While the Rapide retains Aston Martin’s inherent design characteristics the additional length and extra doors build upon the DB9’s taut, poised stance, generating a natural, even flow and a dynamic sensation that’s conveyed even when the Rapide is standing still. “In terms of elegance the Rapide is adding value to the DB9’s undisputed elegance and subtle understatement,” says Dr Ulrich Bez, Chairman and Chief Executive Officer of Aston Martin. “Our cars must look beautiful from all angles, and the four-door is very well balanced.” Practicality and power are the Rapide’s signature qualities, but above all it is recognisably an Aston Martin, a testament to the strength of the marque’s design language. The Rapide’s four-door body provides greater access to the extended architecture, making it a performance car for every occasion. “The proportions must be perfect,” says Dr Bez, “if we couldn’t achieve this then we wouldn’t have made the car.”

ARCHITECTURE
Underpinning the Rapide concept is Aston Martin’s VH architecture, developed to offer exceptional manufacturing flexibility. This high-strength, low-mass architecture forms the backbone of the current generation of Aston Martins, spearheaded by the DB9 Coupé and flanked by the DB9 Volante and the Vantage.

The extruded aluminium construction of the VH architecture can be modified in both length and width, providing a myriad of packaging options, and the chemically-bonded structure (using glues derived from aircraft manufacture) is mated with bodywork that mixes aluminium and composite materials. The architecture’s flexibility is further demonstrated by its use in the DBR9 racing car, where it is combined with carbon-fibre composite body panels to produce a modern race car of rare beauty.

Aston Martin’s traditional hand-finishing, craft skills and attention to detail operate side by side on the ultra-modern production line at Gaydon in Warwickshire. The VH architecture is at the heart of this manufacturing operation, its modular structure providing such inherent rigidity that it has given the company’s designers and engineers the same levels of freedom as their predecessors, 50 years before. In today’s marketplace, even low volume manufacturers like Aston Martin are governed by strict legislation and the need to balance power, weight distribution, handling and safety. Utilising the VH architecture as the foundation for the new Rapide concept, Aston Martin has illustrated how their current range might be expanded, a four-door coupé that complements the formidable DB9 2+2, DB9 Volante and the compact and muscular Vantage.

DESIGN ETHOS: EXTERIOR
The visual language of Aston Martin is highly distinctive. Across a range of three cars, the company’s design team, led by Design Director Marek Reichman, fulfils Aston Martin’s core values – power, beauty and soul – with bodywork that is taut, poised and muscular. “The brand is about the driving experience,” says Reichman, explaining how the concept is intended to provide everything customers have to come to expect from an Aston Martin, and more. “We wanted to make the most beautiful four-door car in the world,” he says, as he traces the Rapide’s development from a series of exploratory sketches in the Summer of 2005 to the finished, fully-functioning prototype. In the process, Reichman and his team explored the way the Rapide might be used, where and when it would be driven, even who would be driving. The four-door body was a natural way of providing access to the Rapide’s increased interior space, part of Aston Martin’s commitment to design usability. “If there’s a space then you should also offer accessibility, otherwise you’re not being honest,” explains Dr Bez.

Reichman describes the ‘beautiful harmony’ of the line that runs through the Rapide’s bodywork, giving the car the appearance of motion even while stationary, an athlete in flight, rather than crouched and coiled upon the starting blocks. “It’s not a wedge, it’s graceful and flowing,” he explains, “we decided to let the lines flow right through the body to the tail, which ends very beautifully. In silhouette, the Rapide shares the same sinuous line as its two-door siblings, although when compared with the poised stance of the Vantage with its sprinter-like forward thrust, the Rapide is a long distance runner.” Reichman believes that proportion is fundamental to how a car is perceived. “There are forms that appear at ease and forms that appear tense and uncomfortable,” he says, “we wanted to make everything on the Rapide work in harmony.” Achieving this required the intuitive skills of Aston Martin’s modelling team, who work with both raw clay models and advanced computer modelling. “We put character and feeling into the surface,” says Reichman. “Our designers and modellers work with a sculptural language here at Aston Martin – the play of light on the surface are incredibly important to us.” Full-scale models are viewed in daylight and dusk conditions, for example, to ensure that the dramatic surface forms remain an integral element of each and every Aston Martin. Reichman believes that technology like the VH architecture allows him “to keep the form language and soul of the product.”

The Rapide represents the pinnacle of Aston Martin’s design ethos, a formal language developed through the carefully balanced combination of elegance and aggression. In silhouette, three-quarters view and from both the front and rear, the Rapide is instantly recognisable as an Aston Martin, regardless of whether it is wearing the famous winged badge (still faithfully rendered in pewter and enamel on every model). The soft curves of the flank kick up into muscular haunches above the rear wheel arches, with the roofline staying low, true to the distinctive Aston Martin silhouette. The Rapide also features the metal side strakes, another signature feature, while the doors feature Aston Martin’s unique ’swan wing’ design, opening upwards at a 12-degree angle away from the kerb to provide greater access. The rear doors cut unexpectedly deep into the flank below the C-pillar, increasing the width of the opening to improve access. At 5m long, the Rapide is 30cm longer than a DB9, and only 140kg heavier. “Aston Martin should always be about the proportions,” Reichman says. “Although the Rapide is slightly taller than the DB9, the proportion of the section is the same, allowing the flowing lines to encase a spacious passenger compartment.”

DESIGN ETHOS: INTERIOR
The Rapide continues Aston Martin’s reputation for highly-tailored, individual cockpits. The trademark glass starter button is a small element of theatre that is also beautiful and tactile, the perfect first point of contact with the car. Providing sporty accommodation for four passengers in such a low and beautiful coupé presents a formidable packaging challenge.

Sitting low to the ground, just four centimetres higher than a DB9, the interior is an exquisite leather-swathed package, with custom-embossed shagreen hide specially sourced for the Rapide. “It’s very cosseting,” admits Reichman, “it’s about creating a personal experience of the journey.” Like a set of exquisite hand-tooled luggage, the interior is compact yet also surprisingly spacious, with great attention to detail, like the extensive map and accessory storage and the mood lighting that maximises the feeling of volume.

Aston Martin has always been about truth to materials: wood is valued for its structural properties and appearance, as are aluminium, glass and leather, while carbon fibre is utilised for its strength and weight-saving abilities and not just a showy finish. A transparent polycarbonate roof brings an increased sense of spatial awareness, opening up the passengers’ vistas beyond the driver’s focus on the road ahead. This ultra-light transparent material is a first for the company. The Rapide has dual climate zones, and the luxuriously appointed rear seats come with their own DVD screens and controls for the audio system and environmental system.

The dashboard is very driver-focused, the three passengers can also be as engaged and involved in the journey. For example, the satellite navigation system is fully accessible to all passengers, with a handheld Bluetooth unit that allows rear seat passengers to add their input to the route ahead. It’s this level of involvement that characterises the Aston Martin experience, and it is vital that both driver and passengers can share it.

The generous rear luggage compartment is accessed via a hatchback, a practical feature shared with the Vantage and the pioneering DB2/4 of 1952. In addition, each rear seat folds down individually, allowing for myriad interior options, be it three players plus three sets of golf clubs, or four people and their skis, which slot neatly above the central console. To give the concept a real sense of occasion, the feeling that every journey ends in an event, the interiors team have incorporated a chiller cabinet in the boot, perfectly shaped to hold a single Magnum of Jacquesson champagne, along with four elegant flutes.

The clock is an integral part of the Rapide’s elegant dashboard. For this element, Aston Martin turned to their existing partners Jaeger-LeCoultre, world leaders in fine timekeeping and original manufacturers of dials in Aston Martins as far back as the 1929 1.5 Litre First Series. The Swiss watchmaker, which dates back to 1833, also created the exclusive AMVOX collection of understated gentlemen’s timepieces. Aston Martin’s engineers and designers collaborated with Jaeger-LeCoultre on the design of the Rapide concept’s timekeeper, which takes on the characteristic traits of the AMVOX watches. The 270 degree sweep of numerals, dark grey dial with circular brushed surface, hands, numerals and raised sapphire crystal combine to make a beautifully refined object at the heart of the car, a series of sophisticated volumes created by the layers of the dials.

TRADITION
Aston Martin has always acknowledged the need for elegant, high-speed touring sports cars. The four-door, four-seater saloon displayed at the 1927 Olympia Motor Show began a long tradition of cars that combined elegance, style and power with usability. The Olympia car was a closed-body tourer that sported long, flowing lines for the era, tapering to a luggage trunk and mounted on a tubular frame. The car was also low to the ground, purposeful and sporting. Four years later another four-door saloon was exhibited, with an aluminium-panelled body by Bertelli, finely engineered, detailed and upholstered throughout, with intriguing touches like the roof-mounted opening glass panel above the rear passenger compartment.

Experimentation and innovation continued. The ‘Atom’ project began in 1939 as a response to materials shortages, packaging design and post-war needs. A four-door saloon, the Atom was built around a steel tube chassis, upon which the bodywork was mounted. The strictly geometrical bodywork drew upon the new science of streamlining, and the car was smaller and lighter than what had gone before, with an innovative chassis design that ensured the company retained its image as a technical ground-breaker. In the decades following the war, the David Brown-era cars created the quintessential image of the grand tourer, two-door four-seaters that remain icons of car design. Beneath the supremely elegant skins there were yet more technological firsts, like the strong chassis-and-tube ‘Superleggera’ construction of the early DB series. In the 1970s and 80s, Aston Martin was uniquely positioned to accommodate almost any customer request, and four-door variants of the V8 and Virage models were built for a select number of discerning customers.

THE JOURNEY
Every journey in an Aston Martin is an occasion, proving that the most enjoyable way of getting between two points isn’t always a straight line. The Vanquish S, DB9 Coupé, DB9 Volante and Vantage are all designed to sharpen the senses, extracting every grain of texture from the road surface, with high levels of driver feedback and involvement. Yet when conditions preclude making progress or spirited driving, an Aston Martin adopts a relaxing, restrained character, with the massive reserves of torque and power combining with the uniquely cosseting interior to envelop the driver and their passengers in the Aston Martin experience.

The Rapide continues this tradition – a fast, cross-country machine that excels in any driving conditions. The Aston Martin customer doesn’t need to have their choice dissected in minute detail: these are cars which appeal primarily to the heart, strong emotional design that is also subtle and discrete. The Rapide is a uniquely personal machine, its interior representing the very best of the company’s immensely skilled workforce, demonstrating how each Aston Martin is still tailored to a customer’s precise requirements. It also represents the high degree of personalisation offered by ultra-modern production facilities and a model line-up underpinned by a flexible architecture – a new model that could broaden the range to cater for every requirement.

Like all Aston Martins, the Rapide is a superlative performer. Powered by the V12 engine from the DB9 but uprated to 480 brake horsepower mated to a ZF Touchtronic gearbox, the car has performance equivalent to the DB9, although the gearing has been adjusted to suit the longer wheelbase and more refined ride. Carbon brakes and callipers, a first for Aston Martin, give the Rapide immense stability and stopping power. “A sports car is not simply characterised by the number of doors,” says Dr Bez, “so a four door car can still have the looks and performance of a sports car and the Rapide is certainly true to its name, providing an unrivalled way of taking four adults on a long-distance journey along any type of road.”

The Rapide is serious about the business of driving, a chassis that is equally at home amongst winding back roads, mountain passes or high-speed carriageways. It has the expertise to devour trans-continental distances while leaving the driver feeling fresh and alert, however far or fast. The rich exhaust note is intended to be heard echoing off the sheer rock walls of the Alps, the steering demands to be taken to the switchbacks of Austria’s Grossglockner Pass, while the engine begs to be opened up along a stretch of German Autobahn. Although the power delivery is unrelenting, this is also a car designed for every day use, with ample space for a golfing weekend for three in Scotland, a lengthy trans-American journey or even a trip to a Bordeaux vineyard, with space to bring back 20 bottles of wine. You can sweep up to a hotel, restaurant or première and the four doors allow your passengers to enter and exit with style.

An Aston Martin is about elegance, power and innovation, a bespoke form constructed to high standards that provide the model definition of 21st century design and engineering execution.

The Rapide is a seminal evocation of Aston Martin’s recent history, proof positive that the high performance four-door automobile need not imitate the conservative three-box saloon; it can be a car of extreme elegance and beauty. A sporting coupé with real heritage, the Rapide is a practical choice that expresses the pure emotion and passion that underpins the Aston Martin marque, its rich heritage and design DNA.

Aston Martin begins the 21st century with almost limitless potential. As one of the strongest and most recognisable brands in automotive history, the company now has the products, technology, production facilities and distribution network to offer unparalleled choice in this market segment, able to move rapidly from prototyping to concept to production. The company’s fast-expanding global dealership network continues to revolutionise the high-performance sales environment, with a series of crisp, contemporary showrooms that highlight the very best in modern architecture and design, making them the perfect backdrop for the product.

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By Prashant Gopal

The recession might be technically over, but unemployment is rising month after month even in most of the nation’s strongest job markets.

A full-fledged job recovery seems to be a long way away. But some metros are poised for significant job growth by the first quarter of next year. BusinessWeek.com teamed up with Moody’s Economy.com to identify America’s 25 next recovering job markets. These metros were ranked based on Economy.com’s projected job growth in the first three months of 2010.

