Episode 779 – Fewer Teens Getting Licensed, Tata Still Not Cheap Enough, RC Car Hits 100 MPH

December 2nd, 2011 at 12:03pm

Runtime: 7:30

As the auto industry struggles to sell more cars, teens aren’t helping matters because fewer of them are learning to drive. Motorcycle sales are on the increase in India while Tata Nanos languish on dealership lots. This RC car doesn’t come cheap, but for good reason: it can hit 100 miles per hour! All that and more, plus John McElroy’s analysis of November sales results.

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This is Autoline Daily for December 2nd, and so wonderful to see that it’s Friday. Later on in the show I’ll give you my analysis of the sales numbers, but now, the news.

A study from the University of Michigan says fewer young people are getting their driver’s license. In 1983, 87% of 19 year-olds had their license, in 2008 the number dropped to 75%. Part of the reason is, there are more restrictions for teenagers to get their license now but the main factor is teenagers don’t need to drive anymore to socialize with their friends. They’ve got smartphones and the internet to do that now. And this is a serious threat to the long-term health of the auto industry.

We’ve got one more Tokyo reveal to look at. Suzuki took the wraps off the Swift EV Hybrid. Like the Volt, it has a small engine to charge the battery when it gets drained. It can travel up to 18 miles in electric only driving because Suzuki says that’s average distance most Swift drivers drive. That means it uses a smaller battery which means it costs less and doesn’t take as long to charge.

Maybe having the cheapest car isn’t cheap enough. Sales of motorcycles in India are growing because they’re not nearly as expensive as small cars like the Tata Nano. You can buy a motorcycle in India around $830, while the Nano sells for about $2,800. But it’s also about image. Who wants to show off to their family, friends, and neighbors that they bought the cheapest car you can buy?

Hey, who says the Chinese aren’t innovative? The Double Star Tire Company decided that if every car in the world has black tires, then there’s probably an opportunity to do something different. So it’s going to offer a multitude of different colored tires, from red to blue to green, and just about every other color in the rainbow. So the next time you go out to light ‘em up and lay down some rubber, you could leave some beautiful aqua colored strips running down the road.

We found this fascinating story on Autoblog. It’s a radio controlled car, but this one can do something no other RC car can do. The Traxxas XO-1 can do 100 miles an hour, that’s 160 kilometers an hour for our metric viewers. They took it to the Texas Motor Speedway to run it at max speed on the high banks of the oval. It’s powered by a lithium polymer battery, and even though this is a toy, the front splitter, the undertray, rear diffuser and wing are fully functional to provide downforce with minimal drag. Of course, like they say in racing, speed costs money. The Traxxas XO-1 costs just over $1,000.

Mark your calendar for next Tuesday’s 2011 finale of Open Line. The guest of honor will be none other than that living automotive icon, Bob Lutz. As always with Open Line, you’ll have the chance to call in and have a conversation with Bob. The whole show kicks off at 8PM Eastern Time with hosts Michelle Naranjo, Chelsea Sexton and Aaron Bragman. That’s Tuesday, 8PM at Autoline.tv.

Coming up next, I’ll give you my analysis of the latest sales numbers, and all I can say is wow!

NOVEMBER SALES (subscription required)
Everyone was expecting November to be a good sales month in the American market and that’s exactly what we got. According to Ward’s, the SAAR, or seasonally adjusted annual rate, came in at 13.59 million units, the strongest sales month we’ve seen in a couple of years. The total number of vehicles sold was just under 1 million units, and cars gained more than trucks.

The biggest gainers, on a daily sales rate basis, which is the way Ward’s does it and provides the accurate year to year comparison, shows Mercedes topping the charts with sales up nearly 41%, followed by Chrysler at just under 40%, Volkswagen up just under 35% and Kia up more than 33%. Those are huge increases folks.

But some automakers did see their sales go down, including Suzuki, Subaru and Mitsubishi. But they’re minor players. Most notably, Honda was off 10%. That’s mainly because of a big drop in sales with the Accord, and a brand new Civic which was up only 3.5%. That’s not very good for a new car.

In fact, Nissan outsold Honda, but here’s the real news. Hyundai-Kia outsold both of them.

The best selling passenger car in the American market was the Toyota Camry, followed by the Nissan Altima and Ford Fusion. The F-series continues to dominate the full-size pick-up segment, outselling the Chevy Silverado and GMC Sierra combined. And Ford is clearly clearing out stocks of the outgoing Escape to make room for the new one, because it decimated the competition in the cross-over segment.

