Divide $64 million by about 10,000. What do you get? I was a liberal-arts major, but I figure the answer is “About $6400.” That’s a lot more than $850, right? Hop into this here Silverado with me, dear reader, and let’s take a ride through another adventure in GM’s mismanaged past.
With the world’s established automakers facing increased competition from ascendant Korean car brands, and with even more competition from Chinese automakers just over the horizon, the key to continued success is leveraging every single advantage that’s been accumulated in the past. Traditionally those advantages have been technical, whether in engine technology, suspension set-up know-how, or long-established relationships with suppliers. But as technical advantages fade, brands are having to cash in on their other, less tangible assets… including heritage.
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If you answered in the negative when we asked if Fiat would be able to make its 50k unit sales goal in the US this year, you were right. Executives for the Italian brand tell Automotive News [sub] that
“We lost the whole first quarter”… If the store openings had occurred as planned, the sales target would’ve been achieved… Now, that will “probably not” occur this year.
This is no real surprise. Thanks to the slow rollout, Fiat has sold only 7,982 units so far this year… but even with sales at their current levels (3,083 units in July), sales would only barely top 36k units in a 12-month period. Of course, next year the 500 is joined by a higher-performance Abarth version (no, not that one) as well as a hideously expensive electric version, so sales should continue to climb. On the other hand, the brand is hoping for 100k units next year, or about double the MINI brand’s 12-month average… so Fiat may well be looking at another missed sales goal anyway.
With US gas prices at some of the lowest levels in the world, it’s not too surprising that US consumers aren’t overly anxious to go electric, but what about in Germany, where gas prices are near double the US’s? According to Thilo Koslowski of Gartner Research, interest in EVs remains low there as well, and the big gainer in recent years has been hybrid technology… at the expense of the once-ubiquitous diesel, demand for which has “peaked” according to Koslowski’s research. Says the man who coined the term “the trough of disappointment,”
Although the majority of German consumers continue to see EVs’ benefits in environmental and socioeconomic implications, broad adoption of EVs will remain low as long as current offerings don’t meet drivers’ practical usability and cost-saving requirements. To expand from early to mainstream EV adopters in Germany, automotive companies must focus on technology innovations, offer pricing strategies that are aligned with established premiums for diesel and hybrid powertrain options and develop diverse EV model mixes targeted at younger consumer segments that have higher EV interest levels than older demographics… E-mobility will become a viable addition to future transportation scenarios in Germany, but automotive companies and the German Government must address marketability requirements of EVs, prioritise technology investments and continue to promote cross-industry collaboration. Future mobility concepts will consist of diverse powertrain choices and business models that will leverage technology to satisfy consumers’ transportation needs while challenging traditional car ownership.
The US won’t be receiving the hatchback version of the forthcoming, front-drive Mercedes A-series, but we will be getting this “CLC” four-door coupe based on the same platform. But, if American owners can’t tell the difference between front- and rear-drive, will this CLC cannibalize the C-Class? According to AutoBild, it will be only 2cm shorter than the C-Class sedan, and its wheelbase is only 6cm shorter. In Europe, they say the CLC will be bought by 45-50 year-olds with two kids and enough money to spend €5k more than the average A-Class buyer. But in the US, where this will form the Mercedes entry level, and where shoppers tend to be more value-oriented, couldn’t you see a cheaper, front-drive/AWD CLS lookalike stealing sales from the rather subdued C-Class?
Six days ago, Honda announced minor revisions to its slow-selling Accord Crosstour. They are summarized in the press release:
For 2012, new features on the Crosstour EX include auto on/off headlights, a rearview camera, Bluetooth®1 HandsFreeLink® and USB audio interface. Two new colors are also available on all Crosstour models: Twilight Blue Metallic replaces Glacier Blue Metallic, and Basque Red Pearl replaces Tango Red Pearl.
The other change: it’s not the “Accord Crosstour” anymore. Like Sting, Madonna, Ke$ha, Shakira, et al, it’s now just the one-word “Crosstour”.
I was curious as to how the automotive media would cover this important news, and how each of the TTAC contributors might cover it, given the chance. If you are, as well, click the jump.
