Tesla moves further down the road to cast bodies; Ford’s age problem; and you have permission to plan for a recession. Please enjoy our auto industry and mobility briefing for 14^th April to 19^th April 2020. A PDF version can be found here.

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

Why Stop Now — Tesla is so happy with the use of large castings in the Model Y that plans are afoot to go further and roll back some of the changes to Model 3. The use of castings for the vehicle body is nothing new, but Tesla’s approach to replace assemblies made up of stampings and extrusions with castings far bigger than normal is innovative and makes things simpler (and hopefully cheaper, if you can overcome weight and engineering change problems). Will Tesla now proceed to the completely cast underbody as promised?
Respect My Conglomerate — Ford celebrated the recruitment of two new executives, one aged 44, the other 36. They are going to work in new-fangled departments like data analytics and digital experience. All well and good, but why doesn’t Ford seem to have any homegrown talent under 45 in senior positions? Could it be that ageing managers have supressed talent? Or, everyone they recruited from school is no good? Will the new recruits stay?
Extinction Level Event — The head of the IMF is expecting a mega recession, so it’s official: we are allowed to talk about it without fear of being labelled a scare mongering demand destroyer. Kongsberg Automotive (a supplier) thinks that even in the best case, global industry will fall around 10% in 2021 (and crater in 2020). Which OEMs will be the first to openly agree? Will Tesla and Uber survive?

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

FCA ^(history)

Ford ^(history)

Prompted by an intensive study led by new COO Farley, Ford announced an executive reshuffle: The head of the Americas will now run all markets except China and Europe, receiving extra help from a new North America COO and an expanded role for the leader of the South America unit. The head of Ford’s much-vaunted Team Edison electric car project will run commercial vehicles in North America, without a clear replacement. Two lower-tier external recruitments were made in data analytics and digital experiences. (Ford)
- Significance: Ford’s external recruitment highlights the firm’s dearth of under 45s with significant leadership experience, perhaps in part explaining the tardiness on upgrading the portfolio for electrification and connectivity. The last major hire at a similar age didn’t fare too well, leaving relatively quickly citing an unease with the company’s culture.
Raised $8 billion in bonds that mature between 2023 – 2030. Analysts noted the high interest rates — 9.625% for the longest-dated debt. (Ford)

General Motors ^(history)

Raised an additional $1.95 billion credit line. GM said it would only be used for the captive finance company (although the terms aren’t so prescriptive). (GM)

PSA ^(history)

JLR’s fiscal full year (April 2019 to March 2020) retail sales of 508,659 units fell (12)% year-over-year. (JLR)

Tesla ^(history)

CEO Musk says the use of large castings to replace traditional stampings in the Model Y subframe had been so successful that the company is going forward with a plan to replace components with even bigger castings, and to roll some of the changes into the Model 3, but not for some time. (Clean Technica)

VW Group ^(history)

Announced preliminary financial results for Q1 2020. Revenue was around €55 billion, with an operating profit of €0.9 billion with VW saying it lost €(1.3) billion on commodity and currency hedging. Cash flow was €(2.5) billion. Financial guidance for the full year was withdrawn. (VW)
Bugatti engineers say that working restrictions in place to prevent virus transmission have led to a 30% increase in the time it takes to complete calibration drives but they are still having fun. (VW)

News about other companies and trends

Economic / Political News

The recently appointed head of the IMF expects a massive global recession to follow coronavirus. (BBC)
French president Macron believes that people will want to push harder on clean air and climate change related regulations. (FT)
European passenger car registrations in March of 853,077 units fell (52)% on a year-over-year basis. (ACEA)
European car makers trade body ACEA explicitly called for a financial stimulus to encourage “fleet renewal” by customers who might otherwise keep their cars. (ACEA)

Suppliers

Motherson says customer (OEMs) are suggesting financially distressed suppliers as potential takeover targets and it will share some plans in October. (Autocar)
Tenneco has outsourced some engine components that it (or previously Federal Mogul) traditionally supplied to Burgess Norton. It is unclear whether any asset transfer is involved. (Burgess Norton)
Bharat Forge thinks that as a result of coronavirus, OEMs are more likely to diversify their supply bases so that they are better placed to weather similar shocks in future. (Autocar)
Endurance Technologies acquired Italian clutch specialist Adler. (Endurance)
Michelin took a 20% stake in recycling company Enviro, developers of a promising process that can break down used tyres to their constituent raw materials. (Michelin)
TomTom reported Q1 2020 revenue of €131 million and a net loss of €(63) million. (TomTom)
Kongsberg’s worst-case scenario for a coronavirus recovery is that factories restart en masse in May but take until mid-July to get up to normal speed. Even in the company’s best case, in 2021 industry would be (9)% – (11)% worse than 2019. (Kongsberg p.13)
Goodyear issued preliminary Q1 2020 financial results. Revenue was $3 billion and the PBT loss will be in the range $(185) million to $(195) million. (Goodyear)

Dealers

Mazda started giving quotes for bodywork repair based on photographs uploaded by the owner. (Mazda)

BMW and Daimler’s FREE NOW ride hailing service absorbed Kapten. (Kapten)
Fleet management software developer Autofleet raised $7.5 million. (FINSMES)
Uber says coronavirus has caused a write down of investments in other companies totalling around $2 billion. (Uber)

Zoox and Tesla settled a lawsuit over documentation (about parts ordering and how to run a warehouse) ex-Tesla employees had taken with them when they joined the self-driving start-up. (The Verge)

APB Corporation licenced Nissan’s battery technology for use in stationary storage applications. (Autocar)
- Significance: With stationary storage producers (obviously) looking to use the most up to date technology, it remains to be seen how much revenue used batteries will capture when in direct competition with brand new products.

Other

Lime acquired the remnants of electric skateboard maker Boosted. (The Verge)

Find our archive here.