Motor City Blogman, News

All the News that I’m Happy to Have Focused on Instead of CES

I’m happy to have written this story at my office desk, after a week of mostly sitting at my desk. I did not attend CES and I did not fly to Beirut for that long-awaited press conference. This week, I’m getting used to the idea of not driving downtown to a convention center that fortunately is no longer called Cobo Hall, in order to not attend the North American International Auto Show, which has been moved to June.

Au revoir, Carlos Ghosn

“I’m here to clear my name,” the former Nissan-Renault-Mitsubishi Alliance chairman and onetime CEO told a group of reporters in a press conference at a Beirut safehouse. “The allegations are untrue, and I should never have been arrested in the first place.” We knew that was coming, of course. Ghosn’s true revelations last Wednesday did little more than confirm what we thought had happened before his stunning November 2018 arrest in Tokyo, according to reports by Bloomberg and Automotive News. Reminiscing back a decade, Ghosn confirmed rumors from the time that President Obama’s automaker bailout czar Steven Rattner in 2009 offered him the job of General Motors CEO, a job that Fritz Henderson held instead through the forced bankruptcy. Henderson was replaced instead by former AT&T CEO Edward Whitaker.

In 2015, future French President Emmanuel Macron, who was then a little-known 37-year-old economy minister, gave the country greater voting rights on the Renault board. France holds 43.4 percent of Renault, but Macron’s move gave the nation majority blocking control over the automaker—which sounds a bit like the Ford family’s Class B stock—and Nissan executives back in Tokyo worried the country would use it to take over their company.

Ghosn also blames former CEO Hiroto Saikawa, who took over for Ghosn in late ’18 when Ghosn was arrested, and last year was accused, but not arrested for, allegations of financial impropriety himself. The fugitive said he began discussions with scion John Elkann in 2017 regarding a merger of Renault-Nissan-Mitsubishi with Fiat Chrysler, which, of course, hooked up with Peugeot-Citroën instead, while Ghosn was under house arrest in Tokyo.

The post-Ghosn Alliance is not healthy. While tiny Mitsubishi, the 15th-bestselling brand in the U.S. had a 2.5 percent sales increase in 2019, to 121,046, the overall number six Nissan Group (including Infiniti) was down 9.9 percent, by far the most of the major automakers, to 1,345,681. Nissan has seen sales slip elsewhere. “I’m having trouble seeing any strategic direction,” Bloomberg quotes Ghosn as concluding.

This is what has replaced the Detroit auto show in January:

The latest OLED TVs and handheld gaming PC, the Quibi streaming service, high-tech sex toys, robotic cats, and keynote speaker Ivanka Trump. That’s what CES is about, not so much all the automotive tech you’ve read about here. (The one time I attended CES, Ghosn was a speaker, as it happened.) PRI’s Marketplace talked about the Sony car the morning I wrote this, but the radio show’s tech reporter admitted the car was just a vessel for all the Sony video and audio products you will soon enjoy as your rolling living room drives itself. I think CES is mostly about screens.

But they love the Hyundai/Uber helicopter ‘car’

This “flying car,” which is really a people-size helicopter-style drone designed in part to put Uber drivers and their Toyota Camrys out of business, got a lot of attention early in the week before CES began. I wonder who’s going to pay for all the additional air-traffic control. Some attention was paid to Toyota’s Woven City, which will test an entire ecosystem of artificial intelligence riding around in autonomous cars, all while real humans live there.

Helicopter car could make its debut in ‘Parasite II’

Bong Joon Ho’s Parasite is the best movie of the last year, and in fact, one of the best of the 2010s. It has a car component; one character gets himself a job driving for another character (you have to see this film, and I’m doing all I can to avoid spoilers). The car is a Mercedes-Benz sedan, and the driver’s employer also has a Range Rover at home for his family, and in the final scene there’s another foreign car that plays a part in the plot. The movie is set in Seoul, but the only domestic car that gets any sort of close-up is a Hyundai Sonata taxi.

I describe this because the first time I visited Seoul, in 1999, foreign-brand cars made up something like five percent of vehicles on Korean roads. I can tell you with great certainty there will be no Parasite sequel, but if there were, the Hyundai/Uber flying car could find its way into the driveway, or more likely onto the garage roof, of the rich characters. This is not a good thing. Flying cars becoming a thing only proves what I’ve been writing for years: That cars and trucks as personal transportation is becoming a luxury again, just like the years before the Ford Model T.

Jackie Jouret’s The BMW 2002 – The Real Story Behind the Legend

At CES, BMW showed its i3 Urban Suite, with an all-new 1+1 seating interior designed with a “boutique hotel” ambience and Sound Zone technology that can filter outside noises. BMW had 20 on hand that “can be summoned using an app,” the website Bimmerfile says. There was a BMW X7 ZeroG Lounge with seatbacks that can be lowered by 60 degrees without affecting safety, and the automaker announced the ‘21 iNext will have 5G Internet connectivity.

Casual observers might find It easy to forget that BMW made its reputation with the relatively affordable, practical four-seat sport sedan, the 2002 and its four-door siblings, the 1600/2 and 1602. Whatever you think of the Munich company’s current direction, the BMW 2002 stands as one of the top automotive icons of all time.

