In college, I spent a lot of time thinking about Mustangs. On too many occasions, when I should have been studying or paying attention in class, I was reading about Mustangs. On the last day of class, I bought myself a new 1988 Mustang GT as a graduation present. With 225 horsepower, 300 lb.-ft. of torque, and a 0-60 acceleration time of 6.4 seconds, my Mustang was faster than most cars of the time. I treated it like my most prized possession.

For the first six months, I washed it every day—literally. Our garage was filled with a wide variety of soaps, waxes, and polishes. I had so many car-care products that I could have opened a detail shop. There were chemicals for treating and polishing chrome, plastic, leather, and vinyl; windshield wax to repel water; wheel wax to repel brake dust; scratch removers; dirt and grime removers; and a "detailer" to remove fine exterior scratches that were barely visible but irksome nonetheless.

My burgundy red car was cleaner-than-showroom clean, and it attracted a great deal of attention—sometimes of the wrong kind. My friend once told me that he could see me coming from a mile away because the car was so shiny. I was peppered with questions at gas stations, at the beach, and at the mall: What kind of wax do you use? How do you keep it so clean? And sometimes by the police: Do you know how fast you were going, son? Is there a reason why you were going so fast? Are you late for an appointment?

When no one else was around—or at least when I thought no one else was around—I drove it like it was meant to be driven. Each time I entered the car I imagined I was qualifying for the Indy 500. I laced my sneakers as if putting on racing shoes; I fastened my seat belt as tightly as possible; I adjusted the mirrors carefully; and I remained ready to out-accelerate anyone who I thought (read: imagined) was trying to pass me. One time I took my dad for a ride, and from that point forward, he refused to drive with me.

I found out first-hand that the Mustangs of that era were better at going fast in a straight line than going fast around a corner. In one memorable incident, I exited an unfamiliar off-ramp way too fast with predictable results—I slid straight off the road. As racers know, it is far better to enter the corner slowly and accelerate out of the corner. They call it slow in, fast out, and I wish I had known this before I took that fateful corner.

Since the car was still drivable after the "incident," I drove it home. The next morning, fearing the worst, I took the car to my mechanic who surprised me with the news that all I needed was a front-wheel alignment. Apparently, the suspension was heavy-duty enough to absorb most of the impact. The next day, I was back in my garage, fussing over the paint and touching up numerous little rock chips that covered my car from my first and only off-road journey.

15:20 | Permalink | Comments (1)

If you read Part 1 of the blog on Electronic Stability Control (ESC), you know that ESC is a vehicle safety system that protects drivers and passengers from potential rollovers or unstable vehicle conditions. It is standard or optional on 218 2007 models. While the system can be a lifesaver in inclement weather or during evasive driving maneuvers, there is another side to ESC that appeals to driving enthusiasts. Automakers such as Ferrari, BMW, and Chevrolet (Corvette), among others, tune electronic safety systems so they don't detract from the driving experience on the racetrack. In fact, in some cases, these systems can actually enhance the experience and improve lap times on the racetrack.

For example, on its $350,000 599 GTB Fiorano, Ferrari provides a multi-position "manettino" switch on the steering wheel that allows drivers to choose from five settings: snow, reduced traction, sport, race, and off. Thanks to quick-acting magnetorheological shock absorbers—which apply an electric field to magnetic particles in the shock absorber to control fluid movement—the vehicle's behavior can be changed at the touch of a button. Variables like ride stiffness and the threshold at which the stability system intervenes can be adjusted easily with the manettino.

For snow and wet weather, the first two settings provide the most protection. Sport mode allows some wheel slip during aggressive driving before the system intervenes. Race mode is appropriate for track use only. It allows spectacular tail slides (oversteer) and intervenes only at the last possible moment if the system determines the car is headed for trouble. The car also features F1-Trac, an evolution of basic stability control. Based on pre-programmed parameters, the system determines which car control techniques (reduction in throttle, brake application, etc.) should be used to obtain the fastest lap times during track use.

