AD #2115 – Why Ford Wanted a New CEO, Fiat 500L Looks Better with 2018 Refresh, Dodge Releases Demon Price
May 23rd, 2017 at 11:50am
Runtime: 7:49
To watch this episode on YouTube click here.
- Why Ford Wanted a New CEO
- Study Says Ride-Sharing Will Kill Sales
- Hyundai-Kia in Recall Trouble
- Fiat Refreshes 500L for 2018
- Dodge Challenger Demon Price
- VW Made & Saved Billions with Cheating
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On today’s show… Ford drops big hints why it wanted a new CEO… a new study predicts that ride sharing will cause car sales to collapse… and Dodge finally releases the price of the Demon. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show that’s researched, written and produced for people who want to know what’s going on in the global automotive industry.
WHY FORD WANTED A NEW CEO
We’re learning more about why the Ford Motor Company decided it needed a leadership change. At a press conference at the company’s headquarters yesterday the chairman, Bill Ford, said the company needs faster decision making. With the auto industry evolving so fast, especially with the move to mobility services, Ford needs to move faster making complex strategy decisions. Next on the list: he wants clearer communication to employees and investors about the company’s vision of where it’s going and how it’s going to thrive in the future. He also wants a culture change, where employees feel energized and feel good about coming to work everyday. While both Bill Ford and his new CEO Jim Hackett praised outgoing CEO Mark Fields, it’s clear they felt the company was taking too long to make decisions, did not do a good job of communicating where it’s headed, and that employees were losing their sense of community at the company.
IT’S THE END OF THE WORLD AS WE KNOW IT
Here’s one reason why the Ford board of directors may have felt they needed to take drastic action. A new study by an independent think tank called RethinkX is calling for the end of the auto industry as we know it by 2030. The study predicts Transportation as a Service, that is ride sharing and car sharing with autonomous cars, will drop the price of transportation so much that:
| RethinkX Transportation Study 2020-2030 |
|---|
| - The size of the U.S. vehicle fleet will drop from 247 million in 2020 to 44 million in 2030 |
| - Annual manufacturing of new cars will drop by 70% |
| – Mainstream cars with gasoline engines sold to individuals will drop to zero |
| – Car dealers will cease to exist |
| – Global oil demand will drop from 100 million barrels per day to around 70 million |
| – The price of oil will drop to around $25 per barrel |
| – Oil prices might collapse as soon as 2021 |
We here at Autoline agree that mobility services will drastically disrupt the auto industry, but we don’t agree that it will happen by 2030. What do you think? What if it turns out that these guys are right?
Coming up next, the Fiat 500L is practically sales proof, so Fiat just went out and redesigned it.
HYUNDAI-KIA IN RECALL TROUBLE
Hyundai and Kia are being investigated for not properly conducting recalls related to engine issues, which led to three recalls totaling 1.7 million vehicles. The company says it “has conducted recalls in compliance with U.S. regulations and procedure.” But in August of 2016 a Hyundai engineer flew to the U.S. to warn regulators that the automakers should have recalled more vehicles. This is turning into a major whistleblower case. You may remember this is not Hyundai/Kia’s first problem involving recall practices. It had to pay over $17 million in 2014 for delaying the recall of Genesis cars to fix a brake defect.
2018 FIAT 500L 40% NEW
Sales of Fiat’s biggest vehicle, the 500L have been going nowhere in the U.S. It only sold 399 of them so far this year. But it just introduced a new version in Europe that we think doesn’t look as dopy. Fiat says 40% of all the components are new, including reworked front and rear fascias. A new model, called Cross, features a suspension that’s been raised 25mm or about an inch and front and rear skid plates. It seems that Fiat wants to move the 500L more into the crossover territory. The interior has been reworked slightly as well, with a new dashboard, steering wheel and instrument cluster. The new 500L will go on sales in Europe later this year, but no word yet on when it will hit U.S. shores.
