Wednesday, July 19, 2017

2017 Summer Product Reveals: Part 7

Alexander Carabitses

(Image credited to Audi)
This past week's product onslaught featured a number of significant vehicle debuts, a few of which nobody saw coming. However, before I begin, I want to mention that this will be the final Car News Commentary post for the next two weeks, as I embark on a well deserved two-week vacation.  Upon my return in early August, content will resume as normal.

2018 Fiat Panda City Cross:  This vehicle is baiscally a Front-Wheel Drive version of the AWD Panda Cross (a crossover version of the Panda).  That's it.
(Image credited to Fiat)

2018 Honda Grace/City: For those who were unaware, Honda sells a sedan version of the Fit hatchback in other parts of the world, with the car being called Grace or City (depending on what country one lives in).  For 2018, the car sees a few minor design tweaks, both inside and out, in order to coincide with the mid-cycle refresh of the Fit.
(Image credited to Honda)

2018 Ford Mustang Pony Package:  After debuting the 2018 Mustang during the public days of the Detroit Auto Show in January, Ford has just launched the Pony Package, which features a retro look that's only available on ecoboost-powered models.
(Image credited to Ford)

2018 Ford Tourneo/Transit Custom: The first of the Ford vans to receive a mid-cycle refresh, both the Tourneo Custom and the Transit Custom (Ford's midsize van that the US does not get) receive a new front fascia and a much more refined cabin than any Ford van before them.  Expect to see the refreshed versions of Ford's other vans debut in the coming months, although I'm not sure when they will hit US shores.  As far as US availability of the Transit/Tourneo Custom is concerned, I'd say that there's a fifty-fifty chance that we see it, considering that Mercedes currently sells a midsize van in the US (the Metris), which itself has been targeting the compact Transit Connect in its marketing campaigns.
(Image credited to Ford)
(Image credited to Ford)

Volkswagen Gen. E Concept: What we have here is a random hatchback design study, featuring an electric powertrain with a 248 mile range.  Also, the car was presented with a robotic charger (i.e. a charger on wheels) because God forbid a person has to plug in their electric vehicle manually.
(Image credited to Volkswagen)

2018 LEVC TX: London has a new edition to its taxi fleet with the TX.  This model is significant because of its plug-in hybrid powertrain that allows it to run for 70 miles on electric power alone and another 330 miles on the gasoline engine before needing to refuel. Of course, the company was sure to make it look like a traditional London taxi, and I must admit that it looks a hell of a lot better than the Nissan NV200 taxi that NYC taxi fleets are stuck with.  The car will hit the streets of London later this year, while the Netherlands will receive its order of 225 units early next year.
(Image credited to LEVC)

2018 Hyundai i30 Fastback: For those who were unaware, the Hyundai Elantra is not sold in Europe, so to compensate, Hyundai has pulled this product out of its back pocket: the i30 (Elantra GT) Fastback. It features a rear liftback, rather than a hatch or a trunk, and due to its proportions, it looks awkward.  Expect the vehicle to go on sale, in Europe, in late 2017.
(Image credited to Hyundai)

2018 Hyundai i30 N:  This is another model that's due to go on sale in Europe by the end of the year.  Serving as the brand's gateway into the compact hot hatchback segment and the brand's first vehicle to be tuned by the N performance division, the car makes 271 horsepower and gets from 0-62 mph in 6.1 seconds.  However, those numbers only come about after one orders the Performance Package; base models will make 246 horsepower.  Hyundai has, of course, sharpened the handling in order to make this version of the i30/Elantra GT more engaging to drive.  Unfortunately, some "intelligent" product planners decided that the US should not get this model and that we will be more than content with an N version of the next-generation Veloster.  I'll write it off as a shameful mistake and a missed opportunity.
(Image credited to Hyundai)

Aston Martin Valkyrie: After first debuting last summer, this outlandish Aston is back with a few updates that make it more "production ready", although one would never be able to tell that this will be en-route to production in the next few years. New for this year are openings between the cabin and the front wheel arches that are supposed to improve downforce. More interesting is the fact that both the headlights and the badges were reengineered to weigh less than before. As far as the interior is concerned, it looks to have been modeled after an actual Le Man racer. No official specs were announced by Aston Martin, although the brand alluded to the fact that the car should feature a 6.5-liter V12 engine and an electric motor under the hood.
(Image credited to Aston Martin)

2018 Zarooq SandRacer 500 GT:  Just as you thought things couldn't get more bizarre than the Valkyrie, an automaker from the United Arab Emirates just launched this off-road machine that is both incredibly cool and incredibly stupid.  Expect it to be powered by a 6.2-liter V8 that makes 525 horsepower and 487 lb-ft of torque when it goes on sale for the modest price of $450,000.
(Image credited to Zarooq)

