November 27th, 2012 at 12:01pm
Amid all of the destruction and chaos caused by Superstorm Sandy, there may be a silver lining for the auto industry. Apple’s digital assistant Siri will be making its automotive debut in a couple of Chevrolet models. The abruptly ousted GM marketing chief, Joel Ewanick, has landed at Fisker, for now. All that and more, plus guest host Peter De Lorenzo has the High-Octane Truth about Volkswagen’s key to success.
Hello and welcome to another episode of Autoline Daily. Today is Tuesday, the 27th of November and I’m Peter De Lorenzo, the Autoextremist, filling in John who is on his way to California to cover the LA Auto Show, but more on that later. Let’s get to the news.
HURRICANE SANDY HELPS SALES
Last month Hurricane Sandy put a dent in car sales but this month the storm is expected to have a positive effect on sales. According to WardsAuto, sales in November will hit 1.12 million units, for a SAAR of 15.2 million units, the highest since February 2008. The storm pushed back some purchases last month, plus thousands of vehicles that were destroyed need to be replaced. A new study from The National Insurance Crime Bureau estimates that 230,000 vehicles were destroyed because of the hurricane.
CHEVY SPARK EV REVEALED
Yesterday General Motors introduced a small EV in China, today the company revealed the electric version of the Chevy Spark in LA. GM didn’t announce its range but expects it to be among the best in its segment. The Spark EV will initially be sold in California and Oregon, as well as Canada, South Korea and other global markets. The car will be priced under $25,000 with tax incentives.
SIRI COMES TO CHEVY
And speaking of the Spark, starting next year it will integrate Apple’s voice-activated system Siri into the car. Customers who own compatible iPhones can use Siri through Chevy’s MyLink infotainment system. Drivers can do things like make voice-activated phone calls or play songs in iTunes. The new feature will also be offered with the certain models of the Chevy Sonic.
FISKER HIRES EWANICK
And speaking of General Motors, the former head of marketing at the company, Joel Ewanick, was just hired by Fisker. Ewanick will work on an interim basis as Fisker’s head of global sales while the company looks for a replacement for the retiring Richard Beattie. According to the Wall Street Journal, Ewanick was working with the company as a consultant and will continue that role while the company searches for a new head of global sales.
Hey, I want to remind you to tune into Autoline’s LIVE broadcast from the floor of the LA Auto Show tomorrow. John will be talking to top-level executives at the show like Adrian Hallmark from Jaguar Land Rover, Mark Reuss from GM, Tim Kuniskis from FIAT and many others. But you can get involved and send questions now! Submit your questions by clicking the link in today’s show notes or by visiting John’s Journal on Autoline.tv where you’ll see a full, up-to-date list of the guests slated to appear. And, make sure you tune in Wednesday at 4PM Eastern Time, 1PM Pacific for the LIVE show.
Now it’s time for our continuing series of “Barn Finds,” all about some of the hidden automotive gems that you, our audience, send our way. Recently we got photos from viewer Eddy Mursuli, of his uncle’s 1957 Chevy 210. But, while this ’57 looks like a run-of-the-mill classic, there’s more than meets the eye. Under the hood you’ll find a 2.8-liter diesel engine, including the transmission and differential, from a Toyota campervan. Eddy tells us that the Chevy uses the stock fuel tank and gets around 42 MPG. Not sure we’ll ever hear that again. Thanks to Eddy for sending these pictures our way. And remember if you’ve got any pictures you want to share with us, send them to firstname.lastname@example.org. We’ll take videos too. Just upload them to your favorite video sharing service like YouTube, send us the link, and you just might see them on a future show.
Coming up next… The VW Group masters a classic formula: Product Desirability = Profitability.
I’ve written columns about cracking the code in the premium market before, and nothing ever changes, because it’s all about the product, always has been about the product and always will be about the product.
But though the parameters may not be wavering from that fundamental industry High-Octane Truth, how automakers are pursuing this quest for excellence is showing signs of unexpected boldness.
We only have to look as far as the VW Group to see how things are dramatically unfolding. The VW Group, led by the maniacal genius, Ferdinand Piech, is on an unbelievable roll right now. Wrangling such pivotal brands as Volkswagen, Audi, Bentley, Bugatti, Lamborghini and Porsche, to name a few, the VW Group is orchestrating the most successful array of brands the industry has seen since GM’s glory days.
Normally, it would be a recipe for disaster but somehow, someway the VW Group making it work.
The VW Group’s individual brands are allowed to run fairly autonomously, with individual design, engineering and product development functions tuned to the specific brands. And on top of that for the most part the VW Group seems to get the whole “image wrangling” thing, employing highly disciplined marketing positioning and advertising strategies. The result? The brands all have a distinctive identity in the market and are clearly defined to consumers.
Believe me, there are manufacturers with just one brand to worry about who can’t even come close to the brand differentiation going on in the VW Group.
But the kicker in all of this and the one thing that confounds and infuriates its competitors? The VW Group employs 520,000 workers. That’s more than GM, Ford and Fiat-Chrysler combined (plus another 82,000).
And, in the first six months of 2012 VW built 200,000 fewer vehicles than General Motors, and it needed 310,000 more people to build them.
“How can this possibly be?” you might ask. How can that level of inefficiency be rewarded with success in the market?”
Well, VW has posted $7.7 billion in profits to date this year, as compared to $4.6 billion for GM.
How do they do it? Well, maybe the car I’m driving this week – the 2013 Audi S7 – offers a glimpse at how the VW Group’s profitability is soaring. The Audi S7 shares the vehicle architecture with the A6 underneath, and then it is given the full zoot-suit treatment by the magicians at Audi.
The S7 is graced by elegantly swoopy fastback bodywork found in the A7 (concealing a hatchback), and it signals its presence on the road with an array of LED lighting that would warm the heart of any Hollywood production designer. Stuffed with a 420HP V8 and finished off with the usual exceptional Audi interior design and detailing, the S7 is indeed an impressive piece.
But let’s not forget it started out as an A6 underneath. The Audi A6, in case you’re wondering, starts out at an MSRP of $42,200. A regular A7 starts out at a price of $60,100 and the S7 starts out at a base price of $78,800. The S7 I’m testing this week comes in at a stunning $94,570, however, albeit with a boatload of options.
So if you’re wandering how the VW Group does it, the S7 is a graphic demonstration of how it’s done. But then again it’s still more than that, which brings us full circle.
You first have to have the product and that will never, ever, change.
Then you have to have the kind of brand image that is crystal clear to consumers, one unwavering in its execution and consistency. And if it’s dead-on – as Audi’s marriage of product and brand image is – then you’re able to create the fundamental desire for your product that will have people paying real money to acquire it.
It’s a classic industry formula – Product Desirability = Profitability – but one that Audi and the VW Group have spit-shined to perfection.
And that’s the High-Octane Truth for this week.
Well, that wraps up today’s episode. Once again I’m Peter De Lorenzo, the Autoextremist, thanks for watching and I’ll see you next time.