With GM’s share price currently hovering below $25, well under its $33 IPO price, The General is holding its second annual Global Business Conference in hopes of encouraging investors the world over to buy into its turnaround. A webcast is currently streaming over at the GM Investor Relations website, but the key points are available in slides available in PDF here. The presentation involves nearly every level of GM’s business, so listening in and reading the entire PDF is going to be the best way to make sense of what GM is trying to communicate… but if you just want an overview, check out the gallery below for a few hand-picked slides, illustrating some of the more important points.
You know it’s time to say “Toto, I don’t think we’re in traditional journalism any more” when fanboys get better access than industry rags. In a story picked up by Automotive News [sub], myfocuselectric.com commenter whitgallman showed the auto media what can be done if you just send a few emails… as long as you make it clear that you are only interested in buying a car, not embarrassing the program. Because then, instead of languishing in some disinterested inbox, your emails actually draw a response, like this from David Finnegan, Electrified Vehicles Marketing Manager at Ford:
For the first few months of production, we will be concentrating on California and New York. Our dealers in those areas will be the first to have their retail orders scheduled and receive the Focus electric. We will be rolling out to the remainder of our initial markets starting in spring 2012.
Well, that was news to Automotive News [sub], which had been told (along with everyone else) that the Focus Electric was supposed to launch in “late 2011” in 19 US markets. So what happens to Focus EV intenders in Chicago, Detroit and Seattle (among others)? Per AN [sub]:
As for the rest of the country’s markets, no word yet from Ford, so the best advice is to be patient.
Uh-huh. We’ll send some emails ourselves, but we aren’t holding our breath for Ford to admit that, say, buying the Focus EV wholesale from a supplier may not have been a great idea. Or that there are problems with the batteries (again, hypothetically). But there I go thinking like a “traditional journalist” again…
Tata’s Nano was launched with much fanfare in 2009, as the world’s cheapest car and a symbol of India’s automotive and economic aspirations. But first Tata had problems with its factory, which was to be built on land [allegedly] stolen from local farmers. Then, early last year, the cars started catching fire and refused to stop. Then finance was the issue, and when Tata revamped its finance, advertising and retail presence, it looked like things were beginning to improve. It turns out the bump was short-lived. After hitting 5k monthly sales last December, volume has fallen again dropping to 3,260 units in July (1/8th the volume of its main rival the Maruti Suzuki Alto) according to indiancarsbikes.in, which reckons
Startlingly, the most fuel efficient petrol car in the country, which is the most inexpensive too isn’t finding takers in a market troubled by high petrol prices and rising loan interest rates, that is clearly favoring cheaper and more fuel efficient cars… the market isn’t biting and the Nano sales have begun the downward spiral, this time continually.
So, what’s Tata going to fix to get its attempt at “India’s Model T” back off the ground. How about “everything”?
Fiat’s 500 is a tough vehicle to figure out. On the one hand, it’s got a lot of intangibles going for it: it’s got huge fashion appeal, it gets far better fuel economy than anything in the Chrysler Group’s US stable and it grabs attention like nobody’s business. On the other hand: the sales stink. Chrysler expected to move some 50k Cinquecentos this year, but after three full months of sales (only 500 special editions were sold in March), the 500 had moved fewer than 5,000 units through June (4,944, to be precise). Fiat has admitted that the 500 launch is “a tiny bit behind schedule,” and the first official ad (which I count as another positive intangible) is only just going live this week. It’s miles better than the glorified tourist bureau video that has since disappeared from Youtube, but can it motivate 45,000 hip young (at heart) things to buy into the next small thing? We’ll certainly be watching July sales with interest. But if Fiat doesn’t get the ball rolling towards New Beetle-style iconic status in the US, the 500 could go the way of the Smart: iconic, but for all the wrong reasons (namely a challenging combination of price and size).
Sorry for the delay on this one… Eight days ago, the New York Taxi and Limousine Commission approved the Ford Transit Connect for immediate use within NYC. Taxi-conscious TTAC readers will remember that this board rather controversially approved the Nissan NV200 as the Taxi Of Tomorrow a few months back. At the time, a source within Ford told me that “the battle isn’t over yet,” and this appears to be proof.
