Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news

Auto Industry Briefing — week ending 10th March 2019

Cheap cars with batteries that get bigger; electrification’s missing link; and what is going on at Tesla? Please enjoy our auto industry and mobility briefing for 4th March to 10th March 2019. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

  • Rebel YellFiat unveiled the Centoventi concept, previewing the next-generation Panda. Among a host of neat ideas was one we have been crying out for: modular batteries. The idea is that the car is sold with only a basic, short range pack. So far so cheap and restrictive. But then, additional modules can be rented (or purchased) to create a longer range as required. There are practical problems to do with pricing and sorting out enough locations where you pick up and drop off the batteries that the scheme is convenient, but that shouldn’t stand in the way of someone giving it a go.
  • Turning JapaneseNissan plans to launch a range of ePower-badged series hybrids (motor as generator) cars in Europe. As our research with Evercore ISI in late 2018 concluded, we believe that this type of powertrain will greatly help the transition to fully electric vehicles. Put simply, customers get the driving experience of an electric car but the cost of an internal combustion engine (plus a bit). What’s not to like?
  • The Hokey Cokey Last week Tesla announced the death of the dealership and a price reduction, this week stores get a reprieve and prices are going up. Deciding to go online only was a MASSIVE bet, one that should only have been made after very careful consideration. A rapid about turn (surely the right move) suggests the original analysis was underwhelming or (worse still) based on gut feel. Is this a unique and terrible mistake or has Tesla lost the plot when it comes to strategic rationale?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW (history)

  • Is prepared to move some engine production from Hams Hall, UK to Steyr, Austria in the event of an unfavourable Brexit. (The Guardian)
  • The Nedcar plant could be preparing for incremental (post-Brexit) Mini production after purchasing 38 hectares for site expansion. (Dutch News)
  • Reportedly working on an €800 million deal to buy Audi out of a shareholding in the Bayern Munich football club and then take on the role of sponsor. (Manager Magazin)

Daimler (history)

  • Incoming CEO Kaellenius is open to sharing battery cell design with other companies if it suited Daimler’s vehicles and was cost effective. (Reuters)
  • Unveiled an all-electric V-Class people mover with a 100 kWh battery. (Daimler)

FCA (history)

  • Unveiled the Centoventi, all-electric city car concept at Geneva. Fiat says that in order to keep prices low, the car will have a modular battery pack. Buyers can opt for a cheaper, small, battery and then rent larger units for a limited time when they really need the range. Another idea previewed by the concept is for customers to choose the colour by wrapping the car after it leaves the factory — vastly reducing plant complexity. Design cues in the car suggest it is destined to be the next generation Panda. (FCA)
    • Significance: Making a larger battery pack available for a short time — provided supply is freely available and reasonably priced — looks like a very sensible solution to overcoming the cost issues that battery electric vehicles are likely to experience for most of the next decade. If the design is sufficiently neat, there is no reason why packs could not be compatible across vehicle lines.
  • CEO Manley said he is open to “any deal that would make Fiat stronger” when asked about the potential for a tie-up with PSA, but ruled out a sale of Maserati. (Detroit News)
  • Revealed the Alfa Romeo Tonale C-sized plug in hybrid SUV, probably the car FCA has promised Italian unions it will build at the Pomigliano factory. Executives expect it to be the brand’s biggest seller. (FCA)
  • Alfa Romeo is recalling around 60,000 cars because the adaptive cruise control might refuse to adapt. (Detroit News)
  • Might not drop diesel in Europe by 2022 if consumer demand for the fuel type remains at a level where the company feared it would lose 15% or more in sales volume. (FT)

Ford (history)

  • Introduced a new nameplate for large trucks: F-600. The new model sits below the F-650 and F-750 in the line-up with a similar size to Super Duty but more powerful loading carrying capabilities. (Ford)
  • Former employees at the now-defunct Chariot on-demand bus service criticised the brand’s management, although no one could explain how, even with improvement, the business would have made money. (Bloomberg)
  • A profile of CEO Hackett expounded his virtues in helping the company to embrace user-centric design methodologies but failed to give many concrete examples of where this is happening beyond prototypes for autonomous vehicles. (The Atlantic)
  • Mahindra’s MD says the firm will build an electric vehicle using Ford’s platform and wants Ssangyong to be included in a three way partnership. (Economic Times of India)
  • The turnaround plan for the Russian business reportedly envisions closing two plants in the country and producing only commercial vehicles in future. (Reuters)

Geely (includes Volvo) (history)

  • Proton’s CEO expects the brand to turn a profit in 2019. (Malaysiakini)
  • Volvo might not sell Polestar electric cars in the USA if tariffs on Chinese imports are increased. (Reuters)

Honda (history)

  • Intends for 100% of European sales to be electrified vehicles by 2025, accelerating the prior plan by five years. Unlike some other competitors, Honda appears more explicit that “electrification” means full hybrid and above cars, and not electrically augmented mild hybrids where the car cannot move without the combustion engine. (Honda)
  • Invested in charging network ubitricity. (ubitricity)

Hyundai / Kia (history)

  • Looking for partners to finance the development of a new corporate headquarters in Seoul, South Korea. (Reuters)
  • Developed a smartphone-based key that lets owners share the vehicle with up to four others. Unlike many contemporaries, Hyundai’s system works using near field communication, rather than transmission to the vehicle modem. (Hyundai)
  • Hyundai may cease operations at a plant in Beijing, China. The firm was keen to stress that the move would be a suspension, not full closure. (Reuters). Kia might also close a Chinese plant. (Reuters)
  • Hyundai is reportedly in the final stages of talks to invest $250 million in Ola. (IB Times)

Mazda

  • Took the wraps off the CX-30 crossover at the Geneva show. (Mazda)

Nissan (includes Mitsubishi) (history)

  • Nissan CEO Saikawa reportedly told employees he intends to stay in role for another three years, seemingly contradicting earlier comments that he would be headed for the exist much sooner. (Bloomberg)
  • Nissan said stories about a plan to reduce production of Qashqai and Leaf in Sunderland by going from three shifts to two were rumours, but didn’t issue an outright denial. (Sky News)
  • Mitsubishi unveiled the Engelberg Tourer SUV and suggested that the car can be used as a back-up generator if the customer adopts the firm’s Dendo house concept for connecting the car to the home grid. Previous concepts of this nature have centred on battery electric vehicles, thus haven’t been able to explore this idea before. (Mitsubishi)
  • Announced that the e-Power range of motor-as-generator vehicles will launch in Europe by 2022. Concepts shown by Nissan at Geneva hint that the Qashqai and X-Trail will both receive the powertrain. (Nissan)
    • Significance: Nissan’s choice to launch the technology in Europe suggests (in line with the findings of Ad Punctum’s research in partnership with Evercore ISI), that motor-as-generator will be a useful part of the powertrain portfolio, providing an all-electric driving experience with a cost closer to a conventional gasoline engine.
  • Renault, Nissan and Mitsubishi are discussing a new governance structure that would oversee joint projects, in a way that would not require a change to the shareholding structure. (Renautlt)
  • Carlos Ghosn was granted bail but wasn’t allowed to attend a Nissan board meeting. (BBC)

PSA (includes Opel/Vauxhall) (history)

  • Believes that L4 self-driving capability would add €15,000 to the vehicle price, and a solid L3 system will cost around €5,000. At these prices, PSA sees the likely take-up as being in single digit percentages. (Auto Express)
    • Significance: With VW giving interviews citing a €50,000 cost for L3 capability, it seems as though nobody really knows for sure.  

Renault (history)

  • Renault, Nissan and Mitsubishi are discussing a new governance structure that would oversee joint projects, in a way that would not require a change to the shareholding structure. (Renautlt)

Tesla (history)

  • Workers at the Gigafactory have complained that Tesla makes them take unpaid time off when production stops due to a shortage of supplier parts. (CNBC)
  • After making price cuts and announcing a move to online only sales, Tesla abruptly reversed course, increased prices and said it would only close some stores. (Tesla)
    • Significance: Two contradictory strategic moves coming within days of each other is grounds for severe concern. Moving to online only sales was a massive bet, one that should only have come after considerable soul-searching and analysis to give confidence that the move made sense (which on the surface it did not). Whilst it is a net positive that Tesla seems to have now chosen a more sensible route, this raises red flags over the decision making process.
  • The third generation of supercharger offers a 250 kW rate. Tesla will start shipping the new units in 2019 and says it can offer the “fastest production charging experience”, something that may confuse users of 350 kW stations from the likes of Porsche. (Tesla)
  • German regulators told Tesla to end its practice of including estimated savings from using electricity in lieu of fuel as a method of lowering the headline price. (Reuters)
  • Secured funding from Chinese lenders for the initial Shanghai factory costs. (Tesla)
  • CEO Musk said that although the $35,000 Model 3 would enter production this month, it will not be widely available for some time. (Reuters)
  • Investors threw a giant wobbly over news that Model 3 imports were being blocked by Chinese customs officials. Tesla said the problem was down to labelling and the World moved on. (Reuters)

Toyota (history)

  • Executives said that a “bad” Brexit could result in a withdrawal from UK manufacturing, but their comments implied that this would be at the end of the new Corolla’s product cycle rather than in the immediate future. (Bloomberg)

VW Group (history)

  • Recalling nearly 75,000 Audis of various types to fix problems with fuel leaks. (Detroit News)
  • Porsche will increase the production capacity of the all-electric Taycan above 20,000 units per year, but won’t say by how much. (Bloomberg)
  • Bentley says that battery technology needs to lead to a doubling of energy density before the brand can consider it as a suitable alternative to internal combustion engines for products like Bentayga. The brand believes that fuel cells may be the answer, but sees the technology as more than 10 years away. (Autocar)
  • Although VW continues to explore potential sites for a new plant in Eastern Europe, works council representatives are reportedly unimpressed and plan to vote against the scheme. (Handelsblatt)
  • Porsche is currently studying a successor to the 918 Spyder supercar and hasn’t yet decided whether it should have a hybrid or all-electric drivetrain. (Autocar)
  • Bugatti unveiled a one-off “voiture noire” coach-built Chiron derivative. Bugatti says the car has been sold for £9.5 million and the project pretty much broke even. (Autocar)
  • CEO Diess believes that automakers are trading at a discount because the market does not believe they can make the transition from vehicles with internal combustion engines to all-electric power and that explaining the transition plan will be critical to winning investor confidence. (CNBC)
  • VW’s commercial vehicle chief said autonomous vehicles require at least five years of further research and the sensor set cost needs to fall to around €6,000 – €7,000 per car. (Reuters)
  • Audi showed the Q4 e-tron all-electric SUV. (Audi)
  • Audi is experimenting with installing used lithium-ion batteries from road cars into plant vehicles such as forklift trucks and tugs. The firm believes that the repurposed batteries could be more efficient than the traditional lead acid packs originally fitted. However, Audi’s description of a recycling process that includes stripping down the donor pack, testing the cells and then re-packaging into a completely different configuration serves to demonstrate that the recycling process hasn’t been fully thought-through. (Audi)
  • Says that there may be no business case for combustion engine powered city cars like the Up! as emissions legislation in Europe will make them too expensive to produce; and that poorer customers will suffer as a result. (Autocar)
    • Significance: VW’s comments appear designed to shock politicians into reconsidering emissions limits as they imply several falsehoods: (1) that car makers only approve profitable programs; (2) that city cars are the entry-level vehicle of choice, when b-sized cars are a far larger segment.

Other

  • Morgan announced that Investindustrial was taking a majority stake in the firm for an undisclosed sum. (Morgan)
  • McLaren is preparing a fourth model line, positioned as a grand tourer, to be unveiled later in the year. How it will compare to rivals is unclear since the car will (unusually for the segment) have a mid-engined layout. (McLaren)
  • McLaren’s CEO says that solid state batteries will likely be ready for application in vehicles between 2023 and 2025 and that the brand is thinking about a 2+2 car. (Autocar)
  • Aston Martin unveiled the mid-engined “concept” Vanquish sports car, along with a new V6 engine.(Aston Martin)
  • Aston Martin gave more details about the 003 supercar, philosophically a slightly bigger, slightly more practical version of the Valkyrie. The car will use a hybrid V6 engine, data from the Valkyrie suggests that the electric drive will yield an additional 150+ bhp.  (Aston Martin)
  • Karma heralded a big reveal of the brand’s plan and future products at the Shanghai show. (Karma)
  • Mahindra sees the future in terms of three segments: shared and autonomous robo-taxis; SUVs and; luxury cars like the recently unveiled Pininfarina Battista. (Autocar)
  • Mahindra’s MD says the all the brand’s electric vehicles will be conversions from models with internal combustion engines, except for a car built using Ford’s electrified platform. (Economic Times of India)
  • NIO reported financial results for the full year. There was a loss of $(1.4) billion on $(720) million of revenue. Sales in January and February have also disappointed — seemingly on course to drop more than (50)% on a quarter over quarter basis. NIO will no longer commission a plant in Shanghai, saying that production from a JAC-owned plant was enough for the next two to three years. (NIO)
  • Koenigsegg debuted a new supercar called the Jesko. The car features a new in-house designed transmission, an uprated engine, a claimed top speed near to 300mph and a price tag of $3 million. Koenigsegg says it will only make 125 examples — and 90 of them have already been sold. (Koenigsegg)

News about other companies and trends

Economic / Political News

  • UK passenger car sales in February of 81,969 units were up 1.4% on 2018. (SMMT)
  • German registrations of passenger cars for February were 268,867 units, up 2.7% on prior year. (KBA)

Suppliers

  • Chipmaker Renesas will slow production at Japanese plants, primarily due to reduced demand from China. (Reuters)
  • Schaeffler is looking to close or sell five European plants as part of a profit improvement plan. (Handelsblatt)
  • Dana took a stake in heavy goods vehicle developer Hyliion. (Dana)
  • Continental’s full year 2018 revenue was €44.4 billion, with EBIT of €4.0 billion, down (12)% on a year earlier. The firm said it still intends to meet 2019 profit goals. (Continental)
  • Autoliv and TRW were fined €368 million by the EU for running a cartel that sold steering wheels, seat belts and airbags at inflated prices. (Economic Times of India)
  • Michelin completed the acquisition of 88% of Indonesian tyre maker Multistrada. (Michelin)

Ride-Hailing, Car Sharing & Rental (history)

  • Ride hailing firm Taxify changed its name to Bolt (because it doesn’t just offer taxis anymore). (Bolt)
  • FlixBus is in talks to acquire rival Eurolines. (TechCrunch)
  • Grab announced it has raised a further $1.5 billion from SoftBank to bring the Series H total to $4.5 billion. (Grab)

Driverless / Autonomy (history)

  • Lidar developer Innoviz reportedly raised $100 million but wouldn’t confirm it. (Reuters)
  • Uber has been found not criminally liable for the fatal accident between a self-driving vehicle and a pedestrian in Arizona, USA. The safety driver may still be charged. (BBC)
    • Significance: It is unclear what precedent this sets, does it mean that: companies are not responsible for poorly performing safety systems, so long as there is a safety driver or; that so long as firms can show why a car acted in a certain way, they will not be held criminally liable even when there is a fatal accident? Either way, self-driving car developers will see this news as positive.
  • Computer vision developer Brodmann17 raised $11 million. (TechCrunch)
  • Waymo will offer its proprietary perimeter lidar sensor to selected partners. More powerful units used for longer-range vision aren’t yet available (and you can’t have one if you are building a driverless car). (Waymo)
  • PSA believes that L4 self-driving capability would add €15,000 to the vehicle price, and a solid L3 system will cost around €5,000. At these prices, PSA sees the likely take-up as being in single digit percentages. (Auto Express) VW’s commercial vehicle chief says a L3 system costs €50,000 per car. (Reuters)

Electrification (history)

  • Charging provider Eneco acquired Dutch rival Flow Charging. (Eneco)
  • Spartan Motors showed off three all-electric commercial vehicles under the Utilimaster brand. (Spartan)
  • FCA unveiled the Centoventi, all-electric city car concept at Geneva. Fiat says that in order to keep prices low, the car will have a modular battery pack. Buyers can opt for a cheaper, small, battery and then rent larger units for a limited time when they really need the range. (FCA)
  • McLaren’s CEO says solid state batteries will likely be ready for use in vehicles between 2023 and 2025. (Autocar)
  • Charging network ubitricity raised €20 million from investors including Honda. (ubitricity)
  • Mitsubishi unveiled the Engelberg Tourer SUV and suggested that the car can be used as a back-up generator if the customer adopts the firm’s Dendo house concept for connecting the car to the home grid. Previous concepts of this nature have centred on battery electric vehicles, thus haven’t been able to explore this idea before. (Mitsubishi)

Other

  • German car insurance start-up FRIDAY raised $114 million. (EU Startups)
  • PAL-V says it is ready to enter production with a 90 vehicle run of the Liberty flying car. (PAL-V)
  • Goodyear showed off a concept tyre for flying cars that can double as a rotor fan. The technolohy involved looks phenomenally expensive. (Goodyear)
  • Harley Davidson has diversified by acquiring children’s electric bicycle maker StaCyc. (Reuters)
  • Air traffic control firm AirMap received undisclosed investment from Temasek and Honeywell. (AirMap)
    • Significance: If drone taxi firms are going to take off, they need air traffic control to be capable of handling many times the number of flights dealt with today. Companies like AirMap aim to provide the tools that could make that a reality.

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Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news

Auto Industry Briefing — week ending 3rd March 2019

Cheap electric vehicles get more wheels; selling without a storefront; and how far can the Porsche brand stretch? Please enjoy our auto industry and mobility briefing for 25th February to 3rd March 2019.

Before you read the detail, what were my favourite stories of the past week…?

