Check out Fiat/Chrysler CEO Sergio Marchionne’s recent quote-tastic speech and Q&A session at the Peterson Institute for International Economics. The speech is almost identical to the one he gave at the Five-Year Plan, but the Q&A session is full of fun insights, ranging from Sergio’s fear of a Chinese planet and Opel regrets to the reasons for pricing discrepancies between Europe and the US.
Picture above are the base-model prices for the cheapest sedan and hatchback variants of the new Ford Fiesta. As you can see, the cheapest Fiesta hatch is priced $1,800 more than the cheapest sedan. In part, that’s because Ford won’t offer an S trim Fiesta hatchback, but even in the best apples-to-apples comparison, the SE trim hatch costs $800 more than an SE sedan. Compare that to last month’s subcompact segment sales leader, the Nissan Versa. Like Ford, Nissan makes its lowest-cost models sedan-only; in fact you can’t buy a Versa hatch with the base 1.6-liter engine. By that measure, the $9,990 “base” 1.6 sedan is a whole lot cheaper than the lowest-cost Versa hatch, the $13,150 1.8 S. But compared apples-to-apples to a 1.8 S sedan, the cheapest Versa hatch carries a mere $50 premium over the sedan. As a hatchback lover, I want to damn Ford for not offering a hatchback Fiesta for less than $15k. On the other hand, with so few hatchback options on the market, I can understand why Ford would want to squeeze more cash out of weirdos like me who crave hatches possibly because nobody else does. But has Ford taken the hatchback premium too far?
In a NY Times Op-Ed a few weeks back, I laid into the Obama administration for allowing GM to pretend that its $6.7b planned payback is even in the ballpark of what it owes the taxpayers. “If tens of billions in lost tax dollars is simply the inescapable price of preventing a systemic economic collapse, the White House should tell us so,” I wrote. Well, it appears that the White House agrees. Sort of. In an interview with the Detroit News, Gene Sperling, the senior counsel to Treasury Secretary Tim Geithner admitted
The real news is the projected loss [from the $82b+ auto sector bailout] came down to $30 billion from $44 billion
Well, halle-frickin-lujah. Now show us how we’re really going to get $50b out of GM and Chrysler.
Why does TTAC roll its eyes at every proclamation of change, rebirth and renewal from automakers, particularly of the Detroit-based variety? To put it in a single French phrase, dèjá vu. In an industry as cyclical as the automaking game, the latest downturn always takes place within recent memory of the last downturn. As a result, the promises of reinvention and renewed focus are still ringing in our ears by the time each new PR offensive rolls out. One can only hear so many pleas and promises before they all start running together, creating the permanent, inescapable sense that we’ve been here before and it didn’t work out. No better evidence for this phenomenon exists than this series of videos from the 1988 edition of GM’s perennial campaign of renewal (especially in part two). The music may have changed, but the beat goes on.
Between trying to pull of one of the greatest attempted miracles in the history of the auto industry, and keeping things together at Fiat, you can bet Sergio Marchionne does. He tells the Freep:
This cannot go on forever. Certainly within the next 24 months, we’ll find a more permanent solution, either there or here. I’m not threatening the Italian side with a departure from Italy, but we need to find a solution.
More promises of Chryslerian change, this time from a UK-market minisite [via Autoblog]. Maybe the brand is planning on going back to its Rootes?
Chrysler CEO Sergio Marchionne isn’t bothered by his firm’s sliding market share, which have declined to the point where Honda will certainly surpass them to become the number four automaker in America. At least that’s what he keeps saying, and Automotive News [sub] went ahead and made it a headline. If dealers are “expecting us to call them up and give them a $6,000 check for every new vehicle, they won’t get the call,” Marchionne joked recently in the Detroit Free Press.
It’s officially unanimous: literally everyone thinks the new Jeep, Dodge and Chrysler ads from Sergio Marchionne’s brain trust are crap. Sure, you knew that TTAC doesn’t think much of the spots, but were you aware that Chrysler’s dealer council has requested that Chrysler stop showing the ads? Sadly, Bloomberg only quotes one dealer on the plea, who explains that
it is a little difficult for us to understand because it is far different from what we were used to seeing. The message to us is that it is branding, branding, branding, and maybe that will work.
