AD #1245 – Toyota #1 in Sales, GM Upsets Suppliers, 2014 Cadillac CTS Goes on a Diet
October 28th, 2013 at 12:00pm
Runtime: 8:40
Toyota is in the lead to be the number one global automaker this year. Suppliers to General Motors are up in arms over the way the company recently dictated new terms and conditions on their contracts. And speaking of the General, it looks like the company will adopt a modular approach with its platforms, similar to Volkswagen’s strategy. All that and more, plus a look at how Cadillac engineers trimmed the weight of the new CTS.
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Hello and welcome to a brand new week of Autoline Daily, now let’s get to what’s happening in the global automotive industry,
TOYOTA #1 IN SALES
Well the automotive horse race results are in the for the first nine months of the year, and Toyota is in the lead to be the number one global automaker. The Japanese carmaker sold more than 7.4 million vehicles. GM is next with 7.2 million and VW rounds out the top three with just over 7 million units in sales.
CHINA TELLS WHICH OEMS TO QUIT
As we’ve reported before, there are hundreds of car companies in China and it’s no secret that the government thinks that’s too many. So China’s Ministry of Industry and Information Technology just issued a list of 48 automakers that it wants to quit and go away unless they pass an audit, or if they merge with a larger automaker.
CHINESE CHEVY FOR AFRICA
And speaking of China, the Buick Excelle based, Bajoun 630 sedan will be exported to North Africa as a rebadged Chevrolet Optra starting next year. Bajoun is the entry level brand that was created by GM and its Chinese partners SAIC and Wuling. The Chinese government mandated that foreign automakers create new Chinese brands from scratch, all with the goal of creating more Chinese chief engineers who know how to develop an entire car. And we would like to thank Rivera Notario for giving us a heads-up about this story via Twitter. If you hear about interesting news developments, you too can submit ideas to us at Twitter.com/autoline.
SUPPLIERS MAD AT GM
Suppliers to General Motors are up in arms over the way the company recently dictated new terms and conditions on their contracts. Amongst other things, the new terms spell out exactly what suppliers must do and what they are liable for. But what really has suppliers angry is that they weren’t consulted about these changes or even warned that they were on the way. The new terms were issued in July. Last month the OESA, the Original Equipment Suppliers Association, organized a special conference for its members to learn about the new contracts and compare them to other automakers. GM, for its part, says its terms and conditions had not been updated in nearly 20 years, were badly in need of revision, and that they are consistent with what other automakers demand. Ford’s vice president of Purchasing, Hau Thai-Tang, says the company recently updated its terms and conditions, but that it spent three years consulting with suppliers before issuing them. He says Ford does allow for suppliers to ask for variations in the contracts, but that they rarely ask for it. Here’s my Autoline Insight. I think with the uproar, GM now recognizes it should have consulted its suppliers before making such drastic changes to its contracts. At least I hope that’s the case. I’ve heard more than one senior supplier executive say they believe GM is back to its old arrogant ways. Click the link in today’s show notes to find the full 13 pages of those terms and conditions.
GM CHANGES MODULAR DESIGN
Big automakers want to use their size to cut costs. They all want global-scale, modular platforms that reduce costs and shorten manufacturing and product-development times. The goal is that any model, no matter what size, powertrain or body type, can be built at any plant around the world. Volkswagen has identified that about 70% of its vehicle’s value is located between the front axles and the instrument panel. The German automaker calls it MQB, which will cover 39 models spanning 8 sizes and markets segments by 2019. Now it looks like General Motors will be dropping its old architecture approach that is based on vehicle segments in favor of a strategy more like VW’s. The company recently shifted its lead product development back to its Warren, Michigan R&D facility, instead of spreading that out all over the world. GM has yet to announce which vehicle will be the first to take the modular approach, but we will be the first to let you know.
Automakers are scrambling to reduce the weight of their vehicles, all with the idea of improving fuel economy. The new Cadillac CTS is a great example of how to do just that and we’ll get into the details after this.
2014 CTS GOES ON A DIET
(Our look at the 2014 Cadillac CTS is only available in the video version of today’s show.)
