Episode 682 – Slow Sales in July, Daimler to Introduce Electric Bikes, 2012 VW Beetle

July 18th, 2011 at 11:46am

Runtime: 8:04

Car sales in the U.S. are slow again in July. It’s estimated that sales will barely top 1 million units because of low inventory at Japanese dealers. Daimler plans to introduce a lineup of electric bicycles as early as next year. The new 2012 Volkswagen Beetle is set to go on sale soon with a starting price just under $19,000. All that and more, plus a look at Audi’s all-new flagship sedan, the A8.

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This is Autoline Daily for July 18, 2011. And here’s the latest of what’s happening in the industry.

SLOW SALES IN JULY (subscription required)
And unfortunately, the sales picture in the American market isn’t very good. Ward’s says sales will barely top one million vehicles, and the SAAR will come in under 12 million units for the month. But July is typically a slow month because car buyers are under the impression that August and September are when car dealers want to clean out their lots for the new models, and that there are better deals then. Ward’s also says the main reason for weak sales is the extremely low inventory at Japanese car dealers.

DAIMLER TO INTRODUCE ELECTRIC BIKES (subscription required)
Daimler’s smart brand isn’t selling well within the U.S. or Europe. Call it German stubbornness, but the bosses in Stuttgart just won’t give up. They’re pushing smart into a new market – one you might not think of. The Wall Street Journal reports the company plans to introduce a lineup of electric bicycles as early as next year. Other automakers including BMW and Toyota have shown-off two-wheeled concepts but none of them have production plans. smart’s management is looking to cash in on the popularity of electric bikes in markets like China.

BOB KING FAVORS PROFIT SHARING
Looks like the UAW will not revert to its old ways, demanding concessions that could drive the industry into the ditch again. The Detroit News reports UAW President Bob King says workers need to go for profit sharing instead of wage increases. But labor experts are split on the issue. Some of them doubt whether King will get enough support for his plan because profit sharing has not been very significant or consistent over the years. But here’s my tidbit. If the UAW asked for profit sharing in the form of stock, it could get the car companies to cough up much bigger profit sharing checks.

F1 TESTS FIGHTER JET CANOPIES
Two years ago Formula 1 driver Felipe Massa was knocked unconscious behind the wheel of his Ferrari racecar when a piece of debris struck him in the head which sent him flying into a tire barricade. Luckily, he survived that incident. Now the FIA Institute, which performs safety tests for Formula 1, is looking at using jet fighter canopies to protect drivers in open-wheel racecars. To test the canopy they used a machine to fire a tire at 225 km/h or about 140 MPH into a windshield. The first test shows a tire hitting a 30mm thick, triple-layer polycarbonate windshield and the tire completely shatters it. The next test shows a windshield made from aerospace-spec polycarbonate which bounces off the tire with nary any damage.

2012 VW BEETLE
The new Volkswagen Beetle is set to go on sale soon, and we’ve got a more info about the car. As we previously reported, the 2012 version is wider, longer and lower. There’s also more interior room for passengers and cargo. It will launch with two engines, a 2.5-liter five-cylinder mated to a six-speed automatic and a 2.0-liter turbo with a six-speed dual-clutch. Both five- and six-speed manuals will be available later. Next year a 2.0-liter turbo diesel will be added. Starting price for the 2012 Beetle is $18,995.

FUEL ECONOMY FIGHT
The Alliance of Automobile Manufacturers, the association that represents most of the big car companies in the American market is launching a radio advertising campaign across parts of the country to push for attainable fuel economy standards. The Obama Administration is pushing for a corporate average fuel economy of 56.2 miles per gallon. But just about every automaker says it can’t hit that average. Here’s my Autoline Insight. Why is it only the auto industry that has to hit fuel economy standards? Cars and light trucks account for about 40 percent of all the oil we use. What about the users who account for the other 60 percent? How do we possibly think we’re going to reduce our dependence on oil when we’re ignoring 60 percent of the problem? Isn’t it time to give the auto industry a breather and force other sectors of society to do their fair share?

Coming up next, a look at Audi’s all-new flagship sedan. Back right after this.

NEW AUDI A8
Audi is on a roll. Every new or redesigned model it comes out with is excellent. They’re fun to drive, luxurious and elegantly styled, with the best interiors in the business. And I’m happy to report, all of this applies to the brand-new A8, which recently hit the market.

Still, the A7 is a fun car and I wouldn’t mind having one in my garage.

