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Diesel Resurrection: How Volkswagen Might Win Back Customers

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Five ways Volkswagen might salvage its US operation.

Volkswagen is in a world of hurt, but that pain is entirely of the company’s own doing. While some have been making pronouncements that the automaker as we know it is finished, others believe that something can be salvaged. I, for one, stand in the latter camp. To that end, there are several conditions Volkswagen must meet in a bid to win back customers. It all begins with transparency and continues by building trust.

1. Never deflect blame. Thus far, Volkswagen has accepted blame for the emissions scandal, although it does not yet revealed who is to blame. Affected customers don’t care — they want to be made whole. There will come a point when we’ll learn precisely how the cheating scandal was conceived — a clear and unequivocal response from Volkswagen is the transparency required at this point.

five2. Buy back the affected cars. Unless the fix Volkswagen creates preserves both performance and fuel economy, diesel customers will always feel that they were deceived. Drivers operated their vehicles under the impression that their cars were clean and efficient. Volkswagen breached that trust. Therefore, providing a buyback program is a start with customers, then free to buy a heavily discounted new Volkswagen or take their check to a competing manufacturer. Unless Volkswagen offers an aggressive program in the United States, its hopes of ever improving beyond a market toehold here will be set back, perhaps permanently.

3. Drop the price of new diesels across the board. Volkswagen is the largest seller of diesel cars in America. Shoppers spanning all brands will wonder if any diesels are worth the cost. Volkswagen cannot do much about general perceptions, but they can begin to change impressions for the Volkswagen brand. One way to do that is to offer diesels as a no extra cost option, perhaps for one year. Certainly, Volkswagen will take a hit with each sale, but they’ll build goodwill and allow owners to reap the highest residual values.

4. Extend the powertrain warranty. So far as we know, the diesel scandal has nothing to do with the engine’s long-term durability. The problem has everything to do with manipulating emissions testing to deliver results that are a flat-out lie. Volkswagen can build customer confidence by matching the Hyundai-Kia 10-year, 100,000 mile warranty on all of its models, regardless of the engine type. Also, they should back date the warranty coverage to 2009 for the affected diesels that customers choose to keep. Chances are expanding the warranty coverage won’t cost Volkswagen much, but it could earn the brand much-needed respect and the sales edge that has eluded it in the US for decades.

5. Back strong emissions standards worldwide. The Volkswagen scandal exposes the weak and inconsistent testing practices of the EPA and other government environmental agencies around the world. A related matter that will need to be tackled is just who should be doing the testing. Likely, we’ll witness all automakers consenting to government testing instead of being allowed to submit their own tests for approval. This change should include the EPA mileage testing. As a result, Volkswagen must back tough emissions testing or at least provide evidence that their vehicles don’t contribute to smog and climate change, at least at elevated levels. Certainly, this a topic rife with political posturing and gamesmanship, but Volkswagen lost whatever edge it had before the scandal was made known. It would be best to back tougher emissions and find other ways to demonstrate environmental leadership than to give any appearance that they’re not sorry for polluting with abandon.

Time Will Tell

For Volkswagen, time is of the essence, especially as they restructure the company, determine the cause behind the scandal, and work diligently to regain the trust of their customers.

There is a chance Volkswagen will remain a permanent “also ran” player in the US market, but they dare not abandon it. The company is heavily invested with its lone US manufacturing plant in Tennessee and also has two other important brands to protect, Audi and Porsche.

Speaking of the other brands, maintaining a safe distance apart from the Volkswagen brand is critically important. In addition, Audi A3 owners with the 2.0-liter TDI engine will also need to be made whole.

Volkswagen Diesel Cheating May Cost the Company Billions

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turbodiesel

A Volkswagen Group TDI supplied to Audi.

Over the weekend, news that the Volkswagen Group had cheated on EPA emissions testing began to spread across the Internet. By late Sunday afternoon, the extent of the scandal became fully known. On Monday, the commercial markets reacted and dropped the automaker’s worth by approximately 20 percent, effectively erasing US$ 17 billion from its market value.

Once again, a major car manufacturer found itself embroiled in a steep controversy. But unlike Toyota and GM where deaths were directly involved, Volkswagen’s transgression involves technological manipulation, whereby the manufacturer wrote vehicle software designed to activate anti-pollution control equipment only while tested.

Specifically, when the equipment is tampered with to not function in real world conditions, it spews many times the amount of harmful pollutants than it claims. In effect, vehicle owners became unwilling contributors to “rolling coal,” what purposefully manipulates computer-controlled diesel engines to emit more soot to the tune of 10 to 40 times the allowable limits.

So, although no immediate deaths have occurred as in the case of GM and Toyota, some may make the argument that the increased emissions lead to a corresponding and lasting rise in illnesses, including cancer.

Clean Diesel Engines

Volkswagen launched its line of “clean diesel” or TDI engines in 2009. Since then, the company has sold five Volkswagen and one Audi models equipped with the 2.0-liter, turbo-diesel engine that is at the heart of the controversy. Not included is a larger V-6 turbo-diesel displacing at 3.0 liters. That engine is widely used in Audi models as well as in some Volkswagen brand models.

As the scope of the crisis began to set in, Volkswagen responded to the charges levied jointly by the EPA and the California Air Resources Board.

On Sunday, Prof. Dr. Martin Winterkorn, CEO of Volkswagen AG, issued a press statement that reads in part, “The Board of Management at Volkswagen AG takes these findings very seriously. I personally am deeply sorry that we have broken the trust of our customers and the public. We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case. Volkswagen has ordered an external investigation of this matter.”

Winterkorn went on to add, “We do not and will not tolerate violations of any kind of our internal rules or of the law.” He concluded by explaining that the “…trust of our customers and the public is and continues to be our most important asset.”

EPA Fines and a Stop Order

The statement followed the revelation that the EPA could fine Volkswagen as much as $37,500 per affected vehicle. With approximately 482,000 of the affected diesels sold since 2009, that fine could mount to a staggering US$18.075 billion.

Furthermore, the company has also placed a stop order on its leftover 2015 four-cylinder turbo-diesel models. No word yet on how this will impact the upcoming 2016 model year diesels.

