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Episode 508 – Exchange-Rate Crisis, Geely Receives Zero Stars, 007′s Aston Up for Auction

October 27th, 2010 at 12:09pm

Runtime 7:36

Nissan says that every one-yen increase against the dollar shaves nearly $190 million off its profits. The CK1 from Chinese automaker Geely received zero stars in crash tests. A 1964 Aston Martin DB5 driven by Sean Connery in the James Bond movies “Goldfinger” and “Thunderball” is up for auction. All that and more, plus John responds to your comments in the “You Said It!” segment.

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This is Autoline Daily for October 27, 2010. And now, the news.

EXCHANGE-RATE CRISIS (subscription required)
Japanese automakers are in a full-blown crisis. They are getting hammered by the strength of the Japanese yen. The dollar is down to near-record lows, only 80 yen to the dollar. Nissan says that every one-yen increase against the dollar shaves nearly $190 million off its profits. Of course, it wasn’t that long ago when the yen was going in the other direction and Japanese automakers were racking up record profits. I remember back in the early ’80s when the yen was at 225 to the dollar and American automakers were at a massive cost disadvantage. In fact, for the better part of 30 years Japanese automakers have enjoyed a currency advantage, so now they’re about to experience what GM, Ford and Chrysler have been up against for decades.

MOUNTAINS OF MONEY (PDF)
Volkswagen says it wants to take the pole position and become the biggest car company in the world by 2018, and today the company says it made a $3 billion profit in the third quarter. That’s nearly twice as much as Ford reported yesterday. And it’s thanks to strong car sales, particularly with Audi and especially in China. But, the AFP reports, Bentley and Seat continue to lose money, and VW says it expects profits to go down in the last three months of the year.

STARS? WHAT STARS?
Uh-oh this is not a good sign for Chinese automaker Geely. According to Auto Express, the company’s CK1 model received zero stars in crash tests in South America. This video shows the car folded up like an accordion. The vehicle was tested without airbags but the testers said adding airbags wouldn’t help because the integrity of the body is no good. And maybe this helps explain why Geely bought Volvo, which knows a thing or two about safety.

YOU OUGHT TO BE IN PICTURES
Have you ever wanted to own one of James Bond’s cars? If you have, you’ll have a chance to get one of 007’s more-famous rides but you better have your checkbook ready. According to Bloomberg, a 1964 Aston Martin DB5 driven by Sean Connery in “Goldfinger” and “Thunderball” is up for auction. The car could go for as much as $5.6 million. But it comes with some cool props like a bullet-proof windshield, revolving license plates, an oil-slick sprayer and machine guns.

OBAMA MOTORS MAKES GOOD CARS
Consumer Reports just released its annual reliability survey. Predictably, Honda and Toyota topped the chart, but the Detroit Three keep getting closer. Ford builds the most reliable vehicles of the domestic automakers, with 90 percent of them delivering average or better reliability. That puts them just behind Lexus in quality. Chrysler on the other hand didn’t fare too well. None of its models rated better than average in reliability. GM splits the difference between the two, but it’s moving up the charts, FAST. Here’s David Champion, senior director of Consumer Reports’ Auto Test Center.

GM made the most progress of the Detroit-Three automakers. Of its brands, Cadillac improved the most, jumping seven places from last year’s ranking while Chevrolet had its best showing in years.

BABY CADILLAC ON THE WAY
And this should help the Big Three even more. According to the Detroit News, GM is spending $190 million in Lansing, Michigan. The move will put some 600 people to work and paves the way to start production of a new compact Cadillac, the ATS. It’s a small car aimed right at the BMW 3 series. With a rear-wheel-drive layout it has perfect proportions, which could make it a strong global seller, unlike Cadillac’s previous compact sedan, the BLS, which failed dismally in Europe.

CHRYSLER GETS AN UPGRADE
The Detroit Free Press reports that Chrysler is investing $850 million in its Sterling Heights, Michigan facility to upgrade its body and paint shops. Sounds like it’s getting ready to start production of the new 200. The company is also putting $150 million in its Dundee engine plant to build Fiat-designed four-cylinder powerplants.

FORD BETS ON 6 (subscription required)
Like Chrysler, Ford is also investing $850 million in Michigan. It’s upgrading several facilities so it can build more six-speed transmissions to make good on its promise of having them in 100 percent of its vehicles by 2013. And all those investments translate into thousands of more jobs.

Coming up next, it’s time for You Said It!

One of the ways we’re looking at delivering this show is via YouTube. Autoline was just invited to become a YouTube partner, so we asked you to let us know if they block YouTube at work.

