Episode 1006 – Sandy Slows U.S. Sales, Mulally Stays With Ford, Overstated Fuel Economy

November 2nd, 2012 at 12:01pm

Runtime: 7:12

Auto sales were up in the U.S. last month but were not as strong as they could have been. Ford announces that CEO, Alan Mulally, will retain his position for at least 2 more years. Hyundai-Kia make a fuel economy blunder that could cost them tens of millions of dollars. All that and more, plus on Autoline This Week John sits down with Scott Painter, the founder and CEO of TrueCar, to talk about how the company is reinventing itself.

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Hi-diddly-ho and welcome to another episode of Autoline Daily. It’s the second of November, 2012. I’m Jim Hall from 2953 Analytics filling in for John once more. Methinks it’s time to look at all that news from around the interwebs. Let’s get started, shall we?.

SANDY HURTS SALES IN U.S.
Car sales were up in the U.S. last month but were not as strong as they could have been due to Hurricane Sandy shutting down dealerships along the east coast. WardsAuto reports that October sales were close to 1.1 million units which is nearly a 7 percent gain compared to last year. That translates to a SAAR of 14.2 million units well short of the 15 million units Wards predicted before the Hurricane. Porsche had the biggest jump last month with a 41.5 percent gain compared to a year ago. Subaru had a great month seeing sales jump by 30 percent. Volkswagen had the third highest gain and it was followed by BMW. Toyota rounded out the top 5 with nearly a 16 percent increase in October. Jaguar Land Rover had the worst month on a percentage basis, seeing sales drop by over 20 percent. And not surprisingly it is followed by Volvo and Mitsubishi. But there were a couple of surprises. Hyundai’s sales dropped by 4 percent and Nissan was also down over 3 percent last month.

MULALLY TO STAY AT FORD
There’s been a lot of speculation over when Ford CEO Alan Mulally will retire but now we know it’s still a few years away. The company announced that he will be staying at his current position until at least 2014. Mark Fields, the current President of the Americas, was officially named Chief Operating Officer. I’d like to add that Mark is one of the smartest guys around. So smart he wisely chose not to anchor the 2009 April Fools Day edition of this very show. Now that’s true wisdom, indeed. But I digress, anyway Ford also announced a number of other promotions. Joe Hinrichs, the current head of Asia Pacific and Africa, takes over Field’s position as President of the Americas. Steve Odell, who heads Ford of Europe, will also add the Middle East and Africa to his duties. And Jim Farley will be in charge of Lincoln’s global marketing in addition to leading global marketing for Ford. The new positions are effective the first of December.

FORMER VW EXEC TO HEAD OPEL
And speaking of executive changes, the Wall Street Journal reports that General Motors is expected to name former Continental and Volkswagen executive, Karl-Thomas Neumann, as the next head of Opel. As we reported yesterday GM is in a lot of trouble in Europe. The company says it could lose up to 1.8 billion dollars in the region this year.

OVERSTATED FUEL ECONOMY
Hyundai has touted that it leads the industry with 4 models that get 40 mpg, on the highway, but now it will have to retract those claims. Hyundai and Kia admitted yesterday to overstating the estimated fuel economy on window stickers. This impacts about 900,000 vehicles sold between 2011 and 2013 model years. For customers who bought vehicles with the faulty readings, the companies will reimburse them for as long as they own it.

CONTINUED SLUMP IN CHINA
Yesterday we reported about Toyota and Infiniti sales continuing to drop in China. Now we can add Honda and Nissan to that list. Honda reported an October drop of 53.5 percent from a year ago. And Nissan says deliveries fell 41 percent last month. Some experts have even stated it’s hard to say if they have hit rock-bottom yet.

OK. It’s time for this week’s Autoline Poll, and we know some of you will hate us for this, but with the U.S. presidential election just a few days away, it’s our last chance to get cars and politicians mixed up for a while. Here goes: President Obama claims he saved the auto industry. Mitt Romney said Detroit should go bankrupt. Now that you’ve had four years to think about it, who was right?

