In this section of the blog, you can find opinions about all kinds of matters related to the automotive industry. Corporate strategies, future technologies, past, current and future models, you name it.
Actually, you can really name it:
* Do you want to know more about a certain subject related to cars or to the automotive industry? Or do you want an analysis of an automotive subject? Let me know, I will write about it!
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Tesla fires: the numbers don’t lie

November 19, 2013 by Bart Demandt Leave a Comment

As I mentioned in my article on Tesla vs. Fisker, Elon Musk takes great use of Twitter as a marketing machine. Some of his comments have had an immediate (positive) impact on the Tesla stock price, or on the Tesla brand perception. He (or is it his team?) also contributes to the blog on the teslamotors.com website.

With the recent media coverage of 3 Tesla Model S catching fire within 6 weeks time, all of them after impact that punctured the battery compartment, Tesla stock has taken a big hit, and yet again Musk was quick to respond. However, he is taking a very liberal approach to statistics and risking a kickback from a bold claim.

Tesla’s reaction to the fires

He has written a lengthy article in the Tesla blog, revealing 3 actions Tesla is taking:

An update to the air suspension, which is done wireless to the vehicle’s computer, to increase the ride height at highway speeds, reducing the chances of underbody impact damage.
Musk announced that any damage as a result of a Tesla Model S fire, even due to driver error, will be covered by the warranty. He is smart enough to make the reservation that a deliberate attempt to destroy the vehicle is not covered. He is talking to Americans after all, the same people who need a warning sticker to tell them their airbag may hurt them while saving their lives.
Tesla claims to have requested an investigation by the NHTSA, National Highway Safety Administration, not only to make sure there’s no safety defect to the cars and to prove Musk’s statement that the Model S is safe, but also to shut down any negative publicity of people parroting about the fires, without knowing what really happened. However, NHTSA denies this claim and says that they initiated the investigation after the third fire.

If Musk’s claim about who initiated the safety investigation proves to be “a bit overstated”, it may hurt his credibility in the future. For someone who is known for his bold claims, credibility is key, or he will make a fool of himself. [Read more…]

primark

How does GMs Global Brand Strategy fit in Europe?

November 19, 2013 by Bart Demandt Leave a Comment

I recently wrote about GMs strategy for Opel, and I received encouraging support from a few readers, asking for more details on my views of GMs Global Brand Strategy. In this strategy, General Motors wants to build Chevrolet and Cadillac into global brands that are present in every country of the world, “Chevy” as a mainstream brand, “Caddy” as a premium brand.

I personally believe that it’s a dead end to push a brand just for the sake of bragging rights; GM should let go of its focus on Chevrolet and Cadillac as global brands. They are American. Full stop.

Chevrolet’s image in Europe

Chevrolet is an historic American brand in the US and Canada, known for strong and durable pick-up trucks and large family cars. But in Europe, it’s a bargain-basement budget brand, selling cheap South-Korean small cars of lesser style and quality than competitors Hyundai and Kia. It has no heritage, no clear image and next-to-zero brand value. Compare that to cross-town rival Ford, which has had a presence in Europe since the beginning of the 20^th century, selling cars that have been designed and built in Europe for Europeans. Ford is considered a European brand instead of an American brand, and it’s brand value is way above that of Chevrolet. [Read more…]

Why hydrogen fuel cells are NOT the future

November 16, 2013 by Bart Demandt 2 Comments

In the past weeks, hydrogen fuel cell cars have been in the media again:

Toyota revealed the FCV concept car and said costs of fuel cell vehicles have gone down from $1 million to $50.000-$100.000 in 10 years time.
Hyundai stated that it will have a fuel cell vehicle on the market next year.
and Tesla CEO Elon Musk, never afraid to speak his mind, called fuel cells Bullshit: “Hydrogen is quite a dangerous gas. You know, it’s suitable for the upper stage of rockets, but not for cars”.

Why are hydrogen fuel cell vehicles being developed?

The idea for hydrogen fuel cell cars has been around for decades. Automobile manufacturers and universities all over the world have experimented with the technology, trying to figure out a way to make it work. But despite these years of research and the investment of billions of dollars, the simplest and most usable solution that is currently available for a reasonable price is the battery electric car.

Advocates of hydrogen mobility keep shouting the two main benefits of hydrogen from the rooftops:

Hey, it reduces our dependency on foreign oil, and it will never run out!

and

Hey, you can drink from the tailpipe, because there’s zero exhaust emissions, just water!

Of course, this will get populist and short-sighted politicians on the band wagon, using the promotion of hydrogen mobility and the promise of even more billions of subsidy into the further development of hydrogen cars. This should show how savvy and involved with the environment they are, but what they are eager to forget (conceal) is that hydrogen is a backwards and utterly superfluous technology for cars. [Read more…]

What should General Motors do with Opel and Vauxhall in Europe?

November 12, 2013 by Bart Demandt 1 Comment

General Motors has a problem in Europe. The world’s second largest automaker European Opel brand (named Vauxhall in the UK) is losing money faster than drunk guy in a strip club.