Back to the big winners for a moment. Mercedes topped the list of big gainers thanks to the C-class which was up 104%, while at Chrysler, Jeeps were literally flying off the lots. Sales of the Compass were up 847%!

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And that wraps up this week’s coverage of the latest news in the global automotive industry. Have a great weekend and we’ll see you back here on Monday.

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57 Comments to “Episode 779 – Fewer Teens Getting Licensed, Tata Still Not Cheap Enough, RC Car Hits 100 MPH”

  1. tj Martin Says:


    Uh Oh ! Trouble in Suby Paradise

    Jalopnik is reporting that Subaru has cancelled sales for 3/4′s of their cars , due to brake issues .

    Funny that second to the seats , the brakes have been my biggest complaint with every Subaru I’ve ever driven/rented with the exception of the WRX/STI’s


    Big problems with Big Red as well

    Over 300,000 Honda’s have been recalled ( check the models HtG to see if yours is one of them ) due to AirBag issues

    Seems as the end of the Year draws near , the Recalls are once again on the rise


    As I stated yesterday and CNBC etc are reporting , Chrysler’s sales advances are all due to the JEEP division . Chrysler sales are stalled . FIAT’s sales are all but non-existent . e.g No JEEP … No Chrysler sales gains . I’m telling you guys … JEEP is Chrysler’s ONLY hope right now , assuming Marchionne doesn’t have his way , what with Unibody Wranglers and FIAT platform JEEPs ! On the negative side Chrysler Dealers came out on the bottom of the list for Dealer Satisfaction

  2. tj Martin Says:


    Is that due to less young people actually driving , or is it that more are driving Without a license ?

    Now there’s a question worth a bit of research

  3. Tony Gray Says:

    A friend of mine in the early 70s had color tires on his 20 inch bicycle that he got from the local Goodyear dealer! I am amazed it took so long to hit the auto market.

  4. tj Martin Says:


    Oops ! The Chinese missed again . They in fact did not innovate colored tires

    EU Bicycle tire manufactures have been doing that for years , with M/C tires also and several other tire manufactures have been making colored tires for Automobile for the Hip Hop Gangsta Banger Low Rider Custom crowd .

    Chinese = Photocopy Innovations

  5. RS Says:

    I find myself looking for two specific numbers when the monthly sales stats come out:

    1. When is Honda going to break out of its funk?
    2. When is the Chrysler bubble going to burst?

    The next one is:

    When is Ford going to actually get its act together and pass the General? I don’t mean for one month, I mean with consistent sales results… Ford division is extremely strong, Lincoln is visible but feeble. The growth is going to have to come from the Ford side. The new Escape might push them close but not over the top. Ford needs a more competitive “Flex” to compete with the multiple SUV brands at GM.

    The real news seems to be the “democratic” sales figures. There is no longer a specific manufacturer who shows all the other “how.” Innovation can come from any of them.

    What a great time to be a gearhead!

    Pity about those 19-year-olds who just don’t get it! They will never know what they are missing.

  6. LS ford Says:

    Young Drivers
    John, I think you missed on this one. Is the effect of the economic downturn effect that polls? IE parrents cannot afford the car for their teenager, so there is no need to get a permit to drive?? I think its more than Facebook that is hurting this market.

    Colored burnouts??!! i love it! Perhaps the tires could wear out in defferent colors. Like tie dye shirts?

    Traxxas. Yes, to all my friends and family, please buy me one! The battery better be good and strong as a 100 mph car can get out of range very quickly. Perhaps we will have RC battery fires to contend with now??


  7. tj Martin Says:

    @ LS ford – #6 – Put my order in to Santa as well . Fire Extinguisher included – X 2 LoL :o

  8. Kit Gerhart Says:

    tj said in #1,
    ” Chrysler sales are stalled .”

    No, Chrysler sales were up 92%, year-to-year for November. That’s an odd definition of “stalled.”

  9. Kit Gerhart Says:

    There have been colored bicycle tires, etc., but serious tires will probably always be black, because carbon black is a great material for making rubber durable, and it’s cheap.

  10. dcars Says:

    I can’t believe that they were able to control that RC car at that speed.
    As my kids would say/text- tbh they just aren’t that interested in cars. They want to drive but they don’t seam to care what kind of car it is….. so styling is not important but reliability and utility are their concerns.

  11. HtG Says:

    Honda recall. I’m alright, tj.


