Volkswagen is rumored to cut some 40-plus models from its worldwide fleet as it ushers in a new era of electrification.
That, Tesla wants you to order something now instead of waiting until later, and millennials are just like the rest of us … after the break.
Electric tide pushing out 40 models at Volkswagen
With a significant shift planned for Volkswagen as electrifies its vehicle range, the automaker is expected to phase out some 40 models worldwide, reports Reuters.
According to sources who spoke to German newspaper Handelsblatt, Volkswagen Group will eventually stop producing 40 of its 340 total models sold worldwide.
From Reuters:
A Volkswagen spokesman said, however, the number of models that would be discontinued had not been decided yet. “A decision on how many models will be phased out or ceased has not been taken yet,” he said.
Audi: You can take Ducati from our cold, dead hands
Of those 40 models apprehensively staring at the guillotine in Wolfsburg, Audi’s Italian motorcycle brand is not one of them.
Ducati, which was purchased by VW Group for $1.12 billion and placed under Audi’s command in 2012, is safe in the clutches of the four-ringed brand.
From Motorcycle News:
Professor Rupert Stadler, Chairman of the Board of Management at Audi, who is also a board member of Volkswagen, told MCN: “Ducati is not for sale,” after we asked what was going on with the future of the famous Ducati brand.
I’d say that’s pretty damn clear.
Tesla wants you to give up your Model 3 ticket and buy a Model S right now
After announcing it had sped up its production line, Tesla is now openly courting Model 3 reservation holders to move that $1,000 toward the purchase of a Model S instead.
According to Electrek, Tesla mailed reservation holders explicitly asking for the opportunity to get them into a Tesla even sooner.
From Electrek:
The automaker sent out emails announcing the reintroduction of the Model S 60 to its mailing list, including Model 3 reservation holders, which is to be expected and not in any way special, but several reservation holders are also reporting having received another email, in which Tesla is directly addressing upgrading from a Model 3 reservation to a Model S order:
“We are thrilled to have just launched the new Model S 60 and as a valued model 3 reservation holder I wanted to personally reach out to invite you to University Town Center Showroom to experience Model S 60 and 60D. It is a wonderful opportunity to get into a custom designed Tesla with payments starting at $667/mth before gas and tax incentive savings. Depending on your current vehicle trade-in value the monthly payment could be even lower.
We know how excited you are to receive your Model 3 and wanted to ensure you had the chance to work with myself and our team to explore the options of getting into a Tesla even sooner. Please let me know if I can arrange a test drive experience for you or answer any questions. We would also be happy to review your current trade-in options as well. We are here to help you build your dream car and continue our mission to accelerate the transition to sustainable transport.”
Ford’s shared leasing program is a dud
Ford was incredibly smug when it announced the pilot launch of its shared leasing program aimed at the group everyone believes to not have any interest in owning cars: millennials. Well — guess what? — the shared lease program, which allowed multiple people to make payments toward a lease on a single vehicle, is a complete failure so far.
How complete of a failure?
From Automotive News:
In March, Ford Credit launched Ford Credit Link, a pilot lease sharing program that allows three to six customers to share a lease, scheduling their driving time and dividing payments any way they’d like. The captive finance company began piloting the program at three Austin, Texas, dealerships: Leif Johnson Ford, Maxwell Ford and Covert Ford.
Three months later, there are still no takers.
Emphasis mine.
That doesn’t mean Ford Credit is giving up on the idea. Ford’s financing arm will increase marketing for the product in hopes that more awareness will prod someone — anyone — to use the new lease program.
Everyone hates subcompact cars
Values of used subcompact cars are tanking, and this might just be the beginning the expected lease-return bubble.
According to Automotive News, subcompact cars from 2010-2014 model years have experienced a 26-percent plunge in prices versus the year before.
From AN:
Small cars are the canaries in the pricing coal mine. The weakness in prices of small used cars is starting to spill over into the new-car lot, too.
