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DETROIT FEELS THE HEAT: Big 3 fleet sales hid Oct. retail collapse
Automotive News ^ | 11/14/05 | By Mary Connelly

Posted on 11/14/2005 1:29:03 PM PST by BurbankKarl

DETROIT -- This may be hard to believe, but the Big 3's October sales collapse was even worse than it looked.

Retail sales -- normally the most profitable automotive sales category -- fell far more than the weak total sales figure that the automakers announced. Fleet sales to businesses, governments and daily car rental companies kept the Big 3 afloat.

"No one is happy with the retail numbers inside these (October) industry numbers," said Chrysler group sales boss Gary Dilts in a conference call. "It is severe. A double-digit (decline) on retail is something we have not had much of."

Overall, sales of the Big 3's domestic brands declined a cumulative 20.7 percent. But retail volume at General Motors, Ford Motor and the Chrysler group collapsed. GM's retail sales fell about 30 percent last month, while Ford Motor reported a 34 percent drop. Chrysler said only that retail sales fell by "a double-digit decline."

Steering clear of showrooms

Retail customers simply steered clear of Big 3 showrooms in October. "The traffic is off all the way around," says Glenn Hartzheim, owner of Hartzheim Dodge in San Jose, Calif.

Fleet sales include vehicles sold to businesses, government agencies and daily car rental companies. Automakers often lose money on sales to daily rental fleets, but other fleet sales can be profitable.

For each of the Big 3, fleet sales accounted for an unusually big chunk of total sales.

GM's fleet sales generated 33.5 percent of its total October volume, up from 25.8 percent for the period a year earlier. Ford Motor's fleets also accounted for 33 percent of October sales, up from 24 percent a year earlier.

The Associated Press reports that Chrysler's fleets shot up to 40 percent of its October sales. Chrysler doesn't report precise figures for monthly fleet unit sales. Dilts acknowledged that commercial sales -- excluding sales to daily rental fleets -- rose 119 percent in October. He did not indicate whether Chrysler increased sales to rental fleets.

Chrysler also notes that fleet sales for the third quarter totaled 17.2 percent of its U.S. sales, up from 13.8 percent in the third quarter of 2004.

For the industry as a whole, fleet sales represented more than 25 percent of the light-vehicle market in October, says Bob Schnorbus, chief economist for J.D. Power and Associates. In the first nine months of the year, fleets accounted for about 22 percent of industry sales, he says.

The Big 3 sell an estimated three out of every four fleet vehicles, Schnorbus says.

Toyota Motor Sales U.S.A. Inc.'s monthly fleet percentage typically remains in the single digits, the company says.

"Our fleet runs between 6 and 7 percent," says Xavier Dominicis, company spokesman. "October was typical."

The Big 3 traditionally have sold a higher percentage of vehicles to the fleets than the imports. And Chrysler's Dilts defends the practice, noting that commercial fleet sales are "good business."

Chrysler did well selling minivans, Jeep Grand Cherokees, Dodge Chargers and Chrysler 300s to commercial fleets last month, he says.

Poor residual values

But heavy fleet sales can hurt a vehicle's residual values. That's why Ford has tried to limit fleet sales of its new Five Hundred sedan.

General Motors also has tried to limit fleet sales. "We have increased our commercial fleet sales -- which are profitable sales and good sales for us to increase -- and we've decreased our daily rental," says GM spokeswoman Deborah Silverman.

Schnorbus says the "strength on the fleet side is partly due to some legitimate strength in the commercial side of the market. But I wouldn't rule out the possibility that they're pushing fleet to smooth out their production and soften any weakness on the retail side."

Art Spinella, president of CNW Marketing Research Inc. in Bandon, Ore., says autumn is a strong season for commercial fleet sales. And Spinella says heavy fleet sales are actually a sign of the economy's strength.

"The fact that fleets are back in the business is good, primarily because they have some confidence that the economy is back," Spinella says.

"In 2001 and 2002, fleets -- whether business or governmental -- were all pretty much out of the market," he says. "In bad times, they will hold on to vehicles for a long time trying to squeeze out every mile."


TOPICS: Business/Economy; News/Current Events
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1 posted on 11/14/2005 1:29:06 PM PST by BurbankKarl
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To: BurbankKarl

So how did the non-Detroit makers do, or is this because of Greenspan's battle against economic growth?


