Driveline Chatter
Chris Kersting, SEMA President & CEO
Editor's note: SEMA is a trade association for automotive aftermarket companies that puts on the annual SEMA Show, where parts and accessories companies introduce their latest and greatest products for us to drool over. Here's Kersting's view on our industry, and whether or not the public will ever be invited to drool with us at the SEMA Show.
Drivelines: How has the 4WD segment changed in the last five years?
Chris Kersting: We've seen growth in two key areas of the off-road marketplace. On one hand, we've seen strong growth among core enthusiasts-the type of enthusiasts that participate in extreme off-roading like rockcrawling, desert racing, and hard-core trail rides. We've also seen growth among mainstream consumers. Off-roading is catching on with families and other "non-core enthusiasts," and they're using four-wheel-drive technology in such lifestyle categories as kayaking, bicycling, boating, and winter sports. It wasn't too long ago that second- and third-hand vehicles were the primary target for this category with increasing interest among mainstream consumers. We see more and more new SUVs and trucks being accessorized.
DL: What is the hottest trend in the 4x4 industry right now?
CK: Diesel performance is among the emerging trends right now, although diesel engines aren't exclusive to the four-wheel-drive niche. This emerging technological trend will have a big impact on the four-wheel-drive market.
DL: What scares you about the segment?
CK: I'm afraid that the threat of unreasonable legislation will continue to be a challenge for everyone in the off-road industry. Through our relationships with ORBA, Tread Lightly!, and other interested groups, the industry will work to protect enthusiasts' ability to enjoy off-roading.
DL: Favorite off-roading area or event?
CK: A favorite off-roading event is the Easter Jeep Safari by the Red Rock 4-Wheelers held in Moab.
DL: Will the public ever be allowed in the SEMA Show?
CK: For the last 40 years, the SEMA Show has been an event where businesses participate in all kinds of activities, from education to new product demonstrations, that ultimately lead to the sales of products and technologies. It's important to remember that these businesses are often geared for sales using distributors, and it's critical that they get a chance to meet once a year with time to hear about new products and business plans. Given the scope and importance of these business activities, our exhibitors are telling us that they really would have a difficult time handling consumer traffic at the show. For the near future, everyone is going to have to rely on fine publications like yours to get inside scoops from the SEMA Show.
This Just In
* Cash-strapped General Motors announced it will sell its stake in Isuzu for $300 million. Three Japanese trading houses, including Mitsubishi Corporation, will divvy up GM's 7.9 percent share in the maker. According to Automotive News, GM will remain involved with Isuzu on an operational level, as the General needs Isuzu's diesel-engine experience.
* The Ford Explorer, Explorer Sport Trac, and Mercury Mountaineer recently earned the highest frontal offset crash test rating from the Insurance Institute for Highway Safety. All three vehicles previously earned five-star ratings in the U.S. government's frontal and side crash tests for drivers and passengers.
* Hummer continues to donate vehicles to the Red Cross to strengthen the agency's emergency preparation and disaster response capability. A combination of H1, H2, and H3 SUVs have been delivered to Atlanta; Detroit; Los Angeles; New York; Norfolk, Virginia; Philadelphia; San Diego; San Francisco; and Washington, D.C. In addition to the vehicles, the GM Foundation is making cash contributions of $100,000 annually for six years.
* We like it, but apparently the Commander isn't selling as well as Jeep hoped it would. According to an Automotive News report, the maker is having to pay some $5,400 in per-vehicle incentives to move the new SUV. That's almost $2,000 more than the average incentive for midsize SUVs. Jeep says the spending is "on par" for the segment.
* Speaking of incentives, another AN report says even cash offers of $3,000 per vehicle haven't been enough to move Mitsubishi Raiders off dealer lots. So Mitsu has asked DaimlerChrysler to suspend production of the Dakota-based pickup. No one is sure when (or if) production will begin again.
Environmental & Political Watch
After working on it for months, the National Highway Traffic Safety Administration (NHTSA) has put into effect new Corporate Average Fuel Economy (CAFE) rules for light trucks that will see the mileage target grow from its current 21.6 mpg to 24 mpg by 2011. But as we've indicated in previous reports, the rules now are different. According to a report from SEMA, NHTSA will set actual fuel-economy rates based on the vehicle's footprint as measured by wheelbase. The bigger the footprint, the lower the mileage requirement. The actual mileage rates achieved will vary depending on the mix of trucks sold by each automaker. Vehicle manufacturers that sell mostly smaller vehicles will have higher CAFE requirements than those that sell larger vehicles. For the first time, the rule will also apply to SUVs and vans with GVWRs of between 8,500 and 10,000 pounds.
All three of Detroit's automakers are promoting their alternative fuel programs in one way or another. DaimlerChrysler joined with Ohio Governor Bob Taft, the state's soybean growers, and a refiner, Peter Cremer North America, to promote the use of Ohio-made biodiesel fuel. The diesel engines in Liberty CRDs are fueled with B5 (5 percent biodiesel) as they leave the factory; and this fall, DCX will approve and endorse the use of B20 (20 percent biodiesel) in diesel-powered Dodge Ram trucks used by government, military, and commercial fleet customers.
GM is throwing its promotional weight behind E85, the ethanol flex fuel, with a major advertising campaign as well as the loan of E85-capable vehicles to 28 states and agencies across the country. GM has nine models that are E85-capable, and plans to add more than 400,000 E85-capable vehicles to the fleet in 2006.
Ford recently took part in Biotech 2006, a forum to demonstrate the latest advances in biotechnology and its many uses in consumer products. Ford was the only automaker at the conference and exhibited its latest advancements in ethanol-powered flexible fuel technology. By the end of the year, Ford will have placed nearly two million flexible-fuel vehicles on the road.