Jaguar's Fresh Assault on German Rivals



As I climbed into the driver's seat of the 2009 Jaguar XF, the illuminated start button on the center console beckoned. According to the manufacturer, it "pulses red, like a heartbeat." That's a risky greeting from a company whose quality reputation has been dodgy; the first thought that came to mind was, "Oh no -- there's an electrical short in it."



I pressed the button anyway, steeling myself for the shock that did not come. Instead, I watched in mesmerized amusement as the car fired up and the climate-control vents all rotated open. I didn't know what to make of this gratuitous effect the first time I saw it and still don't, but it's curious that a car maker struggling so mightily to be regarded as modern would ape the hidden headlights of a 1970s-era Lincoln.



This wasn't the only surprise. As I stared bemused at the dashboard, a knurled aluminum knob sprouted from beside the start button. It looks like a British imitation of those overly complicated multifunction controllers found in BMWs and Mercedes. But this one is simply the gearshift for the automatic transmission, with the familiar markings of "P," "R," "N" and "D" (plus a fifth selection, "S," for sport mode) arrayed above it. The novelty of the knob's odd rotary action fades with use. If you're going to reinvent the wheel -- or, in this case, the method of engaging them -- this is a fine way to do it. It certainly is superior to the awkwardly redesigned shifters recently deployed by the aforementioned competition, such as stubby shifter stalks on the steering wheel that don't conform to traditional shifter behavior.

Speaking of competition, let's address the $64,000 question right away: Is there really any reason to take this new Jag seriously, given the field of fairly exceptional luxury sedans already on the market? The $62,975 answer (the actual sticker price) is yes. The XF Supercharged I tested is more compelling than either the BMW 5-Series or Mercedes E-Class, its most obvious competitors. While I wouldn't call the XF better, it seems Jaguar is really trying hard to be different, and that counts for a lot in my book. The ubiquity of the German duo may well be reason enough to consider the Jag, as it's an undeniably fresh take on a class of cars that in many ways is conservative to a fault.



It starts with borrowing styling from the gorgeous and more expensive Mercedes CLS-Class, which looks like a coupe with four doors instead of the traditional two. Jaguar gave the XF the same windshield angle as the British maker's striking XK sports coupe, making the sedan appear low and streamlined like its sibling. While the hood is still a little too upright (and its swept-back indentations bear more than a passing resemblance to the Toyota Camry's) the lines on the new Jag flow gracefully rearward. The attractive looks are a major selling point if you're making comparisons with the Teutonic competition, whose styling has lately grown flaccid.

The XF not only takes on the appearance of the Jag coupe but also borrows the XK's engine and transmission. The 4.2-liter V-8 is mated to a quick-shifting six-speed automatic, which also can be controlled manually via paddles on the steering wheel. The standard XF puts out 300 horsepower, while the top-of-the-line version uses a supercharger to bump that number to 420, just like in the XK. Sharing engines and transmission gives the cars a similar rowdy character, and contributes to the XF's being significantly sportier than average.

All this reinforces the notion that the XF is an XK with a couple of extra doors, which isn't true. The cars share similar suspension designs (the shock absorbers, struts and antisway bars) but the XF is a further evolution of the Jaguar S-Type sedan that was first introduced for the 2000 model year. The XF thus has an entirely steel body while the XK is made of lighter (and pricier) aluminum. This helps explain why the XF's base price is more than $25,000 cheaper than that of its two-door stablemate. That makes it unsurprising that the XF has accounted for 43% of Jaguar's sales this year, despite being on sale only the past two months. BMW still sold more than four times as many 5-Series in April, and Mercedes moved nearly three times more E-Classes.



While there are plenty of reasons why the Germans trump Jaguar in sales, one worth noting is that BMW and Mercedes both offer six-cylinder models that get more-reasonable fuel economy than the Jag. BMW's 528i is rated at 21 miles per gallon in combined city-highway driving and the diesel version of the Mercedes E-Class tops that at 26 mpg. The standard XF manages just 19 mpg combined, and the supercharged model a mere 17 -- and the difference grows more pronounced if you compare the highway-only numbers. Perhaps someone in the United Kingdom (or at Jaguar's new owner, India's Tata Motors Ltd.) should make the necessary arrangements to import the diesel-powered XF sold in Europe. That would certainly make an even stronger case for taking a flier on such an upstart model.

Honda starts production of zero-emission cars


TAKANEZAWA, Japan (AP) -- Honda Motor Co. has begun commercial production of its new zero-emission, hydrogen fuel cell car, called the FCX Clarity.

The midsize four-seat sedan, which runs on hydrogen and electricity, emits only water vapor and none of the gases believed to be responsible for global warming.

Honda says the vehicle offers two times better fuel efficiency than a gas-electric hybrid and three times that of a traditional gasoline-powered vehicle.

The car will initially be available for lease starting July to a limited number of customers in southern California and then in Japan later this year.

