Yesterday’s Morning Dump was all about Europe’s car industry and how screwed it might be and the possibility of it unscrewing itself. At the core of the “Europe is screwed” argument is the idea that no one wants to be a carmaker anymore after a century of carmaking being the thing that proves you’re an advanced economy. No one is impressed by carmaking anymore.
So, today, let’s talk about what it means to be a carmaker in the 21st century and why that’s maybe not what you want to be. First, we’ll go back to Europe, where the former head of Europe’s Central Bank put out a big report on Europe’s burgeoning industrial crisis that argues that the continent needs to innovate more (in all areas, not just carmaking. Hell, you gotta come to America for croissant innovation).
What could you possibly do if you don’t make “cars” in the normal sense? You could make software! Automakers were huge on the idea of getting into the SaaS (Software-as-a-Service) game, but that hasn’t panned out as initially hoped.
When I say “no one” wants to make cars I’m being a little hyperbolic. There’s one country that wants to make cars and, in fact, needs to make cars: China. Don’t worry, China is here to help.
And, finally, we now have a date for the last day of Autoblog as we know it.
European Leader: We Are ‘Stuck In A Static Industrial Structure’
I’ve written before that Tesla CEO Elon Musk seems bored with the idea of Tesla being a carmaker. He wants Tesla to be an AI company, or a self-driving car company, or a robot company. Or all of the above. To hear him talk you come to the conclusion that, in his mind, there simply isn’t enough margin and, frankly, not much of a future in just making cars. Cars are an old, 20th-century idea.
He’s not alone. Carmakers around the world, but especially in the United States, are putting up big money to make cars less something you own and more a service you subscribe to and use. European carmakers, to varying degrees, have dipped their toes in this but haven’t been quite successful at transforming their businesses.
Why?
Former European Central Bank President and Italian Prime Minister Mario Draghi celebrated his 77th birthday yesterday by releasing a 69-page report (nice) that basically says: Europe doesn’t have to be screwed, but we need to do a lot to fix the country, and one big way is to stop just thinking about ourselves as carmakers.
Here’s how it opens:
Europe is stuck in a static industrial structure with few new companies rising up to disrupt existing industries or
develop new growth engines. In fact, there is no EU company with a market capitalisation over EUR 100 billion that has been set up from scratch in the last fifty years, while all six US companies with a valuation above EUR 1 trillion have been created in this period.This lack of dynamism is self-fulfilling.
As EU companies are specialised in mature technologies where the potential for breakthroughs is limited, they spend less on research and innovation (R&I) – EUR 270 billion less than their US counterparts in 2021. The top 3 investors in R&I in Europe have been dominated by automotive companies for the past twenty years. It was the same in the US in the early 2000s, with autos and pharma leading, but now the top 3 are all in tech.
The problem is not that Europe lacks ideas or ambition. We have many talented researchers and entrepreneurs filing patents. But innovation is blocked at the next stage: we are failing to translate innovation into commercialisation, and innovative companies that want to scale up in Europe are hindered at every stage by inconsistent and restrictive regulations.
There are, indeed, a lot of regulations in Europe. There’s also a complicated way that EU-wide laws get implemented called “Comitology” which basically means ‘We’ll set up a bunch of meetings and commissions’ to get anything done. That is not always an ideal way to work. Silicon Valley’s ‘Move fast and break things’ mantra may have its drawbacks (for example: breaking democracy), but the alternative isn’t much better.
Draghi doesn’t just call for a cutting of red tape, he also pushes hard at the idea of spending some of the continent’s money collectively to catch up with China and the United States and, hopefully, move ahead:
To meet the objectives laid out in this report, a minimum annual additional investment of EUR 750 to 800 billion is needed, based on the latest Commission estimates, corresponding to 4.4-4.7% of EU GDP in 2023. For comparison, investment under the Marshall Plan between 1948-51 was equivalent to 1-2% of EU GDP. Delivering this increase would require the EU’s investment share to jump from around 22% of GDP today to around 27%, reversing a multi-decade decline across most large EU economies
That little mention of the Marshall Plan is quite good, although it skips the part where the U.S. footed some of the bill. I think it’s a smart comparison and exactly what Europe needs. It can slowly die like a frog boiling in the pot or it can try to leap out of it.
Of course, low-debt countries like Germany will be key to financing that investment, so let’s check in and see how Germany feels about that:
It took less than three hours. Germany’s Finance Minister Christian Lindner said a firm nein to Mario Draghi’s call for more common debt to boost private investment.
Lindner, whose liberal party’s share of the vote has collapsed in recent state and EU elections, told POLITICO that the pooling of “risks and liability creates democratic and fiscal problems.”
[…]
“Germany will not agree to this,” Lindner said.
Well, it was worth a shot.
So Much For Carmakers Becoming Software Companies
I remember in the late-online media hype cycle that the narrative being pushed was that the old place, Gawker Media, was not a media company but “a tech company,” with our tech being Kinja. Some of you may find that amusing, though I now respect how hard it is to have a fully functioning commenting system (we’re working on it, I promise).
Big carmakers here in the United States have acted in the same way. For a while, it was driverless cars that were getting all the hype, with both GM and Ford investing huge sums in the concept. Ford bailed on its investment with VW, which left GM and Cruise as the big automotive-backed player, though it’s not going great.
