AD #1133 – Volvo Truck Gets Bigger, Honda’s Core Products, Facebook’s $1B GPS Deal

May 14th, 2013 at 11:57am

Runtime: 5:51

The European Commission approves a deal to allow Volvo Trucks to acquire a 45 percent stake in a Chinese truck division. Honda could get rid of over half of its lineup in the American market, and sales would not go down that much. Facebook is close to purchasing social mapping and traffic app maker, Waze. All that and more, plus the Autoextremist, Peter De Lorenzo shares his thoughts on the value of Chief Marketing Officers.

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Hello and welcome to Autoline Daily for Tuesday, the 14th of May. I’m Peter De Lorenzo, the Autoextremist filling in for John while he’s out driving the new Kia Cadenza. But let’s get to today’s top stories.

BIG TRUCKS RECORD SMALL GAIN
Medium and heavy duty trucks recorded their first sales gain in the U.S. this year. According to WardsAuto, big truck sales were up 1.5 percent in April compared to a year ago. However, so far in 2013 heavy truck sales are down over 14 percent in the American market. But hopefully April’s sales gain is a sign big trucks are picking back up since it’s one indicator of where the economy is heading.

IF YOU CAN’T BEAT ‘EM, JOIN ‘EM
And speaking of big trucks, the European Commission just approved a deal to allow Volvo Trucks to acquire a 45 percent stake in Dongfeng Motor’s truck division. The $900 million deal will make Volvo and Dongfeng the world’s largest truck maker, ahead of the current leader, Daimler.

BAIC HIRES FORMER MERCEDES DESIGNER
And sticking with China for the moment, Beijing Automotive just hired former Mercedes-Benz designer Peter Arcadipane. The Australian helped create the CL, CLS and M-Class models. BAIC is getting serious about design, as you may remember, last year the company hired former Ferrari designer, Leonardo Fioravanti, as its chief of design.

HONDA’S CORE PRODUCTS
Do you realize that Honda could get rid of over half of its line-up in the American market, and sales would not go down that much? Get this, only 5 models account for 93 percent of all the sales at Honda. That includes the Accord, Civic, CR-V, the Odyssey and Pilot. Meanwhile, the Crosstour, CRZ, FCX, the Fit, Insight and Ridgeline really don’t contribute much. The FCX, which is a fuel cell car, represents really good PR, even though they’ve only sold 2 of them this year. The Fit gets lots of accolades from the enthusiast media, so I understand why they have that one too. Here’s our Autoline Insight. Those other models don’t contribute much at all. Honda has some of the best core products in the business and should put all of its efforts into selling them.

2014 ACURA ILX
And in other Honda news, the Acura ILX received a few upgrades for 2014. It now comes standard with 17 inch alloy wheels, leather seats, heated front seats, a rear view camera, plus a new audio system. It’s starting prices is now $26,900, which is up one grand compared to last year. The 2014 ILX is on sale now.

FACEBOOK’S BILLION DOLLAR DEAL
It appears that Facebook is close to purchasing social mapping and traffic app maker, Waze. The deal will cost Facebook somewhere in the range of $800 million to $1 billion for the app maker, which currently boasts over 47 million active users. Sources say the deal will happen but there is one remaining hurdle to clear, whether Waze will stay stationed in Israel or move to the U.S. Facebook has previously purchased two companies based in Israel, both of which were moved to the U.S.

Coming up next, my thoughts on the real value of Chief Marketing Officers.

VALUE OF CMOs
From the “Hey Martha, Let’s Break Out The Scotch!” File comes word that the average tenure for Chief Marketing Officers in corporate America has gone up from 23 months to an average of 45 months, according to research conducted by executive-search firm Spencer Stuart.

Now this wasn’t broken out to reflect the automobile industry, but it’s worth noting nonetheless.

Does this mean that corporate CEO’s are finally understanding the value of a dialed-in CMO who can affect an image of a company in a most positive way?

Could be.

Then again it could mean that this spike in the average tenure for big-time Chief Marketing Officers is but a temporary aberration and that the revolving door for CMOs is due to fire-up shortly.

Because when things go well Chief Marketing Officers get their due, at least for the most part, although many CEOs don’t like to share any of the credit.

But when things don’t go well? CMOs usually get shown the door.

Why?

It’s much easier to blame things on a Chief Marketing Officer when things look a little shaky then it is to actually stick with a reasoned, nuanced, long-term strategic marketing plan that has real value for the future of a company.

In short, image is absolutely everything these days… until a CEO decides that it isn’t somehow.

Which means that corporate image wrangling on a grand scale is a high-wire act with no net.

And in this instant gratification world we live in today, I would recommend that CMOs should always have a bag packed… and sleep with one eye open.

