The web has created new customers that are educated and ready to buy. You go to Amazon.com to buy a book or a television. You can pick up a couch at Etsy.com. You can purchase an entire vacation – flights, hotels and a rental car – at Expedia.com. The opportunities to empty your wallet are but a few clicks away.
But are you willing to spend tens of thousands of dollars over the Internet on your next set of wheels? According to many recent studies, an increasing number say, bring it on. In a poll of 1,002 people in the U.S. by Edmunds.com conducted this year, 83 per cent indicated they would love to avoid the haggle associated with purchasing a car in a dealership; one in five said they would rather give up sex for a month than go through the traditional car-buying experience. Another worldwide study of 10,000 people by Capgemini (a global consulting and technology firm based in France) for Cars Online found that 44 per cent of car buyers expect to purchase their next vehicle over the Internet
While the options for purchasing a vehicle online are relatively limited, auto makers and dealerships are slowly recognizing consumers’ embrace of the Internet when it comes to making their second-largest purchase. But all of this still doesn’t mean the end of the brick-and-mortar dealership just yet.
In August, Volvo opened sales for its latest XC90 SUV model online and sold the first lot of 1,927 in just 47 hours, with 61 of those going to Canadian buyers. After paying a deposit online, the buyer was obligated to visit a local dealership to secure financing before picking up the XC90 vehicle early next year.
“In Canada, the core business of most car retailers is the service, and if you ask retailers where they sustain their business, it’s on the service side,” says Margareta Mahlstedt, vice-president of marketing with Volvo Canada. “So, for us, it’s a way of making the time invested in the upfront purchase less from a retailer’s perspective and, at the same time, increasing their car park and opportunities for service.
“We don’t want it to ever be a pure retail transaction online, at least not now because that’s not what the market is ready for.”
The internet is already a driving force for car consumers, whether they buy online or not. McKinsey Global Institute research showed that the average number of dealership visits by car buyers has dropped from five in 2005 to less than two today, a result of people visiting manufacturers’ websites and reading car reviews before actually going to see any car.
And this should be good for the car business, says Michael Hatch, chief economist for the Canadian Automobile Dealers Association (CADA). “It means that the person walking through the doors is already nearer to purchasing a car, whereas, in the past, people just came in to kick the tires and take a look.”
Still, a car is not a computer nor a pair of jeans. Most customers want to touch the leather, see the sparkle of the paint and take in that new-car smell before they lay down their money. More and more, however, Many dealers are coping with the new realities by adapting the Apple retail sales model, notably by equipping their sales reps with tablet computers, as Audi Downtown in Toronto will soon do. The car maker itself offers an interactive app, the Audi Configurator, enabling consumers to spec and price a vehicle, and point them to nearby dealers. BMW is placing product geniuses on the front line at dealerships to answer questions before handing over customers to a sales person, averting the pressure of the initial interaction. Lexus and Mercedes are developing similar models with “Lexperts” and “product concierges.”
Customers are walking through the doors with more knowledge than ever. Some websites provide prices, sales incentives and even compare deals on the same car from different dealerships. Will dealerships be able to capitalize on this new customer?
Out with the old in with the new! Aston Martin says that James Bond’s next car also previews the brand’s new look.
The DB10 two-door coupe, built exclusively for the next installment in the Bond film franchise, “Spectre,” overhauls a design language first used by the V12 Vanquish in 2001.
“The DB10 gives a glimpse to the future design direction for the next generation of Aston Martins,” the company said in a statement.
Aston Martin chose not to sit the DB10 on the new platform it is developing for future generations of cars. Instead it will sits on the VH (vertical/horizontal) platform and will be powered by a 4.7-liter V-8 engine, a company spokeswoman told Automotive News Europe.
The engine is sourced by Ford and also used in the V8 Vantage.
All 10 units of the DB10 will be used in filming the movie, Aston Martin CEO Andy Palmer tweeted Thursday.
The DB10 is fully driveable, according to Aston, and has already been tested by actor Daniel Craig, who plays James Bond.