The better dream, perhaps, was seeing the car as a software platform. This way companies can create value by offering a service that people subscribe to, therefore encouraging revenue beyond just greasy and labor-intensive things like maintenance (which, in an EV environment, there might be less of in the future).
How’s that going? According to S&P Global Mobility, not as well as hyped:
There is money to be made from infotainment and advanced driver assistance systems packages, feature upgrades and enhancements, service unlocks, advanced safety or navigation features, and various other means.
That said, the industry is slowly waking up to the fact that the monetization potential of connected vehicle data has been overhyped and that a massive portion of this potential is derivative or indirect. According to S&P Global Mobility, the annual revenue generated by connected services and paid updates amounts to about $6 billion, while projections put revenue at about $200 billion for software, services and data in 2030.
The recent collapse of big data aggregators such as Wejo and Otonomo was a reality check for the industry and sobered the lofty monetization projections issued just half a decade ago. The industry is learning the hard way that it’s not only difficult to extract value from car data, but it may also be illegal and have lingering ramifications if done without proper consumer consent.
That last little bit is important. Remember when we found out that companies like GM and Honda were sharing information with insurance companies to potentially drive rates up? That hasn’t gone well for those companies, which have walked back some of those integrations, though that hasn’t stopped the lawsuits.
This doesn’t mean that carmakers won’t figure out a way to extract more money out of the life of a car. They will. It just might generate less money and take longer than automakers originally hoped.
Chinese Automotive Leader: ‘We Will Never Turn Against The European Market’
Here’s a wild fact from Europe’s car industry group, the ACEA. China exported way more cars to Europe in 2023 than Europe exported to China, but the value is way backward:
- 359,271 cars were exported from the EU to China
in 2023, valuing €19.4 billion - 706,976 cars were imported from China into the
EU in 2023, valuing €12.9 billion
Some of this makes sense. Europe has more partnerships with local manufacturing in China and, therefore, is exporting more big BMWs, Porsches, and even Ferraris while importing cheaper Chinese cars. This does underscore, however, that both Europe and China need the other group as a trading partner and that Europe needs more domestic production from Chinese brands.
Or, as one exec said at a conference on EV production held in Frankfurt said:
“Even if some in Europe turn against us, we will never turn against the European market,” said Victor Yang, senior vice-president at Geely, the only carmaker to host a press conference at the fair.
China does seem to be the one country happy to be an automaker, especially because it controls a large chunk of the battery supply chain, which is the key to successfully building electric cars (also, China is investing in software, advanced semiconductors, planes. and autonomous driving as well).
It’s invested a ton in automotive capacity, so, it needs to send its cars elsewhere. It’s happy to sell cars in Southeast Asia and Latin America and will continue to do so. Big profits, though, lie in more advanced economies like Europe. In this way, Europe has a bit of a bargaining chip with China, though barely.
As Draghi remarked in his report:
We rely on a handful of suppliers for critical raw materials, especially China, even as global demand for those materials is exploding owing to the clean energy transition. We are also hugely reliant on imports of digital technology. For chips production, 75-90% of global wafer fabrication capacity is in Asia.
These dependencies are often two-way – for example, China relies on the EU to absorb its industrial overcapacity – but other major economies like the US are actively trying to disentangle themselves. If the EU does not act, we risk being vulnerable to coercion.
It’s tough! Italy is calling for the EU to relax its ICE-ban targets, which would make Chinese cars less attractive, while at the same time, the EU is proposing to trim back some of the tariffs it planned to impose on Chinese-built EVs.
Thursday Will Be The Last Day Of Autoblog As We Know It
Last month we were the first to report that Autoblog, at least in its current iteration, is basically no more. The company has been sold to The Arena Group and, while they may resurrect Autoblog and bring it back to life, the current staff was going to be dismissed at some point in the future.
The writers of the site seem to be putting their farewells in various posts, including in this last luggage test from author James Riswick, who wrote:
In the beginning, there was a Hyundai Palisade in Portland, Ore. In the end, there will be a Porsche Panamera in Agoura Hills, Calif. After almost exactly five years, this Luggage Test will be the 157th. It will also be the last.
I enjoyed these posts and have often looked at them when I was about to get an unfamiliar press car for a trip. A commenter further inquired as to what the reason for ending the series was, to which Riswick replied:
It’s not so much that I’m ending them, it’s that this website has been sold and that entity is ending the entire staff. The last day of this staff publishing is this Thursday with the future TBA. I certainly hope to do luggage tests again soon, albeit under a new name, elsewhere. -James Riswick
Thursday looks like the last day. Hat tip to Benton Kalani in the Discord for pointing this out.
What I’m Listening To While Writing TMD
In honor of the passing of James Earl Jones, instead of some hyperpop, here’s James Earl Jones explaining why you’d be foolish to buy anything other than a Plymouth Laser XE. I had the honor of meeting Jones when he came to The University of Texas to speak. I was a freshman and somehow was lucky enough to be part one of two students to drive in the limo to go pick him up from the airport. After a quick introduction, he looked at me and the other guy and asked in his famously deep voice: “Where can I get some guns and barbecue?” His speech, as he himself later admitted, wasn’t particularly memorable, but I’ll never forget that moment.
