GM wants some of you to borrow a car instead of buy one (Roadshow AutoComplete, Episode 2)

[MUSIC] Welcome to AutoComplete, I'm Brian Cooley. It's Episode Two, everything you need to know about the latest in automotive and car tech news. I'll be joined momentarily by Tim Stevens who is on the road. He'll be telling you where he is, and you will be green with envy. And he'll update us on what's new on Roadshow. If you're new to this podcast, don't feel bad. It's an entirely new product. It's part of our new Roadshow website at theroadshow.com, and AutoComplete Is our weekly news podcast from the Roadshow team. And as you know, I still do CNET on cars, which shows up within Roadshow as well. Everything's under Roadshow now. All your favorite things you used to like from Xcar, and On Cars, and CNET's Car Tech reviews, and new shows like this AutoComplete. So that's our housekeeping Let's get started on the top news stories of this week. A lot of this has to do with General Motors and their future direction. They just launched something new literally hours ago from our taping right now called Maven. Maven is a car sharing service not unlike Zipcar for example. They're launching it in Ann Arbor, Michigan to start, not far from their headquarters. A small launch, but it's gonna be a big idea we think. The idea here is you can reserve and unlock and access any of their cars from your phone, which is sort of the new vanguard. No fussing around with any sort of traditional key. The cars that they're gonna make available will have Android Auto and CarPlay in them. They're all General Motors cars, of course. They give you your first tank of gas and your insurance as part of their rate which is as low as $6 an hour. And it's free to join. So you may look at this and say, okay, what's the big deal? It sounds like any other car show service. The big deal is, it's a car maker doing it. And that's important, because General Motors is hedging a bet here, placing a bet that car sharing is going to continue to grow, especially in certain areas with certain demographics. And they wanna make sure that that is as much as possible something that they are taking part in, to get revenue from it. To get data about people's usage from it and most importantly, to make sure that General Motors cars are front and center as supposed to a ride service that just has any different brand of cars and you don't build brand loyalty that way. It's a very big part of where Detroit is going. This comes on the heels of the news you may have heard a few days ago where they have bought up the remains of Sidecar [INAUDIBLE] Ride-sharing service in the basic category of Uber, Lyft and the others. We don't know how much they paid for it. It's expected to be somewhere in the low 10s of millions. But, again, an investment to get the technology of Sidecar. And we understand about 20 of their executives, though not their CEO Sunil Paul. He's not gonna be joining General Motors in this. What's interesting here Is some remarks that Ford CEO, Mark Fields, told Tim Stevens and I recently when we were on the road at CES in Detroit, that the car-making business in the US is about a $2.3 trillion business. Okay, that's big. But then look at the transportation services business. Things like cars, black cabs, busses, all of that. That's a $5.4 trillion business. So if you're a car maker, you by no means want to give up your very rich business of building and selling cars. but you also see there are different trends out there in terms of usage that go to an even larger business, even bigger market, and this is all part of a major trend that many car-makers are doing as you know, Ford, General Motors, BMW, Audi, there are not a lot of... Carmakers out there that aren't playing some kind of a ride service, or a car sharing service. But we're gonna have a lot of news about this as it goes forward this year I can tell you. Now let's talk about the changing way people are buying cars. Tesla as you know sells there cars direct. They've had a big beef with the general Dealer community around most of the US for some time now saying we want the right to sell cars directly in every state. They get a lot of push back and a lot of states. There was testimony just the other day at the FTC. Particularly by Tesla and the small upstart, Elia Motors, trying to make their case. Here's Tesla's case. They say look you gotta educate people about EV's. And dealerships aren't as savvy about that as we are as a factory ouch they're kind of saying dealerships get the message messy. Number two they say Tesla's don't have a lot of maintenance they're electric cars electrics cars won't have a lot of maintenance. As a result How's a dealer going to make it if you have to sell E Vs only as a Tesla dealership would make it? Cuz dealerships make a lot of their revenue from service, but there won't be much Tesla argues, making it difficult for a dealership to be viable. And Tesla says in any instance they're always going to have some factory stores, because some states will allow them and to compete. With other states that mandate Tesla go through dealers isn't really fair, cuz the