AD #1604 – Fiat Catches Up To MINI, EV Sales Drained By SUVs, R-Class Production Starts
April 22nd, 2015 at 12:02pm
Runtime: 9:26
- Hybrid & EV Sales Drained By SUVs
- EVs Maintain Global Growth
- Fiat Catching Up To MINI
- AM General Begins R-Class Production
- Suppliers Venture into New Territory
- You Said It!
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On today’s show…Oh no, this wasn’t supposed to happen. People are trading in their hybrids for SUVs…Fiat is catching up to Mini…and automotive suppliers venture into areas we’ve never seen them before. All that and more coming right up on Autoline Daily.
This is Autoline Daily for April 22nd, 2015.
HYBRID & EV SALES DRAINED BY SUVs
Edmunds reports that 22% of people who traded in their hybrids and EVs this year, swapped it for an SUV. Three years ago, when gas prices were closer to $4 a gallon, that number was only 12%. Overall, only 45% of hybrid and EV owners opted for an alternative fuel vehicle during a trade in this year. It’s the first time that number has dropped below 50%. Edmunds blames it on cheap gasoline prices, but that doesn’t tell the whole story. When people are in the market for a new car, they love getting something new and different. Yes, some will buy the same kind of car they had, but most want to try something different. I know someone who loved his Chevy Volt, said it was the best car he ever owned, but when it came time to replace it, he bought a Jeep Grand Cherokee.
EVs MAINTAIN GLOBAL GROWTH
Even though the green car segment is slowing in the U.S., another study expects plug-in and EV sales to grow globally. According to Frost & Sullivan, EV sales will top 466,000 units this year. Last year just over 300,000 were sold around the globe. North America will remain the largest market, with 36% of the share, followed by Europe and China.
CATCH ME IF YOU CAN
Fiat is taking a page out of MINI’s strategy in the U.S. and offering several versions of one nameplate. The Cooper in MINI’s case, and the 500 with Fiat. So is the Italian automaker making a dent in MINI’s sales? It looks like that’s the case. Last year, MINI sold just over 56,000 vehicles in the U.S., a drop of nearly 16%. While Fiat was up 7% with sales topping 46,000. MINI turned it around so far this year, sales are up nearly 50% thanks to the new 4-door hardtop and a big jump in 2-door hardtop sales. Fiat’s sales did slip 3% in the first quarter of the year but take a look, it’s only 1,700 units behind MINI. With the all-new 500X about to go on sale, it wouldn’t be surprising to see Fiat pass MINI by the end of the year. We’ll keep you posted.
And we’ll be back with more right after this.
AM GENERAL BEGINS R-CLASS PRODUCTION
While sales of the Mercedes R-Class weren’t that great in the U.S., its been out of the market for a couple of years, clearly the automaker didn’t want to give up on the vehicle and sees a need for it in its lineup. As we reported, Mercedes signed a contract with AM General to produce the R-Class at its facility in Mishawaka, Indiana, which used to make the Hummer. And now we can report that examples have started rolling down the assembly line. The move allowed Mercedes to free up space at its Alabama plant for its third best-selling vehicle in the U.S., the recently refreshed GLE, formerly known as the M-Class.
SUPPLIERS VENTURE INTO NEW TERRITORY
All this week automotive engineers are meeting in Detroit for the annual SAE convention. The Society of Automotive Engineers holds all kinds of seminars and lectures so automakers and suppliers can share notes and get up to speed with the latest technological developments in the industry. But it’s fascinating to watch how traditional suppliers of parts and components are venturing into very different areas of business. Continental, for example, formed a new business entity called Intelligent Transportation Systems, based in Silicon Valley, that will used cloud-based data to create mobility systems. That data will both come from cars, and be fed to them, and will interact with transportation infrastructure. Helmut Matschi, a board member with Continental told a group of reporters last night, “As we go from 4G to 5G there will be more bandwidth, providing even more services than we see now.”
Coming up next, You Said It!
YOU SAID IT!
And now it’s time for some of your feedback.
