Episode 955 – Free-Trade Warning, Zipcar Expanding Services, ‘Round-the-Clock Building
August 22nd, 2012 at 12:01pm
Runtime: 8:17
A recently published study indicates a free-trade agreement with Japan would be very harmful to the automotive industry in the United States. Vehicle-sharing company Zipcar just announced plans to expand its business by offering vans for rent in select markets across North America. Land Rover cannot keep up with demand for the hot-selling Evoque. All that and more, plus guest host Michelle Krebs from Edmunds.com shares some analysis on automotive advertising during the Olympic Games.
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It’s Wednesday, the 22nd of August, 2012. Welcome to another episode of Autoline Daily! Make yourself comfortable, there’s a lot going on today. I’m Michelle Krebs, Senior Analyst at Edmunds.com, bringing you the latest news from the world of cars.
GIANT SUCKING SOUND
A new study from the Center for Automotive Research, which was backed by Ford, says that allowing Japan in the Trans-Pacific Partnership free trade agreement will cost the U.S. auto industry thousands of jobs. According to the Detroit News, production in the U.S. would fall by over 65,000 units because it would be cheaper for Japanese automakers to build vehicles in Japan and export them to the U.S. since the import tariff would be eliminated. Exports from Japan to the U.S. would increase by over 100,000 units. The study says 2,600 direct auto-manufacturing jobs would be lost, and an estimated 9,000 supplier jobs and another 14,900 auto-related jobs would be eliminated. The Detroit automakers don’t want Japan in the talks, arguing the country doesn’t do enough to open its market to American vehicles.
NEXT-GEN CORVETTE ON THE WAY
General Motors is gearing up to build the next-generation Corvette. According to the Detroit News, starting in September, the company will begin retooling its Bowling Green Assembly Plant in Kentucky to build the new sports car. GM will close public tours during that time and also suspend the Corvette buyer’s tour, which gives owners the chance to watch their Corvette being built. Production will continue while the new equipment is being installed. GM hasn’t announced any info on the next-gen Corvette but it’s expected to be revealed sometime next year.
Think you could earn a fortune if you ran your own dealership? This Friday, August 24th at 8:00 p.m. Eastern Time you’ll have your chance. The RoundAbout show is holding a special Game Night where you can play Dungeons & Dealers with some of RoAb’s regulars like Jim and Bob Hall. To play, you have to register. Just visit the RoundAbout section of Autoline.tv to sign up and get all the info you’ll need to join in. Again, that’s August 24th, 8:00 p.m. Eastern at Autoline.tv.
ZIPVANS COMING YOUR WAY
Vehicle-sharing network Zipcar just announced plans to expand its business. The company is bringing its Zipvan service to North America. So far it’s been rolled out in Seattle, Los Angeles, Philadelphia and Portland, Oregon. Over the next year it will enter other metro markets across the continent. The service is extremely popular elsewhere around the world, particularly in London where van rentals account for some 10 percent of Zipcar’s UK business. In the United States, Ford E-150 cargo vans will be offered for rent by the hour or the day. This is a great service if you’re moving or need to transport bulky items.
‘ROUND-THE-CLOCK BUILDING (subscription required)
There’s no doubt about it, Jaguar Land Rover has a hit on its hands. According to WardsAuto.com, the company is struggling to keep up with demand for the new Range Rover Evoque. Its factory in Halewood, England is running ‘round the clock – three full shifts. Nearly 88,000 have been sold since the Evoque went on sale in July of last year. The luxury SUV is available in more than 170 markets across the globe.
Sit tight, because after the break we’re going to dive into some of the hottest automotive ads that came out during the Olympic Games . . .
AUTO ADVERTISING IMPACT
The London Olympics are over but the aftermath could be felt in August car sales. We’ll know for sure when industry sales are tallied on Sept. 4.
If you were watching the summer games, you no doubt saw heavy advertising by official sponsor BMW as well as General Motors with its Cadillac and Chevrolet brands. As expected, the ads generated interest in some of the models and brands. But surprisingly, the ads may have had an impact in terms of immediate sales as well.
