Car Buying in America

By Gary S. Vasilash

In 2019 some 148,000 went to a facility in Wolfsburg, Germany. Not surprisingly, COVID 19 reduced the numbers (97,570 in 2020).

The reason those people went to Autostadt was to pick up their new Volkswagen.

And while there they could visit a museum, walk through vehicle pavilions, eat everything from light fair to fine dining, and even stay at a Ritz-Carlton. They could even attend concerts.

Autostadt is the world’s largest auto delivery center.

Volkswagen has turned getting a vehicle into an amazing experience.

People don’t have to pick up their VWs at the Autostadt. It is a choice.

(While I’ve never personally picked up a car at Autostadt, I’ve been there on more than one visit to Wolfsburg and it is remarkable.)

There is nothing like it in the United States.

One of the towers at Autostadt where vehicles are located before delivery. (Photo: Landmann, Lars)

There are factory-owned dealerships in Germany. Meaning, for example, VW-owned.

There are no factory-owned dealerships in the U.S.

Why? Why isn’t there a Ford Factory Store in Dearborn where you could go pick up an F-150 that has been built for you, a facility that is affiliated with the Henry Ford so that there would be the opportunity to have a complete experience beyond the vehicle delivery alone?

Simply because of dealer franchise laws in all 50 states.

Did you ever wonder why you can’t but a vehicle from Amazon?

The same reason. The franchise laws.

What’s the rationale?

According to the National Auto Dealers Association:

“automobiles are sold through franchised dealers because that business model is a good deal for everyone. Consumers are given extra protection in the marketplace, local communities benefit when local businesses compete to sell and service great products, and manufacturers get to invest their capital into designing, engineering and marketing great products in lieu of low-margin retailing. For these and other reasons, state legislatures have passed laws that promote the buying, selling and servicing of cars through local franchised dealers.”

Tim Jackson, the president and CEO of the Colorado Automobile Dealers Association, simplifies that as “Win, win, win.” A win for the OEM. A win for the consumer. A win for the community.

And, as anyone who has bought a vehicle within the past several months from a dealer knows, a win for the dealership, as they have racked up record profits.

On this edition of “Autoline After Hours” Jackson explains why dealers are a good deal for consumers to “Autoline’s” John McElroy, Alexa St. John of Business Insider, and me.

Although there are surveys indicating that people do want to purchase on line and to get vehicles delivered where and when they want them rather than having to go through a dealership, Jackson, not surprisingly, argues that dealerships will continue to play a role in the transaction.

Of course, perhaps trying to emulate Tesla, which doesn’t have franchise dealers, it seems that more and more startup companies (e.g., Lucid, Rivian) are foregoing the franchise model.

Here’s a thought: Aren’t all traditional OEMs doing their damnedest to compete with Tesla on product?

Might they not rethink their model of getting products to consumers?

Well, there are all of those laws that makes that difficult to achieve, to say the least.

But I’m willing to bet that the Germans who have had the Autostadt experience think far more of VW than anyone who has picked up a car from their local dealer, cappuccino machine notwithstanding.

You can see the show here.

Remarkable Rotary Engine and Agreeable NACTOY Jurors

Power in a small package. Jurors before casting their ballots

By Gary S. Vasilash

The Omega 1 is a highly efficient engine, one that can produce 160 hp and 170 lb-ft of torque. Yet it weighs just 35 pounds.

While it is a combustion engine, it doesn’t have pistons. Doesn’t have crankshafts.

Rather, the output from the engine comes from a single rotating power shaft.

Yes, the configuration of the engine is predicated on rotary motion. In fact there are no moving parts besides the rotational elements.

It can be fueled with gasoline or hydrogen.

On this edition of “Autoline After Hours” we are joined by Matthew Riley, the founder, CEO of Astron Aerospace and inventor of the Omega 1 and Chris Theodore of Theodore & Associates and technical advisor to Astron.

They explain the way this engine works.

Astron Omega 1. Looks complicated. But simpler and lighter than a reciprocating engine. (Image: Astron Aerospace)

Given the name of the company, there is a focus on use in aircraft applications. For example, drone use would be certainly something that this lightweight engine would lend itself to.