MrRebus777 says ”I thought a fuel cell made the hydrogen. Why are they talking about making hydrogen out of garbage?” No, Mr. Rebus, fuel cells run on hydrogen, they don’t make it. You literally have to stop at a station and fill the fuel tank full of hydrogen. The reason they’re talking about making hydrogen out of garbage is that right now most hydrogen is made from natural gas. And the whole reason for going to hydrogen fuel cells is to reduce the carbon footprint of cars. So if you make it out of garbage instead of natural gas, you significantly reduce your carbon footprint.
ldawson103 says “CUE was the #1 reason I didn’t buy the ATS when it was released, and it’s too bad because I absolutely loved driving that car. I’m a 30 year old who’s completely in tune with the latest tech and I hated using CUE. The ATS was the first American car I’d ever considered buying too. CUE was a mistake. I bought an Acura instead.” Brother Idawson, I’m with you. i don’t like CUE either. I hate having to repeatedly hit the arrow on the screen to change channels. I hate accidently turning up the volume when I really want to go from AM to FM. I hate how hard it is to control the volume with a slide bar instead of a knob. For most frequently used functions, touch screens stink. It’s just too easy to hit the wrong spot on the screen when you’re driving down the road.
Robert Morrison says “I remember growing up in Michigan in the 70′s and early 80′s. If I would have said to someone that someday GM will file for bankruptcy and would fall to 4th place in the auto market, people would have called me crazy and that would never, ever happen. What has happened? John please help me understand!” Two things, Robert. First, the rest of the world grew up. Toyota and Volkswagen have emerged as formidable competitors. But something went terribly wrong at General Motors. It went from being a bleeding-edge innovator in design, engineering and manufacturing to become a bumbling, inefficient producer of very mediocre products. The culture broke down. And you can only blame that on management. Funny you bring this up, because i’m doing research on this right now. My theory is that the problem started in the late 1950’s, when the DuPonts were kicked off the GM board of directors and the revered Alfred Sloan retired as chairman. I have a hunch that’s when GM stopped looking for long-term financial results and started focusing on quarterly earnings instead. I believe that cutting costs to achieve short term financial gains is what started eroding a corporate culture that built the most magnificent industrial machine the world had ever seen. I’m still at the very beginning of my research, but that’s where it’s taken me so far.
And if any of you have any ideas about this, or on other topics, we always welcome your comments and letters.
Before we go, don’t forget that Sandy Munro will be on Autoline After Hours tomorrow. His company recently did a complete teardown of the BMW i3, and his findings are so complete that BMW actually thought someone leaked him internal information. So join me and Gary Vasilash for some of the best insider insights in the business.
But that wraps up today’s show, thanks for watching.
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Comments (49)
April 22nd, 2015 at 12:15 pm
Here’s a new topic for Autoline, you noted in a recent segment that Geely was planning on selling a CUV in the US. Has anyone discussed building barriers to Chinese products that China has forced on the US manufactures that sell cars in China? Seems only fair.
April 22nd, 2015 at 12:21 pm
I think that GM, a publicly-held corporation, was responding to Tex Thornton and the Whizkids at the privately-held Ford Motor Company. Look what happened to FMC when they hit the NYSE.
If anyone has not read David Halberstam’s “The Reckoning”, I highly recommend it.
Reading about GM’s brush with death keeps reminding me of the Lou & Peter Berryman song “Their Brains Were Small And They Died”.
April 22nd, 2015 at 12:22 pm
Could not agree more with the comments on GM’s collapse…
Through decades of short term decision making dozens of GM execs lined their pockets very, very well.
GM collapses…no repercussions to those execs, no payback of all their wealth. We know how this story ends.
April 22nd, 2015 at 12:32 pm
John, interesting comments in your reply to Robert Morrison. You mentioned you’re still at the beginning of your research. Does that mean there’ll be a book from you on this topic in the offing?
April 22nd, 2015 at 12:36 pm
1 If I remember right, most, or all of those R-Classes from Mishawaka are going to China. I don’t think they plan to re-introduce the “R” in the U.S. market. Is that right, John?
April 22nd, 2015 at 1:16 pm
I am very glad Mercedes Benz is bringing back the R-Class. I hope they will be offered for sale to North America.
April 22nd, 2015 at 1:16 pm
How can BMW continue to sell the Mini with so many design problems. Just google on BMW Mini problems – cam chain pensioner disintegrates, transmissions break, etc. before 30K miles!!
April 22nd, 2015 at 1:18 pm
GM’s decline was a real heartbreak and I how the back stabbing at corporate to kill off Oldsmobile and Pontiac hastened the end.
April 22nd, 2015 at 1:21 pm
That is an awful sales number for MINI last year, given all of those models. I may have an “orphan” before long, if that doesn’t improve.
Maybe it will pick up, though, when more models get updated, and switch from the PSA engines to the new, BMW engines. So far, the 3- and 5-door hardtops are the only models sold in the 3rd generation.
April 22nd, 2015 at 1:24 pm
GM
I wonder how much GM’s response to antitrust threats from the US contributed to change in the organization. Was having semi-independent brands with the GM itself running central accounting a ripe target for a breakup? This was Sloan’s creation, I believe. Wasn’t IBM also being hounded by the feds over anti-trust in the 70′s and 80′s?
