The discussion covers Kia's surprising rise as a top US brand with the Telluride SUV, challenges in the new and used car markets driven by affordability and shifting consumer preferences, and Carvana's acquisition of Stellantis dealerships signaling disruption in car sales. They also explore leadership changes at Stellantis and Slate, the future of Chrysler and Alfa Romeo, and the refreshed Pacifica minivan. Honda's cancellation of key EV models highlights struggles in EV development amid shifting market demands. The episode touches on Chinese automakers' global expansion, rising gas prices' potential impact on EV sales, and the ongoing challenges and innovations in the automotive industry.
"All over the Olympics. But I'm impressed by Kiya. You know, they're out selling a Hyundai, which you know you think, okay, they're out selling Honday."
Kia is a car company from South Korea that makes many kinds of cars. They used to be known for cheap cars but now make popular and reliable vehicles.
Kia is a South Korean automotive brand known for producing affordable and increasingly well-regarded vehicles. It is part of the Hyundai Motor Group and has grown significantly in market share and reputation in recent years.
"You know, they're out selling a Hyundai, which you know you think, okay, they're out selling Honday. Believe me, within the Hundai group, that is a milestone."
Honda is a Japanese company that makes cars and motorcycles. Many people like their cars because they are reliable and last a long time.
Honda is a Japanese automotive manufacturer known for reliable and efficient cars, motorcycles, and power equipment. It is one of the top-selling brands in the United States.
"You know, they're out selling a Hyundai, which you know you think, okay, they're out selling Honday. Believe me, within the Hundai group, that is a milestone."
Hyundai is a big car company from South Korea that makes many cars and owns Kia, another car brand.
Hyundai is a major South Korean automotive manufacturer and the parent company of Kia. It produces a wide range of vehicles and is known for value and innovation.
"So so basically, your your rear view mirror shows you what's behind you. Now. Now, this morning in Detroit it was gloriously sunny, and I found that when I was driving wet, a lot of the image was being burned out because of the sun, and which is not a good thing."
The rear view mirror is a mirror inside the car that helps you see what's behind you when you drive.
The rear view mirror is a mirror inside the car that allows the driver to see behind the vehicle through the rear window. It is essential for safe driving and maneuvering.
"...t not there. Chevrolet does have Tracks and trail Blazer. They have Buick has Vista and the on Corgix. So ..."
The Chevrolet Blazer is a medium-sized SUV made by Chevrolet. It is designed to be comfortable for families and good for everyday driving.
The Chevrolet Blazer is a midsize SUV that offers a sporty design and versatile interior space. It fits into Chevrolet's SUV lineup alongside models like the Trailblazer and is targeted at buyers looking for a stylish and practical vehicle. The Blazer is frequently discussed for its blend of performance and comfort.
"...ot a used car twenty seventeen, fairly high miles Cadillac ats ooh, and so we can say, like, you know, people ar..."
The Cadillac ATS-V is a fast and sporty car made by Cadillac. It is a luxury sedan built for good performance.
The Cadillac ATS-V is a high-performance version of the ATS luxury sedan, featuring a powerful engine and sport-tuned suspension. It was designed to compete in the sporty luxury segment, offering strong acceleration and handling. The ATS-V is often discussed in the context of used performance luxury cars.
"For the Detroit three to make a cost vehicle with UAW labor very very difficult to do and make a decent return, because you know, you got to go in front of the board of directors..."
UAW is a group that helps car factory workers in the US get better pay and working conditions. This affects how much it costs to make cars in the US.
The United Auto Workers (UAW) is a labor union representing workers in the American automobile industry, particularly at the Detroit Three automakers. UAW labor agreements impact vehicle production costs and profitability for automakers.
"All right, John, I got to call you out on this though. You said all the sub thirty thousand dollars vehicles are imported. The Corolla is built in the United States,"
The Toyota Corolla is a popular small car, and some of them are made in the US, not imported.
The Toyota Corolla is a compact car widely sold around the world. Unlike many sub-$30,000 vehicles, some Corolla models are built in the United States.
"Carvana has been sort of slowly over the last year buying up just one off around the country, these Stlantis, you know, Chrysler, Dodge, Deeper Am stores... you can now buy a new car, but you have to be sort of regionally somewhat close to the dealer, but you can. Everything is just as their used cars work, So you can you can order them basically do the whole process online."
Carvana is a company where you can buy used cars online without going to a dealership. They even deliver the car to your home, making it easier to buy a car from your computer.
Carvana is an online used car retailer known for its e-commerce platform that allows customers to buy, finance, and trade-in cars entirely online, including home delivery and touchless transactions. They have disrupted traditional car dealerships by offering a digital-first car buying experience.
"Carvana is specializing and selling used cars, and they've been online and their stock price has gone through the roof... you can now buy a new car, but you have to be sort of regionally somewhat close to the dealer, but you can. Everything is just as their used cars work, So you can you can order them basically do the whole process online."
Buying a used car online means you can look at cars on a website, pay for it, and have it sent to your home without going to a car lot.
Online used car sales refer to the process of buying and selling used vehicles through internet platforms without needing to visit a physical dealership. This model often includes features like browsing inventory online, financing, trade-ins, and home delivery.
""Did you look at me? Auto Nation, which started out as used car dealer, also sells new cars, and I wonder how they're doing in that space.""
AutoNation is a big company that owns many car dealerships where you can buy new or used cars.
AutoNation is one of the largest automotive retailers in the United States, operating numerous dealerships that sell both new and used vehicles across various brands.
"Speaker 6: Had been elevated to kind of run a RAM for about. Speaker 7: Six months in twenty twenty..."
The Dodge Ram is a big truck made by Ram. It is used for carrying heavy loads and driving on tough roads.
The Dodge Ram, now simply known as Ram, is a full-size pickup truck famous for its power, towing capability, and rugged design. It is a popular choice for both work and personal use, often praised for its strong engines and comfortable interiors. Discussions about the Ram often focus on its performance and role in the pickup market.
"I mean, what does she have like minivans? Minivans, minivans, And you know. I'm provan. I think we should bring back the minivan. Is the best architecture that exists. For me, I don't know why we we went away from them."
A minivan is a type of car that is big inside and good for carrying lots of people, like families.
A minivan is a vehicle designed primarily for passenger comfort and space, often used by families. It typically features sliding doors and three rows of seats.
"but I'm just thinking that there's maybe not much of a future for the Chrysler brand other than the PACIFICA."
The Chrysler Pacifica is a type of family van that many people use to carry kids and stuff. It's one of the main cars Chrysler sells.
The Chrysler Pacifica is a minivan produced by Chrysler, known for its family-friendly features and versatility. It is a key product for the Chrysler brand, often seen as one of its main offerings in the market.
"Yeah, they're refreshing it for twenty seven and they just kind of unveiled the new look. The front end is kind of the most notable thing"
A refresh is when a car gets some new looks and small updates but isn’t completely changed. It’s like giving the car a little makeover.
A refresh refers to a mid-cycle update of a car model that typically includes cosmetic changes like new front-end styling, updated interiors, and minor feature improvements without a full redesign.
"I would say for real face lift, it's very noticeable."
A facelift means the car gets some new looks on the outside, like a new front or back, to make it look newer without changing everything.
A facelift is a type of refresh where the car’s exterior styling is updated, often focusing on the front and rear ends, to keep the model looking current during its production cycle.
"and the guy points out, oh, every single one of them is a hybrid. Can't buy the Sienna. That's not a hybrid."
A hybrid car uses both gas and electricity to help it go farther and use less fuel. It charges its battery while you drive, so you don't have to plug it in.
A hybrid vehicle uses both a gasoline engine and an electric motor to improve fuel efficiency and reduce emissions. Unlike plug-in hybrids, hybrids typically cannot be charged from an external source and rely on regenerative braking and the engine to charge the battery.
"It's the whole Formulae investment. And then Alpine, which is, you know, part of Renault."
Formula One is a type of car racing where very fast and special cars race on tracks all around the world. It's the top level of racing for cars.
