On today’s show…uh-oh, VW may have more cheating software under the hood…..how car dealers can boost their service business…..and Cadillac hopes to boost sales with some powertrain tweaks. All that and more coming right up on Autoline Daily.
This is Autoline Daily for October 12th, 2015.
OH YEAH, I FORGOT TO TELL YOU
Just when we thought that the VW emissions scandal couldn’t get any worse, now the EPA says there may be a second software program on the company’s 2-liter diesel engines that affects their emission controls. But what makes it potentially worse is that this involves 2-liter diesels that VW hoped to certify for 2016. The EPA still has to investigate, and it’s possible this software is not designed to cheat the system, but VW did not notify the EPA about the software until this whole scandal blew up, even though it was legally required to do so.
GOING…GOING…
We told you a couple of weeks ago that when Martin Winterkorn, stepped down as the CEO of Volkswagen AG, he still held onto his board positions at Porsche, Audi, and a number of other business units within Volkswagen. But now reports out of Germany say he is being pressured to resign from all those positions, and that will probably happen before the week is over.
Still to come….Cadillac tweaks the powertrains on the CTS and ATS.
DEALER SERVICE HAS ROOM TO GROW
Did you know that something like 50% of a dealer’s profit comes from the service department? And according to a new report from DealerSocket they could be doing even better. Its data shows that 30% of sales customers bring their new vehicle in for service within the first year of ownership. That’s really not a bad number, but it drops considerably after 3-years to 13% and down to 2% after 5-years. So, what can dealers do? DealerSocket says that integrating sales and service is a great way to retain customers. Some dealers offer cash-back bonuses on service work that applies to the purchase of a future vehicle, which nearly doubles customer loyalty and retention rates. But it’s clear dealerships could be doing more. As of now 3rd-party repair shops are doing around 75% of all service work.
CADILLAC ENGINE UPGRADE
Cadillac’s lineup is going to get a little more efficient in 2016. The new 3.6L V6 engine that was first announced for the CT6 will be making its way down to the ATS and CTS as will its 8-speed automatic transmission. A Stop/Start feature has also been added to the turbocharged 2.0L 4-cylinder engine in the ATS and CTS, which we showed you the other day. As a result, CO2 output has been reduced up to 6 percent on 2016 ATS and CTS models.
U.S. ON PACE TO SET MILES DRIVEN RECORD
The Great Recession threw record numbers of people out of work and the amount of driving they did plummeted as they lost their jobs. But now that the economy is much stronger, Bank of America/Merrill Lynch says the U.S. is on pace to set an all-time record for miles driven. Through July, U.S. drivers are on pace to hit 3.1 trillion miles driven. And researchers believe miles driven could grow higher over the next couple of years. The report says car sales will remain strong because of this. With more people driving they’ll need to replace their car because the average age of a vehicle in the U.S. is over 11 years old. And since traffic accidents and injuries are directly related to the number of miles driven, we can expect those numbers to go up,too.
Coming up next, the public is going crazy over CUVs, but not because of cheap gas prices.
WHY CUVs ARE SOARING
As we’ve reported, the crossover segment is red hot. Many believe low gas prices are helping to boost the segment but on Autoline After Hours, Mike O’Brien, the head of corporate and product planning at Hyundai Motor America, told us he thinks there’s more to it than that.
(The AAH preview is only available in the video version of today’s show.)
You can watch that entire show with Mike O’Brien right now on our website or on our YouTube channel.
But that wraps up today’s show, thanks for watching.
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Comments (23)
October 12th, 2015 at 12:23 pm
I believe the CUV market is partially due to so many drivers that had SUV’s and got used to the higher seated position which gives a better view of the road and at least in the snowbelt most are offered with AWD.
October 12th, 2015 at 12:44 pm
Mike O’Brien made a great point about the prices being similar between the CUVs and sedan. You couple that with the better residual values of the CUV and many times a CUV with a $2000 higher list price can be leased for the same money as the sedan. I’m not a lease kind of guy but 30% of consumers are.
October 12th, 2015 at 2:17 pm
Perhaps the primary reason 3rd party repair shops are doing 75% of all service work is because the stealerships charge 75% more than they should for the same work.
In other words, the thing that will have the single biggest impact on dealers retaining service work on vehicles over 5 years old is likely to be price competitiveness. I understand that customers can (almost) always count on OEM parts being used exclusively for their repairs when done at the dealer, but many people put cost above ‘recommendation’. We see the same thing when it comes to filling a medical prescription with brand name vs. generic. Probably 90% of the time cost wins out.
October 12th, 2015 at 2:36 pm
I just watched the AAH where they discussed the new Volt. Part of the discussion centered on why it doesn’t sell well. The panel mentioned one part of the obvious, price, but they failed to mention a reason I would not consider it; there is no place to plug it in at most condos and apartments, including the one where I spend 2/3 of the year in Florida. That’s not an issue with a Prius. You just put gas in it and drive, and you have a roomy for its size, very efficient car. I’d think a Volt, or other plug-in hybrid would be a good choice for many apartment dwellers, if they had a place to plug it in.
October 12th, 2015 at 2:53 pm
@ Kit: I think the volt would sell better if they offered a station wagon version,same same with the Cruz diesel.Especially since VW’s imagine is in a steep transition.
