AD #2404 – Detroit Three Fall Behind in Crossovers, Ford Ranger Makes Towing Easier, UPS Tests Electric Delivery Truck
August 1st, 2018 at 11:37am
Runtime: 6:53
0:34 Detroit Three Fall Behind in Crossovers
1:44 Discontinued Vehicle Retention Trends
3:06 Honda Creates Charging App for Fit EV Owners
3:51 Ford Ranger Makes Towing Easier
4:55 Tesla to Invest $5 Billion In China Factory
5:39 VW Considers Producing Its Own Battery Cells
6:06 UPS Tests Electric Delivery Truck
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On today’s show…GM, Ford and FCA are losing ground in the crossover segment in North America…UPS teams up with a California start-up to test electric delivery trucks…and a look at how well or how poorly some vehicles hold their value after they’re discontinued. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show for enthusiasts of the automotive industry.
DETROIT THREE FALL BEHIND IN CROSSOVERS
The Detroit automakers have struggled to sell passenger cars, so much so that Ford and FCA have decided to pretty much abandon that market and focus on pickups and SUVs. And a new study says the Detroit automakers will only produce 16% of North America’s passenger cars by 2023 and that’s down from 53% in 2005. But it’s not just passenger cars. The three companies are losing ground in the crossover segment as well. Bloomberg reports that analyst Alan Baum estimates, GM, Ford and FCA will only produce 35% of the crossovers in North America by 2023, which is way down from 61% in 2005. But not surprisingly, the Detroit automakers are expected to dominate the pickup and big SUV segments. Their share of North American production will be at 86% by 2023. What this shows, is GM, Ford and FCA need to do a better job of selling crossovers, which are becoming more and more popular with consumers.
DISCONTINUED VEHICLE RETENTION TRENDS
Automotive analysis firm, Black Book, released an interesting study on how well a vehicle retains its value after it’s discontinued. When the Mazda MPV and Mercury Milan left the market, they lost value faster than any of the other vehicles looked at, when compared to other vehicles in the same segments. The Ford Crown Victoria, a staple of police departments and taxi companies had a lower retention rate due to police adoption of SUVs and the rise of ride-hailing services. But quirky styling and unique capabilities tends to lead to a better than average vehicle retention rate. The body-on-frame Nissan Xterra, the military-inspired Hummer and the retro-styled Toyota FJ Cruiser, all retained value at higher rates than other vehicles in their class. The way we see it, the more interesting the car, the more likely it’s going to hold its value.
Still to come…Ford is using radar to make towing easier in the new Ranger.
HONDA CREATES CHARGING APP FOR FIT EV OWNERS
Most electric vehicle owners charge their cars when they arrive home for work, but that’s usually when the demand on the grid is highest and electricity is most expensive. That’s why Honda has created a new app for Fit EV owners that allows them to charge when demand is low and the availability of renewable energy is high. Called Honda SmartCharge, it computes the best time to charge based on the owner’s schedule, so it doesn’t impact their use of the vehicle. It’s currently only available for Apple devices for select Fit EV customers in California. But the company says it plans to expand to other areas in the near future and that it’s looking to apply it to the Clarity Electric and plug-in hybrid models as well.
FORD RANGER MAKES TOWING EASIER
Need help hauling? The new Ford Ranger is getting a blind spot monitor with trailer coverage. Users can enter in the length of what they’re hauling, and the radar sensors will adapt accordingly. The system is standard on the XLT and Lariat models and the 2019 Ranger goes on sale early next year.
And be sure to check out our coverage of the Center for Automotive Research’s MBS conference. John is talking to the experts about new technology trends and the issues the auto industry faces. Look for those interviews on our website, Autoline.tv.
Coming up next, Tesla is going to invest big bucks for its new factory in China.
