AD #1422 – U.S. Car Sales Strong, Aston Teases New Lagonda, China’s Top 10 Automakers

July 25th, 2014 at 12:05pm

Runtime: 8:12

- U.S. Car Sales Continue to Rise
- OEMs Want to Delay EV Sound Rule
- Aston Teases New Lagonda Sedan
- GM Cars Now Internet Ready
- China’s Top 10 Automakers
- Buying a Car in 2014

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Hello and welcome to the TGIF edition of Autoline Daily. Today we’ll look at the top automakers in China, GM bringing internet into its cars and buying cars at Costco, yeah Costco. But now the news.

U.S. CAR SALES CONTINUE TO RISE
Car sales are continuing to surge in the U.S. market. TrueCar is forecasting that July sales will hit 1.44 million units, a gain of nearly 10% compared to a year ago. That translates to a SAAR of 16.7 million units. And that could be due to all the money automakers are putting down on the hood. Average incentive spending in July was about $2,700 per vehicle which is 7% higher than last year.

OEMs WANT TO DELAY EV SOUND RULE
Electric cars can pose a problem for pedestrians and especially blind people because they are so quiet. That’s why NHTSA mandated that those types of vehicles must emit a sound at low speeds to warn people they are approaching. But now some automakers are trying to get the agency to delay the rules because NHTSA won’t finalize the regulations until next April. The Detroit News reports that the phase in period was supposed to start in 2016 but automakers are worried that they won’t have enough time to develop the sounds and instead want to wait to 2018 to implement the rules. Not all automakers must be worried though. Fiat has already, with the help of leader dogs, developed a sound for the 500e.

ASTON TEASES NEW LAGONDA SEDAN
Every once and a while I’ll read a press release of a new vehicle and say wow I can’t wait to get behind the wheel of one of these babies only to get to the end and realize it’s not coming to North America. Well Aston Martin is now teasing the new Lagonda sedan, which definitely falls into that category because it will only be offered in the Middle East. I know, it’s going to be ridiculously priced anyway and I probably wouldn’t get to drive one but that does not take away from the fact that I still want to drive one. You may remember that Aston offered a Lagonda sedan in the past, but I think that car had a face only a mother could love. However, this new one appears to be pretty slick looking from the teaser image.

GM CARS NOW INTERNET READY
Have you seen those GM ads in the U.S. bragging about having 4G LTE in its cars? If you’re not sure what that even means, let me break it down for you. Basically GM is using OnStar to equip its cars and trucks with the Internet so you can turn your vehicle into a traveling hot spot. GM’s Chief Information Officer Phil Abram says its customer research shows that an overwhelming number of customers are interested in adding an Internet package to the car. Every new car get’s the Internet free for the first 3-months, but after that subscriptions will run from five to fifty dollars a month. But is this something you’d pay for in your car? Let us know what you think in the comments section below.

YOU CAN’T TELL THE PLAYERS…SO
China is now the biggest car market in the world, but do you know who the biggest players are there? Here’s a list of the top ten automakers in China. Number One is Shanghai-VW followed by FAW-VW. Even though Volkswagen is a joint venture with both companies they are completely independent of each other. Shanghai-VW only sells VWs while FAW-VW sells Audi’s and VW’s. And they don’t sell the same VW’s, each has a different line-up of cars sold in different dealers. Third on the list is Shanghai-GM followed by Beijing Hyundai and Dongfeng Nissan. GM pops back in the top ten with SAIC-Wuling but like VW, that operation is separate from Shanghai-GM. Seventh on the list is Changan-Ford, followed by Changan, the only domestic Chinese automaker to crack the top ten. Rounding out the list is Dongfeng Peugeot Citroen and Dongfeng Yueda Kia.

Did you know you can buy a new car through Costco? And I’m willing to bet the bulk store is probably selling a heck of a lot more than you might ever expect but we’ll have more about that after this short break.

AUTOLINE THIS WEEK
Last year Costco helped sell over 450,000 cars in the U.S. Yeah Costco! In the following clip from Autoline This Week, Jim Prueter from the Costco Auto Buying Program, explains how the big box store is able to help move so many vehicles.

