Elon Musk AND Bob Lutz on Charlie Rose 11/9/11

[ENIAC]

The best selling vehicles tend to be utilitarian.

For instance, a basic "workhorse" pickup tends to be the best selling vehicle in the USA.

http://www.forbes.com/pictures/mkk45ehhl/best-selling-cars-of-2011#content" onclick="window.open(this.href);return false;

True.
Large volume vehicles need to be "not dated" in design & not disliked by many people. In other words plain vanilla. That is exactly how the Camrys and Accords look like.
While a gorgeous looking car might sell a few based on looks, it won't become a large volume vehicle based on how it looks. Value & reputation plays a large part.

However, on occasion, an OEM will launch a more radical design. The press will label it "polarizing". If the OEM can meet their sales targets and stick to it, in the third model season the once "radical" design can go mainstream with large volume. Thus giving the OEM a big advantage, until the others adopt the new style. You are seeing this happening right now with Hyundai. If Honda's had Hyundai styling, Honda wouldn't be in trouble right now.

 

[evnow]

If Honda's had Hyundai styling, Honda wouldn't be in trouble right now.

I don't buy that. Hyundai is just better value than Honda.

Essentially, Hyundai upped their quality, kept their prices down and benefitted in a troubled economy. Infact when we bought our last vehicle a few years back - we compared Hyundai SantaFe & Honda CR-V. For about the same price we got a much better Hyundai compared to a thread-bare CR-V. How it looked wasn't even much of a consideration.

 

[ENIAC]

If Honda's had Hyundai styling, Honda wouldn't be in trouble right now.

I don't buy that. Hyundai is just better value than Honda.

In general, the quality of cars nowadays, from all OEMs, is pretty good. So the key differentiator is the automobiles styling. The mantra in the car business is, "it's all about how you bend the metal". And today Hyundai is bending the metal in a very desirable way. It's likely you'll see their design influences picked up by the other manufactures over the next several years.

 

[evnow]

In general, the quality of cars nowadays, from all OEMs, is pretty good.

But they are not all good value.

Infact what you say is the problem for Honda. Why would anyone pay more for Honda if their quality is same as Hyundai ?

 

[ENIAC]

In general, the quality of cars nowadays, from all OEMs, is pretty good.

But they are not all good value.

Infact what you say is the problem for Honda. Why would anyone pay more for Honda if their quality is same as Hyundai ?

I believe you're missing my point. I'm not saying consumers would necessarily pay more. Rather I'm saying consumers tend to select the brand with the better styling in the same segment category, given there is now no differentiation in the overall reliability, features, mileage, etc of the vehicles. There is nothing wrong with the new Accord's reliability, features, mileage, etc. What is word with the Accord is that it lacks the style of a Hyundai, for example.

 

[cwerdna]

In general, the quality of cars nowadays, from all OEMs, is pretty good.

Rather I'm saying consumers tend to select the brand with the better styling in the same segment category, given there is now no differentiation in the overall reliability, features, mileage, etc of the vehicles.

I strongly disagree with your assertions that I bolded. Go take a look at the December '11 issue of Consumer Reports, their April auto issue or one of their car buying guides on a newsstand.

Also, go take a look the types of problems being reported on say Cruzetalk (both engine configs of the Cruze had much worse than average reliability in CR and were the bottom of the barrel for small car reliability) vs. say Priuschat (Prius has made better than avg. reliability).

If Honda's had Hyundai styling, Honda wouldn't be in trouble right now.

Define "trouble". What type of "trouble" are we talking about when it comes to Honda? They're having problems (which I can elaborate on) but most likely, not for the reasons you think.

On the note of Hyundai, yes, Hyundai's made some recent big strides forward in styling but the Sonata (which actually looks pretty nice on the outside now) has had well publicized steering problems:
http://www.caranddriver.com/reviews/2011-hyundai-sonata-se-20t-test-long-term-review" onclick="window.open(this.href);return false; (search for steer)
http://news.consumerreports.org/cars/2011/03/2011-hyundai-sonata-owners-and-cr-test-drivers-complain-of-steering-alignment-problems.html" onclick="window.open(this.href);return false;
http://news.consumerreports.org/cars/2011/03/2011-hyundai-sonata-steering-update-new-strut-similar-alignment-issue.html" onclick="window.open(this.href);return false;
http://content.usatoday.com/communities/driveon/post/2011/08/hyundai-announces-campaign-to-fix-sonata-steering/1" onclick="window.open(this.href);return false;