For decades, Opel has been GMs European bread-and-butter brand, competing with Ford, Peugeot, and Volkswagen for the likes of families looking for safe and comfortable, non-pretentious transportation. But the European car market has shifted away from the middle-of-the-road brands, and unless you’re a premium or low-cost brand, you’re in trouble, especially without any chance of growing your volume outside of Europe. Several competitors have come up with different strategies to cope with this reality.

Should Opel follow any of these strategies?

Volkswagen strategy

Volkswagen reacted to the rise of (mostly South-Korean) budget competition by moving its core VW brand more upmarket by introducing more advanced technology, better individualization options and more luxurious interiors, with some help from its premium Audi brand, meanwhile re-introducing Skoda as a budget competitor for price sensitive customers.

But it’s extremely difficult to move a mainstream brand like Opel upmarket into (semi)premium territory, and it will take huge investments into technology, design and marketing. Money that GM is not willing to spend on a “local brand” like Opel, especially one that has already lost an unimaginable $ 18 Billion in the past 12 years. And it will also take a lot of time, at least a few decades, to get the new, higher-end image into the minds of consumers. Time the brand doesn’t have, with stockholders breathing down GMs neck, looking for it to focus on high-growth markets and brands, offering a quick return on investment. Arguably, VW isn’t quite there yet either. [Read more…]

Mitsubishi’s fate in the US is sealed

November 10, 2013 by Bart Demandt Leave a Comment

In 2011, Mitsubishi announced Jump 2013, a three-year business plan that focused its attention to building SUVs, pick-up trucks and minicars for emerging and fast-growing markets in Asia, markets that have yet to mature, like Thailand and Indonesia. To put this in perspective: in its last fiscal year, Mitsubishi sold 357.000 vehicles in Southeast and Northern Asia, about 36% of its worldwide sales.

However, in the US market, Mitsubishi is like the kid that never seems to be getting it right.

* In 2002, Mitsubishi’s US sales peaked at 345.111 vehicles, with a market share of 2%, almost twice as many as Subaru, ahead of Volkswagen and Kia, and within 30.000 units of Hyundai.

* Ten years later, Mitsubishi sales in the United States had dropped 83% on 2002 to just 57.790 vehicles, with a market share of less than 0,4%, a drop in the ocean compared to 703.007 Hyundai, 557.599 Kia, 438.133 Volkswagen and 336.441 Subaru sales. In the first ten months of 2013, sales are off another 1,5% in a market up 8%. Mitsubishi transaction prices are among the lowest of all brands, and its brand value has virtually evaporated, resulting in North American operating losses every year since 2007.

Since Suzuki dropped out of the US market last year, Mitsubishi is the smallest Japanese automaker in the continent, and it has promised its dealers and their last few customers that it is here to stay. But no new models were planned for a couple of years, despite already having an aging line-up. But that’s changed, but not for the better: the latest product plans are the final nail in the coffin. It’s over. There’s No More Hope. [Read more…]

What are VW’s intentions with Seat?

November 2, 2013 by Bart Demandt 1 Comment

VW has been a stockholder of Seat since 1986 and full owner since 1990, with the Spanish brand supposedly being the sporty brand of the now 11-brand group. However, the model strategy did not always support this. And after sales peaked at over 520.000 units in 2000, the brand has seen sales drop to just over 300.000 units in 2009 and 2012, the lowest number since at least 1998. It’s sister brand Skoda meanwhile, has seen sales rise every year since 2002, passing Seat in 2005 and peaking in 2012 at almost 950.000 units, more than triple those of Seat. In 1999, Seat was ahead of Skoda by 134.000 units.

With VW Group boss Ferdinand Piech openly courting Alfa Romeo, another troubled Mediterranean sporty brand, the future of Seat seems to hang by a thread, even though Fiat CEO Sergio Marchionne has taken every opportunity to deny Alfa Romeo is for sale or will be in the near future. But what if struggling Fiat needs some of those billions of Euros in VW Groups war chest to buy the remaining stake of Chrysler or just to pay off some of its huge debt? With Alfa Romeo in the hands of the Germans, what value would Seat hold in the Group’s brand portfolio? Especially with the brand reporting operating losses since 2008, adding up to over € 1 billion.

[Read more…]

Tesla vs. Fisker: 6-0

November 1, 2013 by Bart Demandt Leave a Comment

Tesla-Fisker — Tesla Model S & Fisker Karma

As a toddler we all played with a remote controlled toy car, always bumping into the newly painted living room wall or against your father’s toes. Believe it or not, these cars could have been your first introduction to the battery electric car. Now that we have grown older and have become accustomed to the pleasures of the internal combustion engine, some people argue that the world is ready for a true battery electric car. Tesla Motors and Fisker Automotive are the small heroes trying to kick the establishment of their feet for failing to react quickly enough. But why does Tesla succeed while Fisker hasn’t?