Toyota makes Prius a priority as automaker faces a 'turning point'

Hybrids, fuel economy key to comeback

Two weeks after Japan's March 11 earthquake knocked out more than 650 of Toyota Motor Corp.'s suppliers, halting worldwide production, the automaker had to decide where to focus its resources. It picked the Prius.

"We were rapidly burning through cash," said Atsushi Niimi, head of production. "We decided we had to get things going bit by bit to survive through this, so we prioritized the cars our customers wanted most."

The carmaker started calling suppliers across the country to find parts for the Prius and luxury-brand Lexus hybrids.

By March 28, Toyota's Tsutsumi and Kyushu factories were producing the models again at 30 to 40 percent of capacity, Niimi said.

By choosing the Prius ahead of the Corolla and Camry sedans that enabled Toyota to become the No. 1 automaker by 2008, President Akio Toyoda is staking the future of Japan Inc. on hybrid technology as the solution to the nation's worst disaster since World War II and the company's initial indifference to customer complaints that prompted its biggest recall.

General Motors Co. supplanted Toyota as the world's largest automaker in the first half of this year, as Japan's last remaining company in the world's top 50 by market value lost customers to GM, Ford Motor Co. and Hyundai Motor Co. in the U.S. market, which is recovering from its deepest postwar slump.

"The last several years have been a triple shock for Toyota," said Masatoshi Nishimoto, a Tokyo-based automotive analyst for global consulting company IHS Inc. "It's now at a major turning point."

Lost share

The fallout from the earthquake and the unprecedented recalls devastated Toyota sales, which are down 7.8 percent in 2011 through August in the U.S., while GM, Ford, Hyundai and Chrysler increased shipments by 16, 12, 21 and 21 percent respectively, according to Autodata Corp.

Toyota was outsold in the U.S. by GM, Ford and the Fiat-Chrysler group in August, according to data compiled by Bloomberg.

While GM's share of the U.S. market in the first eight months increased 1 percentage point to 20 percent and Hyundai's rose a half percentage point to 5.2 percent, Toyota lost 2.5 percentage points to 12.7 percent.

The 74-year-old company that Ford Chief Executive Officer Alan Mullaly once praised for "the finest production system in the world," plans to regain market share with at least 11 new models over the next two years.

Analysts including IHS's Nishimoto say Toyota's advances in fuel economy will underscore its recovery even as rivals narrow the gap in quality and outsell the Japanese company in emerging markets such as China.

New Prius cars

Toyoda's effort to win back market share, which includes three new versions of the Prius, the world's top-selling hybrid, and electric or dual-power versions of other models, is as much about the company's strategy to regain its lead as it is about the Japanese economy's failure to return to prosperity after two decades of anemic growth.

The revamped lineup begins this week with the release of the 2012 model of the Camry, the best-selling car in the U.S. for 13 of the past 14 years.

Toyota has promised another four releases this year and at least six in 2012.

"Back in the 80s, if someone said Toyota, the first thing that popped in your mind was Corolla," said Jim Lentz, president of Toyota's U.S. sales. "Through the 90s, it was probably Camry. If you ask someone middle of this decade and beyond, it will be Prius."

Toyota is focusing on fuel technology to gain sales in developed markets like North America -- where the company earned about 70 percent of its operating profit last fiscal year -- even as the quake dented its efforts to catch up in expanding markets such as China, which overtook the U.S. in 2009 as the world's biggest car market and where growth is still dominated by all-gasoline powered vehicles.

China sales

The production hiatus after the disaster relegated Toyota to No. 5 in China by sales of passenger vehicles in the first seven months of this year, trailing Volkswagen AG, GM, Nissan and Hyundai, according to an August report on the country by consumer ratings company J. D. Power & Associates.

"Chinese consumers prefer luxury over fuel-efficiency," said John Zeng, a Shanghai-based analyst at J.D. Power. "For the price of a Prius, you can buy an entry-level BMW 5-series."

With limited government subsidies for hybrids, Toyota's strength in China is in mid-size sedans such as the Corolla and Camry, and large SUVs like the Land Cruiser, where demand will continue to grow, he said.

Toyota sold 2,261 Prius cars in China in the last four years, compared with 632,000 Camrys and 809,000 Corollas.

Yen pain

Toyota's comeback will be burdened by Toyoda's commitment to keeping jobs in Japan as the strongest yen against the dollar in six decades and looming power shortages make it harder for the automaker to escape the same fate as Japan's economy: sliding competitiveness and stagnant growth.

Toyota makes more vehicles domestically than rivals Honda Motor Co., Nissan Motor Co. and Suzuki Motor Corp. combined, making it the most-affected Japanese automaker when the earthquake struck.