Jeep has had all kinds of problems getting its new Jeep Cherokee launched, but now they seem to have those problems behind them. To get all the inside information, join us for Autoline After Hours this Thursday at 6 pm eastern time when our guest will be Mitch Claw, the vehicle line executive for the Cherokee.
And that wraps up today’s report. Thanks for tuning in and please join us again tomorrow.
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Comments (48)
October 28th, 2013 at 12:15 pm
Ah those Chinese and their central planning. Two guesses how that works out!
October 28th, 2013 at 12:28 pm
That’s the last thing any auto maker wants, make their suppliers mad at them, specially in today’s auto industry, where suppliers do more and more than ever before.
October 28th, 2013 at 12:42 pm
John McElroy-
Do you know what in particular the suppliers don’t like about the new contract terms or is it just they were not consulted?
Thanks.
October 28th, 2013 at 12:55 pm
Cool information about the CTS. I wonder what the material breakdown is on the competing cars that weigh more?
October 28th, 2013 at 12:59 pm
Lots of interesting ways they saved weight on the CTS. It reminds me of the thoughtful way they reduced mass back in the first wave of GM downsizing back in 77. Some of the later reduction decisions seemed to result in a significant loss to vehicle dynamics and styling (particularly frightful on some 80′s Buick, Olds and Caddy models).
October 28th, 2013 at 1:18 pm
In re: to the “suppliers mad”: This is not new. I spoke to a person in that line of work. The contract had a spec that the supplier would have a Liason” available 24/7, including such holiday’s as Christmas and would call just to be a jerk and it didn’t allow for a cost of materials increase.
Since the OEM was so arrogant they didn’t pay attention to the end of the contrat date thinking it would get automatically renewed and since the supplier knew the OEM only had a day or so supply, this supplier let the contract run out and then they set the terms for the next contract!
My advice, if it costs you more money to do business that there’s profit, it’s time to do something with a business that’s on the up and up!
Thanks!
October 28th, 2013 at 1:28 pm
They need to send some of the Cadillac people to help with the next Cruze, which, while a nice car, weighs more than it should.
October 28th, 2013 at 1:30 pm
Not totally defending GM but a couple points, the
“mad at GM” title, is that an interpretation or what is there backing up this?
Tell the truth here, as long as GM publishes terms of a contract and tells everybody they are getting the same terms, what’s the problem? As if going to suppliers and having them all give suggestions is going to make things “better”. All they would get is more complaints when some people got what they wanted and others didn’t. Sounds like DeLorenzo is still grinding his chops on GM with stuff like this. All GM can do is stay on the move.
IOW, I have serious doubts about the validity of the “report”.
October 28th, 2013 at 1:45 pm
Latest Consumer Reports Reliability Rankings.
Ford still struggling, not just MyTouch but also now EcoBoost…
http://www.autonews.com/article/20131028/OEM01/131029889/lexus-tops-reliability-rankings-ford-again-near-bottom#axzz2j2WPFk00
October 28th, 2013 at 1:46 pm
The CTS weight reduction is impressive, but I suspect the added use of expensive light weight materials is a major reason why the price increased so much.
October 28th, 2013 at 2:13 pm
Soooo, I compared the Ford and GM contracts a little. Sect. 32.03 of the Ford contract says that the supplier must only share their financial information so Ford can be confident the supplier can deliver. But sect.16 of GM’s contract says,
“Seller will cooperate with Buyer so as to facilitate Buyer’s audit, including, without limitation, by segregating and promptly producing such records as Buyer may
reasonably request, and otherwise making records and other materials accessible to Buyer.”
…without limitation….
Houston we might have a problem.
October 28th, 2013 at 2:15 pm
of course, I’m just a guy eating his lunch, YMMV.
October 28th, 2013 at 2:17 pm
#7 I knew it, when I began blabbering about Ford turbo engines a yr or more ago, I got accused of being an old fart with a mindset from the 70′s and that I was wrong, that today’s metals and technology had solved all issues with turbo technology in every-day cars and it would not be an issue, to all of you: HA HA HA, no wonder Ford never uses the word turbo, it’s “ECOBOOST” not turbo. E C O B O O S T it gives you a boost and it’s economical and ecological and downright COMICAL!!
