This week’s link come to us from the LA Times’ Dan Neil.

The article discusses
LA Times Article

Lamborghini last year launched the ad personum program to provide individually tailored options to their cars. In January 2008, then went a step further by releasing the following:

LAMBORGHINI UNVEILS FASHION INSPIRED TRENDS FOR THEIR
GALLARDO AND MURCIÉLAGO MODELS AT THE DETROIT AUTO SHOW

“Lamborghini is strongly focusing on the Ad Personam personalization program due to the importance of offering customers the widest range of possibilities for individualizing their cars. This allows them the ability to reflect their own personality and style,” states Stephan Winkelmann, president and CEO of Automobili Lamborghini. “Many of our customers take advantage of this program as a tool for owning an even more exclusive Lamborghini.”

For most of the decade now BMW has enjoyed a distinct competitive advantage - at least in the American market. They have offered a four-year, 50,000 mile maintenance-cost-free program called “BMW Ultimate Service”. The service includes free replacement of:

• Brake Pads
• Brake Rotors
• Wiper Blades
• Scheduled Maintenance (as outlined in the owner’s manual)
• Oil Changes/topping up of fluids
• Roadside Maintenance

It’s worth noting that BMW parts are generally well-made, and will not typically require new pads and rotors in this 50,000 miles. Still, it’s nice to know you’re covered. It’s also worth noting what the program does NOT include: tyres and alignment for starters. 

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Apparently the Vatican and Mercedes have teamed up to create an “all-new” car for the Pope. 2 years of development time was spent on developing a “holier-than-thou” paint job called “Vatican Mystic White”. This is reportedly a couple of shades brighter than “Ghostly Anti-Devil White” available on most non-Popemobile Mercedes.

A base G-class starts at 72,000 euros for the cabriolet. But given that 2 years of development and god knows how many gallons of wasted paint and bullet-proof steel went into this SUV, the cost most likely soared past an un-Godly $250,000. Looks like Catholics will need to add a few more dollars to that offering plate this season.

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For your weekend enjoyment:

The January 29, 2007 edition of Forbes magazine boasted of new technology to be seen in future automobiles. The article outlines a sort social networking for cars – a sort of MySpace if you will. To summarize, carmakers hope to charge consumers a premium to include technology, which allows cars up to 750 feet away to send data to each other such as vehicle location and rate of speed. Indeed the cars communicate with each other to identify an impending crash. In a way it is the same principle that Mercedes radar technology is employing in the latest S-class. In essence this is a sort of early warning system.

Other benefits might include marketing and entertainment opportunities say for example a sort of file sharing between cars as with video or audio files. Imagine pulling into a gas station and receiving a free video download for buying petrol and a car wash.

The downside is that data could be use in negative ways, for example, in a court case to prove speeding. Such wireless systems could also conceivable used to control a car remotely. Another side is that such technology could take a long time to proliferate, and it does not work so fantastically with only a small percentage of users. The Forbes article does point out that “significant improvements” will occur with as little as 7% of America’s 241 million vehicles on the road. Needless to say this technology is a long way off, but it’s this sort of innovation that will drive product growth in the future.

Forbes Article Here

Yes, it’s that time of the year, the picks for the best cars as of Winter 2007.

Which European cars are by matter of fact, “the best”? Find out below:

Best Supercar over $500,000: Bugatti Veyron 16.4

Best Supercar under $500,000: Lamborghini Gallardo Spyder

Best Ultra Luxury Convertible: Rolls-Royce Phantom Drophead Coupé

Best Ultra Luxury Sedan: Rolls-Royce Phantom

Best Ultra Luxury Coupé: Bentley GT

Best Hot Hatchback: VW GTI

Best Hot Sedan: Audi S8

Best sound: (tie) Ferrari 599 GTB/Ferrari F430

Best sports car under $100,000: Porsche 911 Carrera S

Best sports car over $100,000: Aston Martin DB9 Volante

Best new sports car: Aston Martin V8 Vantage

Best Small Car: Mini Cooper S (John Cooper Works Edition)

Best Old Car Experience: Caterham Lotus 7 SV

Most economical and fun sports car: Lotus Elise

Mid-sized Sedan: BMW M5

Best Car for Old People Who Don’t Give a Damn: Mercedes-Benz S65 AMG

Best SUV: Mercedes-Benz G55 AMG

Best minivan/mpv (yes, I’m ACTUALLY including this category): Mercedes-Benz R63 AMG

In the previous posting of Beyond the KM, we took a look at the competition that the European automakers from Peugeot to Porsche will face in the coming years. We examined some of the East Asian manufacturers and assessed their strategies in Europe. In this installment we will suggest some strategies that the automakers might employ to fight off the increasing competition from Asia.

