AD #1573 – Cars That Fix Themselves, Honda’s Wild Aero Package, BRZ & FR-S Sales Fizzle
March 10th, 2015 at 12:01pm
Runtime: 8:06
- China’s MSRP Envy
- TrueCar Sued for Unfair Competition
- Should “Dealers” be “Retailers”?
- Lambo Accelerates Sales
- Honda’s IndyCar Wings It
- BRZ and FR-S Fizzle Out
- Car Components with Modems
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On today’s show… coming soon, cars that can fix themselves… Honda’s Indycar wings look like they came off a Fokker triplane… and sales of the FR-S and BRZ start to fizzle out.
All that and more coming right up on Autoline Daily.
This is Autoline Daily for March 10th, 2015.
MSRP ENVY
Even though the Chinese car market is now the biggest in the world, it’s not the richest. At least not yet. Last year 19.7 million new vehicles were sold in China, generating $410 billion in sales. In the US market, 16.5 million new cars were sold, but they generated $571 billion, which is $161 billion more than in China. That’s according to TrueCar, which conducted this comparison. It all has to do with transaction prices. The average car in China sold for $20,800 compared with $34,500 in the US. But Chinese brands sell for an average of just $15,700, while foreign makes go for $32,280.
LET’S MAKE A DEAL
Speaking of TrueCar, Automotive News reports its getting sued by 117 car dealers for false advertising and unfair competition. The dealers claim that they suffered from lost profits when they had to match or beat TrueCar’s allegedly false prices and terms. The dealers who are suing do not use TrueCar and say they are losing customers to dealers who do use it. TrueCar says their claim is without merit and will fight them in court.
STICKS AND STONES…
Speaking of car dealers, do we need to change what we call them? Our colleagues at Ward’s Dealer Business say that the word “dealer” has a negative connotation. People associate it with drug dealer, or wheeler dealer. Instead, Ward’s suggests we should refer to dealerships as stores, and dealers as retailers. I kind of like this idea, but what do you think?Give us your opinion in the comment section below. We’ll tally it all up and let you know what the Autoline world thinks about this.
Still to come… Honda’s Indycar aero kit would make Fokker proud… Lamborghini puts up some pretty impressive business numbers… and how cars are going to be able to fix themselves.
LAMBO ACCELERATES SALES
We always like to look at how the big mass manufacturers are doing, but we also like to keep an eye on how the specialty brands are performing. And if we look at Lamborghini’s 2014 numbers, it had a pretty good year. The automaker increased worldwide sales by 19% to a little over 2,500 cars, while revenue increased to nearly 630 million euros up 24%. The company attributes the growth to high-demand for its Aventador and successful launch of the Huracán.
HONDA WINGS IT
If you saw the Autoline After Hours from the HPD center, Honda Performance Development, you may remember a part when they said new IndyCar rules were much more flexible than Formula One. And by looking at its new aero kit for the series, they weren’t joking. The first thing that came to mind after seeing that front design was the World War I Fokker tri-plane wings. This is the package that will be used on road courses and short ovals, which includes almost 200 individual pieces that can be fitted to the current chassis. Lets just say there’s a lot of adjustments that can be made. Chevy showed off a less radical aero kit for its new IndyCar, so it’s going to be interesting to see who has the faster design once the cars hit the track on March 29th in Florida.
And speaking of AAH don’t forget to tune in this Thursday when our guest will be Tadge Juechter, the chief engineer of the Corvette. Of course we’ll want to talk to him about his newest baby, the Z06. So, if you have any questions for Tadge send them our way to viewermail@autoline.tv or Tweet us at Twitter.com/Autoline. And don’t forget, we now go LIVE at 3PM on our website, Autoline.tv.
Coming up next, sales of the BRZ and FR-S are fizzling out fast, and how cars are going to get modems embedded in all kinds of components.
BRZ & FR-S FIZZLE
Every now and then it’s worthwhile to turn around and look back at how certain cars are performing in the marketplace. Two years ago Subaru made a big splash with the introduction of the BRZ, a low cost sports car. One of the reasons it was able to offer it at a low cost was that Subaru teamed up with Toyota to co-develop the car and sell it all around the world. Toyota calls the model the 86, except in the US market where it’s sold as the Scion FRS. Unfortunately sports cars go through a predictable trajectory. A flurry of media coverage lights off a sales frenzy, and then after a year or two, sales drop like a rock. And that’s what’s happening with these cars, at least in the US market. So far this year Subaru has only sold 664 BRZ’s, a drop of 45% compared to last year. Scion has sold 1,552 FRS’s, a 21% drop. The only cure for this is to tough it out, hold on until a design refresh hopefully sparks a new sales flurry, until the cycle starts again.