October 12th, 2015 at 3:00 pm
Stop/Start feature reduces CO2 output up to 6 percent on 2016 ATS and CTS models is incredible as General Motors should consider putting this feature in all vehicles.
October 12th, 2015 at 3:30 pm
5 Yeah, a wagon might help sales, especially a tall wagon, AKA CUV. The current one is a hatch, though, which would work for me, if I had a place to plug it in where I spend 7-8 months of the year. Not everyone lives in “a house in the suburbs” with an attached garage with power. I’d have a place to plug a car in 4-5 months of the year when in Indiana, but then I’d be fueling my car with coal.
October 12th, 2015 at 3:33 pm
6 I suspect the 6% is in very heavy stop and go driving, where the engine would be stopped a lot. Two per cent might be more typical for most peoples’ driving.
October 12th, 2015 at 4:11 pm
Since I’ve never driven a vehicle with start/stop,It may be okay for some cleaner air and some fuel savings.But,I know I wouldn’t want that on a turbocharged anything unless it had a remote oil tank so it doesn’t shorten the life of the bearings from over heating and no oil flow.
October 12th, 2015 at 5:15 pm
#4 agree 1000% Many retired folk would be great candidates for the Volt, not much driving and mostly short trips, but they also mostly live in condos, so there goes the Volt from their shopping list.
October 12th, 2015 at 5:45 pm
From the Uh Oh dispenser
Rights to the vw story have been purchased by Paramount studios and environmentalist Leonardo DiCaprio’s production company.
http://www.reuters.com/article/2015/10/12/us-volkswagen-emissions-movie-idUSKCN0S627020151012
October 12th, 2015 at 5:46 pm
@ Kit: Have you ever asked the condo mgt if they had any intentions of putting in some charging stations?
October 12th, 2015 at 5:50 pm
“I remember when VW was around”…maybe a soon to be saying…
October 12th, 2015 at 6:30 pm
12 A couple years ago, they had no intentions, but that could change with time. If I really wanted it to happen, I should try to get on the condo board, but that doesn’t sound like much fun.
October 12th, 2015 at 6:54 pm
I just talked to someone with an original 1981 Olds diesel that still runs. It must be about the only one in the world.
October 12th, 2015 at 7:14 pm
What about cylinder deactivation when the wheels are stopped? Wouldn’t that also decrease CO2 levels without all the expensive additional hardward?
October 12th, 2015 at 7:27 pm
Even the engines with cylinder deactivation run on all cylinders at idle. I suspect the shake with half
the cylinders would be intolerable, or the engine would have to idle enough faster on half cylinders that it wouldn’t even save gas.
October 12th, 2015 at 9:33 pm
Auto repairs are expensive no matter where you go. Dealerships are much more expensive though. When I took my 98 F150 in for inspection they told me it would soon need rear wheels cylinders . Quoted me a price of $400. I like to have crapped a puppy over that. I have replaced them myself before and it isn’t a hard job. The parts are cheap also. I mean exactly how hard is for a qualified mechanic with air tools and a lift to remove to wheels and drums. Disconnect the brake lines and 2 bolts holding each wheel cylinder and replace them and bleed the brakes? Well I bought the parts for less than $25 and did the job in my drive with a jack and hand tools in under a hour. So unless the shop rate is $350 a hour I have no clue why that job would be so much.
October 13th, 2015 at 8:11 am
@3 & 18 Agreed. Another problem is the OE replacement parts are just down right ridiculous. I worked for a supplier and know we charged $80-100 for a front or rear bumper cover. Go to any shop and GM service charges $600 for that same fascia.
There used to be a day when you could go to the dealer order every part for a car and build it in your garage for less than buying a fully assembled car off the lot. My guess is that $25,000 car would be about $200,000 if bought piece by piece now.
October 13th, 2015 at 8:32 am
18.
Doesn’t surprise me one bit. 10 years ago, when I was still driving my SC400 it needed new pads and rotors all the way around. I knew I was going to do the work myself, but just for kicks, I called up the Lexus dealership to see what they would charge. $1,200!!!
Got the parts (ceramic pads too) at a local import car parts shop and did it myself for under $230. I’ve done the same with alternators, radiators, sway bars, lower control arm bushings, etc.
The only thing I won’t touch again are shocks and struts. Even though I successfully compressed the springs to do the job once, I have no desire to temp fate again. Cranking that one-size-fits-all spring compressor down turn-by-turn is the closest I ever need to come to playing Russian Roulette.
October 13th, 2015 at 10:14 am
18 How does an inspection reveal that you will “soon need wheel cylinders”? I’d always thought that if they were leaking, you need them right now, but if they aren’t leaking, you don’t know when you might need them. Can anyone inform me? Thanks.
October 13th, 2015 at 12:28 pm
Kit, I thought the same thing. They were rusty but not leaking.When I pulled the drums the passenger rear shoe was just about to the backing plate ,but they said the brakes were fine. I don’t know where the hell they get some of these guys. That was a whole experience as well as shoes I bought from Advance Auto and later Ford were so out of consistency it wasn’t funny. The shoes varied in thickness as much as .050″ They were so bad The drums wouldn’t even fit back on. I wound up getting a set from Rock Auto that were made by Rebestos that actually worked. Those were within .005″ max. Oh and everything from everyone was made in CHINA.
October 13th, 2015 at 12:59 pm
22 Thanks for the info.