Formula One (F1) is the highest class of international single-seater auto racing sanctioned by the FIA. It features the fastest and most technologically advanced race cars competing in a global series of Grand Prix events.
"So DNF is still a DNF all right. Anyway, So a name that we haven't heard for a long time."
DNF means a car didn't finish the race because something went wrong, like breaking down or crashing.
DNF stands for Did Not Finish, a term used in racing to indicate that a driver or team failed to complete the race due to mechanical failure, accident, or other reasons.
"Yeah, I mean I a few months ago we saw the news from Canada that they were going to welcome Chinese automakers to sell there, I know, on a caped amount. But that's another one you're watching because there's a few plants that are kind of just not doing much."
Car companies from China are starting to sell their cars in countries like Canada and Mexico, which is a new thing and some people are worried about it.
Chinese automakers expanding into markets like Canada and Mexico represent a growing trend of Chinese car manufacturers selling vehicles outside China, often with government and union concerns about competition and production.
"So there was some research from Edmunds that I just looked at, and in twenty twenty two they did increase like the you know, Edmunds is a car shopping site, so they saw like the clicks of searches where did increase when when gas prices were up for a bit then."
Edmunds is a website that helps people learn about cars and see prices and reviews before buying.
Edmunds is an online automotive resource that provides car shopping information, reviews, pricing, and market research, often used to analyze trends like consumer interest in vehicles.
""Auto Line after Hours. It's brought to you by Bridgestone Tires, Solutions for Your Journey...""
Bridgestone Tires makes the rubber parts that go around car wheels to help them grip the road and drive safely.
Bridgestone Tires is a major global manufacturer of tires, known for producing tires for passenger cars, trucks, motorcycles, and motorsports applications.
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Speaker 1: Auto Line after Hours. It's brought to you by Bridgestone Tires,
Solutions for Your Journey, and by Borg Warner. The automotive
industry continues to evolve, and so do the opportunities to define it. Borg Warner, one of the world's most admired companies,
gets partners where they need to go. Let's do something
big together.
Speaker 2: Hey, everybody, thanks for joining us on Auto Line after Hours.
Speaker 3: Gary, you ready to do a show?
Speaker 4: Absolutely? John, how are you?
Speaker 2: I'm doing great. I'm raring to go.
Speaker 3: Is what I work on.
Speaker 4: Perfect.
Speaker 3: So let's let the audience know who we've got.
Speaker 4: Why you're rearing Yeah?
Speaker 2: Yeah yeah Kaylee Hall from Reuters. Luke Ramseth from the
Detroit News. Great to have the both of you here.
Speaker 3: Where should we kick off the conversation?
Speaker 4: Gary, So, are we gonna do the car thing?
Speaker 3: Well?
Speaker 4: We gonna do.
Speaker 3: I'll start.
Speaker 2: I was in California this week, Uh Santa Barbara. Kia
is doing the media launch of the Tell Your Ride.
They're big, full size suv.
Speaker 3: Which is kind of funny.
Speaker 2: They're doing the media launch now because they've been in dealership since January and they were advertised.
Speaker 3: All over the Olympics. But I'm impressed by Kiya.
Speaker 2: You know, they're out selling a Hyundai, which you know you think, okay, they're out selling Honday. Believe me, within
the Hundai group, that is a milestone.
Speaker 3: You know.
Speaker 2: I remember when all Kia made was cheap little cars and people made fun of them. Now they're out selling Hondai.
And this is the other thing that blew my mind.
It's the number five brand in the United States. It's Toyota, Ford, Honda,
Chevrolet than Kia.
Speaker 3: Wow.
Speaker 2: And you know, if you had even said just five years ago, you know, Kia's going to surpass Hundai and it's going to be the number five brand and that you I would have laughed and said, yeah right, but there we are.
Speaker 4: So that'd be like Mercury outselling Lincoln. Oh yeah, yeah, yeah.
Speaker 2: It'd be like Buwick out selling Chevrolet practically, But how about you.
Speaker 4: I drove a bunch of cars this week, and so I was. I was in the Pollstar fourth today, the
swoopy pole Star sedan.
Speaker 5: Does it have a back window?
Speaker 4: Does not have a back window?
Speaker 3: I shouldn't.
Speaker 5: I hated that, but I noticed that the Auto Show and I was like, very it is.
Speaker 6: It is bizarre.
Speaker 4: So so basically, as she says, there's there's there's no back window at all.
Speaker 2: Yes, and based on one of the g L brands, isn't it a rebad like a sneaker trying to remember?
Because there's another uh g LEI group car with no back window that I've been at.
Speaker 4: So so basically, your your rear view mirror shows you what's behind you. Now. Now, this morning in Detroit it
was gloriously sunny, and I found that when I was driving wet, a lot of the image was being burned out because of the sun, and which is not a good thing.
Speaker 5: Asor on them.
Speaker 4: You've been a clean and everything too, I mean just yeah, or just think about during the winter, you know, when when slush gets kicked up. I'm sure they thought about
all that. But but the other thing that struck me
was that I wear bifocals, Okay, And so when you're looking at a mirror that basically has the image rather than a mirror.
Speaker 3: It's a it's a video screen, I mean, it's place there.
Speaker 4: Yeah, So so basically you're looking at a flat surface versus when you're looking in a mirror, you actually have a sense of depth, right, so looking in the mirror is works very well, and I just found that.
Speaker 3: To be very awkward. It gives me a headache. I
don't like them.
Speaker 4: Yeah so, and I'll tell you why.
Speaker 2: Because your focal point with a mirror is deep into the mirror, as it were, whereas with a video screen it's just flat. And so when you're driving and you're
looking out and you're looking at your door mirrors and then you look at that inside rear view mirror, your eyes have to shift their focal plane and I find it annoying.
Speaker 5: I asked them at the auto show about the snow, and they said, you just have to wipe it off.
Speaker 4: So when you're driving, you have to get out wipe the thing up, driving.
Speaker 3: Off every mile there's the phone swipe on the lens.
Speaker 5: I was surprised that they were allowed to have that on the road. Honestly, I thought you might have visible visibility.
But yeah, somehow it passed.
Speaker 3: Yeah.
Speaker 4: So, another another vehicle that I was driving this week, and this will get to a point that is a story that she worked on. So I'm driving the Lexus
g X five point fifty overtrail Plus. Now what's what's
what's what's sort of interesting about this is that of all the Lexus g X five fifty models, the Overtrail Plus, which is the off road to Ish sort of one, is the highest priced. You know, so you could buy
the GX five fifty Luxury Plus and it's not as expensive, and I would think that's sort of kind of intuitive, but it just seems crazy. So the base price of
this vehicle is eighty five bucks. Now somebody must be
buying it.
Speaker 2: And yeah, now we turn to Kaylee because you just do the store story about.
Speaker 3: Affordability, yes, and might call it yeah right, Nora was here a couple of weeks ago. Well, what you.
Speaker 2: Guys really pointed out is it's just the people who were buying new cars are opting for fully loaded and upper scale ones to begin with.
Speaker 5: Yes, And I mean part of the reason being is that that is a lot of the option available, right, I mean, you can't you have to realize that we definitely have fewer more affordable vehicles available for folks to shop.
So a lot of folks who are in the bottom half of you know, income, they're going straight to US.
I know use has always been like an entry level point, but I think you know, the dealers I talked to you say, yeah, more and more, it's becoming that I won't pick on any auto makers, but I think we I think we know some have you know, really they've their offerings for the lower cost consumer are just not there.
Chevrolet does have Tracks and trail Blazer. They have Buick
has Vista and the on Corgix. So GM does have
the offerings, but if you look at some of the other ones, like we we mentioned Jeep and obviously the Jeep as Luke knows as the Stalani's reporter to try News and he can talk to you. I mean, they've
had a lot of their lineup, their lower cost lineup has gone away, and they've had a lot of more expensive offerings. So yeah, it's we took a while of
that story, and we really wanted to get to the root cause of Okay, why is this affordability such an issue?