TESLA TO INVEST $5 BILLION IN CHINA FACTORY
We’ve got a number of stories related to electric vehicles today. Tesla received approval in early July to build a new factory in Shanghai, China, but at the time it did not reveal how much it was going to cost the company. Now we know. Bloomberg reports that Tesla will invest $5 billion in the new facility. The company had $2.7 billion in cash at the end of the first quarter. And it’s burning through that cash to get production of the Model 3 up to speed. So, Tesla is considering raising funds from local Chinese partners as a way to help pay for the factory. And this shift of production to China is likely to become more common the longer the country and the U.S. continue their trade dispute.
VW CONSIDERS PRODUCING ITS OWN BATTERY CELLS
Volkswagen’s CEO Herbert Diess doesn’t want to be dependent on a few Asian manufacturers for EV batteries and says the company is considering making its own battery cells. And like so many other automakers it’s eying solid-state batteries. Diess sights that advancements in ceramic materials as separators between the two halves of the battery had increased the possibility to mass produce solid-state batteries.
UPS TESTS ELECTRIC DELIVERY TRUCK
And UPS announced it has teamed up with Thor Trucks to test an electric Class 6 delivery truck in California. The vehicle features a Thor-designed and built battery that yields about 100 miles of driving range. UPS will use the electric truck as part of its fleet for 6-months and if the test goes well, UPS may purchase additional electric trucks from Thor.
But that bring us to the end of today’s report. Thank you for watching and we’ll be right back at it again tomorrow.
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Comments (21)
August 1st, 2018 at 12:17 pm
A few months ago, a friend was considering an FJ Cruiser, until he learned of the prices they are going for. He’s now looking for a similar, but much faster depreciating 4Runner. He plans to do actual off roading, and apparently both of those vehicles are quite capable.
August 1st, 2018 at 12:26 pm
$5 billion for a new assembly plant! That is really surprising. With simpler assembly of electric cars and cheaper Chinese labor, I would have thought this plant would cost less than a new plant to assemble ICE vehicles. In the U.S., those typically run between $1 and $2.5 billion. So, what is Elon building that will cost so much?
August 1st, 2018 at 12:31 pm
2 Maybe the plant will also make batteries, motors, and circuit boards. Yeah, $5B sounds a lot, if it is only an assembly plant.
August 1st, 2018 at 12:44 pm
The issue with the Detroit Three and the CUV market is that you do not get the same bang for your buck as you do with the foreign OEM’s.
Detroit is overpriced and under contented when it comes to lower and mid level trimmed models of their CUV’s. There should only be three or four trim levels for consumers to choose from for any model. Base or LX, Middle or EX, and EXL for highly equipped models. OEM’S could add a SE = Special Edition trim also. Most OEM’s have added Touring and Denali for example as their highest trim levels which are most times too expensive for the average Jane or Joe to buy or even lease. Detroit has improved reliability but so that the rest of the OEMs.
The bare bones trim levels should only be sold to rental car companies. I believe that Detroit needs to put it’s customer’s first and add content to their vehicles especially at the entry level trims to simplify manufacturing and assembly and attract customers. They need to do this before looking to satisfy Wall Street, IMHO!
August 1st, 2018 at 12:44 pm
While the big-three may fall behind in crossover (by 2023), remember, these are annalists predictions, and also remember, how great their predictions have been for sale numbers (SAAR); pretty abysmal. So with new product not even out yet, I don’t see these numbers firm or even beginning to gel. Just my take on this story. And for some of my take on one of the points they were trying to make in Bloomberg’s story was that Buick is discounting Encore at 18% and Ford was saying if you’re looking at a Buick why not look at the EcoSport; well first off that is a tiny segment and secondly comparing the Buick which is a little long in the tooth to the Ford which hit the market (new) is just a little bit lame) IMO
August 1st, 2018 at 12:47 pm
Honda seems rather late to the game with their charging app. Our Bolt knows the time of day pricing on our electricity and charges to suit my leave time at the lowest rate. I believe the Leaf does too. Don’t know about Tesla but I am confident we’ll hear all about it in detail…
August 1st, 2018 at 12:54 pm
Anyone have a live link to the Tesla-Musk earnings conference call today?
