Category Archives: News

Volkswagen’s big herausforderungen

“Das problem”

China’s growing appetite for buying anything that has four wheels and isn’t from Japan has been a boon to many automakers, and Volkswagen is no different.

The German automaker joins the likes of GM, Jaguar and BMW in reaping the financial rewards of the voracious consumerism overtaking that society. However, the boosted revenue from the Chinese market hasn’t corrected a growing problem at VW – and that is the stagnancy of the brand overall.

The Wall Street Journal reports that while the company’s net revenue rose 12.5% this last quarter (year-over-year), actual profits for the VW brand are dropping as costs rise.

(See article here: http://tinyurl.com/k2q9we3)

China notwithstanding, VW just isn’t doing the big business in Western markets that it had hoped to just a few years previous. The company’s luxury brands – Audi and Porsche – are the only VW products making gains in the U.S.

Invaluable vehicle sales website www.goodcarbadcar.net (bless their hearts!) shows Audi sales in the U.S. up 13.3% year-to-date compared to 2013, while Porsche is up 8.3% for the same period.

Volkswagen? Well, U.S. sales of its vehicles are down 13.6% compared to last year, dragging the company’s overall sales down 5.3% below 2013 numbers.

In Canada, a much smaller market that has traditionally been partial to small cars, VW sales saw a modest 5.2% year-to-date increase over 2013. However, this number takes into account a big sales month for July; at the end of June, year-to-date VW sales were in the negative, down 2.3%.

Meanwhile, Audi and Porsche sales in Canada have risen 9.9% and 33.9% (respectively) so far this year.

Recent media reports have shown a serious sales slump in South American, which is traditionally a strong market for VW.

When Bugs aren’t enough

So, what’s an automaker like VW to do to lure back those buyers? What do the United States and South America want from it? A giant SUV? A super-cheap subcompact? Vans?

On the U.S. front, it has been reported that a seven-seat midsize SUV is America-bound, but one new niche vehicle isn’t going to turn the tide and hold it there. My personal feeling is that an exciting new small car that isn’t the Golf – something a little smaller, a little cheaper, and a lot more high-tech – could do well in North America, but it could be problematic as well.

Perhaps a four-door coupe version of the Jetta will turn things around…

Europe, Asia, South America and just about everywhere outside of the U.S. and Canada already have the super-compact VW Polo, and have for years. Slotting another small car there into the existing lineup wouldn’t make sense, and producing a new non-Polo vehicle for North America could be an expensive proposition given the limited market and the public’s yet-unknown interest.

Could something be built on a Polo platform? Maybe it could be called a Fox, for retro name recognition. Or: are there enough aging hippies and budding flower children to really make a Microbus or a mini-Microbus a success?

Another idea would be to squeeze more sales out of VW’s existing lineup. Is it possible to diversity the Golf/Jetta/Passat even more?

These aren’t decisions I have to make, and that’s a good thing. Time will tell what strategy VW employs.

Orient express

Big in China.

While General Motors executives might be suffering through some sleepless nights thanks to the ongoing ignition switch/recall fiasco, the news these days isn’t all bad.

Bloomberg News is reporting skyrocketing GM sales in that exotic and lucrative market that all automakers lust over – China.

Yes, the eastern superpower is hungry for vehicles – especially high end vehicles with foreign cache, of which GM is only too happy to provide. Total GM vehicle sales are up 9.1% this June, year over year.

(See article here: http://www.bloomberg.com/news/2014-07-07/gm-china-sales-rise-9-1-in-june-on-buicks-cadillacs.html)

It’s been reported for some time that Chinese car buyers fancy the Buick brand, and sales of those models certainly make up a fair share of the growing volume, but it’s Cadillac that’s now seeing the biggest sales bump.

Sales of Cadillacs rose 46% year over year in June, with the first half of 2014 showing a 72% overall increase. In contrast, Buick sales in June were 14% higher than in 2013. GM expects even greater sales in the second half of this year, and plans to do everything possible to ensure the trend continues.

Much cash is slated for spending in the coming years to boost production for the Chinese market.

Clearly, China is quite enamoured with the 111-year-old luxury brand, despite being far removed from much of Cadillac’s storied history. Clearly, they’re playing catch-up, though no word if there’s an online demand for imports of these:

Grab the technicolour dreamcoat – your ride just pulled up.

