Episode 948 – Who’s Number One?, Delta Wing to Indy Lights?, Young Buyers Spurn Cars

August 13th, 2012 at 11:35am

Runtime: 9:17

VW has publicly bragged that it will be the biggest car company in the world by 2018 but one automotive analyst believes it’s going to come up short. A new study shows that young people aren’t buying cars like they used to. The Indy Lights series, which is the farm system for the IndyCar Series, is going to get a new race car and it could be the Delta Wing. All that and more, plus a look at the fastest MINI ever built.

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Hello and welcome to a new week of keeping track of all the fascinating developments in the global automotive industry. And here’s the latest of them all.

Volkswagen has very publicly bragged that it will be the biggest car company in the world by 2018. Unfortunately, at least one automotive analyst believes it’s going to come up short. Jeff Schuster, the head of forecasting for LMC Automotive says that Toyota will be No. 1 in the world in 2019, followed by VW. Renault-Nissan will take third place, and General Motors drops to fourth. Hyundai-Kia come next, followed by Ford, Fiat-Chrysler, and Honda. Interestingly, Suzuki-Maruti takes the ninth spot and PSA takes 10th. Schuster bases his prediction on sales, manufacturing capacity and future models. One reason why GM falls to fourth is that most analysts don’t count sales of Wuling vehicles in China, since GM is a minority partner in that venture.

The car market in China is continuing to slow down but we thought we’d take a look at the top selling sedans in the market and not surprisingly the list is dominated by General Motors and Volkswagen. According to China Auto Web, the Chevy Sail was the top selling sedan in July, with over 23,600 in sales. It was followed by the Hyundai Elantra (22,539), Volkswagen Sagitar (21,844), Buick Excelle (21,727) and the VW Jetta (20,088).

LARGE LUXURY SEDANS ON THE DECLINE (subscription required)
Are the days of large luxury sedans numbered in the U.S.? Lexus seems to think so. At a media preview of the new LS sedan, Mark Templin, the Group Vice President and General Manager of Lexus in the U.S., told WardsAuto, “There’s some great cars in this segment, but over time you’re going to see this segment decrease.” He says that Baby Boomers, which are the primary buyers of large luxury sedans, are choosing to downsize because they don’t need the extra space. And poor fuel economy is also turning consumers away. Last year Lexus sold just under 10,000 LSs in the U.S.  However, back in 1990, its best sales year, over 40,000 were sold.

The Indy Lights series, which is the farm system to groom a new generation of Indy car drivers, is going to get a new race car. And it could be the Delta Wing. Currently the series uses a Dallara chassis that’s been around for 10 years. There are a number of other constructors who are interested in building race cars for the series, but none would attract as much attention as the radically different Delta Wing. Nissan sponsored the Delta Wing at this year’s 24 hours of Le Mans, but no word yet if Nissan would be involved in the Indy Lights series.

There’s trouble on the horizon for automakers. Young people aren’t buying cars like they used to. According to a study by R.L. Polk, 18 to 34 year olds accounted for 17 percent of new-vehicle purchases in April of 2007, before the Great Recession hit. That figure declined to just 11 percent in the same month of this year. Financially hampered youngsters may be throttling-back demand by as many as 2 million units annually! Are you ready for another distressing statistic? In 1983 92 percent of 20-to-24 year olds had drivers’ licenses. In 2010 it was just 81 percent.

Contract negotiations between the Canadian Auto Workers’ Union and the Big Three kick off this week. According to the Detroit Free Press GM, Ford and Chrysler want more concessions but the CAW has two important trump cards. For the first time in a long time North American profits at each of the automakers are strong. Beyond this important fact none of them have taken very much away from workers in Europe, where the situation is turning into a bloodbath. But with the Looney at parity with the U.S. dollar, manufacturing is more expensive than ever in Canada. This will work against the CAW in these negotiations.

It’s been out of the market for the last six years, but after the break we’ll give you the first sneak peek at the John Cooper Works GP edition. Very few of them will actually be built.

The GP edition is a very special version of the John Cooper Works MINI. And we were able to get a look at the car and the most important highlights before it officially debuts at next month’s Paris Auto show.