Especially with cars? You know, it's what the second biggest
purchase you make. And you know, I was even I
was in the market last year and I was like blown away by I could get you know, I won't say them who was making the vehicle, but it was like an eight hundred dollars new three row SUV eight dollars payment a month. Now if you have childcare as
I do, mortgage, et cetera. I mean, it's just a lot.
And then on top of that, you talk about the overall cost of a vehicle. As everybody knows in Michigan,
insurance is expensive.
Speaker 6: Yeah, so.
Speaker 5: There's just a lot weighing on people's pocketbooks. And I
think a lot a lot more folks are like saying that use market looks pretty good right now.
Speaker 3: So yeah, well, I just.
Speaker 7: Wanted to say on the use market, and speaking of cars we've been driving, I just got a used car twenty seventeen, fairly high miles Cadillac ats ooh, and so we can say, like, you know, people are going to turn to the US market here, which they will, but I think when you start to dig into the US market right now, you're going to find.
Speaker 6: That it's pretty expensive there too.
Speaker 7: Like it's hard to find, you know, and I think it's really increased just in the last couple of years, But it's hard to find a car that's like low miles, single owner. That's what I've found for anything under you know,
I don't know, fifteen grand. Yeah, So I mean you
can say that's way less than your entry level new car.
But it's like there's just limited options out there right now for someone who you're really looking at to you know, make their budget.
Speaker 2: Yeah, yeah, yeah, And I think you touched on it here, Kayley.
What the auto industry has done, essentially is priced lower income people out of the market.
Speaker 3: So who's left people with upper incomes. What are they buying.
Speaker 2: They're buying full boat vehicles and so when they come off lease, because a lot of it's lease.
Speaker 3: But when they come into the market three years.
Speaker 2: Later, they're a whole lot more expensive than used cars might have been in the past. Yes, So we've got
full boat vehicles moving into the used car segment.
Speaker 3: Yeah, and it's just squeezing even more people.
Speaker 4: So Hilly, I mean, you know John is talking about Kia before. Well, Kia has a lot of vehicles under
thirty thousand bucks, yes, right, and you know you can buy a Toyota under thirty thousand. You can buy a
Honda under thirty thousand. I mean, and they have you know,
there's some variety there. So I mean, when you were
talking to these dealers, did you get a sense from them that they would like the opportunity to move more of those cars that they may not have in their showroom.
Speaker 5: More of the lower costs. Yeah, yes, I think they
would like more variety. I think Luke probably would say
the same, right. I mean, as for the dealers I
talked to say, yeah, it would be nice some specific brands especially, they'd like to have more of What's interesting about Kia is a dealer I spoke to you said that, you know, like you said, it was kind of known as like this low cost option, but the Telly write has gotten a lot of attention and he's actually seeing like luxury customers come in, so it's like the brand is sort of changing too. So yeah, I would say
overall dealers, they since the pandemic have definitely leaned more on use in many ways, right because they didn't have the new inventory, So I think they've may do with that.
But I would say yes, they would like to have options, especially the Jeep dealers I talked to you, So, yeah, they would like to have some more options, and they know that that's something that you know, Selenus is working on.
As we know, Selenus has been trying to come back from the difficulties it saw was that last year.
Speaker 6: Twenty twenty four, Yeah, last two years.
Speaker 7: Basically, I was at the Big Dealer Conference a couple of weeks ago, and this was like a really big through.
Speaker 6: Line there, just like this issue of.
Speaker 7: We need more options, especially going into kind of like a little bit of a moment of kind of economic uncertainty right now, we really would like some some lower level options. And the message there was too, you know,
like if you can't whatever you're selling, if you can't get it new, whatever brand you're selling, then stock up that use lot.
Speaker 6: Was kind of like right through live you know, like, really think about stocking you use a lot right now.
Speaker 7: So it's definitely some dealers are thinking about and I think and I think all the automakers right now are increasingly really trying to figure out, how do we come in with some lower level like twenties.
Speaker 5: Yeah, because they've been making like really good profit off of selling these much you know, bigger, techier vehicles, so it's hard to not want to do that, I guess continuously.
Speaker 2: Well, it's even more than that, it's they don't want to lose money on cheap cars, so you know, all the inexpensive of the sub thirty thousand dollars vehicles we've been talking about.
Speaker 3: They're all important, you know, and.
Speaker 2: For the Detroit three to make a cost vehicle with UAW labor very very difficult to do and make a decent return, because you know, you got to go in front of the board of directors and say, hey, I need a billion dollar or a two billion dollar investment to do this new vehicle, and they go, great, okay, we'll kind of return what we get on that investment.
I have to tell them, well, actually we're not going to get any return on it, and then they're going to say, sorry, you don't get the money.
Speaker 5: Yeah, And that's a good point. The Chevy, the Tracks,
the Trailblazer, the Buick models or Plus models are made in Korea. So I'm sure that's for a reason, right.
Speaker 2: Right, That's exactly why I you know, I'm trying to track it down. My guess is the Detroit Three are
paying their UAW workers forty thousand dollars more a year than other none union workers in the US.
Speaker 3: So that's my estimate. I'd like to see some hard
numbers on it.
Speaker 2: Nobody wants to talk about it, Nobody in the industry, nobody at the autumn akers and then compare that to South Korea or Mexico or China, and the gap is even bigger. So I think that's that's one of the
things that they got to come to grips with.
Speaker 4: All right, John, I got to call you out on this though. You said all the sub thirty thousand dollars
vehicles are imported. The Corolla is built in the United States,
the Pacific is built in the United States.
Speaker 5: Mary's Ohio.
Speaker 4: Yeah, No, it's liberty.
Speaker 2: So how much less do Honda and Toyota pay their line workers in the US compared to a UAW world.
Speaker 5: You're bringing us back to the negotiations time.
Speaker 4: How much more satisfied are the workers at Toyota in Honda than their colleague?
Speaker 2: Oh?
Speaker 3: I think they are so.
Speaker 4: Yes, So we all talked dollars and cents, but there's more to no.
Speaker 3: No, Yeah, you're.
Speaker 4: So g John. You can do it here, right, Yeah,
you can do it.
Speaker 2: But what I'm saying is, if you're paying what do you have in your plan at least two thousand workers, and you're paying each and every one of them forty thousand dollars more in Michigan than what Honda pays them in Ohio, the state next door.
Speaker 3: How do you compete.
Speaker 7: I think that you're just on that pay disparity. I
think you're onto something there. I do think that in
terms of just to hourly pay it. In some cases
it's a little bit. There's a gap, but it's probably
a little bit closer than you might think, just because of in the last couple of years, the UAW taking a run at the south, so you saw some kind of adjustments there that brought them a little bit closer to being in line, which kind of was was an effort to.
Speaker 3: Yeah, I don't think they closed the gap.
Speaker 2: They think the gap right, And you know, I'm not just talking wages, I'm talking all benefits and profit hearing.
Speaker 3: You also have to look at absenteeism.
Speaker 2: You have to look at app uptime, you have to look at lines of demarcation and wark rules. So it's
it's not just you know, what's your hourly rate, it's it's the whole ball of all in labor cost.
Speaker 5: Yeah, those are numbers that we will look at again very you know, a couple of years from now.
Speaker 4: But that's right.
Speaker 5: I try to forget them after the negotiations are done.
Speaker 4: That's right. It's sorry to Ohio. It isn't East Liberate,
It's in Greensburg, Indiana. So okay, Midwest Ohio. That you're
okay rooting for it, but.
Speaker 6: Good fact check.
Speaker 4: Well talking about Stilantis. So there's a lot going on there, Luke,
give us, give us.
Speaker 2: Let's talk about the story that you had in today's paper of Carvana is buying the Lantis stores.
Speaker 6: Yeah, you take it from there. What the hell is
going on?
Speaker 7: Fascinating because it has I think loan under the radar a little bit.
Speaker 1: Uh.
Speaker 7: Yeah, Carvana has been sort of slowly over the last year buying up just one off around the country, these Stlantis, you know, Chrysler, Dodge, Deeper Am stores.
Speaker 2: And and now for those viewers who because we have a global audience here, Carvana is specializing and selling used cars, and they've been online and their stock price has gone through the roof end.
