Episode 915 – Ward’s Optimistic Despite Falling SAAR, Lexus LFA Almost Gone, Train of Volvos

June 20th, 2012 at 11:54am

Runtime: 8:19

Ward’s reports despite a falling SAAR last month it is sticking with its sales forecast for the year of 14.5 million units, citing growing employment and consumer confidence. Toyota says their Lexus brand has nine, as in one more than eight, LFAs remaining. Sales of the $375,000 vehicle have almost reached the end of the planned 500 car production run. In autonomous car news, Europe’s SARTRE program to enable follow the leader style road trains on highways recently completed its first public road test. The test featured three Volvo cars following a Volvo truck on a Spanish highway at 53 mph. All that and more, plus You said It!

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Hello and welcome to Autoline Daily. I’m John McElroy and here’s the news.

SALES DOWN, NOT OUT
As we pointed out some weeks back, the annualized sales rate for new cars in the U.S. market slowed substantially in May. The SAAR dropped from the 14.5 million rate it had been running all year down to only 13.7 million. But not to worry, say the number crunchers at WardsAuto. They say as long as employment and consumer confidence grow, so will car sales and they’re sticking to their forecast of 14.5 million new vehicle sales for the year. In fact, Ward’s says evidence is growing of pent-up demand that could push the SAAR to 16 million units, but not until 2018.

LEXUS LFA NEARLY SOLDOUT
If you want to buy the fastest super car ever to come out of Japan, you better you’re your wallet and run to the nearest Lexus store. Toyota says it only has 9 LFA’s left to sell in the world, out of a production run of 500 cars. The 510 horsepower, V-10, carbon fiber, super-car starts at $375,000. The LFA started production in late 2010.

FOLLOW THE LEADER
Earlier in the year we reported about a project in Europe called SARTRE, or Safe Road Trains for the Environment, which envisions platoons of cars autonomously following a lead truck down the freeway. The vehicles that follow use radar and cameras to monitor the lead vehicle and a wireless internet connection allows them to mimic the lead truck’s movements. The first public road test was just completed in Spain using a Volvo truck as the lead vehicle. It was followed by another truck and three Volvo cars. The test covered 200 kilometers or 124 miles. The vehicles were spaced 6 meters apart or about 20 feet while traveling about 85km/h or about 53 MPH.

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TWIZY DROPS 2ND SHIFT
In another sign electric vehicles aren’t ready for primetime, Renault just cancelled the second shift of production for its Twizy model even though it was launched just four months ago. According to WardsAuto, Renault says the extra shift was used to meet advanced orders but analysts say the limited run didn’t justify training the workers. The company says it can now build 20,000 Twizy’s annually.

A BIG CAR FOR THE EVERYMAN
European buyers looking for a big inexpensive car don’t have the same variety to choose from compared to American buyers, even with the stoppage of Crown Vic production. Czech automaker Skoda released photos of its large affordable car, the Rapid, which will be available next month. The car focuses on being spacious, economical, and durable. Skoda’s sister company under the VW umbrella, SEAT, will also get a version of the Rapid called the Toledo. Both vehicles will be built in the Czech Republic, making the Toledo the first SEAT branded car built there.

Coming up next, it’s time for You Said It!

Jon M. says, “It just cracks me up when I hear modern diesel engines referred to as clean diesels. Don’t get me wrong, I get it. I understand why they’re referred to as clean and I don’t disagree with it or object to it. It just sounds like such an oxymoron, kind of like putting an extra filter on a cigarette and calling it healthy.”

Jon, diesel engines in the U.S. are now as clean as gasoline engines. But the companies promoting diesels know that most of the public doesn’t know that yet. And so they’re calling them clean diesels to turn public perception around.

HtG saw my editorial on the need for what I call Formula None, a new racing series with no rules whatsoever. But he has a simpler solution. “I’d just like to see racing become interesting again. Lessen the dependence on aerodynamic grip so that cars can race close to each other, and take away engine displacement and wide slick tires so the driver can just light it up.”

HtG, I like your idea a lot, but for me it’s just a stepping stone to Formula None.

Wim van Acker says, “You mentioned the BMW i8 is priced in Germany at EUR 103,000 (= $125,000). And that it will compete against the Fisker Karma priced at $103,000. That seems like an easy win for Fisker, being $22,000 cheaper. IF … the $103,000 Fisker Karma price you mentioned is the price in Germany. John, is it? Or is the $103,000 Fisker price the price in the U.S.?”

