All posts by Ad Punctum Team

After a spate of engine fires in South Korea, BMW recalled European vehicles with diesel engines and EGR to inspect for EGR coolant leakages. Media reports put the number of affected vehicles at 324,000. (BMW)
Executives said that BMW test drives of autonomous cars often last 1,000 km, with an average of three driver interventions, and also expressed scepticism that fully autonomous driving will be allowed on public roads. (Autocar)
Reportedly won’t replace the 3 Series GT model at the end of the current cycle. (BMW Blog)

Said it had ceased activities in Iran. (Reuters)
Reportedly in talks with BAIC to start making electric Smart cars in China. (Bloomberg)

Ford’s VP of product development and purchasing, Hau Thai-Tang gave a presentation outlining some of the company’s plans and how they tied into recently announced cost saving targets. For example, Thai-Tang presented a chart (slide 7) showing average age of portfolio coming down in the new plan as evidence of reater understanding of consumer trends and the need to produce relevant vehicles. (Ford)
- Implication: Page 105 in this presentation from September 2016 showed Ford had already learned this lesson and was boasting of a 2015 portfolio age of 2.6 years (even the new plan only gets to 3.3). In 2014, Ford called its product refresh plan leading up to 2020 “industry leading”. Is Ford failing to deliver on new products and then having to set itself back on track or is it taking credit for a pre-existing plan as new thinking?
Ford Aims to save around 20% to 40% of the engineering bill for each program by sharing up to 70% of the vehicle parts through common modules across five platforms. Ford conceded that in some markets the global platforms may be too expensive, and they will look to collaborate with local partners to do things more cheaply. Ford’s previous platform strategy restricted parts sharing to around 30% of vehicle content. (Ford)
- Implication: Ford’s new platform strategy echoes the approach of VW, Renault-Nissan and PSA, and to a lesser extent Volvo and JLR. The claimed savings appear realistic since these other manufacturers have quoted similar numbers and, VW aside, financial performance seems consistent. Slightly concerning was that Ford presented its plan as ahead of the pack, rather than recognising some competitors are more than five years ahead (but not GM). To judge for yourself how much of the costing process is new, you may want to look at this 2015 presentation by then VP of Purchasing Hau Thai-Tang, paying close attention to slides 1, 5, 9, 10 & 11.
Believes that the shift from passenger cars to utilities is permanent and the remaining car customers look for value and utility traits that “some of our competitors dominate”. (Ford)
- Implication: There has long been an unwritten rule in the industry that you kept customers by offering a full portfolio of vehicles since customers tend to be more loyal to brands than nameplates or segments. In pursuit of capital discipline, Ford is now eschewing this approach but is doing so without articulating (or potentially, realising) what changes need to be made to the selling model and branding to compensate for the narrower portfolio.
Unveiled the China-only Territory, an entry-level SUV developed with joint venture partner JMC. (Ford)
Suggested that the time to create the Territory, from initial concept to mass production (but not first customer deliveries) was under 20 months. (Ford)

Reportedly close to investing £1.5 billion in Lotus, that would add models and new production and R&D facilities. Geely would also look to increase its ownership from the current level of 51%. (Bloomberg)

GM executives said they had decided not to go all-aluminium for the latest generation Chevrolet Silverado and GMC Sierra full size pick up trucks after seeing Assembly challenges and looking at alternative materials. GM now says it has a cost advantage of “thousands of dollars” over F-150. (Reuters)
- Implication: With a history of crosstown trash talking every time one of them releases a new truck, GM’s comments on cost advantages merit consideration but should be seen in the context of GM’s product head saying he had been sent a box of the rivets used by Ford years ago and they were “still on my desk”, indicating that either: he has a massive desk; it is awfully untidy; or he keeps a special place for a box of rivets he doesn’t intend to use.

KIA unveiled a new technology, dubbed separated sound zone, which the company says can create individual sound zones within a vehicle through localised noise cancellation. (KIA)
Stopping production of diesel engines for Sonata, Grandeur, i30 and Maxcruz, citing low sales mixes. (Yonhap)

Mazda

Said that there was no improper emissions testing in Japan, although it had found some small issues which would be rectified through improved processes. (Mazda)

Mitsubishi is increasing production of the Xpander small crossover from 100,000 units annually to 150,000 units by 2019, citing wild sales success in the ASEAN region, particularly Indonesia. (Mitsubishi)
Nissan has trademarked “h-POWER”, leading to speculation that it could be used in hydrogen vehicles. (Auto Guide)

Suzuki

Was found to have passed vehicles with discrepancies in the emissions test. However, the issues with the test were minor and there is no impact on the consumer (Reuters)

Released its annual sustainability report. (Tata)

Tesla CEO Musk announced via Twitter and internal email that he was mulling whether to take the company private at a $420 per share level. He believes that the stock market listing drives too much short term thinking but still wants to have a tradeable form of shareholding for employees and external investors, citing SpaceX as a precedent. (Tesla)
- Implication: Despite Musk’s misgivings about the stock market, Tesla has been able to post consistent losses whilst pointing to future growth (and maintaining a high valuation). Either the short term thinking is a phantom or the rest of the industry must be facing the same problem to an even greater extent.
CEO Musk is reportedly under investigation because of how he released information about the possibility of Tesla going private. Speculation about legality concentrated on whether the statement “funding secured” was true and the use of Twitter is when some subscribers are blocked (precedent already says it is okay where there is no impediment to access and the company directs investors to the relevant channel — as Tesla have done). (Business Insider)
Saw a large Saudi sovereign wealth fund take a stake of just under 5%, but they reportedly aren’t interested in providing financing for the company to be taken private. (Reuters)
Information reportedly supplied by current and former Panasonic employees showed production of solar cells at around a quarter of Tesla’s intended annual 1 GW target, and includes production that Panasonic is selling under its own brand, due to envisaged demand from Tesla not yet materialising. (Reuters)

VW’s credit company trumpeted its success in selling bonds in euros, Russian roubles and pounds, saying that euro and pound issues were more than three times oversubscribed, despite the low interest payments. (VW)
Bugatti said the yet-to-be-revealed Divo model will not be track-only. (Autocar)
Has around 300 employees engaged on various projects relating to blockchain use in cars. (VW)
May have to recall PHEVs and BEVs due to high levels of cadmium in the charging units. (WirtschaftsWoche)

Other

Subaru announced financial results for Q1 of the 2018-2019 fiscal year. Revenue of 709.2 billion yen (about $6.4 billion) was down (12.9)% on the prior year, explained by a (12.3)% drop in unit sales. Operating income of 57.6 billion yen (about $520 million) was down (51.8)%. (Subaru)
Gyon held a brand launch, revealing the slogan “right is our niche” and saying that a concept car would be displayed in 2019. The only technical details disclosed were that Gyon’s products (sedan., SUV and crossover) will have ~360 mile range batteries that can be 80% charged in 10 minutes and 100% charged in 15 minutes. (Gyon)
Workhorse lost $(6.9) million on revenues of $0.2 million in Q2 2018 (Workhorse) and said it would undertake a stock offering, seemingly aimed at improved liquidity. (Workhorse)

News about other companies and trends

Economic / Political News

UK July passenger car registrations were 163,898 units, up 1.2% on prior year, but still down (5.5)% YTD. (SMMT)

Suppliers

Magna’s Q2 2018 revenue was $10.3 billion with operating income of $819 million. (Magna)
Delphi reported Q2 2018 revenue of $1.2 billion and operating income of $122 million. (Delphi)
Schaeffler announced a 90/10 joint venture with Paravan that will acquire the latter’s Space Drive drive by wire products and Schaeffler’s Mover autonomous platform. (Schaeffler)
Horiba acquired battery and fuel cell testing expert FuelCon. (Horiba)

New York passed restriction measures that freeze the number of vehicles operators such as Lyft and Uber are permitted to operate in the city for 12 months. (Digital Trends)
BlaBlaCar acquired smaller Russia market rival BeepCar. (TechCrunch)
Ola is going to expand to the UK. (BBC)

Wipro and Genesys will collaborate on software and maps for self-driving cars. (Economic Times of India)
Self-driving truck start-up Kodiak says it has raised $40 million. (TT News)
Data labelling company Scale, which says it counts GM, Lyft, Zoox, Voyage, NuTonomy and Embark amongst its customers, raised $18 million. (TechCrunch)
Navya sold 36 autonomous shuttles in the first half of 2018, for over €200,000 each. (Navya)
Driverless truck maker Nikola said it had already raised $100 million of a $200 million Series C target. (Nikola)
News of the hiring of Tesla’s former engineering VP reignited interest in Apple’s self-driving project. (TechCrunch)
BMW executives said test drives of autonomous cars often last 1,000 km, with an average of three driver interventions, and expressed scepticism that fully autonomous driving will be allowed on public roads. (Autocar)

Gyon said their products (sedan., SUV and crossover) will have ~360 mile range batteries that can be 80% charged in 10 minutes and 100% charged in 15 minutes. (Gyon)

Other

Intel said it sold $1 billion of artificial intelligence chips in 2017, but the number should be taken with a pinch of salt, it is partly based on Intel’s estimates of how much data centre workload is AI applications. (Reuters)
Per mile insurance provider Metromile licenced its platform to Japanese insurer Tokio Marine. (Metromile)

Find our archive here.

Auto Industry Briefing — week ending 5th August 2018

August 7, 2018 Ad Punctum TeamAd Punctum, Automotive0

Solar powered cars; the cons of GM’s manufacturing strategy and car making’s no-deal-nightmare Brexit. Please enjoy our auto industry and mobility briefing for 30^th July to 5^th August. A PDF version can be found here.

Favourite stories of the past week…?

Good Day Sunshine — Bolloré and Hanergy are collaborating on solar powered cars. Although not household names, both have a wealth of industrial experience and deep pockets. With others put off by the technical challenges of harvesting energy and solar panel packaging, might Bolloré build on its know-how from the Bluecar and steal a march on others?
Please Release Me — GM wants an exemption from recently imposed US tariffs on Chinese-made Buick Envisions. Their reasoning is that the volume is too small for a standalone US plant, and it’s a good thing for GM to make money because it gets spent in America. But will the Trump administration see it that way when the inability to profitably produce the car in the USA is less to do with industry realities and more because of GM’s industrial strategy and lack of mega-platforms (previously trumpeted as good capital discipline)?
No Plan B — As UK government ministers rated the chances of a no deal Brexit at 60%, the car industry acknowledged the scenario as a “nightmare”. But why should that be the case? The problem for automakers is that they have held off making contingency plans for their manufacturing base because they would have to spend money upfront and think about which European plants would lose the work (Ad Punctum’s 2017 paper showed how this might be done). Are those good enough reasons for executives in wood-panelled boardrooms to stick their heads in the sand and work on different priorities? Unless your cars have a Mazda, Subaru, Suzuki or Mitsubishi badge it surely makes sense to have prepared ways to cut your tariff bill by tens (or even hundreds) of millions of pounds per year?

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 automotive revenue of €22.2 billion in Q2 2018, about level with the prior year. Group PBT of €2.9 billion was down (6)% on a year earlier. (BMW)
Building a new plant in Hungary near the town of Debrecen. BMW say the plant will have capacity for 150,000 units per year and employ 1,000 staff. Total investment could come to €1 billion. (BMW)
Has hedging in place for 100% of 2018 currency exposures and 50% of 2019 levels. (Seeking Alpha)

Joined a slew of transparency groups to promote ethical sourcing of raw materials. (Daimler)
Moovel said it has five million users, with two million joining in the past 12 months. (Daimler)
Car2Go now has a fleet of 14,000 vehicles (of which 10% are electric). In the past six months, 90 million km have been covered by the scheme’s 3.3 million users. (Daimler)

Ferrari

Reported Q2 2018 financial results. Revenue of €906 million was down (1.6)% despite shipments increasing 6% to 2,463 cars. EBIT of €218 million was 8% higher than prior year. (Ferrari)
Markets reacted negatively to the new CEO’s comments that longer term financial targets set by prior CEO Marchionne were “aspirational”, even as he tried to clarify later in the earnings call that he simply meant the company didn’t have a detailed plan. (Seeking Alpha)
Said that normal wait times for cars was 1-2 years but that in “extreme” cases for particular products or markets the wait times could be up to four years. (Seeking Alpha)
Maserati’s drop in engine orders are not expected to affect Ferrari’s financial position because of the “take-or-pay” contract in place between the two parties. (Seeking Alpha)

Reportedly working on a spiritual successor to the Courier car-based pick-up truck, but this time based off a Focus, rather than Fiesta. If the rumours are true, US sales could start in 2022. (Automobile)
Cutting prices in Russia in a bid to increase sales. (Wards)
Has reportedly been discussing a sale of its South American unit with FCA and VW. (Bloomberg)
- Implication: The key question for Ford in relation to a regional exit is whether it could come to terms with relinquishing control of the blue oval brand, since although the overlap between distant markets may not be much, fallout from an uncontrollable scandal is the stuff of executive nightmares.

Applied for the Buick Envision to be excluded from newly imposed US tariffs on China-sourced vehicles, arguing that sales were insufficient to justify US manufacture and profits supported US jobs. (Reuters)
- Implication: Whilst GM’s statement that sales of around 40,000 units a year are insufficient for breakeven is probably true, this is also a reflection of GM’s industrial strategy more than market realities. US OEMs have long eschewed mega-platforms, offering half-hearted words and few deeds, whilst others have made engineering choices enabling lower volume manufacture.
Badging some models as Tripower (previously associated with performance) to highlight the use of three fuel-saving technologies: cylinder deactivation; active thermal management and variable valve control. (Car Buzz)

Reported financial results for the first quarter of its 2018-2019 financial year. Revenue of 4 trillion yen (about $36 billion) was up 8.4% on a year-over-year basis, whilst operating profit of 300 billion yen (about $2.7 billion) was up 11.2% YoY. (Honda)
Intends to resume vehicle and engine production at a Mexican plant hit by flooding in mid-November, having recently restarted transmissions manufacturing at the site. Production of Insight vehicles in the US have been suspended in August as the Mexican plant cannot supply key componentry and stocks have been exhausted. (Honda)

Mazda

Reported financial results for the first quarter of its 2018-2019 financial year. Revenue of 873 billion yen (about $7.8 billion) was up 8.9% on a year-over-year basis, whilst operating profit of 33 billion yen (about $300 million) was down (17.2)% YoY. (Mazda)

Nissan has agreed to sell a majority of its AESC battery division to Envision. (Envision)
Nissan executives expect 35% of the brand’s European sales in 2025 to be electrified vehicles. (Autocar)
May add another plant in China, but wants to maximise existing capacity first. (Bloomberg)

Has reportedly been cutting production rates at several Opel factories: Rüsselsheim is going from 55 vehicles per hour to 42; Eisenach is going from 37 to 30 and Gliwice has reduced from 40 to 25 cars per hour. (FAZ)
- Implication: Since Opel’s sales grew on a year-over-year basis, the production cuts indicate that PSA is seeking to use the performance of newly launched (and PSA produced) crossovers, and Opel’s recent surprise profits to offset a portfolio realignment in cars, especially for Astra and Corsa.