Jackie Jouret, who was editor-in-chief of Bimmer, the magazine about BMW for 17 years, has captured the history of this car, covering the engineering, design, business case, and marketing and distribution of it in The BMW 2002; The Real Story Behind the Legend [paperback, 131 pages, ID Media]. Jouret employs her exceptional reporting skills to write about the BMW 2002 in all these aspects without getting too technical or the least bit didactic.

This is a good point for a disclaimer. I consider Jackie a friend, and we’ve been co-drivers on several BMW press trips, so I’m not presenting this as a book review. But you should know that Jouret’s storytelling and editing skills, and her attention to detail, make for a book that will appeal to any sort of enthusiast, not just Bimmerphiles. I, for one, learned a lot more than I knew about the car I first saw live while walking to elementary school in the late ’60s.

That car, parked in a driveway built for the Detroit behemoths of the time fascinated me. Jouret devotes the first few chapters to BMW’s postwar history, including the Isetta bubble car’s modest success in the U.S. in the late ’50s. In her chapter, “The Max Factor,” she effectively shoots down legendary importer Max Hoffman’s claims he influenced Munich to design the car. The book continues with development of the Type 114 and E10 BMW compacts through their variants, and the six-cylinder 2002’s arrival in the U.S., finally, via Max Hoffman.

The final chapters tackle Hoffman’s questionable business dealings in selling BMWs in the U.S. through interviews with Bob Lutz. Maximum Bob served as BMW’s board member for sales from 1972 to ’74, but it was enough time for him to establish the Motorsports division and find a way to help ease out Hoffman as U.S. importer, and he provides sharp insight for Jouret’s book. The BMW 2002; The Real Story Behind the Legend is loaded with, as German auto executives like to say, Faszination. It runs $29.95 and belongs on every enthusiast’s shelf.

Read More
With Ghosn Gone, Does Nissan Have Much of a Future?
Ford v Ferrari: How Much the Stars Drove, the Stunts, and More
How Toyota Is Avoiding Becoming Another GM

The post All the News that I’m Happy to Have Focused on Instead of CES appeared first on Automobile Magazine.

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Motor City Blogman, News, Opinion

The Auto Industry Changes to Expect for 2020–2029

The year 2019 and the reviews of the decade of the 2010s are behind us. Recaps of the most important automotive events of 2010–2019, from Dieselgate to Carlos Ghosn’s fall and very recent escape from Tokyo are everywhere, as are most important cars and designs and engineering feats. You won’t find one here, and I’ll use as my excuse the math-geek point that a decade begins with year one, so we’re still in the decade of the teens, which thus runs from 2011 to 2020. Call me again for my list next December.

Everything that changed in the automotive world in the 2010s began with the Lehmann Brothers’ collapse in Autumn 2008 that helped trigger The Great Recession. This coincided with the 100th anniversary of General Motors, which way back then was still the world’s largest automaker, based in the world’s largest auto market. Since the federal bailout and forced bankruptcy of GM, the automaker—which officially is an all-new corporation thanks to that event—put off complete redesigns of its full-size pickup truck and SUV moneymakers until very recently, while spending a few bucks in order to try and lead the industry with Chevrolets Volt and Bolt.

While GM has barely held on to 17-percent market share and may fall below that threshold for calendar-year 2019, it is still the market leader in North America. In fact, GM also remains very influential in the world’s largest auto market, China. So while GM may have long ago surrendered its primacy as the global design and engineering leader, its plans for the ’20s, based on everything that has happened to it since 2008 points to trends that are emerging for the 10 years ahead.

In place of “The Biggest Auto News Stories of 2019” or “Biggest Auto Trends of 2010–2019,” here are changes we can expect from this industry for 2020–2029:

Turmoil in Europe.

GM sold Opel and Vauxhall to PSA Peugeot Citroën in 2017, and the French automaker quickly turned the German and U.K. brands profitable after they lost money for years under the U.S. automaker. I don’t see how PSA, which will control 13 marques including Lancia (which is selling low-profit “fashion city cars” mostly for the local market) after the FCA merger, will keep them all alive. The new company sells seven of those brands in North America. At least two of them—Fiat and Alfa Romeo—may not have much future here, and there’s no reason for the French half of the company to carry out its plans to re-enter the U.S. market with the Peugeot nameplate. (Fellow automotive pundit Gary Vasilash believes future Chrysler models could be built on Peugeot platforms.)

But wait, there’s more. Automakers based in the European Union, which soon won’t include Fiat Chrysler Peugeot Citroën’s Vauxhall, have long dealt with keeping local governments and unions satisfied that they won’t move production out of their home countries; Thus, the late Fiat Chrysler CEO Sergio Marchionne’s promise that all Alfa Romeos will be built in Italy from now on, even if Fiat 124 Spiders are assembled in Japan and Fiat 500s in Poland and Mexico, while Jeep Renegades are built in Italy.

And then there’s the new EU CO2 standard.