2 posted on 11/14/2005 1:33:00 PM PST by Moonman62 (Federal creed: If it moves tax it. If it keeps moving regulate it. If it stops moving subsidize it)
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To: BurbankKarl
Any way you slice these turkeys, these car companies are TOAST.

It is clear that Toyota and Honda are grinding them into dust. RIP

3 posted on 11/14/2005 1:33:38 PM PST by Agent Smith (Fallujah delenda est. (I wish))
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To: BurbankKarl

make a good, safe, economical car and sell it at a reasonable price and people will buy it.

make a good, safe, economical car and sell it at obscene prices, and you get what you deserve.


4 posted on 11/14/2005 1:36:35 PM PST by camle (keep your mind open and somebody will fill it full of something for you.)
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To: Agent Smith
It is clear that Toyota and Honda are grinding them into dust. RIP

Nope, they did it to themselfs. The Ford family is proof that the old man was a mental leap well apst any of his progeny. Chyrsler, er Diamler, is doing waht Germans do with inferiors. And GM 'Robert S. MacNamera'-ed themselfs by trying to tell crap as 'that car you knew we could build'.

5 posted on 11/14/2005 1:39:34 PM PST by pikachu (That which does not kill me just makes me grumpy!)
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To: BurbankKarl

This might explain why Ford has called us 2-3 times in the last month asking us to consider purchasing a new vehicle.


6 posted on 11/14/2005 1:40:23 PM PST by knittnmom (...surrounded by reality)
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To: Agent Smith

Not exactly. A good friend of mine is a Toyota salesman in Phoenix and he told me he is having a terrible month. Nothing with a V8 is moving and the only car that is selling is the Camry.

Ford is selling F150's and Mustangs and that's about it.


7 posted on 11/14/2005 1:43:43 PM PST by 38special (Watch It)
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To: BurbankKarl

Crapboxes.

Nissan and Hyundai make better cars right in the US in MS and AL.

Theres no need to buy American.


And yes, the Sonata is much better quality than many GM and Ford vehicles.


8 posted on 11/14/2005 1:46:00 PM PST by LongsforReagan (Dick Cheney is the best elected official in this country. Period.)
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To: BurbankKarl
Paraphrase of a quote I read somewhere:

There is no problem in the automobile industry that good product will not solve.

9 posted on 11/14/2005 1:46:38 PM PST by Plutarch
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To: Moonman62

TOKYO -- As Toyota Motor Corp. cranks up its North American factories, it will reduce exports from Japan, right?

Wrong. Toyota is pushing its exports to new highs, and North America is the prime target.

In the current fiscal year ending March 31, 2006, Toyota expects to export 1.04 million vehicles to the United States, Canada and Mexico, up more than 20 percent from a year earlier. That's a record. Toyota's annual exports to North America have never topped 1 million units.

"Demand has been stronger than expected," says Takeshi Suzuki, Toyota's senior managing director in charge of the finance and accounting group. "It's not proper for us to keep customers waiting. So we have expanded capacity both at home and abroad."


10 posted on 11/14/2005 1:48:55 PM PST by BurbankKarl (NRA EPL)
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To: LongsforReagan

I recently purchased a 2005 Hyundai Elantra and am very happy with my selection.


11 posted on 11/14/2005 1:49:02 PM PST by Phantom Lord (Fall on to your knees for the Phantom Lord)
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To: 38special

After months of "employeee pricing" the bottom feed next years customers. To make sales in the past few months they lowered their prices so low people who would have bougth in the next 6 months to a year bought then. Now they are suprised that they glutted the market and no one is coming around.


12 posted on 11/14/2005 1:49:20 PM PST by TXBSAFH ("I would rather be a free man in my grave then living as a puppet or a slave." - Jimmy Cliff)
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To: camle
make a good, safe, economical car and sell it at obscene prices, and you get what you deserve.

Well last I checked the foreign cars were just as expensive if not more so than domestic cars. Therefore the the reason people are choosing foreign cars (even those produced in America) over domestic cars (even those owned by foreign companies) must be that at least one of the criteria quality, safety, economy) you mentioned must be lacking in the domestic cars and not lacking in the foreign cars that people are buying.