Hey, what if it turned out that the moving assembly line really wasn’t that good of an idea after all? Sound crazy? I thought so too, until I read a book by a guy named Tom Crumm. Now I think that Crumm may be on to something. You can learn more of what he has to say this Thursday night on Autoline After Hours. Join me and the Autoextremist, Peter De Lorenzo, for the best insider information of what’s happening in the industry.

And that’s it for today’s show. Thanks for watching, we’ll see you tomorrow.

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39 Comments to “Episode 682 – Slow Sales in July, Daimler to Introduce Electric Bikes, 2012 VW Beetle”

  1. Jim Sawyer Says:

    It is fair to ask why other petroleum users do not have to bear their fair share in reducing consumption. Unfortunately, people do not buy houses and buildings as frequently as they do vehicles. Nor do structures wear out as rapidly as vehicles. Thus the impact of standards for buildings does not impact petroleum usage as quickly–unless retrofits to existing structures are mandated. And, because of the cost and impact that would have on a very large number of voters, no politician wants to fall into that trap. With CAFE standards, on the other hand, the burden APPEARS to fall in the “deep-pocket’ automakers. In reality it falls on car buyers.

  2. Kit Gerhart Says:

    I agree that the 56.2 mpg is an unrealistic goal, as long as Americans are addicted to big vehicles, but it seems Americans bitch about any effort to conserve energy. People want to buy incandescent bulbs to save a buck or two, never mind that the alternatives quickly pay for themselves in energy savings, and save the burning of, and resulting pollution from millions of tons of coal a year.

    Back to cars, I suspect the car companies would have more sympathy if past history had been different. Remember when the car companies said they couldn’t clean up tailpipe emissions, but when forced to do so, they not only made the cars cleaner, but they also ran better and used less fuel.

  3. pedro fernandez Says:

    I never thought the moving assembly line was a good idea at all, many samples of poorly assembled products due to lack of time and it ends up costing the oem more by spending money to fix problems at the dealer either before or after delivery, not to mention the perceived quality issue that then comes with a certain brand. BTW I will take the Lexus or the MB S class over the Audi, reliability issues folks!

  4. HtG Says:

    John, did you feel like the chauffeur or the owner when you sat behind the wheel of the A8? That thing has some kind of presence, but surely it’s an executive car. How was the back seat? Take any calls from Lutz or Renzo back there?

  5. Mark Says:

    John, on your review of the A8, I couldn’t help but notice how huge and oversized the grill is on the new A8. This is consistent with Audi’s styling theme with large, gaping grills, but unfortunately, everyone seems to be copying them. Now we hear that cars like the Focus and Cruze have shutters to close air flow through their relatively large grills to increase fuel economy. Do you think the styling trend of oversized grills has run its course and fuel economy standard will push markers to cleaner noses on their cars?

  6. Steve Says:

    I’m not fond of the grill on the A8.

  7. Chuck Grenci Says:

    Agreeing with John; we need to share the burden of conservation throughout the users (airlines are looking to conserve, as their newest jets are getting more efficient; though there are a lot of industries out there that don’t).

    The Audi grill doesn’t work for me but that’s subjective, so if you like it, you like it, if you don’t, you don’t. The rest of the car does look eloquent but uninspiring (plain) to me.

    And pooh-poohing the assembly line is like 20/20 hindsight; it was the right thing at the right time in my opinion. Is it now; who knows, I’ll have to watch the show and see what arguments are made against it).

  8. Tony Gray Says:

    I’m a grill snob as well. I just can’t get to love that Audi snout. I know the Auto Union connection, but it doesn’t do it for me. Much like the Acura front ends (yeech!) or the way they are turning BMWs into 1959 Pontiacs.

    Front ends I like: Aston Martins, some Fords, Kia.

  9. Chuck Grenci Says:

    Oh, and the third iteration of the Beetle; well, not really, number two failed (other than to resemble the shape of the original). Without some endearing attributes, i.e. rear engine, quirky, flickable, legendary snow prowess, fix it with hammer simplicity, etc., etc. Number three is just another refresh of number two, so unless it incorporates something to inspire, I’m going to say, another fail. (It may be a fine vehicle, just don’t think it should be called ‘Beetle’).

  10. SalvadorG. Says:

    HtG Says:

    John, did you feel like the chauffeur or the owner when you sat behind the wheel of the A8? That thing has some kind of presence, but surely it’s an executive car. How was the back seat? Take any calls from Lutz or Renzo back there?
    ______

    That’s not a bad idea..
    JohnMc. next time you Do Happen to review a luxury car like the A8, you really need the ride input of passengers, for the perspective rear seats comfort and luxury.

