AD #1248 – Nissan’s First CMF Launch, Tesla Secures Battery Supply, Scion’s SEMA Line-up
October 31st, 2013 at 11:55am
Runtime: 9:36
The 2014 Nissan Rogue is the first vehicle in the company’s line-up that uses its new Common Module Family architecture. Tesla and Panasonic announce a deal to expand their partnership for another four years. Scion unveils the modified cars it will show off at next week’s SEMA show. All that and more, plus KPMG explains how automakers are coping with increased demand.
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Welcome to Autoline Daily, on this, one of the most fun holidays of the season, Halloween! Hope you get a bunch of happy trick or treaters tonight. But now let’s get to the news.
NISSAN’S FIRST CMF LAUNCH
All week long Nissan North America has been bringing in the media to drive and learn about its new Rogue. We’ll have a lot more about this vehicle in future shows, but for now here are the basics. This is a completely new vehicle. It’s the first new product to use Nissan and Renault’s Common Module Family architecture. Kind of like VW’s MQB, CMF doesn’t share platforms. Instead, it shares groupings of components, all with the idea of slashing costs. For the North American market, production of the Rogue is being moved out of Japan to Nissan’s U.S. plant in Smyrna, Tennessee. This is a bigger vehicle than the old Rogue, yet gets better fuel economy. It gets a 33 mpg highway rating, but that’s all the info we have on that for the moment. The only powertrain is a 170 horsepower 2.5 liter 4-cylinder engine mated to a CVT. The base price is $23,350, fully loaded it’s $32,270. But Nissan is going to keep the old Rogue in production, what it now calls the Rogue Select, and it starts at under twenty grand. There are some interesting technical details on the new Rogue so stay tuned.
A BILLION HERE, A BILLION THERE…
Two years ago Panasonic partnered with Tesla to provide the EV maker with lithium-ion battery cells and now the two companies are expanding that relationship. Panasonic will now supply Tesla with 2 billion battery cells over the next four years. The cells will be used for the Model S as well as the upcoming Model X which will make its debut at the end of 2014.
DRIVING MISS AUDI SPORT QUATTRO
Back in September we showed you these pics of Audi’s Sport Quattro Concept it showed off at the Frankfurt Motor Show. But if that left you wanting more, you can thank Audi’s Facebook fans because now that they number over 100,000 strong, the company released this video of the car. And just in case you’ve forgotten, the Sport Quattro Concept is a plug-in hybrid that produces 700 horsepower. I know that a video is no substitute to having your butt in the seat but at least you can see what the Concept will look like tearing up the street and hearing it in its full glory.
SCION’S SEMA LINEUP
And it’s Scion’s turn to show us what it will have on display at next week’s SEMA show. The brand will have 5 vehicles on display as well as three 2014 tC’s that are competing in Scion’s Tuner Challenge. And no real big surprise is that 4 of the 5 vehicles are FR-S’s that look like they range from light performance upgrades to track-ready racers. The other vehicle is a slammed xB that has also been stretched and given suicide doors.
AUTOLINE AFTER HOURS TONIGHT!
Say, don’t forget to tune in to Autoline After Hours tonight. Our guest will be Mitch Clauw, the vehicle line executive for the new Jeep Cherokee. Get your questions ready and then join me and the Autoextremist, Peter DeLorenzo for the best insider information in the business. That’s tonight at 6 pm eastern time, or check out our website, or our YouTube channel, or the ITunes store tomorrow if you can’t join us tonight.
Coming up next: automakers are straining to keep up with demand, and yet they also are about to launch a record number of new products in the next five years. How can they cope with the crunch? That’s coming up next.
KPMG UPDATE
What a difference 5 years makes…
Only 5 years ago North American automotive OEM’s and suppliers were focused on taking out idle capacity. Layoffs, bankruptcy and mothballing assets were the unfortunate reality. Latin America, particularly Mexico had lost significant ground to labor arbitrage in Asia. The messages and the activity around manufacturing in the US have taken a dramatic turn. Automotive is again a highly profitable growth industry in the Americas. Now the pace of new products and thus the launch curve are accelerating exponentially. Maybe even more surprising is the resurgence of Mexico as an important manufacturing hub, as global OEM’s look to capitalize on the growing North American market.
This Autoline report will give you a glimpse into the expected launch activity, Latin America’s part in that activity and some of the pitfalls and opportunities that come with this kind of change.
The level of new model launches over the next three years is at an all time high..There is a 27% increase in the average number of launches including facelifts, redesigns and new product entries when one compares 2007-2011 vs. the expected activity from 2011-2017.