Cast your vote by clicking the link underneath today’s show. We’ll reveal the results on Monday’s episode.

Coming up next, a preview of Autoline This Week with the founder of a website that’s created some controversy with dealers and automakers over the transaction price of cars.

AUTOLINE THIS WEEK
TrueCar.com is a website car buyers can go to, to check out what other buyers paid for their car. But over the last year the company has had to reshape its business because dealers and automakers were upset over dropping transaction prices as a result of using the website. On Autoline This Week, John sits down with Scott Painter, the founder and CEO of TrueCar, to talk about how the company is reinventing itself.

Also joining John for that show is Steve Finlay from WardsAuto Dealer Business and Joe White from the Wall Street Journal. And you can watch that show in its entirety right now at our website Autoline.tv.

But that’s the end of the road for this week. Again, I’m Jim Hall from 2953 Analytics, thanks for watching and have no fear, John will be back in this very seat on Monday. Have a great weekend.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog and WardsAuto.com


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60 Comments to “Episode 1006 – Sandy Slows U.S. Sales, Mulally Stays With Ford, Overstated Fuel Economy”

  1. Chuck Grenci Says:

    Super ending; loved it! Big Smile.

  2. Chuck Grenci Says:

    The ‘Poll’ question didn’t open for me; maybe just my server?

  3. G.A.Branigan Says:

    It didn’t open for me either.

  4. John McElroy Says:

    If the poll doesn’t appear for you at first, just refresh. It should show up when you try again.

  5. Kit Gerhart Says:

    The poll didn’t open for me either, at least on my android phone. I haven’t tried a computer.

  6. Kit Gerhart Says:

    I’ll be checking the EPA site later, to see if they have new mpg numbers published for those Hyundais.

  7. kurt Says:

    clever ending for sure!
    No luck with Poll on IE8 or firefox 16.0.2 – refreshes had no effect. Perhaps later today it will work.

  8. Ron Paris Says:

    With just over 1000 miles on my new Mazda CX-5, it is consistently OVERACHIEVING its EPA estimates (26/32) with 28 city/34 highway. What a pleasant surprise and I’m not the only CX-5 owner who has reported this!

  9. Bradley Says:

    Maybe I choose the “wrong” answer, but after a refresh the vote part appears, but didn’t take my vote.

  10. vette427400 Says:

    Pole would not open for me either.

    Pole answer-
    GM & Chry should have been forced into conventional bankruptcy
    - Section 363 was improperly used by Auto Czar
    - this deviant use of 363 allowed UAW to take irrational owership positions in the companies they ruined

  11. pedro fernandez Says:

    the voting thing did not work in either Firefox or Chrome, what is this. Florida voting system you’re using here, ENOUGH! So where is Smokey to defend his blessed Hyundai with these BS mpg numbers, it’s no wonder no tester could achieve those numbers and it took this long to get the EPA involved? I see class action lawsuits in the future and H/K paying out to disgruntled buyers.

  12. HtG Says:

    Some sights and sounds from the streets pursuant to Superstorm Sandy. Suite style.

    People is insane! There’s a combination of dead street lights and driver adrenaline that makes for some dangerous driving. I don’t think most people understand that a dead street light means that one must stop at intersections. I know this rule and I still blew through one light. But people are even driving through intersections where a temporary STOP sign has been placed in the middle of the road. The cautious move is to wait on a side street until the cars in the main road clear away. The problem comes when you’re in the main road, and you come up to an intersection with no lights, but there is an SUV behind you; do you stop according to the law, or protect your ass, and just roll through?

    I’m seeing closed gas stations north of NYC. The local SUNOCO was closed, as was the LukOil near the NYState thruway. Across the thruway there were two long lines converging upon a Shell station. So the shortage/panic is in NY, too. The flip side is that highway traffic is serene, with cars moving like in the slick ads on tv.