  12. Kit Gerhart Says:

    I suspect they used “exponential” control on the RC car which greatly de-sensitizes the steering near center. I’ve driven RC cars up to ~50 mph, and you have to use a very “light touch” on the steering, even at that speed.

  13. LS ford Says:

    If the car is not fast enough, this fellow in Germany did a jet. The video is crazy. Controlling the car at 100 is easy compared to this one!


  14. tj Martin Says:

    # 8

    Best to get your DEFINITION’s straight before criticizing others there Kit

    Thats Chrysler Corporation Sales Overall that went up ! e.g. JEEP /Chrysler FIAT …. not Chrysler cars .

    Unless of course you’d like to try and convince us all you’ve got some Gnostic Inner Knowledge that supercedes that of the CNBC Financial , Bloomberg TV etc’s pundits who are all reporting just what I’m stating clearly here

    Which ….. I rather doubt ;-)

    FYI -on # 9 – I do believe the folks at Pirelli tires , especially the M/C division would take serious issue with that statement

  15. tj Martin Says:

    @ HtG- #11- Phew !

  16. Chuck Grenci Says:

    Kit, also an R/C buff here; probably got the steering centered (to track straight), and at speed, just steered with the trim control. Used to fly planes, raced mono-hull boats and ran cars/dune buggies.

  17. tj Martin Says:


    Looks like the Traxx isn’t the fastest R/C car

    This one at 161.76 mph is


  18. Lex Says:

    My Friends at my local Honda Dealership say that were is a short supply of the Honda Pilots due to a shortage of parts from Asia caused by the natural disasters and storms they have had recently. I really wonder if this is also hitting other models?

    Congratulation to Hyundai and Kia! If these two brands can maintain quality and competitiveness good for them. Now I want to see Hyundai / Kia pony up a team for NASCAR.

  19. Aliisdad Says:

    It is amazing to me that Chrysler continues to show gains in sales since so many of their cars are “warmed-over” updates on the same designs and their quality is so bad…Please become”FIAT of America” and quit makin’ your crappy cars!!!
    I am also concerned for our domestic automakers in that they are too dependent on truck/SUV sales, depend too much on electronic gadgets, seem lost as to how to organize and sell their cars, and still cut corners on quality…
    While I do not intend on ever purchasing a domestic make car again, I do want them to be successful since so many jobs depend on them; including production people, salespeople, suppliers, etc…My concern is also that they got a chance for a “fresh start”, now, and had better not blow it again…Chrysler is doing as well as they can at selling the junk they make, but GM had better figure out their structure, lines,and marketing pretty soon!!! While the others seem kind of lost, Ford does seem to have some better direction, and “One Ford” really makes sense that should pay off over time…
    One final thought: What is happening at Subaru? I remember John’s reports a while back when times were not so good for most car companies, and they were doing well…

  20. Kit Gerhart Says:

    Sorry, tj, but you are WRONG AGAIN. CHRYSLER BRAND was up 92% year to year for the month of November. Chrysler Corporation, not that much.

  21. Kit Gerhart Says:

    Chrysler is doing as well as they are, partly because of Jeep, and partly because they have a big “niche,” if you want to call it that, with the 300 and Charger. They are more at risk than others when gas prices go up, though, as they don’t have any top tier smaller cars.

  22. Kit Gerhart Says:

    tj says: “Unless of course you’d like to try and convince us all you’ve got some Gnostic Inner Knowledge that supercedes that of the CNBC Financial , Bloomberg TV etc’s”

    Try Automotive News, or Chrysler’s site at:

    I’m sure you will say their numbers lie, but I’m sure they can be confirmed. Actually, the year-to-date numbers are not nearly as impressive as the November year-to-year numbers. Bloomberg et. al. are probably talking about year-to-date, and Jeep “leads” in that catagory.

  23. GPL Says:

    A lot more than 300,000 units in that Honda recall. It now covers a significant portion of their 2001-2003 production.


  24. W L Simpson Says:

    big city teenagers have no need of a license to

  25. RS Says:

    Chrysler also has a VERY loyal brand following. It is at least as militant as the Ford/Chevy group. It is encouraging to see reviewers like CR write optimistic evaluations of Chrysler’s newer models – even if they are essential retreads.

    There is no reason to think that Chrysler cannot make a profit at their current volumes. Lots of other mfgrs would dearly covet that volume.

    Having said that I do not yet want anything they build. Once bitten, twice shy.