Suppliers of 1,260 parts and materials used in Toyota cars were crippled by the magnitude-9 temblor and tsunami, leading officials initially to predict a production loss of 2 million vehicles, or a quarter of the company's global output last year.

A failure to reverse the decline could add Toyota to the list of Japanese corporations that once dominated markets from autos to electronics before losing out to overseas competitors.

Rising competition from companies including Apple Inc., Samsung Electronics Co. and Hyundai eroded the leads of manufacturers like Sony Corp. and Toshiba Inc.

Last survivor

In 1990, when Japan's asset bubble burst, six of the world's 10 biggest companies by market value were Japanese and Toyota was No. 9, according to a ranking by Businessweek.

Toyota now ranks 35th, the sole Japanese survivor in the top 50.

"The world has changed dramatically since Toyota became the top carmaker," said Yuuki Sakurai, Tokyo-based president of Fukoku Capital Management Inc., which manages 600 billion yen ($7.8 billion) in assets.

"Japan became known for producing high-quality products sold cheaply. With the Koreans and Chinese catching up, Japan's position has become ambiguous."

Toyota's troubles came to the fore in 2009 and 2010, when floor mat and gas pedal design flaws led to recalls of millions of vehicles, undermining the company's reputation for quality.

U.S. sales of the Camry dropped 8.1 percent in 2010 and 7 percent in the first eight months of this year. Sales of Hyundai's competing Sonata sedan surged 64 percent last year and 22 percent in the January-August period.

Maximum fine

Toyota was fined a maximum $16.4 million in April 2010 by the U.S. National Highway Traffic Safety Administration after recalling cars in Europe months before doing so in the U.S.

In February, Toyota's Lentz had told a U.S. Congress committee investigating the defects that the company "failed to promptly analyze and respond to information" about the sticking pedals.

Toyota "permanently lost some ground," said Ed Kim, an analyst at AutoPacific Inc. in Tustin, Calif. "Formerly second-tier players like Hyundai now directly challenge them in key product segments."

In June 2009, three months before the recall crisis began, Toyoda took over as president from Katsuaki Watanabe. By February 2010, the grandson of Kiichiro Toyoda, the motor company's founder, was summoned to appear before the U.S. Congress committee.

Toyoda vowed to fix the problem, establishing a global committee to oversee quality, from suppliers through to customers.

Flooded factories

The complexity of that task was revealed when the earthquake hit this year, shifting Japan's northeast coastline by 3.6 meters and triggering the wave that destroyed more than 100,000 buildings and left more than 15,700 people dead.

Factories around the industrial center of Sendai were flooded or destroyed, including a Sony plant and hundreds of small subcontractors for Japan's manufacturers.

It took Toyota three days to set up the first video link between headquarters and the company's newest plant, a factory near the disaster zone that produced Yaris compact cars.

"The first image we saw was of everyone in helmets in darkness, standing very still," production chief Niimi said in an interview in Toyota City, about 600 kilometers (400 miles) from the quake's epicenter.

Toyota's parts system relies on thousands of companies -- suppliers of suppliers of suppliers. So when the quake struck, the company didn't know how badly it was affected.

Employees spent days calling suppliers and searching the Internet to try to find out where all its part-makers were, marking them with push pins on a map, said Niimi, 64.

Head spinning

"My head was spinning," he said.

By contrast, the 1995 Kobe earthquake, which killed more than 6,000 people, damaged 14 Toyota suppliers producing 30 parts.

The lack of components cut Toyota's output by 23 percent in the first half, to 3.38 million units, allowing it to be overtaken by both GM and Volkswagen AG in global sales.

Toyota's stock closed at 2,680 yen on Sept. 9, down 27 percent from the day before the earthquake and a 68 percent drop from the peak in February 2007.

Goldman Sachs Group Inc. lowered its 12-month target price to 3,600 yen from 4,000 yen on Aug. 18, citing higher incentive spending in the U.S. and possible excess inventories next year.

Of 23 analysts surveyed by Bloomberg, 10 recommend Toyota as a "buy," while 13 rate it a "hold."

Toyota's slump recalls the decline in competitive edge of other Japanese brands that once dominated.

In the 1980s, Sony's Walkman music player and Trinitron TV were leaders, capturing the imagination of a young Steve Jobs, co-founder of Apple, who was given an early Walkman by Sony co-founder Akio Morita.

Jobs's Walkman

"Steve was fascinated by it," said former Apple CEO John Sculley in an interview in December. "The first thing he did with his was take it apart, and he looked at every single part. He didn't want to be Microsoft. He wanted to be Sony."

In the mid 1990s, Sony's PlayStation games console helped it sit atop the video-games industry. Then, as Japan's economy stagnated over two "lost decades" Sony's reputation in consumer innovation waned.

