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Episode 865 – British Car Sales Beat the Odds, F1 Circus, Hybrid Buyers Shun Second Helpings

April 10th, 2012 at 11:50am

Runtime: 9:06

While most of Europe is in an automotive meltdown, it looks like somebody forgot to tell the British there’s a financial crisis going on.  Sales of new vehicles in the UK have gone up for the last three months!  The private owner that holds the majority of Formula One stock, CVC Capital Partners, wants to issue an IPO to raise $2 billion.  Hybrid buyers are not returning for second helpings.  The loyalty rate for gasoline-electric vehicles is very low.  All that and more, plus a review of the new Fiat 500 Abarth.

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Welcome to Autoline Daily, the automotive information machine that never sleeps. It’s April 10th, I’m John McElroy and here’s what’s happening in the wonderful world of automobiles.

TALLY-HO! (subscription required)
I say, chaps, what’s up with this? While most of Europe is in an automotive meltdown, looks like somebody forgot to tell British car buyers that there’s a financial crisis going on. Ward’s reports that for the last three months, sales of new vehicles in the United Kingdom have gone up. Not by much, mind you, less than one percent, but that’s still much better than anyone expected. Maybe the same thing is happening in England that we see happening in the United States, the auto industry is leading the economy out of recession.

FORMULA ONE’S THREE-RING CIRCUS
Anyone who follows Formula One knows that it is a tangled web of political machinations, insider intrigue, Machiavellian plots, and mountains of money. And now the private owner that holds the majority of Formula One stock, CVC Capital Partners, wants to issue an IPO to raise $2 billion. That IPO represents 20 percent of all holdings in Formula One, which suggests the entire F1 circus is worth at least $10 billion. By comparison, the 32 teams in the National Football League in the U.S. are estimated to be worth about $32 billion.

HYBRID BUYERS SHUN SECOND HELPING
The best brands in the automotive business manage to keep about two-thirds of their customers, that is, about two out of three people buy another vehicle from the same brand the next time they need a new one.  But not with hybrids.  R.L. Polk says loyalty to gas-electric vehicles in the U.S. was just 35 percent last year.  That figure drops to 25 percent if the Toyota Prius is pulled out of the equation.  Hybrid buyers just aren’t coming back for seconds, but they are staying loyal to their brands.  For instance, 60 percent of Toyota hybrid owners purchase another Toyota.  Interestingly though, buyers in eco-conscious cities like Los Angeles, San Diego and Portland, Oregon are no more loyal to hybrids than drivers in other parts of the country.


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HD = HIGHLY DISTRACTING
If you’re not aware that Honda is behind the eight ball please extricate yourself from the boulder you’ve been trapped under for the last five years.  The company was once a technological leader but now it’s an also-ran.  Sadly, the same is true of Acura.  The luxury brand’s upcoming RLX flagship will come with HD radio, a feature other automakers have offered for years.  Among other things it makes AM stations sound as good as or better than FM, but the trouble is it can drift in and out of HD.  You’ll be driving along listening to crystal-clear audio and then out of the blue it’ll start sounding like something from the 1930s. In some cars, Volvos come to mind, HD seems to work fine, but in just about everything else I find HD to be very annoying.

WIRES: OPTIONAL
Chrysler announced it will be the first automaker to offer in-vehicle wireless charging for smartphones or MP3 players. The feature will be offered through Mopar and will be first available on the new Dodge Dart. All you have to do is place your phone in a bin located just below the center stack and once the car is turned on it will start charging automatically. The wireless charger works with iPhones, Blackberries and Droid-based phones. It costs $200 plus installation and also includes a special case for the phone which is needed for it to charge.

DRAGON RISING
It was bound to happen sooner or later. Bloomberg reports that BMW just sold more cars in China than the U.S. for the first time. In the first quarter, the company sold just over 80,000 vehicles in China which is over 4,000 more than it sold in the U.S. The strong growth in China helped BMW post record global sales last year but as we reported recently the luxury market in China is slowing down which is forcing luxury makers to slash prices.

A quick correction here. Yesterday I identified Jessica LaFond as model responsible for the Ram trucks. I was wrong. She’s model responsible for Chrysler’s minivans. And model responsible is Chrysler’s internal way of saying she’s the chief engineer.