    BMW drivers, ever the asshats. Here’s a tip for driving around 3series, post storm. If you’re crossing a working and lit intersection, and a large SUV is coming straight toward you, it is wise to take notice of the car next in line, because it may be a shiny BMW coupe whose driver wishes to take a left without checking on-coming traffic. What you do is assume he’ll cut across traffic, so you slow down just in case, whereupon the Montvale Asshat stops in the middle of your lane, seemingly surprised by your existence, and starts snarling, cursing and waving a paw at you. Mirror the paw waving behavior until he drives off. Fuck you BMW, boxes for asshats.

    In my neighborhood, there were lots of people with generators working through the blackout. But it seemed like most people were turning them off overnight. I imagine that these people needed the power more for convenience than some continuous need for power, like a medical issue. We were using battery backups from computers as a reserve of electricity, which can charge your phone of course, but also give you brief 120volt power for critical appliances like my coffee bean grinder. (Hey, if you didn’t hate me before….)

  13. Ken Stadden Says:

    I love surprise endings. Hey, the poll came up when I refreshed. Cool.

  14. pedro fernandez Says:

    Mullaly had no choice but to stay at Ford and fix these quality issues, his reputation would have been damaged if he had quit at this moment. This is the same thing that happened to them with Taurus and Explorer, the best sellers in their respective segment and they allowed the competition to over-take them.

  15. Kit Gerhart Says:

    It looks like the EPA site has “corrected” ratings for the Hyundais. I now shows 24/35 for a 2012 automatic Sonata, and 28/38 for a 2012 Elantra, both manual and automatic. I think those were among the “40 mpg” cars, in Hyundai advertising.

  16. pedro fernandez Says:

    Hyundai disclaimer: 40mpg achieved with a skinny driver, over-inflated tires, going downhill with a strong wind behind.

  17. Kit Gerhart Says:

    Thanks for the update, HtG. I don’t envy you, and I hope things get back to normal soon.

    How did you brew the coffee? Did you use some type coffee maker on a gas stove? I assume your battery backup wouldn’t have enough capacity to run an electric drip maker, or anything like that.

  18. Kit Gerhart Says:

    Regarding a negative comment yesterday about Subaru using CVT’s in the new Forester:

    It seems to me, that CVT’s are unpopular mainly with people who don’t have them, and with automotive journalists. People who drive them regularly like them just fine, as shown by high owner satisfaction with most Nissans with CVT’s, and exceptionally high owner satisfaction of Prius and Fusion hybrids.

    These 8, 9, and 10-speed automatics are just trying to be as much like a CVT as possible, with transmissions capable handling the power of large engines.

  19. Mike Says:

    I think a good follow on question to the Obama vs Romney would include the post bankruptcy aftermath. Yes GM and Chrysler offed their bondholders but then they needed financing to get up and get going again. There was more done than a “managed bankruptcy” That might be more grmane to why Chrysler and GM are both in business and profitable today.

  20. pedro fernandez Says:

    HtG must have natural gas at home, this is one problem here in Fl most people don’t have gas and when power is down, you can’t even cook unless you buy a propane gas burner like I have. When Andrew hit here in ’92 local authorities disappeared and no one was around to even direct traffic, I recall seeing regular folks doing it, while the Nat guards came in after and restored order and brought in supplies, I recall the dumb-ass mayor calling in to a radio station from his bunker in Disney World while his county was in chaos.

  21. pedro fernandez Says:

    #17 I tested a Nissan Rogue with a CVT and I did not find anything wrong with it.

  22. Alex Carazan Says:

    George Bush funded the auto industry bailouts BEFORE Obama took office. Obama and Romney BOTH were for bankruptcy. But Obama was for government funding, ownership, and control and Romney was for government guarantees and private ownership. Both companies did go bankrupt. Ford smart to have walked out. Result was GM bankruptcy was managed by political socialists who were clueless how to run an auto company…private Pension contracts ended for salaried workers in favor of union workers. Also more Dealerships that donated to Obummer were saved and those to Bush and McCain were more likely closed. GM now owned much by federal government and unions…it will be GM’s downfall if they do not escape such control. Chrysler is now an Italian led company but with union ownership. Crony capitalism or fascism at it’s worst. Those who claim the entire industry would have collapsed are clueless. Much equity and investors would have loved clean up the miss management in both firms. GM had way too many brands for too long…and still does today…and their styling lack luster…exception is Cadillac. Chrysler was way to slow to go global and leverage larger scale platforms and way behind in technology. So in short Bush was wrong, Obama wrong, and Romney in the right direction. Don’t forget to vote Nov. 6!!

