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Episode 1093 – Toyota’s New China Brand, Non-Food Crop Ethanol, VW TN May Unionize

March 18th, 2013 at 11:48am

Runtime: 7:09

Toyota is creating a new China-only brand that will build low-cost and alternative-fuel vehicles. Cellulosic ethanol has not caught on, due to its high price, but that could change soon. It looks like Volkswagen’s Tennessee facility could be the first transplant with union representation. All that and more, plus host John McElroy gives his insight into the global race going on amongst car companies to lock up the supply chain for carbon fiber.

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Hello and welcome to a brand new week of Autoline Daily. And here are some of the latest developments in the global automotive industry.

NISSAN TO MAKE LEAF IN CHINA
Nissan, is all in when it comes to electric cars. And now it’s going to start making the LEAF in China. Production will start at only 10,000 cars a year and ramping up to 50,000 units…if sales go up that much. Nissan doesn’t need more capacity to make LEAFs, not with plants in Japan, the US and the UK. But unless EVs are made in China they don’t qualify for generous government subsidies and are slapped with hefty import tariffs.

RANZ IS FOR CHINA ONLY
And that’s exactly why Toyota is creating a brand new China-only brand, called Ranz, that will build low-cost and alternative-fuel vehicles. Ranz is a joint venture between Toyota and First Auto Works, or FAW. Ranz’s first model will be a pure-electric that will make its debut at next month’s Shanghai auto show. Toyota also has a joint venture with GAC that is expected to release its own China-only brand at the Shanghai show as well.

BETTER LATE THAN NEVER
Hey, what the heck ever happened with cellulosic ethanol? You know, instead of making ethanol out of corn or sugar, what happened to all those plans to make it out of non-food crops, or even garbage? Right now it costs about 90 cents a liter to make cellulosic ethanol, which is about 40 percent higher than corn ethanol. But a study by Bloomberg says the price is coming down and that cellulosic ethanol will cost the same as corn ethanol by 2016. The Renewable Fuel Standard is a law in the U.S. that mandates the use of 36 billion gallons of biofuel a year by 2022, including 16 billion gallons of cellulosic ethanol.

VW CONSIDERS UNION REPRESENTATION
We’ve been following the UAW’s attempt to organize Nissan’s plant in Mississippi but it looks like Volkswagen’s Tennessee facility could be the first transplant with union representation. The Detroit News reports that VW management is considering creating a works council for its Tennessee employees that could possibly work in tandem with the UAW. Employees would elect representatives to a council which then works with a union to negotiate wages and other issues. A decision is expected by the middle of the year. This is not that surprising of a move because I believe under VW’s by-laws all employees must be represented by a works council.

VW BEGINS APPRENTICE TRAINING
And speaking of VW’s Tennessee plant, the company has started apprentice training at the facility. So far, VW has trained 55 apprentices in mechatronics, and courses developed by the VW Group Academy. I think this is a really good idea. As I’ve mentioned before VW has around 550,000 employees worldwide, more than Toyota and GM combined. And it likes to brag that this type of training gets them the best workers.

EMERGING ON TOP
According to a report by WardsAuto and AutomotiveCompass, developing and emerging economies will soon pass other markets like Germany, Japan and the U.S. as the world’s largest automotive manufacturing sector. For the first time, these markets will account for more than half of the world’s light-vehicle volume, more than 50 percent of global output and pass the 50 percent mark in sales by 2014. Generally, an emerging market is defined as a country that’s ramping up its industrial output, growing its service sector and improving its technological infrastructure, like China and India.

Did you know there is a global race going on amongst car companies to lock up the supply chain for carbon fiber? That is coming up next.

CARBON FIBER SUPPLY CHAIN
Automakers are making important improvements to slash the cost of using carbon fiber in their cars. They are especially focused on developing cycle times that are well under 5 minutes, a key enabler for mass production.