THE COST OF DEALING WITH THE DEVIL
We finally have pricing for Dodge’s newest muscle car, the Demon. It starts out just over $86,000 including destination charges. That’s about $20,000 grand more than a Hellcat. And some of the extra goodies, or luxuries in this case, aren’t going to break the bank. The passenger seat, rear seat in leather or cloth and trunk carpet only cost a $1 each. Even the Demon Crate which is filled with race parts and tools valued at over $6,000 only costs a dollar.
Just when you thought Volkswagen was coming to the end of its diesel woes, another shoe drops. That’s coming up next.
VW MADE & SAVED BILLIONS WITH CHEATING
Yesterday we reported that Volkswagen’s repaired 2.0L diesels are flying off dealer lots in the U.S. But in Europe, the diesel crisis keeps getting worse. Earlier this month, German prosecutors launched an investigation into possible stock manipulation by its Chairman, CEO and former CEO. And now Reuters reports that a French watchdog claims the company made over $25 billion selling cars with cheating software in the country. It says VW saved about 1.5 billion euros by sidestepping regulations. If VW is found guilty of stock manipulation, the watchdog calculates it could face nearly 20 billion euros in fines. And that’s on top of the $25 billion in fines and penalties it has to spend in the United States.
Elon Musk believes electric semi-trucks are the answer to hauling cargo around the country. But Toyota is placing its bet on fuel cells and recently began testing a hydrogen powered semi-truck in Southern California. To learn more about that project, we’re inviting Sheldon Brown, the Executive Program Manager of Toyota’s Advanced Fuel Cell Project to join us for this week’s Autoline After Hours. It’s going to be a great show, so be sure to tune in Live at 3PM eastern time on Autoline.tv.
But that wraps up today’s show, thanks for watching and making Autoline Daily a part of your day.
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Comments (29)
May 23rd, 2017 at 12:04 pm
About that top story, see my comments from yesterday.
May 23rd, 2017 at 12:05 pm
I think the word “drastically” used in describing the effect of ride-sharing is too drastic, used in its context. Ride-sharing will probably reduce the overall number of vehicles on the road, but those are going to be mostly in urban settings. The effect will be gradual and not as ‘deep’ as suggested, so no, I don’t think the “sky is falling” nor will it be by the time-line suggested in the article.
Oh and the Fiat refresh; still dopey looking to me.
The price for the Demon includes those one dollar options (and you’d be foolish not to get them (because of their eventual collect-ability), which of course is where most of these sales are going to be.
May 23rd, 2017 at 12:21 pm
One only has to look at the freeways and see all the commuters and wonder how is ride sharing going to work for them. It seems like they didn’t think this through.
May 23rd, 2017 at 12:25 pm
Think tank? Sounds like they have been experimenting with acid. Where do they get the impression that oil will collapse from? Is there a huge discovery of crude we don’t know about? As the supply decreases the prices will only increase no the other way around. Also the world’s economy is mainly supported by oil and it ‘s many products. If that were to happen it would be a worldwide Venezuela. Gas there is about 2-3 cents a gallon and no one can afford it.
Also ride sharing isn’t going to go that deep. I expect it to flatten out in the next few years once the fad dies down. The only people that will use it is those living in major cities where cost of vehicle ownership is prohibitive. If you ask most of the people that use mass transit it is only because they can’t afford their own car. Sorry ,but to me they have watched too many dystopian scifi movies.
May 23rd, 2017 at 12:32 pm
Observing the number of cars on the road while driving to work this morning, I must disagree with the reduction of the car parc by 80% or so in the next 13 years. As I traveled from the northern suburbs to my office on Detroit’s northeast side, it was apparent that all of those on the road could not be served at the same time to myriad office destinations – if that were the case, bus services and other mass transit would be more prevalent. Without a change in the basic structure and locale of manufacturing businesses, ride sharing will have a much slower uptake than the article projects. Not all of us are well suited to information economy based careers or live in high population density areas, places where ride sharing makes a lot of sense.
May 23rd, 2017 at 12:41 pm
Wow John, now I understand why Ford chose an executive from a furniture company to become the CEO. If you believe that study on mobility and the collapse of the automobile manufacturing companies, choosing to go into another line of business now, makes sense.
May 23rd, 2017 at 12:46 pm
“Study Says Ride-Sharing Will Kill Sales.”
