On today’s show… a judge gave Volkswagen one month to fix its diesel car, Mercedes says it wants more humans and fewer robots on its assembly lines and GM tests the waters with hybrid pickups. All that and more coming right up on Autoline Daily.
This is Autoline Daily for February 26th, 2016.
VW GETS 1-MONTH DEADLINE
The Volkswagen emissions scandal broke 5 months ago and the company still has not come up with a fix. So yesterday a U.S. District judge in San Francisco ordered VW to come up with a solution by March 24. Plaintiffs suing the company say VW must either fix the 600,000 diesel cars involved or buy them back. As we’ve reported before, a buy back could cost the company over $10 billion. Attorneys representing VW say they should have a plan in time to meet the judge’s deadline.
TESLA WINS AGAINST GM
Tesla won a victory in Indiana to sell cars directly to consumers. A state legislator introduced a bill forcing Tesla to establish a franchised dealer network if it wanted to sell cars in the state. General Motors was directly involved in advising the legislator on how to write his bill, but the bill was tabled and will not be enacted. Here’s our Autoline Insight. Franchise laws were never written to say that cars could only be sold through car dealers. They were written to say that car companies could not compete directly against their own dealers. So if a company never had any dealers, like Tesla, then franchise laws should not apply to them. Forcing Tesla to use a dealer franchise is like saying you can only sell hamburgers if you get a franchise from McDonald’s or Burger King.
USED CARS’ SIZZLING SALES
New cars sales are selling at a record pace in the American market. But used cars are red hot, too. Edmunds reports that used sales were up over 5% last year, hitting 38 million units, the highest amount since 2007. Franchise dealers sold a record 11.4 million used cars. 22% of them were Certified Pre-Owned, which is also a record. In fact CPO sales have grown 55% over the last five years. Not only are more used cars being sold, prices are at an all-time high. The average used car sold for $18,600 last year.
Still to come, GM is going to offer a limited number of hybrid pickups.
GM REVIVES HYBRID PICKUPS
Remember the two-mode hybrid versions of the Silverado and Sierra? Sales were dismal and GM had to drop them. But if you don’t succeed at first, try, try again. Now GM will offer hybrid Silverados and Sierras in limited numbers in California. They use a mild-hybrid setup called eAssist. It uses a lithium-ion battery with a 5.3L V8 and an 8-speed automatic transmission. Compared to similarly equipped models, the hybrids are 13% more fuel-efficient. That would take them from 18 miles-per-gallon combined to 20 mpg. It also provides an additional 13 horsepower and 44 lb-ft of torque and adds 100 pounds. GM is only charging $500 for the system. But GM is proceeding very carefully. It plans to sell only 500 Silverado’s and 200 Sierra’s in California. It will then adjust its sales targets based on demand.
ECOBOOST GETS PRODUCTION BOOST
With over 60% of F-150 buyers choosing an EcoBoost engine Ford decided to pump up the volume. It’s going to invest $145 million in upgrades for its Cleveland Engine Plant, which will also create or retain 150 jobs.
VIGNALE IN DEMAND
Ford also announced that it’s going to expand its Vignale brand in Europe. You may remember that’s the upscale trim line that adds more premium touches to vehicles as well as unique ownership experiences, like free pickup and delivery for vehicle services and free lifetime car washes.
Coming up next why Mercedes wants more humans instead of more robots..
MERCEDES WANTS MORE HUMANS
The number of industrial robots rose 43% from 2013 to 2014. But in a day and age when more robots are being used to make things, Mercedes-Benz wants to hire more humans instead. Robots are really just suited for repetitive tasks, but Mercedes offers so many different variants of models and so many options, that robots have a hard time dealing with all the complexity. Mercedes is not going to get rid of robots on the factory floor, but humans will now take care of all the custom stuff while machines handle the more mundane tasks.
NISSAN LEAF HACKED
Last year, FCA was forced to recall 1.4 million vehicles after two hackers hacked into the UConnect system in a Jeep Cherokee. Now it’s Nissan’s turn. It had to disable an app for the LEAF, after an Australian researcher hacked into a friend’s LEAF located in the U.K. Nissan has apologized and says it’s working on an update.
NEW VOLT GETS PRICE DISCOUNT
And in other EV news, Chevy is putting a $1,000 incentive on the hood of the new Volt. However the discounts are only available in California and 10 other CARB compliant states. Sounds to us like GM needs to generate more ZEV credits in those states.
And with that we come to the end of today’s show, and to the end of this week. Thanks for watching and we’ll see you back here on Monday.
