August 29th, 2012 at 12:00pm
Fiat-Chrysler CEO Sergio Marchionne says the company is guaranteed to lose money on every zero-emission vehicle it makes. Mazda just revealed the all-new 2014 Mazda6 at the Moscow Auto Show. The head of General Motors’ International Operations says the company plans to invest $1 billion in Russia over the next five years. All that and more, plus John responds to your questions and comments in “You Said It!”
Hello and welcome to Autoline Daily for August 29th. I’m John McElroy and here’s the news.
EVs: THE ECONOMIC LEMON
As we reported yesterday, the Obama Administration finalized its ruling on a new CAFE standard of 54.5 miles per gallon by 2025. And yesterday, Fiat-Chrysler CEO Sergio Marchionne said they are struggling with the choices they have to make to meet those standards by 2017. Marchionne is especially critical of electric-vehicle mandates. Speaking to members of the North American Car of The Year jury, he said, “I’m guaranteed to lose money on every-zero emission vehicle.” Referring to the electric version of the Fiat 500 they’re going to come out with, Marchionne added, “I’ll be the proud owner of an economic lemon.” As if to put an exclamation point on this, as we reported yesterday GM is idling production of the Volt for four weeks, and Chinese EV maker BYD just reported that its profits plunged 94 percent so far this year.
Mazda just revealed the all-new 2014 Mazda6. The car features the company’s KODO design theme, which means “soul of motion.” To our jaundiced eye it’s not quite as pretty as today’s model. The new 6 rides on a 111-inch wheelbase, which is slightly longer than the outgoing version. Also, that’s about an inch or so more than the wheelbases of the Toyota Camry and new Honda Accord. That stretch should make for a spacious interior. In the Russian market powertrains will include a 2.0-liter SKYACTIV-G gasoline engine or a larger 2.5-liter four-cylinder. A manual or automatic transmission is available, but the larger engine is slushbox-only. The car will feature Mazda’s groundbreaking i-ELOOP capacitor-based regenerative braking system. The company claims this will boost efficiency by up to 10 percent, a HUGE increase. The 2014 Mazda6 goes on sale in Europe this year. The car should arrive at North American dealers early in 2013.
HYUNDAI’S PRODUCTION STRATEGY
Last week we tested the brand-new Hyundai Sante Fe. We’ll have a report on this 2013 model in a future episode of Autoline Daily, so stay tuned. While we were at that drive event we ran across John Krafcik, President and CEO of Hyundai Motor America. He shared a little about how the company is coping with its incredible sales growth.
Hyundai has been growing like gangbusters. It’s interesting they’re throttling back on extra manufacturing capacity in order for focus on quality. I think they recognize they have to consolidate their gains. On that note, Krafcik mentioned if things continue as they are the company is on track to sell a whopping 700,000 units in the United States this year! Who could have imagined that just five years ago?
GM PLANS RUSSIA EXPANSION
The head of General Motors’ International Operations, Tim Lee, says the company plans to invest $1 billion in Russia over the next five years. Right now Russia is the only BRIC country that is booming. It’s a hot market everyone wants to be in and it’s expected to become a significant one. Last year sales were up 40 percent in the country to 2.5 million vehicles. Analysts expect the Russian car market will become bigger than the German market in the next decade.
LICENSE PLATE LUNACY
As you Autoline Daily viewers know, a number of cities in China are limiting the number of license plates they give out in order to limit car sales to curb pollution and emissions. But now it’s just about impossible to get a plate. According to Gasgoo, each month Beijing issues 20,000 plates or about 240,000 a year through a lottery system, but there are over 1 million applicants looking to receive one. As bad as that sounds, some cities are holding auctions to get plates and they’re going for thousands of dollars. In Guangzhou the average bid for a plate is over $3,600 and in Shanghai license plates go for nearly $9,500.
Coming up next, it’s time for you Said It!
YOU SAID IT!
And now it’s time for some of your feedback.
David Darovitz wrote in to say, “Volt is the best-selling EV in the world. Four months of sales growth. Very strong August retail sales. Highest scores in third party consumer and quality metrics.”
Dave, all I can say is that GM is losing a fortune on the Volt, and Nissan is losing even more money on the Leaf. As Sergio Marchionne said at the top of the show, electric cars are economic lemons.
Chuck Grenci saw our report on the piezo electric motors from DTI and says, “The story on the piezo electric motors left out one important piece of the equation; cost. A lot of benefits but… Anyone know what that might be?”
Chuck, the DTI people say their motors would be a little more expensive, but offer other offsets, such as being able to use lighter-gauge wiring.
Pedro Fernandez is keeping an eye on labor talks in Canada and has this to say. “CAW workers better watch out, Mexico is looking pretty inviting to the OEM’s with its lower labor and tax costs, and it seems the work force is not too shabby either. Just look at the Fiat 500 and the Fusion.”
Pedro is right, Mexico is red hot right now with all kinds of automakers expanding there. If the CAW isn’t careful it could see production moving to the southern part of the NAFTA region.
W.L. Simpson liked my editorial on how GM could save the situation with Opel. “John, I think you have a fine idea, but it exhibits entirely too much common sense.”
GMveteran said, “John, under your Opel liberation scenario, you mentioned that a Fiat-Opel-PSA tie-up would become possible. Does this mean that GM would be able to extricate itself from the highly questionable relationship it now has with PSA? That might add another billion or so onto the benefits of liberation!”
Good point, GMveteran.
And Kate McLeod said, “As someone pointed out to me, GM doesn’t need to be in Europe at all. They’re not important in Europe and they’re not going to be and there are worlds to conquer. I thought that made a lot of sense. There was a time when Opel was important to GM, but I think those days are gone.”
Kate, I would agree with you about Opel, but Europe is still one of the biggest, richest markets in the world and GM needs to be there. Besides, Chevrolet is one of the fastest-growing brands in Europe and still has a lot more room to grow.
Thanks for all your letters and comments, and keep ‘em coming!
And don’t forget to join me and the Autoextremist tomorrow on Autoline After Hours for the best car talk in the business. Our guest will be Randy Stephens, the chief engineer of the Toyota Avalon, the first passenger car that Toyota designed, engineered and will manufacture in the United States. It’s a milestone for Toyota and you’ll get the inside story.
And that wraps up today’s show, we’ll see you tomorrow.