MONEY Autos

Buick’s New Encore Will Change Your Mind About Buick

The small SUV turns in a respectable performance.

Since its own corporate revival, GM has been working hard to reposition Buick as brand that we should take seriously. And not without reason: The company sells more than three times as many Buicks in China as it does here, so the badge is important globally. It’s just that car buyers here have long memories, and their memory of Buick is that it’s been all marketing and not very interesting metal.

Encore is one of the models out to reverse that notion, and it’s making headway. The small SUV’s sales were up 21% in May, making Encore Buick’s top model, accounting for 30% of sales. You can look at it as a gutsy decision, since Buick unleashed Encore into one of the most competitive segments of the auto markets. There’s Honda’s CR-V, Mazda’s CX-5, Ford’s Escape, Chevy’s own version, called Trax, and Nissan’s Rogue, to name a few.

Can Encore compete with this excellent group? In a word, yes. That is, it can compete but it can’t necessarily win. But that’s all right with Buick. It just wants a chance to be considered in such good company. And Encore has earned that right, courtesy of some nice styling. It’s a curvaceous little number with the classic Buick grill but frills such as blue halogen headlamps. Inside there’s a really great adjustable chair, the better to enjoy a ride that you have to admit is smoother and quieter than you’d thought it would be. One reason: The Encore has an active noise cancellation system. Our test model, a front-wheel drive Premium Group number, ($31,755; entry level models start at about $24,000) came with a good collection of safety systems: forward collision alert, lane departure warning, blind spot and rear cross traffic alert. The navigation system, though, was annoying, and the middle console, a jumble of buttons that were less than helpful. Intuitive, it’s not. There’s also an 4G LTE Wi-Fi hotspot available.

Where Encore comes up a little short is under the hood. It’s powered by a turbo-charged, Ecotec 1.4-liter engine. While that sounds like it has some oomph, it’s so wimpy at 138 horsepower that Buick doesn’t even bother to list it on the dealer’s invoice. Can’t say I blame them. You can measure the acceleration on this thing with a calendar, although it does get a thrifty 28 miles per gallon combined mileage, which is one of the only benefits of the smaller engine. To be fair, Encore is really designed to be a city/suburban getabout. And by that measure, it gets about its business fairly well.

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MONEY Autos

This Company Just Overtook Toyota to Become the World’s Top Automaker

2015 Volkswagen Jetta
courtesy Volkswagen 2015 Volkswagen Jetta

The world really likes German engineering.

During the first six months of 2015, Toyota sold 5.02 million cars. That represents a decline of 1.5% compared to the first half of 2014. More importantly in terms of bragging rights for automakers, Toyota’s total was slightly less than German rival Volkswagen, which sold 5.04 million vehicles from January through June of 2015.

Toyota has traditionally held the top spot in terms of global auto sales, though there have been flukey years like 2011, when natural disasters in Asia pushed the automaker to third place worldwide. Volkswagen, which sold just 6.2 million cars for all of 2007, has established a goal of selling 10+ million vehicles per year by 2018, if not sooner. The automaker came close in 2013, selling 9.73 million passenger cars and superseding General Motors as the world’s #2 automaker in the process.

Volkswagen just barely crossed the 10 million sales mark in 2014, and it is on pace to do so again in 2015, perhaps while taking the overall global sales crown as well. To do so, Volkswagen, which owns Audi and Porsche in addition to its flagship mid-market brand, must continue to post big sales in China—which won’t be an easy task.

“VW is snatching the sales crown in difficult times with major car markets in decline,” Stefan Bratzel, head of Germany’s Center of Automotive Management, said to the BBC. “They will need to withstand the slowdown in China if they want to keep the top spot.”

Toyota has struggled in China and wants to improve sales there. But overall, the Japanese automaker has stressed for quite some time that it’s not particularly worried about holding the global top spot for sales. “Their focus is not No. 1,” Peggy Furusaka, a Tokyo- based auto-credit analyst at Moody’s Investors Service, observed in January. “Toyota is more concerned about keeping profitability than chasing numbers. So for coming years, I wouldn’t be surprised to see Toyota selling fewer cars than Volkswagen.”