Apple is now the biggest maker of smartphones and has 61 percent of the tablet computer market. Sony begins selling its tablet this month, more than a year after the iPad went on sale.

Last year, South Korea's Samsung Electronics made twice as many TVs as Sony. Others suffered a similar fate.

In the 1990s Toshiba owned almost 100 percent of the market for the flash memory chips it invented. Sharp Corp. pioneered liquid-crystal displays. Samsung overtook both by outspending them each year on more advanced manufacturing plants.

'Long time ago'

"The iPod/iPad set of products is something that a long time ago, one might have expected a Japanese firm to come up with," said Robert Feldman, head of Japan economic research at Morgan Stanley MUFG Securities Co. in Tokyo, who used to work at the Federal Reserve Bank of New York and the International Monetary Fund.

"Some of Japan's competitors, particularly the Koreans, are becoming very good at many of the things Japan used to be best at. Japan's competitiveness has worsened."

Sony in May posted its widest annual net loss in 16 years, the first time the company has had three straight full-year losses since it listed in 1958.

While Apple's profit more than doubled in the three months ended June, Toyota's fell 99 percent. In the weeks following the earthquake on March 11 -- known as "san ten ichi ichi" or 3/11 in Japanese -- Toyota worked to rebuild its manufacturing network.

While its darkened plant near Sendai, in Miyagi prefecture, suffered little damage, many suppliers had plants destroyed.

Navigation lost

Among the biggest challenges was semiconductor maker Renesas Electronics Corp., which makes chips that run dashboard meters, navigation and audio systems.

Toyota and other customers sent 2,500 workers to help repair Renesas's Naka building, water and electricity systems.

It took 2 1/2 months before the plant resumed operation. Japan's national effort to recover from the quake helped bring factories back on line quicker than expected.

Toyota now estimates a shortfall of only 150,000 units this fiscal year. Even without the damage from the quake, Japanese companies have had to cope with a domestic economy that has grown at an average 1.2 percent annually in the past 21 years.

More than two decades of government spending to revive growth have saddled the country with the world's highest level of public debt.

Japan has had deflation for more than a decade, and has the world's oldest society with a median age of 44, according to the United Nations.

Downward pressure on wages has sapped consumer spending on cars, televisions and appliances.

Growth downgraded

Japan's economy contracted at an annualized 2.1 percent rate in the three months ended June, its third consecutive quarter of decline.

The government downgraded its growth forecast to 0.5 percent in the year started April, from 1.5 percent, to reflect the quake's effect. The stronger yen has sapped exporters' profits.

Following the 2008 global financial crisis, investors treated the Japanese currency as a haven, sending it to a post-World War II high of 75.95 to the dollar on Aug. 19, from almost 95 in May last year.

A 15-yen change in the rate over the past year has "blown off" 300,000 yen, or $3,900, in profit on a $20,000 car, Takahiko Ijichi, Toyota's senior managing officer, said on Aug. 2.

That cut Toyota's fiscal first-quarter operating profit by 50 billion yen, he said.

Japan's former finance minister, Yoshihiko Noda unveiled a $100 billion effort on Aug. 24 to help companies cope with the yen's rise, releasing foreign-exchange reserves to the state-run Japan Bank for International Cooperation to aid exporters, hours after Moody's Investors Service lowered the nation's debt rating for the first time since 2002.

Noda was elected to succeed Naoto Kan as prime minister on Aug. 30.

Idled reactors

Worse still for Japan's manufacturers may be the long-term effect of the earthquake on power supplies.

When the sea surge knocked out cooling systems at Tokyo Electric Power Co.'s plant in northern Japan, three reactors went into meltdown, plunging the nation into the world's worst nuclear crisis since the 1986 accident in Chernobyl, Ukraine.

Forty-three of Japan's 54 atomic reactors were offline as of Sept. 5, according to data compiled by Bloomberg News.

Before the Fukushima failure, nuclear energy provided 30 percent of Japan's electricity, a number Kan had promised to reduce in a shift to renewable energy.

Industries in parts of Japan were ordered to cut consumption by 15 percent from July 1 to help mitigate shortages. Toyota, Honda and Nissan began closing plants on Thursdays and Fridays and operating during weekends.

LCD-maker Sharp and Mitsui Mining & Smelting Co., Japan's biggest zinc smelter, said they plan to move production abroad because of concern that nuclear plants will remain closed, extending power shortages.

'Endless obstacles'

"Manufacturers here have faced endless obstacles such as foreign exchange rates, corporate tax and environmental and labor regulations," Sharp Chairman Katsuhiko Machida said at a briefing in Osaka on July 15. "This issue over power supply could be the end of manufacturing in Japan."

Japan's effective corporate tax rate is 41 percent, compared with 25 percent in China and 24 percent in South Korea, according to KPMG LLP's 114-nation survey in 2010.