factory price, they say, will always be much lower and a different experience. Folks, they say, will hop across state borders to go to a Tesla factory store, end up screwing those states that require Telsas go through a dealership network. Those are kinda three of their big points The dealers, of course, have their arguments. They say, wait a minute, dealerships create massive competition. There are many of them. They really have a cutthroat business in a given market trying to undercut each other. So that would seem to be good for the buyer. Dealers are independent advocates for the car buyer, they say. Not sure how many of us really buy that. And they also say selling cars is different than selling iPhones. They're big, they're complex, they do require maintenance, at least non-electric vehicles require a lot of maintenance, although that too has been shrinking lately, and they have things like financing and insurance, and other sorts of things that you don't really have to buy with other electronic products. This is where the dealership community comes in, and of course, they have a tradition and a heritage of being where people think of. To go buy a new car. Then they also had an interesting guy. Professor of economics from University of Michigan, Dan Crane came in and gave his unbiased opinions, saying forcing sales through the traditional dealerships that we have now, he says in many ways it makes no economic sense. It just adds a layer of mark up. Compared to going direct to the factory, that's one economic theory. He also said having choice of where you can go, either dealers, multiple dealers, or a factory store as well in the market, creates more choice and more competition. Competition, he's kind of advocating factory stores and dealerships networks all via against each other for your business. And he also says we don't really know how that would work out because it hasn't been done on any scale yet. So it's still a bit of an unknown quantity How the economics work out there. Interesting testimony at the FTC about the selling of cars as opposed to the cars themselves. Another interesting federal headline this week has been, the feds are really getting almost antsy to become the leader on autonomous vehicle regulations. We've told you many times in our various coverage how auto makers are nervous that the states in the U.S. are going to ba having their own patchwork quilt of laws and regulations about how self driving Or partially self-driving cars are going to work and the rules around them. Automakers hate that because they don't want that patchwork that they dealt with back in the emissions control days, when you had California and a few other states breaking from the rest of the country's standards. So here we have the Department of Transportations head Tony Fox says some proposals are coming. He would like to see a ten year, $4 billion, federal level consistent national program to support a goal of ending traffic deaths in the US. That's code for regulating Future autonomous and even current assisted-driving cars. He says this would help to move AV autonomous vehicle regulation from the state to the federal level, which he is clearly in some favor of. The feds already Overrule states in some cases, for example. He'd like to see it where up to 2500 cars within a carmaker's test fleet could be federally licensed for testing and not have to run into the various barriers of state testing, allowing them to drive all around the country in testing and not worry about what state are they in and what regulations apply there. Notice this The folks at BMW recently got an exemption at the Federal level allowing them to do self-parking on the BMW7 via that key fob we showed you outside the car. Up until very recently, they disabled that feature in the US. They've apparently just got an exemption to that to now allow it and again that was a Federal level exemption, whereas a patchwork of state regulations might have kept that feature on ice, and disabled it in this country. So that was an interesting early move right there that happened in the last few days as well. Now all of this gets through the connected car. More and more, especially when the connected car is connected for driving purposes and that can lead to some heavy pay loads. A lot of folks write in to me and say wait a minute connected cars that are also self driving sound like the perfect Perfect vector for hackers. There's a big payload and it's easily gotten into because cyber security on cars ain't real developed. Well, another announcement this week from the federal government, the National Highway Traffic Safety Administration. Mark Rosekind, the head of that organization says This will be the year for auto cyber security to get moving at the federal level. He's not letting on exactly what any regulations or rules will be but he says this is the year they will start with programs and outlines and funding and getting things out there into hearings to say, what should the parameters be. What do we need to regulate, what should those regulations look like, what are the components segments of the car that need regulation, and who are