Monthly Archives: November 2019

Increasing prices in India by up to 6% to partially recoup costs arising from the BS VI emission standard. (Autocar)
Signed massive battery orders with Samsung SDI and CATL covering production in Europe and China. The combined value is just under €10 billion between 2020 and 2031. (BMW)
Was fined by German authorities for being part of a steel cartel. (Reuters)

Confirmed that Mercedes will continue to offer V12 engines in the next-generation S-Class. (GT Spirit)
Daimler Trucks upped its stake in Russian truck maker Kamaz to 15%. (Xinhua)
Unveiled the production version of the Mercedes-Mayback GLS. (Daimler)
Was fined by German authorities for being part of a steel cartel. (Reuters)

FCA Chairman Elkann expects the merger with PSA to be fully agreed by the end of 2019 and says the combination with PSA will be better than one with Renault because of increased freedom to expand in Asia. (Torino Oggi)
GM filed a lawsuit against FCA, claiming that the latter’s bribery of UAW officials had inflated GM’s labour costs and hurt the bottom line to the tune of billions of dollars. FCA was dismissive, pointing to the timing (disrupting both the FCA-PSA merger and FCA’s talks with the UAW) as evidence of GM’s pettiness. (FCA)
Maserati confirmed a new high-power engine line-up is under development and set for launch in 2020. (Maserati)
Recalling about 580,000 SUVs to correct problems with fuel pumps. (FCA)

Ferrari

Has no plans for a hybrid version of the Roma (even though Ferrari says it would be easy), implying that the technology will appear on the most expensive models first. (Forbes)

General Motors ^(history)

CEO Hackett says the Mach E electric SUV will be immediately profitable but clarified that this was only on a basis of contribution margin less variable manufacturing costs. (Bloomberg)
Initial capacity for the Mach E will be capped at 50,000 units because Ford says battery supply is constrained. (Fox)
- Significance: Since other brands continue to sign massive battery deals, Ford’s predicament is more likely the result of the type of battery supply contracts it is pursuing, than a reflection of outright supply constraint.
Ford was unhappy with Tesla showing the Cybertruck pulling an F-150 uphill, despite the latter’s best efforts to drive in the opposite direction. Executives suggested Tesla had used a lower spec model without AWD (it isn’t possible to know the exact price-adjusted comparison at this stage) and offered to repeat the test with the Blue Oval’s own all-electric pick-up truck. (Detroit News)

Filed a lawsuit against FCA, claiming that the latter’s bribery of UAW officials had inflated GM’s labour costs and hurt the bottom line to the tune of billions of dollars. FCA was dismissive. (Detroit News)
CEO Barra said GM would have an all-electric pick-up truck on sale by autumn 2021. (GM 12:30)
GM and Isuzu’s joint venture will invest $175 million to produce machined components for engines. (GM)
- Significance: Coming at a time when executives are talking about rationalising spending on traditional internal combustion engines, the investment shows: (1) not to believe the hype; (2) a lack of imagination and will power to do things differently since someone, somewhere should have a load of machining centres going for a song (ahem: Ford Bridgend and Romeo) and; (3) when extra capacity is needed for high margin units (heavy trucks in this case), money is thrown at the problem.

Renault ^(history)

The head of the Vauxhall brand expects the next generation of B cars (e.g. 2025+) will only be offered as all-electric models in Europe. He also ruled out “active” derivatives, preferring to point customers in the direction of different cars in the portfolio with more rugged styling. (Autocar)
PSA executives expect their small car platforms to be used by the merged group. (Reuters)

Renault’s former COO Patrick Pelata gave an interview in which he opened the lid on the current state of Nissan and Renault’s relationship (presumably based on well-sourced second hand information). He claims that no new joint projects have kicked off for ages; that Ghosn had stopped caring about details — allowing executives on both sides to squabble; and that Renault had engaged in adversarial transfer pricing and mismanaged the changeover to WLTP, making Nissan shoulder some of the downside. (Les Echos)

JLR’s boss says the company can survive alone, but he would like to partner on some components. Although the company firmly believes in the future of the electric car, it sees customer adoption as slower than hoped. (Reuters)

Tesla ^(history)

Unveiled the Cybertruck, Tesla’s take on the full size pick-up, representing the most lucrative segment of North America’s mass market. The vehicle will come in several different power levels and varying prices, but Tesla says the entry level models will be priced at $39,000. Tesla has chosen an unconventional styling direction, led partly by the selection of thick gauge stainless steel (about three four times industry standard). (Tesla)
- Significance: Whilst many pundits believe (hope?) that the styling of the truck shown will be superseded by a more conventional design at a later date, the angular form will be amongst the simplest vehicles in the world to produce, requiring very little capital spending by doing away with stamping tools and perhaps the paint shop.
At the Cybertruck’s launch, a demonstration of the truck’s armoured windows appeared to go wrong when the glass smashed after having a metal ball thrown at it. A few days later, with Musk claiming 200,000 orders, it seemed to have been a blessing. (The Verge)
- Significance: Tesla have lowered the refundable deposit required to reserve a Cybertruck, to $100, so it is unclear what percentage of reservation holders will follow through with purchase.
Pininfarina’s CEO finds the Cybertruck so ugly that he is convinced the design is simply a PR stunt. (Autocar)
Elon Musk says a fold-out set of solar panels that generate sufficient electricity for 30 – 40 miles of range is an option being considered for the Cybertruck. (Twitter)

Lexus showed off the brand’s first all-electric car. The UX300e is an SUV with a smaller battery than most peers, a 54.3 kWh unit has been fitted where most peers are in the 70 kWh – 95 kWh range. (Toyota)

