Episode 394 – Opel Drags-Down GM, Honda Disses EVs, Nissan LEAF Pricing All Over The Map

May 18th, 2010 at 12:00pm

Runtime 7:47

General Motors is worried about the future because it’s losing money in Europe, sales in China are slowing down and it has to spend a lot of money in North America for tooling and equipment.  Pricing for the Nissan Leaf is all over the map, literally.  Porsche proves the legitimacy of flywheel hybrids at the 24 Hours of Nürburgring in Germany.  All that and more, plus an interview with Ernst Lieb, the President and CEO of Mercedes-Benz USA.

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Transcript and Story Links after the jump . . .

Hey, it’s Tuesday, May 18, 2010 and here’s what’s happening in the global auto world.

OPEL DRAGS-DOWN GM
Even though General Motors turned in a first-quarter net profit of $863 million, the company admits it’s by no means out of the woods.  The Wall Street Journal reports that GM is worried about how much money it’s losing in Europe, that sales in China are slowing down, and that it’s going to have to spend a lot more money on tooling and equipment in North America.  Here’s my Autoline insight.  I’ve talked to some Wall Street analysts who think GM made a big mistake holding on to Opel.  “They should have sold it when they had the chance,” one analyst told me, “they need billions of euros from European governments to restructure Opel, but now those governments have to spend billions of euros to bail out Greece.” Personally, I thought it was pretty smart of GM to hold on to Opel, but if it can’t get the money to restructure it, Opel could lose money for years to come.

HONDA DISSES EVs
Honda is doing a lot of research on electric cars, and it’s even going to bring an electric car to market.  But it really doesn’t have a lot of confidence that EVs will sell very well. Bloomberg quotes Honda’s top R&D executive, Tomohiko Kawanabe, as saying that customers will not accept the limited range of the EVs or tolerate how long they take to recharge. It says global EV sales will only reach 1 percent of the market by 2020.

LEAF PRICES ALL OVER THE MAP (subscription required)
Of course, Nissan is gung-ho on electrics. But the pricing of its LEAF electric car is literally all over the map. Depending on where you live, you could pay a lot more than someone else in the world. In the U.K. the LEAF costs £28,000 or $41,000. But you can get government incentives that drop it to £23,350 or $33,800. In Japan the LEAF starts at $40,660. But in the U.S. the base price of the LEAF starts at $32,780 and with a $7,500 federal tax credit that price drops to $25,280. Nissan has not exactly explained why Americans can buy the car for $8,000 cheaper than those in Europe or Japan.

NISSAN GT-R GETS MORE HORSES
And just to balance its zeal for EVs, Autoblog reports that Nissan is rumored to be increasing the output of its GT-R supercar.  How does 500 horsepower and 475 pound-feet of torque sound to you?  Look for better brakes, upgraded aerodynamic parts and a revised suspension system to compliment the power boost.

CHRYSLER SUES CHINESE AUTOMAKER
Chrysler is taking legal action against a Chinese company it accuses of copying the design of the Jeep Hurricane concept vehicle. According to Bloomberg, Chrysler filed a suit with the U.S. International Trade Commission against the Xingyue Group Co. over the design of its Jeepzter vehicle. Earlier in the month Chrysler filed a trademark-infringement lawsuit against three companies selling Jeepzters in the U.S. And the company is also looking to block imports of the vehicle to the U.S.

FLYWHEEL-HYBRID PORSCHE
Last weekend at the 24 Hours of Nürburgring race in Germany Porsche debuted its 911 GT3 R with a flywheel-hybrid drivetrain. That’s right, this hybrid uses a flywheel to generate electricity instead of batteries to store it. Over 200 cars started the race and even though it didn’t win, the flywheel Porsche made a STRONG showing.  Within the first hour it was sparring for first-place, but got a flat tire, and dropped to the back of the pack. Then charged to the front again, thanks in part to its 25 percent fuel-efficiency advantage which means it needed fewer pit stops. But it done blowed-up towards the end of the race, allowing a BMW M3 to take the checkered flag.  Even so, the writing is on the wall. This proves the legitimacy of flywheel hybrid technology.

DRIVER DISTRACTION PROBLEM
Speaking of racing, Autoblog has this clip from a rally in New Zealand where a driver piloting a Mitsubishi Evo overturned the car because of a full moon.  No, they weren’t racing at night, somebody mooned the car as it flashed past, distracting the driver enough that the car ended up on its roof. Let this be a lesson to us all.  Keep your pants on!