Suzuki

Reported financial results for the first quarter of its 2018-2019 financial year. Revenue of 987 billion yen (about $9 billion) was up 13.6% on a year-over-year basis, whilst operating profit of 116.5 billion yen (about $1 billion) was up 36.9% YoY. (Suzuki)

Reported financial results for the first quarter of the 2018-2019 year. Revenue of 670 billion INR (about $9.7 billion) was a 14% improvement versus the prior year. There was an after tax loss of (18) billion INR (about $260 million). The year over year drops were almost entirely explained by JLR which saw revenue fall (7)% to £5.2 billion and made an after tax loss of £(210) million. (Tata)

Reported Q2 2018 financial results. Revenues were $4 billion (of which automotive was $3.4 billion) and loss from operations was $(621) million — greater than both the prior quarter and a year earlier. (Tesla)
The company aims to be profitable and cash flow positive “for every quarter, going forward”. In some instances, this could be “barely” and Tesla may take on debt for projects like new factories. (Seeking Alpha)
Aims to produce 6,000 Model 3 cars per week by the end of August and reach 10,000 units per week “sometime next year”. (Tesla)
Revised its medium-term production outlook, saying although 1 million vehicles in 2020 was still its aspiration, “somewhere between half a million and a million seems pretty likely”. (Business Insider)
Said it has faced cost challenges because production problems with Model 3 have sometimes meant resorting to low volume tooling where unit prices “can easily be 10 times more” than volume tooling. (Seeking Alpha)
- Implication: This figure may surprise experienced industry hands, who would probably expect a multiple closer to three times where a supplier has a stable long term contract.
Said its latest driver assistance hardware will be capable of processing 2,000 frames per second, with redundancy, versus 200 frames per second in the current version. (Seeking Alpha)
Has reportedly been in talks with officials in Germany and the Netherlands to decide a site for a European Gigafactory. Tesla currently has a CKD facility in the Netherlands. (Reuters)
Said the most frequently traded in vehicles for Model 3 (in the US) were Honda Accord, Honda Civic, Toyota Prius, Nissan Leaf and BMW 3 Series. (Seeking Alpha)
- Implication: Depending on which way you read this, it is either positive (Tesla are attracting customers to pay far higher price points than they did on their prior car) or negative (3 Series aside, it seems to be failing to win sales from the competitors one would expect). If, as Tesla believes, customers are coming from lower segments then question marks must exist. Why were they not buying more expensive products previously? Have market dynamics been badly understood all along, or are Tesla inferring too much from a group of early adopters?
Tesla’s latest software update will apparently feature some Atari games the driver can play whilst the car is at a standstill, including a driving game controlled with the vehicle steering wheel. (The Verge)
- Implication: Whilst the idea might sound corny to some, using the steering wheel to play a game sounds like a fun way to repurpose vehicle controls (and makes you wonder why no one else has done it already).

Reported financial results for the first quarter of its 2018-2019 financial year. Revenue of 7.4 trillion yen (about $66 billion) was up 4.5% on a year-over-year basis, whilst operating profit of 683 billion yen (about $6.1 billion) was up 18.9% YoY. (Toyota)
Will dissolve its partnership with Isuzu and sell all the shares (5.89%) it holds, saying that the collaboration had yielded few benefits and some of the originally planned projects had not gone ahead (especially diesel). (Toyota)
Announced a new venture fund, Mirai Creation Fund II, with a planned warchest of 50 billion yen (about $450 million) and a mandate covering AI, robotics, hydrogen infrastructure, electrification and new materials. (Toyota)
- Implication: The inclusion of electrification (out of scope in the 2015 fund) shows that Toyota is taking this technology more seriously.

Reported group financial results for Q2 2018. Revenue of €61.1 billion was up 3.4% on a year-over-year basis whilst operating profit before special items of €5.58 billion rose 22.7% YoY, however special items of €(1.6) billion meant that the net operating profit was lower than the prior year. (VW)
Said WLTP will result in around €(1) billion of non-recurring profit reduction in 2018, and that in partial response to the new regulations, several portfolio trimming measures are underway, with reductions of 30% in VW Golf and Audi offerings being cited as examples. (Yahoo Finance)
VW’s performance division head said the brand wants to introduce performance versions of its forthcoming electric vehicles but hasn’t yet decided which vehicle is most suitable or what the product characteristics should be. (Autocar)
Announced a new COO for the VW brand. (VW)
Former CEO Martin Winterkorn may have been aware of the diesel scandal in 2007, if leaked witness testimony is to be believed. (Der Spiegel)
CEO Diess commented that synergies between motorbikes and cars were “not much, probably the same as between trucks and cars”, and “wouldn’t exclude” an independent future for the Ducati brand. (Bloomberg)

Other

Faraday Future has started the first production intent builds of FF91 vehicles, with the intention of customer car deliveries starting in December. The company previously said it has over 64,000 orders but it isn’t clear how many of these are paid deposits. Curiously, Faraday is rejecting interest from customers in some markets. (Faraday Future)
Aston Martin’s CEO said the company will offer hybrid versions of both the Mercedes-supplied V8 and its own V12 engines. (Autocar)
Prodrive is looking into production of a car that can convert into a boat, with a likely price tag of £150,000 if the vehicle ever makes it to production. (Autocar)
XPENG announced a 4 billion RMB fundraising round, taking total investment to 10 billion RMB (about $1.5 billion) and a valuation of “close to” 25 billion RMB (about $3.6 billion). (XPENG)
Austrian hypercar start-up Milan Automotive said it has already sold 18 of the planned 99 examples of its €2 million Milan Red. (Milan)

News about other companies and trends

Economic / Political News

US light vehicle SAAR in July was 16.7 million units, about flat compared with July 2017. (Wards)
German passenger car registrations in July came to 317,848 units, an increase of 12.3% on the prior year. (KBA)
July passenger car registrations in Spain were 131,176 units, an increase of 19.3% on the prior year. (ANFAC)
Italian passenger car registrations in July totalled 152,393 units, an increase of 4.4% on a year earlier. (UNRAE)
The US government unveiled plans to relax future fuel economy standards. Instead of requiring a fleet average of around 50 miles per gallon by 2026, the new rules call for about 37 miles per gallon. (CNBC)
As the UK trade minister put the chances of a “no deal” Brexit at 60% (BBC), the UK car industry trade body said “no deal… is just not an option”. (Reuters)
- Implication: The automotive industry has exhibited an extremely relaxed approach to Brexit planning, concentrating on obvious issues such as increased customs paperwork (actually mostly electronic) volumes and ignored the impacts of no deal scenarios, mostly because they involve spending money and contemplating changes to the industrial base that executives would prefer to avoid. Unfortunately, this is looking ever more rash as lead times to set up alternative manufacturing or sourcing have now been exceeded for all but the most inventive solutions. If a no deal comes to pass, companies faced with tariff bills in the hundreds of millions of euros are likely to point to similar failures by their competitors, it remains to be seen whether investors will be so accepting of the collective failure.

Suppliers

Aptiv reported Q2 2018 revenue of $3.7 billion, adjusted operating income was $474 million. (Aptiv)
Denso reported Q2 2018 revenue of 1.3 trillion yen (~$12 billion) and operating profit of 91 billion yen. (Denso)
Mahle announced that it had loads of test stands available for WLTP certification. (Mahle)
Continental reported Q2 2018 revenue of €22.4 billion and adjusted EBIT of €2.2 billion. (Continental)
Magneti Marelli agreed terms for the acquisition of perception software developer SmartMeUp. (Magneti Marelli)
Chinese materials supplier Teijin Frontier is to acquire German automotive interiors specialistH. Ziegler for €125 million. (Textile World)

Dealers

Despite troubling times for US OEMs, dealer group AutoNation reported 11% profit growth on slightly improved revenue. Much of the profit increase was attributed to used cars and financial services. (Auto Nation)

Grab said it had raised $2 billion in a round where Toyota invested $1 billion. (Grab)
Indian bus (shared rides) service aggregator ZipGo is reportedly close to a $50 million investment. (Live Mint)
Didi is reportedly considering a $2 billion takeover of bicycle rental firm Ofo in combination with Alibaba’s Ant Financial. (Deal Street Asia)
Lyft is conducting a trial for 100 people in Chicago where it will provide $550 in vouchers for a combination of mobility services in return for them renouncing car usage for a month. (The Verge)
- Implication: Whilst the trial has attracted plenty of media interest (presumably its intent), the number of users seems extremely low, the timeframe short and the $550 per month travel entitlement seems unduly generous — but perhaps that’s the point: offer loads of money and then report back that they didn’t need as much to get by without their car?
Winner-takes-all ride hailing bulls saw their vision of a future monopoly for the likes of Uber take a blow as New York investigated measures to control fleet sizes, meaning regulators are now active in major cities on both sides of the Atlantic. (New York Times)
Moovel said it has five million users, with two million joining in the past 12 months. (Daimler)
Car2Go now has a fleet of 14,000 vehicles (of which 10% are electric). In the past six months, 90 million km have been covered by the scheme’s 3.3 million users. (Daimler)

Mapping supplier RideOS announced $25 million in investment. (RideOS)
Hertz and Aptiv announced a strategic partnership that includes running Aptiv’s vehicles in Las Vegas but also aspires to create a standard set of operating procedures. (Hertz)
Swedish self-driving start-up Einride unveiled a new model called T-log which is says can handle off-road activities in addition to the on-highway capabilities of its predecessor. (Business Insider)
Uber is stopping development of self-driving trucks. The company still sees a future for freight movement using autonomous vehicles but believes the way forward is to develop working driverless passenger transport and then transfer the technology to commercial vehicles. (TechCrunch)

Continental executives said the company is still unsure if battery cell production is “right” for the company and, if so, whether to go it alone or form a partnership. (Reuters)
Bollore’s Bluecar and Hanergy signed a cooperation agreement to develop solar powered cars. (Hanergy)
- Implication: Although many people will have heard of neither company, the effort should be taken seriously (substantial technical difficulties with harvesting sufficient solar power for useful vehicle performance notwithstanding). Bolloré produced thousands of electric vehicles to support its interest in car sharing schemes, so if the partners believe the technology is practical, production models are very likely.
Mahle’s CEO said there were several projects underway using the same technology as the 48V BEV concept car it created. He also said Mahle’s base planning scenario for EVs in 2030 was 15% BEVs and 20% PHEV but that combined shares of up to 50% were possible in “extreme cases”. (Handelsblatt)
- Implication: The comment on 48V technology could be either very interesting, or nothing of the sort. The interesting version would be if the company is really working on 48V BEVs with emerging manufacturers — a move with a host of cost, safety and size benefits. The boring version would be that it is selling 48V systems for ICEs, which everyone already knows.
UK gas supplier Centrica invested in Israeli EV charging start-up Driivz as part of a $12 million round. (ET India)
Charging provider EV Connect raised $8 million to expand its coverage. (Inside EVs)

Other

Electric scooter rental firm Bird is expanding into Paris and Tel Aviv, its first non-US locations. Both locations start on a “pilot” basis with new scooters only being added once the fleet averages three or more rentals per day. (Bird)
- Implication: Despite boasts of fantastic gross profits from scooter rental, the ultimate demand appears unclear and rests on the supposition that a significant amount of city dwellers want to ride electric scooters but find them unjustifiably expensive as an outright purchase.

Find our archive here.

Auto Industry Briefing — week ending 29th July 2018

July 30, 2018 Ad Punctum TeamAd Punctum, Automotive0

Opel’s turnaround story; Tesla’s rebate strategy; connected cars talking about the weather and Ford’s mystery restructuring bill. Please enjoy our auto industry and mobility briefing for 23^rd July to 29^th July. A PDF version can be found here.

Favourite stories of the past week…?

You’re Unbelievable — PSA blew the doors off with a stonking first half, including an incredible turnaround at Opel. From PSA’s explanation, I simply can’t reconcile Opel’s improvement in such a short space of time (some of it is clearly volume related). If PSA can really deliver this sort of restructuring so quickly, investors will soon be asking who they should buy next…
Oh Dear What Can The Matter Be? — Investors and the media got bent out of shape over Tesla’s request for retrospective rebates from suppliers. Although many smelled a whiff of desperation, the more likely explanation is that it’s business as usual. OEMs normally establish price reductions backdated to when negotiations began. In exceptional circumstances, where the OEM believes the price was established on a cost-plus basis and costs have been shown to be lower than initially believed (e.g. over-recovery of capital spending), the OEM will try to go as far back as possible.
Seven Nation Army — Bosch reckon that simply to provide accurate reporting of weather conditions to other vehicles, 20 million cars that share information will be needed to cover Europe’s 80,000km of highways (and more to cover all the other roads). If their sums are right it calls into question whether V2V data transfers are really the honeypot some are suggesting. If no one is big enough to be a monopoly, how can anyone charge monopolistic premiums?
Sitting, Wishing, Waiting — Ford reported sub-par Q2 earnings but said it was going to spend $11 billion in restructuring to sort the whole thing out. But Ford won’t tell people how they’re going to do it. And they’ve cancelled the meeting where they normally explain the business’s future. And investors are already ranting about the lack of clear communication. And the only clear advance in thinking is some charts showing what everyone already knows: that trucks in North America, CVs in Europe and SUVs everywhere make all the money. Keeping powder dry or playing for time?