And everyone is getting in on the game. Toyota, Daimler, Subaru and Nissan have agreements with the Japanese company Toray, the largest carbon fiber supplier in the world. Ford is teaming up with U.S.-based Dow, while General Motors recently signed an agreement with Teijin, another Japanese company. BMW formed a joint venture with the German supplier SGL. Indeed, BMW claims it will be the first major automaker to sell an all-carbon car, its electric i3.

This segment is so strategic that VW rushed in last year to buy 8.2 percent of SGL, which prompted BMW to buy another 15 percent of SGL simply to prevent VW from gaining any more control. Susanne Klatten, a member of the Quandt family and the heiress to the BMW empire, owns 29 percent of SGL. VW may want to find another source quickly. New suppliers from China and South Korea are emerging, but there are few other large-scale suppliers out there.

And no one wants to be left out. After 2015, carbon fiber applications in the automotive industry are projected to grow 10-15 percent a year. It’s almost like the computer industry was 40 years ago.

There are still many issues left to be resolved, especially repairing carbon fiber cars at dealerships and body shops. But mass-production carbon fiber could become be one of the greatest growth segments in the automotive industry in the second half of this decade.

Anyway, that wraps up today’s report. Thanks for watching and please join us again here tomorrow.

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

57 Comments to “Episode 1093 – Toyota’s New China Brand, Non-Food Crop Ethanol, VW TN May Unionize”

  1. ColoradoKid Says:

    Das ‘ Ring ‘ ist kaput ! ( most likely )

    http://www.autoweek.com/article/20130318/CARNEWS/130319813

    Nobody wants Fisker ( Geely has backed out )

    —-

    Ethanol producers are in fact closing down in droves ( NYTimes auto section )

    —–

    Automotive related litigations are projected to be on the rise ( as the use of carbon fiber increases )

    —–

    Dodge Challengers ( 2013 V6′s ) are burning

    ——

    And VW finally catches up with BMW in the Apprentice Training game ( BMW’s been doing this for years here in the US to compensate for our HS’s dropping their IA programs and technical collages either closing or raising tuition out of reach of the common family )

    Hmmmmn . Not such a great day automotive news wise .

  2. Bradley Says:

    At one point and time unions were needed, and in some cases they still are needed.

    However, I have so many difficulties understanding why anyone would support the UAW with their self-fulfillment to exist.

  3. pedro fernandez Says:

    That much heralded Pentastar V6 engine might end up giving GM’s 350 gas to diesel conversion disaster a run for its money!

  4. ColoradoKid Says:

    Bradley

    Because … like it or not ( I don’t ) Unions are still … and will always be …. a necessary Evil …. unless of course we want that inherit corporate greed to return back to the days of Rockefeller , JP Morgan , Carnegie …. which left unrestricted and unfettered …. it will .

    What seriously needs to happen is for all the Unions to go thru a major reform .

  5. pedro fernandez Says:

    Will it now be called the REAF?

  6. Kit Gerhart Says:

    Here is AW’s take on the new Impala. They seemed to like it:

    http://www.autoweek.com/article/20130318/CARREVIEWS/130319849?utm_source=DailyDrive20130318&utm_medium=enewsletter&utm_term=image4&utm_content=20130318-2014-Chevrolet-Impala-drive-review&utm_campaign=awdailydrive

  7. Kit Gerhart Says:

    3,
    The Pentastar engine works well, but from what G.A. has said, there have been some problems with heads or something. As far as power and fuel consumption, it seems to perform as well as most of it’s competition, but without the complexity of direct injection.

    The Challenger recall has nothing to do with the engine. Only Challengers were recalled, not even the 300 and Charger built in the same plant on the same platform.

  8. Todd T Says:

    VW union representation. Seems VW never learns from it’s past? Of course, maybe there is no one at VW that remembers Westmoreland (it did close in 1988) at this point, but I sure do. It was an unmitigated disaster rife with labor issues.

  9. John Says:

    If the big companies are scoring the carbon fiber suppliers will the hobbiest still have sources?

  10. Bradley Says:

    #4 Reform, yes.

