This is The Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place every weekday morning. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn't your time more important?
1st Gear: You Can't Get Everything You Want
You may have noticed that I have a few issues with Volkswagen's product choices over the last few years, and a lot of it comes from a place of historically loving the kinds of vehicles that Wolfsburg produces. As car enthusiasts who aren't super wealthy, we've been lucky to have Volkswagen.
And, for all of our complaints about all of the the things they've done wrong lately, the reality is that we're getting a lot of the cars we want out of them including numerous variations of the Golf platform and a diesel wagon with a manual.
Facts like these are why I'm ok with the recent announcement that VW is going to start trimming back on certain product offerings. As Bloomberg reports:
Volkswagen, the world’s second-largest carmaker, set a target last year of lifting profit at the VW marque by 5 billion euros by 2017 through reduced spending and higher productivity. The goal is for the brand to generate margins of at least 6 percent by 2018 to reduce the parent company’s reliance on the Audi and Porsche luxury divisions for profit.
Efficiency gains of “well over” 1 billion euros will lift earnings at the VW brand this year, Winterkorn said. The company has identified about 50 percent of the measures needed to reach the 5 billion-euro earnings-improvement goal, he said.
Phasing out cars that contribute only a small portion of sales volume will generate savings in the “triple-digit millions” of euros, Winterkorn said. VW will also abandon optional features and equipment ordered in fewer than 5 percent of a particular model to reduce production complexity and development costs.
A good example is the three-door VW Polo. Sure, I love the idea of a three-door subcompact, but most people buy the five-door and other brands are phasing out their three-door models as well. It sucks, but AutoExpress says it'll save them $150 million, which ain't nothing.
If losing a few trims and cars that aren't very popular allows us to keep a manual in the Golf R or a Skoda Octavia RS then I'm all for it. Being successful means making tough choices and the difference now is Volkswagen seems to be making the right tough choices again.
Just bring us the GTD please.
2nd Gear: French Socialists Want To Kill Diesel Cars
If you'd ask me who the worst politicians in France were last week I'd have probably said the xenophobic ultra right wing nationalists who have gained popularity lately.
Now, I don't know, I'm not getting good vibes from France's left wing socialists.
But diesel hegemony is under attack in Europe, led by France’s socialist government. France wants to persuade buyers to cash in their old diesels for electric cars by offering incentives of up to 10,000 euros ($10,500). Meanwhile Paris Major Anne Hidalgo has announced measures to phase out diesels in the city by about 2020. Other cities like London have announced tighter controls on noxious emissions which will severely limit diesel access to the city. Now this might make sense for many old diesel powered cars, but the European car industry has spent hundreds of millions cleaning up diesels and the latest ones are said to be superclean. The industry is worrying that this anti-diesel sentiment might spur an out of control movement to demonize diesels even though current ones are perfectly clean. The Society of Motor Manufacturers and Traders (SMMT), which speaks for the auto industry in Britain, launched a campaign this week “Destigmatizing diesel” to counter this trend, which it described as stirring up ill-informed opposition. Environmental groups like Brussels-based Transport & Environment (T&E) don’t buy this “superclean” claim though and demand action to make these so-called Euro6 vehicles less of a threat to health.
Poor diesel, always so misunderstood.
3rd Gear: Truck Leases On The Rise For Metrucksexuals
Let's be honest, if you're buying a pickup truck to actually use it the idea of a lease isn't a great idea. Putting a lot of hard miles on something is kind of the reason for buying a truck in the first place, which runs against the value of leasing.
On the other hand, metrucksexuals who buy $60 luxobarges probably aren't putting hard miles on their vehicles, so for them maybe it does make sense? It must, because truck leasing has risen from less than 3% in 2010 to about 14% last year according to J.D. Power.
There is a downside, however. Per Automotive News:
Leases are driving incremental sales of the Detroit 3's biggest moneymakers, helping to extend one of the U.S. light-truck market's strongest growth streaks in recent memory. They're also getting pickup owners into a lucrative buying cycle that brings them back to showrooms every three years.
But profitability is lower on leases generally than on purchases, even with stronger residuals that allow automakers to reduce lease subsidies. Leases also require automakers to gamble that those strong resale values will hold up in the face of rising gasoline prices or an economic downturn.
That was a losing bet back in 2008, when the slowing economy and spiraling fuel prices led to a drop of about 25 percent in resale prices of full-size pickups and SUVs, leaving automakers' captive-finance arms holding the bag. One analyst in 2008 estimated that Chrysler's finance unit was losing an average of $5,000 on every big truck it took back at the end of the lease term.
It's a big bet so we'll see how it ends up playing out.
4th Gear: Chinese '60 Minutes' Is All Over Automakers
China has spent the last 16 or so months investigating automakers for various consumer rights violations, some real and some real-but-standard.
The least interesting claim, which has been leveled at almost every foreign automaker, is that car companies have been overcharging for replacement parts and service work, to which people in the rest of the world reply "DUH."
Over the weekend, China's state television had their annual March 15th consumer rights day special addition, Reuters reports, and singled out Volkswagen, Nissan, and Mercedes for the practice.
They also apparently picked on Land Rover for some gearbox issues. All the automakers, of course, were falling all over themselves to apologize for any issues, but that seems more for show than anything.
5th Gear: Cadillac Has A New European Boss
If you're going to be a global luxury brand you have to have a presence in Europe and, while recent Cadillac products have moved towards the standards of the rest of the world, they haven't taken off yet on the continent.
Not surprisingly, Cadillac has poached BMW exec Andreas Schaaf to run the brand.
There's a lot of upside in the premium space for Cadillac so this sounds like a decent job.
Reverse: And Now He's A Household Name...
On this day in 2003, race car driver Ricky Craven wins the Darlington 500, crossing the finish line .002 seconds ahead of Kurt Busch for the closest recorded finish in National Association for Stock Car Racing (NASCAR) history. In May 2009, more than 5,000 racing fans voted Craven’s victory the most memorable moment in the history of South Carolina’s challenging Darlington Raceway, nicknamed “The Track Too Tough to Tame.”
Neutral: What VW Product Would You Trade For What?
Would you trade a manual in the base Jetta for a Jetta prepped like an Octavia RS? A GTI with plaid seats for a Passat wagon?
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