MONEY Autos

The Ford F-150 Is Getting Clobbered This Year

2015 Chevrolet Silverado LTZ Z71
courtesy GM 2015 Chevrolet Silverado LTZ Z71

GM's big pickups gained a lot of ground on Ford in the first half of 2015.

The first half of 2015 is in the books, and two big numbers stand out in the sea of auto-sales results released this past week:

  • Chevrolet Silverado sales: Up 14.6%
  • Ford F-Series sales: Down 2.4%

Fold in the Silverado’s upscale twin, the GMC Sierra, and General Motors GENERAL MOTORS COMPANY GM -1.25% sold more full-size pickups in the first half of 2015 than mighty Ford FORD MOTOR COMPANY F -1.79% .

The F-Series still outsold the Silverado, and it’s still “America’s best-selling” truck line. But while Ford has been touting its all-new aluminum F-150, GM has been scooping up sales, market share, and profits.

What’s the story?

Ford hasn’t had enough F-150s to go around…
It’s not that the F-150 is a bad truck. In fact, reviewers say it’s a very good truck, and it has been selling very quickly.

The problem is that Ford hasn’t been able to make enough of them — yet.

Ford makes the F-150 in two factories. Normally, it takes just a few weeks to change over a factory’s assembly line to the tooling needed to make a new model. But, as I’m sure you’ve heard by now, the new-for-2015 F-150 has aluminum body panels, not steel like the old truck.

Ford’s two factories needed extensive changes to make the new truck, because aluminum requires different tooling and processes than steel. Each of Ford’s two factories — which normally run almost around the clock — were down for about 12 weeks in total.

That cost Ford a lot of trucks. At the start of this process last year, Ford North America chief Joe Hinrichs estimated the company would lose 90,000 units of production, or about six to seven weeks’ worth of sales.

Both factories are now back up and running at full speed. But supplies of the new F-150 have been tight for months. As a result, Ford has given first priority to its most profitable customers: retail buyers seeking loaded trucks.

Normally, commercial fleet buyers account for a significant portion of Ford’s (and GM’s) full-size pickup sales. But until recently, Ford was holding off on sending the new trucks to its commercial fleet customers. “Fleet sales” get a bad rap from investors, but commercial fleet sales are good profitable business.

They’re not as profitable as sales of loaded luxury trucks to retail buyers, though. That’s why Ford steered its early production to its dealers.

It was a smart move. But it gave GM a big opportunity, and GM doesn’t miss many opportunities nowadays.

…which gave GM an opportunity to grab some business
GM doesn’t break down its fleet sales by model. (Neither does Ford.) But like Ford, it does tell us what percentage of its total U.S. sales were to fleet customers every month, and it gives us some deeper details from time to time.

Here are two telling details General Motors shared this past week: GM’s deliveries to commercial-fleet customers were up 20% in the first half of 2015, and its deliveries of full-size pickups to government-fleet customers “more than doubled” last month versus a year ago.

“Commercial-fleet sales” doesn’t just mean pickups. But a lot of pickups are sold to commercial buyers: think contractors, mining companies, oil-field services companies, even cable companies. They all buy a lot of pickups, and most of those trucks come from GM or Ford. (Fiat Chrysler isn’t a big player in this market, although it would like to change that.)

The upshot: Both Ford and GM played their hands well, but now the game changes
Here’s the long story short: Ford couldn’t make enough of its new trucks to go around. So it put some of its business up for grabs — and GM moved right in to grab it.

But the game could look a lot different in the second half of 2015. Ford’s factories are back up to speed, and the company should have full inventories of its new trucks soon, likely within a few weeks.

