Looking back at the GM bailout. Success or not?

Bailout-GM-ChryslerThe U.S. Treasury Department announced on Monday that it had sold its final shares of General Motors stock, officially ending the government bailout of GM at a loss of about $ 10 billion to the taxpayers.

The Center for Automotive Research (CAR) in Ann Arbor, Michigan, published a study that is supposed to prove that the government bailout actually benefited the taxpayers, because the damage to the U.S. economy would have been far greater if no action had been taken by the government. This publication makes perfect sense when you consider it were the same authors from the same research center that issued another memorandum back in November 2008, warning that as many as three million jobs were at stake in the automotive sector unless the U.S. government acted to guarantee the continued operation of all Big Three Detroit automakers.

Two scenario’s: dreamed up and imaginary

In CAR’s 2008 memorandum “The Impact on the U.S. Economy of a Major Contraction of the Detroit Three Automakers”, economic impacts were estimated for two scenarios involving a short-term, severe (50- or 100-percent) implosion of Detroit Three production in the United States. A great way to manipulate statistics and report results to validate one’s point of view is to base the study on fantasized data from a hypothetical worst-case scenario; in this case the scenario that if one of the Big Three were to go bankrupt, they would take down many suppliers with them, as a result also shutting down  the remaining two Detroit automakers and foreign automakers with U.S. factories and the entire rest of the supply chain. The projections of job losses were based on the assumption that all automobile manufacturers and suppliers nationwide would be lost. Wow! Does that seem at all likely to anyone? … Continue Reading …

Should Renault change the Samsung brand name?

Renault-Samsung-Motors-Market-share-South-KoreaRenault Samsung Motors, the South Korean subsidiary of the French carmaker, is the least successful of the South Korean domestic automakers, the brand has struggled in recent years because of bland and uninspiring products, but is going through a transition period, with the restructuring of its sales network and product offering.

Renault Samsung was once the number two brand in its home market, behind Hyundai-Kia, but has been passed in recent years by GM Korea (the former Daewoo now turned Chevrolet) and SUV maker SsangYong, owned by Mahindra & Mahindra of India, as sales of Samsung branded vehicles have fallen almost 60% in two years time, from 161.917 in 2010 to just 65.691 in 2012.

Its main competitor Hyundai-Kia, with a local market share of over 75%, exports to countries all over the world, and has economies of scale to undercut Samsung’s prices in its home market. And with a production of around 130.000 units in 2012 in a factory with a capacity of 300,000 units annually,  it’s hard to make a profit.

Bright future for Renault-Samsung?

But a change of fortune may be in the making.

renault-samsung-qm3The recent successful introduction of a Samsung branded version of the Renault Captur, named Samsung QM3, looks hope giving. The first 1.000 units of the small SUV were sold out in 7 minutes, with another 4.000 orders signed in the following two weeks. It is the first Samsung vehicle not built in South Korea, but that may change if sales remain strong, as shipping costs from Europe and import duties in South Korea make it hard to turn a profit on these sales.… Continue Reading …

GM to drop Chevrolet in Europe to focus on Opel

Chevrolet-EuropeGeneral Motors must be reading Left-Lane.com, as they have announced that Chevrolet will be pulled from the European car market, in order to focus on Opel (and Vauxhall in the UK), just two weeks after I wrote my article on What should General Motors do with Opel and Vauxhall in Europe?

Automotive News reported that “due to a challenging business model and the difficult economic situation in Europe” Chevrolet will no longer have a presence in Europe from 2016. “We have growing confidence in the Opel and Vauxhall brands in Europe. We are focusing our resources in mainstream Europe,” according to Stephen J. Girsky, Vice Chairman at General Motors.

Although that is exactly what I wrote in my article on Opel, that GM should focus on its local brands, in my article on How does GMs Global Brand Strategy fit in Europe? I said that they could keep Chevrolet in Europe, but make a bigger distinction between the brands. Chevrolet should be the budget brand, like Dacia, which is very successful and profitable for Renault. Daewoo was selling quite a bit of cars before it was renamed Chevrolet and raised its prices to mainstream levels for budget cars. For Dacia prices, Chevrolet would have been able to compete in Europe.… Continue Reading …

Man arrested for charging EV at son’s school. Disproportionate? Sure. But theft?

Nissan-Leaf-EV-ChargingWith new technology, there is always a period when regulations and good practices haven’t kept up with the new situations that this technology can put people into.

When automobiles were introduced over 100 years ago, it didn’t take long for speed limits to be introduced, as pedestrians at that time were only familiar with horses walking through the streets. So when they wanted to cross the road, they didn’t expect those motorized carriages to approach as quickly as they were.

Fast forward to 2013, when a Georgia owner of a Nissan Leaf Electric vehicle was arrested and charged with stealing about 5 cents worth of electricity when he plugged his car into a EV charging station at his son’s school while he was attending a tennis practice. He spent more than 15 hours in jail for charging his car for 20 minutes at the school’s expense.… Continue Reading …

VW Up, Skoda Citigo and Seat Mii sales already past their peak?

VW-Up-Skoda-Citigo-Seat-MiiIn 2012, Volkswagen Group made a splash in the European minicar segment, introducing a triplet of cars under the VW, Skoda and Seat brands, that were to take the successful Toyota-PSA triplets C1, 107 and Aygo head on to become the best (and best-selling) minicars of the continent. The cars have been well-received by the press and the public, storming to a (combined) first spot of the segment in their first year on the market. They are selling at a rate their predecessors, VW Lupo and Seat Arosa, and more recently VW Fox, have never been able to reach.