After years of lagging behind the U.S. in terms of carbon dioxide-emissions standards, the EU beginning this month will make it that much tougher to do car/truck business in Western Europe. The CO2 standards threaten to slowly kill off what’s left of the diesel passenger-vehicle business there. While Fiat Chrysler already has launched the Jeep Wrangler EcoDiesel in the U.S., the company’s priority in Europe is the plug-in hybrid version of the Wrangler, which goes on sale there any minute now, while the home market doesn’t get the powertrain until later in the year.

Meanwhile, back in the U.S., who wants to buy an EV?

GM essentially is out of the European market, and yet it has been most vocal about expanding its EV offerings. While Ford Motor Company has announced an electrified Mustang and F-Series, and most sensationally the battery-electric Mustang Mach-E, GM has promised 20 new electric vehicles by 2023. And yet the current share for pure-electric-powered vehicles in both the global and U.S. market is somewhere between 1 and 1.5 percent.

Not all of those GM EVs are cars…or trucks…or available in the U.S.

The first two of those 23 GM EVs are on sale already, in Germany, Belgium, and the Netherlands. GM’s Ariv Meld is a $3,160 compact e-bicycle, and the Ariv Merge is a $3,835 folding e-bike. Looks like GM has a post-Opel/Vauxhall EU strategy, after all.

Speaking of bicycles…

As major cities across the nation have added protected bike lanes, and bicycle commuting becomes more popular, bike fatalities from collisions with motorists have increased severely in the past couple of years. No matter whether you’re a driver sympathetic or antagonistic toward cyclists, experts and bike advocates generally agree that much of the blame goes to smartphones (in the hands of the motorists). Perhaps if fellow drivers can’t get other motorists to limit their smartphone use, militant cyclists will.

The German auto industry is not immune.

Writing for the op-ed page of the New York Times, Anna Sauerbrey, an editor and reporter for Der Tagesspiegal, notes that two weeks after Tesla announced its Metro Berlin gigafactory, Audi announced it would cut 9,500 employees by 2025. The narrative in Germany, she writes, “goes like this: Germany has failed to embrace the future. It has been complacent for too long, economically and politically, coasting on former glories. Now the world is coming for it.”

Reminds me of what we said about GM, Ford, and Chrysler here in the 1980s, ’90s, ’00s, and ’10s.

And then there’s Volkswagen.

The automaker that pounded half the nails in the coffin of the diesel engine announced just before Christmas it would reach 1 million in EV production by 2023, two years ahead of schedule, with 1.5 million planned for 2025. Still no word on how automakers plan to boost demand for these EVs, but keep in mind that the VW brand might sell more than 400,000 cars and SUVs in the U.S. when the 2019 numbers are tabulated. The 1-million by ’23 number refers to global sales. If total global light-vehicle sales remain steady through the next few years, this will be a bit more than the 1 percent market share all brands of EVs currently enjoy.

The first of VW’s EVs, the ID 3, arrives in Europe this year for about €30,000, or roughly $33,500. Even if Tesla, Cadillac, and Ford luxury EVs sell for prices that do a better job of cutting into the cost of battery electrics, though perhaps still losing money, I believe it will be medium-priced commuter cars like the VW Golf-size ID 3 that will make electric power mainstream.

The future has come and gone for…

Car-subscription services. Except for Volvo, which lets subscribers exchange one model for another of equal value after a year, practically all the luxury brand sub services launched in the last couple of years are either gone or on hiatus. I don’t see much future in car-sharing, either. And driverless Ubers and Lyfts might make some sense as taxicab alternatives when traveling to and from airports, they’ll do nothing to alleviate traffic congestion. LAX will still be at least 45 minutes from anywhere in town.

This all adds up to:

Peak auto? I’ve already written that how peak sales in the U.S. of 17.5 million vehicles per year, first set in calendar 2015, isn’t that impressive when you compare the nation’s population to what it was when sales first breached 15 million (in 1978). Since that column, there were three more consecutive years of 17-plus-million sales, with 2019 expected to come very close to that number. That makes overall U.S. auto sales more impressive, though I don’t see the trend continuing through the ’20s. There will not be enough young new-car buyers to replace retiring new-car buyers who will put 4,000 or 5,000 miles per year on their last new cars and trucks.

Cities are rediscovering mass transportation as a way to help alleviate traffic and allow city developers to devote less space to parking lots and garages. New York City has a plan to limit private motorized traffic in parts of Manhattan, and even Kansas City is considering a proposal to cut bus fares to zero for all commuters. Meanwhile, new cars, trucks, and SUVs, even the commodity brands, are becoming luxury items anyway, as average prices race past $35,000 and middle-class buyers increasingly take out seven-year loans.

This future may not bode well for mildly enthusiastic car buyers. More brands, including several that enthusiasts covet, will be gone by December 2029. But as Automobile founder David E. Davis Jr. once said, the absolute number of enthusiasts (not a percentage of the car-buying public) has remained the same since the early 1900s. If Peak Auto plays out this way, there may be more space on the roads for us.

The post The Auto Industry Changes to Expect for 2020–2029 appeared first on Automobile Magazine.

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