On today’s show… a price war is breaking out in the American market, Tesla’s stock could hit $465 a share and Papa John gets his classic Camaro back. All that and more coming right up on Autoline Daily.
This is Autoline Daily for August 18th, 2015.
BULLISH? OR BULLSH@*!?
Tesla’s stock is already trading at a staggering $254 per share, but one analyst believes that it could nearly double. Morgan Stanley forecasts that Tesla’s stock will hit $465 a share because of autonomous technology. They predict Tesla will introduce plans within the next year, to year and a half for autonomous cars on sale by 2018. And as impressive as $465 sounds, Morgan Stanley says Tesla’s business case is so compelling that some bulls could value the company at $611 a share.
CHINESE BUICKS AND CADILLACS
As we pointed out yesterday, we’re starting to see Chinese-made cars in the U.S. market. BYD and Volvo are already here and soon there could be another model on that list. The Detroit Free Press reports that GM wants to bring the Buick Envision from China to the U.S. by the end of 2016. Some are reading this as a negotiation tactic with the UAW but this is just becoming the norm. Autoline has learned that the plug-in version of the Cadillac CT6 will only be built in China, so if and when that car comes ‘Stateside,’ it will be rolling off ships from China somewhere in the 2017 or 2018 time frame.
And we’ll be back with more right after this.
SKETCHY SPORTAGE
Kia just released a couple sketches of the all-new Sportage which will make its official debut at the Frankfurt auto show next month. Kia’s design studio in Germany spearheaded the styling of the new compact SUV.
PAPA JOHN’S CAMARO RECOVERED
The Woodward Dream Cruise is probably the greatest automotive spectacle on earth with over one million spectators and tens of thousands of classic cars. Despite celebrating its 20th anniversary, the event seems to be growing in size. The good news is that the Dream Cruise attracts people who love classic cars, that bad news is some people want to steal them. As we reported yesterday, three classic cars were stolen. Two remain missing, but that Papa John’s 1971 Camaro was found at an abandoned house in Detroit. Anyone who knows the story about “Papa” John and his Camaro know that he was meant to have this car.
DROP TOP S-CLASS
Mercedes just pulled the cover back on the S-Class Cabriolet ahead of its Frankfurt motor show debut. Details about the car will come later, but we can see that the styling is nearly identical to the S-Class Coupe. It doesn’t look like much has changed on the interior as well. But it sure is cool to see such a large convertible. It goes on sale next year
Coming up next, John says it looks like the Americans are starting another war… a pricing war that is.
PRICE WAR BREAKING OUT
In 1956 an assistant sales manager for the Ford Motor Company in the Philadelphia region got the idea to start a sales slogan he called “56 for 56.” In other words, you could get a brand new 1956 Ford for only $56 a month. Sales in the Philly area took off and that slogan launched the career of that assistant sales manager. His name, by the way, was Lee Iacocca and he went on to become president of Ford and later Chrysler.
If you adjust that $56 for inflation, the number today would be $491. And I bring that up because I’m seeing dealer ads for new cars that make me think we’re back in 1956. Here’s a GMC Terrain for only $99 a month. Here’s a Nissan Rogue for only $98 with zero down and a Malibu for only $76 a month with $999 down.
What in the world is going on? The car companies say they are maintaining their pricing discipline and that they can’t control what their dealers do. But dealers representing different car companies are offering unbelievably cheap leases. This is an industry-wide phenomenon, and that tells me we’re in the middle of a price war. Judging by the dealer ads FCA, Chevy and Nissan seem to be the most aggressive, and I bet this pricing war goes thermonuclear before it’s over.
By the way, if you adjust that $76 a month for a Malibu back to 1956 prices, it would only be $8.66 a month.
That wraps up today’s show. Thanks for watching and please join us again tomorrow.
| 
| Listen on Phone 
| 
Share
Embed
Permalink
Comments (35)
August 18th, 2015 at 12:00 pm
Usually sketches of cars look way-better than what actually is produced (in metal), but with that Kia Sportage, even the sketch doesn’t look so good; guess we’ll have to wait to see what is actually presented. And of course styling is subjective so just consider my comment as JMO.
Tesla continues to defy logic (still haven’t mad e a profit); I guess that’s why they call the stock-market speculative.
Price wars: okay, but I think a lot of buyers would just like a fair price and forget the shenanigans. I know some like the ‘lure of the deal’. Mostly people don’t want to feel cheated when purchasing a vehicle.
August 18th, 2015 at 12:08 pm
I’m going to assume that Autoline has a reason to think that these low low low rates for A NEW CAR!!!!! are more than the standard dealer come on.
There’s one car at the dealer that’s that cheap, only vegan unicorns born in Hawaii qualify, and the car’s just been sold when you walk through the door is what I’m thinking.
