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

Auto Industry Briefing — week ending 12th May 2019

Life goes on for diesel; Audi’s treatment of disgruntled customers; and BMW and Tesla’s software woes? Please enjoy our auto industry and mobility briefing for 6th May to 12th May 2019. A PDF version can be found here.

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

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

Find our archive here.

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News about the major automakers

BMW (history)

  • Reported Q1 2019 results. Automotive revenue of €19.2 billion fell (0.6)% year-over-year and automotive EBIT was a loss of €(310) million, a sharp decline from a €1.8 billion profit a year earlier. BMW said most of the drop was due to making a provision for a fine from the EU (that it previously reported). (BMW)
  • After trumpeting a plan to save $12 billion, BMW’s CFO admitted that since this was a gross number he couldn’t be sure how much would flow to the bottom line. He also said that BMW has made a “low to mid three-digit million” budget provision for Brexit as part of current guidance. (Seeking Alpha)
  • CEO Harald Krueger dismissed the idea of taking a stake in Daimler, even as the two companies discuss component sharing projects. (Reuters)

Daimler (history)

  • Announced that by 2039 Daimler wants all of the cars it sells to be either battery electric or a plug-in hybrid. Daimler says that by 2030, these cars will be more than 50% of the mix. (Daimler)
  • Outgoing CEO Zetsche backs the German automakers to stay ahead of the competition saying “for the past 40 years I have heard that German manufacturers have missed all the important trends”. (Economic Times of India)
  • EQC production began in Bremen, Germany. (Daimler)
  • Daimler’s Chinese joint venture partner BAIC is said to want a 5% stake in the German firm. (Reuters)

Ferrari

  • Reported Q1 2019 revenue of €940 million, up 13% on a year-over-year basis on shipments of 2,610 cars (up 23%) and EBIT of €232 million, up 11%. Ferrari said the portfolio of cars were performing nicely, and the revenue growth included lower engine sales to Maserati. (Ferrari)

Ford (history)

  • Ford’s in-house accelerator program targets new businesses ideas that can launch in 90 days, with under $500,000 investment. (Ford)
  • Making about 550 non-manufacturing staff in the UK redundant as part of wider European restructuring plans already announced. (City AM)
  • Talks between Ford and Ineos for the latter’s new 4×4 to built at the Bridgend, UK, plant are apparently going nowhere. (Mail on Sunday)

Geely (includes Volvo) (history)

  • All-electric brand Polestar is setting up an engineering base in the UK. (Polestar)
  • Volvo is reportedly cutting staff in Sweden, starting with consultants. (Reuters)
  • Lotus wants to recruit 200 staff and increase annual sales to 5,000 units. (Telegraph)
  • Geely’s design head believes the design quality of Chinese automakers has overtaken western brands. (Deezen)

General Motors (history)

  • Received a further round of investment in Cruise, providing $1.15 billion and valuing the unit at $19 billion. (GM)
  • Working on a deal to sell the Lordstown, USA plant to EV developer Workhorse under a complicated deal where GM would continue to own the much of the factory through a new entity that Workhorse will have a stake in. (GM)
  • Reportedly will no longer shut the Ontario, Canada plant, instead choosing to reduce operations so that it becomes a standalone stamping facility. (Reuters)

Honda (history)

  • Reported financial results for the fiscal year ended March 2019. Revenue of 15.9 trillion JPY (about $144 billion) rose 3% on a year-over-year basis, mainly down to an increase in automotive sales. Profit before tax of 979 billion JPY (about $9 billion) fell (2.7)% — with operating margin of only 1% in the final quarter — Honda said it would do more to improve profitability. (Honda)
  • Plans to overhaul the way it approaches product development through the introduction of a shared architecture that Honda claims will reduce development time by 30% by 2025. At the same time, Honda wants to improve capacity utilisation so that factories are fully utilised by 2022. Trim levels will be simplified and the claimed total benefit of all these actions will be a 10% reduction in the cost base by 2025. (Honda)
  • The cost of Honda’s hybrid system will drop 25% between 2018 and 2022. (Honda)

Mazda

  • Mazda’s released full year results for the year to the end of March. Revenue from global sales of 1,561,000 vehicles was 3.6 trillion yen (about €28 billion) and operating profit was 83 billion (about €650 million). (Mazda)
  • Re-shuffled senior roles to create new audit and supervisory committees, a move Mazda says will speed up decision making. (Mazda)
  • Will develop a new generation of inline six-cylinder engines, including a diesel version. (Auto Express)

Nissan (includes Mitsubishi) (history)

  • The Alliance Ventures VC unit is partnering with Plug and Play China to reach start-ups in the country. (Renault)
  • Will cut 600 jobs at the Barcelona factory. (Economic Times of India)
  • The head of the Infiniti brand left to join FCA. (Nissan)
  • Mitsubishi reported financial results for the full fiscal year to March 2019. Revenue of 2.5 trillion JPY (about $22 billion) and operating profit was 119.9 billion JPY (about $1.1 billion). Although Mitsubishi expects revenue to increase in the next year, profit is forecast to decline. (Mitsubishi)
  • Will re-organise the board structure. (Mitsubishi)

