This is Autoline Daily reporting on all aspects of the global automotive industry.
STRIKE AT GM LOOKS MORE LIKELY
Another day, another step closer to a strike. It’s increasingly looking like the UAW will go out on strike against General Motors when it’s labor contract expires just before midnight on Saturday. The rank and file are angry with union leaders over corruption charges that resulted in 9 convictions so far. Many of them feel their leadership has been too cozy with the car companies. They want more job security, higher wages and no concessions on their health benefits. Meanwhile GM wants to lower its labor costs which are the highest in North America. Some labor experts believe a strike could last at least a couple of weeks.
WITHOUT A CMO, GM LOST MARKET SHARE
Speaking of GM, last week we reported that Deborah Wahl was named GM’s Chief Marketing Officer, the first one it’s had since 2012. That’s when Joel Ewanick, the former CMO, was unceremoniously pushed out the door. Joel was doing a pretty good job. In 2012 GM had 18% market share in the U.S. But without a CMO in place, GM steadily lost market share despite coming out with a lot of good products. So far this year, GM is at 16.9% market share. If it was back at 18%, GM would be selling nearly 190,000 more vehicles this year.
| GM U.S. Market Share |
| 2012 |
18% |
| 2013 |
17.9% |
| 2014 |
17.9% |
| 2015 |
17.7% |
| 2016 |
17.4% |
| 2017 |
17.5% |
| 2018 |
17.1% |
| 2019 |
16.9% |
RALPH GILLES ON AUTOLINE AFTER HOURS
We have a terrific Autoline After Hours coming up this afternoon. Ralph Gilles, the head of design at FCA is our guest, and he has some fascinating insights regarding the future of automotive design.Craig Cole from Autoguide and Lindsay Brooke from SAE Engineering will also join us for the show. BTW, you can submit questions to Ralph Gilles. Just send them to viewermail@autoline.tv. And you can catch all the action on our website or YouTube channel at 3 pm eastern time.
MORE DETAILS ON FORD’S MUSTANG INSPIRED EV
Ford revealed one of the key details about that Mustang-inspired electric CUV that’s coming out next year. Ford says it will have an expected range of up to 600 kilometers or roughly 370 miles on a charge. Since this info came out of Ford of Europe we’re assuming that’s based on Europe’s WLTP, which we calculate will translate into about 330 EPA miles. That’s a pretty significant range and we also calculate that it will have a fairly large battery pack, probably around 82 kilowatt hours.
NISSAN DEALERS SHOWN NEW EV
In other EV news, Automotive News says that Nissan showed its U.S. dealers an electric crossover loosely based on the IMx concept. The dealers say it’s a 5-seater with a 300 mile range and can do 0 to 60 in under 5-seconds. The EV is expected to launch in the second half of 2021.
AUTONATION DROPPING MORE NISSAN STORES
Speaking of Nissan, Cheryl Miller, the chief executive officer of AutoNation, does not like what shes sees at the automaker. Nissan uses what is called stair-step incentives with its dealers. They get rebates from Nissan based on a quota of how many cars they have to sell. If they hit their quota they get a pile of money. If they miss it, they get nothing. So at the end of the month, dealers discount like crazy to move the metal to hit their quota. Cheryl Miller tells Bloomberg that consumers hate the system. “If I draw the lucky straw, and I get the incentive, my vehicle costs $5,000 less than my neighbor’s vehicle. How does that feel from a brand perspective?,” she asks. As a result, AutoNation is reducing the number of Nissan stores that it operates.
MORE DETAILS ON VOLVO XC40 PHEV
Volvo said it would electrify its entire lineup by the end of the year and now it’s showing off the plug-in hybrid version of the XC40. A 1.5L 3-cylinder gasoline engine combines with a single electric motor for a total output of 262-horsepower. A 10.7 kWh battery pack returns over 28 electric miles. It’s only available in front-wheel drive, it comes standard with a new 7-speed automatic and will do 0 to 60 in roughly 7.3-seconds. Based on initial WLTP data the crossover emits 38 grams of C02 per kilometer and has a combined fuel economy of up to 141 miles to the gallon. The XC40 PHEV starts at nearly 41,000 pounds or roughly $50,000 and UK deliveries start in February.