2018 Mercedes-Benz X-Class: Because Mercedes no longer gives a crap about its true heritage and would rather be dominant in every segment of the market, the brand trotted out this joke of a vehicle. The new Mercedes X-Class is essentially a rebadged Renault Alaskan and Nissan Navara (i.e. the next Frontier), which means it has a payload capacity of 1.2 tons and a towing capacity of 3.8 tons. It will be powered by two 4-cylinder diesels, be offered with either an automatic or a manual transmission, and will come with standard RWD (AWD is an option).  Th exterior design is less offensive than the body style, which is a good thing, although seeing that ridiculously large three pointed star on the grille will take a lot of getting used to.  The interior is spartan, which makes it clear that Daimler intends for this to be a work truck, rather than a luxury vehicle.  If that remains the case, then it's unlikely that this vehicle would do well in the US, due to the truck know-how of Detroit and the brand loyalty that Ford, GM, and Ram buyers have for their respective brands. This is probably why the company has yet to announce US availability of this vehicle, as the truck will go on sale in Europe this November and other world markets next year.
(Image credited to Mercedes-Benz)

2018 Jaguar E-Pace: This is Jaguar's entry into the subcompact luxury crossover space, meaning that it will do battle with the BMW X1, Mercedes GLA, Infiniti QX30, and Audi Q3. Right off the bat, I must say that this looks better than any of the competitors that I mentioned, but that isn't too difficult to do when your competition either looks like an MPV or a raised hatchback.  As it is, the E-Pace has problems of its own, particularly at the back end, where the vehicle looks to be lacking any form of rear overhang.  Still, I will reserve final judgment until I see one in person.  The interior looks to have been modeled after the F-Type, which is a good thing. However, I wouldn't be surprised if the quality is subpar, given the segment that the vehicle competes in and also considering that the interiors of the XE and F-Pace suffer from the same problem. With regards to powertrains, US customers will only be able to choose a 2.0-liter turbo four that makes either 246 hp and 269 lb-ft of torque (0-60 in 6.6 seconds), or 296 horsepower and 295 lb-ft of torque (0-60 in 5.9 seconds).  Both all-wheel-drive and a nine-speed automatic gearbox come standard.  After debuting the vehicle by having it do a record-setting barrel roll, the brand announced that the vehicle will hit US showrooms in early 2018, with the MSRP set at $39,595. Finally, I should note that this will be the first Jaguar not to be assembled in the UK, as production will take place in China and Austria.
(Image credited to Jaguar)

2018 Honda Accord: Honda's bread and butter sedan is all-new from the ground up and due to hit showrooms in the fall of 2017.  Honda took the liberty to cut between 110 and 176 lbs off of this model, while also lowering the center of gravity and improving the suspension to make the driving experience more dynamic.  Sure, the 1.5-liter and 2.0-liter turbo-four cylinders are nothing to be excited about, but they still produce a decent amount of horsepower at 192 and 252 respectively.  Also note that the hybrid is back and the coupe is dead.  I'd go as far as to rate the interior design as being the best in its class.  It certainly looks to have been inspired by Audi's interior design, as Audi seems to be everyone's design benchmark as of late. However, the exterior is not best in class.  While the overall proportions look good and borrow heavily form the Chevrolet Malibu, the chrome front end looks to have been ripped right off of an older Acura and placed onto a wide cavern.  It's as if Honda is trying to give buyers a slap in the face for not accepting that old design language in the first place.  Just give up and let the damn beak die already!
(Image credited to Honda)

2018 Audi A8:  After making a cameo appearance in the new Spiderman movie, the all-new Audi A8 has officially been revealed.  The most impressive features about the car are the one's that you cannot see, such as AI Traffic Jam Pilot (a semiautonomous system that takes care of steering, acceleration, and braking at speeds under 37 mph), AI Remote Parking and AI Remote Garage Parking (features that will park the car for the driver without he or she having to be in the car).  The car will be offered with V6, V8, mild hybrid, and plug-in hybrid powertrains, while the W12 returns as well. Inside, drivers will find a luxurious, contemporary, and somewhat dark cabin (black leather and trim make it look more eerie than sporty) that does not feature an MMI nob.  That's because the car features one touchscreen for the radio and then a second one for the climate control.  As one would expect, the rear seats of the cabin in upscale trim levels look like a great place to be. Unfortunately, the exterior has been designed in a way that will allow it to appear new for the first model year, but only the first model year.  Aside from the hexagonal grille, it honestly looks to have been inspired by the Lincoln Continental, particularly at the back end.  Expect the car the car to hit German showrooms by the end of the year, priced at $103,000.
(Image credited to Audi)

That wraps up another week's worth of product introductions.  Thank you for reading, enjoy the rest of your week, and remember that I will be back in early August.