The Big Question
What does a carmaker become so that it’s not just a carmaker?
Lead image: Ford via Newspress UK
The K car Laser featured in the ad was a Chrysler – Not a Plymouth.
The Dodge version was the Daytona.
The Laser name moved over to Plymouth for it’s Mitsubishi Eclipse twin in 1990 – well after the Chrysler Laser was discontinued in 1986 in favor of the Conquest (the Mitsubishi Starion twin)
Maybe they try the Framework laptop game and make a modular vehicle platform that can be changed & upgraded over time. with a CPO setup for traded-in components.
Maybe they open a distillery/brewery/winery
Maybe they start becoming mass transit companies
Maybe they go back to making affordable cars
Is that enough maybes yet?
Seriously though, a hybrid skateboard that I could put different bodies on would be siiiick.
literally all of these were attempted/ done.
I see nowhere where Matt said they had to be new or good ideas.
Which automaker tried making booze?
and does it pair well with Volkswagen currywurst?
Well to name just a few…
Porsche: Cuvée 356 wineLamborghini: has its own line of winesBugatti: Champagne CarbonBentley: had a single malt Scotch whiskyAston Martin: had a Scotch whisky distilleryTesla: launched a tequila called “Tesla Tequila”Ford: Bronco GOAT beerJeep: Adventure Series moonshine
Name some more!
RAM Malt Liquor: “Don’t just drink it, RAM it!”
VinFast Instant Wine: “If you think our cars were released early, wait ’til you try this”
Stellantis Memory Supplement: “Recall more frequently”
Tesla shirts: “Acceptable fit and no buttons”
Um, the US didn’t fund “some of the bill”, it basically funded the entire thing. Over $13 billion back then, roughly worth $150 billion in today’s money.
Spaceships. Chrysler should’ve never dropped their aerospace division. Imagine a Chrysler division of rockets. “Plymouth: Be the first on your own rock!”
GM can get in on this too. “Rocket Olds!”
Can I post an image? No? Then how about a link to the famous 1960’s Chrysler advertisement showing all the things they made back then, including parts of the Saturn I rocket:
Chrysler’s Business is to Get You Where You Want to Go-Even if it’s 238,000 Miles Straight Up
That’s how to run an auto company.
That is seriously cool. Reminds me of all the gazillion things Mitsubishi and Honda do.
Thanks for the link
They couldn’t fail any more spectacularly than Boeing.
LOL! Yep.
It seems like a lot of articles are about how car makers will try and get owners to pay subscriptions. My question is, when will the consumer stop spending. You don’t have any one big bill, but a lot of small bills (small being relative). You probably have 2 streaming services, a cell phone bill, utility bill, car insurance, home insurance, internet, car payment, house payment, and maybe student loans. How many of these bills have gone down over the past 5 years and how much has your take home pay gone up. And now they want to jam you up for $11.99 a month for heated seats.
People get way over extended and when the economy takes a dump, which it will, then the pain happens.
I’ve been through 3 big economic down turns and the one brewing, if the Fed doesn’t get this right, seems like it will be pretty bad. The commonality of 96 month auto loans is an example of people having overextended themselves. But it’s the constant drum beat of increasing margins that will make this an inevitability. That was the root cause of the 08 housing crisis and in a smaller scale what did in Red Lobster.
https://www.cnn.com/2024/05/03/food/red-lobster-seafood-restaurant-bankruptcy/index.html
I have a friend who is pretty high in the Dept. of Treasury and he told me that all you need to know about the economy is to look at Warren Buffett and his mounting pile of cash.
Not sure what point I’m trying to make, but it does seem that I am working just to tread water finicially.
If car makers (and corporations in general) changed their mantra from “make more money” to just “make money”, capitalism might actually be sustainable.
There’s also the need to shift to “make the people who work here money” from “make the CEO and the board money.” They don’t seem to realize that giving the workforce buying power means they’re going to buy more stuff – including their own products – and keep the economy moving.
Wealth moves from workers to executives and board members. This is part of the massive shift in wealth from the general populace to the top 1% in the past 40-50 years. 90% of Americans have been giving up their wealth to the rich year after year.
And the Justice department needs stronger anti-trust enforcement- whenever a merger happens one (or more) set of high-paying managerial and technical positions disappears. Having worked in businesses that sold stuff to rich people, it is much better to have 2 customers with say $10 million in wealth than one with $50 – one person (/family) only needs so much, with two you double it.
Having worked in businesses that sold stuff to rich people, it is much better to have 2 customers with say $10 million in wealth than one with $50 – one person (/family) only needs so much, with two you double it.
Why sell 2 things for 2x when you can charge the person with $50M 5x as much for the exact same thing but with slightly more snobbish and pandering marketing?
I agree 100%. The problem lies with game theory and the focus on the short term. I can make more money now if I ship the truck production off to Mexico. It will be somebody else’s problem in 10 years when there’s nobody left here rich enough to buy one of my company’s trucks – I’ll be retired by then with my $$$ in the bank, suckers.
