ASIAN AUTOMAKERS DOMINATE CONSUMER REPORTS' MOST RELIABLE CARS LIST
Lexus, Mazda, and Toyota once again took the top spots for the most reliable car brands, according to Consumer Reports' annual study released on Thursday. The Lexus IS compact sedan ranked highest on the list, followed by the Mazda MX-5 Miata roadster. Mazda and Toyota tied for second place as the most reliable brands, with the Corolla Hatchback as Toyota's most reliable model. Rounding out the top 10 in order were Porsche, Genesis, Hyundai, Subaru, Dodge, Kia, and Mini. Dodge climbed 13 spots since last year to get in the top 10 on the back of the Challenger muscle car and its many aging iterations.
Volkswagen and Acura dropped considerably due to redesigned models that are still causing problems for owners. Redesigned for 2018, the Volkswagen Atlas and Tiguan ranked well below average, as did the Acura MDX, which was refreshed for 2017. The redesigned 2019 Acura RDX also suffered below-average reliability. In-car electronics were faulted in the crossovers, as was power equipment, which can be anything from cruise control to USB ports to the horn.
Owners of the Chevy Colorado small pickup truck were the most unsatisfied, citing transmission and drive system problems. That applies to the GMC Canyon as well.
Some automakers lost a few spots due to redesigned models. Consumers who opted for new or second-year models expressed more problems. Oftentimes, automakers are rolling out new tech or powertrains that might have some glitches made evident in real-world driving that weren't detected in testing. For example, the new infotainment system in the Acura RDX had several problems, including the display screen freezing and issues with the navigation system. Lexus and Toyota have some of the oldest vehicle lineups, with technology that cannot be called cutting edge.
What's a car shopper to do? "The smart money is to wait a few years to see whether the manufacturer has ironed out the problems of the new design or to buy the more reliable outgoing version," Jonathan Linkov and Anita Lam said in the Consumer Reports study. "And those older models usually come with discounts so that dealers can move them and make room for the new models." But since we want what we want when we want it, car shoppers can lean on historical reliability. Lexus and Toyota were first and third out of 30 brands, and are perennial reliability-list toppers. Honda's recently redesigned or new models in the Passport and Odyssey dropped them from the top 10 list.
Of the domestic brands, Lincoln(14th) and Ford(15th) ranked behind Dodge, followed by Buick(16th), which was the most reliable GM brand. Cadillac was ranked last at 30th, with the XT4 weighing down its reliability score.
There were not enough responses to include Fiat, Jaguar Land Rover, Maserati, and Ram in the 2019 rankings. The survey of car owners covers more than 420,000 vehicles from model year 2000 through early 2020 models. Each model in each model year gets 200 to 300 responses on average, making it one of the largest scientific studies of its kind, according to Consumer Reports. Survey respondents are asked to report problems in and out of the warranty period, but not problems related to crashes or recalls.
The 17 problem areas range from engine issues to noises and leaks to in-car electronics. Data was collected within the 2019 calendar year, but the scope of problems covers the last 12 months from the date of the survey response.
Source: The Car Connection
NATIONAL ZEV SALES SURGE - ACCOUNT FOR 3.5% OF ALL NEW VEHICLES SOLD
Canadian sales of new zero-emissions vehicles continue to rise in the wake of a federal incentive program aimed at getting more green vehicles on the country's roads. National total EV sales were 3.5 per cent of all light-vehicle sales in the third quarter, calculated by Electric Mobility Canada. By comparison, Honda Civic sales accounted for 3.3 per cent of total sales while the Toyota RAV4 accounted for 3.4 per cent, according to the Automotive News Data Center in Detroit.
"While ZEV adoption has accelerated across Canada, uptake has been strongest in British Columbia and Quebec, the two provinces offering purchase incentives as well as policy mandates requiring that ZEVs represent a steadily increasing proportion of passenger vehicle sales," the report said. British Columbia offers a rebate of up to $3,000 on the purchase of a new electric vehicle. That can be used with the federal government's $5,000 rebate that started in May. The province also makes a rebate of up to $6,000 available through the B.C. Scrap-It program for buyers trading in a vehicle powered by an internal-combustion engine when they purchase an electric vehicle. Quebec residents have access to a rebate worth up to $8,000 on purchases of new EVs. Quebec also has a quota system that requires auto dealers sell a minimum percentage of electric cars or pay a penalty.
