Episode 521 – Heavy Trucks Up, Merging Late Improves Traffic Flow, Fiat May Sell Ferrari Stake

November 15th, 2010 at 11:45am

Runtime 8:17

According to Ward’s, year-over-year sales of medium- and heavy-duty trucks was up 5.2 percent in October. Traffic can be very annoying, but it gets maddening when other drivers drive past you and merge as late as possible, but a new report may have you thanking them. Before increasing its stake in Chrysler, Fiat CEO Sergio Marchionne told analysts it may sell part of its ownership in Ferrari. All that and more, plus a sneak peek of the big reveals you can expect at the LA Auto Show later this week.

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This is Autoline Daily for November 15, 2010. And now, the news.

INDIA PASSES CHINA IN AUTO WAGES (subscription required)
Wages for auto workers in India are going up so fast that they’re now higher than they are in China. Ward’s reports that wages and benefits for line workers in India are now at $2.68 an hour. That compares to $2.51 an hour in China. Inflation in India has pushed wages and benefits up by 20 percent this year alone. The base wages in India and China are about the same, but Indian automakers have to offer more benefits for workers. About a decade from now experts say those wages and benefits will rise to $5 an hour.

HYUNDAI CLARIFIES MPG TARGET (subscription required)
Earlier this year Hyundai said its cars were going to hit an average of 50 miles per gallon by 2025 in the American market. But now the company has issued a clarification. Turns out that when the EPA tests cars for fuel economy in its laboratory, it uses an adjustment figure to make the test numbers match those you’re likely to get in the real world. So that 50-mile-per-gallon CAFE number is really going to be 37 MPGs when you take those cars out on the streets. Not a bad number, but it doesn’t sound nearly as good as 50.

MERGING LATE IMPROVES TRAFFIC FLOW
Getting stuck in traffic because of construction can be very annoying, but it gets maddening when other drivers drive past you and merge as late as they possibly can into the construction zone. But a new report says instead of getting mad at these drivers, we should thank them. According to the Detroit News, several studies show that merging late increases traffic flow by as much as 15 percent. They found the best method to keep traffic moving in construction areas is to use both lanes to reach a merge point then have drivers take turns entering the open lane.

FIAT MAY SELL FERRARI STAKE
Before increasing its stake in Chrysler, Fiat CEO Sergio Marchionne told analysts it may sell part of its ownership in Ferrari. It’s also looking as selling its auto parts division Magneti-Marelli. Bloomberg says Fiat wants to extract the maximum value in Ferrari and Magneti-Marelli before it starts the process of completely merging with Chrysler.

HEAVY TRUCK SALES UP (subscription required)
We’ve reported on this before but it bears repeating. The heavy-truck market is a leading economic indicator, and according to Ward’s, year-over-year sales of medium- and heavy-duties was up 5.2 percent in October. Year-to-date deliveries were up almost 11 percent to nearly 180,000 units. 200,000 sales per year in the U.S. is a significant threshold, and it looks like we’re on track to exceed that number in 2010, which hopefully means the recession is winding down. Ford is having a stellar year in the pickup business. Its Super Duty line accounts for 50 percent of the segment and 80 percent of its growth this year. Market share is up five points compared to last year. The company attributes its success, in part, to the two new engines offered: a 6.2-liter gasoline V-8 and its redesigned Power Stroke Diesel.

2012 LACROSSE WITH eASSIST
Buick has big plans for the 2012 LaCrosse. It’s targeting a 25-percent increase in fuel economy compared to the 2011 four-cylinder model. That equates to 25 miles per gallon around town – about 9.4 L/100 km – and 37, yes 37 MPGs on the highway. That’s roughly 6.4 L/100 km for our non-‘Merican audience. To hit those numbers, Buick is hybridizing the drivetrain. It’s called eAssist and it’s a belt-alternator-starter, or BAS system for short. The standard 2.4-liter four-cylinder engine and six-speed automatic transmission are matched with a lithium-ion battery pack that can deliver up to 11 kW, or about 15 horsepower of electric boost during acceleration. The car also benefits from improved under-body aerodynamics and tires that are optimized for fuel economy. We’ll probably learn a lot more about the 2012 Buick LaCrosse when we’re out at the LA Auto Show later this week, so stay tuned.

Coming up next, a look at what’s coming up this week at the LA auto show.

L.A. AUTO SHOW PREVIEW
We’re going to be out at the LA auto show this week. And it sure sounds like this could be one of the best shows we’ve ever seen in LA. Here’s James Bell from Kelley Blue Book to give us a preview of what’s coming up.