Let's presume that safety and economy are relatively close between foreign and domestic cars. Then that only leaves quality that is lacking.

I don't know about you but I'm driving an 18 year old foreign car, while it is hard to find any domestic cars even half its age still on the road.

Value counts, when you are making the second most expensive purchase in the Average American's life. Even more so when it is the most expensive purchase.

13 posted on 11/14/2005 1:50:20 PM PST by anymouse
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To: camle

Well, I bought a safe (5-star crash test rating), economical (32 mpg highway) Ford sedan almost 9 years ago for under $20k, about $3000 less than a comparably equipped Toyota or Honda would have cost. Still no mechanical problems (though I get a slight feeling the days on the mass airflow sensor ($45) are numbered). Since then, Honda's prices have jumped, Toyota has stayed steady, and the new Ford replacing mine has a lower sticker price than mine had 8 years ago.


14 posted on 11/14/2005 1:50:22 PM PST by eraser2005
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To: Plutarch

the new Pontiac Solstice is sold out for 1.5 years, the factory is adding a third shift to keep up. that is one bright spot for GM.


15 posted on 11/14/2005 1:53:51 PM PST by oceanview
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To: BurbankKarl

Ford should stick to what they do best, trucks and Mustangs, and maybe improve the look of their small nimble foreign Focus. Dump Taurus for goodness sakes... and Crown Victorias only work for cops, I would scale back to a Camry size and convenient like competitor instead, maybe with a Tbird look. Big Sedans are a waste in an SUV world.


16 posted on 11/14/2005 1:54:16 PM PST by JudgemAll (Condemn me, make me naked and kill me, or be silent for ever on my gun ownership and law enforcement)
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To: anymouse
I have an 1986 560sl, a 1993 Buick Regal 3.8 and a 1973 911.
I will never need to buy a new car.
Nor would want to.

New cars are not user friendly when it comes time to repair.
17 posted on 11/14/2005 1:57:28 PM PST by Nalu
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To: anymouse

"I don't know about you but I'm driving an 18 year old foreign car, while it is hard to find any domestic cars even half its age still on the road."

I don't know about that... I see plenty of 20+ year old domestics on the road here next to Toyota's NA headquarters. Plenty of generation I Tauruses (20+ years old), too ...though I consider pre '97 Tauruses to be risky quality wise...

Most recent surveys, when properly analyzed from a statistical basis, show only very slight differences on average in quality... Some domestics do better than some imports and vice-versa. Its always worth looking at the actual data on a specific model, not going with preconceived notions.

After all, Hyundai has until recently built complete crap. :) Did their improved quality allow them to give 10 year warranties, or did the offer of a 10 year warranty result in higher perceived quality? Tough call, there...


18 posted on 11/14/2005 1:57:54 PM PST by eraser2005
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To: LongsforReagan

Nissans are a great deal. Good car, reasonable price. Their latest big truck eats Fords, Toyotas and Dodge equivalent for lunch, despite uglier looks.


19 posted on 11/14/2005 1:58:32 PM PST by JudgemAll (Condemn me, make me naked and kill me, or be silent for ever on my gun ownership and law enforcement)
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To: camle; All
I've said it before, and I'll say it again...

You have your Mustang, Corvette, 300/Charger, a couple of Caddys, and that's it. There's no reason to ever buy any "American" (made in Canada/Mexico most likely) car over a Japanese (made in Ohio, Kentucky, etc.) model.

'Tis a shame, but it is DESERVED.

Cars I've owned:

1984 Dodge Daytona Turbo (was great for 6 months, then fell apart)
1987 Ford Mustang GT (fantastic, too bad I smashed it)
1981 Chevy Cavalier (piece of crap)
1990 Isuzu Amigo (solid as a tank, extremely thirsty, unfortunately)
1990 Mazda Miata (best car I've ever owned--by far)
1993 Ford Taurus (company car--competent, but would never buy one)
1995 Nissan Altima (competant, boring, reliable, died after 150k, I give it a B)
1990 Mercury Sable (garbage)
1991 Ford Crown Vic (comfortable, tons of minor problems)
2001 Chevy Impala (company car-boring, always a problem w/ something, would never buy one)
1993 Ford Crown Vic (better than the '91, comfortable, but as usual, tons of minor problems)

