We don’t yet have understanding and expertise when it comes to mass production or even limited mass production. There is so much to learn, I don’t know quite where to start.
Tesla CEO Elon Musk has finally figured out that making lots of cars is a tough business to get into. Humbling himself before Toyota and Automotive News [sub] Musk presented Akio Toyoda with a red Roadster 2.5, and admitted he needed help. And why not? It isn’t hard to see that without Toyota, all of Musk’s future plans (20k Model S units per year by 2013… then 200k annual production for the company’s next model) are as good as vapor. Which is funny, because Musk hasn’t always been quite this humble. In fact, at the height of the Auto Bailout, Musk told Wired
When the mess gets sorted out, I’d like to have a conversation with whoever’s in charge at the time — the car czar or whoever — and say “I’d like to run your plants, if you don’t mind”
Recently, I wrote about how Tata is reaping huge profits thanks to the acquisition of the “toxic” JLR brands. It was a huge gamble to buy them, but it paid off. Literally. Well, it appears that Tata’s growing profits are going to benefit not only Tata, but ironically, Ford, as well. Read More >
We’ve heard a lot of arguments on all sides of the bailout, but we had yet to hear anyone call for prolonged government ownership and involvement in General Motors… until now. What follows is a letter from Ralph Nader, former NHTSA boss Joan Claybrook, Center for Auto Safety honcho Clarence Ditlow and Public Citizen president Robert Weissman, urging the Obama administration to suspend GM’s IPO and take firmer control of the government-owned automaker’s decisions on a number of issues including lobbying, employment and the environment. Because, despite appearing to be stuck in the 70s, Nader and company have never heard of British Leyland. Taste the madness below.
Dear President Obama,
The U.S. government bailout of, and acquisition of a majority share in, General Motors was anexceptional action, taken in response to exceptional circumstances. The U.S. stake in GM obviously poses novel managerial challenges to the government. The appropriate response to those challenges, however, is not to run from the responsibility through passive ownership and premature sale at a loss to taxpayers.
With news reports filtering in about an industry-mounted offensives against the Motor Vehicle Safety Act and proposed increases to CAFE standards, we thought we’d take a look at how much the industry spent in the recent midterm election cycle. According to Opensecrets.org, the chart above shows the biggest spenders in “Automotive,” and industry sector that includes OEMs, suppliers, rental companies and just about anything else related to four-wheeled motorized transport. Charged up by the bailout-era dealer cull, it’s not surprising that NADA took the top spot, and with a hotly-contested Korea free trade agreement under negotiation, the AFIT PAC is a logical number two. But Enterprise beating out Ford? Didn’t see that one coming. Still, the contributor breakdown for the “Auto Manufacturer” sector is even more interesting…
I came to China first in 2004 on a job for Volkswagen. Back when, and years thereafter, the foreigners at the joint ventures agreed (latest after the third beer at Paulaner) that eventually, their days will be numbered. “Once the Chinese have learned enough, they’ll kick us out,” was the lament. That was six years ago, and no sign of an expulsion from the Chinese paradise yet. On the contrary: The Chinese might invite the foreigners in for good. They are thinking about dropping the 50:50 joint venture requirement that forces foreign automakers to team up with local manufacturers. Read More >
California EV maker Tesla has reported its Q3 results, and they’re a sizable helping of not great. But before we dive into the messy reality, let’s check in with CEO Elon Musk for an unreasonably rosy take on the loss:
We are very pleased to report steady top-line growth and significant growth in gross margin, driven by the continued improvement in Roadster orders and our growing powertrain business. Roadster orders in this quarter hit a new high since the third quarter of 2008, having increased over 15% from last quarter. While some of this is due to seasonal effects associated with selling a convertible during the summer months, we are pleased with the global expansion of the Roadster business and the continued validation of Tesla’s technology leadership position evidenced by our new and expanding strategic relationships
Translation: Toyota is investing in us… now get out of here with your awkward questions. Unfortunately for Mr Musk, it isn’t quite that simple… Read More >
The car business has endured a lot of bad news over the last several years, as finance-fueled sales crashed with the credit market, and automakers around the world scrambled for government aid. The so-called “Carmageddon” has touched everyone even remotely involved with the automotive industry, not to mention everyone who pays taxes, but from a strictly consumer perspective, it hasn’t been all bad. Certainly the deals have been good, as programs like Cash For Clunkers and the wind-down of several brands have helped savvy shoppers find some of the best deals in a long time. So here’s the reality check: according to Booz & Co.’s Global Innovation 1000 study, spending on research and development by the auto sector was down $12b last year. That’s $12b that should have been spent making your car faster, smarter, safer, cleaner, better that’s no longer being spent. Still feeling untouched?
