AD #1217 – PSA Desperate for Cash, VW to Only Offer Turbos?, Carsharing Growing Fast

September 18th, 2013 at 12:05pm

Runtime: 8:41

PSA, the parent company of Peugeot-Citroen, is considering selling a stake in the company to its Chinese partner Dongfeng. Volkswagen said it will only offer turbocharged gasoline and diesel engines within the next 3 to 4 years. A new report says, the number of people using car sharing services will increase 6 fold by the end of the decade. All that and more, plus John responds to your questions and comments in “You Said It!”

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

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

Hello there. Welcome to Autoline Daily. Later on in the show we’ll get to your comments and questions in You Said It!, but now let’s get to the news.

PSA DESPERATE FOR CASH
Things are going from bad to worse for PSA, the parent company of Peugeot-Citroen. As we reported yesterday, sales dropped 18% last month in Europe. In the first half of the year it posted an operating loss of $680 million and now Bloomberg reports that PSA is considering selling a stake in the company to its Chinese partner Dongfeng. The sale could even lead to the Peugeot family losing control of the company. Talk about desperate times! This sure makes me wonder what they’re thinking at General Motors, which sunk $400 million into Peugeot to jointly develop new cars. I bet they never dreamed they might end up sharing that product development with Dongfeng.

CHINA NIXES HYBRID SUBSIDIES
Air pollution is a huge problem in China but the government won’t rely on hybrids to clean it up. China just renewed subsidies for alternatively powered vehicles, but not for hybrids. The government will provide up to $9,800 for the purchase of a passenger EV and up to $81,000 for an electric bus. And for the first time China will provide subsidies for fuel-cell cars. The EV subsidies will be lowered next year and the year after to try and get automakers to reduce costs.

KIA TESTS LPG MARKET IN EUROPE

Gasoline prices in Europe are nearly $8 a gallon. Yet liquid propane, or what they call autogas, is half that price. That’s why Kia is coming out with a bi-fuel version of the Picanto that can run on autogas or gasoline. Usually it costs four to five thousand dollars to convert a car like that to run on propane, but Kia is only charging about $1,400 for the conversion. That means the payback comes in less than two years. Europe has quite a few gas stations that sell autogas, so it’s readily available and I’ll be keeping a close eye on sales of the LPG Picanto to see how sales go.

DOES NA STAND FOR NOT AVAILABLE?
Well it looks as though the conventional naturally aspirated engine may be going the way of the 8-track and VHS. Volkswagen said it will only offer turbocharged gasoline and diesel engines within the next 3 to 4 years. The German automaker only has 3 remaining naturally aspirated engines and sees the turbo units as a way to increase power and efficiency. Ford also says it could drop naturally aspirated engines in the future, but most likely for engines with 2 liters of displacement or less.

CARSHARING GROWING FAST
Carsharing membership has grown dramatically over the last 5 years to 2.3 million users, but that could shoot up nearly 6 fold. According to Navigant Research, car sharing membership will increase to over 12 million users worldwide by 2020. Carsharing provides drivers access to a wide range of vehicles on an hourly or daily basis, and is far cheaper than owning a car. OnStar claims that for every vehicle used in a car sharing program, 13 other cars come off the road. So if it truly becomes popular, car sharing could pose a real threat to the automotive industry.

Coming up next, it’s time for You Said It!

YOU SAID IT!
And now it’s time for some of your feedback!

XA351GT wants to know: “Why do small cars like the Fit, Yaris, Spark, and Smart not get over 50 MPG? The Geo Metro and CRX were pushing nearly or getting 50 MPG back in the 80s. Until these cars start getting near that I’m not impressed especially with 25 years worth of tech on their side.”

XA, today’s small cars are far heavier than they were 25 years ago because of safety standards. And they are significantly safer. They also meet stricter emission standards. If you would bring those old subcompact cars up to today’s standards they would get far worse fuel economy.

WineGeek watched our reports on how transmission dipsticks are disappearing. “No dip stick in the transmission…what a joke. I had a Saturn Vue that had a sealed for life transmission. Well the transmission failed after 90,000 miles and the dealer said GM was replacing them under an extended warranty due to the inability to check the fluid.”

