November 23rd, 2011 at 11:30am
Mazda is moving production out of Japan to Mexico because of the strong value of the yen and the number of free-trade agreements Mexico has. Chinese automakers are starting to learn how to make safer cars. The Geely Emgrand EC7 and the MG6 were awarded four stars in the latest Euro NCAP tests. The used-car market in the U.S. remains strong and in some cases second-hand vehicles are not depreciating in value. All that and more, plus John responds to your questions and comments in the “You Said It!” segment.
This is Autoline Daily for November 23, bringing you the latest news in the automotive industry.
MAZDA MANUFACTURING IN MEXICO
Japanese automakers are getting hammered by the strong yen, so they’re moving production out of Japan to low-cost countries. Mazda’s CEO, Takashi Yamanouchi, says they’re moving to Mexico because it has so many free-trade agreements. Mazda decided not to go to Brazil, which has one of the fastest growing car markets in the world, because Brazil’s free-trade agreements only reach 6 million car buyers. Mexico’s free-trade agreements reach 40 million car buyers which is about the size of North America, South America and Europe combined. As you know, Mazda is abandoning its plant in the United States because the U.S. only has free-trade agreements with 17 countries, while Mexico has FTAs with 41 countries.
CHINA CATCHING UP IN SAFETY
Up to now Chinese automakers have failed to receive high marks in European crash tests. We’ve shown you this clip of a dummy’s head nearly being decapitated in a Landwind crash test. But it looks like Chinese automakers are starting to learn how to make safer cars. The Geely Emgrand EC7 and the MG6, were awarded four stars in the latest Euro NCAP tests. And testers believe that it’s only a matter of time before Chinese cars are receiving five-stars in tests.
DODGE WILL DROP GRAND CARAVAN IN U.S.
Chrysler dominates the minivan market in the U.S. with the Town & Country and the Dodge Grand Caravan. But the Detroit News reports the company will drop the Dodge version in the U.S. when the next-gen minivan debuts in a couple of years. However, in Canada, the Chrysler Town & Country name will be dropped. That’s because the Dodge Grand Caravan is more popular in the Great White North, outselling the Town & Country 10 to 1. In the U.S. the Town & Country traditionally outsells the Grand Caravan 2 to 1.
USED CAR MARKET REMAINS STRONG (subscription required)
The recession changed the automotive industry. No doubt about it. From the bankruptcies in Detroit to how people buy cars, the business just ain’t the same. And that hubbub really impacted the used-car market where prices are shockingly strong. According to Ward’s, in some cases, second-hand vehicles are actually NOT depreciating in value. Blame it on supply and demand. When the economic downturn hit, it gutted new-car sales, taking away between 3 million and 4 million of them. That means there is a much smaller pool of used cars available today. With the soft economy more people are going the preowned route to save money, hence the strong demand and high prices. And according to one analyst, it doesn’t show any signs of letting up. Prices are expected to increase by a few percentage points early next year.
DRIVERS UNHAPPY WITH NAV SYSTEMS
No surprise here. J.D. Power has found users are DISSATISFIED with navigation systems. Poor routing, “address not found” errors and difficult-to-use interfaces topped the list of complaints. The research firm found that NAV systems from Mercedes-Benz, Ford and Toyota – among others – filled out the bottom of the list. Two bright spots were the new Dodge Charger and Chrysler 300. They placed first and third, respectively in the owner survey. And I’d have to agree. I absolutely love the Garmin-supplied system Dodge is using.
Coming up next, it’s time for You Said It!
YOU SAID IT!
And now it’s time for some of your feedback.
A lot of you had a lot to say about Fiat dumping Laura Soave. Tj Martin says, “Yeah right. Blame it on Laura, not the fact that the car is an over priced POS, 99% of the dealers salesmen are real ‘ Tools,’ Marchionne sent the wrong models, and the fact that FIAT, other than J’Lo, hasn’t spent a dime on promoting the little dumplings.”
Dave Forslund points out that, “VW once said “Think Small” and it grew big, Fiat said “think big” (50,000 first year) and they ended up small.”
Phil in Burlington, Ontario writes in to say, “I continue to be amazed at the glowing reviews the Chevrolet Sonic is getting. After all, I thought it was just a refreshened Daewoo product previously sold here as the Chevrolet Aveo and Pontiac Wave. Those vehicles typically received poor ratings for reliability and fuel economy. I know the vehicle is now made in the U.S., but surely changing the factory alone can’t change a sow’s ear into a silk purse.”
You’re right Phil, just changing factories isn’t going to make that much difference. But the Sonic is a completely redesigned car compared to the Aveo. And while I don’t think it’s as good as some of those gushing reviews would have you believe, it’s actually a pretty decent small car.
We reported that BMW bought SGL Carbon to make carbon fiber cars and that prompted Tom Kowaleski, the outgoing vice president of BMW North America to write in. “Just to clarify, BMW originally purchased an 8% interest in SGL Carbon at the time we began the joint venture to build a plant in Moses Lake, Washington to manufacture carbon fiber to be used in the new BMW i3 and i8 vehicles beginning in 2013. Today’s announcement was that the company increased its stake to 15%, rather than it being an initial purchase. BMW was the first automaker to take the equity stake in the company.” Thanks for the correction, Tom.
A few too many of you, in my opinion, wrote in to praise Peter De Lorenzo for filling in for me while I was at the Los Angeles auto show last week. Chuck Grenci says, “Thanks for helping John out this week, Peter.” LS Ford says, “Bye Peter. Funny how he hosted the show from a cockpit.” And W L Simpson says, “Good week, PD, John better watch his six.” Watch my six? Hey, Heyyyyyy!”
Thanks for all your letters and comments, we get a kick out of reading them. A programming note here. We’re taking the rest of the week off for the Thanksgiving Day holiday. That also means no Autoline After Hours tomorrow.
And that wraps up today’s show, thanks for watching, we’ll see you on Monday.