By on March 20, 2017

Macan Porsche

While still exclusive, Porsche is gradually becoming a more populous and profitable brand. It delivered 238,000 vehicles last year and posted an operating profit of $4.1 billion — a 14-percent increase over 2015’s accounting.

A little back-of-the-envelope math places the per-car profit at roughly $17,250. As a premium automaker, you’d expect it to rake it in on every vehicle sold. However, Porsche doesn’t limit production to the same extent that Ferrari does in order to maintain artificially high prices. And it absolutely decimates other premium brands that offer exclusivity at a higher volume. BMW and Mercedes-Benz both hover at around $5,000 in profit per car.

Porsche seems to have struck an ideal balance. While its per-car profit was actually higher a few years ago — $23,000 in 2013 — it wasn’t making quite as much money overall. At the time, Bentley pulled in roughly 21 grand per unit and sold fewer vehicles overall. Since then, Porsche has shifted some of its focus downmarket, introduced the Macan, expanded its volume, increased income, and still managed to maintain a sweet profit margin on every vehicle sold.

How did it manage that? Basically, the same way Ford wrangles its F-150.

Read More >

By on March 20, 2017

2017 BMW 4 Series Convertible – Image: BMW

Choice is good for car buyers. But in the never-ending quest to produce incremental volume gains, the planet’s largest premium auto brands agree that certain niches are quickly becoming untenable.

Known for questioning in 2014 whether the global sports car market would ever recover from its post-recession collapse, BMW sales boss Ian Robertson told Car And Driver earlier this month that “some body styles will be removed in the future.”

Meanwhile, the head of Mercedes-Benz Dieter Zetsche said at the Geneva auto show that the lack of Chinese uptake for specialty cars “makes the business case for these vehicles less easy.”

Yet long before a model cull returns us to the days of tidy luxury lineups — 3 Series, 5 Series, 7 Series, and 8 Series as the 1990s intended! — premium German marques will first introduce a slew of new models. And the body styles destined for removal? Likely not the silly four-door coupes and impractical SUVs you love to hate. Read More >

By on March 17, 2017

2017 Acura MDX Sport Hybrid - Image: Acura

At American Honda’s upmarket division, the Acura MDX is the lifeblood; the premium crossover that keeps Acura’s trains running on time.

In 8 of the last 10 years — including each of the last 7 — the Acura MDX has been Acura’s best-selling model. Fully one-third of Acura’s U.S. volume over the last decade has been generated by the MDX.

Honda knows best of all just how important the MDX has been to Acura’s fortunes, having watched as the brand’s passenger car volume was essentially chopped in half over the last decade. Honda is removing the interference caused by the Pilot, Odyssey, and Ridgeline at the MDX’s Alabama plant by moving production of the big Acura to Ohio.

And more importantly for consumers, the first hybridized MDX — the 2017 Acura MDX Sport Hybrid — is launching now with a pricing scheme that evidently makes the hybrid the best MDX of all. Read More >

By on February 27, 2017

2017 Chevy Silverado 1500 W/T

The pickup is as much of a stereotypical American icon as gun ownership and throwing things away. Last year was a particularly good one for trucks, with Ford F-Series sales reaching pre-recession volume and a 10-year high and Ram recording a seventh year of growth. However, with sales peaking for the other domestic labels, General Motors’ share of the market shrunk.

What’s the solution to whatever consumers find lacking with GM’s product? A price war, of course. While Ford Motor Company and Fiat Chrysler Automobiles are scaling back, GM upped incentives from last February by 56 percent for the Chevrolet Silverado and 82 percent for the GMC Sierra. With the pickup segment being so important in North America, nobody wants to lose ground. Aggressive discounts are often the only way to overwhelm brand loyalty, but the practice is also guaranteed to eat into profits while annoying the competition. Read More >

By on February 24, 2017

2017 Jeep Compass

We knew that Jeep’s redesigned small crossover was going to be sized up, priced up, and niced up in order to avoid cannibalizing the Renegade. What we didn’t know was that Jeep would dump it into the KL Cherokee’s lap like a scalding cup of coffee. At $22,090, the base 2017 Compass is only a stone’s throw away from the larger model’s pre-destination price of $23,695 MSRP.

Worse still is that Fiat Chrysler’s inability to update or enhance the Jeep Cherokee in any meaningful way has helped sales implode in recent months. The KL was Jeep’s top selling model in 2015, with 220,260 units sold in the United States, but it took a sales hit of almost 30,000 vehicles the following year and saw a noticeably weaker beginning for 2017. Read More >

By on February 23, 2017

Dodge Challenger SRT Demon

Dodge has been parsing out minor details on the Demon, slowly shaping its identity, for what seems like decades, when it has actually only been about a month. In today’s publicity sprig, Fiat Chrysler indicated that — unlike the Hellcat — the Demon will be strip-focused with a suspension setup specifically designed exclusively for straight-ahead speed.

With Dodge claiming that the Hellcat is the “ultimate do everything muscle car” with an intention  “to strike that perfect balance between drag strip brute force, road course competence and street car civility,” I am left wondering just how streetable the Demon could possibly be. Like most purpose-built cars, dragsters are wonderful at doing exactly one thing and absolutely terrible at everything else. For Dodge’s new hype machine, the added forward momentum might come at the expense of hanging a right.  Read More >

By on February 19, 2017

2015 Honda CR-V

Sport utility and crossover vehicles have gradually become hotter than the surface of the sun as the public has come to treat sedans with the sort of disdain usually reserved for an old high school flame. It was decent while it lasted, but now you don’t even really want to acknowledge that it was ever a part of your life.

