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Episode 1017 – JLR Goes 50:50 With Chery, VW Helps SEAT, Subaru’s Stock Way Up

November 19th, 2012 at 11:26am

Runtime: 7:52

A partnership with Chery will help Jaguar Land Rover cut vehicle costs in China. Spanish carmaker SEAT is struggling to sell cars in China, so its parent company is stepping in to help. Honda and Nissan have cut profit forecasts due to protests over disputed territory, but one Japanese automaker is actually increasing theirs. All that and more, plus we take a look at Volkswagen’s all-new 2013 Jetta Hybrid.

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Hello and welcome to a brand new week of Autoline Daily. Later on in the show we’ll share the results of our latest poll, but first let’s get to the news.

JLR, WITH A CHERY ON TOP
China is now the largest market for Jaguar and Land Rover, so its parent company Tata is willing to spend $1.7 billion to build a plant in China. Remember, if cars are imported to China they get hit with 25 percent tariffs, so this will help JLR cut its prices significantly. Of course, foreign automakers are only allowed to build plants if they are partnered with another Chinese company, so JLR is going in 50:50 with Chery. The new facility will include an assembly plant, engine plant and R&D facility. Both companies will also collaborate on developing a new brand. Here’s my Autoline Insight. China keeps insisting on foreign companies developing new brands in China, because it wants to develop its own chief engineers. While China probably has more engineers than any other country, they still do not have the capability of developing a world class cars from scratch. They either have to copy or modify existing designs. China figures that by forcing foreign automakers to work with Chinese engineers in developing new brands, it will finally reach the day when it doesn’t need the foreigners at all.

VW HELPS SEAT IN CHINA
Like most European automakers, Spanish carmaker SEAT is struggling. But it’s even having trouble selling cars in China. So its parent company VW is pitching in. SEAT will start selling its compact car, the Leon, at Volkswagen dealerships in China, in addition to its own dealers there. According to Gasgoo, the Leon debuted in China in March with a price tag between $38,000 and $47,000. But sales were so bad the company lowered the price by over $13,000 last month.

SUBARU BENEFITS FROM NO PLANT IN CHINA
And speaking of China, we’ve been following how sales for Japanese automakers in the country have tumbled due to protests over disputed territory. But one Japanese automaker is actually benefiting from the disagreement. Subaru’s stock jumped 83 percent this year, mainly because the company doesn’t have a plant in China. Subaru boosted this year’s profit forecast by 40 percent while Honda and Nissan have cut theirs. But while this is a good short-term gain, analysts say the company will need to boost its presence in China in the long-term.

HONDA CR-Z GETS MORE POWER
The 2013 Honda CR-Z will go on sale in 2 days and gets a few new upgrades, including a higher voltage lithium-ion battery pack that increases horsepower and torque while improving fuel economy by 1 mpg. It comes standard with a six-speed manual transmission, the only hybrid in the US to do so, and a CVT is also available. Styling upgrades include revised interior trim along with a new front fascia, a new finish for the 16-inch alloy wheels, an aerodynamically functional new rear diffuser and two new exterior colors. MSRP for the CR-Z starts just shy of $20,000.

YOU’RE NEVER TOO OLD
Well, well, well. Up to now the Autoline Daily polls have been narrowly decided. Not on today’s. We pointed out that Ferdinand Piech is probably going to be the chairman of the board of Volkswagen until he is 82 years old, so we asked you, “How old is too old to run a car company?” 11 percent of you said anyone over 65 is too old. 10 percent of you said anyone over 70 is too old and another 11 percent said anyone over 75. But 68 percent of your said no one is ever too old to run a car company. I want to thank everyone who voted, and now you can get back to your rocking chairs and games of checkers.

2013 VW JETTA HYBRID
(2013 Jetta Hybrid can only be viewed in the video version of today’s show)

It’ll be fascinating to see how the hybrid version of the Jetta sells against the turbo diesel. It could tell us a lot as to how hybrids and diesels compete directly against each other.

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

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

31 Comments to “Episode 1017 – JLR Goes 50:50 With Chery, VW Helps SEAT, Subaru’s Stock Way Up”

  1. Rumblestrip Says:

    Nice job by Sean for his first stand up review.

  2. Phlip Says:

    I would like to know if the 2013 VW Jetta Sportwagen will also be offered as a hybrid?

  3. Bradley Says:

    Contrasting the actual age of the respondents to the CEO age survey results would be interesting. i.e. Run a poll that simply gathers the age of the respondents.