    -
    DAIMLER TO INTRODUCE ELECTRIC BIKES
    OK! Call me – ‘Not Smart, but this is the one piece of news it just doesn’t seem to make any sense at all. (for the record)
    - I Mean, How does Daimler goes from the decision to NOT stop making the “Smart” car line (Which NO ONE is Buying) to building electric bikes to be sold in China – As to (and this the weird part) somehow encourage people to buy the “Smart” electric car?? -

  11. Ed Says:

    Ward’s also says the main reason for weak sales is the extremely low inventory at Japanese car dealers. I bought that for about 2 months, gm and Chrysler and ford have huge inventory of slow selling trucks sitting on huge rural lots, if people wanted those vehicles they would go get them, sales are down because so many are out of work, and no quick fix is coming anytime soon, anyone with money won’t touch them. Heads in the sand don’t help.

  12. Aliisdad Says:

    I really like the new Audi looks…That grill really is impressive…Not quite the image of a M-B or BMW, maybe, but wow what a car!!! I also think VW got the new beatle right, this time..Not really my cup o’ tea, but it really looks like a good evolution of design and is a real improvement over the first New Beatle…This would be a great wife/daughter car since it makes sense for around town, college, and for dad to sneak off to a poker game once in a while!!!

  13. pedro fernandez Says:

    Ed #11 add to that, insecurity about the future with all the dismally bad projections for the coming second half and 2012 from all economic experts and no wonder sales are so bad, I suppose the Japanese earthquake also affected the other brands that are also not selling.

  14. dcars Says:

    #8 I agree Tony! I just don’t like it, but I’ll wait till I see the new Beetle.

  15. dcars Says:

    As far as new energy standards costing to much, I have this to comment: Consumers will not buy a car that is too expensive. With government ownership of GM I doubt that they will do something that will hurt their investment, but governments are prone to doing dumb things. Like World Wars, Prohibition and price fixing.

  16. Chuck Grenci Says:

    I guess the low sales for July is a prediction as just barely half of the month is gone (so far); and I’m on the side that says it is weak economy, high fuel prices and tough to get a loan (great rates, but you just can’t get the loan), AND, partially the Japanese recovery effort.

  17. MJB Says:

    Give me the New A8 front end and the rear end of the A8 featured in the The Matrix (don’t remember the year).

  18. MJB Says:

    John, until I’m able to get in one, I’m gonna have to take your word for it that Audi’s have “The Best” interiors. Because I just don’t see it.

    Of course things of the easthetic sort are all in the eye of the beholder. But perhaps if I were to see an Audi interior done in Almond instead of black or gray, then I could weigh in on this.

    For me, it doesn’t matter what the design is, if it’s done up in gray, it’s just dreary as h@ll, and all black interiors make me feel like I’m slipping into a coffin – morbid. Never could get into either one of those. And in my mind terms like “supple” “luxurious” and “inviting” just don’t seem to go hand-in-hand with the typical black and gray interiors found in most European autos.

  19. HtG Says:

    Are dark grey and black interiors just there to camouflage the dirt and grime, or is it just me?

  20. Tony Gray Says:

    HTG: Gotta agree.

    Maintenance on the wife’s charcoal interior: 5 seconds with a cleaning rag.

    Maintenance on my tan interior: an all day sucker with a litany of cleaning and protective products.

  21. Kit Gerhart Says:

    I hope the reliability of the new new beetle is better than the old new beetle. While I’d rather have a roomier Golf than a beetle, I understand people liking the “retro” styling. Unfortunately, the beetle has been exceptionally trouble-prone, even for a US market VW.

  22. RS Says:

    Everyone seems to dislike the Acura grills. But the new designs for the MDX, TSX and TL have refined the style and made the front look more refined. Acura certainly doesn’t have a big gaping hole in the front of the car.
    The Audi is not really like a grill (a la Mercedes/BMW/Rolls/Bentley). More like they forgot what they meant to put in there and it got out of the factory before they caught the mistake. Maybe they just couldn’t decide what to put in there.

  23. len simpson Says:

    Had 2 beetles & a type 2 way back when, wouldn’t be caught dead in a New. Intend to test the oil burner version if & when it becomes available.

  24. pedro fernandez Says:

    That is why the New Beetle was no-where as successful as the older ones. They just failed to get previous owners from going back into them, even though they are more civilized in every way, they lost their charm and bulletproof reliability and simplicity.

  25. Lex Says:

    Talking about front ends. The Audi A8 needs a black bumper strip across the front of that grill for the front license plate. I am not a fan of the front of the New Ford Focus. It looks like a “Catfish” to me. I have similar dislikes for the Hyundai Sonata Hybrid. It looks like a bottom feeder also. Why doesn’t Ford embrace the Aero Front of the Fiesta and enlarge it for the Focus. I would suggest the same for Hyundai. The nose of the New Elantra is way better looking that that on the Sonata or the Sonata Hybrid. If both of these OEM’s make these changes sales will increase even more.

