The three major German automakers have long dominated the global automotive sector by offering world class engineering and a product range that runs the gamut from reasonably cheap to ultra lux. This weekend’s IAA Mobility show in Munich highlighted the fact that German carmakers know they’re far behind and, maybe, know what they have to do to catch up with their Chinese rivals.
There’s so much news to catch up on, so we’re also going to talk about NASCAR TV rights, executive pay, and then share some photos of the Skoda Superb because I like the Skoda Superb. Let’s jump right into it.
Can BMW, VW, And Mercedes Compete With China?
The German Big Three all showed off concepts of what their future cars could look like, ranging from massive re-interpretations like the Vision Neue Klasse Concept to the extremely mild Volkswagen ID.GTI (more on that soon), with the CLA Concept somewhere in between.
There are two obvious perspectives on this one can reasonably take, and it depends entirely on how quickly you think China can find its way into the market.
The Optimistic View: Germany Is Finally Taking EVs Seriously
With no disrespect to David’s beloved BMW i3 intended, the German approach to electrification was pretty much as bad as the effort made by legacy American, English, French, and Japanese automakers. The only two groups who took it seriously enough were Tesla and the various Chinese brands, the latter of which were massively boosted by Chinese government intervention.
It’s easy to point to Dieselgate as the catalyzing factor for German automakers to suddenly start their electrification process in earnest but, reasonably, I think it was the quick rise of the Model S as the best selling luxury car in Europe, which started way back in 2016. It’s hard to underestimate how much of the German psyche is built around the idea of the Mercedes S-Class being the best/finest/über luxury car (or Audi A8 or BMW 7-Series, depending on who you ask). The Model S quickly ate its lunch and has never looked back, with Tesla becoming the biggest “luxury” brand in the world last year.
I say this, because Germany has focused more on the higher end of the market with vehicles like the BMW iX, Porsche Taycan and various Audi eTrons, than they have the lower end of the market. This is starting to change, of course, with Volkswagen offering the ID.4 and ID.3, and Mercedes selling the Chinese-based Smart.
How big is this challenge? Here’s some important scene-setting from Reuters:
“We (Germany) are losing our competitiveness,” said Hildegard Mueller, president of the German Association of the Automotive Industry (VDA), adding the Munich car show illustrated “how the high pressure of international competition” makes it essential for Germany to invest more in electrification.
The average EV in China cost less than 32,000 euros ($35,000) in the first half of 2022 compared with around 56,000 euros in Europe, according to researchers at Jato Dynamics.
“The base car market segment will either vanish or will not be done by European manufacturers,” BMW CEO Oliver Zipse said on Sunday evening in reference to China’s push into Europe.
If you’re an optimist, you look at the cars of IAA and think that the Germans are finally less dominated by high-end EVs and more focused on what they need to do, which is make something that can compete with Chinese automakers and compete with Tesla. The new CLA is bling-y, but maybe that’s what Mercedes customers want? Chinese automakers have the tech but, perhaps, those companies lack the swagger of a Benz. The Neue Klasse is focused on building something that looks new, while also is likely to perform similarly to Chinese offerings at a competitive price. The ID.GTI is pretty plain, but Volkswagen also has Cupra as a quasi-startup focused on people who want sporty EVs.
Plus, The European Union doesn’t have an Inflation Reduction Act and, therefore, German automakers are more able to tap Chinese partnerships and batteries to compete on price.
The Pessimistic View: It’s Too Late
None of those three German cars mentioned above are going to be in production this year, let alone for sale. You know what will likely go on sale later this year? The BYD Seal pictured above, which just debuted at IAA.
This is a D-Segment (think Volkswagen Passat, BMW 3-Series, or Mercedes C-Class) electric car with an 82.5 kWh LFP “blade” battery pack. It offers, depending on variant, either 570 km (RWD) or 520 km (AWD) of range on the WLTP cycle for £44,990 or £47,990.
It’s hard to even compare it with anything because the closest German “saloon” for sale in the U.K., for example, is probably the Mercedes EQE, which has a slightly better range but starts at £76,450. By comparison, a base C-Class in the UK is the C 200 AMG Line Saloon and that starts at £45,165.
The argument here is that there are so many Chinese cars coming to Europe and, short of some last minute dose of protectionism, it’s going to be difficult for German automakers to catch up. Sure, there’s a pride in the local automaker, but how much is that pride worth? Are consumers going to wait months or even years to get a potentially more expensive option when there’s plenty of not-as-good-but-good-enough Chinese cars around?
It’s hard to imagine.
Is NASCAR About To Blow Up Its TV Deals?
I love baseball. I do. It is a constant source of heartbreak and consternation but, at least for a few more weeks, the Astros are the world champions and it all feels worth it. [Ed Note: Matt and his daughter’s shared love of baseball is truly beautiful to watch. -DT]. Of course, if you’re a Rangers fan you’re probably ready to jump off a bridge after being forced to watch your once-dominant position in the AL West crumble as fast as your bullpen.
The thing I don’t love about baseball is trying to watch baseball from home. I’m one of those suckers who pays for MLB.tv and still can’t enjoy a bunch of games because of outdated blackout rules or, worse, those games being played on various random networks. And don’t get me started on the Apple+ version of baseball coverage which, despite featuring people I like, is pretty terrible.