Honda says it expects to lease a few dozen units in the U.S. and Japan within a year, and about 200 units within three years.

One of the biggest obstacles standing in the way of wider adoption of fuel cell vehicles is cost and the lack of hydrogen fueling stations.

Duracar Delivers with Eco-Trucking

A Dutch startup has found a promising niche: fleets of battery-powered light commercial vehicles for short-range city deliveries

by Mark Scott

Soaring gas prices have focused attention as never before on electric cars. From Nissan's (NSANY) plan to sell zero-carbon vehicles in Japan and the U.S. to General Motors' (GM) efforts to develop a battery-powered hybrid, the world's top automakers are scrambling to introduce greener vehicles.

Some of the most interesting developments aren't coming from industry giants, though. Former SAP (SAP) executive Shai Agassi has made waves with his bold plan to introduce electric cars in Israel. And a Dutch startup called Duracar is pursuing an ingenious plan to sell an eco-friendly light commercial vehicle roughly the size of a Mini (BMWG.DE) that could be used for deliveries and other short-range travel in Europe's bustling city centers.

RIDING THE ECO-WAVE
This niche may lack the sex appeal of sports cars or SUVs, but it's a big business opportunity. Analysts figure that 330,000 new light commercial vehicles (defined as those weighing less than 3,850 pounds) are sold each year in Europe—a market worth hundreds of millions of dollars annually. Replacing even some of the gas-powered vehicles with electric models would cut noise, pollution, and carbon emissions in cities. And with oil topping $140 per barrel, it also would save money for fleet operators—whether government agencies, field service operations, or delivery firms such as FedEx (FDX).

"We're riding the wave of growing interest in eco-friendly cars," says Duracar Chief Executive Officer Wim Steenbakkers. "For this to work, the vehicle must be economically competitive [with gas-powered vehicles], and we think we've done that."

Duracar will officially unveil its electric car, dubbed the Quicc, at the Paris Motor Show this fall, but the Dutch company already has big plans for the pint-sized vehicle. Steenbakkers aims to book $7.6 million in pretax profits next year on revenues of $83 million, and hopes to sell more than 13,000 units over the next three years.

INNOVATIVE MODULAR PLANT
The startup has recruited an impressive lineup of managers, investors, and partners to help hit its targets. It has raised about $37 million from backers including Dutch venture capitalists Ecoventures—a subsidiary of leading green investment firm Econcern—and is finalizing an additional $20 million in funding to expand production capacity.

CEO Steenbakkers worked previously at Dutch life sciences and materials company Royal DSM (DSMN.AS), some of whose technology is being used in the car. He's joined by Chief Technology Officer John Lodge, an auto industry veteran of 25 years who worked previously for Mitsubishi (MMTOF) and Volvo (F), and Johann Tomforde, the developer behind Mercedes Benz's (DAI) miniature Smart car, who consults eight days a month for Duracar.

The Quicc is being manufactured at an innovative "modular" plant in the Netherlands where all the suppliers work under one roof assembling their portion of the vehicle. Duracar's industrial partners include Siemens (SI) and German electric battery manufacturer GAIA.

SHARP FOCUS KEY TO SUCCESS
Key to the company's strategy is staying focused on the light commercial segment, which is especially well-suited to electric cars. The vehicles have a limited range—typically 80 to 100 miles—and need to be recharged overnight. "It makes it easier for refueling as the cars usually are brought back to a central depot each night where they can be recharged," says Steenbakkers.

Sharp focus also will allow Duracar to develop relationships with the most appropriate potential clients—whether energy and water utilities or logistics outfits such as DHL (DPWGN.DE). It also helps Duracar steer clear of the plans by global automakers to build mainstream hybrid and electric passenger vehicles.

Like other startup electric car companies, such as Norway's Think, the main challenge remains convincing customers that the rechargeable batteries are long-lasting, safe, and cost effective. That has been the downfall of previous attempts to mass-produce electric cars, says Anjan Kumars, a senior analyst at researcher Frost & Sullivan. Battery costs, for example, have typically represented 30% to 50% of an electric car's overall sticker price, which makes it difficult to compete with petroleum rivals.

MORE DURABLE BATTERIES
"The auto industry is based on economies of scale," says Richard Spitzer, global industry managing partner of the automotive and industrial equipment practice at consultancy Accenture (ACN) in Houston. "No company's going to make big bets that turn out to be losers."

Duracar expects to overcome this problem by using a new range of lithium ion batteries that are more durable and slightly cheaper than previous options. The battery cost in the first 325 cars will need to be subsidized, says Guido Boosten, the company's marketing manager. But by 2009, he figures, economies of scale from higher production volumes will allow Duracar to pass along the full cost of the batteries to customers.

