Follow us on social media:
Runtime: 11:24
0:00 Sales People Make +$200,000/Year at Car Dealerships
0:51 CEO Of MAN Says Hydrogen Trucks Not Viable
1:49 Honda Splits Auto Ops into Three Groups
2:50 Legacy OEMs Don’t Know How to Write Software
4:32 Stellantis Reveals Large Platform Details
6:36 Ford Reveals New Infotainment System
7:38 Acura BEV Starts At $64,500
8:23 Foreign OEMs Boost China Exports
9:05 China At 5-10 Million Units Overcapacity
9:52 Waymo To Expand Robo Rides to LA
Visit our sponsors to thank them for their support of Autoline Daily: Bridgestone, Intrepid Control Systems and Teijin.
This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
SALES PEOPLE MAKE +$200,000/YEAR AT CAR DEALERSHIPS
It sure pays to sell cars at a dealership. According to Automotive News’ Dealership Salary Survey, the average sales person at a U.S. car dealer made just over $200,000 in wages, commissions and bonuses in 2023. And most of them are optimistic about their future wages, with 53% of respondents saying they expect to get a pay raise in the next three years. Even so, they have to put in long hours to make the big bucks. Most sales people work nearly 52 hours a week. And there’s gross inequality on the showroom floors. Men make an average of $74,000 more than women.
CEO OF MAN SAYS HYDROGEN TRUCKS NOT VIABLE
Uh-oh, this doesn’t look good for hydrogen fuel cells in heavy duty trucks. The CEO of MAN, which is part of Volkswagen’s giant Traton truck group, says hydrogen trucks are not viable. He says that trucks need to run on green hydrogen or they’re not even sustainable compared to ICE trucks running on diesel fuel. Green hydrogen is made using renewable sources like solar and wind. But it’s only available in very small quantities and is very expensive. The CEO says it’s cheaper to make electricity from renewable sources than hydrogen, saying you capture 75% of the renewable energy with electricity, versus only 25% with hydrogen. Even though other companies like Bosch, Hyundai, Volvo Truck and more are working on fuel cells for heavy trucks, MAN believes they won’t be viable until 2035 at the earliest.
HONDA SPLITS AUTO OPS INTO THREE GROUPS
Honda is splitting its automotive operations into three separate groups, and it’s all about getting the legacy automaker ready for the transition to eclectic vehicles. The new business units include a group called Automobile Production Operations, which will handle all manufacturing and manufacturing engineering. Another unit called Supply Chain and Purchasing Operations will especially concentrate on getting the parts and systems it needs for EVs and software defined vehicles. And a third unit, called Quality Innovation Operations, is tasked with maintaining high quality standards as the company transitions to EVs, and will also take on cyber security responsibility. Our take is that Honda felt that top management needed more visibility into these operations, and having them buried within its automotive division could have hid problems that needed to be dealt with quickly. But none of these changes go into effect until the first of April.
LEGACY OEMs DON’T KNOW HOW TO WRITE SOFTWARE
Traditional automakers are struggling with software because they’re doing it all wrong, said Jan Becker, the CEO of Apex.ai. Becker is an expert in autonomous technology and he knows software. He says you need a small, highly efficient team of only 8 to 20 exceptional software engineers. And you better be ready to pay to get that rock-star talent, at least $1 million a year per engineer, because that’s the going rate for top talent in The Valley. Outsourcing software development to low-cost countries is not the answer, he says, adding that traditional OEMs focus too much on cost and need to focus more on value. Moreover, those SWEs need to operate outside the existing corporate organization. They need short development cycles. They need a single depository of all the data for all the vehicle lines an OEM has, i.e., no more “data lakes” strewn across the company. Also, they need to write in C++ or Rust, but definitely not in C. So what do you think? Will legacy automakers be willing to pay $1 million per software engineer, or will they continue to scour the world for low cost coders?
