Monthly Archives: October 2014

The Next Wave of Luxury Cars

THe luxury market has always been important but today it seems be be grown rapidly.  Luxury electric car maker Tesla Motors is making its Model S sedan faster and safer in an effort to compete better with other high-end sedans.

At an open-to-the-public unveiling Thursday night that included bumping music, free alcohol and test rides on an airport tarmac, CEO Elon Musk unveiled an all-wheel-drive version of the car that includes self-driving features he called “auto pilot.”

The announcement ended a week of speculation following a cryptic Musk tweet that said, “About time to unveil the D and something else.”

Taking the stage with more than 1,000 Tesla fans in the audience, he explained that the “D” stands for “dual motor.” The current Model S is a rear-wheel-drive car with one motor. The “D” will have two motors — one powering the front wheels and one powering the rear wheels.

Musk said unlike all-wheel-drive systems on gas-powered cars, which tend to be heavy and make the cars less efficient, Tesla’s system improves the speed, acceleration and mileage by optimizing which motor is used.

The dual motor version of the P85 performance sedan will have a top speed of 250 km/h, compared with the current 210 km/h. It will accelerate from 0-60 mph in 3.2 seconds, akin to exotic sports cars.

“This car is nuts. It’s like taking off from a carrier deck,” Musk said at a municipal airport near Los Angeles where another of Musk’s companies — the commercial rocket firm SpaceX — is based. The crowd obliged with cheers and applause.

After Musk left the stage came the rides, which demonstrated both the car’s acceleration and safety features. Attendees, many dressed up and some well-lubricated with drink, were not allowed behind the wheel.

The all-wheel-drive system helps grip slippery roads, and analysts have said Tesla needed it to boost sales in the Northeast and Midwest, as well as Europe. The company sold 13,850 cars in the U.S. this year through September, down 3 per cent from a year ago, according to Autodata Corp.

Tesla is also significantly upgrading its safety features.

The Model S will steer itself back if it wanders from its lane and brake automatically if it is about to hit something. Those features are offered on luxury competitors, as well as mainstream brands such as Ford, Hyundai and Toyota.

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Canadians Want European Cars

Some of the top selling cars in the world are from Europe. The problem?  Many Canadians can’t get their hands-on them.  Volvo’s V40 hatchback smashed records in European crash tests, scoring an unprecedented 98 of 100 points. But restrictive Canadian regulations mean consumers can’t buy the sporty hatchback here.

The V40 received a five-star rating in 2012 from the European New Car Assessment Program (NCAP), a consortium of seven European governments and consumer safety organizations, which organizes crash tests for European cars. Its safety features include the world’s first pedestrian airbag.

The V40 is just one of dozens of popular European models that don’t get to this side of the Atlantic because they don’t meet Transport Canada standards. In many instances, for companies such as Volvo, Audi or Mercedes, it’s not economically feasible to retest or modify a model to fit Canadian rules. Those changes can also add anywhere from $1,000 to $5,000 to the retail price.

Volvo Canada president Marc Engelen scoffs at the barriers to the V40, which also effectively prevent the importation of the V40 Cross Country and the V60 plug-in hybrid (1.9 litres/100 km). He calls the government regulations “ridiculous.

“As a smaller company we are not prepared to do these investments,” Engelen says. “Maybe the European trade agreement can help, but there’s delay there, too and that doesn’t help the cause either. It’s not an advantage to the final customer.”

Meanwhile, Transport Canada standards prevent the sale of such models as the Volkswagen Scirocco (formerly sold in North America) and the Mercedes-Benz A-class hatchback.

This has been a hot button issue for Tim Reuss, president of Mercedes-Benz Canada, who has been outspoken about Canada’s regulations. Like other European manufacturers, his company is frustrated with little progress after months of lobbying.

While Canada and the EU have hashed out a blueprint for the Comprehensive Economic and Trade Agreement (CETA) with the European Union, expected to be final in 2016, Reuss says the company has been “lobbying and pushing hard … to at least open the door to discuss standards and regulations.” He expected the process to be slow, but sees little sign of progress.

He’s advocating for “reciprocal acceptance of each other’s standards,” because that would more quickly open Canada’s doors to more models.

As Canada harmonizes its auto regulations with the United States, that sends a mixed message to European auto makers, Reuss says.

“From my perspective, there seems to be a disconnect between, let’s call it the political government and the bureaucratic government.”

Reuss says Canada’s ongoing efforts to harmonize auto standards with the United States amounts to accepting U.S. regulations. Meanwhile, “Canada politically has made it clear that they, while maintaining a special relationship with their neighbour to the south, are opening themselves up to the rest of the world. For me, that seems to be a fundamental disconnect.”

But harmonization with the United States is critical to Canadian consumer safety and expectations, says Mark Nantais, president of the Canadian Vehicle Manufacturers Association. He says Canadian standards are more rigorous than the EU’s. He cites North American specifications as tougher than EU’s “limited” standards on things such as side and frontal impact occupant protection, roof intrusion strength, and fuel system integrity in side and rear collisions.

“Canada and U.S. standards are data-driven and have been shown to have public safety benefits which have resulted in regulations that are more stringent,” Nantais says, adding there are about 15 remaining standards to harmonize between the United States and Canada, where there were once many more.

“Keep in mind these companies are highly competitive and want to be leaders in sales … generally speaking,” he says.

Reuss, however, says nobody’s regulations are “better” – just “different.” Rather, the real issue is also letting innovative technology come to the market and giving consumers more choice.

“To say that the EU does not have stringent safety standards would be accusing the EU of negligence, because it’s the same government that approves and agrees with those vehicles being driven at top speeds on the German autobahn … so, come on, seriously.”