Compensation for Owners and Investors

As for the owners of the soon-to-be-recalled vehicles, they’re waiting to see what steps will be required of them. If the remedy is a software change, then each vehicle’s performance and fuel economy will likely be affected. That would also mean a corresponding decrease in a vehicle’s value — owners should and will seek compensation.

That remuneration may come by means of a class-action suit, what could take years to settle. However, several law firms have already served notice that they intend to file in a bid to help owners recoup the diminished value of their cars. So, if you’re planning to dump your VW or Audi because of the pending recall, you may want to wait.

As for Volkswagen investors, your knight in white armor may also be forthcoming. At least one company, the Rosen Law Firm, announced that it “…is preparing a class action lawsuit to recover losses suffered by Volkswagen investors.” Expect more suits as well as statements from environmental groups condemning Volkswagen’s deception.

The Death of Trust

Perhaps the biggest sufferer here is “trust” or what consumers expect when buying a product from a company that espouses strength and confidence in its products. With record recalls hammering the industry, including not a few based on corporate deception, the trust factor is most certainly in peril. Although that won’t necessarily stop people from buying new cars, it could cause them to rethink their Volkswagen and Audi brand aspirations.

Audi A3 TDI photo copyright Auto Trends Magazine.

Cadillac Unveils New Power Dense V-6 Engine

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The 2016 Cadillac CT6 ushers in a new era for GM’s preeminent marque, a full-size sedan outfitted with leading-edge technologies. The new model debuts in New York at month’s end, a five-passenger vehicle set to take on Audi, BMW and Mercedes-Benz.

The all-new 3.0L Twin Turbo for the 2016 Cadillac CT6
The all-new 3.0L Twin Turbo for the 2016 Cadillac CT6 is the only six-cylinder engine to combine turbocharging with cylinder deactivation and stop/start technologies to conserve fuel.

In the chronology of Cadillac brand history, an 8.2-liter (500 cubic inch) V-8 engine once powered a handful of models, including Eldorado, Fleetwood and deVille. With an output of upwards of 400 horsepower, gargantuan engines once moved some of the largest cars ever built. Furthermore, this particular engine and others like it were built exclusively for the Cadillac brand.

In more recent times, Cadillac has been using engines built by parent GM for its other brands. Cadillac’s once heralded Northstar series were the last proprietary engines used by GM’s luxury brand, although select Buick, Oldsmobile and Pontiac models also used them. In 2010, Cadillac retired Northstar, ending a 17-year tenure and ushering in a new era of complete powertrain sharing with GM’s other brands.

Twin Turbo V-6 Engine

A new, proprietary engine for the Cadillac brand will debut in the fourth quarter of 2015 and power the Cadillac CT6, itself an all-new flagship sedan for the marque. Last week, Cadillac shared details about this 3.0-liter twin turbo V-6 engine, carrying an estimated rating of 400 horsepower and 400 foot-pounds of torque. At 133 horsepower per liter, the new engine will be one of the most power dense engines in the world. It will also come paired with an 8-speed automatic transmission.

Cadillac says that the packed power plant is the only six-cylinder engine to combine cylinder deactivation and stop/start technologies with turbocharging. This coalescence of scientific componentry will conserve fuel — to what degree has not yet been made known.

“Cadillac’s elevation on the world stage is driven in great part by its advanced powertrain technology and the all-new 3.0L Twin Turbo powers past the traditional segment leaders with higher degrees of the performance and refinement their reputations were built on,” said Rich Bartlett, assistant chief engineer.

The Cadillac CT6 will make its world debut in New York on March 31 in advance of the 2015 New York International Auto Show. This writer plans to attend that show.

A Broad Power Curve

The small-block V-6 makes use of turbochargers with “with lightweight, low-inertia titanium-aluminide turbine wheels and an efficient, patented low-volume charge-air cooler, which contribute to optimal boost production and more immediate power delivery.” Peak torque will be sustained across a broad torque curve ranging from 2,500 rpm to 5,000 rpm, something Cadillac alleges will be delivered with “smoothness and progression.”

Cadillac is quick to point out that the new engine will outperform BMW’s 315-horsepower rated 3.0-liter V-6 as well as Audi’s 310-horsepower rated engine of the same displacement. These two German brands as well as the Mercedes-Benz marque are in Cadillac’s crosshairs, serving customers that GM desperately wants to poach.

Additional Engine Choices

The twin turbo V-6 will not be the only engine offered in the Cadillac CT6. A new version of GM’s 3.6-liter, naturally-aspirated V-6 will also be employed, delivering an estimated 335 horsepower and 284 foot-pounds of torque. It, too, will feature cylinder deactivation and stop/start technologies and will include various noise-reducing features, including an all-new cam drive system, an upgraded cooling system, a stronger and stiffer aluminum block, and new high-flow cylinder heads. The benchmark engine for these upgrades is the Infiniti 3.7-liter V-6.

Other engines available in the 2016 Cadillac CT6 will include the turbocharged 2.0-liter in-line four-cylinder motor used in the Cadillac CTS. A V-8 engine is also planned and Cadillac has hinted that at least one other engine will follow. Auto Trends believes that the unidentified engine will be a turbocharged six-cylinder diesel, available for the European market initially, then to its North American customers.

Advancing the Cadillac Brand

The Cadillac CT6 represents a bold step forward for this iconic luxury brand as it seeks to recover its once lofty position amongst premium marques. Moreover, it introduces a new naming convention, one that will roll out gradually over the next few years. Specifically, that nomenclature will pair two letters with one number in sequential fashion based on a model’s size and importance to the Cadillac brand.

Photo courtesy of the General Motors Company.

Will the New V-Series Change Perceptions About Cadillac?

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Cadillac has an incessant image problem, one that has not been resolved by introducing a bevy of new models. Indeed, the automaker cannot assemble its traditional full-size Escalade sport utility vehicle fast enough to meet customer demand. A Reuters report published on Tuesday revealed that buyers are snapping up Escalades, while eschewing the European-styled ATS and CTS sedans.