    In my opinion a lot of companies in/out of the auto industry are abusing employees by not sharing more of the golden parachute, etc.

    Executives are not super human; just like movie stars aren’t. They self justify their pays by stating its within industry norms and apply the same logic to justify low pay for the majority of their employees.

  11. Kit Gerhart Says:

    I remember Westmoreland. Chrysler built most of of the plant, and sold it to VW when they didn’t need the production capacity.

    A friend had two diesel Rabbits from Westmorland. One of them had a lot of quality problems, but not related to the engine.

  12. pedro fernandez Says:

    What is the diff between the Challenger and its stablemates? the way people drive them, I suppose the “muscle” bound sibling gets the most abuse and this could explain the fires? The problem with the Chevy is that it has to be prove that its better (at least as good) than its competition, a problem common with many new American cars, Chevy should have never allowed it’s most iconic name to languish for years in fleet wasteland only, while the general public ignored it and moved on to better products.

  13. Rumblestrip Says:

    John, in the race for carbon fiber (fibre for our Canadian & U.K. friends) who will be the first company to channel Henry Ford, and just by a supplier outright so that they can fully secure production?

    It sounds as if VW & BMW are the closest, that said, besides the enormous startup costs, what’s stopping someone like Hyundai from just having their own plant? They already benefit greatly in cost and quality measure from owning their own steel plant.

  14. ColoradoKid Says:

    #7 – Just wait a day or two ;-)

    Next up on the Car-BQ hot list perhaps ?

    All bets are the new twin turbo V6 in the upcoming Cadillac CTS . Bet me that thing doesn’t run into a plethora of difficulties once its released !

    ——-

    AW ‘s Impala review – Just finished reading it myself . Seems to me … reading between the lines … AW was making every attempt to justify the car in their review rather than tell it like it is … Boring … Parts Bin …. Rebadged and Repackaged ! Minus the quality , dependability and durability of the mostly dull Camry .

    ——

    Bradley – 10 – You got that right . Just always remember rule #2 in the Morganomics theory of business – ” Human beings ( workers ) are a commodity to be used to further the goals of the corporation and nothing more …. with the sole goal of the corporation being …. Profit …. plain and simple “

  15. pedro fernandez Says:

    Hint to auto engineers, stop covering up the engine compartment with so much plastic crap that does not let the engine cool, you got the covers, the hood liner and the hood itself, like going to the Sahara desert wearing a fur coat and a hat, for what for asthetics? l

  16. Kit Gerhart Says:

    12,
    I suspect there is wiring or something that is different in the Challenger from the 300 and Charger, that has nothing to do with the powertrain.

    14,
    I guess we read the Impala review much differently. To me, they were saying that it was quiet, roomy, drove decently for the market it is in, and offers lots of gadgets. Also, they seemed to like the way it looked.

  17. ColoradoKid Says:

    Kit

    The interesting thing about the Challenger recall is that it IS only the V6′s getting pulled off the lots and back from their owners . As far as wiring differences between the Challenger/ Charger/ 300 … I kind of doubt it as they’re all the same platform / different body style … which …. is why Im betting the 300 and Charger V6′s will be next in line for Car-BQ honors .

    Honestly … if Chrysler was being smart about this they’d be taking a pre-epmtive tack and bring the Charger/300 V6′s in just to be on the safe side …. because odds are …. what ever the wiring problem with the V6′s in the Challengers is , its probably the same in the other two as well .

    IMHO

  18. HtG Says:

    Impala

    The Detroit Bureau writes that they found the car to handle like a much smaller car, and that the stiffer platform allowed engineers to more precisely tune the car. All I know is the looks put a smile on my face last year.

  19. Kit Gerhart Says:

    17,
    This article: http://www.freep.com/article/20130318/BUSINESS01/130318055/Challenger-Dodge-recalled-fire-risk

    says: “The parts are unique to the muscle car. The Challenger is built in Brampton, Ontario, alongside the Dodge Charger and Chrysler 300 but the Charger and 300 are on a newer platform and not all parts are common with the older-generation Challenger.