Even so, the cost of a Duracar electric vehicle likely will remain higher than that for a gas-powered rival. The company will rely on third-party leasing companies to gets its cars into the hands of customers—the norm in the industry. All told, the cost for a five-year Quicc lease should come out to about $40,000, compared with $30,000 for a petroleum vehicle.

POSSIBLE GOVERNMENT INCENTIVES
But with the cost of gasoline surging, the operating costs of a Duracar electric fleet could easily turn out to be less. Based on a gas price of $5.87 per gallon (the cost in Holland a few months ago), Duracar says a Quicc would cost $42,500 to run over a five-year lease, compared with $44,500 for a similar gas-powered car. Gas prices have risen more than 15% since the calculation was made.

Another factor that could help Duracar is government incentives. As national and local bodies take a tougher stance on vehicle CO2 emissions, the company could benefit from state subsidies that reduce the Quicc's sticker price. Some countries such as Norway also plan to waive import duties on eco-friendly vehicles to jump-start public interest. "The possibility of government help could be an import factor," says Frost & Sullivan's Kumar.

No question, Duracar is an ambitious play in a business that has seen its share of failed dreams. But the time has never been better for electric cars. If Steenbakker and his team play their cards right in years to come, European city dwellers could enjoy an improved urban environment while fleet operators enjoy lower costs.

Mitsubishi Motors unveils Lancer Sportback at Paris Motor Show




Tokyo - Mitsubishi Motors Corporation will unveil, for the first time at an international motor show, the Lancer Sportback at the Le Mondial de l'Automobile 2008 (Paris Motor Show 2008) being held in Halls 1-8 of the Paris Expo Porte de Versailles from October 2 (October 4 for the general public) through October 19. The Lancer Sportback will have its European launch this fall with a phased introduction into the various countries in the region.

The company will also be displaying the Lancer Ralliart and Lancer Sportback Ralliart models that are based on the Lancer*1 sports sedan and Lancer Sportback. These models are powered by a turbocharged engine mated to Mitsubishi's Twin Clutch SST (Sport Shift Transmission) and delivering power to all four wheels through an Active Center Differential.

*1 Named the Galant Fortis in Japan



With its inverted-slant nose and trapezoidal grille that defines the Mitsubishi Motors design identity the sporty Lancer Sportback is a 5-door sport hatchback, a body type that is very popular in Europe. The model is available in versions powered by 1.5-liter (109PS) or 1.8-liter (143PS) gasoline engines or by a 2.0-liter (140PS) turbo diesel engine. The Lancer Sportback offers an "auto-folding function" which enhances luggage compartment convenience through adjustable rear floor height and rear seatbacks that can be tipped forward via a lever located in the luggage compartment. The series is due to be joined by a model powered by Mitsubishi Motors' new diesel engine in spring of 2009.



Lancer Sportback

The Lancer Ralliart and Lancer Sportback Ralliart models use a new turbocharged 2-liter 4-cylinder DOHC MIVEC*2 engine [maximum output 177 kW (240PS), maximum torque 343 Nm (35 kgm)]. This is mated to Mitsubishi's high-efficiency Twin Clutch SST transmission with an Active Center Differential, for extremely responsive steering and traction through tailoring the amount of torque fed to each wheel to optimally suit driving conditions. Also helping to significantly raise the basic performance attributes of these cars over the Lancer base model are 2-pot caliper front brakes and a larger brake master cylinder.

*2 Mitsubishi Innovative Valve lift and timing Electronic Control system

Mercedes' Amazing CL63 AMG

Want the speed of a Porsche but the luxury of a sedan? If you can afford the CL63 AMG, this is the car for you

by Thane Peterson




Many of my favorite moments in the movie Michael Clayton occur when the main character, played by George Clooney, is tooling around in his darkly beautiful Mercedes S550. The S-Class is the perfect car for a striver like Clayton, a gambling–addicted "fixer" for a New York law firm who's trying to pass as a solid citizen. But as much as I loved the car, I kept thinking a single guy like Clayton really should be driving a Mercedes CL-Class, the sportier, two-door coupe version of the S-Class.

Among vehicles that combine high performance with every conceivable luxury, there's nothing quite like the CL-Class. I absolutely love the two I've test-driven, the CL550 and, more recently, the '08 CL63 AMG. For those who can afford them, the main question is whether you want a sport luxury car that's very fast, or one that's insanely fast.



There are two subclasses within the CL-Class. The CL550 and its more powerful sibling, the CL600, are tilted more toward the luxury side of the equation than the AMG versions. The CL550, which starts at $104,475, is powered by a 5.5-liter, 382-hp V-8 engine, while the CL600, which is powered by a monster of a 510-hp, twin-turbocharged V-12, starts at $148,275.



The AMG versions, the CL63 and CL65, have sport-tuned suspensions, extra-big brakes, 20-in. wheels, and special badges and interior appointments that emphasize their ultra-high performance. The CL63 starts at $138,375 and is powered by a 6.3-liter, 518-hp V-8. The CL65 starts at a mind-boggling $198,375 and has a 604-hp V-12 under its hood.