Although the high-priced Escalade is good for the brand’s bottom line, it is the sedans that Cadillac hopes will change buyer perceptions about GM’s luxury brand. The Escalade reeks of “old Cadillac” — dealers, however, are not complaining.

The ATS and CTS are the sedans that GM has designed in a bid to lure luxury car shoppers away from Mercedes-Benz and BMW, to Cadillac. They are not the traditional luxury sedans that have long defined Cadillac, rather both models are “European” in design, performance, handling and craftsmanship.

V-Series: 2016 Cadillac ATS-V
2016 Cadillac ATS-V

Lagging Sales Flag Cadillac

Indeed, with traditional rear-wheel drive and available all-wheel drive, the Cadillac duo should at least outperform Audi with its standard front-wheel drive or all-wheel drive models. However, Cadillac sales slid by 6.5 percent in 2014, while Audi sales soared by 15.2 percent as the Volkswagen Group marque experienced its fifth consecutive year of U.S. record sales. Notably, Audi and Cadillac swapped places in 2014 — the German makes ascendancy is expected to continue unabated.

Dealers have been unhappy with their excess inventory of ATS and CTS sedans, models designed to take on the likes of the BMW 3-Series and Mercedes-Benz E-Class, respectively. Both German models are the segment leaders in their corresponding segments and neither has felt the sting of Cadillac innovation. In fact, both lines have solidified their places in the luxury realm.

Deep discounting of 2014 ATS and CTS models will enable dealers to clear their lots. But, that will come at a steep price as residual values for these models will plummet. Individual owners who already bought in and at a higher price point may balk. Even as production of the duo is realigned with market realities, Cadillac is betting that its vaunted V-Series will attract a new breed of owners, beginning with the ATS V-Series followed by the next generation CTS V-Series late this summer.

V-Series: 2016 Cadillac ATS-V

The ATS V-Series will go into production this spring with dealers taking orders right now. The sedan carries a starting price of $61,460 and the coupe is priced from $63,660. The V-Series is the Cadillac equivalent of Mercedes-AMG and BMW’s M line. Thus far, the first model in the line, the CTS-V, has been received with critical acclaim. Ten years of constant refinement have made this sedan into the beast that it is. However, its overall impact on the CTS line hasn’t delivered the corresponding lift that it needs.

In the ATS-V, Cadillac is taking a different approach, utilizing a twin-turbo V-6 instead of the small-block, Corvette-derived V-8 found in the CTS-V. This writer drove a 2014 XTS VSport sedan powered by that very same engine in fall 2013 and enjoyed the potent power it delivered. The XTS and ATS, however, are far different vehicles with the 455-horsepower ATS-V paired with a six-speed manual or an eight-speed automatic transmission. That automatic comes with launch control and performance algorithm shift. A 0-to-60 mph time of just 3.9 seconds has already been recorded.

Image is everything in the world of automobiles. That is especially so when luxury and performance intersect. Cadillac will harness the ATS-V to lead it in its motorsport quest. Specifically, a new ATS-V.R racecar will begin the Pirelli World Challenge GT 2015 season on March 7-8 at the Circuit of the Americas in Austin, Texas. Cadillac Racing has won the last three races, besting such marques as Porsche, Audi and Ferrari.

Cadillac CT6 Debut

Cadillac is not about to throw in the towel in a bid to woo new customers. Likely, it can forget about convincing
current BMW and Mercedes-Benz owners from making the switch. Those two brands have a lock on their customers and are more likely to lose out to each other or to some other luxury brand than they are to Cadillac.

This April, a third rear-wheel drive model for the Cadillac line will be introduced at the New York International Auto Show. The Cadillac CT6 will rest on the brand’s apex and take on the Mercedes-Benz S-Class, Audi A8, Lexus LS, and BMW’s 7 Series.

In the CT6, Cadillac has promised to unveil semiautonomous driving and other features to set it apart from its competitors. It is a huge gamble for the brand and likely will set the marque’s course for years to come. Failure is unthinkable, but success may elusive as long as persistent perceptions remain unchanged.

V-Series photos courtesy of the General Motors Company.

November 2014: Boom Times for Auto Sales Continue

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November 2014 auto sales increase by 5 percent.

The good times are continuing for the US auto industry, now nearing the end of its fifth year of recovery from 2009’s depressively low sales numbers. Most automakers claimed healthy increases for November 2014, led by the Chrysler Group’s 20 percent increase over a year earlier. Sales for Toyota, Honda and GM also increased while Nissan and Ford registered slight declines for the month.

2014 Jeep Grand Cherokee Summit
Jeep sales continue to pace the Chrysler Group.

GM, Ford and Chrysler

GM continues to lead the market, enjoying a 6 percent sales increase for November. Buick and GMC paced sales with Chevrolet sales increasing a modest 3 percent. However, Cadillac sales continue to pull back, falling 19 percent for the month. GM credited Black Friday sales with boosting is numbers. Said Kurt McNeil, U.S. vice president of Sales Operations, “The buzz around Black Friday helped drive strong showroom traffic but there was a lot more at work in the market.” McNeil noted that more people have jobs, household wealth is on the rebound and gas prices are falling.

Ford sales fell for the third consecutive month as the automaker retools to produce its all-new 2015 Ford F-150 pickup truck. Ford also said that it is ramping up production for two other models — Mustang and Transit — and expects brand sales to stay depressed for the short term. Even so, Ford managed to sell more than 8,700 Mustangs for the month, including its all-new version. Lincoln sales provided a bright spot for the month, rising by 21 percent as interest in the all-new MKC and the latest generation Navigator paced the brand.

Chrysler sales continue to outpace the industry, increasing an even 20 percent for the month. Sales of Chrysler, Dodge, Ram, Jeep and Fiat brand vehicles rose for the month with the Chrysler 200 sedan enjoying a 155 percent increase over the same month in 2013. Notably, 11 Chrysler Group models set records during the month with the Chrysler 200 recording its best sales month ever.

Toyota 4Runner

Toyota sales climbed by 6 percent in November 2014.