But it also is conceivably applicable to automotive applications: Think of how it could be used to power a vehicle using hydrogen as fuel—there would be no need for a fuel cell to transform the hydrogen.

Then on the second half of the show “Autoline’s” John McElroy and I are joined by Matt DeLorenzo of Kelley Blue Book and Jack Nerad of “America on the Road Radio.” All four of us are jurors for the North American Car, Truck and Utility Vehicle of the Year (NACTOY) awards and will soon be voting on the winners for the 2022 awards.

The finalists are:

CAR

  • Honda Civic
  • Lucid Air
  • Volkswagen GTI/Golf R

TRUCK

  • Ford Maverick
  • Hyundai Santa Cruz
  • Rivian R1T

UTILITY

  • Ford Bronco
  • Genesis GV 70
  • Hyundai IONIQ 5

The four of us discuss which vehicles are likely to win.

The surprising part of the discussion is how much agreement there is, with little in the way of dispute.

But you be the judge by watching it here.

Innovation, Static Practices, & How Tesla Has Disrupted the Industry

There are certain things that traditional OEMs care about that Elon Musk and his team will get to—after they accomplish the important things

By Gary S. Vasilash

In 1997 a book by Clayton Christensen was published that had a thesis that was not something that many people in companies really wanted to accept:

It essentially says that there are incumbent companies—think of the long-in-business vehicle manufacturers—who basically provide incremental improvements to their products. Things get better. Just a little bit better. Other companies are doing the same thing, so a given company really doesn’t need to concern itself with doing anything but slightly adjusting the dial. They may improve their existing processes to make their production more efficient, the production of their existing (though improved to some degree) product.

Then a new entrant comes into the field. A new entrant that can pretty much be ignored. (Or so it seems.) That’s because they’re in a space that isn’t particularly valuable (e.g., low margin). Or they provide a product that underperforms the existing. Or they are providing a product that no one has asked for.

The concept, and the title of the book: The Innovator’s Dilemma.

Actually, the one who has a dilemma is the one who isn’t innovating but trying to continue the existence of the status quo.

No one ever got fired to trying to improve margins on an existing product, so that’s pretty much what executives do: invest in improving the existing product. After all, there are all of those sunk costs in equipment and process and knowhow that have to be taken into account.

But then, not immediately, but eventually, the product that could otherwise be ignored, is transformed such that it becomes something to be reckoned with.

Case in point: Tesla.

When it introduced the Roadster in 2008, a essentially a Lotus Elise with an array of lithium-ion batteries that were otherwise found powering laptop computers back then, a two seater that had a price of over $100,000, Tesla was pretty much considered to be a company that was a niche of niche: after all, roadsters don’t have a whole lot of demand, and in 2008 a roadster with an electric powertrain was simply ridiculous.

As time went on, the incumbents looked at what Tesla was doing and didn’t think much. Yes, the Model S may have had remarkable performance, but what about the build? The Model X had doors that were visually impressive but functionally not up to snuff. The Model 3 was impressive, but as everyone knew, Tesla wasn’t profitable, so anyone could build unprofitable vehicles. The Model Y had interior fits that were not the sort of thing that one would expect from a vehicle with its price point.

But also as time went on, more and more OEMs began to realize that not only was Tesla immensely popular among consumers in a way that was beyond the wildest dreams of anyone in the car industry, but that it wasn’t going away.

So they began to roll out an EV here and an EV there, all of which were claimed—publicly or implicitly—to be “Tesla fighters.”

Seemingly that hasn’t worked out.

The innovator’s dilemma in action.

Jeff Stout is executive director for Yanfeng Automotive Interiors and a student of The Innovator’s Dilemma.

On this edition of “Autoline After Hours” Stout joins “Autoline’s” John McElroy, Craig Cole of Roadshow by CNET and me in a spirted discussion that largely focuses on what Tesla does and doesn’t do, which leads to a variety of related subjects including whether electric vehicles will become the dominant type on the roads and whether autonomous vehicles are going to occur in a meaningful way in a bounded amount of time.

And you can see it all here.

They’re Probably Not Throwing in the Mats

Challenges and opportunities in the dealer model and other contentious issues

By Gary S. Vasilash

Research from Cox Automotive, which is a source that dealers find exceedingly useful in their efforts to conduct their business, found that there is an increasing interest among customers to do more of their transactions digitally.