Topping the list is Mount Vernon, Wash., a small town about 60 miles north of Seattle with just 48,000 workers. The town, which lost jobs quickly during the recession, could see a rebound, in part because tourism, retail, and hospitality will make a comeback as the economy improves. Additionally, the weak dollar will provide a boost to communities with international trading ports and metros that border Mexico, such as Brownsville, Tex. (a port town that is No. 4 on our list), and border town McCallen, Tex. (No. 3). Our list was also packed with towns that are closely linked to the energy industry (Billings, Mont., Houston, Tex., and Farmington, N.M.), college towns (College Station, Tex., Tuscaloosa, Ala., Auburn, Ala., and Lawrence, Kan.), and military towns (Columbus, Ga., Augusta, Ga., and Texarkana, Tex.).

None of the metros on the list experienced a housing bubble that had a disastrous pop. Miami, Las Vegas, Phoenix, and Stockton, Calif., will likely be in a funk long after many Texas metros are in growth mode.

“These are areas that had little or no housing cycle and stand to benefit from the renewed firmness in commodity prices,” said Chris Lefakis, an economist at Moody’s Economy.com. “This could be an export-lead recovery with the replenishment of inventory leading to a resurgence in manufacturing.”
Room for Growth in Manufacturing

The manufacturing sector has taken such a battering that it has a lot of room for improvement. Inventories have fallen to such low levels that manufacturers will have to increase production even to keep up with existing demand, Lefakis said.

A plant opening or just expanding can have a magnified impact on a small metro, giving a swift boost to the job market, said Joel Naroff, president of Naroff Economic Advisors in Holland, Pa. But job growth elsewhere mostly will be slow and incremental, he said. Companies will be cautious about hiring and will expand overtime hours and bring on temporary workers before making permanent hires.

The good news is that overtime pay and the increase in temp workers will push up wages nationwide, which could result in more consumer spending, he said.

“If the economy begins to grow, it will be enough [for companies] to add slowly to payroll,” Naroff said. “I’m not expecting a vigorous upturn.”

Travel, hospitality, and retail could see more dramatic growth. Throughout the recession, Americans have cut down on travel, eating out, and shopping. If the economy improves, they’ll add more entertainment to their budgets, he said.

“People might not go to Disney World,” said Naroff. “But they might start going out to dinner once week.”

New York City, which didn’t make our list, could also have a great year, especially now that Wall Street is giving out bonuses “like 2008 never existed,” he added.

The federal government will also play a key role in the recovery even as it begins to phase out tax incentives and other economic stimulus spending, Moody’s Economy.com Chief Economist Mark Zandi said on CNBC Nov. 3.

“Without the government, the consumer would be pulling back,” Zandi said. “By early next year job losses will abate … so we will start to see wage and salary growth and government can begin to pass that baton off [to the private sector]. But it will be a tricky handoff.”

Click here to see America’s 25 next recovering job markets.

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BMW said he would, and is located in Wiesbaden, Germany’s SGL Group’s carbon fiber manufacturers signed an agreement to purchase carbon fiber components. I believe this agreement can in North America, as well as the people of Germany to create about as big as 180 jobs.

Matter of this cooperation is a win-win situation for our two operations. In this way we can get the future of advanced technology, as well as strong support for raw materials, let’s Megacity plan is more of a competitive edge. We firmly believe that SGL Group will become our good partners. “BMW Group’s Chairman Nuobo Te Reithofer said,” In our ‘Project i’ inside the new scheme, we will open up a new world, in the body structure, light weight materials, the use of performance and above will be given greatly improved.BMW “Project i” The new plan is mainly designed to solve urban traffic congestion model developed multiple solutions. The plan is not aimed at proposing a model but rather developed a range of technologies, not only can be used in BMW’s existing models, and even rumors of a fourth brand models.

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By David Welch

Well, the new board of directors at General Motors got its way. The automaker will keep its long-struggling, German-based Adam Opel unit rather than sell it to Canadian parts maker Magna International (MGA) and Russian partner OAO Sberbank (SBER.RTS).

GM’s board made the decision at its monthly meeting Nov. 3, reversing an agreement made in September. GM’s board agreed to sell Opel to Magna but had initially balked at the deal, fearing the sale would cede control of a huge presence in the European market and give technology to Russian automakers.

Now, GM will get to keep a key strategic piece of its global empire. But it will have to fix a company that will require €3 billion to restructure. “GM gets to keep control of the engineering for its passenger cars,” says Michael Robinet, vice-president of CSM Worldwide. “The bad news is, they have to restructure their European operations.”

GM had little choice at the time. The German government refused to give GM enough cash to restructure Opel, after giving GM a €1.5 billion bridge loan to keep the company afloat. Chancellor Angela Merkel’s government also wouldn’t provide financing for a rival bid from Belgian investment firm RHJ International (RHJI.BR). As a result, GM was all but forced to go to Magna, which had a financing deal with the German government.
A Valued Engineering Hub

GM’s board had two problems with the deal. The first was losing up to 1.5 million vehicles’ worth of sales and the scale of parts purchasing that comes with it. Opel also is the engineering headquarters for GM’s compact cars and midsize sedans. The new directors didn’t want to cede those engineering resources even though GM would have kept a 35% stake in Opel. The German company has engineered the platforms for the Chevrolet Malibu and Buick LaCrosse as well as the Chevy Cruze compact that comes out next year.

For the board, the strategic value of keeping Opel’s sales and engineering capabilities outweighs the costs of keeping and fixing Opel, said a source briefed on the meeting.

In one sense, the reversal could be viewed as a slap to GM CEO Frederick A. “Fritz” Henderson, since he recommended the sale to his board. But it’s more complicated than that. Henderson saw no other option when he pushed for the Magna deal back in August, since the German government wouldn’t offer financing for GM’s restructuring plan or another buyer, say sources close to the board. Plus, the events of last month cleared the way for GM to keep the company. In mid-October, the European Commission questioned whether the German government had fostered a noncompetitive bidding process by offering financing only to Magna. When the German government countered that it was willing to consider offering financing for other alternatives, GM saw an opening to keep Opel and ask for financing help to restructure the company.
A Better Cash Position

There is something else at play. On Nov. 15, Henderson will reveal GM’s financial progress. While the company will not be in the black, sources inside the company say GM’s cash position will be improved. So the company will be better able to fix Opel and deal with its losses. GM’s European operations, which included Saab until it was sold recently, lost $2.8 billion in 2008 and another $2 billion in the first quarter of this year.

It will be a tough slog for Opel, though. Germany has run a generous version of “cash for clunkers,” pushing sales up more than 30% in some months. There will be big payback next year for that spurt, adding to an already difficult environment.

Now GM has to negotiate with Germany and other European governments for financing. Henderson will also have to go to IG Metall, the union representing Opel workers, for concessions that could cut about 10,000 of Opel’s 25,000 workers. It won’t be easy. Both the German government and IG Metall have publicly criticized GM’s management and blamed the American executives for Opel’s problems.

However, GM may have some sway with the union. Management could threaten to move assembly of future models to lower-cost countries in Eastern Europe, or import cars from India or China. With the dollar cheap, GM could even export cars from the U.S., says Robinet, the industry analyst. “GM has substantial leverage with IG Metall,” he says. “GM could go to IG Metall and say, ‘We’ll keep building vehicles here for now, but the next one may go somewhere else.’”

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By David Welch

The new, government-owned General Motors is starting to take shape.

GM emerged from bankruptcy on Friday, July 10, and with it came a slew of changes. The company will have far less debt, fewer brands, and a leaner management team. GM also has a new chairman, former AT&T (T) Chairman and CEO Edward Whitacre, and a new board to oversee the sweeping changes being made by CEO Frederick A. “Fritz” Henderson.

GM’s trip through Chapter 11 bankruptcy happened at lightning speed, requiring just 40 days to strip away the unwanted brands, plants, debt, and other liabilities to release a smaller, cleaner GM into the world. “Today marks a new company,” Henderson says. “The last 100 days showed that a company not known for moving fast can do things very quickly.”

It will be even more impressive if GM can master the next phase. The company has to reverse years of decline and start winning back U.S. car buyers who have fled to competitors over the past several decades. Henderson and Whitacre will have to change GM’s culture and keep launching new models that will turn heads. GM also needs to get consumers who have shunned the company to give those models a chance. “Perception is the biggest challenge,” says John Wolkonowicz, analyst with IHS Global Insight in Boston. “GM products are better quality and more exciting than the consumer believes.”

To get all of that done, Henderson and Whitacre are reorganizing the company and trying to change how it does business. One-third of management will be shown the door, including some high-level executives.
A Bigger Job for Lutz

Just as important is who is staying: Henderson brought Robert A. Lutz, GM’s head of product development for the past nine years, back from the verge of retirement, as BusinessWeek reported earlier. Lutz will get an expanded role, overseeing not only product design but also marketing and communications.

GM holds 19.6% of the U.S. car market so far this year, down from nearly 30% at the start of the decade. And it is selling a majority stake in its European Opel unit after a decade of failure there. So Henderson and his team will have to prove they can use GM’s lower costs and clean balance sheet to make and market successful cars.

It will be tough. But Henderson at least starts off with far fewer retiree liabilities and debt than his recent predecessors. That’s in large part because GM got the government and the United Auto Workers union to accept stock instead of cash for big chunks of debt. GM also wiped away nearly $28 billion in bond debt. “Fritz gets rid of a lot of stuff that we talked about for years but couldn’t do,” says Robert Stempel, the former GM chairman who was pushed out by the board in 1991. “Legacy costs were an issue for many years. It crept up on us. The push now is to get away from the doom and gloom and get down to the business of selling cars.”

Henderson will be working with more manageable debt. GM had more than $70 billion in debt before filing for bankruptcy protection. But using bankruptcy to ditch most of $28 billion in bond debt, and getting the union and government to take an ownership stake in lieu of cash for their debt, wiped most of that away. GM emerges with $10.5 billion owed to the U.S. There is some other international debt, but the company’s total debt load will be less than the $17 billion GM predicted before the bankruptcy filing, Henderson says.

“They have substantially cleaned up the balance sheet and are in the position of becoming a fierce competitor,” says Patrick Dreisig, an attorney with New York law firm Butzel Long, which has worked on bankruptcy cases for auto parts firms.
Pension Worries

GM does, however, have a pension plan that was underfunded by some $12 billion at the end of last year. If the stock market, and hence GM’s pension-fund investments, don’t rebound enough, GM could have to contribute billions to the plan in three or four years. Including those pension obligations, debt, predicted future warranty claims, and non-union health-care plans, GM has $48 billion in liabilities.

To make decisions faster, Henderson has made the organization leaner. Two major decision-making boards, GM’s North American Strategy Board and the Automotive Strategy Board, will be combined into one. Fewer executives will staff those boards. Henderson says that should speed up everything from product decisions to broader strategic actions.

He has also eliminated GM’s regional management layers. Instead of an executive to run each of the North American, European, Latin American, and Asian business units, Henderson will oversee North America and one executive, current GM-Asia-Pacific chief Nick Reilly, will oversee the global businesses.

That leaves open what will become of some long-standing GM executives. On Friday, Henderson would not discuss the fate of GM-North America President Troy Clarke, Latin America chief Maureen Kempston-Darkes, or GM-Europe President Carl-Peter Forster. He did say that some of those executives and others will either retire or be reassigned.

Henderson says he and his remaining managers need to get out of the office more. He plans to travel once a month to meet with dealers and consumers to get their feedback. And he will push other executives to do the same. He is trying to get the company focused on what consumers want, instead of pushing discounted cars to meet debt and union obligations.
Getting Closer to Customers

Toyota (TM) executives call it genchi genbutsu, which means go and see. Henderson says he has always believed in getting closer to customers and says now is the time to do so, with bankruptcy and most of the restructuring done. “I have always been a believer in genchi genbutsu, and I don’t speak Japanese,” he says.

Henderson will have a shot at making money if sales rebound. (In the U.S., GM used to require a 26% share—in a car market totaling 16 million vehicles—to make money. After scrubbing away some retiree liabilities and a lot of debt in bankruptcy court, not to mention closing many factories, GM says it can make money with an 18.5% share of a 10 million-vehicle-sales market.

The government will own 60.8% of the new GM, a health-care trust covering union workers and retiree medical benefits will own 17.5%, the Canadian and Ontario governments will own 11.7%, and 10% of the stock goes to the old GM, which is still in bankruptcy court. The old GM holds shuttered factories, a nine-hole golf course, and 10% of the stock in the new GM, plus warrants for 15% of new stock later on.

GM’s bondholders and some tort claimants, who have sued GM in product liability cases, will both have to fight it out in bankruptcy court to collect any value on their bonds or legal claims. The stock and assets will be liquidated, but bondholders will take a big haircut.
Changing Perceptions

GM is sticking to its plan of selling vehicles from just four brands: Buick, Cadillac, Chevrolet, and GMC. Pontiac is being killed. Saab, Saturn, and Hummer are being sold, with the new GM getting proceeds from the sale.

Lutz says GM will go about changing perceptions by rebuilding those surviving four brands. He plans to integrate design, marketing, and communications to build brand image from the product and push that influence into advertising and marketing. Says Lutz: “Design will have a powerful influence on marketing and communications.”

Lutz, who had been acting as an adviser since April, planned to leave at the end of the year. But GM’s new board wanted him to stay, and the prospect of working on new models without the financial burden of years past reignited his interest. Says Lutz: “With all the burden that we have historically managed all gone, I don’t see how we can fail.”

GM has made cocky proclamations like that in the past, of course, only to go ahead and fail. But Henderson has something to say that is very un-GM. He says it’s time to forget about GM’s historic sales leadership and sheer mass. “It’s not about size,” he says. “It’s not about bigness. It’s about creating value and doing something special.”

Now that the playing field is even, he has a once-in-a-lifetime chance to prove GM can do that.

Return to the General Motors’ New Landscape and Auto Bailout Special Report Table of Contents.