In particular, 2014 has an extraordinary peak of new production starts in both South America and North America.
In an industry coming off significant layoffs, downsizing and resource constraints, this level of activity is straining supplier resources. Despite best efforts across the board, we are seeing the toll for this spike in activity in launch delays and quality issues- which if unchecked- can lead ultimately to financial losses and perhaps even losses in market share. The resource strain is visibly evident in the tightening of plant capacity across North America in particular. From a low capacity of 47% in 2009, plant production capacity has risen to 90% in 2013. “Comfortable” capacity tends to run at 85% to 90% in order to accommodate peaks in demand over any one period of time.
To manage the overall market growth spurred by all of this new product and economic stability in the Americas, the global OEM’s are launching new plants. The surprise growth area in this regard is Mexico . While the capacity change in Mexico was quite flat and even falling from 2011-2013, there is a significant magnitude of change moving from 2014 through 2016. Mexico actually has the most number of new assembly plants planned in the next three years, tied with China and Brazil.
In several cases we are seeing parts that had been outsourced to Asia coming back into North America via Mexico as the true cost and risk of outsourcing certain classes of parts has become more evident. This leads to extraordinary growth opportunities along with a new palette of risk issues. Manufacturers, anxious not to repeat the mistakes of the past are looking to manage risks related to this changing environment of increased production, new product and new consumers.
As manufacturers work to mitigate these risks, launch preparedness, working capital acceleration programs and specific region based experience are critical to success.
KPMG has dynamic launch assessment tools customized to meet the needs of your specific product and plant. We work with manufacturers to develop action plans that can be implemented from the design phase through on-site execution with the supply chain.
Growth is the greatest consumer of working capital. True benchmark-level working capital management includes not only the typical days accounts outstanding but effective cash forecasting, tax management, and development of a cash culture. SKU proliferation and the effectiveness of the distribution channels have a direct impact on cash and ultimately on value. KPMG helps your team to take advantage of the opportunities in the working capital cycle and will build the systems, skills and metrics that will make the changes sustainable.
Managing a profitable manufacturing process and supply chain in Latin America amidst the growing demands on talent and capacity require in-country understanding of the State profiles along with labor availability and cost which can vary substantially by region. The changing customs, VAT and trade agreements across the Americas are a core competency of the KPMG tax team.
I am Kimberly Rodriguez and we welcome the opportunity to speak with you on successful launch management and working capital effectiveness. To learn more about KPMG visit www.kpmg.com/automotive
It really is amazing to see how many new car launches are going on right now. And that wraps up today’s report. Thanks for watching, we’ll see you tomorrow.
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Comments (37)
October 31st, 2013 at 12:17 pm
Reference KPMG’s ad: I am always in awe of the successful auto industry. The integration of hundreds of suppliers, thousands of employees, numerous dealerships, websites, testing, product improvements, research and development, advertising and marketing, etc…it is a miracle anything gets done at all!
Then you add in the sometimes overly complex, arbitrary, untimely and conflicting regulatory and political climate…well, my hats are off to all of you. Keep fighting the good fight.
October 31st, 2013 at 12:23 pm
I enjoyed Kimberly’s comment “as the true cost and risk of outsourcing certain classes of parts has become more evident”. In an effort to get to “LCC” price, the risks were deliberately ignored by those who didn’t want to let the “facts” interfere with their keen desire to move the needle. And so they did; for a little while.
October 31st, 2013 at 12:37 pm
Interesting commercial.
October 31st, 2013 at 12:47 pm
It has taken several years for the global manufacturing playing field to even out. I mean, the return of manufacturing to North America from Asia, especially fromn China is due to the growing middle/consumer class in that part of the world. People in Asia want / demand to enjoy the same level of prosperity enjoyed in North America and Europe. My only concern is that the protectorism nature of the Chinese Government will nationalize foreign manufacturing assets / investments to flood the world markets with lower cost goods which will once again shift global manufacturing back towards Asia via currency manipulation.
October 31st, 2013 at 12:52 pm
I find it a little interesting that Nissan is going to continue production of the current Rogue, especially while the new generation is available for sale. I know its just my opinion, but the new model looks like it will be much better. Does the current model have that much demand? If so, does Nissan really believe it will continue to sell as well as the Rogue Select alongside the new model?
October 31st, 2013 at 1:01 pm
I have had a few cars with OEM Panasonic Lead Acid batteries, they always lasted around 7 years. It is too bad Panasonic doesn’t sell them as replacements in the United States. Almost the whole automotive car battery business in the United States rolls up to Johnson Controls. It seems monopolistic to me.