PSA (includes Opel/Vauxhall) (history)

  • Will start producing large commercial vans at Opel’s Gliwice plant in Poland, they will continue to be produced in FCA’s Sevel Sud plant too. (PSA)
  • After the leaking of a document purporting to show how JLR would be integrated into PSA post-sale, PSA said it was open minded on the move but Tata immediately flatly denied that a sale was contemplated. (Reuters)

Renault (history)

  • The Alliance Ventures VC unit is partnering with Plug and Play China to reach start-ups in the country. (Renault)

Suzuki

  • Released financial results for the fiscal year ended March 2019. Revenue of 3.87 trillion JPY (about $35 billion) rose 3% year-over-year but operating income of 324 billion JPY (about $3 billion) fell (13.3)%. (Suzuki)

Tata (includes JLR) (history)

  • After the leaking of a document purporting to show how JLR would be integrated into PSA post-sale, PSA said it was open minded on the move but Tata immediately flatly denied that a sale was contemplated. (Reuters)

Tesla (history)

  • After the recent demonstration of how amazing Tesla’s progress in self-driving technology is, reports emerged of an internal restructuring that suggest all was not so rosy. (Electrek)

Toyota (history)

  • Reported financial results for the fiscal year to the end of March 2019. Revenue of 30.2 trillion JPY (about $272 billion), up 2.8% on a year-over-year basis. Net income of 1.88 trillion JPY (about $17 billion) was down almost (25)% versus prior year. (Toyota)
  • Toyota believes that by expanding into new types of services it can offset some of the pressure to reduce the manufacturing and retail base. (Toyota)
  • Establishing a joint venture with Panasonic to work on technologies for homes and towns. (Toyota)

VW Group (history)

  • VW announced that the Golf-sized all-electric car will be called ID3 when launched, implying a numbering system consistent with age-old alphabetical segment nomenclature (e.g. Golf is c-segment). (VW)
  • VW booked 10,000 fully refundable orders for the launch variant of the ID3 (with up to 30,000 on offer) unfortunately, the IT systems struggled to cope with interest in the ID and kept crashing. (VW)
  • Porsche has agreed to pay German authorities a €535 million over the diesel scandal. (Porsche)
  • Despite long delays in getting eTron vehicles to customers, Audi reportedly is threatening them with huge break fees of over $5,000 if they cancel. (Teslerati)
  • Audi says the eTron can charge quicker than all its competitors (although it doesn’t explicitly say who the competition are). (Audi)
  • Reportedly casting around for buyers of MAN’s large engines division, according to sources who sound exactly like investment bankers trying to drum up interest in the sale. (Reuters)

Other

  • A release of patent filings by Dyson gave a potential glimpse of the car the company wants to build. (Autocar)
  • US start-up Neuron wants to create pod-like electric vehicles. (Neuron)
  • Workhorse reported Q1 2019 revenue of $364,000 and a net loss of $(6.4) million. (Workhorse)
  • Byton wants to raise $500 million and says that its Nanjing, China, plant is almost ready to go. (Byton)
  • Subaru reported fiscal full year financial results. Revenue of 3.16 trillion JPY (about $30 billion) fell (2.2)% on a year-over-year basis. Operating income of 195 billion JPY (about $1.8 billion) fell (49)%. (Subaru)
  • SAIC’s MG brand is reportedly planning a drastic downsizing at its UK operations. (Autocar)
  • DHL apparently wants to sell the StreetScooter electric vehicle division. (Handelsblatt)

News about other companies and trends

Economic / Political News

  • US president Trump said he would implement much-threatened tariffs on Chinese imports, importers into China braced for impact. (Reuters)
  • Electric vehicles continued to gain ground in Europe. During Q1 2019, plug-in hybrids and battery electric vehicles accounted for 2.5% of overall sales. Diesel had a 32% share. (ACEA)
  • UK passenger car registrations in April came to 161,064 units, down (4.1)% on 2018. (SMMT)

Suppliers

  • ZF is buying occupant monitoring firm Simi Reality Systems. (Autocar)
  • Meritor will acquire AxleTech for $175 million. (Meritor)
  • China Automotive Systems reported Q1 2019 revenue of $109 million, down (18)% from prior year. (CAS)
  • BorgWarner is taking a 60% stake in a joint venture with battery developer Romeo Power. (BorgWarner)
  • Adient announced Q1 2019 revenue of $4.2 billion and EBIT of $(22) million. (Adient)
  • Magna’s Q1 revenue was $10.6 billion, with adjusted EBIT of $720 million. (Magna)
  • Allison Transmission announced a buyback program to get an active investor off their board. (Allison)
  • Schaeffler is buying XTRONIC (Schaeffler) and offloading a UK plant it previously planned to close. (Schaeffler)
  • Continental reported Q1 2019 revenue of €11 billion and EBIT of $823 million. (Continental)