Sunday, July 16, 2017

The Problems With Infiniti and Acura

Alexander Carabitses

(Image credited to Infiniti)

While the three German luxury brands continue their fight over who can sell more exclusive cars and the American luxury brands seek a path towards redemption, a lot of people seem to have forgotten the progress of the Japanese luxury brands, or in some cases, lack thereof.  For those who have forgotten, these brands include Acura, Infiniti, and Lexus, with Lexus being the clear leader amongst the three.  However, the other two brands fight somewhere mid-pack, and for years, Acura has bested Infiniti.  However, it seems that the tables have turned, as Infiniti is poised to sell 168,000 units by the end of the year, while Acura only sells 151,000. Infiniti's strong sales can be credited to the QX30 and Q60, although sales of just about every vehicle in the brand are up this year.  It is just the latest bit of news in the never ending fight between these two brands to establish who is less mediocre than the other.

From the very beginning, Acura had both a product problem and a perception problem, due to its lack of heritage; today things haven't changed.  I don't care what Honda aspires for Acura to become because the bottom line is that it was perceived as a near-luxury brand from the get-go and it will continue to be perceived as such for all eternity, whether those in power at Honda want to hear it or not. Its product strategy seems to align more with Buick's strategy; keep in mind that Buick is a brand that purposely competes in this segment and outsells Acura as well.  In fact, Buick sold 229,631 vehicles in the US last year, far more than what Acura is projected to sell in 2017. What's unfortunate is that no matter how hard Acura tries to get out of this near-luxury space, it never can because there is no draw to Acura. After all, those who want Japanese reliability and build quality in a luxury car have two other brands, whose products are not a total joke, to choose from. Acura's latest product, the refreshed TLX, looks to be an uninspiring, half-hearted effort when compared to its main competitors (i.e. the new Buick Regal, Nissan Maxima, and Volkswagen Arteon).
(2018 Acura TLX)

The problems don't stop there for Acura though, as styling differentiation from Honda is still something that the brand is working hard to overcome.  I will admit that while I am personally not a fan of Acura's new design language, it is certainly a step in the right direction, at least as far as differentiation is concerned.  Of course, Honda is now using Acura's signature front beak on its new models, such as the 2018 Accord, for absolutely no reason, but I digress.  Another problem is that the interiors of Honda's latest generation of vehicles look a hell of a lot better, and in some cases more premium than Acura's interiors. Finally, Acura desperately needs the subcompact CDX crossover to make it stateside, as this could certainly boost the brand's sales by providing direct competition for the Buick Encore and Infiniti QX30. None the less, establishing a reason for why a customer should choose an Acura over any other luxury brand, or more specifically, any other Japanese luxury brand, proposes a preposterous challenge that may not even be possible to overcome, regardless of whether the NSX is in the lineup or not.
(Image credited to Acura)

We now move on to Infiniti, which has problems of its own.  First and foremost, the brand's product cadence has been practically non-existent for three years, as we were shown concept after concept and refresh after refresh, between the launch of the Q50 in 2013, and the launches of the Q60 and QX30 in 2016.  While concepts generate excitement and refreshes bolster sales a little bit, fresh new product is what drives a brand's momentum in every sector of the market.  In other words, Infiniti has been suffering from lost time without new products, and although I have no confirmation of this, I'm going to take an educated guess and say that Infiniti's older models are suddenly seeing an uptick in sales because of heavy incentives. Fortunately, following another year of no significant product news, 2018 will see the launches of the long overdue QX50 redesign and possibly even the next QX80. Honestly, I would be surprised if we did not see a new QX70 and Q70 launch in 2019.  These key launches will hopefully eliminate the need for incentives, as the brand no longer has to justify selling dated vehicles. I should also add that Infiniti's latest crop of cars look exactly as they should: premium and elegant, mixed with a hint of excitement.

This lack of a product cadence makes it more clear why a luxury brand which competes in all of the adequate, non-niche segments of the luxury marketplace (except for the flagship sedan segment) is struggling to sell vehicles since it has a lineup that can be cross shopped with the German competition. More specifically, it may explain why Infiniti was outsold by Acura for such a long time. It is also true that the brand does need a flagship sedan that will set everybody's hearts ablaze for the Infiniti brand and make a statement about what the brand truly is: a great alternative to Lexus. The difficulty is getting customers to believe it, and when a brand lacks a proper heritage that is expected by consumers who shop in this market, getting them to believe it will be quite difficult.
(Image credited to Infiniti)

The potential (and I can't stress that word enough) bright spot that I see for Infiniti in the long term is that it's the same boat as many other luxury brands, as it waits for the sad truth regarding the redundancy of German luxury brands to set in with consumers.  I have a strange suspicion that the German luxury brands' exclusivity will eventually wear off in their pursuit to sell a vehicle to every person on the planet, and those who want to stand out from the crowd will have to resort to brands like Lexus, Jaguar, Infiniti, Alfa Romeo, and Cadillac. Naturally, a scenario like this would take years to unfold, but given the current trend that I've been seeing from the German juggernauts, I honestly feel that it is more likely for Infiniti to finally achieve full luxury brand status in the future, than it is for Acura to justify why it should be on the shopping-lists of consumers that are in search of the world's finest automobiles.