NASCAR has long been split between Fox Sports for the first half of the season and NBC Sports for the second half/playoffs. It works. Those contracts are up soon and it’s becoming pretty clear that NASCAR is going to look at an MLB/NFL-style split for its broadcast rights. (Full disclosure: I produced/directed a TV show around motorsports on NBC that included NASCAR races).
The good news is that, as announced, the Xfinity series is going to the CW Network full-time from 2025 to 2031. This sounds like it’ll mean free-to-watch races on the CW app and an over-the-air broadcast for those who don’t want to download another app. This excites me.
My old pal Gerry Smith over at Bloomberg has the scoop on what else is coming, which is less exciting to me:
Amazon.com Inc. and Warner Bros. Discovery Inc. are competing to broadcast a new package of Nascar races, with the league trying to boost its overall revenue by bringing in more media partners.
The companies are vying with a third broadcaster for a package of between six and eight races during the summer months, according to people familiar with the matter who asked not to be identified discussing private negotiations.
It’s going to be hard to convince the haters, but NASCAR is fun to watch and more interesting/exciting to me than Formula 1 in its current condition. Similarly, I think it’s important for NASCAR to find new ways to reach viewers, but an MLB-like split across multiple networks could cause consternation for the average fan if not handled well.
The CEO Of Lucid Made $379 Million Last Year
Every year, Automotive News does this great chart of what all the automotive CEOs make and it’s a good reminder that automotive CEOs, whether successful or not, get a ton of money. This year’s chart is out and, yet again, the CEOs of Lucid and Nvidia (the chipmaker) are on top for 2022.
Nvidia, which makes computer chips, gave Jensen Huang $506.3 million worth of pay and benefits, while Peter Rawlinson got $379 million from Lucid, an electric vehicle maker that went public in 2021.
Rawlinson’s compensation was 11 times more than the next highest-paid CEO, Mary Barra of General Motors.
If you ever want to know why companies push so hard to become publicly traded, this is partially why. Tying your compensation to stock means that, if the stock goes up, you get a lot of money. There are downsides to this (a lot of short-term thinking), but it’s the way of the world at the moment. I’m sure Rootwrym will be in the comments soon to expand on why this is problematic.
Of the $379 million that Rawlinson earned by, uh, having to lower prices to stoke demand, $372 million came from stock award gains. Overall, though, the median CEO compensation was down 3.9% as more economic uncertainty resulted in smaller bonuses compared to the huge payouts in 2021.
The Škoda Superb Is Keeping Its Hatchback
While most of the news out of Europe has been focused on the new generation of electric cars, the reality is that automakers will still be selling ICE vehicles for at least another generation. If I had to buy an ICE vehicle in Europe what would I get? Would I go cheap and get a Dacia Duster? Maybe. Perhaps I’d get a Puma ST, which is delightful (and I owe you all some words on, having driven it recently).
I don’t know for sure, but I’m a sucker for the Škoda Superb, which is sort of the Czech version of the VW Passat/VW Arteon platform. Even better, the Superb is going to keep its hatchback! From the company:
[T]he Superb, will once again complement its popular Combi estate with an elegant hatchback. The new iteration of this traditional body variant has grown in length and height and at the same time become even more aerodynamic. Its sculptural Škoda design has evolved further and now features a redesigned octagonal Škoda grille and updated door handles. The wide range of powertrains for the new Superb now also includes a mild hybrid.
Hell yeah, though I’d prefer a PHEV to mild hybrid.
The Big Question
If you had to buy a car in Europe, what would you buy? If you’re in Europe, what did you buy?
Photos: Lucid Motors, Skoda, Mercedes, BMW, BYD
I’m in Europe. I bought a Volkswagen Polo. It’s gray, underpowered and boring. But it works and it was cheap.
Took a vacation to Portugal last year. Lots of great car spotting of EU makes/models that we do not get in the US. I spotted the car I would want. The Renault Talisman wagon. It’s so beautiful.
I just googled it, damn that’s a nice wagon!
It really is. I don’t know how it drives or anything else, but it is beautiful. Since wagons are being supplanted by CUVs in Europe, I didn’t see a lot of them but when I did I always gave them many looks.
I will definitely agree with NASCAR being more interesting than F1 right now but that’s clearly a subjective view. Clearly like having a choice on things but with instances such as racing, just give me either a service with a reasonable price to stream all the races live and on replay or sell the rights to a streamer where I can do the same. Indycar has been on Peacock all year and it’s been amazing. Let me finally kill cable by getting all sports on a reasonably priced streaming option.
I’d buy a dirt cheap manual, bi-fuel Dacia Duster and drive the shit out of it. Wish I could do that here because I would, though the bi-fuel doesn’t make much sense in America.
If I were back in Germany, I would seek out the best Citroen CX (any model) I could find and baby it for the rest of either it’s life or mine.
I’m old enough to remember people talking about how those new Jap cars would never make it in America. How’d that work out again?
I’m old enough to remember that, too, but even in an historic context like this you’re not doing yourself any favors by using a word that, these days, should be reserved only for clearly delineated discussions of the engines of the British firm J.A. Prestwich.
Or at least use some quotation marks to demonstrate irony re outdated thinking.
Not only do I still have to hear that word being tossed around by certain family members, they still think “those” cars are junk. Living the dream over here…**heavy sigh**