Toyota, Honda and Nissan

Toyota reported sales of 183,346 units, reflecting a three percent increase for the month. Camry, Corolla and RAV4 each topped 20,000 units sold with 4Runner sales up by 53 percent for November. Lexus sales increased by 7.3 percent, helping the luxury brand to keep pace with segment leaders. “Lexus set an all-time November sales record thanks in part to the momentum surrounding the arrival of the newest edition to the lineup, the RC coupes,” said Steve Hearne, vice president for sales and dealer development. “As a result, Lexus outpaced the luxury market with strong growth for both passenger cars and utility vehicles.”

Honda sales increased by 4.6 percent on strong sales of its CR-V crossover, midsize Accord and compact Civic lines. Honda sold a record 32,378 CR-Vs, the best-selling compact crossover utility vehicle in America. Honda’s truck sales, including utility vehicles, came in at 51,735 units, a November record. Sales for Acura, Honda’s premium brand, rose by 2 percent based on strong demand for its TLX and ILX sedans.

Nissan’s bid to catch Honda continues to stall as sales fell by 3.1 percent for the month. Nissan division sales fell by 1.7 percent while Infiniti sales sank by 13.3 percent. However, year-to-date sales are up 11.5 percent and the Nissan brand has already set its all-time US sales record. One particularly bright spot for Nissan was its Rogue crossover as its sales topped 15,000 units, increasing by nearly 44 percent for the month.

Kia K900

Kia sales continue to grow even as cousin Hyundai slips.
Pictured,
the flagship K900 sedan.

Subaru, Hyundai and Kia

With one month remaining in the year, Subaru has already broken its all-time sales record. November sales climbed by 24 percent and are on pace to top 500,000 units before the month is out. Like Chrysler with its 56 consecutive months of month-over-month sales increases, Subaru’s streak is now at 36 months. Two models, Forester and Outback, are leading the charge for Subaru.

Hyundai and Kia continue to go in opposite directions in terms of US auto sales. Hyundai sales fell by 4.2 percent for the month, while Kia sales rose by 6.6 percent. Kia continues to enjoy strong demand for its Optima sedan, its best selling model. Soul sales slipped in November, while Sorento sales declined slightly.

Hyundai sales fell for the month, but are still ahead of last year’s record-setting pace by 3,400 units. Elantra sales topped the 200,000 units sold threshold for the year with the Sonata expected to follow within the next day. Sales of the all-new Genesis sedan were up 57 percent for the month.

Audi Q3

Audi continues to win a larger piece of the luxury segment pie.

Volkswagen and the Rest

Volkswagen’s struggles may not be over, but it is seeing increased sales for the second month in a row. November sales rose by 3.2 percent, paced by Jetta sales up by almost 32 percent. The strongest gain was recorded by the Golf as sales rose by nearly 86 percent for the month. “We are thrilled with the accolades the Golf family of vehicles has received, including the 2015 Motor Trend Car of the Year. These awards applaud the line up’s versatility, quality and value,” said Mark McNabb, chief operating officer, Volkswagen of America. “Partnered with the refreshed Jetta and upcoming redesigned Touareg, the potential for increased showroom traffic looks promising.”

Among the German luxury makes, Audi continues to shine the brightest. Audi sales rose by 22 percent, BMW sales fell by 2.3 percent and Mercedes-Benz sales increased by 2 percent. With a 20,000 unit lead going into December, Mercedes has sewn up first place for luxury brands this year.

Other manufacturers and brands reporting sales included Mitsubishi, up 7.6 percent; Mazda, up 2.4 percent; Tesla Motors, up 6.5 percent; Volvo, down 14.4 percent; Jaguar Land Rover, down 19 percent and Porsche, up 18.5 percent.

November 2014 Auto Sales

Automotive analysts have pegged November’s SAAR at 17.2 million units based on 1.3 million+ models sold for the month. The five percent increase comes as manufacturers ramp up year-end specials. Keep an eye on special deals that can shave even more money off of sticker prices.

See Also — Rocking October 2014 Auto Sales Lift Industry

Note: November 2014 photos copyright Auto Trends Magazine. Sales information provided by the manufacturers and Autodata Corporation (Motor Intelligence).

Rocking October 2014 Auto Sales Lift Industry

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October 2014 sales remain in positive territory.

The US auto industry continues to record strong sales even as the overall economy shows only modest gains. Sales this year should top 16.5 million units with analysts forecasting at least 17 million units sold for 2015. And if October 2014 auto sales are a good indicator, the year should finish on a strong note.

Sales for the month were up by 6.1 percent as 1,281,313 light vehicles were sold according to Motor Intelligence by Autodata Corp. Through October 2014, more than 13.7 million units have been sold we are on pace for for the best year since 2007.

2015 Audi A3 -- October 2014

2015 Audi A3

Auto Sales Trends

As sales continue to rise, some might question just how much further they can rise. At least for the short term, sales seem likely to continue moving up.

Mike Rabkin, president of From Car to Finish, a national new vehicle negotiating service, contends that there is still pent up demand for new vehicles yet to be tapped. Specifically, Rabkin cited the average 11-year age of registered vehicles as one important factor supporting increased increased sales.

He went on to note that “late model used car transaction prices are also still near historical highs, which pushes people towards new vehicles since for similar money, they can get the peace of mind of a new vehicle, a full warranty, the newest features and technologies, better mileage, etc.”

2015 Corvette Stingray -- October 2014

2015 Corvette Stingray

GM, Toyota Up; Ford Sales Fall

GM paced the market in October 2014, but barely registered a month-over month gain, enjoying a 0.2 percent increase for the month. The strongest improvements came with the Cadillac CTS (up 49 percent) and the Chevrolet Cruze (up 51 percent). Strong sales of the Chevrolet Silverado and GMC Sierra also helped keep GM in the positive column for the month.

Toyota sales rose by 6.9 percent, fueled by strong demand for the best-selling Camry. Camry and RAV4 sales were the difference for Toyota; the automaker also sold more than 20,000 hybrids across its Toyota and Lexus lines. Lexus sales rose by 2.8 percent for the month.

Ford sales fell by 2 percent as retail sales dropped by 13 percent while fleet and government sales rose. Ford is in the process of swapping out its E-Series van for the Transit and is also working diligently to bring its all-new aluminum-body F-Series to the market. Lincoln posted a 24.6 percent gain for the month, based largely on strong demand for the new MKC crossover.

