AD #1575 – VW’s Margins Drop, ABCs of Autonomous Terminology, Ford Testing Diesel F-150
March 12th, 2015 at 12:01pm
Runtime: 7:56
- VW’s Profit Margins Drop
- South Korea Way Off EV Sales Target
- Tesla Components Fail on RAV4 EV
- How to Protect Your Rims From Thieves
- ABCs of Autonomous Terminology
- Mustang Already Popular in Europe & China
- Ford Testing Diesel in F-150
- Making a Balloon-Powered Car
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On today’s show… VW’s profit margins are dropping, the ABC’s of autonomous terminology, and Ford starts testing a diesel engine for the F-150. All that and more coming right up on Autoline Daily.
This is Autoline Daily for March 12th, 2015.
VW’S PROFIT MARGINS DROP
Volkswagen AG reported its financial earnings for 2014, and on the face of it, the numbers look good. Sales hit 10.1 million vehicles, revenue hit 202.5 billion euros and profits grew to 12.7 billion. And yet, VW’s profit margins are declining. They were down at the VW brand, at Audi, at Porsche and Bentley. This wasn’t supposed to happen. Three years ago VW, with much fanfare, announced its MQB program of platform sharing that was supposed to cut costs by 19 billion euros by the end of the decade. When the cost savings didn’t show up last year VW announced a new program to cut another 5 billion euros. That involves dropping slow selling models and eliminating certain build combinations. So the savings are not coming from efficiencies, but from taking an axe to the portfolio. On paper, the MQB program looks really good. But it requires a massive up-front investment and it looks like it’s turning out to be a very expensive way to cut cost.
SOUTH KOREA WAY OFF EV SALES TARGETS
Like American car buyers, consumers in South Korea aren’t rushing out to purchase electric vehicles. Wards reports that the government projected EV sales would hit 60,000 cars last year but fewer than 1,200 EVs were sold. This year the sales target is 80,700. But that’s unlikely to happen despite generous government handouts of $13,500 and a robust network of charging stations. The Kia Soul is the top selling EV in the country and the automaker was the only company in South Korea to beat its EV sales forecast.
TESLA COMPONENTS FAIL ON RAV4 EV
And in other EV news, Toyota is recalling 2,500 RAV4 EVs in the U.S. because a problem with the propulsion system may cause the vehicle to shift into neutral, which results in a complete loss of drive power. Toyota dealers are responsible for fixing the problem but the company confirmed to Bloomberg that Tesla supplied the components that have the issue. The two company’s collaboration ended last year.
Still to come… now there’s an app to protect your rims, Ford starts testing a diesel for the F-150, and are you up to speed on autonomous terminology?
HOW TO PROTECT YOUR RIMS
I can only imagine the empty pit of the stomach feeling one must get walking out to their car looking like this. And with a set of rims capable of fetching up to $3,000 it’s no surprise they’re getting snatched by thieves. But a new company by the name of RimTech is hoping to prevent this from ever happening again. Its device is inserted on a tire, although it doesn’t say how, and is linked to your smartphone through an app. If a tire is tampered with the owner is alerted, an alarm is sounded and the police are called. It’s a two-stage alarm, so no false police reports. RimTech hopes to launch its $300 device in October by crowdfunding it through an IndieGoGo campaign.
ABCs OF AUTONOMOUS TERMINOLOGY
Are you up to speed on your autonomous car terminology? You’re going to start to run into these terms more frequently, so here’s the definitions used by the National Highway Traffic Safety Administration that pretty much everyone else is starting to use. A Level 0 car is exactly what it implies. That’s a car with zero autonomous technology. A Level 1 car has some basic controls such as electronic stability control and pre-charged brakes. Level 2 cars have adaptive cruise control and lane centering. Level 3 refers to vehicles with semi-autonomous technology such as Traffic Jam Assist and forward collision warning with full stop. And Level 4 cars have full autonomy that don’t need any driving input from a human being. If you haven’t heard these terms before, chances are you’re going to start to hear them a lot.
Coming up next, forget batteries, fuel cells or pistons, we’re going to show you balloon power… and Ford starts testing a diesel for the F-150.
MUSTANG POPULAR IN EUROPE & CHINA
Mustang sales in the U.S. were up 32% last month and things are continuing to look bright for the global pony car. Ford says nearly 1.1 million people have configurated a Mustang on websites throughout Europe and more than 18,000 Chinese consumers have signed up to take the car for a test drive.
