Red Cadillac Crowe MacKay Retail Automotive Dealership Newsletter

Too Much Trust on Safety Systems

Red Cadillac Crowe MacKay Retail Automotive Dealership Newsletter


The U.S. Federal Communications Commission moved toward letting mobile devices take over airwaves long assigned to carmakers for vehicle safety, advancing a plan opposed by highway officials focused on cutting crash deaths. The FCC on a 5-0 vote Thursday proposed devoting most of the auto-safety airwaves to broadband uses including Wi-Fi for routers, with most of the remainder of the swath going to a new cellular connected-vehicle technology.

Source: Bloomberg


Off-Lease Volume, New-Car Prices Among Dynamics

Overall used-vehicle transaction prices have never been higher than they were last quarter, according to Edmunds’ latest Used Vehicle Report released Thursday. But interestingly enough, the gap between the average prices of 3-year-old vehicles and new vehicles reached a third-quarter high. At play is an influx of off-lease vehicles returning to market, more than half of which are SUVs and trucks, that “doesn’t have an end in sight”, and a new-car-buying population leaning towards vehicles with all the tech perks.

Source: Auto Remarketing


General Motors expects a majority, if not all, of its Cadillac cars and SUVs, sold globally to be all-electric vehicles by 2030, according to a company executive. Cadillac President Steve Carlisle on Thursday said the brand will phase out current models of internal combustion engines based on market demand. He expects an inflection point for electric vehicles for the brand to occur in the mid-2020s.

Source: CNBC


General Motors Co. will invest $1.5 billion to build its next generation of mid-size pickups, the automaker announced Friday. A $1 billion investment at GM's Wentzville, Missouri, plant where the Chevrolet Colorado and GMC Canyon are built will retain about 4,000 jobs. Another $500 million will be spent on supplier tooling for the new trucks. GM did not disclose when the new Colorados and Canyons will go on sale.

Source: The Detroit News


Sales of electric vehicles in Ontario have plummeted since the Progressive Conservative government canceled a rebate last year, hampering progress toward a national target.

In the first six months of this year, sales in Ontario were down more than 55 per cent from the same period in 2018, according to data from Electric Mobility Canada. In the second quarter of this year, 2,933 electric vehicles were sold in the province, down from 7,110 in the same period last year. Ontario is the only province not seeing increases in sales, year over year. Quebec and British Columbia, which have their own provincial rebates, have long been leading in total sales. Ontario's figures had been increasing on par with theirs until the province's financial incentive disappeared. Under the previous Liberal government, Ontario had offered up to $14,000 back for buyers of electric vehicles, but Premier Doug Ford's government canceled it after winning the June 2018 election, saying it was going to people who could already afford expensive cars.

Shortly after that, Ontario's sales sharply dropped — and national sales did, too. They rebounded after the introduction this spring of a $5,000 federal rebate, but national sales of electric vehicles are still only at 3.5 per cent, which is a far cry from the federal government's target of 10 per cent in 2025. "It's going to be challenging for the federal government to meet that target...then even more by 2030 [when Ottawa hopes the number rises to 30 per cent],” said Al Cormier of Electric Mobility Canada. "If Ontario was in the game again it would make the whole thing a lot easier."

B.C. is now at 10 per cent of sales, with Quebec close behind at seven per cent. In Ontario, electric vehicles made up around three per cent of total passenger vehicle sales at its highest point then dropped to below one per cent after the cancellation of the provincial rebate, then climbed to sit under two per cent after the introduction of the federal rebate.

Rebates key to sales

Experts say rebates are key because the up-front cost of an electric vehicle can be anywhere from $10,000 to $30,000 more than a similar gas-powered car. Rebates take away some of that initial price shock, said Cara Clairman, the CEO of Plug'n Drive, a not for profit devoted to electric vehicles. "The total cost of ownership, when you take into account that you're not going to be paying for gas and there's less maintenance," she said. "The total cost of ownership today is actually lower for an EV than for most gas cars."

Mark Nantais, president of the Canadian Vehicle Manufacturers' Association, said that right now the auto industry is taking a loss on electric vehicles of upwards of $10,000 a car. The cost of the technology is still so much higher than that of gas-powered vehicles, he said, but it won't always be that way. "We see that gap, or that differential, there until probably where you see cost parity in late next decade," Nantais said. "We've been quite clear on the need to continue with the consumer point-of-purchase incentives. That's really critical until we reach price parity with internal combustion engines."

Transportation Minister Caroline Mulroney's office refused to make her available for an interview. A spokesman for Environment Minister Jeff Yurek later said the auto industry is giving people more options on electric vehicles than ever before. "People have an individual choice and responsibility when they are purchasing their next vehicle and as charging infrastructure expands, we are confident there will be an increase in the uptake of electric vehicles," Andrew Buttigieg wrote in a statement.

Clairman said a 2017 survey of about 1,200 drivers in the Greater Toronto Area found that price was a larger barrier to people purchasing electric vehicles than range anxiety — people's worry that their electric vehicle will run out of power before reaching their destination.

It helps that vehicle manufacturers are now coming out with models with a battery range of 400 kilometres, Clairman said, but more public charging infrastructure is still needed.