(Today’s overview of the John Cooper’s Works MINI GP edition is only available in the video version of today’s show.)

We think the car will be priced well above $40,000.

Don’t miss this week’s episode of Autoline After Hours. We’ll be down at the Woodward Avenue Dream Cruise, the world’s largest public display of classic cars. Join me and the Autoextremist, Peter De Lorenzo, for the best car talk in the business. That’s this Thursday night starting at 6:00 p.m. Eastern Time.

And that wraps up today’s report. Thanks for watching, we’ll see you tomorrow.

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23 Comments to “Episode 948 – Who’s Number One?, Delta Wing to Indy Lights?, Young Buyers Spurn Cars”

  1. Kit Gerhart Says:

    If there were some large sedans that weren’t so expensive, they might sell better. Yeah, an LS is a gas hog compared to a Camry, but it’s pretty easy on fuel compared to a lot of these SUV’s and pickups people are buying.

  2. HtG Says:

    Oh, irony, thy name is Chip. I couldn’t help bit notice that the Mini GP clip was being recorded by Chip using an IPhone.

    Doesn’t this go some way to explaining why the young crowd ain’t all gaga for gogo?

  3. Todd T Says:

    Young folks not driving. It gets even worse, 32% of 19 year-olds do not have a driver’s license. These statics are the reason you are not seeing the “pent up demand” everyone keeps hoping to find. But, of course I’m sure Peter the “autoextemist” all ready knew all that.

  4. Brett Says:

    John Cooper Works Mini GP, eh?

    I thought cocaine was God’s way of telling you you had too much money…

    For the same amount of money you could buy a shifter kart for yourself and seven of your friends. Now *that* would be some fun!

  5. jmann Says:

    Young People Spurn Cars -
    Doodes! Young people are short on $$! The quickest way to bolster the budget is ditch the personal auto. Manufacturers are putting themselves out of business – cars are increasingly complex and expensive and maintenance is just plain nuts. Check out VW maintenance once you get beyond the “free” 36,000 mile point . . . and dealers pad the ticket with extra services for stuff like fuel injection cleaners, battery service (whatever that is). Add in insurance and it gets crazy. R&R a fender, you’re talking a cool $1K. Not like the “good old days” when you could bump it out, fill and paint with simple tools and materials. And for engine do-it-yourselfers, forget it – you need special tools and computer hook-up. The VW analysis tool is approx. $10K and gets revised on a regular basis – assume other manufacturers are similar. In the current economic environment, which ain’t going away anytime soon, young people just don’t have that kind of $$ to spend. Also, today’s young people are smart – they don’t fall for the bogus ads.

  6. HtG Says:

    5 Totes, FTW

  7. Chuck Grenci Says:

    Too many drivers on the road as it is; they take their pick (to drive or not), and the industry will just have to adjust. You can’t always forecast production for growth; sometimes a stasis is achieved and maintenance of level occurs. I’ve got a feeling, after these folks finally get a job, that cars in their future will follow. Like Gunny Highway said, “you need to improvise, adopt and overcome”.

    Another Mini………………….yawn

  8. Kit Gerhart Says:

    I hope fewer new drivers means that we in the U.S. will someday have decent public transit, like in much of the rest of the world. Then, all these people who would rather text than drive can do so while on the train or bus.

  9. Jon M Says:

    Part of me hopes VW becomes the #1 automaker just in hopes that they would finally shut-up about it! Certainly you can’t expect that they will become number one in terms of overall quality as well. If they’re not the best now–and they aren’t–don’t expect all this clamoring about being number one to put any focus on quality. GM is a shining example that there is no correlation between being the number one automaker and quality. I would argue that VWs would further decline in terms of quality if they reach the light at the end of their tunnel vision.

  10. dcars Says:

    The Wuling Sunshine is one of the best selling vehicles in the world and it was designed by GM. It would never sell in the US but it does well in many third world countries.

