The Biggest Auto Industry Stories Of The Year
If the past five years had been pedestrian for the auto industry, 2012 might have seemed like an exciting, chock-full-of-news kind of year: The industry became a huge part of the Presidential elections, acting as a political football between Democrats and Republicans and resulting in a little bit of fiction-telling. There were new fuel economy regulations, some exciting product launches, and one automaker caught in a big, fat lie.
But given that we're just a couple years removed from the automotive meltdown that sent General Motors and Chrysler into bankruptcy (2008/2009), a massive recall at Toyota that could've sunk the company (2010), and a giant tsunami in Japan that reverberated through the auto industry for an entire year (2011), 2012 seems blissfully boring.
But that's a good thing for the auto industry, because it means things are stabilizing. And that brings us to probably the biggest story of 2012 for the industry, one that many hope will continue into 2013: The strengthening of U.S. auto sales. Read on to see what else AOL editors thought made big news for 2012.
While much of the conversation in 2012 discussed a bleak economic outlook-- unemployment and fiscal cliffs--automotive sales continue to climb back to healthy and profitable levels not seen since the great financial calamity of 2008.
While the final sales figures are not in, the total number of non-commercial vehicles sold in America during 2012 will certainly top 14 million units, and represent nearly 2 million more vehicles sold during the year compared with 2011.
Through November, sales were up nearly 14- percent and automakers had already sold 13.1 million vehicles. The rebound of the auto industry has certainly contributed heavily to the economy, even as other industries have sputtered. Pent up demand from consumers who delayed new-car purchases in 2008 and 2009 and even into 2010 because of depleted wealth from falling housing prices and uncertainty over job security, and a raft of new vehicles has helped spur sales. And many expect 2013 to be even better.
Pickups in America seem to be improving at the pace of computers. Every year, another feature becomes standard and another milestone is reached. The bar is always being raised.
In 2012, Chrysler's Ram brand rolled out its all new 1500 full-size truck and offered something no one has ever done: 25 miles per gallon.
The 25 mpg (on the highway) is a monumental milestone for big pickups. The new high mark sets a standard everyone will be shooting for.
Ram was able to do it with its "all-world" 3.6-liter Pentastar V6 and key aerodynamic changes. The Ram also comes with an optional start/stop system, something that hybrids usually tout as fuel savers.
The story of the Ram is big because it is emblematic of the overall comeback of Chrysler under management of Italian automaker Fiat. There were so many doubters in 2009 that Chrysler was worth bailing out. Yes, the tax-payers (as well as the United Auto Workers) kept Chrysler in business. By the company has paid back all of its loans years ahead of schedule. And the Ram, arguably for the first time, is so good top to bottom that we think it will make a lot of Ford and Chevy buyers think twice before re-upping with those brands. The new Ram is so good that AOL Autos named it the 2012 Truck/SUV of the Year.
It was an icon that disappeared when Chrysler Group LLC entered and then re-emerged from bankruptcy. Back then, it was known as the Dodge Viper – one of the most exhilarating and dangerous vehicles on the road. It was fast and unforgiving to drivers who did not have the skills to handle it. It was also a vehicle with no future. As the company came out of bankruptcy, the Viper was scrapped as a luxury the company could no longer afford.
But after much internal debate and lots of people pulling for this 640-horsepower supercar, the SRT Viper was born. While it can outperform its predecessor, it also arrives with a much higher level of sophistication, power and elegance. The new Viper may draw on its heritage, but this model sets course for a much brighter future.
Yes, Chrysler, under the management of Italian automaker Fiat, needs to produce some solid high-volume vehicles--family cars, minivans and crossovers--but the Viper represents a kind of gritty, sexy, street racer that MoTown has long excelled at delivering.
Tesla Model S
No car means as much to a company as the 2013 Tesla Model S – the all-electric sedan and second model for the California-based carmaker--means to start-up Tesla. The Model S won critical praise across the country, being named Popular Mechanic's Grand Award winner for the Best of What's New in 2012, Motor Trend's Car of the Year and Automobile's Car of the Year.
The Model S, which has a starting price around $60,000, sets the new standard for electric cars, many critics claim. It also boosted Tesla Motor's reputation and, hopefully, will help the company's bottom line and share price. The 10-year-old company has yet to report a quarterly profit, though the car maker's charismatic CEO, Elon Musk, has said Tesla will be in the black in 2013.
Why such a big story? There is a battle going on over electric vehicles in the U.S. The government and environmentalists want us to buy and drive more of them. Conservatives and fans of right-wing radio see EVs, as long as their sales are subsidized by tax credits, as the enemy of democracy.
The fact that an electric car of any kind has received so many laurels from the automotive media establishment is big news. The awards should help awareness and acceptance of electric vehicles.
Romney's Auto Ad Named Lie Of The Campaign
Fact: The proper role of government in bailing out the auto industry was a key topic of debate during the 2012 presidential campaign. Fact: Both Democrats and Republicans alike exaggerated truths, used the powers of selective omission and otherwise distorted one another’s positions in discussing the auto bailout.
Not a fact: President Obama sold Chrysler to Italians who "are going to build Jeeps in China," thus depriving thousands of workers in the swing state of Ohio of their jobs.
