Canada: Paying Bills - The Mercedes Way

Last Updated: September 24 2019
Article by Crowe MacKay LLP


McLaren North America is moving its headquarters from midtown Manhattan to near Dallas, having outgrown its original office, the company announced Thursday. The British exotic automaker has been on a product push the past couple of years, which has led to ballooning sales and more needs from its office space. "As we've grown and expanded, it became crystal clear that being in the city just is not very practical and doesn't make a lot of sense," Tony Joseph, the automaker's president, told Automotive News. "Unfortunately, I've got some on my team who have not seen a McLaren because we're on the 24th floor of a high-rise."

McLaren will go from a 4,500-square-foot office suite in Manhattan to a 30,000-square-foot center in Coppell, Texas, a Dallas suburb, which will cost significantly less than the automaker is paying for the New York space, Joseph said.

McLaren began U.S. sales of its hand-built supercars late in 2011, and North America has quickly become the brand's largest global market. Last year, North America represented 33 percent of the automaker's 4,806 global deliveries. McLaren launched with nine U.S. dealerships, including a location in Dallas. In 2013, when the automaker was still building out its retail presence, the Dallas location sold more McLarens than any other in the world, Joseph said. "Overall, it's a fairly large market," he said of Dallas. "They should be somewhere between 85 and 90 new units this year." McLaren has 24 dealerships in the U.S. and three in Canada.

In 2018, McLaren sold 1,569 vehicles in North America, an increase of 21 percent from a year earlier. Joseph said through August, McLaren's North American sales are up another 17 percent. Joseph, already relocated to the Dallas area, said McLaren plans to have employees working from a temporary office in Texas by year-end, with building renovations set to wrap up by February. He said he expects most of the employees to make the transition from New York. McLaren has 27 employees in North America, though roughly half are field-based.

With the move to an industrial park, McLaren will have over 567 percent more space. And the brand plans to put that space to use. Through its bespoke program, McLaren Special Operations, the automaker lets customers design their own vehicles. But that often requires a trip to McLaren's global headquarters in Woking, England. "We're going to have our own on-site MSO area," Joseph said. "Ideally, we'd like the customers who are doing heavy specifications to go to the U.K., but that's not always practical. So we'll provide it on-site. It provides a real ease for them to get in and out of Dallas." Joseph said the building is about three miles from Dallas/Fort Worth International Airport and that's by design.

"We're going to evolve what our office will be," Joseph said. "We're going to provide both technical and sales training at this location. So for dealers and sales and technical people coming in and out, it really is a perfect location." When it comes to McLaren's new location, about 60 percent of it will be dedicated to the technical side of business, including the company's internal fleet of vehicles.

"We've grown our fleet of cars significantly over the past few years," Joseph said, noting that among McLaren's press, marketing and, track fleets, the automaker has around 50 cars to manage. "It's going to allow us to be able to maintain the fleet on site ourselves internally."

Source: McLaren and Autoweek


Daimler Mobility is integrating its ePayment service, Mercedes pay, into Mercedes-Benz vehicles, the company announced at the International Automobile Exhibition in Frankfurt. The service will allow Mercedes-Benz owners to pay for parking, gas, and Mercedes-provided services through the multimedia system MBUX.

Source: Auto Finance News


Large pickup trucks that tow most of the profits into Ford Motor Co. and General Motors are holdovers from another century—with heavy ladder frames and big internal combustion engines in the front driving the wheels in the back. Now, Ford and GM are racing to design radical new takes on their most profitable models, replacing petroleum-fueled engines with batteries in a bid to get ahead of the industrywide move toward EVs. Ford's F-150 pickup and GM's Chevrolet Silverado are the top-selling vehicles in the U.S. market.

Source: Automotive News


Deliveries of the redesigned 2020 Ford Explorer and Lincoln Aviator are being hampered by extensive quality control problems which have forced the company to divert thousands of vehicles to secondary facilities for inspection and repair. 

Ford's corporate office will not comment on the nature of the problems plaguing both cars, but insiders at the company's assembly plants described problems ranging from non-functioning air conditioning systems to transmissions that will not shift properly, according to an extensive report from the Detroit Free Press.

