Cato on cars

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Globe and Mail Update

Jeremy Cato, the Globe and Mail's senior writer for the weekly auto section was online Friday to answer your questions about the Canadian International Auto Show, currently being held in Toronto until Feb. 25th. For an inside look at what is new on wheels, check out the Auto Show special hub and supplement in Friday's Globe.

Don't miss Mr. Cato's auto show blog, which will kick off Friday.

Mr. Cato is an award-winning print and broadcast journalist who has covered the auto industry for more than 20 years. He hosts the weekly television show Car/Business on Report on Business Television and is the host and executive producer of The Car Show, a live, hour-long radio show heard on stations from Vancouver to Toronto.

Mr. Cato is an expert on cars and trucks — the issues, the products and the players — from the inside out. He has won more than two dozen awards for journalistic excellence, including being named Automobile Journalist of the year in 1999 and again in 2003.

Editor's Note: globeandmail.com editors will read and allow or reject each question/comment. Comments/questions may be edited for length or clarity. HTML is not allowed. We will not publish questions/comments that include personal attacks on participants in these discussions, that make false or unsubstantiated allegations, that purport to quote people or reports where the purported quote or fact cannot be easily verified, or questions/comments that include vulgar language or libellous statements. Preference will be given to readers who submit questions/comments using their full name and home town, rather than a pseudonym.

Sasha Nagy, Business Features Editor, globeandmail.com writes: Hi Jeremy: Thanks for coming online today to talk cars and share insights into the Canadian International Auto Show. I was walking into the Globe offices this morning, and I passed the the Toronto Convention Centre. There was a long procession. Police cruisers were giving an escort to a line of Dodge Avengers. My first thought was, "A funeral procession….." Maybe this is a dark view. In light of Chrysler's recent restructing. How important is this year's car show to this auto maker?

Jeremy Cato: Oh, this is critically important to Chrysler. But I wouldn't be buying a black suit just yet. Chrysler's Dodge Ram pickup had a record sales year in Canada last year, there are new models on the horizon such as the Avenger and the Jeep Patriot and coming this fall is a new version of the minivan. Chrysler also is working feverishly to modernize its plants to be more flexible and efficient.

But in the end the car business is all about what goes into dealer showrooms. You can see all of that, save the 2008 minivan, on the floor of the Convention Centre right now. Here's the point: 300,000 people will visit the Toronto car show in the next 10 days. This is a chance for Chrysler to showcase its models in front of a lot of eyeballs.

What will be painfully obvious is that Chrysler has a lot of work to do on the car side of things. For instance, Chrysler has no small car to compete against the Nissan Versa, Honda Fit and Toyota Yaris, not to mention the Chevy Aveo. Chrysler has signed a memo of understanding with a Chinese car company to make one, but nothing will be imported for several years.

The bottom line for Chrysler and the two other Detroit-based car companies is this: If they are to survive, they simply must get out of the mindset of 10-day sales reports and general deal-making. They all need to commit to long-term product planning. They all have done a generally lousy job of that for the last decade and more. They need to think long-term and commit to product excellence. Not easy, but Toyota does it and so do others.

There are many, many jobs at stake here, so I wish Chrysler luck.

Ian Thomson from North Vancouver writes: Jeremy, I am hearing a lot about new diesel models coming out from traditionally non-diesel companies like Honda - cleaner emissions, no lack of power, a big fuel economy improvement. Is this really happening, and will diesels take off?

Jeremy Cato: Hi Ian: Yes, we're going to see more and more diesels, starting right now. This week at the Canadian International Auto Show in Toronto, DaimlerChrysler took the wraps off the new Jeep Grand Cherokee equipped with the Mercedes-Benz Bluetec diesel. The Chrysler Group plans to launch four new diesel models in the next four years. This Bluetec engine essentially uses a triple-filter system to cut emissions. So it is pretty clean. DCX plans to share this technology with Volkswagen/Audi. Next year VW and Audi will be introducing new models with Bluetec diesels, though neither is expected to use the Bluetec label.

Now Honda. Honda has announced plans to bring a 2.2-litre diesel it calls the i-CTDi engine to North American within about three years. Honda says the engine is very clean, very advanced and will meet tough Tier II Bin 5 emissions regulations.

You are going to see lots more of this sort of thing. J.D. Power thinks diesels will hold 10 per cent of the Canadian passenger car market by 2010-2012. For more on this topic, go to a story I wrote for yesterday's Globe on the whole diesel scene. Lots of details there in Globe Auto.