Audi is in talks with BYD about supplying batteries for China-built cars and says that half of the forthcoming launches will be all-electric models. (Bloomberg)
Bugatti’s boss is contemplating going down market with an entry-level product that could see sales rise to 600 units per year. Don’t get your wallets out just yet; it will cost north of €500,000. (Automotive News)
In the latest chapter in Prevent Group’s ongoing feud with VW, the supplier filed a lawsuit claiming it has been prevented from buying smaller rivals by VW’s anticompetitive practices. (Reuters)
The Volkswagen brand is only going to participate in motorsport that uses electric vehicles in future (for the moment, it will still make combustion-powered cars for customer teams). (VW)
Porsche executives say the 911 will be the last model to go electric. (Bloomberg)
Lamborghini is using blockchain to validate the credentials of the marque’s classic cars. (Salesforce)
Audi unveiled the e-tron Sportback, a hatchback-like derivative of the e-tron. Sales start in 2020. (Audi)
CEO Diess said the ID3 is 40% cheaper to build than the outgoing electric Golf. 5% – 10% of the improvement came through scale, the rest is improvements in technology and application. (Reuters)
VW’s software engineering teams will be consolidated into a single structure from the beginning of 2020 as part of a bid to reduce brand-driven complexity and grow VW’s share of software development in its cars from 10% today to 60% by 2025. (VW)
SEAT has created a new business unit to hold its mobility assets including car sharing and scooter rental. (SEAT)
Was fined by German authorities for being part of a steel cartel. (Reuters)
Announced a series of management changes, mainly affecting the VW and Audi brands. (VW)

Other

Aston Martin unveiled the DBX SUV. The brand has a lot riding on the car, which it hopes will make up nearly half of annual sales. (AML) Aston Martin’s CEO suggested that customers might have to wait until the next generation DBX to get their hands on an all-electric model. (Car Advice)
Workhorse raised $41 million in debt. (Workhorse)
Karma Automotive showed off the SC2 concept, nodding towards the brand’s next-generation sportscar, and hinted at a forthcoming pick-up (which Karma appears less keen on building itself but hopes will attract other users to its engineering platform). (Karma)
Neuron EV released renderings of a three-seat double cab pick-up called T-ONE. (Neuron)
The UAW dumped its president and accused him of corruption. (Reuters)

News about other companies and trends

Economic / Political News

European passenger car sales in October of 1,214,989 units rose 8.6% on a year-over-year basis. (ACEA)

Suppliers

Hella is selling off its relay division to Hongfa. (Hella)
Magna is acquiring lighting supplier Wipac. (Magna)
Aptiv completed its takeover of cable management specialist gabocom. (Aptiv)
ZF is creating a joint venture with Wolong to make electric motors for the Chinese market. (ZF)
Continental is considering more plant closures, and acting sooner, than previously announced. (Continental)

Gett is shutting the Juno ride hailing service in New York in a deal with Lyft that will see Gett use Lyft’s US network on a whitelabel basis. (Gett) Despite being based in Belarus (and therefore relatively close to Gett), the Juno software team are transferring to Lyft rather than being absorbed into Gett’s efforts, raising the question of whether talent shortages are a thing of the past. (Business Insider)
Uber explained a little bit about how it shares with governments and said that in future it will give updates less frequently. Apparently, this will make the data more accurate. (Uber)

Lyft executives suggested passengers were on average more satisfied with riding in the firm’s autonomous test vehicles than with a human driver but accepted that it might also be because the cars are nicer. (Business Insider)
Here are the research papers that Lyft’s self-driving team thinks are most interesting. (Lyft)
Sensor developer Vayyar raised $109 million. (TechCrunch)

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

Nikola Motors reckons it has a battery with a 500 Wh / kg energy density that is nearly production ready. (Nikola)
The head of PSA’s Vauxhall brand expects the next generation of B cars (e.g. 2025+) will only be offered as all-electric models in Europe. (Autocar)
Electric GT are selling an electric motor complete with batteries that fits into the same space as a V8. (IEE Spectrum)

Connectivity

US regulators are thinking about allocating part of the spectrum reserved for automobiles to wi-fi users because car companies have failed to produce vehicles that talk to each other (although they keep promising to). (Reuters)
Telematics firm Geotab acquired Intendia, a firm that helps business customers integrate telematics into their other IT systems. (Fleet Europe)

Other

Scooter rental firm Circ (formerly Flash) is cutting staff, which it says is a sign of success. (TechCrunch)

Find our archive here.

Auto Industry Briefing — week ending 17th November 2019

November 18, 2019 Ad Punctum TeamAd Punctum, Automotive0

A very expensive Ford; smaller and more powerful batteries; and making the right number of vehicles. Please enjoy our auto industry and mobility briefing for 11^th November to 17^th November 2019. A PDF version can be found here.

New Man In Town — Ford unveiled the Mustang Mach-E, the company’s first serious stab at an all-electric car. The car looks competent, although the name is a bit of a mouthful — the unfortunate result of Ford wanting to use Mustang in the name, but at the same time clearly differentiate from the namesake muscle car. The real question is whether the car can command the pricing Ford has set. How much interest is there in a £55,000 / €55,000 / $60,000 car that looks like an Infiniti QX70 with a Blue Oval (actually a pony) on the front?
Headshrinker — BMW expects energy density of batteries to double by 2030. That implies a battery big enough for 250 miles of range in a large car could be around 250 kg lighter than today’s technology (and obviously smaller). If those targets are reached, might we see people quietly dropping much-vaunted skateboard chassis and going back to unibody? Could it be the tipping point at which OEMs stop designing completely different ICE and EV cars to do the same job (ahem Golf vs ID3)?
Borderline — Some US dealers say FCA has been building cars that they haven’t ordered. FCA says it is all part of an improved predictive ordering system that knows better than the dealers do. It all points to an age-old problem: scheduling. How do either carmaker or dealer know better than the customer themselves? Why is it so hard for a retail customer to get a custom order built when it is standard practice (rental aside) for fleets?

