Episode 1043 – BYD to Build in California, Victory for Tesla, Faurecia for Sale?

January 7th, 2013 at 10:55am

Runtime: 8:01

Since 2006 the bus industry in the U.S. has grown between 5 and 10 percent a year, which could be why one Chinese automaker will open an electric bus factory in California. Some car dealer associations are suing Tesla because it’s selling cars in its own stores instead of going through the existing franchised dealer network. PSA, the parent company of Peugeot and Citroen, desperately needs cash and may sell its stake in parts maker Faurecia. All that and more, plus a look into the all-new 2013 Toyota RAV4.

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Welcome back as we kickstart a brand new work week. There’s already a lot going on today in the global automotive industry. Here’s the latest news.

Even though the United States has the highest density of cars per people in the world, more and more Americans are taking the bus. A new study from DePaul University says it’s the fastest growing form of intercity travel in the U.S. Last year scheduled departures were up 7.5 percent and since 2006 the industry has grown between 5 and 10 percent a year. Some of the advantages are that it’s cheaper than taking a train or plane and you don’t have to deal with security lines.

And this could be why Chinese automaker BYD will open an electric bus factory in California. According to Gasgoo, the company will produce 50 to 100 electric buses at the yet-to-be-named site by 2014 and boost that to 500 the following year.

And speaking of China and buses, in an effort to reduce traffic congestion, the government announced that it wants public transportation to account for 60 percent of vehicle use in urban areas. It did not say what the current number is or offer a timeframe for reaching the goal. At the end of 2011 there were over 62 million private cars on the road in China, by 2020 it’s estimated that number could be over 200 million.

Many car dealer associations are furious that Tesla is selling cars in its own stores instead of going through the existing franchised dealer network. And so they’re suing the electric car start-up. But Tesla just won a major victory in Massachusetts where a lawsuit against the company was thrown out. The Massachusetts Car Dealer Association says its going to appeal, but here’s my Autoline Insight. State franchise laws prevent automakers from opening their own company stores and going into competition with their own dealers. But if a car company, like Tesla, is a start-up and never had any other stores, then I believe the courts will allow it to introduce its own retail network. In a way, what Tesla is doing is very similar to Apple opening its own retail outlets. Nonetheless, Tesla is going to face an awful lot of lawsuits over this. It wouldn’t surprise me if it has to fight its way through all 50 of the states in the United States of America.

Recently we showed you a new type of seat developed by Faurecia that is lighter and more comfortable and could show up later in the decade. Now we’re getting word via Bloomberg that Faurecia may be up for sale. You see, Faurecia is owned by PSA, the parent company of Peugeot and Citroen, and PSA desperately needs cash. Faurecia does over $20 billion in sales every year and posts an operating profit of around $750 million. That would suggest to me that PSA could raise about $5 billion by selling Faurecia.

A new world record for the largest simultaneous burnouts was set down under at Australia’s Summernats Car Festival. The previous Guinness Book record was raised from 49 cars to 69. The record breaking attempt saw 30 of those participants blowing out tires in the 30 seconds needed to set the record.

(RAV4 can only be viewed in the video version of today’s show.)

Toyota really needs to get sales going with the new RAV-4. Last year the Honda CR-V topped the list in the segment, followed by the Ford Escape and Chevrolet Equinox. The RAV is in fourth place and quite a ways behind the other three.

And that wraps up today’s report. Thanks for watching, and we’ll see you right back here again tomorrow.

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47 Comments to “Episode 1043 – BYD to Build in California, Victory for Tesla, Faurecia for Sale?”

  1. G.A.Branigan Says:

    Tesla is selling their own cars? So what is the sales figures….one or two? Even if it turns out that Tesla is in the clear for selling it’s own vehicles,if I were a dealer for them,I would be extremely pissed off,and rightly so.It just ain’t right irregardless of the legalities.

  2. pedro fernandez Says:

    Chinese buses, what’s next? Chinese Jets, Chinese tanks, Chinese space ships, wake up America!

  3. pedro fernandez Says:

    Tesla salesmen would be even lonelier than the Maytag repairman.

  4. gmveteran Says:

    Hey G. A. – Tesla doesn’t have ANY dealers and never has. That is the whole point. They don’t have any dealers to get pissed off. Just dealers of competing brands.

    And, Congratulation to Toyota for showcasing the powered liftgate as if it were a revolutionary new technology. GM has offered this “teachable” liftgate on their Equinox, Terrain and SRX for about three years now. Welcome to the party. No wonder they are in fourth place of the segment they helped to found.