For the first 11 sales days in August, when the Olympics were in full swing, compared with the first 11 sales days of July, Cadillac’s retail market share rose 19 percent, according to sales transaction data gathered by Edmunds.com. Some of the increase is due to the fact that Cadillac has a new model already on the market. The flagship Cadillac XTS went on sale in June. But it appears the Olympic ads had a halo effect on the entire brand. BMW’s retail market share also rose for the early days in August. We’ll have to wait until after Labor Day to see if Cadillac and BMW sales and market share continue to rise.
Big-time advertising like that on the Olympics isn’t about generating immediate sales, however. It’s about generating interest in brands and its models for future sales. And BMW and Cadillac got results on that count as well. Both luxury brands saw significant increases in shopping consideration on Edmunds.com. Shopping consideration, which measures visitors who click on the brand and its models, is an indicator of advertising effectiveness, but not necessarily a predictor of future sales.
From the opening ceremony to the closing one, the Cadillac brand posted the biggest rise in shopping consideration on Edmunds.com at 59 percent. The 2013 Cadillac ATS, the brand’s new BMW 3 Series fighter that goes on sale later this year, starred in the ads. The Cadillac ATS saw a 455-percent gain in consideration. Of course, it’s a new model so it had virtually no consideration.
Still, the “Cadillac ATS vs. The World” campaign resonated. The ads were shot in exotic locations, including the deserts of Morocco, the streets of Monaco, the hand-chiseled tunnels of China and windswept Patagonia, Chile.
Shopping consideration for BMW-branded models increased 32 percent; Mini rose 13 percent, according to Edmunds.com’s analysis. The BMW X1, a new entry-level crossover, posted the largest rise in shopping consideration on Edmunds.com – a massive 1,011 percent increase. Like the ATS, the model is new so had little consideration to start with. BMW also advertised its popular X3 crossover, which had a 26-percent rise in shopping consideration, and the 5 Series sedan, which had consideration up 11 percent. Mini saw a 19-percent gain in shopping consideration of the Mini Cooper.
Meantime, GM’s Chevrolet division, which also advertised during the games, didn’t fare as well, posting no increase in shopping consideration.
And on that note I think we’re just about done for today. Once more, I’m Michelle Krebs from Edmunds.com. Thanks for joining us; I’ll see you next time.
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Comments (38)
August 22nd, 2012 at 12:47 pm
Spending all that money to promote a car that won’t be available for months is stupid, IMO, by the time it comes out, the fervor created by the ads will be all but gone.
August 22nd, 2012 at 1:04 pm
I hope you gentlemen will take the time to read Peter DeLorenzo’s rant today. He’s gone guns a blazin’ against GM PR. Usually I don’t wave my arms in the schoolyard, but this fight’s worth watching.
August 22nd, 2012 at 1:12 pm
The reality of GM is pretty much the reality of the US, it’s a leadership issue.
August 22nd, 2012 at 1:24 pm
or a 2nd lien, HELOC, balance sheet issue, depending on your liquor
August 22nd, 2012 at 1:25 pm
crxn….’TBTF bank balance sheet issue….’
That’s better
August 22nd, 2012 at 1:52 pm
Actually the timing for GM’s release of ATS information was spot-on during the Olympics; roll-out is slated for the end of August. (Can’t address BMW)
August 22nd, 2012 at 2:00 pm
I thought I read it was towards the end of the year, regardless, a big demand and no supply to speak off, car makers keep doing this over and over I don’t get it, by the time stock is available, people have lost interest and moved on to something else.
August 22nd, 2012 at 2:11 pm
I saw a few Darts at a local Dodge dealer the other day, they were all stick, guy was telling me one was even asking for a test drive, scared off buyers who don’t drive or like manuals. Great product intro once again.
August 22nd, 2012 at 2:34 pm
#3, I think you are right on based on the continued personnel changes and the constant reversing/changing of decisions…The company seems to be adrift and keeps going in different directions…GM kind of has a history of changing plans and directions often, and many times they seem to change just as someting is beginning to work…
As far as the government; yep, pretty much the same..BUT, at least there is an election coming that might help a little???
August 22nd, 2012 at 2:41 pm
GM is sorely lacking a strong, car-loving, no BS leader that can get the troops behind him with one single goal, much the same Mullaly and Bill Ford have done and Sergio is trying to do as well.