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Comments (31)
February 26th, 2016 at 12:14 pm
WAIT? What, GM was helping write a bill to prevent Tesla from selling direct to consumers. When the franchise law was to pervent automakers from competing with their dealers? Kinda like the new website you guys mentioned a week or so back where now consumers can search cars coming off GM lease without having to deal with a dealer.. Humm maybe Tesla should sue GM for infringing on franchise laws.
February 26th, 2016 at 12:27 pm
Mercedes should probably invest in some good robot programmers. I worked in a facility where we painted 40 to 50 different car parts each with a different program and the robots handled the complexity with ease.
February 26th, 2016 at 12:28 pm
I think Tesla is scaring the big Auto Companies. The luxury brands bring in big profits and it looks like Tesla is getting noticed.
February 26th, 2016 at 12:37 pm
I think automakers and dealers fears over Tesla’s direct sales model are unrealistic. Stop to consider that Tesla will bear all of the same costs that the mfr/dealer combination does. So, with the same costs, how could Tesla undercut traditional dealers and be more competitive? Are Apple computers and iPhones cheaper at Apple stores than at large retailers? No.
In addition to engineering, materials, labor, assembly plant and shipping costs, Tesla will have to finance their inventory, pay for advertising, fund the retail facilities, personnel and insurance just like dealers do. I honestly don’t see that they have an advantage, other than the ability to have more control over the consumer experience at their stores.
February 26th, 2016 at 12:38 pm
Indiana franchise law – It is very near the end of the “short” session here in Indiana so lots of wild legislation gets tossed at the wall. From what I can tell, GM got a bum rap in that all of the traditional manufacturers were lobbying against the bill. GM was blamed because of the pending Bolt will be direct competition for the upcoming Model 3. While the argument was they wanted Tesla to operate on a level playing field, unfortunately I did not hear anyone suggesting the State should repeal the existing law and we’d have more flexibility of how we buy cars. This bill is not dead. It was simply send to a “summer study” session, which is code for delaying the bill to see which lobbyists can make the most campaign contributions to the State legislators and political caucuses over the next nine months before it gets introduced again.
February 26th, 2016 at 12:53 pm
Tesla is such a small player in this I wonder what is the big worry, what is the ” worst case scenario” that they are trying to avoid. Sure Tesla is saving money not having dealerships but I have to think that most buyers don’t see that as a positive, especially with such a specialty vehicle.
February 26th, 2016 at 1:10 pm
Anytime you remove a middle-man you typically save money. So not paying commissions to a sales guy or subsidizing the cost of an elaborate showroom with acres of cars in inventory has to save the consumer some cash. I think Elio Motors has a great idea of a structured price (no negotiating) and the cars a picked up and serviced (including warranty work) through Pep Boys. That’s if they ever make any cars. As for Tesla I would want, at a minimum a service center nearby. The sales guy I could do without.
February 26th, 2016 at 1:48 pm
Since Tesla has no dealers, do they dispatch a flatbed to get your car if it needs service? How many service depots are there? Do they give you a loaner while they have your car?
I’d have a lot of questions like that, before buying a very expensive product with no known location to get it fixed.
February 26th, 2016 at 1:54 pm
Mercedes
I also saw this story in AutomotiveNews, where Merc said they needed all this customization because their customers were so keen to express their individuality via their cars. (personally, I express my individuality by the logos on my sneakers and tshirts. kidding. I have a non-auto website. not kidding)
I checked the links for the 43% increase in robotics, and it looks to me like this number refers only to increase in investment between 2013 and ’14.
http://www.prnewswire.co.uk/news-releases/global-survey-13-million-industrial-robots-to-enter-service-by-2018-570066771.html
“…global investments in industrial robots increased by a record-breaking 43 percent (2013-2014) within one year….”
February 26th, 2016 at 2:13 pm
Just a note. VW does not have to fix it’s diesel issue, only provide a plan. What is not known is if the plan includes a timeline. But, of course it’s a Calif. court that has stuck it’s nose in the issue. Probably a computer fix will do.
February 26th, 2016 at 2:45 pm
10 I suspect it will take a lot more than a computer fix for the pre-2015 Golf/Jetta/Beetle that don’t have after treatment. We shall see.
February 26th, 2016 at 3:14 pm
11 I’m sure glad I’m not the US Attorney General these days.
February 26th, 2016 at 3:31 pm
Kit, I had heard of Tesla picking up their cars with a flatbed, but I would assume that is just in cases of warranty repairs. They have a map of service centers all around the world, but there are not enough yet. Only 2 in GA. They require very little maintenance, even the brakes last a much longer time due to the regenerative braking sys. and they do give loaner vehicles during service “when they can”.
