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Episode 885 – Cadillac ATS Priced to Sell, High-Value Hybrids, Toyota’s Expensive RAV4 EV

May 8th, 2012 at 12:20pm

Runtime: 8:13

Cadillac announced pricing for its new BMW 3 Series competitor, the ATS.  An Indian company just introduced a new low-cost hybrid system that can be paired with all kinds of different batteries and engines.  The electrified version of Toyota’s RAV4 seems pricier than it should.  All that and more, plus John McElroy chooses a winner in the Race to Replace GM CEO Dan Akerson.

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Welcome to Autoline Daily for May 8th. I’m John McElroy, and here’s what’s going on out there.

PRICED TO SELL
Cadillac announced pricing for its new BMW 3 Series competitor, the ATS. It starts at $33,990 when equipped with the 2.5-liter engine and six-speed transmission. With the 2.0-liter turbocharged four-cylinder the price jumps to $35,795 and with the 3.6-liter V-6 it costs $42,090. All prices include destination charges, and bravo to Cadillac for including those charges, which other automakers omit to make their prices look better.

HIGH-VALUE HYBRIDS (subscription required)
Indian company KPIT Cummins just introduced a low-cost hybrid system it calls Revolo. According to Ward’s, it’s similar to GM’s eAssist technology but it can be used with several different types of batteries and with gasoline, diesel or bio-fuel engines that range from 0.8- to 3.0-liters. Fuel economy is improved by 30 percent. The company is making Revolo available both to OEMs and the aftermarket. Pricing for the system will be between $1,200 and $2,800 in the aftermarket.

NOT PRICED TO SELL
And now for some Toyota news. The company just released pricing information on its all-electric RAV4. This amped-up crossover will sticker for nearly $50,000 when it goes on sale in California later this year. That’s twice as much as a conventional, gasoline-powered version. The company plans to deliver 2,600 RAV4 EVs over the next three years. That works out to a modest annual sales target of about 900 units a year. Hell, they probably sell more Camrys than that in an hour! But how come this thing costs so much? The Nissan Leaf and the Focus Electric are considerably less expensive. Even the Chevy Volt, which comes with an internal-combustion drivetrain costs about $10,000 less. Maybe it has to do with range. Toyota claims the RAV4 EV will go 100 miles on a charge, considerably farther than the Focus or Leaf EPA rating. Even so, somehow I get the feeling Toyota really doesn’t have its heart in this project.

SIGH-ON AYE-CUE (subscription required)
In related news, Scion’s diminutive iQ city car is rolling right along. According to WardsAuto.com, the youth-oriented brand has sold more than 3,700 copies since it hit the market in the Western U.S. last October. Its sales targets are conservative at about 1,000 units per month. To help introduce the hatchback to more drivers, the company is looking into car-sharing services. So far they’ve met with Zipcar, probably the best known of these firms, but nothing is official yet. When the time is right the brand wants to go whole-hog by really committing to a car-sharing service. You can bet we’ll keep you posted . . .

Coming up next, it’s time to name names in the race to replace GM’s Dan Akerson.


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RACE TO REPLACE AKERSON
For the last week we’ve been showing you who the candidates are to replace GM CEO Dan Akerson when he retires, presumably in a couple of years. And now it’s time to forecast who might get the job. It’s not as easy to figure out, because the situation at GM is still very much in a state of flux. But here goes.

Tim Lee would seem to have it all – tremendous operations experience and extensive overseas experience. But people who come up on the manufacturing side of the business never make it to the top spot at General Motors. Moreover, at 60 years old, Tim Lee would probably be about 62 or 63 if he got the top job, and with a corporate retirement age of 65, this would seem to take him out of the running.

Dan Ammann would be an obvious choice since he’s got such a strong financial background. But Ammann has the opposite problem of Tim Lee. He is only 40 years old. If the board were to put him in as CEO he would be in that position for over 20 years, and it’s unlikely any board would leave an individual in that position that long. Dan Ammann’s time may come, but for now the board will look for an older candidate.