  • Weight Of Living Scooter rental firm Gotcha thinks that trikes are the way forward, probably because you can sit rather than stand. It can surely only be a matter of time before someone offers a four-wheeler, perhaps citing stability benefits. If so, will these vehicles look like two scooters lashed together or could someone hit upon a design for very low-cost, yet reliable, electric vehicles along the way?
  • Thrift Shop Tesla says physical dealerships are old news and the firm is moving to online sales. Only time will tell whether the move is genius or unmitigated disaster. It certainly flies in the face of all convention to aim for industry leading volumes (half a million units per year) without using all the available tools to attract as many buyers as possible. Using Model 3 numbers to justify the move (~80% of buyers used the online portal) could be dubious — the 2018 sales came from people who signed on as depositors before launch. Will buyers unable to kick the tyres in 2020 make the same purchase decision?
  • Perfect To MePorsche says that the next generation Macan will be all-electric. The move makes sense in the context of helping the wider VW Group with emissions targets but can the brand position itself as the true home of electrification (Taycan / Cross Turismo / Macan) and petrol-headed driving pleasure (911 / 718)?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW (history)

  • Agreed to pool self-driving technology efforts with Daimler, but only for SAE Level 3 and 4, aiming to release technology in the mid-2020s. The parties will continue with individual efforts on SAE Level 5 technologies, but remain open to discussion on sharing those too. (Daimler)
    • Significance: It makes sense to collaborate but the exclusion of Level 5 seems arbitrary. Given that most specialists struggle to explain a practical difference between the sensor set and AI of Level 4 and Level 5 vehicles (although differences in capability are obvious), it remains unclear how BMW and Daimler will avoid crossover with the development of the higher ability systems — unless they believe that in coming years, geo-fenced autonomy will be possible with lower order sensors, something that at present only Elon Musk is openly saying.
  • Fined €8.5 million by German prosecutors for installing the wrong engine management software in about 8,000 vehicles. (Reuters)
  • Invested in ride hailing firm Zūm, which has a service aimed at ferrying children around. (TechCrunch)

Daimler (history)

  • Created a blockchain-based prototype sourcing ledger that can track materials across multiple stages of product creation and certify their origin. (Daimler)
  • Agreed to pool self-driving technology efforts with BMW, but only for SAE Level 3 and 4, aiming to release technology in the mid-2020s. The parties will continue with individual efforts on SAE Level 5 technologies, but remain open to discussion on sharing those too. (Daimler)
  • Scheduling down days at the Vitoria plant due to reduced demand for diesel vehicles. (Europa Press)
  • Daimler Buses acquired a 5.25% stake in fleet management software company IVU. (Daimler)

FCA (history)

  • Announced a $4.5 billion investment (some of which had been reported previously) to revamp five plants in Michigan, USA for Jeep and pick-up products. The largest single amount — $1.5 billion — will be spent to convert the Mack Avenue engine plant to one that makes vehicles.  (FCA)

Ferrari

  • Released photographs of the F8 Tributo, the replacement for the 488 GTB. (Ferrari)

Ford (history)

  • Suffered unscheduled downtime at two North Ameican plants because of a strike affecting the steering wheel supplier. Ford built (but didn’t gate release) thousands of cars with temporary parts whilst trying to overcome the shortages. (Detroit Free Press)
  • Rumoured to be shedding 2,000 of workers in China by not renewing temporary contracts. (Nikkei)
  • Although some claimed that VW and Ford were close to a deal to team up on self-driving equipment (WSJ), others said that a deal was months away and implied that leaks were almost all from VW and unreliable. (Detroit Free Press)
  • May have found a buyer for the Brazilian car plant scheduled for closure. (Reuters)

Geely (includes Volvo) (history)

  • Volvo invested in ride hailing firm Zūm, which has a service aimed at ferrying children around. (Volvo)
  • Published pictures of the Polestar 2, the first all electric car from the brand. The starting price for the launch edition will be €59,000 but Polestar says that after that prices should drop to €39,000. (Polestar) The brand hopes to sell over 50,000 units annually according to the CEO. (Reuters)
  • Proton unveiled the new Persona B sized saloon. (Proton)
  • Volvo will impose a 180 kmh (just over 110mph) speed limit on all cars. Speed demons need to make their purchase before 2020 to pick up an unregulated model. (Volvo)
  • Showed off the GE11, the first vehicle from the new Geely New Energy brand. (Geely)

General Motors (history)

  • The UAW union launched a lawsuit against GM asking US courts to order plants scheduled for “unallocation” to remain open. (Reuters)
  • Made a series of executive changes to replace the heads of North America (GM) and manufacturing. (GM)

Honda (history)

  • Released images of the production-ready all-electric city car to be unveiled at the Geneva show. (Honda)
  • Commenced production at the Itirapina, Brazil, vehicle plant. (Honda)

Hyundai / Kia (history)

  • Hyundai issued a medium term profit objective of 7% return on sales by 2022. The brand believes that this can be achieved despite a 58% increase in average year product spending. (Hyundai)
  • Announced an executive reshuffle. (Hyundai)
  • Hyundai says that it needs 14 trillion KRW (about $12.5 billion) of net cash or equivalents for working capital and to provide a sufficient buffer for unforeseen one off events. (Hyundai) This appears to be the rationale for rejecting calls from an activist shareholder to return more cash. (Reuters)
  • Hyundai CEO Lee reportedly told investors that the firm is considering capacity cuts in China. (Reuters)

PSA (includes Opel/Vauxhall) (history)

  • Reported financial results for the 2018 full year. Automotive revenue of €61.3 billion was up 27% year-on-year but this included the full year impact of Opel / Vauxhall. Operating profit of €4.5 billion rose 61%. PSA said Opel / Vauxhall swung from a (2.5)% loss to a 4.7% profit. PSA raised profit guidance, but as with last time, it was to a number that it is already exceeding. (PSA)
  • Will launch the Peugeot brand in North America, Citroën in India and Opel will return to Russia. (PSA)
  • Reportedly looking into the potential for a capital tie-up with the likes of FCA, JLR or even General Motors, in a bid to obtain enough global scale. (Bloomberg)
  • CEO Tavares said that stricter EU CO2 rules could destabilise society and bemoaned the pace of decision making at the firm’s Chinese joint ventures. (Reuters)

Tata (includes JLR) (history)

  • Reportedly exploring a sale of a partial stake in JLR to raise cash. Tata spokespeople denied it. (Bloomberg)
  • Sources told the BBC that JLR was about to make a major investment in UK manufacturing. The lack of any detail suggested it was the work of PR people or politicians rather than well-informed yet loose-lipped insiders. (BBC)
  • Unveiled a facelifted XE saloon (the second such update). The main focus of the redesign was the front and the interior, which now features an array of digital displays. (JLR)
  • JLR’s InMotion fund participated in a further investment round for usage-based insurer ByMiles. (JLR)

Tesla (history)

  • Put a $35,000 version of the Model 3 on sale, accompanied by a new $37,000 derivative with slightly more equipment that Tesla hopes customers will buy instead. (Tesla)
  • Anecdotal feedback from would-be Model 3 owners says that Tesla is taking many months to process deposit returns if they decide they no longer wish to order the vehicle and that multiple follow-ups are necessary to get the company to act. Tesla wouldn’t say how long it takes on average to process refund returns. (Detroit News)
  • Rebalanced the features in driver assistance (“Autopilot”) options so that the base $3,000 system capability is similar to those of other brands. Navigating highway slip roads and interchanges and remote parking are now only available by subscribing to the more expensive “full self-driving” pack. (Business Insider) After the move, Tesla offered owners a cut price deal to upgrade. (Tesla)
  • Paid a $920 million bond in cash (as Tesla said it probably would). (CNBC)
  • Will only sell cars through online and telephone channels (some high traffic locations will remain open). Tesla says the move will save about 6% of revenue and allow it to return the saving to customers. As an enabler to the change, Tesla is creating a seven day, 1,000 mile no hassle return program and says it will improve mobile servicing. (Tesla)
    • Significance: It remains to be seen whether Tesla’s move is genius or foolhardy. The firm is betting that customers are ready for online-only sales, whilst making sales projections that other brands can only meet by offering omni-channel experiences. Although dealers are often judged by customers to do a poor job, sales of high value items indicate only a small minority are prepared to forego face-to-face contact with salespeople at this time. Analysts speculated that the firm’s retail solar business will suffer an even greater negative impact, having failed to build a meaningful following so far.
  • CEO Musk said in an internal email that 78% of Model 3 orders were made online and 82% of customers did not have any test drive as part of the justification for the move to online sales. Since the car was initially only released online and production problems meant few demonstrator vehicles were initially available, these figures may be less compelling than they seem. It is unclear what the comparable figures for Model S and X are. (Clean Technica)
  • Set a 14th March date for the unveiling of the Model Y SUV. (Elon Musk)
  • The SEC asked a US judge to hold CEO Musk in contempt of the earlier deal that followed incorrect statements about funds to take Tesla private after he sent erroneous tweets about 2019 production figures. (Reuters)

Toyota (history)

  • Working with Carmera to produce high definition maps from vehicle camera data. (Toyota)
  • Creating a French hydrogen joint venture to create a fuelling network called Hyset, intended to encourage take-up of fuel cell vehicles. This mirrors Toyota’s approach in Japan, albeit with a scheme that is smaller in scale. (Toyota)

VW Group (history)

  • Will use Jetta as a standalone brand in the Chinese market, in partnership with FAW. The portfolio draws heavily on SEAT models. (Autocar)
  • Announced that the next generation Macan will be all-electric. (Porsche)
    • Significance: Porsche seems to be setting itself up as a brand that gives both ecowarriors and petrolheads what they want. More broadly, the move will be highly positive for the VW Group average CO2 emissions in Europe
  • Reportedly considering a smaller IPO of truck division Traton than the previously mentioned 25% stake if economic conditions deteriorate. (Reuters)
  • Although some claimed that VW and Ford were close to a deal to team up on self-driving equipment (WSJ), others said that a deal was months away and implied that leaks were almost all from VW and unreliable. (Detroit Free Press)
  • Announced an executive reorganisation at the VW brand aimed at giving CEO Diess more time to run the wider group. The main changes are a broader remit for the COO and a more important digital services function. (VW)
  • VW and Russian partner Gaz have apparently been working on a series of nearly finalised new projects, with the intent of being able to make a fast start if US sanctions against Gaz are lifted. (Handelsblatt)
  • Announced that e.Go will licence the MEB platform. (VW)

Other

  • Aston Martin announced full year 2018 results. Deliveries rose 26% year-over-year to 6,441 units and revenue was up 25% to £1.1 billion. There was a PBT loss of £(68) million but Aston Martin said this was IPO costs and without it, there had been a £73 million operating profit. (Aston Martin) CEO Palmer said there is a £30 million Brexit contingency budget; much of this appears to be for extra inventory. (Reuters)
  • Subaru announced a reorganization aimed at improving risk management and planning. (Subaru). There will also be a series of senior executive changes. (Subaru) At the same time, the firm is recalling 2.3 million cars to fix a problem with the brake lights. (Reuters)
  • Ginetta unveiled a £400,000 supercar, aiming to make between 30 – 50 per year. The firm says there are already 14 firm orders in the bag. (Autocar)
  • Piëch say the platform on which the Mark Zero sports car is based will also have a four seater and an SUV. (Piëch)
  • Koenigsegg revealed that the tie-up with NEVS was less ambitious than hoped. The new higher volume product will have a production volume in the hundreds and a price tag of the best part of one million euro. (Road&Track)
  • Faraday Future extended enforced unpaid leave for employees, citing continued cash problems. (The Verge)
  • VinFast will soon begin a safety testing program to certify that vehicles meet European standards. (Retail News Asia)
  • Electra Meccanica, makers of an all-electric three-wheeler, said production started at their Chinese factory. (CNBC)
  • A report on industrial robot usage in the USA concluded that the automotive industry installed (12)% fewer machines in 2018 than the prior year. (CNBC)

News about other companies and trends

Economic / Political News

  • US Light Vehicle industry in February was 16.53 million, about (2.5)% worse than a year earlier. (Wards)
  • France had 172, 438 passenger car registrations in February, 2.1% higher than prior year. (CCFA)
  • Italian passenger car registrations for February were 177,825 units, a (2.4)% drop on a year earlier. (UNRAE)
  • Spanish passenger car registrations of 100,701 units dropped (8.8)% versus prior year. (ANFAC)

Suppliers

  • Hella opened a new $14 million electronics plant in India. (Autocar)
  • CATL plans to increase annual battery cell capacity at its still-unfinished German factory from 14 GWh in 2021 to 60 GWh by 2026. (Nikkei). The firm has also reportedly created a 49% / 51% joint venture with Chinese automaker FAW for local battery production. (Inside EVs)
  • SK Innovation will build a second battery factory in Hungary for $845 million. Although no capacity was provided, for the size of reported investment it is probably about 10 GWh annually. (Reuters)
  • JBM acquired metal forming specialist Linde-Wiemann. (Autocar)
  • Dana completed the acquisition of Oerlikon’s drive systems business. (Dana)
  • BYD is building a new battery factory in Chongqing, China with a planned annual 20 GWh capacity. (Xinhua)
  • ZF has been in talks with Wabco about a potential takeover. (Reuters)
  • Bosch will invest another €200 million in start-ups. (Bosch)
  • Techrules says it will release a 15 kW turbine at the end of 2019 that the firm believes will have widespread application in cars and commercial vehicles as a range extender. (Autocar)
    • Significance: Whilst a 15 kW motor can probably provide sufficient steady-state generation to power a mid-size car, it remains to be seen whether OEMs will favour this technology over a traditional internal combustion engine that can do the same job.

Dealers

  • Chinese online new and used car sales firm Chehaiduo raised $1.5 billion. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental (history)

  • Lyft filed S-1 paperwork ahead of an IPO. The co-founders will hold a class B stock with 20 times the voting rights of ordinary shareholders. Financials can be found on page 17. (SEC)
  • Uber is rumoured to be heading towards a $3 billion deal to buy Careem. (Reuters)
  • Mahindra is launching a ride hailing service called Glyd. (Mahindra)
  • French on-demand ambulance start-up Ambler raised €1.5 million. (EU Startups)

Driverless / Autonomy (history)

  • Autonomous vehicle developer Horizon Robotics raised $600 million. (Deal Street Asia)
  • FedEx is testing a prototype delivery pod. (ZDNet)
  • Apple fired 190 people from its self-driving car program. (Reuters)
  • BMW and Daimler agreed to pool self-driving technology efforts, but only for SAE Level 3 and 4, aiming to release technology in the mid-2020s. The parties will continue with individual efforts on SAE Level 5 technologies, but remain open to discussion on sharing those too. (Daimler)

Electrification (history)

  • The Indian government passed legislation to encourage uptake of electrified vehicles (dubbed FAME II) and received positive reviews from vehicle makers. (Economic Times of India)
  • Ola’s electric vehicle subsidiary raised $56 million. (Tech In Asia)
  • CharIN published standards for 1MW charging stations. Sadly, it is aimed at heavy trucks and buses rather than passenger cars in search of eye watering charging speeds. (CharIN)

Connectivity

  • AT&T and Vodafone launched a joint connected car initiative, aiming to offer a single service that can span most of the globe. (Telematics News)
  • Gosuncn and Qualcomm will supply Geely with C-V2X equipment. (Geely)
  • President Trump reportedly plans to pledge a state-owned 5G network in his re-election manifesto. (Politico)
    • Significance: If the US decides that the heavy hand of the state is the best way forward, this could call into question the winner takes all mentality that underpins the investment case for many emerging (and loss-making) business models.

Other

  • Bicycle rental firm Gotcha is offering electric trikes with a 40-mile range. (Gotcha)
  • Electric scooter rental firm Voi announced $30 million in funding. (Deal Street Asia)
  • Lime said that some of the firm’s scooters have a firmware bug that might cause sudden braking and suggested riders pump the brakes a few times to check if their vehicle is affected. Apparently, it is now fixed. (Lime)

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Auto Industry Briefing — week ending 24th February 2019

Mercedes-Benz EQC’s failure to launch; broadening the Model 3’s appeal; and is Ford’s CEO isolated? Please enjoy our auto industry and mobility briefing for 18th February to 24th February 2019. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

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News about the major automakers

BMW (history)

  • BMW and Daimler’s mobility joint venture will be five different services, all branded as “something” NOW: Reach Now will be multimodal travel; Free Now is for ride hailing; Share, Charge and Park Now services are self-explanatory. Emails have already been sent out to service users explaining the change in branding to them. The partners plan to invest €1 billion in the joint venture. (Daimler)
  • Opening a new technology office in Tel Aviv, Israel. (BMW)
  • Says that in a few years 2,000 people will be employed at the Dingolfing, Germany plant making components for electric vehicles, but BMW is not clear what will be made (probably battery packs and electric motors) or in how great a volume. (BMW)

Daimler (history)

  • Will reportedly only be able to produce EQC in large production numbers from November 2019 onwards, with some “VIP” customers getting their vehicles in June. (Golem)
  • BMW and Daimler’s mobility joint venture will be five different services, all branded as “something”
  • NOW: Reach Now will be multimodal travel; Free Now is for ride hailing; Share, Charge and Park Now services are self-explanatory. Emails have already been sent out to service users explaining the change in branding to them. The partners plan to invest €1 billion in the joint venture. (Daimler)
  • Recruited a 200-strong team of software developers over the past 18 months to create in car experiences. (Daimler)
  • Kicked off production of the second generation CLA at the Kecskemét, Hungary, plant. (Daimler)

FCA (history)

  • Plans to pay a €1 billion dividend from 2018 results. (FCA)
  • Told unions that there will be a series of down days through March at the Melfi, Italy, plant. (Adnkronos)
  • Allegedly under investigation for being part of a cartel fixing prices for spare parts in Europe. (Automotive News)

Ford (history)

  • Following what sounds like employee whistle-blowing, Ford has launched a series of investigations into whether analytical assumptions used in US vehicle emissions certification might have reduced the effect in the laboratory versus real world observations.  Ford was keen to stress that this was not a defeat device, and it wasn’t yet certain whether any meaningful difference would occur in tests where the problem was corrected. Ford has already alerted the authorities and engaged external experts, just to be on the safe side. (Ford)
  • A profile of CEO Hackett’s management style suggested that employees are feeling patronised by his communication style and that he has made a series of faux pas — which Hackett explains away as trolling. (Detroit Free Press)
    • Significance: Although executives were quoted defending Hackett’s management style, Bill Ford left journalists to recycle comments made in mid-2018…
  • Announced the closure of the São Bernardo do Campo factory in Brazil in addition to the withdrawal from sale of the Fiesta and heavy commercial vehicles. Ford will incur about $(100) million of accelerated D&A and $(360) million of payments to employees, supplier and (truck) dealers. (Ford)
  • Recalling around 2,100 hybrid vehicles because of an electrocution risk. (Ford)
  • Named a new head lobbyist, and also appeared to reduce Executive Chairman Bill Ford’s role since, after CEO Hackett’s appointment in 2017 global communications and government relations began reporting directly to Ford but the new lobbyist will report to the vice president of operations instead. (Ford)
  • Executives said Ford was about halfway through the redesign of major processes that CEO Hackett and others believe will deliver a step change in performance. (Automotive News)

Geely (includes Volvo) (history)

  • Volvo showed off a minor refresh to the XC90 large SUV. (Volvo)
  • Volvo issued a $215 million bond. (Volvo)
  • Volvo increased the battery size of plug-in hybrid vehicles. (Volvo)

General Motors (history)

  • Investing $20 million to increase capacity for 10 speed transmissions at the Romulus, Michigan, plant. (GM)
  • Will continue vehicle production at Detroit-Hamtramck until January 2020, rather than ceasing in mdi-2019 as previously planned. (Reuters)

Honda (history)

  • Revising the management structure of the automotive division so that there is a lead executive for sales and one for operations, almost a mirror of Ford’s set-up. (Honda)
  • Announced a series of senior management changes. (Honda)
  • Launched production of the latest Civic in India. (Autocar)
  • In addition to ceasing Civic production at Swindon (UK), Honda will also stop making the model at its Turkish plant, although Honda’s announcement indicated a continuing role. The firm’s European headquarters will remain in Swindon even after the plant closes. (Honda)
  • UK prime minister May spoke to Honda executives to complain about the closure of Swindon, her spokesperson said it was because of the shift to electric vehicles — a rationale not publicly given by Honda themselves. (Reuters)

Hyundai / Kia (history)