Sean, The hamberger franchise analogy would be more accurate to say that White Castle (all family owned with no franchises) can no longer sell hamburgers until they let someone start a franchise. White Castle has stayed relatively small in number of stores, even though they started before anyone back in 1921. I see Tesla doing the same by not franchising, staying relatively small, and having lower overhead. They can be innovative and have better control over their company but not really be threatening to the big car companies.
February 26th, 2016 at 3:40 pm
Come on now. This franchise thing is about one thing; Money. If you, the dealers, want the state laws to protect you, you pay the local politicians off. That’s the racket, just like in other parts of the govt.
Man alive, the dealers’ smoke and mirrors are as tiresome as the venality of the political echelon.
February 26th, 2016 at 3:42 pm
I’d think the big car companies could be very threatening to Tesla, if they wanted to be. Maybe they are content to let Elon have his niche, at least for now.
February 26th, 2016 at 4:11 pm
15. The silicon valley powers have recently figured out that they need ‘representation,’ read lobbyists, in DC. Elon has somehow gotten help for his enterprise, but I don’t see his game plan now. The next Tesla car is supposed to be cheaper, so I presume higher volume and more mainstream. How does he pull this off? (And what happens when a Chinese carco comes to the states? Will Tesla have cleared the way or will they have to follow the old dealership model?)
February 26th, 2016 at 4:23 pm
Speaking of Elon, one of his rockets with a big, heavy comm satellite destined for a geosynchonous orbit has scrubbed the last two days. Apparently they are using “extra cold” liquid oxygen, so more can by carried, and they’ve had a problem with it. I haven’t heard if they will try again today.
February 26th, 2016 at 5:07 pm
Yep, I checked the tweets and the site. It doesn’t look like they’re going tonight either.
February 26th, 2016 at 5:52 pm
Dan Nicholson, of GM Global Propulsion system appears to say E-assist is the way of the future as the electric motors from the plug-in hybrid will give additional torque and horsepower for acceleration giving a car with a low displacement engine the sensation of greater performance.
February 26th, 2016 at 9:24 pm
Ok, what is driving between the grape vines in the first cut of the gm truck hybrid video?
February 26th, 2016 at 10:30 pm
The problem with eAssist is “The compact induction motor, located on the accessory drive, . . . ” This is the wrong end of drivetrain because it means all power has to flow through the engine. Put the induction motor in the transmission, separated from the engine by some sort of clutch and it would work. But the accessory drive is the wrong end.
Bob Wilson
February 26th, 2016 at 11:44 pm
21 EAssist is cheap and easy, but yeah, it is only minimally effective, with power delivery, and especially, regen braking having to go through the gas engine. It silently cranks the gas engine, though, without having to engage a Bendix.
February 27th, 2016 at 3:32 pm
@G.A., or anyone else interested, the interior of my Corvette. It’s a “base” 1LT.
https://flic.kr/p/EwqnpY
February 28th, 2016 at 1:50 pm
@ Kit: Man that is one beautiful ride.I love that interior.Is the quality as good as they say compared to the older ones? It sure looks it.
February 28th, 2016 at 1:59 pm
24 The quality is very good compared to earlier Corvettes, but not as nice as a similarly priced Audi. It depends on how you look at it.
February 28th, 2016 at 3:22 pm
STHU, Kit. That thing is the shizz.
Drinking. Go Kyle
February 28th, 2016 at 4:23 pm
Are you eating m&m’s with your beverage?
February 28th, 2016 at 6:22 pm
#2 I agree. Though I’ve never worked a day in an assembly plant, I’d have to say the complexity Mercedes claims is too much for it’s robots to ‘keep up with’ is nothing more than its unwillingness to hire the programmers necessary for getting the machines to do what’s needed.
There’s a task out there that’s “too complex” for a robot? I mean, really…Are you kidding me?
February 28th, 2016 at 7:40 pm
SpaceX launch scrubbed again.
February 28th, 2016 at 9:32 pm
26 Kyle didn’t win, but he’s leading in points, so far.
March 1st, 2016 at 6:50 pm
I presume GM is losing cash on every hybrid truck hence the sale limit. Most likely its going back to research what customers think of this powertrain, now that hybrid is more acceptable. Whats amazing is the miniscule 2mpg improvement . GM needs to put all their trucks on the same F150 weight diet. I’d headhunt some Mazda body engineers/designers and see if there is an alternative to going with alum. Its still too expensive to use Carbon fibre like the new BMW7. Whats strange with the ecoboost is that its not delivering the MPG boost customers expect even if sales are good.