The hybrid trend may have started in Japan, but it is really US customers that were first to wholeheartedly embrace the technology, making the Toyota Prius the giant success that it is today. Ever since it became clear that the technology had the power to lure customers into the showrooms, and, more importantly, open their wallets wider than they would for conventionally-powered cards, carmakers have been trying to offer hybrid cars of their own. Some, though surprisingly few, have taken on the Prius directly (the poor Honda Insight, now Hyundai Ioniq and Kia Nero). Others, primarily Toyota’s luxury brand Lexus, have made good money of offering hybrid options on their luxury cars – a bandwagon that the German luxury brands have belatedly caught onto. Others still have tried to offer hybrid versions of mainstream cars, mostly meeting with moderate to no success (Honda, Ford, Nissan, VW). But the one niche that has not yet truly been tapped in the US, unlike in Europe, is that for smaller cars where a hybrid drivetrain can be used to give normally FWD cars a second set of driven wheels. [Read more…]
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.
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Continuing a series I began last year, I’ll look at different cars sold in worldwide marketplaces that I think US customers would like. This week the focus is on Citroën, one of the oldest and most venerable european car brands, founded in 1919 by André-Gustave Citroën. Over the subsequent almost-century, Citroën acquired a reputation for producing cars that are beautiful and innovative: it built the first unibody car, the first mass-produced front wheel-drive car, the first hydropneumatic self-levelling suspension, the first swiveling headlamps… the list goes on. And while today’s marketplace has eroded some of Citroën’s idiosyncratic spirit, it continues to make cars that are very distinct from it competitors.
Previous US is missing out columns:
Ever since I checked out the Model S at a Tesla dealer, and put my e-mail down to get a test-drive, I’ve been getting the occasional e-mail from the carmaker. The other day I got an interesting e-mail ad for the new base Model X, the 60D, which suggested that, to quote: “The Model X 60D can later be upgraded through a software update to 75 kWh to increase range by about 20%. ”
Recently I’ve been looking to buy a car capable of carrying more than the usual five passengers, which got me thinking about the way this market has developed over the past few decades, and how it will change in the future. However, rather than spend time retreading the topic that’s been covered thousands of times, namely the history of the minivan and SUVs, I want to focus on the the interesting efforts by carmakers to offer those looking for space something genuinely new and potentially market-changing. In the first of a series of articles, I look at the brief history of the family-haulers, and then dive into the American experience of looking for the middle ground between the unsexy minivan and the gas-guzzling and compromised SUVs.
Bart and Kriss couldn’t agree on whether the US is ready for a true low-cost car brand, and now they’re locking horns again on whether Volkswagen would benefit from following the highly successful Dacia strategy that has been raking in the profits at Renault.
I just don’t understand why they haven’t done this already. Like with crossovers, Volkswagen has waited too long to follow this trend and has squandered the opportunity to gain a huge volume boost. Not only from the newly-created, low-cost brand itself, but also from sharing the platforms and cost-saving technologies to some of the existing VW Group brands, most notably Skoda and VW itself in regions like South America and China, where it still sold decades-old models under the VW brand until recently. As our reader M. Hoffman commented earlier, last year 46% of worldwide sales of the Renault and Dacia brands combined were Dacia-based models, so they gained huge economies of scale without the need to launch an additional brand in every single market. In markets where Renault was an established brand, like Europe and Mediterranean Africa, Dacia filled the open slot below it, and in markets where Renault was still trying to gain a foothold, like Russia, Asia and South America, the models helped establish Renault as a top player, not necessarily with a budget-brand image.
My big worry is brand-overload over at VW Group. They already have some 12 brands in their portfolio (counting trucks and motorcycles), plus their mainstream offerings (VW, Seat, Škoda) are already rather close and the company seems unable to give them truly different characters. In a sense, the success of Dacia stems from Renault being OK with the cars being no more than acceptable by European standards, at least at first. Somehow, with German perfectionism I don’t see how they could do that – I’m afraid is that they would be unable to position the new brand low enough for it to truly remain a different offering. After all, Škoda started off as a budget offering, but quickly caught up with Seat in terms of quality and is now a mainstream brand that offers good value for money, rather than being a true value brand. [Read more…]
As has become customary, weeks before a car premieres the first pictures have leaked onto the internet. Unusually, they are actually of decent quality, which is why I think it’s OK to post them, especially that they bring up an interesting question.
Fiat-Chrysler Automobiles CEO Sergio Marchionne is famous for speaking his mind and making controversial statements about the automotive industry. He did so again earlier this week when he stated that he didn’t understand how the upcoming Tesla Model 3 could be sold for € 35.000 euros ($39,600) at a profit. He also claimed that he could build a rival to Tesla’s mass market sedan but doesn’t want to because he doesn’t see the business case: “If he (referring to Tesla CEO Elon Musk) can show me that it can be done, I will do it as well, copy him, add Italian style to it and put it on the market within 12 months”. Guess what? Sergio is right: it would be impossible for FCA to make money from EVs under his command, but that’s because he’s stuck in the traditional way of doing business as a car executive and an accountant.