CAR OWNERSHIP GETTING MORE EXPENSIVE
Owning a car got a lot more expensive this year in the U.S. The AAA reports that the average annual cost of owning a new car hit $9,282, or $773.50 a month. Gas prices, maintenance costs, taxes, titles and fees, and MSRPs have all gone up, but the AAA says financing costs account for more than 40% of the total increase. The Fed is expected to cut interest rates so maybe that will go down. The Auto club says 72 month car loans are becoming common, and every 12 months added to a loan adds another $1,000 in financing charges.
And that’s it for today’s report, please join us again tomorrow.
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Comments (28)
September 12th, 2019 at 12:11 pm
“Consumers hate the system”
I bet very few consumers know that Nissan has that arrangement with dealers. I understand if dealers hate it, but I don’t see how consumers would know/care?
September 12th, 2019 at 12:18 pm
Re Car ownership getting more expensive.
I know there are many people who believe, because of the steep depreciation, (especially true for flagship luxury vehicles who lose 90% of their value after 7-10 years), that only fools buy new cars,
but recent evidence shows that the by far bigger fools are those who repair their cars at the Dealer and not at the independent mechanic.
I have first hand evidence of this.
Last Saturday I was doing my A BCDE A shopping rounds and my town’s Merc Dealer was right on my way, as are many other makers (BMW, Lexus, VOlvo, Lincoln etc all nearby), so I stopped and asked Service for a quote, how much it would cost to replace the spring and strut in my front left tire, which had a broken spring (and I predicted it! I said it would be a matter of time, with the pothole-filled roads in MI).
The guy at service went to various offices at the dealership and collected the info, and came back to me with this RIDICULOUS estimate: $400 for each part, $600 (FAR more ridiculous) for the labor, $189 for the alignment, so total (probably before the 6% tax) to do both front left and right, $2,189+6% tax!!!
I was sure the $600 each labor was 100% nonsense, so I thanked them and left.
Monday morning I called Firestone where I recently did an oil change and rear brakes. They told me that while they do springs on other cars, they don’t do them on Mercs. “Why?” I asked. “Because they are Mercedes” they non-answered. “SO what? AN E class is not a spaceship, not even an exotic!”. And I asked them if they knew of a good independent mechanic.
ANd they did, and it was a great tip. I called them, did not even have to visit, gave them the vin no of my car, and they got back to me in 10 mins with a detailed estimate.
Instead of the RIDICULOUS $2,200+tax of the dealer, they did the whole thing, with a 2 year, 24k mile warranty, for not half, but a QUARTER of what the crooked dealer quoted.
$664.47 TOTAL. (which included a $86 discount I never asked for).
I checked them out on the web, they had testimonials from 125 customers, less than 1 in 100 was negative, and a 4.9 /5.0 rating.
Bu-Bye Crooked Dealer!
September 12th, 2019 at 12:21 pm
1 As that woman on the show said, consumers sure know if one of them gets lucky and gets her POS Nissan Sentra for $5,000 less than her neighbor who was unlucky with his timing paid for the exact same vehicle.
September 12th, 2019 at 12:26 pm
2 this reminded me of my MIT colleague Dick Y., who came here to give a seminar some years ago and I met him at the airport. He told me he had just bought two (his and his wife’s) M3 Convertibles, which even back then he claimed he paid $80k for each, (so $160k for two 3-series!!!). Despite this splurging, he told me that it is important, if you buy cars like BMWs, to make sure you find a good independent mechanic you can trust. Which seemed odd at the time to me, given his $160k expense, to worry about $1-2k in repairs, but it makes much more sense to me now.
September 12th, 2019 at 12:32 pm
2 I’ve heard that it’s even worse with Porsche, as far as service cost at dealers. It might be a little harder to find a good independent shop for a 911 or Cayman/Boxter, which are more “exotic” than an E-Class, but I suspect there are good shops that can work on them, at least in most major metro areas.