Aston Martin announced earlier this year it is developing a new architecture to update the range but hasn’t said when it will appear on a new car. IHS Automotive recently told Automotive News Europe that it didn’t expect to see cars built on the platform until 2016 at the earliest. In addition, Aston Martin has an agreement with Daimler’s performance arm, AMG, to buy 4.0-liter turbocharged V-8s for its new models.
Aston is struggling financially as it announced a pre-tax loss of 25.4 million pounds (32.3 million euros) for 2013, according to a Reuters report. Investment firm InvestIndustrial bought a 37.5 percent stake in Aston Martin in 2012.
The reveal of the James Bond DB10 is the first big event at the firm since Palmer, a former top executive at Nissan, joined as CEO in September. Palmer tweeted a picture of himself unveiling the car at a UK event on Thursday to announce the film title, saying, “I challenge anyone to tell me I don’t have the best job in the car industry.” “Spectre” will be in theaters starting Nov. 6, 2015. With all of the success this partnership had had, will it continue with this newest installment?
Normally you wouldn’t see auto makers fighting with each other but right now they are. Nineteen auto makers accounting for most of the passenger cars and trucks sold in the U.S. have signed onto a set of principles they say will protect motorists’ privacy in an era when computerized cars pass along more information about their drivers than many motorists realize.
The principles were delivered in a letter Wednesday to the Federal Trade Commission, which has the authority to force corporations to live up to their promises to consumers. Industry officials say they want to assure their customers that the information that their cars stream back to auto makers or that is downloaded from the vehicle’s computers won’t be handed over to authorities without a court order, sold to insurance companies or used to bombard them with ads for pizza parlours, gas stations or other businesses they drive past, without their permission.
The principles also commit auto makers to “implement reasonable measures” to protect personal information from unauthorized access.
Many recent-model cars and light trucks have GPS and mobile communications technology integrated into the vehicle’s computers and navigation systems. Information on where drivers have been and where they’re going is continually sent to manufacturers when the systems are in use. Consumers benefit from alerts sent by auto makers about traffic conditions and concierge services that are able to unlock car doors and route drivers around the path of a storm.
The National Highway Traffic Safety Administration is also working with auto makers on regulations that will clear the way for vehicle-to-vehicle communications. The technology uses a radio signal to continually transmit a vehicle’s position, heading, speed and other information. Similarly equipped cars and trucks would receive the same information, and their computers would alert drivers to an impending collision.
“As modern cars not only share the road but will in the not too distant future communicate with one another, vigilance over the privacy of our customers and the security of vehicle systems is an imperative,” said John Bozzella, president of Global Automakers, an industry trade association.
The auto makers’ principles leave open the possibility of deals with advertisers who want to target motorists based on their location and other personal data, but only if customers agree ahead of time that they want to receive such information, industry officials said in a briefing with reporters.
“Google may want to become an auto maker, but we don’t want to become Google,” said Mitch Bainwol, president of the Alliance of Automobile Manufacturers.
The possibility of ads popping up on the computer screens in cars while drivers are behind the wheel worries some safety advocates.
“There is going to be a huge amount of metadata that companies would like to mine to send advertisements to you in your vehicle,” said Henry Jasny of Advocates for Highway and Auto Safety. “We don’t want pop-up ads to become a distraction.”
Industry officials say they oppose federal legislation to require privacy protections, saying that would be too “prescriptive.” But Marc Rotenberg, executive director of the Electronic Privacy Information Center, said legislation is needed to ensure auto makers don’t back off the principles when they become inconvenient.
“You just don’t want your car spying on you,” he said. “That’s the practical consequence of a lot of the new technologies that are being built into cars.” What is the next step to stop this?
When Toyota decides to release a new car, everyone takes note. Toyota Motor Corp. said it’s chosen the name “Mirai,” which means “future” in Japanese, for a fuel-cell powered sedan that travels 483 kilometers with a hydrogen tank that can be refilled in less than five minutes.
The announcement, on the eve of the Los Angeles auto show, increases the company’s commitment to fuel cells, as opposed to battery-only cars, as long-term alternatives to internal combustion engines, said Jeff Liker, a University of Michigan engineering professor. Toyota also promised to develop and supply fueling stations in northeastern U.S. states.