And that’s the High-Octane Truth for Tuesday, May 14, 2013.

But before I go I want to remind you to watch Autoline After Hours this Thursday. My guest will be Jordan Lee, the head honcho of GM’s small block engines. So tune-in for the best insider discussion in the industry this Thursday at 6PM Eastern time at Autoline.tv.

But that’s it for today’s show, once again I’m Peter De Lorenzo, the Autoextremist, thanks for watching and I will see you again tomorrow.

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24 Comments to “AD #1133 – Volvo Truck Gets Bigger, Honda’s Core Products, Facebook’s $1B GPS Deal”

  1. Tony Gray Says:

    In gaining my BA (Business Management because Pitt did not offer one in Marketing back then), we spent a lot of time in classes trying to develop marketing plans to sell products that no one in their right mind would buy. It served me well in my follow on life as I often had to pitch ideas or events that in my guy I knew were doomed to failure. But like Jodi Arias’ attorney…I did my duty.

  2. Tony Gray Says:

    In my gut…not in my guy….fat fingers…

  3. Bradley Says:

    In early 2009, I bought a 2009 Yaris. For these reasons:
    1. Size and Amenities at a rated 36mpg were unmatched.
    2. Manual Transmission
    3. Toyota for the first time (that I know of) offered 5 years 0% on the Yaris.

    During my shopping I didn’t understand the Honda FIT. It cost more, rated at less MPG and was smaller than the Yaris. Yet critics liked it.

    After 4+ years, I still don’t understand the FIT.

  4. Sean Sweeney Says:

    Need to get Kemal Curic on the Afterhours show…current Mustang Design Manager Ford of America …also the 2012 Ford Escape,Kuga lead exterior designer.
    2011 Ford Vertrek concept lead exterior designer.
    2010 exterior designer New Ford Fusion/Mondeo 2012
    2008-09 lead exterior designer Ford Focus III.
    2007 interior designer Ford Kuga
    2006 Iosis-X lead interior designer
    2005 Iosis concept interior designer
    2005 Ford KA lead interior designer
    2004 Ford Fiesta interior

  5. Kit Gerhart Says:

    #3,
    The Fit has more usable cabin space than the Yaris and, according to most reviewers, it drives better. Also, the Fit is larger, not smaller than the Yaris. Yeah, the Yaris probably gets a little better gas mileage.

    Both Yaris and Fit are good, reliable cars.

  6. Bradley Says:

    #5

    Based on the dimensions its a bit of toss-up. The Yaris “feels” bigger and looks bigger (IMO).

    Yaris FIT
    Length 169.3 161.6
    Width 66.5 66.7
    Height 57.5 60
    Wheelbase 100.4 98.4
    Track Width 58.3 58.7
    Drag 0.29 .35 ?
    Headroom front 38.8 40.4
    Headroom rear 36.7 39
    Legroom front 42.2 41.3
    Legroom rear 35.6 34.5
    Hiproom front 49.8 51.5
    Hiproom rear 50.1 51.3
    Shoulder room front 51.6 52.7
    Shoulder room rear 50.2 51.3
    Cargo 12.9 20.6
    Weight 2293 2496
    Interior volume 100 90.8

  7. Jon M Says:

    That was an interesting commentary on CMOs, Peter. It’s nothing new for CEOs to not share credit for high times and delegate blame when the going gets rough. If only CFOs were not Tonto to CEOs, they would surely be the easiest scapegoat. Until then, as you say, CMOs should pack light.

  8. Kit Gerhart Says:

    Edmunds shows the Yaris hatch as 11 inches shorter than the Fit, which is sold only as a hatch. The ’09 Yaris sedan was a little longer.

    My point, and the point made by most reviewers is that the Fit has more USABLE space, partly because it is a little taller, and it is apparently just efficiently packaged. Both are very good cars.

    In 2010, I checked out both the Fit and Yaris, and ended up buying a MINI. I paid more for less, in the traditional sense, but I love the MINI as a “fun” car when I don’t need much space, except for a driver and one passenger.

  9. Kit Gerhart Says:

    I, for one, am glad that car companies don’t concentrate completely on “core” products. If they did, the automotive landscape would be very boring indeed.

    Actually, it seems that Honda and Toyota are already concentrating too much on core products. I miss cars like S2000, MR-2, and even Celica. I guess they didn’t sell enough of these “specialty” cars to keep making them.

  10. ColoradoKid Says:

    America’s newest … and possibly greatest Sports Car

    (ironically built by Honda/Acura .. in the US )

    http://www.autoweek.com/article/20130514/CARNEWS/130519922

    This should make Kit #9 happy !