September 12th, 2019 at 12:39 pm
The shop I found specializes in Mercs but also does Audi, VW and BMW I believe. The guy who gave me a ride from the shop to the office and took me from my office to the shop in the afternoon had a Mercury Mountaineer, though (Explorer clone).
Although this spring break is not really a reliability issue (I wish I could sue the state for its lousy roads whose potholes caused it), Porsche 911s are surprisingly reliable in many surveys.
September 12th, 2019 at 12:45 pm
6 con’d I just checked their webpage and they have been around since 1980, I thought they started far more recently. And while they specialize in Mercs primarily, I wish I knew them in 2005 when I got the 1998 740iL, for which I never found a really satisfactory mechanic, and sure none who charged… 1/4th what the dealer did!
September 12th, 2019 at 12:50 pm
1 I was thinking that consumers would actually like the program as long as they can wait till the end of the month to go car shopping. Seems like it would be a good way to get a great discount. The only way the consumer would be unhappy about it was if they know what others pay which most don’t.
So I agree that the dealerships probably are the ones that don’t like it the few consumers that might think they paid more than someone else rarely are comparing the exact same vehicle.
September 12th, 2019 at 12:52 pm
Ford taking a little page out of Elon’s book of hype. As I doubt the Ford EV will have the range they are touting. Hey they might as well say its going be priced under 35K too.
September 12th, 2019 at 1:27 pm
#3 Ah ok.. I don’t know what any other human has ever paid for a car. I must be doing something wrong.
September 12th, 2019 at 1:29 pm
10 My friends have always told me, in great detail and with comments, what they pay for every car they ever bought. I did not know it was such a damned state secret.
September 12th, 2019 at 1:32 pm
9 the Model 3 is priced bloody close to $35k, $37k, not even 8% higher than 35k.
If you really believe the 82 KWH Ford fatass CUV that is allegedly “Mustang inspired” (maybe like the discontinued Fusion was “Aston Inspired”) will sell for anything less than TWICE $35k, you need to save much more, if you plan to buy one.
September 12th, 2019 at 1:39 pm
@7 I need to speak with them, Larry about my 1966 Benz and my son’s 2005 CLK 320. Could you please mention their name? If that is not allowed on this forum, please be so kind to send through e mail wvanacker@holdenrichardson.com Thanks in advance.
September 12th, 2019 at 1:45 pm
#11 Oh no it isn’t. I am not implying there is anything wrong with it. For me I was just raised it isn’t polite to ask or brag. So that is why I haven’t heard anything.
September 12th, 2019 at 1:50 pm
13 They are Stadium Auto. If this is not allowed, it will not appear.
https://www.stadiumautoservice.com/
I did see a 60s/early 70s Benz in their lot. looked good (paint wise etc)
September 12th, 2019 at 1:52 pm
13 You live in SE MI? I am less than 5 miles from them.
September 12th, 2019 at 1:55 pm
14 It may be less pronounced today, but for decades people who bought new cars would leave the entire detailed sticker with the prices of the vehicle and each of its options on the side window (usually) for years. I always thought it was terrible taste.
September 12th, 2019 at 1:57 pm
6 911s are “average” reliability in CR’s survey. Boxster and Cayman are “above average.”
The thing a friend commented on was the cost of routine maintenance for his ~2012 model year 911. over $2000 for a 4 year/40K mile service. It includes changing the plugs, and maybe changing the transmission oil with the PDK he has, but still… He’ll be looking for an independent mechanic for any future service, now that warranty is not an issue.
September 12th, 2019 at 2:00 pm
17 I remember a few, but not a lot of people leaving the stickers on their windows. I never did that, but I save the stickers.