Here are some other painful issues for some w/other brands:
http://www.autoblog.com/2011/02/11/report-nhtsa-investigation-into-100-000-vw-and-audi-diesels-int/" onclick="window.open(this.href);return false;
http://www.tdi-issues.com/hpfp-cases-tac68/" onclick="window.open(this.href);return false;
http://my350z.com/forum/other-vehicles/513158-anyone-here-own-a-135i.html#post8931167" onclick="window.open(this.href);return false; (relates to the HPFP used in recent BMW x35i models (where x is a number such as 1 or 3) which have their N54 engine)
http://my350z.com/forum/other-vehicles/513158-anyone-here-own-a-135i.html#post8931748" onclick="window.open(this.href);return false;
http://my350z.com/forum/other-vehicles/513158-anyone-here-own-a-135i-2.html#post8936394" onclick="window.open(this.href);return false;
http://www.autoblog.com/2010/10/26/abc-news-airs-big-expose-on-bmw-n54-engine-problems-lawsuits-w/" onclick="window.open(this.href);return false; (apparently, they finally issued a recall)
http://my350z.com/forum/8434627-post10.html" onclick="window.open(this.href);return false; (engine failures on the Cadillac SRX that eventually resulted in a recall)

 

[ENIAC]

Define "trouble". What type of "trouble" are we talking about when it comes to Honda?

Well it's been in the news for awhile now, but a quick Google found this WSJ article as pretty typical.

And just like that, a giant stumbles. The redesigned 2012 Honda Civic—one of the most successful cars in U.S. auto history, a nameplate burnished with the grateful tears of generations of Americans—is a dud. A sham. A shud. Massive fail, LOL.

Civic's U.S. sales were down 26% in September and 15.6% year-to-date, a cratering rivaled only by the 15.7% decline registered by the Honda Accord.

http://online.wsj.com/article/SB10001424052970204346104576639391879623856.html" onclick="window.open(this.href);return false;

 

[cwerdna]

Define "trouble". What type of "trouble" are we talking about when it comes to Honda?

Well it's been in the news for awhile now, but a quick Google found this WSJ article as pretty typical.

And just like that, a giant stumbles. The redesigned 2012 Honda Civic—one of the most successful cars in U.S. auto history, a nameplate burnished with the grateful tears of generations of Americans—is a dud. A sham. A shud. Massive fail, LOL.

Civic's U.S. sales were down 26% in September and 15.6% year-to-date, a cratering rivaled only by the 15.7% decline registered by the Honda Accord.

http://online.wsj.com/article/SB10001424052970204346104576639391879623856.html" onclick="window.open(this.href);return false;

Yep, the 2012 Civic has not been well received by the press, but as I suspected, I think you don't have the full picture re: their sales being down.

http://www.ft.com/cms/s/0/57093e68-0494-11e1-ac2a-00144feabdc0.html#axzz1de9wMJPd" onclick="window.open(this.href);return false;
http://www.washingtonpost.com/business/parts-shortage-due-to-thai-floods-drive-honda-to-cut-us-canadian-factory-output-by-50-pct/2011/10/31/gIQAqMLPZM_story.html" onclick="window.open(this.href);return false;

Prior to the Thai flooding, Honda was most badly hit by the tsunami and earthquake: http://www.thetruthaboutcars.com/2011/07/japanese-auto-industry-loses-1-4-million-units-%E2%80%93-nissan-walks-away-unharmed/" onclick="window.open(this.href);return false;. http://www.prnewswire.com/news-releases/american-honda-reports-august-sales-128894373.html" onclick="window.open(this.href);return false; makes a mention of reduced supplies, for example.

Some of the older articles from http://www.thetruthaboutcars.com/tag/parts-paralysis/" onclick="window.open(this.href);return false; might provie insightful. http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-when-the-chips-are-down/" onclick="window.open(this.href);return false; was interesting, when I read it.

 

[Herm]

Well it's been in the news for awhile now, but a quick Google found this WSJ article as pretty typical.

I did not check the article you mentioned but I have probably seen it.. the two complaints against the Civic is a) interior styling has not kept up with the competition and b) EPA mileage ratings are low compared to the slew of compacts getting 40mpg.

Yet in a recent Car & Driver comparo review the Civic achieved the highest mpg, but had the lowest EPA ratings.. and all that while using a lowly 4spd automatic when everyone else is going to fancy 6 speeds. The Civic is still a very light car.

Lutz knows what he is talking about. Honda listened and is adding more glitter and soft interior plastics.

