AD #1216 – Europe Car Sales Slide, Silverado #1 in CR Tests, Tesla Faces Franchise War

September 17th, 2013 at 12:15pm

Runtime: 7:17

After it looked like car sales in Europe were starting to recover in July, they slid back down again in August. Consumer Reports names the Chevy Silverado the number one pick-up truck. A group of California car dealers are asking the state to investigate fraudulent advertising by Tesla. All that and more, plus John shares his impressions of the electric version of the Volkswagen Golf.

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Hello and welcome to another Autoline Daily, as we strive to keep you up to speed with the latest developments in the global automotive industry.

RIP EIJI TOYODA
We just got word this morning that Eiji Toyoda, who played such an important role in expanding the Toyota Motor Co. in the U.S. market, died at the age of 100. He was the longest serving president of the company when he stepped down in 1994, and has definitely earned his way into the automotive history books.

EUROPE SALES SLIDE CONTINUES
After it looked like car sales in Europe were starting to recover in July, with a 5% increase, they slid back down again in August. Bloomberg reports that car sales in the region fell nearly 5% compared to a year ago to just under 690,000 vehicles. Peugeot-Citroen and Volkswagen were the hardest hit. Sales at the French automakers dropped 18% while VW saw its sales drop by 11%. Through the first eight months of 2013, sales are down just over 5% to 8.1 million units in Europe, and this suggests the market has not hit bottom yet.

SILVERADO EKES OUT RAM IN CR TESTS
All the hard work over at GM is paying off because, along with the Chevy Impala getting the top spot on Consumer Reports large-sedan list, the new Chevy Silverado was just named top full-size pickup. That’s stunning, I can’t think of a time when Chevy had both a sedan and truck topping the list. The Silverado just beat out the Ram 1500 because of its larger bed, better payload capacity and better tow rating. All you PD people at GM, give yourselves a pat on the back. This is quite an accomplishment.

GM EXPANDS BATTERY LAB
Speaking of GM, it nearly tripled the size of its Global Battery Systems Laboratory in Michigan which tests and validates battery cells and packs for all of the company’s EV systems. With the expansion the facility is now capable of building prototype battery packs, developing and testing new chargers and benchmarking competitors. In addition to Michigan, GM also has battery labs in China and Germany.

TESLA FACES FRANCHISE WAR
Let’s stick with electric cars. Tesla is on a tear. Sales are running strong. Its stock price is running even stronger. And the company is very bullish about its future. But there is one problem. Tesla is circumventing U.S. franchise laws by opening its own stores instead of going through the normal dealer franchise network. Now the Detroit News reports that a group of California car dealers are asking the state to investigate fraudulent advertising by Tesla. They say Tesla includes the $7,500 federal tax credit in its advertised pricing even though only about 20% of buyers qualify for that credit. Believe me, this is just the tip of the iceberg when it comes to car dealers trying to stop Tesla. So it’s time for another Autoline Daily poll. Do you think Tesla should be allowed to operate its own stores, or should it have to go through the dealer franchise network like every other automaker is forced to? We want to know what you think and we’ll report the results later this week.

Coming up next, we’ll take a look at Volkswagen’s claim that when it comes to electric cars, it is going to outsell every other automaker in the world.

VW AIMS TO CONQUER EV MARKET
Volkswagen created something of a firestorm at the Frankfurt auto show last week, as least amongst the EV crowd. VW unveiled the production versions of its electric Golf and Up! and went on to brag that it will soon become Number One in the EV segment by 2018. Well that sure ticked off the people at Nissan. They were visibly irritated that VW had the audacity to claim it would outsell them.

Volkswagen states that electric cars will comprise 3% of its global sales by 2018, and since it plans on being the world’s biggest car company by then, it assumes that it will also sell more electric cars than anyone else by then. Of course, the key to that assumption is sales. And I don’t think they have a very good chance of pulling that off. More about that in a minute.

