Episode 1051 – Suppliers Need to Boost Capacity, Prius Passes Civic, Volt to get Lower Price

January 17th, 2013 at 10:53am

Runtime: 7:26

As car sales continue to grow, and as automakers bring more new models to the market, suppliers need to boost their production capacity. The Toyota Prius passed the Honda Civic to become the best selling car in California last year. One top executive at GM says the price of a Volt could be dropped by thousands. All that and more, plus host John McElroy takes a walk around the Mopar Garage with Pietro Gorlier, President and CEO of Mopar.

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Welcome to Autoline Daily. Here’s what’s happening in the automotive industry today.

READY, AIM, HIRE!
Automotive suppliers in the United States are going to go on a hiring binge this year, says the Center for Automotive Research. As car sales continue to grow, and as automakers bring more new models to the market, suppliers need to boost their production capacity. The Center says suppliers will add 44,000 jobs this year and another 17,000 in the next three years. Even so, others point out that many suppliers are still capacity constrained and that could turn into a choke point in the supply chain. What are the strategies suppliers will use to cope with the capacity crunch? This will be one of the key topics at the Autoline Supplier Symposium which gets going live at 1:30 pm Eastern time today, or 1830 GMT at our website Autoline.tv.

GM TO BOOST CAPACITY
Even though suppliers are straining to keep up with demand, automakers keep raising the ante. General Motors plans to invest $1.5 billion in its North American assembly plants this year. GM is planning on coming out with an onslaught of new models this year and needs to crank up capacity.

FORD IS CAPACITY CONSTRAINED
Meanwhile, Ford says that boosting manufacturing capacity to meet that demand is the biggest challenge it faces this year in the U.S. During the recession the company slashed production but now CEO Alan Mulally says the company needs more capacity even though most of its plants are already operating on three shifts.

PRIUS IS GOING PLACES
The Toyota Prius passed the Honda Civic to become the best selling car in California last year. Sales hit 61,000 units in the Golden State, up nearly 80 percent. A couple factors led to the huge boost. Disruptions at refineries in California last year caused gas prices to skyrocket to over $4.50 a gallon, plus Toyota added two new models, the V and the C, to the Prius line-up. And even more shocking, the company says the Prius line-up could pass the Camry in sales by the end of the decade.

LOWER VOLTAGE
And maybe EV sales will start to perk up as well. Right on the heels of Nissan announcing that it is lowering the price of the LEAF, we get word from Mark Reuss, GM North America President, that it is developing a new EV platform that will lower the cost of a Volt by thousands of dollars. The price reduction would be applied to the next-generation Volt, but GM has yet to give word as to when that may be.

Oh boy, do we have a great Autoline After Hours coming up tonight. Join me and the Autoextremist Peter De Lorenzo from the floor of the Detroit auto show where we’ll be talking with Harlan Charles, the product and marketing manager for the Corvette. Here’s your chance to learn a whole lot more about the car that stole the headlines at the show. And the action gets going tonight at 6 pm eastern time to get the best insider information in the business.

Coming up next. Mopar is all about performance and customization. But did you know that it’s also about tricking out your garage? More on that, after this.

(The Mopar Garage can only be viewed in the video version of today’s show).

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40 Comments to “Episode 1051 – Suppliers Need to Boost Capacity, Prius Passes Civic, Volt to get Lower Price”

  1. HtG Says:

    What, no comedy stylings of Charlie Vogelheim tonight?

  2. G.A.Branigan Says:

    The Mopar garage….I’ll bet the phan-bois will rush out to buy that stuff.

    “onslaught of new models this year”…okay John,give it up.Just what does GM have going on in the Dept.of new models Dept.?

  3. Kit Gerhart Says:

    #2,
    Big Pickups
    Impala
    ELR
    Corvette
    CTS
    SS(?)
    Colorado(?)

  4. Kit Gerhart Says:

    OK, most of those are for 2014 model year, but will show up in late 2013.

  5. Bradley Says:

    Corvette “Stole the headlines”, I guess negative or positive publicity is publicity.

    Yes, California is its own world, but in my mind it is really saying something that the Prius will outsell the Camry in 10 years.

  6. Kit Gerhart Says:

    …but there are 4 Prii, with 3 different body styles, and only one Camry, or two if you count the Camry hybrid separately. It’s kind of misleading to say that Prius will outsell Camry.

    Regarding GM, according to Edmunds, the next Tahoe, Suburban, et. al. will arrive for the 2014 model year.

