AD #1175 – Supplier Pleads Guilty, U.K. to Test Autonomous Cars, First Use of Ram Air?

July 19th, 2013 at 11:48am

Runtime: 7:26

The U.S. Justice Department says one major supplier has pleaded guilty to a price fixing scheme. The U.K. is set to test self-driving cars on its roads by the end of the year. An Autoline Daily viewer sends us a new Barn Find, which may be the first ever use of Ram Air. All that and more, plus is it better to buy a car or to lease one?

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Hello and welcome to Autoline Daily. It’s Friday, July 19th and I’m Michelle Krebs from Edmunds.com filling in for John today. In the second half of the show we’ll preview this week’s Autoline, which is all about leasing. But first let’s get to today’s top stories.

ANOTHER SUPPLIER PLEADS GUILTY
Earlier in the week we reported that Ford is suing Japanese supplier Fujikura over price-fixing and bid-rigging of wire harnesses. And now the U.S. Justice Department says Panasonic has pleaded guilty and will pay a $46 million dollar fine as part of the same probe. Reuters reports the company plead guilty for a price fixing scheme involving turn and wiper switches sold to Toyota as well as high intensity discharge ballasts sold to Honda, Mazda and Nissan. A total of 10 companies and fifteen executives have pleaded guilty as part of the scheme.

RUSSIA MOVING TO #5?
As of 2009, Russia was the 10th largest auto market in the world. Over the last few years car sales have grown to just under 3 million units a year, which now makes it the 7th largest market in the world. According to a report from Boston Consulting Group, the Russian market will continue to grow at a rate of 6 percent a year through the end of the decade and surpass 4.4 million units. That will make Russia the 5th largest auto market, behind only China, the U.S., India and Brazil.

SPECIAL ½ MODEL MUSTANG COMING?
In the first six months of production of the original Ford Mustang, it was referred to as a 1964 ½ model and I’m sure you’re all aware by now that this year marks the 50th anniversary of the pony car. So, according to Mustangs Daily, Ford will build 1,000 examples of a 2014 ½ model with a special VIN and build number to commemorate its anniversary.

FUJI HEAVY TURNS 60
And in other anniversary news, Fuji Heavy Industries, the parent company of Subaru, celebrates its 60th anniversary this month. Back in 1953 five companies merged to form Fuji Heavy and in 1958 the company released its first Subaru called 360. So we would like to say Happy Anniversary.

U.K. SET FOR AUTONOMOUS TESTS
As you know, autonomous driving tests are already well under way in Nevada, Florida and California. But now the BBC reports, the U.K. is set to test self-driving cars on its roads by the end of the year. The tests will be performed by Oxford University and initially start on rural and suburban roads. A back-up driver will be in the car just in case of an emergency. It’s part of a $43 billion dollar project to reduce traffic jams in the country.

WIRELESS MARKET SET TO GROW
And in other technology news, a report from IHS says the automotive wireless market is set for significant growth over the next five years. Increased use of technology like Bluetooth, Wi-fi and embedded cellular connectivity will boost that market over 40 percent by 2018. The technology not only allows customers to pair their smartphones and tablets with their car, it will also allow drivers to upgrade systems and help with safety and diagnostic issues.

RAM AIR BARN FIND
Anytime you can force more air into an engine you’re going to increase the power, especially when the air comes from outside the engine compartment. And that’s the subject matter for our latest Barn Find, sent to us from Autoline Daily viewer Les Talcott from Arizona. It appears that a drag racer came up with their own form of Ram Air using some flexible exhaust tubing and some kind of funnel. Something that MacGyver could surely be proud of. The picture was sent to Les by a friend, so unfortunately, not much else is known about it or the car. Maybe you out there can tell us what kind of car this is and what year you think the picture was taken? Send your responses to ViewerMail@Autoline.tv

So is it better to buy a car or lease one? That discussion is coming up next.

IS IT BETTER TO BUY OR LEASE?
This week’s topic on Autoline is all about leasing. Joining John for that show is Scot Hall from the website Swapalease.com, Geoff Robinson from Mercedes-Benz Financial Services and Sam Slaughter from Sellers Buick GMC. In the following clip, they discuss whether it’s better to buy a car or lease one.

(Clip from Autoline This Week about whether it’s better to buy or lease can only be viewed in the video version of today’s show.)

As always you can watch that entire show right now on our website, Autoline.tv.

And that’s it for today’s show. Once again I’m Michelle Krebs from Edmunds.com, thanks for watching and have a great weekend.

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

33 Comments to “AD #1175 – Supplier Pleads Guilty, U.K. to Test Autonomous Cars, First Use of Ram Air?”

  1. Bradley Says:

    Happy Anniversary Fuji!!

    I was a long fan of both Isuzu and Subaru cars. GM’s partnership killed my love for Isuzu, but fortunately GM walked away from Subaru before they had too much influence.

    In my opinion, Subaru’s success is that they offer something different. GM called it a niche brand and this is one poor decision GM made I can support, as it saved Subaru.