  5. G.A.Branigan Says:

    Gotcha….hey I’m only on my second cup of coffee ;}>

  6. HtG Says:


    I’ve taken it between NYC and DC a few times. Nice customers, one time I sat next to a Delta pilot and he told me about his 58 Corvette. The drivers know the alternate routes to get around jams, and you go point to point from Penn station to the garage at Union Station. One downside is that if you’re a tall person, you’ll be cramped. The other is that it only takes me 4 hours door to door if I drive, but forget about it if you ride the bus; you can add 2or3 hours.

  7. Chuck @ GM Says:

    @6 The last bus ride I was on, the seats were sized for Oompa Loompas. It made coach on an airplane seem like first class. I was miserable the whole 16 hours.

  8. Kit Gerhart Says:

    A college friend goes from DC to NYC a few tims a year, and sometimes takes the bus. He likes the train better, because it is quicker, but I guess the bus is a lot cheaper.

  9. Kit Gerhart Says:

    I suspect a lot of the reason for RAV-4′s poor sales has been the frumpy appearance. There are a couple of them at my condo, and between the spare tire on the tailgate and the styling in general, they just don’t look very good compared to most of the competition.

  10. dcars Says:

    Bus services are terrible in WNY. Our buses are controlled by a group in New York City and they don’t have a clue of the needs for Western New Yorkers.

  11. ColoradoKid Says:

    Video Alert ;

    Get yer Supercar geek on and have a look at DRIVE TV’s ( youtube.com/DRIVE ) new 9 part series starting tomorrow with Christian von Koenigsegg walking us thru the innovations and procedures it takes to create the new Koenigsegg Agera . CvK is an excellent speaker and though aimed at the layman still manages to go into a lot of good detail

    Caveat though . To all you SAABisata’s still remaining . This series is guaranteed to PO you off even more than GM refused to sell SAAB to CvK

    Also Jerry Seinfeld’s ” Comedians in Cars Drinking Coffee ” has been signed up for another 24 episodes . The only online series about absolutely nothing well worth watching 8)

  12. ColoradoKid Says:

    Toyota RAV4

    Its bigger
    Has even more blind spots
    A smaller motor ( with no V6 option )
    And its even more boring to look at than the previous model

    So someone . Please . Remind me . How in the ( blankety blank ) can the new RAV4 be considered an ‘ improvement ?

    G.A.Branigan – The real kicker with TESLA as I’ve recently discovered is the overwhelming majority of their ‘ Dealerships ‘ are in fact store fronts in Suburban indoor Malls

    Every time I’ve walk by one all I ever see inside is a bunch of teen mega geeks drooling over the ( cough ) looks

  13. ColoradoKid Says:


    Chinese air to breath and water to drink . You heard it here first ! (LoL)

  14. G.A.Branigan Says:

    “teen mega geeks”….would these be the one’s who are wondering what the 3rd pedal on the floor is for on most fun to drive vehicles?

  15. Lex Says:

    Will BYD be building these electric buses at the Nummi Plant along side Tesla?

    Tesla has the right idea, Company owner stores cutting out the middlemen(dealers) will hopefully keep costs down. Now if they can do internet sales with indivdual vehicles delivery at new owners location. I would also recommend mobile service vehicles from regional Tesla stores to maintenance vehicles. These two ideas would sell more vehicles.

  16. ColoradoKid Says:

    G.A. Branigan – Yup !

    Lex – Heck I wouldn’t buy a cell phone online never mind a $70K + ( lots of plus’s actually ) car that I couldn’t even sit in … never mind test drive before buying .

    You’re placing far too much confidence and trust in a technology with far too many glitches – limitations – security beaches and virus’s IMO … not to mention cutting out the possible neighbors ability to make a living wage ….. or did you forget about him/her in your Star Trek scenario ?

    FYI what would ‘ sell ‘ more vehicles for TESLA’s is for them to A) Build a car that actually functions as advertised/hyped B) Sell them at a price equal to what one is getting ( they’re vastly over priced rich mans toys at present ) C ) Not to mention build cars that people actually want … without the Billions of Tax payers dollars subsidizing every aspect of each and every car … from Development to Sales to Repairs and Maintenance

    THAT …. might sell a few cars . Not some Trendy Wendy Computer Wonk Smoke & Mirrors strategy/agenda designed to keep you from actually driving the car before shelling out your hard earned $$$

  17. C-Tech Says:

    About Tesla VS. (Any State). Dealership.Associations. Good luck Tesla! I personally hope they can break the stranglehold dealers have on the way we purchase new cars. If I want to, why shouldn’t I be able to purchase a new car online? Why shouldn’t I be able to purchase direct from the manufacturer?