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50th Anniversary Commemorative Edition Chevrolet Corvette Stingray Concept Car in the overall design concept is described using a more traditional shape the future of design. GM’s vice president of global design of this love of Caldwell, said: “We have to give their design team with considerable freedom, so that they can create the eclectic products, broaden our horizons, as well as their own imagination .

50th Anniversary Commemorative Edition Chevrolet Corvette Stingray Concept Car in a sense is just a design breakthrough, not to a certain volume production models. Despite the news that the upcoming C7 Corvette may be very incredible performance, but it does not mean that Council and the car are. We believe that some of the above concept car design will eventually be applied to a production car of a top to go, including the clam shell style hood, scissors-style doors, ergonomic seating, enhanced night vision effect and high-performance hybrid drive systems.

Internal body interaction has a touch control that allows the driver to customize the situation for the power output and efficiency of the body. They could also use the car camera and advanced communications systems and to share the data.

General Motors said that this concept car Corvette Stingray “Corvette brand represents the rise of the past and exciting future. Body combines the traditional elements as well as the Corvette has a lot of high-tech components and materials, stylish appearance is the eye-catching. ”

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Infiniti in March of this year’s International Motor Show Geneva, Switzerland, to give the observer the feeling of the above a bit strange. However, in the United States next year, the New York International Auto Show, Nissan Skyline Coupe in the new top of the application of this concept car design elements and displayed in public before. Inside in the previous report, it is reported that the upcoming Nissan Fuga has confirmed that the final state. However, this was called the Holiday Auto (holidays, cars, referred to as HA) of the media said he received information is false. The real situation is that the next generation Nissan Skyline (that is, Infiniti G37) will be extensively used the concept car from the elements of Essence.This means that the next generation Nissan Skyline (that is, Infiniti G37) and the Essence of the design is very similar, just above the volume will be smaller, would be more practical.

The new Nissan Skyline Coupe the time there should be in October 2012, but as of that time, Nissan’s product line into should also have a lot of hybrids, and hybrids including Fuga Car and ultimately appear in the Japanese market above the Lexus hybrid sedan.However, 2012 Skyline Coupe and the Essence would not use the same turbo-charged engine, instead of using “3D motor” and a 3.7-liter, V6 engine, maximum output power of 450 hp. As for the hybrid version of the Skyline Coupe is the most advanced version, is a “high output power,” the Grand Sports Coupe.Clearly, this displacement 3.7-liter V6 hybrid engine using fuel only and 3.0L liter engine is almost the same time, for the protection of the environment is a higher level, the strong extent of even and Nissan GT – R par. 2012, paragraph Skyline Coupe will be used will become larger (and wider) in 20-inch wheels to be able to match the strong power output. As for the body of the chassis length, width, as well as double wishbone suspension and the current version will not be any different.

2012, paragraph Skyline Coupe should be in the United States in 2010 New York International Auto Show for the first time to meet you. Sedan version will be exhibiting at the 2011 Tokyo International Motor Show, and in 2011 began selling in Japan in October.

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Pagani Zonda Cinque aerodynamic body re-engineered, the new rear spoiler and the vehicle is designed to make the car at 300km / h speeds can produce 750kg of downforce; roof guide draft (for cooling the engine) and the body behind the new The guide duct (cooling rear brake) is from the Zonda R racing design concepts; Öhlins titanium suspension system can be developed to make four kinds of settings, each setting can be used for fine-tuning 10. In addition, Zonda Cinque is also equipped with alloy wheels, four-point seat belts, unique interior design and body painting; Zonda Cinque and Zonda F weight ratio but also reduce the 20kg (body weight 1.21kg)

Pagani Zonda Cinque carry the momentum to re-adjust some of the AMG 7.3L V12 naturally aspirated engine, maximum horsepower output of 678ps / 6,150 rpm, peak torque has also increased to 780Nm / 4,000 rpm; six-speed sequential gearbox, MR Driven Placement ; 0-100km / h acceleration takes only 3.4 seconds ,0-200km / h acceleration 9.6 seconds, top speed of over 350km / h; Zonda Cinque braking reaction time was equally astounding ,100-0km / h only 2.1 seconds ,200-0km / h only takes 4.3 seconds.

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It’s now fair to declare Ford Motor (F) an unqualified turnaround story.

The company reported a $997 million third-quarter profit on Nov. 2, adding profits to gains in market share and improvements in quality since CEO Alan Mulally took over in September 2006. The nearly $1 billion profit is a $1.2 billion turnaround from the third quarter of last year. The company also generated $1 billion in cash and paid down $2 billion in debt.

“Ford is making tremendous progress,” Mulally said on a conference call. “Our transformation is working.”

Strong earnings are a big victory for Ford and Mulally. The company has been far stronger than rivals General Motors and Chrysler (FIA.MI), gaining market share this year. But looking healthier than GM and Chrysler, both of which were in bankruptcy earlier this year, was hardly a great feat.

Ford still has a big debt load, something that GM and Chrysler were able to greatly reduce in bankruptcy. The company dropped long-term debt to $23 billion. But adding short-term debt and obligations to the UAW’s retiree health-care trust, Ford’s debt is estimated at $38 billion. It’s a disadvantage, but Barclays Capital analyst Brian Johnson says Ford should have enough cash to meet its needs.
U.S. Market Share Up to 15.2%

Ford made the earnings leap on the back of about $4.6 billion in cost reductions so far this year. But the company is making progress with consumers, too. Ford’s U.S. market share is up one percentage point to 15.2%, and Ford added $100 million to automotive revenue. The company said that productivity gains, lower retiree costs, and a drop in costs in its plants all added to the bottom line.

There is some real meat in Ford’s improvement. The company added $1.9 billion in pretax profit by getting better pricing. Some of that may be because the incentives it had to offer were lower during the government’s cash-for-clunkers program. But CFO Lewis Booth said Ford has been more disciplined at its plants, building fewer cars, so the company doesn’t need deep discounts to foist excess production on the market. Its new models are also selling at fatter sticker prices, Booth said.

Ford made $357 million in pretax profit in North America, after losing $2.6 billion at home in the third quarter of last year.

Despite the strong quarter, Ford has still lost $1.3 billion so far this year.

Ford did report a $2.3 billion profit in the second quarter, but that was thanks to a one-time special items that added $2.8 billion in black ink. Ford still had an operating loss of $424 million in the second quarter.

If you strip out Volvo’s $135 million loss—Ford is moving closer to selling the unit to China’s Geely Automotive—the numbers look even better.
Still Relying on Finance Profits

Ford’s results are a big boost for the company. But a lot of work still needs to be done. Of the company’s $1.1 billion pretax profit, $677 million came from the finance company. Relying heavily on finance profits has long been a crutch of U.S. automakers since profits on their cars were hard to come by.

Just being in the black in today’s recession is a big achievement, of course. Mulally said he expects Ford to be firmly profitable and to show positive cash flow in 2011, but he didn’t give guidance for 2010 because of uncertainty over the economy. “We’re not sure about the strength of the recovery,” Mulally said.

Ford is also flush with cash. The company has $23.8 billion in cash, up $2 billion from the second quarter. Part of that was achieved by issuing $565 million in new stock in the quarter.

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According to the Japanese car magazines BestCar the news media, mass production version of the 086A to be used a 2.0-liter turbo-charged engine, maximum output of 250 hp. As there is a legend in the STI version will use the maximum output power of 308 horsepower engine and uses rear-wheel drive. The Brothers version of the Toyota FT-86, compared with the maximum output power of 200 hp.

We believe that in 2011 launched the production version of the Subaru 086A will be in the price slightly higher than the Toyota FT-86, should be 2 million U.S. dollars (equivalent to about as big as 140,000 yuan), but until now, there is no news Fuji will be able to confirm what name this production model.

Many people do not like Subaru for the car nose problems still exist, particularly in the company until now have not a small, rear-wheel drive Coupe models. In fact, Toyota Motor Corporation and to work together, the two shared each other’s core resources are still also still has a lot of controversy, sharing of resources also means sharing of supporters. The “Feng Baru” (TOYOBARU) so that Subaru has always been out of his own field, in order to bring this company is a completely new market opportunity.

Company said the car’s market positioning is young and has a passion for buyers, the use of Toyota’s engine technology, so Subaru is expected to reduce the car in the heart of the cost. However, if the car can not be mass production, then the nature of this cost savings can only be nominal. Sources claimed that Subaru plans will launch a four-wheel drive version, again different from the Toyota brand, but this one to the car’s weight and complexity will increase, technical difficulties to be overcome.

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Abu Dhabi’s “Ferrari World” theme park, with a total of 20 spots, and will be formally opened next year. Ferrari’s official said: “The park is a place for each design, all will give you a completely different experience, so that you know the story of Ferrari’s every period of history.” The theme park is completed, will become the world’s largest indoor park. The park located in Yas Island, off Abu Dhabi Airport takes about 10 minutes by car.

The park, the most exciting fun place, than is currently the world’s fastest roller coaster in. Exposure to which is just like their own driving an F1 car, because inside the device has a variety F1 roller coaster simulator, such as the G-force simulator, so that ordinary citizens have the opportunity to enjoy the thrills and excitement of F1 racing . And “Surf spaceship” tour, will take you through the Ferrari 599 engine, so you play in the Ferrari sports car experience leading technology.

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Amid much fanfare, Nissan finally showed off the first of several new electric vehicles this morning at the opening of its new global headquarters in Yokohama. Nissan chief Carlos Ghosn, a longtime skeptic on hybrids, is betting that the Leaf and other EVs, will quickly become mass market hits, and even suggested that fully electric models could account for 10% of all car sales by 2020.

The car looks much like other mass market models. Despite its name, the design doesn’t scream “eco-car” and, unlike some electric vehicles of the past, space inside isn’t compromised. Capable of seating five, Ghosn and three Japanese politicians with connections to Yokohama, including former Prime Minister Junichiro Koizumi, emerged from the “blue earth” colored Leaf with ease after it appeared on the stage.

The grand entrance was followed by a short video featuring an assortment of school-children explaining how good the Leaf is for all our futures. One youngster, presumably of his own free will, even compared the Leaf to an angel coming down to Earth.

Ghosn, though, focused on the practicalities, reiterating Nissan’s plan that the Leaf, which runs a 100 miles on a single charge, excluding the cost of the batteries, will cost no more to buy and run than a traditional gasoline-powered car. Zero-emissions of CO2 and other greenhouse gases, he said, are a bonus. Charging time is seven hours, although a 30-minute quick charge can get batteries back up to 80% of full power.

Key to its success will be bringing down the cost of the batteries, which currently cost around $10,000 per car to make. Sensibly, Nissan plans to lease the batteries to customers rather than try to sell the car at an inflated price. Initially, the carmaker will share the burden by taking advantage of government subsidies and cheap loans to ensure sales are profitable from day one. The challenge will be to get costs down to a sufficient level by the time governments begin scaling back incentives. Mass production should help. Ghosn, once again emphasizing the importance of affordability, said that the cost of leasing the batteries, plus the electricity used to charge them, will be less than what customers spend on gasoline for regular cars.

Even if the economics remain challenging—no other automaker is yet following the mass-market approach of Nissan and its alliance partner Renault—the Leaf is an enjoyable drive. I tried out a version of the car, albeit with a different body, earlier this week on a Nissan test track. The acceleration and handling were impressive and, importantly, it felt steady and secure. In terms of size, the version I drove, which measures 4.4 meters long by 1.7 meters wide, was perfectly comfortable. Indeed, when I then drove a Nissan Tiida (Versa in the U.S.) a few minutes later, I realized I much preferred the EV.

Ghosn once again took aim at hybrids, which he says have failed to become a mass market choice. He pointed out that their global market share is just 2%. To me, that’s slightly disingenuous given that, until recently, only Toyota and Honda were serious about gas-electrics. What’s more, Toyota expects to sell over a million hybrids a year in a year or so, and both Toyota and Honda reckon hybrids will soon account for 10% of their sales. Also, hybrids, unlike EVs, aren’t hindered by short driving ranges, use batteries that cost a fraction of the cost of electric cars and don’t require billions of dollars of public subsidy. Ghosn, though, reckons that the only thing stopping EVs becoming a mass market phenomenon will be automakers’ ability to make them quickly enough. “The problem we have is will we have enough capacity,” he said.

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In Detroit’s hey day, American cars were been fawned over in rock and roll tunes both for their brawny performance and cultural significance. Songs like Bruce Springsteen’s “Cadillac Ranch” glorified big, ostentatious Caddies. “Hot Rod Lincoln” by Commander Cody and the Lost Planet Airmen did far more as an homage to horsepower and a polish job for Ford’s luxury brand than it did for the band’s career. But the same can’t be said for the Chevy Camaro.

The most recognizable tune I can think of is the ‘80s punk ditty “Bitchin’ Camaro” by the Dead Milkmen. In the tune, the Milkmen lampoon the Camaro as a car for rich spoiled kids who guzzle gas and tear up their neighbor’s yard. It’s the hood ornament for crass American suburbia. Here’s a clip of the lyrics:

So you’d better get out of my way
When I come through your yard
Cause I’ve got a bitchin’ Camaro
And an Exxon credit card

For much of its history, the Camaro was a gaudy guzzler for the buzz cut and gold chains crowd. The cars were usually fast, but also inexpensive and unsophisticated. So, frankly, when GM announced two years ago that Chevy would bring the car back, I was very skeptical. It arrives later than Ford’s Mustang and Chrysler’s Challenger. And let’s face it, reborn muscle cars preach to the 50-something guys who already buy American brands, not the import owners that Detroit needs to win back to survive. It sends a signal to people shopping for Bimmers, Hyundais, Priuses and the like that Detroit is stuck in 1970.

