Automotive News Digest; Week Ending October 20, 2018 Edited By Larry Nutson
News Snippets - 13.6 Average Age Cars On US Roads; Diesel-gate Alive; New GM Chair?; Trump Hurts China Car Numbers; GM Extended Warranty For Sale; EV Makers Lobby To Extend Govt Handout; Ford Reveals Built Ford Proud Ad Campaign; Taking Orders For Lower Cost Version Of Tesla Model 3; Another Flying Car; Manufacturer Race Championship Clinched
AUTO CENTRAL, CHICAGO - October 21, 2018; Every Sunday Larry Nutson, Senior Editor and Chicago Car Guy along with fellow senior editor Thom Cannell from The Auto Channel Michigan Bureau, give you The Auto Channel's "take" on this past week's automotive news, in easy to "catch up" with news nuggets.
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The Auto Channel Automotive News Weekly Digest - Week Ending October 13, 2018
Executive Editor Larry Nutson
* The average age of vehicles on American roads has steadily risen and is now 11.7 years. This according to a recent Federal Highway Administration report. Broken down, cars average 10.3 years, SUVs average 8.5 years and pickups average 13.6 years. Average age is on the rise due both to increased quality making a vehicle last longer and the high price of an equivalent replacement.
* Another shoe has dropped in the VW "dieselgate" affair. German law enforcement authorities fined the company’s luxury division Audi 800 million euros ($925 million) for selling cars equipped with the defeat device to cheat on emissions tests. The fine was imposed because Audi management neglected its oversight duties in selling cars with engines made by it and group partner Volkswagen that did not conform to legal limits on harmful emissions of nitrogen oxides. The case covered some 4.9 million Audi cars sold in Europe, the U.S. and elsewhere between 2004 and 2018.
* Mary Barra’s job may be in jeopardy as several important shareholders are expressing dismay at GM’s stagnant share price, as reported by a story in Reuters this week. The investors note the share price is down 22% since Barra took over and is now 6% below the stock’s 2010 IPO price. GM's stock price peaked at over $46/share a year ago. Barra has led the company through a series of crises with her performance lauded by most analysts.
* Despite trade conflicts, budget deficits and other potential headwinds the Trump administration remains confident of a continued boom in the U.S. economy according to White House National Ecomomic Council boss Larry Kudlow who spoke to the Detroit Economic Club this week. “This is not a sugar high,” he proclaimed as and predicted the “boom is going to go on for a bunch more years.” His biggest fear, he says, is that the "new Congress will overturn these policies that are working.“
* The Chinese auto market is taking a hit with Trump's trade war. Now for three months running sales are down. This year may be the first decline in 30 years. GM, who sells more vehicles in China than in the U.S., has a sale drop of 15 percent. Ford is down 43 percent, VW is down 11 percent and Hoinda is done 6 percent. Chinese brands like Geely are down too.
* Effective immediately, people buying new General Motors vehicles will have the opportunity to purchase a true, extended bumper-to-bumper limited warranty resulting in five years or 60,000 miles of coverage (whichever comes first) for Chevrolet and GMC customers, and six years or 70,000 miles for Buick and Cadillac customers. No other brand offers customers a true extended warranty. The standard factory bumper-to-bumper limited warranty on Chevrolet and GMC products is three years or 36,000 miles, whichever comes first. On Buicks and Cadillacs, it is four years or 50,000 miles, whichever comes first. On average, new car buyers keep vehicles for about 6.8 years, according IHS Markit.
* Rumors are ramping up on a some type of partnership between Ford and VW. Speculation leans in the direction of light commercial vehicles. It wouldn't be the first as there was the Ford-VW Autolatina partnership in Brazil of the late 1980s, the maker of the VW Fox for the U.S.
* Get your application in. Ford said it will build 350 additional GT supercars, extends output by 2 years. Ford had planned to build 1,000 GTs through the 2020 model year. Now says it will build 1,350 vehicles through 2022. Demand is high for the mid-engined 647-hp supercar in spite of its near $500,000 price. Ford’s Performance Division director Hermann Salenbauch touted “unprecedented [demand] outstripping supply by more than six-to-one.”
* The future of a federal tax credit that provides up to $7,500 to buyers of electric cars is up in the air, as lawmakers in the U.S. Senate have unveiled a pair of bills that would either end the program or boost the cap on the number of credits per automaker can be used. One Senate bill wants to eliminate the credit and instead tax EVs and hybrids.
* Ford released a video in its new "Built Ford Proud" ad campaign that show what may be the front end of a hybrid powered Mustang. We're not sure if this will be a V8 or V6 hybrid, but it could indeed be called Mach 1. Ford has said that by 2021 it will be the largest seller of hybrids in the U.S. and plans to offer hybrids across its entire SUV-centric product line.
* Tesla began taking orders this week for a lower-priced version of the compact Model 3 sedan. They seem to have mostly solved production problems experienced during the launch of the car. The new version of the Model 3 will have a range of about 260 miles and cost $45,000, compared to the existing model's $49,000 and about 310 miles on a charge. The $7,500 federal subsidy will be cut in half after December 31st. Demand remains strong for the Model 3.
* Teams of engineers at Munro & Associates in the northern suburbs of Detroit spent months disassembling and closely scrutinizing a new Tesla Model 3 to assess the engineering and assembly processes in the most minute detail. Company Boss, Sandy Munro, said that while most of the car is first rate it seems the body construction is not. He attributes that mostly to Elon Musk’s lack of paying attention to lessons the rest of the industry learned long ago. He also speculated that without Musk the company would already be making money.
* Get out your checkbook - you can now order a flying car called “Transition." A U.S. development company owned by Chinese automaker Geely is taking orders for a two-seat airplane that converts to a driving mode in less than a minute. In flight it uses a turbo 4-cylinder gasoline engine and on the ground it becomes a gas/electric hybrid. The multi-mode vehicle is created by a group of MIT engineers. Deliveries are expected to begin next year, they insist, but the price has not been confirmed. We await to hear what the FAA and Homeland Security has to say about okaying these new modes to transport.
* Three manufacturer championships were clinched in the early running of Motul Petit Le Mans at Road Atlanta, the 2018 season finalé for both the IMSA WeatherTech SportsCar Championship and the Tequila Patrón North American Endurance Cup. By starting the race, both Cadillac and Ford clinched the Prototype and GT Le Mans (GTLM) manufacturer championships, respectively. Ford also wrapped up the Patrón Endurance Cup manufacturer championship in the GTLM class.