This is Autoline Daily reporting on the global automotive industry.
WHICH CARMAKERS WILL DO BEST BETWEEN NOW & 2023?
Which automakers will do the best between now and 2023? Merrill Lynch looked at the new cars and trucks that automakers have coming between now and then and came to these conclusions:
• 70% of the new vehicles coming out will be trucks, and 45% of them will be CUVs. Only 24% will be passenger cars.
• GM is below the industry replacement rate, but it has new full-size SUVs and heavy duty pickups coming that will raise profits.
• Ford has the highest replacement rate, and 96% of its new lineup will be trucks and CUVs.
• FCA’s replacement rate is below the industry average.
• Amongst the Japanese, Honda has the highest replacement rate, Toyota is strong, but Nissan is sputtering.
• Hyundai and Kia are above the industry replacement rate, but are a bit heavy on passenger cars.
• European automakers are below the industry replacement rate, but Daimler is higher than the rest while BMW and VW are at the bottom of the list.
New products in showrooms always help boost sales and profits, so this list can help forecast which car companies will do the best over the next three years.
SALES SLUMP CONTINUES IN CHINA
Car sales in China continue to crater. Automakers sold 1.54 million light vehicles in the country in April, which is a 16.5% drop compared to a year ago. It’s the 11 month in a row sales have dropped in China. And they’re not expected to rebound anytime soon due to a slowing economy and concerns over trade tensions with the U.S.
FORD CREATES SELF-DRIVING ROBOT
Autonomous vehicles from Ford are a few years down the road but it’s using the technology to its advantage at its body and stamping plant in Valencia, Spain. Ford engineers have created a self-driving robot to deliver parts to employees around the facility. Nicknamed Survival, it’s been programmed to know the plant layout and it uses LIDAR to navigate the entire facility without any external guides. It can change its route on its own if someone or something is in the way. The robot doesn’t replace any employees but it can save up to 40-employee hours every day by delivering parts, which is a time-consuming process for us humans. Ford has been testing the robot for nearly a year and hopes to expand it to other plants in the future.
FERRARI REVEALS HYBRID AND ENGINE PLANS
Ferrari CEO, Louis Camilleri had some interesting things to say about the company. It will reveal a top-of-the-line hybrid with supercar performance before the end of the month. He says the car will slot above the 812 Superfast, but won’t be direct replacement for the 488. Camilleri also said Ferrari will stop supplying engines to Maserati in 2021 or 2022, which it has done since 2002. The CEO thinks a good move, both from a margin perspective and because it can transfer a lot of the labor that’s been focused on engines to the car side of the business.
MAZDA DEVELOPING INLINE 6-CYLINDER ENGINES
And speaking of engines, Mazda has confirmed it’s developing inline 6-cylinder versions of its Skyactiv-X gasoline engine and Skyactiv-D diesel engine. They will be mounted north to south in a new “Large Architecture” platform. Mazda says this is all part of its plan as it continues its path to premium. But what do you think? Can Mazda successfully transition to a premium brand?
ROAD TRIP IN A BUICK REGAL
Hey, did you notice that John hosted Daily all last week? That’s because I was fortunate enough to take a week-long road trip. I’m nearly ready to spill all the beans, but here’s a little preview. We set out on a Friday afternoon. Our mode of transportation, a Buick Regal GS. We drove from Michigan to Arizona, then up to South Dakota, over to Indiana and finally back home by Saturday afternoon. In total, we logged 5,300-miles and even had time to cram in a few automotive stops along the way. Poorly painted Cadillacs with still dripping paint in Texas, deceitfully sized classics just outside of Phoenix and true works of art from Indiana. More to come next week.
TESLA DURABILITY REMARKABLY GOOD
Tesloop is a ride sharing company in Southern California, that only has Teslas in its fleet. It’s kind of like Uber but for much longer distances. On Autoline This Week, we’re joined by Rahul Sonnad, the CEO and co-founder of Tesloop, and he says the durability of Teslas is remarkably good.
(The ATW preview is only available in the video version of today’s show.)
You can watch that entire discussion right now on Autoline.tv or you can find it on our YouTube channel.
But that’s it for today, thanks for watching and have a great weekend.
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Comments (54)
May 10th, 2019 at 12:32 pm
Sean, any word on who Maserati will go through for their engines after Ferrari stops supplying them in 2021?