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

Confirmed that it is raising the prices of some US-manufactured models in China to partially recover recently announced tariff increases. (Reuters)

Reported financial results for Q2 2018. Revenue of €40.8 billion was (1)% lower than Q2 2017. EBIT of €2.6 billion dropped (30)% YoY. Daimler’s 2018 full year guidance was reduced with the challenges of WLTP singled out as a contributing factor as the company believes customers will switch to lower margin units than wait for the vehicle they wanted — the company wasn’t clear whether this was because they will order different vehicles or because it will have to pay incremental variable marketing to keep the sale. (Daimler)
Hopes to have completed the legal steps necessary for its previously announced plan to separate the car and truck businesses by late 2019. Daimler will also rename financial services as Daimler Mobility. (Daimler)
Obtained employee agreement to the separation of its businesses by giving an employment guarantee that lasts until 2029 and a profit sharing agreement in place until 2025. The extensions will only come into force if Daimler shareholders approve the final split once all the legal arrangements are completed. (Daimler)
Unveiled the European version of the A-Class sedan, saying it will be on sale by the end of the year. (Daimler)
Signed a new agreement with Baidu that deepens the autonomous technology partnership and will see Baidu’s services integrated into Mercedes’ MBUX infotainment system. (Daimler)
Announced a new five year €11 billion credit line, which can potentially be extended to 2025. This replaces Daimler’s previous €9 billion facility. (Daimler)
Adding battery production to vehicle plants in Sindelfingen and Untertuerkheim. (Reuters)

Reported financial results for Q2 2018. FCA sold 1.3 million vehicles with net revenue of €28.993 billion. Adjusted EBIT of €1.655 billion was down (11)% on a year-over-year basis. A highlight was FCA reaching a positive net cash position for the first time as a combined entity. The company reduced full year guidance. (FCA)
Following the death of Sergio Marchionne shortly after being relieved of duty, questions were raised over unspecified treatment he had been receiving in the past 12 months and who knew what about his condition. (Reuters)
Said that it had not noticed any anti-American sentiment from Chinese customers, but that “we’re going to have to see” whether it develops into a larger problem. (Seeking Alpha)

Reported financial results for Q2 2018. Revenue of $38.9 billion was down (3)% on a year-over-year basis, net income of $1.1 billion was down (58)% YoY. The company blamed conditions in Europe and China for a full year earnings downgrade. (Ford)
Ford’s earnings presentation contained several slides laying out what the company termed a comparison between the accretive (money making) and dilutive (money losing) parts of the business. After “filtering for value creation”, the company intends to undergo a major, yet unspecified, restructuring which will see a likely EBIT impact of $11 billion and cash impact of $7 billion over the next three to five years. (Ford)
- Implication: Whilst Ford executives expressed repeated confidence in their planning ability, with numerous references to the “Way Forward” restructuring in North America dating back to 2006 (including the CFO’s admission that he might not be following corporate document retention policies), they failed to give analysts sufficient detail to gain their confidence. Ford was heavily criticised by investment analysts for its repeated failure to explain its future strategy. Executives refused to answer questions about the payback (justification for) on the restructuring sums that had been declared, the likely size of the company following restructuring, or how well specified the plan was.
Postponed the investor day previously scheduled for September to an undetermined point in the future. (Ford)
CEO Hackett said there will be 16 BEVs by 2022, all of which are “additions to our portfolio”. (Ford)
- Implication: Given the dearth of available product (Focus and large Transit), this is more of a statement of fact than insightful forecast, however it is likely that portfolio should be interpreted in terms of powertrain and body type combinations rather than an expectation of 16 fully differentiated vehicles by 2022.
Said the European light commercial vehicle business had EBIT margins of 13% on a standalone basis and that Britain had been responsible for the majority of the $1.2 billion of profit from the region in 2016. (Ford)
Announced the creation of a standalone business unit to hold its autonomous vehicle assets, including the company’s stake in Argo AI. The CEO of the new company is the executive previously in charge of autonomous vehicle efforts. Ford pledged that $4 billion will be invested in the unit by 2023, since this includes money already announced for Argo AI, it isn’t clear how much of this is money already spent. (Ford)
- Implication: Not mentioned in the press release was the fate of Ford Smart Mobility LLC, the arms-length vehicle originally announced to coordinate Ford’s investment in all things futuristic (originally described as “complimenting” the Argo AI investment). Ford also has yet to explain or demonstrate how it believes it can execute an entrepreneurial structure with greater success that GM did during its ownership of EDS (and fobbed off analysts who asked about it on the earnings call).
Changed several executive reporting relationships, with product development reporting directly to the CEO again, having spent about a year reporting to the (then) newly created operations function. (Ford)

Released further technical specifications for the BMA platform, saying it can accommodate vehicles with wheelbases between 2550mm – 2700mm long and a width of 1500mm – 1600mm. The platform uses “nearly 100” modules to achieve commonality levels of up to 70% between vehicles. (Geely)
Initial investor feedback on Volvo’s IPO reportedly indicates a $12 billion – $18 billion range, rather than the $16 billion – $18 billion Geely had apparently been hoping for. Either would be a substantial return on the $1.8 billion Geely paid to Ford in 2010. (Deal Street Asia)

Reported financial results for Q2 2018. Revenue of $36.8 billion was slightly down versus Q2 2017, with deliveries of 2.1 million vehicles slightly up (excluding Opel / Vauxhall from the prior year number). Adjusted EBIT of $3.195 billion was down by (20)%, more than explained by weaker mix and cost pressures. The company revised its full year guidance downwards. (GM)
Announced a peer-to-peer scheme for Maven that will let owners of 2015 or later GM vehicles add their cars to the service. GM suggested that owners of Camaros could make $19,278 renting their car for 12 weeks of the year, and Cruze owners could make $6,400. (GM)
Started trials with robo gloves in US factories. (3D Printing)

Produced 2,681,341 vehicles globally in the first half of 2018, a 3.7% increased on a year-over-year basis. (Honda)

Mazda

Released global production figures for first half 2018 of 833,274 units, a 6.3% increase on a year earlier. (Mazda)

Nissan reported net revenue of 2,716 billion yen (about $24.5 billion) in Q2 2018 (Nissan’s fiscal first quarter), down (1.6)% on a year over year basis. Operating Income of 109 billion yen (about $1 billion) was down (28.8)%, which Nissan blamed on lower sales and unfavourable exchange. (Nissan)
Mitsubishi reported financial results for Q2 2018 (fiscal first quarter). Net sales of 560 billion yen (about $5 billion) were up 19% versus the same period a year earlier. Operating profit of 28.1 billion yen (about $250 million) was up 7.5%. (Mitsubishi)
Said it is on track for its Japanese electric car sharing venture to reach 500 sites by March 2019. (Nissan)
Dropped the slow-selling Juke in the US market. (Car Buzz)
Renault-Nissan-Mitsubishi collectively sold 5,538,530 vehicles in the first half of 2018, an increase of 5.1% on a year-over-year basis. (RNA Alliance)

Reported financial results for first half of 2018 that markedly beat expectations. Automotive revenue of €32.1 billion was substantially up on a year-over-year basis, even accounting for the boost from Opel Vauxhall. Operating income in the Peugeot, Citroën and DS brands was €1,873 million, an increase of almost 30% on a year-over-year basis and a margin of 8.5% (excluding restructuring costs). For Opel and Vauxhall, a 5% margin (excluding restructuring costs) was reported, reversing many years of poor performance under GM, seemingly overnight. (PSA)
- Implication: The performance of both the core brands — achieving margins normally received for well-honed premium brands — and Opel / Vauxhall — left analysts struggling to be anything other than effusive. Given that PSA complained about its own performance in several regions, the obvious insinuation is that the European business is performing even better.
Said Opel / Vauxhall’s 7.5% margin turnaround on a half-over-half basis was: 1.7% pricing; 4.6% cost reduction; 2.1% of lower D&A (post write-downs), partially offset by (0.9)% of unfavourable exchange. Although, on a half-over-half basis, volumes seem to be up by around 17%, this was absent from the explanation. (Seeking Alpha)
Said that average revenue for the DS7 Crossback in Europe is €45,000 and more than 53% of customers were specifying the driver assistance system. (Seeking Alpha)
Will make an announcement on the future portfolio for the Indian market “very soon”. (Seeking Alpha)
Opel’s CEO said the announcement that the brand’s line-up would have electrified versions of all models by 2024 should be a “strong clue” that there will be no more GM-sourced products by that time. (Autocar)
Faurecia invested in stereo company Subpac. (Faurecia)

Reported financial results for first half 2018. Revenue of €29.957 billion was up 1.4% on a year-over-year basis but EBIT was down (3)%. Net income of €2.040 billion was strongly down, reflecting lower profits at Nissan. (Renault)
Said that it expects to be able to price for around 2/3 of the currency devaluation it has experienced in emerging markets but, due to the scale of the drop and the market’s inability to absorb rapid price increases, it has so far only recovered around 50% of the effect. (Yahoo Finance)
Renault-Nissan-Mitsubishi collectively sold 5,538,530 vehicles in the first half of 2018, an increase of 5.1% on a year-over-year basis. (RNA Alliance)
Said it was “likely” to leave Iran due to US sanctions, reversing earlier confidence in finding a way to continue operations in the country. (Radio Farda)

Experiencing delivery delays with I-Pace, depending on who you ask it is because of “manufacturing issues” (the dealers) or “prioritisation” to best meet market demand (Jaguar). (Electrek)

Saw widespread interest in a request by Tesla for retrospective rebates from some of its suppliers. (WSJ)
- Implication: Media interest appears to have been piqued by two things: an explicit mention in emails Tesla sent to suppliers to supporting the company’s profits and; the requests being retroactive. Seeking price adjustments that date back to the start of negotiations over any saving is standard practice throughout the industry and completely unremarkable. Although it is rarer for savings to be applied to earlier points in time, this is not unheard of if the OEM believes that there are pricing elements, for instance capital recovery, that now look artificially high and the supplier is taking excess profits on an item that was negotiated based on cost-plus pricing.
CEO Musk said the company was “trying” to get rid of contracts and enable customers to return a vehicle “for any reason”, but with no comment forthcoming on timing, it wasn’t clear how hard they were trying. (Business Insider)

Announced 2018 first half sales of 5,209,000 units, a (1.6)% reduction from the same period in 2017. Production of 5,249,052 vehicles was (0.7)% lower. (Toyota)
Reportedly planning a wider portfolio of fuel cell vehicles in the mid-2020s, covering cars, SUVs and pick-ups, with ranges of up to 1,000km. (Reuters)

Announced the recruitment of BMW’s head of purchasing; he is expected to become the new CEO of Audi. (VW)
Reportedly hired thousands of car parking spaces to park cars that will be held for sale until WLTP certification is completed. (Reuters)
Showed the new Audi Q3, saying the car will be in European dealers by November 2018. The vehicle boasts a removable parcel shelf that can be stowed in the boot floor rather than having to be taken out of the car. (Audi)
Started production of SEAT Arona and Leon in Algeria. (SEAT)
Audi’s new electric motor plant in Hungary has a capacity of 400 electric axle motors per day on a one shift pattern and will soon move to three shifts. (Audi)
- Implication: The production rate suggests that Audi expects production in excess of 50,000 upa for the new etron, and possibly up to 140,000. Audi also suggest (unsurprisingly) far greater productivity for employees making electric motors than for internal combustion engines, even at relatively low volumes.

Other

Gyon announced itself as a new luxury car company. The first cars from the Chinese-backed, US-designed range will be unveiled in August. (Gyon)
McLaren’s much-hyped new grand tourer, thus far dubbed BP-23, will be called the Speedtail. (Autocar)
Scuderia Cameron Glickenhaus will make 25 road-going examples of its SCG 007 LMP1 sports car. (SCG)
BAIC said it was on track to open its new South African plant in Q4 2018, with production equipment for semi-knocked-down kits already operational. (Wheels24)
Scooter maker Micro said the Microlino EV was on track to start sales in September. (Micro)

News about other companies and trends

Economic / Political News

EU researchers have allegedly found evidence of carmakers declaring WLTP emissions greater than the tested results, by an average of 4.5% in the vehicles tested. Their suspicion is this is a bid to overinflate the 2020 levels that will be used to set 2030 objectives. (Handelsblatt)

Suppliers

Magna’s new Chinese joint venture with BAIC is reportedly in talks with Didi and Singulato to provide bespoke electric vehicles for both companies. (Deal Street Asia)
Ningbo Jifeng said it had won a takeover battle for Grammer against Prevent. (Deal Street Asia)
Goodyear reported Q2 2018 financial results; sales were $3.8 billion and net income was $157 million. (Goodyerar)
Veoneer’s Q2 2018 financial results were net sales of $572 million and a $(48) million operating loss. (Veoneer)
Autoliv released financial results for Q2 2018; sales were $2.2 billion; operating income was $230 million. (Autoliv)
Lear reported sales of $5.6 billion and net income of $331 million for Q2 2018. (Lear)
Borg Warner’s net sales were $2.7 billion in Q2 2018, with operating income of $313 million. As a result, the company increased its full year earnings guidance. (Borg Warner)
Dana announced Q2 2018 sales of $2.1 billion and net income of $124 million. (Dana)
Michelin reported net sales of €10.6 billion in H1 2018, with €1.35 billion of operating income. (Michelin)
Adient reported financial results for Q2 2018 (Q3 in Adient’s fiscal year). Revenue was $4.494 billion and EBIT was $99 million. (Adient)
Valeo reported sales of €9.9 billion and net income of €453 million in the first half of 2018. The company revised its earnings guidance downwards, citing raw material headwinds and production disruption from WLTP. (Valeo)

Uber said it completed its 10 billionth trip in mid-June. (Uber)
Careem said it had completed 300 million trips, covering 3.019 billion km. (Careem)
Ola’s CEO is hoping for an IPO in the next 3-4 years, saying the business is nearly cashflow positive. (TechCrunch)
Uber users have been warned to be aware of vomit fraud, an unseemly racket by drivers to charge passengers cleaning charges for being sick during the journey when they weren’t. (Gizmodo)
- Implication: As Uber implicitly admits in its reply to the article, with a massive user base, nearly any and every cautionary tale is likely to be true in a few cases. If well organised trolls and bots can supposedly undermine democratic processes, how long before we see them being used against company reputations?

Waymo is running a pilot scheme with Walmart where shoppers order goods online and then collect them from a local store in an autonomous vehicle. It isn’t fully clear why the service isn’t offering to simply transport the goods directly. Waymo also announced an increased series of tie-ups in Phoenix, USA aimed at funnelling easy to service customers from major corporate partners such as dealers, rental companies and hotels. (Waymo)
Uber restarted operations of its autonomous test fleet in Pittsburgh, USA but the cars will remain in manual mode, gathering data for simulation and mapping, for an unspecified period of time. (Uber)

After earlier announcing trials in four regions, China said 17 cities will have trial EV battery recycling schemes and will work on a set of attractive policies to encourage uptake. (Reuters)
Charging network Volta, which uses advertising to fund electricity costs, raised $35 million. (TechCrunch)

Connectivity

Bosch estimates that 20 million connected cars will be required be become self-sufficient in local weather data on European highways and therefore believes V2V infrastructure needs to be augmented with fixed sensors. (Bosch)

Other

SpotAngels, an app that helps people find parking, raised $2.3 million. (TechCrunch)

Find our archive here.

Auto Industry Briefing — week ending 22nd July 2018

July 23, 2018 Ad Punctum TeamAd Punctum, Automotive0

A new CEO at FCA, e-scooters score first blood over taxis and a forgetful CEO at Tesla. Please enjoy our auto industry and mobility briefing for 16^th July to 22^nd July. A PDF version can be found here.

Favourite stories of the past week…?

Goodbye My Friend — Sergio Marchionne stepped down from his post as CEO of FCA unexpectedly early. Many are still marvelling at how he managed to take a company in such a ghastly state that GM paid billions to avoid buying it and make it respectable enough that he got close enough to touch the dandruff on Donald Trump’s shoulders. Timing and luck? Partly, but it was mainly down to persistence and disciplined capital allocation. The result has been a hollowing out of the Fiat portfolio and a reliance on SUVs and trucks but could anyone else have done better with the same cards?
Jump (For My Love) — Uber indicated that adding Jump e-scooters to its app was a net positive but led to a fall in bookings for ride hailing, unless it was raining. Unlike car makers, electric scooter manufacturers seem happy to adapt their designs for the needs of the companies using them. Might they become even more popular as designs improve?
Man In The Mirror — Elon Musk has raged at suggestions that orders for the Model 3 are declining and is demanding to know the source of the information. Umm… how about himself and his company’s PR department? He said in Q2 2017’s earnings call that there were 455,000 orders and a recent Tesla press release said there were 420,000 orders remaining after delivering 28,386 cars. Quick maths shows a shortfall of about 6,600..?

