March 20th, 2012 at 12:00pm
It looks like China’s gravy train is derailing and German luxury automakers are panicking. Dodge is introducing a new version of the Durango SUV aimed at law enforcement and fire departments. Ford may have debuted a completely redesigned Tourneo van in Geneva a few weeks ago, but the name has a long and interesting history. All that and more, plus we take the new Hyundai Azera for a test drive.
Welcome to Autoline Daily for March 20. I’m John McElroy and here’s the news.
CHINA: MAKES ITS OWN GRAVY
Uh-oh, looks like the gravy train is coming to an end in China. According to the China Association of Automobile Manufacturers, sales will not hit the government’s 7 percent growth targets this year. They may increase by 5 percent, which would be a healthy increase in any mature market, but that represents a remarkable slowdown in China. But here’s the real eye-opener. The waiting lists for luxury cars have evaporated, and the German luxury brands are panicking. Bloomberg reports that Mercedes-Benz is discounting its S-Class in China by up to 25 percent. That translates to a $31,000 discount on the S600. The BMW 7 Series and Audi A8 have 20 percent discounts. And here’s the real worry. Strong profit margins in China have helped the German luxury brands weather the downturn in Europe. Amazingly, Audi gets 30 percent of its profits from China, BMW gets almost half. Daimler’s and BMW’s stock took a pounding on the news, falling 4 percent yesterday. China will remain a critically important market, but the days of whopping big profit margins are quickly coming to an end.
PENTASTARS ALIGN IN THE FAR EAST
And yet, there’s good news for Chrysler in China. Even though the Chinese government is clamping down on foreign automakers and doesn’t want them expanding their manufacturing capacity, the president of Guangzhou Automotive, which has a joint venture with Fiat, says it’s perfectly legal for it to with build vehicles from the Chrysler group. They’re still discussing what and when, but we would bet the Jeep Grand Cherokee and Liberty would be the most logical products to make there.
DURANGO SPECIAL SERVICE
Speaking of the Chrysler Group, Dodge is introducing a new version of the Durango SUV. No, it’s not some luxury trim level, this one is for real work. The Durango Special Service model is tailor-made for law enforcement and fire departments. Heavy duty is the name of the game here. The vehicle’s brakes, battery, alternator and cooling systems have all been improved. And the package is wrapped in a five-year, 100,000-mile powertrain warranty. Inside, there are customizable storage compartments and special wiring for spotlights and other equipment. Dodge is taking orders for the Durango Special Service model right now and deliveries should begin in the second-quarter of the year.
We showed you Ford’s redesigned Tourneo van a few weeks ago. And here’s an interesting factoid, Tourneo is actually an internal name Ford has used for decades to designate “people-hauling van.” I don’t know the origins of the term, but I believe they first started using it in Germany in the 1960s. Hey, it’s just part of our effort to keep you as the best-informed audience in the business.
FISKER KARMA: BAD OMEN
A few weeks back, the Fisker Karma make headlines when Consumer Reports bought one and it promptly broke down during the magazine’s testing. Well, they got the car fixed and now the magazine has its first driving impressions. They liked the styling and the interior design, but they were not impressed with driving it. CR says the Karma is a tight squeeze inside and that’s its obese, 5,400 pounds hurt acceleration, agility and fuel economy. The magazine also said display gauges went out and warning indicators popped up while they were driving it, so it’s hard to imagine the Karma is going to get glowing reviews from Consumer Reports.
2012 HYUNDAI AZERA
The Azera’s 3.3-liter V-6 comes with direct injection and is mated to a six-speed automatic transmission. Fuel economy is 20 MPG in the city and 29 on the highway. That translates to a combined rating of 23 MPG which Hyundai claims is best in class.
In addition to the styling upgrade, the interior is also more refined than before. It offers best-in-class head and legroom for passengers in the front, ambient lighting, heated and cooled seats in the front and heated seats for the rear. And it also comes with standard features like navigation, leather seats and a leather-wrapped shift knob and steering wheel.
While the previous Azera struggled in the U.S., Hyundai believes the improvements to the new model will make it more appealing.
There are just two trim levels for the Azera. The base model starts just under $33,000 and with the technology package, which adds features like a panoramic sunroof, a premium sound system and 19-inch wheels, the price jumps to about $37,000.
The Azera is a nice car and is definitely an improvement over the previous model. But it’s in a competitive segment, so it will be interesting to see if it can continue Hyundai’s recent success.
It’s just amazing to watch Hyundai cranking out so many new products, year after year.
And that wraps up today’s show. Thanks for watching, we’ll see you tomorrow.