Liker predicted Toyota’s fuel-cell commitment will be as significant as those that came in 1989, when the company introduced its Lexus luxury brand in the U.S., and in 1997, when it started selling Prius gasoline-electric hybrids. Lexus led the U.S. market in luxury sales for 11 years, and Prius is by far the top-selling hybrid line, now with four models.
“In most cases, Toyota has been a fast-follower, not a leader,” Liker said. “But when it comes to the environment, they’re seeking to play an aggressive leadership role.”
Many battery-only cars in the U.S. can travel fewer than 100 miles on a full charge, and charging them can take hours. Toyota argues that fuel-cell cars can provide the same clean transportation with far greater convenience. And with a low center of gravity, it’s particularly fun to drive, Akio Toyoda, the company’s chief executive officer, said in a videotaped statement.
“Today, we are at a turning point in automotive history,” he said. “A turning point where people will embrace an environmentally friendly car that is a pleasure to drive.”
In its statement, Toyota didn’t provide details on how much the Mirai will cost in the U.S., or how many the company hopes to sell. Toyota has said previously the car will go on sale in Japan in April for about 7 million yen ($60,300), with U.S. and European introductions a few months later.
Automakers are under pressure in California, as well as across the U.S., Europe, Japan and South Korea, to offer vehicles that emit little or no carbon pollution and reduce petroleum use.
Battery-powered cars championed by Tesla Motors Inc. and Nissan Motor Co. store electricity in large lithium-ion packs. Fuel cells generate it in an electro-chemical reaction of hydrogen and air, producing only water vapor as a byproduct.
Honda Motor Co. has said it will offer a revamped hydrogen sedan in California in 2015. In May, Hyundai Motor Co. began leasing a fuel-cell version of its Tucson sport-utility vehicle.
To help promote fuel-cell sales, California plans to install more than 50 hydrogen fuel stations within two years, partly with financial support from Toyota and other automakers. Toyota will also start working with Paris-based Air Liquide SA to build 12 fueling stations in five northeastern U.S. states, the company said in its statement.
Most commercial hydrogen is made from natural gas in a process that consumes energy and emits carbon. Hydrogen, the most abundant element in the universe, is also the lightest, making it difficult and sometimes dangerous to store and transport.
Tesla Chief Executive Officer Elon Musk said hydrogen’s shortcomings make it a dead-end for vehicles. “Fuel cells should be renamed ‘fool cells,’ they are so stupid,” he said in an interview last year.
By 2025, California plans to require about one of seven vehicles sold by each of the biggest automakers to eliminate or reduce emissions by using fuel cells, batteries, or gas-electric hybrid engines. Ten other states are taking similar steps. These steps are the right steps but are they coming too late?
Toyota unveils new sports car. Bayerische Motoren Werke AG and Toyota Motor Corp. are moving closer to putting jointly developed sports cars on the road.
Co-operation on the underpinnings of the vehicles “has moved on to the concept phase and is running according to plan,” Munich-based BMW said in a statement to Bloomberg News. A technical feasibility study that began in January 2013 has been “successfully completed.”
The mid-size model is the most visible project within a broader partnership the manufacturers have said will last until at least 2020. The two companies have been tight-lipped about details, including the targeted introduction date, after announcing the plan early last year. Toyota confirmed Thursday that the project has moved beyond the feasibility stage, which was initially due to be completed by the end of 2013.
Toyota, the world’s largest auto maker, needs sports cars “to put that energy back into the brand,” Europe executive vice-president Karl Schlicht said last month at the Paris Motor Show when asked about the co-operation with BMW, which this year started selling the racy i8 plug-in hybrid.
In January, Toyota showed the FT-1 coupe concept at the North American International Auto Show in Detroit. The company said the rear-wheel-drive sports car’s design drew from past models including the Supra, 2000GT and Celica.
In addition to the sports car, Toyota and the world’s biggest maker of luxury vehicles are co-operating on research into fuel cells, lightweight technology and lithium-air batteries. The two companies agreed to work together on lithium-ion batteries in 2012. Both companies declined to comment further on the new sports cars. The new sports car should be released in the new few years.
