I TEST DROVE A KIA TODAY…

5/20/13

And why, one might ask, would I test drove a Kia Rio today?  It’s Kia’s smallest and least expensive car, what is called a B-body car, two sized down from my trusty 2007 Accord.  Why would I even consider what some might call such a drastic downsizing?

First, I don’t know if I’m considering buying a new car; in fact, I’m probably not.   But I am never completely out of the car market (back in the old days, when I was making lots of money and had far fewer financial responsibilities, I owned, consecutively, 4 cars in the space of 16 months.  I guess we all do dumb things, and if that were the dumbest thing I’ve ever done (It’s not.), I would be in good shape.   Dumber than owning 4 cars in the space of 16 months was that one of them was a Saab (“Sure ain’t a Buick,” as a guy who sold both Buicks and Saabs once told me), but I digress.

Second, I love to test drive cars.  It’s fun, it keeps me up to date on what’s going on in the car market, and, in the past when I traded car stocks with some frequency, helped me make some considerable money on those positions. 

Third, Kia offered me a small inducement to test drive one of its cars and I had the time on this beautiful afternoon to stop by my local Kia dealer (Gerald in Naperville) and take one for a spin.  Further, I did so during the week during the day, so the salespeople were not busy with customers, as they would be on a Saturday or in the evening; I don’t want someone indulging my habit of test drives for fun when they have actual, want to buy that day, customers, and the potential to make some dough, waiting for them.

Fourth, I am, as regular readers know, frugal beyond the point of fault.  And though the Rio is, by and large, an inexpensive car, the Kia Rio, in its most expensive guise, the SX, has most of the features I look for in a car…a manual transmission and some decent equipment; more on that later.

Fifth, as I wrote in my 4/3/13 post, “R-E-S-P-E-C-T, FIND OUT WHAT IT MEANS TO (KIM JONG EUN)”, I am a great admirer of the South Korean people and might want to indulge that admiration by buying a Korean car, to wit…

The South Koreans and, yes, their formerly authoritarian regimes under Syngman Rhee and, to a greater extent, Park Chung Hee, took the types of risks, and engaged in the type of hard work, that the North Koreans are too timid to undertake.   They are to be congratulated.   The North Koreans, and their pudgy ruler, are to be ridiculed.   Only they don’t appear to know it.

With that having been written, I think I’ll go out and buy a Kia or a Hyundai.

Roughly equivalent sentiments point me in the direction of a Volkswagen (BISMARCK’S DREAM, MERKEL’S VICTORY, 5/1/13), but that is another issue.

So what’s the point of this screed?

I was amazed at the car.  I wasn’t amazed so much at the car itself, but at what is available in new cars, even at lower price points, nowadays.   Yes, I keep up on the industry, and I know intellectually that x, y, or z is available in certain cars, but until you get in the car and drive it and experience all the gizmos (and, more importantly, the ride, handling, and driving experience), you don’t realize how far cars have come.

Here I was, driving a car for stickering for just under $20,000 (Rios can be had for a lot less money; I drove the fully loaded SX, as I said above.) that handles like a sports car of not too many years ago with a six speed manual and plenty of power.  The car has satellite radio, Bluetooth (I have only a vague notion of what “Bluetooth” is, not being a regular celphone user.), all kinds of gizmos for streaming music in the car, backup camera, navigation, power folding mirrors, one of those keys that enables you to not only start the car but also open the doors with the key only being in your pocket, eight air bags, stability control, hatchback utility, a 5 year, 60,000 mile bumper to bumper warranty, 10 year, 100,000 powertrain warranty, 28/36 city/highway fuel economy…again, for under $20 grand.   It is amazing how far cars have come in the six model years since I bought the venerable and trusty Accord.

Since I am sure some of readers will point this out, I, too, can remember when you could buy two fully loaded Cadillacs for less than $20 grand.  But by latter day standards, this Kia Rio is just an amazing achievement, testimony to how great and dynamic the world auto industry, and, more importantly, the competitive, free market system, is.

Not that I would want to trade-in the greatest, and, in at least one sense, most unusual car I have ever owned, my 2007 Accord EX-L manual.   Nor would I necessarily trade it in on the Rio; the Rio lacks a few things I would like in a car and could be quieter and have tighter steering.  But the drive I took today really opened my eyes.

CHRYSLER’S PROBLEM: IT’S (MOST OF) THE PRODUCT, STUPID!