But Mike goes on to say, “Apparently there is data that most customers not only do not know where the dipstick(s) are but never use them anyway. The dipstick might not cost much, but then if it is not used, it doesn’t do much either.”

To me, the dipstick is like having a small insurance policy. You hope you never need it but you’re so glad you’ve got it when you do need it.

Mike heard our report that Ford is going to introduce 25 new models in the next five years, up from the 15 models it announced a year ago. “I’m glad to hear that Ford Europe is going to design 25 new vehicles. Do we really need 25 new vehicles? How many niches are there? Is there something fundamentally unsound about a product like the Focus that needs a new, clean sheet approach? What leaps of technology are there out there that need this much new design work?”

Mike, it’s my observation that the car companies with the newest products are the ones that gain the most market share. And you are definitely going to see big technological improvements in the next few years in lightweighting and aerodynamics that will necessitate clean sheet designs. Also, Ford is going to start selling the Mustang and probably the Explorer in Europe which will get it into new segments. And when it says 25 new models don’t forget it’s also referring to commercial vehicles, not just passenger cars.

A. Bellis has something to say about our most recent poll where we ask your opinion on whether Tesla should be able to sell cars in the U.S. in its own stores or go through the dealer franchise network like every other automaker has to. “I believe that a manufacturer has the right to sell their products through a franchise system or not!”

Well, that’s not what the law says. Existing manufacturers have to sell their cars through the franchise system. Now the courts will decide if a startup company like Tesla can circumvent the franchise law. What do you think? Go to the Autoline Daily section of our website and check out yesterday’s show so you can vote in this poll. So far the results show that most of you support Tesla. We’ll have a full report tomorrow.

And finally DocWolph wants to know, “Is the Volt and Ampera’s pricing in the EU a function of European taxes and tariffs or some nimrod bean counters thinking? This kind of price disparity is grossly unacceptable. Especially when Nissan can sell their LEAF for literally half the price.”

Doc, it’s tariffs, value added taxes, shipping rates, but mostly the mistaken belief at GM that they need to price this car to make a profit. They need to do what Nissan is doing and lose money on every Leaf ….he said with his tongue in his cheek. Seriously, Nissan recognizes it has to price its EV to sell and pray that at some point in the future sales pick up enough to make a business case for these cars.

Say, thanks for all your comments and questions. We really like going through them all.

But that brings us to the end of today’s report. Thanks for watching, please join us again here tomorrow.

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

61 Comments to “AD #1217 – PSA Desperate for Cash, VW to Only Offer Turbos?, Carsharing Growing Fast”

  1. GM Veteran Says:

    I have a hard time understanding why a car has to be sold through a franchised dealership owned by an independent dealer, but a computer can be sold through a store owned by its manufacturer. In fact, I can’t think of any products besides automobiles that have to be sold by independently owned dealerships. I don’t see some of the really restrictive dealer laws in some states holding up in court, when challenged. Its also generally accepted wisdom that manufacturers can’t operate a successful dealership. They simply don’t have executives with the right mindset. There is a big difference between a corporate executive and an entrepreneur. The automakers have learned this lesson many times over the years and when they do acquire a dealership, they typically try to sell it as fast as possible. Can Tesla operate their own stores successfully? Maybe. In the long run, they may also decide that independent ownership is in their best interest. It will certainly free up capital that may be needed to fund new vehicle development, promotional programs, etc.

  2. Tony Gray Says:

    I think turbo’s across the board (in most cases) is an idea whose time has come. My personal experience with them has been very positive as of late and they are now as reliable as any other accessory on the vehicle.

    The twin turbo BMW is a FAR cry from the hairdryer that was attached to the Pontiac Turbo Trans Am 301 V8.

  3. ColoradoKid Says:

    PSA desperate for cash ….. Gee …. there’s a surprise and a real revelation ….. hang on a minute …. let me get my ‘ Looking Surprised ‘ face on …. Convincing ? Nahh …. didn’t think so;-)

    And yet …. who recently dumped a ton of money they do not have into a doomed from the start partnership with PSA knowing this has been the case for decades with PSA ? Errr….. that’d be …. ahem ….. GM

    Yup … some mighty fine brain trusts running the show at GM these days ….. Or is it more a case of the Lunatics being allowed to run the Asylum ?

