Episode 476 – Range Rover as a Brand? VW’s New Chief, Chinese Don’t Like Small Cars
September 13th, 2010 at 12:03pm
Runtime 8:50
Could Range Rover be spun off as its own high-end brand? VW gets a new head honcho in America. And here’s a shocker: a new report says Chinese consumers prefer large vehicles with handsome styling. All that and more, plus our first drive of the Chevy Cruze.
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This is Autoline Daily for September 13, 2010. And now, the news.
THE BROWNING OF (VW) AMERICA (subscription required)
For several months now, Volkswagen of America has been running without anyone running it. But according to the Wall Street Journal, Volkswagen is naming Jonathan Browning, the former vice president of global sales, service and marketing at GM, as its top U.S. executive. The position was formerly held by Stefan Jacoby who unexpectedly left in June to run Volvo, which was recently acquired by Chinese automaker Geely.
TOYOTA HIRES HOGAN
And there’s more to this game of musical chairs amongst executives in the industry. The Detroit Free Press reports Toyota just hired former GM executive Mark Hogan as an adviser. Up until a decade ago, Hogan had a brilliant career at GM, but when he was given the task of making small cars in America and doing it profitably, he clashed with then-UAW president Steve Yokich, who objected to work rule changes that would make GM plants more efficient. Rather than back Hogan up, GM management moved him out of automotive operations, and he later left the company. Toyota is going to find that Mark Hogan is a vast repository of automotive information.
RANGE ROVER, THE BRAND
Here’s an interesting tidbit coming out of China. Land Rover is thinking about spinning off Range Rover as an entirely separate brand. Currently, the Range Rover is the top model in the Land Rover lineup. But now the company is thinking about adding the Range Rover Sport and Range Rover Evoque to form the new Range Rover brand. Gasgoo reports that Land Rover is thinking about making this change on a worldwide basis. Presumably that would allow Range Rover to go even more upscale while the Land Rover brand would become more mass market.
CHINESE DON’T LIKE COMPACT CARS
And this next story ties in perfectly. According to Gasgoo, a new report out of China says Chinese consumers don’t really like compact cars. They think they’re too small and too expensive for what they are. Nearly 90 percent of people polled said Nissan’s new small car, the March, is too expensive with its $10,000 price tag. The same report says three quarters of consumers don’t believe compact cars have a bright future in the Chinese market and say they prefer larger vehicles with good styling.
EV BUSINESS BASED ON SUBSIDIES
Lots about batteries in the news. A123 is officially opening its battery plant for electric cars in Michigan today. GM announces that it’s investing $3 million into a start-up company called Sakti3 that will make advanced EV batteries. But here’s my Autoline Insight. All around the world, countries and companies are building up an EV infrastructure that is based on massive government subsidies. Subsidies to build battery plants, subsidies to build EV plants, subsidies to install battery chargers and subsidies for consumers to buy electric cars. At some point these subsidies are going to run out. I give them maybe three years. And it’s hard to see how this vast EV infrastructure is going to survive when those subsidies dry up.
FEDERAL MOGUL’S NEW PISTON RING
Besides, there’s a lot more life left in the internal combustion engine. For example, Federal Mogul just introduced a new kind of piston ring for direct-injection or diesel engines. The ring cuts oil use by 50% and friction by 15%. While most piston rings apply equal pressure around a cylinder, Federal Mogul’s ring combines a stepped surface and taper on its contacting edge. This means the down stroke scrapes more oil off the cylinder walls and returns more oil to the pan. Thanks to this, the ring reduces both fuel consumption and CO2 emissions.
Maybe Chinese car buyers aren’t interested in compact cars. But will Americans buy them? Coming up after the break, a look at one of the newest compact cars that’s about to hit the market.
Presumably we’re going to have to drive smaller vehicles in the future as fuel economy standards get stricter and stricter. Automakers are working on a whole new crop of compact cars that will deliver the mileage we need with the performance and features we want. Autoline Daily correspondent Craig Cole just test drove one that’s about to make its North American debut.
Thanks, Craig. You know, after launch, a special eco version of the Cruze will debut. With a six-speed manual transmission and special aerodynamic tweaks, it’s expected to deliver best-in-class fuel economy –- up to 40 miles per gallon on the highway.
Hey, don’t forget to join us tonight for Open Line, the best automotive call-in show on the internet. To get in on the action, dial (218) 936-6581 and use PIN 2619. The doors open at 8PM Eastern Time and the party goes until whenever you’re done. Stop in for five minutes or stay all night – either way, it’s a lot of fun.
And that brings us to the end of today’s report on the latest news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.
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Comments (19)
September 13th, 2010 at 12:26 pm
It sounds like the taste for large, stylish cars goes along with an emerging middle class. China’s emerging middle class may have similar car tastes as the US in the middle of the 20th. century, when big, stylish cars (not trucks) ruled America’s roads.
September 13th, 2010 at 1:02 pm
Hands up, who doesn’t think oil and gas are subsidized by our massive defense establishment? Is Japan protecting the free flow of oil? How about China? Check out this WSJ piece on a new 60B defense contract with the Saudis; if you read down you will see there is another 30B coming.
I’d like to see petroleum compete fairly with EV for just one second. But that would be one nasty world to live in.
September 13th, 2010 at 1:04 pm
whoop…
http://online.wsj.com/article/SB10001424052748704621204575488361149625050.html?mod=WSJ_hps_sections_world
September 13th, 2010 at 1:24 pm
Many Americans switched to trucks be cause they wanted more room. Cars were getting smaller, Minivans and SUV’s were introduced. Why wouldn’t they want to own a bigger car if they can afford it?