    I know that The Ford Grand C-Max is not coming to North America, but isn’t the Mazada 5 a clone of the Grand C-Max? How are it’s sales doing?

    The New Beetle is a modernized Original Beetle, however I like the previous model better.

  26. cwolf Says:

    John Mc; Your suggestion about the UAW recieving profit sharing in the form of stock has my gears turning. On the negative side, stocks are speculative and can be manipulated and may not project the true picture of worker performance. I can just invission inflated stock prices at the time they are presented,only to become lower in the weeks that follow. However, there may be an advantage for higher income workers, for example a tradesperson and working spouce of equal/greater income. Then, cashing in the stock at a tax rate of 15% just may result in a honey of a deal. But more sensible and realistic, is profit sharing,not as a whole, but by individual plant performance. Following this practice rewards performance, devotion and inovative ideas over other plants that do not.

  27. Kit Gerhart Says:

    The new beetle was a styling exercise. There is no other connection whatever to the type 1, rear engine car. The people who have bought new beetles were willing to sacrifice the better packaging of Golf for the “cuteness” of the beetle. Anyone who thinks there is any real connection between the type 1 and the new beetle is very out of touch with reality.

  28. John Says:

    RE: #11 Ed, #13 Pedro, #16 Chuck ,

    People that work for others, or, State/Local/Fed Government have no real perspective of the economics of the main street destruction of consumer demand that has happened in the last three years.

    Those people are clueless.

    Nothing is supporting the U.S. Economy. It is floating on media propaganda and B.S. .

    “Borders Group Inc. said it would liquidate after the second-largest U.S. bookstore chain failed to receive any offers to save it. ”

    “Borders, which employs about 10,700 people, scrapped a bankruptcy-court auction scheduled for Tuesday amid the dearth of bids.”

    “The company said liquidation of its remaining 399 stores could start as soon as Friday, and it is expected to go out of business for good by the end of September. ”

    http://online.wsj.com/article/SB10001424052702303661904576454353768550280.html

    This “Shell Game” “Ponzi Scheme” Media Propaganda “Economy” is going down because nothing is holding it up.

    Energy speculators started it in 2008 and they are still at it.

    No Energy = No Economy

    The White House knows it. No Nuclear, No Yucca Mountain. No Domestic Oil Drilling. No Domestic Coal For Power. Start a bunch of trouble in the Middle East and call it Arab Spring “Democracy”.

    Now, that is B.S. .

    Unless,

    your goal is to intentionally collapse the U.S. Economy to trigger a “Cloward Piven Strategy” and get a majority of U.S. voters dependent on government handouts, It makes perfect sense. (for future elections)

    What you are seeing, in real time, is the “fundamental transformation” of the U.S. Economy, just like Obama promised.

  29. cwolf Says:

    John: You are a perfect candidate to host a regurgitation broadcast of any of the twisted Fox News shows. Considering your political standing, how can you, or even why do you, make example of “Boarders” plight when you far “right-wingers” beliefs are that the weak shall parish? No one, in their right mind, want to save a buisiness that has clearly overgrown itself and had no insight to downsize to fit the lessening demand.
    And you are incorrect to say nothing is holding-up our economy. For the past three years consumer spending has; Not corporations with there vast tax breaks and certainly not the republican party who proudly are advocates of the corporations and their donations.
    Agreed the media reports on selective topics and that the Obama stimulus was not a success. We should have learned by now that about half of the Obama stimulus that went to tax breaks for the rich did NOTHING for the country except make the rich moreso and demanding more. If you want a realistic view as why our economy is enduring hard times, educate yourself of world affairs and how they have effected us,listen to varing viewwpoints as to the many ecological changes and disasters. Study the recent past to discover the who and more importantly why we battle abroad. War is not cheap. Yet republicans hold this administration liable for the war debt while holdind the american flag high, pledging to fight to the end! You and the far right are totally mis-informed and speak out of both orfaces. Let’s get the economy moving by resolving our debts; not on the backs of the poor and middle class, but,rather and equal burden shared by ALL!

  30. Kit Gerhart Says:

    Also, John, (not John Mc) says:

    “No Domestic Coal For Power.”

    WTF, exactly, are you talking about? Not that it’s a good thing, but nearly half of our electricity comes from burning coal, and, yes, it is domestic coal, not from China.