the parties that should come in and have a say into what the standards should be for cyber secure vehicles. So really keep an eye on that one as they move forward here The car makers have also done some work on this that will also bubble up this year. They've launched something called the ISAC. The information sharing and analysis center. They just launched that back in July, it's just getting going now at the top of 2016, they want to do a lot of the same thing. To make sure that there is a cohesive voice around this and not a patchwork quilt. Now as I mentioned, my co-host Kim Stevens is on the road. Before we take a break, I want to get a heads up from him of what's happening on Road Show this week at the theroadshow.com. Again, just our second week in business, so we're still trying to get you the money with all of the things we have To offer. Tim is here, actually Tim is there. Where are you Tim? Hey Brian there's really no good way to say this so I'm just gonna come out with it. I'm in Monaco this week. I'm here for the start of the 2016 road rally championship it's the Monty Carlo rally, the most historic and probably the most prestigious event of the year on the world rally championship calendar. We're going to be giving you an inside look of how all that comes together. So look for that on the coming weeks on Road Show. But in the interim I wanted to make sure that everyone's aware some of the great content we posted this week. Starting with our new video series called Driving Detroit. With Driving Detroit we're going to be profiling the economic revitalization that's happening in motor city. Starting at a facility called M City. M city is on the University of Michigan campus. It's actually the world's premier autonomous car testing facility. Better than anything they've got in SIlicone Valley or Japan or anywhere else. Manufacturers can come here and test their driverless cars in controlled situations. Even test them in the snow which si something you can't do anywhere else in the world. Also this week, we have Road Show Rivals, another new video series. This time though we're gonna be comparing the top cars in a given segment, pitting them head to head to see which one comes out on top. We started off with sports sedans, bringing together BMW's iconic M3, Mercedes' AMG C63, and the F-star Cadillac ATSV. The winner might surprise you. I can say that confidently because it certainly surprised us. That's a great video with a lot of awesome track action. You will not want to miss it. We also have a full review of the new 2016 Jetta, coverage of the Bentley Continental GT and the new Cadillac CTX6 as well. So make sure you check out the roadshow.com for all those great videos and plenty more. We'll see you next week. Okay, Jim. Thanks a lot. Have fun there on hazard duty. I'm sure it's real tough. That's a pretty sweet destination. All right. We're gonna come back in just a few moments. Continuing here on auto-complete. I wanna tell you about how Panasonic has made an interesting turn toward not being the company you think it is, and instead being an auto company and if you know someone who is eager to get their drivers license, you may know someone who is increasingly odd. All that when auto complete continues. Welcome back to Auto Complete. I'm Brian Cooley, this is our weekly news podcast from CNET's new site Road Show at theroadshow.com. Here's what's going on with Panasonic's thinking around automotive tech. It's kind of a business story but I want you to think about this for a minute. When I said Panasonic just now you probably though televisions most likely. Maybe some home electronics, home appliances, they do a pretty good business there as well. That's what Panasonic's always meant. This company is becoming an automotive sector company rather rapidly. You know them for some car audio, but you think of them as something else. But they're really becoming a car company. They are already the number 21 auto supplier in the world. They just, in the last few days, moved 400 people From their television division to their automotive division, that sector means primarily to them three basic areas, batteries for powering electric cars or plugin hybrids. Head units and head up displays. Head units would be Be the main screen system with navigation entertainment and all that and the hood module to give you head up on your windshield. Sensors and the systems for adaptive driving and future self driving. So those three modules, batteries Hudson head up and had head unit and also adaptive driving sensors in tech. Three big growth areas. And areas where they think they're going to be having their biggest growth to the point that it won't be long before we think of Panasonic more as automotive than anything else. Even though this is under the hood type stuff, a lot of consumers may not know That there's a Panasonic brand battery or Panasonic branded self-driving sensors in their car. But those of us that, like you and I, that are really into car technology, fascinating story to watch. Now, speaking of car audio, a study came out this week from a research firm called Ipsos. That looked into the