Tag: Ford

Chevy Silverado mpg: Turbo-4 lower than V-8 in gas mileage test

2019 Chevrolet Silverado 1500
Until all cars can become electric, it makes sense to support making internal-combustion passenger cars as fuel-efficient as possible.

It makes even more sense for popular, thirsty large pickups, where each mpg improvement can save a lot more gallons of gas.

Unfortunately, some of the latest attempts as improving fuel economy in big pickups—such as installing small engines with turbochargers to make up for the power difference—don't always bear out in the real world.

The latest illustration came in Car and Driver's test of the new 2019 Chevrolet Silverado pickup with its new everyday engine-choice: a turbocharged, 2.7-liter I-4 rated at 310 horsepower and 348 pound-feet of torque. Those are appropriately big, trucky numbers.

DON'T MISS: 2019 Chevy Silverado will offer new turbo-4 that can run on 2 cylinders

When Car and Driver tested the new Silverado double-cab four-wheel drive with the new 2.7-liter turbo-4, it actually got worse mileage on the highway than an otherwise identical Silverado the magazine had tested with the truck's 5.3-liter V-8 (an updated version of the 5.3-liter in the 2018 Silverado.)

On paper, the small turbo-4 doesn't help the boxy, parachute-like truck on the highway, but benefits it by 3 mpg in the city. The 2019 Silverado with the 2.7-liter turbo-4 gets EPA ratings of 19 mpg city, 22 highway, and 20 combined. With the 5.3-liter V-8, it's rated at 16 mpg city, 22 hwy, and 18 combined.

CHECK OUT: Chrysler to electrify the next Dodge Challenger, boot the V-8?

What the magazine didn't expect was for the highway mileage to be significantly worse with the 4-cylinder. In Car and Driver's highway testing, the V-8 Silverado almost delivered on its EPA highway fuel economy rating at 21 mpg. Choosing the turbo-4, however, actually dropped the mileage by 3 mpg on the highway, to 18 mpg, despite being 314 pounds lighter.

Both trucks use GM's new 8-speed automatic transmission.

The turbocharged I-4 comes standard on the Silverado's two most popular trim lines according to Chevrolet, the LT and the RST. GM says it can run on two cylinders, but given the mileage results, it seems unlikely that the engine did that in the magazine's 75 mph highway test.

2019 Chevrolet Silverado 1500

With the I-4 as the standard engine on the two most popular trims—most likely to boost GM's corporate average fuel-economy ratings—a lot of Silverado buyers may be in for a disappointment when it comes to mileage.

The results are reminiscent of when Ford first introduced smaller turbocharged engines in its F-150 in 2011 and its Fusion sedan in 2013 under the EcoBoost moniker, independent tests showed similar results. The cars showed notable city mileage improvements on their EPA tests, but independent tests actually showed they didn't come close to their mileage ratings on the highway.

Word on the street was that you could “have Eco, or you could have Boost,” but not both at the same time.

READ THIS: Engineers find new ways to improve efficiency of gas engines: Engineering Explained

Small turbocharged engines help fuel economy by saving gas when power demand is low and the turbo doesn't have to spin up. In a gas engine, which has to maintain relatively precise air-fuel mixtures, the fuel injection has to add gas to complement the increased airflow from the turbocharger when it's spinning, reducing fuel efficiency when the engine is under load. Car and Driver speculates that at 75 mph in the real world on the highway, the 2.7-liter Silverado is constantly in need of boost.

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Millennials may claim another victim: Harley-Davidson and the classic American motorcycle

Getty Images
Harley Davidson motorbikes are driven down St. Martins Lane in London.

The supposed millennial penchant for “killing” industries gets thrown around a lot, but it could really be happening to one American icon: the Harley-Davidson motorcycle.

Data suggest a considerable generational divide in attitudes toward heavyweight motorcycles, the sort of bikes sold by brands such as Harley and Polaris' Indian brand, said UBS analyst Robin Farley in a note published Friday.

It turns out that younger people do consider buying motorcycles, but for entirely different reasons than older customers, and that has potentially profound implications for companies such as Harley-Davidson, which has been struggling with declining sales and an aging demographic.

Shares of the motorcycle maker have fallen 32 percent in the last 12 months.

The survey's most significant finding is that 21- to 34-year-olds consider buying a bike for “ease of transportation,” whereas older buyers purchase bikes “as a hobby” or because “motorcycles are cool.”

This distinction is important, since the average Harley-Davidson customer is a married man in his early 50s, with a household income at or above $90,000. These are the customers buying motorcycles out of a passion for the product or lifestyle.

Younger buyers appear to be more motivated to consider motorcycles for practical reasons, which means it is likely they will be more interested in less expensive bikes that bring in lower margins for manufacturers.

“We believe this significant divergence in incentives to buy a new bike could be what is partly behind Harley's and broader heavyweight motorcycle industry's challenge to tap into a new segment of younger riders to drive growth,” Farley said. “So unless there is a generational shift among younger riders to see motorcycling as a hobby vs. means of transportation, the outlook for the heavyweight industry could continue to be more dependent on an aging demographic.”

It might not be all bad, though.

“Perhaps one hopeful sign for the industry is that younger potential buyers cited the second most common reason to buy a motorcycle is that it 'goes with their self-image,'” Farley said.