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

Find our archive here.

News about the major automakers

Expects energy density to double by 2030, implying ~ 300 Wh / kg and is spending €200 million on research into new technology to achieve it. BMW believes that in future, 90% of the battery will be recyclable. (BMW)
Launching an “expert” career path offering employees with the right skillset the opportunity to progress without having to take on management responsibility. Such schemes aren’t anything new and often fall foul of either headcount reductions that force unwilling technical experts into management positions, or the inherent ceiling that companies are prepared to offer those without executive responsibilities. (BMW)

Held a capital markets day. Mercedes-Benz thinks that 2020 CO₂ compliance will be a close-run thing, worrying about battery availability and customer enthusiasm. The firm plans to save over €1 billion through staff cuts (already leaked) and says that investment has peaked — it will be about the same next year as in 2019, but will then drop. The impact from product cost to improve CO₂ and higher development spending will be so great that by 2022, Daimler’s profit will be almost eliminated without “countermeasures”. (Daimler)
Daimler believes that autonomous driving will come to trucks first and that the primary retail applications will be for unsupervised highway driving. CEO Källenius says there is a reality check setting in about robo taxis and that the advantages of being first to market are more than offset by the downside of having to put a hugely expensive fleet of vehicles on the road. (Daimler)

Some US dealers complained about FCA building cars no one had ordered, with a reported peak of 40,000 unassigned vehicles at one point. Others said everything was under control and it was all part of a recently created predictive analytics system (which builds cars dealers haven’t yet realised they need to order). (Detroit News)
The 3^rd shift at the Windsor, Canada, factory was granted yet another reprieve — until the end of Q1 2020 — FCA originally said the shift would be gone by September 2019 and has extended several times since. (Detroit News)

Ferrari

Unveiled the Roma, a 2+2 grand touring car derived from the Portofino coupe-cabriolet. (Ferrari)

General Motors ^(history)

Unveiled Ford’s much-anticipated, first serious all-electric entry. Named the Mustang Mach-E, the sporty SUV boasts performance to rival the Tesla Model X (sans Ludicrous mode), and a price tag ($60k+ / £55k+ for a decent trim and battery combination) that will test the limits of the Blue Oval’s attractiveness to consumers. (Ford)
US unionised workers voted in favour of the tentative agreement. Ford will pay $700 million in ratification bonuses in Q4 2019. (Ford)

Received a patent for a start/stop system that uses GPS data to determine whether switching the engine off will be useful or annoying. (CNET)

Honda ^(history)

Honda’s CEO says the hurdles to widespread adoption of electric vehicles and autonomous driving are “still quite high”. He believes that Honda has the same level of technology as peers but that some companies are being too optimistic about take-up and cost. He has no interest in a capital tie-up, fearing obstruction. (Automotive News)

Hyundai / Kia^(history)

Investing $410 million to build the Santa Cruz pickup at the Montgomery, USA, factory. (Hyundai)
Hyundai created a mobility subsidiary in California, initially offering car sharing, called MoceanLab. (Hyundai)

Nissan (includes Mitsubishi)^(history)

Nissan reported financial results for Q3 2019 (fiscal year Q2). Revenue of 2.6 trillion JPY (about $26 billion) fell (6.6)% on a year-over-year basis, while operating profit of 30 billion JPY (about $280 million) fell (70.4)% YoY. Nissan slashed the full year outlook: revenue forecast is (6)% lower and operating profit is (35)% worse. (Nissan)
Nissan announced a series of executive changes. (Nissan)
Nissan is recalling almost 400,000 cars to fix problems with the braking. (The Guardian)

Renault ^(history)

The Peugeot brand will enter the 2023 Le Mans race. (PSA)
Unions at the Rennes, France, plant say that if the factory isn’t awarded a new car then utilisation will drop from 2023 onwards. (France Info)

France’s government apparently favour an automotive industry professional as the next Renault CEO, potentially bad news for the caretaker CEO as she only came into the industry a few years ago. (Reuters)

Tata is rumoured to have explored linking up with BMW and Geely to share parts (and maybe even entire models) with JLR in a bid to gain scale. Geely denied there had been any discussions. (Economic Times of India)
- Significance: Whilst it makes sense for Tata to look for partners, JLR’s existing strategy is to try and leverage scale within vehicle lines by using common components (as is Volvo’s). Vast sharing would likely necessitate re-drawing much of JLR’s product plans.

Tesla ^(history)

Will build a new factory in Germany, near Berlin. CEO Musk said Brexit had deterred him from choosing the UK, a comment that set tongues wagging. (Reuters)

Reckons its US advertising impact can be measured by analysing minute-by-minute internet search statistics. (EDO)

Confirmed high level financial targets for the period to 2025, reiterating that VW believes R&D and CapEx will fall from 2020 onwards (despite high spending on electric vehicles). (VW)
Planning to spend €60 billion, or 40% of all investment in the period, between 2020-2024 on new technologies such as electrification and digitalisation. VW says that €33 billion of this will be for electric cars. (VW)
Porsche has developed a reconfigurable pop-up store that displays a handful of cars. Thus far, the same design has been used in Brazil, Taiwan and Canada. (Porsche)
Confirmed ex-BMW purchasing chief Markus Duesmann as CEO of Audi from April 2020 onwards. Incumbent Bram Schot will leave VW Group altogether. (VW)
Will build ID3 electric cars (in low numbers) at the Dresden “Glass Factory”. (VW)