Speaking of the LA auto show, Autoline will be broadcasting LIVE from the floor of the show with this lightweight new technology.  We’re using LiveU which has everything we need right here in this backpack to bring the auto show right to your screen. This portable backpack hooks up to our existing camera and allows us the ability to be wireless on the show floor thanks to a series of cell cards built into the system. We’ll be broadcasting Autoline LIVE from the LA Show on Wednesday for two hours with LiveU bringing you the hottest cars, topics and people starting at 3:30 p.m. Eastern time. That’s this Wednesday, November 17 when Autoline LIVE teams up with LiveU from LA.

And that’s today’s report on the top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

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25 Comments to “Episode 521 – Heavy Trucks Up, Merging Late Improves Traffic Flow, Fiat May Sell Ferrari Stake”

  1. Brett Cammack Says:

    I’m looking forward to Peter DeLorenzo’s take on a Murano convertable.

  2. Ted Hone Says:

    MERGING LATE IMPROVES TRAFFIC FLOW…..BullShiot

  3. David Kornrumpf II Says:

    I wish chrysler would update the 300 m series but that line i believe has been discontinued now.

  4. dcars Says:

    Most mergers don’t succeed if your combining two weak companies. I hope that’s not the case for the Fiat/Chrysler true merger of equals. Fiat has proven that they are deeply committed to making it work. I didn’t think that Chrysler 200 was a great success, but the other stuff they have done looks good.

  5. jesse Says:

    If only everybody who drives in NEW JERSEY and Connecticut could see this issue about merging in a construction zone,the world would be a safer place…. !!!lol.

  6. Jon M Says:

    Chrysler has long been on the brink of extinction–remember this most recent bailout isn’t the first time they begged uncle sammie for some taxpayer cash to avoid the abyss of oblivion–yet they think the 200 is a good product to take them off life support. They must be joking! Have they learned nothing from the Sebring (YAWN). Hemi power may be nice, but in the long run they need better packaging…among other things.

    A convertible Murano!?! Well, it is the same company that produces the ugliest vehicle since the Pontiac Aztek, the Juke.

  7. HtG Says:

    Does this mean I’m not an asshole, John?

    Let me explain. Some months ago I was driving toward a roadway construction area in Wilkes-Barre, PA, and saw a sign saying the right lane would end. The rest of the rush hour traffic had lined up in the two left lanes even as I could see there were no cones or other indications that the right lane was yet off limits. So I proceeded in the right lane in my open Miata(some readers may know what comes next.) But as I drove to the spot on the road where merging was indicated and necessary, several other drivers were honking at me; or so I presumed. When I heard one male call out, ‘ay-hoe,’ I could be sure I had drawn attention to my misdeed.

    Bunch of backwood, hillbilly gits. Thank you for backing me up, John.

  8. pedro fernandez Says:

    Re: Chrysler, if you take Walmart brand pasta and dress it up with homemade sauce, it’s still Walmart pasta down in the nitty-gritty. Capisce?

  9. tj Martin Says:

    pedro fernandez ;

    After todays announcement about FIAT you’ll have to amend that recipe ever so slightly . A good dose of Salsa is the missing ingredient as FIAT today stated the ” new ” 500 destined for the US will be made in Mexico .

    So now you got the unholy triumvirate of a FIAT ( F[bleep] Italian Automotive Trash ) sold by Chrysler ( a reliability nightmare in and of themselves ) built in Mexico . Can it get any worse ?

    Probably .

    Does our economy and job sector a lot of good as well . Thanks Macaroni .

  10. tj Martin Says:

    With apologies to HtG I’m not convinced about this merging late finding being reported here . If anything I’ve seen just the opposite where the late merger holds up what could of been a smooth transition to less available lanes .

    And … in all honesty I am rather annoyed when someone waits till the last minute to merge in . Can’t say Id go so far as to yell out the window at them , but it does leave me feeling like somebody either wasn’t paying attention to the early warning signs or just thinks they’re so special those signs don’t apply to them .

  11. tj Martin Says:

    HtG;

    Wilkes- Barre PA. that is one rough end of Pennsylvania . The graveyards there are filled with members of my dads family . So it doesn’t surprise me that they verbally abused you there .

  12. pedro fernandez Says:

    Tj I believe I got that scenario beat, how about a Chinese branded car built in Chihuahua Mexico assembled by repatriated illegal immigrants. ps put enough salsa in that sauce and you’ll be doing the Mexican hat dance the day after.

  13. Chuck Grenci Says:

    I’m with Ted and tj on the issue of merging; perhaps what is needed is a direction stating: fill both lanes and prepare for ‘alternate merge’ at the indicated traffic cone(s). And if it is an accident merge; instead of having all of the constabulatory standing around the accident scene (unless they are needed), move a couple to organize an effective merge (and try to get the ‘rubber-neckers’ moving.

  14. HtG Says:

    tj, I admit to having felt the social pressure to merge early like everybody else. But only because everybody else was doing it. Maybe it takes a special kind of person to do the sensible thing. There in PA was the first time I saw people merge so early and obediently.