"We've seen pressure for more and more Japanese manufacturing to move offshore," said Feldman at Morgan Stanley. "Then we have the earthquake. Then we have the power problem. And now we have the yen at 76. Japanese companies have a lot of trouble competing at that level."

While a manufacturing exodus might benefit companies moving production to countries with higher growth, it would further undermine Japan's recovery, he said. "The companies will just shift the jobs somewhere else. This is extremely serious."

Japanese jobs

Even Toyoda's stated aim of preserving Japanese jobs has come under strain. Toyoda has pledged to make small hybrid cars in quake-hit Iwate prefecture and spend 2 billion yen on a new engine factory in Miyagi.

"How much longer should we insist on producing in Japan?" said Chief Financial Officer Satoshi Ozawa, seated next to Toyoda at a press conference in May. "Our efforts may have exceeded the limits of what is possible in dealing with the yen's impact."

Even Toyota's overseas plants like the Camry factory in Georgetown, Kentucky, still rely for some parts, particularly electronics, on Toyota's vast supplier network in Japan.

That plant is crucial because Toyota's recovery in its biggest market will be measured by a rebound in market share, which fell to 15 percent last year from 17 percent in 2009, production manager Niimi said.

Toyoda was at the Kentucky factory on Aug. 23 to drive the first of the new Camrys off the production line in an event relayed to a ceremony at Paramount Studio's "New York City" backlot in Hollywood, with 200 actors, dancers and musicians.

Japanese crown

"In the two short years I have been president of Toyota, my focus has never wavered from one goal: product, product and product," Toyoda, 55, told workers. "This vehicle has become a symbol of Toyota's success over the years. This is an opportunity to show the world again what Toyota is all about."

The Camry -- an Anglicized spelling of "kanmuri," or "crown" in Japanese -- is the first of 20 new and refreshed Toyota, Lexus and Scion models arriving in the U.S. between now and 2013.

"The cadence comes faster than I've seen in 30 years with Toyota," Bob Carter, group vice president of U.S. sales, said in an interview. Under Toyoda "there is a renewed focus on products themselves that we haven't seen in years."

Toyota plans to add the hybrid Prius v wagon, revamped Yaris subcompact, Scion iQ minicar and modified Tacoma pickup this year.

Releases in 2012 include a plug-in version of the Prius and compact Prius c hybrid, new Lexus GS sport sedan, battery-powered RAV4 sport-utility vehicle and electric version of the iQ, as well as the rear-wheel drive Scion FR-S sport coupe, Carter said.

Running overtime

As Toyota's plants run overtime to build the new models, Toyota may reclaim some ground, with its global market share rebounding to 11 percent in 2012, from 9.7 percent this year, and its U.S. share rising to 14 percent, from 13 percent, according to IHS's Automotive division in Englewood, Colorado.

Still, the company will struggle to recapture the lead it enjoyed before the financial crisis, said Tokyo-based IHS analyst Nishimoto.

The automaker told suppliers that the new models are expected to cause global production to rebound in 2012 to 8.9 million units, an all-time high, from 8.04 million vehicles forecast for this year, according to Nobuaki Katoh, president of Denso Corp., Toyota's biggest supplier.

In parallel, Japan's economy will get a boost next fiscal year from reconstruction, with the Bank of Japan forecasting GDP to rise 2.9 percent compared with 0.4 percent this year.

Falling birthrate

That won't be sustained because the falling birthrate means the economy's losing a key driver of growth, according to Yoshimasa Maruyama, a senior economist at Itochu Corp. in Tokyo.

"The country can no longer expect the kind of high-speed growth it once had," said Maruyama. "We can't change that."

The Bank of Japan estimates growth in the long run will be around 0.5 percent. Japan still has examples of leading companies, including Canon Inc., the world's largest camera maker; and Fanuc Corp., which makes controls that run more than half the world's computerized tools.

To rejoin them, Toyota may need to reduce its dependence on production in Japan and sales in the U.S., said Fukoku Capital's Sakurai. "Toyota's future success will depend on just how global a company it can be," he said. "It needs to diversify its operations and risks more."

Etios in India

Toyota has said it plans to get half of its global sales from emerging markets by 2015 with models such as the Etios sedan, its cheapest car, which began selling in India in December.

The company aims to introduce a similar vehicle in China, Brazil and Thailand, said Yoshinori Noritake, chief engineer of the Etios.

"We need to introduce entry-level vehicles there as soon as possible," he said.

Toyota entered the Chinese market after rivals, setting up its first assembly plant in 2000, 16 years after Volkswagen.

Still, Toyota's edge in its biggest market in North America is the Prius and hybrids that allow drivers to cut fuel consumption, said Jesse Toprak at TrueCar.com, an auto pricing and data service in Santa Monica, California.