importance of branded car audio when you go buy your new car. Some of this you'll predict, some of this will be a little surprising. First of all the four big brands are clear, Bose, Sony, Pioneer, Panasonic. The four big names in car audio, the [UNKNOWN] have the most mind share if you will. A third of new car buyers [UNKNOWN] that branded audio, as opposed to generic factory audio is a big factor in the car they choose to buy. One-third of folks say that. Now, when you bump up to the super premiums, like Bowers & Wilkins, Bang & Olufsen, Burmester, those super high end systems, One-half of all car buyers tell you that was a big factor in the car they'd buy. This is major numbers for car makers that scrap for every percentage point of what they call consideration, getting someone to think about Seriously buying their car. Any lever they can do to increase that they're really into. This is why you see so many constant innovations in branded audio in factory cars. And you often see car makers changing to different brands. We just recently saw Lincoln move from THX to Revel as a new premium audio system in their car. Carmakers are always moving to what they think is hot and new, and not sort of overworn, if you will. Audio brands tend to have high awareness like Sony and Bose, or they tend to have high prestige, like B&O and Burmester. There's one brand that Ipsus found that captures both. Total awareness and believed to be really high in prestige and that's Bose. Bose has done an amazing job of getting into a lot of cars, but also not watering down the perception of their quality, according to this study. No other brand out there has a lot of people saying that's a super high quality system, and everyone seems to have heard of it. Very interesting position for Bose there. And by the way, over 50% of new car buyers Do buy better than standard factory audio, so they option up to something better. And 65% of them believe it increases resale value which I don't think is a bad assumption. Talked about drivers licenses before we went to our break They're declining. It's very interesting. The number of people in the US who have a driver's license is gradually declining. This is a new study from the University of Michigan Transportation Research Institute. And they found that 16 year olds are down 3%. to 24 1/2% of them having a drivers license. 20-24 year olds, that band, also off 3%. This is a very driving segment but they're also down to 76.7% having a drivers license. 17, 18, and 19 year olds taken individually by year Are all basically flat. 70 plus is actually flat, which is actually a good trend. Most other demos are down. The older folks are actually not declining. The study did not address why this is happening, why there's a gradual erosion of having a license in most age demographic bands. But I think a lot of it has to do with the top story we talked about at the beginning of the show. More options to get around that don't necessarily require having a car. Especially if your young in an urban area. Ride sharing services are really perhaps delaying someone's need to have a car. And as we've talked about many times over the last couple of years you express yourself more through your services, your connections, your friends, and your networks than through the car you own. As it was a few generations ago. It's a big societal shift. Now what a car means to you, beside just having wheels to get around. Now, speaking of getting around on wheels, if you've got an electric car that does that, you are part of a Smaller population just like with drivers licenses. Some new numbers on EVs selling in America. Now let me flash back, 2008, the Obama administration had a goal of one million electric vehicles that plug in in some capacity on US roads by 2015. We just finished that year with about 400,000 sold. And EV sales were down last year, about six percent. That's pretty substantial for what is already a small part of the market. Less than one percent of total U.S. car sales are any kind of car that plugs in. That's a plugin hybrid, Or a full battery plug in car. Two dollar gas. That's a big part of the problem. Let's face it. People buy EB's in many cases because they want the efficiency and the cost efficiency. Not necessarily because they're out there saving the environment. Historically low oil prices forecast for the year. You're coming for 2016, don't portend a great change to any of this. Now here's the interesting car to watch though, it's the Chevy Bolt, which we've been intrigued by in the last few weeks seeing it at both CES and the Detroit auto show. It's an interesting sweet spot, it's under 30 grand after federal tax credit, it has 200 mils of range, nearly double The other affordable EVs out there, and it can get 90 miles of charge in 30 minutes if you can get to a high current DC charger, which aren't that common, but they're out there. That trio of things, along with some great cabin technology, and some cool video rearview mirror tech, and things like that, Android Auto, CarPlay, and such, make it a very interesting package that we think may be the new high water mark, the new bar, for an