October 16th, 2012 at 12:00pm
Joint-ventured and government-owned companies dominate the Chinese market, but one company is thriving without bank or government backing. If you think the sticker price of a Tesla Model S is high, find out how they are getting even more money from their buyers. Take a look at what one Israeli inventor thinks will be the lightweight material of the future. All that and more, plus our first look at the updated BMW 7 Series.
Welcome to Autoline Daily for October 16th. I’m John McElroy and here’s the news.
GREAT WALL RISING
Foreign automakers joint-ventured with government-owned car companies dominate the Chinese market. But one domestic company is making a name for itself. Great Wall Motors, which gets no money from the Chinese government or state-owned banks, is growing faster than the overall market, is solidly profitable, and just broke into the Top 10 car makers in the country. It originally concentrated on making pick-ups and SUVs, but is now making passenger cars. This is the company that electric car maker Coda will get its next model from. And Phil Murtaugh, the CEO of Coda and who formerly ran GM’s operations in China, tells me that Great Wall is the best domestic car company in China. I share that with you because this is a company we ought to keep an eye on.
CHECK YOUR SURROUNDINGS
Nissan keeps figuring out more and more functions to add to its back-up cameras. On the new Altima it also does blind-spot detection, lane-departure warning and moving-object detection when you’re backing out of a parking space and can’t see if a car is coming down the lane behind you. But on the new Elgrand in Japan, Nissan is using the cameras and ultrasonic sensor that will limit acceleration and apply the brakes if the driver is in a tight parking situation and is in danger of colliding with another vehicle or walls or anything else. This could eliminate the pedal misapplication that causes sudden unintended acceleration, and no doubt we’ll see this technology spread quickly.
LOW STATE OF CHARGE
A123 systems is in trouble. The Massachusetts-based battery maker is running out of cash and it could face bankruptcy. The Detroit News reports it will likely fail to make its next loan payment. This is the latest in a string of bad news that has devastated its stock price. Shares lost 45 percent yesterday, closing at just 13 cents. So far the company has received about $500 million in grants from federal and state governments. Michigan alone chipped in nearly $240 million. You know, A123’s woes are indicative of the whole electric-vehicle industry – it’s an unmitigated disaster. EVs simply aren’t selling in the numbers these companies need to make money.
SQUEEZE YOUR POCKETBOOK
Speaking of electric car problems, Tesla Model S buyers may be in for more than just sticker shock. According to Autoblog, Tesla is charging customers $600 a year for a service fee! This includes a comprehensive inspection, software updates and replacement of brakes and windshield wipers. That’s an awful lot of money considering one of the selling point of EV’s is that they don’t need much service. But if owners do not bring their cars in for a yearly checkup they will VOID their warranty. The same is true if they take their Model S to a non-Tesla service station. Company CEO Elon Musk said this is comparable to the cost of owning a Mercedes-Benz E-Class, but I’d say it looks like Tesla has just found another revenue stream.
LINCOLN TRIES TO REINVENT ITSELF
The Lincoln MKZ will be the first of four new models coming out soon, as Lincoln tries to reinvent itself. And the new hybrid version of the MKZ just got a 45 mile per gallon rating. That’s about 5.2 liters per 100 kilometers. That’s 5 MPG city better than the Lexus ES 300h; 18 MPG city ahead of Infiniti M35h and 20 MPG city ahead of BMW ActiveHybrid 3. Even so, Lincoln doesn’t have a good track record selling hybrids. Even though the hybrid version is sold at no extra cost, the take-rate is only 16 percent. The current MKZ hybrid is rated at a combined 39 miles per gallon. Maybe 45 MPG will entice more people to take it.
COULD CARDBOARD REPLACE STEEL?
Automakers are using lightweight materials like aluminum, carbon, and magnesium more and more to reduce weight. I wonder if they have ever thought about using cardboard? Israeli inventor Izhar Gafni is using the material in new and interesting ways. Like his concept for a $20 bicycle made mostly of cardboard that has been treated to be water and fire resistant. Hey, if balsa wood is good enough for the Corvette floor pan, why not make things with cardboard?
(Autoline’s first look at the updated BMW 7 Series is only available in the video version of today’s show.)
Remember how much criticism the 7 Series got for its Bangle butt? And how the iDrive was the butt of so many jokes? Those days are well behind the 7 series, but it sure needs these new tweaks. So far this year it trails the Mercedes S-Class in sales by 111 units in the American market.
Don’t forget to join me and that Autoextremist, Peter De Lorenzo, this Thursday night for Autoline After Hours. We’ll have the new Ford Focus ST in the studio and we could have a surprise guest with us as well. But I can’t say who that might be because it isn’t confirmed yet. But I know you’ll agree with me that he’ll be the perfect person to talk about the ST, and how! Oops, did I just give it away?
I better wrap it all up now and get out of here. See you tomorrow.