Regular gasoline retailed in the U.S. for an average $3.655 on Sept. 7, up 97.5 cents from a year earlier, according to the American Automobile Association.

Backbone engine

"Prius is going to be the backbone of our powertrain philosophy going forward," said Toyota's U.S. sales chief Lentz. "The vast majority of vehicle sales we're going to have are going to be hybrids."

The new $25,900 Camry Hybrid's 41 miles per gallon average tops the Hyundai Sonata Hybrid's 37 mpg and Ford Fusion Hybrid's 39 mpg, according to U.S. Environmental Protection Agency data.

"Having the biggest number of fuel-efficient vehicles does differentiate Toyota," said Toprak. "The Prius line expansion should generate sales, particularly if fuel prices rise again."

Competition is tougher in quality and technology than it was in the first quarter of 2007, when Toyota ended GM's seven- decade reign as the world's biggest automaker.

Hyundai's new Equus came fourth in this year's U.S. new-car quality survey by Westlake Village, California-based J.D. Power, which has been conducting customer research since 1968.

Only two of Toyota's Luxury brand Lexus models and Porsche Automobil Holding SE's 911 beat the South Korean car.

"For Toyota to get back to where it was in 2007, you'd have to beat Hyundai back to where they had been, beat Nissan and Ford back to where they had been," AutoPacific's Kim said. "I just don't see that happening."

Ford to launch MyKey safety feature in Europe

Ford Motor Co. will launch its MyKey feature in Europe next year, alongside the Ford Sync voice-control system.

MyKey allows an "administrator," most likely a parent, to give younger drivers a designated key with a unique computer chip that among other things limits a car's top speed to 140kph (around 87.5 mph) in Europe.

In North America, MyKey debuted as a standard feature on the 2010 Ford Focus and is now a no-cost feature on nearly all Ford and Lincoln models. In Europe, the Ford Fiesta will be the first model to get MyKey next year, followed by the all-new Ford Focus, before spreading to the rest of the lineup.

In North America, MyKey imposes a standard top speed of 80 mph, but parents can opt for a top speed of 65, 70, 75 or 80 mph.

Ford decided not to give the option of choosing different top speeds for European markets, said Pim van der Jagt, executive director, Ford Advanced Research and Engineering Center in Aachen, Germany.

"Speed limits are different in different markets, and in Germany there are highways with no limits, so we decided not to (provide lower limits), because for instance in an emergency you might need to accelerate," he said Thursday following a press conference at the 2011 IFA consumer electronics show here.

Additional safety features

In Europe, MyKey can be programmed to sound a warning as the car passes speeds of 70, 90 or 100kph, similar to the North American version. Most MyKey features are almost identical in Europe and in North America.

For instance, MyKey makes it impossible to turn off certain safety systems, such as blind-spot detection, electronic stability control, lane departure warning and traction control. MyKey also limits the audio volume to 44 percent of total volume, and mutes the audio until front seat belts are fastened.

MyKey also turns on the "low fuel" warning at a remaining range of 120 km instead of 80km, van der Jagt said. One difference is that Ford announced in North America in December 2010 that it would allow parents to lock out satellite radio programming with explicit language. That won't be available in Europe at launch.

"Satellite radio really isn't all that popular in Europe, so we won't have that," van der Jagt added.

Noise from left front wheel, and ABS light on

Subject: Noise from left front wheel, and ABS light on

Vehicles Involved: Ford Escape 2009, Mercury Mariner 2009

Condition: A clicking or rubbing noise from the left front wheel, and the ABS light may be on.

Repair: The ABS wheel speed sensor may be making contact with the reluctor wheel. This is caused by a defective knuckle, which miss-aligns the sensor and reluctor.

Remove the wheel and measure the air gap between the sensor and reluctor. If the air gap is less than .020 in. or inspection indicates the sensor has been making contact with the reluctor, the steering knuckle must be replaced. The installation of a new design knuckle from Ford should correct this problem.

TSB No. BPI 11-07

Figuring out your gas mileage

In order to figure out MPG you must 1st fill the tamk and record the mileage then drive and repeat noting to fill to the same capacity level. do this several times to assure a correct estimate. After a month use the total miles and to;at gallons and remember where your decimal point goes.

Daimler to test Smart electric cars in Hong Kong

Daimler AG will provide a trial version of its Smart electric car to partners in Hong Kong as the city battles record pollution.

Daimler's partners in the trial, which include the Hong Kong Jockey Club and Swire Coca-Cola HK, will use the two-seater car for six to 12 months, the carmaker said in a statement today.

Daimler's Mercedes Benz unit will offer a service center with technicians and mechanics.

