Not all that long ago the Japanese Big Three were Toyota, Honda and Nissan. Nowadays the last-named seems to have lost its momentum in the market while the other two keep driving forward. Why?
By Gary S. Vasilash
“Remember when driving was fun?” actress Brie Larson opens a new Nissan commercial rhetorically asking before she blitzes her way through the array of new vehicles that Nissan has launched, or is about to.
At one point she’s being the wheel of the Z Proto and acknowledges that there are three pedals down there. Enthusiasts will get it. Others may be confused.
Will Brie boost Nissan? (Image: Nissan)
Nissan is rolling out 10 new or improved products over 20 months, so its showrooms will be fresh with sheet metal.
For those who are interested in one-pedal driving, Larson drives in a Nissan Ariya, the new EV that is anticipated to launch this year. (EV drivers will get it. Others may be confused.)
Although Nissan showed improvement in the first quarter, with its sales up 14.8% from Q1 2020, it really isn’t a good reflection of what it has on offer right now.
Consider: the Nissan Division had sales of 266,482 units. That’s Versa, Sentra, Altima, Maxima, LEAF, 370Z, GT-R, Kicks, Frontier, Titan, Pathfinder, Armada, Rogue, Murano, NV, and NV200.
Ford sold 277,233 trucks. F-Series, Ranger, E-Series, Transit, Transit Connect, and Heavy Trucks. 203,797 of those were F-Series.
What accounts for Nissan’s lack of traction in the market is certainly mystifying.
The question is whether Captain Marvel will save the day.
Yes, it is hot, as the pent-up demand looks for a release valve. But. . .
“The quarter ended strong, setting the market up for an incredible spring from a demand perspective, with $1,400 stimulus payments starting to be issued, tax refund season beginning, rising consumer sentiment because of the vaccination progress, and, literally, it is spring which normally causes people to think more about buying vehicles. All those things are coming together right now, and the industry would likely be setting all-time sales records if it were not for tight supplies and elevated prices.”—Jonathan Smoke, chief economist, Cox Automotive
It’s that second thing that can be troubling.
According to Experian, in 2020 U.S. consumer debt was $14.88 trillion, which is a 6% increase compared to 2019 and the highest growth rate in more than a decade.
And of that, auto loan debt was at an all-time high of $1.35 trillion, a 3.8% increase over 2019.
Gen X has the largest auto loan debt balance, at $22,307, followed by the Boomers, at $19,306, which is just ahead of the Millennials, at $19,011.
(Seems like Gen X is big on debt, as it leads all generations in all categories, including credit card debt, student loans and mortgages.)
A new 86/BRZ is being launched. But this is about a different approach
By Gary S. Vasilash
Toyota and Subaru developed a car that is tailored for each brand’s character, the 86 for Toyota and the BRZ for Subaru. The collaborative vehicle, which was launched in 2012, is built by neither, but by Magna in a plant in Austria.
The companies have introduced the new version of the vehicle, the GR 86 for Toyota and still BRZ for Subaru.
Toyota GR 86 (Image: Toyota)
What is interesting to note about this is that the companies have developed the rear-drive vehicle with a bigger engine—no surprise there—but they’ve gone from a 2.0-liter to a 2.4-liter that produces 232 hp.
Yes, bigger, but not in the least bit like the mill that would be likely installed in an American performance vehicle.
(Performance? According to Toyota, 0 to 100 km/h (this is a global intro, so km) in 6.3 seconds. This is an improvement from the previous car, which was 7.4 seconds.)
This is a lithe vehicle: it weighs just 2,800 lb.
If it is like the previous generation—and it probably is—then when you’re behind the wheel you feel like you’re wearing it, not just driving it.
This is a sentence from the press release that is worth pondering: “Going forward, Toyota and Subaru intend to further ally their respective strengths, deepen their relationship, and so pursue the possibilities of making ever-better cars.”
It isn’t often you hear car companies about creating “ever-better cars.”
A historian and a design strategist walk into a virtual studio. . . .
