Posted by George Peterson on April 14, 2014 at 2:39 pm
Audi A8 in a Smaller Platform For a car that is slightly smaller than the Honda Civic sedan and the Ford Focus sedan, the designed-for-America (and China) 2015 Audi A3 sedan comes across as a premium piece. The A3 previously was a slow selling hatchback. Now adding the three-box notchback with a trunk bodystyle Audi can substantially broaden its appeal in the USA. For decades, American buyers have perceived hatchbacks to have less safety (less rear crash protection – a perception) and less security (from bad guys seeing into the cargo area and stealing what is there). The sedan clears those negative perceptions and gives Audi a strong platform to build the bottom end of its brand.
Competes With New Premium Small Cars Designed to compete head-to-head with the newly introduced 2014 Mercedes-Benz CLA and the BMW 1-Series, the Audi A3 does not scrimp on technology. Audi’s features list is on bold display in this car. The Audi A3 is standard with a panorama sunroof, retractable MMI (multi-media interface) display, leather seats, Xenon headlights with Audi’s signature LED daylight running lights. It also has LED taillamps.
You won’t have a problem syncing your iPhone to the A3 and, if you want, the car can become a 4G LTE internet hotspot.
A4 Cues Prominently Evident Think of the Audi A3 as the last generation A4. It’s about 7/8th the size of the present A4. In fact, at a glance, you could mistake the A3 for the present A4. Too small? Not at all in the front seat. While it might be a bit narrow for some, it has enough headroom for moderately tall drivers. The rear seating is low (to give some headroom with the fast sloping rear roofline) and there is little foot room or knee room. Clearly, the A3 is for the driver and front seat passenger.
Pricing Sweet-Spot – $30 – $35k At $29,900 base, the A3 is priced on top of the new Mercedes CLA but comes with standard equipment that is optional on the Mercedes. The base engine for the front wheel drive version is a 1.8L 4-cylinder with 170HP. When you opt for the Quattro all-wheel-drive system the engine bumps up to a 2.0L 4-cylinder turbo ($32,900). These are Audi’s EA888 series of engines. Later, a turbo diesel will be added to the lineup as will a higher horsepower S3 version.
Proliferating Bodystyles The A3 sedan is assembled in Gyor, Hungary just inside the Hungarian/Austrian border. Out of seven variants of the A3, the Gyor plant will assemble two – the sedan and the cabriolet. This is a new $1 billion investment in Audi’s presence in Hungary (where they also build the TT sports car and have an engine plant). The others will include 3-door hatchback, 5-door hatchback, e-Tron EV, Q3 XSUV and a sportback. The key models in the USA are the sedan, of course, and the Q3 crossover SUV.
Sales Prospects Audi estimates this segment – lets call it the Premium B-Segment – will sell about 75,000 units per year. For reference, the Mercedes CLA has sold a bit over 6,000 cars for the first three months of 2014 putting it on a sales rate of 20,000 to 25,000 units per year. Given that the first quarter of 2014 had dismal weather for much of the country depressing sales, AutoPacific’s forecast for the CLA for the 2014 calendar year is about 3o,000 units. The A3 is forecast to have 22,000 sales in 2014 after its on-sale date of April 3. Steady state, A3 sales are expected to be in the 25,000 unit range per year with the CLA being in the 28,000 unit range. The CLA, however, achieves its sales with one bodystyle and two levels of engine tune. The Audi arguably has to work much harder leveraging its variant proliferation to achieve its sales.
In any event, the Audi A3 is an entry that will improve Audi’s overall sales in the USA and provide an entry level product for buyers wanting fully-featured, premium brand transportation in an efficient package.
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Posted by Dave Sullivan on March 20, 2014 at 12:50 pm
You know that last time you rented from Enterprise and you were really hoping to get a Nissan Maxima or maybe even a Chevy Impala? Then you come to find out they “upgraded” you to a Chrysler 200! Yay! The Chrysler 200 and Dodge Avenger have ruled the rental car roost for years and Chrysler is finally ready to shed that image by dropping the Dodge Avenger and bringing the 200 up to competitive standards for the 2015 model year.
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Posted by George Peterson on March 7, 2014 at 9:27 am
Brilliant Ad – Controversy Worth its Weight In Gold Cadillac, once the Standard of the World, has aired an outstanding ad for the Cadillac brand and the Cadillac ELR electric coupe. It was first shown on the American broadcast for the Sochi Winter Olympics and more recently for the Oscars that aired on Sunday, March 2. And what a controversy has ensued. Cadillac’s agency Rogue created the Cadillac Poolside ad to espouse unbridled American confidence and showcase what Cadillac stands for. In the process, the spot has left leaners and right leaners sniping against each other on numerous websites. On Thursday, March 6, arch-conservative pundit Rush Limbaugh (click on the link to be taken to the transcript of the Limbaugh show about the Cadillac ad) devoted the top of his second hour to the controversy the ad has created. The Cadillac Poolside ad pushed a button that allowed Limbaugh to rant for about a half hour.