The pilot program, which will run for four years, joins a push by automakers such as Mitsubishi Motors Corp. and Nissan Motor Co. to introduce electric vehicles in Hong Kong, where pollution reached "very high" levels on a record one in four days in 2010, according to government data.

The city government plans to replace some fuel-powered vehicles with electric ones and is trying hybrid buses, lawmakers said in February.

"A combination of electric vehicles and cleaner energy is a very good recipe for Hong Kong to become a greener city," Edward Yau, Hong Kong's environment secretary, said.

The city has 170 electric vehicles and will increase the number of charging stations to 1,000 in a year from 300, he said.

Daimler's Smart electric car, which can travel 135 kilometers (84 miles) on a full charge, won't be produced globally until 2012.

In Asia, the company has launched similar pilot programs in Indonesia, Japan and Singapore.

The other four partners who will get the car in Hong Kong are CLP Power Hong Kong Ltd., Jardine Airport Services Ltd., Yan Chai Hospital and Hongkong Electric Co.

Vehicles are the second-biggest source of pollution in Hong Kong after power stations, and their numbers rose 9.6 percent between 2004 and 2009, according to the government.

Nissan agreed to supply advance units of its Leaf electric car to Hong Kong, the government said in January.

Mitsubishi Motors already sells its battery-powered i-MiEV in the city. Daimler's Mercedes marque was the second-largest luxury car brand based on the latest full-year numbers.

Buick Verano pricing to start at $23,470

The price for the upcoming Buick Verano, the brand's first compact since the 1990s, will be $23,470, including shipping charges, General Motors said today.

The price is considerably lower than the Japanese compact sedans that GM is pitting the Verano against in the entry-luxury segment: the Acura TSX ($30,495 with shipping) and the Lexus IS 250 ($34,170 with shipping).

"Given some of the great features the car is going to have, that's about the price we expected," said Sam Slaughter, dealer principal at Sellers Buick-GMC in suburban Detroit, which was the nation's top-selling Buick store last year. "We don't want it to be the el cheapo car that's going after the beer-can market."

Still, the Verano price is "going to be a little tight" with that of the Regal mid-sized sedan, the next car up in Buick's lineup, said Lynn Thompson, a Springfield, Mo., dealer who sells Buick, GMC and Cadillac. The base Regal has a sticker price of $27,530, including shipping.

Buick last marketed a compact in the United States when the Skylark was sold from the 1992 to 1998 model years.

The Verano, which goes on sale by year end, will be offered in three models. The top model will have a sticker price of $26,850 including shipping. All three models will get a 2.4-liter, four-cylinder engine combined with a six-speed automatic transmission that delivers 180 hp.

The Verano is hitting the market at a time when more U.S. consumers are shifting to smaller, more fuel-efficient vehicles.

GM has touted the Verano's quiet cabin and standard features not typically found on a car in its price range, such as a 7-inch color-touch radio display with IntelliLink, the infotainment system for Buick and GMC.

Higher-end Verano models will receive the same leather used in Buick's flagship LaCrosse sedan, and touches such as push-button start, a heated steering wheel and heated seats that activate automatically in colder temperatures.

The Verano "expands the brand's reach," Tony DiSalle, Buick's U.S. vice president of marketing, said in a statement. "We're inviting new customers into the Buick family, giving us the opportunity and privilege of building longtime Buick loyalty."

GM hopes to build on the success of the Chevrolet Cruze compact, which is built on the same platform as the Verano. The Cruze, which replaced the Cobalt in Chevy's lineup last fall, was the top-selling U.S. compact sedan in July and August.

The Cruze starts at $17,470, including shipping.

Editor's note: An earlier version of this story said it had been decades since Buick marketed a compact car in the U.S. market. Buick sold a compact, the Skylark, as recently as the 1998 model year.

When you do the math, promoter extraordinaire Terry McAuliffe's grand hybrid vehicle plan just doesn't add up

Terry McAuliffe, the former head of the Democratic National Committee and political ally of Bill and Hillary Clinton, has bold and beautiful plans to hire U.S. workers to produce hybrids and electrics.

McAuliffe says he can develop hybrid powertrains, assemble highway-ready vehicles that meet all federal safety and emissions standards, and employ 5,000 U.S. workers. He even plans to export advanced parts to a planned joint-venture auto-assembly plant in China.

"The powertrains, batteries, will be made here and shipped" to China, McAuliffe said Aug. 8 on "The Daily Rundown," a talk show on MSNBC.

But even casual scrutiny of his vision reveals overwhelming obstacles. Let's be plain: His plan is dead on arrival.

He casts himself and his company as part of the solution for a country struggling with 9 percent unemployment, unsparing global competition and gridlocked politics.