August 18th, 2015 at 12:33 pm
Price Wars: It would be interesting to have John send some “teams” out to check the lease pricing he sees in the ads and report back what the final lease price would be on, 1. the low-end model advertised and 2. the model equipped the way that most people purchase this car. This would inform his listeners if these ads are “believable or not.”
August 18th, 2015 at 12:42 pm
I see a new spot on Autoline called- Autoline’s – believe it or not
August 18th, 2015 at 12:46 pm
The Kia design looks so much like any other small SUV sketch I’ve seen in the last few years. Add the door handles and lines for the door openings, enough window to actually provide headroom and this will look similar any current production small SUV.
As for the low lease pricing; I would love to meet the person that is actually leasing any of those cars with those advertised prices. I view that as on the verge of the old bait and switch. Get people in the showrooom and they leave with a $200 a month lease.
August 18th, 2015 at 12:48 pm
John, please, I think you know better. These are ads as you said, the bait on the end of the hook meant to get you into the showroom where the price suddenly increases. The devil is in the details, which in this case is the fine print of the lease agreement. But take 2015 Nissan Rogue Select you held up. The vehicle pictured is not a Select model. It “excludes 6% monthly use tax, bank acquisition fee, license, doc and title” and offers a paltry 10K miles/year. My favorite is the very objective, easy out escape clause otherwise referred to as with approved credit. “Oh, sorry Mrs. Johnson, that offer is only for buyers with an 850 credit score, yours is 830.” “I’m sorry, Mr. Davis, the picture is for illustration purposes only.” “Well, Bob, even though your 2012 CR-V is in mint condition with only 6K miles, the (pick a color) book value says it’s only worth $2,500 on trade. But don’t worry, we can roll the negative equity into the new car!” I wouldn’t call it price wars, maybe and ad blitz.
August 18th, 2015 at 12:48 pm
$76 a month for 24 months is $1824 + 999 down means this new Malibu bare bones car is only going to result in $2800 in depreciation? Who’s kidding who? At best this car with a list price of $22,000 if going to lose 40% so where is the other $6,000 going to come from?
August 18th, 2015 at 12:48 pm
I agree with Dave. Let’s send in an undercover reporter to find out the low-down. Could the catch be in what happens when the lease is up? I’m not familiar with leases, but if there is some balloon payment or penalty at the end of the lease, that would be a devious surprise.
August 18th, 2015 at 12:53 pm
The Kia looks like yet another car you can’t see out of.
August 18th, 2015 at 12:53 pm
It used to be “made in japan” for junk , now , it’s “Made en Chine” Chinese metallurgy in my GM 2.4 cost me a lot of money & bother. After a lifetime of GMs, I switched to ford (used) , but that didn’t work out too well either.
I was a Ford dealer line mech when the 56 Ford was hot , made several hundred in birddog fees that year.
August 18th, 2015 at 1:04 pm
Kia Sportage: Why bother having any windows in the damn thing.Stupid looks,poor visibility,yeah right.Don’t any of the designers drive??
August 18th, 2015 at 1:37 pm
#3 + #8
I concur. Let’s send a team out for one day gathering ‘real world’ intel on those lease offers.
Oh, and here’s another point. The ’56 for $56 was a PURCHASE price back then. Not really an apples to apples comparison when you hold it up to today’s LEASE pricing.
I never did like leasing. Something about the promise of perpetual, never-ending car notes…
August 18th, 2015 at 2:01 pm
#11
The $56 was most likely one of those super long brand new 48 month loans. Even at 10,000 miles a years, you would be on your 3rd or 4th set of tires, had it tuned up 5 times, most likely replaced the battery, had the “oil bath” air cleaner serviced and maybe even a brake job. Today’s cars would have changed oil and maybe an air filter. More ways that $56 payment equated to the inflation adjusted $491 doesn’t seem so cheap.
August 18th, 2015 at 2:05 pm
@11 – and with leasing, you are continually paying for the steepest part of the depreciation curve. That is why a I but a 2-year old with low miles. Someone else pays for the steepest depreciation and I still have at least a full year of OEM warranty for peace of mind.
August 18th, 2015 at 2:06 pm
Oops. “Buy” not “but”.
August 18th, 2015 at 2:21 pm
The more I look at the Scion iM from yesterday’s Autoline Daily the more I think Toyota has brought back the next generation of the Toyota Matrix. I believe the M = Matrix.
I think this is a good thing but Toyota should cut it’s losses and dump the Scion Brand and focus on the Toyota and Lexus. The iM can be rolled back into the Toyota showrooms
as the 2017 Toyota Matrix. The same could be done with the other new model as a 2017 Yaris.
August 18th, 2015 at 2:32 pm
I am very glad Papa John got his Camaro Back!
Score one for the Good Guys!!! OnStar should out fit Papa John’s Camaro with a state of the art OnStar system to prevent any future attempts to steal it.
August 18th, 2015 at 4:13 pm
I think the Papa John’s Camaro brings up another quandary about restore, modify, or keep as is: do you add a modern security system to your classic car?
