Automotive

Meet America’s least reliable car

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Tesla’s Model X has earned the wooden spoon in the 2017 Consumer Reports study on automotive quality. The car was marked down for problems hardware, paint, trim and climate system. While Tesla has undoubtedly been a disruptor in the auto world, conventional auto makers are quickly getting their act together on product and coupled with far longer experience in manufacturing and distribution wth a supply chain that backs the OEM’s track record. Tesla’s problems will only escalate as the Model 3 production issues show it is still amateur hour in the most important part of the auto making process. The overall rank for quality was as follows. 5 of the top 10 makes being Japanese.

1. Toyota
2. Lexus
3. Kia
4. Audi
5. BMW
6. Subaru
7. Infiniti
8. Buick
9. Honda
10. Hyundai
11. Nissan
12. Mazda
13. Porsche
14. Mercedes-Benz
15. Ford
16. Volkswagen
17. Chrysler
18. Chevrolet
19. Acura
20. Jeep
21. Tesla
22. Lincoln
23. Volvo
24. Dodge
25. Ram
26. GMC
27. Cadillac

 

What car in Japan has the best residual value? A Jeep

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I was shocked to learn today that the Jeep Wrangler has the best residual value of any mainstream car in Japan. Better than the Europeans, Japanese or any other brand. US cars used to be thought of in Japan as the laughing stock of retained value. In three years owners expected it would be worth near as makes no difference – zero. Yet the Wrangler holds 70% of its value after 3 years here. Depreciation on most things is almost anvil off a cliff type price action. It is no surprise that Jeep has grown from 1000 units in 2009 to over 10,000 today.  Even dealers have a massively positive outlook which is almost unheard of among the auto makers. Most are so conservative that they look to flat to down as an annual target. The FCA management is on another league here and it shows.

I was also checking the Fiat Chrysler financials and share price. The stock has tripled in the last 12 months and the margins are up there with the pack with greatly shrunken debt and growth. When I covered the stock in 2000, Fiat was a laughing stock. Tail end Charlie and the butt of jokes – how things change when you focus on customer needs.

Will Greenpeace Be arrested and charged with trespassing?

Greenpeace has disrupted a business which is already paying billions in fines. If only Greenpeace had the first clue about diesel emissions and the reality of the CO2 footprint of EVs at the production stage and charging.

Alfa Romeo Giulia launch in Tokyo

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You have to hand it to the Italians for design and flair. Fiat Chrysler Automobiles (FCA) launched its new Alfa Romeo Giulia model in Tokyo tonight. It is a car I’ve long been fond of given my father owned a 1970s version. In Japan FCA sales have almost quadrupled in 10 years to over 20,000 cars. Chrysler/Jeep sales are up 10x over that period as well. American cars have always struggled in Japan for the obvious reasons of narrow streets being unsuitable for Yank tanks. Jeep has put one of its cars on a photocopier and shrunk it for Japan. Boom. Target client needs and away you go. FCA CEO Pontus Haggstrom has steered the company for the lst 9 years to turn it into the fastest growing foreign brand in Japan. Impressive.

The thing I loved most about the new Giulia Quadrifoglio is that it hasn’t been built in a gluten-free multi-ethnic factory which has one eye on Johnny Polarbear. It is pure noise, speed and emotion. As the head of design said, “we want a car that rules the heart not the head”. Too true. No wonder the tag line of Alfa is “la meccanica delle emozioni’.

Tricking the auto-pilot 73% of the time

 

So much faith is put in the hands of computers nowadays but the idea of driverless cars is still fraught with danger.  Car & Driver reports “Researchers at the University of Washington have shown they can get computer vision systems to misidentify road signs using nothing more than stickers made on a home printer. UW computer-security researcher Yoshi Kohno described an attack algorithm that uses printed images stuck on road signs. These images confuse the cameras on which most self-driving vehicles rely. In one example, explained in a document uploaded to the open-source scientific-paper site arXiv last week, small stickers attached to a standard stop sign…using an attack disguised as graffiti, researchers were able to get computer vision systems to misclassify stop signs at a 73.3 percent rate, causing them to be interpreted as Speed Limit 45 signs..”

Sure systems will improve over time but we already have a plethora of people already putting too much “blind” faith in systems being fool proof as this video demonstrates

Exactly

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From Car Buzz – Mazda’s SVP in North America talks total sense with respect to allowing automakers to come up with the best solution rather than be dictated to on how they should run their businesses. Let them live and die by the sword of their own decisions in challenging technology even if it means zero emissions targeting and let necessity become the mother of invention rather than forcing inefficiency through regulation which governments excel at.