At that point, Ford’s new-for-2015 F-150 will finally be able to go head-to-head with GM’s new-for-2014 Silverado and Sierra. What happens then? We’ll find out in a few months.

John Rosevear owns shares of Ford and General Motors.

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TIME

See Chevy’s New, More Fuel-efficient Cruze

2016 Chevrolet Cruze front 7/8
The 2016 Chevrolet Cruze – a larger, lighter, more efficient and more sophisticated evolution of the brand’s best-selling global car. The 2016 Chevrolet Cruze.

It's a leaner, meaner, greener machine

General Motors has announced the latest generation of its best-selling Chevrolet Cruze — and it’s larger, lighter, faster, and more fuel-efficient.

After issuing a press release entirely in emoji, details on the 2016 Chevy Cruze were revealed in a slightly more legible statement by the company. The new compact car will be 250 pounds lighter despite being three inches longer. It will do 40 miles per gallon on the highway, and launches with the automaker’s established 4G LTE wifi hotspot, and built-in Apple Carplay and Android Auto.

The Cruze has become Chevrolet’s best-selling car, with 3.5 million sold around the world since 2008. However, sales of the Cruze are lagging behind Toyota’s Corolla and Honda’s Civic in the US market, placing behind both last year, according to numbers from MotorTrend. GM has estimated that the latest Cruze will generate $1,500 more profit per car than the old model, according to Reuters, and will hopefully bring newer drivers into the Chevy fold.

The price of the 2016 Chevy wasn’t released. It will go on sale early next, with its diesel model following in 2017.

TIME Autos

Chevy Publishes Press Release Entirely in Emoji

General Motors Recall Widens As CEO Barra Testifies To Lawamkers In DC
Joshua Lott—Getty Images A man walks past a Chevrolet Cruze Eco displayed at the General Motors headquarters April 1, 2014 in Detroit, Michigan.

We think it says "drink your Ovaltine"

Well, this is where we are, world: General Motors, one of the biggest companies in the world, has published a press release in emoji. Entirely in emoji.

Honestly, the release is pretty difficult to decipher. We know it’s about the 2016 Chevy Cruze, a compact car GM’s been making since 2008.

Outside of that — maybe some of the kids reading this will be able to do a better job decoding the message, but it does seem that GM wants you to know the new Cruze is 100% awesome, that it will work well with your smartphone, and that you will love it. It also seems to say that you’ll be better at sports if you buy the car, but that may be a bad interpretation.

If you want to try your hand at reading these millennial hieroglyphs, check out the release. Or, wait for GM to post the translation at 2 p.m. ET Tuesday.

TIME Executives

These Are the Top 5 Female CEOs, According to Their Employees

GERMANY-GM-OPEL
Daniel Roland—AFP/Getty Images Mary Barra, a new CEO of U.S. carmaker General Motors GM addresses the media during a news conference at the headquarters of the company's German subsidiary Opel in Ruesselsheim, on January 27, 2014.

A new annual ranking is out

This week, Glassdoor.com — a site popular for people searching for jobs, who can get the inside scoop from anonymous reviews from former and current employees — posted its annual list of the CEOs most popular with their employees.

The company also broke out a list of the five top rated woman CEOs. They are, as follows:

  1. Mary Barra, General Motors (86% approval)
  2. Pam Nicholson, Enterprise Rent-A-Car (84% approval)
  3. Kay Krill, Ann Taylor (84% approval)
  4. Marillyn Hewson, Lockheed Martin (83% approval)
  5. Sharen Turney, Victoria’s Secret Stores (83% approval)

It should come as no surprise that Barra tops this list. She’s earned praise from all angles for her handling of GM’s ignition switch recall crisis. Barra is a GM lifer who has respect throughout the organization.

TIME Transportation

General Motors Says 100 People Have Now Died from Faulty Ignition Switches

Faulty Ignition Switch Repair At A General Motors Dealership
Jeff Kowalsky—Bloomberg/Getty Images Shop foreman John Chapman performs a service recall on a General Motors Co. (GM) 2005 Saturn Ion at Liberty Chevrolet in New Hudson, Michigan, U.S., on Friday, April 25, 2014.

