Episode 992 – BMW Let’s You Skip Payments, New Brand for VW? New Explorer Targets Luxury Buyers

October 15th, 2012 at 11:45am

Runtime: 8:40

BMW must be worried about its market share; lessees can now skip payments on certain models. Could Volkswagen be cooking up a new brand to satisfy low-cost hunger pangs? The 2013 Ford Explorer Sport is aimed squarely at the luxury market. All that and more, plus an inside look at the engineering of the just-unveiled Jaguar F-TYPE.

Visit our sponsors to thank them for their support of Autoline Daily: Bosch, Bridgestone, Dow Automotive Systems and Hyundai

»Subscribe to Podcast | iTunes | Zune | RSS | Listen on Phone Stitcher | YouTube

Hello to all of you in automotive land and welcome to a brand new week of Autoline Daily. I’m John McElroy and here’s what’s happening out there.

#1 IN OUR HEARTS
Luxury car makers will always tell you that they’re not really interested in being number one in sales. No, they tell you, we just want to be number one in the hearts of our customers. But BMW is clearly worried that Mercedes is outselling it in the U.S. market. It just introduced an incentive program that lets current owners skip three lease payments if they buy a new or certified used car. This does not apply to M or 3 Series coupes and convertibles. Though BMW has cut incentives this year, it’s still spending 37 percent more per vehicle than the industry average. Mercedes has boosted its incentive spending to 44 percent above industry average. So despite what they say about being number one in the hearts of their customers, this is an all-out sales war.

VW ENTERS LOW-COST MARKET
Low-cost cars are becoming something of a rage right now. Renault has its budget brand called Dacia, while Nissan is relaunching the Datsun name for low-cost cars in emerging markets. The idea is to offer super-affordable cars in countries like India, Russia and Brazil without tarnishing the parent brands. Now VW wants to join the low-cost club. Reuters reports Volkswagen may introduce a new brand by 2015, with cars priced between 5,000 and 10,000 Euros. The lineup could include a small sedan, a station wagon and even a van. It’s all part of VW’s plan to fill empty spaces in its lineup and become the world’s biggest automaker by 2018. Imagine that, the company with the most brands is launching another one! As the people’s car, I always thought Volkswagen was a low-cost brand.

CNG-POWERED RAM
News from the natural-gas front! Chrysler is making CNG-powered RAM trucks available to retail customers; up to now they were only offered to fleet buyers. The company joins Honda as the only automaker retailing natural-gas-powered vehicles in the United States. Base price for the RAM 2500 HD is $47,500, including destination charges. The truck can run on both CNG and gasoline. Range is about 255 miles on natural gas. An eight-gallon gasoline reserve tank extends that distance to 367 miles. Fiat is a leader in CNG technology and really wants to use that advantage. To that point, Sergio Marchionne says they will lose $14,000 on every electric Fiat 500 they sell.

FORD TARGETS LUXURY MARKET (subscription required)
The new 2013 Ford Explorer Sport is aimed directly at luxury buyers. It features a 365 horsepower turbocharged EcoBoost V-6, which is 75 more horsepower than the base version. It has 20-inch wheels and an interior that took inspiration from fashion designers such as Prada. Ever since the new unit-body Explorer was introduced, 51 percent of buyers represent conquest sales, with about 12 percent of those trading in high-end models. Prices of the Sport model start at $41,000.

CHRYSLER DRESSED UP AT SEMA
Chrysler is set to be one of the largest exhibitors at this year’s SEMA show. It will have 24 Mopar-modified vehicles in a 15,000-square-foot exhibit. Brands from Chrysler, Jeep, Dodge, Ram, SRT and Fiat will be dressed up in over 500 Mopar performance parts and accessories.

Coming up next, a look at some of the engineering that went into the new F-TYPE Jaguar.

Two weeks ago, we showed you a walkaround of the new Jaguar F-TYPE with Wayne Burgess, the head of Jaguar’s production design studio. Now we’re about to dive into the engineering that went into the car. Take a look.

(Our look at the engineering of the Jaguar F-TYPE is only available in the video version of today’s program.)

I for one cannot wait to drive that car.