 

[cwerdna]

I did not check the article you mentioned but I have probably seen it.. the two complaints against the Civic is a) interior styling has not kept up with the competition and b) EPA mileage ratings are low compared to the slew of compacts getting 40mpg.

Yet in a recent Car & Driver comparo review the Civic achieved the highest mpg, but had the lowest EPA ratings.. and all that while using a lowly 4spd automatic when everyone else is going to fancy 6 speeds. The Civic is still a very light car.

There are other big complaints (from reviewers) about the '12 Civic beyond the interior styling. http://www.thetruthaboutcars.com/2011/08/did-you-ever-imagine-that-cr-would-not-recommend-a-civic/" onclick="window.open(this.href);return false;, http://news.consumerreports.org/cars/2011/08/2012-honda-civic-lx-scores-too-low-for-consumer-reports-to-recommend.html" onclick="window.open(this.href);return false; and http://news.consumerreports.org/cars/2011/10/2012-honda-civic-ex-testedbut-not-recommended.html" onclick="window.open(this.href);return false; mentions some.

As for the above comparo, can you please cite the review and those EPA numbers? From http://www.fueleconomy.gov/feg/sbs.htm" onclick="window.open(this.href);return false;, no '12 Civic has a 4 speed transmission. The non-Si models have 5 speed autos or manuals.

"40 mpg" is a big pet peeve of mine is that refers to an EPA highway rating yet doesn't mention the combined or city mileage. See http://priuschat.com/forums/other-cars/99292-detnews-40-mpg-claims-grab-headlines-miss-mark.html" onclick="window.open(this.href);return false; for my rant and discussion about this.

 

[ENIAC]

Yep, the 2012 Civic has not been well received by the press, but as I suspected, I think you don't have the full picture re: their sales being down.

http://www.ft.com/cms/s/0/57093e68-0494-11e1-ac2a-00144feabdc0.html#axzz1de9wMJPd" onclick="window.open(this.href);return false;
http://www.washingtonpost.com/business/parts-shortage-due-to-thai-floods-drive-honda-to-cut-us-canadian-factory-output-by-50-pct/2011/10/31/gIQAqMLPZM_story.html" onclick="window.open(this.href);return false;

Prior to the Thai flooding, Honda was most badly hit by the tsunami and earthquake: http://www.thetruthaboutcars.com/2011/07/japanese-auto-industry-loses-1-4-million-units-%E2%80%93-nissan-walks-away-unharmed/" onclick="window.open(this.href);return false;. http://www.prnewswire.com/news-releases/american-honda-reports-august-sales-128894373.html" onclick="window.open(this.href);return false; makes a mention of reduced supplies, for example.

Some of the older articles from http://www.thetruthaboutcars.com/tag/parts-paralysis/" onclick="window.open(this.href);return false; might provie insightful. http://www.thetruthaboutcars.com/2011/04/japanese-parts-paralysis-when-the-chips-are-down/" onclick="window.open(this.href);return false; was interesting, when I read it.

So is your thesis that if it weren't for the Thai flooding, Japan tsunami and earthquake there would be an even greater over supply of fugly 2012 Honda Civics available?

 

[cwerdna]

So is your thesis that if it weren't for the Thai flooding, Japan tsunami and earthquake there would be an even greater over supply of fugly 2012 Honda Civics available?

I've seen a # of reports of supply shortages of Civics and other Hondas:
http://9thcivic.com/forum/threads/honda-struggles-with-supply.2214/" onclick="window.open(this.href);return false;
http://blogs.insideline.com/straightline/2011/10/honda-cutting-north-american-production-by-50-updating-civic-by-2013.html" onclick="window.open(this.href);return false;
http://www.autotrader.com/research/article/car-news/133027/honda-experiences-civic-shortage.jsp" onclick="window.open(this.href);return false;
http://www.djapanesecars.com/honda/stock-shortage-2012-honda-civic.html" onclick="window.open(this.href);return false;

Side note: Honda hybrid sales in the US have always been puny compared to Toyota hybrid sales but it seems like Honda's been been doing even worse in that dept, as of date. See http://priuschat.com/forums/prius-hybrid-ev-alt-fuel-news/99602-october-car-sales-up-prius-down-2.html#post1411956" onclick="window.open(this.href);return false; for one guy's report on a dealer Honda dealer in So Cal in his quest for a HCH.

When you can't get car or get it equipped the way you want, that tends to steer you to other brands that don't have such a problem.