October 31st, 2013 at 2:28 pm
My guess regarding the two Rogues is that they’ve amortized the tooling on the old one and it’s still profitable, even in reduced quantities.
They also may be selling it in other markets so they can justify continuing to produce it. Also, it gives them something to sell to folks that are price-shopping and don’t want a bigger, more expensive CUV such as the new one.
October 31st, 2013 at 4:21 pm
They should call the old Rogue “classic,” like some old Chevys that have been carried over, mainly for rental fleets.
October 31st, 2013 at 4:27 pm
Rogue and Classic: both old AMC nametags
October 31st, 2013 at 4:42 pm
I think the Rogue should have remained similar size/weight and therefore get maybe 35+ mpg instead of 33 mpg.
October 31st, 2013 at 4:44 pm
I’d about forgotten about the Rambler Rogue, I think the top trim level Rambler American for a year or two. Those AMC names keep reappearing, as with the Buick Encore. Buick must be counting on not many people remembering the AMC/Renault Encore, which was not a very good car.
October 31st, 2013 at 4:53 pm
@ #5 I belive Nissan will sell the old Rogue to rental fleets, as GM does with the old Impala and Captiva.
A question for Mitch Clauw tonight: If the Cherokee is not successful with this radical styling, will we see a facelift in 2 years?
October 31st, 2013 at 4:57 pm
@ #11 Kit I take umbrage with you over the Encore not being a good car. It was well designed with a weak engine and dubious durability of the beautiful controls. Perfect mechanic’s special!
October 31st, 2013 at 5:24 pm
13, Yeah, the reason I said the Renault Encore was not a good car, is that a friend had one, and it kept you techs way too busy. Other than that, not a bad car.
October 31st, 2013 at 5:26 pm
Wasn’t the Rambler Rogue a high-performance Rambler American?
October 31st, 2013 at 5:45 pm
The Rogue may have been a Rambler American with a V8. That would have been quick, for the time.
October 31st, 2013 at 7:35 pm
#13
I take umbrage that you think that the Encore may not be reliable. The 1.4l turbo has been proven to be very reliable and with a tune, can actually be pretty fast…
http://www.youtube.com/watch?v=Ml6MDpC-db8
I was going to rip on the Rogue because, let’s face it… it is BUTT UGLY!! But when I went to look at the sales figures, it is actually the BEST SELLING NISSAN vehicle in North America, outselling even the CHEAP Versa 125K to 91K through September of this year… Amazing… and… well… ummmm… very disappointed when it comes to the buying public these days…
October 31st, 2013 at 7:42 pm
TB: reports abound regarding problems with both Nissan CVT’s and Ford’s DCT’s transmissions, is this why GM sticks to more traditional units? and what ever became of the joint GM/Ford transmission research that went on all those years? Why isn’t Ford using them?
October 31st, 2013 at 8:09 pm
CVT’s (or snowmobile transmissions, as I like to call them
) are actually a lot better than a normal transmission, however, we have gotten so accustomed to the feel of shifting, that people have not warmed up to them. What feels strange in a conventional transmission, is very normal in a CVT. Eventually, all vehicles will probably go to CVT’s but as long the conventional trans gets comparable performance and mileage, they will still be around.
The 8 Speed Auto that Ford and GM are working on is still in the works, so stay tuned…
October 31st, 2013 at 9:47 pm
Does anybody know what the Hell she talked about ?
That was the worse monotone commercial I have ever heard. She could be a good politition, she talked and talked and made no sense at the end.
John, Stick to the good reporting you guys do, don’t add crap like this to your show.
October 31st, 2013 at 9:49 pm
I have a very simple CVT in my SilverWing scooter, and an “acts like a CVT” in my Prius. I like the one in the scooter, except that it doesn’t really have a wide enough gear ratio range, so the engine is spinning too fast at highway speed. The ECVT in the Prius works fine. It has no clutches or bands, and does the right thing to maximize mpg and acceleration, depending on what you do with the right pedal. Some people, especially automotive journalists, don’t like CVT’s, but those of us who actually drive then on a regular basis like them. If the ones in Nissans break, that is another issue, but is there evidence that they break? I don’t know.
November 1st, 2013 at 8:00 am
How do I love this piece? Let me count the ways. A Ferrari FF, painted dark grey was backed over by a delivery truck on the upper west side of Manhattan. Note the incendiarily cool asphalt matching tint of the FF’s paint job. The driver of the truck asserted that he ‘couldn’t see nothin’.’ Verily, I do not doubt it, since every Ferrari owner’s dream is to be numbered among the unseen.