Imported from obscurity

Something non-generic this way comes…

Auto reviews in the New York Times can sometimes generate their own news stories, so I’ve started paying closer attention to the road-going scribes at that lofty publication.

(For evidence of my claim, please see Exhibit A: http://jalopnik.com/this-brutal-nyt-mirage-review-is-whats-wrong-with-cheap-1583123298)

Anyhoo, the Times has just come out with their take on the vastly-improved Chrysler 200, which replaces a forgettable car that couldn’t avoid being mentioned in the same sentence as ‘rental lot’.

And they like it!*

*with some quibbles

The 2015 model went on sale at the beginning of June with new everything, minus the top-level Pentastar engine (which everyone agrees was the only flawless element of the new 200’s flawed predecessor). Classy-looking on the outside (with vaguely Audi-inspired lines), the interior of the 200 wowed me when I first sat in one at a March auto show.

We’re talking comfort, luxury, and nice trim that was pleasing to both the eye and the touch.

Reviewer Lawrence Ulrich (I’m putting that name near the top of my alias list) was clearly smitten with the car’s interior, though I can’t agree that the 200 has a “distinctly American design.”

The car’s new 9-speed automatic – actuated via a novelty rotary shift knob – does get called out for gear-hunting and roughness (possibly an early production problem that can be corrected with a software tweak), as well as a soft suspension seemingly calibrated for comfort rather than handling.

Props are given to the vehicle’s design, materials, and the availability of both class-leading fuel efficiency and raw power.

(Read the full write-up here: http://www.nytimes.com/2014/07/06/automobiles/autoreviews/2015-chrysler-200-review.html?_r=0)

“You will forget about the Sebring….. You will forget about the Sebring…”

At first, I didn’t know how to feel about the Chrysler’s new body, but it has grown on me since. Obviously, it’s better in every way than its bulbous, boring predecessor, with lines and curves that convey both length, strength and heft (hallmarks for any luxury sedan).

I wish to drive this alluring beast.

The old 200 sold in fairly good numbers in its last couple of years, thanks to a low, low starting price and upgrade packages that didn’t break the bank. It very well could have been the cheapest way to get into a midsize sedan with V-6 power.

Commercials aired in all mediums flogged the previous 200 to such a degree that Chrysler will have its work cut out for it as it tries to alert the buying public to the presence of this all-new vehicle with an old name.

Lost and found

Here’s a little bit of heartwarming automotive news for all to enjoy.

George Talley, 71, of Detroit was recently reunited with his 1979 Chevrolet Corvette, which was stolen from outside his Jefferson Avenue apartment building in 1981. The car, discovered in Mississippi, was returned to the ex-GM worker thanks to some helpful General Motors executives, who made sure cameras were rolling when Mr. Talley fired up his long-lost steed.

As the Detroit Free Press stated, the (opportunistic?) feel-good moment comes at a stressful time for GM, which is now operating at DEFCON 5 due to the faulty ignition/bazillion vehicle recall crisis currently gripping the company.

Cynicism comes easy in times like these, but if we can shove that aside (plus public relations maneuvering) for just a second, there’s happiness to be felt in seeing a hard-working elderly man experience a moment of belated joy.

Watch as he tests the ‘Vette’s dodgy retractable headlamps and wipers, and retrieves a cassette tape from the deck.

http://www.freep.com/article/20140701/NEWS05/307010132/stolen-corvettee-recovered-detroit-gm

In reporting on incoming Lincoln Motor Company CEO Mark Fields, Bloomberg News let slip that former CEO Alan Mulally had considered scrapping the brand altogether amid stagnant sales.

According to industry insiders, Fields convinced Mulally that Lincoln had a future in the Ford stable. Seen by many as Lincoln’s saviour, Fields’ mandate will be to turn the tide of stagnant sales, which reached an all-time low last year – 65% below the peak of 1990.

To do this, Fields must draw attention to the brand, lure in youthful buyers, and pursue new models and freshened design.

Lincoln’s overhaul has already begun; Bloomberg reported back in April that Ford had quietly replaced former design director Max Wolff (hired from GM in 2010) with David Woodhouse, a Ford veteran who previously oversaw the company’s European luxury divisions.

(http://www.bloomberg.com/news/2014-04-10/ford-replaces-lincoln-chief-designer-with-luxury-veteran.html)

Hopefully, these changes will correct Lincoln’s aimless drift and herald a move away from the badge-engineering and awkward design that plagued the brand over the past several years.

Price chopper

“Guys! Hey, guys!… Over here!”

