Autofield Blog

Enjoy Italy


By: Gary S. Vasilash 13. November 2014

This gets a little complicated, but it deals with transportation in Italy, so hang on.

There is Enjoy. Enjoy is a service provided by Eni. Eni is an integrated energy company. Enjoy is a car-sharing service. So there’s gasoline and cars.

One of Eni’s partners in this service is Fiat. Gasoline and the provider of cars.

Fiat

Another is Trenitalia. Trenitalia is the primary train operator in Italy. So there’s travel by train, then travel post-train trip via a car that’s filled with gas.

Enjoy opened earlier this year in Milan and Rome with a fleet of Fiat 500s. It opened earlier this week in Florence. Again, with 500s.

There are some 185,000 members of Enjoy in Milan and Rome, who accounted for some 1.5-million rentals.

Those who have signed up for Enjoy can either reserve a car online or pick one up that happens to be available on the street. In Florence the Enjoy 500s can be driven in the limited traffic zone in the city center. What’s more, they can be parked in a variety of places, including those that are otherwise reserved for residents. Certainly that will make the Enjoy driver happy. Probably not the residents.

The fees are said to be highly competitive with alternatives, coming in at 25-cents a minute for the first 50 km that the vehicle is in motion, after which there is a 25-cent per kilometer fee added to the time fee. The cost of having a parked Enjoy 500 is 10 cents a minute.

Here’s the thing: Eni is going to sell gas to individuals who own or lease cars as well as to the Enjoy members (the aforementioned fees include insurance, fuel, parking, and maintenance costs). Trenitalia has Enjoy vehicles outside of the main train stations, which means that its customers can have more seamless mobility.

But what about Fiat? If people choose to join Enjoy and not buy a 500, then presumably there are going to be fewer 500s sold then there otherwise might be.

And with the proliferation of car-sharing services around the globe—and certainly not just in Italy—things are going to get a little complicated for all OEMs.


Motorcycles and Luxury


By: Gary S. Vasilash 12. November 2014

BMW Group, in addition to cars and utes and limos, builds motorcycles. Its BMW Motorrad operation is widely acknowledged for making high-quality, top-performance bikes. The blue and white roundel on a fuel tank is as respected as the one that is found on the hood of a 7 Series.

BMW S 1000 RR

Back in 2012, AUDI AG announced that it would acquire Italian motorcycle manufacturer Ducati Motor Holding. In making the announcement, Rupert Stadler, chairman of the Board of Management of AUDI AG, explained: “Ducati is known worldwide as a premium brand among motorcycle manufacturers and has a long tradition of building sporty motorcycles. It has great expertise in high-performance engines and lightweight construction, and is one of the world’s most profitable motorcycle manufacturers. That makes Ducati an excellent fit for Audi.”

Audi Ducati

A good rationalization. Particularly that part about profitability.

Recently, Mercedes-AMG, the performance part of Mercedes-Benz Cars, announced that it would be acquiring a 25% stake in MV Agusta. It, too, is a motorcycle manufacturer.

Mercedes-AMG und MV Agusta geben Kooperation bekannt. Die neue Partnerschaft umfasst die Zusammenarbeit bei Marketing und Vertrieb. Hier die aktuellen Produkt-Highlights der beiden High-End Marken: Der Mercedes-AMG GT S und die MV Agusta F3 800 Ago. // Mercedes-AMG and MV Agusta announce cooperation. The new partnership covers the cooperation in the area of marketing and sales. The actual product highlights of the two high-end brands: The Mercedes-AMG GT S and the MV Agusta F3 800 Ago.

The explanation for this one comes from Wilko Stark, vice president Daimler Strategy & Mercedes-Benz Cars Product Strategy and Planning, and it goes like this:

“The positioning of Mercedes-AMG as the performance brand in the Mercedes-Benz product portfolio will be further strengthened through the strategic partnership with MV Agusta. The strategic cooperation with MV Agusta will allow us to address high-performance enthusiasts with automobiles and with motorcycles. Through the cooperation in the area of marketing and sales, we will be able to attract new target groups for both companies all over the world.”

Which sounds somewhat more nebulous than the Audi explanation (i.e., Ducati knows a lot about light structures, makes compact, high-performance engines, and is really, really profitable).

Somehow, the notion that a buyer of an S 63 AMG is going to say, “Hmm, maybe I ought to complement this ride with a Brutale 800 Dragster RR.”

Of course, as I don’t have $130K-plus for a car, this may be completely off base.

I asked a friend who rides motorcycles (and for full disclosure: he once owned a Ducati) about the relative status of the German companies vis-à-vis the related motorcycle brands.

And he responded that while BMW and Ducati have the same level of street cred as the car parts of the businesses, things are not so good, in his estimation regarding MV Agusta: “The brand is murky and their quality is so-so.”

Not exactly a ringing endorsement for Mercedes-AMG.


Renault’s New Design for a. . .Pickup


By: Gary S. Vasilash 11. November 2014

While pickups may be big in the North American market, they are massive in South America, comparatively speaking.

So it is fitting that the Renault design center in Sao Paulo created a show car for the recent Sao Paulo Motor Show  that is a combination between an SUV and a pickup.

(Think the gone-and-lamented Ford Explorer Sport Trac).

Ford Explorer Sport Trac V8 LIMITED

2010 Ford Explorer Sport Trac

The Duster Oroch concept was designed by RDAL, the Renault design center for Latin America, based in Sao Paulo.