Back in the late 1950s auto designer and racing enthusiast Karl Abarth converted a Fiat 500 into a racecar that went on to break six international records in its first year of production. Eventually the Abarth brand became part of the Italian automaker but by the early part of this century it was rarely used. However five years ago Fiat resurrected Abarth in Europe and now the performance version of the cinquecento is heading to the U.S.

While the 500 Abarth doesn’t look much different than the base model, it’s what’s underneath the sheet metal that sets it apart.

Even though it was built for the track fuel economy wasn’t sacrificed. Its combined rating is 31 MPG.

The interior also features race-inspired cues including performance seats in the front, a steering wheel with a flat bottom and a turbo-boost gauge.

The 500 Abarth is a fun car to drive and has a cool, throaty-sounding exhaust. But even Fiat admits it won’t sell a whole lot of them. So why bother adding a performance car to its line-up?

Pricing for the 500 Abarth starts at $22,700 but that also includes a day at the track.

A day at the track? What a great idea! I hope other manufacturers jump onto that idea.

Say, don’t forget to join us Thursday night for Autoline After Hours, the irreverent show that takes you behind the scenes. We’ll have David Rand joining us. He was the executive director of advanced design at General Motors and just got back from a stint in China where he worked with the Chang’an car company. Join me and that outrageous Autoextremist, Peter De Lorenzo for the best insider information in the business.

And that wraps up today’s report. Thanks for watching, we’ll see you tomorrow.

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19 Comments to “Episode 865 – British Car Sales Beat the Odds, F1 Circus, Hybrid Buyers Shun Second Helpings”

  1. Brett Says:

    That little Abarth looks like more fun than an Airstream full of cheerleaders. If it’s reliable, they just might sell well and pull some city folks to the brand.

  2. G.A.Branigan Says:

    It’s a no brainer……I’ll take the airstream full of cheerleaders…….duh.

  3. HtG Says:

    Here are some notes from my visit to the NY Autoshow over the weekend. At the bottom, there’s a link to some photos I took; the texts are my own, and the pics were massaged in Picasa software.

    -The Nissan NYC Taxi is perfectly fine looking in the flesh. It doesn’t photograph well, but to my eye it’s going to look fine in Manhattan.
    -Guess where the biggest crowds were massed. Around the Viper and a Bugatti Veyron painted black and white.
    -Ford had a neat way to get people to spend lots on time their exhibit. They had a racing simulator fitted with hydraulic pistons which threw the driver and passengers around. The kids wait on line while mom and dad hang around. There was also a guy with a microphone being videod and projected up onto the back wall.
    -The Fiat 500 exhibit had an installation that looked like an atelier, with display cases for luggage and who knows what. I was too distracted by the looker at the desk to notice much else. But I did witness a guy walk up to a suitcase and show actual pleasure at the sight. Please explain this to me, car gods.
    -Plenty of opportunities to have your picture taken next to some revealingly dressed model. Dads standing with their kids. Yes, there were cringes.
    -Once again, I am too fat to sit in the Scion FRS. The side bolsters are tight.
    -I got to sit in the Lincoln MKZ for a moment, as it somehow became unlocked. Very interesting feeling of sitting on the car rather than inside it. The dash and center console flow into each other with a hard edge around you.
    -The seating position in the new 911 has you semi-reclined such that when the car brakes hard your heinee, thighs, and feet will take the compression more the seatbelts. Pretty trick.
    -Malibu. The buttons for controlling the windows feel awesome. The rear seating position was very comfortable, and was slightly higher than the forward occupants.
    -The ATS product specialist explained to me that the checkered flag decals inside the doors were not going to make into production, as at the Detroit show designers got feedback from patrons that these stickers weren’t favored.
    -I watched a guy try to squeeze into the Kia Rio. It looked like someone trying to stuff a balloon into a shoebox. He told he was 6’6”.
    -Many carmakers had cars vandalized on Saturday morning by some creep that sliced up seats with a box cutter. One maker had 4 cars get hit.
    -I looked at the Acura soon to arrive models, and I just don’t get it.
    -If you’re going to go the show, consider eating beforehand or bringing in something to eat and drink, because the food prices are a monopolist’s fantasy, and terrible quality. I mean it. And I can only imagine how bad the carmakers are getting squeezed.

