The i3 Long Bet, an update with incentives

Time flies. It was February, 2014 when I posted “The i3 Long Bet“. That article followed a brief drive and, several months before, a chance lunch with a “BMW i” product manager.

These memories returned to focus when driving past a BMW dealer recently. I noticed that several i3’s featured windshield offers. That observation required a u-turn and a quick study.

The placards displayed discounts from $5000 to $7,220 and monthly payments from $279. The i3 has joined – at least for now – the legacy car marketing party: “Cash on the hood” and “how much is the monthly“?

That said, the Leipzig composites have not yet joined the yellow or pink balloon promotion club. I’ve often wondered which color drives more sales.

Might Toyota Prius initial sales data inform our observations? They are similar:

Year Toyota Prius [1] BMW i3 [2]
1 3,000 1,477
2 17,700 16,052
3 15,200 9,846 (to June, 2015)

What happens next should be rather interesting, in light of ongoing rumors of a BMW and Apple arrangement.

My February post noted the not great i3 interior experience. Perhaps this is where Apple might begin to enter the game. Some have noted that a BMW / Apple relationship seems similar to Apple’s pre iPhone Motorola Rokr iTunes initiative.

P.S. I wondered about BMW’s view of lease residuals [3] last year (Residuals are an estimate of the car’s value at the end of a lease term. Getting this wrong can be expensive).

A June, 2015 eBay sale offers one data point, a 2014 BMW i3 with 3,495 miles on the odometer sold for $29,480. Cars.com lists 85 used i3’s for sale and 2,083 new models available.

The evolution of BMW’s i products is worth observing. Might the upcoming Frankfurt auto show illuminate BMW’s future i plans?

[1] Toyota Prius sales data.

[2] BMW i3 sales data.

[3] Lease Residuals.

“As as an industry turns to retro, you know it’s over”

Co-create. Design. Build. Shop. Creative Commons. Modular. Microfactories. New business models.

Horace and Jim talk with Matthew Gunson, Director of Brand Management at Phoenix based Local Motors.

We learn about Local’s business model, their view of automotive jobs to be done and the 3D printing driven micro factory. Automotive nostalgia and a detour into consumer behavior closes our conversation.s

26mb mp3 about 55 minutes.

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Show Notes:

Local Motors.

Volkswagen’s “California” Camper Van.

Bob Lutz: “Luxury in the “Modern Era“.

Local Motors’ latest 3D printed car project.

To sign up for the co-creation community
Localmotors.com and click “sign in.”

To learn about the Microfactory program.

Asymcar 22: The Goddess

“From the moment an idea is worth having no one cares what it costs” – Andre Citroën

The incomparable Citroen DS (French homophone: déesse), 60 years old this year.  Hydropneumatic, self-levelling suspension aerodynamic and interior design efficiency, swiveling headlights, novel construction methods. Ahead of its time even in 1985. Why did this iconic design not endure?

We use this parable to analyze Apple Car rumors.

32mb mp3 about 65 minutes.

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Show Notes

The Prada of the Tire Industry

Citroen DS

Stephen Bayley’s paen to the Citroen DS appeared in the February, 2015 print and iPad issue of CAR Magazine.

A Pilgrimage to Albert Kahn’s Abandoned Packard Factory

With Asymcar, we’ve extensively discussed the auto industry’s intransigence while considering likely disruption vectors, including modular manufacturing, the information layer and emerging “transportation as a service” plays.

In Detroit recently, I had an opportunity to explore a bit and muse on Packard, once king of the American car business and now just a distant memory. Packard’s East Grand Boulevard factory was designed by Albert Kahn, “the foremost American Industrial architect of his day”.

Packard’s former market position, architecture and stagnation echoes Asymcar themes.

Aaron Severson:

Between 1935 and 1956, the Packard Motor Car Company went from the top of the heap among American automotive brands to just another independent, struggling to survive on the scraps of the Big Three. This week, we take a look at the Packard Clipper, the “bathtub Packards” of the late 1940s, and how the once-great automaker lost its way. We also examine one of the company’s odder experiments, the 1948 Packard Station Sedan.

At the start of the Great Depression, the Packard Motor Car Company was the default choice for American luxury car buyers. There were cars that were more expensive or more exotic, but Packard had an aura of patrician respectability that no other domestic automaker could match. A big Packard was not a sign of material accomplishment so much as a badge of class status, bolstered by graceful but restrained styling, impeccable quality, and exacting engineering.

.

Detroit Free Press:

1899
The first Packard is built at Packard Electric, founded in Warren, Ohio, by brothers James and William Packard.

1902
Detroit investors, led by Henry Joy, buy controlling interest in Packard Motor Car Co.

1903
Packard moves into new factory, designed by Albert Kahn, along East Grand Boulevard.

1905
Kahn designs Building #10, the first factory ever built of reinforced concrete. He revolutionizes the design of factories nationwide.

1918-19
Packard builds Liberty engines at the plant for U.S. military aircraft.