Yesterday I got a chance to test drive one of VW’s EV development cars, or mules, based on the last generation Golf. It has an 85 kilowatt electric motor that produces 270 newton meters or nearly 200 foot pounds of torque. And it has a 25 kilowatt hour battery pack that provides roughly 100 miles range, according to VW. The battery cells are manufactured by Panasonic or Sanyo depending on whether they’re going in the Golf or Up!. But VW makes almost everything else in-house.

The development mule I drove performs quite well. VW says it will run from 0 to 60 mph in 11.7 seconds which is quite slow by today’s standards. That’s nearly three seconds slower than the Chevy Volt. Yet the e-Golf doesn’t feel slow, thanks to all that torque. It also has 5 separate re-gen settings that you can choose using the paddle shifters on the car. Using the left-hand downshift paddle I could slow the car down. I love this feature and hope it makes it into the production version.

VW is going to need all the help it can get to sell these electric cars. It decided not to develop a dedicated BEV and converted the Golf and Up! instead. Ford tried this same approach with the Focus and the sales results have been miserable. So far this year Ford sold about 1,200 of them, compared to over 13,000 Leafs.

But VW says that selling 1,000 EV’s can have a noticeable impact on an OEM’s fleet emissions in the US, since those electrics are counted as having zero emissions. And they can start selling those EV credits in California. So it believes the effort is worth it, at least from a regulatory standpoint.

Look for the electric Golf and Up! to go on sale next summer in Europe, then hit the US market about 6 months later, and then at some point it will also make its way into the Chinese market.

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

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55 Comments to “AD #1216 – Europe Car Sales Slide, Silverado #1 in CR Tests, Tesla Faces Franchise War”

  1. pedro fernandez Says:

    Boy them Toyodas do last a long long time, don’t they? Tesla just like ALL automakers should sell directly to the public, one price haggling, no BS,no dealer prep fees, none of that happy horse$hit that has been going on forever and it still does, it’s like a freaking war when you go buy a car, instead of a pleasant, enjoyable experience, you feel every one there is trying to take as much of your money as they can! You come out there feeling as you just had a colonoscopy.

  2. ColoradoKid Says:

    VW Aims to conquer the EV market ?

    Seriously ? And just what EV market might that be pray tell ? Cause in all reality ….. they aint one down here on good ol’ Planet Earth … EV’s sales are bombing worldwide ….. and with the recent revelations as to Global Warming etc …. they aint gonna be no EV market anytime soon either …. at least not the kind of EV market TESLA , GM ( seen todays news about GM now wanting to go head to head with TESLA ) or VW are envisioning / aiming at

    As to that ” I’ve seen the future of the EV ( and it aint TESLA ” I left y’all with ?

    Well ….. ND’s went all around … with consulting fees and future shares given for signing … so …. can’t say no more ’bout it I’m afraid ;-)

    ( that oughtta drive HtG absolutely crazy :o )

    ———–

    TESLA – The sales numbers stated by TESLA are a blatant exaggeration to say the least . Fact is less than 30% of the sales claimed can be verified . Their stock prices … are being manipulated …. so in reality who gives a rats tail what TESLA does when it comes to their sales methodology … But if push comes to shove …. I say Franchise . Elon’s got enough of our money in his back pocket and certainly doesn’t deserve any special favors when it comes to selling his pretentious junk as well

    BWTM …… That little ….. errr … discussion group I was part of on the future of the EV ? Two of the more prominent attendees were in fact TESLA S owners …. Like to know what their impressions of the cars they leased are ? Both in total agreement ….

    The TESLA S is in fact …. an automotive dinosaur .. in both owners opinions the cars solving nothing and in fact creating more problems than they’re worth . Funny thing as well … when shown the TESLA owners ( owners only ) forum NOT sponsored etc by TESLA …. there’s a whole lot more complaints than compliments to be found ( 80% complaints . 20% praise )

    Smoke & Mirrors as well as a Dog & Pony show pretty much sums up TESLA and Elon Musk quite well … according to those who own them , done business with Musk etc .. and not just me

    ———-

    Ooops … more bad news on the financial front . Ethanol’s about to increase in price by leaps and bounds …. due to a whole lot of market speculators etc …. which means …. as goes Ethanol …. so goes our Gas Prices …. Ooops !