BMW provides on all its models a stability control system called Dynamic Stability Control, or DSC. The system has three levels of operation: fully on, which is the default mode when the car is started; traction off, which keeps the stability control on but disables traction control; and all systems off. The fully-on mode provides an added layer of safety in the event of driver error or poor road conditions, controlling for understeer or oversteer by applying the brakes at individual wheels, reducing the throttle, or even engaging ABS. For example, if you are entering a freeway onramp and hit a patch of water or ice, DSC can intervene, often without the driver's notice, to prevent loss of vehicle control. DSC takes over and, all the driver notices is a flashing light on the dash indicating that the system is protecting the driver from a potentially dangerous situation. Without DSC, the vehicle would likely spin out of control.

The second mode—traction off—removes the traction control function but leaves stability control engaged. This can be useful when starting in snow or ice. With all systems fully engaged, progress would be painfully slow or non-existent in very low-traction situations, so in some circumstances it is helpful to have a small degree of wheelspin.

On a racetrack, this mode appeals to the enthusiast driver because it allows the rear of a rear-wheel-drive car to slide (oversteer) within set parameters. Although this certainly isn't the fastest way around a track, it is the most fun. And with the stability control still functional, the system will intervene should things get seriously out of control. When the system recognizes situations that may lead to a complete spin or off-track excursion, ESC will intervene.

The last mode—all systems off—is appropriate only for expert drivers on a racetrack. The only safety system still functional in this mode is ABS, which only works when the vehicle is moving forward in a straight line. If the vehicle is sliding completely sideways or spinning, ABS will not work. In this mode, the only thing that can prevent drivers from a complete spin or wreck is their skill with the steering wheel, brake, and throttle.

In the Corvette, Chevy also offers three modes for the stability control: fully on, traction control off, and all systems off. However, Chevy adds a "competition mode" that allows wheelspin and oversteer within certain parameters. Chevy recommends that drivers not use this mode on the street.

With these safety systems either fully or partially engaged, drivers can explore the limits of their vehicle's traction capabilities in relative safety. For drivers with more experience—enough to counter-steer and react extremely quickly to a sliding vehicle—the systems can also be turned off. But beware; these systems are there for your safety, so never experiment on the street. Save that for the racetrack.

09:29 | Permalink | Comments (0)

My oldest son and his fiance recently rented a white Ford Mustang convertible instead of leasing a limo and hiring a chauffeur to ferry them to their California wedding site and reception. The choice of the Mustang seemed fitting since the couple, dressed in linen beach clothes, exchanged vows in the sand at the ocean's edge in Malibu.

In the parking lot at the beach reception, among the silver, gray and black sedans and SUVs, the Mustang was a sporty upstart just raring to go. It was also my son's vehicle of choice for a major event in life, which reminds me that Ford's iconic sports car remains a focal point of American car culture because it continues to meet many customer desires and needs.

The first "pony" car debuted in 1964, a product based on the idea of a 2-door, 4-seat sports car. Today's Mustang was completely redone in 2005 with styling hearkening back to the original's design cues and heritage. Its success is evident in sales figures, and the Mustang has also received awards in two recent J.D. Power and Associates customer satisfaction studies.

Just this month, the 2007 Mustang ranked as the most appealing midsize sporty car model in the J.D. Power and Associates 2007 Automotive Performance, Execution and Layout (APEAL) Study.^SM And, Mustang is the most problem-free model in its segment in the J.D. Power and Associates 2007 Initial Quality Study^SM (IQS). Both studies collect verified owner feedback about quality, design and performance after 90 days of ownership.

Mustang continues to hold its cachet, from the romantic and sporty convertible lover to the muscle-bound Shelby GT street racer and enthusiast. Despite an 11% drop in U.S. sales through the first six months of 2007, the Mustang's year-to-date performance outpaced the midsize sporty car segment, which slumped 19% compared to 2006, according to the J.D. Power and Associates Sales Report.^SM

Mustang offers consumers a sporty and pleasing performance model at more modest price points but also offers an array of gutsy, muscle car models for the enthusiast. A Ford marketing official's recent comment about the company's goal to offer "a steed for every need" is certainly apt. I know from personal experience that my son had a lot more fun driving America's original pony car along the beach with the top down than he would have had he hired a stretch HUMMER or Cadillac limo and driver. Besides, Mustangs get just as many looks as limos, especially at California beach weddings. What's your favorite Mustang story? We would love to hear about it.