Ride-Hailing, Car Sharing & Rental (history)

  • Uber’s IPO was a bit of a damp squib. After debuting with a valuation north of $80 billion, the stock failed to maintain its price. (Fortune)
  • Ugandan ride hailing firm SafeBoda received investment from GoJek. (Deal Street Asia)
  • Grab is considering spinning off the payments and financial divisions from the ride hailing business. (FT)
  • Gett raised $200 million and probably won’t want any more before an IPO planned for early 2020, saying that operations have reached profitability, on an EBITDA basis. (TechCrunch)
  • French ride hailing service Heetch raised $38 million. The CEO says it is close to profitability. (TechCrunch)
  • Ford will expand the GoRide Health non-emergency hospital transfer service to a second US location. (Ford)

Driverless / Autonomy (history)

  • Waymo executives called Tesla’s reliance on cameras for driverless cars “very risky”. (Business Insider)
  • Uber’s CEO poured scorn on Tesla’s timeline for driverless cars saying that they will arrive several years later than Elon Musk believes (in 2020). (CNBC)
  • Some of the driverless vehicles operated by Waymo in Phoenix will be available via Lyft. (Waymo)
  • Intel’s Mobileye division is undertaking a mapping project with the UK’s Ordnance Survey to create an official register of roadside infrastructure. (Intel)

Electrification (history)

  • Farasis Energy is planning a 6 GWh battery factory in Germany. (Sachsen-Anhalt)
  • Bosch says next generation fuel cells will use the same amount of platinum as a diesel catalytic converter. (Reuters)
  • The cost of Honda’s hybrid system will drop 25% between 2018 and 2022. (Honda)

Connectivity

  • Over the air updates had a bed week. BMW seemingly managed to wipe Apple smartphone integration from vehicles because of a server migration issue (Engadget), whilst Tesla owners who shelled out Ludicrous amounts of money to enable super acceleration modes found a recent update has removed the big red button they use to access it. Tesla said the feature removal was inadvertent. (Inside EVs)
    • Significance: In both cases, the removal of content is not simply incompetence, these are features that customers have paid extra for.

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Auto Industry Briefing — week ending 5th May 2019

Cheaper 3D printing of metal parts; Tesla’s lean cash experiment; and is a battery raw material supply crunch real or imagined? Please enjoy our auto industry and mobility briefing for 29th April to 5th May 2019. A PDF version can be found here.

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

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

Find our archive here.

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

News about the major automakers

Daimler (history)

  • A research project Daimler collaborated on has concluded that next-generation metal additive printing processes will reduce costs by around 50%. (Daimler)

FCA (history)

  • Reported financial results for Q1 2019. Revenue of €24.5 billion was (5)% down versus prior year and adjusted EBIT of €1.07 billion was down almost (30)%. FCA said profit would be much stronger in the second half. (FCA)
  • CEO Mike Manley’s comments on the earnings call suggested that FCA was in preliminary discussions with potential strategic partners, but that details would not be forthcoming until “subsequent calls”. (Seeking Alpha)
  • CEO Mike Manley says FCA will achieve European CO2 compliance, avoiding (by their maths) a fine of around €400 million. The benefit of the pooling agreement with Tesla will come mainly in 2020 to 2022 — in 2020 he expects pooling to be responsible for around 80% of the gap closure but by 2022 pooling, if any, will be “very small”. (Seeking Alpha)
  • Spending about €1.8 billion on emissions credits in “various jurisdictions” that will be used up to 2023. FCA didn’t break out the exact amount of this that applies to Tesla in Europe. (FCA)
  • Combined the manufacturing and sales arms of its Chinese joint venture with GAC and established a new executive team incorporating representatives from both companies. (FCA)
  • Will follow the lead of GM and Ford by moving US sales reporting to every quarter, rather than monthly, from Q3 2019 onwards. (FCA)
  • Settled a US lawsuit about emissions from diesel engines, agreeing to provide a software update to adjust output and offer financial compensation to affected customers. (FCA)
  • All new FCA vehicles from 2022 will have infotainment systems connected to the internet using hardware supplied by Samsung’s Harman division. (FCA)
  • Completed the sale of Magneti Marelli to Calsonic Kansei. (Magneti Marelli)

Ford (history)