Speaker 3: I mean, they're they're just taken.
Speaker 6: Prisoners, right, So they've they've started to do this.
Speaker 7: Frankly, they've said very little about it on earnings calls or otherwise. I think the most their CEOs said is basically,
you know, we're kind of experimenting a little bit here, but they but they really haven't said much, but but clearly they're they're kind of you know, they're they're testing things out, maybe a little bit on the new car side.
I mean, this isn't a huge play for them. It's
not like they bought twenty stores or something like that all in one run.
Speaker 2: I know. But when a company that specializes and used
used online sales buys new car dealership franchise, exactly, Oh, something's going on.
Speaker 7: It's interesting. And so this is this is they are
selling these online. It's kind of all running through their
main website, just as you would buy a used car on carvona dot com. You can now buy a new car,
but you have to be sort of regionally somewhat close to the dealer, but you can. Everything is just as
their used cars work, So you can you can order them basically do the whole process online.
Speaker 6: You can have them ship it to you.
Speaker 7: Looks like a lot of these will ship for free, even if you live pretty far from the store. So
just some interesting dynamics here. And uh, and this is
kind of rattled some stillanis dealers. It seems like because
i mean, carvan has has has already been a bit of a disruptor in the industry. Uh, and I think
this is this is continuing that and dealers are kind of looking around.
Speaker 6: Saying, well, you know, what are they up to here?
Speaker 4: So, yeah, do you think it goes to your point about your popularity? I've used cars. This gives Carvana some
money whereby they can do this testing.
Speaker 5: I mean, yeah, I probably And I think that I know a lot of Slanni's dealers who were wanting to get out of the Stalana's business. So it's not surprising
that they might have sold off their dealerships, right, I mean, I know you've talked to those folks too, that this is the frustration of like I mean the one I remember, yeah to cut like lay off all of his staff and finally just kind of said no, this is enough, is enough, And you know, because they weren't making any profit and sold a dealership. So it's not surprising that
it's Stillana's first. But I'm sure that I mean, what
did Carbona say. I'm sure that they expect maybe this
could grow for them.
Speaker 7: It's not they haven't really talked much about it. But
but yeah, the idea is that this is uh with these with this particular company. For them, I think they
view it as an affordable way in to this new car market to kind of experiment here a little bit.
Speaker 2: Uh.
Speaker 7: And they haven't talked any you know, said anything about trying it with other brands.
Speaker 6: But but surely you could imagine.
Speaker 7: I mean I had a few people mentioned to me like there's some other you know, companies, automakers, maybe they that would that would be appealing to them, and vice versa.
If Carvana can grow volumes at some of these stores, like for example, maybe a Nissan or something like that, is.
Speaker 4: This going to be labeled as Carvana.
Speaker 6: Or still they are are labeled as Carvana. With the
Chrysler and Dodge.
Speaker 3: See that that's going to give Carvana a lot more name exposure.
Speaker 6: Definitely.
Speaker 4: Did you look at me? Auto Nation, which started out
as used car dealer, also sells new cars, and I wonder how they're doing in that space.
Speaker 7: Yeah, I mean they're they're huge, and that's I mean, I think they have a ton of new car stores.
I do so, so Yeah, I think We've seen this sort of different iterations of this type of disruption before, but maybe Carvana is viewed as a little bit of a next level, next.
Speaker 6: Tier of it.
Speaker 4: So is just because they have those glass towers that your car in large coins dispensive, Yeah, your car, Yeah.
Speaker 3: Speaking of were sticking with it.
Speaker 2: Chris Fuel who had been the CEO of the Chrysler brand and I guess was running Alfa Romeo in the US.
Speaker 3: And decided for a period tune right, But so what have you uncovered on that or anything?
Speaker 7: I mean, I don't have a whole lot of kind of reporting her intel and just what exactly led up to her departure. She had been with the company for
a while, as you said, Gary, she had been with Uh, she.
Speaker 6: Had been elevated to kind of run a RAM for about.
Speaker 7: Six months in twenty twenty four, Uh, Tim Kiniskus came back, who's now the CEO of RAM and kind of oversees the other brands, and then she moved back to just overseeing Chrysler and then picked up Alfa.
Speaker 6: Romeo in North America.
Speaker 7: Now you've got Matt McLear who has been the Dodge CEO, is going to now kind of take those two responsibilities to Chrysler and Alpha Oversight And Slanus hasn't said much kind of about you know, she just said, you know, this is a personal thing. She's decided to depart, but
they also it's it's a little bit unclear kind of what's going on here. What I would say is that
it's sort of the latest example of I think CEO Antonio Felosa continuing to shape his team a little bit here too. I mean, he's he's been sort of gradually
making some leadership adjustments globally since he took over last June.
And I'd say, I would I think this is kind of another example of that.
Speaker 4: Is it's just possible that she wants to sleep at night and know that, you know, being in charge of Chrysler may be one of the most thankless jobs in the industry.
Speaker 6: Absolutely.
Speaker 5: I mean, what does she have like minivans?
Speaker 3: Minivans, minivans, And you know.
Speaker 5: I'm provan. I think we should bring back the minivan.
Speaker 4: Is the best architecture that exists.
Speaker 5: For me, I don't know why we we went away from them.
Speaker 2: Well, and we could talk about the New Pacific in a minute, but I want to stick with Chris Yell leaving because I'm trying trying to read the tea leaves here what's going on, and I'm wondering, you know, Felosa has got his hands full, right, and they've taken this massive EV right off. Was the future Chrysler EV part
of what got canceled, And so Chris Yuell is thinking, wait a minute, we were going to expand the line and now I'm just going to be selling minivans. And
I think she had Alfa Romeo too, and I mean, boy, there's a brand that is kind of dead on arrival, at least in the American market. So maybe she looked
at you know, I've got this moreribund brand called Alpha that's only really got two products to sell and sales are going nowhere. And now we've got this mini van
and that's so maybe it's a good time for me to go spend more time with my family. I don't know,
but I'm just thinking that there's maybe not much of a future for the Chrysler brand other than the PACIFICA.
Speaker 6: I think, yeah, you might very well be onto something there.
We might look back in it year or so.
Speaker 7: I mean, there was a lot of talk of a crossover coming from Chrysler, I think fairly soon, but there's really been not a lot of kind of chatter about that of late.
Speaker 6: I don't know the current status of that.
Speaker 7: There is this refresh Pacifica, and there was even kind of some talk of some additional product there.
Speaker 6: Down the road.
Speaker 7: I know they have kind of quietly floated a really affordable option speaking of kind of the sub thirty range, but I don't think that's right around the corner either.
And then to your point on Alpha too, I mean, that's a brand that has not seen a lot of investment there, and both those brands have been the subject of a lot of rumors, I would say, over the last couple of years about whether whether they might continue on kind of long term at all.
Speaker 4: So, so, so what do you think? So we were
talking about AutoNation a moment ago, and who runs AutoNation Mike Manley, who used.
Speaker 3: To run Stilantis.
Speaker 4: So what's the what's the possibility that Chris Fuel shows up at Carbana?
Speaker 5: Oh boy, I don't know.
Speaker 4: Yeah, very interesting. Yeah, So you mentioned the Pacifica. So
they're they're refreshing it.
Speaker 7: Yeah, they're refreshing it for twenty seven and they just kind of unveiled the new look. The front end is
kind of the most notable thing that I think is radically different.
Speaker 2: I would say for real face lift, it's very noticeable.
Speaker 6: Yeah, I'm curious what you guys in the world.
Speaker 4: In Botox, John, It isn't that different.
Speaker 7: I wouldn't say, like a ton of other changes, some some safety updates, some minor changes to the interior, and then this is maybe.
Speaker 6: Viewed as a little bit of a minor thing. But
they're in theory.
Speaker 7: Like the last two years they kind of had two vehicles Chrysler did and they were like the two minivans, the Voyager and the PACIFICA. Now they're just kind of
going to call it all the PACIFICA. So this like
base level trim that was the Voyager that's going to look different, like the old version will continue on.