Meanwhile, ZEV sales continue to plummet in Ontario, where the Doug Ford's Conservative majority government eliminated a provincial incentive in late 2018. Third-quarter sales in that province were down 44 per cent to 3,127 when compared with a year ago. "Underscoring the role of policy support in making Zero Emission Vehicles financially accessible to the greatest number of Canadian car buyers, the greatest percentage gains have come from provinces where incentives had not yet been offered," Electric Mobility Canada said in its report. David Adams, head of the Global Automakers of Canada, said "incentives are currently a pre-requisite for ZEV sales." "With rare exception, most people are not willing or able to spend thousands more to purchase a ZEV over an ICE vehicle. The incentive serves to somewhat offset the price differential," he said in an email to Automotive News Canada. "Previous experience in B.C. and recent experience in Ontario have shown how dramatically ZEV sales fall off once the incentive is removed. So, certainty around the provision of incentives is very important. "That said, incentives also disrupt the normal operation of the vehicle market so they are a necessary evil."
Tesla leads sales
The top-selling zero-emissions vehicles in Canada during the third-quarter, according to Electric Mobility Canada, were:
- Tesla Model 3 with 5,529 sales;
- Chevrolet Bolt, 1,122;
- Nissan Leaf, 1,093;
- Toyota Prius Prime, 2,467;
- Mitsubishi Outlander PHEV, 1,048.
Adams said the numbers don't tell the entire story, though.
"The very robust growth in ZEV sales that is being reported neglects to mention that Tesla pushed about 2000 Model 3's into the market during that time and while ZEV growth will most certainly continue, the B.C. statistics represent an anomaly at this point," he said in an email to Automotive News Canada. The Ford F series, the most popular vehicle in Canada, accounted for 7.8 per cent of all new-vehicle sales through the first three quarters.
"Recent confirmations of a plug-in hybrid Toyota RAV4, expected in late 2020, and a battery-electric Ford F150, potentially in 2021, among many other Zero Emission options give reason to believe combined ZEV sales could approach Ford F-series levels early in the coming decade," Electric Mobility said.
Source: Automotive News Canada
AUTO PARTS SUPPLIER SUES VOLKSWAGEN FOR SUPPRESSING COMPETITION
Volkswagen parts supplier Prevent Group on Monday filed a lawsuit alleging the German automaker used anticompetitive tactics to stop larger suppliers like the company from acquiring smaller rivals in the United States. In the lawsuit filed in the U.S. District Court in Detroit, the auto parts supplier said Volkswagen extracted written agreements from suppliers not to sell themselves to Prevent Group.
ELECTRA MECCANICA WILL OPEN KIOSK IN CALIFORNIA TO PROMOTE SOLO EV
Electra Meccanica, the British Columbia-based electric-vehicle maker, will open a kiosk in a posh California neighbourhood throughout the holiday season in an effort to market its low-cost single-seat EV to environmentally conscious Americans there. The kiosk will pop up in the highly trafficked Westfield Century City Shopping Mall on Santa Monica Boulevard in Los Angeles. The mall is located amongst the surrounding Beverly Hills, Bel Air, Santa Monica and Century City communities. Electra Meccanica sales staff will introduce customers to the single-seat Solo EV commuter vehicle. Potential customers will have the chance to view, drive and place pre-orders for the car, set to be released in 2020. "Los Angeles was strategically selected as the first market to launch the Solo because of the early adopter mentality prevalent throughout the city," Paul Rivera, Electra Meccanica's CEO, said in a statement. "We are thrilled to showcase the vehicle to Century City Shopping Mall customers at our kiosk. Our safe, environmentally responsible and fun EV will not only provide an exciting driving experience but will revolutionize commuting as we know it."
The Solo features a 160-kilometer, has the ability to cruise at highway speeds and can charge on a regular household (110V) socket in fewer than six hours. It is scheduled to be released in 2020 and expected to retail for less than US$20,000.
Electra Meccanica's small outlet will be open daily from 10 a.m. to 9 p.m. during the 2019 holiday season, starting Black Friday, Nov. 29, 2019, through Sunday, Jan. 5, 2020.
Source: Automotive News Canada
GM NOT LIABLE FOR PUNITIVE DAMAGES IN IGNITION SWITCH CASES
A federal appeals court said General Motors Co is not liable for punitive damages over accidents that occurred after its 2009 bankruptcy and involved vehicles it produced earlier, including vehicles with faulty ignition switches. The 2nd U.S. Circuit Court of Appeals in Manhattan said on Tuesday that the automaker did not agree to contractually assume liability for punitive damages as part of its federally-backed Chapter 11 reorganization.
FORD AND CHEVY ARE LOSING BUYERS AFTER DISCONTINUING COMPACT CARS
Many current Cruze and Focus drivers are trading for Escapes and Equinoxes, but also Civics and Corollas.