  4. Tony Gray Says:

    Agree Rumblestrip. Not bad for a rookie. Not bad at all.

  5. ColoradoKid Says:

    Rather than go on myself about why LRJ hooking up with Chery is in fact a very bad idea ;

    http://www.chicagotribune.com/classified/automotive/sns-rt-us-china-autos-winnerslosersbre8ah0ik-20121118,0,4790522.story

    What is wrong with the Auto Industry today ? Don’t they know two wrongs don’t make a right and most certainly Two Losers will not make for one Winner ?

  6. ColoradoKid Says:

    BTW – One tiny hint to Sean or whoever writes the text for the site for future reference .

    It is LRJ , not JLR ;-)

  7. HtG Says:

    Give Sean a poncho, a a cowboy hat, and half a cigar, and I think we got ourselves a Sergio Leone movie. Nice job kid, we’re gonna make you a star.

  8. Jonathan Says:

    Good to see Sean do such a wonderful report on the VW hybrid.

    Thanks for your fine efforts!

    JB

  9. ColoradoKid Says:

    No commentary on the return of F1 to the US ? Thats a bit disappointing . Though not directly related to the Automotive Industry the indirect relationships are many and do have an impact on things .

    So here’s my take on the Austin F1 race ;

    First off the track is by far the best thing Tilke has ever designed . Ordinarily I’d say thats not much of a compliment but in this case the man actually did one right for a change . The track preparation on the other hand was a bit wanting . More could of and should of been done before hand to assure reasonable traction from the get go for the tracks grand debut

    Second ; The racing was quite good , despite the very slippery track .

    Third ; The crowds were decent . Not a sell out by a long shot but a good beginning . Albeit before calling the race a success I think it’d be best to see how the race is fairing five years from now .

    Fourth ; And the one major disappointment . The Architecture of the facilities . Honestly from the Country that’s brought about the likes of Frank Lloyd Wright / Frank Gehry and the best the Circuit of the America’s track owners can come up with is : ” Welcome to our Industrial Park with grandstands and a Bungee Jumping tower in the middle ? ” I wasn’t expecting or hoping for Abu Dhabi but the Austin tracks architecture for a World Class hosting venue is more than just a bit – embarrassing if you ask me

  10. Anthony Says:

    @ColoradoKid – Pfff, I haven’t watched the race yet its not that important (1). (2) the market for F1 is about the same size for ALMS and Indy Car its not that big. You say a beginning? I say this is what your going to get (50,60,70K per event) so you better be happy with it.

    You were also expecting imagination from Texas?

    It is not New York or Los Angeles, that is very unrealistic. You let me know when the middle of the country is leading popular culture trends, it hasn’t and never will.

  11. HtG Says:

    F1

    I thought that was a terrific race. The track is exciting for the drivers and encourages many types of overtaking. Maybe Pirelli could have selected a different tire for this green and oily track. I wonder how many foreign fans attended, especially from south of the border.
    The race could have been much worse if Vettel had been able to drive away, but in the end Kathikayan said that Charlie Whiting had said not to make way for faster cars in the high speed turn section.

    Predictions for Brazil? Rrrrememberrr, Alonso says, Ferrrarrrrri have dee bess team.

  12. HtG Says:

    La Revue, architectural

    Maybe that big spike is supposed to be visible from mile away, and reference the bollards in the apexes of some turns. Otherwise, I got nothin’.

  13. shan Says:

    We looked at a few 2012/2013 VW Jetta’s and Passat’s and they looked underwhelming. The quality of the interiors have been lessened and compared to the Toyota Camry or Honda Accord or the new 2013 Civic…it’s no competition.

  14. Kit Gerhart Says:

    The Jetta hybrid is quicker than a Prius, but with the DSG and turbo GDI engine, it is much more complex. Also, the Jetta is not nearly as useful as a Prius, since it’s not a liftback. It would be a huge improvement if they’d offer the wagon version, or a Golf hybrid, but I haven’t read of any such plans.

    Also, how about a TDI hybrid? Yeah, it would cost a little more, but should get really exceptional mpg.

  15. Jon M Says:

    @ #6

    The corporate name is Jaguar Land Rover PLC, so how do you come up with LRJ?

  16. Kit Gerhart Says:

    All indications are that COTA is a great circuit, but with underwhelming amenities. This is Texas, after all, so having the track itself be world class is a good start.