Harley-Davidson has initiated an ambitious plan to lure 2 million more riders to the brand in 10 years. Among other things, the company is setting up riding schools around the country, and it is releasing an electric motorcycle called the “Livewire.” The company also previewed two electric concept bikes earlier in January.

Officials at Polaris weren't immediately available to comment. Harley-Davidson told CNBC the company has been aware of the demographic trend and it has been informing the company's strategy.

“There's nothing new here,” Harley-Davidson told CNBC in a statement. “Our advanced analytic capabilities allow us to deeply understand rider migration trends. In fact, our knowledge of riders informed our strategy to build the next generation of Harley-Davidson riders globally, which we launched in early 2017.”

The survey polled 2,100 adults in the U.S. over the age of 21 from Sept. 1, 2018, to Sept. 21, 2018.

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Ford’s 5 big fixes for its troubled international business

Hauke-Christian Dittrich | picture alliance | Getty Images
At Ford's stand at the IAA Commercial Vehicles, an off-road vehicle of the Ford Ranger type is on a Ford Transit van.

Ford reported fourth-quarter earnings that fell short of what investors expected, laying the blame for its lackluster performance on restructuring costs and troubled markets overseas.

Ford's difficulties in Europe, China and South America have been no secret, and executives devoted a fair amount of time on a their earnings call Wednesday explaining the company's weaknesses and what they're doing to address them.

“Ford entered 2019 with a very clear vision and we're building momentum to improve profitability and returns,” said CEO Jim Hackett on a conference call on Wednesday. “We're now in execution mode.”

Its shares rose by more than 3 percent in intraday trading Thursday.

Here are the top five things executives said Ford is doing to turnaround its international sales.

New products

Source: Ford
The Ford Territory, a mid-sized SUV Ford unveiled in China

Ford is revamping its lineups all over the world, focusing on selling only its most profitable models. In the United States, this mostly means pickup trucks and sport utility vehicles. In Europe, this includes pushing the Ranger, its mid-size pickup, and offering higher-performance sports packages for the Fiesta subcompact car and Focus compact car overseas.

Perhaps the biggest push is in China, which is the largest auto market in the world and a sore spot for Ford. Chinese automakers already offer consumers there a lot of options, forcing importers to constantly refresh their lineups or get left behind like Ford.

“China is the largest automotive market in the world and we think it could be twice the size of the U.S. by 2025. So getting our business back on track is essential,” Ford Executive Vice President of Global Markets Jim Farley told investors. “Last year as we discussed you with you, we identified a number of operating shortfalls,” he said, citing dealership profitability, excess inventory and a lack of a fresh lineup of new vehicles as major deficiencies in China.

Last year, the company unveiled a sport utility vehicle that is meant to kick off a slew of new products for the country. This includes a new version of the Escape compact SUV, and Focus. Both vehicles saw transaction prices double in China in 2018. Ford has ten more models on the way, Farley said.

Dealer profitability

Qilai Shen | Bloomberg | Getty Images
A Ford Escort on display at a Ford dealership in Shanghai, China, on Thursday, July 19, 2018.

Keeping dealerships profitable has been a big problem for Ford, particularly in China. The company has taken some steps to address this, and about one third of its dealers in China are now profitable. The company expects the trend to continue upward through the year, Farley said.

Local production

Meghan Reeder | CNBC
Cars roll down the assembly line at the Ford plant in Chongqing, China.

Automakers typically build where they sell, but sometimes import and export vehicles from one country to another. The ongoing trade war has not been kind to the business, primarily driving up the cost of materials. Tariffs alone cost Ford $750 million in 2018.

Ford said it can make money-losing cars more profitable just by focusing more of the supply chain and assembly near the market they're destined for sale.

“Simply by sourcing from a true local Chinese supply base, we will cut our material costs and we are targeting significant reductions in structural costs for consolidated operations,” Farley said.

Ford said Wednesday it needs to “localize” some key imports into China, specifically the Ford Explorer and some Lincoln vehicles, which tend to command high prices and yield profits for the brand.

“The effect of that is pretty amazing when you look at each of the Lincoln products and the Explorer in terms of going from what now are quite substantial losses for those imports to very attractive mostly business cases,” Farley said.

Cutting losses

Oliver Berg | picture alliance | Getty Images
Ford employees assemble the StreetScooter Work XL in North Rhine-Westphalia, Cologne. For the first time, Deutsche Post DHL is not building the street scooter itself, but in cooperation with carmaker Ford.

Unlike rival General Motors, which determined its European business wasn't worth keeping, Ford's problem is that many of its international operations are a mixture of good and bad, said Jeffries analyst Philippe Houchois. It's especially an issue in Europe where it recently announced job cuts and a new partnership with German automaker Volkswagen.

More details about how the two automakers intend to work together need to be revealed, but many industry analysts think collaborating with VW will allow Ford to keep a foothold in Europe, where it currently has successful commercial transit van and pickup truck businesses that has grown in market share for the last five years.

More restructuring

Paulo Fridman | Corbis News | Getty Images
Assembly line of engines for the Ford KA 1.0 3 cylinders at the Ford Engines plant in Camaçari, Brazil.

Ford's $11 billion restructuring plans, which Hackett had largely kept a mystery from investors, are beginning to take shape. He told investors “more details” will be coming on its plans to overhaul its business in South America, where Ford, and many automakers, have historically had uneven performance.