But after driving the new Camaro, I have to erase all of that. The car is simply terrific. And it’s far more sophisticated in many ways that competing cars and certainly than the old Camaros. Start with the engine. My test model had a direct-injection V6 which kicks 304 horsepower but gets 29 mpg on the highway. All that grunt still guzzles 19 mpg in the city, but a combined 22 or 23 mpg for a car with that much oomph is impressive. You can get a V8 in the SS version, but it starts at $31,000. The V6 models start at $23,000

Then take a look at the car. Love the design or hate it, you have to say that it’s not just reproduced retro. Chrysler simply knocked off a 1970 Challenger. The Camaro looks like a new-era interpretation of the old pony car. If GM never killed it, the Camaro may have just evolved into this design today. It’s fresh. The Camaro really handles quite well, too. At 3,700 pounds it doesn’t feel as heavy as other big sporty cars.

The cabin is decidedly retro and not the car’s best feature. GM took many cues from the early ‘70s cars. And while the plastics inside don’t feel top grade, they’re good enough for a car that starts at $23,000 and offers as much as it does in terms of performance and style. My test car, by the way, was about $30,000 loaded up with satellite radio, blue tooth, stability control and a nine-speaker Boston Acoustics sound system.

Still, the new Camaro is a very impressive car. I was surprised by how much I liked it. I’ve never been a Camaro guy. But I was also suspect of how GM would execute it. When Pontiac brought back the GTO in 2004, GM was content to take a ‘90s jelly bean body style from its Australian unit, shove a big engine under the hood and call it reborn muscle. It didn’t last. This is a purpose-built muscle car for a new age, and quite a good way to usher in the New GM assuming the company emerges from bankruptcy in a couple of months as planned.

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Just when you figured that the United Auto Workers have been hammered into submission, union workers are flexing their muscles. Ford union workers at 11 plants have voted against concessions made by the UAW’s bargaining committee. Workers at four plants have approved the concessions, which include wage freezes for new hires, a moratorium on strikes over pay and benefits and some work rule changes, Bloomberg reported on its web site. If workers don’t ratify the concessions, then union leaders and Ford management have to hammer out a deal that can pass muster with the rank and file. Either that or Ford gets none of the concessions.

Where to begin with this one? From a public perception standpoint, this is the worst thing the union can do. Across America, workers are losing jobs even as the economy shows signs of life. Few Americans will have sympathy for UAW laborers who have kept their jobs even amid the worst downturn in auto sales in decades. You can’t blame UAW leaders for this one, since they agreed to the concessions. It’s the members who aren’t seeing the writing on the wall.

The new concessions aren’t exactly gut wrenching, either. Ford wants to freeze entry-level workers. That doesn’t affect the voting members and won’t likely hurt anyone new since Ford isn’t hiring. They also want to consolidate some skilled trades classifications, which could weaken job security for the electricians, welders, pipe fitters the like. But the big sticking point looks to be the no-strike clause that would be in place for the 2011 labor contract negotiations. Under the tentative agreement, the union can’t strike over wage and benefits proposals made by the union. But they could if management tries to cut their pay and benefits or over other issues like health and safety concerns. If the UAW and Ford can’t strike a deal, it would go to an arbitrator. Other major unions already do this, so it wouldn’t be the end of the world.

Wait, it gets even more silly. To sweeten the deal, Ford has been willing to give workers a $1,000 bonus upon ratifying the new concessions. The company would also commit to build new products in some UAW plants. So the union could strike over proposed pay cuts in 2011 and they’d get some more cash and job security today.

For both sides, that argument seems to be much ado about nothing. Ford hasn’t had a strike this decade. Neither side is interested in doing that since the union would worry about damaging their healthiest Big Three employer, which is already carrying a big debt load. And Ford wouldn’t want to blow cash on a standoff with labor. In other words, they are fighting over how to manage a very unlikely outcome. That said, asking a union not to strike declaws its negotiators.

My guess: Ford will give in on that one to get the other concessions, which deal with actual compensation and work rules, done and sealed. But given the nature of the concessions and what the workers stand to gain—and not lose—I can’t explain their obstinacy on this one.

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Fiat CEO Sergio Marchionne will soon deliver his fix-it strategy for Chrysler. One big piece appears to be the return of Fiat’s upscale Alfa Romeo brand to the U.S. with a dedicated dealer network. It would be sold as an upscale performance line that offers a bit of snooty European cachet but at lower prices than BMW and Audi. And it could work.

It will be a grand experiment by the Italians. The U.S. luxury market is already hotly contested with Lexus, Mercedes, Audi and BMW holding sway. Infiniti and Cadillac have new models coming. Alfa Romeo retreated from the U.S. market in 1995 and wasn’t exactly known for its quality. So its entrée won’t be an easy one.

But I’ll go out on a limb and say that Alfa has a real chance. I don’t expect the brand to sell cars in big numbers, especially at the start. Alfa will have to establish its name, brand image and prove that its car have real quality. The marketing push will cost a couple hundred million a year. But the styling is sophisticated and sexy, especially the MiTo compact. The MiTo would take the Mini Cooper head on. The 159 sedan is a looker. Check out the GT coupe, as well. The 8C is an absolute stunner. No word on which cars would arrive here from the boot. But they have some product that would turn heads. They are also pretty zippy cars that are fun to drive. Simply put, the brand offers something different than most premium makes sold in the States. And if fuel prices jump again, small and efficient upscale cars could catch on.

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Tata Motors has won kudos for its low-cost Nano, the world’s cheapest car. Here’s one honor the Indian company won’t want to trumpet: According to my BusinessWeek colleague Damian Joseph, the $2,500 Nano is one of the world’s 50 ugliest cars over the past half-century. “Admittedly, appearance wasn’t a design priority for the Nano, which is intended for Indians too poor to buy a regular car,” Joseph writes. “But that doesn’t excuse its egg-like stylings. Even the snub hood and tiny tires can’t draw the eye from the car’s domed top.”

Meanwhile, Tata Motors has other Nano problems. Check out the piece on BusinessWeek’s Asia Channel now by Mehul Srivastava, Ian Rowley and Moon Ihlwan. As they write in the BW story, Tata “may have to work hard to fight perceptions created by being a cheap, made-in-India car in Western markets obsessed with comfort and safety. Since September three Nanos across the country developed a short circuit that caused fire-retardant plastic parts to smoke up from the heat. Tata says it will carry out a preemptive audit of cars sold and in inventory as a precautionary measure, and it has ruled out a recall, choosing instead to replace the supplier for that specific part, called the combination switch.” Three problem cars out of 7,500 sold does not a crisis make. Problem is, when you hype your product as a People’s Car that’s the world’s cheapest, three might be all it takes to create jitters in the marketplace. Sure enough, auto blog GM Inside News already has a comparison between the Nano and the infamous Ford Pinto.

Tata should move fast to defuse the problem. CarTradeIndia.com, an auto industry website, reports today that a Tata spokesman says there have not been “actual cases of Nano catching fires but only smoke due to short circuit around the switch area and the melting of the plastic.” As damage-control strategies go, “No fire, just smoke” probably isn’t going to cut it.

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It has been almost two years since Tata Motors (TTM) unveiled a prototype of its $2,500 Nano at the January 2008 New Delhi Auto Expo. Analysts and reporters predicted at the time that by now the industry would follow Tata’s move by rolling out a host of cheap, small cars.

As the buzz surrounding low-cost cars subsides, though, there are no signs of the competition. The diminutive Nano’s closest rival for the potentially lucrative and mostly untapped market for cars that cost less than a few thousand dollars is a joint venture where Bajaj, an Indian two-wheeler manufacturer, and the Nissan-Renault alliance would share the remainder. The companies announced their plans for a Nano-killer in May 2008, and Bajaj showed the mock body of a prototype the day before the Nano was unveiled in January 2008. Back then the hype was so huge that even the empty shell of the unnamed car made the front page of Indian newspapers, and Nissan-Renault chief Carlos Ghosn predicted the $2,500 car would be ready by 2011, with the joint venture expecting to build a 400,000-unit plant just for that car.

Since then, however, few details have emerged, and it isn’t clear the companies will be able to meet their self-imposed deadline. Two Bajaj executives, speaking on the condition of anonymity, tell BusinessWeek the company is finding it difficult to persuade suppliers to do the kind of aggressive research and development required to push down prices without a clear guarantee that it would produce a sizable number of cars, especially without an approved final design. A Bajaj spokesperson declined to comment. Nissan’s executive vice-president for Africa, the Middle East, and Europe, Colin Dodge, said last week that Nissan’s (NSANY) input in the car is now minimal. “The project itself is very difficult,” says Dodge. “Doing this car for around $2,500 and getting motorbike drivers to jump into four-wheel vehicles [is] very challenging…[but] the car is coming along.” Dodge declined to comment on when the car will be released or if it will be badged as a Nissan, Renault, or Bajaj.
Where’s Hyundai?

South Korea’s Hyundai is taking its time, too. The second-biggest carmaker in India, the Korean company has spent more than two years mulling over a plan for an 800-cc, three-cylinder car that would be cheaper than its best-selling Santro, which retails for about $5,000 in its most stripped-down version. has yet to release details on its plan and hasn’t set a target launch date. Even if Hyundai does eventually produce such a car, it may have limited ambitions: Seoul-based spokesman Oles Gadacz says the car wouldn’t be exported to China, the world’s largest auto market by car sales.

Given its success in the Indian market, the Korean automaker can afford to put risky plans for an ultra-cheap car on hold. Hyundai’s India plant is operating at near-full capacity, says Lee Hang Koo, an auto specialist at government-funded think tank Korea Institute for Industrial Economics & Trade in Seoul. “It does not make any business sense to introduce a new platform with poor profitability and uncertain volume,” adds Lee, who doesn’t expect Hyundai to make the low-cost car a priority.

India’s top automaker isn’t focusing on the ultra-cheap auto sector, either.

Until the Nano came along, Maruti Suzuki laid claim to India’s cheapest car, the Maruti 800, which sells in the $3,500 to $4,000 range. Now the company (in which Japanese automaker Suzuki owns a 54% stake) has actually moved away from that segment. In 2007 it redesigned that car, the Maruti 800, into the Maruti Alto, a slightly up-market version with better air conditioning, nicer seats, and a new look, making the approximately $4,500 Alto India’s best-selling car. That’s no surprise. When hype over the Nano was nearing its peak, Suzuki Chief Executive Osamu Suzuki said the Japanese automaker wouldn’t follow Tata’s lead. “Our fundamental stance is that rather than Suzuki becoming very concerned about watching over our shoulder to see what other people are doing, we’ll move forward at our own pace,” he said in December 2007.
Little Incentive

The hesitation among international carmakers—and the challenges Bajaj and Nissan are running into—underline the potential pitfalls of making such a cheap car. The Nano car project is far from profitable; even when it reaches its full production run of some 250,000 cars a year in 2012, it will add no more than a few percentage points to Tata’s revenues, according to estimates by Vaishali Jajoo, an analyst with Angel Broking in Mumbai. The company has sold only 7,500 Nanos so far, and with such a low sale price, margins are likely to be almost anorexic—a few hundred dollars at the most when steel and other commodity prices swing to their cyclical lows. With that headline-grabbing $2,500 price tag, Tata hopes to make profits from the slightly up-market versions, which with air conditioning and power windows sell for about $3,200, and its export models, like the Nano Europa, which may retail for as much as $8,800.

For the export models, though, Tata will have to beef up safety measures, making the car heavier, and it will also have to invest even more money to make the electric models of the car it has promised. And it may have to work hard to fight perceptions created by being a cheap, made-in-India car in Western markets obsessed with comfort and safety. Since September three Nanos across the country developed a short circuit that caused fire-retardant plastic parts to smoke up from the heat. Tata says it will carry out a preemptive audit of cars sold and in inventory as a precautionary measure, and it has ruled out a recall, choosing instead to replace the supplier for that specific part, called the combination switch.

Part of the reason other carmakers are taking their time is that it still isn’t clear whether it’s worthwhile to spend the money and time to develop such a cheap car. For Tata, so far, the benefits have been intangible: swinging an international spotlight onto a company that sells 88% of its cars inside India. At the same time, Tata took four years to design the car, and a year and a half to sell the first one, giving it a head start that might make it difficult for others to catch up. Until the car was actually shown in 2008, many skeptics thought it would be a box on four wheels. “So they didn’t start planning a competitor until then,” says Prakash Telang, the managing director of Tata Motors. “But we are acutely conscious of the fact that the lead times can’t last forever.”

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By Kenji Hall

McDonald’s (MCD) took plenty of flak years ago for its super-size meals. But Microsoft’s (MSFT) strategy for building buzz in Japan gives new meaning to the term. Beginning on Oct. 22, to mark the launch of its Windows 7 in Japan, Microsoft has teamed up with Burger King (BKC) on a limited-offer burger: the Windows 7 Whopper.

The seven-patty burger weighs more than 791 grams (1.4 lb.) and stands about 12.7 centimeters (5 inches) tall. At 2,120 calories, it’s more than just a quick snack, easily exceeding the 2,000-calorie daily diet recommended by the U.S. Food & Drug Administration. The promotion was originally supposed to last seven days, but it’s been such a hit that the fast-food chain has extended it for nine more days. “We were surprised that it’s been so popular,” says Burger King’s spokeswoman Nozomi Nagumo.