After years of new-vehicle lease growth, a widely forecast surge in off-lease vehicles has started. Because all segments eventually will be affected, automakers are taking steps to soften the blow to prices by finding new ways to encourage sales of those off-lease used vehicles.
Oh well, there’s always Toyota, Hyundai and Honda.
I’m seeing a whole lotta Velosters on the road lately.
I would love to see a Harlequin-edition Golf like the one in the picture, but I don’t think any of them stayed here in Oklahoma.
Just use the Murilee Martin do it yourself method. Every time you need something replaced, go to the junkyard and find the part you need in a color different that what your car was factory painted. ;-)
No, I’m not interested in buying a $66k Model S with 219 miles range instead of waiting for my reserved $35k Model 3 with 215 miles range.
I really can’t see many people doing this.
The base Model S is bound to be better equipped than a base Model 3, so the real price difference will be smaller than it seems.
The Base model S also exists whereas the Model 3 does not.
Sure, the Model S is more available, and is better-equipped. But that’s not what I want, and having such a vehicle today is not worth $31k (almost double) to me.
A good deal on a car I can’t afford isn’t a good deal.
True.
What makes the thing hilarious to me is the fact that it’s functionally identical to the model 75, but the range is limited by software. You can have it reprogrammed at a later date for the same range, but of course that negates the price difference.
I don’t understand why sites and people in general are scoffing at the notion of Tesla trying to up-sell/ turn future sales to current sales. It’s just good business. Tesla has a ton of pent up demand that it knows it can’t satisfy for likely the next 4-5 years. Why not try to get some of those sales cashed in now and make the future that much easier? I can’t imagine any other company not doing the same thing were they in Tesla’s shoes.
Good point, SlowMike,
I am actually one of those people considering taking a Model S 60 instead of waiting for a Model 3. If you figure the tax advantages will end before I can take delivery of a Model 3, the difference is $20K. Which isn’t so different from the difference between a 320i and a 528i.
I expect to still receive the Federal rebate for the Model 3, since I registered early.
Perhaps it will be renewed in some fashion, but probably not.
While I understand the appeal of a Model S today vs a Model 3 tomorrow, I see the $20-30k difference as rather non-trivial, and not even worth considering.
This seems like a slightly softer bait-and-switch.
When I think to myself how deeply in debt these millenials, Gen X and Gen Y are, I wonder how it is that any car company can’t see what’s going on?
Student Loans alone are preventing most of them from getting into a “new car”.
If you wanna lease your cars for 3 years at less-than-$200 a month…OK – but because of the cost of smartphones (exceeding $100 a month) and the cost of video games, gaming services, etc – it’s hard to get up that kind of cash as well. Not to mention Cable TV costs.
The problem that I’m not sure these people get is that the average American is CASH STRAPPED, yet they’ve chosen monthly payments for entertainment OVER car payments.
Insurance costs on new drivers are sky high in many places as well.
Exactly. People seem to be choosing their phone plan over a car payment.
Mine’s $37.00/mo, unlimited talk, unlimited text, 2.5 GB data. There are far cheaper plans out there.
But then again, I didn’t pop for an Iphone 6 or Galaxy 7. That’s what’s driving up the cost for most folks. My girlfriend’s son is still paying on his two-year-old Pantech something or other that has been utterly outclassed by the $55.00 LG phone I bought up front. The last LG I bought lasted for about a year and a half. It died and I replaced it. Not a loss. And if I nick the thing up or break the screen, I’m not going to need psych meds.
I don’t get why people do this with far cheaper plans out there.
Agreed. I have:
Virgin Mobile: $35/month, unlimited talk & text, and lots of data.
Dish Network: $15/month (yes, fifteen), includes local stuff and a decent selection of satellite channels.
Comcast Data: $40/month for 3 years.
These are expenses I didn’t have 15 years ago. But I refuse to spend hundreds per month on deluxe tech packages, while wondering why I can’t pay my bills.