2015 Hyundai Genesis -- October 2014

2015 Hyundai Genesis

Chrysler, Nissan and Honda

Chrysler once again enjoyed record sales, registering its 56th consecutive month of year-over-year gains. Chrysler Group sales rose by 22 percent as every Chrysler, Jeep and Ram Truck brand vehicle experienced increased sales. Jeep sales rose by 52 percent, Chrysler 200 sales were up by 40 percent and Ram pickup truck sales fell just shy of 40,000 units sold.

It may take Nissan another year, but it seems that Japan’s second-largest car manufacturer may finally overtake smaller Honda in the US market. Nissan has never outsold Honda stateside, but this year it is enjoying stellar sales, rising 13 percent year to date to Honda’s 0.6 percent gain. October was another strong performer as Nissan sales rose by 13.3 percent while American Honda recorded a 5.8 percent increase.

2015 Kia K900 -- October 2014

2015 Kia K900

Kia, Hyundai, Volkswagen and Audi

Kia and Hyundai continue to work with capacity constraints, but are seeing sales affected in opposite ways. Kia sales rose by 12.4 percent on the strength of big demand for its Soul multi-purpose vehicle and for renewed interest in its Sedona minivan.

Hyundai sales fell by 6.5 percent as demand for its two top-selling products, the midsize Sonata and compact Elantra lines fell. Sales of the all-new Genesis sedan rose for the month.

Volkswagen sales have been down all year, but in October the German brand enjoyed a healthy 7.8 boost on the strength of demand for its all-new Golf. Golf sales doubled for the month and Jetta sedan sales increased by nearly 25 percent. Sales for the year are still off by 12.2 percent. Audi sales rose by 16.5 percent, recording the 46th consecutive month of month-over-month sales. Its Q5 and Q7 crossovers along with the all-new A3 sedan led the charge for October.

Subaru October 2014 Sales

Like Audi and Chrysler, Subaru continues to enjoy an extended sales streak. For October 2014, Subaru topped 40,000 units sold for the seventh consecutive month and also registered its 35th consecutive month of growth. Legacy midsize sedan sales more than doubled and both the WRX/STI and Outback enjoyed increases of more than 50 percent. Subaru’s sales for the month were up by 24.7 percent and are now up by 20.3 percent for the year.

2015 Infiniti QX70 -- October 2014

2015 Infiniti QX70

Best of the Rest

BMW may not catch Mercedes-Benz for the year, but at least they are trying. BMW brand sales were up by 11 percent, while Mercedes-Benz sales fell by 4.3 percent. Other manufacturers reporting sales included: Mitsubishi (up 30.5 percent), Mazda (down 4.8 percent), Tesla (down 15.4 percent), Volvo (up 1.4 percent), Jaguar Land Rover (down 19.8 percent) and Porsche (up 2.9 percent).

Sales figures culled by the respective automotive manufacturers.

See Also — September 2014 Auto Sales: Bada Bing, Bada Boom

Acura Mulls a Full All-Wheel Drive Strategy

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Honda’s premium brand looks to the future.

Acura NSX
The NSX is the first performance Acura in a decade.

When you think of premium and luxury cars, brands such as Audi, BMW, Cadillac, Mercedes-Benz, Infiniti and Lexus may come to mind. Acura is up there too, but its models are more often compared with Buick, Lincoln and Hyundai. Its not that Acura lacks product — what it lacks is excitement and any sort of edge that might entice customers to consider the brand.

Acura All-Wheel Drive

Acura excitement is on the way and will appear in 2016 when the NSX returns, a model sold as a Honda in some markets. The newest NSX will be built in Marysville, Ohio, and will offer standard all-wheel drive and be augmented by an electric motor. Its a model that parent Honda hopes will begin a much-needed transformation for the staid Acura brand.

The NSX alone won’t do that, however. What may make a difference for Acura is to offer all-wheel drive only vehicles, something it now offers only on half its product line. The rest of the line is front-wheel drive, something luxury buyers typically avoid.

Will #Acura switch to all-wheel drive only & enjoy the same level of success as #Subaru?(Click to Tweet)

Eyeing Subaru

Word that Acura might make the shift was reported by Automotive News on Tuesday and picked up by other outlets. Its a move that Acura has been studying, particularly as observed in the success another Japanese manufacturer, Subaru, has had in elevating its own brand.

In the 1990s, Subaru switched to an all-wheel drive-only format and has benefited from that move tremendously, particularly over the past six years. The company does sell one rear-wheel drive model, the BRZ, a newer product resulting from its partnership with Toyota.

About all-wheel drive Koichi Fukuo, Acura’s top global executive told Automotive News, “I think that’s the way we should go.” The move would coincide with the release of Acura’s next generation all-wheel drive technology, but the process could take several years to complete as the company overhauled its entire product line over the past three years.

Performance Considerations

Acura is also considering more powerful engines to help stoke sales. The company won’t match BMW and Mercedes-Benz by offering V-8 and larger engines nor would they move to rear-wheel drive. Audi has also had much success with its all-wheel drive models with 90 percent of its sales AWD — the rest are composed of front-wheel drive models.

The advantage of all-wheel drive means that so equipped Acuras would benefit from improved acceleration, stability and offer better handling. All-wheel drive is desired as it systematically offsets torque understeer — what causes a car to pull to one side when full engine power is delivered. It is an uncomfortable and even an unnerving feeling, one that prompts ardent luxury car buyers to look elsewhere for superior handling.

Acura NSX Returns

Acura has been working diligently on changing the brand’s direction and may be ready to present the all-new NSX at the North American International Auto Show in Detroit this Jan. When the NSX does arrive it will be the first performance model from Acura in a decade. It will also offer a glaring contrast to what Acura currently sells: three restrained sedans and a pair of crossover utility vehicles.

See Also — Hot Car: 2016 Acura NSX Prototype Laps Mid-Ohio

Photos courtesy of American Honda Motor Co., Inc.

Attainable Opulence: 2015 Hyundai Genesis

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2015 Hyundai Genesis

Wow.