  23. HtG Says:

    16 Nah, Kit, we’ve got it easy. I live in a part of Westchester that did very well. To make coffee I just use a tea strainer that fits in a mug, and heat water on the gas range. People with electric ranges, uh oh. Also if you look at the map below, you’ll see northern westchester is largely dark; that area is elevated and heavily wooded, their weather always much colder than downstate. They’re going to suffer for many more days.

    The map is interactive, you can click and see the percentages of people that lost power.

    http://www.lohud.com/viewint/article/20121102/NEWS05/311020021/Map-Power-outages-by-community-?odyssey=mod|defcon|img|Frontpage

  24. pedro fernandez Says:

    I think it’s safe to say that H/K sales will drop even more with this mpg mess they got themselves in, what the hell were they thinking???

  25. HtG Says:

    18 Pedro, you know, the gas range lets you heat water and cook. This lets you keep warm. It’s cold here.

    One thing I didn’t expect is that after several days, I can’t look at LED flashlight or fluorescent lantern anymore. Oil lamps and candles are much better, except for that fire thing.

    And boy, am I bored of Sandy news. Sitting at home I knew eventually the news would move on. Isn’t this what happens with all natural disasters?

  26. C-Tech Says:

    Does anyone know what the reimbursement will be to Hyundai owners and for how long ?

    If I could offer a suggestion to Ford for the MyTouch and Sync systems (as well as other makes), after seeing the system in action why not give owners a choice of what features to use and set up those touch-screen icons on the screen. Some features certain customers just don’t use so why leave it on the screen to clutter it up and make it confusing. You can always reconfigure it for the next driver or owner.

    I believe Ford will work through the issues with their new cars. Ford and Nissans’ sales drop I believe is due to the gap you have when introducing new vehicles.

  27. G.A.Branigan Says:

    @ 20,Alex: Agree 100%.

  28. C-Tech Says:

    @ #20 What a Joke! Democratic car dealers saved? I saw a Michigan dealership owner lose TWO franchises in a week! If “Republican” car dealers suffered, then someone needs to let one of the mega-chain dealers know his group is “suffering” under Obama with all the money they are making.

  29. ckernzie Says:

    #17 You may be right Kit, I’ve never had or even driven a vehicle with a CVT (unless snowmobiles count) but they are a deal breaker for me. I should give them a chance but I’m old school because I want to hear and feel my shifts even with an auto and want control over my RPM’s. CVT’s are a pathetic attempt by automakers to squeeze an extra mile per gallon out of vehicles and exist for no other real purpose but to increase retarded American CAFE numbers. I also have lingering doubts whether they are robust enough as well. Why would you build a vehicle that ‘automatically’ turns some consumers like me away? Maybe in our world of appliance drivers it’s not going to matter sales wise but I’ve owned 6 Subarus including a Forester and I would not consider one with a CVT.

  30. ColoradoKid Says:

    Poll

    There’s one option that should of been included for the poll and which negated my participating in it today .

    Neither !

    Because in truth neither one is right . Obama did not single handedly ‘ save ‘ the auto industry ( nor can one currently consider it saved ) and Mitt Romney’s claims : though half right : would of led to massive unemployment etc ( half right because IMHO Chrysler should of been thrown to the wolves decades ago : with the government interventions being focused on GM and then Ford if needed . But also had Chrysler been thrown to the wolves : IMO JEEP should of been pulled out of the mixed and had government intervention as well to set it up as a stand alone company )

  31. John Says:

    This poll question is silly! Obama forced a “quick rinse” bankruptcy on GM and Chrysler in order to save them. Romney says they should have gone bankrupt. Well, they did! ‘Bama and Mitt are both right…