As in 80% of consumers would like to do part of the buying transaction on line. (Who doesn’t do research on the vehicles they’re interested in on line; who doesn’t want to get some of the “paperwork” related to the transaction done in the comfort of their own home rather than under the fluorescent lights of a dealership?)

And 25% of customers would like to have the whole thing done and dusted on line.

What’s more, KPMG conducted a global survey among executives in the auto industry—OEMs, suppliers, dealers, financial services providers, etc.—and they found (again, realize this is a global survey and the Cox Automotive survey in U.S. only):

  • 78% think the majority of purchases will be on line by 2030
  • 34% think that from 60 to 79% of the vehicles delivered will be direct to the consumer by 2030
  • 84% think vehicle subscriptions will be competitive to buying and leasing by 2030 and only 22% dealers are the best channel for subscriptions (OEMs are the biggest choice, 45%)

There is some concern that due to the reduced inventories that are a result of supply chain issues dealers—not all, but some, some that get attention—are increasing prices well above the sticker price.

If consumers were thinking there might be an alternative before this occurred, then those who were subjected to or simply heard about this behavior might be thinking harder about new approaches to getting vehicles (e.g., the Tesla approach).

This is one of the topics that is discussed on this edition of “Autoline After Hours” with “Autoline’s” John McElroy, Cars.com editor-in-chief Jennifer Newman, the Wall Street Journal’s vehicle expert Dan Neil, and me.

Other topics include whether Apple is going to get into the vehicle business (Neil and Newman both think that it is a when not an if), and whether electric vehicles are going to be the end of muscle cars as we know them.

And there’s much more in one of the more animated shows in some time.

Which you can see right here.

Developing the ’22 Toyota Tundra

The inside story from the vehicle’s chief engineer

By Gary S. Vasilash

Let’s face it: Trucks have a pull on people in a way that is almost unimaginable. Who—outside of someone who either has a vocational reason (contractor, landscaper, etc.) or who has an avocation that makes a truck a necessity (putting a snowmobile in the box; having the torque and capability for pulling a trailer)—really needs a truck?

If you take a look at the numbers of trucks sold the answer to that question seems to be “Damn near everyone.”

Toyota, while not the leader in the truck sales segment by any means, has long been building things that have remarkable capabilities, like the Land Cruiser that has been going to places in the world that are simply extreme.

Hybrids are generally associated with fuel efficiency. An objective of the hybrid in the Tundra is not to pay tribute to the Prius, but to provide the kind of torque that truck drivers like. (Image: Toyota)

It does build the midsize Tacoma which is a leader in that segment despite the best efforts of GM and Ford. Yet GM and Ford best Toyota in the full-size truck segment (with the Silverado, Sierra and the F-150).

But Toyota continues on with the Tundra. And has just launched an all-new truck which, coincidentally enough, now shares its underpinnings with the Land Cruiser.

One could argue that neither Ford nor GM has anything that is in the Land Cruiser category, so that is something serious to be said about the 2022 Tundra.

On this edition of “Autoline After Hours” Mike Sweers, executive chief engineer in charge, among other things, of the Tundra, talks about how this new truck was developed with “Autoline’s” John McElroy, Joe DeMatio of Hagerty, and me.

Sweers is not only an engineer, but he happens to live on a small farm. Consequently, for him a truck isn’t just something he works on from the development point of view, but something that he uses in his off-hours. (Does someone who develops pickups and then uses a pickup at home ever really have off-hours?)

From how the suspension is setup so that it doesn’t “ride like a truck” to why they decided to use a composite box (e.g., it doesn’t break or corrode like aluminum and steel do) are among the topics that Sweers discusses.

And what is interesting to know is how a guy who really, really wanted a diesel (and Toyota has a new 3.3-liter diesel) discovered that a hybrid powertrain setup met his requirements for torque.

You can see it all here.

Lyten Is Building a Better Battery

That’s the goal of on-going work in San Jose. It is using lithium sulfur and a 3D grapheme that it has developed.