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

Launched a new version of the ReachNow service in Seattle which offers both car rental and ride hailing. (Wired)
Showed off a new non-destructive structural analysis system using X Ray scanners mounted on robots. (BMW)

Announced that CEO Marchionne was stepping down early for health reasons and will be replaced by head of the Jeep and Ram brands Mike Manley. (FCA)
FCA’s EMEA head resigned after being passed over for the CEO role. (CNBC)
Production of the Punto model will end in August. (FAZ)
Has reportedly begun setting up the legal entities that will be used for the spin-off of Magneti Marelli. (Reuters)
Announced a €420 million four year, low interest loan from the European Investment Bank. (FCA)

Ferrari

Announced that CEO and Chairman Marchionne was stepping down early for health reasons and will be replaced as Chairman by John Elkann and CEO by Louis Camilleri. (Ferrari)

Reached a settlement that gives Ford $299 million from Takata as partial compensation for recall costs. (Reuters)
Launching a chatbot, from Botnik.ai, to answer questions from French customers on social networks. (Journal Auto)
Set a sales target of 2,800 all-electric Transit van sales in Europe for 2018. (Automotive News)
Confirmed that it was still intending to build 1,000 examples of the GT, despite production being behind schedule, indicating a production run of longer than the initially planned four years. (Motor Authority)
Announced two safety recalls for around 550,000 vehicles in the US. One corrects potential gearchange issues that could allow the vehicle to roll away. The second is a much smaller recall of heavy trucks. (Ford)

Volvo reported Q2 2018 revenues of 66 billion SEK (about $7.5 billion), up 27% on the same period a year ago. EBIT of 4.2 billion SEK (about $470 million) was up 29% YoY. The company has reduced its R&D as a % of revenue to 4.1%. (Volvo)
Will export XC60 SUVs to the USA from Europe rather than China in a bid to avoid tariffs. (Reuters)
Geely-owned Terrafugia said it was on track to launch its first flying car in 2019. (Terrafugia)
The Polestar 2 SUV will have a UK price of between £30,000 – £50,000 and range of up to 350 miles. Volvo has taken 600 orders for the Polestar 1, the company previously set a 500 units per year production target. (Autocar)
Announced a series of asset purchases in China between affiliates. (Gasgoo)

Honda and Panasonic are planning a trial involving battery swapping for motorcycles. There will be several sites with chargers where customers can drop off depleted battery packs and put in a fully charged one. (Business Leader)

Launched a digital showroom on Amazon that will let buyers browse Hyundai products and then directs them to a dealer for a final purchase. (Hyundai)
Reached a wage agreement with South Korean unions. (Reuters)
Will develop a standalone halo model for the N sports sub-brand, but hasn’t yet finalised the design. (Auto Express)

Mazda

Will resume full production at plants disrupted by flooding on Monday 23^rd (NHK)

Faurecia reported financial results for the first half 2018. Sales of €9.0 billion were up 10.9% versus a year earlier when excluding currency effects. Operating income of €647 million was up 11% YoY. The company saw growth in revenue across segments and regions. Faurecia increased its full year guidance. (Faurecia)
Developed a shortlist of 15 US states and four Canadian provinces for a base of operations supporting PSA’s re-entry into the US market. (Motor1)

Tata Motors has reportedly restarted talks to sell a share in its engineering arm. (Hindustan Times)

CEO Musk and Tesla PR said reports that Model 3 net orders were falling were false. They probably need to pay more careful attention to their own statements. In the Q2 2017 earnings call, he said there were roughly 455,000 orders, the other week Tesla said there were roughly 420,000 outstanding orders, having delivered 28,386 cars. 455,000 – 420,000 – 28,386 = 6,614 missing, or cancelled, orders. Perhaps Tesla choose to measure net orders by their own definition? (Business Insider)
Panasonic suspending its relationship with a supplier over cobalt supplies that may be in breach of sanctions against Cuba. Batteries containing the affected material have been installed in Teslas since the beginning of the year but it is unclear whether there is any legal issue. (Reuters)

Will close a plant in Shizuoka, Japan due to low production volumes — around 50,000 units per year. All workers are being transferred to other nearby plants. (Mainichi)

New CEO Diess is reportedly setting elevated internal profit objectives. Audi has been told to achieve a return on sales of 12% and Porsche needs to maintain a level of 15%, with Diess pushing back on complaints that the brand cannot contain the costs of electrification in its business plan. (Manager Magazin)
VW Group delivered 2,839,200 vehicles in Q2 2018, an increase of 6.7% over the same period in 2017. (VW)
Reducing production in Brazil for a month, affecting around 1,000 factory workers. (Reuters)
Executives said a fourth Lamborghini model was unlikely before 2024. (Autocar)
Will localise production of the ID Buzz and ID Crozz in the USA. (Autocar)
Škoda invested in app-based AI developer Anagog. Porsche already has a stake in the company. (VW)

Other

Several OEMs including FCA, Ford, GM, Toyota, VW and Tesla were exposed to a data breach after it emerged a sub supplier had stored sensitive manufacturing technology documents on an unprotected server. (Detroit News)
Pininfarina revealed some of the intended performance specifications for the forthcoming PFO electric supercar. The top speed is expected to be 250 mph and the car will accelerate from 0 – 60 in under two seconds. The range of 300 miles and charging time of around 15 minutes is like Porsche’s claims about the Mission e / Taycan, although the top speed and acceleration suggest a significantly larger battery pack could be required. (The Verge)
Mahindra sold 140,101 vehicles in Q2 2018, a 20% increase on the prior year. (Mahindra)
Aston Martin showed off a virtual concept for a small flying vehicle dubbed the Volante Vision. (Aston Martin)
- Implication: Although at this stage, the concept doesn’t appear sufficiently developed to take seriously, it merits further thought as to the type of combined mobility offerings brands might need to offer to ensure private ownership remains compelling in a world of autonomous vehicles. Then again, the super-rich have never insisted on buying boats from the same place as their cars. Perhaps Aston Martin executives have simply spent a lot of time watching Elysium, the 2013 action romp starring Matt Damon and featuring a Bugatti rocket pod?

News about other companies and trends

Economic / Political News

Germany’s chancellor hopes the government will make a final decision on whether to require diesel retrofits by the end of September. (Reuters)
US automakers complained that the Trump administration had asked for an unnecessarily large amount of commercially sensitive data in its probe into automotive tariffs. (Detroit Free Press)

Suppliers

Continental said it would split into three groups: rubber; automotive and powertrain. The powertrain operations will then have an IPO in mid-2019 but Continental said it does not intend to “relinquish control of the Powertrain business in the medium or long term”. Part of the logic appears to be to attract external investment in new technologies, such as batteries. (Continental)
Asahi Kasei has agreed a takeover of interiors maker Sage Automotive for $700 million. (Asahi Kasei)
Engineering services company Segula acquired plastics specialist Activetech. (Segula)
UNO Minda will acquire German automotive software supplier iSYS RTS. (Autocar)
Faurecia reported financial results for the first half 2018. Sales of €9.0 billion were up 10.9% versus a year earlier when excluding currency effects. Operating income of €647 million was up 11% YoY. The company saw growth in revenue across segments and regions. Faurecia increased its full year guidance. (Faurecia)

Dealers

US dealer group Sonic Automotive said Q2 results had been negatively affected by OEMs reducing the incentives they were offering dealers. (Sonic)
US short term leasing company Mobiliti acquired start-up rival Condor. (Mobiliti)

Didi saw the owner of com take a $500 million stake. (Fortune)
Didi is reportedly looking to spin off its car services unit that provides cars, servicing and fuel, and raise around $1.5 billion in the process. (Economic Times of India)
French car sharing operator Totem says that it can break even with monthly revenue of €450 per vehicle and believes this will help it expand through offering franchises. (Journal Auto)
HyreCar and DriveItAway, two companies that provide access to vehicles for ride sharing drivers said they were forming a strategic partnership. (HyreCar)
Link Motion sold a 58% stake in itself to a Chinese investment vehicle. (Link Motion)
Lyft executives said the reported $250 million purchase price for bicycle rental firm Motivate was inaccurate, without providing further information. (Fortune)
Uber researchers said that after launching services that integrated the recently acquired Jump e-scooter rental offering, overall trip bookings increased but ride hailing’s share fell, in preference to scooter rental. (Uber)
Uber lost the closest thing it had to a CFO when the finance leader left for another start-up. (Fortune)
BMW launched a new version of ReachNow in Seattle which offers both car rental and ride hailing. (Wired)

ZF executives said they expect take-up of private autonomous vehicles to lag commercial vehicles due to cost and reliability concerns. (Journal Auto)
Waymo has now reached 8 million miles driven on public roads in autonomous mode. (The Verge)
Rinspeed is putting a product based on the Snap Motion, an autonomous vehicle built on a flexible skateboard-type chassis into limited production for proof of concept applications. (Rinspeed)
Zoox is reportedly raising $500 million in a round that will value the company at $3.2 billion. (TechCrunch)
Self-driving truck start-up Embark raised $30 million. (Fortune)
Apple’s testing program has grown, with 66 self-driving cars registered for testing in California. (9to5Mac)
Coast Automotive unveiled its P-1 autonomous minibus. (Venturebeat)
The deputy head of US highways regulator NHTSA said it was too early to put rules in place for driverless vehicles but that the agency is continually trying to assess when it would be “appropriate” to do so. (Automotive News)

A recent article said there are 487 prospective electric vehicle makers in China. (WSJ)
Panasonic suspending its relationship with a supplier over cobalt supplies that may be in breach of sanctions against Cuba. Batteries containing the affected material have been installed in Teslas since the beginning of the year but it is unclear whether there is any legal issue. (Reuters)
Honda and Panasonic are planning a trial involving battery swapping for motorcycles. There will be several sites with chargers where customers can drop off depleted battery packs and put in a fully charged one. (Business Leader)

Other

Geely-owned Terrafugia said it was on track to launch its first flying car in 2019. (Terrafugia)
Light, a maker of sophisticated camera sensors, said it had raised $121 million in a round led by SoftBank and that it was looking at automotive applications for the technology. (Light)
On-demand car care company Spiffy raised $9 million. (Spiffy)
Bird said it will start a discounted scheme for customers who receive federal assistance. (Bird)

Find our archive here.

Auto Industry Briefing — week ending 15th July 2018

July 16, 2018 Ad Punctum TeamAd Punctum, Automotive0

The demise of cheap motoring, a Brexit that pleases the automotive industry and parking spaces for autonomous vehicles. Please enjoy our auto industry and mobility briefing for 9^th July to 15^th July. A PDF version can be found here.

Favourite stories of the past week…?

Mixed Emotions — The Tata Nano is no more. What did we all learn from the experience? Was the instinct that people wanted cheap cars wrong? Initial reservations suggested Tata was onto something but the problem was with the execution. That isn’t a criticism of Tata, who took on a challenge so hard no one else has tried anything similar. Perhaps the way forward is cheaply refurbishing existing vehicles? If the industry can’t work out the answer, it runs the risk that the middle class in emerging markets may never opt for car ownership, preferring per mile payments instead (take an Ola cab in India if you aren’t sure of why that might make economic sense from their point of view).
You Can’t Always Get What You Want — The UK Government unveiled its white paper for detailed post-Brexit negotiations. If you are an automotive OEM or Tier 1 it pretty much ticks all the boxes: zero tariffs; no border checks; a mysterious “common rulebook”; trusted trader status; a sort of free movement for key talent and even diagonal cumulation of local content. So far so good, but will the EU agree? The Achilles heel of the UK’s plan could be the EU not wanting to give concessions it knows could cause a whole load of other agreements (e.g. EFTA, EEA, Turkey) to be revisited.
Fortune Teller — Although we’ve yet to see autonomous cars on the roads, companies are offering parking spaces tailored to their requirements. Although some of this is headline grabbing, it shows that infrastructure providers are starting to think about the opportunities for them. That can only help…

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

Sold 1,242,507 vehicles in the first six months, up 1.8% on the same period in 2017. (BMW)
Working towards majority ownership of its Chinese joint venture with Brilliance. (Der Spiegel)
Re-affirmed plans to increase production in South Carolina, USA, despite capacity increases in China. (KVEO)
Joined Baidu’s Project Apollo, securing a board seat. The two companies had dissolved an earlier partnership. (BMW)

Daimler’s autonomous vehicle program will be underpinned by Nvidia electronics. (Daimler)
The IG Metall union announced an agreement to improve the terms for temporary Daimler employees sourced from the Dekra agency at the Rastatt plant that creates a path to guaranteed employment. (IG Metall)
Will run a pilot autonomous ride hailing service in San Francisco, starting in 2019, in partnership with Bosch. The scheme will also integrate car sharing and multi-modal services. (Daimler)

A much-hyped strike by Fiat workers in Turin protesting the extravagant signing of Cristiano Ronaldo by Agnelli family-owned Juventus football club turned out to be a non-event. (Bloomberg)

Reportedly using the Fusion nameplate for a new high roofed hatchback to replace the current model. (Detroit News)

Announced a new modular platform for smaller Geely branded vehicles (sitting beneath the CMA platform led by Volvo) called BMA. Powertrain offerings include ICE, 48V and PHEV. (Geely)

Stopped production of the Fit and HR-V in Celaya, Mexico until the end of July, due to flooding. (Honda)

Hyundai’s CRADLE fund announced an investment in solid state battery developer Ionic Materials. The Renault-Nissan-Mitsubishi alliance is already an investor. (Hyundai)
Hyundai and Baidu signed a far-reaching agreement on connectivity and voice recognition, like the one Baidu agreed with Ford. (Hyundai)

If demand is sufficient, Nissan will build 50 GT-R50 supercars, with a likely price tag of €900,000 each. (Top Gear)

Sold 2,181,800 vehicles in the first half of 2018, an increase in 1.9% on a like-for-like basis (PSA’s headline figure YoY of 38.1% includes inorganic growth from the purchase of Opel / Vauxhall. (PSA)
Opel vehicles are reportedly the subject of investigation by the German regulator, the KBA, with up to 60,000 vehicles under suspicion of failing to meet emissions standards. (Bild)

Renault sold 2,067,695 vehicles in the first six months of 2018, an increase of 9.8% on a year-over-year basis. Although the news was mostly good, sales declined markedly at Renault Samsung. (Renault)
Increasing production of Zoe to 440 units per day. (Automotive News)
Will increase production of Alpine models from 15 per day to 20 per day. (Auto Evolution)

Stopped production of the Nano after a dramatic fall in sales. (Autocar)
An Indian court rejected the case brought by the ex-Chairman against his dismissal after it concluded he tried to concentrate too much power. (Economic Times of India)
Tata Motors took a 26% stake in freight aggregator TruckEasy. (Tata Motors)
Moody’s downgraded Tata Motors to Ba2. (News 18)

Agreed the terms for a new factory in Shanghai, China, with annual capacity of 500,000 units. (BBC)
Reached a milestone of 200,000 sales in the US, meaning that buyers no longer receive a federal subsidy. (Reuters)
Saw an employee branded a “saboteur” by CEO Musk report the company to the SEC, alleging misstatements on production figures for Model 3. (Bloomberg)
Raised prices in China by around 20%. (Reuters)
CEO Musk gave an in-depth interview where he acknowledged the company didn’t listen to doubters about the Model 3 production process because he had been told Tesla was doing it wrong for the last 15 years. He appeared to set a target for the Model Y unveil to be in March 2019. (Bloomberg)

