Episode 1005 – Could GM Break Even in EU? Escalade Loses Bling, All-New 2014 Forester

November 1st, 2012 at 11:46am

Runtime: 7:36

General Motors expects to break even in Europe by 2015, despite loosing half a billion dollars in the third-quarter. The new Escalade is still a year away from showrooms, but Cadillac has already cut out some amenities. Subaru reveals the all-new 2014 Forester. All that and more, plus a look at pedestrian protection technology from Continental.

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I’m back…Yes it is I, Jim Hall of 2953 Analytics here again to host another episode of Autoline Daily, this time for the first day in November. It’s hard to believe its only three more weeks before it’s Turkey Day – my absolute favorite self-basting holiday! Just thinking about that is making me hungry. But enough talking about Franklin Cider Mill cider-brined Amish turkey with Andouille cornbread dressing, let’s get started. Shall we…

Despite losing nearly half a billion dollars in Europe in third-quarter this year and over 17 billion dollars in the region since 1999, Bloomberg reports that General Motors says it will break even in Europe by the middle of the decade. Yes this decade. The company has cut 2,600 jobs this year through buyouts and early retirements and by 2016 it will have 23 new models in Europe. But the company still has way too much capacity in Europe. Does this mean GM expects big savings with its alliance with Peugeot?

Car sales in China for Japanese automakers are still tumbling because of protests over an island dispute with Japan. According to Reuters, Toyota’s sales fell 44 percent in October, compared to a year ago, to just over 45,000 units. For the year, the company’s sales are down 1 percent in China. And Gasgoo reports that Infiniti will temporarily halt exports to China until next January because dealers don’t need the inventory due to falling sales.

Sales of the Cadillac Escalade really took off about a decade ago when the vehicle started showing up in rap videos. The more the hip-hop crowd got into it, the brighter the bling, the bigger the dubs, the better the ‘Slade sold. But Mark Reuss the head of GM’s North American operations, says the next generation Escalade is going to be a lot less ostentatious. He says it’s going to be very understated, even elegant. Dave Leone, the head of Cadillac engineering, says they’re using just about every trick in the book to boost the fuel economy. The new Escalade is still a year away before it shows up in the showrooms, but it looks like this is the beginning of the end of the big bling craze that started just over a decade ago.

Mercedes-Benz really wants to hold their U.S. sales lead, about 5200 units, over BMW. Weak demand in Europe and China has put more pressure on Mercedes to keep holding the luxury lead in the U.S. Now they have announced discounts of as much as 5 thousand dollars to “VIP customers.” This is in addition to dealers being instructed to include cash offers and special lease deals on some 2012 models, as well as allowing some buyers to skip as many as 5 payments.

The Forester has been one of Subaru’s best-selling models over the last 15 years. Today Subaru gave us a look at the all-new 2014 Forester. Powering the car will be a 2.5 liter BOXER engine, or a new turbocharged 2.0 liter direct-injection BOXER engine that is capable of producing 250 horse-power. Either engine can be mated to a new six-speed manual transmission or a CVT. Oh yeah, I need to mention that the forced-fed 2.0 liter is based on the flat four introduced in the Subie BRZ and Scion FR-S – but I digress. The all-new Forester will also feature increased rear seat legroom and an enlarged cargo area. We will get a better look at the Forester later this month when it debuts at the LA Auto Show.

And speaking of product, the Dodge Dart will be E85 capable next year. WardsAuto reports that the company is currently upgrading its 2.0L Tigershark engine to run on the fuel. The only other vehicles in its class that can run on E85 is the Ford Focus and Buick Verano.

Coming up next, a look at pedestrian protection technology from German supplier Continental.

German supplier Continental has made it a goal to virtually eliminate traffic accidents and fatalities by developing technology to help cars avoid accidents. Pedestrian protection is part of that goal and recently we were able to experience several of the company’s systems that it is working on.