  32. ColoradoKid Says:

    Presidential Elections 2012

    Here’s my opinion on who to vote for . The only thing that scares me more than another 4 years of Obama is in fact even a single year of Romney . Assuming Obama is the Socialist everyone claims him to be ( he’s not ) experience and history in direct contradiction to that former Hungarian investment bankers ads of late have shown that you can survive and possibly even thrive in a Socialist atmosphere ( Hungary despite the moniker was Communist back in the day btw ) But you cannot and will not survive in the Fascist atmosphere the present guise of Romney and his Tea Party lap dog Ryan are proposing

    Having said that I despise both extremes ( Socialism and Fascism ) But if I must make a choice between the two . I’ll take Socialism any day . FYI – Socialism , especially the type the extreme left are proposing is not Communism

  33. ColoradoKid Says:

    #11

    I’m a coffee lover myself so no hatred will be coming from me ;-)

  34. Kit Gerhart Says:

    I like manual transmissions, and I like CVT’s. I don’t much like regular automatics so much, especially older ones with their non-rev matched downshifts that feel like you are abusing the machinery, every time you step on the right pedal very hard.

    Actually, unlike a lot of people, I DID like the Ford dual clutch I drove briefly a year or so ago, except at low speed, where it was hard to drive smoothly at parking lot speed. The shifts were pretty well rev-matched, both up and down, like a manual being shifted very quickly by a skilled driver. The issue at low speed may have been more a case of the throttle mapping being too sensitive, rather than the transmission itself.

  35. pedro fernandez Says:

    #31 Kit this issue with the dual clutch could be why Ford’s reliability ratings have gone down so much, perhaps buyers perceive this as a defect of the car.

  36. Kit Gerhart Says:

    #27,
    I wouldn’t consider a Forester because it has mandatory 4WD. Subaru seems to be doing ok in spite of people like me, though, and I doubt that they will drive away too many people because of the CVT. I guess a year from now, we will know how the new Accord and Forester did, after a year of using CVT’s.

  37. pedro fernandez Says:

    Kit just because we live in sunny So Fla doesn’t mean the rest of the country cannot use all wheel drive like Subaru, exception being So Ca, Hawaii or South Texas. even in the Fla panhandle a couple of years ago, I remember going there and the temp was dropping to near freezing and there were warning about bridges freezing and I felt insecure driving a reg FWD car with sloppy handling like the Sonata.

  38. Kit Gerhart Says:

    #32,
    “Transmission minor” and “audio system” are the things that show as major trouble spots for the 2012 Focus in the CR survey. “Squeaks and rattles” also showed up, but less severe.

    Both the transmission and audio system issues could be that people just don’t like it, rather than things breaking. There is no way of knowing from the CR report, though.

  39. Kit Gerhart Says:

    To me, Subaru should offer both FWD versions of some, or most of their cars, but keep AWD available on all of them. It makes sense for the WRX versions to be AWD only.

    I guess the bottom line is that Subaru wants to be a niche car company, and the mandatory AWD defines the niche pretty well for them. It probably cost them a sale of a Legacy or Impreza wagon to me in the 90′s, though, but overall, Subaru seems to have a loyal following, kind of like Saab in the 70′s and 80′s.

  40. Earl Says:

    Obama and Co have done more for the car industry than Mittens and Co.
    After last weeks statements about an Italian car Co buying Jeep and moving production to China I feel that Romney blew it. We don’t want a President that’s a pathological liar that will say anything to get elected. These ‘religious only on Sunday’ types are dangerous. Hopefully,he’ll get his head handed to him in next Tuesday.

  41. HtG Says:

    AD Poll

    The auto industry was also indirectly bailed out by the treasury and Federal Reserve which kept the banks from getting nuked. If there were no credit available even today for auto loans, then all carcos would suffer. It is the Fed which is supporting the credit markets. And Romney’s current bigoted demogoguery about Italians makes me too biased to opine about his too-many-pointed plans for the industry.

  42. HtG Says:

    Local Sunoco.

    The Sunoco that was out of gas yesterday is now serving both lined up cars and people with gas cans. The police are marshalling traffic. Uh oh, no more cruising for fun for HtG.