This summer I had the pleasure of touring Volkswagen’s advanced research lab at an industrial park near Stanford University. VW is developing a number of advanced technologies at this Silicon Valley facility, including its autonomous driving systems and electric battery packs. But in one corner of the lab, VW techs have a driving simulator set up with cameras aimed at the driver’s face. Using these cameras, VW developers measure driver attention and focus, testing just how much the latest Google Maps-based navigation system distracts drivers, and whether a car could offer features designed to keep the driver’s attention on the road.
These are doubtless worthy goals, but this ad for the Hyundai Sonata Turbo made me wonder whether VW pays much attention to changes in facial features based on changes in performance. Surely the kick of a turbo at full boost focuses the driver away from the gadgets and gizmos that VW (and every other automaker) is trying to integrate into its vehicles, and reconnects them with the original automotive “killer app”: a compelling driving experience. Technology, it seems, is being used simply to integrate more technology while minimizing distraction. When will car companies start using that technology to assist their vehicles in providing a more engaging, emotionally-rewarding driving experience?
Fleet sales data can be some of the toughest numbers to find, but thanks to a post from commenter GarbageMotorsCo, we’ve got some pretty comprehensive numbers for last year’s fleet performance [courtesy: automotive-fleet.com, PDF list here]. Overall fleet levels have been higher this year, but by identifying the most popular vehicles with fleet buyers (in terms of fleet sales as a percentage of overall sales), we’ll at least have some hints about this year’s performance. To help give a more accurate picture, we’ve left out obvious commercial vehicles (mainly large vans, and the queen of all fleet queens, the Ford Crown Vic (95% fleet)), as well as discontinued models like Chevy Uplander (57%) and Pontiac G6 (44.7%). We also left out hybrid or CNG versions of nameplates. Two vehicles with limited sales last year (GMC Terrain and Kia Forte) are on the list, even though they may not be on a similar list for 2010 (the Honda Insight is not on the list, despite selling all 193 of its 2009 sales to fleets). Hit the jump for our full list.
Chrysler lost $84m last quarter on an operating profit of $239m, showing slow but consistent progress from last quarter’s $172m loss [Press release here, slides here, both in PDF]. Chrysler has lost $453m since the beginning of this year. Overall deliveries and sales were down slightly compared to Q2 2010, but thanks to a strong launch for the profit-generating Grand Cherokee, revenues were up just over 5 percent to $11b. As the slide above proves, “Mix and Net Price” accounts for one of the biggest contributions to operating profit, and that’s largely thanks to the new Grand Cherokee which (at 12,721 units last month) is the second-best selling vehicle in Chrysler’s lineup after Ram pickups. That’s a good sign for the future of a company that needed a hero, but there are some troubling signs under the surface.
Nobody knows for sure how many automakers China has. The guesses were somewhere between 60 and 120. Now we have it official: It’s “more than 130 big and small companies in 27 provinces,” writes China Daily. But it looks like a lot of them need to seek other employment. After having made consolidation noises for more than a year, the Chinese government is about to bring their car companies down to a manageable number. Read More >
Germany’s new car market continues to be anemic. In September, sales for the first nine months were down 27.5 percent. Official October data are expected later in the day, or tomorrow. Nobody expects sudden growth. (The whisper number is -20 percent.) Nevertheless, the German car industry runs extra shifts and out of cars.
The Sixth Sense. The “Saw” movies. The Vanishing (Original Dutch version). The Fight Club. What do all these films have in common? They are like the “Porsche-Volkswagen” saga. Always an unexpected twist. Let’s start at the beginning. When Porsche tried to takeover Volkswagen, it really was a case of the mouse biting the lion. The reality set in, the credit markets collapsed, and Volkswagen went from being the takeovee to the takeover…er (how I managed to pass English is a complete mystery to me). [ED. Takeoveror?] But like any good saga, there’s got to be a final bite and there’s a 30 percent chance this one will happen. Read More >
Ever since it became clear that the government would rescue General Motors and Chrysler, the Treasury Department has made it clear that it would stay out of “day to day” decision making at the rescued automakers. Allowing the rescued firms to operate independently was a political calculation based on the desire to keep politics from affecting sales at the two rescued automakers, but according to a Reuters special report, Treasury has not been able to keep its hands completely out of important decisions concerning the future of the two firms. Particularly in terms of setting up GM’s Initial Public Offering, Reuters found that the Treasury made important decisions affecting
its speed and size, the fees paid to the bankers and the potential involvement of offshore investors
Though this has kept the IPO out of election season and all of its potential for political problems, there is some downside to the Treasury’s involvement, particularly because it will not be exiting its equity position in GM until about 18 months after the IPO. As a result, analysts predict problems securing investors in a firm that may still be subject to ongoing government control. Morningstar’s David Whiston tells Reuters
I’m sure that there will be some institutional investors, and even some individual investors, that it scares away
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