    I’ll vote the later

    ————

    VW . Hmmmn . With some of the ever so desperate tripe being released by VW lately in a vain attempt to get some press coverage … well ….. it kind of makes me wonder …. is all as well as VW-Audi would like us to believe ? And is Kaiser Winterkorn’s plans for Worldwide Automotive domination going as smoothly as the words he’s using to convince us they are ? Hmmmm.

    But anyway … back to VW offering Turbo’s only . Truly one of the most stupid decisions I’ve seen from the automotive world on 2013 . …… I mean …. think about it …. VW-Audi’s reliability record is already abysmal ….. Turbo’s will only serve to exacerbate the issue ( Turbos in and of themselves create reliability problems due to excess heat … oiling issues etc )

    So how in any way does ‘ Turbos Only ‘ in VW’s future make a ( bleep ) bit of sense .

    Hmmmn . Maybe Piech … err … aint such a Peach after all and has truly gone past his Sell By date ? …… Ya think ?

    ———–

    One last – While I was gone I see good ol ( doesn’t come around nearly enough ) XA351GT made comment about Ford having a lot less models than GM .

    True ….. but I’d also add Ford has a heck of a lot less debt … never took a dime of bailout money …doesn’t currently also owe the American Tax Payer some $25 Billion + …. has more actual cash in hand … and … surprise surprise … a much more reasonable inventory as well … so …

    I’d say its Ford thats doing things right . GM may have the numbers on paper … but its Ford that has the cash in hand

  4. ColoradoKid Says:

    GM Veteran – #1 – Because …. if you so much as comprehend even a modicum of the corporate mentality … you’d know if Cars were sold direct … the manufactures would be raping yours an my wallet left and right every chance they could get

    Having that happen with a $1500 lap top or a $500 Smart Pad is one thing ….. having the same with items costing well in excess of $20,000 …. is another story indeed .

    The one ( computers ) is tolerable … barely

    The other … would put more good folks in the financial hole in less time than it takes to type this …. guaranteed .

    Believe me GMV …. as much a hassle as car dealers are … as big a Sharks as they can be …. you want those SOBs competing for your business …. now just take the time and effort to learn how to bend the situation to your advantage … rather than looking for the easy way out that’d cost you ten times more in the long run ;-)

  5. Richard Says:

    I believe a car manufacturer should be allowed to sell directly to the public if it believes there is an advantage to that. And I can think of many advantages. Prices can be lower by cutting out the middle man; customer service delivery can be better controlled; and more accurate market-tailored manufacturing principles can be utilised. Sometimes I wonder who coined the term “land of the free” because with so many laws preventing liberty and the pursuit of happiness that such a claim is just harder and harder to substantiate.

  6. Bradley Says:

    I am not sure GM invested in PSA as a partner. This fallout may have always been on their radar. I could see them taking designs from PSA and factory capacity to serve their interests.

    Save Citeron DS!!

  7. T. Bejma Says:

    It does make a lot of sense for the auto manufacturers to sell vehicles through their own dealerships and here is why:

    Dealerships make 75 to 90% of their profits where? hmmmm…. SERVICE! The dealership has gotten to the point where they make razor thin margins on new cars. Being a car salesman at a dealership used to be a pretty good job. With commissions you were well into 6 figures. I have had several relatives live very nice lives with vacation homes and money to put several kids through college in the past. Today, it is hard to find anyone that wants to do that job and when you do, they really aren’t knowledgeable about the vehicle or even how to sell so the consumer (and to a point the automaker) gets screwed.

    If the manufacturers controlled the dealers, they would get rid of commission, pay salesman a set (fair) salary, standardized the sales process and focus more on selling the car, not servicing. In addition, the consumer would have a direct line of communication to GM (something they don’t have very often now). There would still be competition with other makers to avoid gouging but prices could be no haggle. If auto makers tried to jack up prices, people would just go to another maker. This model worked great for Saturn and people really liked the no pressure environment.

    I do think that companies like Apple have an advantage with direct selling their products and even though they do charge a premium, people continue to buy due to the desirability, so that would be key for automakers as well. In the past automakers have been able to sell undesirable vehicles using incentives, basically sabotaging their own business.

    In the end I think that Tesla, if they get much larger, will eventually have to franchise their dealers in order to comply with state laws or else face a barrage of lawsuits.