People hate SUVs don’t they? Nobody wants to buy SUVs anymore, right? Well, somebody forgot to tell the people who buy SUVs from Mercedes-Benz. We have that coming up, right after this.

Even though SUVs were supposed to fall out of favor, and they have to some extent, automakers still sell a lot of them – especially in the luxury segment. Recently we ran across Ernst Lieb, the head of Mercedes-Benz USA, and asked him how their SUVs are selling.

If you want to watch the whole interview we shot with Ernst Lieb, the CEO of Mercedes-Benz North America, click-over to the John’s Journal page of our website, AutolineDetroit.tv.  You can check it out right now.

Alright guys, that’ll wrap things up for today’s installment of Autoline Daily.  As always, thanks for watching, and we’ll see you back here tomorrow.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog, The Auto Channel, Car Chat, WardsAuto.com and WWJ Newsradio 950

46 Comments to “Episode 394 – Opel Drags-Down GM, Honda Disses EVs, Nissan LEAF Pricing All Over The Map”

  1. tj Martin Says:

    John ;

    You missed out on Toyota’s announcement that they will never return to F1 as it id too elitist and out of touch with the general public . To which I say TWO THUMBS UP Toyota . They should have never left the likes of WRC to do F1 .

    On the hybrid Porsche GT3 at the 24 of the ” Ring ” the most ironic aspect of its demise at the very end of the race while in the lead was it was the gas motor , not the hybrid drive that gave up the ghost

    And another Two thumbs Up to Honda for not going the currently unrealistic E/V route

  2. tj Martin Says:

    On GM not selling Opel to Magna . How much of that decision do any of you feel was due to GM and all the major manufactures blatant fear of competing head to head with Magna ?

    My personal feeling and that of several of my CDN associates is that the fear of Magna becoming a full fledged automotive manufacture was the sole reason for GM backing out of the Opel deal at the 11th hour .

  3. Nick Stevens Says:

    Why don’t journalists ever challenge all these named or unnamed people of questionable expertise when they pontificate?

    Why didn’t John ask this “Wall Street analyst” clown, “And WHY did Opel need restructuring in the first place”? Tjhey seemed to be quite competitive, The Golf vs Opel Astra was an eternal struggle for the heart of the Euro markets!

  4. James Says:

    You stated “the Porsche hybrid uses a flywheel to generate electricity instead of batteries to store it.” I believe a much more accurate way to state it is that the Porshe hybrid uses a flywheel to store energy that is converted to electricity when needed. And… this energy stored by the flywheel comes from where? Braking I presume?

  5. diffrunt Says:

    I believe “restrucuring” means reducing union expenses as they did at home. I would tell them to either agree to reduced featherbedding or shut down the company.

  6. tj Martin Says:

    And just a reminder here in case anyone has forgotten . It was VAG and the excessive pressure they placed on GM not to sell to Magna along with VAG stating if the sale dod go thru they would sever all business ties with Magna that scuppered the deal .

    Nice folks VAG .

  7. Chuck Grenci Says:

    John’s comment on lesson learned (about keeping your pants on) should have been, “Keep your eyes on the road”.

    Opel can still be an asset, but there’s still work to be done; get the right people making some good decisions and strive for quality. (funny how if you do the right thing, in the long run and in most cases, things work out).

  8. Kit Gerhart Says:

    It seemed like a good thing to me that GM kept Opel. After all, Opel has been the source of the platforms for GM’s best cars, like the Epsilon platform of the Malibu. Opel is competitive in European market segments up to and including the Epsilon platform cars.

    In the changing market of the future, I’d think Astra would likely return to North America, despite the poor results from the non-serious attempt by Saturn to sell the car.

  9. Nick Stevens Says:

    Bob Lutz himself admitted Astra’s US failure, and attributed it to both poor marketing but ALSO a price that was way higher than the market is willing to pay for a small hatchback that is far inferior to the Civic hatches of the past.

    Many companies aimed at having a ‘global car’, Ford tried and failed with the old Escort for example, but it does not work, different marketsd have different requirements by the owners, and also very different price tolerances.

  10. Salvador G. Says:

    1. JohnMc, What is GM exact problem with Opel (other than overcapacity in a slow market) and whats GM’s plan for the future of Opel – the only plan I see from GM is that they are trying to save their intellectual property and their necks rather than the Opel brand itself.

    2. I’m kind of glad that Honda is seeing the writing on the wall for the Future of EV’s and hopefully Nissan will listen to Honda’s R&D exec. and fire their Research and Devlp. exec. that told them that the Leaf was a good idea.