IOT OF CAR COMPONENTS
With all the high-speed communication capabilities going into cars, over-the-air updates could change the way automakers conduct recalls. Tesla is perhaps the most aggressive at letting customers upgrade their cars by downloading new software, but it’s not the only one. Joe Hinrichs, the president of Ford’s operations in the Americas, tells Autoline that in the future we’re going to see modems embedded in all kinds of components in a car so they can get over the air updates. Hinrichs says this will change how the industry does recalls and customer service actions. Today, a shocking number of owners never even bother to follow up on a recall. So this is going to make things safer for consumers, because in a lot of cases the cars will just fix themselves.
And that wraps up today’s report, thanks for watching.
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Comments (47)
March 10th, 2015 at 12:24 pm
Uh-oh, hold your tongues, it sounds like the PC Police are on patrol at Ward’s. Personally, I don’t often hear people refer to…um…those places and people you buy vehicles from…as just plain “dealers.” Most often I hear them say something like “I went Honda” or “I’m going to go to the Ford dealer.” Of course that’s just me. But honestly, I don’t think very many people, if any at all, will ever interpret your trip to “dealer” as your need to get a heroin fix–especially after you’ve been driving them crazy complaining about your broken-down, old ride.
March 10th, 2015 at 12:26 pm
Dealer vs retailer? My thought was the derogatory nature of wheeler dealer or drug dealer was spawned from the treatment most received in the past from auto dealers. While many auto dealers have shaken this behavior some have not. So call ‘em retailers – sooner or later dope peddlers will brand themselves the same. Imitation is the most sincerest form of flattery?
March 10th, 2015 at 12:27 pm
Not calling a dealership a dealership is taking a page from Saturn where they called the dealerships retail facilities.
March 10th, 2015 at 12:30 pm
By the way, comment #1 is intended to be tongue in cheek. As for BRZ and FR-S sales, I don’t think it would change things all that much, but Toyota would have at least earned more revenue if the FR-S would have been sold as a Toyota Celica. I know it’s a tired out argument, but I still think it’s true.
March 10th, 2015 at 12:39 pm
When the BRZ/FR-S was introduced, it sounded like something I might really like as a “fun” car. It would be fun, but it didn’t take long to learn that the car is quite “rough around the edges” for a car new to market, even a sports car. Also, it has turned out to be unreliable, very out of character for both nameplates it carries.
If I didn’t have my MINI, I might be interested, but overall, BRZ/FR-S has been a disappointment, and it seems to be showing up in sales numbers.
March 10th, 2015 at 12:42 pm
4 Also, Toyota would have sold more, if they had sold it as a Toyota anything, even FR-S, rather than as a Scion, because not all Toyota dealers sell Scion. The Indiana dealer where I bought my Prius does not have Scion.
March 10th, 2015 at 12:43 pm
The Toyobaru twins need more power to please those people who crave it, most hot hatchbacks are quicker even though their handling is not as sharp, when they introduced them, they only seems to show how well they drift and handle, well for most enthusiasts, speed is King everything else is BS.
March 10th, 2015 at 12:44 pm
Dealers- this reminds me of people who think that teletubbies are promoting a gay agenda or hearing satanic lyrics when playing LP’s backwards, maybe it’s got more to do with a guilty conscience than anything else.
Modems in car parts- what part of that has to to with vehicle “abuse” and warranties I wonder.
March 10th, 2015 at 12:45 pm
#6 agree 100%. just to try to save Scion, they killed any chance for the car to be a success here.
March 10th, 2015 at 12:45 pm
What a shame. Good looking, nice handling entry level sports cars can’t find any buyers in the Millennial crowd? OK, maybe they’re a bit underpowered but still…am I missing something?
Maybe Toyobaru should approach SCCA about creating a grassroots spec series featuring these cars. Or include the Miata too as a nice foil. Zoom Zoom.
March 10th, 2015 at 12:45 pm
conscious – guilty one that is
March 10th, 2015 at 12:48 pm
I LIKE Wheeler Dealers. It’s my favorite show on Velocity.
As with the BRZ/FR-S, they need to take a page from the Mustang, Camaro and Corvette and space out different models to stretch the media buzz, and consumer awareness. Bring out the base and SS/GT/Z51 models first; then the Shelby/ZL1/Z06 models and then the Boss/Z28/ZR1.