First, the marketing must change at European carmakers. Mercedes-Benz, for example, will see competition in the form of a Chery – Chery Automobiles of China that is. As noted in part 1, pointed out before, Chery will compete on price. Mercedes-Benz could never be profitable producing their vehicles and then selling them for $20,000. They require higher costs and profit margins. As a result, Mercedes and BMW must offer superior channels for delivery of vehicles, offer more models to fit as many niches as economically possible, and they must offer as much customization as possible, and they must develop a special connection with owners to retain current customers and gain more. These factors are essential to not just grow the market, but to retain market share in the face of stiff, price-based competition.

A second strategy that the automakers must focus on is innovation. Innovation does not mean BMW’s iDrive (few people find it fun OR enjoyable to spend five minutes “configuring” a car in order to turn it from mild mannered coupé into deadly beast). The innovation will not just come from more computers that interfere with driver usability, rather the innovation will come in the form of safety systems, handling improvements, design improvement, and improvements in drive train. Most importantly in the coming years will be improvements in engine technology that allows for more fuel-efficient engine designs and later the implementation of alternative fuel engines such as hydrogen.

Third, auto service must become increasingly important to the Europeans. Not only do they have the home field advantage, the companies have existing service centers. Additionally, service is typically higher profit than new car sales. Additionally examine, the highline car market. The average profit for a domestic car in the U.S., of which tens of thousands are made each year compared to the Porsche 911, which has fewer and far more customized vehicles, is vastly different. A Ford dealership may make just a few hundred dollars, but a new Porsche can make thousands because it is more exclusive, higher priced, and a very customized vehicle.

In another example, BMW has a service program called BWM Ultimate Service, available only in the U.S. This program should be offered everywhere because it really puts BMW in a class of its own in the way it deals with the customer. Any problem is easily taken care of, no questions asked. This allows the service departments at dealerships to run like cogs in a well-oiled machine. Service is where the profit is and will be in the future, car companies must embrace this.

Another area that will require change in the future will be on the part of government. Government changes must take place at the national and international levels. Tax laws must favor automakers and suppliers both. Labor laws must become less restrictive and more flexible as the market changes. Import laws must also be modified to handle imports from China. The European Union must take notice now so as to allow proper time for discussion.

Finally, the labor force must change. Germany’s automakers are some of the least product in the world. Only recently did VW force its unions to make its members more flexible in the hours it works. Until the recent agreement, VW workers were working under 29 hours per week and were the highest paid in the world! In addition to flexibility of the workers, the work forces in the EU and even U.S. must become smarter. Education levels are rising and the “blue collar” work is the worker of yesterday. In the future, workers will have to be mentally more flexible and be more innovative in the way they work.

Change is afoot in corporate offices in Europe’s automakers. GM and Ford have struggled for many years now with the harsh realities of the global auto market. Now those realities are knocking on the doors of the European automakers. About two-thirds of Western Europe’s carmakers have seen changes in the executive suite in the last two years.

The reasons vary, e.g. BMW’s Helmut Panke left due to age restrictions, yet the BMW board failed to grant him a waive to allow him to drive the ultimate machine longer. The fact remains though that boardrooms and shareholders, alike, are concerned about increasing competition from the Far East.

Once a joke to respectable manufacturers, the Chinese automakers - led by Shanghai Automotive Industry Corporation (SAIC) and Nanjing Automobile – are increasingly competitive. The Chinese are increasingly developing more and more sophisticated facilities and borrowing more and more from the Europeans. Take American Axle and Manufacturing. AAM has been setting up new factories at breakneck pace. Indeed some of the intellectual property has been sold to the Chinese as well.

What all of this means is that the Chinese now have a way to produce good quality cars, yet sell them for next to nothing. Therein lies the problem not just for Renault and Peugeot and VW. Mercedes-Benz and BMW must be careful in their strategies since companies like Chery, is planning to bring their “luxury” automotives to the U.S. market soon. At $20,000 Mercedes and BMW are tracking the company, you can be sure. In the end, automakers will find difficulty in beating the Chinese on price. They must find other ways or they will falter as Ford and GM have done.

The next part in this topic will deal with possible strategies that the European automakers might develop to combat the competition from the east.