October 28th, 2013 at 2:18 pm
TB them Cruzes and Sonics and Silverados are starting to look pretty attractive to lots of buyers.
October 28th, 2013 at 2:23 pm
Ruh Roh II
A Tesla in Mexico crashed and…wait for it…burned.
http://www.businessinsider.com/report-another-tesla-model-s-caught-fire-after-a-crash-video-2013-10
October 28th, 2013 at 2:29 pm
Will insurance companies now insist that Tesla owners carry extra fire insurance for their cars?
October 28th, 2013 at 2:43 pm
#8
The new CTS is also considerably bigger than the outgoing model.
#9
Thanks for doing that HtG, but I am pretty sure that has always been in the GM contract. The linked site has both versions of the GM contract, if you have any break time left, it would be interesting to see what those differences are. I try and read that stuff and my eyes start glazing over…
Quality perception…
From the CR article:
“In the first nine months of the year, the Camry was the third-most-sold vehicle in the United States…”
“While Toyota and Lexus enjoyed high overall reliability rankings, the magazine said it will no longer recommend the Camry”
Still proves that people buy what they think is good, not what really is good…
#12
October 28th, 2013 at 2:48 pm
11, Even if the Ford turbos didn’t have “issues,” I would be getting really tired of all the very misleading “ecoboost” TV ads. As, I think G.A. stated a few days ago, it should be “eGoboost.”
October 28th, 2013 at 2:49 pm
14,
If Teslas, or other EV’s have much propensity to burn WITHOUT crashing, I’d think home owner’s insurance companies would charge higher premiums if you store, and charge an EV in your attached garage.
October 28th, 2013 at 2:52 pm
#15
What was CR’s reason for not recommending the Camry? FYI, “not recommending” could be for many reasons.
When CR had their child seat fiasco (~7 years ago), I stopped my subscription and haven’t looked back.
Yes, just like all those years GM sold the Cavalier and Cobalt as Honda Civic/Toyota Corolla equals; people bought them because they thought they were good cars.
October 28th, 2013 at 2:54 pm
15,
Quote without comment:
“We (CR) can no longer recommend the Camry because it scored a Poor in the IIHS small-overlap crash test.”
October 28th, 2013 at 2:58 pm
18 Camry, RAV4 and Prius V didn’t meet the latest IIHS crash standard that impacts the extreme corner of the car’s front. TB’s link also says that Rover, Fiat and Tesla weren’t rated because of too few responses. Darn, I’d like some sense of how Rover’s doing.
Apparently Rover owners don’t need no stinking consumer reports.
October 28th, 2013 at 2:58 pm
On Youtube there is a 23 min long CR video talking about the latest CR reliability report that is pretty interesting #18 I believe it has to do with the poor results of the crash tests, ditto for the new Corolla.
October 28th, 2013 at 3:01 pm
HtG in the CR video they explained that if they don’t get enough responses on a give vehicle, they don’t publish them, but he did mention about the LR4 having a lot negative responses from its owners, just there weren’t enough of them
October 28th, 2013 at 3:07 pm
20,
At one time, CR gave reliability results on about everything, but a few years ago, they quit giving results unless that had at least 100 responses for a car model.
With CR, as with other reports on cars, or any product, you have to make buying decisions based on what is important to you. If you like a Camry, and are willing to take the chance that you will not be the one in a million who will get into a crash where another car might do better, you will still buy the Camry.
October 28th, 2013 at 3:10 pm
People who think safety is a must, usually buy Volvo, Subaru or Mercedes, otherwise they just count airbags, the more they have, the more secure they feel.
October 28th, 2013 at 3:11 pm
7,
Only MINI is lower than Ford. I guess I’ve been lucky; I’ve had zero problems with my MINI. I’m sure it helps, though, that mine is a base, non-turbo with no options except 16 inch wheels.
October 28th, 2013 at 5:34 pm
Caddy better be careful with their ads because a lot of their old customers equate weight with safety
October 28th, 2013 at 5:42 pm
Anybody read the Ward’s piece on common platform at VW?
They’re writing that so much of the cost of a car happens in dealing with crash structure, that a goal is to get the engine compartment to dashboard made common.
It’s interesting to think that Ford is putting an engineer like Hau Thai-Tang in charge of purchasing, when the Ward’s article makes it seem that engineering goals of a common platform are driving supplier cost goals.