This MAY be somewhat true for cities,but definitely not the whole country.
They fail to take into account those that live well outside of any city.
This ‘study’ has the feel of more pie in the sky thinking that really isn’t in touch with reality.
Sure,eventually we will all be driving something that is electric,but it won’t be in my lifetime.
It seems that these types of studies tend to lean towards confining American citizens to specific areas.
For me,it has more of a rotten political stench about it.Flame on,but that’s how I see it.
May 23rd, 2017 at 12:47 pm
Can someone explain to me the rationale for FCA discontinuing the 200 and the Dart which sold in much higher volumes than the 500L ever did and investing more money into an underperforming suv?
May 23rd, 2017 at 1:05 pm
No doubt mobility services will impact the automotive industry, but whether Ford’s new CEO is better prepared to face the upcoming changes remains to be seen.
Another key issue has been Ford’s slow product updates, which may change under new leadership. However, Mark Fields may have intentionally delayed investment in new models to keep profits up (a strategy that’s worked relatively well for across-town FCA). This however may point towards an underlying fundamental problem his predecessor may have initiated:
Mulally’s “One Ford” policy effectively left one brand to carry the full burden of new architecture development. We can only imagine what profit margins and revenue steams might be available if Ford had a platform sharing partner (ie: Mazda), plus a globally viable premium brand (ie: Jaguar) to share its R&D costs.
Hmm.. I wonder if anyone in Dearborn wants to turn back the clock 17 years?
May 23rd, 2017 at 1:11 pm
The U.S. fleet will drop to 44 million in 13 years? Even if zero cars were built, starting tomorrow, the fleet would be over 100M in 2030, unless there is a nuclear war that destroys all of the vehicles, and kills all of the people.
Also, there will be gasoline powered cars for a long time to come, and used in rural areas and smaller towns and cities. I don’t see a huge change in transportation, except in big cities. In cities, there will be more “car sharing,” and maybe on-demand autonomous transportation. Of course, the best solution for much of the transportation in big cities is mass transport of various types, but in America, it won’t expand, because rich people don’t want to pay taxes to subsidize it. In other parts of the world, like China, major investments are made for transit. They were just starting construction of a subway system in Shanghai when I was there in 1994. Now, it is very comprehensive, and still expanding.
https://www.travelchinaguide.com/cityguides/shanghai/transportation/metro-subway-map.htm
May 23rd, 2017 at 1:15 pm
7 The Sergio factor, perhaps?
May 23rd, 2017 at 1:28 pm
@ Kit: Yup.He’s using the profits from Ram and Jeep to prop up two lines of cars that don’t sell worth a damn here,ie: Fiat and Alfa.I’m not sure how well they sell in the eu either.
May 23rd, 2017 at 1:28 pm
@#7 Hi Ctech,
FCA did not invest enough time in developing and researching what the North American customer wanted in cars like the Chrysler 200 Dodge Dart to make them more substantial and desirable vehicles.
I still do not know why Chevy continues to build the Malibu which is so close in size to the Impala which is a better looking and more desirable car.
Gasoline averaging $2.50 per gallon around the country no body wants a FIAT 500 or 500L.
My only hope is that FCA will graph the new nose and tail lights from the 2018 Jeep Compass onto the Cherokee in the very near future.
May 23rd, 2017 at 1:35 pm
I was CUV shopping at my local GMC store and found it amazing that a 2017 GMC Terrain SLE1 AWD had less features than my 2015 GMC Terrain SLE1 AWD. No Apple Car Play no Android Auto even the fog lights were deleted off the 2017. I see Mary Barra being shown the door just like Mark Fields at Ford unless they can improve product on all vehicles from base trim to premier trim because the Honda CRV, Nissan Rogue and Toyota RAV4 are well out pacing GM products. The 2018 Chevy Equinox and 2018 GMC Terrain have a lot of catching up to do.
May 23rd, 2017 at 2:03 pm
That’s a great price for the Demon but how much will it cost to get it off the dealer floor? I can easily see the dealer marking it up to $120k.
Can you fit a trator trailer in the studio?