  8. Kit Gerhart Says:

    While I don’t like complexity for complexity’s sake, it seems that people get overly dramatic about the down side of having turbochargers.

    I have had several of them, and have never had a problem. My 1989 van still has the original turbocharger, which is working fine. Yeah, it doesn’t have many miles, but….

    I checked a couple web sites, and I can get a “rebuilt” turbo for less than $400 for my van. I couldn’t find a new one, but, since VW is the company being discussed here, I looked up the cost of a replacement turbo for a VW/Audi 1.8 turbo, most of which would be several years, and many miles old. A rebuilt turbo for that engine from turbochargerpros.com is under $400, and a NEW one is $575. Yeah, that is quite a bit of money, but as car repairs costs go these days, not so bad, when a new transmission would cost several times that, and the transmission is probably as likely to fail.

  9. ColoradoKid Says:

    Richard – #5 – For that to work in the positive ways you’re mentioning would take having the likes of a Steve Jobs at the helm … which all the automotive manufactures do not : everyone to a number having hard core bean counters and bean counters who only want more beans in their pot not yours running the show . And even so … you’d then pay even more too much for the car you’d be purchasing …. not to mention then dealing with Price Fixing issues etc …. which btw Apple etc ALL do to the extreme . Which would again negate any and all sense of ‘ Freedom ‘ you may be dreaming about in the market place

    Simply put … the dream of the Free Market Place – Land of the Free ( seriously ? … since when ? .. when have we truly ever been ‘ free ‘ ? never being the answer … we have freedoms within a structured set of rules created by others …. at best ) Retail Sales coming to the customers advantage are nothing more than a beautiful …. but untenable , unattainable and very unrealistic dream . Cause its never been … aint never gonna be … and any so called Solutions such as what you’re suggesting would only serve to make matters worse . And thats a guarantee you can take to the bank !!!

    ————–

    Ugh … No wonder the market place is such a mess . Hardly no one on the consumer side of things has a bloody goram clue how thing really work in the big , bad , cruel , ugly and greedy as hell world we live in . Not a bloody goram clue !

    Ugh …. if most of you only comprehended the half of it …. How’d that quote go ?

    ” You want the Truth ? … You can’t handle the Truth ”

    Sigh …. all too true – far too often I’m afraid … No more from me on this subject …. reading the comments on this is getting way too depressing …. no insult intended

  10. ColoradoKid Says:

    Kit – Once again …. one person … two cars …. and you’ve been damn lucky and the very rare exception to the rule to say the least . A little reminder about Turbos Kit you may of forgotten ?

    BMW over the last 24 months has had each and every one of their Turbo engines .. both diesel and gas ( as well as MINI’s ) … Worldwide I might add …. recalled for a multitude of ills multiple times . And those problems continue on to this very day .

    VW-Audi you ask ? Even worse except they’re refusing to recall their Turbos … preferring to place all the blame on the consumer despite scientific evidence to the contrary

    So would you please …. once and for all …. accept the fact that you are at best the very rare EXCEPTION when it comes to the cars in question … as well as counting your blessings .. knocking on wood for the future and appreciating the luck you’ve had … Rather than trying to convince the rest of us that your experiences have in any way shape or form been the norm !!!!!!!!!!!

  11. HtG Says:

    9 You gonna be lining up Friday, CK? (keeding)

    5S looks like The One.

    ——-
    How the World Works:

    Power and Self-Interest. Who knew?

  12. T. Bejma Says:

    Sergio getting closer to getting his hands on that $12B of Chrysler cash…

    http://www.autonews.com/article/20130918/OEM02/309189976/marchionne-prepares-final-hand-in-fiat-chrysler-merger-game#axzz2fGxVIouv

  13. Kit Gerhart Says:

    While Apple is the only computer company that has company stores, virtually all computer companies sell products through their web sites. I know f or sure that HP, Dell, and Gateway sell directly, and so does nearly everyone else.

    Computers are a much different product than cars, though, in regard to price, need for routine service, etc. Still, it seems strange that state laws have created this franchise system we have.

    As far as “manufacturer control,” it seems that car companies don’t have as much control as they would have if they sold directly, they actually have more control with the franchise system than manufacturers of most products. Even though there are Apple stores, nearly everyone from WalMart to Bergdorf-Goodman sells iPads, but only Chevy dealers sell new Chevys.