13:39 | Permalink | Comments (0)

Each year, J.D. Power and Associates conducts its Initial Quality Study^SM (IQS) to measure owner-reported problems after 90 days of new-vehicle ownership. The IQS study, first conducted in the United States in 1987, is the firm's most recognized study today. In addition to the U.S. IQS, the firm conducts IQS in other countries, including Japan, South Africa, Malaysia, India, Indonesia, Thailand, the Philippines, and China.

In the firm's 2006 Japan Mini-Car IQS, the Daihatsu Move Latte (which sounds like a coffee drink from Starbucks) ranks highest in initial quality. Following the Latte are the Mitsubishi i, the Honda Zest, the Nissan Moco, the Honda Life (a great car name), and the Daihatsu Esse and Move, all of which performed above industry average.

In Indonesia, Thailand, and the Philippines, automakers Toyota and Honda dominate the ranking, which makes it challenging for local, domestic automakers. In the 2006 Indonesia IQS, the Toyota Yaris, the Toyota Vios (think Corolla), the Toyota Fortuner (think 4Runner), and the Toyota Kijang Innova (think small Mercedes-Benz R-Class) lead their respective segments.

In the 2006 Thailand IQS, the Toyota Yaris, Toyota Corolla Altis, Toyota Hilux Vigo (like the U.S. Tacoma), and the Toyota Hilux Vigo Prerunner lead their segment. And in the 2006 Philippines IQS, the Honda CR-V and Toyota Corolla Altis receive the highest scores. Remember that all of these rankings are based on each country's new-vehicle owner ratings and not the opinions or preferences of J.D. Power and Associates.

The model rankings are more diverse in South Africa. In the 2006 South Africa IQS, Honda, BMW, Mercedes-Benz, Subaru, and Audi are the top five industry nameplates, with only six nameplates ranking below industry average. In the 2006 Malaysia IQS, models such as the Perodua Kelisa (looks like a modern, updated Yugo, but is unrelated), Toyota Vios, Honda Civic, and Inokom Matrix (rebadged Hyundai mini-MPV) are the top-performing models in their respective segments.

In India, segment leaders include the Maruti Zen (think Chevy Aveo, but smaller), Ford Ikon (a sedan version of the Ford Fiesta), Honda City, Honda Civic, and Toyota Innova. In China, top-ranked models include the Chevrolet Spark; Suzuki Swift; Nissan Tiida (similar to our Nissan Versa); and the Honda Civic, Accord, and Odyssey.

With more than 300 models available in the United States, we have the largest range of choices by far. A few of the same models that earn top initial quality scores in the U.S. were the same ones that earned the highest rankings in initial quality abroad, although the models might be slight variations on the same theme. In addition, even global models—such as the Toyota Corolla—offer different engines, features and styling options for consumers in different parts of the world.

11:07 | Permalink | Comments (0)

Forecasting new-vehicle sales in the U.S. automotive market is notoriously difficult, as all of us automotive economists know all too well. Monthly levels fluctuate widely and even the underlying trend rate of growth seems to accelerate and slow down over the years with unpredictable regularity. Add in some potentially severe shocks, ranging from skyrocketing gasoline prices to housing slumps, and the challenge is daunting under the best of circumstances.

Consider, for example, that the most recent Blue Chip Consensus Forecast that includes predictions for sales in 2007 by economists and business analysts. Forecasts vary from as low as 15.7 million unit sales per year (or, the lowest annual performance in almost a decade) to as high an estimate as 17.3 million unit sales (or, just short of a record level, if it is achieved). That’s a difference of nearly 1.6 million vehicles. The problem is not so much the skills of the forecasters, but the lack of data on what is really driving car and truck sales.

In today's automotive market, two factors are essential to predicting how many new vehicles will be sold in a year: incentives, which includes rebates and special loan rates including the popular 0% financing, and fleet sales, which are purchases by rental car agencies, such as Hertz and those vehicles sold to government and corporate fleets.

