Episode 504 – China Cornering Rare-Earth Market, More Toyota Recalls, Parts Business Booming

October 21st, 2010 at 12:08pm

Runtime 8:35

China is cornering the market for rare-earth metals used in hybrid batteries and electric motors.  Toyota’s in trouble, again, this time recalling vehicles for brake-fluid leaks and fuel-pump problems.  The auto-parts business is booming with the stock prices of several companies at 52-week highs.  All that and more, plus a look at how Ford is working to make its vehicles as quiet as possible.

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This is Autoline Daily for October 21, 2010. And now, the news.

PUTTING THE “RARE” IN “RARE EARTH”
As you know, we’ve been reporting on how China has slashed exports of rare-earth metals. China controls the world market for those metals, which are needed to make nickel-metal hydride batteries for hybrids, and electric motors for electric cars. Now, Bloomberg reports that China says it will resume exports, but Japan says it’s been cut-off altogether, and the New York Times reports that China plans to cut-off the U.S. and Europe, though China denies that. Here’s my Autoline Insight. China is slashing exports because it wants to force foreign manufacturers to come to China to make their batteries and electric motors, and other products that use these metals. Now there is a mad scramble going on to find other sources in the world where these metals are available.

SKILLS TO PAY THE BILLS
So, what kind of money can you make if you’re an automotive engineer? The Society of Engineers commissioned a study that found the mean base-salary for auto engineers on a global basis is nearly $75,000. When you add in bonuses, retirement plans and other supplemental income, that rises to more than $82,000. In the United States, the base mean-salary is nearly $98,000, and with the bonuses and retirement plans it rises to nearly $106,000. The average engineer covered in the survey is 44 years old.

MORE TOYOTA RECALLS
Uh-oh, not again! Toyota’s issued another recall but the AP reports this time it’s over brake fluid and fuel pump problems. The company is recalling more than 1.5 million vehicles worldwide, mostly in the U.S. and Japan. The Avalon, Highlander and several Lexus models are being recalled in the U.S. because a small amount of brake fluid could slowly leak from the brake master-cylinder. In Japan and other markets, Toyota and Lexus models are being recalled due to an electrical problem with the fuel pump.

THE BEST NEVER RUST REST
And over in China, Gasgoo reports Bentley is recalling about 100 vehicles because the retractable hood ornament may rust to the point that it won’t retract in the event of a crash.

AUTO-PARTS BUSINESS BOOMING
Due to the sluggish economy people are hanging on to their cars a lot longer and that’s helping auto-parts stores. According to USA Today, the stock market is going crazy for the largest chains, Advanced Auto Parts, AutoZone and O’Reilly Automotive. They’re near 52-week highs. But hanging on to cars longer isn’t the only reason for the increase in business. With the Big Three closing many dealerships, people turned to independent repair shops, which get parts from those stores. And more are willing to repair their older cars because used-car values have increased.

EXTREME MAKEOVER: JOURNEY EDITION
Chrysler’s onslaught of refreshed product keeps on rolling.  The company just released details about its overhauled Dodge Journey.  The family-friendly crossover gets some major enhancements including a retuned suspension, a brand-new V-6 engine and a completely redesigned interior.  It also gets some useful technology in the form of Chrysler’s Uconnect Touch infotainment system.  Under the hood it’s got Pentastar power in the form of a 3.6-liter V-6 engine.  It whips-up a class-competitive 283 horsepower with 260 pound-feet of torque.  A six-speed automatic transmission is its powertrain partner.  These are welcome upgrades but the BIG news here is what designers have done inside.  The cockpit is completely transformed, going from blocky and bland to swanky and stylish.  It looks a lot like Jeep Grand Cherokee’s interior which is not a bad vehicle to copy.  The 2011 Dodge Journey is more proof that Sergio Marchionne and his team are working their butts off.  Look for it at dealerships soon.

PANOZ ABRUZZI “SPIRIT OF LE MANS”
Boutique car-builder Panoz is returning to Sebring to race its Abruzzi “Spirit of Le Mans” car.  We first showed you this wild-looking vehicle – whose design was inspired by the 1935 Delahaye – several months ago when it was revealed at Petit Le Mans.  The company is working on a full-development program to get the Abruzzi ready to race next year.  Just to recap some of its specs:  it’s powered by a 640 horsepower V-8 engine and its body is made of a recycled composite-material the company claims is as strong as carbon fiber but lighter.  We’ll have to wait to see how well it performs on the track.

Coming up next, a look at how Ford makes sure it gets rid of wind noise and air leaks.

AIR-TIGHT ENGINEERING
All automakers are trying to make their vehicles seem more luxurious, and a key way to do that is get rid of as much noise as possible. Here’s how Ford fine-tunes its vehicles to make them as quiet as possible

The new Explorer goes on sale early next year.

Don’t forget to join us for Autoline After Hours tonight, LIVE at 7:00 p.m. Eeastern Time. Join me and the Autoextremist, Peter De Lorenzo, for the best inside information on what’s going on in the industry. Also joining us is Kevin McMahon from the Martec Group. One of our topics: looks like the California Air Resources Board overstated diesel emissions by more than 300 percent when it set its diesel emission standards. So what’s going to be done about that? Tune-in tonight to find out on Autoline After Hours.

And that’s it for today’s report on the top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

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21 Comments to “Episode 504 – China Cornering Rare-Earth Market, More Toyota Recalls, Parts Business Booming”

  1. HtG Says:

    John, please do not let Frank Marcus drink the Roaster Jacks before the show. Aye Yiminy!

    ps Keep the engineering and construction footage coming. Now that’s must watch internet.