Juan Barnett who calls himself the “Lej Geek” who wrote in to say, “My workplace, (the Pentagon), does not block YouTube. As much as I like looking at John, Peter and Jim – I find it easier to listen via Stitcher.”

And of course he’s referring to how you can use Stitcher to listen to Autoline on your smartphone.

Dave in China, says “I used to live in New Jersey, but if you move to YouTube you will be blocked. China doesn’t allow YouTube in the country. Not sure how many other people are in China watching your broadcast almost daily, but I know I am one.”

Thanks for the feedback from China, Dave. And actually, we have a decent amount and a growing number of viewers there.

And finally Thom wrote in to say, “John, we are not blocked, and as a college instructor I often use AUTOLINE as a teaching aid.”

Thom, thanks for that. I love the fact that Autoline is helping students learn more about the auto industry.

So, the bottom line is, you can now watch Autoline Daily, and our other programs on YouTube, but since enough of you would be blocked out if we migrated there, we’re going to offer you both ways to get the program, here on our website, and on YouTube, oh, and on Stitcher.

Don’t forget to tune in for Autoline After Hours tomorrow night at 7:00 p.m. Eastern Time. Join me and that rambunctious Autoextremist Peter De Lorenzo for some of the best inside information of what’s going on with cars and the people who make them.

That’s tomorrow at 7:00. And that’s today’s report for the top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

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

29 Comments to “Episode 508 – Exchange-Rate Crisis, Geely Receives Zero Stars, 007′s Aston Up for Auction”

  1. dcars Says:

    A baby RWD Cadillac? I wonder if its based on the Pontiac Solstice/Saturn Sky platform. Or the is it based on the Camaro frame?
    If Chrysler can’t get out of the reliability cellar it will mean big trouble.
    I take that back, Audi is second worst and its making money. Accept for Porsche, the lower end is ruled by German cars.

  2. G.A.Branigan Says:

    Chrysler has made improvments with the interiors of their wrangler line but it hasn’t done squat to better the engine/auto trans coolers/elcheapo throwout bearings for the standards etc etc etc….

  3. G.A.Branigan Says:

    I’m now waiting to look at the 2011 F150′s with the all new 5.0L cammer.I’m not going to play the “wait and see” game over getting a small diesel pickup anytime soon.If I buy one,I’ll let you know how it performs ie:mpg/towing/fit & finish and so on.

  4. Chuck Grenci Says:

    The ATS is to be built on the alpha platform and it will be announced Thursday that the car will be built in Lansing and should employ 600 workers. The ATS will be of the size of the BLS (that is currently available in Europe) thus making it smaller than the CTS and being rear drive will be aiming at the BMW 3-series of vehicles.

    It’s nice to see that production will be U.S. based.

  5. HtG Says:

    I’d tell Japan to go cry me a river over their strengthening currency, if not for the fact that I have to buy replacement parts for my cars. I just recently paid ~8.50 for a plastic splitter tube for my windshield wiper fluid hose on the Miata. Yeah, yeah cwolf, I know, ‘go cry me a river.’

  6. pedro fernandez Says:

    I remember just a few short years ago when everyone longed for much better or better than average reliability grade from CR now just having average or slightly above average is considered job well done, BS!! stop, with the brainwashing will you? Even stalwarts Toyota and Honda are getting into mediocrity.

  7. pedro fernandez Says:

    Thank heaven for CR, otherwise we would all be misled by all involved into thinking that all cars are created equal and they’re all reliable and you can’t go wrong with any brand or model that you buy. That’s a lot of crap, yes they have improved but Chrysler Audi Merc and others are still making crap. VW take some of those profits and improve your dismal quality and also put some into Audi, before you continue on your quest for automotive world domination.

  8. Tony Gray Says:

    OK, not going YouTube only…I guess I can put that little schoolgirl outfit away.

  9. pedro fernandez Says:

    It shouldn’t matter whether you spend $15k or $75k on a car, you shouldn’t have to spend hours at a dealership service dept waiting for the damn electronic gizmo to be fixed again, no matter how good the coffee is in the waiting room (lounge for the luxo brands)

  10. Don MacConnel Says:

    The Geely story brings back the memory of a great video (I think it was on this site) of the European crash test of an early Chinese SUV.

    The SUV hit the block, the airbag deployed and the steering column punched a hole in the airbag and nailed the crash test dummy.

    Is there such a thing as minus stars?