Speaker 6: It'll just be called the PACIFICA if that makes sense.
Speaker 5: You'll never tell the difference anyway, So they use.
Speaker 4: The old tooling for the front end of the.
Speaker 7: I'll still kind of live on in this PACIFICA LX, I guess, but yeah, I don't know.
Speaker 6: What did you guys think of the refreshed front end on that.
Speaker 2: I thought it was good because it's distinctive. You know,
anybody who looks at her go what what what's that?
And it doesn't look like an updated PACIFICA. I'm strictly
speaking about the front end, and it's got more of an EV kind of styling or even some of the stuff that you're you're seeing which may not be a good thing, or or some of the stuff that we're seeing out of China. And what I'm getting at is
it looks very modern, very current. So I think that's
a good move on that part.
Speaker 4: So so I was very surprised that I didn't realize that the p have is gone now.
Speaker 6: And the jeeps ps are gone.
Speaker 4: So how is how is the discussion over there now that hybrids are popular and they're getting rid of them.
Speaker 6: That's a good question.
Speaker 2: You know, the hybrids are popular, not necessarily plug in hybrid.
Speaker 6: Right, That's that's a key thing.
Speaker 7: And that's I think what stillana Is pointed to when they recently, just a couple of months ago, decided to ask all of those was that we realized where this is going, which is which is mild hybrids, and that's what they're rolling out with the with the new Cherokee, and I think they have some more plans there. Another
complicating factor for all mostly more on the jeep side, than the christ of PACIFICA plug and hybrid side was just that they had they had a lot of issues with them. There was a lot of big, big recalls,
and there was some concerns about battery fires and.
Speaker 6: And so I think that was maybe play a role.
Speaker 3: I'm sure it did.
Speaker 2: But I think even if there had been no recalls at all on those vehicles, probably wouldn't have because I don't think they were Look, you do a p have you add a lot of cost and complexity. I don't
think they were getting the pricing to cover that.
Speaker 6: Those were.
Speaker 2: Compliance products to qualify for zeb states.
Speaker 3: And that requirement is gone. So all right, so let's okay.
Speaker 4: So, so although the Pacifica is still the number one minivan one d and twenty six thousand last year, is.
Speaker 5: That because it's one of the only or no.
Speaker 4: Well, so the Toyota Sienna second one hundred and one thousand last year. So you're interested in buying a new
minivan and you go into your Toyota dealer and you say, oh, that Sienna looks pretty nice, and the guy points out, oh, every single one of them is a hybrid. Can't buy
the Sienna. That's not a hybrid. They say, well, okay,
thank you, I'm going to go look at the Chrysler dealer because I know that there they invented the minivan.
So you go to the Chrysler dealer and guys, Pacifica we have and you say, well, I was just at the Toya dealer, and you know they've got a hybrid.
You're able to say, I've got a plug in hybrid.
That's even better. Just think of how many medals you
can drive with no gasoline. Pure electricity costs a little more,
but it's a far superior vehicle. Now they can't make
that argument true. But that was because they were afraid
that people would say, oh, it's bizarre technic. Sean said.
They didn't call it a plug in hybrid.
Speaker 3: They didn't even call it a hybrid. Are they called
it a hybrid?
Speaker 4: Oh okay. So I just I just think that that's
a bad timing decision to get rid of that.
Speaker 6: I think they were reasonably popular.
Speaker 7: I mean, the Pacifica plugins were sold decently well the last few years.
Speaker 2: So and pro master City they're bringing back a smaller commercial van.
Speaker 7: That's right, which is and I didn't know this until until I went to this media event a week ago or so. But there did you guys know, there have
not been any small commercial vans in this market for a few years.
Speaker 3: There used to be five of them, and I thought everyone left the market.
Speaker 2: Yeah, the Forard Transit connect. There was the Mercedes Metriss,
There was a Nissan Nissan and NB two hundred Chevrolet had a rebadged version of that what I mean, miss on.
Speaker 3: There was another one.
Speaker 2: I don't know well anyway, Oh oh, and there was the h of course Master City and they all went away.
And I didn't realize this before. You know, your fuel
economy class that you are measured for your fuel depends on the footprint of the vehicle, which is wheelbase times track, and all of them fell in uh sort of the small car footprint, which counted against their pass car fuel economy standard and which dragged them down. I mean, they're
commercial vans. They don't get as good a fuel economy
and so that's why when the RAM people thought, hey, we have a chance to bring one back because we have a longer wheelbase one in Europe that bumps it up a class in terms of fuel economy. So it
opened the door for this thing to come. But I mean,
this has got to be a program they were looking at two to three years ago, i e. Before any
of the tariffs hit. This is going to be imported
from Turkey, and I'm sure that upset those plans a little bit, but obviously they're still going forward with it.
Speaker 6: Yeah, I don't know. I found it fascinating they're doing
it now.
Speaker 7: But I do see that maybe there is a nice opening for them in that space right now. I mean,
if you're that certain business that needs a nice little work fan, right now, you just don't have a lot of options. And I think the pitch, as Ram made
it last week, was like, right now, if you want something new, you've got to go for the something pretty chunky. Yeah,
you got to get a Ford transit. You got to
get the current pro Master, which is like a lot bigger.
Speaker 2: So right, No, they said it's a it's wide open space right now. They said the tam the total addressable
market was what like three or four billion dollar potential.
I'm not sure they're going to get that, but it shows there's room to sell.
Speaker 4: Okay, do you honestly think that Ford, which still sells the trains to connect in Europe in vast numbers. You know,
here's a company that that basically has made its bones on trucks, right, more than more than anything else in memory.
If if there were such great opportunities, don't you think they would have something in this market that's smaller than the transit.
Speaker 2: I think this is going to be one of the models off the UEV platform. So that that's my surmising.
As we've talked about on the show. You know that
there's going to be multiple models off that platform in that plant. I think a commercial, small commercial van.
Speaker 4: Small commercial electric vand yeah, so I noticed that Bollingert Lartstown Motors arrival New Yeah, every single one of them.
Speaker 6: John, I know you're thinking they're gonna wait, they're going to hold.
Speaker 7: Off on doing anything until until they can do it in that plant, make it all electric.
Speaker 3: All I'm saying is they need multiple models.
Speaker 2: You know, EV's aren't selling that well in this country, right, so you cannot expect this little pickup that they're going to come out with to sell two hundred thousand. That's
that's Ford knows that. So their idea is to build
up to five different models in that plant, off that platform.
I think there might be a hot hatch. There's definitely
the pickup. I think there's going to be a van.
There might be a said, I'm not sure what all of them are. Something something fire truck. Hey, we got
to take your quick break right now for a shout out to our great sponsors. We're going to be talking
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Speaker 2: All right, we're back talking all things automotive here. I
got a question for Kaylee Hall. Yes, we're earlier talking
about Chris Fuel leaving Chrysler leaving Stilantis. I should say
we also saw at Slate another Chris Chris Barman CEO has sort of been demoted to president and they're bringing in some other guy. I go to look at his name, Uh,
Peter Pharisee as CEO.
Speaker 3: What do you make of that?
Speaker 5: I was kind of shocked because I thought, you know, you're kind of pretty far along in this process and have a new CEO, so it's an interesting choice. And
I don't know much about him. I know Chris. Everybody
really likes likes her, and she has a good reputation.
I interviewed her last year when I wrote about Slate coming out, and yeah, I mean their concept is interesting.
You know, you have to pay for everything. In fact,
I got in the truck and I went to put my elbow down and there wasn't a There wasn't anything there.
You know, you have to buy that. So it's it's
truly like a blank slate, and so you get to make it how you want. It's an it's a cool concept.
I think at the end it might be a little more expensive than than what they're suggesting, which I think is like under thirty thousand, or about thirty thousand.
Speaker 3: We keep talking mid mid twenties.
Speaker 2: Yeah, so you know, you know, in automotive parlance, mid twenties could be twenty seven thousand.