Thank you for reading and have a good week.

Tuesday, July 11, 2017

Next Stop For Tesla Investors: The Twilight Zone

Alexander Carabitses

A slow news week was suppose to conclude with the first production-spec Tesla Model 3 rolling off of the assembly line and into the garage of its proud papa, Elon Musk. Furthermore, the investment community had anticipated colossal returns, due to the vehicle's launch. Unfortunately for Tesla, things did not go as planned and the week ended up being manure for the brand.
(Image credited to Tesla)

Why? Well, to put it simply, Tesla shareholders are finally beginning to see the light, after Elon Musk himself admitted that the company's share price is much higher than it should be. According to Bloomberg, we ought to blame Tesla's "worst week in a year-and-a-half" on fear over anticipated quality problems that could occur when the car goes into full production, along with poor sales results.  With regards to quality, the main concern lies in the fact that Tesla technically isn't a mass-market automaker, and therefore has not had the experience necessary to deal with production problems that arise on the assembly line on a daily basis, while simultaneously trying to meet a high- volume, daily production quota.

In Tesla's defense, Elon Musk did revise his production estimates for the year, and after all is said and done, the max number of cars that he wants to produce in a monthly period will be 20,000 (in the month of December).  Furthermore, only 30 cars will be delivered this month, 100 in August, and 1,500 in September.  This incremental production increase should allocate the automaker more time to address and fix any production and quality problems that occur before the vehicle is produced at a high volume.  Believe me, the last thing that Tesla needs is to have a blown launch with a vehicle that, in theory at least, is supposed to be the end all be all to the company's survival.

The reason that I say "in theory" is because none of Tesla's existing lineup brings in a profit.  Bare in mind that the rest of the brand's lineup consists of a luxury crossover (a vehicle that should produce high-profit margins) and a large luxury sedan (another vehicle that should produce high-profit margins), but given the fact that these are powered by batteries and not internal combustion engines, the company cannot make a profit.  Now we have a small car that procures lower profit margins, to begin with, mixed with a powertrain that will kill any hopes of a profit until somewhere around the middle of the next decade. For the company's sake, I hope that the loss on each vehicle sold is not huge.
(Image credited to Tesla)

The main reason that Tesla's stock was valued beyond that of GM and other automakers is because the company is viewed as more of a technology company than it is an automobile company, meaning that investors don't expect an immediate return on their investment and are little more patient.  In the business world, this is known as cost-free capital.  I honestly do not believe that investors will be willing to wait another eight years to see a return on their investment though.  Keep in mind that this is still a car company, and cars take longer to develop than the iPhone, a product that is in its seventh generation in ten years, has a profit margin of 200%, and takes only two years to develop.

Since Tesla has never made a profit, I find it extremely odd that Bloomberg's analysts are pointing to rough sales figures for the quarter as being one of the deterrents to the company's value. Believe me, I trust Bloomberg's analysts but think that Tesla's investors are living in the twilight zone.

The last thing that I want to touch upon is Bloomberg's third reason for the decreased value of Tesla's stock. Apparently, the news that other staple automakers, such as Volvo, are planning to add more electric cars to their lineup played a key role in the value declination.  I said it earlier and I'll say it again, Tesla's shareholders have finally seen the light.  They suddenly remembered that other automakers exist and that these automakers also know how to make electric cars.  Once these electric cars hit the market, Tesla will be in big trouble from an image standpoint. Given that luxury automakers with a great deal of cachet, such as Audi and Porsche, are in the midst of developing electric cars of their own that aren't too far away, I can guarantee you that these models will win over the hearts of buyers faster than any Tesla ever will.  In other words, Tesla is currently a novelty because electric cars are a novelty, but once the novelty of electric cars wears off, so too will the novelty of Tesla.  This could probably even happen by the middle of the next decade when electric cars become profitable and demand is expected to heavily increase as prices come down.
(Image credited to Tesla)

I don't think that Tesla will be viewed as the second coming in the mainstream market either.  Quite frankly, there will come a day that the Toyota Camry and its competitors are offered with pure electric powertrain options at affordable prices; that will also be the day that Tesla can just say that it's present and accounted for in the segment.  Even if it sits as a standout manufacturer in the segment with the Model 3 for the time being, it's not like every buyer will flock to it because let's be honest, consumers still aren't ready for electric cars. Sure they may snag some potential Bolt EV sales because of the novelty factor I mentioned earlier, but aside from that, I'd think that more people would flock to the electric cars of the traditional automakers because they simply feel more comfortable buying vehicles that are produced by them.