  11. dcars Says:

    I can’t believe that VW is gaining market share. I have a friend who owns a 2009 VW Jetta TDI wagon, the electronic door lock mechanism failed, The doors wouldn’t open from the inside!

  12. pedro fernandez Says:

    dcars: most new cars use keyless entry which is fine and dandy but when it breaks, you have NO choice but to fix it, the only door with a keyhole is the driver’s. none in the trunk/hatch either, how on earth are you supposed to unlock the doors when power fails or the mechanism, in the case of my sister’s Journey, the locking pins are so even with the molding that when they’re in the down position you need some kind of tool to pull them up. You can’t use your fingers, very convenient.

  13. Kit Gerhart Says:

    “I remember just a few short years ago when everyone longed for much better or better than average reliability grade from CR now just having average or slightly above average is considered job well done,”

    The quality of all cars has improved enough that what would have been “much better than average” a few short years ago would be “average,” at best, now.

    FWIW, my “unreliable” Mini is almost a year old now, and I haven’t had any trouble with it.

  14. Kit Gerhart Says:

    This is unrelated to today’s show, but I just made my twice-a-year trip from central Indiana to the Florida “space coast” in my 2010 Prius. Except when traffic prevented it, I drove about 75-76 on interstates marked 70 mph. I averaged 44.7 mpg. I had an unusually strong head wind on one leg of the trip, and even though the Prius has very low drag, the extra ~20 mph of headwind pulled the mileage down to about 40.

    For comparison, the same trip driven at about the same speed in other cars I’ve had:

    2005 Chevy Malibu Maxx ~29 mpg
    2002 VW Jetta TDI wagon (manual trans) ~44 mpg
    2000 Mercury Grand Marquis (someone elses car) ~22 mpg.
    2010 Prius 44.7 mpg

    The Prius basically tied the 90 hp TDI on the interstate, but handily beats what I got with the VW in stop-and-go driving.

  15. HtG Says:

    Kit, are your mileage figures indicated, or based on your miles/fuel purchases?

  16. pedro fernandez Says:

    No doubt in anyone’s mind that for city driving the Prius is tops, for highway I believe a 4 cyl diesel or gas engine with a 6 speed transmission is equally good. Ex the new Sonata.

  17. cwolf Says:

    @HtG: Hey, cut me a small break buddy. I have nothing against Japans cars,or most others really. In fact I wouldn’t mind having a Miata…If I lived in Japan or if it was made in the US. They remind me of my 69 MGC thats still not restored! The parts for it were never cheap either.What does rip me is the imbalance in trade between the two. I am not from an automotive family,but was always instilled to by AMERICAN; unfortunately not many things are now days.

    VW’s profits may be skyrocketing, but they won’t last long in the US market by cheapening the new Jetta(rear drums,etc). IMO, I see foreigners now cutting corners to increase profits, while Ford and GM are getting better. One possible brownie point for my team… if they continue.

  18. Alex Kovnat Says:

    >A 1964 Aston Martin DB5 driven
    >by Sean Connery in the James Bond
    >movies “Goldfinger” and “Thunderball”
    >is up for auction

    I hope that whoever bids the most and takes possession of that car, will take good care of it. I saw Goldfinger and Thunderball when they were playing in movie theaters.

    Actually, I don’t really like the way that Aston-Martin was portrayed. Why not? Because it give the technologically uninformed public the impression that you can load a car up with more and more and ever more doodads without performance suffering. Maybe that’s why the same politicians who complain about cars not getting enough miles per gallon, are the same ones who are forever demanding more and more safety equipment.

  19. HtG Says:

    cwolf, sorry to give you the wrong impression. I was teasing myself more than you.

  20. cwolf Says:

    HtG, nothing to be sorry about and my reply was meant to be taken light heartedly.

  21. Kit Gerhart Says:

    HtG Says:
    October 27th, 2010 at 4:14 pm

    “Kit, are your mileage figures indicated, or based on your miles/fuel purchases?”

    They are carefully checked, actual numbers. I checked the odometers on all of the cars, and they were within 1%, except the VW which read 2% high. As far as speed, based on a Garmin GPS, the Prius speedo reads 2 mpg high at 70 mph, but I took that into account when stating speed on my trip.

    The trip computers on all four cars were a bit “optimistic,” but actual miles/gallon as read on the pump are what I used for my calculations.

  22. Kit Gerhart Says:

    “VW’s profits may be skyrocketing, but they won’t last long in the US market by cheapening the new Jetta(rear drums,etc).”