Renault Duster Oroch

Duster Oroch

Laurens van den Acker, Renault senior vice president, Corporate Design, said, “The Renault Duster Oroch show car boasts the energetic, robust stance that appeals to customers. It’s the work of our Sao Paulo design center and packs an emotional punch which is characteristic of design in Latin America. While it takes its inspiration from the Duster, itself a robust vehicle with an assertive personality, our local design team has delivered a fresh interpretation of the model in the form of this show car.”

This, incidentally, is the Duster, an SUV:

Renault Duster

Duster

Noted Denis Barbier, Renault senior vice president and chairman of the Americas Region, “The show car explores the world of pickups—a segment we’re absent from at the moment but which totals around 900,000 vehicles a year.”

In reporting its third-quarter performance, Renault Group’s overall registrations were stable, but down 20.6% in the Americas region, which as a market was down for automakers by 8.3%.

Seems like a piece of that 900,000-vehicle market would be helpful to Renault’s fortunes in the region.


“Earl Grey, Hot.”


By: Gary S. Vasilash 11. November 2014

Were Captain Picard to have the opportunity to visit a Lincoln store in Beijing, Shanghai or Hangzhou—all of which opened last week—he would have the ability to partake of a beverage in the store’s tea room. Presumably while musing over the vehicle of his choice.

Lincoln Opens First Three Stores in China: Tea House

Or perhaps he would simply spend his time in the “Personalization Studio,” where there is a 46-inch LCD touch screen that can be controlled to display a configured vehicle, inside and out.

It may not be the Holodeck, but it is certainly a far cry from what many people are familiar with when it comes to their “dealership experience.”

In China they’re operating under the label, the “Lincoln Way.”

Apparently, Lincoln discovered during three years of research into the Chinese luxury market that the Chinese buyer is no longer interested in luxury as “an overt statement of their personal net worth,” but as “a way to express their unique individuality.”

Individuality seems a bit odd in what is still a collectivist state.

Lincoln Opens First Three Stores in China: Store environment

Anyway, the Lincoln customer (it is not clear whether are tire-kickers in China, people who might roll into the dealership just to kill time, which in this case might include having a delicious hot drink) will have the opportunity to interface with the “Lincoln Team.”

This consists of the Host, who is the primary person working with the customer. If the Host needs to get some additional help (is this a variant of “I’ll have to run this by my manager”?), then the Master gets involved. The Master is said to be “the customer’s trusted resource during the sales process.” Then there is the Craftsman, who handles repair, which is quite a controversial thing in China, such that not only does the Lincoln Way have it that there are cameras in the service bays that the customer can access while sipping tea in the Star Lounge (a bit Big Brother), but once the repair is done, the Craftsman can return the used parts, “packaged in a Lincoln box and tagged with a label, extraction date and the name of a service technician.”  Presumably, this is to provide assurance to the customer that what was said to have been done was, indeed, done.

Lincoln Opens First Three Stores in China: Vehicle display

Lincoln plans to open five more stores before the end of the year, and have 60 stores in 50 cities by 2016.

According to a recent report by automotive data company Inovev, in June 2014 there were 23,348 dealerships in China, up from 21,756 in July 2013.

Here’s hoping the tea is good.


Taking a SWOT at Sales


By: Gary S. Vasilash 10. November 2014

Strengths. Weaknesses. Opportunities. Threats.

Those are the fundamental elements of a SWOT analysis, which is sometimes deployed in companies to figure out what they’re good at, not so good at, what they might do, and what they need to watch out for.

Last week, the OEMs reported how they were doing in terms of sales for October.

So on this edition of “Autoline After Hours,” John McElroy, Joe White of the Wall Street Journal, Scott Burgess of Motor Trend and I take a SWOT at how some of the OEMs did.

2015 Jeep® Cherokee Trailhawk

The Cherokee’s sales are going in one direction: Up.

Take Chrysler Group, for example:

  • Strength: Jeep. Up 46% for the year, with 571,585 units sold. (Cherokee is doing remarkably well, with 147,733 sold so far, and given that the other vehicles in the lineup are doing well, too, it isn’t like there is cannibalization.)
  • Weakness: Cars. The Chrysler 200 is -22% for year, the Chrysler 300 -9%, the Dodge Dart -5%, the Dodge Charger -3%, and the Dodge Challenger -3%
  • Opportunities: Cars.
  • Threat: The 2015 Ford F150. That is, Ram sales are up 23%, and total sales this year of the pickup are 359,702, which represents 63% of Jeep sales for the Ram pickup alone. The EcoDiesel version is widely hailed for its fuel efficiency. But what if the F-150 comes in at a lower price point with equal-to or better-than fuel efficiency?

So White addresses some of the key business considerations for Chrysler (and the other companies we talk about). Burgess knows cars and trucks exceedingly well, so he is able to address the sheet metal portion of the business. And McElroy has bridging knowledge that accommodates both positions. (E.g., he suggests, for example, that given the poor performance of the Dart, which he considers to be an outlier in a brand that is positioning itself as a “performance” brand, the Dart ought to be moved over to the Chrysler side of the house, and reconfigured to become the Chrysler 100.)

In addition to the SWOT, we take a look at the melee at the NASCAR Sprint Cup AAA Texas 500, the economics of Formula One, and much more.

You can check it out here:




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