For all of Henry Ford’s flaws (and there definitely were some), he understood that by paying his labor well, it created a market for his own product. Then the Harvard School of Business brain trust comes along and trains a couple generations of business majors that the only real purpose of a company is to generate profits for its owners, and we end up where we’re at today.
It actually worse than that – the Delaware Court declared that shareholders are the only thing managers can care about. Of course there is a conflict between short term shareholder interests and long term interests, and you can usually justify doing the right thing with long term impacts – but most MBA and management incentives don’t get this.
Harvard Law, by chance?
The best selling SUV in the world is a Toyota Rav 4. The best selling car is the Toyota Camry (Edmonds, 2023). Why? They are not the cheapest. They are not the nicest. They are not particularly exciting or fast. They are the best selling because they are damn good vehicles. Granted, the F150 being the best selling vehicle would be a strong counterpoint to my argument, but I really think if manufactures would focus on quality over the latest gadgets and gizmos, they would be in better shape. I don’t want to spend $35K on something that is going to be disposable.
What does a barber become so that they are not just a barber?
At some point, buggy makers lost out to cars. Converting from cars to software makes no sense, and they found (are finding) that out the hard way. Sorry, automakers, your profits are not going to be the same as they have been the past 50-100 years, and you need to just deal with it (really shitty thing to say and suggest, I know).
We can’t expect the world to not change and evolve. It does and will. Nothing will stop that, and trying to stop that will lead to failure. Know your lane, diversify, change, get used to 4% profit on what is becoming an appliance.
The expectation of “infinite” or 40% (as I have suggested before) profit is not sustainable. The industrial world working for the stock market doesn’t work. They need to work for the proletariat.
This.
We’re in late stage capitalism and companies are desperately looking at ways to keep making more $$$
*insert Kylo Ren MORE.gif*
Maybe just be happy making billions? But what do I know, I’m just a working stiff.
What does a barber become so that they are not just a barber?
They go old skool:
https://www.youtube.com/watch?v=edIi6hYpUoQ
Automakers aren’t trying to make anything like 40% profit margins – they are struggling to break 5%.
For those that say just be happy to make less money I question if they are willing to do the same. In today’s economy when one’s retirement is almost complete dependent on personal saving and investing are you happy with 4% – 3% inflation = 1% real growth on your personal investments ?
Can you ever retire on investments that only have a 1% real return? Invest $800 a month at 1% and in 50 years you will have $623K. That is enough to provide a yearly retirement income of $14,500.
I personally don’t “believe” the stock market as the right place for my retirement. I’m a bit old school, and still believe in pensions. I believe that companies should set aside money for the future. I believe that rainy day funds are a good thing. I was really upset to learn what Reagan did to social security starting in the 80s. It’s not a piggy bank for the rich to use to then get more rich.
So, NO, I don’t really plan to retire. I enjoy working. I want to continue to work until I die. While, that is not for everyone, it is for me, right now. Hopefully, we will, as a society, find ways to keep everyone employed as long as they can and want, and not force or suggest that everyone needs to retire at 62 or 67.
The way society values the working man is disheartening and offensive to me. It seems like all anyone cares about is their “porfolio” and how it’s “working for them”. Guess what, not everyone has one, and not everyone can afford one. As such, much of the population is simply fucked when it comes to retirement, including me. I’ve been a gainfully employed mechanical engineer who has built of a 401k for 23 years, and I really couldn’t care less. It’s still not enough despite the “matching” that every offers.
Yes, my number of 40% may be bogus for selling cars. But, the last place I worked required a 40% margin on everything sold. And, 52% of all of our profit went back to the umbrella company so they could buy more companies, squeeze the living crap out of them, not reinvest in innovation and the future. Rinse and repeat.
Every raise in those 23 years has been at or less than 3%. I’ve had a couple that were better. Cost of living over that time has not matched my raises. And, I’ve worked for companies that are, in the grand scheme of things, not horrible.
So, yes, I am willing to do the same, because I have been forced and trained to do so, and at this point, I just don’t care.
Sorry, I may be a bit too passionate about this, and though it may appear that I’m attacking you, I am attacking the concept you communicate.
This idea that to move beyond industry in order to thrive is silly and proven false by China. I would argue that Europe’s problems are stemming from the fact that they don’t make enough industrial stuff anymore, from raw industrial chemicals to VW switches for HVAC, to Louis Vuitton buckles.
China is proving this time and again: keep making low-tech stuff while pushing the high tech stuff. The holy grail should be how to make low or everyday stuff efficiently, benefitting from high tech innovations. Think washing machines made by high tech german robots. But Kuka is now Chinese. So there…
I think France comes close to this blend of government support, innovation and old fashion industrial production. Their Renault division Dacia makes affordable good cars people want to buy, so here’s a data point we care about on this site.
Trying to focus on the next thing while abandoning what brought you prosperity in the first place is not wise
Holy crap, where do I buy a Laser?
A friend in my tech school had one of these – Gold w/ beige Mark Cross interior.
It was perhaps the nicest of the K car derivatives.
As I recall, it even had sun visors for the back seats like the Porsche 928.
Some brands have tried to do the “lifestyle” thing where the cars are a part of the “lifestyle”. Like Ferrari. Get some extra money from the first job, buy a shirt. Get to the C-suite and get to buy a car.
