Episode 541 – German Assembly Lines Humming, China Bumps R&D Spending, Monster Crate Motor

December 15th, 2010 at 12:00pm

Runtime 7:50

German assembly lines are humming even as new-vehicle sales slow down in Europe.  With the exception of the United States, China now spends more money on research and development than any other country in the world.  GM’s performance parts division just introduced the most powerful small-block V-8 it’s ever engineered.  All that and more, plus a look at Lexus’ latest luxury hybrid, the CT 200h.

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

DEUTSCHLAND ÜBER ALLES
Car sales in Europe are slowing down, fast. Part of that is due to the debt crisis that continues to be a drag on the economy. Part of it is the hangover from ending “scrappage schemes” that offered customers generous incentives to turn in their clunkers for cash. Fiat, Ford, Peugeot and Renault have seen their sales drop a lot. And yet, Bloomberg reports that German assembly lines are humming with activity. So what’s going on? Here’s my Autoline Insight. The luxury segment hasn’t been hit nearly as hard by the economic crisis. But more importantly, German automakers do a great job of exporting their luxury cars all around the world, especially China. And the global market for luxury cars is doing quite well.

RAW MATERIAL REPORT
Here on Autoline Daily we like to keep an eye on all aspects of the automotive industry. Sure, we love to cover all the new product that’s out there, but we also like to look at what it takes to make new cars. You can’t build a car without the proper raw materials. Well right now there is a global shortage of rubber, and prices are skyrocketing. Automakers use rubber in all kinds of moldings, not just tires. So Bloomberg reports that India is now going to experiment with genetically modified rubber plants that will be immune to drought and will produce higher yields. India did the same thing with cotton, and went from a net importer to becoming the second biggest exporter in the world.

R&D SPENDING
China now spends more money on research and development than any country in the world, except the United States. The Wall Street Journal reports that China just surpassed Japan in R&D. Even though the U.S. spend more on R&D than China and Japan put together, a big chunk of the U.S.’ spending is tied up in the automotive industry. In fact, I would estimate that GM, Ford and Chrysler spend close to $20 billion a year in R&D.

WHAT A CRATE!
GM’s thinking outside the “box.” Its performance-parts division just announced the availability of an all-new crate engine. Called the LSX454R, it’s the most powerful small-block V-8 the company’s ever engineered. Designed for drag racing, it’s officially rated at 720 horsepower and 720 pound-feet of torque! To deliver those numbers, it features all-forged internals and special high-flow, high-compression cylinder heads. It also features a solid roller-cam. The cherry on top of this performance sundae is a Holley Dominator carburetor.  No word on price or availability, but like J.P. Morgan said . . . if you have to ask you can’t afford it.

REVVIN’ UP THE E-REVS
With the first Volts just reaching Chevy dealers this week, rumor has it the General is already preparing a crossover based on the extended-range EV. Keeping with the electricity theme, Autoblog reports the five-seat vehicle will likely be called the Amp and it could debut at the Detroit Auto Show next month. I wonder if GM will also offer an Ohm? This, of course, will help spread-out the cost of developing the Voltec drivetrain. Remember, the company already showed off a concept crossover called the Volt MPV5 at the Beijing Motor Show earlier this year.

SHOCKING PRICE FOR A VOLT
In other Volt news, GM offered the first Volt up for a charity auction benefiting the Detroit Public Schools. It sold for $225,000!

TEN GRAND FOR A HYBRID
In more green-car news, Russian billionaire Mikhail Prokhorov it tackling a seemingly impossible task. According to the Wall Street Journal, he’s spending €150 million to develop a $10,000 gasoline-electric hybrid car. Nearly everything for it will be sourced in Russia. Ten grand for a hybrid? I’ll believe it when I see it.

Speaking of hybrids, coming up next, we’ll take a look at the newest hybrid from Lexus, the CT 200h.

Toyota sells more hybrids than every other automaker put together. But none of its hybrids have replicated the success of the Prius. Now the company is taking another run at the luxury segment with the Lexus CT 200h. Isaac Bouchard filed this report for Autoline Daily.

Hey John, I’m here in the Big Easy to drive the next BIG thing in luxury: SMALL.

At least the Europeans manufacturers think so; tighter carbon regulations are forcing people into cars with smaller footprints—both physically and environmentally.  Not wanting to be left behind, Lexus is rolling out the CT 200h hybrid, and we’re in New Orleans to see if their latest has got what it takes.

The CT certainly looks European: a five-door hatch is about as Continental as it gets.  Inside, it has great seats, a good driving position, and decent quality materials.  Though there’s lots of standard equipment, there are surprising omissions too — no Mark Levinson audio, cooled seats, or the like.