Other

MG aims to sell 2,000 – 3,000 all-electric ZS models in India, at 22 lakh INR / $31,000 a pop. (Autocar)
McLaren unveiled the Elva, a high-performance roadster. Limited to 399 cars, it will cost £1.425 million and has no stereo (although McLaren will fit one for free if you want). (McLaren)
Evergrande wants to build ten factories for electric cars and has signed up 60 suppliers. (Xinhua Silk Road)
Navistar said the GM strike meant $140 million of lost sales (mainly on GM-badged vehicles where parts supply dried up). (Navistar)
Aspark showed off the production-intent version of the Owl all-electric hypercar. (Aspark)
Nio announced a new CFO — former sell-side analyst Wei Feng. (Nio)
Chinese electric vehicle start-up XPeng says it has raised $400 million. (XPeng)

News about other companies and trends

Suppliers

Continental reported Q3 2019 revenue of €11.1 billion and adjusted EBIT of €615 million. (Continental)
Grammer reported Q3 2019 revenue of €498 million and EBIT of €12 million. (Grammer)
Lithium miners have been complaining that there is a supply glut. (Reuters)
Meritor reported Q3 2019 revenue of $1.0 billion and adjusted income of $70 million. (Meritor)
Martinrea reported Q3 2019 sales of C$974 million (about $740 million) and net income of C$47 million (about $35 million). (Martinrea)

Dealers

Frontier, owner of multiple emerging market used car sites, raised $400 million. (TechCrunch)

Lyft is ending scooter rental services in several cities. (TechCrunch)
- Significance: The move indicates that, even if there is a market for scooter (or similar vehicle) rental, it could be highly dependent on local tastes with many territories proving resistant for reasons including weather; quality of the road network; proclivity for vandalism and local regulatory / political environment.

Ouster released a 32 channel lidar retailing at $8,000. (Ouster)
- Significance: Ouster didn’t explore the relative merits of the new unit versus the company’s existing 64 and 128 line offerings. Although more “affordable”, it isn’t clear whether self-driving developers value the lower resolution units over long distances where distance between points makes high confidence object recognition more difficult.
Self-driving vehicle developer Wayve raised $20 million (as earlier rumoured). (VentureBeat)
Cruise’s head of AI talked about some of the firm’s methods. (VentureBeat)
Daimler believes that autonomous driving will come to trucks first and that the primary retail applications will be for unsupervised highway driving. CEO Källenius says there is a reality check setting in about robo taxis and that the advantages of being first to market are more than offset by the downside of having to put a hugely expensive fleet of vehicles on the road. (Daimler)

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

Lyft says that drivers of all electric ride sharing cars / taxis save $70 – $100 per week in fuel costs. (Lyft)
Workhorse will offer EnerDel battery packs in a range of sizes. (Workhorse)
BMW expects energy density to double by 2030, implying ~ 300 Wh / kg and is spending €200 million on research into new technology to achieve it. BMW believes that in future, 90% of the battery will be recyclable. (BMW)

Connectivity

Indoor mapping start-up Mapxus raised $3 million. (Deal Street Asia)

Other

Trait Signal reckons it can improve feedback about cars by taking focus group feedback, running it through specially trained artificial intelligence and then creating something useful from their comments. Good luck. (Trait Signal)
Logistics firm Convoy raised $400 million. (TechCrunch)

Find our archive here.

Auto Industry Briefing — week ending 10th November 2019

November 11, 2019 Ad Punctum TeamAd Punctum, Automotive0

Good news for internal combustion engines; realistic break even figures for niche producers; and futuristic concepts that need more work. Please enjoy our auto industry and mobility briefing for 4^th November to 10^th November 2019. A PDF version can be found here.

Keep On Running — Mahle reckon that 48V has plenty more fuel economy to give (+15%), if the battery can be optimised for real world charge and discharge cycles. One of the clichés of the march towards lower CO₂ is that internal combustion engine use will collapse. Is there life in the old dog yet?
Swing Low Sweet Chariot — Geely’s LEVC unit must sell upwards of 12,000 vehicles (taxis and taxi-derived vans) to be profitable, according to the CEO. If Geely are setting such humble (yet still challenging) targets for the brand, what does it say about the aspirations of start-ups aiming for six figures with similar portfolios?
Sit Down — Kia showed off a futuristic SUV concept which the brand says previews a passenger cabin fit for autonomy. This seems to boil down to giving the driver and passengers lit-flat-seats — is that imaginative enough? And if this is really what the customer needs, why don’t front seat passengers have this luxury today?

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

Find our archive here.

News about the major automakers

Reported Q3 2019 automotive revenue of €16.7 billion, up 11% on a year-over-year basis and automotive EBIT of €1.5 billion, up 64%. (BMW)
BMW remains “strongly committed” to meeting 2021 CO₂ standards. (BMW) The CFO said that fines “are definitely not a strategic option”. (Seeking Alpha)
BMW believes that the vehicle will be the most profitable part of any future mobility ecosystem. (Seeking Alpha)

Union officials implied workers in Germany could go on strike if the Untertürkheim, Germany, site — with over 10,000 employees in making parts for traditional powertrain — isn’t chosen to produce electric drives. (Handelsblatt)
A leaked newsletter suggests 1,100 Daimler managers are set for the chop. (FAZ)
Confirmed there will be an all-electric version of the G-Class. (Autocar)

Moody’s improved the outlook for FCA’s debt. (FCA) So did S&P. (FCA)
PSA CEO Tavares believes the synergy targets set by the PSA-FCA merger proposal are minimum levels and doesn’t foresee scrapping any of the combined group’s brands (good news, Lancia fans). (Reuters)