Marchionne is betting big on gas-guzzling trucks and SUVs which are more profitable at the moment and probably will remain so in the near future. That’s a sound business decision from a purely financial point of view. But he lacks the vision to prepare FCA for the future beyond that, and he’s making the same mistakes as those American auto executives from the 1970s who didn’t believe they could make money from economy cars, until Honda and Toyota quickly rose to dominate the compact and midsized car segments and have continued to do so while making money off them. In the meantime, FCA is abandoning those segments because they’ve been trying to catch up with the Japanese, but simply haven’t been able to build competitive and profitable compact and midsized cars for decades. [Read more…]
After revealing the Tesla Model 3 last Thursday, Elon Musk tweeted the company had received 276.000 pre-orders by the end of Saturday. (UPDATE: THE FIRST-WEEK TOTAL NOW STANDS AT 325.000). That would translate to more than $10 billion in revenue if all of those orders end up being delivered. In less than 72 hours, it also almost fulfills the company’s full-year goal of 300.000 Model 3 sales, in a total of half a million annual Tesla sales by 2020. Filling the order base this quickly for a model for which not a lot of specs have been released so far and which won’t start deliveries for at least another year-and-a-half is an amazing performance from the start-up manufacturer by any measure. And if the rebound of its stock price continues, Tesla’s market capitalization will close in on that of General Motors again. However, FCA chairman Sergio Marchionne has been quoted last year that car makers need to sell at least 5,5 to 6 million cars per year in order to survive in the long run. And despite its quick rise out of nowhere as a challenger of the establishment, Tesla is still a long way from selling that kind of volume worldwide, and to reach it would require vast investment in additional models and in expansion of the distribution channel. So assuming Marchionne is right, what’s Elon Musk’s strategy for building Tesla into a long-term viable auto maker?
Let’s just drop the bomb right here: I don’t think he has such a strategy, because I believe he thinks of himself more as the boss of a tech company that happens to produce cars than as the boss of a car company in the traditional sense, like General Motors or Ford. For tech companies, making money in their first few years is much less relevant than achieving a certain network size and scale so their new technology can claim to have set the standard for others in that market to follow. Elon Musk’s vision for Tesla therefore is probably to set the technology standard upon which all future electric cars can be built, using his batteries and perhaps even his platform. That vision is reflected in the structure of the company, the design of the cars, the size of their battery factory, their decision to give away the patents to their technology and their Supercharger network and in their ability to do over-the-air software upgrades on their cars. [Read more…]
For a while us here at Left-lane.com have been in awe of the success of Dacia, the first true dedicated “value” brand (re)started by a major car manufacturer. Sure, Skoda was arguably the first attempt by a major manufacturer to buy a lowly brand and have it slot in at the bottom of its brand hierarchy, but it was never truly positioned as a “bargain” brand. Notwithstanding the Felicia, itself a re-skinned Favorit, all its models have been basically current VW models for some 20% less cash – that’s cheaper, but not really cheap. When Renault bought Dacia, on the other hand, it created a line-up of dedicated cars that were based on tried and tested platforms whose R&D costs have long been recovered, thus allowing the models to be sold at a very low price point. Add to that a simplified construction, long-travel suspension that was both sturdy and comfortable, minimal styling and a spartan interior and the first Dacia model, the Logan, was ready to do battle with both more expensive western, as well as long-obsolete homegrown models in the Eastern European markets. But what followed was a success story that exceeded all expectations Renault may have had for the brand – Dacia models became a mainstream hits in Western Europe as well, including in über-demanding markets such as Germany and England.
The Chinese Range Rover Evoque clone Landwind X7 has revived an old habit among Chinese automakers, of whom we had thought they’d have grown up by now and had quit copying foreign car designs. However, last month two of the three all-new models launched in China are blatant copy-paste jobs again. You’d think that especially Changan, the largest of China’s domestic auto brands with almost a million domestic sales last year, would be large enough to have their own design department. But no, they just decided to screw over their own Joint Venture partner Ford by “taking inspiration” from the Ford Explorer for their new Changan CX70 SUV. Especially from the rear ¾ the door profiles, C-pillar and rear side window, the chrome bar between the rear lights look an awful lot like the Explorer. At the front the headlights are a bit more stretched and the grille is a bit thinner, but the placement of the hood is similar and the bottom end of the bumper also. The entire car is a bit narrower, giving it different dimensions, but the resemblance is still remarkable. Maybe it’s a stab at Ford for planning to have the Explorer for the local Chinese market produced by its Jiangling-Ford joint venture which produces its commercial vans and the Everest SUV. Not sure what Ford thinks of this design from the company that produces all other Ford passenger cars including the Edge SUV for the local market, but I don’t think they’re going to make a big deal of it unless Changan starts to export it to the US, which is highly unlikely. And 72 sales in its first month on the market don’t make it an instant blockbuster that could threaten the Explorer either. [Read more…]