By Gary S. Vasilash

One of the more interesting aspects of the on-going transition to electric vehicles (EVs) is that there are all manner of companies that are pursuing the technology, not only companies like Foxconn, more ordinarily associated with making things like iPhones rather than EVs, but a growing number of companies whose names are new, typically companies based in Silicon Valley who are busy developing things ranging from control software to batteries.

One such company is Lyten, which is based in San Jose, not exactly a place associated with motor vehicles (although the Tesla plant in Fremont is close, and there used to be a Ford assembly plant in San Jose, although it closed in 1983 and eventually became a shopping mall).

One of the cofounders of Lyten is Dan Cook, currently the company’s CEO. Cook began his career working at GM but has spent the better part of it in the tech space in northern California.

As he describes his professional point of view, “I’m half auto, half tech.”

Which is a good thing for someone who is working for a company that is undoubtedly hoping to become a supplier to a vehicle manufacturer.

Lyten is developing batteries.

The batteries it is working on are based on three-dimensional graphene and use a lithium-sulfur chemistry rather than the currently conventional lithium nickel manganese cobalt (NMC) chemistry.

Cook, on this edition of “Autoline After Hours,” explains why the three dimensional grapheme is important to the batteries and the benefits of using sulfur rather than NMC for batteries. Among the benefits are energy density, which means long range, and another is that the materials used can be domestically sourced, which is advantageous as regards the supply chains that we are so now very aware of.

As for the chemistry part of it, let’s just say that you should want the show because Cook provides a better description of it than any summary here could.

Cook talks with “Autoline’s” John McElroy, Christie Schweinsberg of Ward’s Intelligence, Dave Tuttle of the University of Texas Energy Institute, and me.

And you can watch it here.

All About Jeep

Jim Morrison talks about the venerable brand on this “Autoline After Hours”

The numbers are notable.

Through the first three quarters of 2021 Jeep sold 604,671 vehicles in the U.S.

That makes it, by far, the most important brand within the Stellantis U.S. group.

While everyone knows that pickup trucks are driving the market in a big way, Jeep handily outsold Ram brand, which had sales of 495,410 units.

Of course, in terms of product offerings Ram pretty much has the Ram pickup variants, which accounted for 434,772 of the sales. The ProMaster Van and the ProMaster City account for the rest.

Jeep vp Jim Morrison (Image: Jeep)

In the case of Jeep, there are the Wrangler (164,710) and the Grand Cherokee (189,727). Having two popular models is certainly beneficial.

And as for the other brands—Chrysler, Dodge, Fiat and Alfa Romeo—realize that all in for the first three quarters the entire group had sales of 1,365,881.

Jeep and Ram combined account for 1,100,081 units, so you can figure how the others did.

Jim Morrison is vice president, Jeep Brand North America. On this edition of “Autoline After Hours” he talks with “Autoline’s” John McElroy, Mike Austin of Hemmings and me about where the brand is and where it is going.

The importance of having some solid nameplates is something that they’re taking into account which is leading to an expansion of offerings.

For example, the fifth generation Grand Cherokee is now also available as the 4xe (plug-in hybrid) and Grand Cherokee L (a three-row vehicle).

In addition, this year Jeep has also launched the Wagoneer and Grand Wagoneer. The Grand Wagoneer starts at $86,995. It is not only the most sumptuous Jeep, but what is important to note is that it is still a Jeep: the engineers didn’t forget capability when developing the vehicle.

Morrison talks about those vehicles, as well as about the influx of competition that Jeep is now facing, such as with the Ford Bronco and the GMC HUMMER.

He thinks that what is going to happen is that the entire segment is going to grow as people begin to think more and more about vacations that put them behind the wheel of a vehicle and not strapped into a seat on an airplane, and that an increasing number of those vacation trips will be out in the wilds, a place where Jeeps excel.

Morrison also thinks that Jeep will maintain its share of the market, not lose it to the other companies.

He also talks about whether there could be fully battery electric Jeeps, and while he is cautious about talking future product, he does make an interesting statement that encompasses Jeep:

“We don’t care what puts power to the ground. We just want to do it better than anyone else.”

That’s a Jeep thing.

You can see the show here.