  26. pedro fernandez Says:

    After my sis’ Journey brake issues and the lack of interest by Chrysler to fix the problem once and for all, I take 3 dumps on them and will talk anyone I run into away from buying any Chrysler product

  27. merv Says:

    R/C cars zoomed past 100 mph years ago. You had to buy a kit-build it-add a few upgrades and voila.

  28. Kit Gerhart Says:

    Pedro, I’m sorry your sister has had such bad, and persistent problems with her Journey. I hope they get her problems resolved. I’ve had a number of Chrysler cars over the years, and have had good service from them.

    Since they dropped the Magnum wagon, Chrysler hasn’t had anything that appealed to me, but I really hope they get things straightened out. There are a lot of people in my original home town that depend on Chrysler for employment.

  29. pedro fernandez Says:

    R/C cars faster than my Vibrolla? How embarrassing, I will never be able to face the public again!

  30. Kit Gerhart Says:

    I wonder if other companies will follow Honda with recalls. TK Holdings, the company that supplies Honda’s airbags, also supplies them to other car companies.

  31. Kit Gerhart Says:

    Yeah, but they won’t run 300K miles.

  32. pedro fernandez Says:

    Kit this is not the only case, I have met 2 other people with same issues, only worse. One of them is going after the 3 strike lemon law in Fl because she told me she is afraid to drive the car and have brake failure. The web is replete with cases of Journey owners facing the same issue, the fix would be expensive, that is why they won’t do it. Funny thing I read the specs on the current model and the brake discs are the same measurements, they did not make any improvements to it, all they did was give it a nicer interior and put in the new Pentastar engine and 5 speed auto on the higher priced model.

  33. XA351GT Says:

    So John , for the Jeep Compass to be up 847% over the previous month does that mean they sold 1 in Oct and 847 in Nov ? They must be giving them away somewhere because I never see any here where I am. I’d like to know the sales for both months , because I bet totalled it’s not that impressive as it sounds. I hope I’m wrong ,but I’d like to see those numbers.

  34. Kit Gerhart Says:

    They sold 432 Compasses in November 2010, and 4,262 in November 2011.

    This is from the link I posted in #22.

  35. C-Tech Says:

    The hurdles for the 16-18 set getting a license are much higher than in the past. Restricted licensing, higher insurance, and more expensive used cars. The past entry level car for a lower middle class teen cost about $1000-1500. Harder to find a good one, and harder to keep it going. Look at Pedro holding on to his Corolla.

  36. pedro fernandez Says:

    Agree with XA, I just don’t recall seeing any Compass around these parts, I do remember seeing a lot of Liberty models when they became popular a few yrs back.

  37. Kit Gerhart Says:

    I see a few Compasses, but don’t notice what they are from the rear until I see “compass” molded into the rear bumper cover.

  38. Kit Gerhart Says:

    Some people here seem to equate a 16 year old getting a license with buying another car. When I got my license long ago, I didn’t have my own car for years, and that is the case with a lot of teens now.

  39. pedro fernandez Says:

    Well, that depends on the economic status of a given family, I see, however, that girls nowadays would rather get a cruise with a few close friends or a boob job over a car, and lots of guys are more into internet and electronics than cars, and will end up inheriting something from Dad or Grandparents.

  40. Kit Gerhart Says:

    It amazes me how many kids have smart phones, with ~$80 fees attached. When the family doesn’t have the money for both the electronic gadget and an extra car, it seems a lot of them go for the electronic gadget.

  41. Kit Gerhart Says:

    My first car, in 1966, was a ’57 Chrysler from my great aunt. I know of similar cases now. I know a kid, now in college, who ended up with a tan 1990′s Buick Century that way. Talk about the ultimate “old person’s car.” It’s transportation, though, and he’s glad to have it.

  42. pedro fernandez Says:

    Kit, you and I come from a diff time when you had to “earn” things, nowadays these kids seem to think they’re “owed” by parents or by society or by breaking the law, whatever it takes. My first car was a $500 beetle that I bought working odd jobs and delivering papers and then had to pony up for insurance and other expenses, but you know what? I loved it, man! I had the freedom to go where I wanted without having to depend on anyone else to take me there.

  43. tj Martin Says:

    Another one bites the dust !

    Hasta La Vista Herman Cain ! ( quit the race )

    One less Idiot to consider


  44. tj Martin Says:

    Make that two ( that’s bitten the dust )


    Cause E/V’s are in such demand and work so well , especially George Jetson wanna be E/V’s

    Well lets make it three for the week , what the heck !