By Gary S. Vasilash
If a person who was interested in a career in the auto industry did just one of the things that Karl Ludvigson has done in his time on the scene, that would be a notable accomplishment.
Ludvigson has been a:
Designer at General Motors
PR guy at GM
VP of Corporate Affairs at Fiat Motors of North America
Technical editor of Auto Age and Sports Car Illustrated
Editor-in-Chief of Car and Driver
VP of Ford of Europe
And there are more items on his resume.
In addition to which he has been deeply involved in motor sports, which has given rise to a book shelf worth of tomes on racers including Jackie Stewart, Juan Manuel Fangio, Emerson Fittipaldi and more.
He has written another shelf’s-worth on companies including Porsche and Ferrari, on specific vehicle, and even on vehicle components.
His knowledge of the auto industry is, in a word, breathtaking.
Ostensibly, Ludvigson came on this edition of “Autoline After Hours” to promote his most-recent volume, Fast Friends, in which he writes about an array of people who he had the opportunity to know. But functionally, Ludvigson shares a portion of his wealth of knowledge not only about people he has known, but about the design and development of a number of important vehicles.
Joining him on the show—in addition to “Autoline’s” John McElroy and me—is Jim Hall, a walking Wikipedia of automotive knowledge and recent GM retiree, who was working on strategic design before he departed the automaker.
This is a show where the depth of discussion of, primarily, the recent past of the auto industry is discussed, although how those developments have come to affect what is on the road today is revealed, with a particular emphasis on automotive design, which Ludvigson and Hall are particularly well-versed in.
And while this may sound as though it may be a dry recitation of what once was with a glance at what is, know that it is anything but.
Yes, customers are back. But some of what they’re buying is surprising.
By Gary S. Vasilash
Although it was April Fool’s Day when the first quarter 2021 numbers for U.S. sales were announced by OEMs, the smiles were real in offices across the land as the SAAR (seasonally adjusted annual rate) rose to approximately 16.5-million units, or about a 12% sales increase compared to Q1 2020, which, of course, contained the first month of the pandemic in America.
2021 Toyota Prius Prime. There was a 70.6% sales increase for the model in Q1 2021. Who saw that coming? (Image: Toyota)
This wasn’t supposed to happen
Plenty of people who seem to have a particular affection for liking the use of fossil fuel and has therefore been gloating over the fact that Toyota Prius sales have been dropping must have gotten a surprise. Despite that fact gasoline prices have been low for the past several months and still under $3.00 per gallon ($2.85 in the U.S. as of now, according to the Energy Information Agency), Prius sales rose 22.4% in Q1, to 14,050 units. (For a not apples-to-apples comparison: Chevy sold 7,089 Camaros during Q1.)
What is more striking is that all Toyota hybrids had a combined 152% increase, to 125,318 units. (“Thank you, RAV4,” they must be saying down in Plano.)
***
The Big Three?
Remember when that was General Motors, Ford and Chrysler?
GM is still big. Overall sales of 642,250 vehicles.
The other Two, however:
Ford, including Lincoln, had sales of 521,334.
FCA, including Chrysler, Jeep, Dodge, Fiat, Alfa Romeo, had sales of 469,651.
Toyota, including Lexus, 603,066. That’s a lot more than either Ford or FCA.
***
This wasn’t supposed to happen, 2
Everyone knows that (1) sedans are nearly dead in the market and (2) economical vehicles are so 2010.
Nissan, including Infiniti, had a good first quarter, with overall sales of 285,553 vehicles, which is a 10.8% increase over Q1 2020.
But there are two absolute standout vehicles in the Nissan lineup:
Versa: 22,394 vehicles, or an 83.9% increase
Sentra: 37,238 vehicles, or a 55.9% increase
Admittedly, crossovers like the Kicks (24,421 units) and the Rogue (86,720) were big contributors, the fact that the Versa and the Sentra did so well ought to make some analysts reconsider that whole “Cars are on life support” position.