The malfunctioning switches have prompted the recalls of millions of GM vehicles

The death toll from faulty ignition switches in General Motors’ vehicles officially reached 100 this week, putting a grim tally on the long-running saga of the company’s delayed recalls.

The automotive firm’s compensation fund said it had approved the 100th compensation claim resulting from the issue on Monday, the New York Times reported.

This number, according to the Times, is significantly higher than the 13 deaths that GM claimed were the only ones from malfunctioning ignitions on multiple models.

Several lawsuits against the company allege that the actual death toll far exceeds even the latest number, and accuse the company of downplaying the number of deaths in multiple congressional hearings.

“The success of the cover-up for over a decade leaves most of the victims unaccounted for,” Robert Hilliard, one of the lead lawyers, told the Times. “One hundred is not even the tip of the iceberg.”

Read more at the Times

TIME Autos

You’ll Never Believe Who Makes This Gorgeous New Car

It drives itself, obviously

In a Fountain Valley, Calif., workshop thousands of miles away from General Motors’ headquarters in Detroit, dozens of designers, engineers and craftsmen have been toiling for months. Their project offers a glimpse of the way we may be driving 15 years from now. The hangar-like workspace belongs to GFMI Metalcrafters, a company that for decades has built many of the most important concept cars. Laboring in its password-protected workrooms, these teams have been assembling a car so far ahead of its time, some of the technologies and materials it requires don’t exist yet.

The result, dubbed the FNR, is arguably Chevy’s most unusual concept car to date. The FNR is a fully autonomous electric vehicle. It’s a family sedan and infotainment hub. It’s aimed squarely at the young, consumers who characteristically respond better to smartphones than sheet metal. Chevy first unveiled the FNR (it stands for “Find New Roads,” the brand’s tagline) at the 2015 Shanghai motor show, and says it plans to bring it to the U.S. later this year.

Chevy hopes that the FNR will hook millennials, not just in China but worldwide, with the promise of a vehicle that will be part Siri, part Fitbit. “Everywhere in the world our time is constrained—commute time, work time, family time,” says Sharon Nishi, head of sales and marketing for GM China. “Those are some of the things that inspired this car.” And in a departure from current trends in autonomous-vehicle development, Chevy envisions the FNR as a vehicle for the mass market. GM projects that by 2030—the hypothetical model year for the FNR—self-driving technologies will be prolific enough to have become less costly, and therefore feasible for a real-world family car. And executives think autonomous vehicles have a particularly good chance of proliferating in developing countries like China, where cities and roads are crowding quickly, governments are anxious to resolve congestion, and much infrastructure is yet to be built.

Like many of GM’s most famous concept cars, the FNR helps us glimpse possible technologies of tomorrow. Motors housed in the rims of its massive, hubless wheels will power the car. Double scissor doors open on each side like lotus blossoms. Webbed seats can read everything from heart rate and blood pressure to mood—and adjust temperature, speed, lighting and even musical selections for those who want to work or sleep. Care to swap out the map projected on the oversized canopy to work on some spreadsheets? Simply swipe your hand over the gesture-controlled crystal ball in the center console to reconfigure the display. Of course, that’s assuming you’re in the car at all. The FNR could “run errands for you while you’re at work, or take itself to the dealer for service so you don’t have to,” says Mark Reuss, GM executive vice president of global product development.

There’s much work to be done before cars come anywhere close to fulfilling the FNR’s fully autonomous promise. Like other manufacturers and suppliers, GM has gradually loaded more vehicles with active-safety technologies that are precursors to a car that could pilot itself–night vision, blind-spot alerts, lane-change warnings, adaptive cruise control, brake assist. Next year, GM will be the first automaker to bring vehicle-to-vehicle communication—cars “talking” to one another to help them avoid collisions—to market in a 2017 Cadillac CTS. “It’s a step-by-step progression—some of the things we introduced in 2010 and 2011 are now trickling down into our production cars,” says John Capp, GM’s global director of safety strategies and vehicle programs.