Don’t forget to tune in to Autoline After Hours this Thursday night. Ford is going to drop off the new Focus ST for me and the Autoextremist to go over. Should be a fun night.

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

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog and WardsAuto.com

44 Comments to “Episode 992 – BMW Let’s You Skip Payments, New Brand for VW? New Explorer Targets Luxury Buyers”

  1. HtG Says:

    HA! I’ve been getting letters from Honda and Nissan for a couple of years, telling me I can get out of lease payments if I get a new car. Apparently, BMW is serious about not being hung up on being first. (yeah, yeah, I always bash bimmers)

    Oooh. I ‘attended’ the Scarsdale Concours d’Elegance on Sunday, and took some photos. You’ve got to check out the ’58 Eldorado.(with cwolf’s Dagmars proudly displayed)

    http://www.flickr.com/photos/76985302@N03/sets/72157631770536572/

    if you begin the slideshow with the Packard flower car, the shots will play in proper sequence

  2. pedro fernandez Says:

    These automakers are missing the boat by not introducing these low cost vehicles to declining Western countries as well as the “emerging” ones.

  3. G.A.Branigan Says:

    47k starting price for a cng powered ram 2500.That is more then a diesel ram 2500.The cng option would be good for a local contractor,but I believe the cng infrastructure won’t make cross country trips too enjoyable.I wonder…..

  4. G.A.Branigan Says:

    @ Pedro: I second that.We are almost 3rd world.

  5. Bradley Says:

    The Explorer name on the front hood edge really looks Land Rover esque.

  6. pedro fernandez Says:

    Could this mean that Ford is giving up on Lincoln? Why not a Lincoln version of the Explorer and sell it as a Luxo SUV like Nissan all the other makers are doing with their full size SUV’s

  7. Kit Gerhart Says:

    I thought Skoda was VW’s lower cost brand. I guess the new one will be “more lower.” Had they thought of Trabant for this new brand?

  8. Kit Gerhart Says:

    #3,

    It will be able to make road trips, since it also burns petrol. It will need frequent stops, though,with only an 8 gallon tank.

  9. Lex Says:

    VW has too many brands as it is! Why don’t they simple introduce / expand one of their existing low cost brands into new markets. This would probably save them a whole lot of marketing dollars / euro’s and keep the transaction cost of these vehicles down.

  10. pedro fernandez Says:

    perhaps what VW needs to do is expand their own brand instead of adding so many new ones, as john stated, VW was know for affordable, reliable transport with the Beetle and all its variants, then when the old Beetle went away, they lost their mojo, just like Honda did

  11. C-Tech Says:

    BMW seems committed to keeping and expanding their customer base. I wonder if the new lease pull-forward plan will actually just eat their future sales by pulling those who would have leased another BMW in 2013 into 2012?

    Another low-cost brand for VW? Even in emerging markets, they might be better off offering lower cost vehicles through their current outlets.

    @ #6 The Explorer has always had a model aimed at upscale buyers (they sold a lot of Eddie Bauer editions) and the Aviator missed the mark in the Lincoln line-up.

    The F-Type looks great. Another Bond beauty.

  12. Kit Gerhart Says:

    VW lost their mojo in the U.S., but not in Europe. They dominate the European market, almost like GM in the. U.S. in the 60′s. Well, not that much, but they do have by far the largest market share.

  13. G.A.Branigan Says:

    @ Kit: yes 8 gallons firing a hemi in a 3/4 ton pickup won’t get you too far.I would hate to ‘crow hop’ cross country because the cng infrastructure is so sporadic.Just saying that it,right now,would be better suited to local stuff.

  14. C-Tech Says:

    Thinking about what Peter D. thought about making Corvette a stand alone brand at GM: I think the Corvette stood out as the “every man” sports car for Americans and that is part of the appeal. To make it availiable in fewer, more exclusive markets I thing diminishes its appeal. From a smaller dealer perspective, the profit margin on Corvette also helps your bottom line. I think if anything, GM could produce a hi-performance limited line-up which could then be sold as a brand through any committed GM dealer, and perhaps by some High-End boutique type dealers.

  15. C-Tech Says:

    Please forgive my spelling, perhap we could get a spell-checker on the site somewhere down the line?