There are jokes. And things that fall flat. And things that have consequences. And something in between. Which isn’t particularly good.
By Gary S. Vasilash
“You’ve got a spider on your head!”
“Taylor Swift is on the phone.”
“There’s a unicorn in the backyard—come see, quick!”
Today in the U.S. people of all ages are saying things like that. It is April Fool’s Day.
Are those characteristics supposed to be a joke, too? (Image: Volkswagen of America)
For the past several years automotive companies have been participating in pranks. They distribute news releases on April 1 describing things from flying cars to flux capacitors.
The more plausible, the more funny they tend to be.
Earlier this week, on Monday, there was a “leak” that Volkswagen of America was going to change its name to “Voltswagen of America.”
Reporters contacted sources that substantiated that yes, VoA was going to be doing that. The rationale was that it really wanted to emphasize that it is going to be an all-electric brand.
Right now VoA has one electric vehicle, the ID.4.
On Tuesday, the company sent out a news release with the headline:
Voltswagen: A new name for a new era of e-Mobility
The opening sentence: “Today, Volkswagen Group of America, is unveiling the official change of its U.S. brand name from Volkswagen of America to Voltswagen of America.”
There was a link to the company’s media webpage.
(Those of a grammatical bent might have thought there was something awry because of that second comma, which shouldn’t be there.)
The dateline on that release: “Herndon, VA, March 30, 2021.”
Herndon is where VoA is headquartered.
Now the company is claiming that this is all an April Fool’s joke.
Let’s see:
–April Fool’s Day: April 1, 2021
–VW press release: March 30
–VW denial: March 31; the press release was scrubbed from the site
If it is a joke, then it wasn’t very well executed.
If you told your significant other, who was going to be leaving for an important meeting, that their car had a flat tire and then said “April Fool’s!” when it was March 30, you probably would be spending that night on the couch.
There are those who say that this isn’t a big deal, that it is simply something along the lines of P.T. Barnum’s “I don’t care what the newspapers say about me as long as they spell my name right.”
But in this case, the name wasn’t being spelled correctly.
The people trying to minimize this say that “regular people,” not those who are obsessed with the auto industry, probably don’t pay much attention to this.
I would suggest that this story had national attention and while it didn’t shake anyone to their core, “regular people” heard “Volkswagen” and words associated with denial and retraction.
Maybe the last time they heard the word “Volkswagen” on their local news “diesel” was linked to it.
VW’s market share in the U.S. is small. The company, which is #1 or #2 in Europe, depending on the month, is way down the list in the U.S. market.
The people in Wolfsburg are probably quite frustrated at this.
VW is going electric in a big way. So far that big way is in Europe and China.
In the U.S., not yet.
But this whole thing has done nothing to improve its reputation in this market.
And that’s the problem. They need to get people into dealerships to buy vehicles to increase their market share. One of the ways they could do this is by selling more EVs.
I’ve driven the ID.4 and I think it is a very good car, something that could make “regular people” go to an EV.
But if those regular people are skeptical about VW and are interested in an EV (and let’s face it: there aren’t a whole lot of them right now), they could conceivably go to their local Ford or Chevy dealer for a Mach-E or Bolt EUV.
Right now I am test driving a 2021 VW Golf GTI 2.0T Autobahn and think that it is the best car that I’ve had the opportunity to be in during the first quarter of 2021: Inside, outside and under the hood, this is what seems to me to be a well-executed machine that is the definition of affordable German engineering. A superb car.
It would be a shame if people stay away from VW vehicles because they think there is something foolish about the company.
P.T. Barnum also allegedly said, “There’s no such thing as bad publicity.”
Your phone may become far more advanced than your vehicle
By Gary S. Vasilash
Here’s something not to look forward to, according to Tom Blackie, founder and CEO of VNC Automotive, a Cambridge, UK-based car connectivity and telematics software developer for OEMs:
“Our customers are experiencing serious supply issues, with some making big long-term commitments in order to get any kind of guaranteed supply, and the implications are much higher costs.”