Beefteck 1 from Yuho United States writes: Something I have not been able to understand is why North American car makers are having such a difficulty producing reliable cars. We hear that the gap is closing, but I tend to disagree - looking at the Consumer Reports magazines I would say that 90% of vehicles look awful compared to those from Honda/Toyota and even Hyundai now. The only North American cars that appear to be somewhat reliable are offerings from Buick and Lincoln. Given that Honda's and Toyota's haven't been forward on the design front (typically they have been pretty boring looking) why don't N.A. car makers realize that its all about long term reliability?

Jeremy Cato: Beefteck, you have hit on the very question we've all been asking for decades. Personally, I think this starts out as a cultural issue. I do not honestly believe the North American business culture is very good at focusing on long-term details -- and quality is all in the details. I could get into a lot of long-winded business mumbo-jumbo here -- some philosophical jabbering, too -- but the simple truth is, North American-style capitalism is mostly aimed at generating nearly instant results. Certainly the Japanese auto makers do not work under the same kinds of quick-results pressures from shareholders that the Detroiters do. Don't underestimate how important this is.

You will notice that during this time of restructuring in Detroit, GM, for instance, has stopped giving earnings guidance. You will also notice that with so much private capital floating around, there is plenty of talk about one or more of the Detroit car companies going private -- being bought out by a private investor or group of investors. That eliminates stock-market players like Kirk Kerkorian from the game and allows for long-term decision-making. We'll see.

As for quality today, the actual gap between auto makers is generally pretty close. Still, much of this depends on the individual model. For instance, GM's trucks are proving to be very durable and that explains, at least in part, the high loyalty rate. The Detroiters are also focusing a lot more on designing vehicles that project the perception of quality -- better interior materials where people see and touch things, tighter panel gaps and so on.

I think I should also point out that certain Detroit models are superior to the best imports. The Chevy Tahoe, for instance, rates better than the Toyota Sequoia. So there is progress.

Finally, the Detroiters have surely gotten the message with their continuing market share and financial losses. If they do get it right in the next five years, then the game will be over forever.

Scot Affleck from Prince George Canada writes: Just a quick comment about the Mercedes 'smart car.' A lot of years ago, maybe before your time, Transport Canada dis-allowed Austin Minis and Morgan sports cars to be imported to Canada due to inadequate bumpers. The bumpers on my brothers 75 MGB were totally gross and obnoxious. My question is, ' When and why did Transport Canada change its mind on these bumper rules when it came to dealing with 'Smart Cars'? Life is full of condradictions, aint it?

Jeremy Cato: Hey, Scot: The Smart actually meets crash standard in North America and Europe. Sure, it's small but it is also well-engineered. What Mercedes did get special dispensation for is the fuel tank. When the Smart came to Canada it did not meet certain filling standards related to emissions and Mercedes got a pass on this.

Yes, life is full of contradictions. Got any Smarts running around in PG?

don skelton from Calgary writes: Jeremy: welcome to the web. I enjoy your show on ROB-TV but that old guy you work with is cramping your style! My question: Do you see a diesel revolution in N. America or are U.S. consumers too reluctant to adopt this technology? Thanks.

Jeremy Cato: The old guy likes diesels a lot -- even owns one, a Golf with 210,000 km on the clicker. Yes, he does cramp my style but I've always believed in being respectful of senior citizens.

Diesel revolution? Honestly, I see diesels growing slowly in popularity here. I don't think North Americans will easily switch from gasoline -- too many bad memories from the past re: diesels. That's one thing.

Second, diesels are more expensive now than ever and to make them clean adds cost still. Right now the typical diesel engine is about $2,000 more expensive than a gas one. Add in super-cleaning devices and the really pure diesel engine costs about as much as the premium on a gasoline-electric hybrid. Remember, more of the world's diesel engines are manufactured in Europe and the strong Euro makes exports from there very expensive here -- especially for Americans.

A wild card here is fuel prices, but with oil prices heading down or at least stabilizing, pump prices are not likely to explode any time soon. Unless, of course, governments add taxes.

Then we have the infrastructure. Will oil companies add diesel pumps at every gas station? Hmm. Exxon-Mobil didn't earn $40-billion last year by wasting money on things like this. Grocery stores at gas stations are, of course, another story.

Oh, and what about the capacity to build diesel engines? The Europeans are tapped out here, with all the demand for diesels in Europe.

Diesels will become more popular here, but an explosion of demand is unlikely for a whole bunch of reasons.