  7. jesse Says:

    Sorry,but other then the cool techno stuff the C7 doesn’t do it for me like the C6 did. I didn’t get that WOW feeling when they did the unveil.Hope it’s not another 100 years before the C8!!

  8. ColoradoKid Says:

    Boosting capacity ;

    Now isn’t that at least a major part of how GM wound up in the position its in right now ? Over estimating sales – over building of production facilities – over production of cars when things look ever so slightly ( and I do mean slightly when it comes to the economy ) better …..

    ….. only to then Crash & Burn in and amongst their own over saturation ?

    At least Mulally is taking the sensible view … being a tad bit cautious and leaning towards ‘ Just in Time ‘ rather than ” Oops .. We Built Too Many ”

    Business & Economics 101 – Its always better for demand to outweigh supply …. than for supply to outweigh demand .

    Ahhh… but this is GM we’re discussing . You know . The bunch that was ‘ smoking ‘ out on the Football field when that lecture was being given .

  9. ColoradoKid Says:

    #7

    I’ll slap another GM wager down .

    Within the two years after hitting the sales floor the C7 will mystically and magically get a well needed …. facelift .

  10. Kit Gerhart Says:

    If the rear end of the C7 gets a “facelift” before it even hits the sales floor, it won’t really need another for a few years.

  11. Phoenix Mark Says:

    I love the looks of the new C7. I am disappointed that it is larger than the out going model. Wider is not better if you want to sell it to the whole world.

  12. ColoradoKid Says:

    #10

    Boy did I ever miss a great one liner in #9 . Should of said ” …… get some well needed major ‘ Plastic ‘ surgery ” ;o

    Rear end

    Side view

    ‘Shave’ ( to coin the hot rodding term ) off all the glued on JC Whitney bits

    Dump the fake air vents

    Eliminate the pretentious ‘ Racer Wanna Be ‘ bits

    Take the attitude ” Less ( really ) IS More ”

    And generally tone the whole thing down more than just a few notches .

    That ‘ might ‘ just fix all its visual ills . Maybe .

    Interesting that I just heard back from three automotive corespondent friends . Two foreign – one US . All pretty much coming to the same conclusions about the C7 . ” If you think it looks over done and bad in the videos .. wait till you see it in person … its worse ” summing it up . With the US pundit having been ‘ warned ‘ by his editor not to make any seriously critical or disparaging remarks about the C7 in print ;-)

  13. ColoradoKid Says:

    Phoenix Mark

    Christmas ! Its larger as well ???? To my undying shame I missed out on that point .

    So now the C7 is ;

    Bigger
    Ugly
    Has more blind spots
    More ‘ cheap ‘ fake fiddly bits

    So is it heavier also ?

    Yes sireee .The C7 . The very epitome of GM’s advanced engineering ( urp ) capabilities . ;-)

  14. Brett Says:

    GM styling has, for the past three or four decades, exhibited an inability to stop when they should have stopped. They invariably go past the point where good taste ended. The results are cars like the new Camaro which is over-styled and will look dated in a short time.

  15. Bradley Says:

    #14
    I agree, I think their Marketing wants the “Bubble-Gum” effect. Lots of excitement in the first few chew. To me it is an example of where GM is a company that owns car making assets, but they are not a car company.

  16. Kit Gerhart Says:

    Where has GM “gone too far” with styling, except with the Camaro and C7, and the Escalade? Actually, the blinged out Escalade seems to appeal to a certain clientele, and is a big money maker.

    Most GM products, including Malibu, the pickups, Impala, and most others, are often accused of being “too bland.”

    It seems that GM bashing is really popular on this forum these days.

  17. ColoradoKid Says:

    I find it interesting that everyone including Pietro railed on and on about the 991′s added girth … when in fact the C7 has done the same ( grown in dimensions ) and in fact is even larger than the 991

    Porsche 991 … L-176.8 … W-71.2

    Corvette C7 …..L-177 …… W-73.9

    …. and even more interesting that Chevrolet despite all their claims … press releases … Carbon Fiber ravings …. are refusing to divulge the C7′s overall weight …

    … as well as the price !

    #14 … +1

  18. ColoradoKid Says:

    #16

    C7 , Camaro , Escalade , SRX , CTS , Equinox , Volt , ELR etc .