September 13th, 2010 at 1:43 pm
anybody catch this DOA POS from Lexus?
http://www.autoblog.com/2010/09/13/lexus-ct-200h-details-on-u-s-version-arrive/
Aaarrgh! Just stop it right now Toyota. Are you dropping this load on us for something we did? Aaaargh!
September 13th, 2010 at 1:44 pm
The single biggest difference between China’s new middle class wanting more substantial cars like we did back in our day (I’m 59) is their cars are infinitely more fuel efficient then ours were.Not to mention safer too.
September 13th, 2010 at 2:00 pm
The new Federal Mogul piston ring looks interesting; reminds me of the ‘old time’ hot rodders trick of drilling (tiny) holes in the top of the piston to help gas-out the rings (tighter fit) when combustion occurs. This, of course, more elegant and more efficient and practical.
September 13th, 2010 at 2:05 pm
HtG: Aside from the hideous paint color in the story pictures (gray), I do not see how the new offering for Lexus is any uglier than anything else from Lexus.
Compared to a GMC Terrain, or Lincoln MKT it’s attractive.
September 13th, 2010 at 2:15 pm
Hmm… maybe Ford could start producing the Lincoln Town Car / Crown Victoria in China?
September 13th, 2010 at 4:55 pm
GM is sinking another $3 Million into a start up battery company, and the Chevy Volt is not in the Chevy Showrooms yet! This is exactly why the Volt will cost $40,000 per unit. I bet the EV1 cost only a fraction of the money GM (Government Money)has shank in to the Volt.
I heard the lease payment on the Volt will be $350 per month. Is this correct?
September 13th, 2010 at 5:33 pm
dcars says:
“Why wouldn’t they want to own a bigger car if they can afford it?”
I could “afford” much bigger cars than I drive, and in my case, there are multiple answers to your rhetorical question.
1) I don’t like throwing away money on fuel.
2) I don’t like trashing the environment any more than I have to, while still “maintaining my lifestyle.”
3) I don’t like sending any more money than necessary to places where we are hated.
4) Generally speaking, smaller cars are more fun to drive than big, trucky vehicles.
September 13th, 2010 at 5:35 pm
LEX says:
“I heard the lease payment on the Volt will be $350 per month. Is this correct?”
That’s what I’ve seen several places, which means these leases will be heavily subsidized. Either that, or they expect the Volt to have a very high residual value.
September 13th, 2010 at 8:29 pm
You guys didnt know that Chinese didnt like small cars, and want big cars, with big interstates, and cheap gas like Americans(that’s why Chinese government subsidzes gas prices to be about $4.00 a gallon over there, when it really should be closer to $8.00 a gallon)? They WANT LINCOLNS SO TAKE THAT AS A HINT, FORD GUYS!!!
Like Minorities in America, the Chinese like Chrome on their cars too. Chrome is classy, it says I paid money for this car. Unlike the non-chrome glorified Toyotas that BMW has been making as of late. $80K for a car that looks like a $16K car, LMAO. What a Ripoff!!
I see why John Mc Elroy asked the Volvo of America CEO “So, is Volvo still a Luxury Company?” My god, that much money for a car without any kind of chrome? Are you kidding me?
European Understatement is so passe’.
September 13th, 2010 at 10:46 pm
John,
Please spare us the corporate marketing bullshit when reviewing a car and just tell us how you or your reviewer liked it. The guy from GM spouting off about how wonderful the Cruze is made me physically ill. Enough with the spin, we get that everywhere else, please be the bastion of common sense evaluation. Thanks for a great show.
September 13th, 2010 at 10:51 pm
>CHINESE DON’T LIKE COMPACT CARS
>And this next story ties in perfectly.
>According to Gasgoo, a new report
>out of China says Chinese consumers
>don’t really like compact cars.
Given that China is pulling ahead (or IS ahead) of the USA as the biggest emitter of carbon dioxide, especially with all their coal fired power plants, I think it might be best for our planet if the Chinese government were to impose a tax on motor fuel, or an engine horsepower/ fuel consumption tax on big cars.
A possible reason why Chinese consumers like big cars might be that their government subsidizes coal-to-methanol plants to supply part of their need for motor fuels. If so, this is not good news. Coal-to-methanol has been studied in our country, but unfortunately it offers poor performance in well-to-wheels (or should I say coal mine to wheels?) efficiency.
September 14th, 2010 at 12:05 am
casual,
John has to pay the bills you know.
September 14th, 2010 at 2:34 am
I wouldn’t be surprised at all if the ECO version of the Cruze got 40+ mpg on the highway. In fact, it should be able to get a lot more. A few summers back, my family and I went on a road trip and found that the family Accord (2006 SE, I4, 5spd Automatic) got 37 mpg on the highway. I was absolutely shocked. I knew that my fuel saving techniques (using cruise control, proper tire inflation, maintaining constant motion without hard braking, etc) would be effective, I just had no idea that it would be so great as to enable me to drive 37 miles on a single gallon of gas. So a Chevy Cruze, purpose built with a fuel-efficient engine and 6spd manual, should be able to do a lot better.
September 14th, 2010 at 7:28 am
hey casual, I don’t mind hearing an engineer tell me how much torque his engine makes at low rpms or that power is available in the range customers can actually use it. That isn’t corporate bull, and we all benefit from John’s fairness, which means letting people be heard.
September 16th, 2010 at 5:53 am
The Cruze is an OUTSTANDING car in its class, a HOME RUN that will be at least as successful as the Excellent Equinox. I am cautious to not say it will be the next 56 Chevy for GM in importance, but it well may be.