Ferrari

Reported Q3 2019 revenue of €915 million, up 9% on a year-over-year basis (in line with a 9% increase in shipments to 2,474 cars), and EBIT of €227 million, up 12% YoY — mainly driven by special editions. Ferrari upgraded full year earnings guidance and now expects adjusted EBIT of €920 million. (Ferrari)
Ferrari has recruiting more people to work on electrification and human machine interfaces recently. (Seeking Alpha)

Geely (includes Volvo) ^(history)

Sold part of the European financing portfolio (covering Scandinavia) to Santander. (Reuters)
Announced an executive reshuffle, including for the autonomy and strategy leadership. (Ford)
Didn’t produce any vehicles in Mexico for the entire month of October, blaming retooling. (Reuters)
Experimenting with seamless knitted seat covers in a bid to make seats more “intuitive”. (Ford)

LEVC needs to sell between 8,000 – 12,000 vans and around 4,000 taxis to turn a profit. (Automotive News)

Honda ^(history)

Reported Q3 2019 (fiscal Q2) revenues of 3.7 trillion JPY (about $34 billion), down (3)% on a year-over-year basis and operating profit of 220 billion JPY (about $2 billion), up 3% YoY. Honda now predicts lower revenue and profits than previously guided. (Honda)

Hyundai / Kia^(history)

Kia revealed a concept SUV Coupe called Futuron. Kia thinks that in the future, partially autonomous cars mean — on some journeys — the driver and passenger can simply lie back. Rear seat passengers will still have to slum it with a conventional position however, and why front passengers can’t simply do this in Kia’s contemporary cars wasn’t explained. (Kia)

Nissan (includes Mitsubishi)^(history)

Mitsubishi reported Q3 2019 (fiscal year Q2) revenue of 592 billion JPY (about $5.4 billion), down (3)% on a year-over-year basis and operating profit of 6.4 billion JPY (about $59 million), down (78)%. Mitsubishi reduced full year profit guidance. (Mitsubishi)

Renault ^(history)

CEO Tavares believes the synergy targets set by the PSA-FCA merger proposal are minimum levels and doesn’t foresee scrapping any of the combined group’s brands (good news, Lancia fans). (Reuters)

Renault thinks that used batteries from electric cars could have an application in boats. (Renault)

Suzuki

Suzuki reported Q3 2019 revenue of 848 billion JPY (about $7.8 billion), down (10)% on a year-over-year basis. Operating profit of 56 billion JPY (about $510 million) fell (32)% YoY. Suzuki expects lower revenue and operating profit in the full year than previous guidance. (Suzuki)
Maruti Suzuki and Toyota affiliate (Toyota Tsusho) set up a 50/50 joint venture to recycle cars, with a capacity for 2,000 vehicles per month. (Suzuki)

JLR believe that printed electronics could save 60% of the weight of traditional wiring harnesses. (JLR)

Reported Q3 2019 (fiscal Q2) revenue of 7.6 trillion JPY (about $70 billion), up 4% on a year-over-year basis. Operating income of 662 billion JPY (about $6.1 billion) rose 14% YoY. Toyota says it will sell fewer vehicles in the full year than previously anticipated (8.95 million rather than 9 million), but revenue and operating profit outlook remain unchanged. Toyota announced a ~$1.8 billion share buyback. (Toyota)
Maruti Suzuki and Toyota affiliate (Toyota Tsusho) set up a 50/50 joint venture to recycle cars, with a capacity for 2,000 vehicles per month. (Suzuki)
Toyota and BYD announced a joint venture to develop battery electric vehicles. The (50/50) partners will create a platform and models for the Chinese market. (Toyota)

VW’s autonomous cars have a claimed sensor range good for predicting the next ten seconds of driving conditions in cities. (Manager Magazin)
Audi has some posh new robots in the paint shop that can applied very thin lines of paint (akin to using a paint brush) so that the roof can be painted a different colour to the rest of the body without needing masking tape. (Audi)
VW’s distributors in Vietnam are in hot water because they advertised cars featuring maps recognising Chinese territorial claims that Vietnam rejects. (Bloomberg)
- Significance: With multiple territorial disputes, and highly sensitive governments and consumers, mapping in Asian countries is an issue that can easily catch out carmakers used to more benign conditions in the West.

Other

Subaru reported earnings for Q3 2019. Revenue of 772 billion JPY (about $7.1 billion) was a whisker below prior year, profit of 2.6 billion JPY (about $24 million) was better than Q3 2018. Although the outlook for revenue remains the same, profit is forecast to come in below previous expectations. (Subaru)
NIO will develop a self-driving system based on Mobileye’s technology. (NIO)
Aston Martin reported Q3 2019 revenue of £250 million, (11)% lower than prior year and an operating profit of £10.5 million, down (58)% year-over-year. Aston said the Vantage sports car isn’t selling as well as hoped, blaming a declining segment, rather than the product itself. (AML) AML announced pricing for the DBX SUV — about £160,000 / $190,000 — when analysts asked why US prices were lower than Europe ($189,000 vs €193,500), Aston Martin’s CEO cited competitive pressues in the US market. (AML)
Aston Martin released a track-only motorbike, limited to 100 examples, built by Brough Superior. (AML)
Workhorse released Q3 earnings. Revenue of $4,000 was more than offset by cost items and mark to market bad news, resulting in a net loss of $(11.5) million. The firm also reported details of the licencing arrangement with the (ex-GM) Lordstown plant. Workhorse will be paid a 1% royalty for each vehicle sold — low in the context of industry rule of thumb levels for R&D investment of 4% – 6% of revenue. (Workhorse) The company intends for the plant to be unionised. (Detroit Free Press)

