By Peter M. De Lorenzo
Detroit. The swirling maelstrom of chaos that surrounds this business is getting louder and even more confusing. To say this business is heading down the wrong road doesn’t quite capture the rampant stupidity and outright boneheadedness that seem to be permeating everything these days. I can’t recall a time when there was more flailing about, or when the crazy M.O. of throwing everything plus the kitchen sink up against the wall to see what sticks has become an actual business plan.
Cooked (aka “punched”) sales numbers fueling inflated monthly sales figures as the business blows by its peak with nary a discouraging word uttered, the highest rate of subprime lending in automotive history, car companies rushing headlong into the “future” of mobility and spending cash like water with apparent little rhyme or reason, and of course Sergio “The Master Manipulator” Marchionne hoping his smoke-and-mirrors routine can last long enough until he can find a buyer for FCA, so that he can then line his and the Agnelli family heirs’ pockets for one last giant payoff.
And that’s just the topline stuff. Then there’s the automotive industry’s unflappable belief in the Chinese market being the future of the business, when at any time the squirrelly Communist-run regime could end their party on a whim. And then there’s the stringent new U.S. fuel-economy standards hanging over everyone’s heads, with the prevailing opinion being that the real number will get reduced, even though there’s no real path for that to happen. To top everything off, there’s a virulent anti-car movement gaining steam in the U.S. and around the world, with no one having a clue as to where it will lead and what the ultimate consequences will be. Nice, huh?
Speaking of ongoing train wrecks, what's happening out in Auburn Hills is bordering on the nonsensical. FCA flew 200 Fiat dealers into Detroit last week to convince them to hang around and, after a pep talk from FCA’s Tim Kuniskis, whereupon he promised the sun, the moon and the stars – plus some cold, hard cash for every unit sold – the dealers walked away beaming with optimism. At least that’s how Automotive News reported it.
Oh, if this business were that easy.
And really, is that all it took for some of these dealers who have been living – and dying – on Sergio’s promises for three years to get turned around? Because Kuniskis is a nice guy and they think he will treat them right? Even though by my rough calculations Fiat will never make money for FCA here in the U.S. and that they’re propping up the entire enterprise to save face so as to continue appearances for a future suitor? Damn, if it’s that easy to flim-flam dealers maybe it’s time I bring back Fu-King Motors, because given the current bat-shit crazy atmosphere I imagine getting startup funding would be a breeze. Oh wait, what was I thinking? Faraday Future already has that market covered.
I hope these dealers got back home, thought about it for a while and then asked themselves, “Wait a minute, WTF has changed?” Because the real answer is, not much. Yes, the FCA stores can now sell Fiats under one roof and consolidate the backend business overhead (plus, the Fiat exclusive stores get big cash for every vehicle sold), and there is more cash from the factory overall – think of it as payola to move cars – but nothing else has changed. And I mean, n-o-t-h-i-n-g.
Fiat still has the weakest product lineup in the business as in, how do you want your Italian-flavored mediocrity? Medium small? Smallish? Or tiny? And this just in: All of the early adopters have adopted. And the rest of the momentary intenders who gave a cursory glance to the idea of Fiat drifted off after seeing their friends get one and deciding, “Yeah, well, that’s cool but maybe not.” And the fact that there’s no compelling reason for being for the brand’s existence here beyond the manufactured nostalgia by FCA’s marketers for a time that never was.
I get some of the Fiat dealers wanting to put a brave face on things because to do anything else would be to admit that they were duped by that sweater-wearing, espresso-swilling “maestro” but, really? This is the quintessential definition of throwing good money after bad and I just want to shake every single last Fiat dealer by the lapels and say, “Walk away. There’s nothing left to see here.”
Then there’s the outrageously odd news conveyed by Richard Truett in Automotive News from its sibling European publication Automobilwoche that the French automaker, PSA Peugeot Citroen - now that it’s all fat and sassy and in the black after wandering around in the wilderness for years – is actually considering an international growth strategy. And you guessed it - one of its targets for consideration is the U.S. market.
Now it’s my turn to say WTF? What part of being “in the black” translates into insanity? I know that Carlos Tavares, the PSA chief honcho, is allegedly one of this industry’s rock stars, but since when did he stumble upon Sergio’s personal Fountain of Delusion? Remember, this is a car company that last sold vehicles here in 1974 (Citroen) and 1991 (Peugeot) respectively, and even though they carry a modicum of credibility over in Europe, the prospect of that company setting up shop here is beyond ludicrous.