There are very few cars I test drive that surprise me. I expect that certain vehicles will stand head and shoulders above the pack, including the Porsche Cayman among sports cars and the Toyota FJ Cruiser among 4×4 models. But I must tell you that Hyundai has trotted out the wow factor for me several times in the past year, especially in the Hyundai Genesis sedan, what is all new for 2015.

My previous experience with the Genesis was an all-too-quick test drive at a local Hyundai dealer nearly five years ago. I liked the sedan a lot, but I wasn’t seriously considering buying one. What I did find was a sedan that offered a lot of content for the price, a budget-priced alternative to the BMW 5 Series. That earlier model was a decent BMW competitor, but if you were looking for a high-end dealer experience, you wouldn’t find one in the Genesis.

2015 Hyundai Genesis

Luxury Under the Hyundai Banner

The Genesis sedan — along with the Genesis coupe and the top-end Equus — are three models that could just as easily be sold under a separate brand umbrella along the same lines as Toyota does with Lexus and Nissan with Infiniti.

Hyundai’s strategy, however is different: the Korean automaker is satisfied with delivering premium models under one brand name. That effort hasn’t hurt sales although in the eyes of discriminating buyers — status seekers who want the Mercedes-Benz three-pointed star or the stylish Lexus emblem — Hyundai may not go far enough.

But there are tens of thousands of buyers who want the Genesis and its upscale stablemates, with 55 percent of Genesis customers representing conquest sales, including former Lexus and Mercedes-Benz owners reports Automotive News. Hyundai is fully aware that its strategy is unique to an industry that prizes brand delineation, but the good here (sales) is certainly outweighing the bad (prestige). At least for right now.

2015 Hyundai Genesis

2015 Hyundai Genesis

The first generation Hyundai Genesis was sold from 2009 to 2014. It was the initial premium Hyundai model sold in North America and was followed in succeeding years by the Genesis coupe and the Equus. You should know that the Genesis sedan and coupe share a name, but are nothing alike.

The big changes for 2015 Genesis are inside and out, although the same engines found in the first generation model return as does the eight-speed automatic transmission.

As tested, a 2015 Hyundai Genesis 3.8 edition was provided, with a base price of $38,000. The 3.8 represents the engine size, a 311-horsepower V-6. Also available is a 5.0 edition, retailing from $51,500. It has a 5.0-liter V-8 engine making 420 horsepower.

Rear-wheel drive is standard with this model; all-wheel drive is available ($2,500 upgrade) for the first time and can be had with the V-6 edition only. An all-wheel drive V-8 version should arrive in the next year or two, perhaps sporting the previously used R-Spec mantle.

2015 Hyundai Genesis

Fluidic Sculpture 2.0

Hyundai’s design language, dubbed fluidic sculpture, has been applied across the model line since the previous generation Sonata sedan rolled out five years ago. That language has since been updated and now carries a 2.0 designation. In the Hyundai Genesis the latest design provides a more polished and modern look marked by a strong, but elegant grille flanked by automatic headlamps and LED daytime running lights.

The Genesis’ stance is strong, refined and limousine like, marked by tasteful profile sculpting near the top of the doors and across the rocker panels. To the rear are beautifully designed wrap around tails lamps and integrated dual exhaust ports. This sedan sits on 18-inch alloy wheels.

2015 Hyundai Genesis

Longer Wheelbase, More Interior Room

The second generation Genesis is three inches longer between the wheels although its overall dimensions are about the same. That extra room benefits passengers who have almost as much interior room as found in the Equus. Measuring just seven inches shorter than Hyundai’s flagship model, the current Genesis makes the Equus seem old.

Inside, the delights continue. Only you may swear that you’re in a Lexus or a Mercedes-Benz when slipping behind the wheel of the 2015 Hyundai Genesis.

But before you get inside, the Genesis senses your approach when your key fob is in hand. The side mirrors, what automatically pull in when you lock your car, move into position, flash and beep as you make your approach. If your approach is made directly to the rear of the car, the rear lights will flash and you’ll hear several beeps as the trunk opens. No swishing the leg under the rear bumper ala Ford to get the trunk to open.

The interior is large, limousine-like and very comfortable. Genuine leather seating, real wood trim with matte finish and thick aluminum accents are just for starters. You also get rear side window sunshades, a power rear sunshade, heated and vented front seats, heated side mirrors, BlueLink infotainment and a navigation system.

Pricing and Package Upgrades

This model also features keyless entry, push button start, a tilt and telescoping steering wheel column, front power seats with lumbar support, an automatic dimming rear view mirror and a seven-speaker audio system. Three package upgrades brought the test model’s final price to $49,950, what added in many of the amenities found standard in the 5.0 edition.

An Ultimate package ($3,500) brought in the wood trim, a larger 9.2-inch center display screen, a 17-speaker Lexicon audio system, the power trunk lid and a head-up display. For another $3,500 you get a technology package, what includes premium leather seats, a number of safety features — including lane departure warning and lane keep assist, high-beam assist, an electronic parking brake and smart cruise control. You can also choose the signature package, what brings in the sunroof, blind spot detection, the sunshades and ventilated seats among other amenities. You can only choose the tech or signature packages if you opt for the Ultimate package first.

2015 Hyundai Genesis

As beautiful as the Genesis’ interior is, Hyundai kept things simple by opting for a clean, but modern design for the instrument panel and the center console. The panel features traditional tachometer and speedometer displays flanking a large, driver information center. Much of the information found on the center screen can appear on the digital screen, including music and navigation displays.

The Genesis has cruise and secondary control switches on the steering wheel. Traditional buttons and knobs surround a numberless and stately clock face centered within the console. Voice and touchscreen control of the center display screen is also possible.

The driver’s seat is as comfortable as you would expect in a premium sedan. Adjust the steering column to suit your needs, buckle up and you’re ready to experience the Hyundai Genesis.

2015 Hyundai Genesis 3.8

View manufacturer details and pricing

2015 Hyundai Genesis

Capable V-6 Engine

The current Genesis roughly parallels the defunct Lincoln Town Car in size, but with shorter overhangs. With its smaller standard engine, the Hyundai Genesis still manages to deliver a higher horsepower rating than the last Lincoln Town Car (311 hp v. 284 hp) and that alone should dispel concerns by some that the V-6 isn’t enough to power this big sedan.