August 1st, 2018 at 1:27 pm
@chuck- but the Ford isn’t really new is it? It’s just new to us. I think it’s another vehicle that’s been sold in Brazil for a while.
My wife and I have been shopping for a replacement for our Juke, I find that most of the CUV offerings have a large stench of boring, Kona being the exception. That said I think we are going with a Cruze hatch, giving up AWD to save a few bucks since we are about to build a house.
August 1st, 2018 at 1:31 pm
7
https://edge.media-server.com/m6/p/wasrmjwi
August 1st, 2018 at 1:37 pm
8 The current Ecosport is a 2nd generation, but has been around (in other markets) since 2013 or so. Maybe you know, but the ones sold in North America come from India.
August 1st, 2018 at 1:40 pm
Sean does that 16% of NA passenger cars figure come from the cars they plan to produce in 2023 and the current market volume? Because I would suspect that the 2023 passenger car market will not be what it is today. At the rate of decline the Detroit three may only produce 4 cars and still have 53% of the passenger car market.
August 1st, 2018 at 1:40 pm
Lex, not a valid point when a 2018 Equinox 1.5t AWD is $6,000 less than a 2018 CR-V 1.5t AWD on autotrader.
August 1st, 2018 at 1:42 pm
#2 Its 5 billion renminbi. which currently has an exchange rate of $1 to .15. lol
August 1st, 2018 at 1:43 pm
Cars will make a comeback by 2023.
August 1st, 2018 at 1:56 pm
Lumping them all together is a little stupid. FCA is on fire with Jeep. GM has the Equinox which sells well. Ford is probably the weakest link with it hideous lineup of Hyundai/Subaru/Audi/VW look alike front ends. The superman grill is tired on all these makes. Lazy designers and lazy Ford with their euro trash lineup. I have driven and owned several Ford products. Literally all six vehicles at my house are Ford products. I would not be caught dead in ANY crossover they have. The Ecosport is just plain and boring. The Escape was ugly out of the gate. The Edge has the same tired look from it’s introduction LAST DECADE. The Explorer is a piece of crap with more lame and boring styling. Ford has NOTHING exciting crossoverwise. And lately all they do is cvopy other manufacturers. When Ford gets back to making good looking, non derivative copies of others crossovers, maybe they will do better.
August 1st, 2018 at 2:29 pm
Kit the 2019s are out so dont hold your breath for a 2023 passenger car comeback. Probably take those 4 years to see the full decline. Then about 6-7 years of stagnancy maybe a revitalization around 2030.
But by then no one will own cars and just hail a mobile pod that looks like an egg.
August 1st, 2018 at 2:59 pm
I wasn’t too serious about cars making a comeback by 2023. The only thing that might really hasten a return to lower vehicles, would be drastically higher fuel prices, and even then, it might not make much difference.
August 1st, 2018 at 6:55 pm
Tesla news
https://twitter.com/guardian/status/1024789414847950849
August 2nd, 2018 at 6:44 am
#16
So Tesla loses another 3/4 of a billion dollars; pretty soon they are going to be talking ‘real’ money.
Musk has guts, balls, chutzpa but I fear his pyramid may fall (eventually).
#8
Buzzard, agreed, EcoSport not new but I’m sure Ford is bringing a ‘refreshed’ vehicle to the table; the Encore, while pretty good, hasn’t changed much. But point (yours) well taken.
August 2nd, 2018 at 7:42 am
8, 17 Both Encore and Ecosport have been around for about 5 years, pretty much in their current form. The Ecosport was “aging” when it arrived in the U.S.
Both are on the slow end, performance-wise, being slower than a Prius, but make good “city cars” for a lot of people.
August 2nd, 2018 at 12:52 pm
@12 NormT are you looking at MSRP before incentives for equal trim levels?