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Weekly Recap: GM scales back as Russian auto market teeters

General Motors' extensive plans to scale back its Russian operations are the latest sign the automotive market in the former superpower is collapsing – and there are few signs of recovery. GM said Wednesday it will stop selling mainstream Chevrolets and shutter the entire Opel brand in Russia. The moves leave GM with a luxury-focused presence consisting of Cadillac and Chevrolet's Corvette, Camaro and Tahoe. The cutbacks will be completed by the end of the year. The automaker will also idle its factory in St. Petersburg and end a contract-assembly agreement with Russian manufacturer GAZ. "We had to take decisive action in Russia to protect our business," Opel Group CEO Karl-Thomas Neumann said in a statement. "We confirm our outlook to return the European business to profitability in 2016 and stick to our long-term goals." GM is the latest automaker to scale back in Russia as the economic conditions, volatile currency and uncertainty over the conflict in the Ukraine all have sandbagged new car sales. Last month, vehicle sales collapsed 38 percent in Russia to 128,298 units, according to the Association of European Business, which records sales. Joerg Schreiber, chairman of the AEB automobile manufacturers committee, didn't even feign optimism in a statement announcing the figures. "The market is entering a very difficult phase now, and February is only the beginning," he said. "Industry sentiment is the next few months will be extremely difficult and the market bottom has yet to be found." The dovetails with industry experts, who predict the Russian auto sector will remain in the doldrums. IHS said earlier this year it expects Russia's sales to slip to just 1.8 million units in 2015, which is a 40-percent drop from 2012. Other News & Notes Chief leads Jeep's Easter Safari stable Jeep is bringing seven attention-getting concepts to Moab for its annual Easter Safari off-roading celebration in Utah, but the Chief is perhaps the standout of the group. It salutes the 1970s Cherokee with a throwback appearance and surfer styling cues. The Chief has a custom modified razor grille made famous by the Wagoneer, and it rolls on 17-inch slotted mag wheels. The surf theme comes in with ocean blue paint, floral cloth and leather seats and a tiki-style shifter handle. Based on the Jeep Wrangler, the Chief has removable sides, a 3.6-liter V6 engine and a six-speed manual gearbox.

Luxury car brands scrambling to avoid a blue Christmas

DETROIT — When financial markets surge to new records, sales of luxury cars usually rise, too. Instead, October U.S. auto sales reports on Wednesday showed that a collapse in sales of luxury sedans is accelerating. Consumers have gradually shifted over to luxury sport utility vehicles from sedans in the past decade, but the trend — which has occurred in both the non-luxury and luxury sedan segments of the auto market — was particularly pronounced in October. Sales of Daimler AG's Mercedes-Benz S-Class, long a global benchmark for large, premium sedans, plunged 49 percent in October, and are down 24.8 percent for the year to date. General Motors' Cadillac brand said it sold just 779 of its CTS sedans in October. Demand for that car, designed to compete with German luxury sedans, is down nearly 33 percent for the year. "There's still a significant portion of the market that wants a car, but I'm sure there were people who preferred a horse to a car at one point." Cadillac's best-selling model this year is the XT5 compact SUV, which has more than doubled sales from a year ago. The shift within the luxury vehicle market away from sedans toward SUVs of all sizes is forcing some of the most prestigious brands to scramble to add SUV models to their lineups or boost SUV production to meet demand. "In the short term, there will be pressure to add (consumer) incentives, cut production or both," said Cox Automotive analyst Michelle Krebs. "And we just don't see an end in sight to this trend." The Dow Jones Industrial Average has been trading at all-time highs, usually a good sign for luxury sedans, but as major automakers reported new U.S. vehicle sales for October on Wednesday, sales for passenger cars continued their slide while luxury SUV and crossover sales rose again. According to Kelley Blue Book data, in 2007 luxury sedans made up 7.6 percent of U.S. new vehicle sales, while luxury SUVs made up 4.2 percent. Through September this year, luxury SUVs made up just over 7 percent of the market, compared with 4.9 percent for luxury sedans. In the short term, luxury brands could use holiday season sales promotions to clear slow-selling sedans off dealer lots, analysts said. Toyota's Lexus brand said on Wednesday it will launch its "December to Remember" year-end sales promotion for the 18th straight year.

GM admits Cadillac ELR no real competition for Tesla Model S

Last year, then-CEO of General Motors, Dan Akerson, made it clear that the company lookouts at the Ren Cen had California automaker Tesla in their sights. "If you want to compete head-to-head with Tesla, and we ultimately will, you want to do it with a Cadillac," he said. So, given the fact that the Cadillac ELR has a plug and sells for roughly the same price at the Tesla Model S ($75,000 vs $69,900, before incentives) and that Cadillac doesn't have any other electric vehicle on the horizon, you'd be forgiven if you thought that the way that Akerson wanted to challenge Tesla's EV success was with the ELR. Well, you'd apparently be wrong. "The ELR is a different car, it's a different price point. It's way-different technology." - GM's Mark Reuss Speaking yesterday in Detroit, GM's head of global product development, Mark Reuss, admitted that the ELR is not the Tesla competitor that Akerson promised. "People like to say the ELR is [competition for the Model S], but it's really not. It's a different car, it's a different price point. It's way-different technology." So, if we follow that logic to conclusion with Akerson's quote from last year, then the only way that Cadillac can eventually compete with Tesla is with a pure electric car, and that seems an outside chance, at best, for the foreseeable future. Through the end of July, Cadillac has sold 578 ELRs since it went on sale earlier this year. Tesla doesn't break out monthly US sales, but has sold 15,114 Model S EVs around the world in the first six months of 2014. For his part, Tesla CEO Elon Musk has already said that GM is headed down the wrong path with plug-in hybrids like the ELR or the Chevy Volt. Speaking about the Volt last year, Musk said, Chevy "sort of created something that's a bit of amphibian," which resulted in a car that's, "Okay but not great."