Lesson; perché grigio?
http://www.businessinsider.com/nyc-truck-backs-over-ferrari-ff-2013-10?pundits_only=0&comments_page=1#comment-527395a56bb3f7f050c39d58
November 1st, 2013 at 8:07 am
The Renault Encore was a Renault Alliance with a hatchback. My ex-wife had an Alliance when we got together. I thought it was a decent, cleverly engineered car with a rather anemic 1.4L engine, particularly when combined with the automatic tranny. It rode great, handled great, and was roomy, too.
I noticed that they vanished from the highways of America very quickly after they stopped selling them, though.
November 1st, 2013 at 8:07 am
There’s got to be more to this story, creatively speaking. Maybe the Ferrari actually drove into the truck? And made a deal with the truck driver to take the wrap? Why was the Fcar behind a reversing truck, which goes BEEPBEEPBEEP? Was the Fcar unattended by the driver because he needed to run into a store and couldn’t find street parking? Get it? Street parking for Ferraris?
Keep it in a garage, pookie.
November 1st, 2013 at 8:09 am
Prancing Principessa
November 1st, 2013 at 8:42 am
The moral of the story, is that an F car should be red, not asphalt pavement grey. Then, the truck might be less likely to run over it.
November 1st, 2013 at 8:53 am
Anything colorful. It’s not a stuffy Teutonic premium sedan, driven by shy financier. It’s a Ferrari FFF.
November 1st, 2013 at 9:55 am
Last month a friend of mine was behind a garbage truck and it backed up and hit his car. Destroyed the passenger side of his car. He was lucky it wasn’t the driver’s side as he was in the car at the time. Car was totaled. He and the city and the insurance companies are in disagreement as to whom should pay for his car. This past Spring, right in front of our house, a garbage truck backed up and tore the front bumper off my neighbor’s car. She was in the car at the time but wasn’t hurt and was pretty calm about the whole ordeal.
November 1st, 2013 at 9:57 am
FF explainer
Here’s what happened, as far as I can invent events. The truck was stopped on the left hand side of one way only Columbus Ave, southbound. The FF driver spotted this blockage to normal flow, and decided to slot in behind the truck. Maybe he wanted to go buy smokes. So the FF is unattended. But now the truck driver comes back to his truck and needs to back up because some other car has gotten in front of him just like the FF driver. Or the truck driver never got out of the truck, but never saw the FF since it came in from the truck’s right shoulder blind spot(remember, the truck is on the left side of the road). That could do it.
November 1st, 2013 at 10:34 am
WTF is this KPMG ad?! I fell asleep after the first 30 seconds. John Mcelroy do you actually think people want to watch crap like this? NO WAY!
November 1st, 2013 at 11:31 am
I advanced the slider at the bottom of the frame, AA.
November 1st, 2013 at 11:48 am
Yes I find myself hitting the FF button when I see some company rep talking up their product, that is not objective reporting at all. And I thought Motorweek was bad. It’s not like John to do that, he’s always told it like it is and was w/o sugar coating it!
November 1st, 2013 at 12:39 pm
^^^ Htg and PF, I agree. John is selling out here. I’ll just skip this crap in the future. Fast forward for me!
November 1st, 2013 at 1:13 pm
I disagree adamantly, guys. The site appeals mostly to people in the industry. That’s who KPMG is trying to reach. Without the corporate support John is able to attract, we don’t get to kvetch. Think about where John goes on the days when there’s a subsitute host for the show; it’s likely John has put on his business owner hat and is sitting in a meeting making his case. (Just like a race car driver[sorry John, team owner
])
November 1st, 2013 at 1:30 pm
Walking the line between your sources’ and your audience’s interests is the tough work of journalists(beyond having a great sense of humor and being handsome, John). My sister and BiL do this stuff in DC and I have to play a little too, so I get to see from the inside a bit.
November 1st, 2013 at 2:04 pm
It’s on thing to sell advertising,quite another to push this crap down our throats. I got no issue with ads, but pawning them off as a news piece or a feature is in poor taste.
November 24th, 2013 at 1:38 pm
For the first time since 1973, when Richard Nixon was president and Beame won office on the ill-starred slogan “He knows the buck” just as New York slouched toward fiscal disaster, the nations largest city is poised to have a mayor who is not a braying wisenheimer, not a precedent-shattering racial first, not a hard-charging crime-buster nor a quietly competent entrepreneur elected in the wake of the national disaster of Sept. 11 but a conventional, labor-loving urban liberal of the old school made new.