    To me, next year’s F1 season is going to be very interesting, with Hamilton going from one of the best cars, except when they break, to a team that is, at best, mid-pack. Teams fortunes change, though, so with a great driver like Hamilton, Mercedes’ fortunes could certainly turn around next year.

    Speaking of “how old is too old,” and F1, has Schumacher’s return to F1 been not-so-good because of the cars, or because Michael is too old?

  17. ColoradoKid Says:

    Correction ;

    At myself embarrassingly . I’ve just been admonished by a UK mate that it is in fact JLR . Apologies

    #10 I’m afraid you’re wrong as SpeedTV’s statistics disagree . The fact is F1 is the most watched auto racing series broadcast in the US after NASCAR ( who’s numbers are waning rapidly BTW ) which is why everyone was vying for the rights and NBCSports finally got them for 2013 – and at a fair expense I might add in order to wrest the series away from Speed . BTW until you’ve spent some time down Austin way I wouldn’t go making such rash statements as you’ve done in your post . Nor would I be quite so critical of the US’s middle . NYC and LA haven’t been the center of the US cultural universe for years now .

    #11 Brazil – Vetel . Winner and champion . So Long S’Lonso The Prancing Horse coming up a bit lame of late if you get my drift . ;-)

  18. Kit Gerhart Says:

    Alonso’s best chance for winning the Championship would be if Vettel gets one of those bad alternators in Brazil.

  19. pedro fernandez Says:

    With VW’s continuing low reliability ratings, I would be very nervous about buying a VW hybrid at all, it is not any better than Prius, which has more than proven itself, not a smart purchase, IMHO.

  20. Chuck Grenci Says:

    I think ‘Austin’ went off with barely a hitch, the racing good, the speed fast, from what I heard the drivers liked the new course. Slippery conditions; well, what the heck, it’s a race and the drivers job is to find a way around the track (and the engineers a way to find grip). There was passing, racing, and I’ll go on a limb (not really a stretch) and say job well done.

    Nice job Sean (and good luck in your future endeavors).

  21. ColoradoKid Says:

    #16

    Both . Schumi’s a bit past it and the car was less than good this year . What is interesting is that M-B all but suspended development on the 2012 car once it became obvious the car was uncompetitive and have focused all their efforts on the 2013 car . So you bet Hamilton’s move and the 2012 season will be interesting

  22. ColoradoKid Says:

    Correction on # 21 Should be 2013 at the end !!! Sorry ! Just call me goofy today !

  23. HtG Says:

    El matadoro thinks the RrrredBulls will have the advantage on a dry track in Brrrazeeel.

  24. HtG Says:

    21,22 have you considered the altitude, my boy?

  25. HtG Says:

    Am I too cynical if I suspect the FIA allowed Ferrari to break the seal on Massa’s gearbox in order to help Alonso and thus promote the sport in the US? Did Ferrari also have to actually change the box? Everyone knows what FIA stands for, right?

  26. Lex Says:

    Great Job Sean McElroy!

    Congratulations to Brad Keselowski, Roger Penske and the whole team on their Sprint Car Cup Championship!

    VW has the right idea use standard high volumne models and incorporate hybrid technology in an effort to keep these vehicles affordability and economically attractive to consumers.

  27. Kit Gerhart Says:

    I suspect the FIA people knew exactly what Ferrari was doing, and why, which is to increase the chances of Alonso winning the championship. From what I’ve read on a couple sites, they didn’t actually change the gearbox, or even disassemble it at all. They just broke the seal of whatever type they use to determine if a gearbox has been tampered with.

  28. Kit Gerhart Says:

    #26,
    I agree on the idea of using high volume models for VW hybrids, except for one thing. People who want exceptionally high fuel efficiency want utilitarian vehicles. Consider: By far, the best selling hybrid in the U.S., and in the world, is the Prius, a hatchback. Of the VW’s offering the TDI engine, Golf and Jetta wagon have a higher percentage TDI than the Jetta sedan, and the last I knew, by a wide margin.

    That would indicate that VW should be offering a hybrid Golf or Jetta wagon as a hybrid, rather than the sedan, unless they want to do all three.

  29. Dave Foley Says:

    Great job Sean! Good positive energy, and decent delivery too. You have promise in this business!

    Keep it up!

  30. Ukendoit Says:

    I was also impressed with Sean’s reporting. He seems to have the same inflections & mannerisms that make John such a joy to watch.

  31. Fritz Kocher Says:

    I would buy a Jetta hybrid. By the way, great job Sean! Nice to see a family (of car enthusiats) carry on!

    Fritz