But McAuliffe, a born promoter who set eye-popping records as the Democratic Party's fund-raiser in chief, glosses over the sheer magnitude of the task.

To understand the challenge, take General Motors. It invested more than $1 billion in the Chevrolet Volt plug-in hybrid and its technologies, which will be spread over other upcoming vehicles.

In recent years GM has added nearly 2,000 engineers to support its various hybrid and electric-vehicle technologies. And it has spent $700 million in Michigan alone to support vehicle electrification, including test facilities, a battery manufacturing lab and special equipment at its Detroit-Hamtramck assembly plant.

And what does McAuliffe's company, GreenTech Automotive, have? About 50 employees, says Alan Himelfarb, executive vice president for strategic planning. Not even 50 engineers. Fifty total employees.

What keeps the vision alive is McAuliffe's audacity. With confidence and verve, he spells out his job-creating optimism on friendly national cable shows such as "The Daily Rundown" and "The Ed Show," also on MSNBC.

And he wraps his goals in feel-good hot buttons: cleaning up the environment and taking on the growing economic might of China.

"We can achieve two important goals at once. We can provide China with clean technology and help reduce carbon emissions in the country," said McAuliffe, chairman of GreenTech, in an Aug. 6 press release about the China factory. The China project will create 2,000 jobs for Americans, he said.

Superb fundraiser

Political pro Terry McAuliffe has a track record raising big money -- but can he put hybrids on the road?

McAuliffe, a high-energy speaker with a quick and charming smile, is a superb fundraiser. His biography on the GreenTech Web site says that under his leadership the Democratic National Committee set party records by raising more than $535 million.

After a four-year stint at chairman of the committee from 2001 to 2005, he was chairman of Hillary Clinton's presidential campaign. In 2009 he ran unsuccessfully for governor of Virginia.

In the auto industry, though, he's a newcomer. Bold auto visions are fine. But they require staggering amounts of money and manpower. And there's no tangible indication that McAuliffe has either.

That hasn't slowed McAuliffe's promotional machinery. Most recently, GreenTech said on Aug. 6 that it had signed a deal to construct a joint-venture factory in China to assemble 300,000 vehicles a year for the Chinese market.

The Chinese partner is Shengyang Zhong-Rui Investment Co., which GreenTech says has investments in banking, commercial real estate and Chinese airlines. But no investments in automotive operations are listed in the GreenTech press release.

GreenTech says the vehicles, "subcompact, compact, midsize and sports," will be powered by "U.S.-made high-efficiency combustion engines, hybrid powertrains and pure electrical drivetrain" and sold only in China.

Hybrid powertrains, which combine an internal combustion engine, an electric motor, regenerative braking, a large propulsion battery and other advanced components, require millions of lines of software code and world-class engineering and manufacturing.

Meanwhile, GreenTech's Web site also says is has a line of vehicles in development that will be "fully NHTSA- and EPA-certified, full-speed, all-road vehicles." The autos will be assembled in a plant in Mississippi that the company acknowledges is still in the planning stages.

GreenTech, along with suppliers, will invest $1 billion in the Mississippi assembly complex, the company says. A 2010 press release says the cars will go on sale around 2013-14.

And the Web site of the Ordos provincial government in China says GreenTech pledged to start production of hybrids and electrics at its plant in 2013.

But last week the company scaled back those estimates.

"Our expanding product portfolio, including hybrid and electric full-speed vehicle will come in due time and we have not yet set a timetable for the next product introduction" after this year's neighborhood electric vehicle, the company said in a statement. "We fully understand the challenges in time, money, and technical expertise to produce a quality hybrid or electric vehicle."

Even without a timetable, it is not credible that a company with 50 employees now can develop, even with help from major suppliers, a full line of vehicles, master hybrid powertrains, construct an assembly plant and put together a dealer network.

"We are very realistic'
Last week, GreenTech's Himelfarb acknowledged skepticism about starting an auto company from scratch. But he said, "We are very realistic about the challenge."

He made these points about the gap between the vision and reality:

-- Staffing. GreenTech's staff is small now, but it is hiring and plans to have 100 employees by year end, Himelfarb said. And it plans to use major global suppliers and engineering firms with the talent and resources to develop vehicles and powertrains. So the jobs promised by GreenTech could be at suppliers. Himelfarb declined to name those suppliers.

-- Money. Himelfarb insisted GreenTech has money to meet its business plan. "We are very well financed," he said. He declined to reveal the source of the company's funds.

-- Mississippi assembly plant. Site preparation has started in Tunica County, he said, but GreenTech has not yet hired major contractors capable of building and equipping an assembly plant.

-- Neighborhood electric vehicles. To "get its feet wet" in autos, Himelfarb said, the company is gearing up to produce low-speed electrics, which are mainly suitable for resorts and retirement villages. They have turn signals, seat belts and other safety features but are not legal on roads with speed limits above 35 mph.