 

[ENIAC]

I've seen a # of reports of supply shortages of Civics and other Hondas:

When you can't get car or get it equipped the way you want, that tends to steer you to other brands that don't have such a problem.

That would be true, if in fact there was a shortage. However, here are the present U.S. inventory numbers for some popular C segment vehicles.

Honda Civic - 20,000
Toyota Camry - 23,000
Ford Focus - 22,000
Hyundai Elantra - 5,000
Chevrolet Cruze - 28,000
Volkswagen Jetta - 14,000

It spite of the fact Honda are trying to create the illusion of scarcity, it appears there are plenty of Civics available on the lots presently. But the nameplate offering brands with the more desirable bent metal appears to be in rather short supply from the looks of it.

 

[cwerdna]

^^ Source?
So, Honda is lying when speaking to the press in articles like http://www.insideline.com/honda/civic/2012/honda-dealer-inventory-of-2012-honda-civic-is-virtually-zero.html" onclick="window.open(this.href);return false;?

 

[ENIAC]

^^ Source?

My data came from a simple cars.com new vehicle search. I know autotrader.com is also popular. The results are usually within a few hundred vehicles of one another.

So, Honda is lying when speaking to the press in articles like http://www.insideline.com/honda/civic/2012/honda-dealer-inventory-of-2012-honda-civic-is-virtually-zero.html" onclick="window.open(this.href);return false;?

Um.... well they did say "virtually" which, in this context, means kinda... sorta.... I suppose. So if a dealer is accustomed to a 60+ day inventory and now they have a ~30 day inventory you could make a case that you have virtually no inventory. On the other hand you could also make a case it's a bold face lie.

Did you read the comments from readers of the Inside Line article you pointed me to? Many are calling BS because they have actually visited Honda dealerships with significant 2012 Civic inventory.

 

[cwerdna]

^^ Source?

My data came from a simple cars.com new vehicle search. I know autotrader.com is also popular. The results are usually within a few hundred vehicles of one another.

So, Honda is lying when speaking to the press in articles like http://www.insideline.com/honda/civic/2012/honda-dealer-inventory-of-2012-honda-civic-is-virtually-zero.html" onclick="window.open(this.href);return false;?

Um.... well they did say "virtually" which, in this context, means kinda... sorta.... I suppose. So if a dealer is accustomed to a 60+ day inventory and now they have a ~30 day inventory you could make a case that you have virtually no inventory. On the other hand you could also make a case it's a bold face lie.

Did you read the comments from readers of the Inside Line article you pointed me to? Many are calling BS because they have actually visited Honda dealerships with significant 2012 Civic inventory.

It took me a bit to find it (had to search for car and switch to All in a distance dropdown). Interesting, I've never thought to look there or at autotrader.com to get some idea of inventories. I wonder how accurate it is and how many of these actually are sitting at dealer lots? Dealers generally receive VINs before cars arrive. I don't know the "order" process for each make, but for some, AFAIK, the dealer does all the ordering of colors, equipment levels, etc.

There are clearly some erroneous listings like 4 Civics that are >$197K including a $212K one. The two above $40K are suspect too.

No, I didn't look at the comments until now. Thanks. I'm seeing mixed reports, some confirming and yes, others claiming there's plenty. One guy said "driven past 3 Honda dealers this weekend. I was actually curious to see if they had anything in stock...and they had plenty. Coupes, Sedans, the works - at least 10 Civics at each dealer..." For Civics, that's not a lot, in my book.

 

[davewill]

No, I didn't look at the comments until now. Thanks. I'm seeing mixed reports, some confirming and yes, others claiming there's plenty. One guy said "driven past 3 Honda dealers this weekend. I was actually curious to see if they had anything in stock...and they had plenty. Coupes, Sedans, the works - at least 10 Civics at each dealer..." For Civics, that's not a lot, in my book.

Well if he's just driving by, he's only seeing what they've got out front. They could have 50 more in inventory...or none.

 

[ENIAC]

No, I didn't look at the comments until now. Thanks. I'm seeing mixed reports, some confirming and yes, others claiming there's plenty. One guy said "driven past 3 Honda dealers this weekend. I was actually curious to see if they had anything in stock...and they had plenty. Coupes, Sedans, the works - at least 10 Civics at each dealer..." For Civics, that's not a lot, in my book.

Well if he's just driving by, he's only seeing what they've got out front. They could have 50 more in inventory...or none.

True, and they could be stacked up at the port as well. I've read were the mid-cycle revamp of the Civic, which was scheduled for spring 2014, is now set for 2013. That's a big red flag that something is amiss.