I wonder how that will affect Maserati’s sales. I suspect that a good percentage of Maserati buyers are aware that they’re getting a Ferrari engine under the hood.
May 10th, 2019 at 12:48 pm
I am going thru the links of my weekly “energy in the news” email, and here is ample confirmation of how hostile is my state of MI towards BEVs. Even the new Dem governor proposes to slap fees on BEVs in MI that are the highest in the nation!
“Electric car fees in Michigan would soar under Whitmer’s roads plan
Bridge Magazine, featuring Ellen Hughes-Cromwick
Drivers of gas guzzlers aren’t the only ones who would pay more under Gov. Gretchen Whitmer’s proposal to increase the state fuel tax by 45 cents per gallon to fund fixes to Michigan’s roads. Registration fees for electric and plug-in hybrid vehicles also would skyrocket and become the costliest in the nation.
“We really need to move in that direction of reducing [carbon dioxide] emissions, if we all agree on the science of climate change,” said Hughes-Cromwick. “Therefore, I would be really discouraging any sort of tax that would disincentivize the purchase of EVs.””
May 10th, 2019 at 12:51 pm
Although the self driving robot that Ford is touting looks like something new, most manufacturing facilities have been using unmanned delivery carts for something like 20 years. Yea they started with requiring a metal strip or tape on the floor but have evolved and were being used for a while now.
May 10th, 2019 at 12:55 pm
Sean Your trip looks awesome and I look forward to more details next week. I did something similar a couple years back and also stopped at the Cadillac Ranch in Texas. I found it weird that something so obscure would draw so many people. I went as far as Cali and made a stop at the Peterson Museum in L.A. The building itself is a work or art. For those that are not aware google it the building is as amazing as the cars inside.
May 10th, 2019 at 12:57 pm
3 The parts delivering robots I’ve seen, years ago, followed painted lines on the floor. I think they had an IR sensor or something to make them stop if they would hit something or someone. These Ford robots are higher tech, but the “follow the line” things were useful.
May 10th, 2019 at 1:03 pm
I think Mazda is perhaps better off sticking to premium trim levels for its lineup rather trying to become a premium brand overall. In addition, if they want to try to change their image, then their dealership network would be a good place to start. Good luck trying to sell premium vehicles out of the current showrooms. If you want to be premium, your dealerships better look and feel the part. I really don’t get those ridiculous lifts that take up space and do nothing for the feel and flow of the showrooms and serve no real purpose at all! I like Mazda, but I might suggest that their dealerships are at least part of their problem. If they want to move upmarket, the wrapper better look and feel as good as what’s inside.
May 10th, 2019 at 1:07 pm
Sean,
Mazda a premium brand? Don’t make me laugh. Mazda has been in a COMA in the US market, with a pitiful 1.4-1.7% market share, for a decade now. Auto journalists always praise its cars, YET the almighty CONSUMER keeps ignoring them. Mazda should learn a lesson from 0.5% market share VOLVO and drop ANY thoughts, let alone actions, to enter the crowded and Demanding Luxury market. Even the best players there, Merc and BMW and Audi, are having a very hard time with TESLA eating their lunch and hitting their sales AND profits hard!!
Let’s get real, people!
May 10th, 2019 at 1:14 pm
“Car sales in China continue to crater.”
To ‘crater’? Really? aren’t we too dramatic here? A 16% drop from DIZZYING HEIGHTS the year before is now called “cratering”?
For decades, many decades, the US car market was by far the biggest in the world. Then China, in a few short years, managed to sell almost TWICE, close to 30 million, new cars a year, compared to the 16-17 mill tops sold in the USA. Now they naturally take a breath from this STELLAR Achievement and we say they ‘crater”?
Don’t worry about China. Worry about Old Europe! (and of course that “hell on earth” India!)
May 10th, 2019 at 1:33 pm
That would be cool if Mazda made a rear drive sedan, or better yet, a wagon with an in-line six, but there is no way they should try to create a “premium brand.” It’s not working for Hyundai, and it isn’t working that well, even for Honda.
May 10th, 2019 at 1:37 pm
Sean, I look forward to your road trip report. You mention “true works of art from Indiana.” Did you go to Auburn, perhaps?