Jim Prueter: We have 50 million people a month who walk in to Costco and when they walk in, they walk by a new car because we park the cars – where we’re allowed to by law. Some places you can’t do that and walk by a new car. The impressions are huge and they stand back. A lot of people go, “I didn’t know you could buy a car” so that’s just one way we get to them. The other way is Costcoauto.com where you can go in. You’re right. As far as not knowing what they want or we do it either way. If you know what you want, you can go on our website and target it exactly. If you’re not real sure, you can configure a vehicle. “I know I need room for the kids. I know I don’t like driving a big SUV.” You get an idea. “Gas mileage is important,” et cetera, et cetera. Then we come back and then recommend what you might be interested in. Then you can take a pick. Most people have some sense about, “You know, I saw that car and I really like it. I think I’m interested in that.” They go in and they configure a car or they put the information on. Then it says, “you want to contact the dealer?” If you do, absolutely no obligation, you just hit a button. That lead then goes to the closest dealer, in this case, it could be a Chevy dealer, the closest participating Chevrolet dealer and it goes into the fleet department. We work with fleet only, so that they’re not the next walk-in into the showroom. You’re working with that end of the business. They have been trained by boots on the ground people from Costco, I mean, the dealer fleet manager has and their personnel or the web person, that online person that they have on almost every dealership. The dealer has agreed that they will contact, get back to the Costco member within 24 hours. Quite honestly, the dealer closes about 42% of the leads that we send them and it’s huge. No other place, nobody has that kind of a close ratio.

Also joining John for that program is Larry Dominique from Automotive Lease Guide and TrueCar, and Scott LaRiche from Lou LaRiche Chevrolet. This is a great discussion about the many different ways consumers now buy new and used cars and you can watch the entire episode right now on our website, Autoline.tv.

But that’s the end of today’s show, thanks for watching and have a great weekend.

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23 Comments to “AD #1422 – U.S. Car Sales Strong, Aston Teases New Lagonda, China’s Top 10 Automakers”

  1. XA351GT Says:

    Internet in cars. Just another distraction for drivers. Besides are not most cars to configured to work with Smart phones that already have Internet? It seems just another complexity to go wrong cost money to fix, have consumers complain about not being able to use them ( Idrive,Sync/My Ford Touch etc.)

  2. G.A.Branigan Says:

    I don’t need a traveling internet ‘hotspot’,although my granddaughter would argue that.

  3. XA351GT Says:

    EV sound problem, why not make them sound like a baseball card in the spokes of a bicycle wheel? You need to make it a unusual sound to draw attention to it without being overly obnoxious .

  4. Jon M Says:

    No way would I pay for internet in my car. I already pay for it on a device that goes in my car every time I do. There is one really good reason why I never access the internet when said device is in the car while I’m driving. It is for this reason that I don’t think cars need to become–among other unnecessary things–internet cafes.

  5. marshy Says:

    Way no to paying for the car’s mobile hot spot. Apart from the fact that my phone IS one, there is no value proposition for the car vs a real mobile hot spot that works in ALL my cars and any where else (like and air port or hotel room).

    Its of waste of money…unless you’re rich and ignorant. Then its fine for them to take your money.

  6. Bradley Says:

    Internet in Cars:
    Too little, Too late… GM hasn’t answered the question why would their cellular connection work any better than the one I can hold in my hand?

    The internet will be in cars and it will be a nice partner to autonomous driving. However, why does the OEM have to integrate something most people already have in their pockets?

    Costco Cars?!? What was that guy talking about? It was extremely difficult to follow. It sounds like buying a car through Costco is more of a hassle than going to a dealer.

  7. Kit Gerhart Says:

    If the internet hot spot in a car would have enough range to work in my house or condo from where I park the car, and if it was cheaper than a Verizon hot spot for 6GB a month, I might be interested. I doubt that either will be the case, though.

  8. Kit Gerhart Says:

    With most, or all carriers, you have to pay extra to use a smart phone as a hot spot, and the data will be metered. I use a separate tablet as a hot spot for using a real computer in the summer, when I don’t have cable internet.