  11. C-Tech Says:

    Who’s going to be #1 in sales in 2018? Who cares? Who is going to product the best quality, reasonably priced cars, will most likely be the most profitable! Customers care about quality and price, Wall St cares about profits, Media cares about sales!

    Look at the gap in price between the new LS and the rest of the Lexus auto line now VS. 1990. That should tell you more about the decline in big luxury cars.

    From a driving perspective, how much of a difference is driving a Delta-wing VS. a conventional chassis? Is the difference going to be a hidrance to Indy lights drivers?

    Young buyers haven’t spurned cars, the entry costs now are much higher for my sons than it was for me. It is more difficult to get a driver’s license. Entry level jobs do not pay enough to afford many new cars and trucks. I remember one of the reasons small Japanese pick-ups became popular was because you could get a brand new, economical, and versatile vehicle you could customize.

    Is it just a coincidence that “Chain of Fools” was playing loudly in the background while showing us the GP Mini? Is there a reason the engine wasn’t shown or the mechanical details weren’t discussed?

  12. Kit Gerhart Says:

    I don’t know why a car company would want to be number one in sales. It just puts a target on you back, whether from the Ralph Naders, as with the Corvair, or just from people who just want to “pick on” car companies for no reason. A lot of people seem to like to “pick on” Camry because of its bland styling and non-sporty drive. I doubt that would be the case, if Toyota were number 7 in sales.

  13. Kit Gerhart Says:

    According to C & D, the JCW GP will probably have the same 211 hp engine as the JCW Countryman. Even, as a MINI owner, I don’t get it. I like my $20K base MINI hatch, but if I were going to spend twice as much, I can think of a lot af cars I’d rather have than a hopped up MINI with boy racer body treatment. They only plan to sell 2000 GP’s world-wide, though, so they should find the buyers.

  14. Chuck Grenci Says:

    I find it a bit arrogant declaring their supremacy by the year 2018; sort of the way they are ‘high fiving’ the new Beetle in the commercial, basically declaring it a classic (or ‘too cool’ already); well, like the first Beetle, you have to earn it (and that just takes time………..and a following).

  15. Kit Gerhart Says:

    VW has a “plan” for being number one in sales. Part of that plan is to sell more cars in the U.S., where the have been weak for many years, compared to where they are in the rest of the world. They are selling more cars here, but they have a long ways to go to get beyond being little more than a “niche” brand in the U.S. They need more, and better dealers, even if they can improve the quality and appeal of the products. If they want become “mainstream,” they need more than a BMW/MB/Lexus size dealer network.

  16. G.A.Branigan Says:

    Whatever car company wanting to be #1,they might want to offer small pickups here in the USA again.If they really want to sell,offer compact diesel pickups here.Whoever does that first will win,and I believe will win big.

  17. Kit Gerhart Says:

    Would people in the U.S. buy small front drive pickups? VW could build one of those easily, and with a diesel. I know the old, Golf Mk 1 pickups are highly collectable, especially with the diesel.

  18. C-Tech Says:

    I believe there is a limited market for a small fwd pick-up IF done right. There are several manufacturers who may have a good platform to deliver that type of truck at about 15k nicely equipped (Chrysler, Volkswagen, Ford, GM, Toyota, and Nissan) I doubt sales overall will exceed 500K units total.

  19. G.A.Branigan Says:

    Going back to the small original sized toyotas/nissans/rangers etc.RWD/FWD optional,2 liter turbo diesel,around 130 hp with 350 or better ft.lbs.of torque…….they would fly off the lots.More people live in the country that actually need small pickups for work etc.A good economical high mpg diesel is what people want.

  20. cwolf Says:

    Over the past week I had by ear open to what is transpiring in wage negotiations within the auto industry. Although profits are up and suppliers are once again flourishing,overall worker wages are decreasing and a larger portion of health care costs are felt by them. As a resuly,I suspect, a decline in future auto sales. I also predict the custom to be faithful to the product one produces will loose its emphasis as lower wages make products less affordable. I bet Hyundai’s will become more common in Ford,GM and Chry factory lots and an increase in used cars.