Late 1920s
Packard becomes the dominant luxury car in the U.S., outselling Cadillac and other competitors combined.

1940-45
Packard builds aircraft and marine engines for the U.S. military and World War II allies. At peak production in 1943, the company has 36,000 employees, almost all at the Detroit plant.

1954
The last Packard is built at the East Grand Boulevard plant; Packard buys out Studebaker, a higher-volume carmaker based in South Bend, Ind., and becomes Studebaker-Packard.

1956
Last Packard built in Detroit, at a facility on Conner Avenue.

Antique Automobile Club

Silverghost: my $.02 tempered with/ adapted from “The rise and Fall of the Packard motor car company” by Ward

1. Packard’s preference to pay stockholder dividends over re-investment in new, more technically advanced product.

2. The failure to merge with other independants as far back as the 20’s or 30’s, when GM (as re-designed by Sloan) and Walter P. Chrysler showed American and the world how to combine strengths and maintain (or gain) market share.

3. Abdicating the Luxury market after the war, being stuck in the middle–largely the effect of the 120 line managers rising to the top.

4. The out-and-out plainess of the 24-26th series cars coupled with their outdated powertrains (see No.1) and the inability of the dealer network to deal on those cars in comparision to their big 3 rivals.

5. (big personal opinion here) is that Packard, as a corporation was “a nice guy” in terms of competition, labor relations, dealership relations, etc. Ford and Chrysler in particular were scrappy individuals when it came to these topics/behaviors, and were not nice guys. It’s always been a cut throat business. Packards were cars built “for gentlemen, by gentlemen” The world stopped supporting that model with their buying habits. I.E. Snoop Dog sells a lot more records than Johnny Mathis these days.

“Ask the man who owns one”.

The Packard Club

The Packard Museum

Abandoned America: The Packard Plant

“Largest Abandoned Factory in the World.

Packard @ Wikipedia

While wondering around the Packard Plant, I remembered an earlier visit to Turin’s Lingotto.

Panorama: Lingotto Pinacoteca Giovanni e Marella Agnelli.

If you go, contact Pat or Kim at Show Me Detroit for a great drive around the Motor City.

Detroit, full of history and urban renewal reminds me of Berlin and vice versa.

Postscript: Fernando Palazuelo purchased the plant via a county tax foreclosure auction for a mere $405,000 in late 2013.

Asymcar 21: Where we’re going, we don’t need roads

Chicago Suburbs

Gartner asserts that “connected cars or smart cars are poised to play a pivotal role in the Internet of Things (IoT)”. We say “Hah!”

Also,

  • Who levies automotive platform taxes?
  • What in the world could “over serving” transportation mean?
  • Using the Automatic app in a Porsche.
  • BMW’s  “sounding the alarm” over tech companies efforts to collect auto data.
  • China’s car industry and other unimportant details relative to declining interest in driving among young people.

(Picture above was taken with Horace’s iPhone 6 back camera 4.15mm f/2.2 ISO 1000, 1/15 second exposure on approach to Chicago’s O’Hare International Airport and shows the way Americans like to live).

29mb mp3 about 60 minutes.

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Show Notes

250 Million: Number of Connected Vehicles on the Road in 2020, According to Gartner


Volkswagens gefährliche Nähe zu Chinas Politbüro (Volkswagen & China’s Politburo “Dangerously Close”)
.

Ford’s connected car plans.

BMW sounds alarm over tech companies seeking connected car data.

Asymcar 20: Iconic Design

JoyThroughWork

We consider Uber’s street smarts, “cash on the hood” driver acquisition tactics and their ability to operate over the top, that is above local regulations and norms.

The proposed elimination of diesel cars in Paris and London ignites a side trip through today’s regulatory labyrinth.

Horace reflects on a recent Tesla test drive while evaluating innovation on jobs to be done, form factor design, production methods and their business model.

Jim considers Sandy Munro’s recent BMW i3 teardown, which lead him to conclude that “this car makes money”. Might BMW have leaped ahead of Tesla while pumping out 500,000 traditional 3 series this year?

We close with news that Porsche has once again rejected an “entry level” sports car project. This, despite their growing SUV and large car portfolio.

29mb mp3 about 60 minutes.

Subscribe to Asymcar podcasts via iTunes or RSS.

Notes:

The Future of Cars Looks Very Different: Forget Power and Symbolism, Auto Are Becoming Communication and Utility Tools.

will be paid solely by a percentage of revocation reinstatement fees collected pursuant to this program

Herb Chambers, Auto Dealer Extraordinaire, Will Never Retire.

Possible changes to Europe’s diesel landscape.

Ford’s cap on lifetime service costs.

Porsche’s “baby boxster” project cancelled.

## Correction: Jim mentioned in the podcast that the Uber driver paid $10.00/month. It was $10.00/week.

Asymcar 19: About that Ferrari SUV…

Ferrari FinIn today’s show, Brand managers gone wild!

