Model 3 Reservation Holder Survey Underlines Tesla’s Mass Market Challenge

 

They waited for reservations… will they also wait for service? (image courtesy Investors Business Daily)

Much of the critical coverage of Tesla Motors, both here at Daily Kanban and elsewhere, has focused on issues that Tesla is able to get away with as a small-volume manufacturer serving an affluent, early-adopter market segment. From manufacturing bottlenecks to quality control problems, from inconsistent, hype-happy communication to poor service, Tesla has been able to weather a storm of problems because its customers and fans are so patient with and passionate about the company. But as Tesla moves from expensive, low-volume cars to the mass market Model 3 these problems are taking on a new significance. In part this is because higher volumes increase the likelihood of quality and service problems, and in part it is because mass market customers who depend on a single car for their daily routine are more demanding than luxury car buyers who can always take the Lexus to work if their Tesla is broken.

Given Tesla’s pattern of releasing cars with insufficient testing as well as its chronic quality problems, it’s safe to assume that the Model 3 will face its fair share of issues. Thus, investing in service infrastructure that will allow Tesla to promptly and affordably repair and upgrade high volumes of Model 3 is extremely important. As Bertel has written about at Forbes, Tesla is behind the curve on those investments and it will cost billions to catch them up. Just yesterday a piece by former Tesla employee Evan Niu dramatically illustrated just how far Tesla has to go to improve its service time, which has dragged on for 8 long months in Niu’s case. Now an exclusive study of about 800 Tesla Model 3 reservation holders, EV owners and luxury brand car owners conducted last year on behalf of a major automaker and provided to Daily Kanban by an industry source, reveals why Tesla’s quality and service woes are so critical to the success or failure of the Model 3.

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Why Are These Teslas Gathering Dust?

Tesla's Ghost City?

Tesla’s Ghost City?

Tesla has taken a beating in recent months for the quality problems that are affecting the Model X (and to a lesser extent, Model S) as the California electric automaker struggles to scale up. And with Tesla’s production and manufacturing VPs leaving the company and a massive production ramp looming which aims to take the company from 50,000 annual units of production to 500,000 units in a few short years. As Bertel explains over at Forbes, Tesla’s ambitious plans deepen the gulf between it and the real world of automotive manufacturing. But even if Musk can turn a century of automotive expertise on its ear, another challenge awaits that I lay out in my most recent Bloomberg View post: [Continue Reading]

Japan’s new car registrations brought down big by mini mobiles

Japan--3--Picture-courtesy-Bertel-Schmitt

Registrations of new automobiles in Japan contracted by 7.6 percent in September, consolidated data by Japan’s industry associations show. Data were diminished by continuing, even accelerating weakness of mini vehicles, on top of sluggish sales of regular vehicles. [Continue Reading]

Volkswagen September sales were whatever you want them to be

Are we confused yet?

Are we confused yet?

 

The picture above is what stares at me from my screen. It is the output of the Daily Kanban Newsbot that helps us stay abreast of the news without waiting for Autoblog. The bot reads the headlines, and the bot is as confused as I. The fabled checking with multiple independent sources comes to a halt. Sales up? Down? Flat? Left? Right? Tylenol? [Continue Reading]

Mini vehicle hangover brings Japanese car sales down

Honda NBOX - Picture courtesy Bertel Schmitt

Japan’s new automobile registrations were down 7.6 percent in May. It was the mini vehicles that brought the market to its knees, after a change in taxes had caused a run on kei cars in the first quarter. Mini vehicles were down nearly 20 percent in May. Regular vehicles were up 1.4 percent. [Continue Reading]

Japan’s new car hangover continues in March

Japan roads - Picture courtesy Bertel Schmitt

Registrations of new cars in Japan dropped a further 11.2 percent in March year-on-year, after sinking 14.7 percent in the month before. This according to consolidated data by Japan’s major industry associations (full table here.) A month ago, we said that the JDM will “drop some more,” and it was an easy call. [Continue Reading]

Volkswagen February Car sales a further indicator of global slowdown

"Increase sales, got it?" "Got it."

“Increase sales, got it?” “Got it.”

 

The DailyKanban has had its eyes on the global slowdown of the auto market for a while. Here is yet another piece of data for the puzzle. Volkswagen’s bread and butter volume brand, Volkswagen Passenger Cars, has a difficult start this year. February was flat, January through February 2015, deliveries were down 1.6 percent, the Wolfsburg company said today. It’s not because they are lazy. The markets are getting tougher around the world. Just because things are divvy in the U.S. doesn’t mean they are everywhere. They aren’t.

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Japan’s new car sales down again in February, and they will drop some more

Ping-pong

New car registrations in Japan continued their statistical return to earth in February, as total registrations across all segments dropped 14.7 percent (full table here.) We predicted this a month ago, and it didn’t take exceptional clairvoyance to do so. The month compares with a February 2014 when Japanese customers rushed to car dealers in order to beat Abe’s sales tax rise in April. We will see a similar drop again in March, and a little more of that in April, due to registrations of made-to-order cars bought before the March 31 deadline. [Continue Reading]