News about other companies and trends

Economic / Political News

UK passenger car sales in October of 143,251 vehicles fell (7)% compared to prior year. (SMMT)
Passenger car registrations in Germany during October of 284,593 units rose 12.7% year-over-year. (KBA)
Passenger car registrations in France during October of 188,989 units rose 8.7% year-over-year. (CCFA)
Spanish passenger car registrations in October grew 6.3% year-over-year to 93,961 units. (ANFAC)
Italian passenger car registrations in October grew 6.7% year-over-year to 156,851 units. (UNRAE)
US light vehicle SAAR in October of 16.55 million units fell (5.2)% versus prior year. (Wards)

Suppliers

Motherson Sumi reported quarterly revenue of 15,709 cr INR (about $2.2 billion) and profit after tax of 385 cr INR (about $54 million). (Motherson)
Mahle increased its stake in Mahle Letrika Roots to 90% (from 50%). (Mahle)
Faurecia entered a 50/50 joint venture with Aptoide to create apps and an app store for drivers based on Google’s Android platform. (Telematic News)
Kongsberg reported Q3 2019 revenue of €279 million and adjusted EBIT of €14 million. (Kongsberg)
Cooper Standard reported Q3 2019 sales of $729 million and a net loss of $(14) million. (Cooper Standard)
Adient reported Q3 2019 revenue of $3.9 billion and EBIT of $102 million. (Adient)
Magna reported Q3 2019 revenue of $9.3 billion and an operating loss of $(319) million and expects full year revenue and profits to be lower. (Magna)
Schaeffler are looking for a new CFO. (Schaeffler)

Dealers

Mobile servicing firm Wrench raised $20 million. (Wrench)

Uber reported Q3 2019 financial results. Revenue of $3.8 billion rose 30% versus prior year, but a net loss of $(1,162) million was (18)% worse. Uber still has $12.65 billion of cash. (Uber)
BP invested in MaaS Global’s multimodal offshoot Whim. (Reuters)

Intel’s Mobileye held an investor day, briefing attendees on the technology behind Mobileye’s driver assistance systems, the crowd-sourced mapping project and an Israeli ride hailing scheme launching in 2020. (Mobileye)
Waymo is closing its Austin, USA base to concentrate on other locations. (CNBC)
Ghost Locomotion hopes to be selling a hands-off retrofit kit for highway driving in 2020 for a price that is lower than Tesla’s full self-driving offering. (TechCrunch)
Uber’s self-driving cars were involved in 37 crashes before the fatal incident in Arizona, a higher number than the handful previously known about. (Business Insider) Someone in the autonomous vehicle team might be getting a smacked bottom: an expert found that Uber’s software contains some code belonging to Waymo — something Uber’s CEO had seemingly been assured was impossible. (Reuters)
The home of the Indy 500 is offering a $1 million prize to the designer of the best self-driving racing car. (ESN)
VW’s autonomous cars have a claimed sensor range good for predicting the next ten seconds of driving conditions in cities. (Manager Magazin)
NIO will develop a self-driving system based on Mobileye’s technology. (NIO)

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

Mahle says that by optimising the chemistry to reflect the drive cycles of cars fitted with 48V batteries, the fuel economy can be improved by up to 15% compared with today’s offerings. (Mahle)
The head of the DTM touring car championship wants to start a new category for battery electric and fuel cell powered racing cars where the pitstops are performed by robots. (Reuters)
Sila Nanotechnologies raised a further $45 million, bringing total funding to $340 million. (Sila)
Renault thinks that used batteries from electric cars could have an application in boats. (Renault)

Connectivity

Subaru is teaming up with SoftBank (telecoms, not the VC arm) to research high-speed connectivity. (Subaru)

Find our archive here.

Auto Industry Briefing — week ending 3rd November 2019

November 5, 2019 Ad Punctum TeamAd Punctum, Automotive0

Promiscuous customers; visions of an all-powerful Tavares; and why do carmakers hate batteries but love hydrogen? Please enjoy our auto industry and mobility briefing for 28^th October to 3^rd November 2019. A PDF version can be found here.

All Of Me — One of the main reasons Ford sold short term leasing (subscription) specialist Canvas was because it didn’t fancy offering Ford customers the chance to hop into a Nissan or Toyota (the other reason was because it didn’t make any money). Executives say they didn’t fancy having to explain to grumpy Ford dealers why they were shifting opposition metal. But have Ford called time on the idea too early? If I’m understanding this right… in the future I can have short term all-inclusive leases that allow me to select new cars every so often, but I will be content to just stick to the same brand? Really? Based on what parallel from other industries?
Harder, Better, Faster, Stronger — FCA and PSA are planning a merger. Markets are already looking forward to a signature Carlos Tavares overhaul — boosting profits without closing plants when the theory says that is pretty much impossible. But is a five-year uptick in PSA performance, after several factories were shuttered before his watch began, during a boom period, proof that the recipe works (not daring to question his brilliance)? Or is the real genius the creation of a European behemoth that can play unions and governments in France, Germany and Italy off against one another in a recession?
Better Place — Hyundai has been making a lot of noise about hydrogen fuel cells, saying they are critical to long term fuel economy targets. But how do they know? Is it based on the technology, or just because filling up with hydrogen is more like filling up with petrol than plugging in a car? Why do car companies bleat about insufficient charging infrastructure one minute and the next praise hydrogen, which carries a set of different, unresolved, installation problems? Isn’t it a bit of a double standard?

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

Find our archive here.