Source: Automotive News Canada


Electric vehicles are touted as environmentally friendly, but the metals needed for their batteries are creating other environmental and humanitarian concerns, including the use of child and slave labor. However, a global partnership between suppliers and automakers — including Ford Motor Co. and Fiat Chrysler Automobiles NV — seeks to bring transparency to the origins of these raw materials. The goal is to give companies confidence in the responsible sourcing of its materials.

Source: The Detroit News


Multiple systems that are designed to make driving safer and easier are placing drivers in danger, according to a new study. Adaptive cruise control and lane-keeping-assist technologies lull drivers into letting their guard down, which puts them at greater risk of crashing, the AAA Foundation for Traffic Safety found. When used correctly, the technologies can make people safer. But many drivers place too much trust in the systems, according to the study released Tuesday by the AAA Foundation, which is partially funded by motor club and insurer AAA.

Source: USA Today


Which vehicles will America get?

Fiat Chrysler Automobiles and PSA Groupe officially signed a 50/50 merger between the European and American automakers Wednesday, making the as-yet-unnamed automaker the fourth largest in the world behind Volkswagen AG, Renault Nissan Mitsubishi, and Toyota. 

It remains to be seen which vehicles will be offered and which ones will be discontinued, let alone the company name, but in a press release and presentation to shareholders, there is a clear indication where Peugeot SA and FCA intend to go. 

One of the strengths listed for FCA is a “strong SUV and pickup truck lineup,” which clearly indicates the two profitable arms of FCA in the Jeep and Ram brands out of America. It also references the “premium/luxury brand experience,” which suggests the Maserati and Alfa Romeo brands from Italy. There is no mention of Dodge, Chrysler, or Fiat, all of which have had product lines stripped down over the past few years, and past decade. Chrysler sells the Pacifica minivan, but the 300 full-size sedan is aging, and the Voyager is essentially the inexpensive minivan for fleets. 
Fiat cut production of the 500 city car series in the U.S. earlier this year, leaving the 500L and 500X small crossovers, as well as the low-volume Fiat 124 Spider built out of a partnership with Mazda. Fiat still has a strong presence in its home country of Italy. 

The Dodge question might be the largest one. The aging but beloved fleet of classic American muscle cars in the Challenger and Charger has been pared back in recent years, even as Dodge keeps making headlines with its SRT performance brand, which is responsible for the 797-horsepower Dodge Challenger SRT Hellcat and other performance beasts. It’s a surprise that Dodge is still making the Journey crossover and Grand Caravan minivan, so those vehicles likely won’t be part of the new family. The Dodge Durango three-row crossover SUV might also be kicked to the curb. The entire Dodge lineup runs contrary to one of PSA's stated strengths of "smartly addressing CO2 emissions," and contrary to many industry forecasts.

FCA has one plug-in hybrid in the Chrysler Pacifica, and mild-hybrid versions of the Ram 1500 and Jeep Wrangler won’t be enough to reach fuel economy targets in the U.S. and Europe. 

This is where the French automaker can help, ostensibly. PSA Group owns Peugeot, Citroen, Opel, Vauxhall, and DS Automobiles, which aren't sold in the U.S., and perhaps more importantly, struggling in China. PSA boasts two “multi-energy flexible platforms” to ramp up electrification plans. It currently has seven plug-in hybrids (PHEV) and battery electric vehicles (BEV), and, in 2019, committed to a PHEV or BEV version for each new vehicle launch. 

A Dodge Challenger plug-in hybrid does not seem likely. A future Dodge lineup with overt Opel overtones, and a Chrysler family filled with DS and Peugeot-alikes, shows some promise.

The merged brands expect to save $4 billion annually in cost savings. 

The merger shakes up the automotive world order, but it is the culmination of years of international courtships and stalled partnerships. Fiat rescued Chrysler in the wake of Chrysler’s 2009 bankruptcy filing, eventually turning FCA into a global company in 2014. CEO Sergio Marchionne actively but futilely pursued partners until his death in 2018. A proposed merger with Renault was withdrawn in 2019. The French automotive company of Peugeot has had a recent turbulent past as well. General Motors tried to rescue Peugeot-Citroen in 2012 in a partnership that would last for only one year. In 2017, GM cut ties with its European brands of Opel and Vauxhall Motors to, who else, PSA Group. 

Technology, product, and platform sharing should account for cost-saving synergies that will not result in “any plant closures resulting from the transaction,” the group said in a statement. FCA shareholders will get a special dividend of about $6.1 billion. 

The merger is expected to take at least a year, and will need approval of both companies’ shareholders as well as pass regulatory requirements. In the meantime, dealerships and service centers will continue business as usual.

Source: The Car Connection


BMW AG and Daimler AG said Wednesday they plan to exit the North American car-sharing market and will halt operations in Montreal, New York, Seattle, Washington D.C. and Vancouver. SHARE NOW and its Car2Go unit, a joint venture of the two German automakers, are ending operations on Feb. 29 in the United States and Canada citing the “volatile state of the global mobility landscape”, and “the rising infrastructure complexities facing North American transportation today and the associated costs needed to sustain operations here.”

Source: Reuters