    So much for the Ethanol free lunch

  3. ColoradoKid Says:

    #1 – Guaranteed Pedro … knowing the corporate mentality as well as I do ….. selling cars and trucks direct would be ten times worse an experience than dealing with the Car Sharks at the franchised dealerships … ten times worse being the best case scenario ;-)

  4. pedro fernandez Says:

    EV Market, CNG market, hydrogen market, where are all these markets? Oh yeah there’s also the market where Harry Potter bought his wand.

  5. Lex Says:

    The Pure EV still suffers from the stigma of Range Anxiety. Vehicles like the Chevy Volt are better suited for the American Driver. When will Chevy produce an Equinox with a Volt powertrain?

  6. pedro fernandez Says:

    Why CK? You buy online, pick your options, get your price and place the order and go pick up your wheels at a delivery/service center, formerly known as dealer. Or in the case of the Equus, they deliver to your door.

  7. Mike Says:

    I think VW needs more help than it understands. When you look at the used car lots, the used Vdubs tend hang out on the back row. I’ve seen some 5-10 year old models with broken plastic interior parts, poor paint, and durability issues. I’ve seen similar with Chrysler products. I’m wondering if there is something in the basic material standards for both companies that needs a rethink.

  8. A. Bellis Says:

    In regards to Telsa……I believe that a manufacturer has the right to sell their products through a franchise system…or not! The franchizers should not automatically get the right to sell product B just because they currently sell a similar product A even if the products are from the same manufacturer. “Franchise law” should be re-written into “consumer protection law” so that all salesmen are held to the same standard regardless of product.

  9. Lex Says:

    VW needs to reconsider it’s EV program. I believe retooling the VW UP and Golf as EV’s was the most cost effective way to jump into the EV market. I also believe range anxiety will cause sales to suffer as is the case with the Ford Focus EV.

    A compromise combination of an ICE & EV powertrains makes the most sense in most automotive markets around the world. It’s great to have very high mileage numbers in most pure EV’s however what do you do when there is no recharging stations available. The Electric Recharging Infrastructure is a decade away and the US Power Grid is in sorry shape as it is.
    It will take billions of dollars to implement a cohesive energy plan just for the US and Europe.

  10. HtG Says:

    2 EV NDA, come on man, pleeeez

    1 very good one, Pedro. You killed

    CK, would it violate any NDA to give a review of Rush? How was Bruhl’s Niki?

  11. Bradley Says:

    Well the dealer will be obsolete when cars can drive themselves to my door step. Do a few clicks online, walk outside, test drive, go back inside and add a car to my “shopping cart.”

    Done!

    I it is beyond me. If Dell can sell a computer online and without aggressive sales people. I think cars can also be sold with sales people.

  12. Bradley Says:

    Ugh!

    Should read:
    It is beyond me. If Dell can sell a computer online without aggressive sales people. I think cars can also be sold without sales people.

  13. HtG Says:

    TESLA

    I’d expect state legislators to stay bought. Dealers will get decimated if Tesla’s model is copied by GM or chinese makes. Though it is a bit rich for traditional dealers to come at Tesla for misleading advertising.

  14. Chris Orchard Says:

    Wow – car dealers claiming OTHERS have deceptive practices! As we all know what bastions of honesty and fair-dealing THEY are! Not all of course, but kettles, and the issue of describing relative blackness does come to mind.

  15. Kit Gerhart Says:

    It would seem that if there are “franchise laws,” Tesla would need to abide by them, as does GM, Toyota, and BMW. Maybe Musk needs to file a law suit to try to have them declared unconstitutional. (maybe he is already doing that)

  16. Kit Gerhart Says:

    7,
    What is wrong with VW’s and Chryslers? I have a 27 year old VW, and a 24 year old Chrysler, and both of them run and look almost like new.