August 22nd, 2012 at 3:42 pm
I think it would be an excellent idea to have a couple of prominent auto dealers compete in the Dungeons and Dealers game. It would be interesting to see how well they do at running a virtual dealership vs the cast of characters who talk about cars for a living!
August 22nd, 2012 at 3:48 pm
FYI: ATS availability at dealerships in August. Production started a month ago.
August 22nd, 2012 at 4:10 pm
Checked a couple of big Caddy dealers in area, ATS doesn’t even show up on their website yet, same thing happened to FR-S and BRZ no stock, tricked in one or two every week, now no one cares anymore.
August 22nd, 2012 at 4:30 pm
#8,
Sunday, the Dodgedealer near me had three Darts, one automatic, and two manual. Both manuals were 1.4 turbos.
August 22nd, 2012 at 4:30 pm
I keep telling myself I don’t need an ATS.
I keep telling myself I don’t need an ATS.
I keep telling myself I don’t need an ATS.
I keep telling myself I don’t need an ATS.
I keep telling myself I don’t need an ATS.
I keep telling myself I don’t need an ATS.
I keep telling myself I don’t need an ATS.
August 22nd, 2012 at 4:36 pm
It’s pretty amazing how much effect brand panache has with some people. That Evoque is selling well, and it isn’t as good as a CRV that costs $20,000 less
August 22nd, 2012 at 4:41 pm
#13,
Yeah, ATS won’t show up on dealer web sites until they have them in stock. The Cadillac site is pretty good, though, and has a good “build” section that makes it pretty easy to tell how the cars can be ordered. A manual transmission will be available only with the 2.0 turbo.
August 22nd, 2012 at 4:49 pm
It seems to me that Japan’s market is more open than ours. Japan allows the import of left hand drive Amercan cars, while the U.S. doesn’t allow the import of right hand drive Japanese cars, unless the post office might want some.
August 22nd, 2012 at 5:04 pm
> GIANT SUCKING SOUND
> A new study from the Center for
> Automotive Research, which was
> backed by Ford, says that allowing
> Japan in the Trans-Pacific
> Partnership free trade agreement
> will cost the U.S. auto industry
> thousands of jobs.
I don’t believe in restricting American consumer access to Japanese cars. We have to remember that the automobile industry is under constant pressure for higher CAFE and ever more stringent safety standards. So the American road-going citizen should have access to the best auto engineering to meet such demands, at minimum sacrifice of the performance we are accustomed to. To deny the American consumer access to Japanese, South Korean or European cars adds to the regulatory burden we already have to deal with.
August 22nd, 2012 at 5:05 pm
Kit so the right hand cars I’ve seen here, like Rolls and others, are individually brought in? I’ve always read that Japan has strict safety requirements to keep out most foreign cars, and most Japanese don’t want to buy American cars, BTW I saw the last US Top Gear and it was pretty good, except the shots of post-apocalyptic Detroit are pretty upsetting! Evoque has gotten a lot of negative reviews but Land Rover owners are a pretty loyal bunch.
August 22nd, 2012 at 5:18 pm
The Japanese restrictions are more subtle than in other countries, the 2.0L and above tax, outside mirror requirements, etc. Check the U.S. vs Japan Fuji apple wars
August 22nd, 2012 at 5:27 pm
#20,
Any newer RHD cars are brought in only after going through a lot of red tape. Cars older than a certain age, I think 25 years can be brought in easily.
August 22nd, 2012 at 5:31 pm
Thanks!
August 22nd, 2012 at 6:36 pm
It is pretty difficult to import, and register any car that doesn’t meet all U.S. emissions and safety regs. A couple years ago I was at a big Mini/MINI show in Florida, and a guy had a late, like 2000 or 2001 old Mini. It was originally sold in Germany and was LHD. He didn’t go into the details, but it was a very involved process getting it importe. Even then, I’m not sure he had a legal plate. He may have been using a plate registered to another car.
August 22nd, 2012 at 6:37 pm
If you don’t think there is an imbalance between the Japan and US/Euro auto market,just look at the numbers! When US assembled Japanese cars are slighted,it should become self-evident that an abundance of red tape in that Asian market is intensional. I have a hard time accepting the fact some of you continue to sell your soul just to save a few dollars!