    Most people don’t care if their car has rear drums, nor should they, if the brakes work ok. The thing that VW needs to work on if they want to really compete with Toyota and Honda is reliability. If they can keep the interior appearance a notch or two better than the competition, and have decent reliabilty, VW should be able to sell the heck out of the new Jetta, and the Chattanooga car.

  23. dcars Says:

    Other manufactures will jump on the fact that the Jetta has rear drums. VW is hoping that it can ride on the coat tails of “German engineering” baloney. If buyers head down to the Ford, Chevy or Toyota dealership and see better cars for the same money they not going to buy a Jetta.

  24. pedro fernandez Says:

    I look forward to the day in the very near future when you don’t need to look to imports to get a good, reliable car. No matter what size or type you need. Cadillac and Lincoln need a flagship sedan in much the same way the imports do.

  25. Kit Gerhart Says:

    pedro fernandez Says:
    October 27th, 2010 at 5:03 pm

    “No doubt in anyone’s mind that for city driving the Prius is tops, for highway I believe a 4 cyl diesel or gas engine with a 6 speed transmission is equally good. Ex the new Sonata.”

    So far, the only “conventional” car that is even close is the VW TDI cars. Both the EPA numbers and Consumer Reports test numbers for the Sonata are about 70% of the highway mpg a Prius gets. Part of why the Prius does so well, even on the highway, is the low aero drag, but I suspect the Atkinson cycle gas engine also helps.

  26. Kit Gerhart Says:

    dcars says:

    “Other manufactures will jump on the fact that the Jetta has rear drums. VW is hoping that it can ride on the coat tails of “German engineering” baloney.”

    I sure see a lot of Civics and Corollas with drum rear brakes, and no one seems to care. The tiny drums do look silly, though, when people put 18 inch wheels and “rubber band” tires on a Civic.

  27. donald Says:

    John……..common!!!!!!!!!!! Enough with the “race track”……….”does not alienate the driver”; what dribble! a Volvo is a Volvo and at best yesterdays news!!!!!!!!!!!!!!!!!
    If there was a brand that should have died on the vine it should have been VolVo, not any of the American brands!!!!!!!

  28. Nick Stevens Says:

    Oh here we go again, blaming the… Exchange rate of the yen for the US Automaker’s troubles in the 80s and 90s.

    So how come, if you really believe this BS, that the TRANSPLANTS did so well, making excellent cars IN THE US with US Workers?

    Such as the STZELLAR CIvics and Accords and Corollas and Camrys?

  29. Nick Stevens Says:

    “# Kit Gerhart Says:
    October 27th, 2010 at 3:53 pm

    “I remember just a few short years ago when everyone longed for much better or better than average reliability grade from CR now just having average or slightly above average is considered job well done,” (Pedro)

    The quality of all cars has improved enough that what would have been “much better than average” a few short years ago would be “average,” at best, now.

    FWIW, my “unreliable” Mini is almost a year old now, and I haven’t had any trouble with it.”

    Pedro,

    Kit saved me a ton of time. I 100% endorse the above, and have my oWN experience to prove it.

    My passat 75 was a TOTAL UTTER DOG reliability and durability wise, it fell apart after 65k miles, almost everything wore out or failed except the engine and transmission.

    ON THE CONTRARY, the 98 BMW 740iL that is condemned by CR has procen FAR better than they say, and even better than my 1990 ACCORD for gawd’s sakes!!!!! And the Accord is a MUCH SWimpler car with 10% of the systemas the BMW has!!!

    SO ALL cars have made great progress over time, the gaps have narrowed a bit reliab wise. but the QUALITY gaps are still there.

    The OTHER thing is, FACE IT, Pedro, buying a car is an EMOTIONAL Purchase. I DO the math AFTER I have narrowed down the cars I like to buy, I will NOT buy a damned ztec or Subaru tribeca JUST because they may be reliable. I do NOΤ want to drive with a brown bag over myh head.

    Pedro and Dcars: Cars are a bit like Wives. Are you willing to marry an utter dog just because she is reliable and dependable? WHat if you could have whichever is the top supermodel or movie queen today, but you know she is “Unreliable”. WHat have you got to lose by marrying her? (she probably makes 100 times what you do and can’t even take you to the cleaners when you divorce!!)

    For me, life is TOO SHORT, even if I live to 123, to drive UGLY BORING DOGS just because SOme OWNERS TELL CR that their dogs are reliable (NOTE that CR DOES NOT DO any scientific SURVEYS or Experiments to find the RLEIABILITY of the cars, and its OPINIONS about 2011 models are PREDICTIONS ONLY, NOT FACTS, based on similar older models!!!)