The transmission in the CL AMG is a performance-tuned, seven-speed automatic with a manual shifting function and aluminum paddle-shifters mounted on the steering wheel.

The good news is that loading up the CL63 AMG with options only increases the price by 10 or 12 grand, which is practically just rounding up in this price class. For $7,000 extra, you can add the AMG performance package, which includes 20-in. double-spoked alloy wheels, carbon-fiber interior trim, and an increase in the top speed governor to 186 mph. The intelligent cruise-control system plus backup assistance and a blind-spot warning system go for an extra $2,850. A premium package that includes a backup camera and night-vision system adds $2,090.



The least expensive option is the one that irks me most—the $425 iPod integration kit. You would think Mercedes would throw that one in for free.

The obvious downside of going with one of the bigger engines is poor fuel economy. The CL550, which is rated at 14 city/21 highway, does considerably better than any of its more powerful siblings. In 230 miles of mixed driving, I got only 15.6 mpg in a CL63 AMG, which is rated to get 12 in the city and 19 on the highway. That rating is only a tiny bit better than the CL65 AMG (11/17) and the CL600 (11/19).

Like other big, high-end Mercedeses, the CL-Class is being hurt by high gas prices. CL-Class sales fell 7.7%, to 1,323, in the first five months of this year, while Mercedes' overall U.S. sale rose 1.1%, to 99,703.

Behind the Wheel

My epiphany in the CL63 occurred one afternoon when I decided to make a quick, spur-of-the-moment left turn in front of oncoming traffic. I was astonished by the car's agility. There was absolutely no sway or body roll, even though I was going much faster than I had intended. I assume this was due to the CL63's sport suspension coupled with the Active Body Control system kicking in. Whatever the reason, this extra-sharp handling is what gives the CL63 an edge over the less expensive CL550.



The CL63's other main advantage is raw power. Punch the gas at any speed in this car, and it leaps forward. I clocked the CL63 AMG at 4.8 seconds in accelerating from 0 to 60, slightly slower than the 4.5 seconds at which Mercedes rates it. That makes the CL63 just as quick as the more expensive V-12-powered CL600, and nearly a second quicker than the CL550. Only the top-of-the-line C65 AMG, which does 0 to 60 in just 4.2 seconds, is faster.

The CL63's top speed is 155 mph, and there's a helpful little sticker on the inside of the fuel door reminding you to raise tire pressure to 46 pounds per square inch from 36 pounds if you plan to be cruising at over 100 mph. Even without altering the tire pressure, though, the car remains quiet and composed at over 100 mph.

Despite its performance orientation, the CL63 AMG is no less luxurious than the CL550.

The interior of my test CL63 was extremely elegant, with stitched leather upholstery and hand-polished burled walnut trim on the doors and dash. As a coupe, it's only a two-door, but the doors are very wide, making getting into the back seats relatively easy. The front seats also slide forward electronically at the push of a lever, and back into place once the passenger is seated in the back seat.

There are numerous helpful amenities built into the car. Backing up in a tight parking situation? The rearview monitor pops on automatically, and it has little graphic indicators that show you when you're getting close to an obstacle behind you (yellow lines) and a red zone when you're very close. Driving at night? The Xenon headlamps illuminate more of the road than with most cars, and swivel to point the way around curves. Plus, you can always flick a switch and turn on the optional night vision system, lighting up a screen that shows you the road ahead.

The night-vision system still seems a bit gimmicky, but it's growing on me as I use it more. True, its infrared sensors don't "see" much farther down the road than the naked eye. Also, even a light fog shows up on the screen as a white cloud, headlights from oncoming traffic often obscure the left half of the screen, and road glare from wet pavement is substantial. But I tested the system late one night after a huge rainstorm, and then test-drove another car without night vision immediately afterward. To my surprise, I felt much less safe without the night-vision system. Despite its flaws, it seems to focus your attention during difficult night-driving conditions. It's like Tai Chi. I'm not sure how it helps, but it does.

Buy it or Bag It?

The big question is whether the performance advantages of the CL63 AMG justify its premium price. The CL63 sells for an average of $142,007, according to the Power Information Network (PIN). Personally, I would save the 30 grand and go with the CL550, which is plenty fast, handles well enough for me, and gets better mileage. (PIN, like BusinessWeek, is a unit of The McGraw-Hill Companies (MHP).)



Other performance-oriented models to consider in this price range include the Porsche 911 (which sells for an average of $106,120, PIN says), and the Audi R8 ($133,499). More luxury-oriented alternatives include the Audi A8 Sedan Coupe ($81,158) and BMW's (BMWG) 750i Sedan ($80,722).

Another possibility is Toyota's ™ Lexus LS460, which starts at $63,665 but costs around $100,000 well-loaded in the long-wheel-base version.