News about the major automakers

Invested in a $22.5 million funding round for wiring developer CelLink. (BMW) BMW also put money into ELISE, a company creating product development tools. (BMW)

Daimler trucks pledged to offer only battery electric, or hydrogen fuel cell powered vehicles by 2039. By the late 2020s the brand hopes to have a portfolio containing both technology types on sale. Manufacturing is intended to be CO₂ neutral in Europe by 2022. (Daimler)
Although barely released on sale, Daimler is recalling EQC electric cars to fix problems with the differential. (Reuters)

Reported Q3 2019 revenue of €27.3 billion, down (1)% on a year-over-year basis and adjusted EBIT of €1.959 billion, up 5% YoY. FCA recorded €1.4 billion of special items for restructuring in Europe and impairments to the platform used by Alfa Romeo (which FCA explained as modifications made for electrification rendering much of the original design redundant). (FCA)
FCA laid out a series of challenges to profitability in Europe and actions to be taken. The main thrust of the strategy is to move customers into larger (yet still B segment) vehicles, reduce jobs and continue to pin hopes on Maserati, Alfa Romeo and Jeep. (FCA)
CEO Manley expressed a (vague) interest in licensing Tesla’s platform rather than developing technology in-house. He has been pleasantly surprised by the market reaction to electrified products. (Seeking Alpha)
FCA and PSA proposed a merger that would see (FCA’s) Elkann become chairman and (PSA’s) Tavares as CEO. To arrive at the deal’s proposed 50/50 structure, PSA will divest the stake in Faurecia to shareholders and FCA will do the same with Comau, plus give shareholders a special €5.5 billion dividend. The combined firm claims €3.7 billion in annual synergies are possible — and intend to spend €2.8 billion to achieve it. (FCA)
- Significance: After the deal, the new PSA-FCA group will be controlled by the Elkann family (Via Exor), the Peugeot family, the French government and Dongfeng. The merger will create a portfolio overloaded with mainstream European brands, the near premium Jeep and Alfa Romeo, and Maserati. Executive ego, and business analysis will soon enough be asking whether more premium brands are a sensible bet (clue: unless the Quandt family can be persuaded to join the old money love-in, probably not).

General Motors ^(history)

Reached a tentative contract agreement with the UAW, avoiding strike action (assuming members approve). (Ford)
One of the reasons Ford sold (short term leasing firm) Canvas was because Ford didn’t want to support a multi-brand (i.e. non Ford) portfolio, yet Canvas saw it as crucial to the business model. Ford Credit executives cited the difficulty of defending money spent on other brands to the dealer body as a key stumbling block. (Automotive News)
People renting connected Ford cars have reportedly found it very easy to register the car and retain control after the rental period ends using the FordPass app (if rental company staff responsible for cleaning the vehicles don’t do their jobs properly). (Ars Technica)
Will release an upgraded infotainment system called Sync 4 in 2020. In addition to new hardware, capabilities and graphics, Ford said that a variety of screen sizes will be supported, from 8 inch to 15.5 inch. (Ford)
Recalling over 315,000 vans in North America because of faulty driveshafts — Ford doesn’t yet have a permanent fix for the problem. A small volume of cars are being recalled to fix faulty seatbelts and suspension. (Ford)
Invested in a $22.5 million funding round for wiring developer CelLink. (BMW)
Closed the Sao Bernado do Campo, Brazil, factory, seemingly without finding a buyer. (Reuters)

Reported Q3 2019 financial results. Revenue of $35.5 billion fell (0.9)% on a year-over-year basis, whilst income of $2.3 billion fell (8.7)%. GM said the UAW strike had cost a net $(1) billion but that plants were now going all out to recover lost units. (GM)
CEO Barra said that EVs might not bring an overall improvement in productivity (after accounting for reductions in powertrain) because of additional work required by new technologies to create lighter vehicles. She wouldn’t be drawn on the potential for a Corvette-branded SUV. (Seeking Alpha)
GM’s president becomes de facto COO after a reshuffle that sees all the regional teams reporting into him. There were also promotions in the product development team. (GM)
Sacked three US workers for violent methods of obstructing production during the UAW strike. (Detroit News)
Recalling about 630,000 SUVs and trucks to fix problems with braking sensors. (Detroit Free Press)

Honda ^(history)

Intends to buy the outstanding shares of Japanese suppliers Keihin, Showa and Nissin Kogyo and then merge them with Hitachi Automotive. Honda will then own 33.4% of the new company with Hitachi holding 66.6%. (Honda)

Hyundai / Kia^(history)

Invested in three companies focused on hydrogen fuel cell technologies: Impact Coatings; H2Pro and GRZ Technologies. (Hyundai)
Hyundai is “fully convinced” that long term fuel economy targets cannot be realised without hydrogen powered vehicles. (Autocar)
- Significance: Given the rise of battery powered electric vehicles (hydrogen fuel cells use electric drive too) and the slow pace at which fuel cells are maturing (going from seven figures for a car at the start of the millennium to six figures now), it is unclear why some manufacturers continue to be so certain of the fuel’s place in the future. Despite constant carping by OEMs over the lack of a recharging infrastructure for electric vehicles, immature infrastructure is rarely seen by the same group as an impediment to hydrogen-power.
Announced a partnership with logistics firm Taavura to develop unspecified new mobility businesses. (Korea Herald)
Kia invested $12.5 million in autonomous transport start-up Code42. (Code42)
Showed off a concept fuel cell powered heavy truck. (Hyundai)

Mazda

Reported fiscal year 2019/20 first half financial results. Revenue of 1.706 trillion JPY (about $15.7 billion) fell (1.3)% on a year-over-year basis whilst operating income of 25.8 billion JPY (about $237 million) tumbled (14)% YoY. Improvements in volume and mix were more than offset by exchange bad news. (Mazda)
Mazda revised full year outlook downward. This was explained by a strengthening yen versus other currencies. Sales will be down too. (Mazda)

Nissan (includes Mitsubishi)^(history)

Nissan announced a series of executive changes, including a new CFO. (Nissan) Mitsubishi did too. (Mitsubishi)