That brings us to Mark Reuss, who would be my choice, because I believe it’s very important that a car company be run by someone who truly knows cars. But Dan Akerson was recently quoted by the Wall Street Journal as saying it was the car guys who drove the company off a cliff. I think he’s wrong, it was the finance people who did that. But Akerson’s view probably reflects the board’s thinking. So even though Mark Reuss runs the biggest and most profitable part of the company, my guess is he will not get the job.

The executive the board is most comfortable with is Steve Girsky. A brilliant finance guy, he speaks their language. Better still, he’s an outsider with no ties to the old GM and its bunker mentality. Even the UAW likes him! But Girsky hitched his horse to keeping Opel, and Opel is a basket case right now. In fact, it’s likely to be a basket case for years to come since any solution will be stymied by European politicians who don’t want to hear anything about lay offs and plant closing. Boards like to nominate CEOs with a string of recent successes under their belts. So, in my read of the situation, Opel will take Girsky out of the running.

And that brings us to Mary Barra. A very capable executive who has proved herself in a variety of assignments in different parts of the company, she is in the perfect position to become the next CEO at General Motors. Mary is known as someone who can get the job done. If Akerson and board would like to leave themselves a legacy, naming the first women executive in the automotive industry would assure them a footnote in the history books. And that’s why I believe that Mary Barra will win the race to replace Dan Akerson.

Before we go, I want to remind you that you can get Autoline Daily e-mailed directly to you everyday, along with reminders of our other shows. Just go to our website, Autoline.tv, and scroll down the left-hand column to where it says “Daily Email” to sign up.

And that wraps up today’s show, thanks for watching we will see you tomorrow.

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28 Comments to “Episode 885 – Cadillac ATS Priced to Sell, High-Value Hybrids, Toyota’s Expensive RAV4 EV”

  1. Chuck Grenci Says:

    Entry level ATS at $33,990; at a dollar a pound (announced weight at sub 3400 lbs), sounds like a pretty good deal. Coincidence, maybe, but still a pretty nice correlation.

  2. pedro fernandez Says:

    One car to sell, another one to sit in dealer’s lots, unsold so Toyota can say: “See, we build them and no one wants them” what a joke, trying to ram down both oem’s and consumers what the govt thinks they should buy.

  3. dcars Says:

    Interesting pick for GM’s next CEO, but I know one think, the quicker Ackerson leaves the better.

  4. pedro fernandez Says:

    Today I met a twenty something guy that went to look at the CTS and ended up with a Sonata, I asked: Huh? and he said he was not impressed with the CTS interior quality or materials and would rather take some of that money and do some traveling, I said good for you, that is something you will cherish and enjoy as long a you live, Caddy, not so much!

  5. earl Says:

    Methinks the people at BMW will not be loosing any sleep over Cadillac’s ATS. I’m impressed that GM is making available those new 4 cylinder engines that have been a long time coming. What the ATS needs is that new 8 speed transmission that’s in the works at GM. Hopefully they’ll be installed by fall of 2013 not 2015 as rumoured.

  6. HtG Says:

    Wha, WHAT!? Ackerson blamed the car guys? I’ve been watching you for years, John, so I’m going to believe your reporting. What were Ackerson’s arguments? Leave it to a financier to take credit and shirk blame. Dick

    I am now going to go off, half cocked.

  7. pedro fernandez Says:

    #6 I agree, Ackerson is either crazy or is into early dementia for saying that.

  8. cwolf Says:

    If Ackerson,if you think he reflects the boards feelings,blames the car guys for GM’s past problems,what makes you think he and the board will be willing to accept a women as CEO?

  9. cwolf Says:

    By the way; yesterday,when commenting,I referred to the Japanese as “Japs”. My intent was just to shorten any spelling and not to be offensive. After rereading my comment I realized my error.Please accept my apologies.

  10. pedro fernandez Says:

    you are excused cwolf San.