  14. ColoradoKid Says:

    7 – Oh gee …. big surprise …. Mr Corporate Shill – True Believer comes down on the side of the corporations and to hell with the consumer .

    … and errr …. where did you say you got that so called ‘ Business ‘ degree from Mr B ? Oh wait . It doesn’t matter . You’ve been ‘ assimilated ‘ into the corporate ‘ Collective ‘ mindset lock stock and barrel … never mind .

    Depressing doesn’t even come close . Anyone got some cyanide on hand ? …. Or at least a stiff drink to numb the pain ? HtG ? Anyone ????

  15. HtG Says:

    14 I agree, it’s a very distressing time. Concentrate on what you can do and where you matter. OTH, some Tito’s vodka+soda+ice+lemon and some Q2 can definitely take the edge off.

  16. ColoradoKid Says:

    13 – Yes Kit … but Apple holds those resellers under a barrage of rules and controls like you would not believe … and the penalties for breaking even the smallest of them are harsh beyond belief .

    ( suffice it to say even one solitary minor infraction can and will lead to a multi million dollar lawsuit that Apple will not back down on and will win )

  17. ColoradoKid Says:

    15 – Molto grazie …. I’s a pouring a mighty tall glass o’ Stranahams with a splash of Voss as we speak …. and flipping over to Q2 before I ….. errrr …. flip out …. ;-)

  18. Kit Gerhart Says:

    10,
    I don’t know where your information comes from, but in the U.S., at least, there have been NO RECALLS OF ANY KIND on 2012 or 2013 MINI’s, and no recalls having to do with turbochargers on any 2012 or 2012 BMW’s.

    See:
    http://www-odi.nhtsa.dot.gov/owners/SearchVehicles

  19. T. Bejma Says:

    If it were not for a turbo on my Cruze 1.4l the fun factor would be completely gone even though the mileage (combined 33 mpg) is still very good. Turbo technology is not new and has proven to be very reliable over the years. I am a fan.

  20. Eric Reading Says:

    Very funny John, at 3:15 on autoline daily you slipped up and said, “but that could sh*t up… shoot up nearly 6 fold…” Yes, you corrected it, but still ;) I couldn’t stop rewinding it to make sure you didn’t say what I thought you said at first.

  21. Alex Kovnat Says:

    > Carsharing membership has grown
    > dramatically over the last 5 years
    > to 2.3 million users, but that
    > could shoot up nearly 6 fold.

    If car sharing helps with environmental issues, than bravo for those who provide such services and those who participate.

  22. Alex Kovnat Says:

    > Well it looks as though the
    > conventional naturally aspirated
    > engine may be going the way of
    > the 8-track and VHS.

    One of the benefits of ethanol is, it increases antiknock (octane) rating. Unfortunately, I have heard that oil companies are using lower-octane gasoline stocks when blending with ethanol, so as to avoid “octane give-away”. It seems to me that a technical benefit of giving away a little more octane than the law specifies for a given grade of gasoline is, high specific output turbocharged or supercharged engines are less likely to run into detonation issues.

  23. HtG Says:

    Car sharing

    My experience with ZipCars in the DC area is that there’s also a convenience value. There are ZipCars parked in spaces salted all around town, so it’s easy to take a short walk to your waiting ride. Come to think of it, I see them near bus stops and metro stations, too. Just a couple of cars on the street, or maybe a few in a public lot. That’s quite different from the traditional rental fleets who have their inventory at a central shop. If I lived in DC I’d probably think hard about joining the hip crowd; the little snag being it’s not entirely up to moi. Last I checked, you could even rent a Miata if you’re really fizzing in your fur.

  24. HtG Says:

    trust me, you don’t want to drive in DC or anywhere near it.

  25. HtG Says:

    Funny Reminiscence

    When my BiL was merely a young pipsqueak driving the Muckity Muck Twins around, they struck another car on the highway, but he was instructed to just keep going to the destination. Official like.

    Everybody’s a peon somewhere

  26. Kit Gerhart Says:

    I’ve never used ZipCar or similar, but it sounds like a great service in a big city, assuming it is cheaper than a taxi.