Speaker 5: Yeah, it could be twenty nine yeah, nine nine nine, So yeah, it'll be you know, we just briefly mentioned the and I know that Luke was covering the bowl Enger story. You know, ev startups have a difficult time,
and you know they have the backing of Jeff Bezos and so I think, you know they have a good backing.
But we'll see how how things lay out there. The
Automotive Press Association, she is supposed to have an event with them coming up.
Speaker 2: So and you're the president and the president, so have they called you and said Chris is not available or we want to hear that.
Speaker 5: We're waiting to hear some more from them, so I'm hoping we hear soon. But we were scheduled of an
event within the spring, so keep keep a watch out, and if you're not an APA member, be showing.
Speaker 6: So.
Speaker 4: I mean, what's interesting about the new guy though, is he's a former VP of the Amazon marketplace. So it
seems that maybe the powers that are think, okay, she's she's she's more of a technical person who will be the president of vehicles and we'll get this guy in who's going to be able to move the I would say metal, but it's a plastic vehicle, so it'll be moving.
Speaker 5: The plastic again. Interesting concept. But yeah, I kind of
thought the same thing that they wanted maybe some somebody with more of like a financial business mind in that role.
But yeah, it was it was interesting for sure to see that headline.
Speaker 6: Yeah, I don't know, I thought it was.
Speaker 4: Yeah.
Speaker 7: I think it's noteworthy that she's not leaving, she just is moving to this other product center position, which.
Speaker 6: Maybe is maybe more of her wheelhouse. I don't know.
Speaker 7: I know they're kind of in the midst of this setting up this Indiana factory, which I'm sure you're all interested to see how that looks here in a little bit.
Speaker 4: Yeah, so I think remember how many times you've had Bollinger in here. They brought vehicles in here, and Robert
Bollinger came and gave us the origin story of the company, and we lived through that whole lifespan of that company.
Speaker 7: I do think that Slate is kind of I mean, what are the other examples of EV startups right now?
They're still kind of plowing ahead other than Slate. Yeah,
I guess there's the big, big players.
Speaker 2: But look, you need deep pockets. You need to investors
through really deep pockets. So Lucid's got the Saudi foreign
investment fund or sovereign investment fund.
Speaker 3: You know, Rivian had a bunch of cash and now.
Speaker 2: They're getting billions from Volkswagon for their their zonal electronic architecture.
They've got Amazon van sales that have kept them going, and yet they're burning through cash, and so is Lucid burning through cash. The one thing that I've always admired
about Slate.
Speaker 3: Is I love their approach. It's so basic plain.
Speaker 2: You know, go find an old band and building and make that the factory. Don't spend billions building a new one.
Speaker 3: You know. I like their approach.
Speaker 2: And obviously with Bezos and there's actually a couple of other billionaires who really started the company. I think Bezos's
connection to them is very arm's length. But when you've
got at least three billionaires that are willing to put money into the company, that bolds bodes well for their longevity.
But as I keep saying, they're they're a little pickup in their little suv. I mean it's essentially the same thing,
right with a roof cap. Yes, that goes on the
pickup bed. To make it an suv. They need more models.
Speaker 4: You buy that cap with the arm wrest.
Speaker 2: Yeah, Yeah, they need more models, just like Ford with the UV or Ford's looking at, you know, five models in that plant.
Speaker 3: I think Slate's got to look at the same sort of thing.
Speaker 5: Yeah, that's what I did this round Slate last year.
And that was what the experts I talked to was Sam billsmid which I think we all know him, and yeah, and he said, yeah, they need more option, you know, so maybe once they launched, you know, the.
Speaker 3: First one launch up at a time.
Speaker 2: Absolutely, you don't want to try to do too much all at once. Yes, certainly as a startup.
Speaker 4: So there's another Stilantis thing that just came out today that shell May and shaping Is are talking to them, And so what do you make of that situation.
Speaker 6: I guess I'm not totally surprised. I think we've seen.
Speaker 7: A few automakers recently kind of at least have conversations on partnerships.
Speaker 6: I don't really know a lot about.
Speaker 7: The specifics of this particular you know, the talks here other than what I've read, but I guess I'm not I'm not at all surprised that Stillanis in particular is is exploring this. They've already they already have a partnership
JV with Leap Motor in Europe, and actually they're they're they're starting to sell them, I believe right now in South America, I think too. So in some ways they're
kind of ahead of the game a little bit on this whole idea of you know, let's partner with the Chinese OEMs in some of these spaces where it makes sense.
Speaker 4: So I mean, the I mean, what I read from Bloomberg, it seemed sort of nebulous what the situation would be.
But I mean, the only brand name was Maserati that came up, and I was wondering, is it possible that they may be talking to the Chinese companies and saying, you know, why don't you buy this brand?
Speaker 6: I mean, it's certainly possible.
Speaker 7: I do think that the chatter around, just speaking generally, like the chatter around stillanis is and has been. As
you guys, I'm sure no, like there's a lot of brands.
Are we going to keep all these brands going forward?
Speaker 6: And you know, I.
Speaker 7: Guess Antonio Felosa, the CEO, has not said a whole lot either way. I mean he was asked about at
the auto show and he didn't he didn't. He was
kind of non committal on the US on a couple of the US brands like Alpha, their futures. So yeah,
I think that's that's possibility, but I don't know that for sure.
Speaker 2: Well, you know, Europe's a basket case for the mass manufacturers, it really is, and it's getting worse, and they've got excess capacity, and the Chinese are coming in, and I'm sure the EU is saying, look, we really don't want you guys to come in here and build new plants.
You know, why don't you take over existing plants. And
you've got somebody like Antonio Filosa is going, Man, I got a lot of excess capacity and I need money, and I could see the two going together. And yeah,
if I were Felosa, I'd be figuring out how I could offload Maserati. It's a basket case. It's losing money.
They've thrown a lot of investment into it. It hasn't
worked at all. But if he tries to kill it,
or tried to kill Alpha, the Italian government and the Italian people would be after his hide. I mean, he
would be persona no grata. And I don't think any
their headquarters, so that the Yeah, I know CEO has got to make tough decisions, but at the same time, I mean that they wouldn't be able to sleep at night too.
Speaker 3: You know, this weighs heavily on them.
Speaker 2: So if you could say, okay, we're offloading mass Rot, we're not killing it. We have found somebody who's going
to keep the brand going, I could see that happen.
Speaker 6: And it's appealing.
Speaker 7: I mean, it is an appealing name, certainly from from the from the flip side, right, like it's a you know, they've long made very sexy cars, so yeah, that's right, being appealing to some Chinese company.
Speaker 2: In fact, that this is where I got to bring up Formula one Gary, because there the rumors are out there that B y D is interested in getting into Formula one, and now the rumors are spreading that maybe it would buy the Aston Martin Formula one team. Because
Lawrence Stroll, the guy who.
Speaker 4: Uh owns Astin, well.
Speaker 2: He's had to sell chunks off of it. But you
know what, I he's he can't believe how much money he's had to put in there.
Speaker 3: It's not working at all.
Speaker 4: Great investment, I understand. It's the whole Formulae investment.
Speaker 2: And then Alpine, which is, you know, part of Renault.
Maybe that's something else because ever since Luca Demeyo has stepped away from Renault, the new guy provos. I mean,
one of the first things he did was kill the Formula one engine program. So silly man, maybe sell that
to the Chinese. And I'm sure the Chinese would love
to get into F one.
Speaker 4: You know, you know what, I thought it was interesting sticking with the Chinese. I won't I won't talk about
the results of the Cadillac team. I won't talk about
the Oh, I'll happily talk Yeah, I know you'll happily talk about it because because you can't lose. If they
had come in first, you say, well, magic, And if they had come in dead last, you say, I said that they'd come in last.
Speaker 3: Yeah.
Speaker 4: So DNF is still a DNF all right. Anyway, So
a name that we haven't heard for a long time.
You used to be one of the one of your one of your guys, le shue Fu.
Speaker 3: Yeah.
Speaker 4: So when I was looking at this, this possibility of the Chinese doing something with Stilantis and I you own something.
