March 26th, 2012 at 11:49am
Fisker Automotive is trying to raise $100 million through private equity after the U.S. government refused to loan more funds to the company. Ford is producing an hour-long reality series called “Escape Routes” featuring the 2013 Escape that will air on NBC. Dodge announced it will enter the Global RallyCross Championship Series with a rally version of the Dart. All that and more, plus another entertaining installment of Hall versus Hall.
This is Autoline Daily for March 26. I’m John McElroy and we have a lot to show you today, including another installment of Hall versus Hall. But first, the news.
MAMMA MIA! WE NEED MORE MONEY!
Fisker Automotive is scrambling to find more money. Last month, the U.S. Department of Energy refused to release more funds to the company as part of a previously agreed upon loan. So now, Bloomberg reports, Fisker is trying to raise $100 million through private equity. That could prove harder than it would have just a few months ago. The fledgling start-up is running into a number of problems, including an embarrassing story that hit the headlines when one of its cars broke down while undergoing tests by Consumer Reports. Recently, a number of electric car start-up companies have folded up as government money dried up. So let this be a lesson for anyone else trying to break into the automotive business: if your business plan is predicated upon getting government subsidies, then you really don’t have much of a business plan.
PSA STOPS SPENDING
Now that General Motors is buying part of Peugeot, the French automaker is slamming on the brakes when it comes to spending money. It stopped development of a dual clutch transmission and at least four new vehicle platforms, the Wall Street Journal reports. PSA wants to see how it can get GM to split the costs. The two companies are looking for $2 billion in combined annual savings. But GM better hope that PSA can quickly get its financial house back in order because the last thing it needs as it struggles to turn its European operations around is a partner that can’t turn a profit.
OOH-LA-LA, ARE THOSE APPS EXPENSIVE (subscription required)
Meanwhile, Ward’s reports that Peugeot is banking heavily on its new B-class car, the 208, to run up the sales charts. But the B-class segment in Europe is facing a ferocious pricing war as most automakers are not making any money on those cars. Peugeot says if the 208 hits its sales targets, three of its assembly plants will be back in the black. One of their key selling points will be with a touch screen that displays apps, like one for finding a nearby restaurant. Get this: the cost of getting those apps is “only” $460 for the first year, and “only” $200 a year after that. Please, don’t any of you out there tell Peugeot that you can get apps for free on your smart phone. I think it would ruin their day.
THE GREAT ESCAPE
Ford is out in front of most automakers with its social media efforts. And it has integrated its products into TV shows like American Idol. But with its most recent effort the company is producing an hour-long reality series called “Escape Routes” featuring the 2013 Escape. Six episodes of the show will air on NBC starting this Saturday. Like any other “reality” show, teams will have to complete a series of challenges for a chance to win $100,000 and two new Escapes. Ford won’t say how much it spent on this but its way more expensive than a traditional ad campaign. Even so, Ford’s top marketer, Jim Farley is a true believer in audience engagement, and that’s what this is all about.
DODGE RALLIES AROUND THE DART
Dodge announced it will enter the Global RallyCross Championship Series with a rally version of the Dart and driven by four-time Rally America champion Travis Pastrana. The car is powered by a purpose built 2.0 liter, turbocharged four-cylinder that cranks out 600 horsepower and 550 lb.-ft. of torque. If you ask me, this is a very smart way for Dodge to reach out to a new generation of buyers.
Coming up next, it’s time for another installment of Hall versus Hall.
HALL VS. HALL
Jim and Bob Hall are two of our favorite people in the auto industry. Jim is with 2953 analytics and Bob is an auto designer. Every now and then we like to pose a question to them and here is the one we asked them in the most recent installment.
(Today’s episode of Hall vs. Hall is only available in the video version of today’s program.)
Boy do I enjoy the Jim and Bob show. And don’t worry, we’ll have more Hall versus Hall in future shows.
But that wraps up this show, thanks for watching, we’ll see you tomorrow.