Wim, the price of $103,000 that we cited for the Fisker Karma is the mid-model version in the U.S. In Germany the same mid-model version costs €111,300, or about $141,000 at current exchange rates. Thanks for the question because it forced me to look all this up.

Lex saw our report on the new Acura ILX and wonders, “Why would anyone pay $25K+ for a Acura ILX when you can get a Honda Accord EX or EXL with premium options at that price?”

Lex, you are too rational. It’s all about the status and prestige of owning a car with a more premium brand name.

C-Tech wants to know, “Will Renault ultimately need to try to re-enter the North American market to increase sales?”

Well, technically C-Tech, Renault is already selling cars in North America. It sells a number of passenger cars and light commercial vehicles in Mexico. By the way, so do Peugeot, Fiat and Alfa Romeo. But to your question, I think Nissan would not want to see its partner competing for sales in the U.S. or Canadian markets, unless it only offered models in segments where they don’t compete. And since Nissan offers a very wide line-up, I don’t know where Renault would fit in. But next time we get the chance we’ll put that question to Carlos Ghosn, since he’s the CEO of both companies.

Say don’t forget to join us for Autoline After Hours tomorrow starting at 6 pm eastern time. Actually, I should say join us for our party as we celebrate the 15th anniversary of Autoline. That’s right, it’s going to be an on-line party, which I think will be an internet first, at least in the automotive media business. We’re going to have a great collection of guests coming on the show, and of course the Autoextremist Peter DeLorenzo will be here with some of the best insider talk of what’s happening in the world of automobiles.

But that wraps up today’s show, thanks for watching.

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27 Comments to “Episode 915 – Ward’s Optimistic Despite Falling SAAR, Lexus LFA Almost Gone, Train of Volvos”

  1. HtG Says:

    Engadget got a ride with Cadillac demonstrating CUE on XTS in NYC. Scroll down for the video(~5min).

    http://www.engadget.com/2012/06/19/cadillac-cue-xts-hands-on/

  2. Kit Gerhart Says:

    Wouldn’t those road trains be more efficient if they just used hitches and tow bars, and had the lead truck tow the Volvos without using their engines?

  3. mike Says:

    John -
    On CNBC Steve Liesman said that job growth is slowing in the US and maybe the Unemployment Rate will increase, as well. If more people are looking for a job, don’t you think the SAAR will drop further no matter how much pent up demand there is? The 14.5 million SAAR seems a little high for 2012.

  4. HtG Says:

    Let’s see what a $800 Billion kick in the Euros will do the SAAR in the US.

  5. C-Tech Says:

    @ #2
    Kit, I see the road train concept as allowing drivers to electronically link their cars together for an autonomous commute to and from city to surburbs. This version probably requires minimal investment in infrastructure and changes to cars. The mechanical linkage would be more fuel efficient, but you could not easily join or drop out at your entry / exit.

  6. C-Tech Says:

    Does the name Toledo mean something more luxurious in Europe than the U.S.?

  7. C-Tech Says:

    Is it just me, or does the Twizy look a lot like the GEM golf carts sold here?

  8. Lex Says:

    How many vehicles does VW sell under the Skoda and SEAT brands? Wouldn’t VW be better off phasing out these two regional brands and replacing them with VW models?

  9. Tony Gray Says:

    This whole autonomous car think makes me ill.

  10. Tony Gray Says:

    thing…not think. Fat fingers.

  11. Kit Gerhart Says:

    #5,
    I was being facetious with my comment #2. The mechanical connection would be hard to utilize, and probably wouldn’t work with “trains” of more than a few cars. My real thought was, that people who don’t want to drive should ride buses, or trains with steel rails where they are available.

  12. C-Tech Says:

    I’m sorry Kit, I get your sense of humor now. The car train concept is for those who can afford the conveinence of a “budget” chaffeur on their daily commute.

  13. Kit Gerhart Says:

    #8,
    I found a site saying Skoda sold 454,700 cars during the first half of 2011. That’s quite a few.

    VW bought Skoda after “things changed” in Eastern Earope in the early 90′s. They probably bought to get an early foothold of the emerging market in the former Soviet bloc, but they now use Skoda as kind of a “value brand” for VW in the UK and elsewhere, including China.