During the last several years, changes in incentive programs have explained much of the month-to-month volatility in vehicle sales. Yet, not only is there little data on incentives, but the decision to change incentives by the Detroit-based automakers, including General Motors, Ford and the Chrysler Group, may have little to do with economic factors that are normally used to forecast sales, such as income, interest rates, or even changing gasoline prices. Incentive strategy is more likely determined by automakers’ sales and market share concerns. Manufacturers must worry about keeping their workers active in the plant (many of these workers get paid whether they build anything or not). Fleet sales play a similar role, increasing and declining, depending partly on the need to offset changes on the consumer side of the automotive market. And, like incentives, there are little data that allow forecasters to separate retail and fleet sales activity and review their behavior separately.

The result of missing data is that automotive forecasters today are often flying blind. Our firm, J.D. Power and Associates, is in the process of building new databases that will soon allow forecasting modelers or builders to incorporate incentives and fleet sales in their crystal ball gazing. However, for now, we must resort to guessing about manufacturers’ intentions. When you hear on the business news a forecast about how many vehicles will be sold this year, you may now have a little sympathy for the poor economists who have to make their livings reading tea leaves and holding séances just to figure out how many cars and trucks consumers will buy each month.

10:03 | Permalink | Comments (0)

When I purchased my most recent vehicle two years ago—a Ford Escape—I wanted all the convenience, comfort and safety features possible in a non-luxury model. I ended up with the Limited trim level, which included amenities such as heated, leather 6-way power front seats; fold flat rear seats and a sunroof. Safety features that came with my crossover utility vehicle (CUV) included canopy and side-impact air bags, ABS and reverse sensors in the rear bumper. Of course, my real splurge was a higher-end audio and CD changer system with multiple speakers including a subwoofer and Sirius satellite radio. I may have paid too much, but I still love my CUV.

Some of the features that I indulged in were only available on premium models as recently as 2000, but now are standard equipment or available in option packages on many non-luxury models. Many of these items are among the most important features that women look for in their new vehicles, according to J.D. Power and Associates research. Let's take a look at a few comparisons between then and now:

At the beginning of the millennium, according to the J.D. Power and Associates 2000 Automotive Performance, Execution and Layout (APEAL) Study,^SM three of the top five features women wanted in their new vehicles were safety features:
1. run-flat tires
2. Smart passenger air bags that identify when a small person or child is in the front passenger seat
3. rear passenger-seat air bags
4. sunroofs
5. fold-down rear seats

The study, which launched in 1995, measures new-vehicle owners' opinions on the performance and styling of their new vehicles after 90 days of ownership and also asks about the desirability of new and emerging features.

Today, four of the five features that women desired in 2000 are standard or readily-available options in today's models, even in non-luxury models. Only run-flat tires are more limited as an option and are not as high on women's priority lists in 2007. Today's top features, according to women responding to the J.D. Power and Associates 2007 Automotive Performance, Execution and Layout (APEAL) Study,^SM include convenience features:
1. power liftgate/trunks or hatches—especially in minivans and utility vehicles
2. remote engine start
3. All-wheel drive (AWD), a performance and handling feature
4. bottle holders in door panels
5. sunroofs

However, when asked about which new or future technology features they desired, safety again is a concern. Women respondents in the 2007 APEAL study select the following five safety-minded features:
1. lane-departure sensors
2. blind-spot detectors
3. rear back-up camera and sensor
4. side-curtain air bags
5. a sleep detector sensor and pre-accident alert systems

After comparing the lists of the most important features that women want in their new vehicles in 2000 and in 2007, it is easy to conclude that many desirable emerging technologies, which are currently offered mainly on luxury or premium models such as the Mercedes-Benz S-Class and Lexus LS 460, will be available on non-luxury models by 2015. It's a trickle-down effect. The J.D. Power and Associates U.S. Automotive Emerging Technologies Studies^SM indicate that as the price drops, these features will become available in non-luxury vehicles for consumers like you and me.

13:46 | Permalink | Comments (2)