  11. cwolf Says:

    Did ya read that the first Dart came off the assembly line today? Maybe it won’t be long before we start to hear from some customer reviews.

    Is it me or my imagination? It seems the time between the first mention of the Dart and its first car off the line was rather short,while the hype from GM and Ford seems to go on and on and on as if they were the energizer bunny . And when their cars arrive they are at times not what was first introduced. For instance,Ford intro’d the C-max,but it comes only electrified. I even believe a sliding door was first mentioned,but only for Europe.

  12. cwolf Says:

    pedro: I’ve seen several Yaris on the road and noticed they were more peppy than what I imagined!

  13. Josu Says:

    John if VW, based in your criteria is the biggest car maker in the world, why everybody insist Smsung is the biggest phone maker in the world, anyway Apple last quater only with iPhones earned mor than $6 billion (more than 10 billion all combined), when Samsung all combined earned 5,1 billion. By the way have you notice that Apple only with the iPhone earns more than your beloved VW with all this luxurious cars it sells by boatloads worldwide? and all Apple earns more in a quarter than all German automakers combined? Really interesting.

  14. Kit Gerhart Says:

    The Rav4 EV, if it actually has 100 mile range in normal driving, would have a battery about 4 times as big as the one in a Volt or Leaf. No wonder it’s expensive.

  15. pedro fernandez Says:

    12 Kit you seem to forget ALL companies exaggerate the range of their EV’s Remember the Volt’s 50 mile range?

  16. Kit Gerhart Says:

    Red bull makes a lot of money selling cans of stuff for 2 dollars that cost 5 cents to make. It doesn’t work that way with car companies.

  17. Kit Gerhart Says:

    #13,
    Yeah, they advertise the range you can get under very good conditions, not “average” conditions. As I remember, CR got 35 miles out of a Volt in mixed driving, but 55 or so at a steady 55 or so mph. If the electric Rav4 goes 50 miles under the conditions under which a Volt goes 50 miles, it would need twice the battery, given the size and drag of the vehicles.

    Whatever the reality, it will be a very low volume vehicle.

  18. pedro fernandez Says:

    let’s face it, none of these oem’s are interested in selling EV’s They’re being pushed down their throats by regulations and outside pressures, BTW I read on TTAC that some Honda Accord will be coming equipped with CVT’s, Honda’s plunge into the abyss of automotive incompetence continues.

  19. pedro fernandez Says:

    #14 ditto for soft drinks. specially the ones you get from dispensers in fast food joints.

  20. HtG Says:

    Red Bull is genius. According to their website, the caffeine and sugar ingredients are the only active elements. Two bucks a can and an F1 team. It’s genius.

  21. Kate McLeod Says:

    Akerson thinks it was the car guys who drove GM off a cliff? He doesn’t know his GM history. Could GM put a woman in that job? I don’t think so. I think Mark or Girsky.

  22. HtG Says:

    It’s true, DeLorenzo confirms Ackerson’s remark.

    What planet am I living on?

  23. HtG Says:

    Here’s the quote from Ackerson’s interview with WSJ’s Alan Murray;

    MR. MURRAY: She[Mary Barra] must be the first car gal, right? I mean it’s sort of a job that’s infested with testosterone.

    MR. AKERSON: Yeah, there’s a lot of that in Detroit. I would say that Mary is as good at seeing through the bureaucracy and the process and what’s important and what’s not. She works incredibly well with people.

    MR. MURRAY: You got some criticism for that appointment.

    MR. AKERSON: Yeah. I was surprised, quite frankly. I mean, because I wasn’t a car guy. But I almost think that being a car guy right now isn’t the best thing, because the car guys drove it over the edge.

