The Year In Wheels: The Good, the Bad, the Green: Life is Pretty Good for Car Buyers With Hundreds of Vehicles to Choose From and Relatively Flat Prices

Dec. 29--Toyota was up, American car companies were down and more automakers began turning green, driven by soaring gas prices and consumer interest in environmentally friendly vehicles.

That sums up most of what occurred in the automotive world in 2006. But not everything.

There were also exquisite new cars and the promised return of American-made muscle, executive suite shake-ups, stockholder threats, factory closings, supplier rebellions and auto worker buyouts galore.

What did it all mean?

For vehicle consumers, life is pretty good. There are hundreds of passenger cars and light trucks to choose from -- many of them either all-new or so reworked they might as well be considered new.

Buyers can get motor vehicles virtually any way they please -- huge, tiny, horsepower-laden or hybrid-powered. And prices stayed fairly flat throughout the year, another bonus for prospective buyers.

But it was not a particularly good year to own a fleet of full-size sport-utility vehicles or be an auto worker at American plants in Rust Belt states. (Although auto workers in the American South had much better prospects.)

Here's a look back on a turbulent year in the world of wheels:

Toyota's rising sun

Toyota continued its march to the top, with only a few stumbles along the way.

International auto industry analysts hold to their prediction that Toyota will soon pass General Motors as the world's No. 1 automaker.

The Japanese car company's lineup, while not winning raves for flash and stylish flair, is solid from top to bottom -- from the award-winning Prius gas-electric passenger car to the new 2007 Toyota FJ Cruiser, an SUV with fresh looks and old-school ruggedness.

Toyota's updated-for-2007 Camry continued to sell at a monster pace; the company's Lexus division continued winning some of the nation's top awards for quality, reliability and customer satisfaction.

And revenue continued to pour in. In the July-September quarter alone, Toyota's net profit was up nearly 34 percent, powered by a 25 percent increase in sales.

Not everything was perfect: A unusual spate of recalls prompted Toyota to announce in late summer that it was slowing new-vehicle rollouts to get a better handle on quality control. And ironically, Toyota found little respect in Japan, where luxury car buffs said they longed for European models.

But with the hugely anticipated arrival of the updated Toyota Tundra full-size pickup in early 2007, expect another big year from the still-rising giant.

Restructuring woes

At its lowest point in 2006, General Motors was rumored to be pondering alliances with seemingly everyone -- with the possible exception of Britney Spears, who was busy divesting herself of alliances.

Uber-investor Kirk Kerkorian pushed to unite GM, Renault SA and Nissan Motor Co. in a global alliance. When that didn't happen, Kerkorian opted to unload his last block of what was once a nearly 10 percent stake in GM.

GM officials greeted Kerkorian's departure much the way most of us feel about the extraction of an excruciatingly painful tooth.

The company kept a stiff upper lip as gasoline prices soared above $3 a gallon ... right about the time GM was rolling out updated versions of its full-size, fuel-thirsty SUVs.

But despite the pains associated with announcing a $3 billion loss in its first three quarters, GM could be cheered at year's end by its strong head-start in China's booming automotive market, Chairman Rick Wagoner's determination to produce alternative-fuel vehicles and the seemingly hopeless mess facing its longtime rival -- Ford Motor Co.

Mark Fields, the highly intelligent, battle-tested, budget-cutting head of Ford's Americas division, began the year by announcing an aggressive "Way Forward" plan of job/factory cutbacks designed to drive Ford back to profitability. Months later, the plan to cut up to 30,000 jobs and shutter 14 plants by 2012 was revised to include even more belt-tightening.

Then in September, Ford announced it was bringing in Boeing executive Alan Mulally as its new chief executive, replacing Bill Ford, who retains his chairman position. Fields now reports to Mulally, who is rapidly consolidating operations as the new year approaches.

It makes one wonder who will be in charge of Ford in 2007. Stay tuned.

Over at Chrysler Group, things were comparatively calm. But executives there conceded that brutal competition was making it increasingly difficult to sell even its critically acclaimed vehicles. Looking ahead, the company admitted it needs to be less reliant on light trucks.