Also, a financial system that got shot in the brain in 2008 was not a good thing for most people.
April 22nd, 2015 at 1:29 pm
5 The R-Class has been built all along, since being dropped in the U.S. market, and has been built in the U.S., it so happens, but has been sold only in China for a few years.
http://www.freep.com/story/money/cars/2015/01/27/mercedes-class-general/22404319/
April 22nd, 2015 at 1:40 pm
7 I remember talk of breaking up IBM, probably when they nearly owned the mainframe computer business.
April 22nd, 2015 at 3:28 pm
Started wrenching in 1945, worked on everything, drove nothing but GM. My 3rd 2.4
came with Chinese metallurgy, got jerked around
by 2 dealers. No more GM’s for me except my cherry ol’ Sierra . No more FWD’s– period.
April 22nd, 2015 at 3:37 pm
John I have owned two Caddy’s with CUE. I share your frustrations, BUT, there is another way. Look on the steering wheel. Where you right thumb rests. Viola… radio channel and volume controls. Also there is what Caddy calls Natural Voice Recognition. Flawed to be sure. My new CTS V sport shows improvement.
Robert Sauter
PS-The combination of knobs and touch screen in my new Z06 is an improvement.
April 22nd, 2015 at 4:01 pm
14 It certainly helps that CUE-equipped Cadillacs have steering wheel controls and voice recognition, but let’s face it. CUE is the worst, or nearly the worst of the “infotainment” systems on the market. It is time for the people at Cadillac to admit it, and fix it. Chevy’s and Buick’s systems are much better than CUE. Chrysler’s is probably better yet, with steering wheel controls, voice recognition, and knobs, in addition to the touch screen. I liked the controls for the radio on the back of the steering wheel of a Challenger I recently drove.
Cadillac has some great driving cars in the ATS and CTS, but CUE really needs to go. It is costing Cadillac sales.
April 22nd, 2015 at 5:26 pm
GM went from 400,000 active employees in the eighties to 40,000 active an 360,000 retired by 2009. The sacred cow that couldn’t be butchered…Thirty and Out.
April 22nd, 2015 at 5:43 pm
Huh? GM has about 200,000 employees.
http://www.statista.com/statistics/239843/employees-of-general-motors/
April 22nd, 2015 at 5:56 pm
Sorry, that’s 207,000 worldwide, and about 75,000 in the U.S. (from a Forbes article that is mostly anti GM)
April 22nd, 2015 at 6:02 pm
212,000 according to the GM website.
http://www.gm.com/company/aboutGM/our_company.html
April 22nd, 2015 at 6:03 pm
And that doesn’t count dealership employees.
April 22nd, 2015 at 6:20 pm
John,
The reason CUE is such a mess is because the Human Factors department at GM is staffed by a bunch of yes men (and women) who are more concerned with their careers than standing up to management and the bad designs they endorse. GM got rid of the only HF engineers with spines during the last round of layoffs and now the department is made up of a bunch of brown nosers and suckups. Sad to say I know this is true because I used to work in that department and got layed off with the rest of the truth tellers. Rock the boat and you are soon looking for another job. As you do more research you will see that this is true in most of GM’s departments.
April 22nd, 2015 at 6:21 pm
20 …or supplier employees.
April 22nd, 2015 at 6:25 pm
21 Does each division of GM have its own HF people? CUE is unique to Cadillac, but Chevy and Buicks systems are decent.
April 22nd, 2015 at 8:50 pm
I absolutely agree with #14. I don’t usually use the steering wheel controls on cars, except when driving the Cadillacs.
The there are multiple books covering the decline of GM, such as The Reckoning, On A Clear Day You Can See GM, and The Machine That Changed The World. John I look forward to yours (or PBS Mini-series ala Ken Burns).
April 22nd, 2015 at 9:15 pm
Things were so completely different when GM ruled the U.S. car market, that it is impossible to pinpoint GM’s “decline.” People were pointing out what was wrong with GM, even when they still had almost half the U.S. market. GM had over 40% of the market when DeLorean wrote “On a Clear Day.”
One thing is clear. The arrival of Japanese imports, especially after they didn’t rust out in 2 years and generally had good quality, hurt all of the “big 3″ tremendously. Interestingly, the one market segment that GM and Ford “took back” from the Asians in the early 1980′s was small pickups, but they later abandoned that market.