Microsoft, based in Redmond, Wash., approached Burger King’s Japan unit to explore a tie-in that would coincide with the Windows 7 release. The idea was to reach out to a non-techie audience that might not be aware that Microsoft had revamped its operating software, Microsoft spokesman Masaki Iida says. For Burger King, which reopened in Japan in mid-2007 after a temporary pullout, this was a chance to piggyback on Microsoft’s brand. The fast-food chain says the special Whopper is the biggest burger it has ever marketed. Neither company would reveal the cost of the campaign.
Selling Like Hot Cakes?

Sales have been strong. Burger King sells the first 30 burgers at every store in Japan for 777 yen ($8.45); after that, the price jumps to 1,450 yen ($15.75). In just the first two days of the promotion, the company’s stores sold 1,700 burgers. Two days later, the count reached 6,000. (The majority of customers were paying the higher price.) For several days at a Tokyo shop, the Windows 7 Whopper accounted for one in every three orders.

The success of the campaign is evident in the blogosphere and on YouTube, where videos show people grabbing the burger with both hands and trying to bite through all seven patties. In one video, a man repeatedly draws attention to a pool of grease forming on the wrapper he eats over. Burger King’s Nagumo says staff members were told to ask customers if they needed a fork.

The crush of publicity is a welcome change for Miami-based Burger King, which has struggled for visibility since reentering the Japanese market in June 2007. The company withdrew in 2001 after losing a price war with McDonald’s. Its return was part of a global expansion to new markets such as Egypt, Hong Kong, and Poland. By next March, Burger King plans to add five new stores in the Tokyo metropolitan area, raising its store count to 20, says spokeswoman Nagumo. That’s nowhere near the 3,754 stores in Japan of rival McDonald’s.
Larger Than Life

Meals in Japan are usually pint-size, which explains why big burgers tend to attract a lot of attention. McDonald’s introduced its limited-offer MegaMac, featuring four beef patties, in 2007. Last November, McDonald’s launched a stealth-marketing campaign for the Quarter Pounder, which has been on the menu in U.S. stores for decades but had never been offered in Japan. That campaign centered around two restaurants in Tokyo’s hip Shibuya and Omotesando shopping areas that were marked only by a “Quarter Pounder” sign outside. During the pre-launch, customers could only order a single or double Quarter Pounder meal; now it’s a staple on all McDonald’s menus.

Burger King’s collaboration with Microsoft wasn’t the biggest burger the chain had ever sold in Japan. “One group ordered a 20-patty Whopper for a friend’s 20th birthday,” says spokeswoman Nagumo.

Microsoft’s Iida stresses that the Whopper isn’t the focus of its Windows 7 marketing. Besides ads, the tech giant filled a showroom in Tokyo’s Akihabara district—a hub for electronics, anime, and manga shops—with dozens of new computers made by Lenovo, Hewlett-Packard (HPQ), Acer, Sony (SNE), Toshiba, and others for the two days starting on Oct. 22. Microsoft staffers were on hand to give demonstrations of the PC operating system’s latest features. And in keeping with the numerical theme, Ultra Seven, a giant Japanese superhero from outer space that protects the earth from aliens and monsters, made a guest appearance.

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By Nick Heath

Following its sale by parent company Ford (F) last year, car maker Jaguar Land Rover has had to face the thorny problem of cutting itself loose from Ford’s web of business applications.

JLR is spending £200m separating its IT operations from Ford, largely on carrying out the painstaking process of copying and cloning more than 1,600 business applications.

The work – which followed its sale to Indian car manufacturer Tata Motors (TTM) – has ended up “costing an awful lot of money and not adding any business value overall”, according to JLR CIO Jeremy Vincent.

“We are now in the final straight. It has been very tough and the whole company have worked extremely hard.

“In the next three to six months, we will be free to pursue our own destiny and to take our own decisions,” he said.

Before being free to pursue its own destiny, JLR has to extract 18TB of email from Ford’s Microsoft (MSFT) Exchange system.

“When faced with cloning an entire Microsoft Exchange environment across the whole enterprise, I thought – here was a golden opportunity to do something different,” Vincent said.

For Vincent, doing something different meant making the decision to migrate 14,500 staff worldwide from Microsoft Outlook to Google (GOOG) Mail and Calendar, part of the search giant’s Google Apps suite.

The move has saved Jaguar Land Rover several million pounds compared to the cost of setting up its own Microsoft Exchange server and will offer ongoing service savings as well.

However, Vincent said that getting the old messages into Google Mail had proved “complex”, something Google hopes to address with the release of new tools for migrating data from Microsoft Exchange this financial quarter.

Staff will get access to Google Mail within the next four months and in future Vincent is interested in rolling out further apps within the Google Apps suite, such as the word-processing software Google Docs and possibly the collaborative comms software Google Wave.

JLR’s move to Google Apps is the company’s first step towards simplifying the IT infrastructure it runs in-house and farming out more of its IT services to outsourcers and cloud providers.

“The strategy will be one of simplification, standardisation and modernisation,” Vincent said.

“Where I can deem services and technology as being commodity I will seek to externalise, outsource or place them in the cloud.”

Jaguar Land Rover already works with software-as-a-service provider Salesforce.com (CRM), which provides the systems that house the company’s employee records, and Vincent said he is in talks concerning letting Salesforce run more of its services.

Vincent is also planning to talk to the CIOs of its sister companies Tata Technologies and outsourcing giant Tata Consultancy Services (TCS.NS) about how they could work more closely together in future.

In future, with the IT department no longer having to run so many services internally, Vincent said staff will instead play a greater role in managing outsourcers, business process management and choosing and integrating different cloud services.

Vincent may have been a recent convert to cloud computing, but its impact on his strategy has been significant.

“About six or seven months ago I did not have a clue about what cloud computing was and was invited to speak about it at a conference so I had to find out about it – since then it has fundamentally changed my philosophy of IT management and investment.”

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By Christopher Lawton

BMW (BMWG.DE) became the first major blue chip German company to link the bonuses of its top managers to those of its assembly line workers, amid growing global criticism of executive compensation. The move sends a strong message to other firms also examining their compensation practices, as the world’s largest banks in particular have come under fire from politicians, shareholders and the public over excessive bonuses during one of the worst economic crises the world has seen.

BMW plans to tie executive bonuses to those of its blue-collar workers, in a bid to create a fairer and sustainable compensation environment within the company. Starting in 2010, the company will use a common formula to ascertain and award bonuses to its upper and lower level employees, based on the company’s performance as measured by profit, sales and other factors. That means that upper level management could potentially lose more money than their lower level counterparts for bad performance, BMW said.

A spokesman for BMW said the company’s goal was to create fair and transparent compensation practices and to prevent a gap between management and the workers, as the under class, from developing. “We don’t just want to build sustainable cars. We also want to have sustainable personnel politics. We think this is good for the company culture,” the spokesman told SPIEGEL ONLINE. He declined to be more specific on how the formula will work.

BMW May Set Trend on Executive Pay

Other companies may follow BMW’s example as pressure grows on firms to curb excessive bonuses in the wake of the financial crisis. German Chancellor Angela Merkel has been outspoken about her dislike for excessive bonuses, calling them “inappropriate.” In September, she penned a letter with French President Nicolas Sarkozy and Prime Minister Gordon Brown of the United Kingdom ahead of the G20 summit in Pittsburgh that proposed a cap on the total amount of bonus money a bank could pay out. They didn’t stipulate how much banks could reward a single individual.

“Our citizens are deeply shocked at the revival of reprehensible practices, despite taxpayers’ money having been mobilized to support the financial sector at the height of the crisis,” the letter stated.

US President Barack Obama has also been outspoken about excessive compensation. In June, he appointed attorney Kenneth Feinberg to oversee compensation practices at seven companies that received bail-out funds from the government. To that end, Feinberg has devised a plan to cut the total compensation for these companies in half. This month, Feinberg pushed Kenneth D. Lewis, outgoing chief executive of Bank of America Corp. (BAC), to give back $1 million in compensation and forgo any additional salary this year, arguing his retirement benefits and stock, worth millions, was enough.

Firms Re-Assessing Pay Structure

Joseph Sorrentino, managing director with Steven Hall & Partners, a US-based executive compensation consulting firm, said a combination of factors including political pressure, government bailouts, public pressure and the declining stock market has led to many companies re-examining their compensation practices to make sure they are effectively paying for performance and not encouraging excessive risk-taking.

“Companies are trying to make sure they balance the public outcry with what they need to make sure they are able to attract and retain their employees,” Sorrentino told SPIEGEL ONLINE. He added that often when big companies such as BMW change their compensation practices, other companies take notice.

To be sure, the BMW spokesman said the company has been discussing its compensation practices for months, and that its announcement has nothing to do with the larger debate over executive compensation circulating through governments currently.

However, Harald Krüger, BMW’s human resources director, was critical of the bonus structure of banks and other businesses. “If employees need the money or bonuses for motivation, it encourages harmful developments inside a company,” the executive told Frankfurter Allgemeine Sonntagszeitung newspaper on Sunday.

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General Motors, facing criticism that it may not be moving fast enough to stir new conversations around its brands, is about to start hearing new pitches from new ad agencies.

As first reported by Jean Halliday in Ad Age, it does not appear that long time ad agency Campbell-Ewald, Warren MI is facing a firing. But the automaker is finally doing what this blogger has been advocating for years—-it is opening itself up to hearing great ideas to push the Chevy brand down the field to a better place.

For a long time, politics and personal relationships have kept the Chevy/Campbell-Ewald relationship bound together as if by Crazy Glue; even when the advertising and thinking that produced it was terrible. The agency has been Chevy’s agency since 1922.

1922!!!!!!!

That was then. Chevy IS General Motors. It used to be that Chevy was just one of eight brands at GM in North America. Going forward, it is one of four. But in fact, it is the whole show. If Chevrolet does not increase market share and improve perception, it’s not going to matter what happens at Buick, GMC and Cadillac.

New Chevy chief Brent Dewar obviously knows this.

Campbell-Ewald is expected to keep doing the bulk of work on the account. It is a huge account with lots of moving parts. And it requires that GM maintain continuity to keep the trains running on time. But new ad agencies will be invited to become roster agencies so that C-E is always challenged, not only on the ideas themselves, but regarding the talent they bring to bear for Chevy.

Why should the creative talent pool be restricted to people willing to live in Southeast Michigan?

There are going to be some “retirements” at Campbell-Ewald, I am guessing.

Dewar clearly understands, finally, that it is nuts not to have hungry, creative agencies, whether they are in Minneapolis, Los Angeles, Miami, Brazil, Romania pitching Chevy ideas that will stir the conversation anew.

Finally….Religion has arrived at Chevy!!

The problem right now is that there are so many car accounts in review that it is taxing some of the better shops trying to respond.

Chrysler’s brands have been in review. Volkswagen is in review, and will be decided after October 20. Cadillac is now in review. Now Chevy.

Deutsch, which is pitching Volkswagen right now, will be expected to pitch either Chevrolet or Cadillac if they should lose. Perhaps, they can pitch both—Cadillac from its LA office perhaps and Chevy from New York. Nike agency Wieden & Kennedy is pitching VW too, as is Goodby Silverstein. Those are two agencies I would love to have creating ideas for Chevy if I am Dewar.

Another terrific agency, Fallon, Minneapolis is pitching Chrysler. The Martin Agency (Geico) is available, and will most certainly be asked to pitch Caddy and Chevy. New York’s Strawberry Frog is handling Indian automaker’s Mahindra & Mahindra’s launch in the U.S. Could they also pitch for a Cadillac model that doesn’t compete?

Because C-E is expected to keep working on Chevy, GM has the luxury of tapping all kinds of small shops for ideas that don’t have to be full-service ad agencies. Agencies in St. Louis, Kansas City, Texas.

The company should have done this a decade ago at least.

Politics is the only reason the company did not do it before. Funny, that it took U.S. government ownership of GM to get rid of the politics.

GM is advertising a campaign with the theme, “May The Best Car Win.”

As far as Chevy’s advertising goes…now, it’s “Let The Best Idea Win” no matter where it comes from.

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On Day One, though, there were visibly fewer attendees than in 2007 when the Nissan GT-R, another very fast car, was the star. Indeed, while Toyota also unveiled the exciting FT-86, an affordable sports car due for release in 2011, and other automakers showed off a host intriguing hybrids and electric vehicles, the absence all major international carmakers-and even two Japanese truck makers, Hino and Isuzu-confirmed long-held fears that Tokyo’s motor show is no longer the most important in Asia. After all, automakers from over twenty countries braved the recession to attend the Shanghai auto show in April. In Tokyo, only three foreign automakers-Group Lotus and Caterham Cars from Britain and Alpina Burkard Bovensiepen from Germany-could be bothered to show up.

But what of the LFA, which will go on sale in 2010? A long time in the making, it certainly has some dazzling performance stats, including a top speed of 202mph and 0-60mph in 3.7 seconds. Clearly, this is no ordinary Lexus. For all that, I’m slightly baffled by the price (I repeat: $375,000) and the decision to limit sales to 500. In his speech on the floor of the show, Toyoda talked about the need for automobile to serve as dreams and aspirations. Well, the high price and limited availabilty certainly sees to that. Of course, the LFA, alongside the great looking FT-86 sports car concept, will give Lexus and Toyota’s brands a much-need sporty boost. The difference of course is that the FT-86, which goes on sale in 2011 is likely to cost closer to $20,000 and should sell in thousands. Indeed, given that Toyota will lose money again this year, it would also be interest to know more about the economics of the LFA. The price tag is high, but then so is the cost of developing super-fast sports cars. And by limiting sales to 500, one wonders how much Toyota will lose on every sale.