  9. Kit Gerhart Says:

    6, My sister checked out buying a car from Costco when recently shopping for a Subaru Forester. It turned out that Costco doesn’t have arrangements to sell Subaru, at least in Indianapolis, but if you want to buy a car they are set up to sell, and if you don’t have a trade, it can work pretty well. You probably get a price about as good as the best you can negotiate with a dealer, for people who don’t get employee discounts. If you can get an employee discount on what you want, you go to a dealer.

  10. MJB Says:

    I just finished switching phone providers for me and my wife (from one of the big 2-yr contract provider to a month-to-month provider) taking us from an absolutely ludicrous $170/mo (& that was WITH a 23% Ford discount) down to $80/mo.

    NO WAY am I about to incur additional monthly expenses with in-car Wi-Fi! Let this next generation of buyers (suckers) get ropped into thinking they can’t survive without all that 24/7 connectivity!

    My answer to this survey… a resounding NO!

  11. Mike Says:

    Curious with the Costco statement “We work with fleet only, so that they’re not the next walk-in into the showroom”. Does this mean buyers who go through Costco can purchase cars at fleet prices?
    Is that what’s contributing to the higher closing ratio?

  12. Bradley Says:

    #9

    I am still not following. Why would I go to Costco to buy a car?

    If the local Chevy dealer started selling Toilet Paper, it doesn’t mean I will go there and buy it?

  13. MJB Says:

    #11 – Disco!

  14. Bradley Says:

    I guess in the realm of consolidating errands, and you buy a car frequent enough, this will save time.

    However, from hearing that guy talk, it doesn’t sound like it is as easy as buying a gallon of peanut butter.

    When I bought my VW Sportwagen TDI, I had them agree that on the day of their choosing I would spend no more than 30 minutes on the car’s paperwork.

    They thought it was silly, but agreed.

    On the day of the sell they admitted it was difficult to maneuver, but they did meet my 30 minute requirement.

    It happened that this was the same dealer that I bought my Yaris. That took almost two hours.

  15. Kit Gerhart Says:

    11, 12
    The reason to buy a car at Costco is that you can get at least a half-decent price on the car, without going through the usual, generally unpleasant, “negotiating” process.

    Of what I know, this only makes sense if you are not trading a car, and only if you have no employee or supplier discount that predetermines the price of the car.

    For those who have fun negotiating with dealers, buying a car at Costco would not be their thing.

  16. Bradley Says:

    #14

    Ah, I see. Thanks!

    I wonder if manufacturer discounts and financing offers are still applicable?

  17. Kit Gerhart Says:

    15, I don’t know about that.

  18. Lex Says:

    The only advantage for buying a car through Costco is prearranged warehouse pricing. I told a collegue of mine that if she purchased or leased a Subaru throught the Costco Auto Buying Program there was a gift card promotion going on at that time. She would receive a $500.00 Costco Gift Card from Costco. She leased the car and got the gift card which she used it to buy a big flat screen TV and some movies. She was very happy and I was happy to help a collegue. Sometimes in life timing is everything.

  19. Lex Says:

    Distractions and more distractions are going to drive up insurance costs. I bet Insurance Companies will be looking at a vehicles classification, weight, horsepower and whether it has 4G LTE / Internet access when determining rates. A vehicle with 4G LTE will probably be more expensive to insure.

  20. Brett Says:

    When cars are fully autonomous, they *will* be Internet cafes. The price of insurance will also drop dramatically as will the weight of the vehicles themselves.

  21. C-Tech Says:

    If the internet connection was cheaper than what I pay for the phone hot spot I may consider it since I do use my car for business. The kid’s car? NO F*****G way do they get another distraction in the truck!

    John, since some of these car sales are pent-up demand, when do you think sales will taper off? I believe about 1 to 1.5 million of these sales will go away as people replace their 10 year or older vehicles.

  22. MJB Says:

    @21 I would imagine there is but a small percentage of car purchases accounting for pent-up demand right now, as economic recovery began well over a year ago and borrowing restrictions have been lowered for some time now also.

  23. Richard Tait Says:

    The EV Sound Rule reminds me of the old “red flag” rule that used to exist in the infancy of the motor car. All cars required a gentleman with a red flag to walk ahead of the car to warn pedestrians of the car coming. That rule was dumb and so is the EV Sound rule.