1/31/13

The Wall Street Journal reported this (i.e., Thursday, 1/31/13, page B6) morning that “Chrysler’s Aging Cars Pose Hurdle.”  It seems that the Fiat miracle is taking more time, money, and effort than expected; while net income is increasing smartly at Chrysler, free cash flow over the next two years is expected to fall by half to $2 billion.  The primary reason for this relentless drain of company cash is the need to refurbish a tired and relatively sorry product line.

None of this comes as a surprise to my regular readers, who recall the following posts on one of this site’s precursors, The Insightful Pontificator:

“THIS ISN’T NEW YORK CITY, OR THE SECOND CITY, OR SIN CITY, AND WE’RE CERTAINLY NO ONE’S EMERALD CITY”, 2/7/11

WALTER P., LEE, AND ME?,  1/10/11

“UH OH, SERGIO…”, 7/3/10

“CAN THEY MAKE IT?  CAN THEY MAKE IT?”,  5/1/09, and

“WE ARE NOT AMUSED”, also of 5/1/09

The main point of those articles is that without good product, you don’t have a good company.   And Chrysler’s product has been wanting for years.   The Journal article has simply confirmed, and events and numbers have borne out, what my readers have known for years now.

Not all the Chrysler product is bad.   Jeep is selling briskly, and the Grand Cherokee is a hot and supposedly stellar product.  But the Grand Cherokee can’t be that good; its updated iteration was to be one of the eight new products Fiat/Chrysler’s CEO, the very capable Sergio Marchionne, wanted to introduce this year before money got too tight.  As I’ve said before, only Wall Street believes that the Jeep line is a great asset, probably because it is one of the few American brands that a Wall Street analyst would consider buying 

The Chrysler 300 is a truly great product, but that might be yours truly’s personal taste, and undying quest to find a product that would replace my long gone but still pined for 1990 Pontiac Bonneville SSE (aka “The Batmobile,” the last car with an automatic transmission that I truly loved), talking.   One of the few American sedans still available with a V8 (One of the others is the Dodge Charger, obviously another Chrysler product..), the Chrysler 300 is distinctive, powerful, safe, relatively fuel efficient, quiet luxurious, fun to drive, and a relative bargain.  And it’s a car that shows one means business.   But even the great Chrysler 300 is in a market segment characterized by (almost) equally great competition.   Still, if I ever get over what my friends and family deride as my manual transmission “fetish,” and start making some real money again, I’ll be driving one of these most testicular of automobiles.  But I digress.

The Ram pickup line also is a more than decent product, but still places third of three in its very competitive and profitable market segment.

Once one gets beyond Jeep, Ram, and the 300, one finds awfully slim pickings at Chrysler…and Mr. Marchionne knows it.   It is his urgent efforts to apply to Chrysler some of the product wizardry Fiat has displayed under his tutelage that are causing financial strain at the third of the Big 3.

One final, and somewhat personal, note:  the first of Mr. Marchionne’s efforts to produce some product fruit from Fiat’s purchase of Chrysler is the Dodge Dart, which seems to have fallen far short of expectations.   This Dart is built on the Alfa Romeo Giulietta platform and is supposed to ride and handle somewhat like an Alfa while providing a level of luxury, and an amount of room, beyond its competitors in the U.S. compact car market.   The car has, to put it only a bit too strongly, bombed, with poor sales and bloated inventories crowding dealer lots.   At first, the Dart’s problems were ascribed to the first few copies’ being available only with manual transmissions.   That problem was solved when Chrysler shipped subsequent, and much larger, batches of cars with slushboxes (i.e., automatic transmissions).  Still the car doesn’t sell.   Why?   Mr. Marchionne opined on Wednesday that there are too many variations and expensive features available of or on the Dart.

Mr. Marchionne is absolutely right.  Yours truly is interested in the Dart for the two reasons it isn’t selling:   It offers a manual transmission combined with some luxury features.  But I have all but given up my admittedly casual search for a Dart because I am confused by the baffling array of model combinations available and find that, when I have figured out what will meet my needs, I can buy a Honda Accord, which is one size larger and is, after all, a Honda, not a Dodge, for the same money.  At anything like the offered side, the otherwise excellent, or at least very good, Dart makes no sense.

However, if I could get a good enough deal on a Dart….

But it is difficult to prosper selling products nearly exclusively to people looking for, and insisting on, a great deal.