AD #1399 – GM Recalls Another 3.4 Million, Volvo Trucks Adds DCT, 2015 Volkswagen Golf

June 17th, 2014 at 12:07pm

Runtime: 9:19

- Mary Barra Headed Back to Congress
- GM Recalls Another 3.4 Million Vehicles
- Bentley to Offer Limited Edition GT3-R
- Volvo Trucks Adds DCT
- First China Build Vehicle Headed to U.S.?
- 2015 Volkswagen Golf

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Hello and welcome to Autoline Daily. In today’s show: GM continues to make headlines, for all the wrong reasons, a look at what could be the first Chinese-made cars to hit the American market, and a look at VW’s MQB platform and the brand new Golf.

BARRA IS BACK IN THE HOUSE
General Motors is going to be in the headlines all this week. Tomorrow CEO Mary Barra returns to Congress where she will be interrogated by members of the U.S. House of Representatives. Remember, this is an election year, and this is their chance to look tough in front of the TV cameras, so you know it’s going to get rough. And then she’ll be back in a couple of weeks to testify in front of the Senate, which could get really ugly. Barra is going to need to put on a command performance because this is going to be the toughest test of her career. If she handles it well, she’ll gain a lot of supporters, if not…

A BILLION HERE, A BILLION THERE
Meanwhile, GM recalled another 3.4 million vehicles, for a host of different reasons. You can click on the link in today’s show notes to see which models are involved and why they’re being recalled. GM says that it will now take a $700 million charge in the second quarter to pay for all this. With the $1.3 billion charge it took in the first quarter, the total is now $2 billion and counting. Plus, there will undoubtedly be legal costs, lawsuit losses and government fines that could easily add several billion more to the total. And unfortunately that is going to destroy GM’s profitability for the year.

RACE INSPIRED BENTLEY CONTINENTAL GT
It had been 84 years since Bentley had won a race in the UK until it did so this year in a Continental GT3 race car. So, in honor of that win and the car, Bentley is going to offer customers a Continental GT3-R. It’s an all-wheel drive rocket that can hit 60 miles-per-hour from a standstill in just 3.6 seconds thanks to its 572 horsepower twin-turbo V8, which is a detuned version from the race car. Power flows through a 8-speed automatic transmission as well as through the all-new titanium exhaust system. And of course the interior has hints of race-inspired luxury. The GT3-R is only available in the Glacier White paint that you see in the pictures and only 300 examples are being built worldwide, making this the rarest of the Continental GTs.

VOLVO TRUCKS ADDS DCT
We have two firsts from Volvo to report today. Volvo Trucks, which is now a totally separate company from Volvo Cars, just introduced the first ever dual clutch transmission for heavy-duty trucks. The new transmission doesn’t improve fuel efficiency compared to the current automatic, but the company says the dual clutch trans improves driving on long hauls and hilly or twisty roads, and reduces noise in the cabin. The dual clutch system will be available in the Volvo FH truck starting this fall.

VOLVO FIRST TO SELL CHINA BUILT CARS IN U.S.?
And in other Volvo news, this time the car company, it could be the first automaker to sell cars built in China in the U.S. Reuters reports that the company will export the S60, including the long-wheel base version to U.S. by the end of 2015. Volvo will also ship XC90’s from China to Russia as well. Volvo wants to use China as a global production base in order to minimize foreign exchange risks compared with the cars it makes in Sweden.

Coming up next, a look at how VW has updated the entire Golf family of vehicles.

HOW VW UPDATED THE GOLF
We’re just a few weeks away from Volkswagen’s U.S. dealers taking delivery of the all-new 7th generation VW Golf. The compact is celebrating its 40th birthday having sold more than 30-million cars globally over those four decades. This latest family of Golfs, and we do mean family, will be built for the American market in Mexico on VW’s new MQB platform which, thanks to its flexibility, will be producing several VW and Audi vehicles. With a look at the 2015 Golf along with the new MQB platform here is Kevin Joostema the General Manager of Product Marketing and Strategy as well as Vinay Shahani from VW Marketing with the Golf story in their own words.

Kevin Joostema
General Manager, Product Marketing & Strategy, VWoA
“This MQB platform is significant in its efficiency of design; it’s significant in terms of the styling it allows because the wheels can be pulled out further to the corners and it’s a bit lower than usual, it’s a wider stance. I mean this is a designer’s dream to make a fresh and modern design. We’re also still honoring the global importance to of this with reference to Mark 1 & 4 generations in the design of the vehicle. And we are bringing our latest technology in our powertrains — the latest generations of powertrains to the Golf family with the 1.8 TSI, our new generation TDI clean diesel and the latest generation of the 2.0 for the GTI icon.”