It's not unusual for a handful of cars to fail standard quality control checks, often for minor issues like mismatched trim pieces or wheels, or missing (or incorrect) badges, but what Ford employees are describing is a vehicle repair queue numbering in the thousands. The repairs are holding up deliveries of both the Aviator and Explorer from the Chicago facility where they are manufactured. "From what I've seen on what they call 'money cars,' or cars which are done, I would say they're currently getting maybe 80 to 100 cars (per shift) finished. Still, with somewhere north of 12,000 cars needing repairs, doing the math, you can see this is a huge project and a huge expense for Ford," an employee at Ford's Flat Rock Assembly facility in Michigan told the Detroit Free Press. According to the same employee, Ford has even outsourced some of the repair work to Roush, one of the better-known tuning companies affiliated with Ford.  In addition to the aforementioned transmission and air conditioning issues, employees also said some Explorers are having their chassis X-rayed to check for defects, and some Aviators are arriving with failed adaptive suspensions. Ford's plant employees say a quality control issue of this magnitude is "highly unusual."

With Ford scrambling to triage repairs of both vehicles, another problem has started creeping up: mileage. Brand-new vehicles rolling off the Flat Rock assembly line will often have up to 10 pre-delivery miles on their odometers; some Explorers and Aviators are racking up hundreds before they're trucked off to dealers due to the logistics involved in getting them repaired and validated. Thousands of Explorers and Aviators reportedly remain on delivery hold and Flat Rock has added extra shifts to help with repair and re-assembly. Contrary to what sources said, a Ford spokeswoman told the Free Press the repairs were not unusual.

Source: The Car Connection


'Meeting consumer demand, especially for a product like this, is going to be a challenge'

With a starting price of $69,998, the new 2020 mid-engine Corvette Stingray has Chevrolet Canada and its dealers hoping they have a conquest machine that will win over buyers of high-end sports cars in a declining market. "We've got a strong, loyal base of customers," said Jamie Dewhurst, Chevrolet Canada national marketing manager. "I feel really good about our prospects of holding onto our base.  "We also feel really good in terms of where we stand with potential conquests, whether it's Porsche or Jaguar or any of the entries in the segment." 

GM rolled out the eighth-generation Corvette — the C8 — in July, showcasing perhaps the most radical overhaul of the venerable sports car since it was introduced in 1953. A host of design changes include an exterior that GM says is inspired by fighter jets and Formula One cars and an interior featuring a 12-inch display and a long strip of buttons between the driver and passenger seats. 

Beyond GM's promising a base price below $70,000, full pricing details are not yet known. The Corvette will begin arriving at Canadian dealerships in early 2020, Dewhurst said and will be available in the same variants as those offered in the United States. The new Corvette will enter the market as many high-end sports cars have suffered sales declines at the end of a decade that was marked by growth. 

Through June, GM sold 706 Corvettes in Canada, down 22 per cent from a year earlier, according to the Automotive News Data Center in Detroit. Porsche, meanwhile, sold 630 911 models, down 14 percent, while F-Type sales dropped by 33 per cent to 159 units. July sales were not included because GM no longer reports monthly sales. GM has seen a high level of interest in the 2020 Corvette, Dewhurst said. "Meeting consumer demand, especially or a product like this, is going to be a challenge, no question," he said. "But internally, we feel really good about the numbers that we're seeing, and we're really excited to see where this car is going to take us." 

Lennox, whose dealership began taking orders for the new Corvette in 2017, said he has "enough orders in the bank" to cover the store for 12-18 months. "We've been overwhelmed by the outpouring of not only orders but the absolutely phenomenal customer response," he said. 

"The front-engine, rear-drive car has been around for so long. For Corvette to now go to a midengine car, we were a little pensive in advance, but the response from Corvette purists has been overwhelmingly positive." Dewhurst said his team would be working over the next several months to balance 2020 Corvette production with sales of the outgoing Corvette. Inventory of the current generation is expected to wind down over the next several months, especially as colder weather affects sports car sales in Canada, he said. 