I found the V-6 to be energetic, capable and sufficient for the Genesis. Like the V-8, the standard engine employs continuously variable valve timing and direct injection without turbocharging. You get good off the mark acceleration and never lack power when you’re on the highway, especially when passing. Consider the V-8 only if you prize performance and the added continuous damping control suspension system that comes with it.

Hyundai made the Genesis quiet, comfortable and its suspension soft, in keeping with what many buyers want. This model is outfitted with front and rear stabilizer bars, an independent front and rear suspension and performance gas shock absorbers. Early on in the Genesis’ development, Hyundai engineers reached out to Lotus for assistance to enhance driver feedback. Lotus came back with advice on improving the steering, with Hyundai incorporating those changes to help make this model more BMW “M-Like” than before. Whereas the first generation model was closer to the earlier Lincoln in drive and feel, the current model has transitioned nicely to compete with what the big European sedans deliver.

2015 Hyundai Genesis

Taking on the Competitors

Hyundai has unquestionably raised the bar with the current Genesis. Certainly, you can shop the Mercedes-Benz E-Class, BMW’s 5 Series, the Audi A6, Cadillac CTS and Lexus GS when considering a sedan in this class. What you won’t find is anything near the Genesis’ sub-$50,000 price for this fully-loaded Korean bargain. Wow indeed.

2015 Hyundai Genesis 3.8

  • Sticker price from $38,000
  • Price as tested: from $49,950
  • Seats 5 occupants
  • 3.8-liter 24-valve V-6 gasoline engine
  • 311 horsepower @ 6,000 rpm
  • 293 foot-pounds of torque @ 5,000 rpm
  • 3.78 inches bore by 3.43 inches stroke
  • Engine compression ratio: 11.5-to-1
  • 8-speed automatic transmission
  • Wheelbase: 118.5 inches
  • Length: 196.5 inches
  • Width: 74.4 inches
  • Height: 58.3 inches
  • Passenger volume: 107.7 cubic feet
  • Storage volume: 15.3 cubic feet
  • Towing capacity: NR
  • EPA: 18 mpg city, 29 mpg highway
  • Regular grade gasoline
  • Fuel tank: 20.3 gallons
  • Curb weight: From 4,138 pounds
  • IIHS safety rating: Top Safety Pick+ (2014)
  • Limited vehicle warranty: 5 years/60,000 miles
  • Powertrain warranty: 10 years/60,000 miles
  • Corrosion warranty: 7 years/Unlimited miles
  • Vehicle assembly: Asan, Korea

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2015 Hyundai Genesis 3.8 photos copyright Auto Trends Magazine. All rights reserved.

September 2014 Auto Sales: Bada Bing, Bada Boom

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Light vehicle sales up 9.4 percent for the month.

Toyota 4Runner

4Runner sales helped pace Toyota in September 2014.

Analysts had expected that September 2014 auto sales would rise and they were not disappointed. GM, Chrysler and Nissan paced the industry, with each enjoying sales gains of 19 percent for the month. Ford sales dipped slightly, Toyota moved up just under 2 percent, while Honda sales rose by 12 percent.

September 2014 Auto Sales

The big news for the month came from the Chrysler Group. Not only did the company register its 54th consecutive month of month-over-month sales, but it surpassed Toyota in sales: 169,890 to 167,279 units sold. Likely, Chrysler won’t be able to sustain its hold on third place and is still 238,000 units behind Toyota for the year.

September 2014

Silverado sales topped 50,000 units in September 2014.

GM’s surge was led by GMC and Chevrolet, up 27.7 and 20.4 percent respectively. Buick sales rose by 11.8 percent while Cadillac sold one more vehicle in Sept. than they did last year for virtually no change. The biggest gainers were the Chevrolet Silverado on 50,176 units sold or up 54.4 percent for the month. The Chevrolet Cruze, up 44.7 percent and Traverse up 45.1 percent also paced the bow-tie brand. GMC, by the way, saw sales of its all-new Yukon nearly doubled. GMC Sierra sales also came in strong, up 24.7 percent for the month.

“GM saw strength almost across the board in September, and outpaced the industry with the newest trucks and SUVs at exactly the right time,” said Kurt McNeil, U.S. vice president of Sales Operations. “We will have improved availability of heavy-duty pickups and large SUVs in the months ahead, and the Chevrolet Colorado and GMC Canyon are arriving in showrooms as we speak. This sets us up to finish the year on a very strong note.”

Chrysler continues to ride the crest of mushrooming Jeep sales with Ram also contributing. Cherokee sales have now moved past the Grand Cherokee and are also ahead of Wrangler. The biggest gainer for the month was the Patriot as sales rose by 51 percent. Jeep’s September 2014 sales were up 47 percent.

Ram continues to benefit from interest in its large pickup truck, the 1500 series. That truck recorded 36,612 units sold for the month, up 30 percent month-over-month. Ram sales finished up by 35 percent for the month and are up 25 percent over 2014.

Nissan, Ford and Toyota

Nissan Versa Note

The Versa Note is Nissans entry-level hatchback.

Nissan group sales rose by nearly 19 percent, held down by a 13 percent decrease in Infiniti sales. Several models contributed to the onslaught with the biggest gainers coming in the Rogue (up 51 percent) and Sentra (up 61 percent). Frontier sales rose by 47 percent for the month.

Ford’s loss of 3.2 percent for the month can be attributed largely to the reduced availability of its best-selling F-150 pickup truck. As of this writing, Ford is transitioning from its 2014 to 2015 model year, bringing to the market an aluminum-bodied truck. Even so, Ford sold 59,863 pickup trucks to lead all comers. Ford reported strong sales for the Fusion, Transit Connect and the all-new Transit van. Lincoln sales rose 12.5 percent largely on demand for its all-new MKC crossover and a new Navigator SUV.

Toyota’s sales inched up by 1.7 percent even as demand for the Camry and Corolla slipped. Sales of the RAV4 and Highlander crossovers, as well as the 4Runner SUV, helped move Toyota forward. Lexus sales increased by 7.3 percent for the month.