  • Kia will show an all-electric concept car at the Geneva show. (Kia)
  • Hyundai will start offering a performance-oriented range of SUVs in Europe. It isn’t yet clear how much the changes will be purely to the styling and how much dynamic performance might change. (Hyundai)
  • Promised Vietnam’s government that it would increase local sourcing for products assembled in the country to a minimum of 40%. (VietnamNet)

Nissan (includes Mitsubishi) (history)

  • Allegedly under investigation for being part of a cartel fixing prices for spare parts in Europe. (Automotive News)

PSA (includes Opel/Vauxhall) (history)

  • Citroën will show a small electric vehicle called AMI One at the Geneva Show. Although the package is different, the vehicle seems to be based on the same use case as Renault’s Twizy. (Citroën)
  • Invested in Chinese B2B used car platform FengChe, having recently bought into spare parts distributor UAP. (PSA)
  • (Probably) following extensive research that showed DIY was a proven counter-cyclical hedge against automotive declines in a recession, Peugeot launched a range of power tools. (PSA)
  • Images of the new all-electric Peugeot e208 (conventionally powered versions will also be available) were leaked ahead of the intended Geneva reveal. (Inside EVs)
  • Building a new B-sized SUV for Opel and Vauxhall at the Poissy, France, plant. Although the vehicle was not named it seems likely to be the Mokka. PSA has already confirmed a new generation for 2020 and over half the European market demand for the vehicle is currently imported from GM in South Korea. (PSA)
  • Allegedly under investigation for being part of a cartel fixing prices for spare parts in Europe. (Automotive News)
  • Faurecia reported full year revenue of €17.5 billion and operating income of €1.27 billion. (Faurecia)

Renault (history)

  • Said that if labour unrest in South Korea continued, Renault-Samsung could lose export vehicle production contracts that account for about half the manufacturing volume. (Nikkei)
  • Standard & Poors cut Renault’s outlook to negative. (Reuters)
  • Allegedly under investigation for being part of a cartel fixing prices for spare parts in Europe. (Automotive News)

Tesla (history)

  • Looking into a leasing product for the Model 3. (CNBC)
    • Significance: Although some observers seemed troubled by the prospect of leasing, apparently in the belief that it undermines the sales model, Ad Punctum’s 2017 analysis of Tesla sales performance suggested leasing as a key enabler to the brand’s volume aspirations.
  • CEO Musk said that Tesla vehicles would have fully autonomous driving by the end of 2019 and the company might even be comfortable with owners falling asleep at the wheel by 2020. (ARK Invest)
  • Tesla’s general counsel left, two months after being appointed. (Reuters)

Toyota (history)

  • Toyota’s Australian unit said it had successfully fended off cyber-attackers seeking customer data. (The Guardian)
  • The UK sales company’s social media arm said that high performance versions of all cars were being brought to market in the future. (The Drive)

VW Group (history)

  • Reported preliminary 2018 revenue of €236 billion and an operating profit of €13.9 billion. Analysts were troubled that the firm’s cash balance had deteriorated. Despite VW’s continuing promises to overhaul efficiency, capex and R&D were both up in real terms, and as a percentage of revenue. (VW)
  • Audi’s CEO believes that one in ten management positions should be eliminated. He said that eliminating 30% of powertrain combinations (the least popular ones) resulted in hardly any sales being lost. (Handelsblatt)
  • Bentley’s CEO says that brand’s recovery plan is already ahead of schedule. (Autocar)
  • LG Chem has reportedly threatened to supply VW Group with fewer batteries than the car maker would like if VW proceeds to build battery factories in partnership with SK Innovation. (Manager Magazin)
  • Audi reportedly told unions that it wishes to cancel the night shift at Ingolstadt to save costs. (Handelsblatt)
  • VW’s head of design gave an in-house interview talking about the challenges of electric vehicle design and the benefits of latest virtual reality gizmos. (VW)
  • Audi trumpeted the success of early trials of an internal resource allocation system that lets employees vote on the benefit of potential new projects. (VW)
  • Output at the Zwickau plant has been temporarily reduced, VW says supplier problems are to blame. (Handelsblatt)

Other

  • Hispano Suiza said it will take its €2.2 million Maguari supercar to the Geneva Show, where it will compete for attention with the… Hispano Suiza Carmen all-electric car. (Auto Express)
  • Piëch Automotive plans to unveil an all-electric sports car at the Geneva Show. (Piëch)

News about other companies and trends

Economic / Political News

  • US president Trump announced a stay of execution for tariffs on Chinese imports to give negotiators more time to reach a conclusive deal. (Reuters)

Suppliers

  • CIE Automotive’s revenue was €2.3 billion, with €190 million net profit, in the first fiscal nine months. (CIE)
  • Magna announced $40.8 billion of revenue in 2018 and $2.95 billion PBT. (Magna)
  • Tenneco reported full year revenue of $11.8 billion but won’t issue detailed financial results until later, citing the workload involved with getting the financial integration of Federal Mogul sorted out. (Tenneco)
  • Delphi had $4.9 billion of revenue in 2018 and $434 million of operating income. (Delphi)
  • Visteon announced 2018 revenue of $2.984 billion and $164 million of net income. (Visteon)
  • Faurecia reported full year revenue of €17.5 billion and operating income of €1.27 billion. (Faurecia)

Ride-Hailing, Car Sharing & Rental (history)

  • Lyft started a service called Shared Saver where passengers walk to mutually convenient pick-up spots and are delivered to an algorithmically derived drop-off point, rather than the precise intended destination. Lyft says that only a short walk will be necessary and passengers won’t pay surge pricing (for now). (Lyft)

Driverless / Autonomy (history)

  • Self-driving vehicle developer JIMU Intelligent raised $15 million from investors. (Deal Street Asia)
  • Livox unveiled a $1,499 lidar sensor that it say has comparable performance to a Velodyne 32 line unit. There is a more advanced sensor under development that will be on sale later in the year. (Livox)
  • Uber released open source visualisation software for autonomous vehicles, hoping that others will adopt the same standards. (Uber)
  • CEO Musk said that Tesla vehicles would have fully autonomous driving by the end of 2019 and the company might even be comfortable with owners falling asleep at the wheel by 2020. (ARK Invest)

Connectivity

  • In-car assistant firm German Autolabs raised €7 million. (EU Startups)

Other

  • On-demand logistics firm Lalamove raised $300 million. (TechCrunch)
  • Flying car developer Beta Technologies emerged rom stealth mode. (Clean Technica)

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Auto Industry Briefing — week ending 17th February 2019

Renault cut the cords of Ghosn’s parachute; using Brexit to bury bad news; and Americans who can’t afford their wheels. Please enjoy our auto industry and mobility briefing for 11th February to 17th February 2019. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

BMW (history)

  • Expects that US industry will grow slightly in 2019, with BMW taking a larger market share than 2018. Executives did concede that the large SUV segment (e.g. BMW X7) was “crowded”. (CNBC)
  • Issued a half-hearted denial in response to stories that it could source some 1 Series production to the Cowley, UK plant. Since the car is built on the same platform as the Mini, this would make sense in the event of no deal Brexit tariff barriers. (Oxford Mail)

Daimler (history)

  • Appointed a new CFO, Harald Wilhelm, who joins from Airbus. (Daimler)
  • CEO Zetsche said the EQC was sold out for 2019, and potentially all of 2020. (Welt)
  • Continued to stress that the firm intends to meet EU 2020 and 2021 CO2 emissions targets. Daimler says that in 2019, fleet average emissions won’t improve that much but in 2020 the benefit of large numbers of PHEVs and battery electric vehicles will kick in. (Daimler)

FCA (history)

  • Blah (More…)
  • Extended the large LCV joint venture with PSA for a further generation, adding Opel and Vauxhall derivatives. Currently all vehicles are produced at a jointly owned Italian plant (Sevel) but the agreement envisages PSA starting to build vans in the firm’s own plants. (FCA)

Ford (history)

  • Talks with VW on sharing autonomous and electric vehicle technology appear to be taking longer than both parties hoped. On driverless cars, VW’s apparent $4 billion valuation of Argo AI seems far lower than Ford had hoped and Ford’s head of markets wondered aloud on a podcast whether VW’s MEB electric vehicle platform was suitable for blue oval products in markets outside Europe and China. (Reuters)
    • Significance: There is always a risk in car company collaborations that industrial logic fails to overcome corporate machismo and short term thinking. From many angles, there is much to benefit both companies but vehicle programs are complex projects, there are always plenty of excuses why going it alone would be a bad move for product X…
  • Rumours of CFO Shanks’s retirement surfaced without much in the way of a rebuttal from Ford. Although some sources said an executive search firm have been appointed, an internal candidate appears the most plausible given the unusually high number of finance executives appointed to Ford’s top executive grade in recent years. (CNBC)
  • Recalled around 1.5 million pick up trucks because of transmission problems that could cause the vehicle to suddenly slow and two smaller recalls for door latches and faulty instrument panels. (Ford)
  • Will trial a delivery service where a full loaded van drives around main city thoroughfares, stopping to rendezvous with cycle couriers who decant the packages into smaller batches for delivery to the customer. Ford believes this may be more efficient than having a human driver sit in traffic. (Ford)
    • Significance: A van servicing several bicycle couriers would have to see a fantastic increase in utilisation to make up for the cost of the increased labour of the cycle couriers — especially if the couriers spent any length of time on empty runs back to meet it. This business model seems unlikely to bear fruit until robots can be involved.
  • Reportedly told the British prime minister that it was planning to move production abroad in the case of a no-deal Brexit. (BBC)
    • Significance: As one of the largest net importers into the UK, sourcing powertrain production to alternative sites may save Ford tariffs on imports into the EU (and assist with country of origin requirements), but it does nothing to help Ford overcome massive potential tariff headwinds on all vehicles sold in the UK.

General Motors (history)

  • Will sell electric bicycles under the Ariv brand in Europe. At around €3,000 each, it seems that GM are determined not to repeat the low pricing levels that afflicted Opel and Vauxhall. (GM)
  • Rumoured to be working on an electric pick-up truck underpinned by a Tesla powertrain. (Clean Technica)
    • Significance: Given the sketchy details, at this point the most likely explanation (aside from the story being wrong) is that GM have scavenged a Tesla powertrain to cobble together an in-house evaluation prototype. Nevertheless, some onlookers will see this information, plus the reported interest in Rivian (developers of their own all-electric truck) and start putting two and two together…
  • In a sarcastic-sounding review of an impromptu concert for workers by globetrotting megastar Sting, GM detailed the redundancy payments it was prepared to make for Canadian plant employees. (GM)
  • Took a 35% stake in connected vehicle data analysis firm Wejo in a deal worth €60 million. (EU Startups)
  • Will invest $36 million in the Lansing, Michigan, plant, but won’t say what it is for. (GM)

Honda (history)

  • Appears to have decided to shut the Swindon, UK plant when the current generation of Civic finishes in around 2022. Despite no formal announcement, politicians said they had spoken with the company and Honda made no attempt at a denial. (Sky)
    • Significance: Already poorly utilised, the plant was a clear candidate for closure when the going got tough. Brexit seems to have given Honda political cover to make a closure announcement now. The tone of statements from the UK government indicate their acceptance. Contrast that with the response of the French economy minister who vowed to fight the closure of PSA’s Hérimoncourt site, even though the firm has said that no jobs will be lost.
  • Recalling 437,000 vehicles in the US to correct problems with fuel pumps. (Detroit News)
  • Released teaser images of the near-production ready Urban EV interior. The dashboard is Model 3-esque, with three horizontal displays responsible for almost all functions. (Honda)

Nissan (includes Mitsubishi) (history)

  • Nissan reported financial results for the fiscal third quarter (Q4 2018). Revenue of 3.045 trillion yen (about $27.5 billion) was up 5.9% versus a year earlier and operating profit of 103.3 billion yen (about $930 million) was 25.4% better. Despite the improvements in the quarter, Nissan reduced full year guidance for profit and revenue, mainly due to reduced volume assumptions. (Nissan)
  • Says that a new JV plant in Algeria will cost $160 million, with operations to begin by 2021. (Nissan)
  • Renault-Nissan-Mitsubishi’s VC unit invested in PowerShare, a Chinese company that coordinates transactions between EV owners and different charging networks. (RNM Alliance)
  • Rumours continue to swirl about how Nissan will structure the role of chairman. Some of the more convoluted ideas appear to make sense only in the context of preventing Renault from controlling the role. (Reuters)

PSA (includes Opel/Vauxhall) (history)

  • Peugeot has increased UK inventory by 25% to help smooth over a no deal Brexit. (Motor Trader)
  • Extended the large LCV joint venture with FCA for a further generation, adding Opel and Vauxhall derivatives. Currently all vehicles are produced at a jointly owned Italian plant (Sevel) but the agreement envisages PSA starting to build vans in the firm’s own plants. (FCA)
  • PSA’s retail division (wholly owner dealer group) is doing so well that the plan is to hire 1,600 staff in 2019. (PSA)

Renault (history)

  • Renault reported full year 2018 financial results. Revenue of €57.4 billion fell (2.3)% versus prior year. Operating profit of €3.6 billion dropped (6.3)%, all despite a 3.2% increase in unit sales to 3,884,295. Renault blamed currency and raw materials pricing for most of the drop whilst claiming credit for pricing and cost reduction. (Renault)
  • Renault-Nissan-Mitsubishi’s VC unit invested in PowerShare, a Chinese company that coordinates transactions between EV owners and different charging networks. (RNM Alliance)
  • Claims to be making “good money” on some battery electric vehicle lines. (Seeking Alpha)
  • Won’t give Carlos Ghosn the €30 million or so in severance pay that he could have been entitled to, arguing that because he is in prison he cannot fulfil the terms of his non-compete clause (although oddly Renault retains sufficient confidence for him to remain on the board). (Reuters)

Tata (includes JLR) (history)

  • Unveiled a new inline six cylinder engine, initially available as a high performance gasoline mild hybrid. (JLR)
    • Significance: The new I6 engine is expected to also yield a diesel version, allowing JLR to wean itself completely from Ford-built V6 versions — this is the product responsible for the recently announced Bridgend job losses.

Tesla (history)

  • Suffered a small fire at the Fremont factory that Tesla said had no impact on production. (CNBC)

VW Group (history)

  • Porsche is making UK customers sign up for a potential 10% surcharge in the event of a no-deal Brexit if they have a car delivered after the end of March 2019. Since a 10% import tariff would apply to the imported cost of the vehicle (i.e. less than dealer margin and national sales company profits), Porsche would effectively be over-charging for the tariff. (Car Dealer Magazine)
  • Talks with VW on sharing autonomous and electric vehicle technology appear to be taking longer than both parties hoped. On driverless cars, VW’s valuation of Argo.ai seems far lower than Ford had hoped and Ford’s head of markets wondered aloud on a podcast whether VW’s MEB electric vehicle platform was suitable for blue oval products in markets outside Europe and China. (Reuters)
  • Announced an new initiative to rate suppliers based on their manufacturing emissions, in part because — for battery electric vehicles — more of the supply chain is outsourced. (VW)
  • VW’s Moia on-demand shuttle service plans to charge around €6 – €7 per trip. The company believes that there is a gap in the market between public transport (cheaper) and taxis (more expensive). (VW)

Other

  • McLaren extended its engine supply agreement with Ricardo and confirmed that there will be significantly more hybrids in the future. (Ricardo)
  • Electric vehicle start-up Rivian raised $700 million with Amazon making a large investment. (Rivian) Although GM were rumoured to be somehow involved, the company was missing from Rivian’s announcement, yet was content to let media know GM admires Rivian’s progress. (Reuters)

News about other companies and trends

Economic / Political News

  • European passenger car registrations in January totalled 1,226,446 units, down (4.6)% on prior year. (ACEA), the trade body expects “at best” full year 2019 sales to be about in line with 2018’s level. (ACEA)
  • The report into whether US vehicle imports constitute a national security threat (and therefore fair game for increased tariffs) landed on Donald Trump’s desk and no one was sure what it said. European politicians gave pre-emptive warnings that tariff escalation would be frowned upon. (Bloomberg)

Suppliers

  • Tower reported full year financial results. Revenue was $1.6 billion and EBITDA was $178 million, after excluding the operations in Europe and Brazil that Tower will exit. (Tower)
  • Tenneco announced the post spin off aftermarket and ride performance division will be called DRiV. (Tenneco)
  • The EU launched an anti-dumping investigation into Chinese steel wheel suppliers. (Reuters)
  • Denso is cutting senior executive ranks by almost half in a bid to increase the speed of decision making. (Denso)
  • BorgWarner already has contracts signed that will provide a $2.4 billion net increase in revenue over the next three years. (BorgWarner)
  • Bridgestone reported full year 2018 revenue of 3.65 trillion yen (about $33 billion) and operating income of 402 billion yen (about $3.6 billion). (Bridgestone)
  • AAM reported full year sales of $7.3 billion and a net loss of $(58) million including a $(486) million impairment of powertrain and casting assets. (AAM)
  • ZF opened a new plant in India making airbags and seat belts. (ZF)
  • Dana reported full year 2018 revenues of $8.14 billion and net income of $440 million. (Dana)

Dealers

  • TrueCar acquired a 20% stake in vehicle valuation firm Accu-Trade. (TrueCar)
  • Indonesian used car marketplace BeliMobilGue.co.id raised $10 million. (Deal Street Asia)
  • eBay received regulatory clearance to take over Motors.co.uk’s car sales and information websites. (Motor Trader)
  • The Federal Reserve Bank of New York said that 7 million Americans were 90 days or more behind in their car loans. (CNBC)

Ride-Hailing, Car Sharing & Rental (history)

  • Lyft’s co-founders are reportedly planning to create a super voting class of stock so that they have near-majority control after the business IPOs in late 2019. (WSJ)
  • Uber’s latest financial results showed a net loss of $768 million in Q4 2018 on net revenue of $3 billion ($14.2 billion in gross bookings). Net and Gross revenue grew at around 30% on a year-over-year basis — consistent with recent quarters. (TechCrunch)
  • Car rental start-up Virtuo raised €20 million. (EU Startups)
  • VW’s Moia on-demand shuttle service plans to charge around €6 – €7 per trip. The company believes that there is a gap in the market between public transport (cheaper) and taxis (more expensive). (VW)

Driverless / Autonomy (history)

  • California released 2018 disengagement reports for driverless vehicles testing in the state. Although Cruise and Waymo were the centre of attention, perhaps the more interesting statistic was that total miles travelled in 2018 came to only just over two million — a very low level, although around four times greater than in 2017. Around half the total test miles were by Waymo. (California DMV)
    • Significance: As testing gathers path at other locations, people are increasing vary of drawing firm conclusions from the Californian numbers. Even in Waymo’s case, far more miles are covered outside of California than inside.
  • Autonomous truck developer TuSimple raised $95 million. (Reuters)
  • Self-driving vehicle start-up Nuro raised $940 million from SoftBank. (Nuro)

Electrification (history)

  • The French government plans to invest €700 million into battery cell manufacturing and charging networks in the hope of encouraging a European (read Franco-German) battery champion. (Reuters)
  • WiTricity took on Qualcomm’s wireless charging assets in exchange for a minority shareholding. (Inside EVs)
  • Renault-Nissan-Mitsubishi’s VC unit and BP invested in PowerShare, a Chinese company that coordinates transactions between EV owners and different charging networks. (RNM Alliance)

Connectivity

  • NavInfo will provide maps for BMW cars in China. (Economic Times of India)
  • Mapping firm Dynamic Map Platform reportedly plans to acquire smaller rival Ushr. (Reuters)
  • Connected vehicle data analysis firm Wejo raised €91 million, with GM taking a 35% stake. (EU Startups)
  • Vehicle cyber security firm C2A Security raised $6.5 million. (FINSMES)

Other

  • A cyber security firm announced that it could remotely control the brakes and acceleration of some electric scooters, but as the hack relies on Bluetooth, it only works close to the scooter. Scooter companies said they had known about the problem for ages and replaced vulnerable hardware. (The Verge)
  • Shell acquired all of Sonnen, a home energy management firm it previously invested in. (Clean Technica)
  • Bicycle sharing firm Ofo lost its Singapore operating licence. (Straits Times)

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Auto Industry Briefing — week ending 10th February 2019

PSA’s continued efficiency drive; when Renault-Nissan-Mitsubishi met Waymo; and JLR’s big write-down. Please enjoy our auto industry and mobility briefing for 4th February to 10th February 2019. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

Daimler (history)

  • Reported Q4 and full year 2018 financial results. Full year revenue of €167 billion rose 2% from 2017 but EBIT of €11.1 billion, down (22)%. Daimler said that profits would be under pressure in 2019 because of negative economic headwinds and the need to maintain product spending. (Daimler)
  • Production problems at the plant in Mexico are rumoured to be so bad that full year A-Class production could miss targets by (20)%. (Handelsblatt)
  • Outgoing CEO Zetsche said that Daimler and Geely are discussing a broader cooperation, but declined to give any specific details. (Reuters)
  • Mercedes-Benz and electricity supplier TenneT declared an experimental 1MW stationary storage to be a success and will now attempt to develop a commercial proposition. (Daimler)
  • Outgoing CEO Zetsche suggested that a conversion to electric cars would mean demand for labour increased rather than reduced. (Handelsblatt)
    • Significance: This conclusion is confusing given the relative labour hours in an electric drivetrain compared to an internal combustion engine and can be reconciled only by a future state in which hybrid powertrains (i.e. two engines) become the dominant powertrain choice (with very little downsizing). Zetsche’s relaxed attitude suggests Daimler might not be taking the threat as seriously as it should.

