Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: More Mazda
Mazda is in a thoroughly interesting spot these days. It’s a small automaker, one of the last truly independent ones, and it makes some of the best driving and best looking cars on the market. But its size and lack of volume sales compared to competitors can be a challenge, which is one reason it partners with companies like Toyota and Fiat Chrysler for platform-sharing.
But while it won’t introduce a true luxury model (or new brand, as it toyed with back in the 1990s) Mazda does want to “reach out to more affluent customers” with nicer and more expensive vehicles, marketing vice president Russell Wager said at the J.D. Power Automotive Marketing Roundtable, according to Wards Auto:
“We’re not trying to go luxury; that’s not in our cards,” Wager says at the 2016 J.D. Power Automotive Marketing Roundtable. “But we are trying to make vehicles people will pay more for.”
Demographically, the average income of Mazda buyers is up, he says, adding the brand is attracting more college-educated consumers who typically can afford something beyond an inexpensive entry-level vehicle.
The automaker’s brand-loyalty ranking has improved, but it’s still below the industry average. “We need to work on it,” Wager says.
Mazda’s already working on that with cars like the CX-9, which is probably the nicest Mazda since the 929.
The question of the rotary engine came up, as it always does, especially after Mazda debuted the gorgeous RX-Vision concept you see above.
At a Q&A during his conference presentation, Wager says: “That concept car shows RX in the title. Every time we’ve used that in the past, it means rotary engine. I hope that’s the case this time.”
Afterward, he’s more precise about the rotary prospects for the car, if it indeed goes into production; that hasn’t been announced.
“That car wouldn’t come to market unless it has a rotary engine,” he tells WardsAuto. “That’s what they are working on.”
2nd Gear: AutoNation Takes The Fight To Carmax
Carmax, the used car dealership chain famous for insane warranty coverage for people who want cheap fancy used luxury cars but are afraid to change their own oil, is about to face some direct competition from AutoNation. That dealership chain is about to launch standalone used-car only stores with a very similar premise to Carmax. Via Automotive News:
The retailer’s AutoNation USA used-vehicle stores will begin operating next spring, with the first store planned for Houston. AutoNation plans to open five stores in 2017. Another 20 stores are in development, AutoNation CEO Mike Jackson said. Up to 100 stores are feasible for the retailer’s current footprint.
In addition, AutoNation will move to no-haggle pricing for all used vehicles, both those sold at AutoNation USA stores and at the retailer’s traditional 270 franchised dealerships.
The dealership group, the nation’s largest new-car retailer, also will:
Add collision centers and renovate existing ones, unifying them under the AutoNation brand.
Launch a line of AutoNation-branded maintenance and repair parts.
Sell AutoNation-branded vehicle accessories at its dealerships.
Expand its auction business to five locations within the next two years from one today.
No word yet on whether their warranty coverage will be as nuts as Carmax’s, so maybe hold off on that V10 M5 purchase there until you we know for sure.
3rd Gear: Audi Loses Ground At A Time When It Can’t Afford To
Adding to the Volkswagen Group’s many troubles is the fact that Audi’s return on sales and profits will end below targets this year, reports Bloomberg:
While Volkswagen has made strides in overcoming the scandal that erupted after it admitted to cheating on emissions tests, Europe’s largest automaker still faces criminal investigations and hundreds of lawsuits. The company also has yet to reach an agreement with U.S. authorities over 85,000 cars with the tainted 3-liter motors, which were developed by Audi. A hearing is scheduled in a U.S. court next week.
The unresolved issue contributed to Audi saying its return on sales this year will be “considerably below” its target of 8 percent to 10 percent, rather than missing that range only slightly. The distraction comes as Audi, which has so far set aside 885 million euros for the diesel scandal, loses ground to bigger rivals BMW and Mercedes-Benz.
“Audi’s earnings would be under some pressure even without the diesel scandal” amid sluggish demand for the high-volume A4 model, said Juergen Pieper, a Frankfurt-based analyst at Metzler Bank. “The brand currently has an issue with the general attractiveness of its product range.”
That last sentence is surprising to hear, because while a few of Audi’s offerings may be a bit dated—or look that way—they do have a very impressive lineup.
4th Gear: Five Cities Picked For Self-Driving Initiative
Former New York mayor and philanthropist Michael Bloomberg this week launched a program in five cities to promote autonomous cars. Their goals and methods are kind of ill-defined, as these “initiatives” often are, but here’s what Forbes had to say:
“No tech has shaped cities more than cars in the last 100 years,” Bloomberg said via Twitter. “It’s time for cities to turn the focus to self-driving vehicles.” To help with this process, Bloomberg Philanthropies and the Aspen Institute announced a new program this week titled the Bloomberg Aspen Initiative on Cities and Autonomous Vehicles.
The two organizations said the initiative’s goal is to “galvanize experts and data to accelerate cities’ planning efforts, and produce a set of principles and tools that participating cities, as well as cities around the world, can use to chart their own paths forward. Five cities initially have been chosen to be part of the initiative: Austin, Los Angeles, Nashville, Paris and Buenos Aires. Five additional cities will be included and announced later this year.
Interesting. We’ll see what comes of it.
5th Gear: October Decline
Yep, new car sales are going to be down again, reports Automotive News:
Forecasts from LMC Automotive, TrueCar, Edmunds.com and Kelley Blue Book show sales falling 6 to 8 percent from a year ago. That would be a better performance than it appears because October has two fewer selling days than it did in 2015. Analysts said Hurricane Matthew also slowed sales in the Southeast early in the month.
The forecasts translate to a seasonally adjusted, annualized selling rate of 17.7 million to 17.9 million. That compares to 17.74 million last month and 18.15 million a year ago.
“Considering that there are no popular weekend sales events in October, automakers and dealers can feel encouraged by this month’s performance as they head into what they hope will be a busy holiday season,” Jessica Caldwell, a senior analyst with Edmunds.com, said in a statement.
Neutral: How Does Mazda Survive?
The automaker is certainly doing well, but does it have a future being tiny and independent?