DSkippy

http://www.bloomberg.com/apps/news?p...IjI&refer=home
[quote]
Jan. 31 (Bloomberg) -- Don't be fooled by the auto industry's obsession with cars powered by hydrogen, batteries, ethanol, sunlight or heaven knows what alternative fuel.

Detroit car designers never stop dreaming of new muscle cars to sell to baby boomers.

For boomers, the smell of gasoline fumes and screeching rubber will always rekindle the joys of youth. For them, Chrysler's new Dodge Challenger, which reaches dealers this spring, might well be the next nostalgia toy they can't resist.

``These cars were loud, they slid sideways and they were driven incredibly fast by our heroes,' said Dutch Mandel, editor of AutoWeek magazine. Soon to turn 50, Mandel grew up watching Peter Revson, Mark Donahue and Dan Gurney compete in Trans Am car races, which helped to promote muscle cars for what was then the Big Three.

``Cars like the new Challenger and the new Camaro (coming in 2009 from General Motors Corp.'s Chevrolet division) certainly won't be mainstream,' he said. ``They're for a segment, the guys I want to hang with.'

And a few girls, too. Mandel says he intends to buy GM's new Camaro for his wife when she turns 50.

CO2 Outlier

True, the carbon emissions of muscle cars such as the Challenger and the Camaro won't win kudos from the Union of Concerned Scientists or the Audubon Society. But few, if any, hardcore gear heads are seeking that kind of approval.

The Dodge Challenger prototype that debuted at the North American International Auto Show in Detroit two years ago did win high praise from collectors and racing fans, so much so that Chrysler (then still a unit of DaimlerChrysler AG) decided to build it.

The idea was to modernize and update the body of the 1970 and 1971 two-door on the same mechanical underpinnings as the Chrysler 300, Dodge Charger and Dodge Magnum. The Challenger at first will only be available with Chrysler's powerful Hemi V-8 engine, though the horsepower rating hasn't been revealed yet.

Less powerful versions will be built later. Chrysler will charge about $38,000 for the base model.

A muscle car, never mind how out of sync with the great tide of environmental concern, might well bestow on Chrysler LLC some needed positive energy. Since Cerberus Capital Management LP, the big private-equity fund, last year bought an 81 percent stake in Chrysler, the new owners have shown little in the way of fresh ideas.

Changing Places

The onetime No. 3 U.S. carmaker has dropped to No. 4. GM is the leader, followed by Toyota Motor Corp. and Ford Motor Co. But unlike its domestic competitors, Chrysler has minimal investment in emerging economies overseas, where automotive growth is exploding and money is being made.

Closely held Chrysler's financial performance is known only to Cerberus, though automotive analysts doubt the company is profitable.

Challenger by itself can't improve profitability much, since it will be built in small volume -- only about 6,000 in its first year. The car will be made in Brampton, Ontario, on the same assembly line as the Chrysler 300 and Dodge Charger, improving the plant's economics by adding incremental volume.

Challenger might catch a break if gasoline prices fall, as some forecasters are predicting. The one hitch is that the same economic slowdown that tamps down energy prices might also reduce consumer spending power and hurt automotive sales.

Race Fans

Yet fast cars as entertainment aren't likely to vanish, no matter how shrill the Earth First movement becomes.

``If you look in Europe at countries where high taxes and other reasons keep gasoline prices much higher than they are in the U.S., there's still healthy interest in racing and performance vehicles,' said Tom Wilkinson, a spokesman for GM.

A year from now GM intends to revive the Camaro, another muscle car from the 1960s orig