It plans to start modest production of the MyCar electric at a former elevator factory in Horn Lake, Miss., also in Tunica County, 15 miles south of Memphis, Tenn., in the third quarter. MyCar was designed by a Hong Kong company GreenTech acquired in 2010.

GreenTech says it has signed Greenabout, a Danish company, to distribute American-made MyCars in Denmark.

In expansive tones typical of its press releases, GreenTech makes over-the-top forecasts for the MyCar. A press release says: "We will make the first 100,000 U.S.-built MyCars available to consumers for $10,000 apiece."

But the entire market for low-speed vehicles in the United States last year was only 25,650, says International Market Solutions, a market research firm in Cortlandt Manor, N.Y., that specializes in what it calls small, task-oriented vehicles. Low-speed vehicles include golf carts and most vehicles that generally are called neighborhood electrics.

In a written statement to Automotive News, GreenTech said neighborhood electrics "are a small market for sure, at least right now. We have a few ideas on how to create some awareness and build that market. Our goal of 100,000 units is a cumulative sales figure over time. We look forward to achieving that."

Like all of GreenTech's projects, its neighborhood electrics are long on promotion and short on credibility. And road cars are a lot tougher to make and sell than golf carts.

BMW Recall Notice FUEL SYSTEM, DIESEL: PRE-HEATER

Manufacturer: BMW OF NORTH AMERICA, LLC Mfr's Report Date: AUG 18, 2011
NHTSA CAMPAIGN ID Number: 11V441000 NHTSA Action Number: N/A
Component: FUEL SYSTEM, DIESEL: PRE-HEATER
Potential Number of Units Affected: 2,120
Summary:
BMW IS RECALLING CERTAIN MODEL YEAR 2009 X5 XDRIVE35D VEHICLES EQUIPPED WITH A DIESEL ENGINE AND MANUFACTURED FROM OCTOBER 1, 2008, THROUGH JUNE 12, 2009. THE FUEL FILTER HEATER, WHICH IS USED FOR WARMING UP THE DIESEL FUEL DURING VEHICLE OPERATION AT LOW OUTSIDE TEMPERATURES, COULD EXPERIENCE AN ELECTRICAL OVERLOAD CONDITION AND BECOME PERMANENTLY ACTIVATED.
Consequence:
THE FUEL FILTER HEATER COULD REMAIN ACTIVATED EVEN WHEN THE IGNITION IS OFF AND LEAD TO A DEAD BATTERY. THE UNIT COULD ALSO OVERHEAT, POSSIBLY LEADING TO A VEHICLE FIRE.
Remedy:
BMW WILL NOTIFY OWNERS, AND DEALERS WILL REPLACE THE FUEL FILTER HEATER FREE OF CHARGE. THE SAFETY RECALL IS EXPECTED TO BEGIN DURING OCTOBER 2011. OWNERS MAY CONTACT BMW CUSTOMER RELATIONS AND SERVICES AT 1-800-525-7417.
Notes:
OWNERS MAY ALSO CONTACT THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION'S VEHICLE SAFETY HOTLINE AT 1-888-327-4236 (TTY 1-800-424-9153), OR GO TO HTTP://WWW.SAFERCAR.GOV .

Audi to unveil production version of A8 hybrid

Audi will unveil a production version of the A8 hybrid sedan at the Frankfurt auto show.

Audi said the A8 hybrid uses a four-cylinder gasoline engine for the first time in the A8 range. The 245hp 2.0-liter unit is combined with a 54hp electric motor powered by a lithium ion battery pack weighing 37kg.

The car has a range of 3km while driven on battery power alone.

Audi says the A8 hybrid will reach 0-100kph (62 mph) in 7.7 seconds and it has a top speed of 235kph (146mph). It uses 6.4 liters of fuel per 100km (44 UK mpg; 36.5 U.S. mpg) and has CO2 emissions of below 148g/km.

The hybrid has an aluminum construction, which Audi says will make it one of the lightest sedans in its category, weighing 231kg, about 40 percent lighter than a comparable steel construction.

The car will go on sale in Europe in late 2012.

Toyota Camry Power Lock problems.

The power locks in my Camry will only unlock the driver’s side door. They lock every door in the car, but only unlock the driver’s. I checked the fuses underneath the front dash, (edit: all the fuses I checked are fine) and after reading information online, bought and replaced the rear, passenger’s side lock actuator. (It was expensive, so I wanted to tackle one door first to make sure I could do it.) Unfortunately, the exact same problem persists, even with the new actuator. Power locks lock it, but not unlock it. All the door handles and manual locks work fine. Suggestions? 2004 Toyota Camry 4 cylinder.