October 28th, 2013 at 7:17 pm
I am not a big fan of Consumer Reports “reliability” because they are not solely based on mechanical issue that make the car unable to be used for transportation. If someone made a car that drove 500,000 miles without ever needing an oil change brakes tires or any other maintenance but the dome light bulb burned out every month on every one it would rank at the bottom of consumer reports reliability ratings.
Scion introduced no new models for 2013 I can recall other than the FR-S (technically a 2012 but a late year addition) which Pedro seems to find very reliable yet went from number 1 to number 11 in reliability. Did they suddenly just start building the same cars in an unreliable way for 2013??? or did more “crabby” consumer reports subscribers just happen to buy scions this year?
October 28th, 2013 at 7:32 pm
No it’s the FR-S’ fault, seemingly, even though we’ve only had minor things, (condensation in tail lights, rattling door speaker) some people have had serious problems with the fuel delivery system and other engine related stuff, sometimes it’s a matter of luck. just look at Kit’s Mini, minivan and the old Malibu Maxx he traded away.
October 28th, 2013 at 7:50 pm
#28
Actually, according to the weighting system that CR uses, your dome light scenario would not drive your wonder car to the bottom…
CR: “Problems with the engine-major, cooling system, transmission-major, and driveline are more likely to take a car out of service and to be more expensive to repair than the other problem areas. Consequently, we weigh these areas more heavily in our calculations of Used Car Verdicts and Predicted Reliability. Problems in any area can be an expense and a bother, though, so we report them all in the Reliability History charts.”
October 28th, 2013 at 8:35 pm
28, CR’s reliability data is most useful, if you look at the entire chart. For example, if you are deaf, “squeaks and rattles,” and “audio system” will be of minor importance, but “engine mechanical” would be important to everyone. They have 15-20 different trouble areas that they evaluate.
October 28th, 2013 at 8:42 pm
#29 Pedro Fernandez – thanks for the update on the FR-S Pedro… didn’t know you had had those minor issues… but I don’t read every comment every day.
#30 T. Bejma – was I being a bit over the top yes but I think most got my point… you may be the best to answer a question for me. The beginnings of my distrust for the ratings was the consistent low ratings (usually poor as I remember) that they gave year after year to the Safari/Astro van twins. The 4.3 V6 and the vans in general always seemed to be very reliable vehicles even if they were a bit more “crude” than other minivans.
Could you shed some light on the major mechanical issues that led to them being at the bottom of Consumer Reports reliability ratings year after year in the late 90′s early 2000′s? (these are the time frames I used to check Consumer Reports ratings) I have never known anyone to have major issues with these vehicles and most mechanics recommend them to be quite reliable that I talk to.
October 28th, 2013 at 10:18 pm
32,
I know two people I can think of who have Astro vans, and they are a prime example of why you need to go through CR’s list of trouble areas to find out what matters most to you. One of the vans in question was one of the last built, ’04 or ’05. The other is late 80′s or early ’90′s. The old one has a lot of miles, I think approaching 200K. Neither has had major powertrain trouble, that I’m aware of, but both have had various door latch, window motor, rattles, and various problems that can be annoying, but don’t keep the vehicle from running. I suspect that is why Astro/Safari didn’t come out well in CR’s reliability surveys.
October 28th, 2013 at 10:35 pm
#33 Kit Gerhart – Thanks Kit… that is my point… back then they rated both of these low in the engine area as well and as poor reliability overall.. squeaks and rattles and the occasional window motor failure do not make for an unreliable vehicle yet these two got low ratings across the board (including engine and transmission) and an overall poor rating from consumer reports back then.
Like I said just an observation of how I feel they rate squeaks and rattle a little too high in determining overall reliability. Regardless of what they say they do.
October 28th, 2013 at 11:06 pm
I guess what I am trying to say is that while those vehicles hardly had mid 90′s Accord or Camry build quality, a vehicle that consistently goes over 200,000 miles needing next to no driveline work but may have squeaks, rattles, cheap plastic and one or two other issues costing less than $500 to repair should not be rated poor in overall reliability in my opinion.