He also owns nine point six nine percent of Mercedes. Yes,
so the guy who starts Jili. You know, ten percent
of Mercedes is owned by a Chinese guy, right, So clearly in Europe this is not an unusual phenomenon.
Speaker 5: Yeah, I mean I a few months ago we saw the news from Canada that they were going to welcome Chinese automakers to sell there, I know, on a caped amount.
But that's another one you're watching because there's a few plants that are kind of just not doing much.
Speaker 3: Right Slants, Rampton Plants number one.
Speaker 5: So I know that there are union officials and there's government officials who are concerned about that and have stressed that, but it's going to be And we had a sort of I think it was a few weeks back or last month, yeah, last month on moving into Mexico, and I didn't realize like fifteen percent of the market in Mexico is Chinese automakers.
Speaker 2: Might even be higher than that, might even mean, well, if you count the GM Chinese made imports, I want to say it's over twenty percent.
Speaker 4: Yeah.
Speaker 5: Yeah, So you see this like creeping in and I think it does sort of feel like it's inevitable that we'll see more of those options.
Speaker 4: So do you think that the Chinese would build or I mean, or take over a factory or just send some of their excisse capacity to Canada.
Speaker 5: I mean, they definitely have excess capacity that they probably just want to unload there, right, But I guess that depends on what the government is willing and the automakers who own those facilities are willing to do, right. So
I don't know, it's uh, I'm just I just know that they're in Mexico. Are also facilities that are just
saying it out. So the Nissan facility was the one
I think that they were just talking about purchasing. So
I definitely watching closely on on how these things move forward.
Speaker 7: I just just a side note on kind of the Chinese growth in Mexico and now coming in Canada. This
is maybe it was news to me, Maybe you guys were already aware of this, but I just thought it was interesting that so quite a lot of the Chinese influx of vehicles in Mexico in particular are not EV's there.
They're gas powered vehicles. They're not even necessarily uh plug
in hybrids, and so I just I just want to underscore that because I feel like so much of this conversation is always about EV's evs, EVS, including when and if they eventually come to the US and and down there it's been I guess, more and more gas cart these cars.
Speaker 3: So no, that's right.
Speaker 2: I mean, Chinese are very good at ice power trains.
There are prices you can't beat them, and they definitely want to sell more cars outside of China because with the price war going on at China and almost none of them are making money, they can take that same Chinese car, sell it in Mexico or Europe or South America or wherever and make a decent profit on it.
So they're keenly interested in getting into new markets and growing that way. Plus we've just seen for the first
two months of the year, sales in China new cars have taken a noseedive, and I mean, you know, like I want to say, twenty three to twenty five percent down.
Speaker 3: That's a big drop.
Speaker 2: And so the only thing that's keeping the industry healthy right now is exports. And you know, even EV sales
new energy vehicles, which includes all the plug ins e revs and phebs, even they dropped something like ten percent.
Speaker 3: So.
Speaker 2: That's all the more motivation for the Chinese automakers to try to find new markets.
Speaker 4: So, speaking of electric vehicles that we've seen but won't see, Honda announced that Honda HQ in Japan, So the Honda zero suv, the Honda zero Sedan and then the accurate RSX all of them killed.
Speaker 3: That is stunning and stunning.
Speaker 2: So at last year's CES, Kanda made a big splash about those vehicles, I mean it was there. They're big
news at the show and talked all about this And.
Speaker 6: Haven't they promoted it for multiple years there?
Speaker 2: Yes, yes, yes, they have, Yes they have, and they had what a sixteen billion dollar Well they're saying that over over.
Speaker 4: Years it will be that high, but within this fiscal year it'll be from five to seven billion dollars loss just.
Speaker 2: This, which is about as much as GM has written off so far, right, and it's a much bigger company than Han.
Speaker 4: That's the problem. So they were saying that this is
quoting them. Profitability of Honda automobile businesses currently declining due
primarily to one the unfavorable impact of changes in US tariff policies on the gasoline and hybrid vehicle business, and two they declined in the competitiveness of Honda products in Asia due to the impact of the allocation of more resources to the EV development. So basically what they said
was that they thought that their EV business would be funded by their ICE in hybrid business, but now their ICE in hybrid business is taking a hit, that funding isn't there. Then they're saying that in markets like China
and the other Asian countries, that those countries are more interested in what software defined vehicles and that Chinese vehicles, And they're admitting that we were spending so much time concentrating on the electric vehicle part of it and not paying attention to when we had Mark Wayfield here talking about how you know, the Chinese customer just wants screens and wizzy things going on in the car and they don't care about ride and handling and those sorts of things.
And Honda saying we didn't invest in that sort of research.
Speaker 3: Which is an astonishing admission.
Speaker 2: I've never seen any automaker come out and essentially say, yeh, we screwed up.
Speaker 5: No, so maybe the anitient switch they admitted General Motors ad minuted they screwed up.
Speaker 4: How many years did it take for them to to come to that conclusion that here's this guy who mebe who has to come right out and say, you know, and and if you read the guy's statement, I mean it's it's one of the most astonishing statements I've ever read from a CEO who's explaining why they lost a lot of money and the decisions they had to make.
And you know, you could you can look at some of them and say, you know, that's just that's just corporate spin to this thing. But you know, you just
the way he emphasizes this and isn't isn't hiding at all that Yeah, we screwed up.
Speaker 2: Yeah, no, this is a deep pole that they've got to climb out of. And remember they had a joint
venture with General Motors to develop EVS poof that went poof.
Then there was all this talk that they were going to do things together with Nissan that never materialized. I
wouldn't be surprised if Mebay's on the phone dialing around the world saying, hey, who wants to join venture with us?
Speaker 3: They need a partner.
Speaker 7: What did you think of those you know, when you got to see them at CEES, What did you think of those those products? And where you, Yeah, I don't
know where you did? You do you understand kind of
where they were headed with them originally.
Speaker 2: I've always said that when a company introduces a new design, it should be edgy. It should make you a little
bit uncomfortable, because in a couple of years time, you're going to get used to that design. And we see
that happen a lot. But I still have not warmed
up to those designs.
Speaker 7: Yes, I was gonna say, there's still a little too ungainly to my eye.
Speaker 4: So so what's going to happen to the AFILA, the stony Honda collaboration on the highly expensive electric vehicle with a giant screen.
Speaker 3: Well, at least they do have a partner on that.
Speaker 2: So but you know, their dealers are up in arms because they want to uh A few wants to sell cars direct, and the dealers want nothing of it, and hasten to add that, at least in the Honda brand.
I think one out of three Honda buyers has told Honda, I would like to have an electric But these are going to be built in a special by a prologue.
These cars are going to be built in a special little plant, the same one that built the NSX when it was in production, so very low production, which would suggest to me that the investment that's gone into it is not as large. So even though they've asked the
other three evs that we just talked about, and the fact that they've got a partner, maybe and they're just going to push on, but they are going to have a lot of lawsuits from their dealers.
Speaker 4: Well, what I wonder about is that, Okay, electric vehicles need electric motors. I don't know that Honda's sort of
an expert in that space. So they may be relying
on a partner or a supplier to provide them with that.
And maybe that partner supplier was one that was going to be on these high volume vehicles, and now they won't be on these high volume vehicles, and so maybe the pricing that once existed will not hold going forward.
There could be a lot of.
Speaker 2: That's a good point. That's a good point because as
you know, in the purchasing world, you know, they say, you want this high volume product, you want to be on that. Okay, well you got to be on this
program too, And by the way, here's the price that you have to give it to us on and the supplier say sure, because now I get the high volume program, so I could see something like that happening now.
Speaker 4: And Honda developed that Electric Vehicle Development Manufacturing Center I mean, which is separate from the Vehicle Performance Center HPC Honda vehicles un to performance center you're talking about. I wonder
it's going to happen to all those people who were suddenly going to be you know, working on these vehicles.
Speaker 6: Now, yeah, that was part of the big Ohio complex for them. Is that where?
Speaker 4: Yeah? Yeah, I question what happened on the GM production?
Speaker 8: Soon do they extend that none?