April 22nd, 2015 at 9:30 pm
I can tell you this about the system in my 12 nox.Yes it has a big touch screen and such,but it works like crap compared to the basic system in my wifes 14 Soul.Hands down far easier and it uses my s4 infinitely better the what’s in my chebby.I have been told that it is more geared towards the iphones.That would explain why I hate my system.
April 22nd, 2015 at 10:19 pm
G. A., does your S4 not connect properly in your Chebby, or does the mike/speaker setup just not work very well?
April 22nd, 2015 at 10:27 pm
It doesn’t connect well,voice calling doesn’t respond to who I want to call from my downloaded directory,and when I use the nav function on my s4,the chebby bluetooth shuts off,and I can’t play my music and stream it using bluetooth.A totally useless sytem to me,yet my wife’s basic system in light years ahead of the big gaudy pos in my center stack.The dealer says nothing is wrong….
April 22nd, 2015 at 10:29 pm
To tell you the truth Kit,I am completely burned out on gm products.They have nothing that excites me at all,and their systems for my phone sux.
April 22nd, 2015 at 11:12 pm
Phone connecting is something I haven’t experienced with any cars. I’ve driven some recent cars, but never connected my phone. Neither my MINI nor Prius have bluetooth. They are both a year or two before that was standard on base cars like mine.
April 22nd, 2015 at 11:48 pm
John,
I disagree with you about the CUE. I have a ’14 XTS and I love the thing. If you do your homework and set it up to do the things you want to do, you never have to take your eyes off the road. You don’t have to move the slider bar, because the volume control is on the steering wheel. It takes a while to learn the thing, but I really like it.
April 22nd, 2015 at 11:51 pm
John,
I have a ’14 XTS with CUE and you gave it a bum rap. If you take the time to learn it and really use it, it is a great system. As for taking your eyes off the road, if you set it up properly for the stuff you like, you don’t have to look at the panel display. As for adjusting the volume control, it is right on the steering wheel.
April 23rd, 2015 at 12:31 am
A few things.
When John tried to offer his reasoning for the decline in EV/Hybrid sales he said a acquaintance did buy a Grand Cherokee based on having something different, which is only allowed because of LOW GAS PRICES.
Edumnds in correct. Its because of low(ish) gas prices that people are buying factory hot rods and SUV’s, I bet his friend didn’t buy a GC Diesel.
My ’15 Accent has USB, AUX and Bluetooth; these are features I specifically was looking for. If I had anything else I would have immediately tossed it for a Double DIN unit from Kenwood, Alpine, Sony or Pioneer.
People not interested in taking advantage of especially Bluetooth in cars I have to really question. I never have to look at my phone, it tells me who is calling, keeps my call history and allows me to easily dial anybody in my contacts/favorites.
I have YET to insert a CD into the drive, I’ve use a USB flash drive, Bluetooth A2DP Streaming and XM/Sirius radio exclusively.
LOL, I also added a 12″ sub, Digital Signal Processing (Time Alignment) and 1,000 watts worth of Alpine PDX power.
I really have wonder about Autoline audience, they aren’t car enthusiast they are just consumers. Because CUE doesn’t behave like a typical car audio interface there is constant whining about it.
There is never any mention of the steering wheel controls, don’t these exist with CUE?
I am not defending GM’s use of CUE for its teleamatics but seriously the learning curve can’t be that steep if everybody posting on here has a PC/Mac and a smartphone…..
April 23rd, 2015 at 12:54 am
G.A. I do like the screen better in the equinox than the soul, but you are right the soul is easier to operate. Given the size, shape, and utility of the Soul, it reminds me of the PT Cruiser and what a 2nd gen PT could have been.
April 23rd, 2015 at 12:58 am
23 No, one department handles all of GM, HF engineers are assigned to each platform based on work load and who ever just finished up with a platform that just launched and now has nothing to do, which explains why some platforms fare better than others. Sometimes the design-release engineer gets it right from the start and the HF engineer really doesn’t have to do much, and then there are the DREs that just want to push their POS component through the system as fast as possible and if the HF engineer doesn’t speak up and demand changes to make the component as user friendly as possible it ends up being another CUE.
April 23rd, 2015 at 7:45 am
My 2011 Cruze had a much better infotainment system than my 2012 CTS. Very sad to see the entry level vehicle having the system I wish was in my Cadillac.
Also on the amount of EV trade-ins going to SUV’s it would interesting if this trend is for (as you mention) just waning something different or customer dis-satisfaction with the EV.
April 23rd, 2015 at 8:07 am
32 Ziggy, thanks for the explanation.
32, 33 I suspect part of why Cadillac ended up with CUE, was to make Cadillac more “exclusive,” even if that made it worse. That sort of thing has been going on for years, with many car companies, as when BMW introduced this wonderful thing called idrive, that sucked, especially in its early form.