FORD TESTING DIESEL IN F-150
And in other Ford news, we have it on good authority that Ford is getting ready to test a 3.0L V6 diesel engine in the F-150 for the 2017 model year. Ford placed its bets on aluminum and its Eco-boost engines, but the fuel economy numbers haven’t impressed anybody. And undoubtedly Ford is watching the amazing success Ram is having with its V-6 diesel. Late last year Ram raised its diesel sales targets to 20% of sales. Last month they hit 25%.
MAKING BALLOON-POWERED CARS
The days of a Pinewood Derby have certainly come a long way. For this year’s Fluor Engineering Challenge kids from grades K-12 are asked to make a balloon-powered car out of a few CDs, balloons, straws, pencils, paper clips, paper and tape. The idea is to see how much weight, in the form of pennies, the vehicle can carry across the finish line. Students can build and test their creations anywhere and if submitted have a chance to win $1,500 for their school. Just get those entries in quick, the deadline is Sunday.
That wraps up today’s show. Be sure to join us tonight for After Hours. Our guest is Tadge Juechter, chief engineer on the Corvette. Maybe we’ll find out if they ever plan to make a mid-engine one. But that wraps up today’s report, thanks for watching.
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Comments (28)
March 12th, 2015 at 12:27 pm
It’s not much of a surprise that Ford is testing a light duty diesel for the F150 lineup.Too many expensive long term problems for the ecoboost imho.I wonder when GM will follow suit? I do remember last year when GM said we don’t need no steenkin diesels in our 1/2 tons….we’ll see.
March 12th, 2015 at 12:28 pm
Rear mid engine, rear mid engine, rear mid engine, rear mid engine, rear mid engine, rear mid engine, rear mid engine, rear mid engine, rear mid engine, rear mid engine, rear mid engine, rear mid engine,
March 12th, 2015 at 12:28 pm
Isn’t it interesting to watch how quickly “anonymous” sources inside Toyota threw the supplier under the bus when 2500 cars and the parts on them had a problem. The supplier is named as the culprit when the genuine responsibility should belong to both companies. No part gets approved without extensive levels of approval from within the OEM. If all those approvals gave the go ahead, why does the blame belong to the supplier alone?
March 12th, 2015 at 12:33 pm
#1 The numbers for and against diesels have really taken some bounces in the last 12 months. The price of gasoline dropped, but diesel prices fell far more slowly. diesel does 30% better with fuel, but who knows if the extra sticker price will pay off. My Son asked the other day if he should buy a VW with a gasoline engine or should he take the diesel for only $1K more? The answer is not obvious to me.
March 12th, 2015 at 12:47 pm
GA – do you know of specific problems with the EcoBoost or are you just generically weary of any added engine complexity? If the latter, we need to remember the old simple engines had lots of issues that were greatly improved by added technology. We no longer have oil spots on the ground where we park, oil life is longer, maintenance is nil, no stumbles, no smells, and we have much better perfamnce than before. Of course, some technologies take a couple of generations to get right. I’d say the first gen of turbos occurred in the 1980s. I believe this gen is much smarter and more robust.
March 12th, 2015 at 1:08 pm
5 My problem with the Ford turbos is that they don’t buy you anything. In many applications, the Fords have non-turbo, and in same cases, non-GDI competitors which perform better, and use less gas. The “ecoboost” engines are complexity for complexity’s sake. The 1.6 really is nice in the Fiesta ST, though.
March 12th, 2015 at 1:12 pm
I read that a VW executive said that they could save millions by dropping the Polo model. I wonder how much they could save by dropping the Phaeton and repurposing its exclusive and expensive assembly plant? It would help Audi by having one less competitor for their A8 too. Its amazing that the company is looking high and low for savings and the Phaeton remains a “sacred cow”. The power of politics is truly amazing!
March 12th, 2015 at 1:29 pm
3. I noted also that during his last AAH appearance VW’s Oliver Schmidt blamed their cars’ reliablility issues entirely on suppliers. I counted that as yet another Edward R. Murrow moment for John; now that’s a pro.
March 12th, 2015 at 1:54 pm
I wish Toyota offered a diesel on the tundra. I would buy one.
March 12th, 2015 at 1:55 pm
7 I thought the Phaeton had been discontinued, but I found that it was only dropped from the U.S. market, and may return. As an R & T article put it, the car is for people who want to impress their passengers, but not their neighbors. That seems to be a very small market.
March 12th, 2015 at 1:59 pm
7 If VW did drop Polo, it would be a strong indication that they had rethought the goal of selling the most cars of anyone in the world. Polo is probably second to Golf in global sales for VW.
March 12th, 2015 at 2:13 pm
10. “That seems to be a very small market.”
