Auto Outlook: Driving costs up, what is 'American-made'?

April 21, 2013 at 5:40 AM
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There are reasons why sales of new cars and trucks continue at a torrid pace.

First the average age of a car on U.S. roads is 11.1 years old, and second the costs of keeping those older vehicles operating is rising.

Even if you're lucky enough to avoid a major repair bill, the era of the friendly, affordable neighborhood mechanic is pretty much history.

AAA's 2013 "Your Driving Costs" study says maintenance bills for motorists rose 11.26 percent last year, some 4.96 cents per mile, but operating costs were around a more reasonable 2 percent higher.

The automobile and leisure travel organization said it took about $9,122 to keep an average family sedan running in 2012 -- that works out to 60.8 cents per mile. That's 14.45 cents per mile for fuel, an increase of 1.93 percent, but less than 5 cents a mile for maintenance costs.

Insurance costs rose 2.8 percent to an average $1,029 a year for a low-risk driver. Tire costs were unchanged.

"Steve Mazor, manager of the Automobile Club of Southern California's Automotive Research Center told Tribune Newspapers higher labor and parts costs fueled the hike in maintenance bills -- which were a direct factor of rising vehicle age.

Maintenance costs are based on the cost to maintain a vehicle and pay for needed repairs for five years and 75,000 miles. The figure includes parts, labor and purchase of any extended warranty.

"As a vehicle gets older you tend to encounter more significant repair costs," Michael Calkins, AAA manager of technical services, told USA Today.

The cost to keep an older all-wheel-drive SUV on the road was $11,599, or 77.3 cents per mile.

The study estimated depreciation rose slightly increasing to $3,571 a year, up 0.78 percent, which may be a consequence of all those new cars driving off dealer lots.

Just what is 'American Made'

An analysis by professor Frank DuBois of the Kogod School of Business at American University looked at 253 cars, trucks and SUVs to determine which had the most domestic content.

The Buick Enclave, Chevrolet Traverse and GMC Acadia -- all made at the same plant in Lansing, Mich. -- led the pack in the Made in America Auto Index with a score of 88.5 out of 100, but the Toyota Avalon was high on the list with an 81, one point ahead of the Ford Taurus, which is assembled in Chicago.

The Ford F-Series pickup, the No. 1 truck in the United States, was second with 87.5, tied with the Michigan-made Dodge Avenger.

Two American automotive icons, the Ford Mustang and the Chevrolet Corvette, scored 85.

Among foreign name plates, the Toyota Camry, the Toyota Tundra pickup and Sienna van all scored 78.5. Toyota is one of the foreign auto companies like Honda that has been assembling cars at plants in the United States for decades.

The highest ranked European car on the list was the Mercedes GL at 42.5.

Trying to determine the origin of components shows just how globalized the industry has become.

"If you break down a single "America-made" transmission, you'll find many smaller parts each stamped with its own country of origin," DuBois said. "You may well find 80 percent of the parts inside that transmission didn't come from the U.S."

The study awards points on the following criteria:

-- profit margin, 6 percent: 6 if U.S. company; 0 if foreign.

-- labor, 6 percent: 6 if assembled in U.S.; 0 if foreign.

-- Research & Development, 6 percent; 6 if U.S. company; 3 if foreign and assembled in U.S.; 1 if foreign and improved.

-- inventory, capital, and other expenses, 11 percent: 11 if assembled in U.S.; 0 if assembled outside of U.S.

-- engine, 14 percent: 14 if U.S. produced; 0 if not.

-- transmission 7 percent: 7 if U.S. produced; 0 if not.

-- body, interior, chassis, electrical and other: 50 percent; 2013 AALA percent divided by 2.

"When was the last fully American car made in the U.S., with zero Canadian or Mexican content?" DuBois asked the Los Angeles Times. "I really don't know. I think you would have to go pretty back in years to find that."

There's an app for that

Competition for parking spaces is so fierce in New York City there's an app for that.

The New York Times described a pilot program that will allow motorists to find and pay for one of 264 parking spaces near Fordham University in the Bronx by smartphone.

The app, called PayByPhone, has been tested in London, Miami and San Francisco, which spent $20 million for SFPark.

The system employs wireless sensors in the parking space that tell a driver when a space is available in real-time.

The New York program will be along nine blocks around Arthur Avenue and East 187th Street.

"These new initiatives are just the latest examples of our work to bring parking and driving in New York City into the 21st century," Mayor Michael Bloomberg said in a release.

'Video Snacks'

There was a time not that long ago when picking out the color was the biggest purchasing decision in selecting a new vehicle.

These days all the in-vehicle electronics and infotainment systems have many potential car buyers scratching their heads.

Do you really need a blind-spot monitoring system, adaptive brakes, lane departure alert, a backup camera, a customizable smart key or remote starting?

Ford is launching a video manual that will allow car shoppers to preview the technology and what it does to reduce the time spent asking questions of salespeople (who want to sell the most option-loaded vehicles).

Called "video snacks," Ford will email short videos to customers before they pickup new vehicles.

"The truth is, many savvy consumers know more about the cars they are shopping for than the sales people," vice president of market intelligence, told The Detroit News. "It's just more practical to watch a video for most complicated functions in today's vehicles than to try to interpret a complicated diagram on a page."

10 speeds ... and we're not talking about racing bicycles here.

General Motors and Ford announced agreement to jointly develop advanced nine and 10-speed transmissions that will make new vehicles shift more smoothly and improve fuel-efficiency.

Six-speed transmissions have become common and the new nine-speed gearboxes would go in front-wheel-drive vehicles and the 10-speeds in rear-wheel drive vehicles.

Cooperation on R&D between carmakers is nothing new. GM and Ford jointly developed six-speed transmissions a decade ago.

"We expect these transmissions to raise the standard of technology, performance and quality for our customers while helping drive fuel economy improvement into both company's future product portfolios," Jim Lanzon, GM vice president of global transmission engineering, said in a statement.

Chrysler already has eight-speed transmissions on some models and plans to put German-built nine-speed transmissions on new Jeep Grand Cherokee and Dodge Dart models.

While the GM-Ford transmissions will share components and commonalities each company would tailor its own control software for optimal shifting in each specific vehicle.

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