  16. Kit Gerhart Says:

    13,
    Yeah, it would be best suited for use as a work truck where it could be fueled overnight, and would have enough CNG range for a day’s use.

  17. Kit Gerhart Says:

    NBC gets U.S. rights to broadcast F1. See:

    http://www.autoweek.com/article/20121015/F1/121019908?utm_source=DailyDrive20121015&utm_medium=enewsletter&utm_term=image1&utm_content=20121015-NBC-Group-gets-U.S.-rights-deal-to-broadcast-F1&utm_campaign=awdailydrive

  18. pedro fernandez Says:

    14 Are they gonna have Vette SUV or Hybrid Vette as well, leave it alone, it is A Chevrolet Corvette. period.

  19. Kit Gerhart Says:

    There was a Corvette station wagon in 1954.

    http://history.gmheritagecenter.com/wiki/index.php/1954_Chevrolet_Corvette_Nomad_Concept

  20. pedro fernandez Says:

    Anyone here lining up to get their new Tata Nano in 3 yrs?

  21. Studebaker Ranch Says:

    Great to hear Dodge -oops, I mean Ram! offering a CNG truck to the general public. I wonder if the home refil system that Honda has will work on the Ram also. If so it would offer a good oppertunity for all involved. Those with a Honda that need a truck ect. The only one that gets short changed is the States by not getting road taxes they normally collect from gasoline.

  22. Kit Gerhart Says:

    20,
    Naw, I think I’ll take my chances with my then 5 year old Prius and MINI.

  23. Kit Gerhart Says:

    Will they sell the Nano at Jaguar/Land Rover stores in the U.S., or maybe at Apple stores?

  24. W L Simpson Says:

    If CNG ever got to be big time, the price would promptly rise.

  25. Brett Says:

    #15

    Use Firefox or Google Chrome. They both have built-in spellcheckers.

  26. ckernzie Says:

    Dodge Ram CNG? Where I am in Western Canada, we’ve been through the whole propane/LPG experiment over the past 30 years. Propane used to be a popular choice for personal and fleet vehicles (used to be almost every school bus was propane powered) but these days that dog won’t hunt even for a T-bone despite about a 50% fuel cost savings. I’ve personally driven numerous propane vehicles and know of a few people that run older propane pick-ups and you can still find propane pick-ups, cube vans, school buses etc for sale in the local classifieds. Auto-propane used to be easy to find at filling stations but now there isn’t a station for a long stretch around here that has it. I concede that CNG may have some advantages over propane, but even for point back to point fleet vehicles I don’t give CNG any chance at selling. We tried very hard here to make propane a legitimate alternate fuel choice but it just didn’t work out in the end. There are several reasons why propane died as a fuel choice and why CNG will suffer from the ‘been there done that’ philosophy but I won’t go into them now. What I will tell you is what fuel has without a doubt won the alternate fuel wars and has taken over the fleet and consumer light truck markets and is now making inroads into the passenger vehicle market…DIESEL.

  27. Kit Gerhart Says:

    The thing CNG has going for it, is that it goes almost everywhere by underground pipe. Propane does not. The down side of CNG is low energy density, and the need for very high pressure vessels to transport it. The tanks use up most of the trunk in the Civic, and Probably half the bed of the truck, and you end up with less range than the regular versions. You have most of the disadvantages of an EV, but with better range. Maybe if you filled half the bed of a pickup with batteries, though, you might get decent range as an EV.

  28. XA351GT Says:

    Pedro @ #2 I agree with you. If they don’t the Chinese will. Once they can get in the NA market it will be game over for anyone else trying to sell a low priced car. They will dump their cars at a price no one else will be able match. No one else in the world has a work force that large willing to work for next to nothing.

  29. cwolf Says:

    #1: Swell photos HtG! These are my type of cars.

    VW needs another brand like we need a hole in the head! As they strive to be numero uno,we have first hand seen their products cheapen, rather than experiencing improvement in quality and reliability. And we have seen what happens when a business becomes too large; The existing products go to hell in a hand basket! While almost every other is consolidating its platforms,VW must think they are wrong. I think I’ll pass on that bet.

  30. cwolf Says:

    For a guy buying a BMW more expensive than an M or 3 series,do ya think 3 stink’in lease payments will sway him one way or the other?