May 10th, 2019 at 2:41 pm
7 Some exec at Mazda looked at their small market share and thought “If we could just turn our 1.5% share into a premium brand than the profits of such small sales will be worth it”.
Then all the yes-men agreed and another dumb idea was born.
As kit said last week the difference between most cars and premium cars has shrunk, and Mazda can try and evolve into a premium brand but its all become kind of a gray area. Most vehicles fall into cheap entry level, premium brands and then Luxury. Not saying Mazda can not do it but I think it would require a new brand. You cant just throw lots of wood and leather and creature comforts on a Mazda and expect to raise the price 25K.
May 10th, 2019 at 2:50 pm
@MJB – Maserati has a few options. I think the most likely scenario is that they’ll take something from within FCA and tweak it to make it their own. I seem to remember claims from FCA that the engine in the Alfa Romeo Giulia Quadrifoglio is not a Ferrari engine. It kind of is, but with two cylinders cut off. So Maserati could do the same thing. Another path would be to develop its own engine, since it has several years before it’s cut off from Ferrari. Then there’s always the possibility of sourcing an engine from someone else.
May 10th, 2019 at 2:55 pm
@Lambo – I too was amazed at how many people were there. I wonder if the fact that you can graffiti something up without getting in trouble draws people in? Your trip sounds really cool and I have always wanted to go to the Petersen Museum. That place looks awesome inside and out.
May 10th, 2019 at 2:56 pm
I saw the Auburn Cord Museum in the background of the photo so I look forward to seeing the results of your trip!
May 10th, 2019 at 3:03 pm
14 I missed that, by just reading the transcript, and not watching the video.
May 10th, 2019 at 3:03 pm
13 I visited Petersen in summer 2003, 16 years ago! I saw the BMW-RR Phantom VII there for the first time. If you are in the area, don’t miss the Nethercutt Collection, a huge and very high-quality one.
May 10th, 2019 at 3:11 pm
#8. Cratering is a good word for Chinese car sales. February -18.5%. March -12%. April -16.6%.
New car sales in NAFTA in April: 1.60 M
” ” ” ” CHINA ” ” : 1.54 M
May 10th, 2019 at 3:16 pm
@Larry D. #7 – Journalist always praise Mazda because its vehicles drive so well. But here’s why I think consumers stay away. First, Mazda does less advertising than other automakers and has even fewer dealers. So, it’s not on people’s radar. Also, Mazda is usually at the bottom of the list in a few key categories with its crossovers that consumers are likely to cross shop. And we all know how important CUVs are to automakers right now. It has gone for this sporty look with its CUVs that have sharp slopping roofs, which cuts down on rear headroom and cargo volume. So, unless sporty styling and dynamic driving are the two main needs on someone’s purchase list, Mazda ends up falling off to the side.
May 10th, 2019 at 3:25 pm
@Kit – Yes, I was in Auburn. What an amazing place!
May 10th, 2019 at 4:08 pm
#2 – Don’t want to penalize BEV’s, however, since they put the same or greater wear & tear (generally heavier than ICE vehicles due to battery weight), they do need to pay their fair share for use of the roads. Most of us are paying for road maintenance via fuel tax.
In addition, BEV’s may be emission free when in use, however, power generated by fossil fuel plants does create emissions.
In essence, system should be fair to all.
May 10th, 2019 at 4:14 pm
19 I’ve been to the Auburn museum twice, and may go again this summer. I love it, both the building, and what’s inside.
May 10th, 2019 at 4:23 pm
20 BEVs are much more efficient than ICE cars, probably 60%+. The very best efficiency for a gas engine is around 40%, at one, ideal load situation, so overall efficiency of a gas vehicle in normal use is probably 25-30% at best. Of course, the actual emissions of a BEV depend entirely on the source of electricity.
If you want to ignore the actual environmental impact, and consider only the wear and tear on roads, taxing in cents per ton-mile would probably be the most “fair” way, but would require a GPS transducer or data logging odometer on every vehicle to measure it, and tech geeks would quickly figure out how to cheat the system.
