Finally, the Big SUV may be on its way OUT
Last week, I was telling Alan how much I liked the pictures of the new Mazda5 MPV (Euro-speak for minivan) shown at the Paris Auto Show. I really like the versatility of a minivan and I've talked before about my hope that BMW may finally make a minivan that men won't be ashamed to drive -- something really cool, sleek with more ingenuity and German engineering than a Swiss Army Knife. The new Mazda5 is a small minivan based on the Mazda3 platform. It's an excellent platform that underpins many Ford Group products such as the European Focus, the Volvo S40 and the new V50 sports wagon. The Mazda5 MPV is a mainstream family hauler in Europe and, just a few years ago, it never would have seen the light of day in the US. Times have changed --Mazda has announced that it is bringing the Mazda5 MPV to the US market!
Over the past year, Mazda has undergone a major rebirth in the US. The Mazda6, replacement for the 626, got off to a slow start, but is now a solid seller for Mazda. Mazda has introduced a wagon and five-door hatchback variant of the 6 and those are selling well alongside the sedan. The all-new RX-8 also had some initial missteps, but it too is now on track and selling well. It's a great new halo car for Mazda. The Mazda3 was introduced earlier this year to great reviews. The 3 sedan is modern and stylish but the 5-door hatch is much sportier and the styling pushes the US envelope. Funny thing -- the Mazda3 5-door has become popular with Asian kids and tuners all over LA. Mazda took a risk and it's a cool car that is a hit! Mazda has announced that it will increase production of the Mazda3 by 50% to meet worldwide demand. This is great news for Mazda and it validates Mazda's strategy of making its own niche in the market and not trying to do battle with giants like Toyota and Honda. If you want something different, more interesting and sportier, look for a Mazda.
I really like the idea of a small, sporty minivan. The Mazda5 MPV isn't much bigger than a Mazda3; but it has dual sliding rear doors and the versatility of a minivan interior. If it gets the option list of the Mazda3 in the US market, it will get lots of attention. I think the time is right for this car and that, if marketed properly, it has a real chance of succeeding in the huge LA/SoCal market. It's the perfect car for your maid to do errands and pick up the kids when your wife is busy with botox injections.
But the small car invasion isn't stopping there. DCX has committed to bringing the Smart brand to the US in 2006. Only exclusive Mercedes-Benz dealers will get the opportunity for the 80 stores DCX wants to open. We will get the ForFour sedan and some SUV-like variation called the ForMore. All reports are that the Smart isn't a great driving car; but it is cute and very unique in the market. I predict a success, just for the quirky exterior and interior styling. It's also likely that aftermarket tuner Brabus will do its magic here in the US, as it already has done in Europe, for the Smart. Then the Smart will really be a fun driver's car too!
Nissan has announced that it is bringing its Cube small car here to compete with Toyota's Scion xB box on wheels. And speaking of Toyota, its newborn Scion division is racking up huge sales gains each month. In LA, one of the original
test markets for Scion in June 2003, you see Scions everywhere. The xB has found a loyal following with a much younger audience than Toyota had with its Echo or Corolla. It's also become a popular delivery vehicle for every business from studios to pizza delivery. Many xBs are scrimmed (shrink wrapped) with the name of the business for advertising. The slab sides are perfect for a rolling billboard! The new tC coupe is a very slick little car with all features for $17,300. The options are merely sound and appearance enhancements. And I've seen them all over LA in just a short time on the market.
Hybrids are also very popular here. It's become very fashionable to drive the new Toyota Prius. The Prius is omnipresent on the streets of LA. The waiting lists at dealers are months long and the dealers routinely get substantial premiums for the car that would negate the normal gas savings over a three year ownership period. However, people just "think" that it's the right car to be seen in. The Honda Civic hybrid is a lower-key entry to the market; but Honda sells every Civic Hybrid shipped to dealers and Honda has just announced the new Accord V6 Hybrid on sale now! The Accord V6 is already a very nice package (albeit a refrigerator) and with the improved gas mileage of a hybrid, it will be the new "gotta have it" car for those socially conscious armchair liberals from Berkeley to Santa Monica.