FCA (history)

  • Sold 1.177 million units in the fourth quarter of 2018 (4.842 million in the full year). (FCA)
  • Reported Q4 2018 and full year financial results. Q4 revenue of €30.6 billion rose 6% on prior year whilst adjusted EBIT of €2.0 billion was up 7%. In the full year, revenue of €115.4 billion was up 4% and adjusted EBIT of €7.3 billion was 3% better. FCA’s guidance for 2019 was for EBIT to be about the same (on a like-for-like basis after the sale of Magneti Marelli). (FCA)
  • Paid $77 million in penalties for missing US fuel economuy requirements in 2016. (Reuters)
  • Doesn’t believe that it needs a partner to make a cost effective European small car. (Seeking Alpha)
  • Recalling about 660,000 pickup trucks to fix an issue with the steering. (FCA) and another 222,000 pickup trucks because of problems with the brake pedals. (FCA)

Ford (history)

  • Investing over $1 billion to produce the next generation Explorer and Lincoln Aviator in Chicago, including $40 million for better canteen and break areas. (Ford)
  • Recalling around 3,500 brand new Ranger pick-up trucks to fix problems with the parking brake. (Ford)
  • Launched a mid-cycle update of the F-Series Super Duty pickup trucks. (Ford)

Geely (includes Volvo) (history)

  • Outgoing Daimler CEO Zetsche said that Daimler and Geely are discussing a broader cooperation, but declined to give any specific details. (Reuters)
  • Volvo reported full year 2018 revenue of 252.7 billion SEK (about $27 billion), a 12.4% increase on 2017 and operating profit of 14.2 billion SEK (about $1.5 billion), up 0.9%. Volvo is concerned about pressure on margins in 2019. (Volvo)
  • Volvo will recall 167,000 XC60 vehicles to fix problems with the electric tailgate. (Reuters)
  • Volvo’s CEO said there is a lot of investor interest in Polestar and funding could be obtained via a private placement rather than IPO. (Economic Times of India)

General Motors (history)

  • Reported Q4 and full year 2018 earnings. Q4 revenue of $38.4 billion, was up 1.8% from 2017 but adjusted EBIT fell (8.3)%. On a full year basis, Revenue was $147 billion and adjusted EBIT was $11.8 billion. GM said the results already included a lot of restructuring costs that would improve profits in future years. (GM)
  • Began firing 4,000 US salaried staff and walking them off company premises. Payouts are a maximum of 6 months salary for those with 12 years or more of service. (Detroit Free Press)
  • Suffered production stoppages at the Oshawa, Canada plant due to strikes at a local supplier. (Reuters)

Honda (history)

  • Agreed a supply deal with CATL for 56 GWh of electric car batteries between now and 2027. (Honda)

Mazda

  • Released financial results for the nine months ending December 2018. Unit sales were slightly down but revenue of 2.622 trillion yen (about $23.75 billion) was up 3% on a year earlier. However, operating profit of 59.6 billion yen (about $540 million) fell (37)%. Mazda slightly improved the full year outlook. (Mazda)
  • Will unveil a new SUV at the Geneva show. (Mazda)

Nissan (includes Mitsubishi) (history)

  • Nominated Renault’s new chairman as a director but stopped short of recommending him as chairman. (Nissan)
  • Renault Nissan Mitsubishi is rumoured to be in talks with Waymo to use the latter’s self-driving system. (Nikkei)
  • Started production of the Qashqai in St Petersburg, Russia. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Reportedly intends to shed a net 500 jobs in France during 2019, with 1,900 existing workers to be let go and 1,400 new hires coming in. (Les Echos)
  • Acquired TravelCar, a parking and rental start up that PSA had previously invested in. (PSA)
  • Plans to close Hérimoncourt, offering to transfer all affected employees. Workers walked out in protest. (France Info)
  • Opel is switching to an importer model in Greece (the same structure as other PSA brands in the country). (Opel)

Renault (history)

  • Renault Nissan Mitsubishi is rumoured to be in talks with Waymo to use the latter’s self-driving system. (Nikkei)
  • Reportedly criticised Nissan’s handling of the investigation into Carlos Ghosn in a letter between the two alliance partners. Renault pointed to Nissan arranging Ghosn’s arrest rather than questioning him first as an example of where it believes the probe should have been handled differently. (Economic Times of India)
  • The French government has apparently signalled to its Japanese counterpart a willingness to consider reducing Renault’s stake in Nissan to create greater balance in the relationship. (Nikkei)

Suzuki

  • Announced financial results for Q4 2018 (Suzuki’s fiscal third quarter). Revenue of 894 billion yen (about $8.1 billion) rose 2% on a year over year basis but operating income of 58 billion yen (about $530 million) was down (33)%. Suzuki maintained guidance for the full year. (Suzuki)

Tata (includes JLR) (history)

  • Tata Motors reported financial results for Q4 2018 (fiscal third quarter), including JLR. Revenue of 77,001 Cr rupees (about $10.8 billion) was up 5% versus prior year. An after tax loss of (26,961) Cr rupees (about $3.8 billion) was explained by a massive (27,838) Cr rupees / £3.1 billion write down of JLR’s assets. (Tata)
    • Significance: Although JLR explained the issue as a re-evaluation of the company’s long term outlook, many will be wondering how a change in conditions significant enough to merit writing down over 25% of the property and intangible assets can have crept up so stealthily.
  • JLR’s treasurer said the firm was looking for ways to access cash but that it would stay away from unsecured bonds because market conditions are “unfavourable”. (Detroit News)
  • Believes that even with a no deal Brexit, a negotiated settlement will happen “sooner or later” and admitted it was “uncertain” whether the company could pass on tariffs in pricing to customers. (Seeking Alpha)

Tesla (history)

  • Deep cuts in the team that mans Tesla’s Nevada distribution centre (150 out of 230 apparently made redundant) led to speculation that US demand in 2019 will be far lower than 2018. (Reuters)

Toyota (history)

  • Released financial results for fiscal third quarter of 2018/19. Revenue of 7.8 trillion yen (about $70.7 billion) was slightly better than prior year, so was operating income of 676.1 billion yen (about $6 billion) Toyota reduced full year outlook for net income by 430 billion yen (about $3.9 billion) and slightly reduced sales volume guidance, although operating income forecast remains the same. (Toyota)
  • Announced some details of the Kinto car subscription offering for the Japanese market. Subscription terms will be three years and customers will have a choice between driving the same Toyota the whole time or flexing between six types of Lexus. At 194,400 yen per month (~ $1,760), the Lexus scheme is more expensive than similar US offerings from the likes of Audi, despite the long lock-in period. (Toyota)

VW Group (history)

  • VW has reportedly abandoned plans to fit the sporty GTI derivative of the next generation Golf with a 48V augmented gasoline engine. The technology will still be used on more economy-minded derivatives. (Autocar)
  • As rumours swirled of a plan to sue Bosch heavily for the firm’s role in the US diesel scandal, VW refused to comment whilst Bosch said the idea was unimaginable. (Handelsblatt)
  • Will launch the updated Passat at the Geneva show. VW confirmed that there is a PHEV derivative with around 55 km of WLTP range and there will be a “partially automated” driving function called IQ.Drive. VW implies that IQ.Drive, an amalgam of different systems such as adaptive cruise, lane keeping and emergency steering will capably drive on the highway so long as the driver keeps their hands on the steering wheel. (VW)
  • VW overhauled its system for staff to submit improvement ideas — and upped the maximum payout to €75k. (VW)
  • VW Financial Services acquired a 60% stake in Fleet Logistics, folding in the CarMobility subsidiary. (Fleet Europe)
  • Seat will work overtime during March because of strong demand for the Ibiza and Arona. (Europa Press)

Other

  • Lucid Motors executives said the company was in talks with other carmakers about sharing electric vehicle technology. (Bloomberg)
  • Subaru reported earnings for fiscal third quarter. Revenue of 891 billion yen (about $8.1 billion) was about 7% better than a year ago and operating profit of 99 billion yen (about $900 million) was about 5% better.  Subaru revised full year figures downwards for drops in sales volume and higher raw material costs. (Subaru)
  • Isuzu reported fiscal Q3 2018/19 financial results. Revenue of 553.4 billion yen (about $5 billion) rose 7% whilst operating income of 56.6 billion yen (about $510 million) improved almost 16%. (Isuzu)
  • Subaru unveiled the next generation Legacy sedan. (Subaru) and announced that it will badge electrified derivatives as “e-Boxer”. (Subaru)
  • Pininfarina wants between 25 to 40 dealerships to sell the Battista hypercar. (Pininfarina)
  • Aston Martin will show a Lagonda-badged SUV at the Geneva show. (Aston Martin)

News about other companies and trends

Economic / Political News

  • Germany’s economy minister suggested the country could create an investment fund to take strategic stakes in key sectors, including car making, to protect national champions from foreign predators. (Reuters)
  • Passenger car registrations in the UK during January were 161,013 units, a fall of (1.6)% versus 2017. (SMMT)
  • German passenger car registrations of 265,702 units in January were (1.4)% worse than prior year. (KBA)

Suppliers

  • Adient reported quarterly financial results. Revenue was $4.2 billion and adjusted EBIT was $105 million. (Adient)
  • Freudenberg acquired a 50.1% stake in battery developer XALT — up from 31.8%. (Freudenberg)
  • Denso invested in chip developer quadric.io. (Autocar)
  • ZF is expanding its plant in Pune, India by about 25%. (Autocar)
  • Wiring harness maker Dhoot Transmission acquired San Eletromec. (Economic Times)
  • Michelin plans to acquire Multistrada. (Deal Street Asia)
  • Goodyear reported Q4 financial results. Revenue was $3.9 billion on 40.7 million unit sales. (Goodyear)
  • Continental completed the acquisition of communications equipment maker Kathrein Automotive. (Continental)
  • Bosch is planning to acquire LAWA Solutions, a developer of networking software. (Bosch)

Ride-Hailing, Car Sharing & Rental (history)

  • Keen to push the boundaries of on-demand transportation, Uber launched a boat hailing service in Mumbai. (CNN)
  • Ride hailing firm Chauffeur Privé is changing its name to Kapten and plans to launch in London and Geneva. (FT)

Driverless / Autonomy (history)

  • AGC and XenomatiX have teamed up to offer lidar integrated into the vehicle windshield. (Sensors Online)
  • Waymo’s CTO gave an interview describing how the challenges of self-driving vehicle development have evolved over the past decade. (TechCrunch)
  • Aurora raised $530 million, with Amazon amongst the investors. (CNN)
  • Self-driving truck start-up Ike raised $52 million. (Redpoint)
  • Renault Nissan Mitsubishi is rumoured to be in talks with Waymo to use the latter’s self-driving system. (Nikkei)

Electrification (history)

  • A test by the AAA, a US consumer group, found that battery electric vehicles lost 41% of the stated range (on average) when operating in sub zero conditions with climate control on. Tesla disputed the report. (CNBC)
  • Workhorse bagged an order from DHL for electric vans. (DHL) The COO will become the new CEO. (Workhorse)
  • Honda agreed a supply deal with CATL for 56 GWh of electric car batteries between now and 2027. (Honda)

Other

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Auto Industry Briefing — week ending 3rd February 2019

Self-driving cars we can’t understand; smart cars doing stupid things; and Koenigsegg are in the money. Please enjoy our auto industry and mobility briefing for 28th January to 3rd February 2019. A PDF version can be found here.

Before you read the detail, what were my favourite stories of the past week…?

  • We Can Work It Out British drivers were quizzed about what an autonomous car should do in an accident scenario. As I’ve covered here before, the exercise is pointless. Doing this for one scenario might be straightforward and headline grabbing, but life is made up of thousands of examples — probably impossible for any group to agree on and properly codify. However, it is illustrative of how lay people (i.e. the type that might sit on juries) think about driverless cars. They expect fantastic object recognition; scene understanding and rules-based decisions. The AI industry’s dirty secret is that we don’t know how a deep neural network is thinking (just how it was trained), or how to impose new rules without going back to square one. What will jurors (and judges) make of that?
  • Falling Into You A NIO SUV trapped its driver and shut down in the middle of a busy street to perform a system update. Unfortunately, nearly everything about legacy vehicle electronics assumes that they will not be touched. Launching over the air updates can make cars far smarter when it all goes right but here the car was stupid enough to allow an update in an unsuitable situation. How many other car makers will suffer Nio’s fate as they iron out the creases?
  • A King Is Born A deal between Koenigsegg and NEVS aims to deliver a set of more affordable, all electric sportscars. Exactly how cheap they will be isn’t clear, and €150 million can be easily squandered. But spent wisely it might be possible to do something on a Model S scale. Fingers crossed.

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

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News about the major automakers

Daimler (history)

  • Unveiled a mild facelift for the V-Class. (Daimler)

FCA (history)

  • Cancelled shifts at two assembly plants after the gas utility reported supply shortages and requested help in prioritising homes and emergency services. (Reuters)
  • It looks as though the Fiat brand will be withdrawn from the Indian market at the end of 2019. (Autocar)

Ferrari

  • Reported full year 2018 financial results. Sales of 9,251 units rose 10.2% on 2017 but revenue of €3.42 billion was up only 0.1%. Adjusted EBIT of €825 million was 6% better than prior year and Ferrari believes this will grow a further 6% in 2019. (Ferrari)

Ford (history)

  • Scheduling “massive overtime” to build the newly launch Ranger pick-up truck for North America. (Bloomberg)
  • Launched a redundancy scheme at the Bridgend, UK, engine plant. Ford wants to separate around 400 members of staff by the end of 2019. (Sky News)
  • French civil servants ordered Ford to give more time to the prospective bidder for the Bordeaux transmissions plant (slated for closure). Punch Powerglide will have a few weeks to improve the quality of its bid. (Les Echos)

Geely (includes Volvo) (history)

  • Issued a statement denying that it was interested in buying FCA. (Geely)
  • Lotus announced a wide-ranging collaboration with Williams. Although the press release was framed in generic terms, specialist media are convinced it is all part of the plan to deliver a much-rumoured all-electric hypercar. (Lotus)
  • Opening a new Geely design office in Coventry, which could ultimately employ 100. (Geely)
  • Proton released pictures of the refreshed Iriz B car. (Proton)

General Motors (history)

  • May invest around $2.7 billion in its Brazilian operations between now and 2024, if it receives enough government support. (Reuters)
  • The head of GM’s mobility business left the company. (Detroit News)
  • Temporarily stopped production at several Michigan factories after the gas utility reported supply shortages and requested help in prioritising homes and emergency services. (Reuters)

Honda (history)

  • Produced 5,357,013 vehicles in 2018, up 2.3% on 2017. (Honda)
  • Reported Q4 2018 financial results (Q3 of Honda’s financial year). Revenue of 3.973 trillion yen (about $36 billion) was slightly up on a year earlier but operating profit of 170 billion yen (about $1.6 billion) was over (40)% worse. Honda maintained full year profit guidance, and slightly raised the revenue outlook despite weakness in motorcyles and power products. (Honda)

Hyundai / Kia (history)

  • Hyundai agreed to build a new low cost factory in South Korea in a joint venture with the local government (19% Hyundai stake). Local unions are not happy but the deal has the president’s support. Wages will be almost one third of the average unionised Hyundai employee in South Korea. (Reuters)
  • Hyundai’s MNSOFT subsidiary will develop next generation maps with help from Netradyne. (Vision Systems)

Mazda

  • Produced 1,596,767 units in 2018, a (0.7)% drop on a year earlier. (Mazda)
  • Purchased Ford’s interest in a joint venture engine plant in China. (Mazda)

Nissan (includes Mitsubishi) (history)

  • Nissan sold 5,653,683 vehicles in 2018, a drop of (2.8)% from 2017. (Nissan)
  • Reversed a plan to produce the next generation X-Trail in Sunderland, UK as a satellite plant of the main Kyushu, Japan factory. Instead, all production will be single-sourced to Kyushu. Nissan explained the decision as capital allocation in the face of high powertrain investment requirements, but said Brexit was not helping. (Nissan)
  • Sources say the production rate of Infiniti Q30 and QX30 models at Sunderland has fallen to below 25 cars per day, from a high of around 450. (Sky)
  • The UK government said that a grant of £60 million to Nissan would be unaffected, then changed tack and stated that almost the entire value was up for debate following the X-Trail decision. (BBC)
  • Carlos Ghosn gave an interview from prison attributing his detention to a plot from Nissan executives set against his integration plans for Renault, Nissan and Mitsubishi. Ghosn described a plan for an umbrella holding company that would own all three OEMs but allow them considerable arm’s length autonomy.  Nissan’s reservations appeared to stem from Ghosn guaranteeing equilibrium only if each unit displayed “solid performance”, something he implied that Nissan was failing to deliver. (Les Echos)
  • Mitsubishi reported financial results for Q2 -Q4 2018 (fiscal first to third quarter). Net sales of 1.518 trillion yen (about $13.8 billion) were up 18% versus 2017 whilst operating profit of 85 billion yen (about $770 million) rose 31%. Mitsubishi reaffirmed full year outlook. (Mitsubishi)
  • Mitsubishi teased an electrified SUV concept named Engelburg (after a Swiss town) it will bring to the Geneva show. The brand was silent on rumours of a sub-series named after the Yorkshire town of Hambleton. (Mitsubishi)