  • Reducing production of the 5.0L V8 engine that powers many Mustang and F-150 vehicles. (Fox News)
  • Reached a settlement with Brazilian workers that clears the way for Ford to either sell or close the Sao Bernardo do Campo plant. (Reuters)
  • Argo is “about two years” away from the first commercial deployment. (Argo)
  • Announced a new rewards program based around the FordPass payments system and a raft of measures designed to improve customer satisfaction in the USA, such as a new call centre and the introduction of Tesla-style mobile servicing for minor matters. After getting US dealers to implement a new set of dealer standards, at an average cost of $2 million per site by Ford’s figures, the company has decided more change is required and is now promoting a concept that sounds much like a Tesla store. (Ford)
  • Said that several third parties will join the FordPass service to offer services in the vehicle while the customer is away, including parcel delivery and car washing. (Ford)
  • Ford’s recently appointed China boss is said to be clearing out expatriate managers at a rate of knots. (FT)

Geely (includes Volvo) (history)

  • Geely’s all-electric Geometry brand claims 26,000 orders for the Geometry A model. (Top Gear)

General Motors (history)

  • Released financial results for Q1 2019. Net revenue of $34.9 billion was down (3.4)% on a year prior while adjusted EBIT of $2.3 billion fell (12)%. On an unadjusted basis, profit of $2.16 billion was almost double the prior year figure; helped in no small part by a massive tax windfall. (GM)
  • CEO Mary Barra declined to confirm the year end 2020 timing for Cruise to launch a fully autonomous vehicles, choosing instead to talk about how happy she was with Progress. When asked to explain whether GM’s design processes had enough room for innovative thinking, Barra pointed to a pretty weak example involving a tailgate redesign for pickup trucks. (Seeking Alpha)
  • Confirmed that there will be a full line-up of electric vehicles, including pick-up trucks, but remained hazy on the timing, indicating that GM will perhaps be slower to market than Ford. (Seeking Alpha)
  • Recalling 368,000 full size pick-up trucks because of problems with the engine block heater. (Reuters)

Mazda

  • Re-entering the Greek market. (Mazda)

PSA (includes Opel/Vauxhall) (history)

  • Plans to offer all-electric version of the Peugeot Boxer and Citroën Jumpy large vans. Using an aftermarket specialist to modify the vehicles for battery power suggests PSA does not expect large demand, or hope to make any money. Electric versions of smaller vans will be released when the vehicles are updated in 2020/21. (PSA)
  • Issued €500 million in debt. (PSA)
  • German and French politicians are reportedly backing a plan for a joint venture between PSA and Saft to make batteries at the Opel plant in Kaiserslautern — and are preparing to commit substantial state aid. (Fleet Europe)

Tata (includes JLR) (history)

  • JLR CEO Ralph Speth said the business had the full support of Tata but stopped short of an outright denial that a partial or outright sale was under consideration. He is conscious of supply constraints on batteries for electric cars and believes the cost will rise over the next two to three years. (Automotive News)
  • Confirmed that the new Defender will be built in Slovakia (at the end of a tedious press release about the vehicle’s development programme). (JLR)

Tesla (history)

  • Tesla’s purchasing team believes that there will soon be a shortage of raw materials for batteries, hence why the automaker is trying to partner directly with mines to ensure supply. (Reuters)
  • Decided to raise $2.3 billion through a mixture of new shares and debt. (Tesla) In the end, investors were more generous than expected and Tesla got $2.7 billion. (CNBC)
    • Significance: Although the cash infusion will be welcome, it is less that two quarters of cash burn, at the current rate. Part of this is due to Tesla’s model of selling directly and therefore having to carry new vehicles on the balance sheet — a problem that will only increase if the business meets Elon Musk’s sales objectives. As with previous raises, the new cash leaves Tesla richer, but not rich enough to weather much of a storm.
  • Being sued by the family of a US driver killed whilst his vehicle was using the Autopilot driver assistance system, who are in effect accusing the firm of negligence. (Economic Times of India)
    • Significance: The case is interesting because it will test Tesla’s underlying philosophy that any change introduced is positive, even if it does not conform to industry norms.
  • FCA will spend about €1.8 billion on emissions credits in “various jurisdictions” that will be used up to 2023. FCA didn’t break out the exact amount of this that applies to Tesla (but it seems likely to be most of it). (FCA)

Toyota (history)

  • Will produce the Lexus NX at the Cambridge, Canada, plant from 2022 onwards. (Toyota)
  • Launched a new $100 million fund to invest in autonomous mobility and robots. (Toyota)

VW Group (history)

  • Announced Q1 2019 group revenue of €60 billion, up 3.1% on a year-over-year basis. Operating profit of €4.85 billion rose 15% YoY but bottom line profits were worse, with the passenger car division responsible. (VW)
  • Will reportedly use electric scooters source from Chinese firm NIU. (Reuters)

Other

  • Mullen selected a site for US production of the Qiantu K50, currently sourced from China. (Mullen)
  • Chinese electric vehicle developer CHJ Automotive is reportedly hoping to raise up to $500 million. (Reuters)
  • NIO recently laid off about 10% of the company’s US workforce. (The Verge)
  • Faraday Future secured a bridging loan, with significant strings attached, worth up to $255 million. The plan is to raise $1.25 billion. (The Verge)
  • Alcraft says it is developing a three car line-up. (Alcraft)