Lexus has modest sales goals for their latest—they only expect to move about 1,000 per month.  At that rate, it would take six years to fill the Superdome behind me with CT 200h owners.

The question is: does this Lexus have that much time?

From New Orleans, this is Isaac Bouchard for Autoline Daily.

Powering the CT is a 1.8-liter Atkinson-cycle engine coupled with a nickel-metal hydride battery pack—basically, this Lexus is a Toyota Prius underneath. The upside is 42 MPG combined . . .

Isaac, thanks for that report. But man, a 10-second 0-60 time, especially for a luxury car? That is borderline unacceptable.

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

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25 Comments to “Episode 541 – German Assembly Lines Humming, China Bumps R&D Spending, Monster Crate Motor”

  1. Kit Gerhart Says:

    The CT 200h should appeal to people who like their Prius, but want a fancier interior. I might fall into that catagory in about 10 years.

  2. pedro fernandez Says:

    Every day we get news about the declining Western economies and the rising East (China) I guess we’re looking at a new world order and are incapable to do anything about it, memo to Lexus: folks who buy luxury expect a certain level of power and acceleration, that’s a lot of money for a revised Corolla engine.

  3. Dale Leonard-Lakewood,Ohio Says:

    Hi John, It appears that GM was listening to AAH when Peter made the comment about sticking those Jag Gas Turbine motors on a Go-Cart. Now Peter can use that LSX454R on his Go-cart instead when he goes off the grid.

  4. Kit Gerhart Says:

    If 10 seconds 0-60 is fast enough for an E-Class Mercedes sold in Europe (E 200 CDI, which they sell a lot of), that should be fast enough for a small wagon intended for those who want a Prius with a nicer interior. The trouble is, the CT will probably cost way to much.

  5. pedro fernandez Says:

    Kit: just about all the folks I’ve spoken to regarding their luxury vehicle love the fact that they have terrific power trains, which accelerate effortlessly and quietly and fuel economy is not even considered.They even put up with higher service costs. Speaking for myself, if I ever got the opportunity to buy one of these wunder-mobiles, I would feel the same and make up for all the slow-as-molasses 4 bangers I have ever owned and driven.

  6. fensterlips Says:

    So Lexus wants a Prius based hybrid? What is the HS hybrid? I read this having deja vu.

    They might be better served listening to their public and testing ideas out on your admittedly aficionado audience and readers.

    The hybrid cars needs great mileage, it’s a touchstone, but also needs to have better handling, high quality and good performance.

    Think the IS line with better economy and cutting edge hybrid technology.

    What they don’t need is another frumpy looking Prius with a bunch of “luxury” features bolted on.

  7. cwolf Says:

    @Kit: In ten years,you’ll prolly be moving about as fast as the CT. (lil’humor)

  8. Andrew Charles Says:

    The HS is the Prius-based Hybrid (although there is a Toyota version called the SAI as well), the CT200h is a reskinned Corolla hybrid (Auris HSD in Europe). Same platform, same powertrain, and even unveiled at the same autoshow. Of course the A3 is based on the Golf, and the C30/S40/V50 on the Focus, but the Golf and Focus are widely acknowledged as the world’s two best compacts, and the Corolla is now one of the worst (it’s small, it’s old—even the last cosmetic update was a long time ago—, it’s expensive, it’s not particularly economical in most markets, it’s boring, it’s bland etc.—there are even one or two Chinese cars which are better).

  9. tj Martin Says:

    GERMANY’S ASSEMBLY LINES HUMMING WHILE VW IS BUSY RECALLING

    Should of been todays headline . Seems some 377,000 VW’s in the US are being recalled for that Ferrari 458/Tesla Roadster /Cadillac SRX self igniting problem of Morphing into a Mobile BBQ .

    When will people learn when it comes to VW-Audi Group products ? SSDD !

  10. tj Martin Says:

    Andrew Charles ;

    What reality are you living in when it comes to Toyota quality ?

    “… there are even one or two Chinese cars which are better ”

    Really ???? You’d better have a little look see at the realities of ALL the Chinese Brand cars and their abysmal reliability/quality before making a comment like that .

    Actually Abysmal is being way too kind when it comes to describing the quality of ANY of the Chinese Car Brands .

    Death Traps would be more to the point .

  11. pedro fernandez Says:

    That explains why Corolla is the best selling small car in America year after year, I guess Americans are just stupid when it comes to choosing the cars they buy. I also suppose the Camry is a boring, bland, old-fashioned, best selling midsize. Ah, these Americans and their poor choices. Just wait till the passionate Fiats get here, Camry & Corolla better watch out!!

  12. pedro fernandez Says:

    I wonder if Jessica Simpson is in charge of QC at Audi/VW group, that would explain a lot of things.