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A well-received debut for its newest operating system and fresh signs that businesses again want to spend on computers gave Microsoft investors reason to hope a more than yearlong sales decline is coming to an end. But it may take big spending by consumers to pop Microsoft stock out of its tight trading range.

Shares of Microsoft (MSFT) gained 1.43, or 5.4%, on Oct. 23 to close at 28.02. Before the market opened, the company reported fiscal first-quarter sales and profit that bested analysts’ forecasts. Revenue fell 14% and profit dropped 18%, but Wall Street analysts had expected worse. “The fourth quarter of fiscal 2009 may well have been the bottom on the economic reset,” Microsoft Chief Financial Officer Chris Liddell said during a conference call with analysts. He was harking back to remarks by other Microsoft officials, who have said that old demand patterns have been “reset” lower amid recession and a credit crunch.

As heartening as recent gains may be, Microsoft shares remain in the mid-20s range, where they’ve been mired for a couple of years. An investor who bought Microsoft shares in late October 2000 and held them would have realized a net gain of about 1%. The shares reached about 37 in November 2007, but then declined to about 27 by February 2008. They’ve barely budged since. Despite Microsoft’s size and influence—the company reported $58.4 billion in sales last year—its stock has lagged the tech industry’s highfliers.

Apple (AAPL) shares closed at an all-time high of 205.20 on Oct. 22 after the company reported a blowout 47% increase in quarterly profits on Oct. 19. Amazon.com (AMZN) shares reached a record high on Oct. 23, closing at 118.49, after it reported a 68% jump in third-quarter earnings a day earlier. And Google (GOOG) is trading at a lofty 554, although the stock is well off its high of 715 in late 2007.
PC Sales Stalled in First Quarter

Getting consumers to embrace Windows 7 and snap up more capable computers than the low-end mini-laptops that have accounted for the PC industry’s meager growth will be key to Microsoft’s earnings and stock performance, analysts say. The difficulty of forecasting consumers’ fickle buying behavior is one reason Microsoft isn’t releasing a specific sales or earnings target for the current quarter. “The financial impact of [Windows 7] will be driven by the consumer market, and that’s very hard to predict,” says Yun Kim, an analyst at Broadpoint AmTech (BPSG) who has a buy rating on Microsoft shares.

During the fiscal first quarter, sales of consumer PCs rose at a single-digit pace while those of PCs for businesses dropped at a double-digit rate, Liddell said.

Business demand will need to reverse course and consumer buying will have to accelerate. A “wildly successful” year of Windows 7 sales could propel the stock to 33 and put the company’s price-to-earnings ratio on par with the rest of the tech industry, Kim says. That will likely only happen if Microsoft can increase sales and earnings by more than 10% a quarter. “If they can grow by double digits, there’s a lot of room for this stock to go higher,” Kim says. “There aren’t many companies doing that anymore.”

For the moment, analysts seem to think Microsoft can pull it off. After several quarters of decline, Microsoft is poised to start growing again. Before the first-quarter report, analysts expected Microsoft to generate $17.12 billion in sales for the second quarter—an increase of 14%—and earn 52¢ a share. The surprisingly strong first quarter will likely prompt Wall Street analysts to raise estimates even higher.
Business Users Ignored Vista, Kept XP

One potential roadblock for Microsoft is Apple, which has been grabbing market share in the U.S., and now accounts for 8.6% of PC sales there, according to market researcher IDC. Apple’s computer shipments grew by 12% in the third quarter while the overall PC market grew at an anemic 2.5%. Worldwide PC sales increased 2.3%, IDC said.

What’s more, Microsoft will need to overcome weakness in sales to businesses, which largely bypassed the Windows Vista operating system released in 2007, perceiving it as slow and lacking in compelling features. Instead, companies stood pat with older machines. Consumers, meanwhile, have been gravitating to low-priced netbooks that run a discounted version of an earlier operating system, Windows XP.

Windows 7 will likely help Microsoft on both fronts. The software has received positive reviews. Windows 7 helps PC users more easily manage files and it starts and shuts computers faster. It eliminates many of the annoyances that bothered Vista users. Windows 7 also gives Microsoft a better-performing—and higher-priced—operating system to sell on netbooks. “The end result may be that Microsoft sells more versions of Windows 7 at lower price points, but if Microsoft did not meet this emerging demand,” rivals would, said Allan Krans, an analyst at consultant Technology Business Research, in an Oct. 23 report.

Microsoft has more than Windows 7 to rely on. Cost-cutting could boost shares by increasing operating margins. Microsoft’s profit margins have been declining over the past seven years as the company entered expensive new businesses such as Internet search and video games. The operating margin in fiscal 2009 was 34.8%, down from 46.3% in fiscal 2001. “One of the biggest hangups investors have had about Microsoft the past few years is their spending on the online side of the business,” says Jeff Gaggin, a vice-president at Avian Securities who rates Microsoft a buy.
An 8¢ Surprise, Aided by Xbox

To rein in expenses, Microsoft is cutting its staff and reducing marketing and other costs. Operating expenses fell 7% during the quarter ended Sept. 30.

Sales declined to $12.92 billion, and profit fell to $3.57 billion, or 40¢ a share, Microsoft said. Wall Street analysts expected Microsoft to earn 32¢ per share on revenue of $12.32 billion. A year ago, Microsoft earned $4.37 billion, or 48¢ per share, on sales of $15.06 billion. Surprisingly strong sales of Microsoft’s Xbox video game console and royalties from games sold for the machine helped boost the results.

First-quarter sales were lower than they would have been had Microsoft not offered coupons for a free upgrade to Windows 7 to consumers who bought Vista in the months leading up to the Oct. 22 launch of the new software. The program resulted in $1.47 billion of revenues, which Microsoft deferred. It will recognize most of those sales in the current quarter.

Liddell didn’t give investors guidance for Microsoft’s second quarter ending in December, but said businesses were ready to buy new PCs loaded with copies of Windows and Office. Microsoft will continue to hold the line on expenses for at least the next year, he added. “The fiscal discipline that you have seen will continue,” he said.

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Apple’s iPhone has been giving Nokia smartphones a hard time in the marketplace. Now Nokia is giving Apple a hard time in the courtroom.

The Finnish handset giant said Oct. 22 it has filed suit against Apple (AAPL) in U.S. District Court in Delaware, accusing its California-based rival of infringing patents for core technology that allows the iPhone to make calls and connect to the mobile Internet. Although Nokia (NOK) has sued rivals such as Qualcomm (QCOM) over patents in the past, the latest lawsuit came as a surprise—and represents an escalation of increasingly contentious competition with Apple.

In a statement, Nokia said Apple has refused to pay for use of intellectual property developed by Nokia that lets handsets connect to third-generation, or 3G, wireless networks, as well as to wireless local area networks. “Apple is attempting to get a free ride on the back of Nokia’s innovation,” Ilkka Rahnasto, Nokia vice-president for legal and intellectual property, said in the statement. Neither Nokia nor Apple responded immediately to requests for further comment.

Nokia dominates the global handset market with a 38% share. But since 2007 Apple’s iPhone has grabbed the initiative in the lucrative smartphone market. Nokia’s share of the segment, which it refers to as “converged devices,” slipped to 35% worldwide in the third quarter of 2009 from 41% the previous quarter, the company said on Oct. 15. Unit sales of Nokia smartphones fell to 8.9 million in the quarter from 9.3 million in the second quarter of 2009.

The loss of smartphone share is doubly frustrating to Nokia because it sold phones with computer-like features years before Apple. During the last two years Nokia has launched a series of handsets with iPhone-like touchscreen interfaces, but none has generated quite the same buzz as Apple’s devices.
A Way to Tap Into Apple Tech?

The specific allegations raised in the lawsuit concern 10 Nokia patents in three broad areas of wireless technology. The most basic is so-called GSM—the dominant global standard for second-generation mobile networks used by most European and Asian carriers, as well as by AT&T (T) and T-Mobile (DT) in the U.S. Nokia also says Apple has violated its patents for 3G mobile telephony (also known as UMTS or W-CDMA), and for unnamed wireless local area network (LAN) technologies—likely relating to the popular Wi-Fi standard.

Apple, like all mobile-phone makers, relies on such standards to make its devices compatible with carrier networks. Nokia says it has contributed its intellectual property to global standards bodies, but demands to be compensated for the use of its patents in commercial products. “Apple is expected to follow this principle,” Nokia’s Rahnasto said in the company’s statement.

While the suit is presumably intended to force Apple to cough up royalty payments, it could also be a negotiating tactic by Nokia to gain access to Apple technologies via a settlement. But Richard Windsor of brokerage Nomura International in London says the suit isn’t “as big as it looks.” Nokia is pursuing claims, he says, for “essential patents” that it is required to share at reasonable cost—not more rarefied intellectual property for which it could charge what it likes. That likely gives Nokia less leverage at the bargaining table.

Nokia also had a long-running legal battle with chipmaker Qualcomm, with each company accusing the other of infringing patents for technology that is essential for wireless devices to function. But in July 2008 the two companies negotiated a settlement that ended all the suits.

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With electric powered vehicle development picking up pace in a big way, German based company e-Wolf is looking to take things one step further after unveiling its “e-2″ EV prototype. Boasting an expected acceleration of 0-60mph in under four seconds, e-Wolf is set to deliver an Italian-inspired electric “supercar” that puts the mean in green.

After recently unveiling its e-1 electric sports car at the Frankfurt Motor Show, e-Wolf has now released details of its upcoming second foray into high performance electric vehicles. The e-2 will, like its predecessor, incorporate an “ultra light carbon/aluminum construction chassis” and weigh in at around 900kgs. Taking visual cues from Italian supercars, the impressive-looking unit will feature a 134 horsepower electric motor at each wheel, with a total of 536 green horsepower and an expected 738 lb-ft of torque.

Using Li-Tec flat battery cell technology, each of the 84 cells would weigh 1kg and measure 23cm x 18cm. Distance on a single charge is expected to be around 186 miles, with a top-up recharge taking approximately thirty minutes. The two seater e-2 will have a top speed limited electronically to 155mph.

Set to take on the likes of Tesla and its popular electric Roadster, e-Wolf also claims it will prove the power behind the promise by entering the ultra-sleek e-2 in a 24 hour race, at the first available opportunity.

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Gray letters on a gray screen. A keypad that some users found lacking. With the Kindle e-book reader, Amazon.com (AMZN) simply didn’t set the bar that high. On Oct. 20, book retailer Barnes & Noble (BKS) raised the standard considerably by announcing its own e-book reader, the nook.

The nook still may not be the game-changer that e-book advocates hope will attract legions of new readers, but it has its attractions. Priced at $259 (the basic Kindle is $279), the nook has two screens instead of one—a screen for the book itself and another iPhone-like touchscreen that lets users type on a virtual keyboard, skim and browse book covers, and add their own personal touches, including pictures, music, and personal documents.

Like the Kindle, the nook has wireless Internet capability for downloads. Both devices can hold a similar number of titles (1,500 for Kindle, 1,700 for nook), but B&N claims to offer more than 1 million e-books (that includes over 500,000 titles in the public domain and free for the asking). Amazon’s Web site says 350,000 titles are available for the Kindle.

Shipping Starts in November

Another unique nook feature that drew much interest at the publishing-industry-and-press event held at New York City’s Chelsea Piers: a “lend-me” function that allows one e-book owner to pass a favorite title along to a nook-owning friend for 14 days. After that, the e-book automatically reverts to the owner. (During the loan period, the original owner has no access to the book.)

Barnes & Noble.com President William Lynch noted that the retailer launched an e-bookstore in July. Since that time, he said, it has had more than 1 million book downloads. The launch of the nook, said Lynch, represents the second step in the store’s e-book evolution. Along with marketing the nook on the Barnes & Noble Web site, the bookseller will also promote the device in its bricks-and-mortar stores. The nook is to begin shipping at the end of November.

Skeptics abound for all such developments. Many say that all of these devices will find their way to the back of the hall closet within a couple of years. With their large capacity, both nook and Kindle seem like naturals for world travelers and students who might like to have a dozen titles always at the ready . But for the average commuter requiring distraction for a journey of under an hour, the dog-eared paperback or rumpled newspaper (not to mention that spreadsheet on the laptop) seems just fine.
Apple Is Mum on Its Plans

Still missing here is the paradigm-changing gadget, the book equivalent of Apple’s iPhone. In fact—although you can load a number of e-reader applications, including Kindle and Barnes & Noble apps, onto an iPhone or iPod, Apple is keeping mum on any plans to produce its own device. But with a touchscreen that utilizes the same technology as the iPhone and its Google Android platform, the nook may have Apple’s technoids thinking twice about entering the e-reader fray.

There still is probably space for that paradigm-shifting thing that is so terrific—so mind-bendingly lovely to fiddle with and to use for a variety of functions—that it actually expands the number of book readers. But at the moment, and for several years’ time, e-books have represented only around 1% of the shrinking book-reading public. Not only must that percentage rise, but also the overall number of book readers must increase—then we’ll know that e-book nirvana has arrived.

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But could Toyota be gearing up to turn the tables on its Korean rival? In an announcement today, the Japanese automaker said that it is now open for business Korea. In a statement, Toyota said it has begun selling Toyota-branded models at five dealerships, including three in Seoul. It will sell three models: the Prius gasoline-electric hybrid, the Camry sedan and the RAV4 crossover SUV. Toyota will also market a hybrid version of the Camry. “We intend to make every effort to contribute to South Korean society and earn a loyal following,” Toyota Executive Vice President Yukitoshi Funo said in a statement, released earlier today.