News about other companies and trends

Economic / Political News

  • US light vehicle SAAR for April of 16.43 million units fell (4)% from a year earlier. (Wards)
  • German passenger car registrations for April came to 310,715 units, down (1.1)% on prior year. (KBA)
  • French passenger car sales of 188,197 units fell (4.4)% when selling days were taken into account. (CCFA)
  • Passenger car sales in Spain for April of 119,417 units rose 2.6% from a year earlier. (ANFAC)
  • Italian passenger car registrations of 174,412 units in April rose 1.5% from prior year. (UNRAE)
  • UK car production fell (17)% in Q1 2019 versus the same period a year earlier. The manufacturers association warned that a no-deal Brexit would send back to the 19080s. (SMMT)

Suppliers

  • Seemingly contradicting statements made last week, Continental announced that Vitesco (the renamed powertrain division) would have a partial IPO in the second half of 2019. (Continental)
  • Delphi reported first quarter revenue of $1.15 billion and PBIT of $25 million. (Delphi)
  • Electric bicycle rental firm Bond Mobility raised $20 million from investors including DENSO. (DENSO)
  • The former Johnson Controls power division rebranded as Clarios. (Clarios)
  • American Axle reported Q1 2019 sales of $1.72 billion and net income of $41.6 million. (AAM)
  • Knorr-Bremse’s CEO stood down with immediate effect, citing artistic differences. (Reuters)
  • Tower’s Q1 2019 revenue was $379 million and net loss was $(5) million. (Tower)
  • Meritor reported Q1 2019 sales of $1.16 billion and net income of $72 million. (Meritor)
  • Magna opened two new component factories in China. (Magna)
  • Dana reported Q1 2019 revenue of $2.2 billion and net income of $98 million. (Dana)

Ride-Hailing, Car Sharing & Rental (history)

  • Pakistani ride hailing firm Bykea raised $5.7 million. (Deal Street Asia)
  • Blacklane’s CEO says the ride hailing business wants to IPO in two to three years. (Reuters)
  • Zūm, a service focused on driving children around, raised an undisclosed amount. (FINSMES)
  • Uber’s IPO has apparently been a runaway success, with investors promising all the money executives wanted in just a few days. (Bloomberg)
  • Ride hailing firm Ola has so far raised over half of a planned $1 billion round. (Deal Street Asia) Ola’s electric vehicle division received funding from Tata’s chairman. (Deal Street Asia)

Driverless / Autonomy (history)

  • GM CEO Mary Barra declined to confirm the year end 2020 timing for Cruise to launch a fully autonomous vehicles, choosing instead to talk about how happy she was with Progress. When asked to explain whether GM’s design processes had enough room for innovative thinking, Barra pointed to a pretty weak example involving a tailgate redesign for pickup trucks. (Seeking Alpha)

Electrification (history)

  • LG Chem is suing SK Innovation in US courts, accusing its rival of stealing technology. (Reuters)
  • An unnamed Chinese battery maker is in talks to take a stake in nickel producer St George Mining. (Reuters)
  • JLR CEO Ralph Speth is conscious of supply constraints on batteries for electric cars and believes the cost will rise over the next two to three years. (Automotive News)

Connectivity

  • Samsung’s Harman division is supplying FCA with Android-based infotainment that includes over the air updates. First deliveries start in 2019 and the product will be offered as standard from 2022. (FCA)

Other

  • Masabi, an app selling tickets for public transport, raised $20 million. (FINSMES)
  • Electric bicycle rental firm Bond Mobility raised $20 million from investors including DENSO. (DENSO)
  • Indonesian logistics platform Ritase raised an undisclosed amount. (Deal Street Asia)
  • Colombian delivery service Rappi raised $1 billion. (Reuters)
  • Multi-modal information provider TransitScreen raised $3 million. (FINSMES)
  • Indian logistics platform BlackBuck raised $150 million. (Deal Street Asia)
  • A US report into accidents on electric scooters found that one third of injuries were caused the first time the rider was using an electric scooter. (The Verge)
  • SoftBank is reportedly investigating the possibility of listing the Vision fund. (Reuters)
  • Logistics matching firm Fretlink raised €25 million. (FINSMES)
  • Scooter rental firm Bird now offers a $24.99 monthly rental where you get to keep the scooter for personal use, which sounds a lot like leasing. (The Verge)

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Auto Industry Briefing — week ending 28th April 2019

Mr Musk’s driverless dog and pony show; dirty passengers make dirty vehicles; and why did Ford just spend $500 million on Rivian? Please enjoy our auto industry and mobility briefing for 22nd April to 28th April 2019. A PDF version can be found here.

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

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

Find our archive here.