May 10th, 2019 at 4:46 pm
Not too many years ago “Made in Japan” was a dirty word , now it’s Made en Chine . every single article from auto electric terminals to bed frames have been strength deficient. Tested the little Buick CUV reportedly Made EN Chine,
tinniest excuse for a car I ever drove
May 10th, 2019 at 5:02 pm
23 What “little Buick” did you drive? The little one, Encore, is made in South Korea, not China. The mid-size Envision is made in China. No, I’m not a fan of either.
May 10th, 2019 at 5:08 pm
Spanish GP qualifying tomorrow at about 9:00 am EDT on ESPN2. Race Sunday at about 9:00 on ESPN2.
May 10th, 2019 at 6:04 pm
Looking forward to the Spanish Grand Prix; go Ferarri and Haas.
May 10th, 2019 at 9:24 pm
23 I get the impression that w l posts here occasionally, but never reads anything posted here. At least he never responds. I am genially curious about which Buick he hated so much. He has posted the same thing twice, but never said which one he was talking about.
May 10th, 2019 at 9:46 pm
27 That’s “genuinely curious”
May 11th, 2019 at 8:11 am
Of coarse he’ll say Tesla durability is good, because he has a deal with them.
Read the truth below.
https://techcrunch.com/2019/02/21/tesla-model-3-loses-consumer-reports-recommendation-over-reliability-problems/
May 11th, 2019 at 8:56 am
17 strongly disagree with the term ‘cratered’ still. When a market grows with leaps and bounds for years, 50% and 100% growth year after year, and then it has a few insignificant corrections for a few months, it has not ‘cratered’. BTW it is rather pathetic to have to enlist the help of miserable Mexico and little bitty Canada (a market smaller than CA alone), to surpass China’s ‘cratered’ auto sales!!!
May 11th, 2019 at 9:00 am
18 Sean, Mazda did have a ton of advertising, which I truly detested, it had this stupid kid say “zoom zoom”! Subaru has the best ads, and Mazda arguably the worst! I hated the ‘zoom zoom’ nonsense with a passion, much more than I disliked ads from Toyota, which had some idiots jumping up and down and the caption “what a feeling?” What feeling???, or Chevy “Like a Rock” as if we are still in the… stone age, and all the rest of them. Zoom zoom was the worst.
I also have little hope that the new Mazda head in the US has a CLUE. I saw him on one of your shows, he can barely speak english, and he introduced this STUPID Diesel nobody asked for.
The only reason
May 11th, 2019 at 10:22 am
The “Like a Rock” ads must have been the most polarizing vehicle ads ever. My dad hated them, because they were silly, but I knew people who loved them, because they were Bob Seeger fans, and in some cases, really liked that particular Bob Seeger song. Of course, Seeger no doubt lost some fans, because he allowed his song to be used for Chevy truck ads. With advertising, as with other things, you can’t please everyone.
May 11th, 2019 at 10:41 am
29 You still believe the moon is made of blue cheese?
May 11th, 2019 at 10:47 am
32 Not always. Who hates the Subaru ads? I may think their cars are ugly, but the ads are great.
Similarly,
Merc, “Engineered like no other car in the world”, excellent and truthful,
BMW, “the ultimate driving machine”, great slogan, quite true (esp in handling)
I like ads that are INFORMATIVE. I hate ads that are just silly, and contribute nothing.
But I am sure there are millions of consumers who make very irrational decisions. They do not have the brains to think that, if a cereal has some celebrity on its box, usually some athlete or ball player, you pay thru the nose, and you would be far better off buying the (identical in contents) generic version at half the price.
May 11th, 2019 at 12:53 pm
34 Probably dog haters might not like some of the Subaru ads. As far as the BMW slogan, it doesn’t apply any more, for many of their vehicles.
May 11th, 2019 at 4:26 pm
34 Most company slogans are mostly BS, like Merc’s current one, “The best or nothing.” In what way is the CLA the best in its class? It isn’t even as good as many, or most similar size sedans from mainstream brands, that cost many thousands less.
May 11th, 2019 at 6:23 pm
36 of the 100s of M-B models, you found the lousy FWD CLA? Even that one looks great, even if it does not perform as well as the REAL M-Bs.
May 11th, 2019 at 6:24 pm
35 I have not driven recent BMWs, but it sure applied like hell to all the many various 1990-2003 BMW’s I have driven.
May 11th, 2019 at 7:06 pm
37 If you actually think company slogans mean much, MB’s, or those of anyone else, you are more reality challenged than I realized. Of the various products M-B sells, some are probably best-in-class, maybe the S-Class, but many more are not, or there is no clear “best” in a segment.