  18. Kit Gerhart Says:

    Sears sold cars in the 50′s. Maybe WalMart will sell them soon.

  19. C-Tech Says:

    @ #18 Not if the NADA can help it! Many politcians will paid, Republican and Democrat.

  20. Chuck Grenci Says:

    Maybe the RAV4 created the segment, but maybe by a definition of splitting hairs; lots of small SUV’s previous: S-10 Blazer, Bronco II, Jeep Cherokee (the original small SUV). I may be called-out on this one because of some technicality (but was the RAV4 really a new segment; uh, maybe.

  21. pedro fernandez Says:

    RAV4 along with CRV and others who followed, were derived from FWD compact platforms, rode like cars and were not meant for rough terrain like the others which became extinct for the most part due to buyer’s preferences.

  22. ColoradoKid Says:

    20 Chuck Grenci

    I’d say you’re spot on but in fact the old Suzuki actually pre-dating the first RAV4 if one wants to go that small for the first of its kind . IMHO the RAV4 created nothing but rather jumped on to what Toyota saw as a growing market segment .

    C-Tech – #17 – You as a tech really need that question answered ? Remember these aren’t lap tops – smart phones and Pads we’re talking about here . These are ‘ Cars ‘ and very expensive cars at that . And do you with all your experience really want the ‘ Factory ‘ controlling each and every aspect of your car ownership from cradle to grave ?

    Think about that one first before answering – remembering how corporations deal with the individual when there’s no one in between to give assistance … along with the major league ly two faced grifter Mr Musk has proven himself to be over the last five years

  23. HtG Says:

    Just think about all the profit VW could make if it employed more people at its own dealerships!! (sorry, cheap, beneath me)

    …goes back to work…

  24. T. Bejma Says:

    Sorry, off topic (don’t know why I am apologizing CK does it all the time ;-) ) but a very good story about how GM saved an assembly plant (and a community) in Michigan and is able to be the only automaker to build a sub-compact in the US. Summarizes the whole downturn and the recovery as well…


  25. G.A.Branigan Says:

    I’ve owned a 92 S-10 Blazer 4×4 and it seated 4 comfortably,could fit 3 in the back seat if they were small enough.Same same with an 01 Cherokee.Except the Cherokee was hands down much more ‘off road capable’ then any of the other offerings,then and now.BTW,my late wife and I did many cross country road trips in the Cherokee.From Oregon to points back on the east coast.23+ mpg with the 4.0L I6,and the 4 speed auto.Sure was a good truck too.

  26. HtG Says:

    Any word on why Orion got the Sonic? How is decision making getting pushed down like M. Reuss said?

  27. C-Tech Says:

    @ #22 You should change your handle to Im-A-Kidding. A good number of dealerships are looking out for their bottom line – not yours. When it comes to warranty, many manufacturers will choose to (and have the power to) give you the benefit of the doubt or extend their warranty in special cases, not the dealer. Many owners loath spending money to upgrade their facilities (including Mike Jackson, look at his bottom 20 dealers). You trust them? Good luck, Ima.

  28. C-Tech Says:

    @ #25 As I am now driving / repairing a 2000 Jeep Cherokee Limited, the fact that you made x-country trips in one of these is reassuring

  29. Kit Gerhart Says:

    My sister had a Geo Tracker, the Chevy version of the Suzuki little SUV. It was really small and crude, but went through snow pretty well. Power steering was an option, and hers didn’t have it. It was probably the smallest rear drive based longitudinal engine vehicle sold in the U.S. since the Chevette.

    The old Cherekee, and the Comanchee pickup based on it were unibody. I guess that means they weren’t “trucks.”

  30. G.A.Branigan Says:

    They were unibody alright.I have taken the Cherokee off road on some very rough mining trails outside of Kingman AZ.I was very surprised and pleased as to how well the unibody jeep handled that road,or actually what was left of that road(and others).And no,they aren’t,or weren’t a truck in the once traditional sense.But they sure were capable vehicles and somewhat comfy.

  31. G.A.Branigan Says:

    @ C-Tech: Routine maint since I bought it new.After 150k miles had to put in a new crank position sensor and one other sensor that I just can’t remember what it was.Every 50k miles I took it in to whatever dealership I was near and had a full flush and service on the auto tranny.Like I said,just routine stuff.

  32. C-Tech Says:

    This one has been sitting in a garage for about a year and half in Detroit. On a wing and a prayer, changed the oil, checked the fluids, and took it Detroit to Orlando. The gauges did not work when I left (fly by feel) but for some reason the cluster woke up and started working in southern Ohio. Any ideas why the cluster sometimes blinks out?