Don't expect to get a discount. According to PIN, buyers aren't getting any price breaks on the Mercedes CL63 AMG or its main rivals. Obviously, if you have to count pennies, this isn't the segment for you.

Japan's New Green Car Push

Detroit will have to work hard to catch Japanese automakers in the race to produce hybrids, electric cars, cleaner diesels, and fuel-cell vehicles



In 2009, Mitsubishi will begin marketing its i-MiEV electric vehicle in Japan.

by Ian Rowley

Since General Motors (GM) first showed its Chevrolet Volt plug-in hybrid concept car at the North American International Auto Show in January 2007, the industry hype has been unrelenting.

Any lingering concerns over the cost and reliability of lithium-ion batteries, a technology not yet used in any mass-production hybrid car but which will help power the Volt, are outweighed by the excitement that GM will finally have a vehicle capable of rivaling Toyota's ™ Prius hybrid as the green car champion.

Yet when the Volt arrives in November 2010, assuming GM meets its challenging deadline, can the U.S. automaker make up for lost time in the race with Japan's automakers to produce cleaner, more fuel-efficient cars? Even if the Volt is as impressive as GM hopes, a slew of recent announcements by Japan's automakers suggest closing the gap will be tough.

A LOT MORE HYBRIDS TO COME
From now through 2010 and beyond, they are pushing ahead with plans for hybrids, electric cars, cleaner diesels, and even, further down the road, fuel-cell vehicles (see "Japan's Green Drive"). The days when auto executives mocked the Prius as a loss-making fad seem long past. "Without focusing on measures to address global warming and energy issues, there can be no future for our auto business," Katsuaki Watanabe, Toyota's president, said at an environmental forum in Tokyo on June 11.

In the short term, that means many more hybrids. By the early 2010s, Toyota aims to more than double hybrid sales, to 1 million a year, far more than all other automakers' combined hybrid sales so far.

To meet its targets, Toyota will roll out several new models. Next year, Toyota is expected to add two new cars that it will sell only as hybrids, one badged as a Toyota, the other a Lexus. A new version of the Prius, which promises to be lighter and more fuel-efficient than the current generation, should also appear in 2009, and a plug-in version, which like the Volt will use lithium-ion batteries, is due to arrive a year later. By 2010, Toyota is also believed to be planning two more dedicated hybrid models, including a new hybrid minivan.

TOYOTA TAKES A LONG-TERM VIEW
Toyota will start production of Camry hybrids in Thailand next year and in Australia from 2010, and is already building a new factory in Japan for nickel-metal hydride batteries used in today's hybrids. "Toyota will continue to increase production of its current hybrid technology and should be selling over 800,000 units a year before we even see the first Chevy Volt," says Kurt Sanger, an analyst at Deutsche Bank (DB) in Tokyo.

Toyota is also looking beyond the next-generation lithium-ion battery: A special battery-research division it set up in June will start off with 100 engineers, but their numbers will double by 2010. The fruits of these researchers' labors may not emerge until 2030, according to some Japanese press reports.

Japan's No. 2 automaker, Honda (HMC), is also turning up the heat. In hybrids, Honda will launch several new models, and expects to be cranking out 500,000 gas-electric cars not long after 2010.

HONDA BURNISHES ITS GREEN STREET CRED
First up will be Honda's push to build a car that's got Prius-like credentials. Sold only as a hybrid and practical enough to seat five in comfort, it will have a sleek exterior based on Honda's FCX Clarity fuel-cell car and a price tag that's "affordable," CEO Takei Fukui told reporters in Tokyo on May 21. And it's destined for Japan, North America, and Europe starting in early 2009.

That will be followed by a sporty hybrid based on the CR-Z concept car, which Honda unveiled at the Tokyo Motor Show last fall. A new version of the Civic hybrid is next, when the compact car gets a design makeover around 2010, and then a hybrid version of the subcompact Fit hatchback. Honda's larger cars, however, will sport clean-diesel engines, with a diesel added to the Acura luxury lineup set for next year.

Where Honda has an advantage is in fuel-cell vehicles, which run on liquid hydrogen and emit only water. On June 16, Honda began limited production of its new fuel-cell model, the FCX Clarity. The car can go 280 miles on a single tank of liquid hydrogen and boasts higher fuel efficiency than comparable gasoline or hybrid models.

Unlike other fuel-cell cars, whose bulky tank and powertrain make for cramped quarters for passengers, the FCX Clarity seats four adults comfortably and still has ample space for luggage. Honda will build and lease just 200 in the U.S. and Japan in the next three years, but CEO Fukui thinks the technology will be ready for the mass market "at the price of a luxury car within 8 to 10 years." One big challenge, of course, is cost: Honda spends an estimated $1 million on every FCX Clarity it makes today. Getting production costs below the $100,000-per-car level will be key.