September 12th, 2019 at 2:01 pm
18 I have a colleague here with a large family, I may have mentioned him before, who buys full sized SUVs, had Landcruisers and their Lexus clones (still has the 96 Landcruiser in his summer place), recently he bought two Merc SUVs, a GLS and an ML, both with low miles for around $30k each, 3-4 years old each, and also bought extended warranties costing $5,000 each (which today he told me were totally useless), and took them to the local crooked dealer for service, he paid $1,269 for a recent one, “oil and filter plus” and none was covered by the warranty. He does lots of miles as does his wife, they split the distance, 60-80 mile commutes each.
September 12th, 2019 at 2:05 pm
18 I got a scan of a RR Phantom VII EWB. Starts at $470,295.00 base price, and after a long list of options, ($10k here, $20k there, it adds up) reaches a final price of $586,270. Around 2012 or 2014.
Now that I have a trusted mechanic, I looked at cars.com for more exotic mercs, AMG S 65s and S63s and other AMG S classes. None was less than $60k. They don’t depreciate as much as regular S class.
September 12th, 2019 at 2:12 pm
GM has more to worry about than just a possible strike. I heard on the news that they recalling millions of 2014-2018 Silverados 1500,2500,3500, Sierras , Tahoes, Yukons , Denalis and escalades for potential brake failure. Even if that is just a software fix that is going to be really expensive on that many vehicles and considering it’s GM;s cash cow can’t be good.
September 12th, 2019 at 2:26 pm
15, 16: Thanks a lot. Their website looks good. Yes, I live in SE MI, Northern suburbs of Detroit, so a 40 minutes drive to them for me.
September 12th, 2019 at 2:30 pm
20 Although I agree $1,269 for oil change plus would be considered crooked. There are many levels of extended warranties from just extended powertrain coverage to a full coverage for wear items like tires, belts, oil changes and even paint. Sure would have thought a $5000 warranty would, but he should have read the level of warranty he was buying.
September 12th, 2019 at 2:51 pm
20 It sounds like they might need to have a blown engine to come out on the extended warranty. I’m kind of surprised they bought the extended warranties. I suspect they won’t do that again.
Do you know how many years/miles the warranties are for? If it’s 200-250K, or something like that, it could explain the high price, even if it doesn’t cover much, other than powertrain.
September 13th, 2019 at 6:14 am
23 No problem. One thing is they will not give you a ride if you are more than 4-5 miles away from them. Another which seems strange is why, after 35 years in the area, I had never heard about them before. Still, they have testimonials from not 125 customers, as I thought, but 540+, on the page I posted.
24 I am sure the devil is in the “plus”. I did one oil and filter change at that dealer and they gave me an estimate of $240, then charged me only $219 or so, in 2017. (price includes a hand-wash) So they must have found another $1,000 or so. I was surprised my colleague did not go over the bill carefully to see what exactly they (claim they) did. He must be too busy.
In the late 70s-early 90s, he used to have a Volvo 240, the old square design, bought new, he babied it, nice car, but I kept taking him to the dealer to fix it all the time, and he got this paranoid theory the dealer was actually sabotaging the car. Then he found an independent mechanic.
25 Don’t think he blew the engine. Also don’t think the warranties covered that many miles. He does a lot of miles a year. It may have been a 3-5 year warranty, and he could do 100k-120k miles in 5 years, but the vehicle only had 30k when he bought them, possibly CPO.
September 13th, 2019 at 6:15 am
Just watched the re-broadcast (missed the live show) of AAH; I’ll call it ‘Straight Talk with Ralph Gilles’. It was a pretty good show, two thumbs up.
September 13th, 2019 at 9:22 am
“Top UAW officials used union funds for golf, cigars, booze, fancy villas”
https://www.autonews.com/video/first-shift-uaw-official-charged-embezzling-funds-others-implicated?utm_source=antv-first-shift&utm_medium=email&utm_campaign=20190913&utm_content=hero-image
Because of the above and the huge inventories and despite the huge 3.5 mill truck recall, I believe GM will do OK with the UAW strike,
and if the corrupt UAW bosses had an ounce of brains, let alone decency,
I’d encourage them to just take whatever little GM offers their rank and file,
and then go to jail where they belong.