LOL
March 12th, 2015 at 2:33 pm
2:32pm Having no luck thinking of cooler names than ‘Tadge Juechter.’
…ok, back to reviewing docs…
March 12th, 2015 at 2:40 pm
Shows you that Ford is playing the Long Game. Just when Ram thinks it has stolen a march on the Blue Oval with its diesel – BAM! – a diesel in the F-150. Now the 700 lb aluminum weight savings is really going to start being significant.
Also – Please don’t make up words like “configurated”. The language is already suffering.
March 12th, 2015 at 4:05 pm
14 That 700 pound figure being thrown about refers to the heaviest version of the new vs old F150. The Ford is only 3-400 pounds lighter than Chevy or Ram for crew cabs, with less difference than that in “smaller” configurations.
As far as diesels, the Ram is selling very well, but, at some point, people might do a reality check, and find that the diesels will never be cost effective for most people. If Ford does a “light duty” diesel, it would certainly hurt Ram, but by the time it hits the market, the total sales of both diesels might be lower than Dodge has now.
March 12th, 2015 at 4:40 pm
I see the day when Autonomous vehicles are all we will be allowed to drive. Think over the air TV, everyone had to buy a new TV and HD antenna or use cable/dish.
The Government-Lobbied by every side except the consumer, will mandate this for all. It will be so expensive to drive yourself, no one will.
Insurance industry will definitely see to that.
Everybody get on the line ride.
March 12th, 2015 at 5:32 pm
11 After a little more reading, I submit a clarification. VW is pondering dropping the 3-door version of the Polo and selling only the 5-door, something one of their chief rivals did two years ago with no negative effect on sales. It would produce some savings in design, engineering, etc. to only have the 5-door. I still say that dropping the Phaeton would save more. Its never made a profit and bringing it back to the US market seems as ill-advised as designing, engineering and producing a new version. Their reputation will take another credibility hit and people will remain very confused about what VW vehicles are supposed to be. The “peoples car” shouldn’t cost $80,000+.
March 12th, 2015 at 5:39 pm
17. Maybe China explains the Phaeton.
March 12th, 2015 at 5:42 pm
Hey, when are we getting a convertible Phaeton? Ha ha, a little joke.
March 12th, 2015 at 6:06 pm
17 They sell a 3 door Fiesta in most markets, but not the U.S. That is one of Polo’s main competitors in Europe, along with a PSA car or two. Maybe the Peugeot and Citroen are made only as 5 doors.
I keep wondering if cars like the “made for America” Fiesta sedan make financial sense for the company.
March 12th, 2015 at 6:07 pm
@3/Mike So what you are saying is the defective version of the part was approved by Toyota?? Why do I think Toyota approved the part that was working correctly, and not the defective version.
March 12th, 2015 at 6:16 pm
Today’s news feels a bit week, but GM’s reducing its power train warranty from 100K to 60K miles and their lame excuse is an attention grabber:
http://www.leftlanenews.com/gm-100-000-mile-chevy-gmc-powertrain-warranty.html
Hyundai gets to keep the crown!
March 12th, 2015 at 6:27 pm
One would think that 10 years would have been long enough for VW to learn that the Phaeton was a mistake. From what I could find, they sell fewer than 200 a month in Europe. People paying S-class or A8 money want a Benz or an Audi, I suspect the few Phaeton sales are mainly at the expense of A8 sales.
March 12th, 2015 at 7:48 pm
My car is officially a zero now, but I like it anyway.
March 12th, 2015 at 10:50 pm
I sure hope that Tadge J was just being corporate correct and ‘hiding the truth’ when he denied any knowledge of a mid engine C8 Corvette. Hopefully he was playing with words. If not, once again my hopes will be dashed. Plus, your comments that Porsche doesn’t mess with mid engine 911 hardly work. They make mid engine 918,boxter, and Caymans. Corvette could have more that one model, as they do now
March 13th, 2015 at 6:32 am
#22 perhaps the real reason is that it was costing them too much in warranty repairs and they just want to save some $$ figuring most car shoppers won’t even take notice?
March 13th, 2015 at 9:59 am
While looking at the Motor Trend site, it appears that GM is bringing their powertrain warranty program in line with its major competitors, Ford, Toyota, Honda, and Nissan at 5yrs / 60. Before throwing shade on GM, consider their competition. Only Hyundai and Chrysler will have longer powertrain warranties in 2016.
March 15th, 2015 at 12:45 am
The F150 would go very well with the 3.2-litre five-cylinder turbodiesel that’s been used by the Ranger for the past three years, or maybe it’s intended the proposed 3.0-litre V6 would go under the Ranger’s hood?