  13. Dan Clemons Says:

    Our 2010 Prius has plenty of power. I can burn rubber with it and I’m a Corvette owner. I have never found the car to be under powered in the passing department.

    We are 100% satisfied with our Prius. My wife drives a Suzuki and informed me the other day she wants to drive the Prius.

  14. tj Martin Says:

    Dan Clemons

    I find the comments on your Prius experiences highly suspect to say the least in light of how often I’ve watched a Prius acceleration drop like a Stone at the slightest hint of an incline . All years including the new one.

    I can’t tell you how many times some pretentious idiot has gone flying past me in a Prius at well over the speed limit on the downhill , only to be holding up traffic on the uphill .

    Me thinks you may have a case of PVS ( Post Validation Syndrome ) going on and the wife has caught it as well .

    The only cure ? A cold splash of reality .

  15. mike g Says:

    Hey, we all know the Prius has the HP of a Mustang GT, the space of a full size van, the towing power of a HD truck and the fuel economy of a bicycle. It’s the perfect vehicle. Oh ya, and they practically give them away.

  16. pedro fernandez Says:

    Let’s not forget Al Gore’s son got caught doing 110 in his Prius, green speed demon.

  17. dcars Says:

    Lincoln starting selling a hybrid and I think it’s zero to sixty times are better than the CT, but not to much better.

  18. tj Martin Says:

    mike g

    You forgot the Prius can also fly like a bird as well as wipe your face off after a sloppy burger .

    I heard Ed Bagley got caught doing 130 on the Salt Flats in his Prius . The Green Weenie Demon

  19. Kit Gerhart Says:

    to all of you Prius “experts” who don’t know anything about Priuses…

    I have a 2010 Prius which I’ve driven between Florida and Indiana, a trip which includes extended climbs in Tennessee. My Prius can easily maintain speeds at and above the speed limit, if all of the a______s in the V-8 powered SUV’s would get out of the way. A Prius has plenty of power, and climbing capability, for any normal driving.

    I’ll admit that there are a number of inconsiderate drivers in Priuses who will go fast downhill and slow uphill in order to get 55-60 mpg instead of the mid to high 40′s you get if you “just drive it” and don’t even try to get good mileage. There are also a lot of jerks who like to block the passing lane in their “ultimate driving machines” while jabbering on their cell phones. tj, it’s not the Prius, it’s the driver that is slowing you down on an uphill.

  20. pedro fernandez Says:

    I’ve yet to meet a Prius owner who’s anything but ecstatic about his or her purchase, yet I’ve met a couple of Insight owners who admitted to me the reason they bought it was because of brand loyalty and price, acknowledging the fact that the Prius has better built quality and materials. I also find it interesting that every article that I read re’ the 10 best cars for less than $18k they never include the Corolla, even though it continues to lead the pack in sales, BTW congrats to GM, I have already seen 3 Cruze on the road in a couple of weeks and only 2 Fiestas since they came out. That Cruze looks really impressive going down the road, can’t wait to try one out.

  21. Tom Martin Says:

    I agree that the Lexus CT 200h is mainly targeted at the current Prius owner who believes that mpg’s are far more important than 0-60 time.

    And there’s a lot of Prius owners who will be upgrading in the next five years.

  22. Kit Gerhart Says:

    To me, the biggest weakness of the CT 200h for the intended market is that, in losing the aero shape of the Prius, it will lose a lot of MPG at highway speed. It will also cost too much.
    The shape will make it better for bulky cargo, though. The Prius’ hatch makes the car very good for long items, but there is not a lot of “head room” in the rear part of the cargo area.

  23. Kit Gerhart Says:

    pedro says:
    “I also find it interesting that every article that I read re’ the 10 best cars for less than $18k they never include the Corolla, even though it continues to lead the pack in sales,”

    The Corolla continues to sell well because the car has the reputation of being very reliable, it gets very good gas mileage, and it is has simple, intuitive controls. It probably also helps that Consumer Reports has recommended Corollas for umpteen years running. Interestly, though, Corolla has a “worse than average” result for “owner satisfaction” in CR’s annual surveys. That surprises me a little. The soon-to-be-dropped Element rated “better than average” in the owner satisfaction survey.

  24. dcars Says:

    The Prius has a really cool interior. I’ve seen loads of Cruzes on our Western New York streets. Chevy is our largest private employer so we have lots of incentives to buy them. The Chevy dealers can’t keep them on the lots. I drive by a new car holding lot on my way into work and the Cruze is constantly moving in and out. I expect big sales numbers for Chevy.

  25. Bob Says:

    Speaking of keeping the old clunker: (for 712000 miles. NOT 71,200!!!)

    http://automobiles.honda.com/mile-makers/story.aspx?Story=1069

    When Honda STILL MADE AWESOME CARS…