What some brand should do is recreate Sears where literally everything is available under one brand. House, car, furnishings, clothing, everything.
Because that worked out so well for Sears?
Blame K Mart for killing Sears. They bought them out.
To be clear Sears failed largely because near the end it had the worst CEO in the history of business and somehow nobody fired the guy.
There were plenty of missed opportunities but the company’s relatively rapid collapse is directly traced to Eddie Lampert being aggressively incompetent.
Fuck Eddie the Weasel..
Sears could have been Amazon.
They had it all planned out before K Mart bought them.
sears was amazon! every house in the country got the catalogue and ordered tons of various stuff.
For a while, you could even order the house from the Sears catalog. I’ve been in a couple of them. They were nice. Small by current standards, but overall great little homes.
I had a relatives who had a Sears house. They were farmers and as the suburbs encroached on their farm they had lots of stories about their new neighbors’ incompetence in the wilderness of their new neighborhood. Lots of stories about had to help this one do something simple… also they made the best cinnamon rolls ever. Always loved to visit and explore the barn.
And after the subsistence farmers order the kids new school shoes and a new shovel, the catalog further served the family in the outhouse.
Indeed, in their way, with mail order & their massive catalog, they were the Amazon of their day.
I still think of how Montgomery Ward shuttered its famous catalog in 2001. That was when the dotcom bubble burst, but it was also the year that Amazon first became profitable, by expanding into selling a wide variety of products. How familiar!
Companies like Montgomery Ward and Sears already had the templates of Amazon in place with their catalogs, as well as the crucial infrastructure of a nationwide fulfillment service. All they (apparently) lacked was the acumen to usher their existing operations into a forward-looking business.
Sears had their own credit card (Discover) and ISP. They literally had everything to become Amazon except the vision.
Some brands have tried to do the “lifestyle” thing where the cars are a part of the “lifestyle”. Like Ferrari. Get some extra money from the first job, buy a shirt. Get to the C-suite and get to buy a car.
AKA fake it till you make it
The automotive industry is SO SLOW. Ten years ago was the time to be looking at software as a service in cars and introducing subscriptions. Instead, they waited… and waited… and waited…and now everyone is wise to the rouse, and starting to object to the subscription economy. For all I know, they weren’t actually waiting, and there’s just that much process to get anything done. But right now, when consumer protection from data is a big thing, and right to repair is becoming a big thing, it’s going to be hard.
As consumers, we won’t be able to say no to subscriptions as much as we’d like to, but as sellers, automakers missed their window for people to think of it as neat.
I strongly disagree on the SaaS in cars issue. A car is (fundamentally) a tool to get you from point A to point B. I like my tools bought & paid for thank you, and not changing on me at some stupid product manager’s whim (looking at you, Microsoft, but really any subscription based software company equally applies).
The whole concept of a “software defined vehicle” makes no sense to me, and it’s nothing I would pay extra for. I live without remote start on my RAV4 because they put it behind a paywall, and I’m not paying them monthly for something I’d use only a couple of times a year. And if it ever becomes a significant issue for me, next time, I’ll get something other than a Toyota.
I’m about to ditch Windows and Office for exactly the same reason – they keep screwing with the product to justify a subscription, but the screwing with it for sake of screwing with it is driving me away. HP is trying their best to push us into a monthly ink subscription model, but all it’s going to do is push people to buy someone else’s printer. (Myself included.)
This “software defined vehicle” concept is fatally flawed. Some idiot CPAs and C-suite managers will try to keep it alive for another decade or so, but eventually it will die off and be looked back upon not very fondly. It really is folly.
That’s my prediction, anyway.
Much of what you’re saying is the reason why they’ve missed their mark. There was a time where subscriptions were an interesting model. It wasn’t that long ago that folks at a related conference were predicting that subscriptions will be the leading driver of our economy. At that time, they hadn’t realized just how exhausted everyone would become with everything becoming a sub.
Automotive is now looking at trying software in an industry after everyone is sick of it in every other industry. They missed their entry point.
There was never an entry point for them to miss, as far as the automotive space is concerned. Any illusion that there was one was delusion, as far as I’m concerned.
My parents just bricked a printer because they put a third party ink cartridge in. Now they buy a new printer – but a different brand. That is completely shooting themselves in the foot. why on earth would I remain loyal to a company that just ruined its own product so I had to buy theirs?
You need to read the 1980s Chrysler link above – this was their marketing slogan (and maybe the purpose for the company)
I agree. 10 years ago I was enamored of subscriptions. A new box in the mail every month! A new TV streaming service! So over it.
When there are subscription services to get rid of unwanted subscription services, it’s pretty much the death knell for subscription services. No one wants another one. Not a single person I know.
Maybe Volkswagen can ramp up sausage production instead? I am the kind of VW owner who would cook VW currywurst on my Type 4’s headers just to say I did it. (Alternately, make cars with usable frickin’ interiors again.)
When there are subscription services to get rid of unwanted subscription services…
It’s freekin subscription service inception!
Duuude. The “De-Subscribe Subscription.” What a ballsy concept!
