This Week in Car Buying: Lease sharing? Not so much; VW settlement coming, Jetta Hybrid axed; BMW 3 Series to Mexico; Dodge Journey to Italy
As the industry assesses the increasing popularity of car sharing and leasing, Ford’s unique approach of offering lease sharing as a way to lower consumer payments and increase flexibility has yet to find a market, according to Automotive News. The unique program called Ford Credit Link that provides for anywhere from three to six people to share a leased vehicle by dividing up the lease payment and vehicle access among them has yet to write a single contract.
The program is in pilot tests at three Austin, Texas, dealerships: Leif Johnson Ford, Maxwell Ford and Covert Ford. “We are still seeing a good flow of traffic to the website but we don’t have any customers signed up at this point,” Margaret Mellot, a Ford Motor Credit spokesperson told the trade paper.
Part of the problem is attributed to a lack of awareness and difficulty in explaining and then setting up the shared lease. Ford Credit is using digital billboards to call attention to the program and says it will add more marketing efforts during the summer.
Bill Scott, general manager at Maxwell Ford, believes the program would probably fly in a more densely populated urban area and that little interest has been shown by his customers. “Maybe there would be more interest in a metro city, but especially in Texas, getting three to six people to agree to something has been very difficult,” Scott told Automotive News.
On the other hand, Gordon Lambert, sales director at Leif Johnson Ford, believes Austin is the right place to test the program because of the high population of students at the University of Texas who don’t own cars. A sharing program with low monthly payments might offer access to vehicles similar to other shorter-term services like ZipCar.
VW settlement coming, Jetta Hybrid axed
It’s been nearly a year since the Volkswagen diesel scandal involving software used to cheat emission tests broke. Word is circulating that a possible $10.2 billion settlement may soon be approved, one that would give owners of the affected vehicles the option for vehicle buybacks, repairs and upgrades that would make their vehicles compliant. and cash payments ranging from $1,000 to $7,000.
Nearly 500,000 VW Group vehicles, including Volkswagens, Audis and Porsches are involved. VW would also be required to provide money used for grants to combat air pollution as a way of offsetting the damage done by the cars, which were emitting as much 40 times the allowable levels of NOx.
The scandal has all but halted VW Group sales of diesels in the U.S., as the government refused to certify any 2016 models using the technology. As a result, VW is embarking on an aggressive electrification program that calls for more than 30 pure electric cars in the group’s portfolio by 2025. “We expect that by then we will be selling about 2 to 3 million pure-electric automobiles a year. This will account for a significant share – an estimated 25 percent – of our total sales volume. We are stepping up our efforts accordingly and will launch a multi-billion euro investment program,“ VW Chairman Matthias Müller said at the company’s recent annual meeting.
In light of that development, the company’s U.S. unit announced that its only hybrid model, the Jetta, will be dropped from the lineup after the 2016 model run, although it will continue to sell the eGolf electric vehicle.
Low sales was cited for the move, with a VW spokesman saying that the model accounted for less than 1 percent of the compact’s total U.S. sales. Sales for the model were down 21 percent during the first half of the year, which is attributed to low gas prices and the high cost of the hybrid package. Base prices for the VW Jetta start at $18,500, but the Jetta Hybrid’s starting MSRP is $31,940, making it one of the most expensive models in the range.
BMW 3 Series heads to Mexico
The current BMW 3 series built in Germany and South Africa will be built in Mexico at a new $1 billion plant in San Luis Potosi when the compact sport sedan is redesigned for the 2019 model year. The German automaker will have the flexibility to build any of its rear-drive products at the plant, according to reports. The newest factory will have the capacity to build 150,000 vehicles per year, which will include the 3 Series and a yet to be specified model.
With 3 Series sales dropping, the lower production costs in Mexico coupled with the shorter supply line to the U.S. market should allow BMW to make pricing on the redesigned sedan more competitive.
Dodge Journey to Italy
One of the reasons the 2017 Dodge Journey will be carried over with few changes is the fact that the expected redesign -- which would have put the vehicle on the front-drive-based Dart platform -- has been shelved in favor of basing the next-generation crossover SUV on the rear-drive Alfa Romeo Giulia architecture. The change will delay the model changeover until 2019.
There are many moving parts to this development, which underscores the global nature of the business. The Journey is currently built at a Fiat Chrysler Plant in Toluca, Mexico. That plant will now build the next-generation Compass and Patriot starting next January, with both vehicles slated as 2018 models. Until then, the pair will continue unchanged into a shortened 2017 model year run. Meanwhile, the Journey will transition to the Alfa platform in Italy sharing components with the Italian brand’s upcoming crossover SUV, which is expected late next year. It also fits in neatly with Fiat’s product lineup, which sells the Journey in Europe as the Freemont.
The all-new 2017 Mercedes-Benz E-Class has been introduced by the German automaker and we drive it. See our First Review here.
Speaking of German car companies, Porsche has released a teaser image of its all-new 2017 Panamera. The 4-door sports car will bow later this year.
It’s almost all over for the Dodge Viper, but the V10 sports car will bow out with no less than five limited edition models. Check the variations on the 2017 Dodge Viper.
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