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: The SUV And Crossover Massacre Continues
See that up there? It’s the new Chevrolet Malibu, and it’s a survivor.
Along with the redesigned Honda Civic, it’s the only non-SUV or crossover vehicle to post year-over-year sales increases. The car market—as in, not trucks, SUVs or crossovers—is getting hammered at the moment. No one is really buying sedans.
Automotive News reports that May was the worst month in six to seven years for mainstays like the Mercedes E-Class, BMW 5 Series, Hyundai Sonata, Toyotas Camry and Prius, and Fords Focus and Fusion.
Cars have accounted for just 41 percent of the U.S. market so far this year, down from 50 percent for all of 2013. Barclays Capital analyst Brian Johnson said the country has plunged into a “sedan recession.”
In May, the carnage affected all sizes and prices; sales in every car segment, including subcompact, compact, midsize, luxury and sporty, dropped double digits from a year ago. Overall, car sales dropped 16 percent and light-truck sales rose 2.4 percent, for a total industry decline of 6.1 percent.
For many shoppers, cars have become the equivalent of wide lapels and whitewall tires, said Gary Uftring, president of Uftring Auto Group in Peoria, Ill.
“We don’t get a lot of ups on cars right now, as far as people even wanting a price on them,” said Uftring, whose brands include Chevrolet, Ford, Nissan and Subaru. “Styling has changed, and what people want to be seen in is a crossover or a sport utility.”
One would imagine that if you do want one of those sedans, now is a great time to negotiate a killer price on one. Good luck.
2nd Gear: Nissan Will Not Be Deterred, It Simply Must Be The Best
Nissan dealers hate Nissan because the automaker’s push for a 10 percent U.S. market share by March 2017 has meant a lot of alienation, a feeling that Nissan’s brand is being watered down in search of volume.
But Nissan’s Joe Munoz indicated to Automotive News that his company absolutely will not back down until its haters are crying themselves to sleep:
But Jose Munoz, Nissan’s chairman for North America, has a clear message to those dealers: That push isn’t going to stop.
“Nobody can say that Nissan stands still,” Munoz, 50, told Automotive News in an in-depth interview. “So we are not going to stop. We’re going to continue. We believe the company has more potential, as we have seen in other markets where we operate. That’s why we continue to invest.
“We have aspirations to continue to grow.”
[...] Munoz said a small number of Nissan retailers are unhappy with the fast pace that he and his management team have taken to make Nissan a more serious threat to import-brand leader Toyota. But he predicted that dealers soon will agree that the company has brought them better products, more sales, higher profits, more fixed-operations business, better marketing and improved customer satisfaction.
“Dealers will soon agree,” the story says. That means get in line.
3rd Gear: Cadillac’s Dealer Overhaul
Speaking of dealers, Cadillac has long had trouble with their dealers offering a less-than-premium experience compared to what you get from Lexus and the Germans. So there’s a big overhaul coming and it’s called Project Pinnacle. Once more from Automotive News:
Small and midsize stores must decide whether it’s worth it to add dedicated salespeople or services for the promise of a bigger margin. For high-volume stores, maxing out the margins will require some heavy lifting, too — they’ll need to offer pickup and drop-off for sales and service customers, for example, according to a draft of the standards obtained byAutomotive News.
Project Pinnacle dismantles a payment structure that all but ensured high-volume Cadillac stores more than $1 million annually in factory new-car money, replacing it with a system that requires them to jump through many more hoops. De Nysschen, who deployed a similar concept when he ran Audi of America, has said dealers will be able to earn more on new-car business under Project Pinnacle: Maximum margins amount to 14 percent of the sticker price, vs. about 12.6 percent under the current system.
Some dealers are skeptical.
“I’ve crunched the numbers,” said one high-volume Cadillac dealer in the Northeast. “They’re asking us to take on a lot more overhead to make less money.”
Will it make a difference for customers?
4th Gear: The New Electric Roadster From China
Qiantu Motor, set up by car design company Beijing CH-Auto Technology Co., is currently building a factory in the eastern city of Suzhou to produce the electric car with a carbon-fiber body and aluminum frame, Chairman Lu Qun said in an interview. The sports car, K50, is to debut next year with a starting price of about 700,000 yuan ($106,000), he said, comparable to Tesla’s Model S, which is made of aluminum. The price is about a third of the BMW i8, which also features a lightweight carbon-fiber body that improves performance.
“We are learning from Tesla as well as all the other electric carmakers,” said Lu, 48, a former Jeep engineer who left Beijing Jeep Corp. in 2003 with some colleagues to start Beijing CH-Auto. “We are aiming at building high-performance cars, and there’s no other option but to build our own factory, because there isn’t a plant in China that has a carbon-fiber molding workshop.”
5th Gear: Bob Lutz’s Crazy ZR-1 Fisker Arrives
At last—at long last!—Bob Lutz’s insane Fisker Karma with the hybrid engine ripped out in favor of the bonkers 6.2-liter supercharged V8 from the Corvette ZR-1 has arrived. Three years after the VLF Destino’s debut, it’s finally being delivered to customers, reports The Detroit News:
The Destino — first seen as a concept at the 2013 Detroit auto show — is the opening product of a partnership between ex-General Motors product chief Lutz, former Aston Martin designer Henrik Fisker and entrepreneur Gilbert Villarreal. While the original Karma chassis was produced in Finland, the Destino is assembled in Auburn Hills.
“I’m over the moon with how the car turned out dynamically — steering, brakes and, of course, Corvette ZR-1 power, coupled with the convenience of a paddle-shifter automatic,” 84-year old “Maximum Bob” said of his new ride. “I’m really happy with color and trim, as well as the spectacular proportions.”
The game will never be the same.
Reverse: Drive In
Neutral: Are Sedans Doomed?
Do we need to start writing the obituary for the three-box sedan?