    FYI The Escalade is a big ‘ money maker ‘ only because its cheap as ____ to manufacture … being the most blatant of all Cadillacs ‘ badge engineered ‘ wonder cars and based on a truck … which are as you know …. are cheap as _____ to build !

    :o

  19. Chuck Grenci Says:

    AAH tonight is going to be on the new Vette; stop by and offer questions, comments etc. I’ve heard just about enough ‘doom and gloom’ on a pretty awesome vehicle (IMO). Camaro’ish rear end; not even close. Bring it on, tonight, on AAH.

  20. Kit Gerhart Says:

    Yes, the Escalade is cheap to make relative to what it sells for, kind of like a Cayenne, which is also a big money maker.

  21. W L Simpson Says:

    My ol C2 has never been topped , size
    or shape.

  22. XA351GT Says:

    My take on the C7. Overall I like the car. There are things that I don’t like (lack of round taillights) . Things I have never seen on any Vette before( rear 1/4 windows) . Things I like (the silouette) Still has the shape of a vette. Also I like the return of the Sting Ray name.

  23. G.A.Branigan Says:

    For me,I have preferred GM’s pu truck styling as opposed fords,for years…..and I used to be a ardent ford fan.

    I also like Ram’s styling,overall.I don’t like their option pkg’s.Even worse then fords,and their offroad pkg kinda sux too,but not as bad as fords.

    So far chevy has me as a truck customer for a while longer it seems.Their 5.3 is a good solid performer in a 1/2 ton.Not bad mpg,although with the 2014′s even that should be better with DI,VVT,etc.

  24. T. Bejma Says:

    Just got back from Industry Preview Days at the NAIAS and had some observations…

    - C7 – I have to agree with the majority of the press and the comments on the Internet – it is BEAUTIFUL!!! It made the Ferrari F12 that was there look like a Panamara! It has some serious Lamborgini angles! Great job GM – finally super car skin to go with the super car performance at a real price. And based on the oooh’s and ahhh’s from the LARGE crowd surrounding it and all of the positive comments from anyone under 55, it will be a hit!

    - Cadillac – Sat in the backseat of the ATS and it was definitely adequate for my 6’4″ 220 lb frame. A little tight in the head room. Wouldn’t want to ride back there to Chicago, but Ann Arbor would not be an issue. ELR is GORGEOUS! Wish, like many of you, they would just put a 2.0l Turbo in it and sell it for $35K.

    - Chevy/GMC – Trucks look even better in person. The changes are not extreme but you definitely would not confuse it with the current model.

    - Buick – The little Encore was plenty big inside. We will have to see how this brand new segment does.

    - GM cars we can’t have – They were up on a balcony area and as I said, they are nothing special. 4 or 5 people milling around them.

    - Lincoln – Really? Bringing out the same exact display as last year. Well, most of the cars were too. MKZ and the Lincoln Escape Concept (looks even more like an Evoque in person) were the only things new and they had 3 or 4 sprinkled around. Keep the deathwatch out for Lincoln, they won’t last until 2018 without a dedicated rear wheel drive platform.

    - Ford – Isn’t Fusion already out? Why did they have 3 or 4 of them on the turn tables??? Focus ST – Very pretty but unless you weigh less than 150 lbs. (which I definitely do not) you will be uncomfortable in the seats. Can I get some adjustment please Recaro? I am a 36″ waist and it was TIGHT. Atlas looks very nice, have to see how much sticks around for production.

    - BRZ/Scion – Again very nice but no way could this be a daily driver. I would love to race it (it felt a lot like my RX7 race car inside) but way to small for anything else.

    - Toyota – Didn’t stop by. There were about 5 people in their display.

    - Dodge – SRT Grand Cherokee SRT8 was HOT! Would love this for the family hauler!

    - Honda – Yawn…

    The rest was uninspiring and not worth the bandwidth…

  25. HtG Says:

    thanks, TB. You weren’t impressed with the Honda crossover concept?

    yeezus, 6’4″ ??

  26. XA351GT Says:

    Thanks for the review TB. I’m going to the Philly sho this weekend. It’ll be interesting because most of these concepts and pre production models will still be in Detroit. Usually this show is 2 weeks after Detroit so we’d get at least a couple of them.
    I liked your description of Toyota. It was the same way here last year. Keep moving along , nothing to see here. Felt like I was in a Appliance Outlet. Almost everything was white and sterile (aka Blandtastic)looking.