Brian Lowry from Fredericton writes: Hi Jeremy: I'm thinking of buying a Volkswagen Fahrenheit (basically an orange GTI), but I'm not close enough to Montreal or Toronto to conveniently visit the auto shows -- any idea how it rates as a moderately premium version of the GTI?

Jeremy Cato: Hi Brian: I think the GTI is a really nice piece. It looks good, the cabin is very comfortable and roomy, the seats are fantastic and the hatchback design if very flexible. In driving, this car is quick, responsive and fun. Just a nice package.

The drawback with VW vehicles is on the quality side. The research is pretty clear on this. VW quality is generally sub-par compared to the best auto makers. There is just no way to get around this. That is not to say every VW vehicle will have problems, but it is to say that more of them are likely to have issues than competing models.

So as a pure purchase for driving fun, great car. I have concerns about reliability and durability. The warranty is good, though. So if you really want this car, make sure you check out the dealer. A good one will make all the difference when you have something go wrong. Forget about the sales person, in fact. Find a dealer you think is good, then go interview the service manager and the dealer principal. Ask them how you will be treated if or when something goes sideways.

Dwight Tanner from Vancouver writes: VW's FSI technology used on their gas engines (e.g. 1.6 L FSI Golf) in Europe offers much better fuel economy than the 2.5 L 5 cylinder currently being imported to N.A. Do you think they will make this engine available in N.A.?

Jeremy Cato: Hey, Dwight: Yes. Audi, the VW luxury brand, has it now and I agree about its merits. But Audi can charge more for its vehicles than VW, so you can see where I am going with this. Ask your VW dealer to push hard for this FSI technology. Sometimes the manufacturers actually listen.

Damir Podnar from Oakville writes: Hi Jeremy, don't you think Japanese automakers are getting a pass in the media. Look at Toyota with its record number of recalls in fact are they not leading the recall race or how about their new monster truck with its 5.7L engine, not very green to me.

Jeremy Cato: Hey, Damir: This isn't the first time I've heard this and it won't be the last. It goes with the job. I try to call 'em like I see 'em. Most others in the news media do, too. But the Detroit auto makers have decades of incompetence to overcome and that won't happen overnight. I really, truly believe the Detroit makers are heading down the right road and there are many products from them I would have not trouble at all buying or recommending. But there is a lot of bad history there for the Detroiters, too.

As for Toyota, it is introducing a big Tundra model but overall, Toyota's truck sales are dwarfed by those of the Detroit-based auto makers. Toyota hopes to sell maybe 200,000 Tundras; Ford sold about 1 million F-Series pickups last year, and GM about the same of its Chevy Silverado/GMC Sierra.

I have personally written and broadcast quite a bit about Toyota's recent quality/recall issues. So have others. But over the last two decades there is overwhelming evidence to show that, overall, Toyota's quality has been better than anyone else's.

On this point I suggest you do a little research test of your own. Check out the Technical Service Bulletins issued for Toyota Corollas and Chrysler Neons. Go back for a few years of this. You will find a lot of problems detailed for the Dodge, not many for the Toyota. TSBs are service notices that manufacturers send to their own technicians, highlighting non-safety-related problems and offering fixes and other information. They are a fantastic measure of what is going on on the quality front for every auto maker. You can find TSBs at the Web site of the National Highway Traffic Safety dministration or through private service providers such as Alldata.

You know, we in the new media make mistakes and if any reporter or columnist says he or she is completely unbiased, they are not being honest with you or themselves. But I can also say that most try to do a good, fair job of reporting, within the structure and confines of the work and the news business.

Jason Taylor, from Toronto asks: What is holding the auto industry back from bypassing hybrids and going truly green by introducing a completely electric car?

Jeremy Cato: Hey, Jason: I have written a lot about this for today's Globe auto show supplement. If you don't have a copy, you will find the stories -- includilng a big piece about the greening of the auto industry -- online.

The answer is complicated, but it really boils down to dollars and cents. Until now, the car companies have not had a compelling need to go green.

Anyway, here is something to take away. The other night I had dinner with GM product czar Bob Lutz and he flat-out guaranteed that GM will build the Volt plug-in hybrid and put it up for sale -- by about 2010 or so. I have him and GM on the clock, as of now.

Jeremy Cato: Well, time's up. Thanks for visiting and joining in the discussion. I really enjoyed it and look forward to the next time.

Until them, look for my daily blogs about the auto show here in Toronto. There is plenty to comment on and I would surely like to hear from you, too.

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