Renault (history)

  • Will start a new night shift at the Palencia, Spain, plant in April 2019 thanks to demand for Kadjar. (Europa Press)
  • Carlos Ghosn gave an interview from prison attributing his detention to a plot from Nissan executives set against his integration plans for Renault, Nissan and Mitsubishi. Ghosn described a plan for an umbrella holding company that would own all three OEMs but allow them considerable arm’s length autonomy.  Nissan’s reservations appeared to stem from Ghosn guaranteeing equilibrium only if each unit displayed “solid performance”, something he implied that Nissan was failing to deliver. (Les Echos)

Suzuki

  • Produced 3,436,589 units in 2018, a 4.1% increase on 2017. (Suzuki)

Tata (includes JLR) (history)

  • No longer planning a limited edition, mega expensive, coupe version of the Range Rover. (Motor 1)

Tesla (history)

  • Reported financial results for Q4 2018. Automotive revenue of $6.3 billion was up 134% on a year-over-year basis and 4% quarter-over-quarter. Income from operations was $413 million and net income was $139 million, both much improved versus losses in 2017. (Tesla)
  • Tesla’s deposits continued to fall (see historical chart here), even though new products (Semi and Roadster) carry very high reservation fees and the entry of Model 3 into production must have boosted accruals. On the conference call, Tesla’s CFO batted away questions about reservation numbers saying they were “not relevant”. (Tesla)
  • Expects to build the Model Y at the Gigafactory in Nevada, rather than Fremont. (Seeking Alpha)
  • Is now talking about 10,000 units per week of Model 3 from Fremont and Shanghai combined, walking back from original comments about US production capacity targets. CEO Musk believes that even in a recession there is annual demand for 500,000 Model 3. (Seeking Alpha)
  • Tesla’s CFO retired (again), to be replaced by 34 year old company veteran Zack Kirkhorn. (Bloomberg)
  • Changed the naming convention of Model S and X vehicles so that the battery size is no longer mentioned and instead range is expressed in qualitative terms. (Clean Technica)
  • Buying ultracapacitor firm Maxwell Technologies for $218 million. (CNBC)

Toyota (history)

  • The mobility joint venture between Toyota and SoftBank has been named Monet. (Toyota)
  • Produced 10,567,412 vehicles globally  in 2018, down (1)% on 2017. (Toyota)

VW Group (history)

  • Wants the MEB electric vehicle platform to be used by other OEMs and become a standard for them. (VW)
  • Plans to have a sub €20,000 all-electric car on sale in Europe by 2023 to 2024. (Autocar)
  • The first 200 E-Tron SUVs have a limited edition specification and €106,000 price tag. (Handelsblatt)
  • Continuing strike action at Audi’s Hungarian plant led to stoppages at German factories. (Reuters)
  • Over 50% of Porsche employees were born after 1979. (Porsche)
  • Will reduce the workforce in Slovakia, primarily through non-renewal of fixed term contracts and by ending the secondment of 500 Hungarian Audi staff. (Reuters)
  • Porsche Taycan buyers in the USA will get three years of free charging, providing they use stations owned by parent VW’s Electrify America subsidiary and only stay for half an hour. (Porsche)
  • Signed an MoU with the Ethiopian government to establish local assembly and component supply. (VW)
  • Said that diesel orders in Germany have started to pick up again with new 2018 orders having a 43% diesel mix, up from 39% in 2017. (VW)
  • Expanding the Audi on demand service to Spain following trials in the UK. At around £2,200 for a one month loan of an A4 saloon, the offering doesn’t differentiate on price from major daily rentals. (Audi)
  • Porsche may be fined after admitting it submitted incorrect fuel economy figures during the homologation of the prior series 911. (Autocar)

Other

  • Subaru produced 1,019,364 vehicles in 2018, down (5.0)% on a year earlier. (Subaru) Production at Gunma restarted after a 12 day suspension. (Subaru)
  • NIO is hoping to raise $650 million through a convertible bond due in 2024 to fund expansion. (NIO)
  • Koenigsegg announced a tie up with NEVS that will see NEVS buy a 20% stake in the hypercar maker for €150 million and the creation of a joint venture. NEVS will get 65% of the JV in return for $150 million in cash, Koenigsegg will get 35% by contributing technology.  The announcement implies that NEVS will produce a line of mass-market Koenigsegg-branded vehicles. (Koenigsegg)

News about other companies and trends

Economic / Political News

  • Germans have started protesting plans to ban older diesel models from city centres. Protester numbers are small but growing. (Handelsblatt)
  • The UK government published the 2016 letter it had given Nissan containing “assurances” around Brexit. This turned out to be confirming the “critical priority of our negotiation to support UK car manufacturers and ensure that their ability to export to and from the EU is not adversely affected” by Brexit — something at odds with the government’s refusal to rule out a no-deal Brexit less than two months before the scheduled exit date. (UK Govt)
  • The German government ruled out the possibility of imposing speed limits on unrestricted parts of the autobahn as a method of reducing pollution. (Manager Magazin)
  • US light vehicle SAAR of 16.6 million units was about (3)% worse than prior year. (Wards)
  • French passenger car registrations of 155,080 units in January were down (1.1)% on a year earlier. (CCFA)
  • Spanish passenger car registrations fell (8)% in January versus a year earlier to 93,546 units. (ANFAC)
  • Italian passenger car registrations in January fell (7.6)% on a year over year basis to 164,864 units. (UNRAE)

Suppliers

  • Autoliv reported quarterly revenue of $2.19 billion, up 1.6% from a year earlier. (Autoliv)
  • Bosch reported full year revenue of €78 billion with a 6.9% EBIT margin. (Bosch)
  • Nexteer launched two Indian sites, one for software development and a steering components factory. (Nexteer)
  • Osram agreed to buy aftermarket lighting supplier Ring Automotive. (Ring Automotive)
  • After receiving regulatory approval, Faurecia announced a one month tender period for Clarion shareholders to submit their stock for the offer price. If they don’t, Faurecia intends to squeeze them out anyway. (Faurecia)
  • Akebono is looking for fresh capital and relief from near term debt repayments. The firm apparently hopes that shareholder Toyota will be forthcoming with some cash. (Reuters)
  • Minda Industries purchased the telematics hardware business of KPIT. (Deal Street Asia)
  • Meritor reported Q4 2018 revenue of $1.0 billion, up about 15% on a year earlier. (Meritor)

Dealers

  • SoftBank will reportedly invest $1.5 billion in Chinese used car sales site Guazi.com. (Deal Street Asia)
  • UK used car prices fell by more than the seasonal average in January, leading to concerns about weaker consumer demand. (Motor Trader)
  • German used car sales site Scout24 is apparently a takeover target for used car trader Auto1. (Reuters)
  • Carly will soon launch a pan-brand car subscription scheme in Australia that will package all bills into a single monthly payment with no long-term lock-in. (Auto Rental News)

Ride-Hailing, Car Sharing & Rental (history)

  • Uber has started trials of including public transport data inside its app. (The Verge)
  • Grab is planning to add video streaming to its app – but it will only be free for the first three months. (CNBC) The firm is planning to move into a swanky new $135 million headquarters at the end of 2020. (Reuters)
  • Lyft’s 2019 impact report said that about 50% of car owners using the service (and responding to Lyft’s survey) use their cars less as a result. (Lyft)
  • Lyft is taking legal action against New York’s transport regulator saying proposed rules to ensure a minimum wage for ride hailing drivers are poorly constructed and hand an advantage to Uber. (Lyft)

Driverless / Autonomy (history)

  • Embark, a developer of self-driving trucks, released a disengagement report. The data is slightly different to those from self-driving car companies in that drivers are constantly active in Embark’s trucks and so the disengagement number comes from simulations of what the AI would have chosen compared to what the driver did. (Embark)
  • Didi is reportedly contemplating headquarters staff cuts of up to 20%, whilst increasing the number of people working on development and safety. (Reuters)
  • Autonomous vehicle insurance specialist Avinew raised $5 million. (FINSMES)
  • Magna’s CEO said the target price for lidar was now substantially below $1,000. (Automotive News)
  • Daimler thinks autonomous cars should signal intent through the medium of turquoise lights. (Daimler)
  • A survey of by a UK drivers’ group found that a majority thought that a self-driving car should endanger its passengers in order to avoid putting children in harm’s way. (The IET)
    • Significance: We can expect plenty more of these simplistic, worst case, trolley problems to emerge (this isn’t the first such study). Self-driving developers need to formulate a response to a public perception that: 1) places a far higher standard on the robot than another human being and 2) expects a level of situational awareness that is far more complex than the current state of the art.

Electrification (history)

  • Shell purchased charging network Greenlots. (Green Car Reports)
  • VW’s Electrify America charging subsidiary confirmed that at present the cost of a multi-charger station is between $500,000 – $1,000,000, but that part of this was future-proofing for 350 kW. (Inside EVs)
  • VW wants the MEB electric vehicle platform to be used by other OEMs and become a standard for them. (VW)
  • Tesla is buying ultracapacitor firm Maxwell Technologies for $218 million. (CNBC)

Connectivity

  • NIO will investigate system update protocols after an SUV stopped and updated during a test drive, causing a major traffic jam on a busy street. The hapless occupants were stranded inside for an hour whilst the car updated and rebooted, unable to converse with the angry mob who surrounded the car demanding it move along. (The Verge)
  • Hyundai’s MNSOFT subsidiary will develop next generation maps with help from Netradyne. (Vision Systems)

Other

  • Brazilian scooter rental firms Grin and Yellow will merge and rebrand as Grow Mobility. (TechCrunch)
  • Bird’s CEO said the company was focused on scooters in the short term but was interested in different forms of short range electric vehicles for the future. (TechCrunch)

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Auto Industry Briefing — week ending 27th January 2019

Old-fashioned electric cars; bicycles that ride themselves; and do panics really only start once everyone is ready? Please enjoy our auto industry and mobility briefing for 21st January to 27th January 2019. A PDF version can be found here.

Favourite stories of the past week…?

  • This Is Acid Chinese brand Kaiyun Motors intend to sell a small pick-up for $5,000. It’s only a bit bigger than a golf cart and it doesn’t go very fast but it made me wonder whether we’ve become too obsessed with lithium ion and are missing use cases where lower status battery chemistries could do the job now, without needing to wait for a decade of cost reduction?
  • Moving On UpUber have a crack team developing electric scooters and bicycles that will autonomous move themselves around. The idea seems to be less about getting customers to their destination and more about fleet redeployment and connecting to charging stations. That all makes it much more low speed… and doable. Might autonomous stealthy bicycles be the next big thing?
  • No SuprisesJLR will take an additional week of shutdown in April to ride out any no deal Brexit. Although I applaud the simplicity of the approach (as I did when BMW led the way), I do wonder if the maths is quite right though. If we are truly headed for a no deal Brexit, do OEMs really think that continental hauliers are going to stick around on UK roads until one second to midnight? More likely they will clear off days ahead rather than risk getting stuck. Having enough parts in stock to make it to Brexit might prove to be a flight of fancy…

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

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News about the major automakers

BMW (history)

  • Reportedly planning to name the BMW-Daimler mobility joint venture “Jurbey”. (The Drive)
  • Invested in roadside assistance firm Urgent.ly. (BMW)
  • Reorganising sales regions so that all of Asia (excluding China), non-EU former Soviet bloc countries and Middle East and Africa will fall under a single manager. (BMW)

Daimler (history)

  • Building a new factory for batteries in Poland on the site of a newly-launched engine plant. (Daimler)
  • Selling its share in electric motor JV EM-motive to partner Bosch. (Bosch)
  • Daimler believes that Chinese companies are more advanced than US counterparts in “many areas” of digital technology and connectivity. (Reuters)
  • Reportedly planning to name the BMW-Daimler mobility joint venture “Jurbey”. (The Drive)
  • Echoing earlier press releases by VW trumpeting their commitment to electrification, Daimler said it had placed orders for €20 billion of battery cells. It also wants suppliers to become more flexible to changes in demand between internal combustion engine and electric vehicles and make greater cost reductions. (Daimler)

FCA (history)

  • Magneti Marelli will expand its US headquarters. (Detroit News)

Ford (history)

  • Reported Q4 2018 revenue of $41.8 billion and a net loss of $(0.1) billion on a GAAP basis (previewed in a conference presentation a week earlier). In the full year, only the North American region was profitable. (Ford)
  • Said that the EBIT effect of the $11 billion of restructuring actions would have almost all been booked by 2020 (i.e. the actions would have been announced) and the $7 billion cash effects would have largely finished by 2021 (i.e. the affected people would have left the business). (Ford)
  • CEO Hackett told employees that he was angry with 2018’s results and would soon be planning the implementation of as yet unannounced actions to markedly improve operating performance and profitability. (Detroit News)
  • Analysts didn’t ask Ford how much a hard Brexit would cost it in 2019, so the figures ($800 million on top of existing sterling devaluation) were leaked, and then confirmed, to media outlets instead. (Sky News)
  • The limited edition suicide door equipped $110,000 Lincoln Continental sold out in 48 hours. (Detroit Free Press)

Geely (includes Volvo) (history)

  • The Kandi electric vehicles JV announced a deal to supply 300,000 electric vehicles to deliver ride hailing services in China.  The expectation is that they will replace privately owned cars. (Kandi)
  • Volvo is recalling about 200,000 cars to fix potential fuel leaks. (Auto Express)

General Motors (history)

  • Working towards a revamp of the Cadillac subscription service, but not until it has worked out how to increase the involvement of the dealers. (Automotive News)
  • Canadian unions called for a boycott of Mexican-made vehicles in protest at GM’s closure of a local plant. GM took the threat seriously enough to issue a press release saying why it thought that was a bad idea. (GM)
  • Investing $22 million in the Spring Hill, USA, plant to introduce an upgraded engine. (GM)

Honda (history)

  • At Geneva, Honda will unveil a near-production version of the small all-electric city car that has been developed from the 2017 Urban EV Concept and the car will go on sale in late 2019. (Honda)

Hyundai / Kia (history)

  • Hyundai reported Q4 2018 and full year financial results. Q4 revenue of 25.67 trillion KRW (about $23 billion) was up 4.8% on the same period a year earlier. Operating income of 501 billion KRW (about $450 million) was down (35.4)%. In the full year, revenue was up 0.9% and profit fell (47.1)%. (Hyundai)
  • KIA reported Q4 2018 and full year financial results. Q4 revenue of 13,.47 trillion KRW was 3.5% better than Q4 2017, operating profit of 382 billion KRW was 26% up. Full year revenue of 54.17 trillion KRW (about $48.3 billion) fell (1.2) on a year earlier. Operating profit of 1.16 trillion KRW (about $1 billion) was down (74.8)%. (KIA)
  • Launching a new multi-collision airbag to improve crash performance from secondary impacts. (Hyundai)
  • Reportedly implementing a turnaround plan at its Chinese joint venture that will see 1,500 jobs eliminated. (Reuters)

Nissan (includes Mitsubishi) (history)

  • The French president reportedly told Japan’s prime minister that Nissan and Renault should both have the same chairman (i.e. Renault’s recently appointed ex-Michelin boss). (Les Echos)
  • Following Nissan’s upheaval over executive pay the SEC is said to have started its own investigation. (Reuters)
  • Nissan’s CEO said he will step down once he has reformed the governance structure. (Automotive News)

Renault (history)

  • Avtovaz committed to spend about $1 billion in Russia over the next ten years, create 2,300 jobs and increase the amount of localisation. (Renault)
  • Renault has withdrawn the Twingo from sale in the UK. Falling sales were blamed. (Autocar)
  • Carlos Ghosn resigned from Renault and was replaced (exactly as the French government had hoped, coincidentally) with Jean-Dominique Senard as chairman and Thierry Bolloré as CEO. (Renault)
  • Senard will continue in his existing role of Michelin CEO until May 2019. (Michelin)

Suzuki

Tata (includes JLR) (history)

  • JLR factories will close from 8th April to 12th April as a precaution against post-Brexit disruption. (JLR)
    • Significance: Since the scheduling is for the second week of April rather than the first, either JLR are holding at least one week’s supply of parts (seemingly in contradiction to industry hand-wringing over just in time supply chains), or reduced demand is also a factor.
  • JLR claimed the I-Pace program took only three years. This contradicts conventional industry wisdom and Jaguar’s puff piece documentary into the program “Jaguar: Going Electric” which says the project began in 2014 (02:35 in for Amazon Prime subscribers). (Autocar)
  • Invested in roadside assistance firm Urgent.ly. (Porsche)

Tesla (history)

  • Cutting production hours for Model S and Model X after dropping the 75 kWh derivatives. Tesla also said it was because of improved productivity. (Reuters)
    • Significance: With demand for Model S already appearing to drop off; Model X approaching a plateau; actions from Tesla to distance bottom-end derivatives from Model 3, reductions in sales of the two models seem inevitable unless Tesla undertakes a significant refreshes (either not on the horizon or a very well kept secret).
  • Received a fine for safety problems in the “tent” Model 3 assembly area. The citations were for improper permits, training and risk assessment, not because accidents had taken place. Tesla objected. (Business Insider)
  • Tesla confirmed that it has been discussing a battery supply contract with Lishen. Although the news was received with horror by some Panasonic-watchers, Elon Musk has repeatedly said that Tesla talks with all the battery suppliers and Samsung have provided batteries for its wall units. (Reuters)

Toyota (history)

  • Confirmed the creation of a 49% / 51% battery joint venture with Panasonic. (Toyota)
  • Hopes that 2019 sales in China will rise 8% versus the prior year, even as overall industry struggles. (Reuters)

VW Group (history)

  • CEO Diess believes that Chinese demand will continue to grow, albeit slowly. (Reuters)
  • Bugatti’s CEO rejected rumours that the brand will produce an SUV. (Autocar)
  • Reportedly plans to build 40,000 Porsche Taycans per year and may add a second factory (Porsche previously talked about 20,000 units capacity). Audi’s e-Tron also looks set for an increase in production rate from 20 to 24 vehicles per hour. (Automotive News)
  • Following warning strikes, workers in Audi’s Hungarian factory stopped work for a week. (Bloomberg)
  • Invested $10 million in battery developer Forge Nano. (VW)
  • Bentley’s CEO said a no deal Brexit would pose a “fundamental risk” to the brand’s profitability. He set the costs of increased customs checks in perspective saying that he would chose a few million pounds of additional inventory over the risk of disrupted production from running supply chains too lean. (Reuters)
  • Porsche invested in roadside assistance firm Urgent.ly. (Porsche)
  • Audi is looking to make €15 billion of cost cuts by 2022. Audi believes that natural attrition will reduce the workforce by 14,000 people in a five year period. (Reuters)

Other

  • Subaru suspended production at the Gunma plant in Japan after discovering defective steering components. The shutdown started on 16th January and is expected to last until 28th January. (Subaru)
  • Subaru discovered that it had underpaid overtime to around 3,400 employees in Japan — a contributing factor in a member of staff’s suicide. (Reuters)
  • Isuzu’s local partner in the Philippines will stop CKD production of D-MAX pickups at the end of 2019. (Carmudi)
  • NIO’s CEO put 50 million shares into a special trust for owners — who will get a say on how the economic benefits of the stock should be used. He retains the voting rights. (NIO)
  • Dyson appointed a new CEO for its car project and says it will spend $1 billion on the program in 2019. (Autocar)
  • RONN Motor Group announced a joint venture in China to build several different fuel cell and battery powered vehicles and is scouting for a factory location. (RONN)
  • Henrik Fisker says his firm will launch a vehicle in 2021 at a starting price of around $40,000. The team currently numbers 100 people but is rising at a rate of one person per week and the R&D group will stay below 500 people for the medium term. (Automotive News)
  • SAIC’s Maxus commercial van brand will build a new plant in Vietnam. (China Daily)
  • Kaiyun Motors says it will start selling an all-electric pickup truck in the USA for $5,000. The low price does come with some drawbacks: top speed is 28 mph and loading capacity is small. (Detroit News)
    • Significance: The vehicle’s low price is thanks to three things: Low specification, forgiving build quality and lead acid batteries. The inclusion of this cheaper technology as opposed to lithium ion does beg the question of whether in some applications alternatives to the prevailing trend are being dismissed too quickly.