38 An automatic only, fairly softly sprung 3 series is far from an “ultimate driving machine,” and then, most of what BMW now sells in the US are trucks, which are certainly not “ultimate driving machines.” Slogans are slogans, little more.
May 11th, 2019 at 10:46 pm
Product slogans certainly have entertainment value, though, like this one.
https://images.app.goo.gl/hfPK8AitUcGTGvNi7
May 12th, 2019 at 11:17 am
https://www.businessinsider.com/germany-opens-first-e-highway-trucks-overhead-cables-2019-5?r=US&IR=T&referrer=twitter?
Who needs these expensive, heavy batteries?
Who cares about range now?
May 12th, 2019 at 12:04 pm
41 Interesting. From the article, I guess the trucks are hybrids, not just battery/overhead wire powered. The idea of the overhead wires, along with batteries and an engine truly covers everything, while saving a lot of fossil fuel, especially as Germany increases their use of renewables.
May 12th, 2019 at 12:48 pm
42 I’ve seen “Trolley” yellow buses in Europe as early as in the 60s, they were electric noiseless buses that got power from wires overhead, they were better than dirty buses but the things that connected to the wires would go out of aligmnent all the time and the bus would stop so the conductor go to the back of the bus and fix them. Apparently they did not keep them long, they were inconvenient. These were not like Trams, which go on rails like trains, they had rubber tires drove like regular buses except for the wires.
May 12th, 2019 at 1:13 pm
43 There were buses like that in Indianapolis at one time. I barely remember them, so they were probably gone by the late ’50s or early ’60s. I remember the drivers having to get out, and reposition the pickups. I don’t know how long they used them.
May 12th, 2019 at 1:29 pm
I found that the Indianapolis trolley coaches ran from 1932-1957.
May 12th, 2019 at 4:18 pm
It’s increasingly looking like the only unknown of the 2019 F1 season, is if Bottas might squeak out a driver’s championship over Hamilton. Then, if he did, would he quit like Rosberg, or defend his championship? I’d certainly bet on Hamilton at this point.
May 12th, 2019 at 4:53 pm
It’s more interesting mid-pack, though.
May 13th, 2019 at 6:11 am
These might be the same buses, and the Euros got them as part of the Marshall Plan. I am trying to remember the company name but I was only 5 when I first saw them. “Saviem” maybe? Or maybe this was the name of the other bus types we called they called the ‘green’ bus although they were 100% dirty
May 13th, 2019 at 7:05 am
http://www.trolleybuses.net/ind/htm/usa_h_ind_brill_571_ohioindiananwb_irm_ss_004.htm
These look very similar, if older designs, to the ones I saw overseas, which were always painted yellow-orange. The stuff on the roof looks identical.
May 13th, 2019 at 7:14 am
“Unsold vehicles hit ten year high in May
Automakers and dealers had an estimated 4,120,900 unsold vehicles on hand to open May, a 78-day supply, according to the Automotive News Data Center.”
it takes a very simple one-line simple calculation (inventory cost) to figure out somebody is losing billions by keeping inventory for almost 4 months on average (and for some poor sellers, a whole year’s supply), as the above numbers imply (compared to 16-17 mill sales for 12 months)
May 13th, 2019 at 7:15 am
I meant three, not four, months. 78 days, Compared to an alleged “optimal” inventory of 60 days (an old wives tale) and the 20 or so days the most efficient and popular models need.
May 13th, 2019 at 8:33 am
49 I read that Marmon-Harrington made some of them, along with Brill. The Marmon of Marmon-Harrington made the car that won the first Indy 500 in 1911.
May 13th, 2019 at 11:41 am
50,51 I’m guessing that since the recovery (in auto sales), say 2010 and moving forward, quite a few manufacturers jumped on the band wagon, over produced (so they wouldn’t get left behind) and we’re finally at saturation; make that oversaturation.
May 13th, 2019 at 11:54 am
53 When I was at GM, the company had to pay the hourly employees for an extended time if they laid them off because of too-big inventories. Does anyone here know if the contract is still that way? At some point, the companies need to quit building more cars, with the inventory that high.