How is it that these car companies, no matter the country of origin, adopt a delusional mindset about this market? Even Sergio The Great was completely taken in by the prospect of untold riches here in this country, ignoring the fact that he was hawking a lackluster brand that couldn’t even get out of its own way in its own home market. And even though arguably there are some specific nameplates from both French automakers that might have a shot over here, do you think they have a snowball’s chance in hell of actually succeeding?
I will answer that one for you: No. As in, a giant bowl of cut-up croissants slathered in butter non. I can just hear the alternative view now, “But there’s so much money to be made here! And some of their cars are so cool!” And, and, and… right. And setting up a dealer network is so not easy. And the marketing bill for launching a totally new brand/nameplate in this market can approach $200 million – if done properly – because invest anything less than that and you’re likely to end up where the Fiat brain trust is today, twiddling their thumbs while wishing it had gone differently.
Hey, here’s an idea, if PSA is that hell-bent on establishing a new beachhead in this market, maybe they can sweet talk the current Fiat dealers into doing a French-Italian “dual” arrangement, because they seem to be in the mood to buy anything from anybody at this point. Hopefully, PSA will put its international growth strategy – at least when it comes to considering this market – on hold. Because it’s a nonstarter the likes we haven’t seen since, well, Sergio’s Traveling Salvation Show for Fiat.
Oh, and by the way, there’s more to this story. The other market PSA is considering? Iran. This just in: These guys are good.
And finally, after being relatively optimistic about BMW’s next 100 years in last week’s column, I now have to take at least 50 percent of that optimism back. Make that 90 percent. Because when you really delve into the future-think that BMW’s throwing around, it should make every Bimmer enthusiast’s blood run cold. And everyone else's for that matter.
BMW CEO Harald Krueger actually said the following last week: "For a better quality of life, the BMW Group is going to turn data into intelligence. Soon, our cars will be digital chauffeurs and personal companions. They will anticipate what we want to do and make our lives easier for us."
This corporate gobbledygook emanated – I hate to have to say this – from the BMW Design staff. Normally, designers stay away from this kind of unmitigated bullshit, but Karim Habib, head of design for the BMW brand, described BMW’s semi-autonomous mode as "The Companion." "It is the analogy of the co-pilot who is there to help you be a better driver," Habib said.
"You have someone next to you who will metaphorically help you take a curve better and enjoy driving to the maximum."
Sure. Memo to enthusiasts everywhere: Run for your lives, because this whole “autonomous” driving thing has now officially transitioned to the Dark Side.
Habib reports to Adrian van Hooydonk, senior vice president for BMW Group Design, who also endorsed this line of bullshit. But Habib wasn’t through, oh no, because he also said this: "We believe the brand is at the cusp of many new opportunities with new technologies for the brand to go from the Ultimate Driving Machine, to the Ultimate Driver."
No, Karim, you and your fellow card-carrying wankers at BMW have just signed the death knell for the brand. BMW grew to become one of the leading enthusiast cars in its first century for a reason (several actually), but we are now faced with the prospect of the brand abandoning those reasons to become just another entry in the robo-car sweepstakes.
Our “personal companion”? I’m sorry, but what touchy-feely, jasmine-infused wellness hose are these guys drinking from? None of what they’re talking about has anything to do with the act of driving, instead it has everything to do with the act of acquiescing, as in, sit back and don’t worry, because your driving days are over, pal. From this point on, you’re going to be leaving the “driving” to us.
Well, “Leave the Driving to Us” worked just fine as an ad slogan for Greyhound, where it belongs, but it has nothing to do with BMW. Or at least the BMW that used to be, apparently.
Oh well. We all saw this day coming, but I think most of us were pretending it would just go away, or it would arrive in some benign fashion that wouldn’t be too hard to swallow.
Maybe it will be up to the Korean car companies, who have now hired ex-BMW suspension gurus to make their cars actually perform dynamically - so that they’re more pleasing to drive - to be our salvation. Because BMW is clearly preparing to abandon that role in favor of a soporific concoction based on acquiescence.
See what I mean about this business going flat-out crazy?
And that’s the High-Octane Truth for this week.