(Today’s look at Continental technology is only available in the video version of the show)

Before I bid farewell, I need to remind you that there will be no Autoline After Hours tonight. But don’t worry, the AAH crew will be back next week for an all-new show with Sandy Munro. He will give us the inside scoop on the REAL cost of building electric cars. You won’t want to miss that one.

And with that I’m afraid we’ve come to the end of the show. Again, I’m Jim Hall from 2953 Analytics. Thanks for watching and I will see you next time… whenever that may be.

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

49 Comments to “Episode 1005 – Could GM Break Even in EU? Escalade Loses Bling, All-New 2014 Forester”

  1. Kit Gerhart Says:

    If Mercedes really wants to be number one, maybe they should back off their obsession with “snootiness,” and offer us some more cars, the ones that sell so well in the rest of the world. For a start, the C-Class wagon with a 4 cylinder diesel, and 4 cyl diesel versions of the C-Class sedan. Then, how about a non-AWD E-Class wagon?

    Maybe Benz could bring about a resurgence in popularity of wagons. OK, I’m probably just dreaming, but it wouldn’t cost them that much to try.

  2. gmveteran Says:

    Cadillac used to have the best-selling large luxury SUV in the States with the Escalade. Its interesting to note that the Infiniti QX56 now outsells the Escalade. Infiniti? Yep. And based on the Nissan Titan platform and the Nissan Armada SUV, both of which are among the most dated currently on sale? Yep. I think less bling is a very good idea. Marketing a tasteful luxury SUV that mainstream wealthy Americans are not embarrassed to be seen driving will really help Slade sales.

  3. Kit Gerhart Says:

    Hopefully, the bling fad that sold Escalades to rappers and NFL stars will fade, and maybe the popularity of huge wheels with rubber band tires, also a “bling” thing, will also fade.

    The use of larger wheels and lower profile tires “to improve transient response” dates back to when people were going from 13 to 14 inch wheels. This thing with 19 and 20 inch wheels only increases road noise, worsens ride, and makes wheels and tires more vulnerable to damage from pot holes.

  4. Kit Gerhart Says:

    That Titan platform is not only dated, but has been about the least reliable of anything Nissan sells in the U.S.

  5. pedro fernandez Says:

    The de-blinging of the ‘Slade will be the best theft deterrent thing they could have done to it. Had a client last month whose ‘Slade had it wheels stolen the same night she brought it home.

  6. G.A.Branigan Says:

    ” Rubber bands on wheels”….they just plain suck.Not to mention the replacement tires are god awful expensive.I personally like the 17′s.Excellent selections of replacement tires and the prices aren’t too awful bad,and the ride is much better.My Equinox LTZ came with 19′s.I don’t like them but I’ll only have this vehicle until a small diesel 4×4 becomes available.Hopefully a 2 door wrangler jk.

  7. pedro fernandez Says:

    Kit I think MB has gone too far into the “snoot” zone to ever come out of there and offend those who buy them cause “regular folks can’t and I wanna show the world I’m better off than others” But as you said, in other countries those same E and C class drive around with no fancy interiors and are a lot more like everyday cars.

  8. Hylton Jorssen Says:

    Thank God GM has decided to remove the gaudiness from the Escalade. This will do wonders in improving the Caddy brand image not only at home but abroad as well.

  9. Bradley Says:

    If I understood Continental correctly, by default their pedestrian detection technology will still allow you to hit Vampires, Zombies and other cold-blooded lurkers of the night.

  10. pedro fernandez Says:

    What if someone is trying to carjack you and you want to plow them over, these cars won’t let you? Important safety issue to remember.