    Yeah, they have both had very sheltered lives.

  17. HtG Says:

    Am I the last to see this VW advert?

    http://www.youtube.com/watch?v=bbRVMua0HUc

  18. pedro fernandez Says:

    #14 1++++ a Toyota dealer about 90 mins from me advertises online that they have brand new Corollas for almost $2k less than nearby dealers, when I contacted them they informed me that it did not include transportation, dealer fees or the SE Toyota distributor fee either, which when you add it up it is the same as the local dealer, Imagine some sucker driving all the way there and getting the news!!

  19. pedro fernandez Says:

    #17 and no charge for all the other repairs that will be needed while it’s under warranty, when that’s over, you better bail out and take a big loss too!

  20. Kit Gerhart Says:

    18,
    If you are ever in Indiana, and in the market for a new Toyota, I can recommend a dealer. No “SE Toyota distributor fee,” and from my experience, very low levels of BS, as car dealers go.

  21. pedro fernandez Says:

    Kit this SE Toyota distributor thing is a racket, and people just fall for it. For me, it’d be a deal breaker and would push me into buying used, even if it’s just a couple of years old.

  22. ColoradoKid Says:

    THIS …. is a Stingray ;

    http://www.youtube.com/watch?v=Sh_8zMVlNVM

    Wow !!!! I am ….. speechless

    ——

    16 Kit … when it comes to Chrysler and VW products … you are in the very extreme minority and need to consider yourself excessively lucky …. cause your experience with either is not the norm ….. by a long shot … never mind both of yours living ‘ sheltered ‘ lives

    ——-

    10 – HtG – re; “Rush ” … You’ve no doubt read JS’s reviews as well as my comments in response …. not much I can add . Suffice it to say if you’re going in thinking its a ‘ documentary ‘ on that year ‘s F1 racing history … you’re gonna be very disappointed …. but if you can accept it as a Hollywood interpretation of history … you’ll love it

    My recommend is …. GO ! But if like me you’re a bit adverse to the excess volume of todays mega theaters ( I for one hate surround sound ) …. see at at one of your local smaller venues …. cause baby it is one LOUD film !

    And yes mien freund … the NDA on the EV thingy is legit … paid quite nicely as well … if’n you catch my meaning … well worth shutting up about . But I did have to stick it in your face ya knows :o …. Turnabout being Fair Play … ( the who drives a GLK issue of days gone past … yeah … I hold [ humorous ] grudges ) ;-)

  23. James hannigan Says:

    When it comes to presidents. They lose their memory on level playing fields when it involves them politically. Obama ,it’s EV cars. Bush, it’s free trade with China. Nixon, It’s Watergate. Tesla will be under the dealer network when a Republican takes the Oval Office

  24. ColoradoKid Says:

    Pedro – Look at it this way . Right now every Toyota dealer in your area ( say 50 miles ) needs to compete for your business … and if you’re up to it you can play them against each other for the best deal possible .

    Fact is … right at this moment ( lease up in December ) with Franz’s lease coming up I’ve got two local dealers as well as the KCMO dealership hitting me up left and right with deals etc to get my business … and I do mean deals

    Make it Manufacture Direct though …. and you pay what ever the manufacture mandates .. period . And guaranteed … they’d bleed you for every penny they can get out of you .

    BTW .. that SE charge is negotiable … I did with SG’s Matrix …. and off the bottom line it went

  25. pedro fernandez Says:

    #22 I concur there CK my sister’s Caravan just seemed to fall apart from normal use, while my Corolla despite being used twice as much had stayed pretty much the same, now the Journey is having electrical issues, the hatch and now the driver’s door cannot be unlocked with the power lock system, she needs to use the key to get into her door, now of course the warranty is over and so is the honeymoon with the vehicle.