May 23rd, 2017 at 2:10 pm
I’m with GA That study must not have paid attention to our last election. The polls were all taken in major cities and they ignored all else and look what happened. They couldn’t have gotten more wrong if they were trying to. Sorry ,but where I live there are no buses, taxis or Ubers. and I only live 25 miles outside of Philly. Tell some guy in Montana that he will have to rely on ride sharing. That is a joke. I had to check the date I thought maybe it was April Fools
May 23rd, 2017 at 2:42 pm
This whole study is ridiculous since the World’s population is increasing and will double in 2050. You will need more mass transit and vehicles to serve the transportation needs of that swelling over crowded world population.
May 23rd, 2017 at 2:51 pm
Good luck to Ford on their leadership change. That said, I think the old saw “be careful of what you wish for, you might get it” seems in order. One of the fastest ways of getting Wall Street’s attention these days is drastically reducing costs. Fields at least had the decent sense to spend money on product that delivered solid returns. Not spending money might increase the stock price, but will ultimately lead to declining sales, which in turn will lead to yet another management shake-up. Becomes a self-fulling prophecy.
May 23rd, 2017 at 3:08 pm
I always wonder why the cities trolley systems doesn’t make a comeback.They run on electric.Restricting car traffic to just delivery vehicles would also go a long way.Towns can be interconnected like they are,or were in west germany when I was a kid.Cheap and reliable transportation.Hell,it was a way of life in w.germany when I was a kid.
May 23rd, 2017 at 3:37 pm
Check how many cars are on the road at rush hour. The US fleet will stay near that, since no one is willing to let someone else decide what time they leave for work or leave to go home. Autonomous cars aren’t going to change human nature.
May 23rd, 2017 at 3:49 pm
In urban areas that are heavily Taxi dependent, when ride sharing takes over there will still be just as great a need for autos as there are now, and I see congestion actually getting worse. Folks who can’t afford an $80 cab ride take mass transit. But if that number is now half perhaps there will be some mass transit converts, putting more cars on the road?
May 23rd, 2017 at 4:04 pm
If cars are going to be obsolete in only a few years, maybe I should sell my Ford stock now, rather than waiting for the office cubicle guy to drive up the stock price.
May 23rd, 2017 at 5:57 pm
Aren’t these the guys that predicted Hillary was going to win by a landslide? We all know how that worked out, and I expect their predictions for autos to be the same, full of sh!t.
May 23rd, 2017 at 6:26 pm
I don’t understand why FCA brought in the Fiat models they did which are not right for the market here and do not sell well. Why don’t they bring in some of their models that are more appropriate to this market. They should be pushing the spyder hard but I have seem almost no ads.. Even the very
May 23rd, 2017 at 6:32 pm
22 No one, or almost no one predicted that Hillary would win be a landslide. The polls steadily narrowed after the Comey/Weiner letter, clear up to the election.
May 23rd, 2017 at 6:35 pm
Woops… Got cut off… Anyway, even the very large local Chrysler Dodge Jeep Ram dealers only have a Fiat or two out on the lot once in a while;AND they don’t even have a Fiat sign up!! Also, what happened to the required separate Fiat “studios”?? They might do well if FCA would ge9 serious..
May 23rd, 2017 at 6:55 pm
The Alfa Giulia is actually an ok car, from report I’ve read, but to actually buy one, you’d need to not care about depreciation or reliability. The Fiats are just not very good cars.
May 23rd, 2017 at 6:55 pm
“Autoline agree(s) that mobility services will drastically disrupt the auto industry, but we don’t agree that it will happen by 2030”….you are held back by an archaic thought process locked in history. Changes will happen faster than you can conceive. Computer memory or processing capacity has doubled every year since the 80’s. Try folding a piece of paper (0.004”) 40 years worth = 250,000 miles thick. We all face a challenging and perhaps wonderful future… don’t discount the futurists.
May 25th, 2017 at 9:51 am
I don’t see ride sharing being nearly this “disruptive” even in 2040. People with kids want their own vehicle. People outside of cities don’t have enough other drivers around to share with. And everyone will still want their car at the same time