Canada’s regulations are also keeping cutting-edge technology from the marketplace, Reuss says. He points to intelligent light systems, which adapt to driving and seeing conditions, automatically dim and differentiate between an animal and a human on the road. Mercedes has adopted it in its S-Class models and other European auto makers have also integrated the technology.

We won’t see them here, Reuss says, because Canada’s regulations were written long before this technology was born. “I’m exaggerating a little bit, but it was written when all you could do was turn lights on and off – and that was the height of technology at the time.”

The A-class hatchback is another example of a model Canadians say they want, but Mercedes can’t import.

“We have very clear market research of what our customers want and we have clear feedback from our dealers from our salespeople,” says Reuss.

Reuss sees hope in the CETA trade agreement. He hopes Canada and the EU can use that mechanism to address the trade barriers that prevent the best technology from coming to Canada.  The market demand is here, it is now up to everyone else to get the cars Canadians want here.

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BMW Lowers Mini Cooper’s Expectations

BMW has decided to lower Mini Coopers fuel economy rating today.  BMW AG is lowering the estimated fuel economy labels on four 2014 Mini Cooper models after tests by the U.S. EPA, the agency said today.

The EPA completed a fuel economy audit on the Mini Cooper and found actual mpg lower than the figures BMW submitted for certification, a statement said.

As a result, the EPA supervised a new round of tests by BMW. The agency also conducted its own testing of the Mini Cooper at the National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Mich.

The agency is ordering BMW to relabel four 2014 Mini Cooper models — the Mini Cooper hardtop with a manual and an automatic transmission and the Mini Cooper S hardtop with a manual and an automatic transmission — that proved to have lower fuel economy than the mpg label showed.

“While this necessitates change, the 2014 MINI Hardtop still delivers outstanding fuel efficiency,” BMW said. “We have sent new labels for 2014 models in stock to our dealers.”

BMW will have all four models’ combined and city mpg ratings fall by 1 mpg, while highway estimates will drop 1 to 4 mpg depending on the model.

“Fuel economy values matter to consumers and automakers,” Christopher Grundler, director of EPA’s office of transportation and air quality, said in a statement. “To provide consumers with the most accurate, reliable and repeatable fuel economy values, we are continuing to strengthen our oversight to ensure fair competition among automakers.”  Will other competitors need to re-evaluate their fuel economy as well?

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Toyota Recalls 1.7 Million Cars Worldwide

It has been a hard year for the car manufacturing giant.  Toyota Motor Corp. called back 1.75 million vehicles worldwide to fix braking and fuel systems flaws, the first global recall since the U.S. put the car maker under stricter safety supervision.

The Lexus IS, GS and LS luxury sedans and Toyota Auris compact hatchback are among the 10 models being called back, according to an e-mail from the Toyota City, Japan-based auto maker. The company said that it isn’t aware of any fires, crashes, injuries or fatalities resulting from the defects.

The safety campaign is Toyota’s fourth this year involving at least 1 million vehicles as the auto industry responds to scrutiny over tardy recalls. General Motors Co. has called back a record 30 million cars and trucks this year in North America, while Toyota has dealt with renewed attention to safety after recalling more than 10 million vehicles in 2009 and 2010 for defects related to unintended acceleration.

“With the lessons learned from past recalls in North America, Toyota keeps showing the attitude to proactively recall and have everything under control before any serious accident happens,” said Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co. “I don’t think this recall would damage the brand image, or cause the shares to decrease, as there were no injuries, fatalities or crashes.”

Toyota’s shares pared gains to trade 0.2 per cent higher at 5,990 yen at the close in Tokyo. The Nikkei 225 Stock Average gained 0.9 per cent.

Model Recalls Toyota is calling back about 802,000 Crown, Crown Majesta, Noah and Voxy models made June 2007 to June 2012 to replace a rubber seal in the brake system that could crack and cause fluid to leak, leading to degraded performance.

The auto maker is also recalling the Crown and Crown Majesta, as well as the Mark X and iterations of the three Lexus models to repair fuel delivery pipes that could leak and increase fire risk. A third flaw involves about 190,000 Rumion and Auris cars in Japan that Toyota dealers will fix by replacing emission-control units that could cause fuel leaks and lead to greater fire risk.

Toyota first received a report of a problem that prompted the fuel delivery pipe recall in June 2010 in the U.S., said Tokyo-based spokesman Dion Corbett. The company received initial reports from Japan for the brake fix in July 2011 and the emission control units in January last year.

U.S. Monitor Today’s recall is the first major global campaign by Toyota since David Kelley, a New York-based partner at Cahill Gordon & Reindel LLP and former U.S. Attorney, was appointed by the U.S. Justice Department in August to supervise the car maker’s safety procedures.

Kelley will review Toyota’s policies and verify the accuracy of its public statements for three years as part of the automaker’s $1.2-billion settlement for the unintended– acceleration recalls.

Toyota has now recalled about 5.3 million vehicles in the U.S. market this year, according to its U.S. media website. A total count for vehicles recalled globally wasn’t immediately available, Corbett said.

The U.S. National Highway Traffic Safety Administration last month said it would renew scrutiny of claims involving unintended acceleration. As many as 1.69 million Toyota Corollas with model years from 2006 to 2010 could be subject to investigation depending on the regulator’s evaluation of an owner’s claim of unintended “low-speed surging.”

Safety Campaigns Toyota in June expanded a 14-month-old recall of more than 2 million vehicles for faulty air bags after supplier Takata Corp. told customers further fixes may be needed. The car maker added about 650,000 vehicles in Japan including Corolla cars to the safety campaign.  After recalling so many cars how will Toyota be able to bounce back?

 

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