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

News about the major automakers

BMW (history)

  • Will purchase cobalt for electric vehicle batteries direct from mines because of concerns that unscrupulous middlemen might be selling material mined with child labour. (Reuters)

Daimler (history)

  • Released financial results for Q1 2019. Revenue of €39.7 billion was very slightly lower than prior year but profit of €2.8 billion was (15)% worse. There was a cashflow hit of €(2) billion relating to problems with the GLE, Nissan built vehicles and commercial vehicles — Daimler says these will unwind over an extended period. The firm still hopes to hit full year financial targets. (Daimler)
  • Pulling the Smart brand from North America at the end of 2019 because it doesn’t see much demand for very small cars in the market, especially not expensive all-electric ones. (CNBC)

Ford (history)

  • Reported Q1 2019 financial results. Automotive revenues of $32.7 billion dropped (4.8)% from prior year yet EBIT of $2 billion was 14% better. Ford’s mobility division lost close to $(300) million in the quarter. (Ford)
  • On the earnings call, Ford executives said that they expect a further $3 billion of special items charges in the remainder of the year related to restructuring actions that haven’t yet been made public, some of which could relate to South America where CEO Hackett said further action was planned. When asked about long term profit targets for the region he declined to answer. (Ford)
  • Invested $500 million in Rivian and announced that a new all-electric vehicle will be developed using Rivian’s all-electric rolling chassis / skateboard (but it won’t be the all-electric version of the F-150 pick-up). Ford’s de facto COO will join Rivian’s board. (Ford)
    • Significance: Questions abound as to what this means for Ford’s electric vehicle strategy. Paying $500 million to access Rivian’s technology (plus presumably downstream licencing fees) is about the same as the development cost for a new platform, which is what Ford is effectively buying — albeit with reduced time to market. Why has Ford taken this direction when it has the fabled Team Edison? Ford’s announcements imply an all-electric SUV positioned between the Mach 1 and the F-150 in size — is this the most cost-effective way of making that vehicle?
  • Ford’s deal to invest in Rivian reportedly came together in only eight weeks, seemingly after talks between the start-up and GM had fallen through. If true, that is a very short space of time for a deal of this type and size. (CNBC)
  • Announced that US authorities have launched a criminal investigation into Ford’s emissions certification, following on from the company’s admission earlier this year that some irregularities had been identified. (Reuters)
  • Plans for 40% of Kuga registrations in Europe to be electrified, but won’t be drawn on a split between 48V and PHEV sales. (Automotive News)

Geely (includes Volvo) (history)

  • Volvo reported Q1 2019 revenue of 62.9 billion SEK (about $6.6 billion), up 10.7% on prior year and adjusted EBIT of 2.9 billion SEK (about $305 million), down (19.3)%. Cash spending on research and development jumped by 45%, about a quarter of which related to work for Polestar. (Volvo)
  • Proton’s CEO says over 85% of the brand’s dealers are profitable, thanks to the recent Geely-sponsored product offensive. The firm also announced $455 million in funding from China Construction Bank. (China Daily)

General Motors (history)

  • Adding a second shift at the Bowling Green, USA, plant to produce the next generation Corvette. (GM)
  • Cadillac plans to offer additional features for the Super Cruise driver assistance system via over the air updates, starting in 2020. (The Verge)

Honda (history)

  • Produced 5,337,621 vehicles in the fiscal year to March 2019, up 1% versus 2017/18. (Honda)

Hyundai / Kia (history)

  • Kia announced Q1 2019 revenue of 12.4 trillion KRW (about $10.7 billion), (1)% worse than prior year. Operating profit of 594.1 billion KRW (about $510 million) was almost double Q1 2018. (KIA)
  • Hyundai’s sales in Q1 2019 were 24.0 trillion KRW (about $20.7 billion), up 7% on a year-over-year basis, with Hyundai assigning almost all the improvement to better mix. Operating income of 825 billion KRW (about $710 million) rose 21% YoY. (Hyundai)
  • Hyundai invested $5 million in audio personalisation firm Audioburst. (Audioburst)
  • Kia executives said that whilst the option of a light pick-up truck based on the forthcoming Hyundai Santa Cruz remains, the brand is not actively pursuing it, seemingly wanting to see how Hyundai’s version fares in the market first. (The Drive)

Mazda

  • Sold 391,012 vehicles in Q1 2019, a (12)% fall versus prior year. (Mazda)

Nissan (includes Mitsubishi) (history)

  • After denying newspaper reports of an output cut for the remainder of 2019, Nissan released a profit warning for the fiscal year ended March 2019. Although this was mainly blamed on increased operating expenses, the statement alluded to sales headwinds resulting from the Ghosn scandal. (Nissan)
  • Announced a series of senior executive changes. (Nissan)
  • Reportedly continuing to rebuff Renault’s attempts to engineer a full merger, or something that looks very similar to it, on the grounds that Renault would have the upper hand. (Reuters)
  • Mitsubishi produced 1,441,227 vehicles in the fiscal year ended March 2019, 13% up on prior year. (Mitsubishi)