Vinay Shahani
VW, Marketing, VWoA
“The challenge for us today is to make sure that we’re approaching this as a family of vehicles. So we start with the Golf GTI, we follow up with the Golf & the Golf TDI, then we come with the e-Golf which is really the statement of innovation for the brand and then we wrap it up with the Golf R and the Sportwagen. So we have a very long lineage of variance that exists in the family but each one is connected to a common denominator of Ready, Set, Golf. We think that this tagline speaks to how this vehicle is going to be a lifestyle enabler for the target consumer.”

Kevin Joostema
General Manager, Product Marketing & Strategy, VWoA
“The Golf is vital for our presence in the compact sedan market here in the U.S. We have our Jetta sedan, and then all the hatches that are present in the compact area. We as our Golf brand and GTI we define that category. The icon the GTI created the hot hatch segment to begin with back when it was introduced in 1983 here in the states. And our Golf presence and GTI together represent up to 13% of the segment for us. And that’s significant. It’s proof positive that we define the category.”

Vinay Shahani
VW, Marketing, VWoA
“No one watches TV anymore without having an iPad and an iPhone running concurrently. So we recognize that the consumption patterns of media have changed dramatically, and from our perspective it’s about optimizing the way we interact with our consumer. So we have a television campaign, we have an appropriate level of digital communications to go along with that and appropriately also leveraging our social media channels in conjunction to create a sense of cohesion across all media channels.”

VW’s global marketing campaign for Golf kicked off at the World Cup in Brazil. One other interesting item about this car is VW’s emphasis on the manual transmission. While so many automakers are moving away from manuals, VW expects a 20% take rate and up to 50% on certain trim levels.

PRO TOURING BOOK GIVEAWAY
We’re giving away another copy of Pro Touring, written by Mark Stielow, the chief engineer of the Camaro Z/28. It’s all about how to convert a vintage Camaro into a modern day performance machine. But the “how-to” can also apply to all kinds of other cars. To win a copy all you have to do is answer a simple question: what was the fuel economy we got in the Cadillac ELR? Check out the Seat Time section of our website, and then shoot us an answer via email. Send it to viewermail@autoline.tv

Be sure to join us for Autoline After Hours this Thursday night when our guest will be Oliver Schmidt, General Manager, Engineering & Environment Office, Powertrain & Fuel Strategy, VWoA. Oliver has some good insights into alternative-energy cars and the challenges facing automakers to sell them. That’s Thursday night starting at 6PM eastern time right here at Autoline.tv

And that wraps up today’s report, thanks for watching.

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33 Comments to “AD #1399 – GM Recalls Another 3.4 Million, Volvo Trucks Adds DCT, 2015 Volkswagen Golf”

  1. buzzerd Says:

    2 billion dollars! wholly feck! So if this was somehow connected to the line workers, A.K.A. the UAW line workers, people would be jumping to there soap boxes ( including Mr. McElroy) to espouse how we need to rid the world of unions blah blah blah, but when it’s the management it’s more like oh well they should really fix that and they need to change the ” culture” at GM.

  2. Bob Wilson Says:

    Hi,

    While researching the Ford ‘over optimistic’ EPA numbers, I found the VW Golf has the opposite problem, ‘under reporting’ EPA numbers.

    We started by looking at the roll-down versus dynamometer coefficients the EPA uses as part of the testing. We found a significant gap in the ‘drag power’, the amount of power needed to move a Golf at different speeds. Then we compared the EPA numbers to the FUELLY numbers . . . 34 combined EPA versus 40 MPG median in FUELLY. That is nearly 20% off, against the Golf!

    Without more study, we can not say it is a diesel pattern or anything more than this single model. But it suggests VW needs to do what Ford did and re-look at their reporting to the EPA. They are walking away from some very nice numbers.

    Bob Wilson, Huntsville, AL

  3. Bradley Says:

    The rest of the world has always had the Golf Sportwagen or Golf Variant. In the states it is called the Jetta Sportwagen.

    With this new Golf Sportwagen being sold in the United States will the Jetta Sportwagen disapear?

  4. Lex Says:

    When is VW going to bring back the Scirocco to the US? The Scirocco was a fun vehicle in my youth. It was a quick three door hatch. I see new versions are being shown at car shows, what gives. The two door hatch is sporty but what about a grown-up four door version? This would be a great BWM 2 Series fighter.