Announced a new car sharing program called Hui, operating in Hawaii. (Toyota)

Appointed the head of strategy to lead the VW commercial vehicle brand. (VW)

Other

McLaren announced an updated business plan that takes the company to 2025. The company is aiming for 6,000 units per year in sales and all mainstream models will feature 100% hybrid electric powertrains. Through their localisation program McLaren are aiming for 57% UK content by value. McLaren confirmed a successor to the P1, with powertrain options reportedly under review. (McLaren)
Vazirani Automotive unveiled the Shul, a supercar powered by turbines feeding electric motors in the wheels. (Autocar)
Noble Automotive will sell a fibreglass-bodied entry-level model called the M500. (Autocar)
Electra Meccanica announced the start of production of the Solo electric vehicle. (Electra)
Dendrobium will manufacture the D-1 electric supercar in the UK. (Dendrobium)
Xiaopeng Motors denied that the employee at the centre of a case over stolen Apple autonomous vehicle secrets had passed anything on to them. (Reuters)

News about other companies and trends

Economic / Political News

The UK Government set out more detail on its “Road to Zero” strategy (not yet law). The government wants 50% of cars and 40% of vans sold in 2030 to have significant zero emissions capability; to end sales of vehicles without any zero emissions capability by 2040 and for “almost every car and van” on sale to be zero emissions by 2050. By 2030 the target is for all government vehicles to be zero emission capable, in a bid top spur supply. (UK Govt)
The UK Government set out its detailed aims for post-Brexit trade with the EU. True to its word, the government has steered clear of any existing mechanism, instead proposing an EFTA-like relationship with a series of new buzzwords to explain slight differences to existing mechanisms: for instance, there is no customs union, there is a “facilitated customs arrangement”. There is no participation in the single market, but there is “free trade area for goods” where a sufficiently detailed “common rulebook” ensures frictionless trade are maintained. (UK Govt)
- Implication: Within days of publishing the white paper, the government was already conceding amendments from its own side, so the final aims of the negotiation with the EU is unclear. Automotive businesses will have been pleased by the inclusion of the following: (1) zero tariffs, (2) regulatory alignment (3) zero border controls (4) trusted trader status for tariff declarations (5) something approximating free movement of key staff (6) an effort to gain diagonal cumulation of local content through the EU’s existing free trade agreements with 3^rd parties (this won’t be easy) (7) Although passporting for financial services is explicitly excluded, and would have been welcome, this only affected some OEMs, who in any case have made alternative arrangements whilst the government decided how to approach the matter. The white paper also implied the UK would uphold, or be more stringent than, EU rules on CO₂ from vehicles.
Two European Parliament committees voted in favour of a 30% reduction in CO₂ from cars between 2021 and 2030, a key step in putting the new rules before the full parliament. (Autovista)

Suppliers

Michelin will acquire off road tyre maker Camso for $1.45 billion. (Michelin)
German employees of casting supplier Neue Halberg Guss continued to try to apply pressure on new owners Prevent Group for job security. (IG Metall)
Aptiv is acquiring connected equipment specialist Winchester Interconnect for $650 million. (Aptiv)
Faurecia is opening a new factory in Michigan, USA. The $11 million plant will employ 100 people. (Faurecia)
Continental is acquiring tool supplier VÚK spol. (Continental)

Chinese carmakers FAW Group, Dongfeng and Changan have set up their ride hailing concern, the catchily named T3 Mobile Travel Services. (Deal Street Asia)
Toyota announced a new car sharing program called Hui, operating in Hawaii. (Toyota)
Coach trip charter and sharing service Skedaddle is reportedly a target for both Lyft and Uber. (TechCrunch)
Gett is reportedly considering exiting the US market and selling Juno. (Bloomberg)
Uber invested in electric scooter rental firm Lime. (Lime)
Malaysia’s competition regulator said it was taking a closer look at the Uber / Grab (Reuters).
Didi signed Continental as a partner for its program to make a purpose-built ride hailing vehicle, ready for launch by 2020. (Brinkwire)

Parking aggregator SpotHero says it has 500 AV-ready parking spots in Chicago. (Venture Beat)
Autonomous vehicle developer ai raised $102 million. (Deal Street Asia)
High resolution radar developer Arbe Robotics announced $10 million in fund raising. (Arbe)
Baraja is ready to start shipping units of its new Spectrum-Scan modular lidar system, the specification of the units in terms of range, resolution and wavelength is unclear. (Baraja)
The Vietnamese government granted a licence for autonomous vehicle trials to local firm FPT Software. (Xinhua)
Daimler’s autonomous vehicle program will be underpinned by Nvidia electronics. (Daimler)
Daimler will run a pilot autonomous ride hailing service in San Francisco, starting in 2019, in partnership with Bosch. The scheme will also integrate car sharing and multi-modal services. (Daimler)
BMW joined Baidu’s Project Apollo, securing a board seat. (BMW)

Panasonic executives said the company has prototype batteries with 50% the cobalt content of current units and will have them on sale in two to three years. (Reuters)
Electric commercial vehicle maker Workhorse raised $6.1 million in debt. (Workhorse)
Hyundai’s CRADLE fund announced an investment in solid state battery developer Ionic Materials. The Renault-Nissan-Mitsubishi alliance is already an investor. (Hyundai)

Connectivity

Several carmakers signed a letter to the EU arguing for the C-V2X connectivity standard to be adopted in preference to C-ITS. (Reuters)
Voxx Automotive and UniKey formed a strategic partnership to develop secure smartphone-based keys. (VOXX)

Other

Electric scooter rental firm Lime is raising $335 million. (Lime)
Indian bicycle rental firm Mobycy is reportedly close to $3 million in funding. (Economic Times of India)
Google says its drone delivery service, Wing, is mature enough to become an independent business unit. (Google)
Rolls-Royce (the engine maker, not the BMW brand) said it was working on a flying taxi. (Reuters)

Find our archive here.

Auto Industry Briefing — week ending 8th July 2018

July 9, 2018 Ad Punctum TeamAd Punctum, Automotive0

A drop in demand for Model 3, high resolution lidar and PSA downsizing by stealth. Please enjoy our auto industry and mobility briefing for 2^nd July to 8^th July. A PDF version can be found here.

Favourite stories of the past week…?

I’ll Be Missing You — Tesla has 420,000 Model 3 orders on the books, after delivering 28,000 of them to happy customers. That’s brilliant news, but hold on a second, Elon Musk said at Q2 last year they had 455,000. Where have the missing orders gone? Tired of waiting for Tesla to deliver? Wanted the bragging rights that come with a refundable deposit but can’t afford the whole car? Hopefully Tesla have some idea because the former is (sort of) better news than the latter.
Lights, Camera, Action! — Neuvition unveiled a snazzy new lidar with 480 lines and a claimed 200 metre range, plus an inbuilt sensor fusion with a camera so that it can make those great looking photo-on-point-cloud animations that normally require lots of post-processing. Question is… does the product deliver on the implied promises of the specs, and how much of a difference does it make to object recognition?
Come With Me — PSA seem interested in a sale of Opel’s engineering centre and all who sail in her. Unbelievable that this comes so soon after Opel became PSA’s centre of excellence for all-important kit such as: internal combustion engines; manual transmissions; seats… erm… restraint systems. It reminds me of that story from Hitchhiker’s Guide To The Galaxy where all the really important citizens of Golgafrincham were sent away on a spaceship to find a new place to live but the others never followed…

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

Sold 594,528 vehicles in Q2 2018, the strongest ever quarterly performance and an increase of 1.9% on the same period a year earlier. (Daimler)
Halted production of a diesel engine for heavy trucks (only on sale outside Europe) because real world emissions could exceed certified test results. (Bloomberg)
Reportedly ended a joint project with Nissan’s Infiniti brand to produce a luxury compact car. (Automotive News)

CEO Marchionne said there is nothing brand-specific about electrified technology and the components can be “easily shared”. (Autocar)
Said it had developed a new type of aluminium alloy that would allow engines to run hotter. (FCA)

Volvo sold 317,639 cars in the first half of 2018, a 14.4% increase on the same period in 2017, with improvements across regions. (Volvo)
Volvo launched a new mobility brand called M, initially it will offer car sharing services. (Volvo)
Selling its stake in ChinaHybrid System Co. (Gasgoo)

Hyundai sold 1,194,217 cars in Q2 2018, an increase of 10.8% on a year earlier. (Hyundai)
Invested in Autotalks, a creator of chips that facilitate communication between cars and the internet of things. The two companies also agreed a strategic collaboration. (Hyundai)
South Korean unions voted to strike in a disagreement over the annual wage increase. (Reuters)

Mazda

Halted weekend shifts in Hiroshima due to flooding. (LiveMint)

Disclosed that end of line emissions tests had been falsified at some Japanese factories. The implications remain unclear without knowing to what extent measured values deviated from homologation. (BBC)
Daimler reportedly ended a joint project with Infiniti to produce a luxury compact car. (Automotive News)

Exploring a full or partial sale of Opel’s R&D facilities, according to leaked internal documents from May, with four engineering service providers having been approached. The targeted areas, affecting 3,980 employees, could reportedly create a business worth €500 million. German unions pushed back against the idea. (Reuters)
Faurecia said it had finalised terms for the long-planned takeover of Parrot. (Faurecia)
Created an artificial intelligence lab based in France. (PSA)
Starting Free2Move branded car sharing in Paris, potentially in competition with Bolloré (and now Renault). (PSA)
Reportedly working on an all-electric Peugeot 208 GTi hot hatchback. It is already clear that the 208 range will feature a BEV in some form. (Evo)

Karhoo said that it now has a fleet equivalent to 51,000 vehicles in the UK. (Fleet Europe)
Starting a new car sharing scheme in Paris, potentially in competition with Bolloré (and now PSA). (Renault)

Suzuki

Suzuki’s chairman said the company aims to control 50% of the Indian market, even as the industry grows to 10 million units per annum, which Suzuki believes will be around 2030. (Nikkei)

JLR sold 318,219 units in the first half of 2018, about flat from the same period in 2017. (JLR)
Publicly called on the UK government to do a better job on delivering a stable business environment post Brexit saying that the company would lose £1.2 billion in profits through a “bad Brexit deal”. The company said £80 billion of spending over five years would be at risk, a figure which includes vehicle bill of material spending. (JLR)
Confirmed that the financial plans for JLR shared at a recent analyst’s briefing did not include assumptions for a “worst case Brexit scenario”. (Tata)

Delivered 40,740 units in Q2 2018, 18,440 of which were Model 3, falling drastically short of most analyst’s estimates. Tesla produced 53,339 cars, of which 28,578 were Model 3. Both figures were records for the company. (Tesla)
Said reservations for the Model 3 stood at “roughly” 420,000 units with 28,386 cars delivered since the start of production. (Tesla)
- Implication: The combined figure is some way short of the 455,000 reservations that Elon Musk claimed in the Q2 2017 conference call — at the time, Musk claimed net new reservations were clocking up at a rate of “over 1,800 per day”. Are customers losing faith in the company’s ability to deliver or are there a large number of flaky depositors who could afford the refundable $1,000 but not the final vehicle?
Said the production rate of the new assembly line in a tent, dubbed GA4, was around 1,000 units per week, as opposed to around 5,000 per week expected from the original assembly line. (Tesla)
Tesla’s internal target for Model 3 production in Q2 was reportedly 36,020 units. (Business Insider)
Luxembourg’s testing body held a media event where the emergency braking of a Tesla Model S compared unfavourably with a Volvo. Tesla implied the event was a non-scientific publicity stunt. (Engadget)

Starting an all-electric car sharing service called WE from 2019 in Germany and internationally in 2020. The press release implied that scooters will become a part of the service offering. (VW)
Announced a series of moves aimed at making the components business more arms-length from the vehicle making parts of the group. (VW)
Scania stopped production of V8 engines due to a strike at a castings supplier. (Scania)
Lost a case preventing German prosecutors from reading the previously withheld investigation into the diesel scandal performed by law firm Jones Day. (Reuters)

News about other companies and trends

Economic / Political News

The British government failed to satisfy many industrialists over its Brexit The head of Airbus said ministers “had no clue” on how to execute Brexit without “severe harm”. (BBC). UK Brexit secretary David Davis resigned (BBC), although he said it was because of dissatisfaction with the government’s preferred deal, it could just be force of habit. (BBC)
US light vehicle sales in June of 1.54 million units represented a SAAR of 17.4 million, up 5.5% on a year-over-year basis. (Wards)
Germany had 341,308 new passenger car registrations in June, an increase of 4.2% on a year-over-year basis. (KBA)
June passenger car registrations in the UK of 234,945 units were down (3.5)% on a year-over-year basis. (SMMT)
Passenger car registrations in France for June 2018 were up 9.2% on the same month a year earlier. (CCFA)

Suppliers

Autoliv completed the spin-off of its electronics division, now named Veoneer. (Autoliv)
Hyundai Mobis will increase R&D spend as a % of revenue from 7% to 10% by 2021. (Yonhap)
Varroc announced the acquisition of Sa-ba, as rumoured in June. (Varroc)
Magna’s CEO refused to directly answer questions about the firm developing and manufacturing bespoke vehicles for companies such as Lyft, but noted that Magna is “the largest independent company that can engineer and build vehicles”. (Automotive News)

Cabify denied that Lyft was interested in taking a stake. (TechCrunch)
Uber reported passed up on the chance to buy bicycle rental firm Motivate before Lyft snapped them up but was put off by the company’s unionized workforce. (CNBC)
Singapore’s competition commission said the merger of Uber and Grab had been unhealthy for competition and may force a separation unless its concerns can be allayed. (CNBC)
Karhoo said that it now has a fleet equivalent to 51,000 vehicles in the UK. (Fleet Europe)
VW is starting an all-electric car sharing service called WE from 2019 in Germany and internationally in 2020. The press release implied that scooters will become a part of the service offering. (VW)
Volvo launched a new mobility brand called M, initially it will offer car sharing services. (Volvo)
PSA and Renault both announced new all-electric car sharing schemes in Paris. (PSA) / (Renault)

Anthony Levandowski, formerly of Waymo and Uber, seems to have formed a new company called ai, but since the firm is still in stealth mode, no one knows for certain. (TechCrunch)
Neuvition announced a new lidar with 480 lines of resolution and a claimed range of 200 metres. (Neuvition)
- Implication: If the claims made for the hardware in terms of range and resolution are correct and the price is right, Neuvition may have just moved themselves to the front of the pack, especially as their solution boasts an integrated camera. Ground truth recognition in a box?
Civil servants running the UK road network expressed scepticism that autonomous vehicles would be widespread on city streets by 2021, but wouldn’t be surprised to see them operating on motorways. (New Civil Engineer)
Valeo joined the Project Apollo autonomous car collective led by Baidu. (Valeo)

Magna’s CEO reiterated his company’s relatively bearish forecast for electric vehicle market share — 5% by 2025, but has become more open minded on the very long term saying that 2030 is “anybody’s guess”. (Automotive News)
The Chinese government is reportedly planning a reduction in electric vehicle incentives in future, with range requirement increasing and per unit incentives going down. (Times of India)

Connectivity

Fleet security provider Trillium Secure raised $11 million. (CSO)

Find our archive here.