Despite the domestic auto industry’s bailout-fueled turnaround, there are a few challenges that the Detroit-based firms have yet to overcome: sales on the West Coast for one, and sales to young people for another. TrueCar tackled the scope of this second issue, digging through millions of transactions to determine the favored cars of both Generation X (ages 28-45) and elderly buyers (65 and up). The results? Buick is still tops with the old folks, despite aiming for younger buyers with new, European-derived products. Lincoln, Cadillac, Chrysler and GMC and Chevrolet round out the top six before the first import brand, Porsche, arrives at number seven. There are few surprises by model choice as well, with the Town Car, Lucerne, DTS, CTS, STS, Azera, Impala, LaCrosse, MKZ and Avalon making the top ten old-folks cars. On the Gen X side of things, import brands still top the list, with VW, Land Rover, Audi, and Mazda taking the top spots, and Jeep taking the top domestic spot at number five. By model, the Routan, M3, Quest, Armada, and Oddyssey take the top five spots for Gen X buyers, with only the Chevy Aveo representing the domestic brands in the top ten. cars with Gen X buyers.
What does it all mean? The domestic manufacturers are still most attractive to traditional, older buyers… spelling long-term issues for the domestic brands. GM, Ford and Chrysler still face huge challenges in attracting younger buyers, and will need to address this problem aggressively if they want to build on their short-term turnaround.
Every automaker is in this business to make money… there’s nothing surprising about that. But some are a little more focused on profits than others, and it should be equally unsurprising that Porsche is one of them. In an extensive interview with Automotive News Europe [sub], Porsche CEO Matthias Mueller gives a strong impression of how Porsche sees itself over the course of the first two questions:
What is your vision for Porsche in 2018?
Porsche is synonymous with sports cars – yesterday, today and doubtless tomorrow as well. In addition, in every other segment where we operate, such as with the Cayenne or Panamera, we always offer the sportiest vehicle. At the moment we are hard at work on our future strategy. And I promise you, it will contain a few exciting surprises.
What are your most important objectives?
We want to remain the world’s most profitable car manufacturer – and build on this position.
These are actually two separate goals altogether, and not two which necessarily go hand-in-hand. But if anyone can pull off the mix between performance and profit, it’s Porsche… and to understand how this strategy will play out in the near future, let’s take a look at Mueller’s product plans.
The internet has been a boon for car buyers in a million ways, but for new car marketers it’s been a decidedly mixed bag. GM’s California-only experiment selling new cars over eBay was quickly abandoned, after generating more embarrassment than sales. Now, another high-ish profile online new car marketing gag has flopped, as Autoweek reports that Groupon’s car debut is going nowhere:
Only four consumers agreed to pay $200 for a $500 discount voucher on a new-vehicle purchase at LaFontaine Buick-GMC-Cadillac in Highland, Mich. Groupon and LaFontaine had set 10 as the minimum required for the vouchers to be issued.
For companies like Tesla, who hope to do without traditional franchised dealers altogether (Chrysler may harbor similar desires), the internet is next great frontier in new car sales… but the eBay and Groupon failures are troubling signs for that dream.
The word “truth” in our title has long been a cudgel for our critics, who, finding fault with our analysis, condemn us for failing to publish their version of the truth. But, as I’ve steadfastly maintained since taking up TTAC’s editorial reins, we do not hold ourselves up as the sole source of truth. Rather, by provoking an engaging discussion, we hope that our readers will use our posts as a jumping-off point to debate the issue at hand with vigor. The truth, as I find myself saying again and again, is a journey, not a destination.
Accordingly, I’m always thrilled when manufacturers read our pieces and offer up their own counterpoint to the discussion, broadening our understanding of the issue at hand and moving the conversation forward. One of my posts from yesterday, which examined GM’s decision to invest in full-sized truck production in the midst of CAFE negotiations and an inventory backlog, has drawn just such a thoughtful response from GM’s Tom Wilkinson, which is published after the jump. It provides some inside perspective on GM’s decision to move forward with the next generation of full-sized pickups, and is a great example of the kind of conversations that TTAC hopes to start every day.
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