  15. tj Martin Says:

    HtG

    Much as I’d like to make claim to a higher ethical standard in my merging habits it all comes down to not wanting the hassle of merging once everyone is bunched up . e.g the path of least resistance . I figure there’s enough other problems to deal with in any given drive , so why add to them when there’s one you can avoid ?

  16. pedro fernandez Says:

    Since Florida has a “shoot first, ask questions later” gun law I choose to avoid any kind of road rage incident with our mixture of red-blooded Americans and cocaine cowboys that co-inhabit this area

  17. HtG Says:

    question, tj. If someone in a BMW tries to merge late, are you thinking what I’m thinking?

  18. XA351GT Says:

    I live in PA ( SE PA ) and when I see some as HtG put it so well A-Hole rocket up the lane that has been marked for a 1/4 mile that it ends and need to merge I always hope that everyone closes rank and hangs the impatient offender out there until he would take his rightful place in line. Low and behold most are Bimmer drivers or similar luxury car or a hulking SUV that some tiny little woman drives to intimidate other drivers in smaller vehicles to let her have her way.
    I have seen lately that highway etiquette has become he who has the biggest/more expensive vehicle gets to go 1st. Well not on my watch. It’s 1st come 1st served. Want to be impatient and run the stop sign my lawyer and I will see you in court. I hate that it has become like that ,but it’s the only way to get peoples attention .

  19. mike g Says:

    @ tj Martin >> I’m all for made in the USA but when it comes to autos, the USA has a major double standard. Americans OK with buying cars made in Germany, Japan and Korea but if a US auto company moves 5-10% of their production to Mexico, Americans are ready to burn them to the ground. Why is it’s OK for Honda, Toyota, BMW, Mercedes, H/Kia … to build most of their cars outside the US and not take any backlash but F/G/C can’t have any outside plants? For the record, my car and truck were both built in the good ol’ USA and the profits from these purchases stayed in the good ol’ USA.

  20. JT Lambert Says:

    If only the majority of us could afford the MSRP on those new FORDS.I’ve driven them and they are fantastic.I just cann’t justify the cost YET.Go drive one and you’l throw rocks at the others.I’m talking F250&F350&F450.They are so powerful that I think owners will OVER FUEL the diesel and GLAZE the CYLINDERS screwing up another good DIESEL motor.

  21. XA351GT Says:

    mike g,
    I think the answer is easy really. People expect foreign cars to be built outside the US the reason they are called foreign. American cars are expected to be built in the States, again the reason they are called domestic. The reason for the backlash is the big 3 take production to mexico or elsewhere it takes money out of American pockets. Also means that there are less tax dollars being collected. The government then will hammer those that are paying taxes even harder to make up the difference.

  22. HtG Says:

    X, the final assembly of a car is only one value adding step in delivering the product. Today engineering work is conducted all around the world wherever the talent is located. A car put together in Ohio may have parts that were made in Canada or wherever. The dealer that sells and services the car is here, no matter where the car was designed or physically made. The financing that provided the capital to run big concerns day-to-day, as well as to fund development, comes from the whole planet: interest for this capital is then sent back to the investors. Who owns the supplier base that makes the parts? Stocks are owned freely no matter where they are traded. You can buy shares of Toyota or Daimler if you wish.

    I really cannot tell where cars are made anymore(I believe much of the engineering for VOLT takes place in GM’s German facilities), and if final assembly happens in the lower 48 or in Canada or Mexico or Alabama, I don’t believe the car was “made” in that spot on the planet.

    I also am not sure how to define profits. Is it dividends and any appreciation of a stock. How about corporate bonds? Are investors in these instruments not sharing in the proceeds of the enterprise? Doesn’t the local shop mark-up the parts he sells you, and then accept compensation for his labor? I’m sure German workers don’t like it that Daimler makes cars here in the states, and the same for BMW workers. But who could afford cars if the costs of the total inputs were too high? Let’s argue for freer trade, like opening up states like Korea, or limiting currency manipulation by China or Japan that makes their products unfairly competitive.

    (wow, I really do sound like an ay-ho.)

  23. Kit Gerhart Says:

    If cars of all types were made in all parts of the world, including the U.S., I might have more “American” cars. It’s not that way, though. Priuses are made in Japan and have no competition. Similarly, Minis are made in England with French engines and German transmissions, and have no real competition. Therefore, my two newest cars are not American, and no American cars were on my shopping list. I’d rather it weren’t that way, but that’s the way it is.

  24. Brett Cammack Says:

    Merging situations would go far more smoothly if drivers acted like they wanted to be part of the solution instead of part of the problem. Heck, most of them don’t act like they’d even know how to be part of the solution…

  25. M Campbell Says:

    Great point, Brett, in #24.

    Thanks to LiveU for bring AD live from the LA AutoShow, looking forward to literally *seeing* a demonstration of that product.