Communication is vastly more vital these days, as people expect instTant replis
Millenials buy cars too, some even buy new cars! Not all millenials are broke. Unfortunately, millenials have been typecast by other generations and marketing types more than any other generation in this country. When a marketer says “millenials”, they typically think of a white person, mid-20s, with a scraggly beard and a man-bun. That is the worst stereotype yet.
Although I will admit, most of the 20s folks I have met have no idea how a car works other than “fill with gas and start”… I suppose that is due to changing times and the car is seen as an appliance, nothing more.
I agree. Whenever Almost every time someone mentions what they pay for cable tv/internet and cell phone per month, I get dizzy. For the record, I am at $59 (up from $48) and $20-$25, respectively. I don’t do facebook /twitter, however.
From conversations with my youngest (23) son, the millenials regard cable TV and land lines as expensive, archaic money suckers and avoid them. My son said he doesn’t know anyone who subscribes to cable TV. Even then, they still are cash strapped due to the low pay of entry level jobs. They do love their smart phones though. They are also ambivalent about new cars being content to drive cheap beaters.
Not to be outdone, I started a campaign with my local cable provider to halve the cost of my bundle. I’m almost there and hope to cut the cord in six months or less. That stream of cash will be available to purchase a new car when the right one comes along.
I’m 37, and I see things basically the same way your son does.
We havent subscribed to cable TV since about 2009. I’m just not willing to pay to watch commercials and to be yelled at by Fox News anchors. Netflix is just a better way to watch reruns. My sons have never seen cable TV anywhere but a hotel room.
My smartphone is a vital tool that I use every day. Back when I was 16 in the mid 1990s, the car was my passport to the community because I could go and see my friends. Now, my phone is the passport to the community and how I stay employed. If I had to pick between a car and a phone, the phone wins.
I like cars because I dig masterpieces of modern engineering. I enjoy both the maintenance process, and the grand industrial soap opera that produces them. But they don’t replace a smartphone.
Tesla is smart to pitch the Model S 60 at Model 3 reservation holders. A sale today is always better than a potential sale down the road (which is why salesmen are so pushy).
Doesn’t every make do that? I know I get invites from dealers all the time. It takes years to age-out of their mailing lists.
Of course every carmaker does it. But when Tesla does it, some of the B&B get in a huff.
I still get mailing from the local Honda dealer, for a car I bought in 2005, and traded in 2007 after a lemon law suit. After asking several times, they still seem totally incapable of removing me from their mailing lists.
I guess letters are cheap.
CPO leases sound REALLY interesting to me. I’m not scared of used cars, but I’m not into driving a car until it dies. I’m not seeing any offers online though, I guess since used car prices are a moving target and lease rates are very individual. Still, a smart move IMO and a necessary one in today’s inventory climate.
If shared leasing couldn’t make a go of it in Austin, I’d say it’s a goner, unless they throw in some bags of weed.
Sharing a lease — intertwining finances — is almost like getting married, and hipsters and millennials aren’t known for getting married early. What if one of the leasee’s can’t make the payment? Ford really misinterpreted the “sharing economy.”
Yeah, that’d be the killer for me – what if my “lease buddy” loses his job and can’t make his payment, do I have to pick it up.
Sounds like some bullshit to me.
Millennials aren’t buying cars because not because they aren’t interested, but because they can’t afford them.
I don’t understand how marketing departments fail to see this. Sharing houses and cars was only cool when you couldn’t afford your own.
Shared ownership of a car only works on a small demographic, like affluent college students.
So maybe Ford should move the pilot to Yale, Notre Dame, Princeton etc.
I have to wonder why car people sometimes don’t get the difference between low oil prices and high oil prices. With fracking you are unlikely to see oil prices much below $50. Nobody wants to drive a little econobox versus a real car.
Ask Fiat.
Funny thing is I have never been to a dealer that tried to up-sale me a car that is 20-30 thousand more than the one I was looking at. Normally it would be only about 5-10 grand more, such as a higher level trim in a 5 series. Strange how folks pic OEMS like they are their favorite sports teams.