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Monday
Mar092015

How Many Models Is Enough?

If you have been in the auto business long enough you hopefully remember from a few decades ago the movement to rationalise the number of models that were offered by a make. At the time the rationale was the Europeans and Japanese have less models.

Back in the day, Chevrolet as an example had a myriad of models and body styles, the same for Ford, and Chrysler. The thinking was to cut back on the number of models, to stop trying to fill every minute segment of the market, while selling more vehicles, and improving profitability.

The  Japanese had dramatically less models, and were inexorably gaining ground.

Once the models were rationalised, the focus shifted to decreasing the number of platforms. When you hear that a manufacturer has gone from 15 to 5 platforms. You can conclude that they are saving money while increasing profitability.

You also remember when models had an actual name, and not an alpha numeric (alphabet soup) nomenclature. Today the names are still around, Impala, Taurus, Camry, Accord, Elantra, to name a few. While the alphanumeric also thrives and seems to gain in disciples. A few examples, 3 Series, X5, CLA250, RX300, CTS, A3 to name a few.

From a manufacturer identification most vehicles have a body/platform identification; its a B Body, a W222, and a model designator its a 7BL57, 1BP67.

If you get the feeling that the model designators are creeping as "marketing" model names that are used to identify the vehicles in the market, we agree with you.

If you get the feeling that some manufacturers are establishing a parallel model line up with even more alpha numeric identifiers, we again agree with you.

Not only do the additional alpha numeric names confuse, you have to ask if they do not also dilute.

This business that constantly pushes the envelope, 1 is good, 2 is better, and 3 might be too much; with a fine line between 2 and 3.

If you think that some manufacturers are close to, or even past the 3, be patient it will be clearer in the following months. Its the classic case of sell 10 with 3 models, sell 12 with 6 models, sell 13.5 with 8 models. The sales are increasing along the the complexity, confusion, dilution, and perhaps even values.

 

Saturday
Mar072015

1962 Daimler SP250

Informative and fascinating walk around of the Daimler SP250 that was restored by Jay Leno.

 

 

Friday
Mar062015

Vroom Room

Good Morning!

Its Friday, its the Vroom Room, come in make yourself comfortable, enjoy the cappuccino and biscotti, join the conversation.

After enduring the coldest February on record, we will hopefully get a warmer March  with spring like climate. Warmth as we all know is conducive the car sales at this time of year.

The Geneva Auto show opens this week, as you can imagine there was extensive coverage of the various press events on the interwebs. Yes...the Ferrari 488 GTB caught our attention, yes the AMG GT3 has a captivating Mercedes nostalgia look.

Our perspective on Canadian sales as of February, just scroll down.

Yes...we started doing reviews for this year, its hopefully a little warmer with less snow. As you can appreciate doing reviews in winter is challenging, especially the photo shoots. Stay tuned...

We found it interesting to read comments from some established auto journalists that for some reason still think that "someone owes them something" and are slowly realising that its a new reality. Its been a new reality for a few years.

A few weeks ago we mentioned that oil companies were absolutely not comfortable with the price of gas below a dollar a liter. You have surely noticed that gas is up to over a dollar since the past few weeks. While the price of a barrel of oil is almost a constant for the past month.

Our usual old race cars from the Goodwood Member Meeting, a superb photo gallery.

 

 

Thursday
Mar052015

February '15 - Canadian Sales

February generated spectacular near record Canadian auto sales...a Wow moment.

Lets take a closer look at the results, and while most folks compare numbers. This morning we are taking a different perspective.

2014

Its was a record year in Canada with 1.85 M vehicles sold a truly remarkable achievement.

2015

The executives at the various manufacturers in the waning months of 2014, looking ahead to 2015 are reflecting on how to improve on a record year. Its an auto business mantra that you always have to achieve higher numbers.

To make it interesting there is increased volatility in the air, with a tinge of uncertainty.

How much more do you improve on 1.85 M? At best probably a few percentage points (< 5%).

The astutes are grasping that mobility at a monthly payment is surpassing ownership.

Financial services (free flowing money) will continue in 2015.

The weak players (manufacturers) will adhere to their tried and true (stale) play book. The stronger players will need to  displace "someone" in one fashion or another to increase sales. Other players have fortresses and moats around their market segment.

Hopefully all manufacturers condensed their voluminous big data to uncover market segments with a strategic advantage.

We could keep on going but you surely grasp that for any manufacturer planning for 2015 offered opportunities and posed challenges.

Strategic Vectors

Strong Start - In the auto business its a given that you start strong, in drag racing its known as a "hole shot" a strong start in January provides an advantage and creates quick momentum. Especially with increased volatility in the Canadian landscape.

Conquer New Customers - If one manufacturer conquers another loses, need we say more.

The Migration to SUV/CUV - Which manufacturer will generate a "utilities" strategy to provide a quick start, and advantage.

February 2 Months Into 2015

Its an understatement to say that the auto business is competitive and unforgiving. If anyone misses a month its a salvageable situation. If anyone misses 2 months especially if they blinked due to a competitor its an arduous challenge and task to overcome a 2 month miss. 

"The climate was just awful in eastern Canada we held back on programs till March, watch us now." Its a good PR line to deflect reality that they are in deep yogurt.

At the end of February sales in Canada are ahead by 3% a stunning achievement especially after a record 2014, and a strong December.

Who Caught Our Attention

MerBimAu - we would have been shocked if Mercedes-Benz, BMW, Audi did not continue increasing their sales.

Toyota - made it clear from the start of 2015 that they are more aggressive.

Korea - these folks have enjoyed their windows of opportunities a few years ago, and are facing unrelenting competition.

Detroit - they are collectively waiting for March to overcome the Alberta effect.

Subaru - the niche is expanding.

Nissan - the Micra effect endures.

Honda - a serious blink after only 2 months.

VW - the momentum continues.

It will be interesting to see how March and the first quarter develops.

 

Tuesday
Mar032015

Fuel Economy Reality

404 Southbound at the 401By now you know that we have an inherent affection for V8's, and The Colonel has never owned vehicles that made a statement towards fuel economy.

Here is the deal.

We constantly hear one comment or another towards fuel economy, and for the past few months the price of gas, and anything and everything that can be mentioned in between.

If you live in a major urban area you certainly endure traffic, congestion, and taking double the time to travel any distance. It struck us that with all the talk of fuel economy, the transportation infrastructure is totally against fuel economy.

Back to the V8, the other day we travelled 32 kilometers at an average speed of 28 KPH, generating a fuel economy of 18L per 100 kilometers. There were hundreds if not thousands of other vehicles in the same situation...

The car used almost 6 liters of gas over $7.00 to crawl in highway congestion....with cheaper gas saved about $2.00 while using the same amount of time. Time is the most precious commodity.

Manufacturers have to meet fuel economy standards, which by they way have altered in favor of larger vehicles. Perhaps CMS (Citizen Main Street) uses fuel economy as a purchase or lease decision. Mind you with the rash of SUV/CUV and pick ups it leads one to question the importance of fuel economy in the decision process.

While the vehicle transportation infrastructure of any urban center is totally counter productive towards fuel economy. There is no longer a specific rush hour, now its 24/7 of heavy or congested.

If you factor in the thousands of folks that use one form or another of public transportation and park their vehicles in the various commuter parking lots. Imagine all those folks on the road with their vehicle, making a contribution towards increased congestion and even poorer fuel economy.

The fuel economy of any vehicle is dramatically impacted by the transportation infrastructure.