Other, more luxury-oriented companies, including Audi and Mercedes-Benz, are closer to putting autonomous vehicles on the road. But GM executives say that by 2030, that may not matter. “How will the consumer interface with and experience all this technology—will it really help, or will it become a secondary burden?” asks Bryan Nesbitt, GM China vice president of design. The automakers that integrate the tech most successfully, Nesbitt says, will come out ahead.

MONEY investing strategy

16 Facts You Never Would Have Believed Before They Happened

"History never looks like history when you are living through it." — John W. Gardner

A reminder for those making predictions.

You would have never believed it if, in the mid-1980s, someone told you that in the next two decades the Soviet Union would collapse, Japan’s economy would stagnate for 20 years, China would become a superpower, and North Dakota would be ground zero for global energy growth.

You would have never believed it if, in 1930, someone told you there would be a surge in the birthrate from 1945 to 1965, creating a massive generation that would have all kinds of impacts on the economy and society.

You would have never believed it if, in 2004, someone told you a website run by a 19-year-old college dropout on which you look at pictures of your friends would be worth nearly a quarter-trillion dollars in less than a decade. (Nice job, Facebook.)

You would never have believed it if, in 1900, as your horse and buggy got stuck in the mud, someone pointed to the moon and said, “We’ll be walking on that during our lifetime.”

You would have never believed it if, in late 1945, someone told you that after Hiroshima and Nagasaki no country would use a nuclear weapon in war for at least seven decades.

You would have never believed it if, eight years ago, someone told you the Federal Reserve would print $3 trillion and what followed would be some of the lowest inflation in decades.

You would have never believed it if, in 2000, someone told you Enron was about to go bankrupt and Apple would become the most innovative, valuable company in the world. (The opposite looked highly likely.)

You would have never believed it if, in 1910, when forecasts predicted the United States would deplete its oil within 10 years, that a century later we’d be pumping 8.6 million barrels of oil a day.

You would have never believed it if, three years ago, someone told you that Uber, an app connecting you with a stranger in a Honda Civic, would be worth almost as much as General Motors.

You would have never believed it if, 15 years ago, someone told you that you’d be able to watch high-definition movies and simultaneously do your taxes on a 4-inch piece of glass and metal.

You would have never believed it if, in 2000, someone said the biggest news story of the next decade — economically, politically, socially, and militarily — would be a group of guys with box cutters.

You would have never believed it if, in 2002, someone told you we’d go at least 11 years without another major terrorist attack in America.

You would have never believed it if, in 1997, someone told you that the biggest threat to Microsoft were two Stanford students working out of a garage on a search engine with an odd, misspelled name.

You would have never believed it if, just a few years ago, someone told you investors would be buying government debt with negative interest rates.

You would have never believed it if, in 2008, as U.S. “peak oil” arguments were everywhere, that within six years America would be pumping more oil than Saudi Arabia.

You would have never believed it if, after the lessons of World War I, someone told you there’d be an even bigger war 25 years later.

But all of that stuff happened. And they were some of the most important stories of the last 100 years. The next 100 years will be the same.

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MONEY Autos

For Electric Cars, High Gas Prices Can’t Come Back Quickly Enough

2015 NIssan LEAF
Nissan—Wieck 2015 NIssan LEAF

Gas prices have rebounded a bit, but they remain low enough to kill the cost-saving argument for buying a plug-in electric car like the Nissan Leaf or Chevy Volt.

Thanks to the dramatic decline in prices at the pump, the average American household is expected to spend $750 less on gas in 2015 than it did last year. We’ve already seen how some of this “saved” money is being spent, what with restaurants, casinos, hotels, and recreational activities all seeing a bump in business lately. Cheap gas seems to have affected big-ticket purchase decisions as well, exhibited most obviously by the spike in SUV and luxury car sales.

