Monday, August 31, 2009

Value is this Kia's Forte

Sacramento, California -- One of the bummers of more than a year of depressed motor vehicle sales is the fact that some very good new cars were buried under an avalanche of negative headlines.

The all-new 2010 Kia Forte compact sedan is one such example.

I thoroughly enjoyed a recent week in the Kia Forte SX, the most expensive of three trim levels. Yet even though the tester was dressed up with extras that included leather seating surfaces, heated front seats and a power sunroof, the bottom line on the sticker came in at a very affordable $20,490.

I loved its sleek looks. Those integrated, swept-back headlights added a sporty feel, magnified even more by 17-inch alloy wheels.

The 2.4-liter, four-cylinder engine (173 horsepower) performed admirably for a four-banger, and a sport-tuned suspension was an able bump-eater and did not present anything like a stiff ride. Only the steepest uphill climbs made the power plant groan, and it felt good to be getting spot-on EPA-estimated fuel economy readings of 23 miles per gallon in the city and 31 mpg on the open road.

Steering was super-responsive. The Forte ate up an orange-coned slalom course I set up in an abandoned store lot.

This discount driver was far from stripped. The safety, interior and exterior features lists on the tested Forte were lengthy. They included goodies you normally don’t get in this price range, including electronic brake distribution, traction control, electronic stability control, a leather-wrapped steering wheel and a three-month complimentary subscription with the Sirius Satellite Radio system.

Interior space is good, but three beefy passengers in the back might struggle. Throw in Kia’s generous warranties, and this Forte makes quite the value package.

The new, funky-looking Kia Soul urban vehicle might be getting the lion’s share of publicity, but the Forte has what many claim they are looking for – a liberally-appointed, practical-sized family sedan at a bargain price.

Sunday, August 30, 2009

The party's what?

Sacramento, California -- Now that the Cash for Clunkers party is over, people throughout the auto industry are asking: Was it worth it?

Overall, I'd have to say "yes."

After all, you can't sneeze at nearly 700,000 new-car sales generated within less than a month by the federal program that gave consumers rebates of $3,500 to $4,500 for showing up to turn in their old cars.

Now that consumer traffic at U.S. dealer lots has dropped off the table in the days after Cash for Clunkers wrapped up, there's all sorts of analysis that Cash for Clunkers really wasn't needed, that Americans already were poised to purchase new cars. Pent-up demand, analysts said, was at a fever pitch before Cash for Clunkers.

Well, maybe.

To say that consumers would probably have started buying new cars without Cash for Clunkers doesn't really dovetail with the evidence. Simply put, consumers nationwide have been sitting on the sidelines for more than a year -- a natural byproduct of watching their relatively humble investments crushed in the stock market dive. And jobless people don't tend to go out and buy a new car with their jobless benefits.

Frankly, I've never put much stock in "pent-up demand," a frequently used statistical analysis term that has a lot of gray area. Just because I look hungry does not mean I'm ready to go out and drop $50 on a steak dinner. I'm more likely to save money and grab a bite at home .... at least until my household budget looks a little better.

Yes, it's true that many car dealers are grumbling about slow reimbursement on their Cash for Clunkers deals from the government. And that is a problem. But it's hardly a surprise in a national red-tape nightmare set off by a rush to dealer lots nationwide. The government probably would have been smarter to hand over a percentage of funds to automakers and let them administer the rebate proceeds to dealers. The automakers were already geared up to do this.

The post-Cash for Clunkers period is likely to produce decreased consumer demand for new cars, but it's hard to put all the blame for that on the federal program. Cash for Clunkers simply prompted consumers to get off the couch and buy a new car, because the price was suddenly in range (especially when additional incentives were piled on top of the rebates). The buyer blitz was needed for an industry that was lumbering along the bottom of the ocean looking for a boost.

Real progress is going to take more time. Job losses, particularly in car-crazy California, have cut into car sales. Until the economy improves, more people are employed and fewer workers see their buying power cut down with pay cuts and furloughs, don't expect annual new-car sales to come anywhere near the 17 million-units-a-year pace that was business as usual just a few years back.

I would expect used-car sales to bump up now, which they already were doing before Cash for Clunkers showed up.

Looking back, consider Cash for Clunkers a good party that a recession-weary public and car industry needed. Now, it's time to get back to work.

It's been ever-thus....MG