None of these potential image problems mean that Tesla will go bankrupt, as that of course is to be determined by their supply of cost-free capital for at least the next eight years. What it does mean is that Tesla's stock should eventually fall back in line with that of the traditional automakers. With the investment community finally beginning to see that all of the automakers they've undervalued for years can do exactly what Tesla does, I anticipate that the value of Tesla's stock will fall.  Naturally, this won't happen overnight, and as things currently stand, no electric car is profitable, which gives Tesla its advantage (i.e. being a novelty). The novelty will fade when automakers are no longer scared to produce electric cars and people are not afraid to buy them.

To all of the Tesla fanatics out there, I'm sorry, but your beloved novelty automaker just got a small hint of what its future in the investment world may hold, and if you ask the CEO of any global automaker, they'll be the first to tell you that it ain't pretty.

Thank you for reading and have a good week.

Monday, July 3, 2017

2017 Summer Product Reveals: Part 6

Alexander Carabitses 

Another week and another batch of new summer product launches.  This week's entry encompasses introductions from the Goodwood Festival of Speed, some Frankfurt Auto Show previews, and some miscellaneous products as well. While not as many vehicles debuted at Goodwood this year, the products that did show up were pretty incredible.  To find out why you'll have to read on...

2018 Jaguar XE SV Project 8:  Forget the BMW M4 GTS because Jaguar has just launched the most insane sedan that the world has ever seen. Powered by a supercharged 5.0-liter V8 motor, the car produces 600 horsepower, has a top speed of 200 mph, and can go from 0-60 mph in 3.3 seconds.  Jaguar's Special Vehicle Operations have added carbon fiber to the front and rear ends, as well as an Electronic Active Differential with an oil cooler, a carbon ceramic braking system that uses silicon nitride ceramic wheel bearings (a first for any production car), forged aluminum wheels, and an adjustable rear wing.  Sure you can have four seats, but you can also ditch the two rear seats and add a roll cage instead. The car will be limited to 300 units, with the price estimated to be near the $200,000 mark.
(Image credited to Jaguar)

2018 Dodge Challenger Hellcat: The only reason I'm covering this bit of insignificant news is because Dodge has decided to add a 3.5-inch wide body kit to the Challenger Hellcat for some reason. In addition to the flairs, the car features a front splitter that comes directly off of the Demon, a new grille, a unique hood scoop, and illuminated Air-Catcher headlamps. Dodge says the car is 2 seconds quicker on a 1.7-mile track and that it features a 0.3-second improvement in quarter mile drag times.
(Image credited to Dodge)

2018 Dodge Durango R/T:  Even less significant than the updates to the Hellcat, this new version of the Durango R/T has been made to look nearly identical to the Durango SRT that debuted earlier this year.  That's it.
(Image credited to Dodge)

2018 Ram Tungsten Edition, Black Package, 1500 Sport: The never ending onslaught of Ram special edition models keeps on coming with the reveal of the Tungsten Edition.  Available for both light duty and heavy duty models, the Tungsten Edition features a unique exterior trim, including a grille that has a tungsten color.  The interior features many great luxury appointments, with the most notable being the suede headliner, a feature that's unheard of in pickup trucks. Prices start at $55,120. The Black package mentioned above is exactly what its name implies in terms of color and trim, both inside and out.  Finally, the 1500 Sport gains a body color RAM front grille on light duty models, while heavy duty models will feature an exterior sport-package that gives the same exterior effect.
(Image credited to Ram)
(Image credited to Ram)
(Image credited to Ram)
(Image credited to Ram)
(Image credited to Ram)

2018 Maserati GranTurismo:  Initially shown in front of the New York Stock Exchange of all places, this revised version of the decade-old sports car now makes 460 horsepower and 383 lb-ft of torque from its 4.7 liter V8.  The car also features some minor exterior styling tweaks, as well as a revised interior, which includes Chrysler UConnect and a new sound system.  The 2018 GranTurismo Cabriolet features the exact same updates.
(Image credited to Maserati)

2018 Aston Marin DB11:  Due to launch in the fourth quarter of this year, this new version of the DB11 features a Mercedes-AMG sourced 4.0 liter, twin turbo V8 that makes 503 horsepower and 513 lb-ft of torque. The 0-60 mph sprint happens in 4.0 seconds and the car has a top speed of 187 mph.  In addition to the powertrain, the exhaust, air intake, wet sump lubrication system, and ECU software have been revised for this particular powertrain. The suspension also gets some revisions of its own to make sure the overall package is as close to perfect as possible. The styling has also been slightly tweaked, featuring details such as two fewer hood vents, darker headlight embezzles, and new wheels.
(Image credited to Aston Martin)

2018 Aston Martin Vulcan AMR Pro: Described as "Aston Martin's wildest ever-car", this updated version of the Vulcan still makes 820 horsepower and 575 lb-ft of torque from its naturally aspirated, 7.0 liter V12.  The only real updates that existing owners can add to their cars are some aerodynamic and light weighting tricks that supposedly improve downforce.
(Image credited to Aston Martin)