It’s an entirely different story, however, when it comes to the impact of cheap gas on electric cars such as the Nissan Leaf. Nissan just released its February numbers, and sales for the brand were up 1.1% compared with last year. Sales of the all-electric Leaf, however, were down 16%. That follows on the heels of a 15% decrease in January, the first such sales decline for the Leaf in two years. Overall Leaf sales dropped from 2,677 for the first two months of 2014 to 2,268 this year.

The recent sales performance of the Chevrolet Volt, the gas-electric pioneer that has been vying with the Leaf for the title of most popular plug-in among buyers, has been even worse. January was the worst month for the Volt since August 2011, with only 592 units sold, a decrease of 41% compared with January 2014. According to General Motors data, 693 Volts sold in February 2015, a drop of 43% compared with 1,210 the year before.

Surely, the prospect of new Chevy plug-in models has hurt Volt sales lately. The all-electric Chevy Bolt, expected to cost $30,000 and get 200 miles on a single charge, is planned to hit the market in 2017, while the 2016 Volt should be available for purchase during the second half of 2015. Many would-be Volt buyers are simply waiting for the newer model, which can be driven 50 miles on electric power, up from 38 miles for the current one.

That explains some—but not all—of the decline in Volt sales. Certainly, cheap gas prices have done damage to sales of the Volt as well as the Leaf, other plug-in vehicles, and even hybrids like the Toyota Prius to boot. After all, one of the big reasons to buy an electrified vehicle is that powering it is cheaper than filling up at the pump. Consequently, when the price of gas plummets, like it did month after month for nearly half a year recently, a prime argument for going the plug-in route is weakened.

It isn’t just new plug-in models that have taken a beating thanks to a combination of cheaper gas prices and emerging new tech that makes older models seem outdated in a hurry. According to the Wall Street Journal, the resale value of used electric cars has absolutely tanked:

In December and January, for instance, the average selling price of a 2012 Nissan Leaf at auction was about $10,000, nearly a quarter of the car’s original list price and down $4,700 from a year earlier, according to NADA’s guide. Three-year-old Volts, a plug-in car with a backup gasoline motor, were selling for an average $13,000 at auction in January, down from about $40,000 excluding the federal tax credit.

Nissan is coming off of the best-ever year for any plug-in, with Leaf sales in the U.S. topping 30,000 in 2014. The way things have started in 2015, it will be difficult for the automaker to beat last year, though Nissan has blamed bad weather for the Leaf’s recent struggles, and it expects a strong rebound in the spring. Meanwhile, at the start of 2014, Nissan CEO Carlos Ghosn said he anticipated selling an average of 3,000 Leafs monthly that year, and 4,000 Leaf purchases monthly sometime in the near future.

Recent sales notwithstanding, Nissan isn’t giving up on electric cars anytime soon. Neither are many other automakers. At the auto show in Geneva this week, BMW, Volkswagen, and Fiat Chrysler were among the car companies showing off high-tech battery-powered vehicles that demonstrate their commitment to electrified cars.

At some point, rising gas prices will likely steer more interest back to alternative-fuel cars too. But that hasn’t happened yet. “Gas prices inched back up this month, but it didn’t appear to have much impact on shoppers’ choices,” Edmunds.com senior analyst Jessica Caldwell said in a report focused on February sales. “We’re still seeing a strong market for trucks and SUVs—especially compact crossover SUVs, which continue to ride an impressive wave of popularity.”

At least if the Leaf and Volt are struggling, Nissan and GM can take solace in the fact that some of their larger, less fuel-efficient and less environmentally friendly siblings are faring quite well during this winter of cheap gas, cold temperatures, and lots of snow. Two Nissan SUVs, the Pathfinder and Rogue, had record sales months in February, while GM pickup sales were up 37% for the month.

 

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