Auto Industry Briefing — week ending 1st July 2018

July 2, 2018 Ad Punctum TeamAd Punctum, Automotive0

A rosy forecast for dealerships, GM discounting and comparing what companies say about their driverless vehicles. Please enjoy our auto industry and mobility briefing for 25^th June to 1^st July. A PDF version can be found here.

Favourite stories of the past week…?

Stuck On You — In JLR’s latest briefing they are forecasting a global dealership network of 1,800 locations by 2023, a 15% increase from today. It will require, by JLR’s own maths, an investment of £6 billion by dealers (including the cost of renovating existing stores). How does all this tally with a trend for greater online transactions and, gasp, the end of retail?
Penny Lover — GM announced a special discount scheme aimed at members of the emergency services in the US. It comes of the back of a recent move to expand eligibility for its military discount program. Are these the first tremors of trouble in the US market, or just GM being patriotic?
Say You, Say Me — BMW said that their autonomous vehicles go around 330 km before a manual intervention. That makes Waymo’s disengagement figures almost 30 times better, yet BMW are working with FCA, who consider them good value despite having an inside track at… Waymo. It all points to an area where regulators could show some useful leadership… start offering virtual and real-world sites where driverless vehicles can be compared in the same circumstances.

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

Rolls-Royce’s CEO says its line-up is now complete and there will not be a smaller SUV below Cullinan. (Autocar)
Said it was committed to its UK sites and workforce, whatever the outcome of Brexit. (Business Insider)
Executives said that BMW currently had a disengagement rate in testing of approximately three times every 1,000 kilometres. This can potentially be compared with Waymo’s publicly recorded rate of around once per 9,000 km in California but it is unclear whether the testing conditions are similar. (Auto Express)
Signed a contract worth €1 billion with CATL to provide batteries from a new European plant. (Reuters)

Investing €600 million in South Africa to produce the next generation C Class and increase capacity. (Daimler)
Collaborating with Xilinx on in-car artificial intelligence. (Xilinx)

Rumours resurfaced (and were refuted) that Hyundai was interested in acquiring FCA re-surfaced. Supposedly, Hyundai executives have decided to buy FCA and are simply waiting for a drop in the share price. (CNET)
The FCA salesforce in the UK doesn’t seem to have been reading the company’s latest sales pronouncements, telling an industry publication that the fuel “still has a future” (maybe just not beyond 2022?). (Fleet News)

Agreed a partnership with Baidu to work on connectivity, digital marketing and artificial intelligence. The collaboration includes developing in-car infotainment based on Baidu’s existing AI toolset. (Ford)
Ford executives got drawn into an uncharacteristic spat with Tesla’s CEO. (CNBC)

Transferred ownership of its Vietnamese manufacturing operations to VinFast, who will also gain the local Chevrolet import concession. (VinFast)
Created a special pricing offer for emergency service workers in the US. This is the second move in recent months by GM to expand discounts to select groups — it previously expanded eligibility for former service personnel. (GM)
- Implication: The continued rollout of targeted high cost variable marketing by GM looks like a sign of nervousness about the US market, rather than a burst of patriotic pride.

Estimated that imposition of customs controls after Brexit would increase time for parts to pass through customs by between two and nine days. Honda says it currently keeps 36 hours of stock on hand and if there were delays of nine days it would need 300,000 square metres of warehousing. (CNBC)

Rumours resurfaced (and were refuted) that Hyundai was interested in acquiring FCA re-surfaced. Supposedly, Hyundai executives have decided to buy FCA and are simply waiting for a drop in the share price. (CNET)
Partnering with Finnish group Wärtsilä on stationary storage that utilises used electric car batteries. (Wärtsilä)
KIA sold 739,866 vehicles in Q2 2018, an increase of 8.2% on a year-over-year basis. (KIA)
Launched an all-inclusive payment option in the US called Hyundai PLUS. (Hyundai)

CEO Ghosn said the company was “in the dark” about what form Brexit would take and was therefore struggling to plan an appropriate response. (City AM)
Cancelling the sale of its battery business to GSR Capital because the buyer has not provided the funds it promised. The company will now consider its options. (Bloomberg)

Started production of the latest generation of light commercial vehicles (Peugeot Partner, Citroën Berlingo and Opel / Vauxhall Combo). (PSA)

Previewed a Russia market unique medium sized crossover that will likely relate to Kadjar in the same way as Kaptur does to Captur. (Autocar)

JLR’s expected powertrain mix in the medium term is 20% PHEV / BEV, 50% Gasoline and 30% diesel. (JLR)
Planning to increase its global dealer body from around 1,570 today to around 1,800 by 2023. (JLR)
Said electrification now accounts for 60% of its powertrain investment. (JLR)
Opened a new development centre in Manchester, UK to work on connected car technologies. (JLR)
Executives said JLR intends to build an EV in China and will release details within the next year. (Bloomberg)

Produced 5,000 Model 3 in 7 days, saying it was on track to reach 6,000 units per week in July. (CNBC)
Invited all Model 3 reservation holders in the USA and Canada to confirm their orders; in return they will have to hand over an additional $2,500. The $35,000 base specification vehicle is still available. (Detroit News)
Granted plant tours to selected journalists, who returned with stories of reactions that assembly line problems that sounded suspiciously like things that should have been identified in pre-Job#1 runs, rather than when the vehicle had already entered serial production. (New York Times)

Recalling around 115,000 units to correct potential fuel leaks. (Toyota)

Saw a final judgement in a case brought by minority shareholders in MAN over the company’s acquisition by VW Group. They will be offered a choice of a higher purchase price than originally offered or a dividend. (VW)
Completed the transition of the truck division into a distinct legal entity. (VW)
Audi partnered with Cognata to work on simulation of autonomous vehicles. (TechCrunch)
The launch event for the Audi e-tron SUV has been delayed, it isn’t clear whether this will affect the timing for production and sales. (Autocar)
Launched production in Rwanda. (VW)

Other

Chinese investor Evergrande took a 45% stake in Faraday Future. (Deal Street Asia)
VinFast announced that their forthcoming new vehicle will be a design licenced from General Motors. (VinFast)

News about other companies and trends

Economic / Political News

Carmakers mounted a resistance to Donald Trump’s proposed import tariffs. GM said the move had the potential to make them smaller whilst Toyota tried to ally national security concerns. (The Guardian)
Europe’s trade body for automakers called for more relaxed CO₂ targets for vans than passenger cars, arguing that whilst much of the technology behind the vehicles is the same, market conditions do not allow the same degree of efficiency that is being targeted for cars. (ACEA)
- Implication: ACEA’s arguments are put forward as absolute statements but there are notable holes: vans don’t have sufficient economies of scale, yet van nameplates outsell many passenger car models; vans use different technology, yet several OEMs trumpet their ability to build cars and vans from common platforms; the market hasn’t taken to the current PHEV and BEV van offerings, yet its hard to point to any compelling PHEV or BEV product that has been out in the market — the rise of projects like StreetScooter is testament to this.

Suppliers

Magna is to acquire lighting supplier OSLA in a €230 million deal. (Magna)
Lear held an investor day to talk about the outlook for its seating and electrical components business. (Lear)
Steelmaker Thyssenkrupp’s supervisory board approved the proposed terms of its merger with Tata. (BBC)
ZF formed a joint venture with Go, called e.Go Moove, to produce autonomous buses and delivery vehicles, starting in 2019. ZF will supply many of the systems and forecasts production of “five digit volumes”. (ZF)

Uber’s London licence was reinstated after a court hearing. Both sides claimed victory; Uber is now operating under a 15 month probationary period rather than the five year licence it previously had. (BBC)

Waymo’s CEO said all the announcements around vehicle purchases so far (JLR I-Pace and Chrysler Pacifica) have been for intended services in the USA and that a “large number” would be needed for services in Europe. (Reuters)
US supermarket chain Kroger will run a driverless delivery pilot scheme in partnership with Nuro. (The Verge)

BP are buying charging firm Chargemaster, having previously invested in FreeWire. (Reuters)

Other

Bird received $300 million in its recent funding round. (TechCrunch)
Zagster launched Pace Parking, which it sees as a solution to the explosion of dockless bicycles on city streets. The service promises to provide a method that dockless renters can use to have a physical locking location. (Zagster)
A couple of journalists have become so irritated by what they perceive as a lack of understanding about what car factories do that they have organised a round the world tour. (Daily Kanban)

Find our archive here.

Automotive strategy, Automotive strategy consultants, Automotive strategy consulting, automotive process improvement, Training

Auto Industry Briefing — week ending 24th June 2018

June 25, 2018 Ad Punctum TeamAd Punctum, Automotive0

Humans abusing autonomous vehicles, innovation in action and great news for electric vehicle enthusiasts. Please enjoy our auto industry and mobility briefing for 18^th June to 24^th June. A PDF version can be found here.

Favourite stories of the past week…?

This Is Why We Can’t Have Nice Things — A company has been banned from selling a device that intentionally defeats built-in safety measures for Tesla’s Autopilot and the safety driver involved in Uber’s fatal AV crash might have been watching television at the time of the crash. It all points to complacency on a grand scale and raises the awful question of whether we can be trusted with cars that are far safer on average, but more dangerous in the wrong hands?
Look What You Made Me Do — ZF unveiled a new type of transmission they are working on that combines and automated manual with an electric drive. I like it because it nicely demonstrates how technology cost comes down. Mild hybrid systems save fuel but are expensive; automated manual transmissions save money but have horribly laggy gearchanges (hence, to date, they have been banished to the least discerning emerging markets). But put the two together and torque from the electric motor can overcome the gear change lag and the overall system cost is cheaper than with a CVT or conventional manual. What’s not to like?
End Game — VW say we’ll see solid state batteries by 2025 and Japanese automakers say solid state packs will cost $90 per kWh by 2030 (and charge in under ten minutes). Throw in vastly reduced motor costs and reduced capacity requirements (because the batteries are lighter and charge quicker) and you get an awfully compelling cost equation and product proposition. In countries with well-developed infrastructure, who will be opting for combustion engines over BEVs and how many of them will there be?
We Are Never Ever Getting Back Together — China is planning a 900 kW charging standard. That’s so fast that we’ll need automated charging stations, otherwise getting out of the car to plug it in will become the longest part of the process. Are Europe, Japan and America lacking in vision?

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

Formed a JV with Critical Software to work on projects ranging from in-car infotainment to automated sales. (BMW)
Working with TTTech Auto to improve the quality and security of software for autonomous vehicles. (TTTech)
BMW celebrated their CEO being voted the most popular manager in Germany with a Q&A about his management style. (BMW)
Said that clarity on post-Brexit trading conditions were required by the end of the summer, otherwise it would have to start making contingency plans. (Economic Times of India)
- Implication: Given that BMW has already opened alternative sites for Mini production, it appears likely that any summer announcements could impact Hams Hall or Swindon Pressings.

Issued a profit warning for full year 2018, blaming likely tariffs on US-built vehicles imported into China (with the expectation that both unit sales and margins would suffer). The impact of failing to certify all vehicles under WLTP before the new regulations take effect and recall costs were also factors. (Daimler)

Ford and VW are exploring potential collaboration on a range of topics relating to commercial vehicles but stressed that equity arrangements and cross-ownership stakes were not under discussion. (VW)
Ford believes self-driving delivery vehicles have greater application in the suburbs than built-up areas. (PC Mag)

Volvo started production at its Charleston, USA, plant. The factory can produce up to 150,000 cars per year. (Volvo)
Swedish authorities reportedly told Volvo that it cannot carry out its planned self-driving testing program with “real” families due to the risks involved. The project was already severely delayed. (Autonomes Fahren)

Investing $175 million in the Lansing, USA plant to install equipment for the new sedan that replaces the ATS and CTS. (Detroit News)
Reported that installing a $35,000 3D printer at one factory had led to cost savings of over $300,000 for new tooling, plus reductions in downtime. (3D Printing Industry)

Hyundai and Audi will jointly develop fuel cell technologies. Affiliates such as KIA and VW will have access to any benefits from the agreement. Hyundai implied that they had superior experience and technology to Audi, but that the potential business for Hyundai Mobis was a major factor in the partnership. (Hyundai)
South Korean unions threatened to take legal action to prevent Hyundai creating a lower cost manufacturing JV with a regional government because they believe the company has sufficient capacity in its unionised plants. (Yonhap)
Granting more autonomy to its regional offices to enable faster decision making. A recruitment drive is on for staff in finance, planning, product development and sales. (Yonhap)

Carlos Ghosn said that although discussions about a deeper relationship between Renault, Nissan and Mitsubishi, a full takeover by Renault was not one of the options. (Reuters)

PSA believes that 120 million km of test mileage are necessary to verify self-driving on highways — with greater distances required for rural roads and cities. (PSA)
Faurecia announced an updated credit facility, providing €1.2 billion until 2023. (Faurecia)

CEO Ghosn said that although discussions about a deeper relationship between Renault, Nissan and Mitsubishi, a full takeover by Renault was not one of the options. (Reuters)
Acquired a 75% stake in taxi and private hire vehicle dispatch firm iCabbi through its financing arm. (Renault)

Suzuki

Released the first official images of the next generation Jimny. (Autocar)

Said that it had been sabotaged by a disgruntled employee and shortly afterwards experienced a fire at its Freemont plant that CEO Musk said was “hard to explain”. (New York Times)
Created a final assembly line in a temporary building to increase Model 3 production. Judging by the reported equipment, size, number of toilets and fire extinguishers, the new line is low volume. This could still have benefits for overall production if it allows models in launch or with low take rates to be assembled with less disruption to the main lines. (Wired)
Said in an internal email that Model3 production was consistently above 500 units per day but that “radical improvements” were needed in several areas of the factory. (CNBC)
CEO Musk said Germany was the “leading choice” for a new Tesla battery factory, probably near the border with France and the Benelux countries — should Ford employees in Saarlouis prepare their CVs? (Business Insider)
A group of hackers published a series of images from Autopilot overlaid with system categorisation and radar data. Their analysis reveals previously unknown shadow capabilities of Autopilot (e.g. how good it is at tracking stopped vehicles) and provide information on which cameras perform which detection role. (Electrek)
Suing a former Gigafactory worker, accusing them of stealing data and trade secrets and leaking misleading information to the media about quality standards. (Bloomberg)

Dropping the Avensis nameplate in favour of Camry in Europe. (Toyota)
Launched an all-new Century luxury limousine aimed at the Japanese market. The model has a sales target of 50 units per month. (Toyota)
Reportedly undertaking aggressive cost cutting in the marketing function, however from the examples given it wasn’t clear whether the measures were the first signs of a major revamp or normal business. (Reuters)
Toyota’s US financing arm will sell $3 billion in financial products to retail investors. (Toyota)

Following the arrest of Audi’s CEO, VW’s board agreed to “temporarily” release him from his duties and Audi’s head of marketing and sales has taken on his responsibilities on an interim basis. (VW)
The truck and bus division is to be renamed Traton Group, in a step VW says prepares the division for “capital market readiness”. (VW)
Porsche purchased a 10% stake in Croatian electric sports car builder and component supplier Rimac. (VW)
Will increase the capacity of the FAW-VW Foshan plant to 600,000 units annually. (VW)
Announced a new regional reporting structure where different brands will take responsibility for coordinating the Group’s approach. VW will lead in the Americas and sub-Saharan Africa, SEAT will be responsible in North Africa, Audi will cover the Middle East and Asia Pacific except China, Škoda will be responsible for Russia and India. China is everyone’s responsibility and Europe wasn’t mentioned at all. (VW)
Audi is part of a consortium intending to test air taxis in Ingolstadt, Germany (Audi’s home town). (Audi)
Invested $100 million in solid state battery developer QuantumScape and formed a JV with the intent of mass producing solid state batteries by 2025. (VW)
Hyundai and Audi will jointly develop fuel cell technologies. Affiliates such as KIA and VW will have access to any benefits from the agreement. Hyundai implied that they had superior experience and technology to Audi, but that the potential business for Hyundai Mobis was a major factor in the partnership. (Hyundai)
A judge in one of the continuing cases into the Porsche acquisition of VW shares said investors could take action against VW majority shareholder Porsche SE, in addition to VW. (Reuters)
Ford and VW are exploring potential collaboration on a range of topics relating to commercial vehicles but stressed that equity arrangements and cross-ownership stakes were not under discussion. (VW)

Other

Aston Martin will open a new development centre at Silverstone and some posh offices in London. (AML)
A Shanghai-based car maker, thought to be GLM, is building a factory based on additive manufacturing, rather than traditional manufacturing techniques. The production method is a sort of spaceframe. (3D Printing Industry)
Local Motors announced a restructuring of its parent, now branded LM Industries to offer tailored design and manufacturing of vehicles based on the Olli platform. One of its projects is an autonomous battlefield vehicle for the US Marine Corps. (Local Motors)
- Implication: Although the company’s offering is not hugely different from those of existing bodybuilders, the extent of potential modification, combined with the ability to order small batch runs from various locations (and ultimately vary in scale) might be very attractive to customers such as the military who are used to paying high prices, but demand substantial customisation.