News about other companies and trends

Economic / Political News

  • European light commercial vehicle sales in 2018 of 2.13 million units rose 3.1% from 2017. Total commercial vehicle sales were 2.57 million vehicles. (ACEA)

Suppliers

  • The owners of interiors supplier Novem is reportedly looking at a sale or IPO. (Reuters)
  • Continental were apparently interested in taking on a “four digit” number of Opel engineers before PSA announced a deal with Segula to do something similar. (Handelsblatt)
  • Lear reported financial results for full year 2018. Although revenue of $21.1 billion was up versus 2017, net income fell and in Q4 both sales and net income were lower than a year earlier. (Lear)
  • Magna will help Waymo run its facility to fit self-driving hardware to cars. (Waymo)
  • Mahle is buying powertrain engineering specialist ZG-Zahnräder und Getriebe. (Evertiq)
  • TomTom is selling its telematics units to Bridgestone for €910 million. (TomTom)
  • Johnson Controls said it had seen a slowdown in orders for lead acid batteries in China (a unit that it is in the process of selling). (Reuters)
  • Nidec reported financial results for Q4 2018. Net sales dropped (3.4)% but profit was down (28.5)%. (Nidec) From the start of 2019, Nidec will consolidate CCI (in which Nidec holds a 48% stake) in financial reporting. (Nidec)
  • Plastic Omnium and Hella are collaborating in integrated lighting. (Plastic Omnium)
  • Delphi is stopping its dividend and repurchasing shares instead. (Delphi)
  • Bosch is buying Daimler out of the EM-motive electric motor JV. (Bosch) Bosch also announced an investment in connected vehicle firm AutoAI. (Bosch)

Dealers

  • On-demand repair service GoMechanic raised $5 million. (Deal Street Asia)
  • Porsche, BMW and JLR invested in roadside assistance firm Urgent.ly as part of a $21 million round. (JLR)
  • Peer to peer used car sales website Motorist.sg raised an undisclosed sum. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental (history)

  • Vietnamese ride hailing firm FastGo wants to raise $50 million and expand into the USA and Brazil. (Nikkei)
  • Ola reportedly plans to cut investment in meal delivery service Foodpanda. (Deal Street Asia)
  • Didi and BAIC created a joint venture to work on connected cars. (CNBC)
  • Zipcar is pulling out of Brussels, Paris and Barcelona. (Auto Rental News)
  • BMW and Daimler’s mobility joint venture will reportedly be named “Jurbey”. (The Drive)

Driverless / Autonomy (history)

  • Apple fired 200 people from its self-driving program. (CNBC)
  • Waymo is opening a facility in Michigan, USA to fit self-driving hardware to FCA and JLR vehicles. Magna will help to run the operation. (Waymo)
  • Jaguar Land Rover says that vehicles should communicate their intention to pedestrians by projecting the proposed path onto the road in front of them. (JLR)
  • Uber is rumoured to be working on a range of autonomous scooters and bikes that would be able to reposition and recharge themselves. (TechRadar)

Electrification (history)

  • BP invested in Chinese charging provider PowerShare. (Deal Street Asia)
  • A comparison in charging between a Mercedes EQC, Audi e-tron and Jaguar I-Pace showed varying approaches to protecting the battery. Both the maximum charging rate and relationship between charging rate and state of charge varied across the three. The Audi charges quickest. (Inside EVs)
  • VW’s Electrify America charging network had to shut down several high-power charging stations due to problems with cooling. (VW) At the same time, the supplier of the affected part said that it has experienced short circuits in test parts. (Huber+Suhner)
  • Kaiyun Motors says it will start selling an all-electric pickup truck in the USA for $5,000. The low price does come with some drawbacks: top speed is 28 mph and loading capacity is small. (Detroit News)
  • Toyota confirmed the creation of a 49% / 51% battery joint venture with Panasonic. (Toyota)

Connectivity

  • TomTom is selling its telematics units to Bridgestone for €910 million. (TomTom)
  • Daimler believes that Chinese companies are more advanced than US counterparts in “many areas” of digital technology and connectivity. (Reuters)
  • Didi and BAIC created a joint venture to work on connected cars. (CNBC)

Other

  • Bicycle rental company Mobike is changing its name to Meituan Bike. (TechCrunch)
  • Amazon has started trials of small delivery robots. (ZDNet)
  • Boeing’s flying car had its first successful test flight. (Reuters)
  • Electric bicycle rental firm Wheels raised $37 million. (TechCrunch)
  • Electric bicycle rental firm Zoov raised €6 million. (Zoov)

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Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news

Auto Industry Briefing — week ending 20th January 2019

Paying for travel differently; Tesla’s growing pains; and more creativity needed to sell electric cars. Please enjoy our auto industry and mobility briefing for 14th January to 20th January 2019. A PDF version can be found here.

Favourite stories of the past week…?

  • Money MachineOla will offer more customers the chance to pay for their rides on a monthly basis. In concept it isn’t much different from a pay as you go option. It must be progress if we can get people comfortable with paying for on-demand travel (season tickets notwithstanding — a bigger upfront commitment), especially if they get used to the idea that some months cost a bit more than others.
  • Welcome To The JungleTesla is shedding 7% of the workforce and ending the customer referral program. For a company that touts its differences, the cost cutting seems a bit unimaginative and one wonders about the long-term effects? Plus, how am I supposed to square all the previous boasts about referral-based marketing costing virtually nothing with a sudden clamp down because “it’s adding too much cost”?
  • Price TagVW’s chairman says that small cars will inevitably rise in price with electrification. It all seems a bit fatalistic to me. We live in a world where people carry around $1,000 smartphones that are more ubiquitous than $200 feature phones were a decade ago. A benefit was explained, a payment model was created and… hey presto! The thing is affordable, even for those with lower incomes. Why should electric cars be so different? Why should electric cars be the preserve of the rich? Why do carmakers tout the long-term savings of electric versus fossil fuel but leave it up to the consumer to achieve them?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

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News about the major automakers

BMW (history)

  • Unveiled the new 7 Series large car in Shanghai. (BMW)
  • Received agreement from the majority of Brilliance Automotive shareholders to sell BMW an extra 25% stake in the Brilliance-BMW joint venture in China (in 2022). (BMW)
  • Secret talks between BMW and Daimler are rumoured to cover joint battery purchasing from CATL and a shared basis for smaller cars (e.g. A/B Class and 1/2 Series). Apparently the BMW team are still smarting from Daimler’s whistle-blowing on a engine technology talking-shop which could yet see BMW pay hefty fines. Autonomous vehicle technology is also believed to be under discussion but a pre-existing choice of partners (MobilEye for BMW, Bosch for Daimler) is making each partner worrying about losing ground. (Handelsblatt)

Daimler (history)

  • Rumoured to be working on a smaller all-electric SUV, possibly to be badged EQB that will be similar to the yet-to-be-launched GLB. (Autocar)
  • Will change the metrics of financial guidance and also re-calibrate the meaning of certain terms used. (Daimler)
  • Secret talks between BMW and Daimler are rumoured to cover joint battery purchasing from CATL and a shared basis for smaller cars (e.g. A/B Class and 1/2 Series). Apparently the BMW team are still smarting from Daimler’s whistle-blowing on a engine technology talking-shop which could yet see BMW pay hefty fines. Autonomous vehicle technology is also believed to be under discussion but a pre-existing choice of partners (MobilEye for BMW, Bosch for Daimler) is making each partner worrying about losing ground. (Handelsblatt)
  • Planning a new assembly plant in Egypt with a joint venture partner. (Daimler)

FCA (history)

  • CEO Manley said an announcement will be made soon about additional new US capacity to build Jeeps, local media speculate that it will be at the idled Mack Avenue Engine II plant. (Detroit News)
  • CEO Manley called medium sized pickup truck a “gaping hole” in the company’s portfolio and is open to a partnership to get one. (Reuters)
  • Will trial two different schemes with small numbers of US consumers: a car swapping scheme run in partnership with Turo and a short-term subscription with help from Avis. (Detroit News)
  • Italian unions criticised FCA’s threat to review its production plans for the country after a new environmental tax was introduced saying that the firm’s existing plans for more efficient powertrains were insufficient. (Torino Oggi)
  • The next generation of muscle cars will have to use electrification says CEO Manley. (Detroit News
  • Italian unions expect local production to fall from the approximately 670,000 units produced in 2018 due to weakness in Alfa Romeo and Maserati sales, and the discontinuation of Fiat Punto and Alfa Romeo MiTo. At the worst hit plants, production is scheduled to regularly stop until September 2019. (Automotive News)
  • The market introduction of the Ram 3500 is being delayed by the US government shutdown and the CEO is “concerned, very concerned”. (Bloomberg)

Ferrari

  • Ferrari’s chairman was moved to make a statement saying he supported the relatively-new CEO and changes in management at the Formula 1 team were not reflective of a wider corporate overhaul. (Reuters)

Ford (history)

  • Preliminary full year 2018 financial results showed revenue of $160 billion and adjusted EBIT of $7 billion. (Ford)
  • Received poor reviews from analysts after a presentation at the Detroit show where instead of giving a 2019 outlook, Ford simply acknowledged the potential for improvement (slide 42) whilst pointing out that sometimes things work in your favour but then again sometimes they go against you (slide 44). (Ford)
  • Ford and VW announced the first fruits of their collaboration, covering commercial vehicles. There will be a pick-up led by Ford (but not shared in all markets); a small van led by VW; and a 1T van led by Ford. The vehicles will launch from 2022 onwards. The two parties signed MoUs to investigate autonomous vehicles and electric powertrains — there had been some hopes that they would make firm commitments in this area. (VW) Ford executives said that the companies would incur the engineering costs directly and recover from one another in transfer pricing. (Ford)
  • Confirmed that there will be an all-electric version of the F-150 pick-up. Ford didn’t give a date for launch but it is possible that the vehicle forms part of the promise to have six US BEVs by 2022. (Ford)
  • Views a no-deal Brexit as “the least likely outcome” and is planning for a soft Brexit. (Ford)
  • Bill Ford said he could never see a situation where the Ford family would give up any of their share in the business and that alliances were the only form of partnership the firm would contemplate. (Click On Detroit)
  • Versace has made the blue oval à la mode with a menswear line incorporating the logo. Commentators were split on the value for money versus Ford’s existing official apparel, but executives must surely be contemplating purchasing a pair of flowing white trousers festooned with Ford badges. (Detroit Free Press)
  • Recalling about 2,700 brand new Lincoln Nautilus SUVs to fix problems with steering software. (Ford)
  • CEO Hackett says that revenues from subscriptions will ultimately be far smaller than the value from monetization of vehicle data. (Ford)
  • Ford’s Argo.ai is hiring a leading car critic to lend a greater voice to the emotional side of driverless cars. (The Drive)
  • There will be a Lincoln version of the Mach 1 BEV. (Green Car Reports)
  • Ford’s product development chief said that electric vehicles would be “contribution margin positive”. (Ford)
    • Significance: Since the contribution margin excludes fixed costs, the statement is less strong than it sounds. A product could make a (20)% loss in terms of return on sales and still be breakeven at a contribution margin level.

Geely (includes Volvo) (history)

  • Volvo is not developing a direct replacement for the V40 and instead will do something more “creative”. (Autocar)
  • According to the website of a new Geely factory in Wuhan, China, Lotus-badged cars will be made there. (Reuters)
  • Spy shots of what look like a medium sized hatchback Lynk&Co vehicle out testing caused confusion after earlier stories that implied the next models would be large cars based on Volvo’s XC90 and S90. (Autocar)
  • Named a new CEO at taxi maker LEVC. (Geely)

General Motors (history)

  • Chevrolet stopping using an advertisement that claimed (based on a survey commissioned by Chevrolet) that the brand’s vehicles had better reliability than Ford, Honda and Toyota after threats of legal action. (Detroit News)
  • Told Brazilian workers that “sacrifices” were required to turn a profit in the country, calling on them to support a mysterious “viability plan” that has been presented to the board. The company’s approach seems very similar to that used in South Korea. (Reuters)
  • CEO Barra said that GM would be launching more products in the US but that workers at the plants slated for closure / unallocation shouldn’t hold their breath as they would likely be used to improve capacity utilisation at the remaining US plants. (Detroit News)
  • Workers at Canadian suppliers have begun walking off the job in support of GM workers at plants likely to close. Unions have also threatened  to humiliate the company at public events. (Detroit Free Press)
  • Executives were dismissive of hybrids, saying the powertrains were “countermeasures” to the decline of internal combustion engines and the smart money was on electric vehicles. (Green Car Reports)
  • CEO Barra said “stay tuned” when asked if the company was planning a full size pick-up truck. She might want to consider a more equivocal answer since in November GM’s strategy chief said “there will not be any AV/EV pickups”. (Electrek)

Hyundai / Kia (history)

  • KIA revealed the 3 row Telluride SUV at the Detroit show. (Detroit News)
  • Recalling around 168,000 US vehicles to fix problems with engine wear. (Reuters)
  • Reportedly received local government approval to make electric vehicles in India. (ET)

Nissan (includes Mitsubishi) (history)

  • The Renault-Nissan-Mitsubishi Alliance Ventures fund invested in dealership software provider Tekion. (RNA)
  • Cutting a shift at the Canton, Mississippi plant, leading to 700 job losses. (Tennessean)
  • Suffered the ignominy of the Infiniti QX electric concept car losing power as it drove to the stage during its big Detroit show reveal. (Detroit Free Press)
  • The French government took steps to impose an end to the Ghosn saga by openly championing Michelin’s CEO as an ideal replacement for Ghosn and reportedly telling the Japanese government that it wanted to integrate Nissan and Renault under a single holding company — something Nissan is resistant to and the government appeared to back away from publicly (for now). (Reuters)
  • Nissan and Mitsubishi said that payments of almost €8 million had been made to Carlos Ghosn by the Nissan and Mitsubishi joint venture company without properly consulting their CEOs and will take legal action to recover the money. (Nissan)
  • One of Nissan’s independent directors speculated that it may not be necessary to have a chairman. (Bloomberg)

PSA (includes Opel/Vauxhall) (history)

  • Sold 3,877,765 vehicles in 2018, an increase of 6.8% versus 2017. The growth is entirely explained by a full year of sales for the Opel and Vauxhall brands as the rest of the business saw volumes drop (12)%, with only Europe as a bright spot. (PSA)
  • Started production of the I3 gasoline engine at the Tychy, Poland, plant with capacity of 460,000 units per year. (PSA)

Renault (history)

  • Renault’s lead independent director issued a cryptically-worded message which seemed to imply that the board was now actively seeking a replacement CEO, without actually saying it. (Renault)
  • Reported global sales of 3,884,295 units in 2018, an increase of 3.2% on 2017. Passenger car sales were down, as were Renault-badged models. Strong performance of Dacia and Lada made up the difference (but presumably at lower average revenue and profit). (Renault)
  • The French government took steps to impose an end to the Ghosn saga by openly championing Michelin’s CEO as an ideal replacement for Ghosn and reportedly telling the Japanese government that it wanted to integrate Nissan and Renault under a single holding company — something Nissan is resistant to and the government appeared to back away from publicly (for now). (Reuters)
  • Senior sales and marketing executive Thierry Koskas abruptly left the company. (BBC)
  • Will not stockpile vehicles in the UK ahead of Brexit, calling the approach “expensive and short-termist”. Renault instead says that it will adapt extremely rapidly to changes as they take place. (Reuters)
    • Significance: Along with VW Group and Ford, Renault is in serious trouble if tariff and customs barriers suddenly restrict access to one of its major markets. Although in the short term it may be possible to simply sit out any market volatility, in the presence of longer term tariff barriers the company has little option but to ask Nissan very nicely to build Renault cars in Sunderland.

Suzuki

  • Started production at Gujurat plant No. 2 in India, a factory with capacity for 250,000. (Suzuki)

Tesla (history)

  • Announcing plans for a (7)% reduction in headcount, CEO Musk told employees that there would be a small Q4 2018 profit but said he was worried that favourable mix of high-series Model 3 was flattering the results and operational cost needed to be reduced to provide lower-priced Model 3 derivatives. The company will retain only “the most critical” temporary employees and contractors. (Tesla)
  • Released a new mobile, plug-in, charging unit with a 9.6kW rating. The catch is that you need a special type of plug socket so unless customers have already installed these, the new product doesn’t save on electrician fees. (Tesla)
  • Launched another round of charging station price increases and moved to differentiated pricing by station rather than region, increasing revenue from more popular spots. (Electrek)
  • Started installing automatic barriers in Chinese supercharger locations that will only lower if the owner uses an app identifying the car as a Tesla. Although the internet was quick to brand the equipment as a potential solution to US pick-up truck owners blocking charging bays, they may want to remind themselves of the ground clearance these vehicles appeared to possess. (Electrek)
  • Ending the customer referral program, citing affordability. (Reuters)
    • Significance: Tesla has long trumpeted the value of word of mouth marketing rather than visible advertising. Either the firm feels that it will never need to advertise again, or (more likely) traditional forms of media will start cropping up.