  11. aliisdad Says:

    Kit, I agree with you about wishing for a Mercedes diesel wagon…Just make it AWD for me, though…They make ‘em and sell’em in other markets, so it seems like a possibility worth hoping for..
    As the owner of two Mercedes cars, I can say that the build quality and customer service is far beyond any other brand I have owned…Also, the “snoot” factor has gone down a lot in recent years since a person can get an entry
    C-Class for around $40K…There are a lot of common sedans that when well equipped run up to that or more…I am actually amazed when I see how much people will pay for Toyotas, Fords, etc. with many options…They are great cars, but my point is that many people can as well have a ‘Benz…The downside of Mercedes cars, and other similar cars, is that they depreciate pretty fast and service can get pretty expensive (…and I really don’t understand why) ..I could care less about the “star” one the front, but I really beleive they are the best cars available…
    I do lust for a C-class diesel AWD wagon, though…I do love the Subaru Forester wagon, and have often wished they would import their diesel models, as well…Anyway, just one man’s opinion..

  12. aliisdad Says:

    Oh, I forgot to mention the Chevy Cruze wagon…Has anyone heard any more about their coming out with a Cruze diesel wagon?? I think it was announced a while back…While past experience makes me worry about GM quality, it sounds like it might be a pretty cool wagon, especially if it actually includes a diesel…Like John and Peter have said a few times before, a lot of us still like “sporty” wagons…although no one else seems to buy them, except maybe for Subarus..

  13. Kit Gerhart Says:

    I’ve had a lot of wagons over the years, and still like them. I guess I’m one of few in the U.S., though. Even Volvo quit selling them, only selling “crossovers” in the U.S.

    I mostly want easy-to-access floor length, and my last two “primary” cars have been a Malibu Maxx and a Prius, hatchbacks with about 5.5 foot floors with the back seat down.

  14. C-tech Says:

    @#10 Pedro, I think you miss the point of pedestrian protection. If someone is coming to your door, your drive away. If someone darts out in front of your car (possibly walking and texting) then it gives them a chance to survive.

    It will be interesting to see if Mercedes and BMW can keep their luxury image intact while going all-out for sales.

    I suspect the “bling” treatments will move from GM design back the dealer accessory dept. for the Escalade where it started.

  15. C-tech Says:

    You are not alone Kit, I liked the Malibu Maxx, and the Magnum. Those old Mercedes E-Class wagons are great.

  16. Kit Gerhart Says:

    I probably would have bought a Magnum if I had worked a few years longer. I like that car. When working, I had more money coming in and drove less, so I was less of an MPG fanatic than now.

  17. Kit Gerhart Says:

    I like the E wagon, both older ones and the current one, except for the price. Also, they sell it in the U.S. with only one power train choice, with mandatory AWD, which most people, including myself, don’t need.

  18. pedro fernandez Says:

    C-Tech I guess you’re right, if someone steps in front of you and asks you to stop, unless they have a gun or a knife, you’re not gonna plow them over, could be just asking for help. Been watching too many movies.

  19. ColoradoKid Says:

    If Mercedes truly wants to remain #1 what they really need to do is to keep on doing what it is M-B does best as well as never pander to the lowest common denominator customer / attempt to build or sell Econo Boxes : along with dropping the idea of selling re-badged Nissan’s as inexpensive Benz’s . Mercedes is about luxury and a certain element of exclusiveness and not about trying to be another Honda/Toyota/Chevy/Ford/Subaru etc . The ‘ snootiness ‘ factor is simply an aspect of M-B ownership you either accept or learn to deal with in your own way . Or , you buy something else .

  20. C-Tech Says:

    Perhaps it is me, but I have not felt a “snootiness” factor at the BMW, Mercedes, or Lexus dealers I vist here in central Florida. They have each been helpful, have there own style, and are top notch in customer service and amenaties. If anything, this factor becomes an issue with customers. Some luxury car owners are real XXXholes.

  21. Kit Gerhart Says:

    MB makes all kinds of cars, including front drivers that compete only about a half notch above similar size VW’s in the European market. MBUSA just wants to maintain their “snob appeal” in the U.S. and Canada, and not sell the more mainstream stuff here, or even less expensive versions of the cars they do sell.

    Yeah, I buy something else, though I might splurge one time, and buy a manual transmission C220D wagon, like the rental I drove in Europe a few years ago, if they’d sell it here.