    Seems the WRC boss just landed in jail and the organization is in receivership ( UK bankruptcy court )

    So maybe no WRC for 2012 . Hmmn . That kinda sucks . Damn Russian mobster …… I mean business man :(

  45. tj Martin Says:

    My first car was my dads worn out (I got it in 73 ) 65 Olds 442 for $350 that my uncles then helped me ( with me doing all the work ) drop a 69 455 balanced blueprinted etc ( yes boys by me ) into

    One bad a** muscle car when I was done .

    My money . My sweat . My labor . Hence truly my car


  46. pedro fernandez Says:

    TJ if you had kept it and restored it, it would have made you a few bucks, If Cain was a Democrat, Jesse and Al would have been there for him!

  47. XA351GT Says:

    My 1st car was a 73 Monte Carlo. My Brother made me a deal that if I stayed on the Honor roll all 4 quarters of the year he’d give me $500 towards the purchase of my 1st car . My sister added a $100 if I could make the high honors at least once which I did. So I made $600 for 180 days of school @ 6 hours a day not counting home work . So I earned .56 @ hour ,but bought my 1st car. How many kids today would even try if you made them that offer?

  48. XA351GT Says:

    Thanks Kit @#34 even those November numbers don’t seem all that great ,but comared to 432 it’s a ton more.

  49. David B. Fishburn Says:

    John, it’s the economic reality that is responsible for fewer teens not getting their license. First, the state cut funding for driver’s ed., then the schools cut driver’s ed classes. Now, for a teen to get a license, he/she or the parents have to cough up several hundred dollars for driver’s ed classes, which are required by law. Second, due to the unemployment problem, fewer families can afford another car, along with the too high insurance, which is also required by law, and in order to put a plate on the car. Also, let’s not forget the high unemployment rate for teens.

  50. pedro fernandez Says:

    Just saw the Lutz interview and once again he fails to mention the main cause for GM and the other domestics for the market loss was the inability to switch over to FWD without bringing all kinds of quality issues to bear, while the Japanese were able to successfully make the transition with no such problems, they should have remained RWD for the midsize and full size while improving engines and taken off weight instead of allowing FWD to be the answer to all challenges. Example: why did the class leading GM midsize practically disappear, replaced instead by a much weaker 2 door version of their A class?

  51. Kit Gerhart Says:

    I still don’t understand the rush to FWD for nearly all American cars. In small cars, you get much better packaging efficiency with FWD/transverse engine as first demonstrated by the original Mini, but in bigger cars, you don’t gain much. A transverse engine/front drive power train should be a little more efficient than a rear drive, because it doesn’t have bevel gears, but that must not be a big issue, since the current Chrysler 300 and Dodge Charger have gas mileage ratings competitive with front drive cars of similar size and power.

    As far as GM in the early 80′s, they did lose weight and therefore gain gas mileage with the front drive cars, but they never replaced the RWD Cutlass Supreme et. al. in the market place.

  52. pedro fernandez Says:

    Kudos should go to Chrysler for keeping their full size cars RWD throughout all the FWD madness the others went through, I read once it was cheaper to build a FWD platform and that is another reason they did it.

  53. pedro fernandez Says:

    That Ferrari crash in Japan further proves that production cars should not be made to go any faster than they are now, in fact, they should start cutting back on power and be more “green”

  54. pedro fernandez Says:

    Spoke to a couple of 20 somethings yr old guys yesterday, one is trading his disappointing 08 Civic for either a V8 Charger or Challenger, the other one, an 06 tC for a Stang also V8, WOW!! I was quite surprised, a few yrs ago these guys would have never bought American cars!

  55. HtG Says:

    54 did you ask why the guy was disappointed with the Civic, Pedro?
    I was just getting an oil change at the dealer, and looked at the Shelby. That’s one aggressive looking sumbitch.

  56. pedro fernandez Says:

    I think he just needs more room (he’s 6’7 plus has gained weight) and acceleration plus he is tired of feeling every little bump on the road and has a long commute as well. Maybe he’s just tired of the car and has enough $$ to buy a nicer one!

  57. Kit Gerhart Says:

    Hmmm… Gas is getting cheaper, which probably has something to do with those guys’ decisions. Now would be a great time to get a good price on a Prius or VW TDI, but not so good for those thirstier cars. If I ever get wanting a V8 muscle car, I’ll wait for a time that gas prices are increasing. That’s when you can get a good buy.