In other words, why would a brand be smeared all over a set of jobs that it would never be hired to do? What motivates a company to destroy its brand?

We start with Mini’s plans to sell 100,000 cars in the States by 2020, nearly double today’s pace and remember how Cadillac destroyed their brand and how Mercedes, Porsche, Ferrari et. al. can’t wait to do the same.

Also, might retail power in the form of strong dealer regulation limit brand’s ability to improve or address customer experiences? What motivated Warren Buffett to enter the American car dealer business? (With a long aside on what Buffett investment logic is all about and why it’s not  contradictory to a growth investor).

We detour a bit into the information battle to come and how car makers yearn to “be the masters of their own cars”.

30mb mp3 about 61 minutes.

Subscribe to Asymcar podcasts via iTunes or RSS.

Notes:

Mercedes, VW to Thwart Google’s Inroads in Car Data.

Ford CEO Mark Fields One Ford Strategy.

My tips to Warren Buffett in his new career as a car dealer.

Mini’s Sales Slump.

Ferrari Strategy Conflict.

Car sharing: A cheaper alternative to owning a car in the city

Kleemann Mercedes “Supercars”.

Corvair Greenbriar.

Mercedes Smart Car

“it is clear to us that Ferrari has been undershooting its market potential.”

Amphicar Appearance

Amphicar from Jim Zellmer.

Speaking of “jobs to be done” (Asymcar 18)….

A rare Amphicar makes an entertaining Saturday afternoon appearance on Madison’s Lake Mendota.

Wikipedia:

The Amphicar Model 770 is an amphibious automobile, the first such vehicle mass-produced for sale to the public starting in 1961. The German vehicle was designed by Hanns Trippel and manufactured by the Quandt Group at Lübeck and at Berlin-Borsigwalde. Its name is a portmanteau of “amphibious” and “car”. The Amphicar was designed to be marketed and sold in the USA. Compared to most boats or cars, its performance was modest, and only 4000 were produced by 1965. Nevertheless, it is still among the most successful amphibious civilian autos of all time, and still often prized and preserved as novelty collectible automobiles today.

eBay: 3 for sale starting at $53,950.

International Amphicar Owners Club. Tips on buying an Amphicar.

Entering and leaving the water.

## I recorded the brief Lake Mendota video using an iPhone 6 with “digital zoom”. Not too bad.

Asymcar 17 Comments & Links

Matt Grantham:

I thought that I would send this one through and add a couple of comments based on the last podcast for things to think about for the second part.

I am not sure if I mentioned it with in Asymcar 16 but one of the reasons that people are so excited about solar (especially in Australia and other sunny parts of the world) is that with the roof top option you completely take the need grid infrastructure out of the equation. Which in Australia is about half the cost of your bill and as panel costs come down the economics of this are just going to get stronger. I agree that wind prices are also going down but all other technologies have the disadvantage that they are not able to be distributed around the grid.

To highlight this point here is an article which really shows the system challenge for energy based looking at the distributed vs centralised model

http://reneweconomy.com.au/2014/even-coal-free-couldnt-compete-rooftop-solar-88808

It is relevant to mention that you can also have large PV solar plants as well that face the same challenges as wind, coal and geothermal if they are grid connected.

In the podcast I did I forgot to mention one crucial element that could really help push EV’s and that was electricity tariff reform because if you can start to see one of the what at the moment is one of the problems for the grid ie over supply and as a result cheap energy and combine that with tariff reforms that encourage EV users to suck up this cheap energy then what was a problem for the grid is now a competitive advantage for EVs as long as you get the market structure right. I think good energy market structures are the key.

Also another concept that we have thrashed about on our show from time to time is the idea of variability VS intermittency with regards to clean energy and if you have got a real time market and smart devices like EV’s then they can add to the overall stability of a grid. Solar now we are calling “predictably variable” because even though it is not there at night and you can get clouds from time to time when you look at the system input across a city on a daily basis you do get a very predictable output from it on a day to day basis and modern weather forecasting is helping to refine this even further.

Here are some other EV articles I stumbled across recently that you might be interested in.

http://reneweconomy.com.au/2014/why-evs-will-make-solar-viable-without-subsidies-91738

http://reneweconomy.com.au/2014/makes-sense-pair-solar-evs-14517

Asymcar 18: Cars of the People

Why did the Tata Nano fail? What is the future of low end disruption in the auto industry?

What does sharing mean for cars? What are the jobs that spaces in cars are hired for that their makers don’t understand?

Is Elon Musk an Industrialist?

30mb mp3 about 61 minutes.

Subscribe to Asymcar podcasts via iTunes or RSS.

Notes:

1. The naming changes are said to be pushed by marketing chief Ola Källenius, with the executive aiming to bring more clarity to Mercedes’ lineup.

2. Mini cars will soon lose their flavor.

3. Shared Automated Vehicle.

4. The Democratization of Luxury (Stupidity).

5. Top Gear, Cars of the People (James May). iTunes.