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We Told You About Auto Financing

We have been mentioning for some time that free flowing money from Canadian banks have supercharged auto sales.

Last week we shared our thoughts on the evolving ownership model.

Today the Bank of Canada:

Industry estimates suggest that, following the pullback from
automakers’ financing arms, the share of leasing in auto
financing has declined to below 30 per cent from a peak of
66 per cent in 2007 . Instead, auto loans have become more
“lease-like,” as innovations such as longer amortizations serve
to lower regular monthly payments .
 These features, which
have become increasingly popular, involve greater risk taking
on the part of both the lender and the borrower .


The following graph from BoC merely reinforces that banks are supercharging sales...





The Narrow Perspective

We continue our conversations with The Colonel this week.

Q: Colonel, we notice that most automotive pundits take a narrow perspective, overlooking many relevant factors and variables.

A: really want to get me going and rant this morning. Narrow perspective is being polite on your part. Perhaps most folks are trying to keep it simple when its increasingly complex.

Q: The auto business and the product is evolving into a complex environment of interconnectedness.

A: Yes it is, but until you talk about disconnected, presumably stand alone points/facts its simpler, and easier. Communicating disconnected morsels, while generating content.

Q: Its a narrow perspective, and misses the full spectrum.

A: Yes it does...way back in the day everyone knew something about cars, there was a ton of pedestrian knowledge (if you could call it that) floating around. Its not different today, there is a propensity of pedestrian knowledge being disseminated on a daily basis.

A: The product is increasingly complex, and disruptive. The business is moving into another phase, and stage.

Q: Yes it is...I agree. The pedestrian knowledge is at least one phase behind; primarily dealing with the past. Its driving with the rear view mirror.

A: Folks in the auto business go to a myriad of conferences, and derive a myriad of take aways.

Q: Its the human condition that if its communicated at a conference its "valid". Conveniently omitting that by the time it reaches a conference its pedestrian knowledge, its mainstream, its common, it lost its edge.

Q: There's content in Strada from years ago, that is disseminated today as novel perspectives.

A: Glad that you guys understand...that Strada is ahead...we don't follow, we lead.

Q: Could you call this pedestrian knowledge a form of "autotainment" (automotive entertainment)?

A: Absolutely, publications need to generate content, need is say more....

Q: If you omit to connect a few points/perspectives there is the real possibility of arriving at the incorrect conclusion, conveying the wrong message.

A: Brilliant deduction...there is a lot of s%&t going around.

Q: Its probably easier to monetise, and attract advertisers if its simplistic, while missing the real issues.

A: You have a point...probably is easier to monetise.

Q: Easier to disseminate "morsels", to try and monetise narrow perspectives, to bow down to guilds.

A: Yes...and its archaic, its bureaucracy, its upholding the past while suffocating the future. I can keep on going...better stop.

Q: Do you think it will change?

A: I don't think so, its an established order, the bureaucracy, the guilds, the narrow view, its enduring. Keep in mind that change requires an additional effort.




It Started With Black Boxes...

Hopefully you noticed that we are looking back, while connecting dots with the present.

Fortunately we have The Colonel that has been around this business for a few years. We are thankful that he is wiling to share his knowledge base, experience, and opinions.

Lets get going with black boxes.

Q: Colonel...good morning...what prompted the advent of black boxes.

A: From my perspective at a certain point "mechanical" controls were no longer adequate to arrive at emission requirements.

Q: If we understand this as an example...altering the timing of an engine with a vacuum line, controlling the oil pressure in an automatic transmission with vacuum in a modulator valve. The mechanical was overwhelmed.

A: You guys are good this morning...precisely. By the early 1980's mechanical controls were completely overwhelmed.

Q: This led to "black boxes" and the infamous "check engine light".

A: You need to include electronic fuel injection in the mix to make it really interesting. Think of this 30 years ago there was a ton of push back towards black boxes. Especially that it was impossible to understand what was going on in the black boxes. Obvious they were expensive too.