    Some buyers treat a car purchase as a commodity and just as that GM exec in the video suggested..GM wants all car buyers to treat it as a commodity. Then GM can focus on making that commodity cheaper, and cheaper. Hmmm, didn’t Hostess do that to the Twinkie?!?!

  2. Phoenix Mark Says:

    Maybe someday sooner rather than later a car company will have lease contract that is easily “upgraded” to next new model with the latest and greatest. The monthly payment would be higher, of course.

  3. Paul Foust Says:

    The “barn find” is a 1949/50 ford convertible with what appears to be a stock 8BA 239 CI 100 HP venerable flathead

  4. Mike Says:

    I see that Diamond Electric paid a $19 million dollar criminal penalty the other day for price rigging in regard to ignition coils. With this sort of thing going on, It probably put false information in front of Ford and others when they decided to get out of making their own “parts”.

  5. Jon M Says:

    I haven’t had a chance to watch the lease vs. buy show yet, but I can say there is no one-size-fits-all answer. Personally, I love leasing and I’ve been doing it for years. The problem with it is you better know what you’re doing and how leasing works. It’s a finance option that makes it especially easy for dealers to write a deal to their own advantage, since a lot of people only ask about the payment. In my experience, dealers don’t seem to like it when you press them for ALL the numbers–net cap cost, lease factor, residual value–because those are the three most important numbers in a lease. You can’t negotiate the residual, but the rest are fair game. This of course only speaks to the financial part, but there is more people need to consider before leasing. Simply put, it’s not for everyone.

  6. HtG Says:

    4 It’s a great episode of Autoline. Real detail from engaging guests. (oh boy am I a nerd)

    What I don’t get is how the tax works when a lease is transferred. Do states not recognize a change of ownership?

  7. Drew Says:

    Leasing is good if you like to have a new vehicle every 2-4 years. But those people need to remember they are paying for the steepest part of the depreciation. They are also exposing themselves to lease turn-in fees for excessive wear. It doesn’t matter if you find some of the small parking lot dings/dents tolerable. Oh, and then there is the worry of staying within your miles-driven contract because the “extra” miles are very “extra” costly.

    On the positive side, you have minimium exposure to the higher cost of maintenance items (tires, brakes, suspension parts, timing belts, HID headlamps, etc.).

  8. G.A.Branigan Says:

    I think that barn find is a 49 ford v8 flathead.

  9. pedro fernandez Says:

    I think that car belonged to Herb Alpert and the Tijuana Brass.

  10. HtG Says:

    My guess, too.

  11. Chuck Grenci Says:

    Even though the Autoline this week is a good show, the lead-in (“IS IT BETTER TO BUY OR LEASE?”) is a bit mis-leading: there isn’t a whole lot of pro and con about leasing; more just a lot of information on why people lease and (some) about leasing transfers. Still an entertaining and informative show though.

  12. Jon M Says:

    @7 Drew

    That is why I say leasing isn’t for everyone. If someone doesn’t take good care of their cars or drives consistently over 12-15K miles/yr, then they should avoid leasing. Another downside though is if you drive well under the mileage limit. Residual value is based in part on the mileage/year. If you drive well under the limit, the dealer who ultimately buys the vehicle when you turn it in can potentially reap the benefit. Trading-in ahead of maturity is a way to retain that benefit, and it’s a move I typically employ. You should only lease vehicles with high residuals–at least relative to what want and/or need.

  13. Kit Gerhart Says:

    #1,
    I don’t know how GM had much to do with it, one way or the other, but Subaru has established a niche for itself good for about 2 percentage points of market share in the U.S. They have kept me away with their mandatory AWD, but their 2% share has been stable, to growing slightly, and seems to be more “recession proof” than most mass market brands.

    Yes, I know the BRZ is not AWD, and one Subaru fan I know doesn’t like it because it is not a “real” Subaru. On the other hand, I’d be more likely to buy it than the others, because it doesn’t have AWD that I don’t need or want.

  14. pedro fernandez Says:

    I read a report that says the reason for Subaru’s recent market upturn is the fact that it comes with AWD standard and many people consider it a plus in the handling and overall safety of the vehicle and it is the only really affordable line up of AWD vehicles in the market.

  15. Kit Gerhart Says:

    I’d think Subaru would sell more cars if most of them were available with FWD, as well as AWD, but their sales numbers are probably more “stable” with the niche they have established.

  16. HtG Says:

    I think Subaru would improve their sales figures if more professors earned tenure.

    I think Subaru would improve their sales figures if they threw that boxer engine in the trunk like a Porsche.

    I think Subaru would improve their sales figures if more people lived in Vermont.

    I think Subaru would improve their sales figures if they bought the Dallas Cowboys from Jerry Jones, ending our national trauma.

    I think Subaru would improve their sales figures if more gay couples tied the knot.

    I think Subaru would improve their sales figures if they could get George Clooney to reconsider.

    I think Subaru would improve their sales figures if….

    OK, I’m done

  17. Rick Says:

    @ HtG- that cracked me up :-) Reminded me of Jim Hall’s humor

  18. pedro fernandez Says:

    HtG are you ok?