Toyota (history)

  • Launched an AWD version of the Prius. The extra driven wheels are exclusively electric. (Toyota)
  • Unveiled the production version of the Supra sports car, which shares underpinnings with the BMW Z4. (Toyota) The car will be built by Magna in Austria. (Magna)
  • Thinks that India will be the third largest market for vehicles within the next decade. (ET)
  • Reportedly working on a battery-making JV with Panasonic. (Reuters)

VW Group (history)

  • Ford and VW announced the first fruits of their collaboration, covering commercial vehicles. There will be a pick-up led by Ford; a small van led by VW; and a 1T van led by Ford. The vehicles will launch from 2022 onwards. The two parties signed MoUs to investigate autonomous vehicles and electric powertrains — there had been some hopes that they would make firm commitments in this area. (VW)
  • Sees great potential for CNG vehicles in India. (Autocar)
  • Announced an $800 million investment in the Chattenooga plant to build electric cars on the MEB platform. (VW)
  • Porsche launched a pay per mile insurance scheme in the US to reduce ownership costs. (Porsche)
  • Audi says that profits on electric cars will be similar to a well-equipped diesel. (Automotive News)
  • Agreed to pay €12.3 million to the Indian authorities relating to exhaust emission irregularities, but VW said it continues to dispute the fine and wants the money back. (Handelsblatt)
  • Audi workers in Hungary started warning strikes after demanding an 18% pay rise. Unions say that they are paid far less than Slovak and Polish counterparts, not to mention those in Western Europe. (Reuters)
  • Considering building a rugged BEV that “loves scratches”. (Automotive News)
  • Spending €250 million to develop the low cost MQB A0 platform in India. VW says the vehicles produced in the country with have 95% local content. (VW)
  • VW’s chairman said that entry level vehicles would have to rise in price if they had electric drivetrains. (Handelsblatt)
    • Significance: Although apparently a truism at present, this type of thinking is potentially dangerous. In much the same way as mobile phone prices have increased massively since the says of Nokia’s domination, service providers have found ways to create financial propositions that customers can afford. How can carmakers do the same? (Hint: maybe the car needs to be priced more like a service)

Other

  • Subaru sold 1.06 million vehicles in 2018, about the same as 2017. In 2019 it hopes for a 2% increase. (Subaru)
  • Subaru disclosed investments in three start-ups: electric aircraft manufacturer Bye Aerospace; lidar developer AEye;and IoT specialists aptpod. (Subaru)
  • Nio completed a chain of battery swapping stations along the route from Beijing to Shanghai. (Auto Express)
  • Karma and Pininfarina announced a collaboration (presumably to design the successor to the Henrik Fisker-penned Revero model). (Fisker)
  • Evergrande Health, a substantial investor in Faraday Future announced it would acquire 51% of NEVS (the owner of Saab’s automotive IP) for $930 million. At the end of 2017 NEVS had $551 million of assets. (NEVS)
  • VinFast says it will launch a further five premium models on top of the two already shown (a large saloon and SUV). There will be a small hatchback and SUV, a midsize hatchback and SUV and a large family car. (VN Express)
  • GAC still plans to enter the US market in 2020. (China Daily)

News about other companies and trends

Economic / Political News

  • German carmakers called a no deal Brexit “fatal” for the industry, saying that UK jobs were on the line. Given that Daimler has little footprint in the country, VW Group has only Bentley and BMW produces no vehicles carrying the namesake brand in the country, it seems unclear which UK jobs the first two companies will influence. (Reuters)
  • European passenger car registrations in 2018 of 15,624,486 units were down (0.04)% versus 2017. In December alone, sales dropped (8.7)% on a year-over-year basis. (ACEA)
  • Indian carmaking trade body SIAM said that regulations preventing the use of imported steel would soon affect production because some, rarer, grades were not available locally. (ET)

Suppliers

  • Eberspaecher opened a new test facility in Shanghai, China. (Autocar)
  • Continental is building a new plant for powertrain components in Talegaon, India. (Continental)
  • Magna gave a financial forecast out to 2021. The firm believes that volumes in North America will stay about the same but the European market will grow slightly. It expects EBIT margin to rise to 8.1% – 8.5%. (Magna)
  • Dana completed the acquisition of electric components supplier SME Group. (Dana)
  • Adient said that preliminary results for Q4 2018 showed a drop in revenue and profits but that hopefully things would brighten up in the remainder of the firm’s financial year. (Adient)
  • Magna will build the Toyota Supra at Graz in Austria. (Magna)
  • Panasonic is reportedly working on a battery-making JV with Toyota. (Reuters)
  • Assa Abloy acquired automotive key specialist KEYper Systems. (Assa Abloy)
  • Goodyear issued a profit warning, blaming tough conditions in India and China. (CNBC)
  • Bridgestone will invest in promising start-ups in partnership with VC firm Iris Capital. (Europa Press)

Dealers

  • FCA will trial two different schemes with small numbers of US consumers: a car swapping scheme run in partnership with Turo and a short-term subscription with help from Avis. (Detroit News)
  • The Renault-Nissan-Mitsubishi Alliance Ventures fund invested in dealership software provider Tekion. (RNA)

Ride-Hailing, Car Sharing & Rental (history)

  • Ola is launching a payment option that will see customers pay for rides monthly, rather than per trip. (TechCrunch)
  • South Korean car sharing start-up SoCar raised $44 million in new funding. (Deal Street Asia)
  • Kakao, a chat app with transport services bolted-on, appeared to run into problems in South Korea after taxi drivers demanded it cease on-demand ride hailing and car sharing services and protests erupted into violence. The company said it would stop the ride hailing offering and was open to talks about car sharing. (Reuters)
  • Grab is creating an insurance marketplace in partnership with ZA Insurance. (Grab)
  • Enterprise is buying Deem, a corporate travel provider. (Enterprise)
  • Recreational vehicle sharing firm Outdoorsy raised $50 million in a series C round. (TechCrunch)
  • Go-Jek purchased a majority stake in payments firm Coins.ph for $72 million. (Tech In Asia)

Driverless / Autonomy (history)

  • Safety simulation firm Foretellix said it had raised $16 million and has “hundreds of millions” of different scenarios that can be used to measure the operational safety of artificial intelligence. (Foretellix)
  • Zoox announced the appointment of a new CEO. (TechCrunch)
  • Stop & Shop plans to launch a fleet of driverless robo-shops that will drive to a customer’s house and then let them select and retrieve daily staples (e.g. milk and bread). (Stop & Shop)
  • Self-driving car developer AutoX hopes to raise $100 million. (SCMP)
  • Waymo say that by using machine learning to adjust the parameters of complex neural nets (i.e. a robot controlling the training of another robot) they can iteratively improve recognition far more quickly. (Waymo)

Electrification (history)

  • Magna’s CEO said the industry was spending money inefficiently and needed greater collaboration in order to deliver affordable vehicles for customers. (Reuters)
  • Powertrain engineering consultant AVL revealed a swappable battery pack for small vehicles. The 2 kWh /9 kg unit uses a 48V architecture and can provide a maximum 5 kW output. (Autocar)
  • Wireless charging company Momentum Dynamics received investment from truckmaker Volvo. (ET)
  • Indian state-owned firm BHEL and Libcoin are in talks to create a battery plant in India, initially with 1 GWh annual capacity with a view to ramping up to 30 GWh over time. (ET)
  • Tesla launched another round of charging station price increases and moved to differentiated pricing by station rather than region, increasing revenue from more popular spots. (Electrek)
  • Nio completed a chain of battery swapping stations along the route from Beijing to Shanghai. (Auto Express)
  • Battery developer GBatteries says it can fully charge a 60 kWh pack in five minutes by simply adding a charging adaptor that contains an algorithm to control charging conditions. (TechCrunch)
  • Tesla started installing automatic barriers in Chinese supercharger locations that will only lower if the owner uses an app identifying the car as a Tesla. Although the internet was quick to brand the equipment as a potential solution to US pick-up truck owners blocking charging bays, they may want to remind themselves of the ground clearance these vehicles appeared to possess. The lack of ongoing evidence suggests the entire thing was overblown. (Electrek)
  • VW’s chairman said that entry level vehicles would have to rise in price if they had electric drivetrains. (Handelsblatt)
  • Ford’s product development chief said that electric vehicles would be “contribution margin positive”. (Ford)
  • Audi says that profits on electric cars will be similar to a well-equipped diesel. (Automotive News)

Other

  • A study of electric scooter usage in the US city of Portland suggested that about one third of users were taking scooters instead of walking, whilst about 19% abandoned their cars and 15% would have other used a taxi. 6% said they had reduced the number of cars in the household because of scooters. (PBOT)
  • Leading Scooter rental companies Lime and Bird have reportedly seen their valuations fall by about one third in the most recent funding rounds. (Deal Street Asia)
  • Scooter rental firm Flash said it has raised €55 million. (TechCrunch)
  • Indian bicycle rental firm Vogo raised $9 million. (Deal Street Asia)
  • Automation bulls were saddened to hear that a Japanese hotel designed to replace staff with robots found only about half the machines were doing their job properly. They have been sacked in favour of organic lifeforms. (WSJ)

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Auto Industry Briefing — week ending 13th January 2019

Opel names a van after a car; Daimler’s unclear sharing strategy; and a real vehicle data scare. Please enjoy our auto industry and mobility briefing for 7th January to 13th January 2019. A PDF version can be found here.

Favourite stories of the past week…?

  • Changingman Opel unveiled the new Zafira. What was previously a purpose-built compact people carrier is now just a reworked van with a nicer interior. Sounds jolly sensible — the segment is shrinking but why lose all that hard-won brand equity just because it isn’t a standalone product anymore? What sounds better, Zafria or Transit Connect Tourneo?
  • On My OwnDaimler’s incoming CEO says the company is open to sharing, but not where they think the parts or technology are key to the brand. Sounds totally sensible, unless the brand criticality is just left to the gut feel of the executive team — who rule everything out whilst maintaining an open for business message. So how are they intending to objectively measure customer impact and what is the threshold for important enough to keep distinct? The one example mentioned isn’t too promising: Daimler sees the MBUX infotainment interface as an area where it needs to be different. Really? Loads of smartphone companies can all share Android but carmakers need their own unique programming?
  • Where’d You GoPoorly set up security meant that real time location data for 11,000 Indian buses was accessible online for ages until the problem was stopped. Whilst perhaps no one is that interested in the number 35 bus route, the same (human) errors could recur — exactly the sort of thing privacy experts are scared of. Will this become a powerful case study that the industry strives to never repeat, or just the first of many incidents?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

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News about the major automakers

BMW (history)

  • Sold 2.49 million vehicles in 2018, an increase of 1.1% on 2017. (BMW)
  • Rolls-Royce say 90% of customers request customisation so great that the cars can be considered one-offs (adding an average 40% to the purchase price) — up from 80% in 2016, for the Cullinan SUV it is 100%. About 5% of the Rolls-Royce workforce is dedicated to vehicle personalisation. (Bloomberg)

Daimler (history)

  • Sold 2.44 million cars in 2018, a 0.9% increase on 2017. Whilst BMW said it was the largest premium manufacturer, Daimler claimed the brand specific crown for itself (basically, because Mini sells far more than Smart). (Daimler)
  • Spending half a billion euros on automated truck technologies and intends to develop level 4 (substantial eyes off but bound by geography and environmental conditions) after mastering level 2 because in Daimler’s view the technology cost of level 3 brings insufficient benefit to operators. (Daimler)
  • Incoming CEO Kallenius said he is opening to sharing components and technologies with other companies but that is something is key to the brand he wants Daimler to go it alone. (Bloomberg)

FCA (history)

  • Reached a deal to settle claims of emissions cheating in the US with a total of $800 million to be paid out in fines and compensation to customers. FCA said the amount had already been reserved in Q3 2018. Although it will pay fines, FCA says that there was no “deliberate” intention to cheat. (FCA)
  • Lost a US Supreme Court bid to prevent a civil suit from owners seeking to sue FCA for vehicle security flaws, regardless of whether any damage has been caused. (Economic Times of India)
  • Appointed a new global purchasing boss. (FCA)

Ford (history)

  • CEO Hackett declared himself unhappy with Ford’s 2018 performance, placing a lot of the blame on product age (a self-inflicted problem). Hackett said Europe had been a problem “for a number of decades” but that it was possible to make money with the right “industrial system” and suggested that VW could build cars for Ford in Europe as the company looks to cut costs in the region. The option of leaving Europe was “never on the table”. (Bloomberg)
  • Launched a new Explorer large SUV, adding a sporty ST model and a (non plug-in) hybrid. (Ford)
  • Announced another new strategy for the European business, lowering long term profit targets from a 6% – 8% range to 6% EBIT margin in the longer term (the last turnaround plan — announced in February 2016 can be found here). The business will be organised around commercial vehicles, European built cars and imported cars, with a suggestion that any one of the three business lines could be closed in future if the returns were not better than the cost of capital. The firm is reviewing the JV in Russia with Sollers, with a decision to be announced in Q2 2019. A round of redundancies is also underway, with Ford re-announcing: the closure of the Bordeaux transmission plant; consolidating the UK administrative footprint into a single HQ; and the cessation of C-MAX and Grand C-MAX production. (Ford)
    • Significance: Given Ford of Europe’s current (unprofitable) condition at a very healthy industry volume, the actions that Ford has announced appear to downplay many of the business’s key challenges: a majority Western European footprint; poor portfolio fit with the rest of the World; and a reliance on the UK market with little natural hedging resulting in Ford fighting over half a billion dollars in annual foreign exchange losses.
  • UK unions say they were told by Ford that it intends to cut 1,000 jobs at the Bridgend engine plant (already expected with the loss of a JLR engine contract and reduction in capacity for small Ford petrol engines) and 150 in other operations, primarily logistics. (The Guardian)
  • Might close further plants to improve the profitability of Europe. (Reuters)
  • The European CEO said Ford was only remaining in the region because of the commercial vehicle business. The head of markets said Mahindra’s approach to cost control was “eye-opening”.  (Detroit News)
  • Shutting the Chariot on-demand bus service by 1st February citing the changing needs of customers. (Ford)
    • Significance: Ford has now shut down the most visible of its bets on consumer-facing mobility services. Unfortunately, Chariot’s business model was always questionable: make money by running bus services, an operation normally so unprofitable that public subsidies of around 50% of costs are normal — and only run services where demand is so low that public buses don’t schedule any routes.
  • Ford’s head of autonomous vehicles implied the company would not budge from the 2021 target for putting a driverless car on the road saying “at some point before 2021, we have to have no driver”. (TheStreet)
  • VW and Ford will reportedly announce specifics of their new alliance at the Detroit show with sources suggesting that press releases will concentrate on commercial vehicle ties ups and rumoured plans for VW to buy into Ford’s Argo autonomous technology unit and Ford licencing VW’s MEB platform will remain unconfirmed. (Reuters)
  • Building on an earlier commitment to make 100% of US vehicles connected by 2019, Ford will install vehicle to everything technology in vehicles launched from 2022 onwards. (Ford)
  • Will stop sponsoring bicycle rental in San Francisco. (Axios)
    • Significance: Ford said that a massive benefit of the bicucle sharing scheme was access to travel data. The implication is either that sufficient data has been gathered, or the data wasn’t particularly useful.

Geely (includes Volvo) (history)

  • Bloomberg said that Geely had sold half its stake in Daimler. Geely said it had not. (Geely)
  • The (taxi-making) LEVC division has delayed the development of a van derivative to the early 2020s. (Reuters)

General Motors (history)

  • Held a capital markets day where it forecast improved 2019 returns, when many analysts had feared a drop. GM said Cadillac will be the “lead” electric vehicle brand and that, following restructuring, South American operations had reduced the breakeven point by 40% and GM Korea was on a “path” to profitability. (GM)
  • Launching a set of battery electric vehicles for Cadillac beginning with a crossover codenamed BEV3. (Detroit News)
  • Oshawa plant workers continue to hold work stoppages in protest at the plan to close the plant. (Detroit Free Press)
  • Agreed that GM owners could access the stations of three US charging networks and pay through GM’s app. (GM)

Honda (history)

  • Will close UK facilities for the first six days in April to sit out any potential Brexit disruption. (Reuters)
  • The launch of Honda’s all-electric city car has reportedly been delayed from 2019 to 2020. (Electrek)

Mazda

  • Developed a new technique for pressing high strength steels that Mazda says allows it to make thinner (and therefore lighter) body parts. Since no additional equipment is apparently required, it seems likely that other companies can replicate the feat with sufficient experimentation. (Mazda)

Nissan (includes Mitsubishi) (history)

  • Carlos Ghosn’s said in court that the foreign exchange contracts at issue had cost Nissan nothing and that he had been offered much more money by Ford and Gm to join them. (Nikkei)
  • Released a Nissan Leaf (dubbed e+) with a 62 kWh battery pack. (Nissan)
  • After a short leave of absence related to the Ghosn scandal, Nissan’s chief performance officer resigned. (Reuters)
  • Nissan’s board said it was committed to the alliance with Renault and Mitsubishi and would claw back control over some business decisions from executives. (Nissan) An executive has been appointed to improve governance, slightly odd in the context of an executive team where certain elements had supposedly gone rogue. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Launched the new Zafira people carrier. Rather than create a like-for-like replacement in the shrinking segment, Opel has renamed the passenger carrying version of the Combo van. (Opel)
    • Significance: This looks like smart marketing by Opel. Rather than losing the brand recognition, an already existing vehicle has been renamed. Opel have spent a bit of money on the interior to make the vehicle more comfortable than the van — far cheaper than a unique vehicle.

Renault (history)

  • Said that an internal probe had concluded payments to the executive team for 2017 and 2018 were lawful and had been properly disclosed. The investigation will continue to look at previous years. (Renault)

Tata (includes JLR) (history)

  • Confirming earlier rumours, JLR announced plans to shed about 4,500 jobs, hoping to save over £1 billion (of which it says £500 million is already on the way). JLR will start making electric motors (at the Wolverhampton engine plant) and assembling battery packs at a new site in Hams Hall (where BMW have an engine factory). (JLR)
  • JLR sold 592,708 vehicles in 2018, a drop of (4.6)% versus 2017. (JLR)

Tesla (history)

  • New car buyers can reportedly still pre-order the fully self-driving feature by emailing Tesla directly but sales advisors are warning anyone who does that it could be a “very long time” before the feature is usable. (Electrek)
  • CEO Musk suggested the forthcoming Roadster would have a hover function going so far as to outline a potential power mechanism and package. But nobody was sure why. (Electrek)
  • Will only offer Model S and Model X with 100 kWh battery packs, dropping the 75 kWh version. (Elon Musk)
    • Significance: As sales of Model S have already plateaued for some time, it will be interesting to see what the effect on demand is.