August 18th, 2015 at 4:19 pm
Rarely have I seen these ” special offers ” apply to cars equipped the way most buyers want. When my lady looked at a Highlander advertised on the radio, it was so stripped down it only had an am/fm radio! To get the options she wanted cost an additional $10k. She walked away.
August 18th, 2015 at 4:23 pm
I wonder if whoever stole Papa John’s Camaro had any idea of the notoriety of that car. I’d guess not at the time it was stolen, but learned later, and then parked it. Anyway, I’m glad the car was found, and was mostly undamaged.
August 18th, 2015 at 4:47 pm
I live in New England, but was recently in San Antonio, TX for 2 weeks.
I saw so many car ad’s on TV that offered cars and trucks for much cheaper prices than I’ve ever seen on the Ad’s here in the North East.
I’m going to be in the market next year to buy or lease a New vehicle and am considering going back to SA to not only buy a vehicle but spend more time with friends out there.
The prices were that much less to make me want to look into the SA, Texas market more.
August 18th, 2015 at 5:51 pm
It’s unfortunate that we will soon have an onslaught of Chinese cars, but it’s not surprising. Everything else we buy comes from China, including expensive Apple stuff, and no one cares.
August 18th, 2015 at 6:09 pm
We keep buying Chinese (the latest money manipulator ) and Mexican goods and blame someone else for stagnant wages and employment.
August 18th, 2015 at 6:22 pm
CWolf I challenge you to find an American made toaster, TV, microwave, stereo, clothing, anything. I was talking to an auto parts supplier the other day and he said most parts are made in China, some fairly decent, many of atrocious quality, even OEM’s are selling them.
August 18th, 2015 at 6:24 pm
According to CR. the iM is replacing the xB, but not boxy any longer, seems like Americans don’t like the boxy look much anymore.
August 18th, 2015 at 6:36 pm
When the xB got the rounded corners, thick C pillar, big engine, etc., it lost its appeal. By most objective standards, it was better than the first one, but it lost that special appeal.
August 18th, 2015 at 6:50 pm
pedro, you are correct; this is what results when greed overcomes common sense. In truth, we did it to ourselves. As I recall, the Germans and Japanese remain loyal to their automotive brands, yet we as Americans have lost all patriotism when it comes to making a purchase.
I realize American autos often have less American content than others, yet the profits remain in the U.S. This is a tough one to evaluate! Perhaps, limiting political bribes and establishing a favoring US trade agreement would lead to a better equilibrium for the US work force. I certainly can’t see this happening in my life time, but I can always dream.
August 18th, 2015 at 7:00 pm
Correct me if I’m wrong but that 56 Ford price was to buy the car not lease it , correct? So after pay what they ask for the lease at the end of the term you have no car unlike buying the 56 . Lisk @ # 7 my guess is that other 6K you mentioned will come in the form of over mileage and wear and tear charges.
August 18th, 2015 at 7:00 pm
26 FWIW, here are some fairly recent sales numbers by company for Germany. The local brands dominate, but there are quite a few Asian cars, and non-German Euro brands.
http://www.best-selling-cars.com/germany/2014-q3-germany-best-selling-car-brands-models/
August 18th, 2015 at 7:06 pm
Kit, I think the list makes my point.
August 18th, 2015 at 7:12 pm
Toyota paid attention to the critics of the original xB and that was a mistake, they did make it bigger, quieter, more powerful more comfortable and at the same time. no longer made it desirable.
August 18th, 2015 at 7:21 pm
29 Yep, true. I didn’t add up the numbers, but an even better comparison might be to add up all EU brands. Doing that, the EU brands would dominate the German market by a huge margin over everything else.
August 19th, 2015 at 8:15 am
21, 22, 23, 29
The situation we’re in with foreign goods is definitely of our own doing. We are a very pluralistic society here in America. We pride ourselves in not being exclusionary – like some other countries. But with that all-inclusiveness comes the bad as well as the good. The bad being that we get heavy tariffs imposed upon our goods entering places like China, but we don’t imposed the same heavy tariffs on their goods entering the U.S.
We’re too busy being the all-inclusive, politically correct, good-guys of the world.
ehhh, enough social commentary…
August 19th, 2015 at 9:01 am
We reserve our high tariffs for trucks.
August 21st, 2015 at 4:26 pm
Hi John, As a few others have eluded to, I don’t think your comparison of the current monthly offers are comparable with those in 1956.
Like so many consumers, you have fallen into the trap of only looking at the monthly amount, not the total cost of the car over the life of the loan or lease. Perhaps you could do a follow up story on the total cost of a 1956 Ford (ie $56 a month for 36 month purchase , I’m guessing) compared to a current loan of 84 or 96 months or whatever the fine print says on the current offers you were referring to.
Thanks,
Phil and Dakota (soon to be aged 12!) in Burlington, Ontario