Fellow VW owner. Also would LOVE if my car could cook me a sausage on the way to school drop-off. Also would also settle for UI that works.
Man, the interiors used to be so simple and easy to use, too. The Amarok (pre-Ranger tie-up) that I tested a few years ago was probably Peak VW Interior for me. Buttons made sense. Controls in easy to find, expected locations. Back-lighting on buttons for when it got dark. It was like pretty much every other VW interior of the era, all of which were good for the same reasons. How the hell did THAT company get it all so wrong?
You enjoy that burnt oil/sludge taste, right? /s
You’ve got to wrap your sausage well. The In-N-Out method doesn’t work for these.
I have never, and will never “wrap” my sausage. YMMV?
I will never wrap my sausage. Just sayin’.
One the other hand my Mom used to reheat leftovers in the engine compartment of our VW Bus on the six hour trip home from Grandma’s house.
I can still taste the flavor of the Pennzoil 30 wt. over 50 years later.
haha, oof
“Manifold Destiny” was not intended for VWs. The exhaust passage crossover on a Detroit V8 was the perfect hot dog/burrito warming oven.
we have the right to cook as we see fit. go away with your crazy talk. /s
actually we only had a handful of American cars, but yeah, a V8 does a better job of reheating food.
God bless America.
Could I interest you in a monthly sausage subscription?
I know you were joking about the monthly sausage subscription, but I would swear that Hickory Farms had such a thing at one point. Heck, maybe they still do.
No! No subscriptions! I will only put sausage in my mouth when I want it!!
With a car feature subscription, you wouldn’t even get the joy of receiving a box every month. Just a “hop into the car and wonder if the feature is going to work today” feeling.
I had never heard of the car data aggregator companies that you mentioned, so I decided to do some googling. Everyone talks about the data from connected cars as a ‘goldmine’, so I wanted to figure out what a car’s worth of data is actually worth?
To these two companies, at least, it worked out to be less than 17 cents of revenue per car. As of 2022 (the date of the report I was reading) they would have had to either increase revenue or decrease their costs 10x to come out even. Evidently they weren’t able to manage that.
If someone was making money off of the data, it wasn’t them. But *they had all the data and did all of the analytics* if what I read about their business model was correct. Who stood to profit more than them?
Also, the list of monetization options for “what the hell do we do with all this Big Data everyone is so excited about?” looks pretty dreary to me:
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Bullet 1 has proven to be the straw that broke the camel’s back and got GM (among others) sued, so that’s out – and good riddance.
Predictive maintenance is nonsense, speaking as someone who was tasked to figure out how to implement such a scheme at one point in my career.
OTA updates are expected to be free.
In car advertisements strikes me as particularly dystopian and also not likely to be accepted by consumers (please, consumers, prove me right just this once…)
In-car payments could make sense, especially for EV charging; they need 2-way communication with the charger anyway, so why not just enter your CC info into the car and have the car deliver that info to the charger via the plug?
Maybe I’m not enough of a visionary capitalist / MBA / Silicon Valley Techbro to see it, but I can’t imagine any of these, or indeed all of them put together, could possibly justify the $billions in software and hardware investment being heaped on the connected/software defined vehicle hype cycle ever paying off. It is, however, making the second most expensive thing we tend to purchase worse in a lot of actual, concrete ways. If the gang will forgive me for sharing a link to one of their competitors, here’s one specific example: https://www.thedrive.com/news/chinas-connected-car-collapse-is-a-warning-for-the-american-market
There are billions ready for the companies that figure out traffic and fleet management through data.
Would you care to elucidate? I haven’t seen any business plans that are any better than underpants gnome reasoning: “Step 1: Big Data – Step 2: ??? – Step 3: PROFIT!”
Traffic management is a little easier – there’s a company near me that’s in the traffic management business, and a few friends have worked there. They rely a lot on sensors around intersections and roadways to be able to do the things they can do to manage traffic. Everybody there knew that the cars themselves were the ultimate sensor. But they also all knew that each automaker would want to drive the standardization that would have to occur for this to be a viable reality. Figure out the standardization and it affects everything from speed limits to traffic avoidance to where parking lots are located. I’m very certain the automakers themselves know this, and are unwilling to give up controlling interest.
For fleets, it would be all about risk avoidance and maintenance cost. If you’re managing a fleet of hundreds, or thousands, of vehicles, understanding when they’re making money for your organization and when they are costing money for the organization is important. A fleet manager could benefit from predictive data to maximize the utility of the fleet.
Agreed on the usefulness of connected vehicle data for traffic management. I worked on a project (funded by CALSTART, as I recall) that used V2I comms to let the truck predict traffic light patterns, and set speed targets through town to let them roll through without stopping – much more efficient than starting and stopping all the time. It worked.
The problem is, while at one level it is easy to understand who benefits from less traffic congestion (every road user!), apportioning the cost of the infrastructure (whether it be V2I hardware installed at road junctions in my example, or the development and maintenance of the traffic management system running on connected vehicle data in this example) is more difficult. If the system works, everyone benefits whether they paid for a car reporting the data or not, so you couldn’t charge more for the new cars. Who is the customer that is going to pay for this service, at what level? The municipalities? The state? The federal government? I’m asking in earnest curiosity, I don’t know the answer here, but maybe your friends’ experience at the company you mention may hold that answer.