News about other companies and trends

Economic / Political News

US President Trump wants a 20% tariff on car imports (mainly from the EU) “soon”. The issue is wider than the automotive trade balance and it is unclear what OEMs can do to resolve the situation. (Economic Times of India)
- Implication: Despite many European brands having US factories, economies of scale have led them to source entire vehicle lines and treat the plants as currency, rather than tariff, hedges. Recent weeks have also shown the political goodwill to be insufficient to shield the industry in the US.

Suppliers

ZF have developed a new drivetrain that combines an automated manual transmission with an electric motor. This gives the normal benefits of light electrification and overcomes the primary downside of automated manual transmissions (the noticeable lag in changing gear). The result is a system that improves fuel economy and creates cost savings to partially offset the electrified technology. (ZF)
Manufacturing engineering company FFT will be acquired by Chinese company Fosun. (Deal Street Asia)
Varroc Lighting Systems acquired a smaller Turkish supplier. (Autocar)
Continental is establishing an artificial intelligence research lab within the German Research Center for Artificial Intelligence (DFKI). (Continental)

Dealers

According to a consultancy report, UK dealers are fast aligning diesel used car inventory with new car demand. In May 2017, diesel made up 57% of stock, by May 2018, it had dropped to 50%. (Motor Trader)

Uber is trialling a fare discount, if the rider will agree to a longer wait for their cab. (Quartz)
Uber’s CEO suggested a levy on ride hailing in New York to compensate taxi drivers who paid (in retrospect) high prices for their operating licences. (Business Insider)

Driverless / Autonomy ^(history)

US crash investigators said the Uber safety driver involved in the fatal crash was not looking at the system interface, as they had claimed, instead phone records apparently show that they were streaming a talent competition on their phone. (Wired)
- Implication: If safety drivers prove to be an unsatisfactory last resort then self-driving companies risk falling foul of a chicken and egg situation regarding road worthiness. Closed course driving. simulation and passive mode on-road testing could continue but the rate of learning would drop dramatically, and some situations would be impossible to confirm (because the effect of the vehicle’s decisions on other users is difficult to predict and therefore simulate)
US regulators told the company behind “Autopilot buddy” to stop selling it. The $199 accessory is put onto the steering wheel to defeat Tesla’s safety measures (checking drivers are holding on to the steering wheel). (The Verge)
- Implication: This is a further, worrying, development in autonomous driving. Customers and third parties are proving happy to perform what they see as hacks, but in reality defeat safety devices. Given the mounting evidence of people coming up with ways to force autonomous control, could this spell doom for L2 and L3 devices? The safer bet for regulators might be to ban the devices altogether rather than risk mis-use (Elon Musk and others would argue that, on average, safety is still improved even with reckless usage).
Israeli start-up TriEye said it was developing an infra-red sensor that could be integrated into cameras, helping them to detect in objects where current performance is very poor (such as mist or dust). (Globes)
Ford believes self-driving delivery vehicles have greater application in the suburbs than built-up areas. (PC Mag)
PSA believes that 120 million km of test mileage are necessary to verify self-driving on highways — with greater distances required for rural roads and cities. (PSA)
A group of hackers published a series of images from Tesla’s Autopilot overlaid with system categorisation and radar data. Their analysis reveals previously unknown shadow capabilities of Autopilot (e.g. how good it is at tracking stopped vehicles) and provide information on which cameras perform which detection role. (Electrek)

Deutsche Post said it intended to continue producing Streetscooter electric vans until at least 2020 but that the company did not want to be an automaker and was looking at options including an IPO or sale. (FAZ)
A research consortium led by the Japanese government said it is aiming for a $90 per kWh battery pack cost for solid state batteries by 2030. (Green Car Congress)
A study by AlixPartners predicted that in 2030 battery electric vehicles will account for 20% of US sales, 30% in Europe and 35% in China. The assessment also concluded that the next wave of electric vehicles would cost OEMs $255 billion, yet many would lose money on the new models. (AlixPartners)
China is reportedly developing a new charging standard capable of 900 kW. (Inside EVs)
CHAdeMO’s maximum rating has been upgraded to 400 kW in a forthcoming generation of products. (Inside EVs)
VW invested $100 million in solid state battery developer QuantumScape and formed a JV with the intent of mass producing solid state batteries by 2025. (VW)

Find our archive here.

Auto Industry Briefing — week ending 17th June 2018

June 18, 2018 Ad Punctum TeamAd Punctum, Automotive0

Toyota bets on Grab, VW’s strategy to monetise data and Proton the sequel. Please enjoy our auto industry and mobility briefing for 11^th June to 17^th June. A PDF version can be found here.

Favourite stories of the past week…?

Billionaire –– Toyota spent $1 billion on a stake in Grab. In return they’ll get board seats and executive roles. Toyota has a cash pile unlike any other OEM and it can afford to wait and see how the mobility marketplace grows before making any bet the farm decisions. In negotiating the executive roles, it looks as though Toyota will gain the sort of insights others have promised, but struggled to deliver (ahem… GM/Lyft)
If I Knew — VW Group gave a presentation about the business model behind autonomous vehicles. So far, so useful. But there was nothing in there about the value of data. That’s only a problem because Audi have said it will make them loads of money, so what’s going on? Is there a gap in the thinking or are VW trying to throw us off the scent of a well-worked masterplan that’s waiting to be unleashed?
Treasure — Malaysia’s new prime minister wants a national car company. It’s a reworking of the scheme (also his brainchild) that launched Proton, now in the clutches of Geely. Potential consultancy fees abound…

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

Recalled almost 775,000 vehicles across Europe to correct disputed emissions control software without admitting wrongdoing. (BBC)
German media reporting of the diesel recall took aim at Daimler CEO Zetsche, criticising both his management approach and the way he had conducted discussions with the German government. (Handelsblatt)
Ford and Daimler are ending their fuel cell development joint venture. (Reuters)

Ford and Daimler are ending their fuel cell development joint venture. (Reuters)
Recalling around 9,000 vehicles in North America to fix fuel pump, transmission and braking problems. (Ford)
Wants to work harder on sourcing in India; Ford says its tier 1 suppliers are 85% local but tier 2s are only 60%, meaning that import tariffs are still largely incurred — the company is aiming for 90% localisation. (Autocar)
A profile of Argo AI said the company currently has 330 employees. (WSJ)

Volvo invested in lidar company Luminar. Toyota previously said they will use the company’s products. (Volvo)
Volvo has set a goal of using recycled material for at least 25% of the plastic in its new cars from 2025. (Volvo)
Polestar returned as a sports sub-brand on mainstream vehicles under the “Polestar Engineered” banner. (Volvo)

Reportedly considering a listing of Cruise, but not until the business has developed further. (Bloomberg)
Announced a new CFO, effective 1^st (GM)
Released its latest sustainability report. (GM)
GM’s CEO said the company has no projects underway with Lyft. (Reuters)

Sojitz, Hyundai’s local partner in Pakistan, said its factory would be completed in December 2019 and the brand was aiming for a market share of 6% by 2024. (Sojitz)

Nissan announced long term targets for its expansion plan covering Africa, the Middle East and India; there were few specifics about how Nissan intends to accomplish its goals. (Nissan)
Said that ultrahigh tensile steel was a key element of its weight reduction strategy, with a target of 25% usage by weight (at an unspecified point in the future) — it already overachieved this figure in the new Infiniti QX50. (Nissan)
Announced that annual synergies from the Renault-Nissan-Mitsubishi alliance reached €5.7 billion in 2017, up from €5 billion in 2016 driven by new measures such as including Mitsubishi in spare parts, retail financing and benchmarking. (Renault)

Executives said that PSA wants to be a fast follower rather than first mover on electric vehicles. (Automotive News)
Appointed a new CFO, promoting the current CFO of Opel. (PSA)
Said that the cost of development for new Opel models had been reduced by between 20% and 50% through integration into PSA and component sharing and that by 2024 all Opel and Vauxhall passenger cars will be on PSA platforms. (Opel)
Faurecia signed a strategic partnership with FAW Group, with a view to partnering in the development of a high quality interior for the Hongqi brand. (Faurecia)
Introducing an upgraded four cylinder petrol engine family from 2022 onwards based on PSA’s (not GM’s) current 1.6 litre engine. (Opel)
Workers at Peugeot Scooters (PSA owns 49%, 51% held by Mahindra) are becoming restless over the failure to provide a compelling recovery plan. If workers become disaffected, Sochaux is a likely target. (Les Echos)

Announced that annual synergies from the Renault-Nissan-Mitsubishi alliance reached €5.7 billion in 2017, up from €5 billion in 2016 driven by new measures such as including Mitsubishi in spare parts, retail financing and benchmarking. (Renault)
CEO Ghosn said that Nissan’s CEO had been misquoted in saying a Nissan-Renault merger had “no merit” but instead had simply pointed out that a period of consideration to assess merits was required. (Bloomberg)
CEO Ghosn implied in an interview that he will step down before the end of his contract in 2022. (Les Echos)
Will invest more than €1 billion in electric vehicle development and production in France, with three sites for vehicles and one for motors. Renault said production capacity of Zoe will double and the Douai factory will begin production of a second electric platform, to be shared with Nissan and Mitsubishi. (Renault)
Said the local partner had acquired the land for the forthcoming Pakistani factory and construction will begin before the end of the year, with vehicles rolling off the line in 2020. (Renault)

Suzuki

Announced the transfer of all equity in its Chinese JV, Changhe Suzuki, to its local partner. (Suzuki)
Diesel decline isn’t only a European phenomenon, Maruti Suzuki ended production of diesel powered Ignis compact cars in India citing low demand. (Times of India)

Will move production of the Discovery to Slovakia when its new plant opens there in 2019. Previously JLR indicated that some production would remain in the UK. JLR said the potential job losses which could result at the Solihull plant would come from temporary staff and was a “tough one”. Sources speculated the decision was made to free up space in Solihull for the Jaguar J-Pace. (JLR)
Launched a new subscription service called Carpe that offers 12 month contracts without deposits. At present the scheme is UK only, and not that cheap. Range Rover Evoques start at £1,176 per month (all inclusive). (JLR)
33% of respondents to an online poll about the I-Pace’s artificial in-cabin sound said they hated it. (The Verge)

Is cutting around 9% of its workforce, almost all of whom are salaried staff, implying a cut of towards 20% of that group. CEO Musk cited duplication of roles and the need to cut costs. Within the job cuts lies a reorganisation of some of the US retail sales channel. (Business Insider)
Elon Musk’s management style and rhetoric were criticised by factory employees. (The Guardian)
Tesla’s director of AI gave a presentation outlining some of the issues the company is grappling with as it improves its machine learning. He put a heavy emphasis on the importance of data labelling and drew attention to the practical challenges in undoing previous labelling decisions. (Electrek)

Announced a $1 billion investment in Grab, a seat on Grab’s board and an executive rotation program. (Toyota)
- Implication: Compared to rivals, Toyota has far more cash on hand to experiment with new mobility services so although this represents the single largest investment of any OEM the company probably feels comfortable with it. By securing the executive appointments, rather than simply board seats, Toyota is getting an opportunity to learn about the business in a way the likes of GM (Lyft) and VW (Gett) said they would but only Daimler (myTaxi) seems to actually be doing.
Executives said company was taking a “strategic look” at the Lexus IS and GS sedans, implying there may not be a like-for-like replacement. (Autocar.)

Fined €1 billion by prosecutors in Germany over its role in the diesel crisis. There were two elements: an actual fine of €5 million, and a “disgorgement of economic benefits” of €995 million. (VW)
Held a future mobility day where a range of technologies were shown to investors and media. (VW)
Gave a series of presentations at the CEBIT show, of potential interest are: VW’s procurement bot and the way the company is thinking about the tiers of value in autonomous vehicles. VW showed an ItalDesign-badged flexible autonomous platform with pods that could be swapped over but this appeared to be aimed at pods that could go on land or sky rather than re-using the road-going platform. (VW)
- Implication: VW’s slides don’t mention, or build a case for, the profit potential of data, yet only recently Audi articulated a set of revenue and profit goals from data-derived services. Is the thinking joined up, or have VW Group hit on such an amazing scheme that they are trying to distract attention by talking about other things?
Audi’s CEO was named a suspect in the German investigation into the diesel scandal and had his home raided. During the week, VW’s board debated a response but took no action. He was subsequently arrested. (Detroit News)
Škoda is reportedly investigating the use of an outside contract manufacturer to increase capacity. (Reuters)
Porsche’s consulting company said it would increase staff by about 20% and open two new offices. (Porsche)
Audi will offer e-tron owners an at-home package of solar charging, battery storage and vehicle charging in partnership with two specialists. (Audi)
Audi will continue to use Ballard to supply fuel cell stacks for development vehicles until at least August 2022. The combined development services and component contract is worth between $62 million – $100 million. (Ballard)
- Implication: The agreement on such a large contract implies that Audi are continuing serious development on fuel cells, alongside their electrification program.