But here’s the dropping of the proverbial other shoe:
“This will ultimately impact consumers, who will be left with stagnated systems or, in extreme cases, retrograde technology as manufacturers and tier 1 suppliers are forced to hobble systems to work with less advanced semiconductor designs. . . . [W]e’re concerned that it will lead to a generation of cars that will become quickly incompatible with future mobile phones and connectivity technology.”
It was called the “Lexus Concept Reveal Show,” and the purpose of the show, such as it was,* was to introduce the LF-Z Electrified.
The show was about the car—a design that has the now-familiar Lexus sheet metal angularity but type-wise something of a cross between a four-door sedan and an SUV, which arguably makes it a bona-fide “crossover”—that is to come out in some form (concepts don’t always turn into production vehicles) by 2025 as part of “20 new vehicle models including BEVs, PHEVs, HEVs, and other electric vehicles.”
Well, it sort of has a spindle grille: the Lexus LF-Z Electrified. (Image: Lexus)
Heretofore the focus at Toyota—of which, of course, Lexus is a part—has been on hybrids.
And it was ahead of the rest of its competitors back in 2005 when it launched the RX 400h, a hybrid.
An interesting thing about that: Lexus was ahead with the straight-up RX, which has become a phenomenal success for the brand, out performing not only anything else in its lineup, but vehicles from its competitors. And the hybrid version was something that others didn’t have because they, to a certain extent, thought that diesel engines were the future.
Yet Lexus was there with that hybrid, then made hybrid variants of everything from its performance cars to its compact utilities.
But its full-EV–especially in the blinding-light of Tesla–was nowhere.
The details of the LF-Z Electrified are sketchy. As in “DIRECT4,” a “four-wheel driving force control technology” that sounds as if it is an approach to torque vectoring (the various wheels are controlled such that the appropriate amount of torque is distributed to each depending on conditions). It rides on a specific battery-electric vehicle (BEV) platform.
The battery is placed longitudinally and helps provide a low center of gravity, but what kind of battery it is or how big aren’t revealed.
The interior is said to be minimalist, using a new design concept, “Tazuna,” which is the Japanese word for rein, as in a rider reining in a horse. (Mazda has long used Jinba Ittai in the development of its vehicles: the combination of a rider and horse as one.)
Lexus has to come big with electric vehicles. Audi is rolling out with models right now, Mercedes is ratcheting up its output, BMW has a suite of electrified vehicles and has announced its own BEVs, and even Cadillac is going all in.
Given that Lexus was already providing electrified vehicles back in 2005 makes me wonder what’s been taking it so long.
*While this was about a car, it should not be mistaken for an “auto show,” one of those events held in a municipal convention center or fairgrounds with miles of aisles of displays of new vehicles, an event that was in the process of diminishing in importance before the pandemic. It almost seems as if those shows, where things like concepts were routinely introduced, may be giving way to things of a tightly controlled and digital nature.
Who doesn’t like predictions? Especially after the year we’ve all just been through.
So here are six from Kayla Reynolds, Industry Intelligence Analyst at Cox Automotive, regarding the vehicle market in the U.S.
Things won’t return to “normal” in 2021, even with the vaccines rolling out. Seems that social distancing and mask-wearing are going to become the way of the life. Comment: Well, at least in some geographies and demographics. Depending on where you live, you might want to bring some Clorox wipes should you be taking a test drive anytime soon.
The auto industry will emerge stronger from the pandemic. Reynolds said that dealers anticipate improved profits on lower volumes. Comment: Odds are you’re not going to be seeing as many giant inflatable animals in front of dealerships because there is evidently lots of demand.
Inventory will remain tight through the year. New and used vehicles are both in shorter supply—by a lot. Comment: Unless it is really something no one wants, deals are going to be few and far in between. Better get ready to spend that stimulus check.
This year will be a tipping point for digital retailing. Consumers discovered that they could spend lots of time on line in preparing to buy, which meant less time being in a showroom, which was a good thing with a raging pandemic. Comment: No, Amazon Prime isn’t going to deliver your new set of wheels this year.