PSA (includes Opel/Vauxhall) (history)

  • Reported Q1 2019 automotive revenue of €14.2 billion, down (1.8)% on prior year (PSA only reports profits every six months). Improvements in product mix and pricing, were more than offset by reductions in sales and negative exchange — despite PSA increasing dealer inventory. (PSA)
  • Announced a new engineering leadership team. (PSA)
  • The unanticipated success in signing up German engineers for early retirement is reportedly calling into question the entire premise of the Segula engineering centre transfer. Potentially the French outsourcing firm will achieve only one quarter of the headcount target. (Handelsblatt)

Renault (history)

  • Reported Q1 2019 automotive revenue of €12.5 billion, down (4.8)% on prior year (Renault only reports profits every six months). Renault blamed falling sales and exchange rates. (Renault)
  • Says that electric vehicle sales are “already quite profitable”, depending on the country and vehicle. Executives believe that if the Renault group can capture around 29% market share in Russia (as planned), then the market will be “very profitable”. Renault has also been reducing inventory levels at European dealers. (Seeking Alpha)
  • There is “no question” that Renault will meet European fleet CO2 targets and avoid paying fines. (Seeking Alpha)
  • Unveiled a set of minor updates to the commercial vehicle line-up, mainly powertrain changes. Renault also previewed the next generation Kangoo small van. (Renault)
  • Continues to explore ways to strengthen ties with Nissan, with the latest idea reportedly being a joint holding company. Unfortunately, it seems that Nissan aren’t much interested. (Reuters)

Suzuki

  • Following Suzuki’s commitment to end diesel production, Maruti Suzuki said the fuel type will no longer be offered in India after April 2020. (Times of India)
  • Produced 855,380 units in Q1 2019, a drop of (4.7)% from prior year. In the fiscal year to March 2019, Suzuki sold 3,327,174 vehicles, up 3.2%. (Suzuki)

Tata (includes JLR) (history)

  • JLR is reportedly interested in private car hire firm Addison Lee (along with other, un-named carmakers). The likely price tag is in the £300 million-range. (Sunday Telegraph)
  • Exploring ways to pay drivers with vouchers redeemable for coffee and parking if they agree to share data about driving habits and road conditions. The vouchers would be stored as a cryptocurrency. (JLR)
  • Tata says it is no longer cost effective to develop diesel engines for small vehicles in India because the technology to comply with new emissions rules will make the vehicle too expensive for consumers. (The Economic Times)

Tesla (history)

  • Held an investor day focused on the self-driving hardware and software Tesla has been developing. Tesla has developed new hardware with impressive power consumption and cost performance BUT… the hardware is dedicated to a (neural net based) self-driving software architecture that hasn’t yet proved itself. CEO Musk tried to bat away concerns over missing lidar sensors (which the chipset CANNOT accommodate) calling the technology “a fool’s errand”. Tesla explained the way in which training data harvested from the fleet is used to build understanding of safe driving techniques and then said it would all be used to build a robotaxi business. (Tesla)
    • Significance: Such was the scope of material covered, that the session deserves a dedicated de-brief. In short, by presenting to financial analysts, Tesla escaped the scrutiny of peer review and was able to portray several well-established academic concepts as near proprietary innovations. Whilst the hardware performance and cost appears impressive, it is a one-way bet on a software solution that has not yet proved itself. For all Tesla’s talk of the strength in fleet learning, charts of geographical mileage show it is painfully concentrated in only a few locations, diminishing the ability to learn everywhere and observe all the corner cases Tesla base their fleet learning argument upon. The research behind the ride hailing business were painfully weak with Musk explaining them with comments such as “we just randomly said, okay maybe a dollar” and liability for accidents would “probably” lie with Tesla. Musk’s timeline of regulatory approval during 2020 appears optimistic given that the team openly admitted numerous problems had yet to be solved, for instance that they “haven’t gone after snow yet”. On top of this, Tesla’s understanding of safety critical redundancy does not match Ad Punctum’s. Tesla appear to have provided duplication to protect for random component failure, but the system looks vulnerable to systemic problems that affect multiple sensors or processing hardware in the same way, at the same time.
  • At the investor day, Musk said that a next generation chipset for self-driving was already halfway developed and mentioned a mysterious supercomputer called Dojo several times, on each occasion implying it was a slip of the tongue and he had already said too much. (Tesla)
  • Released financial results for Q1 2019. Automotive revenue of $3.7 billion was up 36% on a year-over-year basis but down (41)% versus prior quarter. Tesla recorded a $(645) million loss before tax and used up over $(1.5) billion of cash, but said the rest of 2019 should be better. (Tesla)
  • On the earnings call, CEO Musk said there was “merit” in raising capital. He revealed that Tesla intends to create an insurance product that will launch soon. He also believes that the low deliveries for Models S and X in Q1 were a blip and demand will return to around 100,000 units per year. Musk admitted that the approach in Q1 of batch building cars by region was “insane”, but didn’t explain why the company had decided to do it that way. (Seeking Alpha)
  • Musk reached agreement with the SEC over the type of comments he needs to have vetted before publishing, but a judge’s approval is needed before it comes into force. (NYT)
  • Continued to tinker with the Model S and Model X line-up, offering an increase to the maximum battery range and restoring entry-level products that had only recently been cut. (Tesla)
    • Significance: The product announcements appear designed to shore up demand for Tesla’s ageing large cars by improving the competitive positioning and lowering prices. However, Tesla’s rate of change is seemingly at odds with established wisdom about the time customers take to arrive at final purchase decisions — how are they supposed to know what to buy when Tesla seemingly changes line-up on a monthly basis?