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Soon drivers may no longer be needed for race car driving. Two Audi RS7 performance sedans raced around a track in northern Germany. The car without a driver won this matchup by five seconds.
In its effort to bring autonomous-driving technology to the streets, Volkswagen AG’s Audi is testing unmanned vehicles at speeds as fast as 305 km/h. In these experiments, the car decides for itself the best way to take the corners in its race against human drivers
The map the car gets “just contains the left and right boundaries of the track,” Peter Bergmiller, an Audi technician, said Tuesday during a test on a track in Oschersleben (193 kilometres west of Berlin) with a vehicle named Bobby. “The car starts to think about it and generates its optimal line.”
Auto makers from Mercedes-Benz to Tesla Motors Inc. are developing systems to ease the strain of driving by letting cars park themselves and even take over the wheel in stop-and-go traffic. By showing that computers are able to push cars to their limits on race tracks, Audi is aiming to convince regulators that the technology can be safe in the real world.
If authorities open the door to self-driving features, “the first systems for piloted driving could come to market in a few years,” Audi development chief Ulrich Hackenberg said in a presentation of the brand’s autonomous-driving technology.
There’s a lot at stake in getting cars equipped with these features on the road. Technology for self-driving cars is forecast to become an $87 billion market by 2030, according to Boston-based Lux Research.
Daimler AG’s Mercedes tested a self-driving S-Class sedan on a 100-kilometre drive on public roads in Germany last year. The brand, which outsold Audi last month to take the No. 2 spot in luxury-car sales, is already rolling out an optional Stop&Go Pilot on models like the C-Class sedan. The feature enables the car to steer itself while matching the speed of the vehicle in front of it, including coming to a complete stop.
Both Mercedes and Audi got approval last month to test self-driving vehicles on California roads, to get their German-engineered cars used to U.S.-specific situations including eight-lane highways and traffic lights on the far side of an intersection. Will the self driving car take off as predicted?
Mini Cooper is forced to drop its fuel economy today after 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.” How will this consumers overall evaluation of the new Mini Cooper?
Another recall by Toyota lis causing many consumers to no longer trust the car manufacture. 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 a year of recalls Toyota will have a lot of work ahead of them in order to regain customers trust.
Many Canadians have European tastes. 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. When will these cars finally make it to Canada?
The long awaited Audi Roadster has finally made its first appearance. Audi released the first images of its third-generation TT Roadster softtop cabriolet on Wednesday, teasing buyers ahead of the two-seat model’s debut at the Paris auto show next week.
Much of the new TT Roadster’s technical specifications are similar to the already-shown new TT Coupe. The cars have the same engine range and many of the same chassis components, but there are a few important differences.
The TT Roadster’s fabric roof is equipped with two electric motors that can open or close the top in 10 seconds, down from 12 second for the previous-generation model. The roof can be opened or closed at speeds of up to about 50kph (about 30 mph), Audi said in a statement. Thanks to parts made from magnesium, aluminum, steel and plastic, the roof weights 39kg, making it 3kg lighter than its predecessor.
The car also boasts improved crash safety, although the additional reinforcements to stiffen the body and compensate for the loss of the B- and C-pillar pack on 90kg of additional weight for the base 2.0-liter TFSI version compared with the coupe.
More rigid, slightly slower
To improve torsional rigidity, for example, aluminum A‑pillars each conceal a second steel pillar in their interior, which in turn houses a solid steel tube. As a result, the top-of-the-line 2.0-liter TFSI Quattro S tronic with 310 hp goes from 0 to 100kph in 4.9 seconds as a roadster, which is 0.3 seconds slower than the equivalent coupe.
“The concept of designing a compact roadster following clear geometrical rules formed the original idea for the Audi TT in autumn 1994,” Audi development chief Ulrich Hackenberg said in a statement on Wednesday.
In Germany, customers can begin ordering the new TT Roadster in October with prices starting at 37,900 euros for the 2.0 TFSI. The model will arrive in showrooms in spring 2015 while the higher-power TTS cabrio will follow shortly afterwards. How will this roadster compete with the massive market?