Sales have reflected this and automakers have hurried to supply an eager market with utility vehicles. While some did not quite meet demand, and have suffered for it, others are seeing rising incentives to meet the growing inventory surplus — giving us our first indications that interest in SUVs and crossovers has its limits.  Read More >

By on February 8, 2017

Visual Clarity

Telling someone that you can run a car on hydrogen — a greenhouse gas — and emit clean water as the singular byproduct is already an extremely novel concept. You don’t need a laser light display or sideshow antics to make that fact more interesting or palatable. In the case of Honda, you absolutely do not need to include the disembodied heads of singing children bathed in light. In fact, the actual message might even become partially lost in the abyss of confusion you’ve created as people furrow their brows and wonder if someone has snuck a psychoactive drug into their beverage.

For reasons clearer to hired visual artist Adam Pesapane than myself, the 2017 Clarity Fuel Cell ad campaign uses a central theme of floating heads — frequently representing chemical compounds and molecular structures. The end result is as informative as it is unsettling, though it heavily favors the latter.

Read More >

By on February 6, 2017

old dealership Chrysler

Fiat Chrysler Automobiles wants to grow its dealer network by 380 new stores in a bid to improve its dwindling market share. The plan isn’t going over so well with the company’s existing dealers, however. As the strategy could potentially threaten their present businesses, some of those dealerships are putting up a fight over the issue.

The choice to expand comes at a difficult time. Sales locations aren’t doing the best and suffering through a diluted and unpopular product lineup while the automaker shifts its focus away from cars to the more-popular SUVS and trucks. FCA sales have been on the decline for almost six months and the company’s slice of the U.S. market fell to 12 percent in the fourth quarter of 2016, compared to 13.6 percent in the same period of 2015. The expansion decision also goes against the advice of FCA’s dealership location consultant, Urban Science. Read More >

By on February 6, 2017

Television Set

The “Big Game” is as much of a sporting event and as it is a tactical delivery system for advertisements and, at roughly $5 million just to reserve a thirty second slot, the folks working in the media department want their commercials to have a strategic impact. Reaching your intended audience is only half the battle. You must also provoke them into action.

While there were plenty of Super Bowl 51 car commercials that got under people’s skin, those strong feelings often failed to morph into consumer interest. For example, Ford’s mobility-focused spot featuring Nina Simone’s classic civil rights song I Wish I Knew How It Would Feel to Be Free was all over social media when it aired right after kickoff. However, nobody sent me a surprised and excited text about Ford like they did for Alfa Romeo.  Read More >

By on January 26, 2017

Ford Ranger 3.2L TDCI Wildtrak exterior beauty shot, Image: Radek Beneš/The Truth About Cars

On September 5, 2006, Alan Mulally moved into the corner office at the Glass House. He brought with him a simple management philosophy he developed over three decades at Boeing Commercial Aircraft. After a short time at Ford, he formalized his philosophy, which continues to guide the company under Mark Fields.

He called it One Ford — and along with a lot of hard work, that philosophy transformed the Blue Oval into the profitable, future-oriented automaker we know today.

Read More >

By on January 17, 2017

pumping fuel

It would be fair to suggest that government agencies have held the automotive industry by the testicles with both hands for much of the Obama administration. America’s fuel economy and emissions targets are noble, but have cost manufacturers peace of mind and plenty of money. Enter President-elect Donald Trump, who spent a great deal of his campaign promising to repeal some of those standards and change things for the industry.

Are the current targets too lofty? Most automakers would say yes, but it depends on who you’re asking. However, the odds of Trump rolling back efficiency standards in a meaningful way is on par with us returning to the Bronze Age. While not impossible, it’s incredibly difficult to turn back the tide of progress. Even if the 45th President of the United States did manage to dismantle the EPA, abolish Corporate Average Fuel Economy (CAFE) regulations, and convince China to nuke us into the Stone Age, there remains the outside world to consider. Read More >

By on January 16, 2017

BMW X Models

Mercedes-Benz and BMW have more in common than just a bitter rivalry and the Fatherland — they both feel the need to get more crossover vehicles into North America.

Despite being known largely for their rich heritage of premium sedans and coupes, Bavaria’s Motoren Werke and Daimler’s Three-Pointed Star want to see utility vehicles replacing more of the cars they ship to the United States.

Last year, crossovers and SUVs comprised 42 percent of BMW’s sales in North America — an almost ten percent increase from 2015. Mercedes-Benz also saw an increase in truck sales. Sport utility vehicles now account for 47 percent of its passenger vehicle volume. However, both companies are anticipating a balanced ratio right around the corner.  Read More >

By on January 15, 2017

tesla model-s-rear

Tesla pricing is about as predictable as the winning lottery numbers. This year it added numerous surprise fees onto its supercharging network and rearranged the pricing structure for its Model S sedan more times than I can remember. Most recently, the company increased the price of its base Model S 60 from $66,000 to $68,000 with an $8,500 software update that unlocks the battery’s full potential — since the 60 is just a 75 that has been digitally neutered and rebadged.

In some instances, almost 30 percent of the value of the vehicle can be unlocked through in-car purchases. There are all manner of software-upgradable items but keeping up with their pricing is nearly impossible, especially when Tesla doesn’t actively announce those changes.   Read More >

By on January 4, 2017

Nissan Murano CrossCabriolet 2012

Convertible sales have slid steadily for a while now and “everyday” droptops like the difficult to praise Chrysler Sebring have vanished from the automotive market. With the exception of a few premium options from Germany, fun in the sun doesn’t seem to coincide with daily driving anymore.

With their sales volume now trumped even by impractical, short-ranged electric vehicles, lidless cars are less popular than ever. In fact, America’s most popular convertible isn’t even a car (Jeep Wangler), and today’s remaining open-air options are either performance focused, comically small, or extremely expensive European luxury items. That’s likely to remain the case for some time, considering it took us over a decade to get here.  Read More >

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