  43. DJ Says:

    John…In truth OBAMA and the Gov’t did all possible within reason to keep both GM/Chrysler alive. Ford just happened to dodge a bullet but still endures with their own problems. Chrysler has proven themselves worthy of saving and GM image is changing in a slow but ever constant wave. Here’s hoping the future remains bright for the Future of the automobile.

  44. W L Simpson Says:

    All of which proves there is no such thing as 20/20 hindsight.

  45. D$ Says:

    Jim and John at the end remind me of the cars.com commercial with guy with the extra head http://www.cars.com/superbowl/

  46. Bob in Atlanta Says:

    EVERYBODY! Get used to this voting system – it is the way it works in Chicago.

  47. Bob in Atlanta Says:

    We all know that Dan Akerson and Ed Whitacre saved GM. Right Peter?

  48. Chuck Grenci Says:

    Again, I’ve got to say (that perhaps) the question of the poll is flawed; GM did go bankrupt. Maybe not a classical bankruptcy (Chapter 11) but it did go bankrupt. Chrysler didn’t, but (and a very big but) maybe should have. Ford lucked out (and I admit timing is everything) and they missed the ‘big show’ by the skin of their teeth. Any claim Obama makes in fixing the economy, the auto industry, employment, etc., is a wash because he ‘put it on the card’ (doubling the National Debt) and letting the future have to deal with it. He ‘fixed it’ by doing what he wouldn’t allow the ‘industries’ to do; financed it.

  49. Jesse W. Henry Says:

    Just wanted to say loved the ending.

  50. gary susie Says:

    All i know is 300 workers at Belverdire IL plant under Bush,4200 under THE President Obama. No one was loaning money back than it had to be done this way.

  51. gary susie Says:

    All i know is 300 workers at Belverdire IL plant under Bush,4200 under THE President Obama. No one was loaning money back than it had to be done this way.

  52. Keith McLean Says:

    I tried to vote on saturday and could not. My vote would be Romney. His method or should I say the legal way would not have left investors afraid to invest and the Government would not be on the hook for all the money it is going to lose.

  53. HtG Says:

    Plenty of seats over at Plato’s Playhouse.

    I wonder what the ColoKid is thinking

  54. pedro fernandez Says:

    HtG any connection to Plato’s Retreat?

  55. pedro fernandez Says:

    In a Reuter’s article, they claim that Ford is handling the European crisis a lot better and quickly than GM is, once again the brainless twits that mismanage that company will cause them to go broke in Europe, let’s see who is gonna bail them out this time.

  56. cwolf Says:

    #54 Both Ford and GM claim a return to profitablity by mid-century. Because there are great differences in size and partnerships, what is good for one may not be good for the other. I’m sure GM accepts the reality and the losses it has endured in the European market; GM may believe it will be more profitable to turn the Euro situation around, than to exit the E/U market all together. There was talk of Chry/Fiat ending the Lancia brand, but instead chose to keep the brand with US built cars in the line-up. It must be more complicated than we realize for two big car companys to take big risks just to keep a toe-hold in the E/U market. Once you give something up, it’s more difficult to get it back!

  57. Lex Says:

    Great Show!
    Poll link does not work.
    Finally got my power back from hurricane Sandy.
    I hope my fellow New York, New Jersey and Connecticut residents are safe and warm.
    Gas lines are getting longer and unsafe.
    Surprise ending was great!

  58. Bradley Says:

    Subaru tried the FWD option in the early 90s, it didn’t work well. Subaru holds a lot patents for CVTs, and I think Nissan’s CVTs use some.

  59. HtG Says:

    Hurray for Lex! Are you north of White Plains? Check out this link to current outages in the ConEd system.

    http://apps.coned.com/stormcenter_external/default.html

    LoHud.com also has maps, along with storm coverage. If you’re a Cablevision subscriber, you can watch them online after entering your customer ID number found on your bill.

  60. pedro fernandez Says:

    How is H/K like most politicians? They promise more than they can deliver.