Honda, Hyundai and Kia

Honda CR-V

CR-V sales rose as Honda introduces an all-new model.

Honda’s sales rose by 12 percent as both its Honda and Acura brands notched double-digit sales increases for September 2014. The outgoing Honda CR-V, now being replaced by an all-new model, contributed 23,722 sales for the month, ahead of the Civic’s 22,263 and behind the Accord’s 32,956 units sold. Increased demand for the MDX and RDX crossovers and demand for its ILX sedan fueled growth.

With all core Honda models now made in North America, the Honda brand is continuing to gain strength with American car buyers, said Jeff Conrad, Honda division senior vice president and general manager. And with the redesigned 2015 Honda CR-V going on sale today we expect our momentum to continue to grow as step-by-step we reinforce our light truck lineup.

Hyundai and Kia are gradually moving to a place where the two Korean automakers should sell 100,000 units monthly between them. Kia sales were up 6.9 percent for the month while Hyundai sales increased by 1.6 percent. Both automakers, joined at the hip, are feeling the effects of capacity constraints. Nevertheless, the two manufacturers are operating their US factories at full tilt and are relying on imports to satisfy customer demand.

Best of the Rest

The 2015 Mazda CX-5.

The 2015 Mazda CX-5 compact crossover.

The rest of the market saw sales all over the place. The Volkswagen Group continues to struggle, falling 9 percent on the month. VW brand sales fell by 18.6 percent, but Audi sales rose by 14.2 percent. Mazda sales rose by 6.7 percent, Mitsubishi surged by 38.9 percent and Volvo sales rose by 11.4 percent.

Subaru continues to shake up the market, enjoying a 30.7 percent boost for the month. Subaru sales rose by nearly 10,000 units, representing the seventh time this year the automaker surpassed 40,000 vehicles sold in one month.

Jaguar sales fell by 13 percent, Land Rover was down 8.3 percent and Porsche sales increased by 16.6 percent. BMW sales rose by 8.6 percent, Mini sales plunged 20.5 percent, Mercedes-Benz recorded an 10 percent increase and Smart sales climbed by nearly 20 percent. Tesla sales fell by 15.4 percent.

September 2014 and Year to Date

In all, 1,246,006 new vehicles were sold in September 2014, up 9.4 percent for the month. Light trucks continue to outsell passenger vehicles 665,746 to 580,260. Through September 2014, sales are up 5.5 percent for the year to 12,431,305 vehicles sold. Annualized, sales are on pace to top 16.5 million units for the year.

See Also — Highlights of August 2014 US Auto Sales

Sales data supplied by car manufacturers and Autodata Corp.

Strategic Vision: Tesla, Audi, Jaguar and Kia Top Quality Awards

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A look at how consumers perceive todays new cars.

June seems to be the month for automotive awards. Earlier in the month, both AutoPacific and J.D. Power announced their respective vehicle satisfaction and initial quality awards. Yesterday, on the very last day of June, Strategic Vision shared its own findings with its 19th annual Total Quality Index™ (TQI) study.


Strategic Vision: Tesla Model S

Tesla Model S

That study, last released in May 2013, recognized the Tesla Model S as the Best Model in Total Quality. Kia received recognition for being one the Best Brands, garnering the non-luxury segment. The TQI found Audi and Jaguar shared top billing among luxury brands.

TQI helps manufacturers and consumers predict the future success of various models and particular brands. In 2007, TQI recognized Hyundai’s fast improving product line, what has largely been confirmed following a series of much higher quality product introductions.

Christopher Chaney, Strategic Vision Senior Vice President explained what TQI means as it gauges how car buyers are influenced, not just by counting problems. He pointed to the Tesla Model S as a model that offers “true innovation” going beyond the expected “overpriced electric breadbox/toaster” by delivering “rocket-like speed and drive feeling.” Said Chaney, “Consumers are powerful, have the Internet and know how to use calculators.” They are also looking to be impressed.

The study is based on Strategic Vision’s quantitative “ValueCentered®” NVES review of 38,361 owners. The results — as outlined in the chart at the end of this article — contain the top ranked vehicles in Total Quality in their respective segments as rated by new vehicle buyers. The TQI looks at both positive and negative product experiences with consumers responding through such values and emotions as: Love-it, Delightful, Excellent, Satisfactory, Unsatisfactory, a Failure and Hate-it. Not your typical survey responses, but likely closer to the way people think and feel.

Audi, Jaguar, Kia Excel

Strategic Vision

2014 Kia Soul.

Strategic Vision Audi’s “unique exterior styling and interior appointments,” what have produced multiple segment winners including the A5 Coupe, as well as the Q5 and Q7 crossovers. Although Jaguar did not have a segment leader, it had several models that ranked very high and also gave customers something uniquely appealing.

The Kia brand has benefited by offering a pair of segment winners in its Soul small multi-function car and its midsize Optima sedan. These are models that Strategic Vision says are “strong in youthful, cool styling cues and that not only make a strong statement but offer a solid foundation of quality.” Notably, Strategic Vision’s New Vehicle Experience Study (NVES) data has already shown that the recently released Kia K900 is taking some sales away from the luxury brands.

Ford Leads in Five Segments

Several other brands performed quite well including Ford with its five segment winners, more than any other brand. The Ford C-Max finished first among small alternative powertrain cars, the F-150 and F-250/350 pick up trucks nabbed the full-size and heavy duty pickup truck categories respectively, the Flex was first among midsize crossover models and the Expedition was tops for full-size utility vehicles. Lexus, Chevrolet, Honda, Hyundai and Dodge were among brands with at least two segment winners.

The TQI survey comes as consumers witness massive recalls from GM as well as a significant number of recalls from other manufacturers. Automotive sales continue to rise as consumers are carefully using online tools such as survey results and studies to make highly informed purchase decisions.

Strategic Vision: Ford Flex

The Flex was one of five Fords to finish first.

Strategic Vision: Total Quality Index for 2013

See Also — Strategic Vision: Dodge Dart, Kia Soul and Volkswagen CC Among Best Models