NISSAN'S ELECTRIC-CAR INITIATIVE
Nissan (NSANY), Japan's third-largest automaker, is no Toyota or Honda. Today, it sells just one hybrid model, a gas-electric version of the Altima sedan that relies on technology supplied by Toyota. But Nissan is trying to rectify that as it pushes ahead under a new business plan through 2012. Later this year, Nissan will begin selling its first clean diesels in Japan and will launch a diesel version of the Maxima sedan in the U.S. by 2010. Belatedly, the company is also working on its own hybrids. But perhaps more important, in 2010, Nissan will also introduce a lithium-ion-battery-powered electric vehicle in the U.S. and Japan and then sell the vehicles to consumers globally in 2012.

Nissan CEO Carlos Ghosn says electric cars, which don't emit any harmful greenhouse gases, are superior to hybrids and plug-in hybrids, which partially rely on gasoline engines. "We really want to be the first [to offer electric vehicles] in the mass market," Ghosn said following Nissan's annual shareholder meeting June 25. "Zero-emission [cars are] part of what the global market is looking for and ready to pay for." (Debate rages over whether electric cars are really "zero emission," given the electricity used to charge their batteries, depending on the location, could have been generated at polluting coal-fired power stations).

Even minnow Mitsubishi Motors is rushing to commercialize an electric car called the i-MiEV in 2009. Basing it on the "i" minicar, Mitsubishi is currently conducting fleet tests with several Japanese electric power companies. Reports in Japan say Mitsubishi will produce 2,000 lithium-ion-battery-powered i-MiEVs in 2009, rising to 10,000 a year by 2011. The price is likely to be initially between $23,000 and $28,000. Exports are to start in 2010.

Subaru maker Fuji Heavy Industries will also introduce an all-electric car in 2009. "Japanese makers launched hybrid and developed fuel-cell cars far in advance of the global competitors," says Tatsuo Yoshida, an analyst at UBS (UBS) in Tokyo. "Their accumulated real-world knowledge is enormous and that makes a big difference."

Test Drive: BMW X6
Taking a spin in the world's first SUV-coupe crossover




by Sam Livingstone


Why do people like some cars and dislike others? There are all sorts of reasons for sure, but there aren't so many cars that one both likes and also dislikes. The BMW X6 takes this a stage further in being a design that is likable and unlikable for the same reason.

Discounting the Ssangyong Actyon, the X6 is the world's first SUV-coupe crossover (the Munich-based manufacturer calls it a Sports Activity Coupe). And in marrying of these two leisure lifestyle-signifying car types we have the crux of the X6 identity, and the reason we both loved and hated it.

Jump in, just like an X5—the broad and chunky yet svelte driving environment is a familiar sight—albeit with your head slightly closer to the header and the roof lining. Clock the head up display and the elephantine door mirrors, engage the digital gear selector that doesn't move into different positions for different gear selections—it works more like a joystick, with an illuminated display on the handle—and power off with surprising élan. The model we tested was the European market only X6 xDrive35d diesel with 286bhp and a prodigious 580Nm of torque. Dynamically it impresses, and with its sharper than SUV responses yet SUV stature, the X6 makes for an even more confidence inspiring on-board feel than any SUV.



In the back, the two rear seats are set slightly inboard of the front ones as the body tapers rearwards, providing nearly as much space as in a 3 series; very comfortable for a six-footer—just. Being a strict four-seater means the rear seats are separated by a cheap looking and hard feeling plastic tray, and they sit facing cheap looking pockets on the back of the front seats.

Strutting around in an X6 is to make clear that you value highly the spacious front seat accommodation and commanding driving position of an SUV over, say, the 6 Series coupe. It says that you enjoy SUV qualities but don't need the space or want the practical image—that you don't want the 'utility' in 'sports utility'. It also says that you have the money to exercise these subtle preferences of yours and spend roughly $20k more than a 3 Series that does the same job (presuming you drive on the road, not off it).

But we loved the X6's subtle combination of SUV and coupe genes, it gelled somehow, and clearly it will appeal to the well heeled empty nesters out there. Yet we also hated it, just as we imagine a growing majority of people will.



BMW makes much of their environmental credentials with their efficient smaller engine cars, their development of hydrogen powered cars for the future and of their high level of recyclability. But with the X6 they are combining the profligate qualities of a fast coupe—powerful engine and reduced scope to carry stuff—with the profligate qualities of an SUV—high drag body and heavy mechanicals. And the result is a car that shouts very loudly about how profligate it is, about just how un-Prius it is.

For sure the X6 will be a success, at least short term, and particularly in the US. It has a strong and unique conceptual appeal, it's a svelte and attractive design, and it sits in the heart of the BMW brand. But there is also something ugly about what this handsome new design says.