Whether Hyundai has much to fear is another matter. Toyota’s ambitions, to start with at least, are unlikely to worry its Korean rival. Toyota aims to shift just 500 vehicles a month, rising to 700 by the beginning of 2010. That compares with roughly 420 monthly sales of Lexus, Toyota’s luxury marque, which has been in Korea since 2000, between January and September. Even combined, Toyota and Lexus won’t make much of a dent on Hyundai and Kia’s joint sales of 887,000 in 2008.

Moreover, the timing of Toyota’s move is curious. For one thing, analysts say that it is unlikely that Toyota can make a profit exporting cars from Japan to Korea even if it sells them at a premium price (its 2.4 liter Camrys will retail for $29,000, compared to $22,360 for the most expensive Hyundai Sonata). Indeed, Funo told reporters at a press conference in Seoul that Toyota didn’t expect profits in the near term.

Exchange rates are a major factor. As well import duties, the recent surge of yen is a huge disadvantage for Japanese exporters and particularly so against the weak Korean won. Since Jan. 2008, the yen has gained around 36% against the Korean currency, and is a reason why many Japanese companies have plunged into the red at a time when Korea exporters are thriving. This year, Toyota expects to make a loss of around $5 billion, whereas Samsung LG, and Hyundai are all recording strong earnings this fall. The weakness of the won also goes some way to explain why foreign imports to Korea account for just 5% of the market this year, compared to 6% in 2008.

Honda’s recent experience points to difficulties Toyota faces in Korea. Honda, which was the most popular import brand last year, with a 20% share among imported cars, saw its sales plummet 72% to 2,921 in the first nine months of this year with its among foreign brands fell to sixth with just 6.85% this year.

So what explains Toyota’s move into the Korean market? As tough as conditions are now, analysts say that, over the longer term, building up in Korea could make sense. Korea’s market size at well over a million sales a year, its close proximity to Japan and an increasing acceptance of Japanese brands make it attractive. What’s more, unlike Japan, where auto sales have been declining for years, the Korean market retains growth potential and the yen’s strength is unlikely to remain at its current highs indefinitely.
— With Moon Ihlwan

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Volkswagen probably will drop the Passat sedan and wagon in 2011 when VW’s new U.S.-built mid-sized four-door is expected to go on sale.

“We are looking at it in detail,” Stefan Jacoby, VW Group of America CEO, said this month at a press event here.

The U.S.-built sedan, which has yet to be named, will be larger than the Passat but priced lower.

“We’ll have two sedans coming out at the same time, and the smaller one will cost considerably more than the bigger one,” said a VW spokesman.

The Passat sedan is 188.2 inches (4789mm) long. VW has not released dimensions for the new sedan.

VW has said it can afford to price the new sedan lower because it will be built at the new factory in Chattanooga, Tennessee. Unlike the Passat, it will be less affected by currency exchange rates.

The 2010 Passat sedan starts at $27,695, including shipping. The wagon starts at $29,095. The U.S.-built sedan is expected to start at about $20,000.

A spokesman said VW doesn’t need the Passat wagon because its Jetta station wagon is only 9 inches shorter.

The Jetta wagon is offered with a popular diesel option. About half of 2009 Jetta wagon buyers chose a diesel. A restyled Jetta wagon was launched this month.

For the 2010 model year, VW has dropped the V-6 version of the Passat wagon and sedan and offers the vehicles only with front-wheel drive and a 2.0-liter inline four-cylinder engine.

The Passat will still be sold in Europe. A redesigned version is scheduled to arrive in 2011.

VW initially expects to sell about 100,000 of the new sedans annually, far above what the Passat has done lately. The U.S. factory will have a capacity of 150,000 vehicles.

Sales of the Passat sedan and wagon peaked at 96,142 in 2002 but fell to 30,034 last year. Sales through September dipped to 9,163, down from 25,478 during the same period last year.

The new mid-sized sedan will be exported but has been designed primarily for the United States.

VW will continue to sell the coupe-styled CC sedan, derived from the Passat, in the U.S. The CC went on sale last year. The 2010 version starts at $28,300, including shipping. Through September, VW has sold 15,187 CCs.

Jacoby didn’t give a timetable for his decision, but dealers say he has given them the same message about the Passat’s likely demise.

Casey Gunther, a VW dealer in Fort Lauderdale, Florida, said he’s not surprised. He said the Passat sells well only “when they put incentive money behind it and find the sweet spot.”

“The CC has pretty much picked up where the Passat sedan left off,” Gunther said. “It has a good price point, and it’s a beautiful car–they nailed it with that one.”

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Scura translates as “dark” in Italian, and that is derived from the high-gloss phantom black triple stripes that run the length of the car, giving it a menacing yet sporty look. The rest of the exterior is coated in a “soft-feel” matte black finish.

Lightweight carbon-fiber parts slim the Scura by about 22 pounds. Lotus’s launch and traction-control features are standard. That’s the outside, but lurking beneath is a supercharged 1.8-liter motor that makes 257 hp. The car can run to 60 mph in four seconds and can clock a top speed of a 152 mph.

The Exige Scura will be limited to just 35 copies. It will be called the Exige Stealth in Japan.

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Spokesman Ed Miller says the company has not made any firm decisions, nor has it decided which of the company’s U.S. plants might build the vehicle. The hatchback is currently built at a facility outside Tokyo.

The Fit has been a strong seller for Honda in the U.S. But the effects of the stronger yen versus the dollar is diluting the profits made on exported vehicles. Honda currently builds just under 80 percent of its U.S.-sold vehicles at factories in the U.S.

News of the possible production move was first reported by Automotive News.

U.S.-traded shares of Honda rose 43 cents to $30.79 on Monday.

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Editor’s Rating:

The Good: Ultra-smooth and quiet ride, classy interior, relatively low base price

The Bad: Lags rivals in fuel economy and cargo space

The Bottom Line: A nice little SUV, but why no diesel engine?

Up Front

Based on sheer quantity of models, Mercedes-Benz (DAI) is one of the giants of the SUV market, with offerings that include the G-Class, GL-Class, M-Class, and the crossover R-Class. Now, the company has added yet another “Class” to its plentiful SUV lineup—the small, easily maneuverable GLK, aimed at buyers who would like to downsize without giving up the practicality of a sport-ute.

The GLK is about the same size and weight as the BMW (BMWG.DE) X3, an aging model that’s now being challenged by both Mercedes and Volkswagen’s (VOWG.DE) Audi unit (with its new Q5). In this Deutsche dustup, the GLK350 is a strong competitor that I prefer to the X3 and that matches up well against the new Q5. However, there are other attractive alternatives at a lower price, notably the RDX from Honda’s (HMC) Acura division and the Volvo XC60.

That said, the GLK’s diminutive size, incredibly smooth ride, and classy, comfortable cabin make it an absolute joy in day-to-day driving. A peppy 3.5-liter, 268-horsepower V6 makes the GLK more than quick enough for most SUV owners. Plus, the GLK’s base price is relatively low, starting at $35,475 with rear-wheel drive and $37,475 with all-wheel drive. Among luxury SUVs, that’s lower than the starting stickers of the X3 and the RX 350 from Toyota’s (TM) luxury Lexus unit, and even a tad lower than the Audi Q5’s. It’s only somewhat higher than the base price of an RDX, XC60, and Land Rover LR2.

So, if you’re the type of buyer who tends to go with the base model, the GLK is a relative bargain, coming standard as it does with cruise control, full power accessories, eight-way power front seats, an eight-speaker sound system, Bluetooth capability, 19-inch wheels, multiple airbags, and stability and traction control. However, if you max out on options from the GLK’s long and pricey list, expect to pay upward of 50 grand for this vehicle.

The GLK lags its main rivals in a couple of important respects, starting with fuel economy. With all-wheel-drive, the GLK is rated to get an unimpressive 16 miles per gallon in the city and 21 on the highway (22 on the highway with rear-wheel drive). AWD versions of other small luxury SUVs do better: 18/24 for the Lexus RX 350, 18/23 for the Audi Q5, and 17/22 for the Acura RDX. Even the AWD version of the BMW X3, with a rating of 23 mpg, does better on the highway.

To me, the GLK would be far more attractive with a diesel engine that got better mileage. A Mercedes spokesman says that will happen eventually, but “not for the next three or four model years.”

Another of the GLK’s weak points is its paltry cargo capacity: 23.3 cubic feet with the rear seats up, 54.7 cu. ft. with the back seats folded down. The BMW X3, at 30/71, and the Lexus RX 350, at 40/80, have far more hauling capacity—which is saying something.

Even so, the GLK is selling relatively well. The AWD version of the GLK first hit dealerships in January, followed by the rear-wheel-drive version in March. Since then, Mercedes has sold a combined 16,015 units of the new model in the U.S., making it the company’s fourth-best-selling model this year, only slightly behind the M-Class, of which 17,407 were sold through September.
Behind the Wheel

The GLK has the solid, well-built feel of a big Mercedes, with the same chunky steering wheel, ultra-comfortable front seats and quiet cabin that feels isolated from the outside world. Its strong suit is exceptional comfort and ease of use in day-to-day driving.

The GLK is quick but not exceptionally fast. Mercedes figures it will accelerate from zero to 60 mph in 6.5 seconds. I found my AWD test model somewhat slower than that—I clocked it at 7.2 seconds—but competitive with other models in the segment. For instance, Road and Track timed the 2010 Lexus RX 350 at 7.4 seconds in zero-to-60 runs.

In test drives, I found it almost impossible to ruffle the GLK’s composure, even on bad country roads. I plunged my test vehicle into potholes, and accelerated over loose gravel and ridged sections of roadway badly in need of grading. The GLK smooths out even deep potholes without the alarming thud you get in a BMW X3. In urban driving, a tight turning radius makes the GLK a breeze to park.

The vehicle’s styling is blocky and traditional. Mercedes describes the look as a “modern interpretation of the iconic G-Class,” the company’s rugged, Land Cruiser-like off-road vehicle. That influence can be seen in the GLK’s angular front end, relatively vertical windshield, and squarish shape. The car’s interior maintains that theme, with an angular, relatively vertical dash and none of the curving and swooping design elements most luxury vehicles have these days.

The GLK’s interior looks classy, even if you don’t pay an extra $1,750 for leather seats. Mercedes has developed a premium vinyl upholstery that looks and feels so much like leather you won’t know the difference unless you really focus on it. And burl walnut interior trim can be had free of charge.

The front seats are roomy and comfortable. As in other Mercedes, the power seat controls are on the front doors, where you can see them, making it easy to adjust the seats precisely. There’s also a lot of travel in the front seats, so there’s a surprising amount of legroom for tall drivers, though the center console restricts knee space a bit.

You could cram three passengers into the rear seat, but they wouldn’t be quite as comfortable. Shoulder and hip space are limited, and knee space is so tight that Mercedes has put little indentations in the backs of the front seats to eke out a tiny bit of extra room.

I wasn’t able to test the GLK on snow and ice, but in past test drives I’ve found that Mercedes’ 4Matic all-wheel-drive system handles winter driving well. I wouldn’t risk scratching up a $50,000 vehicle by taking it off-road, but the GLK has nearly eight inches of ground clearance so it probably could handle fairly rugged terrain. Maximum towing capacity is 3,500 lbs., which is about average for this category of vehicle.
Buy it or Bag It?

The GLK 350 is a good choice for a young family or an active retired couple, especially those who are trading down from a larger Mercedes SUV. It has the build quality, smooth ride, and characteristic styling of a big Mercedes packed into a small package. Consider test-driving it, however, against the sporty new Audi Q5 before buying.

The GLK’s average selling price, $37,125 with rear-wheel drive and $41,311 with all-wheel drive, according to the Power Information Network (PIN), falls in the middle of the pack. Pricier competitors include the BMW X3, which with standard AWD carries an average price of $43,106 (for the ‘09 model, the most recent on which data are available), the 2010 Audi Q5 at $43,286, and the 2010 Lexus RX 350 at $42,435 with two-wheel drive and $43,512 with AWD.

Among less expensive alternatives, I particularly like the 2010 Acura RDX, which sells for an average of $35,474, according to PIN, and is available with the same marvelous “super handling” AWD system found in the new Acura TL and ZDX. Acura loads up its vehicles with standard gear and there’s only one option package, so an all-wheel-drive RDX tops out at $38,430, 10 grand less than the well-loaded GLK I test-drove. Admittedly, though, the RDX doesn’t have the rock-solid feel of a Mercedes.

The main problem I have with the GLK is not its price but its fuel economy, and the Acura doesn’t do much better on that count. What I’d really like is to be able to buy a GLK with a fuel-sipping diesel engine.

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General Motors may be loosening the purse strings. After living through austerity over the past couple of years, GM aims to add 7 to 10 new vehicles to its current product plan. Management thinks it will need those models to hit revenue and profit targets.

CEO Frederick A. “Fritz” Henderson and Vice-Chairman Robert A. Lutz have been putting pressure on the company to develop more new models and get them to market faster. At the same time, GM’s new board has also questioned whether the company can satisfy revenue and market-share targets without additional new products. It’s not hard to see why: While GM is launching several new models in 2009, the pace will slow down over the next couple of years unless further models are developed.

By pushing hard now, says James N. Hall, principal of 2953 Analytics, a Detroit-area consulting firm, GM “could end up bringing some of these cars out just as the market turns around.” The question is whether GM has the people and the resources to pull this off.
Profit Point: An 18.5% Market Share

Late last summer, the board asked Henderson and Lutz if GM’s product plan was adequate. Some directors had read a report from Bank of America Merrill Lynch (BAC) that said GM would replace only 45% of its sales volume with new models from 2010 to 2013. Among GM’s major competitors, only Chrysler (FIA.MI) was replacing models at a lower rate.