I suppose they thought the BRZ/FR-S twins would follow the MX-5 and go along without many updates required…I guess they miscalculated.
March 10th, 2015 at 12:48 pm
Dealer sounds too much like wheeler dealer? Ask anyone that has ever purchased a retail car! Nobody ever knows if they got a good price or not!! You can’t call it a retail store because the real prices are always shown at a retail store!
March 10th, 2015 at 12:51 pm
I can see the day when the car is 6 years old and a yellow light on the dash comes on. The (Car Store) calls your phone and makes an appointment as you drive down the road. Can’t fix it with a download. Needs $90 diagnostics.
The light was tripped by:
A) – Bad sensor
B) The Company- because service Dept is needing
business.
PS: I may have a car where the airbag may go off for no reason. The good news is it won’t kill me as I had the recall done for shrapnel.
March 10th, 2015 at 12:52 pm
@Steve- many have tried “no haggle pricing” and I think all or almost all have failed because people still want ” a deal”. For certain people paying what everyone else did is un-thinkable.
March 10th, 2015 at 12:54 pm
Do the China prices include any Tariffs on “import” brands?
If the dealers will stop wheeling and dealing…they can call themselves retailers. Until they have firm, fixed pricing…they are dealers.
Subaru should seriously consider adding AWD as an option on the BRS.
March 10th, 2015 at 12:59 pm
Dealer or Retailer – No Difference. Changing the name does not change the behavior. Dealers that are honorable businesses will most likely remain so, & those that are less creditable will most likely continue their behavior.
March 10th, 2015 at 1:01 pm
In CR’s tests, the BRZ/FR-S and the new MINI S turned nearly identical acceleration times. A GTi was quicker. If you want rear drive, only the Subion has it, but if you are ok with front drive, for similar money, the new, 3rd generation MINI is somewhat more refined, and the GTi is hugely more refined. Both of those front drivers are still fun cars.
When the FR-S/BRZ were introduced, I figured they might be “holding back” a turbo version, but they haven’t announced it yet, that I know of.
March 10th, 2015 at 1:02 pm
The whole FR-S/BRZ was a poor attempt by Toyota (I mean Scion) and Subaru to capture a market that is youthful. What I see are the intended targets going to going to Honda/Hyundai/Kia. How many young people riding around in new-ish Corollas? Subie’s WRX is youthful, but mainly after the car is several years old when they are in the $18-22k price range. The Scion brand is proof that Toyota can devise an un-needed Saturn brand just like GM. They should have given the car to Toyota, called it the Celica and put a propper Toyota 4 in it.
March 10th, 2015 at 1:15 pm
“Dealer” sounds okay to me. I try to give every ‘retail franchise’ the benefit of the doubt until (some) show their ‘stripes’ and get themselves the label as ‘stealers’. Images are slow to change; some meriting this cautious approach (but this does hamper some of the good outlets that have raised the bar). And in all reality, and expressed in my above diatribe, a variety of descriptors work (one as good as another).
As far as the sports car twins; they got good reviews, were very good values, but obviously didn’t instill a passion, which most sports cars need to maintain their identity when up against (so many) loyal faithful of other iterations (from other manufacturers). Quite a few sports cars aren’t ‘perfect’, but when you ask their owners about them, they say they love them.
March 10th, 2015 at 1:21 pm
The ~300 hp WRX STi motor should be a bolt-in for the Subion. That should satisfy most of those people who don’t think a 7 second 0-60 time is good enough.
March 10th, 2015 at 1:31 pm
I suppose also we have had so many years of FWD development and the handling has improved so much that RWD is not really that important to the type who buy FRS/ BRZ
March 10th, 2015 at 1:45 pm
Saturn always referred to their dealers as retailers.
March 10th, 2015 at 1:58 pm
Retailers vs dealers?? Looks like Wards is snorting unicorn phartz in their cubicals instead of actually working.PC loosers,grow up and get a life.
March 10th, 2015 at 2:01 pm
Im thinking it might be time for a midlife boost for the Toyobaru. How about offering it with a turbo? That would certainly bring interest back and carry it through to design change.
March 10th, 2015 at 2:22 pm
Dealer/Retailer won’t change people’s perception of what to expect when buying a car when there is a deal to be haggled for.
Fixed pricing? Why would you need salespeople? You could simply log onto your “Retailer” via your phone enter your options be given the price and just go pick it up.. wait that sounds like what Tesla or Elio motors is trying.