Fleet management does make sense, but that tends to be a service directly between the OEMs and the fleets, at least in my (Class 8 truck industry) experience.
What items did you have in mind because from what I have worked with it seems like it’s possible now, but my experience has been law enforcement.
There is an emerging ‘traffic management’ solution in Ocean Freight that could dramatically reduce costs and reduce emissions – most of the time today the freighters steam at cruising speed and end up waiting (days sometimes) for a berth to unload. If you could accurately estimate how long before the berth frees up (which can vary depending on what & how much is getting unloaded) and what speed you would need to steam at to get there right before your slot frees up, then you could use less fuel because you are more efficient at lower speeds, and the product gets unloaded at the same time. This is somewhat complicated because you may need to factor in weather and tides, etc.
Thinking out loud here (apologies in advance for the long post), but been wondering how the sprawling model lines of most manufacturers is surely becoming something of a hindrance for them, rather than it allowing them to find profit in every single niche in the market.
We’re led to believe that platform sharing, spinning various things (mostly crossovers now) off a single platform and using a single powertrain is best for profitability, but what if the actual way is carmakers being far more selective about the markets in which they compete, and the markets they’re realistically best suited to?
It cannot be effective, for instance, for Renault to have eight vehicles that vaguely meet the definition of a crossover/SUV, no more so than it can be for Mercedes-Benz to offer vehicles in everything from the global C-segment alongside the Golf, to ultra-luxury Maybach-branded things or daft limited-run hypercars like the AMG One.
There is even less reason mainstream brands and luxury brands should overlap in any segment either, especially as the market will become increasingly saturated with Chinese brands doing exactly the same in the coming years. What real value is there in trying to compete in a segment that has, say, 20 other vehicles already? European brands seem uniquely obsessed with this desire to offer both a conventional car and a crossover in every single market segment, like any of them are ever going to dominate that segment.
Do you know what has worked really well though? Dacia. Its cars have some overlap with others – the Sandero is basically Clio sized – but it massively undercuts anything similar on price. Yet it’s not at the expense of profits, since it’s both profitable and has double-digit operating margins, which is pretty good these days especially for a budget brand. It takes big slices of the handful of markets in which it competes (the Sandero is one of Europe’s best-sellers), since there’ll always be a market for value, and it’s not messing around with ideas above its station.
So I think Europe should probably split in two directions. Mainstream brands – or ones that used to be so before everyone tried to go “premium” need to have a range cull, and a factory cull, and concentrate on just a handful of the most profitable models, probably not in every market segment, in theory taking a larger slice of the relevant pies.
And genuine premium brands – BMW, Mercedes – should abandon ideas of being accessible to everyone and make the best premium/luxury models they can, just as they did in the 70s and 80s. Will some people be sad they can no longer get into a 3-Series or C-Class for a the same monthly payment as a VW or an Opel? Sure. Will people who can afford it line the pockets of these brands much more than they already do for the one-upmanship of owning one? Heck yes they will, just look at Porsche’s huge margins, a brand that has no problem making a profit these days.
You can already see Mercedes doing what you have suggested. The have dropped a lot of their offerings on the low end and massively simplified their lineup. Remember the recent headlines about Mercedes reducing their coupe, convertible, wagon options from 33 to 14?
I remember something to that effect, though I also recall reading they’ve already U-turned on some of those since their whole EV thing isn’t going so well whereas people are still buying the smaller stuff in quite large numbers – they’ve decided to continue with the A-Class until 2026 for instance rather than can it this year as planned.
Looking forward to purchasing a BMW glockenspiel and a Mercedes-Benz cuckoo clock.
I really don’t want any more final solutions coming from Germany.
Now I’ve got this stuck in my head. Which is actually a pretty good thing, since I haven’t heard it in ages.
https://youtu.be/VelS-YCtHV4?si=fX7UBfTDZwYV2Sey
Not my cup of tea, but I do wish more disaffected youths would take up musical instruments than assault-style rifles.
OK then… how about a Ferrari vacuum cleaner?
Can you hang it upside down?
Sure, do you want to vacuum the ceiling?
It would really suck…and that would be good
“What does a carmaker become so that it’s not just a carmaker?”
Didn’t GM do this for a while? It became a finance company that made cars as a side hustle.
It made cars to sell the financing. And insurance.
Let’s check in on how that is going… ::listens to earpiece:: Aah, they spun off GMAC (Ally bank) in 2006 for $1.5B. Ally is now worth $13B. Way to go GM!
Maybe it’s worth 10x more simply because GM doesn’t own it!
We have the Opel example to confirm
Side note here. We had 5K in our Ally account when they went tits up.
Took almost 2 years to get that money returned…
America. What a country, right?
It’s funny how one european bureacrat points to excessive regulation as the root of EUs stagnation, while some other european bureacrat go after any big company trying to break it apart with regulations.
It’s like wanting to re-invent the wheel of capitalism, but using only stiff sticks to do it
Wild how most of the comments on the luggage test article are wondering why they’re ending. Like… it was well-reported that you’re reading a site with one foot in the grave. At least they get to say goodbye; I remember roughly when “goodbye” posts stopped being a thing at Jalopnik. They used to be a celebration of the career of the writer up to that point; then the very idea of them got swept under the rug so readers wouldn’t realize the site was hemorrhaging talent.