STELLA REVEALS LARGE PLATFORM DETAILS
Stellantis revealed a bunch of details about its STLA Large platform, but first a quick recap. Instead of going with dedicated EV platforms, Stellantis created four architectures, called STLA Small, Medium, Large and STLA Frame, that can support most powertrain types and will cover all of its major vehicle segments. STLA Large will handle D and E segment vehicles from family oriented to high performance to off-road to luxury. Eight vehicles will feature this platform from 2024 to 2026. The first will be Jeep and Dodge models in North America, including the Jeep Wagoneer S shown off last week as well as cars from Alfa Romeo, Chrysler and Maserati. As we said STLA Large can support a number of different powertrains, including ICE, hybrid, plug-in hybrid and pure electric. Engines and motors can drive the front, rear or all four wheels. All electric versions will have either 400- or 800-volt electronic architectures as well as OTA capabilities, which will include performance updates. Battery sizes will range from 85- to 118 kWh, providing up to 800 kilometers or about 500 miles of range. And it’s targeting acceleration from 0-100 km/h in the 2 second range. Stellantis says it will have 48 BEVs on the market by the end of this year and it’s investing over 50 billion euros by the end of the decade to meet its sales goals, which will also require roughly 400-GWh of battery capacity. But it says its flexible architectures allow it to replicate production at its plants around the world, so it will be able to offer models at a competitive price without having to make price cuts. And CEO Carlos Tavares thinks price cuts are a race to the bottom, which “will end up in a bloodbath.”
FORD REVEALS NEW INFOTAINMENT SYSTEM
Ford and Lincoln are coming out with a new and improved infotainment system. Compared to today’s system, the new Ford and Lincoln Digital Experience has five times faster processing, 14 times faster graphics processing, four times the memory and eight times the storage. The big change for customers will be how they view and interact with their vehicle’s infotainment system, including an available 48-inch pillar to pillar display in the new Lincoln Nautilus. Google and Amazon are built into the system and it will also have integrated Apple CarPlay and Android Auto. Google Assistant can help aid voice commands or Alexa can be used as an alternative. Users will also be able to make updates, download apps to play games or watch TV or movies, including 3rd party apps. This is the start of Ford’s attempt to bring more of its software development in-house, which it says will allow it to offer services and updates even faster.
ACURA BEV STARTS AT $64,500
Acura announced pricing in the U.S. for its first ever EV, the ZDX. It starts at $64,500 for the rear-drive version. The dual-motor ZDX starts at $68,500. The more powerful Type S version starts at $73,500 and if you want performance wheels and tires, it will cost you an extra $1,000 on the Type S. The prices do not include destination charges or other EV incentives. Acura is also offering customers three charging packages to choose from which is included in the MSRP. It’s a combination of public charging credits, charging equipment and installation credits.
FOREIGN OEMs BOOST CHINA EXPORTS
Chinese brands aren’t the only ones boosting exports out of China, so are foreign automakers. According to the China Association of Automobile Manufacturers, 18 foreign brands exported 910,000 vehicles from China last year or 22% of the total 4.1 million vehicles exported. Tesla was the largest, with 344,000. GM and Ford were also among the leaders with their exports increasing a combined 21% last year. As many foreign automakers see their sales drop-in China, they need to export cars to keep their assembly lines humming to protect their profitability.
CHINA AT 5-10 MILLION UNITS OVERCAPACITY
One of the reasons exports are increasing is because there’s too much capacity in China. But that could change. China’s vice minister of industry and information technology admitted that overcapacity is a problem and vowed that the government will take “forceful measures to prevent superfluous projects.” According to consulting firm Automobility, there’s anywhere between 5 to 10 million units of overcapacity in China. While many experts expect consolidation in the Chinese car market, most assembly plants will likely never close because local governments rely on them for the jobs they provide. And that means all that overcapacity could be in place for a long time to come.
WAYMO TO EXPAND ROBO RIDES TO LA
At a time when GM Cruise has halted all its autonomous ride services in the United States, Waymo is expanding into more cities. Waymo has been operating for years in Phoenix, Arizona. Last year it expanded into San Francisco. And it just applied to operate in Los Angeles, and after that it will add Austin, Texas. GM has kind of given robo taxis a black eye in the U.S., but Waymo has shown that its approach is working with politicians, first responders and, most importantly, with the public.
But that brings us to the end of today’s show. Thanks for tuning in.
Thanks to our partner for embedding Autoline Daily on its website: WardsAuto.com
Some of those exports from China will be the next generation Lincoln Nautilus, which will be produced only in China.
I am at a loss to understand (except that Tesla has set the standard), why people are so attracted to sub 5 second 0 to 60 times in a family SUV or grocery getter like Stellantis is planning. In my mind, performance, including cornering, goes hand in hand with a sleek sexy smaller performance car or hot hatch. I would rather have decent (6 sec 0-60) performance with the cost savings and extended range it would come with. I never realized that soccer parents (I do try to not be sexist) are as a group skilled at high speed driving since I watch them fail miserably at parking and all low speed maneuvers.