Speaker 2: Sean's asking if they're going to extend uh the production of the the GM based evs, the Honda prologue and what cd X.
Speaker 5: They haven't done for them dead?
Speaker 3: Something went wrong with that relationship.
Speaker 4: Well, don't forget the GM Honda hydrogen collaboration.
Speaker 3: Collaborations have gone.
Speaker 2: And and remember too, they were going to do GM Cruise hot right.
Speaker 3: Honda put I think a billion.
Speaker 2: Dollars into that program and they were going to launch it in Tokyo. And that's something happened between those two
companies where they just said okay, forget it.
Speaker 3: They had a divorce.
Speaker 5: Yeah, I mean, they were forging through with these partnerships, and then a lot of disruption happened too, So I'm sure that that did not help the situation, you know, with COVID and the ship crisis and so on and so forth. I mean, since I've been here covering autos,
I feel like it's just crisis after crisis since twenty nineteen.
But you know that's the way of the industry does feel more disruptive these days than it has in the past, which you guys agree.
Speaker 2: Or totally completely, we've never seen anything like this. I mean,
you had COVID and the chip shortage, then you had rare earths, and you had tariffs, and now you've.
Speaker 3: Got a war with oiler rices and I'm.
Speaker 2: Probably forgetting a couple of the young crises that happened just since youre.
Speaker 4: So as you guys are out reporting now, I mean, within the last week or so, are you hearing from company officials or people at companies about concerned about rising gas prices.
Speaker 5: I just started asking about this because really, I mean, this headline just probably hit like what over the weekend.
I think I was when I first saw it, so I think, yeah, there's definitely they're watching it, and I think it will. It's only been a couple days really,
you know, a very short timeframe when we saw the spike.
So what they're saying is, you know, it has to be like a little bit more lasting effect. But yeah,
I think consumers are constantly I personally don't I go fill up and move on with my life. But I
know a lot of people look at that price and they're like, wow, like I've forgotten twenty twenty two, we had five dollars gas and I completely forgot about that.
That was when.
Speaker 3: Yeah, I don't remember that at all.
Speaker 5: Yeah, yeah, I mean at some point there was like a peak of five dollars a gallon. So yeah, I
think a definitely monitoring it and definitely monitoring the strait to see how that's affected. And I'm sure that the
supply chain crews are monitoring it very aggressively because you know, there are some things that come out of there. Aluminum
is one of the big ones that couldn't maybe hit our industry, right, so I.
Speaker 2: Plus tariff, Yeah, aluminum prices and this is without tariff, about fifteen percent since the war broke out.
Speaker 3: Yeah, so that's a big increase.
Speaker 2: And remember this was the year where you know, with your economy standards and emission standards, you know, being lowered that the Detroit Three thought are right now, we're going to sell a lot.
Speaker 9: Of very profitable hemis yeah and yeah, full size pickups and SUVs, and if gas prices stay high, that mix is definitely going to change.
Speaker 6: I did.
Speaker 7: I haven't kind of done any really recent reporting, as we've really seen the climb in the last few days, as you mentioned, but to do an initial story with my colleague Rihanna, like a little more than a week ago, and uh, and the autumn you know, the Big three didn't really have much to say to us on the.
Speaker 6: Record about it.
Speaker 10: But but I think, yeah, the thinking is that if obviously, if this extends for a while, as we've seen in the past, that it could change buying patterns, and so a company like Stillanis could be you know, find themselves in this kind of really aggressive pivot to hemys and and everything.
Speaker 7: Uh, you know, may be concerned a little bit, always say, for sure.
Speaker 6: Maybe feeling a little bit of whiplash.
Speaker 2: And hey, we're getting down to the end here, Sean.
Any good questions from the chat room that.
Speaker 8: Was talking about opera more and up taking gas prices more interest in evs.
Speaker 2: Yeah, so there's a question is if gas prices go up, stay up, what happens with ev sales?
Speaker 5: So there was some research from Edmunds that I just looked at, and in twenty twenty two they did increase like the you know, Edmunds is a car shopping site, so they saw like the clicks of searches where did increase when when gas prices were up for a bit then.
But I think right now, it's kind of just like too soon to say, right because we don't know when this can end. But I'm sure that those folks are
definitely monitoring that closely to see what happens.
Speaker 3: So on anything else.
Speaker 8: Yeah, a couple more quick things. Has Harvana won't that
you factory orders though, just kind of saying maybe not against Harvana as opposed to a traditional stealandis franchise dealership.
Speaker 3: Oh so it would be interesting. You're not miked up,
are you?
Speaker 4: No?
Speaker 2: Okay, so we got a question from kick your Heart asked noting that and maybe you can pick up on this saw then Luke, the Carvana stores, you cannot order factory direct. You will have to buy off a lot,
not that a lot of people factory order a car.
Speaker 6: A good question. I actually didn't know.
Speaker 7: I don't know that for certain, but that seems like it would make sense if that was the case. I mean,
that's kind of how the model works, right, is like they've got the website set up. This is what we've
got in stock right now, right, here's the straightforward pricing on it, et cetera.
Speaker 4: So but but okay, did they buy the like so let's say John owns the dealership. Did some guy from
Carvana come and buy John's franchise? So the franchise still exists.
So I don't understand why they wouldn't be able to direct order from the factory because.
Speaker 7: They yeah, you might be right, like I, I don't But maybe maybe the customer I don't know, Maybe the customer isn't a yeah, I don't know.
Speaker 2: Maybe Carvana doesn't want to do factory order. You know,
it's not that they can't.
Speaker 6: To your point, they are getting the question fact.
Speaker 3: A lot, you know, anything else they can put.
Speaker 4: In those quick things.
Speaker 8: The car says, Gary is bright and chrisp Well goes to Carmacks.
Speaker 6: It feels that you dad should be buying Gary.
Speaker 4: Lunch, buy me lunch for the f one story, but we won't go.
Speaker 2: Mark Michael Cargeek says that if Chris f you Well does go to Carvana, as per Gary's suggestion, then I should buy Gary lunch, and I should because he'll have proven himself to be a genius.
Speaker 5: You should go to the lottery.
Speaker 8: And last thing, Robert Foster says, Gary, you mentioned call the other Catlin did finish.
Speaker 3: The Yeah, we're talking Formula one.
Speaker 4: Gary finished three laps down in sixteenth.
Speaker 6: Yeah.
Speaker 4: No, I'm just I'm just saying that Ford Ford did better.
Ver Stopping came in eighth with that Ford engine, So they have no Yeah, I mean, Hijack had the d N and he finished twentieth.
Speaker 5: I've read they did better than expected the Cadillac.
Speaker 4: That's what everybody's going to tell you, that they did better than expect.
Speaker 5: I mean, I'm not I'm not a racing pro.
Speaker 2: So yeah, no, no, Look, I've said all along that Cadillac, if they get one point this year, they should declare victory and they should not be They will not be in the hunt for a win for at least three season.
Speaker 5: Is that just typical?
Speaker 4: Okay? But then, John, so in three seasons they'll start
using their.
Speaker 3: New Cadillac engine.
Speaker 4: Cadillac engine, and then will you say, then, well, it'll take some time for that engine to be able to get the bugs.
Speaker 2: I'll go on the record that when their engine is in the car, they better be fighting for a podium.
Speaker 4: I think if any company spends a billion dollars this year, they got to be fighting for a podium right now.
But not my money. Yeah, yeah, exactly.
Speaker 3: That's it's healthy, it's good. This is why people tune
into the show. But it's also why we got to
end it right now.
Speaker 2: So Kaylee Hall from Reuters, thank you, Ramseup Detroit New It's great to have you guys on the shows.
Speaker 6: Thank you.
Speaker 4: Guys, read their stuff, subscribe the news, subscribe to Thompson Reuters.
Speaker 5: Our stuff is also on the news. So if you
subscribe the news.
Speaker 4: Yeah, there you go, done, And that's right, really good.
Speaker 2: Okay, Gary, I'll see you here next week, okay, and I hope to see all of you too.
Speaker 1: Auto Line after Hours. It's brought to you by Bridgestone Tires,
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