  27. HtG Says:

    In DC, if you’re staying within the district or very close, then a taxi or regular mass transit is the way to go. But so much of DCMetro is spread out beyond the beltway that the Zipcar becomes valuable. It’s an odd place DC, with people lining up on Rt 66 to act as ‘slugs’ in other peoples’ cars during the morning commute so the car can travel in the HOV lane. (True story, some of these slugs are doing quite sensitive jobs. Yep)

  28. HtG Says:

    A chief editor at one of the political mags didn’t even have a car, he traveled by taxi. (a very reliable statement from HtG)

  29. Kit Gerhart Says:

    When I went to NYC a couple years ago, I got around almost entirely by subway and walking, but New York is a rare case in the U.S., a city having a really good subway system, at least where I was, and wanted to go.

  30. cwolf Says:

    As long as you can buy an ICE that has been tested over time and provides the same mpg’s,I’ll stick with the ICE! Using Ford as an example; their turbos do not deliver the mpg’s touted. And being only one in a long line Ford family, there are NO regrets with those owning std engines in the slew of uncles and cousins driving P/U’s, yet only the ones who don’t drive a truck for its intended purpose are content with their turbo’s.

  31. HtG Says:

    So, Elon tweeted this…

    “Engineers interested in working on autonomous driving, pls email autopilot@teslamotors.com. Team will report directly to me.”

    I love this guy !

  32. Kit Gerhart Says:

    It would seem that using smaller displacement turbocharged engines rather than larger NA engines of the same power, should give better mpg,, if driven gently. That doesn’t seem to be the case, though, with Ford’s heavily hyped turbos.

    Diesels are a different story altogether, as anyone would know who has driven both an old Rabbit diesel, and a fairly recent VW TDI. There is no comparison in how they work.

  33. Kit Gerhart Says:

    30,
    Autonomous zipcars could be a good substitute for taxis. Companies renting them should keep several near popular bars.

  34. cwolf Says:

    Keep this in mind about China: Their GDP (7.5% about)is not based on deliverables, but what was manufactured. China’s abrupt change to invest from within did create jobs building more and more housing and industrial complexes,…but their is not enought people to rent to!(perhaps 20-30 % at best). And China’s cash debt is so sever, it will double in 3 years, given its 35% rate of increase. It is now over 200% GDP….so in 3 years? China is another Greece! So my point is Dongfeng’s investment in PSA don’t mean crap! A dead horse is a dead horse regardless of the ride.

  35. Kit Gerhart Says:

    33,
    I assume that post is not the real cwolf.

  36. cwolf Says:

    Kit,are you asserting that these few tidbits depicting the real China economy are not true or factual? For as much as I think CK is in a fog about GM,what he shares with us about the $hiphole the world really is in or could face is more real than what is reported. But for a guy who disputes global warming, it is understandable why my comments in #33 are a hard pill to swallow. Yep… my wifey just smacked me so I must be the real cwolf…I think!

  37. HtG Says:

    35 The real cwolf will easily tell us what little foreign jobby he’s got in the garage. ;)

  38. cwolf Says:

    It wouldn’t be a “69″MGC,dark blue with 16″ 68 spoke wheels with a hydrolic O/D on the column. And with exactly 30 K original miles. Nah……

  39. Kit Gerhart Says:

    33, 34
    A lot of why post 33 appears to not be the real cwolf is the poor grammar and word usage, and mis-spellings, ie in “sever” and “enought.”

    As far as China, the thing that will really be a problem for them, is if the U.S. defaults on the debt to them.

    As far as PSA, they are the second biggest car company in Europe, and the biggest industrial company in France. I’d be very surprised if the French government would let them shut down.

  40. cwolf Says:

    I don’t get it,fellas? Don’t you try to protect your investments by listening to Bloomburg,investment sources and pulse on world affairs? Hope you are sitting on a good hunk of it at this time, careful with stocks and waiting for the bond mkt. to spark in 6-9 mos. Better yet, buy an ol’hot rod and enjoy the moment.

  41. HtG Says:

    37 correct! :)

  42. cwolf Says:

    Sorry about the grammar. Plucking at the key board while getting ready for bed. Bad day today and the 4 brews and only a bowl of chicken soup don’t help matters….know what I mean? Gotta go…have a good Thurs.