Dimensions: height 4877mm; width 2195mm (including door mirrors); height 1690mm; wheelbase 2933mm

Mercedes GLK: More Rugged Than It Looks
Don't let the pretty face of the new Mercedes GLK-Class fool you. This compact SUV is ready with some clever tricks for off-road adventures

by Jack Ewing



I felt bemused as I settled into the leather driver's seat of a Mercedes GLK-Class SUV for an off-road test drive in a wooded area of Germany's Ruhr Valley. Let's face it, I thought, Mercedes (DAI) is not aiming at the rod-and-gun crowd with a $53,000 car that you can order in white with tinted windows and two-tone upholstery. Promotional materials even show a fashionable woman loading her designer luggage into the back. Britney Spears may buy this car to evade the paparazzi, but you won't see many bass fishermen kicking the tires.

Or so I thought. A short while later I found myself trying to steer the GLK down a steep, slippery incline. At the bottom was a small river spanned by a bridge consisting of several logs. If I had been in a TV commercial, this would be the moment when a subtitle appears warning that only professional drivers should attempt this maneuver. Except that I'm not a professional driver.



The Mercedes man assigned to keep me from wrecking the vehicle seemed remarkably calm, and soon I found out why. He reached over from the passenger seat and pressed a button on the dashboard that activated the optional Downhill Speed Regulation. Using the cruise control lever on the steering wheel, I set the speed at 4 kilometers an hour. The GLK's electronics slowed the car to walking pace and distributed power among the four wheels in a way calculated to maintain traction. All I had to do was steer carefully onto the log bridge and across to safety. Even Britney could have done it.



After completing the off-road course, I had to admit that, yes, bass fishermen would like this car, too. You can drive the GLK at more than 100 mph on the Autobahn, as I did briefly. (For the record, it was a stretch of highway where there is no speed limit.) But the GLK is also a real 4-by-4. Thanks to clever electronics that keep the vehicle steady and maintain traction in rough terrain, an average driver can perform gymnastics on the trail that would confound even professionals.

UNDER THREE YEARS
The GLK, which goes on sale in Europe in October and in the U.S. early in 2009, is Mercedes' most important new car of the year, and it's good—if you ignore the fact that soaring fuel prices are causing SUV sales to plunge. At least the GLK is a so-called compact SUV. "Compact" in this case presumably means "compared with a Hummer." But the GLK does get decent gas mileage for a 2-ton vehicle. The 4-cylinder diesel version is rated at 34 miles per gallon (or, in European terms, 6.9 liters per 100 kilometers). The 6-cylinder gasoline version that will be sold in the U.S. gets just 22 mpg, however. (Mercedes hasn't yet announced a U.S. price for the GLK, but the same car costs more than $60,000 in Germany.)

Mercedes brought the GLK from design to production in under three years because it needed to compete better with smaller SUVs such as BMW's (BMWG.DE) successful X3. Besides being smaller, the GLK differs from the rest of the Mercedes SUV lineup in a number of ways. Designer Steffen Köhl and his team gave the GLK a boxy look to set it apart from the crowded SUV market, as well as from Mercedes' own M-Class cars. The angular design harkens back to military vehicles, the original SUVs, which had squared-off body parts that were easy to make and fix.



Inside, the GLK feels like a passenger car, except with more upright seating and a picture-window view out the front. In fact, some of the cockpit, such as the seats, comes from Mercedes' C-Class sedans. The car's interior amenities seem more attuned to the suburbs than the woods, though I suppose you could argue that the video display that lets you see what's behind the rear bumper helps the environment. It keeps you from backing into trees.

But people who never drive off the pavement with their GLK will be missing some fun. At one point during the test drive, my Mercedes co-pilot coached me across a series of huge earthen bumps. Between each set of obstacles, the car teetered dangerously on one front wheel and the opposite rear wheel. The other two wheels were several feet off the ground. Instead of spinning wildly, the free wheels stopped instantly while the other two continued to deliver power. The Mercedes guy taught me how to brake slightly when the GLK crested a bump, causing the front wheel to drop gently back to the ground.

It will be interesting to see whether record fuel prices will restrict this kind of fun to a few buyers. Unlike most of the rest of Mercedes' SUV lineup, which is made in Tuscaloosa, Ala., the GLK will roll from a plant in Bremen, Germany. That suggests the car is destined not only for well-heeled European buyers but also the growing flock of wealthy Russians. The fast-growing Russian market has helped prop up sales for the whole industry recently. Mercedes execs can only hope it will keep the SUV market alive as well.

Famed car designer dies in road accident

MILAN, Italy (AP) -- Andrea Pininfarina, the chief executive of the Italian car design firm founded by his grandfather that counts Ferraris and Alfa Romeos among its creations, died Thursday in a road accident near the northern Italian city of Turin.

Pininfarina was driving a scooter along a provincial highway when he struck a car whose driver failed to stop at an intersection, Luigi Semenzato, the police chief in the town of Trofarello south of Turin, told Sky Tg24 television news.

The driver "didn't see the Vespa coming," Semenzato told Sky.