When Rolls Royce’s PR folks told Autobild that the Phantom Coupe was the sportier model in the lineup, they probably didn’t expect the German magazine to treat it like a GTI or Type R. But they did. The result? Er quietscht, er qualmt, er quält sich (or, as Google Translate hilariously puts it, “he squeaks, he smokes, he torments himself”), say the Germans, before concluding that “there is a little bit of BMW in this Rolls-Royce after all.” And in the proud tradition of German car reviewing, comparing any car to a German car is as high as the praise gets.
GM’s New CEO Ed Whitacre made his first appearance at the Fastlane blog in a webchat that represented the first access GM has given reporters to Whitacre. Needless to say, journalists do not like sharing their access with the general public, and they let GM know. Thedetroitbureau’s Paul Eisenstein asked “like many of my colleagues, I wonder when you will address us in the media directly, even if by telephone conference. To be honest, a webchat is quite a bit different and doesn’t carry the veracity of seeing or at least hearing you directly.” To which Whitacre responded:
Dear Paul,
I’ve been on the job for four days. I’ll do it as soon as I feel comfortable and have enough clear air and time. I promise we’ll talk soon.
No worries though. Whitacre didn’t actually say anything newsworthy.
From here on out, GM’s success in the US market comes down to two people: Susan Docherty and Mark Reuss. The two fielded their first joint sales conference call last week, and it was clear that they were still settling into their roles. Listen to the whole hour of awkwardness here, or, for a quick summary check out the final questions of the session (from the WSJ’s John Stoll), and the prickly, defensive answers from Docherty and Reuss. When Stoll asks how Reuss and Docherty expect to change a culture when they’re a product of that culture, the tension is palpable. Then, when Stoll accuses Docherty’s sales organization of buying market share with incentives, the pair’s non-answer is “I guess that’s what you feel.” Meanwhile, Edmunds reports that GM has by far the highest incentives of any automaker, with a True Cost of Incentives of $4,270, over a thousand dollars more than number two Chrysler. Good thing we’re tackling those problems head-on then.
The following is a piece called “What We Wear” by Alex Law, reprinted from the Automobile Journalist Association of Canada’s November 27 “Mini Newsletter.”
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As soon as GM and Chrysler agreed to review their dealer cull decisions, the culled dealers in question began complaining that the review would not improve their situations. According to the aggrieved dealers, the new review would be based on the same allegedly flawed data as the initial cull, meaning nothing would be changed. By GM’s own admission, only 39-51 of the over 1,000 dealers cut would even stand a chance at reinstatement. Now, Automotive News [sub] reports that a new measure has passed the House of Representatives which would allow dealers to “present any kind of relevant information during the arbitration.” The measure comes in the form of an amendment to the House Financial Services bill, which is headed to a conference committee in which House and Senate leaders must arrive at a compromise in order to send the bill to President Obama.
Rumors of a VW-Suzuki tie-up were first floated on these pages by Bertel Schmitt, who reported that VW might be after a ten percent stake in the Japanese firm last summer. And with news last week that GM was buying out Suzuki’s stake in CAMI, the momentum seemed to be building. Well, Reuters reports that Volkswagen could announce that it’s taking a 20 percent stake in Suzuki, a deal valued at $2.8b, as soon as this week. Another source tells Reuters that the VW stake could become a 33 percent plus controlling interest in the future.
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“A Flush GM to Lavish Cash On New Vehicles,” goes the NY Times headline, forshadowing the kind of profligacy that only happens when you have $42.6 billion of taxpayer money burning a hole in the corporate pockets. From the next generation of truck and SUV platforms to the Cadillac Alpha (known in-house as “BMW Fighter”), that money is going towards products…. at least it is when it’s not going to faltering overseas operations. And in most cases that’s a good thing. For example, Mark Reuss explains “ with the BMW fighter, the steering in that vehicle is going to be absolutely critical. In the past we would have gone to the lowest cost source, but not anymore.” Well, good on ya, mate. When it comes to the Volt though, the money doesn’t seem like it’s being quite as well spent.
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