Ford just launched its new Escape Hybrid and found out that there is huge demand far ahead of supply. As I discussed last week, Ford likes to set its sale goals very low so it looks like its cars and trucks are exceeding forecasts. The Escape Hybrid is a prime example of the low bar being easy to jump. Ford's forecast was to produce and sell 4,000 units in 2004. Ford has now raised its output so that is can push 17,000 units out the door this year. Toyota is about to unleash the Highlander hybrid and its cousin, the Lexus RX400h. Since Toyota and Honda are already in their second generation of hybrid vehicles, it makes sense that at least Toyota has the capacity to not only make its own vehicles but supply Ford and others with the sophisticated hybrid system.
Not to be left out in the cold, GM is thinking about increasing imports of cars made by its Korean subsidiary, GM Daewoo. GM already has the unremarkable rental fleet darling, the Chevy Aveo, in its line up. In fact, I saw a pathetic commercial for the Aveo where it comes nose to nose with the new C6 Corvette and the gist of the message is that the Aveo is the new kid on the block getting familiar with its new neighbors - like a little pup snarling at a large dog that rules the neighborhood. It's really pathetic. But I digress… We know that GM likes to put a good face on things even if the news is grim. Without disclosing numbers, GM says that its Daewoo operations are really "paying dividends" just two years after GM paid $400 million for the assets of Daewoo's bankrupt and nearly dead automotive group. GM thinks that a few Daewoo-built, Chevy-badged small cars will be the easy answer to the introduction of Smart in the US by rival DCX. Good luck, GM. After Toyota announced that it would start building the Prius in China for sale in China next year, GM announced that it will build two hybrid vehicles in China. Unfortunately for GM, its technology isn't quite ready yet. Maybe GM should license the technology from Toyota like Ford does.
Volkswagen hadn't announced any plans for bringing its smaller-than-Golf cars to the US. VW would like to bring its clean diesel technology to the US to compete with the hybrids on the gas mileage front. VW's direct injection diesel technology is excellent and reliable and produces real-world gas mileage figures that are comparable to hybrids without the batteries and complexity of a dual drive system. Given the latest California rules regarding greenhouse emissions, we may never get a chance for clean diesel technology in California; but I'm sure VW will be a player on some level in this new push for smaller, more efficient cars. VW's subsidiary, Audi, has announced that it will bring its A3 to the US market in a 5-door hatchback form. The A3 is a very premium version of the new Golf and, as with all Audi products, the interior materials are the best in the business. It remains to be seen if Audi can successfully market its premium small car in the US without some heavy discounts or lease/financing incentives.
Last, but not least, let's not forget what BMW has done in the past couple years with the introduction of the MINI brand here. The MINI is a very small car by US standards. The cars are phenomenally successful and the initial demand has barely waned after almost two years on the market. As of 1 September, there was only an eight day inventory on hand for MINI. The clever design, excellent interiors, fun driving dynamics and a terrific advertising campaign all come together to make customers happy and new customers flocking to the dealers. The new MINI convertible and future variants will keep dealers and customers happy for a long time. BMW also has the new 1-Series in Europe. BMW hasn't said if it will bring the 1 to the US market; but with the renewed interest in smaller, more economical cars, it's very likely, in my opinion, that BMW will give us at least one or two 1-Series models. Given that the 1-Series is meant to compete with the likes of the Golf, Audi A3, etc. it would be the only car in that segment with rear drive derived from the new 3-Series (due next fall). It will have a BMW premium price but you will get lots of quality BMW touches. I think it's a sure winner in the US market and BMW can easily get the premium that eludes competitors like VW or Audi.
I'll be the first to cheer when the big truck SUVs start to die. Let's hope it's sooner than later because I'm sick and tired of these huge vehicles in traffic and parking lots.
Follow up: My friend Debbie that I wrote about two weeks ago bought a beautiful new X3 2.5 in Sapphire Black with black leather interior. She is so thrilled over the new BMW and can't believe the difference between here old Mustang Cobra and this new BMW.