Go South, young worker

Foreign automakers continued to win favor with workers in the South, building sparkling new plants and hiring plenty of non-union employees.

Perhaps the ultimate irony can be found in San Antonio, Texas, where Toyota opened a state-of-the-art manufacturing plant for that most American of vehicles -- the pickup truck. So, deep in the heart of pickup country -- about 20 percent of annual U.S. pickup sales come from Texas, according to analysts -- U.S. workers are assembling Toyota's new 2007 Tundra, perhaps the greatest threat ever to U.S. automakers' market share in the pickup segment.

In another uptick for the South, Nissan Motor Co. moved its North American headquarters from Gardena to just outside Nashville, Tenn.

Supply side economics

The long-simmering storm between automakers and their suppliers boiled over several times in 2006.

For years, car companies have pressed suppliers to produce cheaper vehicle components. In turn, suppliers have raged against the pressure, citing what they call unfair advantages of overseas suppliers who produce cheap parts with cheap labor.

Low points of the year included GM and auto parts supplier Delphi Corp. offering buyout programs to more than 125,000 hourly workers in March.

And the most blatant act of rebellion occurred in October, when Southfield, Mich.-based Collins & Aikman, a supplier to Ford, briefly halted parts deliveries to a Ford plant in Mexico, prompting a shutdown of the assembly line for several hours.

Don't expect producer-supplier relations to thaw in 2007.

Buyers being wary

As 2006 rushes to a close, automakers have unveiled lots of new hardware at the Los Angeles Auto show and say they'll unveil even more early next month in Detroit at the massive North American International Auto Show. At the same time, stock markets continue reaching record levels.

So, why aren't more Americans buying vehicles?

The latest estimates -- including those made by highly respected CNW Marketing Research in Bandon, Ore. -- indicate that 16.5 million new vehicles will be sold by year's end in 2006 -- down from a consistent annual rate of around 17 million in recent years.

High gasoline prices, consumer belt-tightening and the willingness of motorists to keep their cars longer all have been cited for the sales dip.

CNW cited another factor, noting that depressed home prices produced a negative effect on home equity loans, which CNW said back 11 percent of new-vehicle sales nationwide. The home-equity-loan effect was particularly strong in California, where residents buy one of every 10 new vehicles annually.

And the good news is ...

Simply put, there were more negative headlines than positive ones industrywide in 2006, but there is reason to drive into 2007 with a smile.

At this month's Los Angeles Auto Show, GM showed off a handful of imaginative hybrids, including big SUVs. The automaker is promising more alternative-fuel news at the upcoming North American International Auto Show in Detroit.

Even as auto reviewers were getting a look at the 2007 Ford Escape Hybrid, Ford took the wraps off the 2008 version at the Los Angeles show. At first glance, it appears like a better vehicle all the way around.

Chrysler's new Dodge Caliber and Dodge Nitro vehicles have been getting warm receptions from auto critics and female buyers.

Toyota and Honda have upgraded their popular Camry and Civic models and held the line on prices -- something to cheer as Northern Californians continue to seek out these cars.

Muscular cars with familiar names will be returning to the market soon, including the Dodge Challenger (2008) and the Chevrolet Camaro (2009).

Finally, trying to keep track of how various auto magazines, organizations and online sites judge their top 2007 model year vehicles can cause a headache. I try to keep it simple, giving considerable weight to innovation, industrywide impact and consumer satisfaction.

My three overall winners for 2007:

--Passenger car: Saturn Sky roadster (a stylish, affordable cruiser for a GM division that long lacked flash).

--Sport-utility vehicle: Toyota FJ Cruiser (an SUV that actually can be called cute, even while tackling the roughest off-road trail).

--Pickup: A tie between the Toyota Tundra and reworked Chevrolet Silverado (both have more of everything, so I'll need more seat time in each to break the tie.)

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Copyright (c) 2006, The Sacramento Bee, Calif.

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