  21. Kit Gerhart Says:

    What you describe is already happening. When I started working for GM in Indiana in 1979, the vast majority of cars in the parking lots were late model GM products. Now, what used to be GM is partly GM and partly Delphi, with about 1/4 as many employees as in ’79. The thing common to both the GM and Delphi employee lots is that there are of all makes of cars, and a lot of older ones.

  22. Gary Paul Says:

    THIS IS A LONG RANT SO SKIP IT IF DESIRED. –And no offense meant toward anyone here. Just some observations….

    I recall the Volkswagen Rabbit back in the early 1980′s and especially its “Pickup truck (?)” version. This rugged machine had a curb weight of 1850 odd pounds according to its owner’s manual. I was astonished reading this at the time and wondering at this marvel of engineering robustness. A friend of mine purchased a 1982 model and enjoyed it very much with its rather tight handling and high fuel mileage—just one problem. With LESS than 37,000 miles on the odometer and having never ever towed anything or carried more than 300 pounds in the bed, he was driving down the expressway in Ohio when the entire front end –axle, strut, suspension brake lines, all came crashing up into the hood as the paper-mache vehicle came to a halt on the side of the freeway. I was astonished, but realized that you cannot build a real pickup truck–at least with early 1980s technology or even today–on a VW Rabbit platform. I am still astonished at all the fellows so excited to “collect” one of these pieces of junk & actually think it’s a swell idea to make an updated version “just like it” for today…(except a lighter weight version–perhaps 1400 pounds so it can be used as a rugged delivery vehicle for the businessman). After all, weight doesn’t mean a thing in a rugged pickup, just as a separate flexible bed supported by 2 rugged steel frame rails is–”oh so yesterday!!”

    Gee didn’t Ford realize this back in 1961-63 model years? Indeed they quickly did when they made a new version of the their F150 WITHOUT a separate and therefore a FLEXIBLE bed (–Ford called it an “integrated pickup” with solid sheet metal on the sides from the taillights to the headlights). This was designed to make the truck more stylish, less expensive to manufacture (less complicated to build), provide a better ride (less flex and vibration from the twisting of the bed), and even enlarge the cargo area which it did by over 15%. Thankfully Ford only made it in 2wd since the vehicle was also a mini-nightmare because for some reason owners wanted to carry relatively heavy items in the bed and whoops, there goes the straight sheet metal! It was cancelled for the 1964 model year.

    Today as most of you know, Ford appears to be moving toward a full-sized pickup using plenty of aluminum to help reduce weight to increase mpg figures, yet is keeping beefy strong steel frame rails to support the beast and the loads it can carry.

    And Yes, with enough engineering and expense, even a real unibody pickup can work, but often doesn’t seem worth the cost. If we do obtain a modern truly compact real pickup–with a separate flexible bed, ¾ ton load capable, 3500 pound tow rating, a large 4-cylinder engine, and sturdy steel frame rails it would be nice if they make a version with a 7-foot or longer bed (like my 97 Ranger with the optional long bed, so rarely seen with its 4-cylinder engine & the best Ranger I have had, out of the 5 models I have owned), so that men could actually use the thing for serious homeowner or small business applications. But would enough Americans purchase such a vehicle? It seems that Americans endlessly bitch about their compact vehicle not having full-size room, or a compact pickup not having a back seat or big ol’ V8 so a man can tow an 9000 lb trailer. So I guess a true compact (say 3200 lbs curb weight for a 2wd model) real P/U would never sell unless the average man couldn’t retrieve an item from the bed without a step ladder as the trucks get bigger and and the bed sides become almost ridiculously high.

  23. Brett Says:

    The Jeep Commanche seems to be a successful and well-liked unibody pickup truck, but it did use a removable cargo box and a rear subframe to tie the whole rig together.

    American made Rabbits were rust-buckets as I recall. I suspect that might have had a part in your friend’s problem.

    I do believe as well that Australia has a long history of “utes” that are unibody.

    Then there’s the Dodge Rampage.

    Seems to me that the Malibu-based El Caminos were unibody as well, but they did use a front subframe and were RWD.

    The term for this genre seems to be “coupe-utility” from the research I’ve done.