August 22nd, 2012 at 6:50 pm
It is well know that the Japanese govt is not friendly to foreign makes and uses the excuse of regulations NOT to let them in freely as we let others do so, I’ll bet even the Chinese will dump their crap here when they feel they’re ready to do so. So far their quality does not measure up, it must be frustrating for them that even after decades of building along GM and others, they still have not been able to make worthwhile copies to sell here.
August 22nd, 2012 at 7:03 pm
re Japanese imports – I remember when our plant was “shipping” into Japan. They would hold entire shipments and fine comb them looking for any quality excuse to reject the lot (about 10 years ago).
ps – yeah! a different bridgestone ad.
August 22nd, 2012 at 7:12 pm
The Japanrse, Korean, and German companies are building cars specifically for the U.S. market. I’ll be more in a mood to fault Japan when I see Ford building right hand drive versions of all their products, meeting the other requirements for cars sold in Japan. It’s not like these other countries just “send us what they have.”
August 22nd, 2012 at 7:16 pm
#28 absolutely, how many times do we see vehicles available in Europe, even American brands, that we don’t get here, specially hatchbacks, just today I saw a review of the new VW Punto GT Turbo in the UK, VW won’t bring it here cause it would be too expensive and would compete with their own Golf and Jetta. Even the much anticipated Fiesta has not sold as well as expected here.
August 22nd, 2012 at 7:44 pm
I asked one of the Audi reps at a NY autoshow why the states would not be getting the A1, and he said it was because the dealers didn’t want it.
I personally don’t like my Civic coupe, preferring the hatch configuration. I see the ones in europe and know the reasons why.
August 22nd, 2012 at 7:52 pm
#30 I’m with you there as far as the coupe vs the hatchback, I thought the Civic Hatch from the 90′s was awesome.
August 22nd, 2012 at 8:02 pm
That’s the car I wanted, but they stopped making it when I came into the market.(something about a Crown Vic hydroplaning into my Accord. ’90 Accord was built solid)
August 22nd, 2012 at 8:22 pm
Honda took themselves off my shopping list years ago when they quit selling the Accord hatch and wagon, and then the Civic hatch in the U.S. If they’d sold an Accord hatch or wagon in ’05, it certainly would have been high on my shopping list when I bought my Malibu Maxx.
August 22nd, 2012 at 8:28 pm
Alex @ 19 . I don’t think the intent is to limit Japanese cars as much as to prevent them from dumping cars on the market as they did before.What I heard is they want to keep the Japanese producing their cars for the American market here employing OUR workers instead of shifting the production home to Japan. Free trade is a joke. We should adopt a equal trade policy where as we will deal with countries as they deal with us. If we did that then your fear would be realized. Japan lets next to no American cars into their market. The japanese car industry would dry up and collapse without it;’s ability to sell the bulk of it’s production here instead of their home market.
August 22nd, 2012 at 9:11 pm
#34,
Yes, Japan lets next to no American cars into their market, but the U.S. lets ZERO Japanese home market cars in our market. Toyota, Nissan, Honda, etc. build cars for the U.S. market. The U.S. car companies, collectively, build RHD versions of only a handful of models, never mind the other standards that are different in the two countries.
August 22nd, 2012 at 10:01 pm
Where’s ED COLE..ZORA ARKUS DUNTOV…WHEN YOU NEED THEM??GM is just one mess after another in the leadership dept. 2005- 2013..way to long in todays market for a body style to stay the same..I refer to the Corvette.The next one will be revealed at the auto show in January 2013 as a 14 model..I love my Corvette but 8 years is just to long to keep the same style.GM is like the TITANIC of the auto industry..it takes them FOREVER to change course and by the time they do they’ve already struck the iceberg.
August 23rd, 2012 at 6:21 am
Transplants provide jobs for Americans, and the cars are well built here and sell very well, so why change it?
August 23rd, 2012 at 9:11 am
CR just put out a report panning the Ford Touch system, I don’t understand why engineers who are supposed to be car guys, would design such a stupid system with no buttons or knobs and instead put something in there that forces you to take your eyes off the road and I’m sure these touch sensitive spots fail and need to be pressed more than once to make them work