(Source: CNN; TreeHugger; Jalopnik ; Autoblog ; AutoblogGreen)

Chrysler reaches key Canada labor accord Tentative agreement, aimed at cutting costs and keeping automaker out of bankruptcy, to be presented to workers for ratification.

 Time running out on Chrysler  The embattled automaker has one week to reach deals with Fiat, unions and banks, raising doubts it can avoid bankruptcy and a shutdown. 

Fox Car Report Live: Ford Fiesta, Chrysler Bankruptcy [Official Car Pundit Drinking Game] …imaginary Chryslers on conservative cable channel website. [Fox Car Report Live]

 (Source: Business Week)

As the commercial model of India’s microcar is unveiled, U.S. carmakers would do well to learn from the innovations that brought it about

When Tata Motors (TTM) unveiled a prototype of its Nanomicrocar at the Delhi Auto Show in January 2008, auto executives around the world were aflutter. Quickly, they hustled teams to India to document the planned $2,000 “people’s car.” And industry watchers and innovation experts soon reported on the engineering and supply-chain breakthroughs behind the car.

Some 14 months later, Tata is set to show off the commercial version of the Nano, on Mar. 23. Today, the U.S. auto industry is struggling to survive, with General Motors (GM), once the world’s biggest carmaker, on the brink of bankruptcy. Look beyond the Nano halo and it’s clear that Tata Motors has problems of its own, from the $2.3 billion in debt it took on to purchase Jaguar and Land Rover from Ford Motor (F) last year to the sums sunk into the Nano assembly plant in West Bengal that had to be abandoned. On top of that, there are the Nano competitors in development.

Still, no one disputes that the Nano is innovative on multiple levels—from its engineering to its marketing to its manufacturing. So it’s hard to avoid the question: What can a humbled Detroit learn from the Tata Nano?

A lot. The lessons start with the vision of Ratan Tata, chairman of Tata Motors’ parent, Tata Group, to create an ultralow-cost car for a new category of Indian consumer: someone who couldn’t afford the $5,000 sticker price of what was then the cheapest car on the market and instead drove his family around on a $1,000 motorcycle. “Just in India there are 50 million to 100 million people caught in that automotive chasm,” says vice-president Vikas Sehgal, a principal at Booz & Co. And yet none of the automakers in India were focused on that segment. In that respect, the Nano is a great example of the so-called blue ocean strategy.

ROADS TO GREATNESS

“Great companies are built on creating new markets, not increasing market share in existing ones,” says Vijay Govindarajan, a professor at Tuck School of Business at Dartmouth College and chief innovation consultant at General Electric (GE), who quickly runs off 10 lessons for Detroit. Among them: U.S. automakers should focus less on incremental improvements to existing cars or adding a new model to the Cadillac line in order to compete against Lexus, and think more broadly about new market opportunities. Where, in other words, are Detroit’s blue oceans?

Click here to read the entire article.

(Source: Wall Street Journal)

Last summer, when gas cost $4 a gallon, buyers snapped up small cars so fast that dealers couldn’t keep them in stock. Now, with gas prices half that level, almost 500,000 fuel-thrifty models are piled up unsold around the country.

The turnabout comes at a bad time for the struggling U.S. car industry, which has revamped factories and shifted product plans to produce more small cars in coming years. The moves are prompted by coming stricter federal fuel-economy standards and the Obama administration’s car-bailout plan, which encourages auto makers to boost their vehicles’ mileage.

 Practically every small car in the market is stacked up at dealerships. At the end of February,Honda Motor Co. had 22,191 Fits on dealer lots — enough to last 125 days at the current sales rate, according to Autodata Corp. In July, it had a nine-day supply, while the industry generally considers a 55- to 60-day supply healthy.For other models the supply situation is even worse. Toyota Motor Corp. has enough Yaris subcompacts to last 175 days. Chrysler LLC has a 205-day supply of the Dodge Caliber. And Chevrolet dealers have 427 days’ worth of Aveo subcompacts. At the current sales rate, General Motors Corp. could stop making the Aveo and it wouldn’t run out until May 24, 2010.

“I don’t think Americans really like small cars,” said Beau Boeckmann, whose family’s Galpin Ford in southern California is the country’s largest Ford dealer. “They drive them when they think they have to, when gas prices are high. But we’re big people and we like big cars.”

The logjam of small cars is caused in part by the recession, which has sapped sales of all types of vehicles. But it also underscores how badly gasoline prices have whipsawed the industry. A year ago, car companies rushed to react when Americans practically stopped buying large vehicles and flocked to hybrids and small cars.

Click here to read the entire article (Subscription Reqd.  Free Registration available).

 (Source:  Time) 

(Source: Forbes)

Smaller cars are coming, lots of them, but it’s far from clear that buyers want them.

Smaller cars are coming–we all know that. Domestic and foreign manufacturers are about to start a wave, pushed by expected higher fuel economy requirements. These smaller autos will crowd out new versions of the larger cars we have been buying. Automakers don’t have the wherewithall to build everything.

If your main concern is global warming or oil imports, this is good news. But here’s the problem: Americans have not had a love affair with smaller cars. As a rule they are less comfortable, less safe and less useful–carrying fewer passengers and a smaller load.

The danger here is that our auto sales could stay smaller for another decade if owners hang on to their old SUVs and Big Boy V8s, if they don’t like what the greens and government people say they should be buying.

The not-so-easy trick in small cars is making money off them. There are two ways. One is to make them expensive, like $30,000. But Americans think small cars mean cheap cars. Audi has a new small A1 for Europe but isn’t bringing it here, because at current exchange rates it would cost $25,000. Dealers say it’s too much: Small still means cheap.

Click here to read the entire commentary from Jerry Flint @ Forbes.