    3. and as someone that is part of the Playstation Generation -all I can say about the Nissan GT-R is… Ooooh yeah, that car was meant to hit north of 200m/h since it began and hopefully that fairly good increase in torque and hp will get it there.

    And Finally, I try to watch the 24hr of the Nurburgring online and even though I watched it in German -it was great… until I felt to sleep past the 17 hour.

  11. dcars Says:

    One of GM issues with Opel is their lack of interest in being a part of GM. It seams that they want out and will stick it to GM when ever possible. It also seams like they should simplify the branding why carry the Vauxhall name? Why not transition Opel, Vauxhall and Chevy to all Chevy.

  12. dcars Says:

    I test drove the Astra and seamed sturdy but had a very strong on center pull. I didn’t seam like it was worth the higher cost.

  13. RonE Says:

    Toyota went into F1 for the prestige and thought all they had to do to win was outspend everyone. They went through tons of money, but achieved nothing.

    Ford also spent a fortune with their Jaguar F1 racing team and had very little success.

    F1 has a large fan base around the world, but that’s not the case here in the U.S. because there are no American teams or drivers racing in F1 now.

  14. Chuck Grenci Says:

    It seems a little odd that Nissan is pumping up the power when the GT-R had issues with the latest power levels. Of course maybe they upgraded the whole drive train to cope with the increased ‘horsies’. The last iteration was breaking parts, and if I remember correctly, Nissan wouldn’t honor the warranty if they could prove that the owner used the launch control.

    p.s. I’m still a Corvette fan but have to admit the GT-R was a pretty good ‘hotrod’.

  15. Nick Stevens Says:

    The GT-R is probably the only Nissan or Infiniti that I would care for. Despite its heft (it is much bigger than its competitors, it tries to have a rear seat etc), its performance numbers are quite good, and the price quite reasonable. And I like the distinctive styling, you can recognize it from a mile away. BUT who really needs one? it can’t be anybody’s first car, it has to be second and third or fourth car in any household.

  16. Kit Gerhart Says:

    Nick Stevens Says:
    May 18th, 2010 at 1:42 pm

    “Bob Lutz himself admitted Astra’s US failure, and attributed it to both poor marketing but ALSO a price that was way higher than the market is willing to pay for a small hatchback that is far inferior to the Civic hatches of the past”

    It never made sense to import the Astra for the first time with a soon-to-be-replaced model that was clearly showing its age. While there have been times that the Astra was competitive with a Golf of the same year, that was not the case with the Saturn Astra, yet they were charging Golf prices for it.

    The terrible history of GM’s abandoning “captive imports” from Europe continues.

  17. Kit Gerhart Says:

    Ron E. says:

    “F1 has a large fan base around the world, but that’s not the case here in the U.S. because there are no American teams or drivers racing in F1 now.”

    I seem to be one of few in the U.S. who follows F1. It is the ultimate in motor sports technology, and I like the fact that, unlike most major racing series, the cars are not all alike. There are even four engine builders, three of which seem to be about equal, though they work independantly. The bad thing about F1 is that there is very little passing on the course; qualifying order is hugely important compared to most racing.

  18. dcars Says:

    Saturn was was a good idea that was mismanaged. The product runs were too long, the engines were bad, transmissions were junk and the good will lost. It was a real tragedy. Billions were wasted on this venture with absolutely nothing to show for it. I get irritated thinking about it.

  19. Kit Gerhart Says:

    dcars Says:
    May 18th, 2010 at 2:14 pm

    “Why not transition Opel, Vauxhall and Chevy to all Chevy?”

    Opel and Vauxhall are known, and reasonably well respected names in continental Europe and the UK respectively, while Chevy is unknown there. The only Chevy that has been sold in Europe for years has been Corvette, and only in extremely small numbers. Well, maybe they have sold some Chevy-badged Daewoos, which would be a very good reason NOT to re-badges Opel/Vauxhall as Chevy. Anyway, it doesn’t cost much to keep the present names, since only a small amount of badging difference is involved.

  20. Kit Gerhart Says:

    Toyota had to have been the best funded F1 team to never win a race. They had 5 second place results and a few poles during their 8 seasons, but no wins. They’ve done better with NASCAR, but it took a year or two before they were competitive.

  21. HtG Says:

    I recall 20 years ago seeing a story about how one of the engineers that created Compaq had developed a flywheel energy storage device for cars. Two things I couldn’t get were, industry has been using flywheel for yonks but he couldn’t get any traction, and doesn’t a spinning mass influence the handling of a car? Nice to see Porsche ‘leading’ the way.