Other

Malaysia’s new (and past) prime minister said that the country needs a new national car company now that Proton is in foreign hands and hopes to find partners in ASEAN. (Straits Times)
Apollo said they would use HWA to assist in development of the IE supercar. (Apollo)
BYTON confirmed it had completed a series B round, raising $500 million. (BYTON) According to their paint shop supplier, Byton’s factory will have capacity for 150,000 units annually. (Dürr)
Subaru’s CEO announced he was demoting himself following the completion of the company’s investigation into final inspection irregularities. (Subaru)
Solar powered vehicle marker Lightyear said their 2025 volume target is more than 50,000 units per year and more than one million units per year in the 2030 to 2035 timeframe. (Lightyear — video at 12:00)

News about other companies and trends

Economic / Political News

European passenger car sales for May of 1,398,913 units were up 0.8% on a year-over-year basis. (ACEA)
BAIC’s chairman believes one third of Chinese manufacturers will be forced out of business by 2022. (Just-Auto)
US union, the UAW elected a new president. (Detroit News)

Suppliers

Magna formed two JVs with BAIC (having earlier agreed to engineer an electric vehicle for them). The JVs will cover vehicle engineering and manufacturing and envisage an existing BAIC plant with 180,000 units per annum capacity producing units from 2020 onwards. (Magna)
Bharat Forge took a stake in heavy vehicle electric powertrain provider Tevva Motors. (Autocar)
ZF unveiled a new suspension product, dubbed sMOTION, that significantly reduces cabin movement. The company pointed to the rise of autonomous vehicles as a likely source of demand. (ZF)
Adient’s CEO resigned amid rocky financial results and has been replaced on an interim basis. (Adient)
BorgWarner said it would restate financial results for 2015 and 2016. (BorgWarner)
Honeywell said, post-spinoff, its transportation systems business will be called Garrett. (Honeywell)
Martinrea opened a new technical centre in Detroit, partly due to talent shortages in Canada. (org)
Faurecia signed a strategic partnership with FAW Group, with a view to partnering in the development of a high quality interior for the Hongqi brand. (Faurecia)

Dealers

Chinese used car platform Cheduoduo raised $17.7 million in a series A. (Deal Street Asia)

Chubb and SURE launched an on-demand insurance product for ride hailing passengers, so that they are covered for death or injury costs in the event of an accident. Since the service operators already have their own insurance coverage in place, it isn’t clear what the market demand for the product will be. (Press Release)
Didi said that its next international market will be Australia. (Economic Times of India)
Toyota made a $1 billion investment in Grab and took a seat on Grab’s board. (Toyota)

Driverless / Autonomy ^(history)

Magna announced a partnership with May Mobility. Magna will carry out the final assembly and fitting of shuttles to May Mobility’s specification. (Magna)
Rental company Enterprise will run Voyage’s fleet of AVs and says it is lining up other customers. (Bloomberg)
Volvo invested in lidar company Luminar. Toyota previously said they will use Luminar’s products. (Volvo)

The Chinese city of Shenzen said that all taxis in the city must be electric. (China Daily)
After Deutsche Post parted ways with the executive who championed StreetScooter, media reporting implied the division’s future could be affected by forthcoming restructuring. (Handelsblatt)
Porsche launched a charging station consolidation service. For a monthly fee of €2.50, users can charge at a wide range of different providers (nearest site recommended via integration with the car’s navigation) and the app will handle payment electronically (on top of the monthly fee). Porsche says that “in principle” owners of other brands can use the same service. (Porsche)

Connectivity

Turo said it was working with several OEMs to integrate remote access for its peer-to-peer users into factory-spec connectivity, citing Mercedes as an exemplar. (Autocar)
Mapping start-up Mapfit announced investment of $5.5 million. (TechCrunch)
RideOS will provide mapping services to Ford’s Autonomic division. (rideOS)

Other

Parking provider ParkinGo announced an ICO to raise $10 million. Despite the appearance of blockchain, the scheme bears all the hallmarks of a traditional pre-payment for parking. (ParkinGo)
Elon Musk’s Boring Company won a contract to construct Chicago’s high speed airport link. (IEEE Spectrum)
- Implication: the plan calls for high speed electric shuttles, the source remains unspecified, but presumably a design could share much in common with the Tesla
Bicycle rental operator Ofo held a fire sale of unused bicycles in Singapore. The sale price of S$50 was substantially less than Ofo’s reported unit cost of 335 RMB. (Technode)
Scooter rental company Bird is reportedly on the cusp of another funding round — and a £2 billion valuation. (TechCrunch)
3D printing company Virtual Foundry released a new type of filament that lets desktop 3D printers create metal objects. It works by wrapping the metal inside a plastic binding until the material is deposited and then chemically finishing the process in a kiln. (3D Printing Industry)

Find our archive here.

Auto Industry Briefing — week ending 10th June 2018

June 11, 2018 Ad Punctum TeamAd Punctum, Automotive0

Volvo’s 2025 strategy, Honda and GM battery sharing, saving diesel and what people really think about their cars. Please enjoy our auto industry and mobility briefing for 4^th June to 10^th June. A PDF version can be found here.

Favourite stories of the past week…?

Roll With It — Volvo unveiled a set of corporate targets for 2025. They are big on electrification, services and new age ownership concepts. Although it’s hard to see yet how the brand is on track to achieve goals such as 50% of sales from fully electric vehicles, it’s interesting to see OEMs facing up to what might be important. Has Volvo taken a hard look in the mirror or is it just pre-IPO positioning? What are the implications of these targets (ahem, dealers)?
She’s Electric — Honda and GM are teaming up on battery chemistry and pack manufacturing. Good for them. How long before other OEMs see that working apart from one another isn’t working? Battery manufacturers are bringing scale at the cell level but unless EVs suddenly take off, you need to be collaborating to get scale at the pack level.
Some Might Say — A group of researchers released a report saying real-world emissions of diesel vehicles were lousy and the European trade body rebutted them saying the testing method wasn’t up to scratch. Unfortunately, it was too late, and the awful headlines had been written. If the industry really is serious about saving diesel then it can’t just reactively send out nerdy-sounding notes, it needs to capture the imagination about why the fuel has a future.
D’You Know What I Mean? — Ad Punctum surveyed UK car owners about their in-car interface and experience. The answers are unsettling for OEMs… too many people find the systems hard to use and the breadth of customer opinion is at odds with the narrow selection being forced upon them. Take a look here.

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

Find our archive here.

Our Latest Research

We asked car owners what they think about their vehicle’s user interface and user experience (UI / UX), the findings don’t look good for OEMs but provide plenty of food for thought on how to change things:

Over one third of owners said their car’s UI was NOT easy to operate
Over one third said it had the WRONG capabilities
Over one third use SOMETHING ELSE (e.g. smartphone, navigation) to fill the capability gap
And much more

Read it here

p.s. the presentation doesn’t have all the results, just some highlights. If you’d like to know more then please get in touch to arrange a discussion.

News about the major automakers

Said that Magna will produce the new Z4, starting in late 2018. (Magna)
BMW headquarters was evacuated for a bomb alert. After a robot had carried out a controlled explosion, investigators determined that it was an alarm clock designed to look like sticks of dynamite. (SZ)

Will invest €1 billion to build an additional car plant at Kecskemét in Hungary, saying the new factory will be fully flexible and have capability to produce a range of drivetrains and vehicle types on a single line. (Daimler)
Daimler Trucks held a capital markets day where the company promised to boost profitability and create an electric truck division which will offer a range of large electric commercial vehicles, up to and including a Tesla Semi-fighter called the Freightliner eCascadia. (Daimler)

In line with long-running media speculation, after it said in March that it would not allocate a new product to the plant, Ford announced it was seeking a buyer for the Bordeaux, France automatic transmission factory. (Ford)
- Implication: Ford watchers may remember the company selling the same factory in 2009, as an alternative to closure — only to take it back on when the new owners spent all the dowry Ford provided. Will the company fall into the same trap again?
Began production of the Ecopsort in Russia. (Autocar)

Volvo announced a set of objectives for around 2025. It wants 50% of sales from fully electric cars, one third of sales to be autonomous, and for subscriptions to be responsible for half of retail sales. The company wants to have 5 million direct consumer relationships. (Volvo)
Lotus have a new CEO — Geely insider Qingfeng Feng. (Autocar)

GM and Honda agreed to collaborate on next generation batteries. The partners will use GM’s battery chemistry as the basis for the collaboration and the intent is for GM to supply Honda with battery packs. (Honda)
Will offer (hands off highway driving) SuperCruise on all Cadillac products by 2020 and begin rollout to other GM vehicles after that. Cadillac also plans to have V2X capability on some vehicles by 2023. (GM)
- Implication: This announcement shows that SuperCruise isn’t dead, despite the lack of activity or apparent enthusiasm within GM. It also shows that the technology set appears sufficiently different to that of Cruise that GM is not planning to fuse the two anytime soon.
GM’s top powertrain executive said diesels can “still play a role for years to come”, especially in the US market where they can improve the fuel economy of pick-up trucks. (Automotive News)

GM and Honda agreed to collaborate on next generation batteries. The partners will use GM’s battery chemistry as the basis for the collaboration and the intent is for GM to supply Honda with battery packs. (Honda)
Honda’s UK sales head said it would take three years to win back customers after dropping diesel from the CR-V line-up. The longer term sales objective is 50/50 petrol and hybrid. (Autocar)

KIA is recalling around 500,000 vehicles in the US to fix problems with airbag deployment. (Detroit News)

Mazda

Said it is continuing to develop next generation diesel engines and remains sceptical on EV demand. (Detroit News)

Launched a new sustainability strategy with goals for the year 2022 covering the environment, society and governance. (Nissan)
Reportedly decided to end development of diesel engines. (Nikkei)

Began suspending its activities in Iran following the US withdrawal from the nuclear weapons monitoring deal, although it hopes to win an exemption and continue operations. PSA stressed that Iran accounted for less than 1% of revenue and so its profit guidance remained unchanged. (PSA)
Created a fourth shift at the Vigo, Spain plant, employing 900 temporary workers due to demand for Partner and Berlingo vehicles. (Europa Press)
Executives said the first Free2Move will begin offering leasing deals outside Europe from 2019. (Europa Press)
Launched the new-look Opel in-car entertainment system, starting with the Insignia. (Opel)

Created the Blue dCi sub-nameplate to differentiate diesel vehicles fitted with urea SCR systems. (Renault)

Tesla’s AGM featured several interesting comments from executives. Headlines were made by suggestions the company could reach the 5,000 units per week production level for Model 3 by June; but also of interest was CEO Musk stating Tesla would reach $100 / kWh at a cell level in late 2018 and $100 / kWh at a pack level in the next two years. Tesla also plan to offer free trials of Autopilot again. (EV Obsession)
A report claimed Tesla internal documents said 40% of Gigafactory-produced parts for Model 3 were being either scrapped or reworked, amounting to $150 million in 2018. Tesla played down the reports. (Business Insider)
Will release version 9 of its operating system in August. CEO Musk said the new software would “begin to enable full self-driving features”. (Electrek)
CEO Musk says the Roadster will feature an “augmented mode” that he likened to a flying metal suit, assumed to be a reference to a trademarked comic book character. (Electrek)

Invested in self-driving robot delivery company Boxbot. (Toyota)

Porsche announced the program previously known as Mission E will be called the Taycan. (Porsche)
Audi unveiled the new Q8, a large three seat SUV. (Audi)
VW will have to take production downtime in the third quarter of 2018 because it has not certified all vehicles under WLTP ahead of the cut-off date. (VW)
- Implication: Although VW talks about the problems in terms of temporary bottlenecks, it seems up to 250,000 units could be lost. (Handelsblatt)
Participated in the $80 million fund raising round for Gett. (FINSMES)

Other

Aston Martin’s CEO believes “we are at the beginning of the end of the traditional automotive industry” because of the likely commoditisation of the vehicle brought about by driverless technology. (Automotive News)

News about other companies and trends

Economic / Political News

German engineering union IG Metall released a study commissioned in partnership with OEMs and Tier 1s forecasting that, in German alone, a net 75,000 jobs will be lost because of increased use of electrification in vehicles (the scenarios used anticipate far more EVs than today, but still have 60% internal combustion mix). (IG Metall)
German passenger car registrations in May of 305,057 vehicles were down (5.8)% on a year-over-year basis. (KBA)
May passenger car registrations in the UK totalled 192,649 units, a 3.4% increase on a year earlier. On a year-to-date basis the market is down (6.8)% (SMMT)
The European trade body, ACEA, issued a riposte to a study that claimed recently launched diesel vehicles all failed emissions standards. The main point of contention was the TRUE study’s reliance on short duration (one second) samples that ACEA said were unreliable. (ACEA)

Suppliers

Battery systems supplier Akasol is expecting a valuation of around €500 million from its IPO. (Handelsblatt)
CATL had a successful IPO, with share values rising 44% on the first day of trading. (Bloomberg)
CATL made a “sizeable investment” in Byton. (Deal Street Asia)
Cosworth says it is planning an IPO in 2019. (Reuters)
Continental took the unusual step of issuing a press release to announce an internal ban on some messaging services claiming they do not properly protect privacy. (Continental)
Prevent said it would close the Leipzig NHG foundry, blaming cancelled orders from VW. (Manager Magazin)
Magna will produce the new BMW Z4, starting in late 2018. (Magna)

Dealers

Chinese online used car sales platform Tiantian Paiche raised $100 million whilst rival Chezhibao received $125 million. (Deal Street Asia)
Automotive servicing marketplace Caroobi raised $20 million, including funds from existing investor BMW. (TechCrunch)

Lyft announced a major makeover for its app to put more emphasis on shared rides as it aims for 50% of trips to be shared by 2020. The app now also includes multi-modal input from a variety of public transport partners. (Lyft)
Peer to peer ride hailing start-up HyreCar hopes to raise around $10 million in its IPO. (HyreCar)
The mayor of Paris said she was contemplating ending the contract of Bolloré’s Autolib car sharing service in favour of one that did not require fixed stations, or such large subsidies. (Les Echos)
Grab announced a venture fund and accelerator program called Grab Ventures. (Grab)

Driverless / Autonomy ^(history)

Innoviz is partnering with HiRain to provide lidar-based driverless technology sets to Chinese OEMs. (Innoviz)
Autonomous car software developer AutonomouStuff has been acquired by Hexagon. (Hexagon)
Waymo’s CEO said that company’s brand probably wouldn’t be as strong as incumbent brands in Europe and this could lead to a service branded by a partner. (Reuters)
- Implication: Although a truism that Waymo is less well known than incumbent brands, it is hard to see how this is a Europe-specific phenomenon, are the citizens of Nebraska any more familiar with Waymo than those of Newquay?
According to executives, Waymo has reached 7 million miles of on-road driverless testing. (Ars Technica)
Driverless pod maker Navya is hoping to list in Paris. (Les Echos)
Tesla will release version 9 of its operating system in August. CEO Musk said the new software would “begin to enable full self-driving features”. (Electrek)
Self-driving delivery robot company Starship Technologies (Daimler invested in a prior round) raised $25 million. (TechCrunch)
Toyota participated in a $7.5 million investment in self-driving robot delivery company Boxbot. (Toyota)
GM will offer (hands off highway driving) SuperCruise on all Cadillac products by 2020 and begin rollout to other GM vehicles after that. (GM)
GM’s Cruise settled a legal action brought by a cyclist who collided with one of their cars but the terms were not made public. (Reuters)