    The “Golf”, “Passat” and “CC” nameplates just do nothing for me. A vehicles name should inspire the driver with some emotion. I had a 1986 Jetta GL which was great in the snow and fun to drive. I think VW also needs to fix the names of it’s CUV’s and SUV’s. Toureg sounds like “Torture” and Tiguan sounds like “Wigwam”. Who name’s VW vehicles?

  5. Lex Says:

    I hope GM starts putting more money on the hood plus offer zero financing to move the metal to pay for all these recalls and related costs.

  6. Lex Says:

    What if Automotive OEM’s would run internet contests or focus groups to find a name for their new vehicle offerings? These names would then be applied globally to a model in all markets. I find it odd that an Acura “Legend” is a Honda in the UK.

  7. Kit Gerhart Says:

    3, It’s just a name change in the U.S. for the Sportwagon. It’s been called a Golf all along in the rest of the world.

  8. Kit Gerhart Says:

    4, VW’s names probably aren’t as good as some car names, like Mustang, but I’ll take the VW names any day over MKS, TL, XTS, or even the current Benz and BMW number names that once meant something, but don’t any more.

  9. Bradley Says:

    To me Golf, Rabbit, Jetta, Passat are all good names. The wheels fell off the wagon with the CC.

  10. C-Tech Says:

    The VW CC is the best looking of all the ugly “coupe sedans” being sold. Why call it the CC?

  11. Kit Gerhart Says:

    CC means Comfort Coupé

  12. John McElroy Says:

    #2. Bob, you raise a really good point. I don’t know if the FUELLY results are related to this but VW argues that the EPA method of calculating fuel economy–with city numbers counting for 55% of the “combined” number and highway counting for 45%–penalizes diesels driven by people who mostly do highway driving. Those people will definitely get better fuel economy than the EPA label promises.

  13. Kit Gerhart Says:

    12, My diesel experience was with an ’04 Jetta TDI wagon. I consistently beat the EPA combined rating with most “mixed” tanks, even with the “old” rating of 41. The combined rating for that car is 35 using the current system. I had tanks of over 50 mpg when most of the driving was at steady, low speed, like 50-55, and would get about the same mileage as I get with my Prius at 75-77 on the interstate, around 44. I guess what I’m saying is that 10 years ago, as now, diesel cars do better relative to their ratings than other cars. From my experience, that was the case, even in city driving, but especially in moderate speed highway driving.

  14. cwolf Says:

    I’ve always liked VW simple interiors and roominess, yet VW sales in the US continue to decline. Maybe the styling has become stale, people are getting wise to the repair costs, or both. We will see if all the VW can change the US consumer more towards their direction. I don’t think so. I read in the mornings Detroit Free Press a list of most satisfying premium brands in the 18th annual Vehicle Satisfaction Awards and VW wasn’t one of them. Take a look at the winners… somewhat interesting:

    http://www.freep.com/article/20140616/BUSINESS0104/306160115/Vehicle-Satisfaction-awards-AutoPacific-GM-GMC-Ford-Lincoln-Mercedes-auto

  15. cwolf Says:

    Lincolns off to a good start. The rated it the highest satisfaction premium brand and the MKZ won in the mid-size catagory. Still, I think the brand is over priced for what you get for the money.

  16. cwolf Says:

    Did you notice Ford was not on this list (post 14) either? I think Ford’s goal of global platforms will eventually catch up to them when it comes to the US market. IMO, Ford interiors are too much the same.

  17. Kit Gerhart Says:

    To me, the biggest problem with VW is the sparse dealer network, and the iffy reliability. My Prius might have been a TDI Sportwagon, had there been dealers closer than 40 miles away, and had the expected reliability been as good as the Toyota. As far as the cars themselves, I like most of what VW is selling.

    That customer satisfaction thing was, putting it mildly, quite interesting. People like the $50K+ Taurus, AKA MKS, and they like the Benz by Nissan CLA that is universally described as not a Benz in ride quality, quietness, and various other things. I guess the survey says that people like what they buy, or are unwilling to say that they made a mistake.

  18. Kit Gerhart Says:

    16,
    No Fords were on the lists, except the “heavy duty” F series, but the pricier, and to many of us, less attractive Lincoln versions of the Fusion and Taurus were on the list. Maybe it’s the dealer experience.

  19. Mike Says:

    Relative to Chinese Volvo’s. First it will be interesting to see if the Chinese labor and benefits savings are passed on to the Consumer. (fat chance) Then it will be interesting to see if the consumer is really willing to pay big bucks for a Chinese made Volvo.