2017 Bentley Flying Spur Design Series by Mulliner: This limited edition Bentley Flying Spur features unique exterior and interior colors.  Additionally, the brand has added some special trim and badging to compliment the color changes. Pricing has yet to be announced, but note that only 100 units will be produced worldwide.
(Image credited to Bentley)

2018 Seat Arona: Meant to compete in the subcompact b-segment crossover space, the Seat Arona features a suite of safety features and fuel-efficient powertrains.  Expect more details to be announced later this year, as it is quite likely that this model will officially debut at Frankfurt in September. I should note that after all is said and done though, it is pretty safe to say that this vehicle's styling lacks the personality that's expected of crossovers in this segment.
(Image credited to Seat)

2018 BMW X3: While this new version of the X3 may look similar to its predecessor, both inside and out, that is not actually the case. Under the skin, BMW has made this new model two inches longer and 120 pounds lighter than the previous generation X3. If you want further proof, look no further than the 3.0 liter, turbocharged inline-six powered M Sport model that makes 355 horsepower and gets from 0-60 mph in 4.6 seconds.  The suspension, steering, and braking system have also been upgraded for this trim level.  Despite all of this hype that BMW has made surrounding this new model, I will be pleasantly surprised if it comes remotely close to handling as well as the Jaguar F-Pace and Alfa Romeo Stelvio.  Expect a public reveal at Frankfurt in September and for the vehicle to go on sale in November.
(Image credited to BMW)

2018 BMW X5 M and X6 M Black Fire Editions: Since BMW apparently has nothing better to do, it has decided to create this special sport package for its two largest crossovers.  When they both go on sale in August, they will feature a blacked out exterior and some new interior trim that is unique to these specific models.
(Image credited to BMW)

2018 McLaren 570S Spider: After initial details on this model were released in early June, the drop-top variant of McLaren's entry level model has finally made its public debut at Goodwood. Power still comes courtesy of a 3.8 liter, twin-turbocharged V8 that makes 562 horsepower and 443 lb-ft of torque; the car tops out at 204 mph with the roof up and 196 mph with the roof down. Speaking of which, the retractable hardtop takes 15 seconds to be either raised or lowered.  Combine that with the fact that it goes from 0-60 mph in 3.2 seconds and you have yourself one hell of a car.  Deliveries commence in August with prices starting at $208,800.
(Image credited to McLaren)

2019 Porsche 911 GT2 RS: After first showing its face on the cover of the new Forza video game, the hotly anticipated 911 GT2 RS finally arrived at the Goodwood Festival of Speed. Powered by a 3.8-liter flat-six that churns out 700 horsepower and 553 lb-ft of torque, this truly is the fastest Porsche 911 ever.  0-60 mph happens in 2.7 seconds, while its speed tops out at 211 mph.  Not surprisingly, the car also features Porsche's active suspension management system and an electronic limited-slip differential, both of which should aid in the handling of this 3,241-pound monster. Porsche intends for this to essentially be a street legal race car, which is why it used a lot of lightweight materials on the car and included a roll cage (although US buyers won't get that option).  If one wants their GT2 to weigh less, they can easily dish out an extra $31,000 for the Weissach package, which will lend them 40 pounds of weight reduction. Those who aren't that picky can expect to pay $293,200 when the car goes on sale in early 2018, with an official production number not being announced.
(Image credited to Porsche)

That wraps up a lengthy list of product introductions. Stay tuned for more new product unveilings and more editorials from this website in the not-too-distant future.  Until then, thank you for reading, have a good week, and to all of my US readers, have a Happy 4th of July!

Tuesday, June 27, 2017

Tesla and Ford Move To China And President Trump Says Nothing

Alexander Carabitses

(Image credited to

The last two weeks have featured several pieces of auto industry news that are quite significant.  Most recently, the airbag supplier, Takata, has filed for bankruptcy and is being sold to a Michigan-based supplier, which itself is owned by another Asian supplier.  I don't have too much to say on this since it was the inevitable conclusion for the troubled supplier after spending billions of dollars to replace defective airbags.

The two bigger pieces of news that I want to concentrate on are a pair of stories from last week regarding the production plans of two well known American car companies: Tesla and Ford.  For those who are unaware, Ford announced that it would manufacture the next-generation Focus in China, rather than Mexico.  Ford cites cost savings of $1 billion by choosing to build the car in China, rather than Mexico.  I view this as a great example of the changes that Jim Hackett has already begun making in order to boost Ford's profitability in light of poor earnings in recent years. Further cutting the production costs of a vehicle that has low-profit margins and isn't selling well in its home market seems like a great move that should pay for itself in the long run.  That is of course unless President Trump does eventually impose a 35% tax on all cars that are imported to the US. However, even if that were to happen, it is better to pay one heavy import tax from the US, rather than one from the US and China. I honestly feel that this was the line of thinking that went into this decision.
(2015 Ford Focus- Image credited to Ford)