  31. pedro fernandez Says:

    #28, XA I’ve read several times that the Chinese don’t want to bring cheapo, tin cans here, instead they want to outdo what H/K has done, bring in decent quality, desirable vehicles but at a lower price, taking advantage of their almost slave-like wages. Seeing their latest offerings in other markets, I don’t think they will succeed.

  32. cwolf Says:

    #6: pedro,Ford gave up on lincoln long ago in the US and I predict their attempt to introduce themselves in the Chinese market will be half-hearted at best. At least the narrow interiors will fit the populace! Yet, the world knows a Lincoln is nothing more than a heavier overpriced Ford.

  33. HtG Says:

    30 I’d say they care, cwolf. A neighbor that got an X3 this summer was told in a dealership that their clients don’t negotiate prices, which she thought was load. So she refused their offers until she got the deal she wanted. They kept calling back every time she said no. And this weekend I asked a Cadillac salesman at the car contest about selling the ATS; he said that at the 34K price point people were looking for deals(but nothing from GM is on the hood). No stick shift models have arrived yet.

  34. HtG Says:

    Mysterious addendum. When this neighbor ordered her X3, the salesman personally added, at no additional cost, an option which she had not selected. She asked why, and he just said not to ask. I can’t remember what the option was, but my guess is that BMW may have wanted certain options to be on the used cars later on.

  35. pedro fernandez Says:

    must have been some kind of nav or blue-tooth thingy, I suppose.

  36. cwolf Says:

    Thats odd! A lady at work ordered an M3 specific to her needs and got extra options for free. Turned out the X3 came from a dealer/dealer swap.

    pedro, the ATS or any other new model will never be bartered for during the year of introduction. If you recall what T. Bejma said about employee discounts on GM vehicles; He said models in demand will be discounted less than poor sellers. Kinda makes sense to me!

  37. pedro fernandez Says:

    cwolf, I think you got me confused with HtG, he’s the one having a good life. I never mentioned ATS, even though I voted it NACOTY

  38. cwolf Says:

    it was a reply to your #33, pedro.

  39. pedro fernandez Says:

    cwolf I did not write #33, it was HtG. Cwolf are you celebrating Oktoberfest on a Monday as well?

  40. cwolf Says:

    Burrrrrp!!!! Must be!

  41. HtG Says:

    I do appreciate the good life, Pedro. I sat in an ATS. It is good. Real good in there.

  42. aliisdad Says:

    I agree with #2 in that I thimk some entry level, basic cars and small pickups might do well in this and other countries…However, there might be reasons like government mandated equipment or pricing too close to “nicer” models to attract consumer…I just know that when I first started out, I had a number of good basic models that I could actually afford!!
    I also found the competition between BMW and Mercedes interesting…I was suprised to hear that Mercedes has been outselling BMW..
    In my experience, the Mercedes is much more car, and the Mercedes customer service is beyond anything I have ever experienced from any company…They also take care of you for years after the sale..They really do seem to care about their customers and their cars, and the build quality of the cars is beyond either BMW or Audi competitors…I found the Audi to be a great car, but he dealer was horrible, rude, and with little regard for me as a customer…The BMW dealer was fine, but the car spent quite a bit of time in the shop…
    Althought this is my experience with German brands, I have to say that I have found Subaru and Toyota quality and service to be very good, as well…

  43. XA351GT Says:

    Pedro @#31, Well I think if the Chinese are going use H/K as the model then they will bring in cheap cars 1st. Take the beating of selling cheap junk and then move up. That is what all the japanese makers did in the 70s. I remember those being a joke of being made from recycled beer cans ,because of their tendency for rusting out in short order. Hyundai took a beating in the late 80s early 90s the same way and Kia did the same just up to about 5 years ago. 1st you have to get in the market. I don’t think most Americans will spend 25K or more on a Chinese car off the bat. China will have to fend off the stigma as being the producer of cheap junk 1st.

  44. XA351GT Says:

    To prove my point ( I hope), look at Suzuki. They have produced low cost cars to get in the market , have a really good car ( according to most reviews) in the Kizashi and are circling the bowl. That all with a name known in the US for 40 years.I can’t see Chinese cars surviving at prices over 12K .