    I’d love to see an independent think tank’s opinion of what the accounting would show for a Swedish built Volvo versus a Chinese made one. How much can Volvo expect to save on labor? Is the real savings not labor but in Chinese subsidized capital investment and lower tooling costs. Just where do the chips fall and the cookies crumble?

  20. Kit Gerhart Says:

    19, While I buy cars of all nationalities, I would pretty much cross Volvo off my shopping list, just because they are Chinese owned. I wouldn’t think many people would want to pay Volvo/BMW/Benz prices for a Chinese Volvo.

  21. cwolf Says:

    Kit, tell me what you think. Recently, hybred sales have taken a back seat to plug-ins. We also are aware of the increasing MPG’s of non-hybreds which continue to get better, as deemed by CAFE std’s. Then, despite all the hopes of lower gas prices, as a result of the polluting tar sands and fracking, gas prices only get worse, not better. So, my friend, do you think a hybred or hyb. plug-in is worth consideration for a daily driver?

  22. pedro fernandez Says:

    #17 Speaking of the CLA, it made the CR list of cars to avoid, yet I keep seeing a lot of them on the road, people are dumb!

  23. Kit Gerhart Says:

    21, If you plan on keeping it 20 years, I wouldn’t want any hybrid or plug-in, unless you want to make a hobby of finding junkyard batteries and replacing individual cells as the car nears end of life.

    If you only plan to keep it 6 years or so, it’s different. If you want hatchback utility, and don’t mind non-sporty driving and a basic interior, a Prius is hard to beat, especially a base Prius 2. The plug-in Prius does not make sense. It costs a lot more, and would never pay for itself in gas saved.

    If you want a sedan, and especially if you do a lot of city driving, the Camry, Fusion, and Accord hybrids are worth checking out. They could save money if you drive a lot, especially stop and go.

  24. cwolf Says:

    Thanks Kit. I’m giving it some thought.

  25. Kit Gerhart Says:

    22, It:s the three pointed star, the looks of the car, and maybe the dealer experience.

  26. Kit Gerhart Says:

    I suspect first and foremost, the three pointed star.

  27. w l simpson Says:

    I have admired the Golf for years, severely tested one 4 or 5 years ago, but the killers are owners reviews, which harp on constant little things breaking or falling off , & a fight to get them back in service.

  28. Bradley Says:

    Wow, it missed me that Nissan was producing the Mercedes CLA. Is that simply a labor contract and in return Nissan can sell a similar car as an Infiniti? Or is there Nissan content in the CLA?

  29. Kit Gerhart Says:

    I remember reading that Nissan builds the engines, and that the platform was developed jointly between Nissan and MB. I recently read that assembly would probably move from Hungary to Mexico, at least for American markets.

    None of that would matter so much if it rode and drove like a Benz, but it doesn’t. It will be interesting to see if they can “add refinement” over the car’s life cycle, without starting over.

  30. Bob Wilson Says:

    #12
    John, there is merit in looking at the annual miles per model by dividing the used car odometer reading by the years in service. Only an approximation, it does give a clue as to ‘road warriors’ versus the ‘street meek.’

    The web link shows a crude survey of used Prius versus Hummers and the data suggests a 2:1 ratio of more Prius miles per year over the Hummers. We were trying to find out if the original CNW Marketing “Dust-to-Dust” study suggesting the Prius were a status car not driven as much as others held water versus the Hummer.

    Bob Wilson, Huntsville, AL

  31. aliisdad Says:

    Really enjoyed John and Gary’s insight on their “live” coverage about the Mary Barra
    testimony before Congress, today.. Many Kudos!!

    In my opinion, the GM recall mess and many other current news items are missed by too
    many people who spend their time watching too much “entertainment” instead of looking at informative/news sources to get at least some minimal information about what is going on in the automotive world, as well as events impacting our country and the world.. I think many things would be much different, and improved, if people made at least some effort to become informed… I may not currently have a GM car, and I may not be impacted directly by many of the things I learn about, but I still try to at least know something about what is going on in the world.. AND..Autoline is a great source for the automotive part of my world…Thanks!!!!

  32. aliisdad Says:

    Woops… Looks like I put my comments on yesterday’s show comments…

  33. XA351GT Says:

    Yeah sure Volvo wants to sell 30K cars built for 1K in labor. Not that I’d be buying a Volvo in my lifetime ,but with China’s track record of toxic materials ,questionable quality of other products I wouldn’t touch one with a 10 foot pole.