  33. C-Tech Says:

    By the way, In no way do I advocate buying a car, new or used, without test driving it first, or having a indepedent inspection done before you sign off. With that said, if you buy a car from website, you should still inspect / drive before you sign or take delivery. It’s not an iPhone or tablet.

  34. HtG Says:

    33 I keep telling myself that, CTech. How’d you buy that Cherokee?

  35. Kit Gerhart Says:

    You generally can’t test ride a new motorcycle, and you have to “sign the papers” for buying a car via dealer trade. No, I don’t like either one. You can sometimes do “demo rides” on bikes, though, like at Daytona. Maybe Tesla could offer demo drives at various locations for prospective customers, as with bikes.

  36. C-Tech Says:

    i’m sorry Kit, could you explain what is meant via dealer trade?

  37. C-Tech Says:

    @ #34 A good friend of mine knows the seller. His wife took ill and only recovered sight in one eye, so they sold the second vehicle.

  38. Kit Gerhart Says:

    A dealer “trading” a car they had in inventory for one at another dealer that a customer wanted. It happens a lot, from my experience. When I bought my ’05 Malibu, the dealer wanted to “find one” rathet than do a factory order.

  39. C-Tech Says:

    @ #38 I suspected that is what you meant. If a dealer trades a cars to get you the vehicle with the options you want, you stil do NOT have to buy that car basically sight unseen. You can and should add a clause of right to refuse the traded car if it is not acceptable. Remember, the dealer does not own the vehicle until it is delivered to them so until that time this is only a sales order, not a final agreement. They cannot sell you something they do not own (perhaps in the stock market you can do that, but that is a different form of fraud).

  40. G.A.Branigan Says:

    @ C-Tech: Sorry man,never any kind of electrical glitch and certainly nothing wrong/intermittent with the instrument cluster.I would suggest a close inspection of the wiring under the dash.If nothing there and it still happens,I would look for a relay that may be sticking? Even the new jeeps have mechanical relays.

  41. C-Tech Says:

    @ #40 You may be right, a sticking relay or intermittant short since it comes and goes.

  42. G.A.Branigan Says:

    @ C-Tech: being that the vehicle was sitting in a garage for a year and a half it’s a good bet that some rodents might have passed through and maybe munched a couple of wires etc.Happens even in garages.

  43. C-Tech Says:

    Well how luck can a rat be! To hitch a ride to Florida just in time for winter.

  44. Chuck Grenci Says:

    A ‘short’ will usually result in a blown fuse; if no blown fuse(s), then probably an intermittent ‘open’ (from either a connector, broken wire, etc.). Also consider a break (an open) in the instrument cluster circuit board; this might manifest itself by working/not working by either hitting bumps and/or when the vehicle changes temperature (contraction/expansion due to heat/cold).

  45. Lex Says:

    @16 – ColoradoKid

    Now partner keep your britches on! The Tesla senario I suggested for Tesla is based upon the fact that it is an exotic vehicle with a very low production volumne. If Tesla dried up a blew away like a tumble weed tomorrow no one would probably miss them except the rich tree hugging Hollywood types and the officals at the Dept of Energy! So lets put things in prospective: My senario was aimed at increase Tesla sales so that Elon Muck can pay back the Government / US Taxpayer for what they have already borrowed. I still do not understand the governments reasoning for killing off NASA and award Elon Musk’s other company Space X billions to resupply the International Space Station. I guest someone in Washington is hope to get a free ride into space one day.

  46. Kit Gerhart Says:

    No one “killed off” NASA. No NASA employees were even laid off, that I can tell. They are just working on things like robotic probes, rather than the shuttle. The people who lost their jobs after the end of the shuttle program were those working for companies whose jobs were resetting/rebuilding the shuttle to prepare for launches.

  47. Dave Forslund Says:

    Go Tesla!

    John, I hope you have visited a Tesla store. How refreshing!

    The store I visited was in a mall in White Plains, New York. Not large, very nicely appointed with all of the info one would want. But the surprise was the young engineer who informed me about every detail of the car in place of a salesperson who has to know lots about lots of different models with lots of engines and extra choices. How can one expect him to be knowledgable? Plus he has to give you the “close” every so often. No More!!!

    Dealers and manufacturers should be fearful of Tesla. I own (not lease) 2 Mercedes E Class. I don’t buy often, but when I do, Tesla will definately be a consideration. (Normally, I just return to M-B, but no-more.)