Now, the Daytona, Mustang, Amigo, Miata, and Altima were all purchased brand new. Back when cars were somewhat pricey, but worth it. Now they're ALL unbelievably expensive, and not worth it. Wanna spend some cash?---go certified pre-owned. Me, right now I'm still in the middle of a personal corporate restructuring, so everything's done on the cheeeep! Until I'm rich, no new car purchases for me---used only, and always short-term.
20 posted on 11/14/2005 1:59:24 PM PST by motzman (Free Tom DeLay!)
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To: BurbankKarl

Chrysler ought to be ashamed for selling vehicles as bad as their minivans. Poorly made, overpriced and 9 times out of 10 whenever I see a trail of blue exaust smoke going down the road, you can be sure it is coming out of a Caravan's tailpipe.


21 posted on 11/14/2005 2:03:34 PM PST by reagan_fanatic (Darwinism is a belief in the meaninglessness of existence - R. Kirk)
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To: JudgemAll
The Taurus is dead already... there should be no 2006 models available until they come out of fleets...

The Fusion is its direct replacement, and is getting very good reviews - think a blend of Camry and Accord.
USAToday's review And the base model can be had for ~$1300 less than a comparably equipped Camry, $3000 less than an Accord, and a little more than a Sonata.... (all per truedelta.com)
22 posted on 11/14/2005 2:08:06 PM PST by eraser2005
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To: BurbankKarl

Probably had a lot to do with gas prices. Last month would have been a good month to buy a big car.


23 posted on 11/14/2005 2:11:23 PM PST by Aquinasfan (Isaiah 22:22, Rev 3:7, Mat 16:19)
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To: reagan_fanatic
...9 times out of 10 whenever I see a trail of blue exhaust smoke going down the road, you can be sure it is coming out of a Caravan's tailpipe.

I thought I was the only one who noticed this. Dead on, accurate. Get behind a Chrysler minivan and it almost always chugs blue smoke.

I understand how a car blows blue smoke, but what is it about Chrysler minivans that so many of them - over many production years - spew blue exhaust smoke? Valves? Rings? What? And, why in the world would they not correct something so obviously flawed? But hey, if that's what they want to sell, then don't come begging me to buy your defective product!

24 posted on 11/14/2005 2:12:42 PM PST by Obadiah ( Deuteronomy 6:5)
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To: oceanview

Wow. That IS a beautiful car.


25 posted on 11/14/2005 2:14:19 PM PST by Obadiah ( Deuteronomy 6:5)
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To: BurbankKarl

Cadillac is GM's best division I think.


26 posted on 11/14/2005 2:20:39 PM PST by LdSentinal
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To: Obadiah; oceanview
Here's a couple of snippets from Motor Trend's Miata vs. Solstice review (Dec. 2005)

"GM can take pride in what it's accomplished. The Solstice is a real sports car and no the topless poseur enthusiasts feared. It'll sell on looks and value alone. But if the Solstice is solid runner, the MX-5 is a fleet-footed sprinter, delivering a more athletic, lithe drive in most every respect."

"The MX-5's engine is smoother and happier to rev than the Solstice's. The MX-5 has a more communicative chassis, and it feels every one of those 400 pounds lighter and more responsive than the Pontiac. This (GT MX-5)...won every performance contest, although the margins were small. The Solstice's top design is fussier than it needs to be; the MX-5's couldn't be simpler. The Mazda's interior is of higher quality and beautifully packaged. While the Solstice's cabin is comfy and racy looking, it suffers from a dearth of storage, a few ergonomic hiccups, and cheapoplasticity."


Comparably equipped, there's less than a thousand dollar difference between the two. The Solstice is neck-snappingly good looking. With better engineering, Pontiac could have laid the smack down on the MX-5.

But they didn't.

Again.
27 posted on 11/14/2005 2:35:09 PM PST by motzman (Free Tom DeLay!)
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To: JudgemAll

Not my Ford Lightning buddy. Sorry.


28 posted on 11/14/2005 2:37:45 PM PST by 38special (Watch It)
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To: Nalu
I will never need to buy a new car.