Likewise, Bloomberg also hinted last week that Tesla is close to striking a deal that would allow it to assemble cars in Shanghai, China, in an attempt to reach its goal of selling 500,000 cars by 2020.  Last year, Tesla sold around 80,000 vehicles globally, meaning that it is far off from hitting its goal.  Common sense also dictates that having a single plant to handle the production of 500,000 vehicles is unrealistic, especially since the brand plans on launching the Model 3, the Model Y crossover, and an electric semi-truck.  However, due to Chinese law, Tesla will be required to form a partnership with a local automaker, so it will be interesting to see who Elon Musk strikes a deal with.  However, what I find most interesting about Tesla and Ford's news is that President Trump has not attacked either company or China for these moves. Given everything that he had to say about China during his Presidential campaign, as well as all that he's continued to say about Mexico and Germany's trade policy (sarcastically saying that the US should ban the sale of German cars), many are wondering why he has yet to speak up.

In the end, I think that a lot of it comes down to politics.  Right now, President Trump is working closely with the Chinese government to crack down on North Korea and put an end to all of the nonsense that the country is up to.  It would not be wise for him to attack the country that he's working closely with, as that could potentially hurt relations at the worst possible time, given the political circumstances. For the same reason, even attacking the automakers would be a bad move at this juncture. To put it simply, it would essentially be President Trump attacking two American companies for supporting the economy of a close ally, at a time in which the two allies are getting along quite well and are en route to progress in the long term.  See the problem?

There is also another reason that is more applicable to Tesla.  We already know that China has a 25% import tax on vehicles that aren't built in the country, so from a business perspective, Tesla was in a difficult position since it sees more growth potential over there.  Due to this trade policy, President Trump would make himself look like a hypocrite if he shamed a company for trying to avoid an import tax that he, himself, criticized during his campaign.  Plus, he has previously met with the Big Three CEOs and has certainly been made known of the fact that China accounts for more car sales than any other country in the world.  Finally, it is very unlikely that Tesla will export any of its Chinese-made cars to the US in the near future, as this move has been made to gain a competitive advantage in China alone.

Of course, President Trump is known for being unpredictable, so we'll still have to watch closely to see if his stance on the matter changes in the near term.  In the meantime, I must admit that I am very impressed with both Tesla and Ford's latest business strategies.

Thank you for reading and have a good week.

Friday, June 23, 2017

2017 Summer Product Reveals: Part 5

Alexander Carabitses

This week, we only have a few product unveils, which should be more than enough to hold us over until the the Goodwood Festival of Speed kicks off next week.  Until then, enjoy the news.

2018 Kia Stonic:  Kia's new b-segment crossover bares an extremely stupid name.  However, if one is to put that aside, this is a very handsome vehicle, and I think it looks a hell of a lot better than its sister car, the Hyundai Kona.  Much like its sister car, the Stonic has a nice interior, a boatload of connectivity and driver assistant systems, as well as a range of fuel efficient engines.  Expect for the car to go on sale in Europe in the third quarter of the year.  Although it is still unknown when this will go on sale in the US, its arrival is pretty much a certainty.
(Image credited to Kia)

Skoda Element Concept: Designed by a group of students working at the Skoda vocational school, this one-off project car is based on the Citigo microcar.  The car is supposed to look like a beach buggy, and overall, I think it looks pretty cool.  On a side note, Skoda plans to phase out the Citigo when its sister car,  the VW Up!, is redesigned in the next few years.  The decision was made due to Skoda's desire to pursue the development of more crossovers.
(Image credited to Skoda)
2018 Peugeot Pick Up: Peugeot apparently used to make a pickup truck (based on the 207 hatchback), but discontinued it a few years ago.  However, PSA has just launched this new pickup truck for the African market.  Based on a Chinese pickup truck that nobody outside of that market is aware of, the vehicle will feature a turbo-diesel engine and two drive modes when it goes on sale in September.
(Image credited to Peugeot)

2018 Toyota Aqua:  While the Prius C received a tweaked lower fascia for the upcoming model year, its Japanese equivalent receives a new front end, along with crossover variant.  Both the interior and powertrain remain virtually unchanged, save for some new trim and a TFT display on the instrument cluster.
(Image credited to Toyota)

2018 Cadillac XTS: Newsflash folks, the Cadillac XTS still exists and it has just been given a substantial refresh for the model year 2018.  Both the front and rear ends have been considerably updated so that they look more like the CT6 and XT5, while the interior features new trim. Cadillac has upgraded the suspension to make the ride more comfortable, while also adding a 410 horsepower, twin-turbo V6 powered V-Sport Platinum model to satisfy enthusiasts.  Expect for the car to go on sale at some point before the end of the year.
(Image credited to Cadillac)
That wraps up this week's allotment of product news. Thank you for reading and have a great weekend!

