Current Happenings Affecting the Future of the Automobile Industry

This article will examine several directions and trends that are going to (in this writer’s opinion) influence how we look at, and use our cars as well as where they come from. I will also discuss a new American car manufacturer who has such a revolutionary vision that they could very well in the coming decades challenge the monopoly of the “big three” U.S. car companies.

Five years ago who would have thought that your car would be so linked to your cell phone, and that your phone would not be called a cell phone but a smart phone? I know there many systems out there but I am most familiar with Ford’s Sync system. With a simple one time set up, Sync will link your phone up to it’s system using your phone’s Bluetooth circuitry each time you get in the car allowing hands free phone use. Sync can load your music library, contacts and any other properly formatted information for easy recall and use. What I like about Sync is that you can update your car’s info/entertainment experience by upgrading your phone instead of having to buy a new car. As our lives become more intertwined with smart phones, tablets, cloud computing and so on, cars are becoming more than just transportation devices, they are becoming info hubs. Next year’s Sync will even use Wifi to allow you to download apps for your phone while your car is parked and you are running an errand.. I must admit when my wife and I drive our older car, a 2001 Honda Civic EX around and I need a physical wire to plug my phone or MP3 player into the radio, and actually have to manually scroll down my contact list to make a call it feels like we are driving in an ancient form of transportation, disconnected from the rest of the world. Obviously in-car compatibility with all types of hand held devices is only going to grow in ways we can as well as can’t imagine.

Hyundai which is also the parent company of Kia has been making vast improvements in quality, performance, appearance and marketing over the last decade. The results in market share, reliability ratings and brand loyalty measured in 2010-2011 are extremely impressive to say the least. Experian Automotives 2011 second quarter report on market analysis has Hyundai Motor Group scoring number one in US corporate loyalty. This is the first time that a Korean car company has ever achieved the top spot in loyalty as they pushed GM and Ford from the top spots. Experian’s report also had the Kia Forte as the top model of all US market cars in customer loyalty with a mark of 68 percent. All told, Kia had a total of three cars in the top ten customer loyalty list. In addition to the aforementioned first place Forte, the Kia Soul came in fifth at 59 percent and the Forte coup finished eighth at 57 percent. For a car company that was the butt of many a joke and who admittedly used to make substandard flimsy products, this turnaround is nothing short of startling. Most telling is the market share that Hyundai-Kia picked up between 2010 Q2 and 2011 Q2, which saw them moving from 7.9 percent of the U.S. market to 9.2 percent, which was the greatest year to year increase of any brand of automobile. Obviously if Hyundai Motor Group keeps going in the direction they are, Korean cars will no longer be below Japanese and European brands in status and perceived quality and performance.

Domestically, upstart electric car company Tesla has been mostly known for building sporty electric cars that accelerate and handle as well as many traditional performance cars. Tesla has been a boutique brand and their small sporty offerings have been priced in the $100,000 range and have all been 2-seaters. Well, all that has changed with the introduction of the Model S. Tesla is offering an electric 4 door sedan that starts at $57,000 minus the $7,500 electric car tax credit bringing the entry price to $49,500. The entry level car can go 150-160 miles on single charge and impressively accelerates from 0-60 in 5.6 seconds making it about as fast as a Mustang GT. If you add $10,000 to the price of the Tesla, your cruising range per charge goes to 250-260 miles per charge. Another $10,000 gets you the top of the line battery package which reportedly lets the Model S go 320 miles on a single charge. Considering that Nissan is selling the all electric “Leaf” with a cruising range of 70 miles per charge for $40,000, and Ford’s all electric Focus which is due in 2012 reportedly has a range of 70-90 miles per charge and retails also at $40,000, the Tesla Model easily trumps the much larger companies electric entries. Even more impressive than the superior cruising range is the revolutionary design of the “S”. The Tesla has a flat battery that is located on the undercarriage of the car giving it an extremely low center of gravity and superior handing while also leaving room for two trunks for storage instead of one. The engine is simply an electric motor located on the rear axle saving space and weight. The Tesla also is a Wifi hub and the center console is basically an iPad eliminating the need for any switches or knobs. Sadly, Tesla is selling only 5000 Model S cars this year and they have all been claimed. Tesla has acquired a former GM-Toyota factory in California and is said to be planning to sell at least 20,000 Model S cars next year. All I can say is that if these cars prove to be reliable and Tesla can keep their prices somewhat stable I can see them emerging as a legitimate fourth American car company.

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