Don't be surprised when a gasket goes on the engine of the Buick. Motors aren't exactly a strong suit for Buick.

29 posted on 11/14/2005 2:40:45 PM PST by PAR35
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To: eraser2005

Hey Eraser,
I've been thinking of getting a Ford Expedition, I'm NO FAN of fords, i actually hate them. The only reason i've been thinking of getting one is because the resale value sinks like a rock, the Expedition has been out for a while and so by now they have got to have the bugs worked out.

If i get a used late model onei can get it dirt cheap and drive the hell out of it like i do my current car, a salvaged subaru which i've put close to 75,000 miles on it with NO Problems,
i believe in getting my moneys worth out of my car. My current car has been driven very hard and is jap it is foreign after all and maybe is why it's held out, i've been wanting for it to die and thats why i've driven it so hard, (try over 100mph high speed mountain driving, fast take offs, and just pound on that gas pedal) So i don't care if the price of gas is over 3.00 gallon)
I'm not trying to brag but the big 3 should learn a lesson from the japs, a car that's got over 70,000 on it and i still haven't changed the brakepads (i've got all the maintenance reciepts).
This is the only thing that has kept me from getting a newer american car, ( i do own a american truck i never drive, so i'm not bashing american).

I am really leaning to a Ford Expedition though, reasons being: Safety-Big car-, comfort. The jap car is just too small and uncomfortable, and since i'm getting old, i want something where i can relax and have an automatic car.
I hope the expedition works out when i get one, the other car i'm considering is the Chevy Tahoe.


30 posted on 11/14/2005 2:42:17 PM PST by 1FASTGLOCK45 (FreeRepublic: More fun than watching Dem'Rats drown like Turkeys in the rain! ! !)
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To: Obadiah

Oh, you folks are making me feel like crap. I just picked a Town & Country as my new company car! The Ford I've been driving for 100,000 miles hasen't been the best. I was looking forward to the new one now I'm on a downer.


31 posted on 11/14/2005 2:54:21 PM PST by Recon Dad (Force Recon Dad (and proud of it))
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To: 1FASTGLOCK45

I would encourage you to look at the Chevy Tahoe. I have my fourth GMC Yukon XL 2WD (were called Suburbans earlier) and they are wonderful. Just bought my new one the end of June and it's better than any earlier ones. Also gets good mileage on the road (at legal speeds) generally about 23 mpg.


32 posted on 11/14/2005 3:04:24 PM PST by toddst
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To: 38special
Cams and Corollas! I just bought one:o)
33 posted on 11/14/2005 3:05:26 PM PST by TheGunny
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To: TheGunny

1983 Toyota Corolla.. paid $300... worth: priceless.. purhased in 2000... spnt only about $500 on tires and repairs,so far... 269,000 miles... still runnin strong.. wonder if Detroit can make a car that good?


34 posted on 11/14/2005 3:08:34 PM PST by Chuzzlewit
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To: Chuzzlewit

GM carefully engineers their products to last one mile past warranty.


35 posted on 11/14/2005 3:11:12 PM PST by RightWhale (Repeal the law of the excluded middle)
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To: Chuzzlewit

I doubt it, the funny thing is that...Im from detroit. I hate unions and what they are/have done for the industry.


36 posted on 11/14/2005 3:13:13 PM PST by TheGunny
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To: motzman
Solstice is neck-snappingly good looking. With better engineering, Pontiac could have laid the smack down on the MX-5.

And this is exactly why American auto makers fail. It is why the public doesn't buy their wares anymore. The Solstice is a great example. As you mentioned it is gorgeous, but then they - as usual - put cheap plastic crap in the interior, and then skimp on the engineering angles! WHY??? Why do that? Why do they constantly hit a grounder double when a little more effort would be a grand slam? It certainly isn't because they don't have the know-how.

Man, that is just so perplexing.

37 posted on 11/14/2005 4:47:06 PM PST by Obadiah ( Deuteronomy 6:5)
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To: Recon Dad

Ah, don't be bummed. They're not that bad. In fact, truth be told, we're still hanging on to our 98 Grand Voyager.

For all my complaining, ours really hasn't given us any problems. And, I don't think it's blowing blue smoke, but we don't put a lot of miles on that vehicle and I maintain it pretty meticulously.