Tuesday, June 20, 2017

An Explanation For The Crossover Craze

Alexander Carabitses

(Image credited to Nissan)
The automotive industry is one that experiences many fluctuations.  It is a cyclical industry in terms of consumer buying habits and product preference.  As of late, the consumer favorite is the crossover, an SUV that handles like a car and is actually built on a car platform.  However, the two questions on the minds of most enthusiasts are why in the world this vehicle is popular and why it come about in the first place.  Let's take a look.

The story begins with a vehicle that I have previously written about, the station wagon.  Loved for its utility, the station wagon essentially became the staple vehicle of families, as well as those who loved to explore the great outdoors.  However, there eventually arose a stigma surrounding station wagons.  Not only were they deemed boring, uncool, and gas-guzzling family vehicles that a couple would be forced to drive when they decided to create human life, but the car was not well favored by Gen-X'ers that grew up taking long road trips in the back of the family station wagon.
(Image credited to Buick)

At the same time, the growing sizes of families were pushing for the creation of a vehicle that could carry as many people as a station wagon, while being more functional.  Since the Detroit Big Three were still on top of the world in the early-to-middle 1970s, they decided to develop a vehicle to fulfill this need.  GM canceled the project for an unspecified reason, while Ford continued to move along with the program.  That was until Henry Ford II killed off the project, thinking that its front wheel drive platform would lead to the creation of a low-profit margin, niche product.  Shortly thereafter, Ford fired Lee Iacocca and Hal Sperlich (two prominent Ford executives at the time, with Iacocca serving as president of the company) and both of them went to work at Chrysler.  Since Chrysler already had a FWD platform and the two executives had brought the black books containing the specifications for the now killed Ford project, the company was able to develop the new family vehicle in 1984: the minivan.
(Photo taken at the US National History Museum)

The success of the minivan ended up being unprecedented, with the vehicle essentially saving Chrysler in the 1980s.  Many automakers, both American and Japanese, tried to copy the formula, with some being more successful than others. Then, in 1990, just as the second generation of Chrysler minivan was coming to market, Ford launched the first generation Explorer SUV, which triggered other automakers to develop off-road oriented family vehicles.  In the end, the entire movement ended up being a passing fad, and although the vehicles sold consistently well alongside the ever practical minivan, the idea had gone stale by the mid-2000s. It may have taken a decade-and-a-half, but consumers finally realized that these tanks could easily roll over; they also began to mind the poor fuel economy.  Meanwhile, the soccer mom stigma had begun to deteriorate the minivan market, and early Gen-Y car buyers wanted something different.  Fortunately for them, one Japanese automaker knew that this would happen, more than a decade earlier.
(Image credited to Ford)
In 1994, Toyota launched the first generation RAV4 in Japan.  Based on the compact Corolla platform, the car offered the appearance and practicality of an SUV with better gas mileage.  It sold well all over the world, and still stands as one of Toyota's best-selling models.  Although it took some time, other automakers caught on, replacing their off-road oriented gas-guzzlers with crossover.  GM's Lambda-based crossovers, the current generation Ford Explorer, and many others like them started flooding the market, with the majority being based on car platforms.  Today they come in the same size classes as cars, and for that reason, they've started to slowly outpace the sales of passenger cars.  While the remaining traditional SUVs continue to sell well, minivans and station wagons have become niche models.
(Image credited to Toyota)

Why are they popular?  Well, consider that these vehicles offer the higher ground clearance that people came to love about SUVs, optional AWD, a great deal of utility, and better gas mileage.  Otherwise, I don't have a good answer, nor does anybody else.  When one thinks about it, the majority of subcompact, compact, and midsize crossovers are either station wagons or hatchbacks that have a raised ride height and a bolder look.  With those "simple changes" one can make a lackluster product suddenly sell like hotcakes.

So here we are in the crossover dominated era, but despite the hype surrounding these vehicles, I predict that it will be short lived.  I believe this because of an established trend that dictates the moves that every company in the industry makes: changing consumer preferences.  When reading the above paragraphs, you may have noticed two major consumer trends.  First off, family vehicles tend to go grow stale within a decade's time (mostly because it takes this long for people to see beyond the frills of their family cars), at which point something else tends to come along and displace the status quo.  The second trend has to do with the fact that no adult wants to drive around in the same vehicle that they rode in the back of in his or her youth. This is why the minivan proved to be more popular over the station wagon in its heyday, and why the crossover is more popular than the minivan is today.  The current crop of kids riding in the back of their mom's Toyota Highlander will never buy that vehicle.  They may buy another Toyota vehicle, but certainly not that one.  For these reasons, I feel confident that the success of the crossover is not going to last in the long run, and while the body style may not completely fall out of fashion, within the next decade-and-a- half, I think that the vehicle won't be as popular as it is today.

Thank you for reading and have a good week.