  2. dcars Says:

    Yeah thanks for engineering and construction clips. To add the US engineers discussion, did any one else notice how young these folks look? It gives the impression that we’ve witnessed a huge turn over in engineers for at least Ford. I wonder what the average age of engineers is, for the us manufactures.

  3. pedro fernandez Says:

    Oh, great! You buy a new model and not even a year passes and they come out with a newly improved version. That only proves that they got the car into market too quickly just to have something to compete with in that segment, thanks, Chrysler. The wind prevention procedure show shows how far domestics have come, a 2005 PT Cruiser I rented had horrible wind noise around the windows.

  4. Dale Leonard,Lakewood Ohio Says:

    Hey John, I’ve got the perfect solution for Toyota. Just recall every toyota ever built and give it a bumper to bumper fix.

  5. TTom L Says:

    Hey John
    It looks like Sergio Marchionne is going to have Chrysler build better cars.He hired a lot of engineers and it is showing in the new products.Watch out.Chrysler could be a winner.

  6. pedro fernandez Says:

    I got a better solution for Toyota, stop using lame-ass, second rate suppliers and go back to what made you great and established your reputation, and do it before it’s too late. Hyundai is passing you, and if VW can improve their quality, they’ll be a player too

  7. Kit Gerhart Says:

    At least Toyota is recalling the cars when they have a known problem, unlike GM in the 80′s when they just hired more lawyers when the cars had issues.

  8. pedro fernandez Says:

    Why are the Japanese built Lexus and Toyota models and even the complicated Prius not involved in any of these recalls? No crappy parts from second and third tier suppliers, my friend pointed out to me that even some Toyota parts are being made in ‘China and India.

  9. pedro fernandez Says:

    Reading the recall details, again this is a design blunder because Toyotas are sold n parts of the world where you may not be able to find a certain type of fluid or maybe the particular fluid is more expensive than generic ones, my mechanic has told me that certain Honda Accords from the early 90′s had transmission issues because Honda specified a certain type of transmission fluid and if you used another it would eventually cause trans failure.

  10. tj Martin Says:

    Hmmn ! Thats odd. I’d posted a rant this morning, right after todays episode came online , about the pricing of the Hyundai Equus and POOF ! Its gone !

    Guess maybe we’re being censored now for criticizing Hyundai ?

    Thats not good .

  11. Kit Gerhart Says:

    tj,

    Are you sure your post was ever on the board? I seriously doubt that you were censored for criticizing Hyundai. Heck, I’ve even criticized Ford here, and never had a post censored.

  12. pedro fernandez Says:

    Not even when the professor criticizes John, it gets censored. Why don’t you repeat it TJ, I’d like to read a good rant now and then.

  13. HtG Says:

    if you got your email wrong, the rant gets booted.
    Ask me how I know.

  14. Ron Says:

    Hey John, Chrysler has a recall where a vehicle can catch on fire and there is no mention of this.Sorry to hear your auto news is not up to speed.

  15. tj Martin Says:

    HtG

    So how did i do that ? When i type in the first letter it comes up the full email .

    And yes guys the rant was on the boards at 11:10 CDT . When I looked again at 3:29 CDT it was gone .

    I’ll repeat the rant in the morning and see what happens

  16. Kit Gerhart Says:

    tj,
    I still don’t think your post was deliberately removed, given the posts that have stayed on this board. Anyway, I’ll be watching for your rant tomorrow, I’m sure it will be interesting.

    P.S.
    Did you think the price of the Equus was too low:-)

  17. Mouhamad A. Naboulsi Says:

    I do not think Toyota products are getting worse. They just learned from the hefty fines and now they are coming forward and announcing their issues so no one says that they hid it intentionally or with “Secret Warranty”.

  18. Mouhamad A. Naboulsi Says:

    I think there is censorship here.

    I answered John question about Driver Distraction yesterday and it is gone. The was no Rant, No swearing, No anger, just an analysis from an industry expert who worked in this issue for at least 16 years.

  19. Nick Stevens Says:

    I doubt very much that any post was censored, unless it said something REALLY outrageous or obscene.

    I think John likes the lively discussions, the more posts and traffic he gets here, the better it is for him and the site.

    This time I’d like to congratulate John for a great AAH show last night, both the guest and Frank Marcus were good additions,

    And in particular I was astonished at how WORSE the SOnata HYBRID was than the Regular sonata (33 vs 37 ACTUAL MPG) When John did the little experiment and followed the hybrid around in his regular sonata non-hybrid non-turbo.

    I would expect the two to be about even or the hybrid to have a small advantage not justified by its price increase, but not that it would be 4 MPG lower!!!

    Unfortunately somehow my AAH broadcast was lost about the middle of the video and I could not get it to restart from that middle, so I did not see the rest of it.

  20. Nick Stevens Says:

    The above just goes to show that, besides the 50 MPG REAL MPG PRIUS II or III, there is no hybrid in the reasonably priced range ($20-30ishK) worth buying, AND the PRius’s reliability has astonished even TOYOTA DEALERS (two I know).

  21. Nick Stevens Says:

    The other important thing John correctly said in AAH, was that, while a Hybrid costs $4,000 more to make than the identical non-hybrid model, think what we could do if we sank just one FOURTH of that extra cost, $1,000, to improve the gas engine. He betted, correctly, that these cost dollars would go MUCH FARTHER in Per MPG gained per extra $ spent!