    If that article is correct, the cosmetic and interior changes done to the 300 and Charger, but not the Challenger, resulted in the use of different wiring harnesses or something.

  20. pedro fernandez Says:

    Gee, US car makers finally figured out that you need a stiffer chassis? the Europeans have been doing so for decades are we s l o w learners or what? I remember driving a Volvo 260 back in the early 90′s and it was a revelation to me how solid a car could feel.

  21. Kit Gerhart Says:

    20,
    The stiffness of European cars comes at a cost, in weight. An Audi A4 weighs as much as the much larger old Impala, and 200 pounds more than the larger, and roomier new Malibu. ……..and GM has never been known for the lightness of their cars.

    BMW seem to have done a good job with the new 3 series, though. It is, presumably, pretty stiff, and it weighs only slightly more than the current Malibu.

  22. pedro fernandez Says:

    #21 None of the domestics have been very stiff Kit as far as I’m concerned, recall driving a new mid 70′s Chevelle, the high school driving teacher car and how it had rattles galore, I took it for granted that cars rattled like crazy till I got my Camry and it was pretty solid and rattle free.

  23. XA351GT Says:

    Hey it’s great to hear Toyota is developing another all electric car that no one wants or will buy. But I’m sure as which always seems to happen they will find a way to get it regulated to ram it down the the consumers throats.I hope the Chinese reject this thing ,because if they succeed there we’ll be next especially with the current regime in Washington.

  24. pedro fernandez Says:

    At this point it almost seems like OEM’s have to develop EV’s regardless of whether people buy them or not, it’s like politically incorrect not to do so.

  25. Kit Gerhart Says:

    22,
    Yeah, 70′s cars were not very stiff structurally. Also, at that time, they weren’t very good at bolting things together in a way that they wouldn’t rattle.

  26. ColoradoKid Says:

    The ‘ New ‘ ( upcoming ) Trade Agreement

    Looks like nobody’s happy with this one …. kind of ironic though hearing the Korean’s complain about ‘ price fixing ‘ .. pricing agreements between brands etc .

    http://www.thetruthaboutcars.com/2013/03/why-detroit-is-chicken-about-free-trade-agreements-and-why-korea-hates-them-too-now/#more-481627

    Best watch what you ask for T Bejma …. you just might get it … and in this case I really don’t think you want it .

    —–

    Kit – Interesting and curious what that article says about the Charger/300 having a ‘ new ‘ or updated platform from the Challenger as thats just the opposite from what most everyone else is saying . Hmmm.

    BTW Kit the new A4 weighs as much as as the larger older Impala because its so much larger than the previous A4 .. and has AWD , better suspension , better ride , much more luxurious interior …. better ….. sheesh … everything …..oops … what am I doing here applauding Audi ? But seriously Kit … trying to compare the A4 we get to anything in Chevy’s line up is like comparing McDonalds ( Chevy ) to a Michelin 3 star restaurant ( Audi )

    ——

    HtG – 18 – Honestly … considering the source and all …. you really buying that line of ……. ?

  27. ColoradoKid Says:

    24 – Mandated by their respective governments is more like it Pedro

  28. HtG Says:

    18 many journalists that have tested the Impala have praised it. I only related those points about stiffness because I missed it if other reviewers had mentioned it as well. Have you seen Impala in the flesh? I liked it, but maybe others will not.

  29. pedro fernandez Says:

    Wonder why Chevy did not make the police Caprice RWD available as the Impala? if it’s good enough for the cops, why not the general public?

  30. Kit Gerhart Says:

    26,
    The A4 whose weight I saw was the one tested by CR. I don’t know if it was FWD or AWD. Actually, even if it is AWD, it seems porky compated to the current 3 series, which is larger, roomier, and I think a little lighter.

  31. Kit Gerhart Says:

    29,
    They are going to, but only with a Corvette engine, as the SS. Yeah, I’d think it would make sense to sell civilian versions with smaller engines, if the could sell it at Charger prices.

