company has an order bank of more than 6,500 vehicles for the factory at Trollhattan and more than 8,100 vehicles around the world. The numbers include nearly 1,300 cars that were ordered and paid for up front with 30 million Euros, as well as orders for Saab 9-4X.

The Chairman and chief executive of Saab, Victor Muller, who attended the restart of production, said that Friday was a great day for Saab Automobiles. He took the opportunity to extend the company’s gratitude to suppliers and employees alike for making the event possible and for standing by the company in the rough patch it had since the April 6 production shutdown.

Muller added that the company is in the middle of a never before seen product offensive, which will help the company show its ability to be a successful and reliable car maker. The Saab 9-3 Griffin was on sale this year, and the company launched the 9-5 Sedan, while the Saab 9-4X has received exceptional reviews from specialty media. Furthermore, the company managed to sell all the 9-4Xs issued in model year 2011, and the company will start delivery of the 9-5 Sport Combi after the summer.

Ford Unveils a Seat Capable of Monitoring the Heart Rate of Drivers

Ford researchers in partnership with the Aachen University in Germany have developed a car seat that is able to monitor the heart rate of the car’s driver with the help of electrode sensing technologies.

The new seat adds to the existing portfolio of Ford in-car wellness and health solutions, and it aims to help drivers who suffer from chronic conditions manage their illnesses on the road. The new heart-monitoring seat opens the way for other health applications with the potential to save lives.

The seat uses six sensors, embedded in the chair, to detect the electrical impulses that the heart generates. Although it is still a research project, the seat could become an important breakthrough for drivers of Ford vehicles.

A car seat that monitors the heart rate of drivers with heart problems could also serve as a pre-diagnostic tool for those who do not know of any cardiac disease yet, explained the medical officer of Ford’s center for research and innovation in Europe, Achim Lindner.

The data that the six sensors collect could be interpreted by an on board computer or remote medical experts. This could lead to a system that can provide real-time information on the drivers’ health and alerts for imminent heart attacks or other issues.

Ford announced earlier this month that the company was researching ways to leverage Ford SYNC’s ability to connect to various Bluetooth devices or to access cloud Internet services and control applications on smart phones. The company plans to develop voice-controlled connections from the car to helpful health services, such as asthma and diabetes management, glucose monitoring, and allergen alerts.

Toyota and Salesforce Form Alliance to Build a Private Social Network for Toyota Customers

Toyota Motor Corporation and announced that they formed an alliance that will build a private social network for the car maker’s customers. The social network will be called Toyota Friend, and it will be powered by Saleforce’s business social network, Salesforce Chatter.

The new social network will be first available to customers in Japan and their Toyota plug-in hybrids and electric vehicles due in 2012.

The Toyota Friend social network will connect customers with their dealership, Toyota and their cars, and it will provide maintenance tips as well as information on services and products.

One feature, revealed by the two companies behind the social network, will be to alert the owner of a plug-in hybrid when the battery is running low with a message similar to tweets.

The service will be available on mobile platforms, such as tablets, smart phones or other mobile devices, and, if the members choose to, they will have the possibility to expand their communications in Toyota Friend to friends and family via Facebook, Twitter and other public networks.

Salesforce’s chief executive, Marc Benioff, said that his company was excited to partner with Toyota for a transformation that will take the car industry into the future.

Toyota president Akio Toyoda explained that Toyota plans to keep up with the manner in which people communicate and that means becoming part of the social media.

Salesforce and Toyota Motor Corporation will both invest in Toyota Media Service, the division that supervises the development for the company’s worldwide cloud platform. The investments will amount to 442 million yens on behalf of Toyota and 223 million yen from Salesforce. These investments are added to the sum that Microsoft will be investing – of 350 million yen.

High Performance, Compact Design – The New BMW 1 Series M Coupé

BMW extends its portfolio with the new Series M Coupe, a compact sports car of high performance, paving the way for a wider group of M car fans.

The new model’s performance stems from the experience of a power train suitable of a race car and of the M cars’ legendary agile and controllable chassis.

The sporty design is highly attractive; the components and materials are of the finest quality, and they all combine into a sports car meant to ensure a high level of customer satisfaction and the right place in the 1 series.

The BMW 1 Series M Coupé produces a 500Nm torque and 340 hp from an engine of 2,979cc, reaching 62 miles per hour in 4.9 seconds. The speed is electronically limited to a maximum of 155 miles per hour. The manual transmission with 6 speeds created to deliver excellent performance in cooperation with the high-powered engine.

The car has an excellent weight to power ratio of 227 hp/ton, with a total weight of only 1,495 kilograms.

The BMW 1 Series M Coupé is on sale in May at 40,020 British pound OTR.

According to the man that has been the force behind the car, the 1 Series M Coupe is a pure M car dedicated to young fans who love a strong engine and the M3 substance.

Like every other M car, the M Coupe comes with an M button that transforms the car into a creature with increased throttle response for an even more exciting driving experience.


General Motors Creates 4,000 Jobs and Invests 2 Billion Dollars in US Plants

General Motors Creates 4,000 Jobs and Invests 2 Billion Dollars in US Plants  Car maker General Motors announced that the company will invest approximately two billion dollars in the company’s component and assembly plants. The company will also create some 4,000 jobs in eight states in order to cover the staffing needs of 17 facilities.

The company’s plant in Toledo will benefit from an investment of 204 million dollars, which will help retain 250 jobs and will finance the development of a new automatic transmission with 8 speed levels for General Motors’ future vehicles.

This investment is added to the 3.4 billion dollars that the company has already invested in US since 2009. According to the company’s chief executive and chairman, Dan Akerson, the company is making this investment because the board feels confident in the future prospect of the economy and in the demand for GM cars.

In the first four months of this year, General Motors posted a 24.8 percent increase in sales compared to the same period in 2010. Last week, the company reported profits for the fifth consecutive quarter since GM emerged from bankruptcy in July 2009.

The current round of investment includes the Bowling Green investment that was also announced last week.

In the following months, General Motors will make detailed announcements about the investment, based on specific facilities.

The total amount of two billion dollars that General Motors will invest in eight states will generate positive ripples leading an increase of the Gross Domestic Products by 2.9 billion dollars and the creation or maintenance of 28,000 jobs.