Pininfarina, 51, was the third generation to run Pininfarina SpA, founded in 1930 by his grandfather Battista "Pinin" Farina -- who combined his nickname and last name to create the company's name and new family name.

Pininfarina SpA has designed cars for Fiat, Alfa Romeo, Cadillac and Volvo, among many others, but is perhaps most closely associated with Ferrari, designing nearly all of Ferrari's models since the 1950s. They include the convertibles California Spider and Daytona Spider.

Andrea Pininfarina took over as CEO in 2001, and in 2006 also became chairman of the board of directors, a position previously held by his father, Sergio Pininfarina, who is a senator for life in the Italian parliament.

Andrea Pininfarina studied mechanical engineering at the Polytechnic of Turin and started his career in the United States with Freuhauf Corp. in 1982, before returning to the family business a year later.

He was a frequent visitor to Ferrari headquarters and nurtured close relationships with the technical experts.

He was also a former vice president of the Confindustria industrial lobby, and his death was felt throughout the business community.

"Italy, Turin and the entire Fiat Group have lost a symbol of entrepreneurialism, a man who carried on, and introduced innovations to, the work of his grandfather Pinin and his father Sergio," Fiat chairman and Ferrari President Luca Cordero di Montezemolo, a former Confindustria president, said in a statement.

Pininfarina is survived by his wife and three children, according to Italian media reports.

Daimler's Smart Car Hits Cruising Speed
Thanks to eco-image-consciousness and soaring pump prices, sales finally rev up—even in the U.S.


To Daimler's pleasant surprise, most U.S. buyers are going for the upscale

by Jack Ewing

Stuttgart - For most of its 10-year history, Daimler's (DAI) Smart car division has had a reputation for making small cars that lose big money. In 2005 and 2006, Stuttgart-based Daimler recorded more than $3 billion in restructuring costs for the division that produced the diminutive two-seater. Frustrated execs at one point vowed to sell the division or kill the quirky vehicle if they couldn't fix the chronic money loser.

Turns out the Smart may simply have been ahead of its time. Suddenly, Smart sales are soaring, even in the U.S., where the brand has been available since January. Smart USA has sold more than 14,000 cars in the U.S.—about double what Daimler expected—and there is a yearlong waiting list. Worldwide, Smart sales are up 57% this year, to 81,300 vehicles, and Daimler has added shifts at its factory in Hambach, France. Daimler doesn't disclose results for Smart separately, but analysts expect operating earnings of about $75 million on sales of $1.5 billion. The 5% margin compares to about 8% for Mercedes cars as a whole.

STATUS SYMBOL
Gas prices only provide a partial explanation for the Smart's surge. True, the Smart, with a three-cylinder engine and colorful plastic body panels, gets great mileage. At 41 mpg on the highway, the Smart is the most fuel-efficient nonhybrid gasoline car on American roads. A diesel version (not available in the U.S.) gets 71 mpg.

But Smart buyers aren't your average penny-pinchers. Many are affluent, design-conscious folks who have seen Smarts during trips to Europe and own at least one other car. To Daimler's surprise, only 5% of U.S. customers choose the $11,590 base model, instead ordering spiffier versions such as the $16,590 convertible. Though some drivers say the Smart feels like a mouse among elephants on the highway, Ron Moreau, a 74-year-old Williamsburg (Va.) resident, says his two Lexus models have hardly left the driveway since he bought a $16,800 Smart Passion in July. "You don't want to be picking your nose while you're driving the car, because everyone's looking," he says.

Along with BMW's Mini, the Smart is proof that Americans will buy premium-priced small cars. The big change isn't so much gas prices, but a shift in attitudes. Status-conscious buyers now fear that an SUV brands them as contributors to global warming who help prop up petro-dictators. Drivers these days ask themselves, "Do you need to consume two liters of gas to buy one liter of milk?" says Anders Sundt Jensen, head of the Smart brand at Daimler.

Making money on small cars, even expensive ones, remains a challenge. Smart's turnaround is the result not only of strong sales but also of cost-cutting, such as discontinuing a slow-selling four-door model. In the U.S., Daimler outsourced sales to mega-dealer Penske Automotive (PAG) to avoid the cost of a dealer network, so Smart USA has only 25 employees. Smart has spent less than $10 million on marketing, mostly on publicity-generating events such as a convoy to 50 cities where people could ogle and drive the cars.

Of course, there's a risk that Smart sales will fade as the novelty wears off. And competition is heating up. Outside the U.S., Toyota ™ is poised to launch its stylish iQ, which is a foot longer and can seat three adults. Daimler, though, is betting that the two-seat Smart's upright profile, which puts drivers at eye level with full-sized cars, will give it an advantage over the lower-slung iQ. Says Marc-Rene Tonn, an analyst at bank M.M. Warburg in Hamburg: "The segment is growing fast enough that there's room for everybody."