  32. ColoradoKid Says:

    HtG – 28

    Looks wise … its ….. dull ….. but ok ….. I guess .. sort of . The thing that floored me was the price . WTH is gonna pay $40k for a slightly stretched , over contented Malibu with a critter on its snout .. when thats creeping right into ATS -3 Series – A4 – C Class territory ?

    For that matter . Why in the heck is Chevy dumping the most expensive version on the market first … and then bringing the better priced one online months later ?

    Dumb !!!! If’n you ask me .

    BTW to date it seems no ones really ‘ tested ‘ the Impala …. just driven it around a bit …. which tells you nothing at all about the car . So all these so called ‘ reviews ‘ … good or bad are more than a bit premature ;-)

  33. HtG Says:

    32 Isn’t $40K near the upper limit? I’m guessing that by bringing out the more powerful motor first, it’s telling more upscale people that the car’s just like them. Wouldn’t you rather start there? And it’s a very pretty car to my eye. Photos, again, just don’t do it; especially when you see the creased lines on the sides. It’s odd though, to see Impala against Avalon, as both cars have very similar silhouettes. Avalon is also very nice.

  34. ColoradoKid Says:

    Kit

    2013 Audi A4 185.1 L
    80.3 W
    3509 lbs ….. 3685 w/tiptronic

    2013 BMW 3 182.5 L
    71.3 W
    3410 lbs

  35. ColoradoKid Says:

    33 Yes it is … but still …. $40k ….for that ??? Upper limit or not … thats insane . Tell me folks won’t flock to the Avalon Camry heck even the Hyundai over that

  36. HtG Says:

    ck, it starts at 30,760, and that’s with the 300hp motor. But you’re right, I don’t know.

  37. HtG Says:

    Plus, who knows what the leasing number will be. GM can forecast a high residual.

  38. HtG Says:

    Times, the car has been seen for almost a year. GM must have shown it to potential customers to the point they have some sense for who wants it.

    (sorry about the short multiple posts, Ben. I know)

  39. cwolf Says:

    Kit, thanks for the swell link yesterday,but it hindered my arguement with TB,..that is until I regroup my thoughts. I must have mistakenly have been thinking of Ford when making my remarks. It became more clear when I saw the sombrero on my Milan that I had blundered. Don’t worry TB, you’re not out of the woods yet!(smile)

    I’ve known of the VW/UAW thing for a spell and for the life of me cannot get one iota of info pertaining to it or the Nissan plant in Miss. I do sense desperation and feel there is uncertainty about the make-up of the representative panel because of the choice to join the union or not. I hope they have an ace up their sleeve or I’m up the creek!

  40. Kit Gerhart Says:

    34, Thanks for info.

    A4 is a little longer, but 3 is roomier in the rear seat according to CR’s data. I think the trunks held the same number of their test suitcases.

  41. ColoradoKid Says:

    HtG

    #37 So what you’re inferring there is that GM will lease the Impala at a major loss ….. just like the VOLT ?

    FYI – Focus Groups . Come on mien herr …. I know you know better than that ! Fact is I know you know I know you know better than that ! ( why is doing that so much .. fun ? … shades of Richard Pryor I guess ) Especially considering GM’s wishful thinking , focus group proven ( not ) predictions about VOLT sales ….. yeesh …

    Lets face one simple fact if no other when it comes to GM

    Accurate Prognosticators about much of anything ….. GM Aint !!! In the least .

    PS; Ben should forgive us . Its AH’s . I hope . ;-)

  42. HtG Says:

    41 I was only trying to think about what buyers will see when they sit down to crunch numbers. I’m not silly enough to think that you think I’m silly enough to think things silly.

  43. Kit Gerhart Says:

    32,
    To me, it makes sense selling the V6 first. That is the one that will drive the best. They need to build low option V6′s, though. That is what should look appealing on the dealer lots. Even with no options, the car will be well equipped.