Ford and Chevy are losing a loyal set of buyers since discontinuing the Focus and Cruze compact cars, according to a new report from Edmunds.com. Brand-loyalty data shows that fewer Focus and Cruze owners in 2019 are buying another Ford or Chevy for their next vehicle than they did in 2016, with Focus brand loyalty dropping from 40 to 33 percent and Cruze brand loyalty dropping from 57 to 45 percent. The data also shows that competitors such as Toyota and Honda are gaining from Ford and Chevy's loss. Because the compact-car segment still makes up a significant 9.1 percent of all new-vehicle sales this year, Focus and Cruze buyers are trading in for competitor models including the Honda Civic and Toyota Corolla at higher rates. Both the Civic and Corolla are increasingly being bought by customers trading in a Focus or Cruze. Through October 2019, Honda reported Civic sales up 0.6 percent and Toyota reported Corolla sales down 0.3 percent.
To be fair, Ford and Chevy's crossover offerings including the Equinox, Trax, Escape, and EcoSport are also benefiting from the discontinuation of the Cruze and Focus. More people are trading in their Focuses and Cruzes for these small crossovers than before. While this may be better for these companies' bottom lines, as these SUVs generally cost more than the compacts they effectively replace, it's a loss for consumers looking for affordable new cars. The Chevy Equinox's base price is $6125 higher than the Cruze's, and the 2020 Ford Escape's base price is $7255 higher than the Focus's, although it's tough to make a direct comparison because 2018 was the last model year for the Focus.
Edmunds also states that even buyers trading in Focuses and Cruzes for small SUVs are defecting to Honda, Toyota, Hyundai, and Kia in increasing numbers. The report also predicts that brand loyalty will likely decline even more in the future as more Ford and Chevy small-car owners search for replacements for their vehicle.
LAWSUIT CLAIMS BROAD CONSPIRACY BETWEEN MARCHIONNE, UAW THAT DAMAGED GM
General Motors' racketeering lawsuit alleges that Sergio Marchionne, the late Fiat Chrysler Automobiles CEO, wanted to hurt GM in an effort to force a merger. His tool of choice was the 2015 contract talks. Marchionne, the suit says, "formally solicited GM for a merger" in the spring of 2015 and was rejected. From there, the suit alleges that Marchionne orchestrated a negotiation of the collective bargaining agreement that was "designed, through the power of pattern bargaining, to cost GM billions." This was done, according to the suit, with the "purchased support of certain former UAW officials including then-President Dennis Williams."
In 2015, "with the cooperation of UAW leadership purchased through bribes," the lawsuit says Marchionne "schemed to use the collective bargaining process to harm GM by becoming the lead in negotiations and attempting to force a merger of the companies." Those 2015 contract talks took place as federal investigators were looking into past FCA-UAW agreements and other potential misconduct. Williams and Marchionne, the suit says, were aware of the investigation.
The suit alleges that with a "self-described 'rich' FCA-UAW labor contract, Williams and certain corrupt UAW leaders could seek to convince government investigators that they had obtained significant FCA concessions, while Marchionne could impose unanticipated costs on GM in order to force a merger." GM claims in the suit that it was directly damaged "as a result of the pattern of racketeering." Craig Glidden, GM's general counsel, said Wednesday: "We are preparing for trial. We are preparing to take this case to verdict. That is our path."
FCA said it was astonished by the lawsuit and the timing of the filing, which occurs as FCA attempts to finalize a new contract with the union and merge with the PSA Group.
Here are other findings in GM's lawsuit:
Competitive advantages in labor contracts
Starting in July 2009, to pay back FCA's bribes to certain UAW leaders, the UAW gave Chrysler competitive labor advantages, according to the complaint. "FCA ensured that while these special advantages were conferred on FCA, the same or similar advantages were not provided to at least GM despite it seeking similar programs and concessions," which resulted in higher labor costs for GM, the complaint said. For example, the UAW allowed FCA to hire a more flexible work force, which included more temporary and tier-two workers than GM was allowed, the complaint and Glidden said.
Under the UAW's 2007 labor contract with both GM and FCA, the automakers had a 25 percent cap on tier-two workers, who are paid less than tier-one employees. The cap was lifted in 2009, but under the 2011 contract, GM agreed to reinstate it in 2015.
