Bogus mileage ratings at Hyundai and Kia
Hyundai and Kia made 40-mpg vehicles a key part of their identity and marketing. So they ate humble pie in November when the EPA said the fuel economy ratings for 13 Hyundai and Kia nameplates in the 2011-13 model years were inflated. The companies apologized, admitted the mistakes and promised to reimburse owners of about 900,000 vehicles for the extra gasoline that they buy for as long as they own the vehicles.
Fisker project stalls
Fisker Automotive suspended work in February at the Wilmington, Del., factory, where it wants to produce its second car, the Atlantic. The project stalled after a portion of a $529 million U.S. loan was cut off when the company failed to meet sales and production goals for the Karma.
Ford quality suffers in survey
In a reliability ranking from influential Consumer Reports in October, Ford finished 27th of 28 brands. MyFord Touch, the Ford brand's infotainment system, was widely blamed. In November, Ford said it would revise its Sync voice activation, which works with MyFord Touch, so fewer words and steps will be needed to control phone calls and other functions. CEO Alan Mulally said that MyFord Touch "gave customers too much choice so now we're simplifying it." Also in November, the company extended the MyTouch Ford warranty and offered another software update.
The Mitsubishi i-MiEV is shorter and narrower than the $16,000 Honda Fit, but the i-MiEV stickers for nearly $30,000. The $7,500 federal tax credit helps, but the final price tag is still well above Mitsubishi's $20,000 target. So the automaker's enticing prospect -- an EV for less than $20,000 -- never materialized. Sales in 2012 through 11 months were a paltry 511.
Lofty Leaf projections fall to earth
Through much of this year, CEO Carlos Ghosn insisted that Nissan would sell 20,000 electric Leafs in 2012 in the United States. But through 11 months, sales were a disappointing 8,330. Just before Thanksgiving, Ghosn acknowledged that the 20,000 goal was unattainable this year. With high price tags and limited range, electric cars are a tough sell in the United States, even with gasoline above $3 a gallon in most of the country.
Electric battery makers crash and burn
With the Obama administration pushing clean energy, four companies received federal grants of at least $100 million and splurged to manufacture lithium ion batteries for electrified vehicles. Oops. The four -- A123 Systems, Dow Kokam, LG Chem and EnerDel -- now have a glut of capacity. A123 and EnerDel filed for Chapter 11 protection from creditors. Dow Kokam is restructuring. LG Chem has delayed production. A fifth battery manufacturer, Boston-Power, received funding from Chinese investors and has moved production to China.
Romney's claim backfires
In the waning weeks of the presidential campaign, Republican nominee Mitt Romney's camp made a startling assertion: Chrysler Group was moving Jeep production from Ohio, a crucial election swing state, to China. Not so, declared Chrysler. It was keeping production in Ohio and simply adding production in China. But the Romney campaign declined to back off, and some election analysts said blow-back from the false claims aided President Obama in the end. He won Ohio by 103,481 votes.
TrueCar gets sideways with franchise laws
To build its online auto-shopping business, TrueCar.com stepped on a key component of the U.S. auto industry: the independent, franchised dealer system. State regulators and dealer associations said TrueCar violated statutes designed to protect dealers and consumers. For instance, TrueCar charged dealers in many states $299 per vehicle sale, arguably in violation of brokering laws in some states. Also, TrueCar advertised auto prices below invoice, in apparent violation of some state consumer-protection laws. CEO Scott Painter realized his business model was flawed and did an about-face. He changed many TrueCar procedures, and Painter now says TrueCar is growing again.
Chevrolet penalizes standout dealership
By any measure, dealer Marc Heitz had an outstanding dealership. Sales were high, and its Bass Pro Shops-like architecture fit outdoorsy Norman, Okla., nicely. Only one problem. Heitz refused to clad the dealership with siding and signs required by Chevrolet. The result: Chevrolet canceled about $250,000 of quarterly payments to Heitz for failing to meet the brand's facilities standards. In December, Heitz sold the dealership to another Oklahoma dealer. The episode made Chevrolet look like it cared more about enforcing rules than encouraging top-notch dealerships.
Suzuki Motor Corp. bowed to the inevitable in November. With sales shrinking, dealers bailing and no competitive products in the pipeline, the company's U.S. arm filed for Chapter 11 bankruptcy protection from creditors. The plan: Buy out its remaining U.S. dealerships and stop selling new vehicles in America.