December 5th, 2012 at 12:01pm
Incentives for new cars keep going up but that isn’t lowering the price consumers are paying. Chris Grundler will replace Margo Oge, who retired in September from the EPA, as director of the Office of Transportation and Air Quality. Despite tumbling sales in Europe, global car sales keep going up. All that and more, plus John McElroy takes on your questions and comments in today’s edition of You Said It!
Thanks for joining us for another edition of Autoline Daily, let’s get right to the news.
NEW CAR PRICES UP DESPITE INCENTIVES
Incentives for new cars keep going up but it’s not lowering the price consumers are paying for a new car. According to research from TrueCar.com, the average transaction price for a new car in November was nearly $31,000 which is up $335 compared to last year. At the same time, the average incentive was $2,700, a four percent gain compared to last year. TrueCar says consumers are willing to pay for more features which is pushing the transaction price up. I say, all that new technology needed to meet CAFE standards is pushing them up even faster.
THE NUMBER OF THE BEAST
Despite tumbling sales in Europe, global car sales keep going up. According to WardsAuto, worldwide sales hit 6.66 million vehicles in October, a gain of nearly 6 percent compared to last year. Year over year sales were up in every region except for Europe. And it’s especially bad in France with sales dropping nearly 20 percent. Through October, global car sales are at 68.1 million units which is a gain of 5.6 percent compared to last year. That puts sales on track to hit 80 million for the full year.
COULD SUBARU PRODUCTION EXPAND?
Subaru’s sales have shot up 29 percent this year in the US market, and were up a whopping 60 percent in November. So now Subaru is looking at expanding its assembly plant in Lafayette, Indiana. Subaru joins Toyota, Honda, and Nissan in boosting US production to replace production in Japan which is getting hammered due the strength of the yen. Subaru’s Executive Vice President and COO, Tom Doll, who just was on Autoline’s live broadcast from LA last week, said they might bring further production to the U.S., probably for the Impreza and Forester.
EPA HIRES NEW REGULATOR
Margo Oge, who retired in September from the EPA will be replaced by Chris Grundler as director of the Office of Transportation and Air Quality (OTAQ). Both Grundler and Oge have been guests on Autoline over the years and represent public servants at their best. As director of the OTAQ, Grundler’s job is to reduce air pollution from motor vehicles, engines and the fuels used to operate them. He also establishes and implements national emission standards for vehicles, off-road equipment and transportation fuels. In fact, ocean going ships in national waters also come under his purview.
BUICK IS BACK WITH AN ENCORE
Yesterday we got our first test drive of the new Buick Encore. We’ll have more details about the vehicle in a future report, but here’s the highlights. This front-wheel-drive compact crossover was designed in Germany, is built in Korea, and will be sold around the world as the Chevrolet Trax, and Opel Mokka. As the Buick Encore it comes with a 1.4 liter turbo engine mated to a six speed automatic. Base price is $25,000 including destination. Fully loaded it’s almost $34,000. It feels a little bit underpowered, but feels tight as a drum, is quiet for a car in this class, and handles well. Buick is really benefiting from getting new products in its lineup, and the Encore will keep the momentum rolling.
Coming up next, it’s time for You Said It!.
Bradley says, “I am confused to how hurricane Sandy has such an immediate impact on the SAAR. I thought a car was considered ‘sold’ when it left the factory.” Bradley, you’re partially right. Automakers count a car as sold when it leaves the factory, but only for financial reasons. When we report sales that measures the retail customers or fleets that go to dealerships and buy them.
Lex wants to know, “Will we see a Grand C-Max in the U.S. market?” I don’t think so. Ford’s original plan was to bring the Grand C-Max to the US, but then changed its mind, and decided to only sell the smaller C-Max and only as a hybrid.
Mike says, “I wonder if changes in the fuel supply (i.e. the fracking of shale) is supposedly leading to oil self sufficiency within five years, and the massive availability of natural gas is on the verge of making EV’s passe?” Mike, that’s pretty much how I see it. I don’t think that EV’s will become passé, but this is going to limit how much they’ll grow in sales. Amazingly a barrel of oil in the United States is now about $22 cheaper than it is in the world market.
Kit Gerhart wants to know, “Who is going to make all these diesel cars to double their numbers in the next year and a half? VW is almost the ‘only game in town’ with diesel cars.” Kit, Audi just introduced three new diesel models at the LA auto show, Mazda displayed its new diesel engine there, the Chevy Cruz gets a diesel next year, and so does the Jeep Grand Cherokee. Meanwhile, VW, BMW and Mercedes keep selling more and more diesels all the time in the American market.
Blueovalblood is puzzled. “Why is Hyundai/Kia being fined for the mpg errors on their cars? Isn’t the E.P.A. responsible for testing and verifing those numbers? Shouldn’t they be the ones paying the fine?!” First, Hyundai and Kia have not yet been fined by the EPA. Second, all automakers have to submit their own fuel economy data and the EPA only does random testing of their cars, unless it suspects that something else is going on as it did with Hyundai and Kia
Hey, check out this picture. When I was at the LA auto show last week I stopped by Volkswagen to get a Coke and it turns out that the guy behind the bar is a huge Autoline fan. This is Eddie Martinez and as you can tell by the photo that dude is tall.
Thanks for all your letters and comments really get a kick out of trying to answer at least some of them. Before we go don’t forget to tune into Autoline After Hours this Thursday night starting at 6 PM Eastern time. Did you know that the automakers in Detroit went to one of the local universities and asked it to start a new automotive design school? Keith Nagara is the director of the new transportation design school at Lawrence Technological University. So join me and that Autoextremist, Peter De Lorenzo, for the best insider information in the automotive industry.
And that wraps up today’s report, please join us again right here tomorrow.