    So in the context of an interview about women at GM, it’s possible Ackerson only meant that it was the guys that messed up the company. And that would mean Ackerson doesn’t really know what the term ‘car guy’ means. HS

    http://online.wsj.com/article/SB10001424052702304743704577380032730814466.html?ru=yahoo&mod=yahoo_hs

  24. vrmchris Says:

    hello to all.

    cadillac ats. very attractive pricing. no, bmw would not lose any sleep over the ats. for now. if they put in the same 2 litre turbo diesel that is offered in the cruze, then bmw will have cause to worry.

    hybrid system by kpit cummins. if what is claimed is true and at the prices suggested, that will make any oem say “hmmmmmmmmmmm”. of course it all depends on how well the system can be integrated by an oem.

    rav4 ev. at 50.000 dollars? low volumes, and tesla involved with the battery not a surprise from this vantage point. and it probably weighs over 2 metric tons. at this point even i would say to toyota and tesla, “no thank you”.

    ceo to replace mr. dan ackerson. my choice would be either mark reuss or mary barra. both have the experience needed to be ceo. and they can stay in the seat for 10-12 years. no mr. ackerson. it was the guys coming from gm’s treasury department who did not at least like automobiles that ruined gm. the last car guy to be ceo was robert stempel who lasted only 18 months. and ed whitacre did the company no favors when everyone he named to the board has neither industrial or manufacturing experience. that imho is critical to the success of any automotive company. finance cannot do it alone. number crunching is only good up to a point.

    apple computer. the reasons why apple earns outsized profit are the following. (1) marketing. apple is better at it than any other company on planet earth. (2) their product is made at such a low price that they should make a decent profit (2a) profit margin. car companies do not have outsized margins of profit like apple does.

    cts vs. sonata. i get the sense that the young man in question had to justify his purchase. the interior on the cts is of higher grade than the sonata. also they do not compete in the same class. for what it is the sonata is a decent choice for a mainstream 4 door car. not perfect, decent for the average consumer.

    mr. mcelroy. as always thank you for this forum to get daily automotive news and for being able to comment.

    regards,
    vrmchris

  25. T. Bejma Says:

    vmchris – +1 on each of your points, nice job.

  26. Kit Gerhart Says:

    CTS vs Sonata:

    This is a prime example of diminishing returns with increased price. Expensive cars, whether from BMW, Mercedes, Lexus, or Cadillac, are not very good buys.

    When the current CTS came on the market, I think in 2008, I drove one to see what it was like. My overall impression was that it was a nice car, but $15K nicer than the Malibu Maxx I had at the time? No way. The CTS was quieter, a little quicker, and handled better, but, in some ways, my top trim level Malibu was better equipped, plus the Malibu had the advantage of being a hatchback. I get the same impression when driving a 3 Series, except that the BMW is more fun, especially with a manual transmission. Still, it’s easy to get the price of a 3 Series, or a CTS up near $40K. To me, these cars aren’t worth almost twice as much as a Camry, Accord, Malibu, Sonata, or Fusion. Not even close.

  27. Brett Says:

    #26
    Kit,

    You nicely describe why I bought a Crown Victoria LX Sport in 2003 instead of a 2003 Mercury Marauder. My loaded Vic was about $22k and the Marauder was more like $34k out the door. For what? The 32-v DOHC engine, Premium gasoline requirement, whitefaced gauges, and some fancier wheels?

    I called the local Mercury dealership just before I pulled the trigger on the Vic and told ‘em straight out, “You’ve got nearly a dozen Marauders on the lot, unsold and I am going to the dealership tomorrow to buy an LX Sport for $22k. If you can put me in a Marauder for $25-26k, I’ll be over tomorrow to pick one up.” They laughed at me. I told them they were welcome to eat the sons-a-bitches. I’m sure they did, eventually.

    The Crown Vic was terrific, too, BTW. :)

  28. thunder938 Says:

    To be up front I have a CTS 3.6 Wagon..LOVE the car. I do like the new Caddy and at 35 grand ish that MAYBE a great deal. A loaded anything anymore is 30 grand plus. I looked at a loaded Focus that was 29 grand. A 2.0T loaded Sonata is over 31 and you can spend 40 plus on a Taurus. Are car prices out of control? Yes, but the ATS looks to be a ok deal. I will have to see one for real