FCA 'side letter' deals
FCA and the UAW, however, reached a "side letter" agreement that the cap would not be reinstated in 2015, according to the complaint. "FCA hired tier-two workers with abandon, possessing the incredibly valuable foreknowledge that it would not be penalized by any reinstatement of the cap. By 2015, tier-two workers made up around 42 percent of the UAW membership at FCA — double the proportion of tier-two workers at GM," the complaint said.
The UAW also failed to hold FCA to the same limited number of temporary workers as GM. Temporary workers are paid substantially less than tier-two workers and automakers have more freedom to adjust their schedules.
The UAW and FCA also reached "side letter" agreements that significantly decreased health care costs, the suit says.
The plan would have saved GM up to $20 million per year, the complaint said. GM requested FCA's less expensive plan during the bargaining process, but the UAW refused, according to the complaint. "Taken together, FCA Group's corruption, through operation of the FCA-Control and [National Training Center] Enterprises, helped buy a wage advantage to take FCA from worst to first among the Detroit-based automakers," the complaint said. In 2006, Chrysler had the highest labor costs at $75.86 per hour on average, compared with GM's average of $70.51 at the time.
Through its schemes, FCA slashed its hourly labor costs to $47 on average by 2015, compared with $55 per hour at GM.
Sergio's GM dream
It was no secret that Marchionne wanted to merge with GM. He was an outspoken advocate of industry consolidation, and his shadow still looms as FCA aggressively pursues a merger under Marchionne's successor, Mike Manley.
Marchionne's merger dream dated back to the mid-2000s. GM was the prize even then.
After failing to secure a GM merger in 2005, the suit says Marchionne saw another opportunity after Fiat acquired Chrysler in 2009. Marchionne said: "After fixing Chrysler, let's . . . take General Motors and merge them together. Once and for all, let's straighten out the car industry, creating an American giant that also allows a long-term future for Fiat.
In October 2012, when Fiat owned about 59 percent of Chrysler and the UAW Trust owned the rest, the suit says "Marchionne wrote to GM's CEO on behalf of FCA Group proposing a 'comprehensive' combination between Fiat, Chrysler, and GM. GM rebuffed this attempt at a combination. But Marchionne remained resolute in his quest to force an FCA Group-GM combination."
In 2015, Marchionne and his team aimed to "effectively take over GM through a merger," the complaint said.
Marchionne aimed to be the CEO of the combined entities. Because of the merger prospect, Marchionne authorized the bribery of UAW leaders, who could block the merger under the automakers' labor contracts, the complaint said.
GM rejected the merger offer in April, two weeks before Marchionne published a powerpoint called "Confessions of a Capital Junkie: An insider perspective on the cure for the industry's value-destroying addiction to capital."
Marchionne said an FCA-GM merger would save nearly $5 billion without laying off employees. In June, Alphons Iacobelli abruptly stepped down from his post as vice president of employee relations at FCA. Iacobelli would have played a crucial role in FCA-UAW 2015 labor negotiations, and Marchionne assumed his place at the bargaining table.
UAW President Dennis Williams and Vice President Cindy Estrada encouraged the merger proposition to GM later that month, according to the complaint. Marchionne told Williams that his goal was to use the UAW and the labor contract to persuade GM on the merger, the complaint said. He told Williams: "whatever happens in terms of consolidation, it would never be done without the consent and support of the UAW. It's that simple," according to the complaint.
GM expected a 2015 labor contract that would cost about a billion more than the 2011 agreement. GM, the largest and best performing of the Detroit 3 at the time, believed that it would be the target for contract talks, which means it would negotiate with the UAW first while Ford and FCA would follow a similar pattern.
The UAW instead announced that FCA would be the target. After selecting FCA, Williams told a GM executive that he would explain why he selected FCA when he retired, but even after he retired, he never explained, the complaint said.
The final 2015 contract cost GM $1.9 billion, about $1 billion more than GM had expected based on talks with the UAW before it selected FCA as the target. "Although GM was able to successfully resist the FCA-UAW leadership takeover scheme, substantial damage from the racketeering scheme had been inflicted: direct injuries to GM that continue to reverberate and compound to this day, including higher costs and lost investment initiatives," the complaint said.
Source: Reuters and Automotive News
FIAT CHRYSLER SAYS PSA TALKS PROGRESSING DESPITE GM LAWSUIT
Fiat Chrysler's (FCA) planned $50 billion merger with Peugeot owner PSA Group will not be blown off course by a shock lawsuit against FCA from General Motors, a source close to FCA said on Thursday. The source, speaking on condition of anonymity, also said the lawsuit seeking "substantial damages" would not lead FCA and PSA to review the two companies' valuations in their proposed deal to create the world's fourth-biggest automaker.
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