  31. John Says:

    cwolf take your communist crap and move to Iran.

  32. John Says:

    Kit,

    “No Domestic Coal For Power.” is the “OBAMA” White House position, and is part of their INTENTIONAL agenda to collapse our economy.

    You could say, “starving” the United States of ANY affordable domestic energy, “IS” , “The Obama White House U.S. Energy Policy” .

    see: “The White House knows it.”

    “The White House knows it. No Nuclear, No Yucca Mountain. No Domestic Oil Drilling. No Domestic Coal For Power. Start a bunch of trouble in the Middle East and call it Arab Spring “Democracy”.

  33. John Says:

    Domestic Natural Gas is the alternative.

    But, the Communist/Socialist “Greens” know that Natural Gas will solve the U.S. Domestic Energy problem and in turn, revive the U.S. Economy.

    That is why you are about to see a all out Communist/Socialist Attack on Fracking to access U.S. domestic Energy Reserves.

    Fracking is a “Game Changer” and it is effective and can be done in a safe manner.

    But, when your Communist/Socialist agenda is to collapse the U.S. Economy to make the majority of U.S. Voters dependent on Government Handouts, you have to attack Fracking.

    The Green Movement is being used as “Useful Idiots” to destroy the U.S. Economy by starving the U.S. of affordable energy.

    Here is the latest attack on Fracking and Shale.

    From Al Gore:

    “they’re going to shift the national security argument to the exploitation of coal, tar sands, and shale.”"

    (In the context of the article below.)

    “Gore obviously disagrees! He acknowledges that climate is not the only message. “This is a symphony and not a solo,” he told me. He agrees that the national security and economic messages are crucial to the effort, but “if the centrality of climate is excised, then the overall message is weakened.” Without climate, he said, the other lines of persuasion can be defeated or perverted. After all, “the carbon polluters and the deniers and their ideological allies are going to attack green jobs; they’re going to shift the national security argument to the exploitation of coal, tar sands, and shale.” Without climate as an anchor, the economic and security arguments can’t gain the traction they need. In short, “it’s important to reiterate the centrality of this challenge.”

    see:

    “Gore launches new Climate Reality Project, tells Grist all about it”

    http://www.grist.org/climate-change/2011-07-12-gore-launches-new-climate-reality-project-tells-grist-about-it

  34. pedro fernandez Says:

    The new Beetle became a chic mobile from day 1. That was enough to cut sales from the get go, I know some people also refer to the Mini as one also, but I just don’t see it at all! This Fiat 500 may fall into the same rut as the Beetle, it has a dainty look to it.

  35. MJB Says:

    @ #29 cwolf says: “Let’s get the economy moving … not on the backs of the poor and middle class, but,rather and equal burden shared by ALL!”

    “equal burden shared by ALL”? Really? Are you kidding me? Are you kidding?!

    Do your research and you will find that the top 3% wage earners pay close to 50% of the taxes in this country already. And it’s not because they hold 50% of the wealth either. It’s because the governement ALREADY taxes them disproportionately. Yet we STILL get yahoos like yourself who think its alright to tax them even more.

    Anytime a single dime is given in tax breaks to the wealthy it is seen by the general public as “the rich getting richer and the poor getting poorer” without realizing that A). the rich are the ones carrying the rest of us on their backs already. and B). the rich are the primary drivers of the economy because they are the ones supplying jobs in the small to medium sized businesses (you know, the ones that make up the backbone of our economy).

    And guess what else? The rich ARE getting richer. This will never change. It’s a principle that was set in motion long before we got here and will continue to operate long after we are gone. Deal with it, or get rich yourself!

  36. MJB Says:

    …Oh, my bad…

    When I said “…or get rich yourself”, what I meant to say was get rich, then tax yourself heavily, then go back to being poor.

  37. Kit Gerhart Says:

    MJB,
    The top 3% don’t have 50% of the wealth. It’s more like 85%.

    As far as these rich people creating jobs, they don’t seem to be doing much of that. They are sitting on their hoards of cash, doing what they can to make Obama look bad, with the hope of getting Bachman, or whoever they want in the White House in 2012.

  38. pedro fernandez Says:

    While I read about more and more millionaires every year and top execs still getting 23% pay raises, I also see more and more people buying groceries with food stamps, something is not working very well, is it?

  39. pedro fernandez Says:

    Per TTAC, Daihatsu is introducing a new gas-sipper (70mpg hway) non electric, non-hybrid, cheap car that we’ll never see here cause these companies want to make money off those like me that care for the environment and want high mpg numbers. It’s a shame we can’t get that car here, I’m sure it would sell well.