    From what I’ve heard, Spanish Seat has done less well for VW, and there have been rumors that they might drop the brand.

  14. W L Simpson Says:

    Re; LFA Evidently if one has money to burn, it
    doesn’t matter what one buys , just so it costs a ridiculous amount.

  15. Jon M. Says:

    It will be interesting to see if the SAAR increases for August and/or September. How much pent-up demand is lingering in lieu of new 2013 models on the horizon? Perhaps that may explain why Wards Auto is sticking with their numbers. I know I’m holding out on a second purchase for just that reason.

  16. Kit Gerhart Says:

    I’ve heard that for the billionairre who wants a “supercar” to use as a daily driver, the LFA is the best one out there.

  17. Bob in Atlanta Says:

    A possible name for the autonomous cars: The Pied Piper.
    NASCAR has already perfected the concept at the high-speed tracks like Talladega… almost.

  18. cwolf Says:

    I bet semi drivers would like to take part in one of these “trains.” For them,a good way to get in a cat-nap. I can invission a long line of hook-ups to muddy up things,but at lease it will keep them in one lane of traffic.

  19. cwolf Says:

    A friend’s 2010 Malibu wiper motor quit working during a down pour two days ago and took it to the dealership across the street from our plant for service. We thought $125 for the part seemed a reasonable guess. Boy,were we wrong! The thing is a unit and cost $325. The only thing I could think of to cosole him was by saying he should be glad his car wasn’t an Audi. Things ain’t what they used to be; that’s for sure.

  20. C-Tech Says:

    Just a thought on autonomous cars, would the system need to check if your insurance and driver’s license were up to date before allowing your car to start?

  21. C-Tech Says:

    @ #19 Hey CWOLF is that $325 with the GM employee discount?

  22. cwolf Says:

    It would almost be too good to be true if the SAAR could maintain above 14 million,but let us not become blinded by the good numbers we been having. Hiring will become flat because efficiecy rose a bit over 1% and sales and profits may decline slightly. Despite pent up demand,some buyers will remain cautious. A SAAR of 13.8-13.9 is my prediction. I also foresee Euro makers in the US to increase their incentives to buyers of BMW and MB,for the most part. My guess is that US auto makers will have to equally respond in kind,thus breaking their commmitment of 2% incentives. This jockey-of-possition will make a few more buyers wait. Yah,a good time to buy a car,but I think the projections are a little optomistic.

  23. Chuck Grenci Says:

    Just checked Rockauto.com for wiper motor (sold separately) and wiper module (sold separately); both A/C Delco units ($53 and $58, respectively). Shouldn’t that have been warranted in any event (only two year old vehicle).

  24. cwolf Says:

    C-Tech: I called my friend with the Malibu. His total costs were $338 and I don’t know what kind of discount he was given,whether GM or supplier. But,know what? Years ago,the more a GM employee spent on options the more he saved. But over the past year Ive heard many comment that their discounts off the price of their car was a disappointment. I don’t buy GM,so I don’t know. I have become most familiar with ford products over my many years and my father-in-laws Z-plan has been hard to beat. I drive a ton of miles every year and can honestly state I’ve never had one singe problem with any of my purchases. My main expenditures are on tires, oil changes and 2-3 rotor changes per car life.

  25. cwolf Says:

    Let me get back to you after I share the info you provided. Thanks for the info Chuck. Being the group that we are sure has its advantages,eh?

  26. kevin m Says:

    IN CASE I MISS THE PARTY OR DIDN’T WRITE INTO AUTOLINE AFTER HOURS IN TIME . HAPPY 15TH ANNIVERSARY AUTOLINE DETROIT . THANK YOU FOR GIVING US GREAT PROGRAMING AND INFO OVER THE YEARS . I REALY DO APPRECIATE THAT . AND JOHN THANKS FOR STICKING AROUND ALL THESE YEARS AND MAKING IT WORK . SOMETIMES WE NEED SOMEONE TO JUST TO TELL IT LIKE IT IS . CONGRATS AGAIN HOPE YOU GO FOR 20 YEARS.

  27. Kit Gerhart Says:

    My GM discount in the 80′s to early 90′s got me 15% off on the base price, and 18% off on options, as I remember. Later on, that changed, the percentage being the same for the total sticker, but the percentage was a little higher for the upper trim levels.