It should’ve been Carscoops 🙁
“What does a carmaker become so that it’s not just a carmaker?”
Paging Elon Musk.
I’ve been a car aficionado my whole life, but you know what? Screw cars! I want an effing jet pack. James Bond had one 60 years ago – and that dude who used to drop into the Astrodome during NFL games. Are you telling me that 60 years have passed and nobody has been able to improve on that? Come on, I want to be the Rocketeer and I haven’t got that many years left. Maybe one of these carmakers can shift to jet packs. That would be a transportation game changer.
“Tesla Full Self Flying Jetpack coming next year!”
-Elon about 3 minutes after you tweet this idea to him
There are a few jetpacks available, but mostly to first responders and military. There is one or two by jetpack aviation and another by… Northrop? Can’t remember. But one uses kerosene/jet propellant and the other one I am thinking of uses drone-like rotors. I think the second is technically an ultralight and the other probably should be treated like a drone.
But I get it; they aren’t ubiquitous. I also weight too much for both of them, IIRC.
https://99percentinvisible.org/episode/rocket-man/
The one thing I would pay a subscription for. That way my heirs could just stop paying!
Cars as a software service revenue stream is one of those things that sounds really good in a board meeting and almost nowhere else.
Oh and one more thing, the Peugeot family still makes kitchen tools
the pepper grinders are very nice
Bicycles as well.
The next stage of Capitalism is corporations literally producing nothing while convincing the rest of us to give them money simply for existing.
This is my personal dream.
Kardashian behavior.
Sounds like my HR group! Zing!
NFT.
This is really incredible.
Over-regulation is an insidious and slow acting poison. I have a good friend in a Scandanavian country, who has always been very pro-big government, pro-regulations, pro-socialism, etc. In his late middle age, he now has a great business idea and enough capital and connections to make it happen, except no investors will touch it if it’s implemented in his home nation due to some very constricting regulations that make it basically impossible to grow past ~10 million euros in annual revenue (and also the Scandinavian VC/angel investor scene is… small). He’s moving his family to America (not as big of a sacrifice as it might be, since his children all go to American universities) to pursue the opportunity. His tone has changed quite a lot recently, he’s sounding almost libertarian.
His story is not unique, and like Mr. Draghi exemplifies, I think some Europeans are waking up to the fact that the giant bureaucratic regulatory state they have created is not in fact an unmitigated good.
Yep. I’m in the building industry and I see it so much. People wonder why houses and buildings cost so much. It’s the codes and regulations that come out on a 3 year cycle and each time, they need to find things to add. Codes never get easier to meet. Most of the people who lobby and write codes are people that are selling products to meet those codes. The safety is at the point where it’s diminishing returns for very expensive additional costs. The energy code compliances are starting to cost far more than the energy savings will ever pay back, and in many cases are so complicated that it causes great dissatisfaction with the user experience. Safety is important for sure, but sometimes we don’t think about that 1 in a couple million chance of something happening vs. making something as important as housing, more affordable. There’s a cost in health, mental well being, and other things that make not being able to handle your basic needs bad “unsafe” too. Same applies for so many other things that are overregulated.
A-men.
I’ve been arguing that NHTSA and IIHS have similarly been way out on the pointy end of diminishing returns (i.e. time to stop) for a long time now.
Yet cars keep getting safer and cheaper (adjusted for inflation)
I mean… no? Not anymore.
Vehicle deaths per million vehicle miles travelled hit its minimum in 2010 and has basically flatlined there ever since.
That’s despite increasing safety regulations, mandated features and technology, etc. in the intervening ~14 years.
Interestingly, while what you said about inflation-adjusted car prices staying about the same once adjusted for inflation was true all through the 90’s and 2010s, ever since then they’ve been getting more expensive, outpacing general inflation by almost 2 times.
I’ll also take this opportunity to back up my claim that we’re way out into diminishing returns territory when it comes to safety regs:
https://reason.com/2024/09/11/the-feds-think-they-can-save-67-lives-for-the-low-low-price-of-48-million/
What does a carmaker become so that it’s not just a carmaker?
Step 1. Tell people you’re not a car company, but an energy/tech company that makes cars.
Step 2. Really drive that point home hard by making cars with absolute shit quality and then sell EV credits to prop-up the bottom line.
Step 3. Convince your shareholders that the autonomous future is here, later this year.
Step 4. Rinse and repeat steps 1, 2, and 3 until you really got this down to a meme.
Step 5. Ketamine
Step 6. Actively admit to the public and your shareholders that you are self sabotaging the company because they haven’t approved the bonus you deserve
Step 7. Return to step 1
STFU, and just purchase a non refundable seat on my space ship you troll. /s
An everything vehicle maker. Bicycles, motorcycles, microcars, boats, ships, planes, trains, the works.
Stop obsessing over styling cues that pay homage to old designs and focus on making functionally good things instead.
Most of the Japanese automakers do this already.
Hyundai has joined the chat.
Good catch, my bad.