    Here’s the link to the photos…http://flic.kr/s/aHsjzqqvhB

    (you can take the link down John, if you wish)

  4. Brett Says:

    #2

    The Abarth is a lot less expensive, trust me on that. :)

  5. C-Tech Says:

    @ #3
    Thanks HtG for the report and another perspective on the auto show.
    @ #2 and #1
    What a choice? Can I take 1 from column A and 1 from column B?

  6. G.A.Branigan Says:

    @ #4:Your right……but no where near as fun as the cheerleaders ;}>

  7. C-Tech Says:

    I’ve seen the Abarth in person and it does look pretty cool. The track day is an excellant bonus at that price.

  8. C-Tech Says:

    I don’t think I am going pay the equivalent of a car payment for a gadget to recharge my phone when I can get the same function for $10.99

  9. C-Tech Says:

    I think there will be more than enough buyers of F1 shares just to frame the certificate and hang it on the wall.

  10. C-Tech Says:

    Could hybrid buyers have outgrown their hybrids when then choose their next cars?

  11. dcars Says:

    The Abarth is a Halo model for the brand? Where’s all the other models of the brand? Aside from the silliness of Fiat Management, it seams like a pretty nice car.

  12. Jon M. Says:

    I hate to say it Jon, but you’re right, Honda is behind. What in the world happened? What wrong person(s) did they bring in? For example, the Crosstour doesn’t match the Venza when comparably equipped. There’s no other way to open the tailgate other than getting out and manually lifting it, no keyless ignition to start the car with (a demerit for the price point), and an outdated for times 5 speed auto. While they are updating some of the vehicles, they aren’t as on top of things as they once were. I know I’ve been trying to tell them such things with every survey they send. But is anyone reading them?

  13. motorman Says:

    It costs $200 plus installation and also includes a special case for the phone which is needed for it to charge. Does this mean if you change phone brands do you need to buy a new case ??

  14. G.A.Branigan Says:

    What’s wrong with using the car charger that came with the phone? Mine was included with my phone so no extra expense there,and it works great.Maybe it’s designed for those people that just absolutely have to have the latest and greatest gizmo in their vehicles.”Build a expensive dumbass device and some people will come”…..

  15. HtG Says:

    This Mopar inductive charger is one more indication of the importance of accommodating the smartphone lifestyles of today. It seems to me that for someone getting in and out of the car, just laying it down would be ‘handy.’

    I also should say that at GM’s area at the NY show, they had a product specialist on the floor dedicated to talking to patrons about MyLink. There was also a colorful display wall describing the system.

  16. Chuck Grenci Says:

    Referencing yesterday’s story about large cars increasing in sales and today’s story of the Abarth 500; perhaps the American buying public is more resilient to the rise of gasoline prices than most of the pontiff’s decrees. Without the ‘cool’ factor, which I don’t think the “500″ has yet (and not sure if it will ever get), a performance model is probably only going to be accepted lukewarm at best. As dcars says, above, “…..Halo car for the brand?”; until the stable has more than one vehicle, there really isn’t a true brand yet (in the U.S.). And when other models do make it here, is it likely, that the halo will be from the smallest offering, (don’t know, but I don’t think so) because, in a nutshell (and generally speaking) we want bigger (big) here in America.

  17. aliisdad Says:

    #14, exactly my thoughts!!

    #16, that’s true about how can you have a “halo” vehicle when you only offer one car??
    I sure hope we get more FIATS here in the US…Oh, and I still miss Ms. Suave..She just seemed so excited about the brand which I think it needed…Maybe she refused to get a “scorpion” tatoo?!??!?

  18. C-Tech Says:

    When Honda decided to enter the corporate jet business, I think that is where they “Jumped the Shark”.

  19. Brett Says:

    I never got the impression that John said that the *sales* in the large car segment were heating up. I thought he said that the *competition* in the large car segment was heating up because of a flurry of new design introductions by the manufacturers.

    If gasoline prices persist at the $4/gallon level, it’ll be interesting to see if the investment in that segment pays off for them.