Cadillac LYRIQ: Hitting All the Right Notes

An up-close look at the exterior and interior design of what will undoubtedly become the flagship of the Cadillac lineup (sorry, Escalade)

By Gary S. Vasilash

The Cadillac LYRIQ is certainly the most important Cadillac vehicle to be launched since the Cadillac CTS appeared in 2003. Arguably the LYRIQ, an electric vehicle, is one of the most important products that General Motors is putting on the market because it truly marks a commitment to contemporary EVs that it has announced are coming.

The 2023 LYRIQ, which will be on the market in the first half of 2022, is the real thing.

The fresh face of Cadillac. (Images: Cadillac)

Yes, it will be beaten to showrooms by the GMC HUMMER EV, but that is arguably a niche vehicle. A niche vehicle with people with deep pockets: the first edition, for which all of the reservations have been spoken for, has an MSRP of $112,595.

The LYRIQ will start at $58,795. The reservations for the first edition of the crossover were full. In 10 minutes.

The LYRIQ has an estimated range of over 300 miles from the 100.4-kWh Ultium battery pack. It is a rear-drive vehicle. The Ultium drive unit will provide ~325 hp.

On the inside there is a 33-inch diagonal screen that stretches across the instrument panel, a 19-speaker AKG Studio audio system, eight-way power driver and front passenger seats, and other accoutrements that are characteristic of a vehicle that is a showcase for the brand.

An interior so well crafted, you might not want to leave when your trip is complete.

On the exterior there is a illuminated black crystal front grille that illuminates in an orchestrated manner, a grille that is certainly a signature of not only the vehicle, but of the level of creativity, imagination and technology that may become known as what Cadillac is all about.

On this edition of “Autoline After Hours,” we learn about the LYRIQ, inside and out.

We—“Autoline’s” John McElroy, Henry Payne of The Detroit News, and me—are joined by Brian Smith, Cadillac exterior design director, and Tristan Murphy, Cadillac interior design manager.

What is notable about LYRIQ, even if you put aside that it is an EV, is that this is a vehicle that was a total clean-sheet design. They were creating something absolutely new, something that wasn’t a variation on a theme.

The charter was to create a vehicle that would not only show the world of electric vehicles that Cadillac has arrived, but the world that drivers live in too: This is meant to be a vehicle that not only will people like driving, but be one that they’ll be proud to be seen in.

Three of the words that Smith and Murphy use to characterize what the LYRIQ represents are performance, technology and craftsmanship.

The best of right now with the attention of detail that often seems to be lost.

===

Then, for the second half of the show, McElroy, Payne and I, all jurors for the North American Car, Truck & Utility of the Year (NACTOY) awards, talk about the vehicles that we had the opportunity to drive earlier in the week, all semifinalists for the 2022 awards.

The vehicles include:

  • Audi A3 and S3
  • Cadillac CT5-V Blackwing
  • Genesis G70
  • Honda Civic
  • Mercedes S Class
  • VW Golf and GTI
  • Ford Maverick
  • Hyundai Santa Cruz
  • Nissan Frontier
  • Toyota Tundra
  • GMC HUMMER EV pickup
  • Rivian R1T
  • Ford Bronco
  • Genesis GV70
  • Hyundai Tucson
  • Jeep Grand Cherokee
  • Jeep Wagoneer & Grand Wagoneer
  • Kia Carnival
  • Nissan Pathfinder
  • VW ID.4

And you can see it all here.

Lincoln Approaches 100

Yet it is working to maintain freshness and relevance in the market by paying attention to the market

By Gary S. Vasilash

One of the aspects of vehicle ownership that probably doesn’t receive as much attention as it ought to is the act of ownership itself.

As in purchasing the vehicle. Then the on-going owning of the vehicle.

To be sure, the product itself has to be worth acquiring. Features, functions, capabilities and the like. Style and technology.

Lincoln, which is now predicated on a lineup of SUVs, is going to be launching an electric vehicle next year and will be offering a fully electrified lineup by 2030.

Lincoln is readying the launch of the Lincoln Intelligence System, a cloud-based system that provides extensive capabilities for its vehicles, including over-the-air updates.

Lincoln will soon be launching its Lincoln ActiveGlide hands-free driving system.

And there is more.