  22. Kit Gerhart Says:

    My experience with going to the Melbourne, FL Benz/Audi/Porsche dealer has been interesting. I’ve been there a few times, just to look around, and I’ve found that if I drive up in my MINI, sales people want to talk to me, even though I tell them up front that I am just looking, and not buying.

    On the other hand, if I drive up in my Prius, they ignore me. These people may be making bad assumptions about Prius drivers, because of the 5 or 6 Prius drivers I know, one has a Boxster, and one has two Ferraris. Prius drivers, at least some of them, also have other cars that are vastly different from a Prius.

  23. Kit Gerhart Says:

    22, I’ll add another one. A guy in my condo, who I don’t know very well, has a Prius and a Benz SLK. It’s a first generation SLK, not a new, high dollar Benz, but he might be in the market for a new one some day.

  24. shan Says:

    It was always a great mystery to me when I pulled in a gas station and seen young African-American families driving a spanking new Cadillac Escalade.

  25. pedro fernandez Says:

    I don’t think the MB dealers are the snooty ones, it is the company itself, I once met an MB dealer manager who was well aware that I could not buy one of those cars, yet gave a nice tour of the facility and showed me the new G class when it had just come out as well as an AMG 12 cyl beauty of a coupe. Yet we were treated like scumwhen we went to a Chevy dealer to price an Equinox.

  26. cwolf Says:

    Some speculated Mark fields was being groomed to take the Ford throne, but Bloomburg just said Mulally will remain until the end of 2014 and an open-ended invite to stay longer.

  27. cwolf Says:

    I’ve always liked the Forester for its wagon-ish looks and size, but it sounds like it too may become larger as it ages. This is one of those vehicles which should’nt become bigger to be lauded better.

  28. Kit Gerhart Says:

    Yeah, it’s MBUSA that, presumably decides what to import, and they don’t want my business, even though I would consider some of what they sell in the rest of the world.

  29. pedro fernandez Says:

    cwolf, you know quite well that in this industry, bigger is always believed to be better and that is so often not the case, I can think of a bunch of cars that did not get better when they got bigger, yes even Toyotas and Hondas.

  30. pedro fernandez Says:

    cwolf if Mullaly quits now it will be job not done, when you consider how Ford’s quality has dropped recently, and it’s not just the My Ford problems it is other issues as well, Fiesta, Focus, Explorer, I wonder what will happen with the Fusion, if they screw that up as well, it will leave a black eye on him unless he can get it fixed. It seems first year’s blues are alive and well.

  31. Bill Schultz Says:

    Was that a big crack in the windshield on the Continental segment. They must have hit that dummy pedestrian a few times perfecting the system!

  32. cwolf Says:

    Good point, pedro. Mulally’s job is not complete. He does need to correct the “touch system” before it further discourages future buyers, including Ford’s faithful following. It will be interesting to see what is done to small car tranny quirks because, I believe, the wrong fix could negatively impact mileage claims which are so precious to meet future standards. Of the many and on-going critisisms of the Ford brand, I want to believe Mulally won’t turn a blind eye before addressing them befor he departs.

  33. cwolf Says:

    Pedro: I read in the Detroit Free Press an article about Toyota sued/fined for price fixing a component I cannot recall. I am wondering if it is a Toyo owned supplier caught fixing prices sold to other manufactures. Do you know anything about this?

  34. Rafi Jaan Says:

    @ #2 and #4: Actually, the current QX is based on an all-new platform that it shares with the Nissan Patrol. However, it’s surprising to me to hear that the QX outsells the Escalade.

    Finally, it’s still a sad fact that people buy these HUGE, gas-guzzling SUVs in very large numbers. No one needs a 3 ton vehicle to drive from one stop light to the next. Smaller vehicles are not only more efficient and fun-to-drive, but they’re also very safe and just as roomy.