  44. ColoradoKid Says:

    43

    Agreed ….. but errrr …. wanna place odds it’ll be the fully loaded ones that’ll show up on the dealers lots and showroom floors …. with the base model V6 being ‘ special order only ‘ ?

    42 :o

  45. T. Bejma Says:

    Microdistilleries

    Well aware of them CK, like to frequent one in Nashville (Corsair) when there on business. Not catching on in Michigan too much yet, although the microbreweries are here in droves!! ;-)

  46. Kit Gerhart Says:

    44, We’ll know in a few weeks.

    45, Anyone heard of Three Floyds in Indiana.

  47. T. Bejma Says:

    #46

    Actually Kit, I was at my local microbrewery – Kuhnhenn’s – http://www.kbrewery.com/beer.html (home of DRIPA – Double Rice IPA that was rated the best IPA… In the WORLD) and there was a guy in there that could not stop talking about Three Floyds. I have a business trip to Chicago coming up shortly and was definitely going to stop in on the way back. Is it pretty good Kit?

  48. Kit Gerhart Says:

    47,
    They have a pale ale called Alpha King that I really like. The beer they may be best known for is GumballHead, an oddball wheat that is kind of hard to describe.

  49. HtG Says:

    After Hours, I should shut up and go to bed

    A bottle of Old Crow brand whiskey and Andras Schiff playing Goldberg Variations. Cheap ass booze and matchless artistry.

  50. Kit Gerhart Says:

    34,
    The width dimensions you listed must have been with the mirrors for the A4, and without for the 3. CR shows the width of the A4 as 72 inches, and the 3 series as 71. That makes sense.

    I found that CR’s A4 which weighed 180 pounds more than their 328i was, in fact, an AWD.

  51. C-Tech Says:

    The VW apprentice program sounds like a good start and I hope they expand it. I remember when GM had its own college in Flint, Mi. to produce engineers and business grads. Toyota has an excellence apprentice program for auto tech.

  52. C-Tech Says:

    @ #1 Did not see this article about ethanol producers closing in droves. I don’t see that happening given the mandated need for ethanol.

  53. T. Bejma Says:

    #51

    C-Tech – GM does still have the college in Flint, it is now called Kettering University instead of General Motors Institute (GMI) but it is still a direct line to a GM (or other automotive) job.

  54. Kit Gerhart Says:

    I worked with a number of GMI grads. They has a great co-op program, at least into the 80′s or early 90′s.

  55. ColoradoKid Says:

    Kit – Those stats were for the 2013 A4 and the 2013 3-Series and were taken right off their respective websites .. I’ve no clue how they arrived at them . Also … 180 lbs extra for AWD really is about .. if not less than average .

    Though honestly with all BMW’s sporting ‘ pretense ‘ you’d think the 3 would be much lighter than the A4

    ——-

    T Bejma – The point with both BMW’s and VW’s Apprentice programs is that they ARE NOT Universities Colleges etc …. but rather what ALL the manufactures ( including GM who’ve benefitted greatly from BMW’s program ) are in dire need of ….. Technical schools putting out grads with a minimum of 18 months hands on experience …. oh ,,,, and btw ….. BMW’s program is Free … for those who qualify … regardless of where they wind up once finishing the program ( look up the Dan Rather Reports … on the German education system to see the details of BMW’s US program … its amazing … yet PO’s you when you wonder WTH no US manufacture is doing the same despite their constant whining about not finding qualified people )

  56. Kit Gerhart Says:

    I’ve been retired for about 10 years, but when I was working, GM had apprentice programs for skilled trades, and I suspect they still do. Also, the companies paid for the school that was required. I suspect that was in the union contract.

  57. Kit Gerhart Says:

    55,
    Yep, the Audi site specifies that its width spec is with mirrors. That explains things. I knew the A4 wasn’t 7 inches wider than a 3 series.

    Regarding A4, I noticed that, in addition to dropping the A4 Avant, AWD is now mandatory on manual transmission A4 sedans.