  22. cwolf Says:

    The Astra is a nice solid car, but overpriced. Terrible acceleration, over weight and horendous cabin noise,due to the darn low profile tires, made this a no winner. IMO

  23. dcars Says:

    F1 was a real disaster for Toyota, I don’t know how much marketing NASCAR adds to them either. I don’t understand why these companies try to convince us that their an “american car company.” My Honda was made in the US but I’ve never consider it an American car.

  24. dcars Says:

    I wonder how much more time Toyota is going to give Joe Gibbs racing if they don’t win the championship this year? Just a thought but wouldn’t be nice if INDY Cars would allow race car builders to submit designs (Dalara, Riely and Panzo) for use with different manufactures engines. The single engine, single car format they have now is not very interesting.

  25. Kit Gerhart Says:

    I suspect IRL would like to have more than one engine builder, but there apparently isn’t enough marketing value to make companies want to do it. I’ve heard that VW/Audi may build engines for Indy car, but if they do, Honda might quit.

    To me, something that makes F1 interesting is that there are four engine builders, Mercedes-Benz, Renault, Ferrari, and Cosworth. All except Cosworth have at least one race win this year.

  26. Kit Gerhart Says:

    I suspect Gibbs racing is already making it worthwhile for Toyota, even without a championship. There are a lot of Kyle Busch haters among the NASCAR faithful, but he has fans, just because so many hate him. The Kyle fans might be the type who would be influenced to buy Toyotas as a result of the race wins. Not that there is any similarity whatsoever between a NASCAR “Camry” and a real one.

  27. dcars Says:

    I like’d F1 for the same reason. Cosworth is new to the series after a long layoff, I bet they’ll be competitive again. It’s nice to see Renault competitive again.
    Jimmy Johnson winning so many titles and the COT took the soul out of NASCAR.
    Does changing from Honda power to a VW/Audi powerplant add much interest? Maybe if Fiat adds thier engine, Indy cars could get a little more interesting.

  28. C-tech Says:

    F1 is such an expensive proposition that without success (and the PR that goes with it) its a poor return for Toyota. I would love to see the IRL have more engine / car choices. Would it be worthwhile to consider a few formulas which allow stock-block motors as in the past (Chevy small-block vs. Chrysler Hemi vs. Ford 5.4 anyone?)

  29. dcars Says:

    c-tech sounds pretty cool to me!

  30. HyundaiSmoke Says:

    Astra=Garbage Transissions. Many Astras due to Transmission faults were eligible for state lemon laws.

  31. Kit Gerhart Says:

    dcars Says:

    “Does changing from Honda power to a VW/Audi powerplant add much interest? Maybe if Fiat adds thier engine, Indy cars could get a little more interesting.”

    To me, VW/Audi coming to IRL would only add much interest if Honda stays, and/or other engine builders join. I think trying a stock block formula would be cool, but it is always difficult to come up with formulas to have dissimilar engines compete with each other. Also, I suspect using stock block engines would require major changes in the cars due to the size and weight of the stock block engines.

  32. Nick Stevens Says:

    “dcars Says:
    May 18th, 2010 at 3:03 pm

    Saturn was was a good idea that was mismanaged.”

    No, it was not just the mismanagement, it was the product. The first saturns were utterly inferior to the civics and corollas of the time. Part of it was because it took so long to develop them, by the time they were on sale they were really dated and unimpressive.

    I test drove an early coupe with the upscale engine and options, and very low miles, and it was a very small, uncomfortable and noisy you know what, plus the owner, a formed good friend of mine, wanted… $11,500 (in 1994!) for it.

    I told him to fuggedaboutit and went on to buy an excellent accord coupe 5 speed for almost HALF that price, $6,500, for a 3.5 year old car with 68l highway miles. I drove it 14 more years until i donated it to charity, fully running, with excellent mechanicals and interior, (but with rust and a hit and run on the exterior)

  33. Nick Stevens Says:

    meant 68K highway miles over 3.5 years above.

    In fact, Saturn was otherwise well managed, with their clever no haggle pricing idea and good dealer service, but it was the inferior and unreliable product that killed it.

  34. Kit Gerhart Says:

    HyundaiSmoke Says:
    May 18th, 2010 at 11:01 pm

    “Astra=Garbage Transissions. Many Astras due to Transmission faults were eligible for state lemon laws.”

    Were these manual or automatic tranmissions?

  35. Kit Gerhart Says:

    I might have bought an early Saturn wagon, except that they had only a handfull of dealers. Even though I worked in a “GM town,” there was no dealer.