  26. Mike Says:

    16. Yes it is just an observation, but I invite you to wander around the parking lot at Walmart sometime. The 5-10 year old Chryslers and VW’s will stand out for poor paint, broken plastic, and ‘deterioration” compared to GM, Ford and Toyota. This has to be a materials issue. The point is that VW won’t get to #1 when people look at their durability. The 2.7 L engine and the automatic transmission in Caravans haven’t helped Chrysler either.

  27. ColoradoKid Says:

    26 – Yeah … unfortunately they ( VW ) will get to the top despite poor reliability – lousy quality etc . Because .. partly due to ridiculously good marketing …. and mainly because they’ve got the full weight and backing of the entire German government and manufacturing industry ( minus only M-B and BMW ) no matter who’s at the helm in spades . Suffice it to say Peich and family are deeply politically connected and Germany’s finances are heavily dependent on VW’s success ..So as I’ve been saying …

    The BORG ( VW-Audi) are coming . Resistance is futile . You ( other auto makers ) will be assimilated

    And it aint gonna be pretty when it all finally happens .

    ——–

    Kit – I suspect … along with a lot of luck and your VW/Chrysler’s leading sheltered lives …another reason why yours have done well is probably because like me you stay on top of all maintenance etc religiously …. not waiting another 10,000 miles or so cause its inconvenient to do it when its needed . Am I right ?

  28. HtG Says:

    22 Rush

    Without spoiling, I do hope the film climaxes where it’s supposed to. Also, I heard Ron Howard talking about the noise of the cars being an important part of the film.

  29. Ckernzie Says:

    Ah yes the ‘Free Market’ where manufacturers build money losing, sales dog EV’s to get around regulations and appease California.

  30. Chuck @ GM Says:

    Just popped in and read a few entries, so forgive me if aomeone already said this. Don’t shed any tears over dealers. I’ve read a few times that the dealer lobby in any state is typically one of the strongest, if not strongest lobbying force there. They have no issue getting what they want. I am surprised Tesla is still below the radar with them.

  31. Kit Gerhart Says:

    27,
    Yeah, I maintain them reasonably well, but also, I’m just easy on cars. I make it a point to drive smoothly with manual transmissions, a good thing for the drive train. I don’t slam doors, a good thing for cars with so-so body hardware like VW’s. It all helps, I’m sure. .

  32. Kit Gerhart Says:

    30,
    In most states, the clout of the car dealer lobby is surpassed only by that of the beer, wine, and spirits distributors.

  33. pedro fernandez Says:

    Question for the tech savvy among you guys: does replacing both FWD axles and ball bearing assembly cause the alignment to go bad?

  34. Kit Gerhart Says:

    33,
    It shouldn’t if they don’t disturb the tie rods and strut attachments. C-tech, are you out there?

  35. pedro fernandez Says:

    Holy $hit, I had this done a month ago and now both front tires have worn out on the outside edge as if the toe-in got messed up somehow! plus I am getting some torque steering, which I’ve never had with this car.

  36. HtG Says:

    Somewhat related, Pedro.

    I had new front discs and pads put on the Civic a few months ago, but when I got the car back it made a scuffing noise when I braked. It took a tech over an hour to diagnose that the right side wheel hub was bent. The explanation was that the new thicker disc exposed the pre-existing issue.

  37. pedro fernandez Says:

    Well, we replaced the right side front wheel bearing assembly and not the right I suppose they were both bad and one side was just much worse than the other, so I am gonna have to do the other side as well and new tires up front.

  38. HtG Says:

    The service advisor I see at Honda drives an ancient Civic with something like 300K on it. He bought it from a customer that didn’t want to pay to fix something. I say, if the body is good and you like the car, fix it. Parts is parts.

  39. vincent joy Says:

    Dealers fighting Tesla are giving themselves a black eye with the public. A lot of their rhetoric sounds as though it’s come right out of the UAW handbook!