affordable everyday electric car. Leave Tesla our, Tesla's in a premium category. But the Volt is a very interesting car to watch to see if it can spike demand with its price, its range, its car speed, and its good interior cabin tech, or if it's just gonna suffer along with every other EV so far. In the 15, 16 sales projections, thanks to cheap gas. Charging your car. If you've got a Nissan Leaf, you've got more places to charge it for free. New York, Philly and Santa Barbara just got switched on as free Nissan sponsored charging cities. Now these are not just Nissan Charging locations at their dealers. This is on a whole network of many other third-party charging facilities from various different brands. Nissan will let the Leaf owner out there, charge for, let's see, you can get, I think it's one hour of charge For free at any of these different locations by having this access code in this account that Nissan covers for you, and you can get 30 minutes of a level three charge. So 30 minutes on level three, 60 minutes on level two, on the house from Nissan at any of these networks of charges. If you're in New York, Philly or Santa Barbara, head over to the Nissan LEAF site and you're going to find the page that shows a map, which I think we have right here. That shows a map of some of the locations where you can do this charging. Okay the Tesla Model X is soon to be on the market. We know that. It had kind of a long gestation and part of the trouble, interestingly, turns out to have been it falcon wing doors. You know these ones that kind of open like this as opposed to your scissor doors that you see on concept cars, or the true gull wing doors that go up like that and bang into the cars next to you. Those are unusual doors they've got, the Falcon. And it turns out their first manufacturer, a company called Hoerbiger in Germany, had a hard time getting them right. We know this because of a lawsuit. Tesla's in a suit saying you owe us damages for not getting the doors right, taking so long, and making us go find another supplier. They're suing each other, as you can imagine. What's interesting here is it was so hard to get the doors right, to get them to not sag, to open nice and evenly as they went up. To get the hydraulics in them to not overheat and to also make sure that they worked really reliably. They had a lot of problems with these. They opened asymmetrically, which I think is referring to both of them opening at once and not doing this where you got a little bit up and kind of side. At different rates. It doesn't look good, you can't imagine Elon Musk thinking it's okay for a Model X to have its doors go up kind of akimbo like this. So it gives us an interesting insight into what a headache it was to get the Falcon doors done, to the point that Tesla actually had to go find another vendor. The name which we don't know, And is in a lawsuit with the first vendor they say couldn't get it right. You know Yelp is in almost every dashboard these days, almost every car I review for you has got Yelp in there as an app. Very common. BMW says there needs to be another option, this is interesting. BMW is going to be adding soon. Nubian [UNKNOWN] cloud services that will include a Yelp like service to find your nearby restaurants, I assume with ratings, from what base I don't know. And of course, nav you their readily, allow you to make reservations, I assume online without having to dial and make a call to them. They're also gonna roll in some weather, some parking services. In other words, they are going after the apps in the dash Like Yelp, like Parkopedia and saying, wait a minute! We want that business. We wanna have that data stream from our drivers so we know more about their behavior, and not just hand that off to these third parties. That want to collect that rich data, which is so valuable in the auto business going forward. By the way services in the dash, in OEM, in factory head units like that, are expected to be almost a $200 million business. The services, the revenue from them and some advertising revenue, by 2020 according to, Business announces for McKenzie. So this is not peanuts. This is real business, and happening soon. And this also ties into what we've seen recently at CES, for example, about how Ford and Amazon are tying together. So you can control your house and your car, vice versa. From an Amazon Echo in the house, or your technology in the Ford dash, Sync Free. Same thing we saw offered from Samsung, where they're using their TV as a smart hub. And also you can see that connecting to the vehicle so it can talk to the house as well and control the smart home. We're seeing the dots connect between at least smart home And connected car, not so much yet the wearable, which is the third of that triangle of new technologies. But I still have fairly good faith that wearables of some kind, not just our phones, will have some place in this new connected triad in our world. Those are our top stories this week. For Auto Complete, I'm Brian Cooley here for Tim Stephens. Thank you for watching. We'll see you again end of next week with more news headlines, from Road Show. [MUSIC]