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.
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!
* Do you have an opinion on a car, brand or another automotive matter? Be my guest, send in your article and I will publish it!
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.… Continue Reading …
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.… Continue Reading …
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.
… Continue Reading …
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.… Continue Reading …
If you hadn’t already shorted your VW stocks after the diesel scandal last year, now would be the best time to do so: VW just lost the only person who was doing everything right in the aftermath of the scandal. In his position as VW of America president, Michael Horn was popular among the plagued dealers for his straight talk, apologetic to the public and influential enough at the German headquarters to push for the right products. But last week VW issued a statement that Horn, is departing “by mutual agreement” to pursue other interests, effective immediately. Such a sudden departure by someone who has worked for the company for more than 25 years, this statements sounds like a euphemism for “he didn’t do what the company wanted him to do, so we fired him”. Update: according to Reuters, VW offered Horn “other positions within the company”, which he declined. In other words, VW of Siberia is still looking for a new Product Manager Eos and Golf cabriolet. Horn’s departure is very bad news for a company that desperately needs a person who was doing exactly those the things he was known for during the current slowdown in US sales at the Volkswagen brand and inability to reach a deal with US regulators or a technical solution to fix the illegal emissions software in about 600.000 VW Group cars.
When we asked you, our readers, whether you thought Sergio Marchionne was right to kill off the Chrysler 200 and Dodge Dart to concentrate on crossovers, we expected most of you to disagree with him. What we did not expect was just how few of you would either agree with FCA’s action, or would be willing to wait and see if it was the right action.
The Audi Q5 has proven to be a very important model for Audi. It may not have been Audi’s first SUV (that would be the gargantuan Q7), but it has been its most successful one. Even as it is about to be replaced in 2016 by a completely new model, the current eight-year-old Q5 was the second-best selling car in the Premium Mid-sized SUV segments in Europe and in the US in 2015! Over its lifespan, it has consistently outsold its German competitors, the BMW X3 and Mercedes-Benz GLK, quite the feat for a first-time effort from Audi. And now, with the second generation Q5 model almost upon us, I wonder if it will be able to its predecessor’s sales success.