New competition will slow Tesla’s growth. Reynolds said, “We’ve said this before, but we mean it this time.” Comment: The fact that Tesla is the only company to get its own prediction says a lot about that brand. Yes, at some point Tesla sales are likely to suffer. Some point.
Vehicle ownership increases as ride-sharing and ride-hailing decrease. This is predicated on the first prediction, a consequence of the pandemic. Comment: According to the TSA, there were 1,574,228 air travelers processed on March 28, 2021. On February 28, 2021, there were 1,190,682 passengers processed. That is a 25% increase in a month. How long until people are fine climbing into Lyfts and Ubers? Probably a lot sooner than the Cox prognosticators think.
A look at the vehicle and the strategy that Volkswagen has for this important electric vehicle
By Gary S. Vasilash
Even though the Volkswagen ID.4 is only now beginning to roll out on American roads (as well as on German autobahns, which one would have imagined would have happened sooner, as the vehicles are built in a plant in Zwickau), people at Volkswagen were evidently certain of the likely success of the electric vehicle as on November 19, 2019, there was a ground breaking for a $800-million, 564,000-sq. ft. facility at the company’s Chattanooga, Tennessee, complex that will be used, in large part, to build EVs, with the ID.4 being the first.
What’s more, they’re in the process of building a plant for assembling battery packs.
Volkswagen ID.4 (Image: Volkswagen)
So to say VW has a lot riding on EVs is not a hackneyed phrase.
What’s interesting about Volkswagen in America is that it has made a decided focus on crossovers.
While there were once the Touareg and Tiguan Limited, it wasn’t as though either of them made much of a dent in the ute market. The Touareg was described as being “the people’s premium SUV” and the Tiguan Limited was, well, limited in its appeal. MY 2017 was the final for both of the vehicles in the U.S.
But VW has subsequently come out with a new Tiguan, the Atlas, the Atlas Cross Sport and the soon-to-arrive Taos. And the ID.4 is also positioned in the utility space.
In 2020 VW sold 325,784 vehicles in the U.S. While it is down 10% from 2019, arguably because of the pandemic, even 2019’s 363,322 units was nothing to necessarily celebrate, especially when you consider, for example, that in 2020 Toyota delivered 430,387 RAV4s. In other words, one vehicle sold nearly 105,000 more units than the entire Volkswagen lineup.
Be that as it may, the SUV lineup is fundamental to the success of VW in the U.S. market as it accounted for 58% of all VW sales in the market. The Tiguan is the only model that had 100,000+ sales in the U.S. in 2020.
So on the one hand, VW wants to sell more SUVs. On the other hand, it wants to sell more EVs. And while the ID.4 is an EV SUV, it still presents a bit of an issue for VW in that it is close to the Tiguan in terms of passenger volume, which is a metric that people pay attention to more than, say, slight differences in wheelbase (the ID.4 has a 108.9-inch wheelbase, which is 0.9 inches shorter than the Tiguan).
A man who has to deal with all of these issues is Hein Schafer, Volkswagen of America senior vice president, Product Market and Strategy.
And he explains what the company is doing regarding the ID.4 in the context of the company’s other offerings on this edition of “Autoline After Hours.”
Schafer also gives insights into features of the electric vehicle and why they are the way they are (e.g., when you climb into an ID.4 with the keyfob, you don’t need to push a button to start the vehicle: you engage the gear selector and just go; Schafer says they took that approach to make the vehicle simple to use, recognizing that people unfamiliar with EVs might have a preconceived notion that driving one is akin to an algebra class or science experiment).
Schafer talks with “Autoline’s” John McElroy, freelance journalist Sebastian Blanco, and me on the show.
Additionally, McElroy, Blanco and I discuss a variety of other subjects, including the focus other OEMs have on luxury EVs rather than something that is more mainstream like the ID.4, whether sales practices are likely to change as a result of the massive increase in on-line shopping for seemingly everything during the past year, and a whole lot more.
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