That was the storyline of a Mitt Romney campaign ad in the final days of his sputtering campaign. If anything, the desperate claim backfired. A flood of attention – and terse denials from Chrysler – cost Romney whatever momentum he had established in the Buckeye State, which he wound up losing by three percentage points.
Chrysler was taken over by Italian automaker Fiat. The company is building Jeeps abroad for purchase in Europe and China. But the company not only saved jobs in the sprawling Toledo, Ohio Jeep manufacturing complex, it has invested more money and created additional jobs there.
Carroll Shelby Dies At 89
The auto industry lost one of its heavyweights on May 10, 2012. Carroll Shelby was simply a legend in so many ways.
He was one of the top race-car drivers of the 1950s, earning the "Driver Of the Year" title from Sports Illustrated in 1956 and 1957. He was a terrific businessman, using his fame to run a successful car dealership in Dallas in the late '50s. Soon after, he would define himself as one of the best car designers ever, building the Shelby Cobra, a sports car that would dominate the next decade.
In the 1960s, he began a long-running partnership with Ford, which debuted his Shelby GT350 in 1965, a car that took the first, second and third places at Le Mans one year later. He would go on to work for Dodge during the 1980s and keep tinkering and perfecting.
For decades, he was – and remains – an icon for car enthusiasts everywhere. His passion, know-how and imagination represented the best of the romance and excitement that is in designing, building and driving cars.
IIHS Adds To Its Crash-Testing Methodology
America's crash-test dummies braced for a new kind of impact in 2012. In August, the Insurance Institute for Highway Safety, a well-respected automotive think-tank, added a new wrinkle to its crash tests.
It added a test that simulates a common real-world crash: the front corner of a car strikes a vehicle or object instead striking it head-on. In the test, 25-percent of a car's front end strikes a five-foot barrier at 40 miles per hour.
"We still see more than 10,000 deaths in frontal crashes each year," IIHS president Adrian Lund said. "Small overlap crashes are a major source of these fatalities."
Why is it a big story? Ask Toyota. It's Camry, the top selling passenger car in the U.S. and its most important vehicle in terms of profit, scored "poor" in the new test.
U.S. Announces 54.5 MPG Standard For 2025
After months of negotiating, President Obama set a stringent new standard for Corporate Average Fuel Economy in August. It requires the average fuel economy of all new cars sold to reach 54.5 miles per gallon by 2025. Requirements kick in gradually starting in 2016.
The change is expected to help wean the country off reliance on foreign oil, save consumers money at the pump and protect the environment. Experts say it will save 4 billion barrels of oil from being used and prevent 2 billion metric tons of greenhouse gases from entering the atmosphere.
By 2025, assuming a $3.87 per gallon cost at the pump, drivers can expect to save $5,700 to $7,400 on gasoline. In short, fuel economy became the No. 1 concern of car-buyers in 2012. Over the next decade, they're going to get it.
What else does it mean? Big V8 engines are virtually disappearing except in big SUVs and pickups and a few luxury sedans. Luxury car makers like BMW and Mercedes-Benz are now selling high-performance four-cylinder engines in their cars that used to be available only in Europe and Asia. There will continue to be a steady stream of hybrid cars, electric vehicles, extended-range electric vehicles and clean diesel vehicles hitting the market.
This story started online. In chat rooms across the nation, Hyundai owners were complaining that they couldn’t hit the high mileage numbers posted on the window sticker of the vehicles they bought. The complaints grew and ultimately led to the Environmental Protection Agency demanding answers and a test.
The result was a PR nightmare. Hyundai and it’s sister carmaker, Kia, had overstated fuel economy ratings on 900,000 vehicles sold over the last three years because of what the companies called a procedural error in determining the vehicles’ fuel economy. The EPA forced Hyundai to reprint its new mileage number, dropping highway figures 1 or 2 mpg, and thus under the touted 40 mpg number they had aggressively advertised.
The biggest impact was on the popular Kia Soul, which dropped from 35 mpg to 29 mpg.
Hyundai and Kia have both said they will reimburse customers for the missed mileage – about $100 a car – and make things right with consumers, which they have begun to do.
Critical Flops Become Consumer Favorites
In 2012, the mighty fell, at least in the eyes of industry watchdogs. Honda saw the once-unblemished reputation of its Civic take a big hit in August, when Consumer Reports left the compact sedan off its recommended list.
It was no error. The magazine ripped the low quality of the Civic's interior and noted it had become noisy and suffered from a choppy ride. For almost any other car, a slap by Consuner Reports from "recommended" to "not recommended" would be hardly a blip on any one's radar and certainly not worthy of a screaming headline. But the Civic has embodied reliability for millions of car buyers since the 1970s when it first showed up on U.S.shores. Honda was perhaps not suprised, having delayed the car's launch so it could fix problems that turned up in consumer focus groups. But the late fixes made by Honda were not enough, and the company hustled more improvements and fixes for the 2013 model. Honda posted a big sales increase in the 2012 Civic over the old model, but not without heavy discounting off the MSRP.
The Toyota Camry, the best-selling car in America, suffered a similar indignation in December. A new crash test devised by the Insurance Institute for Highway Safety ranked the Camry as "poor." The Camry was one of only two cars to earn the lowest-possible grade on the test, which measured what happens when the front corner of a car collides with another vehicle or object. The dent to Toyota's reputation, though, probably won't dislodge the sedan from its perch as top-selling passenger car in America in 2013.