38 posted on 11/14/2005 4:50:43 PM PST by Obadiah ( Deuteronomy 6:5)
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To: TheGunny

My condolences


39 posted on 11/14/2005 4:53:35 PM PST by 38special (Imports Suck!)
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To: Obadiah
And it's a shame. If I was in the market, I'd definately test-drive the Solstice, but I'd also take out the MX-5. And, being a former owner of an MX-5 (1990), I know I'd go for the Mazda. Not only is it a better overall car, I wouldn't have to worry about quality problems, plus it will hold it's value much better than the Pontiac.

But, there's also more problems. Why did Pontiac wait so long to build this car? If Mazda never made the Miata, I seriously doubt Pontiac or any other US automaker would have. That's a hugh (and series) problem.

And, you have an existing fantasitc benchmark to aim at (the Miata). You don't make a car as good as the benchmark, you blow it away!

The Big Three (GM especially) deserve the trouncing they're getting!!
40 posted on 11/14/2005 4:58:22 PM PST by motzman (Free Tom DeLay!)
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To: Obadiah

I was kind of kidding. I shouldn't bitch. In 32 years I haven't bought a car or paid for gas.


41 posted on 11/14/2005 5:00:52 PM PST by Recon Dad (Force Recon Dad (and proud of it))
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To: motzman

you can't test drive a Solstice - none are available.

why did it take them so long to build it? because Bob Lutz wasn't working there years ago.

the new Miata is not without its problems, the passenger footwell is oddly shaped because of the way the engine sits against the firewall on that side, very uncomfortable.


42 posted on 11/14/2005 5:52:52 PM PST by oceanview
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To: oceanview
Yeah, Pontiac didn't make enough of these cars--figures. Meanwhile, their lots are filled to the gills with crap that will never sell.

If the Solstice came in at around 15k, nicely equipped, it would be a real winner.

the new Miata is not without its problems, the passenger footwell is oddly shaped because of the way the engine sits against the firewall on that side, very uncomfortable.

That's not a problem...that's a quirk...;)

I have this month's Road and Track and Motor Trend--both have comparison tests of the MX-5 and the Solstice and neither mention this (not that it isn't true---they usually love to nitpick this kind of stuff). The only MX-5 interior negative is the leg room is a bit tight for over 6 footers. And, they can't understand why the MX-5 has 4 cupholders. And (most importantly) why the He## would Mazda drop the name "Miata"?

Both, however, give the Solstice credit for a good effort--but recognize the Miat...excuse me, MX-5 as the superior vehicle.
43 posted on 11/14/2005 6:48:43 PM PST by motzman (Free Tom DeLay!)
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To: camle

if the ride is fly you must buy.


44 posted on 11/14/2005 6:49:41 PM PST by mrmargaritaville
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Comment #45 Removed by Moderator

To: 1FASTGLOCK45

Fastglock45,

I would recommend against the Ford Expedition - it, and even more so, the Lincoln Navigator, are good examples of the "look at the model, not just the make" mentality that would serve people well.

My Taurus currently is pushing 100k, without problems. Sure, I've replaced the brake pads, but I would never trust a vehicle with that many miles on original pads. The rule I live by is that the brake system must be the best maintained system on the car. The ability to stop is more important than the ability to go (not to diminish its importance)...

The Tahoe I would rate slightly higher on reliability - but none of the big SUVs are really very good (even the Jap ones) reliability-wise.


46 posted on 11/14/2005 7:23:52 PM PST by eraser2005
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To: Chevy Sales

how is the HHR doing, I don't see many of them on the road.


47 posted on 11/14/2005 7:37:04 PM PST by oceanview
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Comment #48 Removed by Moderator

To: Chevy Sales
So does GM still have sheet metal keys that easily bend or break in the door locks? ;)

I'm sure you enjoy selling (and test driving) Vettes, but what other GM car is worth a damn 5 years down the road? Vettes are only so appreciative because so few are made and the status symbol value. Every 50-something, bald, divorced businessman wants one to score the trophy blond weekend bimbo. Heck as long as Viagra is on the market, you'll keep selling Vettes. ;)
49 posted on 11/14/2005 11:59:36 PM PST by anymouse
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Comment #50 Removed by Moderator


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