In case you haven’t noticed, Mazda does not offer a single EV in its entire global lineup, and it has no immediate plans to do so. How come? Because it believes the internal combustion still has a future. Automotive News has reported about the speech Robert Davis, Mazda senior vice president in charge of special assignments for North America, gave at a recent seminar. But let’s make one thing clear: Mazda is still very much committed to fuel efficiency, hence its ongoing development of its SkyActiv line up gasoline and diesel engines.

But it’s in no rush to develop EV tech for several reasons. For example, Davis made this point: “Take the $7,500 EV credit off the table? At the same time, you take the EV mandate off the table. Let the government keep the $7,500 and let the industry find the best way to meet the clean air standard. Make it C02, make it grams per mile, fuel economy, whatever feels best. But don’t mandate the particular powertrain.” One of the reasons why Mazda has taken this approach is due to its small size; it simply cannot keep up with larger global automakers, so it’s forced to take its own path. Another EV related issue Davis mentioned was concerns regarding lithium-ion batteries; what will happen to them once they’re worn out?

Unlike, say, cellphone batteries, EV batteries are much more difficult to recycle. “This is where the great thinkers of our industry need to speak up and be heard and make sure the manufacturers can do what they do best: compete against each other for the customers’ hearts and minds,” Davis added. “We’re all better than this. We can do better than this. We need to consider that this not zero emissions. This is remote emissions, or displaced emissions.” But his bottom line point regarding internal combustion engine technology is that there’s more innovation to be done, and Mazda will continue doing just that.

However, the Japanese automaker is not afraid to adopt new technologies, such as batteries and plug-in hybrids, “but they all share the internal combustion engine. So before we go into the time and effort and expense of adding electrification, we were convinced that a solid, efficient internal combustion engine was critical.”

Tesla Model 3 – proof that it is still amateur hour

The press are already fawning over the new Model 3. Subscribing to the Tesla Owners Worldwide forum page I’ve learnt it is something more akin to a cognitive dissonance based cult. All of the mutual backslapping between owners trying to justify their purchase as if they know something we don’t. Despite this, Musk – for all of his rent seeking powers – is revealing his amateur status where it matters most – first in production and second in distribution. Yet the press is hailing this as the iPhone type game changer. According to automotive analysts Tesla hadn’t secured a production manager, after the Model 3 was green lighted over 1.5 years ago. Car production is a nightmare. It requires supreme coordination across the entire supply chain.

As the Tesla Model 3 is being rolled out to customers around two dozen of his staff are being given cars to iron out any bugs that haven’t been found before final fill out. Normally car makers go out of their way to iron out bugs or defects before release. Such is the emergency to keep to a schedule, Tesla reminds me of Michael Keaton (plays Hunt Stevenson) in Working Class Man (Gung Ho) where the Japanese are trying to fix the quality control issues of the poor work ethic of its American factory. Such is the sloppiness of manufacturing that the workers say “let the dealer worry about it”

Tesla has a small dealer footprint compared to major auto makers. This idea that dealers are a thing of the past is nonsense. If there is a funny clunk on an individual car or a major recall, dealers bring peace of mind and smooth out the process. Yet Tesla, which has well known quality problems has an underbaked dealer network as evidenced by the following complaint by a customer

“I was on my way to pick up my new Tesla today, when I got a call from the delivery specialist telling me that my car had mistakenly been given to another customer over the weekend. Now they want to deliver the car to me after it had been used by someone else. This diminishes the joy and experience of expecting your new car. Not a happy camper at all. Very unprofessional. After all, don’t they check VIN numbers before delivering cars?”

Wait for production nightmares to arise. Musk, who recently admitted efficient production was pretty much the whole ballgame,  has nothing in terms of experience or quality control of say a Toyota which has coined pretty much every global manufacturing efficiency jargon there is – JIT, Kansan and kaizen for starters. That didn’t come from pushing its luck – it has been decades of refinement not 1.5 years with crossed fingers.

The non motoring press can write whatever they please about how wonderful it is because it’s trendy to like Tesla. However Toyota says it is close to perfecting solid state Li-ion batteries which will be infinitely better than the antiquated things Tesla is using now. That aside, the Tesla Model 3 will be like every other Tesla venture – run in the hope nothing goes wrong. My bet is that this company that is still to turn a profit and relies on the taxpayer to fund its sales can’t compete with the incumbents when they flood the market with attractive product. By the way the centre control dashboard shows that form is being put over function.

Elon Musk may well be the modern day version of Hunt Stevenson. Got the gift of the gab but lives on endless promises that he knows is always a huge long shot. Never forget Toyota had a stake in Tesla but sold it. Be sure Toyota’s tech team went over its technology with a fine tooth comb. It found nothing it didn’t  have already and so let it go.