  43. MJB Says:

    @#7
    Good points, TJ’. Except I think you’re severely overestimating the manufacturer’s eagerness to leave customers high and dry by focusing more on sales than service if they get to switch to the direct sale model. There’s entirely too much money to be made on the service side for anyone to ignore. Especially the ‘bean counters’.

  44. MJB Says:

    CK, I could be mis-reading some of your comments, but it sounds like you’re of the impression that, if allowed to sell direct, auto makers would in essence get greedy and start doing what Macintosh does with their product, but on a more grand scale.

    Not so. Apple can do that because they cornered a market (which, by the way, is now beginning to paint them back into their own little corner – but that’s another debate). Car makers can’t do that simply because there is too much competition. The manufacturers would have just as much incentive to sell cars as dealers do.

  45. C-Tech Says:

    Some points to consider about dealerships and why manufacturers want to sell direct to the consumer. The dealer profit margin on cars and trucks range from about $600 (Yaris, Sonic, Fiesta) to $4,000 (Tahoe, Expedition, Sequoia) and higher on some luxury brands. Why give that away? The profits on service are good, and considering what is paid to the dealers for warranty service, if the manufacturer can control those costs, well you get the idea. If manufacturers can break down the states dealership laws, look for manu. to buy back dealers or buy the stock of the big dealer chains.

  46. C-Tech Says:

    Enterprise is running commercials for their car-sharing serice.

  47. C-Tech Says:

    Given the mis-management at many dealers, for some of them, being owned by the manu. can only go up.

  48. A. Bellis Says:

    Well, I guess now I know how things get twisted in the media. When I said “I believe that a manufacturer has the right to sell their products through a franchise system …or not!” I was refering to all manufacturers not just the automotive manufacturers. There are a lot of companies that sell their products and services directly to the customer. If a manufacturer decides to sell his product through a franchise system, for whatever reason, that is fine with me because that is their choice. I do not believe that a manufactured should be forced to sell their products through a franchise system. Unfortunately, as you stated, the law does not allow this for the automotive industry. So why don’t we change the laws?

  49. HtG Says:

    In their actions, Tesla respects state laws barring new car sales except through franchises. The only thing you can buy in their stores is swag like shirts, hats, and the like. To get a car you have to go online. Whether this is a winning legal strategy or not, only the Federal courts will tell us, since franchise laws are at state level, AFAIK.

    Anyone reminded of Commodore Vanderbilt’s ferries across the Hudson and the Commerce Clause?

  50. T. Bejma Says:

    #48

    I would love to buy a car that way. In fact, that’s what I did when I bought my Cruze. With employee discount we get a “no haggle” price so I just found the car online through dealer inventories, showed up with my check and drove away with a new car.

    You know, they still made me go see the Finance person at the dealer so they could try and push their Loan (even though they knew I was paying cash), Extended Warranty, Undercoating, Fabric Protection, Paint Sealer, etc., etc.). What a pain!

  51. ColoradoKid Says:

    HtG – Thanks for the push in the right direction yesterday . Suffice it to say by the time SG got home from work I was ” Comfortably Numb ”

    http://www.youtube.com/watch?v=pl9dc5FhFYU

    Honestly by the time I bowed out I wasn’t sure whether I should scream , cry .. or grab the next flight to Detroit and knock some sense into a few peoples deluded little heads …

    To think in this day and age … with all the legitimate evidence and historical proof available there’s still a majority of folks out there that still believe the Corporate World in any way shape or form gives a damn about anything BUT their own profits [ at the expense and sometimes lives of their consumers ] astounds me beyond belief .

    btw – as to # 48 …. a resounding …….YES !

    And on that note ….

    ——–

    Mr T Bejma

    Oh yes T . By all means . Lets disassemble the Dealer network … make car sales direct and give even more money to the likes of GM so they can concoct another 1000 ways to throw it all away ..

    Because of course GM cares so much about its customers welfare .. Hmmn …. lets see now …. this would be the GM that ..