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Posted by George Peterson on March 5, 2014 at 12:52 pm
2001 Honda Insight
2nd Generation Honda Insight Fails The Honda Insight began life as a hardcore hybrid with futuristic styling. It was so revolutionary, different looking and so purpose-built it never sold in satisfactory volumes. The first Insight was a pure commuter car with extremely slippery aerodynamics. There was no rear seat and the body tapered off into a teardrop shape. The rear wheels were covered bodywork to improve aerodynamics. The Insight actually beat the Toyota Prius hybrid to the market, but once the Prius launched, the Insight was blown into the weeds. The Prius was more practical, had better performance and got competitive fuel economy. No wonder the Insight failed. After a hiatus, Honda launched the second generation Insight in 2009 as a 2010 model vehicle. While the 2nd generation Insight was a better attempt, its sales peaked at 21,000 units in 2009 and 2010 before dropping to below 5,000 units in 2013. A key aspect of the Insight is how poorly it fared in AutoPacific’s Vehicle Satisfaction Award research. The Insight was always in the bottom ten of the ratings out of more than 200 vehicles sold in the USA. Low sales and poor satisfaction do not make for a viable business case. The car simply did not meet buyers’ expectations and Honda dealers had a hard time moving them.
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Posted by George Peterson on March 3, 2014 at 4:01 pm
GM’s 2015MY Full Size SUVs General Motors has launched its new-for-2015MY full size SUVs. While you might wonder why they care about launching these behemoths when the segment has fallen at the hands of expensive gasoline, these are mighty profit generators for the General even at relatively low volumes. Last year, GM launched the pickups upon which these SUVs are based – the Chevrolet Silverado and the GMC Sierra. When they were launched these pickups were criticized because their styling was so evolutionary from their GMT900 predecessors. But, it turns out that GM planners and engineers really know their stuff and the pickups have won kudos for their capability. The Silverado was named the North American Truck of the Year.
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Posted by George Peterson on February 21, 2014 at 4:07 pm
Big Bronco to Compete With Chevy’s Popular Blazer In the late 1960s, Ford Motor Company was competing in the sport utility market with the first generation Bronco a small hardcore vehicle designed to go off road in a big way. The 1st Gen Bronco was to compete with the Jeep CJ and International Harvester Scout of its day – off-road. Today, these 1st Gen Broncos are coveted by off-roaders all across the nation. At the same time, General Motors was thumping Ford with its Chevrolet Blazer SUV. The Blazer was a two door derivative of the four door Chevrolet Suburban and sold in impressive numbers. Ford had nothing to match the Blazer, but in the early ’70s began a program to develop a strong competitor to the Blazer.
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Posted by George Peterson on February 20, 2014 at 1:01 pm
For this last Holiday Card, I included a non-holiday photo of an vehicle I worked on in my youth at Ford – the Ford Carrousel concept and asked who could identify the vehicle. A few who were working at Ford at the time correctly identified it, but all misspelled it. The prototype used an unusual spelling of Carrousel with two “Rs”. Many though it was Hal Sperlich’s MiniMax concept from the late ’70s at Ford, or a prototype of an early Chrysler minivan. Nope.
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Posted by George Peterson on February 14, 2014 at 10:16 am
Has the 2014 Auto Show Season been a bust so far? Well, with the exception of the all new Ford F-150, there has not been much to justify all the fabricated hoopla at either the North American International Auto Show in Detroit or the Chicago Auto Show. You can almost count the significant new news on one hand. In order of importance to the United States market and their manufacturers here are the most significant: Ford F-150, Chrysler 200, Honda Fit, Hyundai Genesis, Mercedes C-Class in Detroit and the Subaru Legacy in Chicago. OK, that is six significant entries. Others that might have made the list are the GMC Canyon mid-size pickup and the Lexus RC-F coupe. The Detroit Show ended up focusing on performance models or concepts like the production-ready Subaru WRX STI, Toyota FT-1 super car, Chevrolet Corvette ZO6 variant, BMW M3 sedan and M4 coupe, Cadillac ATS coupe. The only other vehicles of note at the Chicago Show were the 2015 Lincoln Navigator with new front and rear styling and the Mercedes GLA compact crossover SUV.
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Posted by George Peterson on January 28, 2014 at 3:21 pm
Volvo Growth Strategy: Tony Nicolosi, new President and CEO of Volvo Cars of North America says 90% of the senior management of VCNA is new since he took over in October 2013. Volvo’s marketing strategy is also going to change with the arrival in January of Bodil Eriksson as executive vice president of marketing and new advertising agency Grey London starting in March. Nicolosi says Volvo will return to its roots emphasizing safety, the environment and the family. The marketing budget for 2014 is bigger by about 50% but its emphasis will shift away from television to digital messaging.
Prior to becoming head of VCNA, Nicolosi was head of Volvo Finance in the USA, so he is very familiar with the leasing game. About 42% of Volvos are leased, well short of the leasing penetration of Audi, BMW or Mercedes. Going forward, Volvo’s lease penetration should increase with more concentration on more car for the payment and regular replacement. This will give Volvo dealers the first shot at putting off-lease customers into a new Volvo.
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