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:
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Skoda entering the US market? Not so fast, says VW, part 1

Skoda_Kodiaq-auto-sales-statistics-EuropeEver since the Diesel scandal broke in the US, there have been rumors that Skoda could step up to enter the North American market to pick up the lost share or even to replace the tarnished VW brand altogether in this market. Kriss even wrote an article explaining in 5 points why it would make sense for Skoda to enter the US market 18 months ago, before the emission cheating software had been revealed. In the poll at the end of that article, 63% of our respondents thought VW should base its US offerings on Skoda models. This week, the influential auto journalist and well-informed industry watcher Georg Kacher quotes a senior VW board member: “We may be crazy, but we’re not mad. Entering this huge market with an unknown brand, a model range focused on Europe, and a non-existent dealer network is pure suicide. Furthermore, the last thing Volkswagen of America needs now is in-house cannibalization.”

The irony in this quote lies in the part “a model range focused on Europe”, because that’s exactly what Volkswagen itself has been unsuccessfully attempting to to for decades.… Continue Reading …

The only way I think Chrysler can survive and why it won’t happen

Chrysler 200With production of the Chrysler 200 midsized sedan set to end next December, the illustrious brand will be down to just two models: the now almost elderly 300 large sedan, which shares its platform with the Dodge Charger and Challenger, and the brand new minivan Pacifica. That means the two namesake brands of Fiat Chrysler Automobiles are also its weakest volume brands in the North American market. And considering Chrysler cars are sold almost exclusively in the US and Canada, the brand doesn’t seem all that relevant anymore. That’s unfortunate for a brand which used to be one of America’s most innovative brands with a number of important technological breakthroughs to its name and which of course is credited with the creation of the minivan. However, for the past decades Chrysler has let its image crumble by selling mediocre cars and ongoing financial uncertainty under multiple owners as it has gone through a number of (near-)bankruptcies.
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US is missing out: European 4WD hybrids

bmw-225xe-active-tourer-hibrido-2-e1441267376624

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.… Continue Reading …

US is missing out: Citroën brand

Logo CITROEN 05.05 MODIF + REPPROCHESContinuing 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:

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Curiosity: Tesla’s “upgradable” base Model X [w/ poll]

Tesla Model X

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%. ”

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Family haulers, part I: history and the US middle ground

Family cars

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.

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Should Volkswagen create a low-cost brand? [w/poll]

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.

Bart:

Volkswagen_Citi_Golf-South_Afica-value-modelI 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.

Kriss:

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.… Continue Reading …

Acura CDX: the next frontier for the brand? [w/ poll]

2017-Acura-CDX-1

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.

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Marchionne still doesn’t see a business case for the Tesla Model 3, will become a dinosaur

Tesla_CEO-Elon_Musk-FCA_CEO-Sergio_MarchionneFiat-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.… Continue Reading …

What’s Tesla’s long-term business model?

Tesla-CEO-Elon_MuskAfter 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.… Continue Reading …