Q: We heard that in the early days there were poster sized decision trees to resolve issues with the old school scanners of the time.

A: You heard right...resolving a check engine light issue turned into a project. Needless to mention that the customer had no patience or understanding as to why a light turned on and it was taking so long to resolve.

Q: Electronic glitches today are often not any easier to resolve even with current diagnostic equipment.

A: Yes...its can quickly become nightmarish.

Q: Do you remember ABS brakes?

A: Should I say this...I was there when ABS brakes made their way into cars.

Q: Many cars had poor brakes, at least ABS contributed to stopping in a straight line.

A: Again...there was push back towards ABS brakes, some systems were crude. Probably even today most folks don't know that ABS enables you to steer out of trouble with your foot on the brake.

Q: Did traction control and then stability control follow ABS brakes.

A: Yes...and we live in winter conditions that are ideal to explore how these systems function in real life. Its sad they are active safety features, and most folks have a glancing knowledge of how they will work if they ever need them.

Q: Are you saying that most folks if they get in a deep yogurt situation have limited knowldge of what ABS, Traction, Stability control will do for them, how it will do it, and what they could do to assist those systems.

A: Exactly...

Q: Its gone way beyond you know there is talk of connected cars being part of the "Internet of Things".

A: Yes...its fascinating and exciting, smart cruise controls, wireless connectivity in cars, autonomous cars, its a brave new world.

Q: Contrary to back in the day there is no push back, folks are comfortable with technology, and its expected in cars.

A: I agree with you guys...the business model of the auto industry is evolving as we migrate towards to "intelligent" cars.




Small Block Chevy

265For all intents the small block Chevy is 60 years

Let's get The Colonel to dig in his memory data base, and see what he can remember about small blocks.

Q: Colonel Good Morning, what do you remember of small block Chevies.

A: Guys I was a kid, although Ford had flatheads, in 1955 a V8 in a Chevrolet was HUGE.

Q: What was it about that engine?

A: It was small compared to an Oldsmobile or Cadillac V8.

Q: Its came out as a 265 and then a 283 in 1957.

A: Yes 265 were sort of rare, 283's after a few years were quite common.

Q: What was it about that engine that captivated attention.

A: It was small, light, stamped steel rocker arms, tubular push rods, readily available, affordable, easy to put in another Chevrolet.

Q: In hindsight Chevrolet through the social media of the day developed an strong following for the small block especially in performance circles.

A: The engine was in the Corvette, there were myriad of variations, and when the 327 came out in 1963 it just took off even more.

Q: From today's perspective the small block was disruptive, it was the iPhone of engines, with a ton of Chevrolet apps, and subsequent apps from performance providers.

A: Intelligent analogy...there were a lots of engines, but the small block stood head and shoulders above the others. It was easy to generate power with a small block.

Q: With all those engines there must have been an extensive knowledge base on how to get a small block to perform better.

A: To think of it, no Internet, no social media, no forums, and word on how to generate power with a small block was pervasive among the folks that really wanted to know. Its was "Did you hear that.....".

Q: The early versions with the shorter stroke would rev up like crazy...we heard.

A: 327's and the 302's would wind up a tach so was pretty wild. Keep in mind that a short stroke limits torque, and you had to wind up the engine to generate power, especially with an aggressive camshaft.

Q: Today after a few versions that engine is still around generating even more power.

A: In a world of overhead cams, 4 valves per cylinder, the venerable push rod V8 is still around competing with the best.

Q: It shows that its an enduring design that adapts to current times.

A: You have to wonder if Ed Cole ever imagined how iconic that engine would become.

Q: Not only iconic, but still around, and current. With mechanical and technology redesigns.

A: Yes...that too.

Overview of the latest small blocks...LSX.




C4 vs C7 Corvette

An entertaining episode of Road Kill...enjoy!