  40. Grayson Says:

    When did buying a car become such a dreaded process? It’s almost as bad as what flying has become. If Tesla can bring some class, enjoyment, and product focus back to the car buying process, then let them! If the dealerships step up their game to compete, then we all win. This is America right? Let the market decide where consumers spend their money… wait! don’t walk out! Let me get my manager. What can we get you to do to take this dealership home today?

  41. C-Tech Says:

    @ #33 Normally you do not have to do an alignment when changing axles or bearings – unless there is a strut camber adjustment bolt. I suspect your older Corolla has a camber adjustment bolt in the front strut and the tech did not take the time to correctly mark where the eccentric on the bolt should go back in place. The tire wear you are getting is most likely from the camber being too far negative or positive now. Newer cars do not have these adjustments as they use stronger struts and are more precisely fitted (note: many “tire shops” will sell you adjustment bolts rather than the new strut you need)

  42. C-Tech Says:

    The issue with Chryslers and VW’s quality I see as separate issues. A number of Chrysler/Dodge customers have been people who do not or cannot afford to take care of their cars, especially the Avenger/Sebrings and lower priced vehicles. The Chargers/300′s hold up well. Grand Cherokee’s hold up well. Even the minivans hold up well when maintained. VW and some BMW’s require more maintainence as they get older and some customers are not financially prepared for a car AND repair payment each month. The Diesel engine versions (VW and BMW) do hold up better, which may be a factor of more affluent 1st owners who take care of the maintence better.

  43. C-Tech Says:

    The problem I see with CK’s analysis of manufacturers owning dealerships, is that they still have to compete with other manufacturers for sales. If Hyundai is selling Sonata’s for $XXX then the company owned Honda dealer is not going to last long selling Accords for more money. Actually, cars could be cheaper if manufacturers could sell direct.

  44. C-Tech Says:

    For those of you who wonder about why there is an extra charge for Toyotas sold in the southeast, just research Jim Moran. talk about a sweet deal.

  45. C-Tech Says:

    I have been drafted to teach a 26 year old male how to drive. Any tips?

  46. pedro fernandez Says:

    Make him leave his phone behind, or turn it off completely, plus tell him this is NOT a video game, you do not get to ‘restart” if you crash.

  47. Kit Gerhart Says:

    Great tips, Pedro. It might be tougher teaching a 26 year old to drive, than a 16 year old. The 26 would be more “set in his ways.”

  48. Kit Gerhart Says:

    43,
    Thanks for that info. I hadn’t known the history of Southeast Toyota Distributors, just that the starting point for price negotiation on a Toyota is $700 higher in Florida, than in the midwest.

  49. HtG Says:

    I’ll re-share what I was taught by SkipBarberRacing; the car will go where you are looking. Controlling your eyes is the most important part of driving. Look where you want to go, not where the car is presently going(extra points for looking through side windows). Also, no shuffle steering; take the wheel by the hand and TWIST.

  50. HtG Says:

    Tip #3. Other drivers will not do what they’re supposed to. Expect it.

  51. pedro fernandez Says:

    Death, Taxes and SE Toyota distributors, 3 things you cannot avoid (if you live in the area) SETD gives you an inspection (all new cars need an inspection) Armol All, in and out, undercoating (no longer a necessity) and etching of the VIN all over the place, for the discounted price of $700/ freaking rip-off!!

  52. pedro fernandez Says:

    No wonder the dude got so freaking rich, charging $700 for a glorified wax job, and people look down on hookers???

  53. Kit Gerhart Says:

    You’re saying the $700 SETD screw job isn’t as much fun as what you get from a hooker?

  54. Blaid Says:

    i agree with tesla wanting to sell directly to the public. having a large dealer network is hard to control and suffers a great amount of quality issues.

  55. Puremoose Says:

    Pedro…TOYOTA will be discounting all the OlD 2013 Corollas when people see the NEW 2014 cars.
    the 2014 COROLLAS