  27. G.A.Branigan Says:

    Thanx for the review TB.I’m sure I will be buying a new chevy truck in the next year.I’m hoping for a Colorado with the 4.3,Z71 ext.cab.Even have my fingers crossed.I would wish for a diesel but that just doesn’t seem to come to fruition in this country for less then 3/4 ton pu’s.

  28. Kit Gerhart Says:

    TB and XA,
    I’m sure I would feel the same way as you guys about Toyota at the auto show, even though I own one. When I see an MR2 on the road, or even a Celica, I keep thinking, why don’t they make anything like this any more? Yeah, the Scion/Subaru are a step in that direction, but some Toyota dealers don’t even sell Scion, including the one where I bought my Prius.

  29. T. Bejma Says:

    #28

    Kit – I had a 1986 MR2 and put about 180,000 miles on it. Loved it. Drove it from Michigan to Florida by myself one year. That car was comfortable, peppy, great mileage, handled great and I fit in it perfectly. My Cobalt SS comes close, but I really miss the RWD.

  30. T. Bejma Says:

    #25

    Missed the Honda SUV. The Honda display was on the way out, thought it was going to be like Toyota and we were getting hungry ;-)

  31. XA351GT Says:

    Kit, It’s shame really. They make a great reliable car, they just don’t make anything exciting to look at any more. Like you mentioned the MR2 ,Celica, the Supra, heck even the old 70s to mid 80s Toyota pick ups were great. I like the FR-S still not sure why they badged it a Scion .

  32. HtG Says:

    31 My understanding is that FR-S is a Scion because Toyota wants to raise the average age of people interested in that brand.

  33. Gerry Parij Says:

    It was painful to watch the interview with Pietro Gorlier, President and CEO of Mopar and knowing that Chrysler exits NASCAR after winning all the marbles as the Sprint Cup Champion. I suspect that Mopar lost a lot of current and future sales with that decision.

  34. Kit Gerhart Says:

    I was sorry to see Dodge leave NASCAR, but they had little choice. It’s all in the money for the teams, and Penske, the only competitive Dodge team, was offered a lot more money and support to go with Ford.

  35. Chuck Grenci Says:

    While Dodge won the Driver’s Championship they were woefully behind in the constructors points; that’s probably more the reason for Dodges withdrawal. They did, perhaps, leave a little too soon as the up coming year (with the new, more distinct car models) may have lead to more sales (but I think their aim was to cut their loses) and enter new venues (of Motorsport). And unless NASCAR rebounds, they (Dodge) may look like genius’ by getting out early.

  36. Kit Gerhart Says:

    35,
    Dodge would have needed teams to continue, and, with Penske gone, they had none. To compete for the manufacturers championship, you need multiple competitive teams and drivers, not just one winning car/driver.

  37. Chuck Grenci Says:

    I thought that that was what I said; if I wasn’t clear thanks for the edification.

  38. ColoradoKid Says:

    T Bejima

    The C7 is better looking than the F12 ? What are you on son ? Next you’ll be trying to tell us the C7 is also more technologically advanced than the F12… what with its neanderthal rear suspension – fake scoops etc . All reviews from the Floor BTW ( and even Pietro’s comments on AE ) say the C7 and all its pretentious body bits are …. cheap looking and over done .

    Seriously T … can you please drop the corporate DRHP&A ( Dogma – Rhetoric – Hyperbole – Platitudes & Attitudes ) and come back to reality ?

    Reading your posts and debating with you on anything GM of late has become a little too much like trying to have an intelligent conversation with a member of a Religious Cult

    Not that the rest of your fellow GMophiles ( see the TTAC link from Wednesday ) aren;t just as bad mind you . But this is a Forum for ‘ discussion ‘ not a platform for the spreading of Corporate Propaganda .

  39. ColoradoKid Says:

    What Dodge and Chrysler in general really need is to rid themselves of Marchionne once and for all : as well as distance themselves are far away from FIAT SpA as is humanly possible .

    BTW – Marchionne is in the news this week in the EU : asking his French , Italian and German distributers why the Dodge Dart isn’t selling ….. in the US .

  40. Enn Norak Says:

    I voted for Corvette to remain a Chevrolet because the Corvette casts a performance halo upon the entire Chevrolet brand and Corvette sales are but a fraction of total Chevrolet sales. Notwithstanding the instant recognition factor of the Chevy bow tie logo, I never did like the look of that logo. I’d like to see a GM think tank come up with a more powerful logo for Chevrolet.