The Merrill report went on to predict that unless GM ramped up its product pipeline, the company’s U.S. market share would tumble from 19.5% today to as low as 15%. GM has told representatives of the U.S. government, which now owns 60% of the company, that it would start making money with an 18.5% share in a market that sells 10 million cars. Henderson said in a September interview that GM is replacing its models at a higher rate than the report says because newer models are already selling at higher levels than some of the comparable cars they are replacing. He also told BusinessWeek he needed to educate the new directors, none of whom have worked in the car business, on how long it takes to engineer models.

Whether pressured by the board or his own targets, Henderson wants the company to get cracking on a range of new models. Some of the cars were canceled or delayed over the past year and others will be additions to the plan. Among the possibilities: small, stylish youth cars for Chevrolet; a production version of the Cadillac Converj concept car, which runs on the same electric drive system as the Chevrolet Volt; more GMC crossover SUVs, including a boxy model that would compete with Toyota’s (TM) Scion xB and Nissan’s (NSANY) Cube; and new Buicks that could do double duty in the Chinese and American markets.
Still Shedding White-Collar Jobs

None of this will be easy. GM has drastically cut its new-product budget. One insider says the company has dropped its budget this year down to $3 billion to develop new vehicles. That’s a far cry from the $8.5 billion GM spent on average during the previous decade. Indeed, it’s about what Chrysler spent during the tight-fisted reign of former owner Cerberus Capital Management.

But GM is decidedly ramping up spending on new cars. Adding as many as 10 new models over the next five years could cost more than $5 billion. GM has been burning cash this year but its balance sheet is now beefed up. The company has access to as much as $33.3 billion in government money, on top of the initial $19.4 billion borrowed before bankruptcy. GM staffers worry that the design and engineering staff will be hard-pressed to gear up development of a half-dozen new models. After all, GM has shed 5,400 white-collar staffers this year and another 1,300 jobs are targeted by yearend.

Assuming GM has the resources to pull this off, the investment makes sense. While convincing consumers to look at the company’s brands remains a challenge, Lutz told reporters on Oct. 14 that GM’s new cars are selling for $31,800 on average, about $6,000 more than they did last year. Says Hall: “They understand that they have to spend to get sales.”

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In northern Italy, Ferrari is king. Lamborghini and Maserati might be just down the road from Ferrari’s nerve center in Maranello, but Ferrari is the only brand truly attached to the Italian psyche, a part of some collective unconscious. Somewhere in every Italian’s brain, tucked away between “secret to cooking perfectly firm pasta” and “how to wear pastel-colored pants without looking like a complete jerk” is the “love Ferrari” file.

The sight of a Ferrari elicits long awe-struck stares that fall just short of construction-worker-grade hip thrusting and whistling. Occasionally the sight and sound of a Ferrari will even cause Italians to literally drop whatever might be in their hands; indeed, a farmer outside of San Giovanni in Persiceto did exactly that, and he was atop a Lamborghini tractor.

Since 1996, Ferrari has won every Car and Driver comparison test it has contested except one, when the Ford GT one-upped a 360 Challenge Stradale. Nonetheless, the company frowns upon our comparing its cars against others. At the risk of Ferrari declining to allow us to test its cars, we keep dreaming up comparisons that might knock the brand off its pedestal.

Today, the challenge comes from Audi. With the exception of the Auto Union race cars of the 1930s and the Audi Quattro of the 1980s, the German luxury arm of the VW family is fairly new to the supercar game. But when the R8 was launched in 2007 with a 420-hp V-8, Audi was nipping at the heels of Ferrari and Lamborghini. But Audi’s latest R8 5.2 FSI appears to be after even bigger fish.

The main source of the R8’s jump on the supercar totem is its Lamborghini-sourced 5.2-liter V-10; you may remember this engine from such cars as the Lambo LP560-4 and the Audi S6 and S8 sedans. In the former, the engine makes 552 horses, but in this venue, Audi saw fit to give the R8 5.2 FSI just 525 horsepower. Even with that firepower, the V-10 R8 still has more ponies than Ferrari’s most powerful mid-engined car, the 503-hp 430 Scuderia.

To figure out where the new V-10–powered R8 fits in the supercar world, we brought together the R8 5.2 FSI and our favorite mid-engined Ferrari, the 430 Scuderia. Wondering about the Lamborghini LP560-4’s whereabouts? Let’s just say the right Lambo couldn’t be provided. Our 300-mile test took us to Italy, through the ancient farmland around Bologna, then into the Apennine Mountains and along the Po River near Milan, whose waters seem to be a kind of Woodstock for mosquitoes. Judging by the river’s ripe aroma, it could use a second “o” in its name. We figured if the R8 can prove itself in the supercar hotbed that is Italy, it can make it anywhere

With a V-8, the R8 is a completely usable and practical two-seater. Even aging surgeons will find it easy to get in and out of, easy to see out of, easy to use in general—and that makes it a lot like the Acura NSX. Just as that sports car asked little more from its owner than, say, an Accord would, the R8 demands little more effort than does an Audi A4. Bolt a Lamborghini V-10 into the middle of an R8, however, and Audi’s two-seater not only becomes a Ferrari competitor, the transplant effectively, if only partly, changes the R8’s personality.

While the usability of the R8 remains intact, under the aluminum skin is an angrier, more tortured soul. From idle to the 8700-rpm redline, the R8 may sound more muffled than the Monza-ready Gallardo LP560-4, but the tone isn’t softened enough to hide the fact that a monster lurks behind the driver’s seat.

Our enthusiasm for the V-10 was probably helped along by the old-fashioned, honest-to-God manual transmission of our test car, a refreshing change from the computer-controlled, automated manual transmission that has become nearly omnipresent in this class of car. Guiding the shifter through the six-speed’s gates and using a clutch pedal provides direct, human control over the gearbox, making for a closer relationship with the V-10 than would paddle shifters alone. Exploiting the 525 horsepower and 391 pound-feet of torque is that much more satisfying without a layer of computer interference.

Like the R tronic system, the manual has launch control. To activate it, engage the ESP Sport setting, put the car in first gear, and press the accelerator. Engine revs will rise toward redline and then settle between 5500 and 6000 rpm; dump the clutch and go. We used launch control during our preview and achieved a 0-to-60 time of 3.7 seconds. On this test, we experimented and found that an 8000-rpm clutch drop brought the time down to 3.5 seconds. It ripped through the quarter-mile in 11.7 seconds at 122 mph. Those numbers suggest a more violent experience than you’ll get. The transmission and all-wheel-drive system swallowed every outburst the engine dished out without any erratic behavior or ill effects. Still, it’s unlikely owners will subject their expensive R8s to such severe launches, even if they do have the urge to teach a cocky Mustang owner a lesson. And there’s really no need to resort to a transmission-torturing monster launch as the 5.2-liter has enough low-end torque to dispatch most muscle cars.

The Audi’s interior is a sensual delight. Gated shifter is standard; we wouldn’t spend the extra $9100 for the automated manual.

———————————————————————————-

Which reminds us: Now that the Italians have discovered the kind of revenue that can be generated from speed cameras, the autostrada is teeming with them. Keeping the Audi’s throttle agape for any length of time more than a few seconds can become an expensive exercise—it takes only 7.9 seconds to get to 100 mph. But the narrow roads that cut through hay fields in the Apennine valley are beyond the prying eyes of Big Brother, and that allowed us to find the 8700-rpm redline over and over again. For all the seeming violence going on behind the driver, little vibration (aside from the sound) enters the leather- and Alcantara-lined cabin.

Handling is much like the V-8–powered R8’s: high limits that are predictable and easy to exploit. Understeer at low speeds is present, but lifting off the throttle jabs the front end back in line. With power at every tire, accelerating out of corners allows for the use of all 525 horses without a hint of wheelspin or threat of ending up in a ditch.

The steering, compared with the Ferrari’s, feels less tactile, as if a thick membrane of maple syrup lies somewhere between the tires and the controls. Brake feel is grabby and overly sensitive; it transitions from “where the hell are they” to “whoa, now I’m stopped” with barely any provocation. Brakes aside, Audi seems to have oozed syrup into every aspect of the Audi driving experience. It is that prophylactic refinement that keeps the R8’s mechanical bits from getting too close to the driver.

The Ferrari doesn’t triumph because it coddles its occupants—it lacks many of the features one would demand in a Chevy Aveo. Its windows, for example, don’t go down. And the extra cost of the 430 over the Audi—nearly $140,000—doesn’t do it any favors. It wins because it provides the definitive supercar experience.

Every piece of the Ferrari seems to have been thoroughly considered, engineered, and tuned by people whose wants and needs are harmonious with our own. Start with the reactive and tactile steering that never fails to relay information through the steering wheel. Subtleties such as a seating position so close to the front axle aren’t noticed until you move from the Audi to the Ferrari. We’re not talking about the relationship between the pedals and the steering wheel, which is nearly perfect. In the Ferrari, you sit closer to the front of the car, as if you’re perched over the front wheels. The benefits are improved forward sightlines, which make the car easier to place in corners, and a greater sensitivity to what’s happening at the front tires’ contact patches. It’s a subtle difference but one that gives the Ferrari an advantage.

Both cars have carbon-ceramic brakes, but the Ferrari’s gently scrub off speed in a more progressive manner. Even the six-speed automated manual gearbox, with its steering-column-mounted paddles, works better than others we’ve driven. Depending on throttle position and engine rpm, shifts can be nearly luxury-car smooth or so snappingly quick that we half expect to see metal chunks lying under the car when we stop. (We checked; it never happened.)

Certainly the engine isn’t fearful of abuse. Nearly a liter down in displacement, the Ferrari engine is just 22 horses short of the Audi V-10. But with a burden of only 3069 pounds to toss around, the Ferrari was able to match the Audi’s 0-to-60-mph time of 3.5 seconds. At higher speeds, the Ferrari gradually makes up for its lack of all-wheel-drive traction and shows off its superior power-to-weight ratio of 6.1 pounds per horsepower. At the quarter-mile, which comes in 11.6 seconds at 127 mph, the Ferrari is traveling 5 mph faster than the Bavarian. The Ferrari is roughly 600 pounds lighter than the Audi, and that lightness infuses the Ferrari with a more responsive feel than the Audi has.

At least some of the mass advantage of the Ferrari is from the lack of sound insulation, and even carpeting. Exposed welds, intricate castings with foam dimples, and the bonded floor panels are all visible from the driver’s seat. Consequently, pebbles thrown into the wheel wells are audible, as is the scrubbing sound of brake pads skimming across the 15.7-inch front carbon-ceramic rotors—stops from 70 mph are among the best in the automotive world, at 143 feet.

And yet, despite its spartan accommodations, we can’t gripe about a lack of refinement. Ride quality is slightly stiffer than in the Audi but never abusive. The race seats looked like they might have us squirming uncomfortably. But even though they lack the fine adjustments and leather lining of the Audi’s, they pamper and are comfortable for longer periods of time.

Unlike the syrupy feel of the Audi, the Ferrari seems to have a light coating of WD-40. There’s enough of a glaze to keep all of the controls from transmitting any harsh vibrations to the driver, but it also feels impossibly slick and direct in its moves. In addition to the nimbleness that comes from less weight, the Ferrari simply feels lower and more grounded than the Audi, as if its center of gravity lies an inch above the road. A 72.5-mph speed through the lane change demonstrates how well balanced the Scuderia is and how willing it is to change direction quickly. The Ferrari seems to have been designed to provoke the driver to go faster; the Audi tolerates speed but lacks the trusty feedback that makes driving fast a thrill in a really expensive car.

Achieving our acceleration numbers required Ferrari’s launch-control system, which automatically sets up the car for a perfect run. It’s a bit odd that the button between the seats marked “L.C.” has absolutely nothing to do with launch control. That button, we were told by Ferrari test driver Raffaele De Simone, is for “making movies.” We took that to mean that it is just for show. To engage actual launch control, first turn the steering-wheel-mounted dial, what Ferrari calls the mannetino, to the “stability-control off” setting. Second, slip into neutral by pulling on both paddle shifters simultaneously. Place your left foot on the brake and engage first gear by pulling on the right paddle and holding it until an “L” appears in the gear display. With your left foot still on the brake, floor the accelerator with your other foot. Do it right, and the V-8 rises to roughly 4500 rpm. Next, get off the brake while keeping the throttle pegged. The Scuderia dumps its clutch and fires forward with the perfect amount of wheelspin, as if Schuey himself were behind the wheel. Launch control engages the clutch violently, so Ferrari recommends performing a slow gradual start before each launch to clean off the clutch disc.

North of about 3300 rpm, a heavy foot on the accelerator opens valves in the exhaust that bypass the muffler, adding a race-car-like sound (a deafening 104 decibels at full throttle) to the laundry list of race-car-like things the Ferrari can do. Should the future bring a world of electric cars with whiny little four-cylinder engines whose only job is to moan out electricity, then this V-8 may come to be considered internal combustion’s last great breath.

There’s art in every detail of the Ferrari but, with the exception of the Pininfarina-designed body, it’s not the kind of fine art one finds at the MOMA. The Audi’s parts seem more contrived and overtly styled. To our eyes, the Audi’s V-10 seems to have been engineered and then redesigned to look good by people who went to art school. The Ferrari is full of art made by engineers who seem to really believe that “form follows function” is more than just a phrase used by the phonies in marketing.

There isn’t an ounce of fat in the Scuderia. Ferrari distilled its F430, and what emerged are the crucial parts, ones that enhance the link between car and driver rather than separate them. And those parts all work with a harmony that led to nearly perfect subjective scores. For now, the Italian obsession with Ferrari is justified.

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