Toyota (history)

  • Hopes to offer “Toyota Guardian” driver assistance features to other car companies. (Toyota)
  • Recalling an additional 1.3 million vehicles in the US to replace airbags. (Toyota)
  • Helping to develop a new type of strawberry through DNA analysis. (NRGene)

VW Group (history)

  • VW Group sold 10.83 million vehicles in 2018, a 0.9% increase on a year earlier. (VW)
  • Creating a subsidiary called Elli that will provide charging services. (VW)
  • VW and Ford will reportedly announce specifics of their new alliance at the Detroit show with sources suggesting that press releases will concentrate on commercial vehicle ties ups and rumoured plans for VW to buy into Ford’s Argo autonomous technology unit and Ford licencing VW’s MEB platform will remain unconfirmed. (Reuters)

Other

  • Aston Martin has activated Brexit contingency measures, including the use of alternative ports (with longer shipping times but hopefully less traffic) and airfreight. It has also built up an inventory of finished vehicles on the continent, potentially a risky move with a customer base that values personalisation. (Reuters)
  • Karma announced a call for suppliers and the start of car sharing operations. (Karma)
  • McLaren sold 4,806 cars in 2018, an increase of 43.9% versus 2017. (McLaren)
  • Byton wants to raise another $500 million, after being given a similar sum by investors last year. (Reuters)

News about other companies and trends

Economic / Political News

  • Chinese passenger car sales of 28.1 million units in 2018 were down (2.8)% on 2017. (Reuters)
  • The UK government tested whether there was a good system for managing slower freight movements in the event of Brexit by driving 87 trucks in convoy across Kent, an exercise derided by critics. (Reuters)
  • UK car registrations of 2,367,147 units for 2018 were down (6.8)% on the prior year. (SMMT)

Suppliers

  • Delphi appointed a new CEO, an external hire. (Delphi)
  • Lear launched an in-house VC fund. (Lear)
  • Denso is launching a new R&D site in Montreal, Canada to work on mobility applications. (Denso)
  • Continental released preliminary 2018 full year results showing revenue of €44 billion and an EBIT margin of 9.2%. Revenue in 2019 is expected to be slightly better but profit margin is likely to fall to 8% – 9%. (Continental)
  • Autoliv’s CFO is resigning to take on the same role at former subsidiary Veoneer. (Autoliv)
  • Bosch settled US claims relating to faulty emissions control software in FCA vehicles for $131 million. (Reuters)
  • ZF is buying Romanian engineering services provider BeeSpeed to beef up the brake controls team. (ZF)

Ride-Hailing, Car Sharing & Rental (history)

  • Ola’s latest fund raising paperwork indicates the business is now valued at $5.7 billion. (TechCrunch)
  • Uber’s CEO said the firm might delay the planned 2019 IPO citing market volatility. He believes the company does not need to go public yet, thanks to a strong balance sheet. (WSJ)
  • Gotcha launched an on-demand bus service in Florida using electric vehicles. (Gotcha)
  • Go-Jek’s application to open a ride hailing business in the Philippines was rebuffed but the setback is likely to be temporary, assuming a deep-pocketed local partner can be found. (Reuters)
  • Ford’s Chariot on-demand bus service is shutting by 1st February citing the changing needs of customers. (Ford)

Driverless / Autonomy (history)

  • Aurora is reportedly looking to raise $500 million in a round that will value the company at $2 billion. (Recode)
  • Navya published a safety report. Because the company is developing autonomous buses, it still envisages having an operator on board who can take control if necessary, whilst normally functioning as a conductor. (Navya)
  • WeRide welcomed Ai developer SenseTime as an investor and plans to deploy a fleet of 500 self-driving vehicles in 2019, with a target of 5 million cumulative test kilometres. (WeRide)
  • Blackmore’s new lidar has a claimed range of greater than 450m and a $20,000 price tag. (Laser Focus World)
  • AEye had to buy a visitor to CES a new camera after the company’s lidar sensor damaged his camera, resulting in lines permanently across the field of view. AEye said there were no implications for eye safety because cameras were far more sensitive, and that it might have been coincidence anyway. In response to concerns for the cameras that feature in car safety systems and encounter such vehicles, competitors pointed to wavelength (Ouster) and pulsing (Blackmore) as potential culprits and declared themselves immune. (Ars Technica)
  • Harman and Innoviz have partnered to deliver integrated lidar to OEMs. (Innoviz)
  • Waymo’s CEO said autonomous vehicles “will always have some constraints” and that even in several decades a degree of “user interaction” will be required. (Auto Express)
    • Significance: Although at first sight, the comments appear to call into question the future of autonomous cars, they are a reflection of what could become infrequent problems, the solution to which might be controlled by remote operators, rather than a driver inside the car.
  • Bose claims to have mastered the art of cabin noise cancellation, moving beyond engine noise to road noise stemming from the vehicle suspension and tyres. (The Verge)
    • Significance: although the technology is likely too expensive to see much mainstream use in the next future, systems that focus on comfort will become a more significant factor in purchase choice as vehicles become less driver-oriented.
  • Ford’s head of autonomous vehicles implied the company would not budge from the 2021 target for putting a driverless car on the road sying “at some point before 2021, we have to have no driver”. (TheStreet)
  • Daimler is spending half a billion euros on automated truck technologies and intends to develop level 4 (substantial eyes off but bound by geography and environmental conditions) after mastering level 2 because in Daimler’s view the technology cost of level 3 brings insufficient benefit to operators. (Daimler)

Electrification (history)

  • Panasonic demonstrated a concept electric vehicle that uses a 48V electric drive (probably fine for relatively low speed applications) and features removable modules for different job types. (Panasonic)

Connectivity

  • Amazon said it received one million pre-orders for the Echo Auto aftermarket personal assistant. (TechCrunch)
  • An incorrect password setting reportedly led to the real-time GPS location of 11,000 Indian buses being available online. The site apparently included identifiable information such as licence plates and routes. (ZDNet)
  • Toyota will use technology from KDDI and AT&T to provide connected vehicle services in the USA. (Toyota)
  • MobilEye is providing technology to the UK government’s Ordnance Survey map making unit that will help maps update more quickly. (OS)
    • Significance: Whilst map-making for cars is assumed by many to be an entrepreneurial endeavour that will impact the rollout of autonomous vehicles to the advantage of a particular company, the Ordnance Survey’s work shows the possibility of an alternative model in some markets: government-mandated and controlled HD maps.
  • Otonomo is supplying the technology used by Daimler to provide data to third parties. (CTech)
  • Building on an earlier commitment to make 100% of US vehicles connected by 2019, Ford will install vehicle to everything technology in vehicles launched from 2022 onwards. (Ford)

Other

  • Ojo launched an electric scooter rental scheme with a (small) difference — there is a seat to sit on. (Ojo)
  • Electric scooter rental firm Bird is looking to raise a further $300 million. (Axios)
  • Lime was forced to cease operations in Switzerland after scooters stalled without warning, throwing hapless hipsters to the floor, sometimes at high speed. (TechCrunch)
  • iOttie is offering a mobile phone mount with motorised jaws that engage the device automatically. (The Verge)
    • Significance: At a retail price of $54.95, while the phone mount may not ultimately be a raging success, it begs the question of why the coolest currently available feature is Tesla’s pop-out door handles.

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Auto Industry Briefing — week ending 6th January 2019

Smart cars for smart homes; sales planning the old way; and docking driverless pods on the move. Please enjoy our auto industry and mobility briefing for 31st December 2018 to 6th January 2019. A PDF version can be found here.

Favourite stories of the past week…?

  • These Words Amazon has sold 100 million Alexa-enabled devices. These are products that customers have chosen specifically because they want to talk to them. Whilst the user experience often leaves something to be desired, many users already find it acceptable for basic tasks. How much longer will customers accept that their cars are not part of this ecosystem — even for simple functions like checking the fuel level? OEMs proudly point to commitments to make new cars connected in the coming years, but what about the legacy fleet?
  • This is How We Do ItRenault’s head of sales planning outlined the approach his team uses. The overriding impression is of art rather than science as the central team try to reconcile market forecasts, factory flexibility and breaking news that could render all previous information obsolete. Without wishing to criticise Renault (other OEMs follow the same approach), it does serve to highlight the fragility of a model that is wholesales led (i.e. sales to the dealers, rather than the end consumer).
  • Plug In BabyAprilli dreams of an autonomous vehicle that plugs into a hotel when it reaches a new city, expanding the space available. I find the idea of purpose build structures a bit clunky, but what about a roving fleet of autonomous amenities that can dock with your pod as you speed between locations? What productivity savings could be in store if the service station came to us, on the move?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

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News about the major automakers

BMW (history)

  • BMW’s product development head hinted that a PHEV supercar was in the works. He also said that, for the foreseeable future, the brand prefers hybrid vehicles to pure electric ones for sporty models because the weight penalty of larger batteries compromises dynamic performance.  (Autocar)

Daimler (history)

  • Renaming the NuCellSys fuel cell subsidiary to Mercedes-Benz Fuel Cell. (Daimler)

FCA (history)

  • Sold 2,235,204 vehicles in the US during 2018, an increase of 9% over 2017. The outlook for the Fiat brand is bleak, with sales down (41)% year-over-year. The Chrysler Pacifica and Dodge Journey and Caravan people carriers, bucked the trend for falling car registrations, with over 364,325 units sold, a rise of 9% on the prior year. (FCA)
  • Italian unions called for FCA to take back control of the Termini Imerese plant from Bluetec, which took on the plant with (so far unfulfilled) promises to provide work for the nearly 700 Fiat employees. (Il Sole 24 Ore)

Ford (history)

  • Sold 2,497,318 vehicles in the US in 2018, down (3.5)% from 2017, explained by an (18.4)% fall in car sales. (Ford)
  • Issued two recalls for around 953,000 vehicles, mainly to correct further Takarta airbag problems. (Ford)
  • Will only report sales figures quarterly, as opposed to monthly, going forward, citing GM’s experience that monthly sales are too short a snapshot to draw meaningful conclusions about market conditions. (Reuters)

Geely (includes Volvo) (history)

  • Volvo sold 642,253 cars in 2018, an increase of 12.4% on 2017 with sales increasing in all major regions. (Volvo)
  • Geely and Lynk&Co sold 1,500,838 cars in 2018, some way short of the 1.58 million target for the year — the 2019 target has been lowered to 1.51 million. Sales of Lynk&Co appear to have stumbled badly in December with the 01 model mysteriously dropping over (80)% from October and the 02 seemingly selling no units at all. (Geely)
  • Showed a silhouette of the first Geely-badged model to come from the CMA platform shared with Volvo. (Geely)

General Motors (history)

  • Appointed the PD chief as company president; it seems that he will continue in his existing role. (GM)  
  • Sold 2,954,037 vehicles in the key US market in 2018, with 785,229 in Q4. GM is “bullish” about 2019 sales. (GM)
  • Cruise vehicles will trial home food delivery in partnership with DoorDash. (GM)
  • One Maven user reports that he is receiving $800 a month for renting out his car on the platform. Since the owner gets 60% of the total fees, that implies $1,330 in monthly gross revenues. (Detroit News)
  • The UAW union is suing GM, complaining that it is using temporary workers in preference to full-time employees who are out of work at other plants. (Reuters)
  • The CTO (and ex-CEO) of Cruise continued to play down rumours that GM might spin-off the self-driving unit saying that it was better to develop the technology alongside vehicle engineers. (Bloomberg)

Hyundai / Kia (history)

  • Unveiled a Hyundai concept vehicle featuring wheels on the end of articulated legs. Hyundai says the vehicle offers unparalleled mobility over rough terrain (without explaining the shortcomings of caterpillar tracks). (Hyundai)
  • KIA sold 2,812,200 vehicles globally during 2018, a year-over-year increase of 2.4%. The 2019 sales target for the brand is 2.92 million units. (KIA)
  • Hyundai reported 2018 sales of 4,586,775 units, an increase of 1.8% versus 2017. The company set a 2019 sales objective of 4.68 million vehicles. (Hyundai)
  • Hyundai and KIA aim to have a level 4 vehicle on sale around 2025 and a level 5 car by 2030. The two brands will “commercialise” self-driving vehicles in smart cities from 2021 onwards. (Hyundai)
  • Increased long term targets for electric vehicles, between Hyundai and KIA, 44 models are planned for 2025, up from 38 previously, expecting them to account for 1.67 million sales annually. (Hyundai)
  • KIA demonstrated a concept cockpit at CES that will analyse the driver’s facial movements to determine the appropriate cabin lighting, smell and temperature, all through a yet-to-be-created AI algorithm. KIA presented no evidence from existing vehicles that vehicle inhabitants frequently change these settings today. (KIA)

Mazda

  • Dealers will upgrade infotainment systems on cars up to five years old to integrate Apple CarPlay and Android Auto capability, for around £300. (Motoring Research)

Nissan (includes Mitsubishi) (history)

  • Carlos Ghosn’s son said the former Nissan CEO will mount a vigorous defence. (Detroit News)
  • Created a concept car that features augmented reality to show information that is either in a blind spot or beyond the driver’s visual range. (Nissan)
  • Released images of the Infiniti QX concept car to be unveiled at the Detroit show which promises to show the brand’s future direction with an all-electric portfolio. (Nissan)
  • Abruptly placed two more senior executives on a leave of absence, apparently related to the probe into Carlos Ghosn’s financial affairs. (Financial Times)

Renault (history)

  • Renault’s head sales planner outlined the volume forecast process. Ultimately, because Renault do not work on the basis of a retail customer “pull” (in common with virtually all other brands), the method is a series of checks and second-guessing as market demands are compared to central production flexibility and overlaid with changes in the market between the time the process kicked off and when it ends. (Automotive Logistics)

Tata (includes JLR) (history)

  • Recalling 68,828 JLR vehicles in China to fix problems with the crankshaft bearings. (Xinhua)
  • The R&D head of Tata Technologies described in an interview how the company approaches material choice for optimum weight reduction and cost optimisation. (Autocar)

Tesla (history)

  • Q4 deliveries were 90,700 vehicles, of which 61,394 were Model 3. Model S sales continued to fall on a trend basis as the product ages and, possibly, customers opt for the cheaper Model 3. Model X continues to grow. Tesla also announced a $2,000 per unit price reduction in the US to partially offset the $3,750 drop in federal tax credits. The company said the year-end production rate was around 350,000 units annually, implying current Model 3 production of around 5,500 cars per week. (Tesla)
  • Tesla’s public relations team appears to be shifting towards the same kind of media-grooming expected of mainstream automakers, recently inviting selected journalists to the Alaskan cold weather testing facility it uses in exchange for glowing reviews. (CNET)
  • Broke ground on the new Shanghai factory. (Bloomberg)

Toyota (history)

  • Showed photographs of the latest-level Toyota self-driving test vehicles. (Toyota)

VW Group (history)

  • Said that proposed hardware retrofits in Germany would reduce reliability and change the driving characteristics of vehicles. VW believes that some vehicles will be impossible to retrofit and that even those that can be modified may fall short of the envisaged emissions levels. (VW)
  • The Porsche and Piech families, majority owners of VW Group, have declared the performance of Bentley to be unsatisfactory and want a turnaround to yield results within two years. (FAZ)

Other

  • Faraday Future settled a legal wrangle with major investor Evergrrande and said the firm’s value had actually increased, to $3.25 billion, during the disagreement. (Faraday Future)
  • Aspiring electric car maker Laureti said is has identified a manufacturing location in India that will have an annual capacity for 10,000 cars by 2021 and 20,000 by 2023 and will launch the DionX vehicle in 2019 with a 6,000 km trip between 7 cities. (Laureti)
  • Volvo Trucks said it will make a provision of 7 billion SEK (about $780 million) to repair exhaust systems that will degrade over time and ultimately fail to meet emissions rules. The company has yet to work out how to fix the problem. (Volvo)
    • Significance: Without further clarity, it is dangerous to draw firm conclusions but it remains possible that the issue Volvo has could affect other companies that have followed a similar design direction.

News about other companies and trends

Economic / Political News

  • Despite reporting mixed year-end US market sales, major brands expressed confidence in the market outlook saying that consumers still had a healthy appetite for car purchases. (Reuters)
  • US light vehicle sales for 2018 totalled 17.2 million units. (Wards)
  • German passenger car sales of 237,058 in December were down (6.7)% on a year earlier, the full year total of 3.44 million was (0.2)% worse than 2017. (KBA)
  • Passenger car sales in France fell (14.5)% in December versus a year earlier to 165,390 units. For 2018 overall, sales of 2,173,481 cars was up 2.6% on a like-for-like basis with 2017. (CCFA)
  • December passenger car sales in Italy of 124,078 units were up 2% on a year-over-year basis. 2018 sales of 1,910,025 cars dropped (3.1)% versus 2017. (UNRAE)
  • Spanish passenger car registrations came to 99,291 in December, a (3.5)% fall on a year earlier. On a full year basis, sales were 1,321,438 units, up 7% on 2017. (ANFAC)

Suppliers

  • Samsung will supply the chips used in Audi infotainment system. (Autocar)

Dealers

  • India used car site CarDekho raised $110 million. (Economic Times)
  • US new car transaction prices at the end of 2018 were up versus 2017 but trending lower month-over-month. (Kelly)
  • Youche Yihou, a website providing car news, purchase information and discounts, raised $29 million from investors including Tencent. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental (history)

  • Changes in ride hailing permit regulations in China may cause a reduction in vehicles available. (TechCrunch)

Driverless / Autonomy (history)

  • Ouster said it would start selling a 128 line lidar unit for $18,000 in mid-2019 and implied that rival devices are currently retailing at over $100,000 each. The new unit is claimed to have equal power consumption to the existing 64 line model, thanks to improvements in the electronics. (Ouster)
  • Velodyne launched new short range, low resolution lidar units aimed at driver assistance applications that currently use cameras and radar. No price was mentioned but a “quantum leap” in performance is claimed. (Velodyne)
  • Robosense said its M1 model would retail for $200 and five units would be enough to provide 360o visibility with a range of 200m for autonomous cars. (Robosense)
  • Uber has reportedly commissioned McLaren to provide back-up safety systems for the firm’s autonomous driving program. (Telegraph)
  • Start-up Imagry is developing a driverless vehicle that does not require HD mapping. (Imagry)
  • Design firm Aprilli showed a concept autonomous vehicle that boasts a lounge-like interior that could function as a valet vehicle and hotel room extension. The idea is that the pod would be provided for travellers, moving them between cities and then docking into purpose-built hotel rooms for a more comfortable sleep. (Futurism)
    • Significance: Although the footprint of the proposed vehicle seems outlandish, could this be the start of an idea for autonomous vehicles that dock in transit to provide greater space or additional amenities?
  • Lidar developer Baraja raised $32 million. (Baraja)
  • GM’s Cruise vehicles will trial home food delivery in partnership with DoorDash. (GM)
  • Toyota showed photographs of their latest-level self-driving test vehicles. (Toyota)

Electrification (history)

  • Tesla CEO Elon Musk said Singapore was not supportive of electric vehicles. (Straits Times)
  • BMW prefers hybrid vehicles to pure electric ones for sporty models because the weight penalty of larger batteries compromises dynamic performance.  (Autocar)

Connectivity

  • Data analysis firm Carmen Automotive raised $730,000. (Deal Street Asia)
  • Delphi and TomTom will work together to integrate real-time mapping data into vehicle controls so that the system can provide feedback and advice to the driver. (Delphi)
  • Continental has won its first customer project for a 5G vehicle to everything network that uses both existing mobile phone communications and dedicated infrastructure. (Continental)
  • Upstream Security and Arilou will partner to create cloud-based cyber security for connected cars. (Upstream)
  • Hyundai has joined the Automotive Grade Linux group. (Linux)
  • Amazon has sold 100 million Alexa devices. (The Verge)
    • Significance: Although the user experience of Alexa – in common with other voice activated assistants – remains patchy, the sales volume implies that large numbers of consumer will expect to have at least basic levels of voice interaction and connectivity with their vehicles (e.g. “tell the car to warm up” or “how much fuel is left in the tank?”). Sales of Alexa are more significant in this respect than mobile phones with personal assistant because these are devices where the customer has explicitly chosen voice activation capabilities.

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