There’s a war brewing.

The population is dividing into camps, taking sides, circling the wagons. How this will end, and what will be left when it’s over, nobody knows.

Yes, I’m talking about entry-level subcompact cars.

Nissan Canada created a splash earlier this year when it introduced (re-introduced, technically) the diminutive Micra hatchback, priced at a rock-bottom, take-off-your-sunglasses-and-squint $9,998.

“What the hell?” cried a heavily taxed, half-frozen Canadian public. “Those are 1990 prices!”

The sub-10K sticker price was a big coup for Nissan and for advertisers, as they could now say they were selling the cheapest car in Canada.

“Step up, Millennials! Don’t be afraid – it won’t hurt you!” the ads shouted, implying there would still be income left over for bike spokes and craft beer.

To achieve that low starting price, buyers of the base Micra will have to do without such must-have’s as air conditioning, automatic transmission, cruise control and power windows/door locks, and it remains to be seen how many drivers will be willing to go forward in such a primitive way.

Frankly, this setup reminds me a lot of my first car, a ’93 Plymouth (I survived the ordeal).

Lost in all the hubbub generated by the Micra’s launch was a vehicle launched last fall that also claimed to be an economic superstar. The Mitsubishi Mirage debuted under a loud banner of ‘America’s most fuel-efficient gasoline car’, touting a combined 40 miles per gallon (U.S.).

In Canada, ads cheerleaded the Mirage’s diesel-like 4.4 litres/100 km highway mileage, which works out to 64 mpg (Imperial). However, in order to achieve these savings at the pump, drivers had to fork over more cash at the dealership.

The Mirage launched with an MRSP of $12,995, a price that was already undercut by other vehicles, including Canada’s previous cheapest car, the Nissan Versa sedan. In Quebec, the vehicle listed slightly less than in the Rest of Canada.

The mileage figures got some press, but nothing like the Micra’s starting price, and it makes sense. The Micra would save you money on Day 1, while the Mirage would save a driver money over time, depending on how much driving was done.

No surprise that winning the lottery is sexier than creating a high-interest investment portfolio.

Guess who’s back?

Not content to have the Micra soak up all of the cheap car limelight, the Mirage is fighting back the only way its manufacturer can – by reducing its price.

As of June, after a consumer cash discount of $2,500, a new Mitsubishi Mirage will set you back – wait for it – $9,998.

Yes, there are now TWO cheapest cars in Canada, both battling for sales ground amid a struggling economy and record high gas prices.

The vehicle sales website goodcarbadcar.net sheds some light on why Mitsubishi adopted this aggressive approach (see chart here: http://www.goodcarbadcar.net/2013/10/mitsubishi-mirage-sales-figures-usa-canada.html)

Mirage sales were pretty much flat for the first quarter of the year, not surprising considering the brutal winter endured by almost all of the country. Come spring we see a sharp uptick in Mirage sales, more than doubling in April compared to the month before, followed by a huge drop in May – the month the Micra debuted.

In the United States, where the Micra isn’t being sold, sales of the Mirage continued to climb as spring progressed. Clearly, Canadian sales were being jeopardized by the Mirage’s newfound competition.

Certainly, the time is right for a low-priced, fuel-efficient car, given the environment we live in, but I’m willing to bet Mitsubishi will have the harder time in this battle.

Make up your mind

Reviews of the Micra point to a driving experience out of synch with the model’s bargain-basement price tag. Capable suspension, a 107-horsepower 1.6-litre four-cylinder, and beefier 15-inch tires sets it apart from the Mirage, which makes do with a 1.2-litre 3-cylinder making 74 horsepower.

The Mirage also rests atop skinny, 14-inch tires and is not known for its handling prowess.

Now that their starting prices are equal, it will be up to the individual buyers to decide what’s important to them – mileage or motoring pleasure. Because there is quite a difference between the two vehicle’s fuel consumption numbers.

On the highway, the tiny Micra consumes fuel at a rate of 6.6 litres/100km, according to the manufacturer. This translates into 43 mpg (Imperial), or 21 mpg less than the Mirage’s highway figure – a consideration for those making long commutes.

Of course, if the buyer just wants a cheap car for running errands every now and then, it’s doubtful this will matter much. After all, the 2014 Micra is not a 1972 Caprice.

With the opening volleys now fired, we eagerly await updates in this ongoing battle.

Driven to Attraction

If it has an engine, it has a heart