Maybe T. Bejma can shed some light on issues with the driveline neither one of us, or the many people I have been around that feel this GM engine is reliable, knows about that led to them rating them so low back then.
October 29th, 2013 at 6:02 am
My 1980 X-car had zero engine or transmission issues, it was mostly the ever failing cooling fan relay that kept failing and allowing the car to overheat, first destroying the radiators and hoses and eventually it would have done the engine in, if I had lived in So Fl then, I would have asked the tech to bypass the thing, so they fan would stay on all the time, can’t do that in the cold NE winters, however.
October 29th, 2013 at 6:17 am
Does IIHS give carcos a heads up about new crash tests? Honda knew about the small overlap test, maybe because they hired the director of CR, but if you’re in the dark, it’s going to take years to meet the new standard. Something doesn’t smell right.
John, does IIHS inform car makers in advance about a new safety test?
October 29th, 2013 at 7:31 am
#32
Chevrolet Astro…Time needs to forget that one.
GM has done a good job polishing the Wikipedia Entry for it and if one wasn’t at driving age during its production time might think it was a competent vehicle. As much as I like truck based SUVs, the truck based Minivan was simply a cost saving venture.
It’s too bad sales quantities aren’t on the Wiki. The profit margin had to be really high by the last model year in 2005, as its 1980s design went almost unchanged in the near 20 year run.
October 29th, 2013 at 8:00 am
34,
The 2006 CR “Buyers Guide” shows good or better for engine reliability in Astro/Safari for all years from’98 to ’03, but worse than average for ’97. I don’t have anything older than that to check.
I never much liked Astro and Safari, because of tight front foot space, so-so gas mileage, the blind spot in the inside rear view mirror, (until they started the Dutch door,) and a few other things. My boss at GM would rather I had bought an Astro, than the Dodge Caravan I bought in 1989. Now, though, if you just want a “beater” box on wheels that will usually run, Astro seems to fill the bill for that pretty well, thinking about some people who have them for a certain purpose, and don’t drive them very much.
October 29th, 2013 at 8:05 am
Rented an Astro van (many moons ago) and came away very favorably impressed; plenty of space for six adults, all their luggage (with space to spare), good ride, averaged 25 mpg (highway) and the one I had had most of the ‘goodies’. More than a mini-van, and less than a full sized, it worked for me. Would I own one, not now (don’t need that much capacity) but I can surely see the niche it provided.
October 29th, 2013 at 8:09 am
I suspect Toyota will change a few things with those cars within a year or so, that will make them do better in that small offset crash test. The publicity on this is not good, even though there is probably less than one chance in a million that it will make any difference for an individual driver.
It seems that crash test results can be improved substantially by doing a few things that aren’t even very obvious. One that comes to mind, is the last GM minivans. Originally, when they were called Venture, they did poorly in most of the crash tests, but they changed it enough before renaming it Uplander, that it did much better in the crash tests. There is little obvious difference, other than the funny nose on the later ones, but they did something to make the structure work better.
October 29th, 2013 at 8:58 am
#35
The 4.3l HO V6 was rock solid but the weak point was the transmission. Being a full frame vehicle, many used them to tow and if you weren’t diligent changing the ATF, they would fail prematurely. I have not heard of any complaints about them and usually, when it comes up in conversation that I work at GM, people tell me they wish we would bring it back.
October 29th, 2013 at 11:28 am
I also rented an Astro van for a long trip and the wheels were out of balance, creating a very unpleasant driving experience for all aboard, specially the driver. No more Mickey Mouse rental agencies.
October 29th, 2013 at 11:31 am
Wow, I would not of guessed the Astro had such a fan club.
October 29th, 2013 at 12:21 pm
#44 well look at what other option there was back then: the ancient Aerostar and the Dustbuster Lumina and its ilk!
October 29th, 2013 at 11:10 pm
It will be interesting to see which one of those lightweight components won’t pass for durability and by next summer they may have to make a few revisions. That front extrusion that is called a bumper and made out of aluminum may bend easier in an accident. In mean time GM has to be commended.
What GM did to the CTS was similar to what Ford did on the Explorer as compared to the Traverse/Acadia/Enclave. Incidentally the Explorer outsells the Traverse and Acadia together.