  19. HtG Says:

    Come on, it’s Friday and I’m getting happy

  20. Kit Gerhart Says:

    16,
    Yeah, if all Floridians lived in Vermont, Subaru would sell a lot more cars, but it would be pretty crowded in Vermont.

  21. Phoenix Mark Says:

    HtG-lol.

  22. pedro fernandez Says:

    And If VW’s were reliable, there would be no reason for anything else in the market. After all, they’re superior in the driving dynamics over just about anything from Asia or America.

  23. Bradley Says:

    #13

    Correct, GM did nothing for Subaru. GM created all kinds of rumors when they acquired an influential share of stock. The only noticeable product of the brief relationship was the Saab 9-2x. Fortunately, GM sold their stock to Toyota.

    I am probably one of the few that believe this constant focus on market share, and sales numbers is silly. If a company makes a good product, has a solid following and makes wise choices they can be successful. Wall Street has convinced the world if you aren’t growing aggressively, then you are a failure.

    I Love Subaru for being AWD only, and I think they do it the best.

  24. Kit Gerhart Says:

    22,23,
    I agree that Subaru is doing a great job of doing what they do. They lost a probable sale to me a few years ago, and a definite sale to a friend replacing an older Subaru FWD wagon, but they have their niche, and play it well.

    VW wants to be the biggest car company, but that seems to be at the expense of quality. Subaru wants to be the “affordable AWD car company,” and they are doing a good job with that. I don’t think it would drive their current customers away if they would sell people like my friend and me an FWD Impreza wagon, but if they can be consistently profitable doing what they are doing with their mandatory AWD, they don’t need my friend’s or my business.

  25. Earl Says:

    #16….three more of those good quips and you would have had a top 10. I’d like to see your comments for the most ugly vehicle on the road to-day….Nissan Juke, it takes over from the Aztec.

  26. C-Tech Says:

    @ #26 Earl I think the Nissan Murano Cabriolet is number 1 now, followed by the Nissan Juke, BMW X6, the Veloseter, Aztec, and Honda Crosstour. That would some ugly car parade if you saw them together on the street.

    The Fiat 500L looks better on the street.

  27. pedro fernandez Says:

    Kit maybe it is cheaper to just build one type of drive-train rather than doing both FWD and AWD for all models, but at least they could do it with the Impreza and Legacy sedans, but do you think they really turn off so many buyers by only offering AWD? Many folks don’t even know what makes their cars run.

  28. Kit Gerhart Says:

    It would simplify things to make them all AWD, and they now seem to be doing that in most markets world wide. For several years after going to AWD on everything in the U.S., they sold FWD Legacies in other markets, but I think not any more. Also, reducing drive train choices simplifies things for dealers.

    Yeah, I doubt that they drive away too many potential customers, especially now that most Subarus have competitive fuel economy. Some people, like myself and a friend who had an FWD Subaru wagon for years, don’t want the un-needed AWD just “on general principles,” but there probably aren’t that many of us. My friend replaced his rusty 20-some year old Subaru with a Jetta TDI wagon. I doubt it will turn out as reliable as his Subaru was, but so far, he likes it, and it has been reliable. I wish him well with the VW, if he keeps it any where near as long as he had the Subaru.

  29. HtG Says:

    27,28 When my sister and BiL were shopping for a Matrix I explained to them just what you guys have been talking about with respect to AWD and FWD. You could just see the switch go off in their heads; FWD it’ll be. They live in DC so there may be one or two days a year when you could argue to yourself you want FWD. The rest of the time? Why carry all that complexity and cost? Maybe Subie people are less cost sensitive and see more snow. (you want to see people freek out? DC metro under a snowstorm threat EMERGENCY!!!!!)

  30. Bradley Says:

    I like the looks of the Juke and Veloseter.

    FWD over AWD has its benefits. If Subaru were to offer FWD, it would be tough to do without confusing the current perception.

    Someone sees a Subaru, hears a Subaru product mentioned…no one wonders “What is a Subaru?”.

    Maybe Toyota could start combining the Goodness of a Subaru without AWD for the Scion brand. However, too me the AWD brings so much goodness. :)

  31. Kit Gerhart Says:

    I like the looks of the Veloster Ok, now that I’m used to it. The Juke, not so much.

    From my experience with serious snow in Indiana, an FWD car will go in snow, as long as it isn’t deep enough to drag the under side of the car. An AWD car will accelerate a lot better on ice than any 2wd car, but won’t stop any better. To me, AWD is great on high performance cars like the WRX sti.

  32. T. Bejma Says:

    Looks like the business community is liking the Detroit Bankruptcy…

    http://www.forbes.com/sites/joannmuller/2013/07/18/why-business-is-cheering-detroits-bankruptcy/

  33. Brett Says:

    As I recall, the dirty little secret about AWD is that if you have a set of 80k mile tires on one, and you hit a piece of debris and destroy one tire at 40k miles, you are going to buy four new tires because the mismatch of one new tire and three tires with 50% of their tread gone will tear the AWD drivetrain to bits over a relatively short period of time.