August 30th, 2010 at 12:00pm
Even though global sales hit just over 43 million units through July compared to 2009, they were down compared to June and analysts expect sales to continue to slide. We take a look at some vehicles that aren’t selling well because of their unusual designs. Citroën released details about its new vehicle, the DS4, ahead of its debut at the Paris Motor Show. All that and more, plus John shares his thoughts on who he thinks would be the perfect person to run GM.
This is Autoline Daily for August 30, 2010. And now, the news.
GLOBAL CAR-SALES SLOW DOWN (subscription required)
Uh-oh. Car sales around the globe are starting to slow down. According to Ward’s, even though global sales hit just over 43 million units through July compared to a year ago, they were down compared to this June and analysts expect sales to continue their downward slope. In fact, if things keep going like they’re going, by October there could be no sales growth compared to 2009. And while Asia shows the most growth, sales have started to slow down there, too.
WEAK AUGUST SALES EXPECTED (subscription required)
And in related news, the AP reports that analysts expect weak August sales in the American market compared to 2009 because the cash-for-clunkers program inflated sales last year.
WEIRD STYLING DOESN’T SELL (subscription required)
Speaking of sales, does styling sell cars? You bet it does. And when designers don’t get it right, or when they come up with something that’s just a little too out there for the public, it’s hard to get people to buy it. Ward’s points out that so far this year, Honda has barely sold more than 15,000 of the controversial Crosstour. Did I say controversial? I meant to say ugly. The Acura ZDX, with that goofy grille, is doing even worse. They’ve sold fewer than 2,000 all year long. What was Acura thinking when it came up with that goofy, Jack-o-lantern grin that it’s slapping on the front-end of all its cars? Another new car with controversial styling that’s dead in the water? The Lincoln MKT. They’ve sold fewer than 5,000 this year. I should point out there is nothing wrong with the way these cars drive. It’s just about the way they look.
BMW DEALERS INCREASE REPAIR WORK (subscription required)
If you own a BMW and take it to the dealer, they are going to find something wrong with it, I promise you. That’s because BMW is getting its dealers to buy a diagnostic computer called MPi-EDGE/World Class Inspections. Ward’s reports that it does a more thorough inspection of a car and typically finds something that adds about $125 to a customer’s repair bill. With car sales down, dealers are surviving with their repair and service work, and a tool like this is going to make them more profitable.
Citroën released details about its new vehicle, the DS4, ahead of its debut at the Paris Motor Show. Even though it’s a four-door vehicle it has a coupe-like design thanks to hidden rear door-handles that are integrated into the body. But that’s not the only unique feature. It comes with a panoramic windshield, the ability to change the color of the instrument panel, and it features on-board ambient polyphonic sounds for alerts and reminders, allowing the driver to choose from four different sounds which include Classical, Crystal Symphony, Jungle Fantasy and Urban Rythmik. The DS4 comes with five engines, two diesel and three gas. It goes on sale next year.
CHINA WARNS JAPAN OVER WORKERS PAY
Things are heating up in East-Asia again, and no, Kim Jong Il isn’t the one ruffling feathers this time. According to the Wall Street Journal, Chinese Premier Wen Jiabao warned Japan that its automakers operating in China should pay workers more. This is the latest salvo in a spat between the two countries over business and manufacturing issues. It comes on the heels of those strikes a few months back that crippled Honda’s and Toyota’s production. The Premier’s comments came after a call from Japan’s foreign minister to improve the business conditions in China for Japanese companies. I’ve got a feeling this story is only just getting going.
EYELASHES FOR CARS?
Just when you think you’ve seen it all. If fart-can mufflers or testicle-shaped trailer-hitch covers aren’t tacky enough, a company called Carlashes has come up with an equally ridiculous yet somewhat less obnoxious automotive add-on. As their name suggests, they’ve introduced eyelashes . . . eyelashes that stick-on to a vehicle’s headlamps. If you’ve always wanted to live Cars the movie, now you can . . . I suppose. Autoblog reports that a set of these oversized lashes can be yours for just $24.95. For high-rollers you can get Crystal Eyeliner for another $19.95. Apparently other people are just as confused by this as I am because the company’s website has crashed from too much traffic.
Coming up next, GM needs someone in charge of the corporation who really knows what the car business is all about. I’ll tell you who I think they need to put in charge. Back right after this.
WHO SHOULD LEAD GM?
There are a lot of good things going on at General Motors these days. It’s solidly profitable, it’s holding onto market share, it has competitive products and superb technical capabilities. Even so, there are troubling signs at General Motors.
This is not a company that turned itself around. It is competitive only because the Obama Administration waived a magic wand, better known as a 363 bankruptcy, and made its legacy costs disappear overnight. The current board of directors can take little credit for the company’s impressive resurgence. You could put my dog in charge of that corporation right now and it would still be profitable.
So now it all falls to Daniel Akerson, an investment banker who spent most of his career in the telecommunications industry. Can he possibly be an effective CEO for GM?
Former GM vice chairman Bob Lutz who wrote that Akerson could be effective, but that he will “. . . need to temper his preconceived notions with a willingness to listen to those who have transformed GM from a product and marketing standpoint.” Doesn’t exactly sound like a ringing endorsement, does it?
While Wall Street believes GM needs the fresh perspective of an outsider, I beg to differ. GM needs someone who knows design, engineering, manufacturing and marketing. Putting someone in charge of the company who has no experience in this is only inviting trouble. Akerson even questioned why the company needed to invest in a competitive four-cylinder engine.
Can you imagine the German or Japanese car companies selecting a CEO from the telecommunications industry? They would never do anything like that.
GM desperately needs a well-seasoned CEO who thoroughly understands the global automotive industry. So my advice to the board is bring back Fritz Henderson. He knows the company inside-out and backwards, knows the global automotive business and had an impressive track-record until he was unceremoniously dumped by the company. Don’t blame Fritz for the morass GM was mired in. That happened well before his watch.
So why go on a massive headhunting search to find someone who will take months to get up to speed? You could drop Fritz in there this afternoon and he would hit the ground running.
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And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.