March 10th, 2015 at 2:22 pm
I wonder how BMW and Porsche dealerships feel about being called ‘stealerships?’ Own it, Helmut!
Toyobaru-Let’s see if the sales pattern holds true with the new Miata. I guess we like cars with lots of horsepower more than one that’s about sports car handling.
March 10th, 2015 at 2:59 pm
Now they just refer to Saturn in the past tense.
(rimshot)
March 10th, 2015 at 3:30 pm
Nobody likes to pay retail for anything. Sounds like a bad move.
March 10th, 2015 at 3:41 pm
I almost bought a new BRZ but it is one rough driver. What are Toyota and Subaru doing sending out a car that sounds cool but lacks the updated electronics and rides really rough. Both of those companies should know better. They both have plenty of experience with chassis and suspension tuning and they know that the American consumer wants luxury as well as performance.
March 10th, 2015 at 3:50 pm
#29 but at that price point? you expect too much when even a lowly subcompact goes for $20k nowadays.
March 10th, 2015 at 4:05 pm
All of us who have called them dealers for years will have to die off before it will ever change to retailer.
March 10th, 2015 at 4:08 pm
Imbedded modems in the power train and anti lock brake modules open the door to hackers. As a tech I don’t mind OEM’S and customers directly connecting for software update recalls as they pay very little, and if done wrong disable the module (imagine your car not starting after you updated the module yourself).
March 10th, 2015 at 4:11 pm
No ads, very little promotion and Subaru & Scion wonder why they don’t sell?
March 10th, 2015 at 4:30 pm
They hoped word of mouth would work, except milennials don’t really talk, do they?
March 10th, 2015 at 4:31 pm
In Spanish they refer to them as retailers always. dealers sell drugs!
March 10th, 2015 at 4:40 pm
And now for something completely expected:
http://www.autonews.com/article/20150310/OEM01/150319997/gm-faces-union-demands-following-stock-buyback-plan
March 10th, 2015 at 5:21 pm
The american public is smarter than u think. U change there name it is still the same.
March 10th, 2015 at 6:34 pm
The assumption that small two door vehicles are for the youth is 30 years out of date. The last 2-3 generations of youth like vehicles that can accommodate their friends. Good looking 4-doors that handle and perform will always win over the Toyobarus. Devices like remote entry systems made 4-doors more easy to manage, whereas shoulder harnesses and head restraints made access to the rear seat of 2-door vehicles more of a hassle. Let’s move on to the new reality wherein fundamental nostalgia has kept a few 2-doors alive.
March 10th, 2015 at 7:53 pm
G.A., I think the UAW should make the most of every opportunity to increase the wage of the middle class,but should also barter for max health care and COLA. I have heard that UAW V.P. Of Suppliers,Mrs. Estrada, has not been very involved in area supplier contract negotiations…and it shows! I saw initial offers,pushed by her international subordinate, of $5/hr. less than the maxarea rate and $11 less than present rate,with no perks. Cut and dry, the UAW is focusing on the increased dues of existing and added labor at the expense of trades and of no real favor of labor. A family of three still boarders qualification of food stamps. Just my normal 2cents.
March 10th, 2015 at 8:48 pm
30 I’ve never driven a BRZ/FR-S, but from what I’ve read, it probably rides like, and is as noisy as my C4 Corvette. I’m ok with that in a 20 year old car I have just for fun, but I’d want more refinement in a new car, even a sporty car.
March 10th, 2015 at 8:49 pm
As a long-time retail customer, I can tell you that the industry can call dealers by any name it wants but people will still call them dealers. The industry should spend more time weeding out bad dealers. In time, the surviving dealers will then be proud to be referred to as dealers.
March 10th, 2015 at 8:51 pm
35 Do they advertise on facebook, or whatever might have replaced facebook as the “in” thing while I wasn’t watching?
March 11th, 2015 at 12:44 am
Uber just got the FL state legislature to pass a law that effectively overrides all local laws which would ban or regulate their service.
March 11th, 2015 at 10:13 am
44 Did Rick Scott and friends get bought off?
March 11th, 2015 at 10:50 am
44-45
Ya think???
re: Dealers
I think your average marketing type would rather come up with a catchy term for darkness before they thought about replacing a burned out light bulb.
March 11th, 2015 at 12:22 pm
Hey Ward’s, the problem is one of perception, a name change without a correction in the practices of some is equal to putting lipstick on a pig or new curtains in a haunted house. It’s difficult to fix in a business that is profit driven and some “retailers” cry if the customer beats them out of a nickel.