  35. pedro fernandez Says:

    No. Sir, unlike Hyundai Smoke who was an “insider” whatever that means, I am an outsider, I’m just a guy who has had good luck with the brand and so have families and friends who have also bought them and are happy with the product, but nothing surprises me about any company, none of them are holier than thou! I do recall seeing a news item a couple of years ago on how they were taking cheap Chinese parts and putting them in boxes that were labeled “made in Japan”

  36. ckernzie Says:

    The new Forester looks great and less of a chick car, not sure how that’ll translate sales wise.

    #34 Rafi, you may not need a full-size SUV but many people who own them DO need them. Large familes, trailers to tow, businesses to run etc. I realize things are different in the States (I’m Canadian) but I honestly don’t know anybody who owns a full-size SUV that could downsize to a car.

  37. 97 Sentra Says:

    #31: I am glad someone else saw the crack in the windshield…..

  38. cwolf Says:

    perdro, I was’nt trying to rub your nose in this, by any means, just because you are fond of Toyota. I just thought word of this may have caught your attention. I’m curious as to what happened.

  39. Kit Gerhart Says:

    34, 36,
    I know a number of people who have large SUV’s and only about 1/4 of them have any reason whatsoever to have them. The other 3/4 never tow, and never carry more than 4 people, and rarely carry more than two people. I guess a lot of people just want to say “screw the world” and buy these things, “because the can.”

    Yes, I realize that there are a certain number of people who have reason to drive large SUV’s and pickup trucks.

  40. HtG Says:

    Power’s back. Ssup?

    19 ;)

  41. pedro fernandez Says:

    From the “DUH” files EPA claims H/K exaggerated mileage numbers for three of their latest vehicles in the past 3 yrs, I thought the window stickers were EPA numbers!!! this is BS, so any manufacturer could just make up whatever numbers they have and if it had not been for consumer complaints, nothing would have been done, great going there EPA!

  42. pedro fernandez Says:

    HtG happy for you. any damage to your place?

  43. HtG Says:

    Minimal damage, Pedro. A branch went through a window and a strip of siding was torn loose. Power was lost at about 8pm. We’re lucky that the main drag mostly has power. I’ll tell you though, when the lights come back on, one’s elation is powerful. Still no cable TV, a catastrophe.

  44. Kit Gerhart Says:

    Welcome back, and I hope things aren’t too bad for you up there. The flooding I see on tv looks awful, both in the beach areas and in the city. We were very lucky here in Florida with the storm path.

  45. HtG Says:

    Thanks, Kit. We followed the storm on radio, necessarily. During the storm it was indeed nauseating as the wind made the ‘freight train’ noises. Communities around us got it real bad, with near 100% blackouts continuing.

    I’ll have a short street report for you guys later today.

  46. Kit Gerhart Says:

    The cars are tested using a procedure defined by the EPA, but the manufacturers do their own testing. The EPA randomly re-tests some of the cars.

    From fueleconomy.gov:
    “Fuel economy is measured under controlled conditions in a laboratory using a standardized test procedure specified by federal law. Manufacturers test their own vehicles—usually pre-production prototypes—and report the results to EPA. EPA reviews the results and confirms about 10-15 percent of them through their own tests at the National Vehicles and Fuel Emissions Laboratory.”

    It always seemed odd to me that the EPA didn’t test all of the cars. Also, it would seem that manufacturers could test, or provide the EPA with either a “good” sample, or a specially tuned sample.

  47. C-Tech Says:

    Here lies the dilemma of defining what is over/under regulating by the government. To avoid the problem which has come up with Hyundai the EPA would have to have more stringent testing, costing manufacturers more, which cost would be passed to consumers. Do you give the manufacturers the guidelines, allow them to integrate the tests into their normal procedures, thus saving money, but relying on their integrity?

    Glad you are ok HtG!

  48. Philip Says:

    Why are auto makers still using CVT transmissions? They have never been popular with the public, and every car review I have read has given them a big ‘Thumbs Down.’

    They has some usefulness in the days before there were 6, 7, or 8 speed automatics, but their day has gone by. WAKE UP SUBARU. CVT’s suck.

  49. Kit Gerhart Says:

    CVT’s are unpopular with people who don’t have them, and 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.