FCA and PSA proposed a merger that would see (FCA’s) Elkann become chairman and (PSA’s) Tavares as CEO. To arrive at the deal’s proposed 50/50 structure, PSA will divest the stake in Faurecia to shareholders and FCA will do the same with Comau, plus give shareholders a special €5.5 billion dividend. The combined firm claims €3.7 billion in annual synergies are possible — and intend to spend €2.8 billion to achieve it. (FCA)
The Peugeot family were reportedly in the vanguard of the negotiating effort to seal a merger deal between PSA and FCA. Robert Peugeot had implied talks with FCA were ongoing in a March interview. (Les Echos)

Tata Sons is increasing its share in Tata Motors to 43.73%. (Economic Times of India)

Lexus’s belief that take up of electric vehicles will be slow is partly based on experience of the US market where, despite the brand’s strong hybrid portfolio, Lexus feels customers still value a strong ICE. (Automotive News)
- Significance: Whether consumer interest in switching from ICE to hybrid correlates to adoption of fully electric vehicles is an open question — especially because (historically) the brands with the most hybridisation have taken battery electric vehicles less seriously.

Reported Q3 2019 revenue of €61.4 billion, up 11% on a year-over-year basis and Operating profit of €4.5 billion (including special items), up 67% YoY, the main improvements were in volume, mix and rates and lower special items. VW lowered expectations for full year sales. (VW)
VW’s CFO said that although the Group thinks it will meet the 2020 EU CO2 targets without paying fines, it expects to look like it is off-track during the first half of the year before a flood of electrified products saves the firm’s bacon in the second half. (Seeking Alpha)
Škoda hopes to improve engine plant productivity by using an automated process improvement company. (Seebo)
Created a subsidiary called Volkswagen Autonomy (VWAT) to bring vehicles to market that use technology developed (alongside Ford) by Argo AI. (VW)
Despite publicising the simplicity of the next generation Golf’s electronics (mainly a reduction in the number of onboard computers), the vehicle will have more wiring than the current version. (Automotive Logistics) VW also continues to suffer the industry curse of complex software, the new car will have 80 million – 100 million lines of code. (VW page 14)
VW is developing four different factory of the future concepts to serve different parts of the business: a mass-manufacturing facility; one for making vehicles for shared mobility (where VW expects very little derivative complexity); a factory that can be set up rapidly (for emerging markets or capacity crunches); and a boutique plant that serves as a brand flagship (think Bugatti, Bentley or Lamborghini). (VW – Page 8)
Celebrated the launch of the Golf 8 with 35,000 packets of currywurst sausages from VW’s inhouse factory. IF you head to a Edeka supermarket now, they might be some left. (VW)
Porsche invested in Tactile Mobility, a firm that uses vehicle sensors to adapt to changing road conditions. (VW)
Beekeeping is catching on at Volkswagen. After Bentley’s bumper harvest this summer, VW’s motorsports division has got in on the act with a facility capable of producing 80kg of honey per year. (VW)

Other

Karma is reportedly hoping to contract manufacture cars for other automakers to use up excess capacity at its Californian factory. (Automotive News)
NIO is looking for a new CFO. (NIO)

News about other companies and trends

Suppliers

Gestamp reported Q3 2019 revenue of €2.1 billion and EBIT of €94 million. The company says that revenue growth will be slower than previously hoped. (Gestamp)
Veoneer is selling its share of a Chinese and Japanese brake making joint venture with Nissin-Kogyo (Veoneer took sole control of the JV’s US assets earlier this year). (Veoneer)
Denso reported first half 2019/20 revenue of $24.3 billion and operating profit of $1.2 billion. Denso revised down the earnings outlook for the full year. (Denso)
Magna won a contract to build dual clutch transmissions for BMW. (Magna)
Nidec completed the takeover of Omrom Automotive. (Nidec)
Tenneco reported Q3 2019 revenue of $4.3 billion and net income of $70 million. (Tenneco)
Aptiv reported revenue of $3.6 billion and net income of $246 million in Q3 2019. (Aptiv)
Visteon reported Q3 2019 revenue of $731 million and net income of $14 million. (Visteon)
Delphi reported Q3 2019 revenue of $1 billion and operating income of $45 million. In response to falling sales, particularly powertrain, Delphi is launching a restructuring. (Delphi)
BorgWarner reported Q3 2019 revenue of $2.5 billion and operating income of $276 million. (BW) The firm offloaded some liabilities to an asbestos specialist. (BW)
Chinese aftermarket parts supplier and procurement platform Casstime raised $80 million. (Deal Street Asia)
Honda will buy the outstanding shares of Japanese suppliers Keihin, Showa and Nissin Kogyo and then merge them with Hitachi Automotive. Honda will own 33.4% of the new company with Hitachi holding 66.6%. (Honda)

Dealers

Hitachi invested in mobility service Mobility Mixx and acquired leasing firm Mobilease. (Fleet Europe)

Lyft reported Q3 2019 revenue of $956 million, up 63% year-over-year, and a net loss of $(464) million. Lyft said that on an adjusted basis, net losses narrowed to $(122) million. (Lyft)
Waymo says it is giving journeys without drivers, but only to people who signed NDAs. (Reuters)
Lyft is ending the $299 per month all-access offering, instead replacing it with a $20 monthly scheme that offers discounts on trips. (Lyft)

Radar developer Smart Radar System (SRS) raised $4 million. (SRS)
Machine vision developer Prophesee raised $28 million from investors including Bosch. (FINSMES)
Comma.ai’s overhead is $160,000 per month; the start-up hopes to become profitable in 2020. (Comma.ai)
Kia invested $12.5 million in autonomous transport start-up Code42. (Code42)