But one of the more interesting aspects of what Lincoln has been steadily doing is providing excellent customer—it calls its purchasers “clients”—service. According to a recent J.D. Power survey, Lincoln is number-one in sales satisfaction among luxury brands.

2022 Lincoln Navigator (Image: Lincoln)

It has developed what it calls the “Lincoln Way,” which is a customer-centric approach to the buying and ownership experience, which it is initially launching in China—an important market for the brand—and then will roll out in North America.

Michael Sprague is Lincoln’s North America Director, which means he is in charge of marketing, sales and service for the marque in the U.S., Canada and Mexico.

And on this edition of “Autoline After Hours” Sprague talks to “Autoline’s” John McElroy and me about what Lincoln is doing to help increase the momentum that it is building with not only vehicles like the Navigator, but with its approach to the customer both during and after the sale.

Sprague is one of the most thoughtful and articulate people in the industry, so his observations about the brand—which will be 100 next year (at least will have been part of Ford for 100 years, since it was founded by Henry M. Leland in 1917, and he sold it to Ford in 1922. . .and it is worth noting that Leland had earlier founded another company: Cadillac)—are worthwhile for those with interest in the industry.

In addition to which, McElroy and I talk with Patrick Lindemann, president, Transmission Systems, E-Mobility, Schaeffler, and John Waraniak, CEO, Have Blue, about the Indy Autonomous Challenge, which will be run at the Indianapolis Motor Speedway on October 23.

This race will pit 10 vehicles, all Dallara AV-21s, that have been engineered by student teams from around the world, in a race with $1-million going to the winning team.

No, it will not go to the winning driver, because as the name of the race indicates, there are no drivers, this is an autonomous event.

And you can see all of this right here.

Developing the 2022 Nissan Frontier

It was a long time coming. Here’s how they delivered

By Gary S. Vasilash

If you go way back in time—to 1959—Nissan (a.k.a., Datsun) introduced its first compact pickup truck in the U.S., the Datsun 220.

Which is to say that the company isn’t a stranger to the segment or the market.

1997 saw the first-generation Nissan Frontier pickup, which was offered as a 1998 model year truck.

The second-generation Frontier, a MY 2005 unit, was introduced in 2004.

And while there have been modifications and improvements over the years, there wasn’t a third-generation Frontier until now, the MY 2022 Frontier.

Third-generation, 2022 Nissan Frontier. (Image: Nissan)

The Frontier is in a segment that has certainly changed during its history. Both GM and Ford had midsize products, which they both removed from the market before re-entering it.

Toyota, with its Tacoma, has just kept at it, year after year, leading the segment in sales.

As this is an important segment for all involved, Melaina Vasko, Vehicle Performance Manager, Nissan Frontier, says that as they developed the 2022 model they were certainly cognizant of the competition, but, at the same time, they were not going to overlook the fact that during its run to date there have been more than four million Frontiers sold in the U.S.

So she and her development team spent time learning from customers, learning what they wanted and thinking about what they could bring them.

One of the things people are absolutely interested in is a truck that can fit into a garage. The Frontier with a short wheelbase is 210.2 inches long; the long-wheelbase version is 224.1 inches. The vehichle is either 73 or 74.7 inches wide (the more rugged trims have brawnier shoulders); the height variations range from 71.6 to 72.9 inches. There are two bed sizes: 59.5 inches for the standard version and a 72.7-inch long bed.

Vasko explains on this edition of “Autoline After Hours” how the 22 Frontier was developed with an eye toward providing capability, drivability, comfort, technology, and style, and how these are addressed with the new vehicle.

She talks to “Autoline’s” John McElroy, Brett Smith of the Center for Automotive Research, and me.

It is notable that this is a vehicle that was a long time coming, longer than most vehicles that you can probably think of.

Consequently, the amount of attention to the execution is certainly something that is different than, say, a model that is turned over every five years.

One of the things that Vasko told her team, one of the things that should be important to anyone in any endeavor, is simply this: “Try.”

When things seemed more than difficult, perhaps teetering on the edge of what might be considered impossibility, they were encouraged to try.

Without trying, they wouldn’t have been able to deliver on the 2022 Frontier.

And you can see the show right here.