Its Friday, its the Vroom Room, make yourself comfortable enjoy the cappuccino and biscotti, join the conversation.
A few days ago we caught practice runs for the Indy 500, which is this coming Sunday. First thought was that they were going fast we saw speeds of 224 MPH...first blush the speeds from our perspective were high, and normal for Indy. The second thought, if anything happens at those speeds with the aero packages it immediately becomes an horrific situation.
Subsequently we see photos of cars landing in the catch fences, and James Hinchcliffe being injured. You have to wonder if the powers to be at Indy have thought it through that over 220 MPH can lead to airborne cars, and injuries. Agreed the art is to go fast at Indy. Just saying...
A fascinating interview with Rick Mears and driving at Indy.
Takata resurfaced on the various media platforms this week. How do you recall something like 34 million air bags? Many on older vehicles that have changed owners several times. If you got the impression that in Canada no one wants to get remotely close to the situation of potentially recalling and replacing over 3 million air bags...we share your thoughts.
Do you remember the onset of the GM ignition switch debacle and only 13 deaths?
If you are the owner of the Toronto Maple Leafs and can't win playing the game, have run out of options to attract a fresh paying attendance to the game. Hire a winning coach on a long term contract to bring fresh hopes and keep the money machine going.
At Kia Canada, Maria Soklis has left to join Cox Automotive in Canada. To say the least the various press releases regarding the move had some awkward timing.
The new Camaro...a little smaller, a little lighter, with a stout small block motor what else is there to say.
Think about this, adaptive cruise control has become a standard feature on many vehicles, a few years ago it was a huge novelty. It reinforces the rapid progress of tehcnology.
In case you missed our review of the 2015 Durango R/T...click.
Superlative photo gallery of the Mille Miglia.
Have you noticed the ongoing concern regarding auto loans. Consumers are getting in perhaps precarious situations with auto loans.
Agreed loans have increased appreciably during the past few years in pace with increased auto sales in Canada, accompanied by the increased participation of banks.
The old model was based on ownership and equity. Under these antiquated perspectives auto loans are out of control and are headed for a day of reckoning.
A couple of years ago, and it still resonates we shared our thoughts with Money for the Deal. As we say...we don't follow we lead, we were prescient back then as to where it was headed. While no longer subscribing to the old ownership and equity model.
Lets look at a few relevant points from back in the day:
- Financial services are an intrinsic part of the auto business. In addition to being lucrative to the providers of these services.
- Back in the day when these services were provided by "captive" (owned by the manufacturer) serive providers, the model was based on ownerhip and equity.
- The advent of leasing, especially for luxury cars (to improve the affordability) initiated a change.
- A myriad of forces constatntly trying to keep Canadian banks out of the mainstream financing upheld the conservative status quo.
The Canadian consumer enabled and empowered by manufacturers, and financial service providers has evolved from owenership to mobility, from equity to cash flow. There is no desire to own a technologically complex vehicle beyond the warranty period. With a limited desire to invest/spend money maintaining a vehicle.
Lets look at a few relevant points from today:
- Manufacturers subsidise the financial services although money is cheap, its even cheaper for autos loans and leases.
- Although the finance terms are longer, the trade cycles are a constant, as well as the monthly payments.
- Negative equity is manageable within the current parameters.
- There is an uptick in leasing penetration to alleviate the longer finance terms.
- Monthly manufacturer incentives erode the value of used vehicles.
- Manufacturers and dealers require recent model trade ins/lease return to uphold their CPO programs.
Until we view the auto business and the financial services from the old perspective of ownership and equity the current model makes little sense and is a recipe for disaster.
Under the current model of mobility and cash flow. The pressure is on the manufacturers to provide relevant financial services that are responsive to consumers. More important to uphold the trade cycle of 36 months.
From our perspective the Canadian consumer is WINNING. While the new model has generated record sales in Canada.
What do you think?
Yes...its the middle of the month.
We have been in a position to buy "premium" gas for decades. Did you notice that Shell just launched V Power Nitro + . Agreed most gas is the same premium from one brand or another is the same stuff. As well it might depend on what batch is in the underground tanks.
A few years ago we noticed that Shell V Power in our vehicles had a bit more substance, and on the highway the fuel economy was incrementally better.
We recently tried a batch of Nitro+ at first blush it has more substance. If you have an almost empty tank, your vehicle requires premium, try Nitro+ and tell us if you also notice a seat of the pant difference.
Lets be up front, you don't even want to think about it, but the occasional collision does occur, and at one time or another we have all been involved in some sort of collision. Obvious that up until its only metal its a big deal, but not a big deal. Hopefully you have never been injured.
If you are wondering who is at fault in the various situatons that can occur. Take a look at this informative article by Kanetix that includes diagrams 10 Accidents And Who Is At Fault.
Did you know, its the 60th Anniversay of Stirling Moss and Dennis Jenkinson winning and setting a record for the Mille Miglia in a 300SLR. It was a magical moment 60 years ago, that still captures the imagination today.
An impressive photo gallery of the California Mille.
Have a wonderful long week end.
We are of the opinion that CMS is not as dumb as some media and pundits would like you to believe. More important CMS is quick to adjust to the economic environment.
The Canadian economy is powered by CMS having evolved into a consumer economy.
Looking at Canadian auto sales:
We mentioned sometime ago that free flowing money was powering auto sales. Sales records are broken on a monthly basis.
Now presumably CMS is in deep yogurt with long term loans and rolling over deficiencies, and it begs the question how long can this last before it blows up?
If you remember in the good old days of leasing the question a few years ago was how long can it last before it collapses under the weight of residual risk?
The reality, free flowing money has raised auto sales to new heights that have shattered records forthe past couple of years.
While CMS is contantly evolving from an ownership to a mobility model when it comes to vehicles.
Consider the most successful manufacturers in Canada have improved, tweaked, calibrated, at times pivoted the mobility model. These manufacturers were not exclusively in the ownership model, and have successfully expanding their own mobility model.
While the pundits are waiting for the sky to fall. The Canadian Consumer is offered a myriad of monthly incentives, from competing manufacturers, is enabled to roll over deficiencies, all at a constant monthly payment.
The other Canadian Consumers that have been on the mobility model for a longer period of time simply replace one leased vehicle with another.
As the pundits have an ongoing discussion of "social media" relating to the auto business, and other pundits discuss the disadvantages of long term financing. The Canadian Consumer keeps on expanding the mobility model empowered and enabled by manufacturers and the financial services.
With increasing talk of autonomous vehicles, which consumer wants to keep any vehicle for any lenght of time?
We could keep on going...what do you think?