    The cars were “rough around the endges” compared to the competition, but had a reputation for being reliable. I thought they drove decently, at least with a manual transmission, and I was comfortable in them.

  36. HyundaiSmoke Says:

    Kit the Manual is fine, its the Auto Trans. It was a big deal last year near te beginning of the year. I first heard it on NPR.

  37. Nick Stevens Says:

    Saturns were not reliable, but had good dealer service, respect for the time of the customer and no-haggle pricing.

    Not only were saturns much inferior to manual civics, i could compare them to my 5-sp Pontiac 2000, a model almost 10 years older, and they would not be any better overall.

    The 2000 was bigger inside than the saturn, the engines were comparable, the Pontiac had much better MPG (rated 46 highway, and if you went 55 on cruise you’d get that, but usually it was 40-42 at 65-80 MPH. The 5-sp of the pontiac was rough in the first few gears, far worse than any Honda I had. Saturn’s 5-sp was not much better.

    The bottom line is that despite the billions Roger Smith thrw at this dog, Saturn miserably failed in its intended mission, ie to produce a “Japan Fighter” that could compare with the civic and the corolla.In the process, it also resulted in the closing down of historic Oldsmobile (saturn had a logo very similar to olds, remember?)

  38. Nick Stevens Says:

    Japan entered the US market with $2,000 or less econoboxes in the 60s, Korea with $5,000 Excels in the 80s, and now the Chinese enter it with.. a $40,000 vehicle in 2010? Did the dollar fall too much? OK, it’s an EV wagon, but still…

    http://www.thetruthaboutcars.com/begging-your-dollars-byd-coming-to-america-for-40k/#more-356892

  39. dcars Says:

    Yeah I agree Kit, more engine manufactures will make INDY cars more interesting. Lets have engines from Ford, VW, Fiat, Honda and GM. More international venues would also be cool, that should include: Miami, Long Beach, Tokyo, Indianapolis, Watkins Glen, Daytona, Toronto, Sydney, San Paulo and even Mexico City.
    I’m ready to take Tony Georges place.

    I had a Saturn Wagon and two Vue’s. the Second Vue was a gift. The Wagon and first Vue were not very good. The last Vue was fine.

  40. Nick Stevens Says:

    The last Vue was an overweight (4,000 lbs for a small crossover!) Opel, as were the Aura, the Astra and assorted late model Saturns.

  41. dcars Says:

    Hi Nick, I had the plastic ones. The metal one (Opel) looked better, but as you stated was heavier, smaller and the gas mileage wasn’t very good.

  42. Kit Gerhart Says:

    The early Saturns got good reliably survey results in C/R for a while. In any case, when I might have considered a Saturn, Civic and Corolla would not have been real options, since I was a salary employee of GM. A Toyota or Honda in the parking lot probably would have been vandalized at the time, and with my boss at the time, my next pay raise would have been a long time coming if I had a non-GM car.

    Also, by the early-mid 90′s, I’m not sure they were selling Corolla or Civic wagons in the U.S. anyway.

  43. Nick Stevens Says:

    That’s true about the parking lots. The guy with the Saturn coupe 5-sp had a wife who was a PhD working at GM labs (many there really did not work, and had second and third jobs on the side back then). So he always got GM cars on discount, despite his belief that the best cars in the world are the German ones. More than decade later we net on the street, and he saw my 7 in the parking lot, asked me to open the hood, and stood there staring at the engine approvingly.

    Recently he got a faculty position in one of France’s top engineering schools, Ecole Polytecnique in Paris, founded for military engineers by none other than Napoleon himself.

    He went there to retire, or, more appropriately, to … surrender..

  44. Nick Stevens Says:

    After a few years, Saturn reliability dropped to the levels of other GM cars.

    Where I live, there is a very practical Accord wagon from the 1990-93 vintage (at least 17 years old but little rust outside and looks ggood, in a conservative, square way) and another from the 94-97 vintage which has rounded edges and does not look as good, looks like a bathtub or something. After that Honda sold no more accord wagons in the US. Corollas and Camry wagons may have lasted longer.

  45. dcars Says:

    “He went there to retire, or, more appropriately, to … surrender.” Nick you do make me laugh, thanks!

  46. pedro fernandez Says:

    my friend bought a 98 Saturn at the same time I bought my Corolla, we saw that car disintegrate before our eyes while good-old Corolla just kept chugging along. The body, specially, was falling apart while the drive train was not too bad. But it was crude and not up to the competition. After all those millions that’s the best Roger and clan could come up with.