The report on legacy automakers and their software was interesting. I agree with your analysis Sean.
As a counterpoint I find it surprising that in the self-driving field, Tesla is notably behind GM, Ford and Mercedes despite Tesla’s obnoxious use of the autopilot name. Listening to Tesla I would expect they would be beating even Waymo.
You might have some insight into the economics at the car dealership, but I wonder how much of the total “labor cost” of a vehicle can be attributed to manufacturing, and how much would go into selling? Assuming that a car sales person is making $15K-20K/month and is selling 15 cars per month, just the labor for the sales (not including admin, “the manager”, janitor or whatever) is going to be >$1,000 per car.
Ultimately the car buyer pays for both the UAW salary and the dealer salaries. How much attention do the automakers put on reducing dealer costs vs. internal labor?
Albemarle, I don’t make much use of sub 5 second 0-60 times, even in sports cars. To me, the fun part of sports car is cornering capability, when I have the chance to use it. I also like the looks of sports cars.
Yep, Tesla set the standard for quick accelerating EVs, but others are going in that direction, because it is easy. Even the slow, for EVs, Bolt and Leaf do 0-60 in ~7 seconds, quicker than many, or most mainstream CUVs. Anything under 10-11 seconds 0-60 is quick enough. I drove a 1.9 tdi Jetta wagon for a few years with probably ~12 second 0-60, and even it was quick enough for all normal driving. You needed a little more space to overtake on two lane roads, but it wasn’t that bad. Yeah, quicker is better, and more fun, but I never do 0-60 runs with my quick cars.
Sean – you have any idea what the breakout is between cost/labor in the dealerships and marketing vs. the manufacturing of the vehicle? I would assume that between the delivery charges/shipping, commissions, and general overhead dealership expenses, that the cost to sell the vehicle would surprise most people.
(sorry if this is a nearly duplicate post – I did not see the first comment I made show up)
The report about the average dealer sales employee making 200K per year had me scratching my head. When vehicles commanded prices over MSRP due to supply challenges the amount of profit (and thus commission) were higher than normal. Now that prices are leveling out (more supply and high interest rates) and discounts are back, I felt the sales salary figures were not a true representation. (Selling EVs here yields barely any profit due to the pricing structure, so nobody wants to sell them, but that is another discussion). I discovered that 78% of the respondents to the salary survey were MANAGER level employees. I find most regular salespeople make between 1/4 to 1/2 (if you are exceptional) of the 200K, thus the high turnover rates for sales employees.
The amount sales people make would depend a lot on what they are selling. I suspect the sales people where I bought my Cayman are doing well, selling the sports cars for MSRP, and probably the CUVs at fairly close to MSRP. Also, I think Toyota sales people would do pretty well, since they have no inventory of popular models. Chevy and Ford sales people would do less well, as inventory piles up, except for Corvette.
While the though that OEMs do not know how to write software may be true, I don’t think hiring writers and paying a million dollars, as well as letting them work outside of the current automotive hierarchy would work either. Are the software writers a Tesla, Lucid, BYD, NIO and Geely paid that kind of money? I do see an opportunity for something like a tier 1 type supplier, to provide that kind software support. For, it would seem that standardizing a lot of the systems would help reduce cost and speed up development of that type of tech for legacy OEMs, in an effort to catch-up with startups. Whether or not automakers can go to companies like Sony, Apple and Microsoft for automotive grade software, is a thought too! May be what the individual in todays story was implying or suggesting, was that legacy OEMs hire a software consultant, or consulting firm? That sounds less objectionable, then paying one or several employees a million dollars, with no direct supervision and let them do whatever they want in that software defined space!
I guess I’m missing something, but what, exactly, is wrong with the software legacy OEMs are using? Toyota has software that makes the hybrid system in my 4400 pound Highlander get almost 40 mpg in mixed driving, while doing 0-60 in a respectable ~8 seconds, and the rest of the electronics does what it’s supposed to. The software in my GM, Mini, and Porsche works fine. The engines run well, the displays work, etc. Decisions were made to make operator interfaces less user friendly than they could be, but not nearly as bad as what Tesla is doing. Anyway, the not-so-intuitive setup in the Mini was a design/marketing decision, not software related.