    In collusion with Standard Oil and Goodyear managed to destroy some 90% of our public transportation system ( read Trolleys and Local Trains ) along with 70% of our Railroad network …. all so they could sell more cars, trucks & buses .. and all of which we are now paying for in spades … both financially , environmentally and convenience wise

    Built and sold with absolute malice and intent deadly cars to the general public

    Managed over a three decade era to wheedle billions out of the US tax payers ( beyond the public eye ) only to waste each and every dime

    Not to mention later taking multiple billions in bailouts which will never be repaid

    As well as flat out lying on a constant basis about their products , business practices as well as defying the very contract that gave them those bailouts etc etc etc ad infinitum

    …. so oh yes .. By all means . Lets give the White Collar Corporate thieves at GM even more of our hard earned cash

    And by the way T .. everything above is absolutely historically verifiable and accurate [ and your minders know it ] …. but by all means … go ahead son …. try and contradict me or better yet attempt to discredit me in the slightest and guaranteed I’ll let loose with a ton more GM history that makes the above look like Disneyland in comparison .

    ;-)

  52. ColoradoKid Says:

    49 – And once again …. the corporate shill speaks out in favor of the thieves and liars he works for

  53. Kit Gerhart Says:

    50,
    It doesn”t have much to do with today’s GM, but yeah, GM, Firestone (not Goodyear) and some oil companies’ dismantling public transport in LA, and elsewhere in the 1930′s and ’40′s, ranks among the worst examples of corporate evil in history.

  54. HtG Says:

    evil inc.

    You want to hear a tale? Check out Living On Earth’s piece on payments by gas companies to landowners.

    http://www.loe.org/shows/segments.html?programID=13-P13-00037&segmentID=2

  55. ColoradoKid Says:

    HtG – TESLA ( #48 )

    Actually HtG … thats not entirely true . When they were trying to sell me a TESLA S at our local … errr …. store front … we informed them that we … absolutely DO NOT do any online/internet financial transactions [ seriously .. we don't ] they immediately came back saying that was not a problem and that we could purchase the car direct from the ” Store Front ” So … methinks a bit of Smoke & Mirrors is going on with TESLA on that front as well .

    And hell … you want ‘ Evil ‘ ?

    Read about the most recent Google revelations ? ( NYTimes WSJ etc )…. the one where it has been proven that while those Google trucks were photographing neighborhoods and streets for Google maps ….. they were also gathering information and communications via WiFi from those neighborhoods .

    Seriously HtG …. Google is evil personified … course I’ve known that for years …. tried to tell everyone here awhile ago … but hey …. what do I know ;-)

    —-

    Kit – It most certainly was Goodyear ( Firestone played a minor role ) and Standard Oil … along with GM that were at the very forefront of that moment in History . …. btw …… GM along with Exxon , Shell etc still maintain a very high level of manipulation in order to keep Public Transportation and RR’s from making a comeback . Ask me how i know that . Or better yet …. ask a DC insider if you have access to one ;-)

  56. Kit Gerhart Says:

    53,
    That was an eye opener to me. I’ve heard about about the environmental concerns with fracking,, and I’ve always figured the “land owners next door” would envy those receiving the windfall from the drilling, but I had assumed those with the wells on their land were making good money, much more than compensation for the “inconvenience” of it, and having to see the countryside disfigured.

  57. Kit Gerhart Says:

    54,
    Multiple sources, not just wikipedia, say it was Firestone. Of course, there are some sources that say it was less of a “conspiracy” than we’ve been led to believe. Whatever, the dismantling the systems, and more importanly, permanently losing the rights of way where they ran, is a huge loss for a number of cities.

  58. Kit Gerhart Says:

    re GM streetcar conspiracy, see:

    http://www.knowledgerush.com/kr/encyclopedia/General_Motors_Streetcar_Conspiracy/

  59. HtG Says:

    54 perhaps Tesla was offering you the use of their computer, but that is an interesting bit of info, CK
    —–
    inside DC, why limit myself, eh?

  60. T. Bejma Says:

    Guess Honda is in no hurry to lose their title of being one of top recall companies…

    http://www.autonews.com/article/20130919/OEM11/130919820/honda-to-recall-405000-vehicles-over-airbag-system-glitch#axzz2fLub92L5

  61. Shane Villasis Says:

    I deem you ended a number of moderately attention-grabbing points. Not very several persons would really think about this the way in which you just did. I am really impressed that near’s a lot in relation to this subject that has been discovered and you perhaps did it hence nicely, with hence ominously caste. Top-notch one, express gratitude you.