    Honda/Acura’s back . In F1 ( 2014 w/McLaren and possibly Red Bull ) .. now in Exotics … so can improved core products and road cars be far behind ? Knowing Honda .. I wouldn’t bet on it ;-)

    Watch your tail GM …. VW’s not the only one coming up fast

  11. Lex Says:

    As a Honda Owner, I could have told you which Honda model sell the most. I just wish the CRV would be offered with the same V6 found in the RDX. The new Honda Urban concept should do well if properly executed. The Fit would sell better if it had a 1.8 litre with more horsepower. The Crosstour has awkward proportions and visibility while the Ridgeline can not compete against the likes of Ford, Chevy and GMC. The CRZ is a waste of time. Honda should product more Civic CNG vehicles and eliminate the FCX and CRZ. Bring back the Prelude over the Civic Si!

  12. Kit Gerhart Says:

    10, 11,
    The upcoming NSX sounds interesting, and will definitely brighten up the automotive landscape, but sounds like technology run amok. I suspect it will work well, though.

    The Fit drives well with a manual transmission, but feels a bit lethargic with the automatic. Yeah, you’d think they would just use the 1.8 from the Civic, unless it is physically too big to fit.

    The current Honda hybrids underperform the competition in most ways. When I bought my Prius, I checked out the Insight, and it was not serious competition. The Insight was slower, thirstier, noisier, and less roomy. It was a little cheaper than a Prius, but not much. They need to either improve the Insight, or drop it. Either that, or put the Civic SI powertrain in it. That would make more sense than the under-performing hybrid. The same applies to the CRZ. That could be a fun car, but in its current form, it is disappointing. It seems that the last really good hybrid Honda had was their first one, the original Insight.

  13. Bradley Says:

    That NSX makes me all tingly like the original.

  14. pedro fernandez Says:

    TTAC reports that the upcoming Corolla will come with a choice of the same 4 speed auto or a new CVT, looks like Toyota realizes most Corolla buyers don’t give a crap about what’s ticking under the hood, just as long as it ticks and does so with minimal fuss or gas use! just yesterday I met a couple who had just bought 2 of them, one replacing a troublesome Volvo S40 and the other a gas thirsty Explorer.

  15. Earl Says:

    #14….that reason that replaced an Explorer by purchasing a Corolla ? l suspect the reasons are:
    1 Must have been a really old Explorer
    2 Lossed his job at the factory
    3.Smaller monthly payments
    4 Was being chided by hs friends for driving a gas guzzler.
    5 Wants to impress his friends that he wants to be environmentally friendly.

  16. pedro fernandez Says:

    It was due for a replacement and the new Explorer has gotten too big, thirsty and EXPENSIVE, plus no more kids at home, don’t need the room either! Not to mention the purchasing power of the lower middle class has been DECIMATED!

  17. Kit Gerhart Says:

    In CR’s tests, the Corolla tops its class in gas mileage, and is only slightly slower in acceleration than most others. The Corolla has somewhat, but not much lower EPA numbers than Civic, Sentra, and Elantra. It seems that the 4-speed transmission doesn’t really hurt that much, as long as you don’t mind feeling the transmission shift. The transmissions with more ratios, which are more closely spaced, will shift more smoothly.

    Earl, people actually do replace big gas hogs with something else for reasons other than not being able to afford a big gas hog, or wanting to change their “image.” I know such people, but as Pedro said, having reduced purchasing power could have been part of the reason. Still, if really on a tight budget, that couple would have bought used rather than new.

  18. pedro fernandez Says:

    BTW , there aren’t many “factories” down here, this has never been an industrial area. This is the same as people downsizing to a smaller home or condo once the kids are out and you don’t need as much room and need to cut out expenses as well.

  19. HtG Says:

    Yen//$ 102.7

    How’s that happen, Dr. Science?

  20. Bob Aubertin Says:

    Gentlemen!
    I totaly agree with Kit, Bradley, Lex and the C-Kid that ” HONDA Makes the World’s Best Dame Lawn Mower “

  21. pedro fernandez Says:

    They also make the best household emergency generators in the market, bar none, a little pricier but by all accounts, the best. Period.

  22. G.A.Branigan Says:

    Here’s a ‘common sense’ EV…..from our northern neighbors.

    http://www.youtube.com/embed/Ri2BG2qOvCg?feature=player_detailpage

  23. pedro fernandez Says:

    looks Chinese!

  24. XA351GT Says:

    Here’s a bit of trivia (you can decide if it’s useless or not) Peter Arcadipane was the designer of the front nose that is on the XB Falcon used in Mad Max and the Road Warrior. The nose ,roof spoiler and box flares were designed for a showcar called the Concorde based on a Falcon Panel wagon. It proved so popular that it was produced by Mr Arcadipane and sold as a body kit in Australia. The makers of Mad Max saw a car in driveway with the body kit and bought it to use in the film so the legend goes.