"The current [generation] car will still sell well up until the new car arrives," Lennox said. "You'll always have some people who say they prefer the older model, and they'll be able to take advantage of savings and discounts that may not be available on the C8."

Source: Automotive News Canada


The United Auto Workers strike against General Motors Co. has curtailed delivery of service parts used to repair cars and trucks at GM dealerships across the country, the company acknowledged. GM's network of parts distribution centers and warehouses wasn't really touched by the UAW's last national strike in 2007, which lasted only two days, or during a long string of local strikes against GM plants in the 1990s or a selective strike during contract talks in 1984. This time around, however, the 49,000 UAW members employed by GM have set pickets outside all of GM's installations in the United States, including the distribution centers and warehouses that are at the heart of the company's service parts operations.



European car sales fell sharply in August, deepening the woes of an industry battling sluggish demand in key markets and the challenge of rolling out electric vehicles. Registrations dropped 8.4%, the steepest monthly decline this year, according to the European Automobile Manufacturers Association. The fall was partly due to exceptionally high growth a year earlier as manufacturers rushed out models ahead of tough new emissions-testing rules. Volkswagen AG shares lost 0.4% in early trading in Frankfurt and BMW AG was 0.3% lower. In addition to the risk of a recession in Germany, carmakers are also facing a slowdown in the Chinese car market.

Source: Bloomberg


Two platforms will spawn 15 new models before 2023, report says

Ferrari appears to be the sole major Italian supercar maker without an SUV -- Lamborghini and Maserati are all aboard the SUV train by now -- but this oversight is expected to be remedied soon enough. Developed under the codename 175, and also under the name Purosangue, which means "thoroughbred" in Italian, the model is one of 15 new Ferrari models planned to debut before 2023, according to Autocar, that will be based on two distinct platforms.

In an interview with Ferrari chief technical officer Michael Leiters, Autocar has learned that one platform will be earmarked for mid-engine supercars like the F8, while the other will be for front- and midengine GT-style cars, which will include the new SUV.

The design has already been approved internally, Autocar notes, and will utilize Ferrari's scalable front-/mid-engine architecture. Both of these platforms will be able to support V6, V8 and V12 engines, with hybrid boost or without, and a variety of body styles and transmission positions. Out of these variables, the SUV is expected to be a five-seater with high ground clearance and will feature a height-adjustable suspension, focusing on on-road dynamics but permitting "some off-road ability," as Autocar puts it. The powertrain is expected to be derived from the SF90 Stradale, and plug-in hybrid tech is also expected to make an appearance due to audience demand. This means we should see a turbocharged V6 under the hood of the Purosangue helped by three hybrid motors, while the SF90 Stradale is tipped to pair those three motors with a 4.0-liter V8.

But fans of displacement should not fret just yet: Autocar considers a V12 engine option likely in the Purosangue. "SF90 is a new product with so many new innovations on the car, then we find the elements to go onto other cars," Leiters told Autocar. "The challenge (with the SUV) is a totally different one. There are some innovations to go on, but our organization has learned to do innovation."

A new approach to interiors will also be used with the SUV model and its siblings, one that Ferrari has dubbed "eyes on the road, hands on the street." This means a new infotainment system, a new steering wheel design, and new instruments, among other items.

Autocar also spoke with head of Ferrari design Flavio Manzoni regarding the appearance of the upcoming SUV model. "You start defining the design of the car in the first steps," Manzoni told Autocar. "In that defining phase, we work with the engineers. We can determine the proportions and the dimensions to have a very good base to work from. That's the case for the SUV, as well. Many SUVs are derivatives of other cars. Designers have many constraints due to the technical base. In our case, it's no compromise."The Purosangue, if that's what it ends up being called, will have no shortage of rivals when it goes on sale, some of which have not even debuted yet, including the Aston Martin DBX. But it remains to be seen if the Purosangue will lean closer to the profile of vehicles like the Lamborghini Urus or something far heavier and more luxurious like the Bentayga. We have a feeling Ferrari will wish to stay on the light side.

Source: Autoweek and Autocar

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