April 23rd, 2015 at 8:31 am
22% of people trading in EV’s and hybrids replaced then with an SUV. That means 78% replaced them with something other than an SUV. Since SUV/CUV’s account for almost 35% the market, I’d say the EV/hybrids are being replaced with non-SUV’s at a rather high rate, especially in a time of cheap gas.
April 23rd, 2015 at 8:55 am
If 22% of people trading in EV’s and hybrids replaced then with an SUV. That means 78% replaced them with something other than an SUV. Since SUV/CUV’s account for almost 35% the market, I’d say the EV/hybrids are being replaced with non-SUV’s at a rather high rate, especially in a time of cheap gas.
April 23rd, 2015 at 9:02 am
#35
That isn’t the headline John was looking for.
April 23rd, 2015 at 10:56 am
I don’t see the trading of ev’s for suv’s as being a big deal because most ev’s are small and the natural trend in this country is to move to a larger vehicle from a smaller vehicle. The exception is for mature buyers realize they don’t need a large vehicle anymore. The key for ev success is how many 1st time buyers will choose an ev / plug-in and will OEM’s offer a variety of ev and plug-in styles.
April 23rd, 2015 at 11:01 am
I’m confused by your post today. What is a GLE? Did you mean the GLA? And the M-class is still very much alive according to my buyers guide, and the Mercedes USA web site.
BTW, funny thing; I typed in mercedesusa.com by accident and it redirected me to WALMART of all places. He he he. The correct website is of course mbusa.com
April 23rd, 2015 at 11:13 am
@ C-Tech: Every time I drive my wifes car it just impresses me more and more,especially the quality in a low end vehicle.One of my granddaughters was so impressed with granmas car she went and bought one for herself.If I could get one a couple of feet longer,I would own it.
April 23rd, 2015 at 11:22 am
#42 – Mercedes has changed its entire naming structure and M-Class is now the GLE. Here’s a link: http://media.daimler.com/dcmedia/0-921-1789788-1-1760337-1-0-0-0-0-1-12759-614216-0-0-0-0-0-0-0.html?TS=1429802496454
April 23rd, 2015 at 11:47 am
@ John Mc: All these letters etc,makes me glad to see Lincoln at least for one model is going back to Continental.To me,it says more them just letters.
April 23rd, 2015 at 11:56 am
43 I’m seeing a lot of Souls in my condo parking lot, for two reasons. The car is a great value, if you don’t “load it up” too much, and the dealer is only about 3 miles away.
April 23rd, 2015 at 11:43 pm
Kia Souls appeal to a large segment of society.
My 81 year old father wants one, but they have other issues, I doubt he’ll get one.
Your right that if you opt for the middle car with a few standard features + options the price is reasonable.
That said Toyota is still selling lots of XB’s (and Matrix) , it’s that overall shape and utility that’s winning the day. It easily is something sporty but also can be grown into especially for young families who won’t be forced to upgrade just to accommodate children.
I get what Kit is saying about choices and I agree that low fuel prices is powering things. A friend of mine’s wife had to be talked out of getting a 2015 Nissan Armada and was only swayed by user feedback. All of their children are out of the house but ONE but she still wanted something sizable, so they got a ’15 Toyota Highlander SE.
Its only slightly worse or the same on gas as her former Nissan Altima which was one of the 4 % that was V6 and manual transmission…
April 25th, 2015 at 8:02 pm
Trading out of a hybrid or EV back to a gasser is less bad than it was even 5 years ago. CAFE has led to improved efficiency in just about every make and model. But Friday I was reminded why it has no appeal when I put in 10.5 gallons, $23 that covered 525 miles.
The Edmunds article means used hybrids and EVs are a buyer’s market. Rather than wait for gas prices to rebound, today’s buyers have negotiating leverage.
As I explained to a couple of co-workers, our Prius saved two car payments in gas every year and now they are paid off . . . we still pocket nearly $1,000/year gas savings.
It takes $1,250 of pre-tax money to make $1,000 gas money. Our hybrids have given us a significant, net income raise for the past 10 years. If others choose to waste their money, fine by me.
Bob Wilson
April 25th, 2015 at 9:12 pm
John John John,
Very disappointing, how many years have you followed the auto industry? I will save you a lot of research with one word, UNIONS!!! Look at UK in the fifties, unions destroyed the auto industry. I blame the executives for not having the guts to put a stake in the heart of the unions. When labor eats up large chunks of your income, you have no money left for innovation and materials. Notice when the unions were busted after bankruptcy, the auto industry turned around !