From my article on Jan-Sept sales of the European minicar segment, you might think sales of these Volkswagen Group triplets keep on rising: VW Up!: +21%, Skoda Citigo: +128%, Seat Mii: +91%. However, that’s compared to their introduction year 2012 when they were in startup mode. Looking more closely at sales of the past four months, a totally different picture is painted. A rather worrying one actually.… Continue Reading …

BMW i3 crash test reminds of the A-class moose test

Remember the Moose Test that almost killed the Mercedes-Benz A-class?

Mercedes-Benz-A-class-moose-testIn 1997 Mercedes had introduced a revolutionary new car, the A-class, Mercedes’s first entry into the compact car segment. Mercedes proclaimed it would be the safest compact car on the market. Shortly after the car was officially introduced, it rolled-over during a test known as the “moose test“, conducted by a Swedish journalist. The A-class’s failed moose-test created extensive media coverage in Germany and other European countries, threatening the success of the A-class launch and hurting the safety image of parent Mercedes-Benz. They were forced to make an Electronic Stability Control system ESP as standard, and then it passed the test, but the damage to the A-class’s image had been done.

BMW-i3-EuroNCAP-crash-testFast forward to 2013: BMW introduces a revolutionary new car, the i3, BMW’s first entry into the electric car segment. BMW proclaimed it would be one of the safest electric cars on the market, thanks to its carbon fibre safety cell. Shortly after the car was officially introduced, it received only a four-star rating in the European safety test, conducted by Euro NCAP. The i3’s “failed” safety test created extensive media coverage all over the world, with BMW hoping it won’t threaten the success of the i3 launch and hurt the technology leader image of parent BMW. They probably will have to make a few safety systems as standard to get a five star rating, but the damage will have been done.

You see the similarities, right? Then why didn’t BMW see this coming?… Continue Reading …

CARicature News: German Autobahn toll will depend on your speed

German-Autobahn-tollThe famous German Autobahn will soon no longer be unlimited. Unlimited free kilometers, that is. Chancellor Angela Merkel has reached an agreement with the ruling parties to introduce a toll system in order to pay for the huge costs for maintenance of the high-speed motorways.

Rumor has it the toll pricing may depend on the speed a car drives on the Autobahn. Fast drivers will pay a higher price-per-kilometer than slower drivers, as the left-wing party Die Linke has requested. According to party-leader Gregor Gysi, “The rich are able to buy faster cars, so if they want to drive them at high speeds, they should pay more, it’s only fair”.

Angela-Merkel“Because of the poor state of our infrastructure, safety may be jeopardized if we do not invest in maintenance”, Merkel said. “But there is no money available in our current budget, so we had to choose: introduce a speed limit of 90 km/h (55 mph) or introduce a toll system, which should generate enough revenue to pay for road maintenance”.

 

Pricing is not yet announced, but expect the highest speed bracket, with an average speed >250 km/h (155 mph), to have a similar price-per-kilometer than a lap around the famous Nürburgring, which costs € 27,- for a 20,8 km lap, equal to € 1,30 per kilometer (US$ 1,10 per mile).… Continue Reading …

Will the DS premium brand succeed in China?

DS-dealership-ChinaCitroën is making a huge bet on its DS premium subbrand in China. With a projected 200.000 cars to be sold through 100 stand-alone DS dealerships by 2015, the investment is enormous and the stakes are high. Crucial to success in the Chinese market is local production, as heavy taxes keep imported models limited to just 10% of the Chinese car market in 2012. This year, Citroën has started production of DS5 in Shenzhen with its Joint Venture partner ChangAn, and two more models will follow.

Citroën dropped the ball in China

The French were one of the first foreign brands that were allowed to sell cars in China in the 1980s, together with VW. But from those early days, both brands have walked different paths, with different results.

Volkswagen has capitalized upon its first-mover advantage to build its brand into the market leader thanks to massive investments in production capacity and a wide range of products from low-end all the way up to premium with sister brand Audi.… Continue Reading …

Self-driving cars: also for driving enthusiasts?

Self-driving-car-BMW

There are many roads that are just too much fun not to drive yourself.

At first, I was skeptical of self-driving cars as well, because autonomous cars would take the fun out of driving. I might as well take the bus or train, if I can’t have control over my own steering wheel and throttle. I don’t have a rear-wheel drive roadster and a V6 Alfa Romeo just to sit back and let the car have all the fun, I want to enjoy every kilometer I drive.

Not everyone drives the Nürburgring on their daily commute

But in reality, I wasn’t enjoying every kilometer. Sure, there are many moments on secondary roads where I get my kicks out of some challenging corners or even roundabouts, or feeling that push in my back when I hit the throttle. But the majority of my commute on the highway is just numbingly following the car ahead of me who’s driving 2 km/h slower than I would like him to, but I can’t be bothered to overtake it. And that’s also due to the fact there might be a traffic cop hiding behind the bushes, ready to preach about road safety, and charging a hefty lecture fee as well.… Continue Reading …

CARicature News: The next step after self-driving cars: passengerless cars

nissan-leaf-autonomous-driveAfter Nissan announced their goal of having multiple self-driving vehicles on sale in 2020 last august, a press release dated yesterday announces the brand is already looking further into the future, and has started investigating the next step into the autonomous car.

 

“We have asked ourselves: ‘what comes next?’ As a technology leader, you need to have a vision for the future”, Nissan CEO Carlos Ghosn explained to left-lane.com. “We expect passengerless cars to be the mobility of the future. Imagine the benefits for road safety: when fully autonomous cars, without a driver or passenger, are involved in a crash, nobody will suffer serious injury of even fatality.”… Continue Reading …