Toyota (history)

  • Sold 10,602,559 vehicles in the fiscal year to March 2019, down (1.5)% on prior year. (Toyota)
  • Abandoned a plan to install vehicle-to-everything communication capability on cars sold in the USA from 2021 onwards, blaming lack of commitment from other carmakers and unclear government rules. (Reuters)
  • Working with Maxar and NTT to develop high definition maps from satellite imagery. (Toyota)

VW Group (history)

  • Shortages of batteries have reportedly forced Audi to cut full year production plans for the e-tron by about 20% — to around 45,000 units. (Brussels Times)
  • Lost a court battle that will limit the rate at which the Moia ride hailing division can expand the fleet size. (Golem)
  • Has been running the numbers for cradle-to-grave CO2 emissions to compare fossil fuel powered vehicles with battery electric versions. The conclusion is that electric cars are already responsible for fewer emissions but have a far worse footprint in the production stage. VW says there are steps which will dramatically improve this. (VW)
  • Media reports suggested that VW initially expects to lose €3,000 on every ID all-electric car sold, with breakeven only coming in around 2025. (Auto Motor Und Sport)

Other

  • Subaru produced 226,906 vehicles globally during Q1 2019, a drop of (11.8)% on prior year. (Subaru)
  • Lucid Motors announced the current CTO as CEO after the incumbent decided to retire. (Lucid)
  • Chinese fuel cell vehicle start-up Grove will use FEV and Hofer to help develop its cars. (Autocar)
  • Canoo (formerly Evelozcity) is reportedly aiming to raise $200 million. (TechCrunch)
  • Russian officials are planning to have a convertible derivative of the Aurus limousine on sale by 2021. (TASS)
  • BYD is building a new factory with capacity for 400,000 electric vehicles annually in Changzhou, China. (Xinhua)
  • Sono Motors has enlisted NEVS to contract manufacture the Sion solar power augmented car in Sweden. Sono is planning a 260,000 unit lifetime run with an annual capacity for 43,000 vehicles, which the firm says will retail for €25,500 (or €16,000 if you want to lease the battery). Almost 10,000 deposits of €500 have been taken. (Sono Motors)

News about other companies and trends

Suppliers

  • Autoliv reported Q1 2019 revenue of $2.2 billion and operating income of $173 million. (Autoliv)
  • Continental reported preliminary Q1 2019 revenue of €11 billion and adjusted EBIT of €884 million. The IPO of the powertrain division, which will be called Vitesco Technologies, will take place during or after 2020 (market conditions permitting). (Continental)
  • Panasonic battery plans in Japan
  • Nidec reported results for the fiscal year to March 2019. Revenue was 1.5 trillion yen (about $13.5 billion) and profit before tax was 139 billion yen (about $1.2 billion). (Nidec)
  • Umicore said profit and revenue growth would be worse than previously hoped due to slow uptake of electric vehicles (for which Umircore supplies raw materials). (Reuters)
  • Allison Transmission reported Q1 2019 sales of $675 million. (Allison) The firm announced deals to acquire Vantage Power and the electric vehicle systems division of AxleTech. (Allison)
  • Lear reported Q1 2019 revenue of $5.2 billion and adjusted net income of $253 million. (Lear)
  • Goodyear saw revenue of $3.6 billion and a net loss of $(61) million in the first quarter of 2019. (Goodyear)
  • Michelin announced Q1 2019 revenue of €5.8 billion. (Michelin)
  • Grammer appointed a new CEO. (Grammer)

Ride-Hailing, Car Sharing & Rental (history)

  • Ride hailing service Ola is reportedly planning to launch a luxury car sharing service. (Autocar)
  • PayPal invested $500 million in Uber ahead of the ride hailing network’s IPO. Uber also revealed a loss of somewhere in the region of $(1) billion in the first quarter (Uber isn’t sure yet). (Uber)
  • Car sharing provider Getaround acquired European rival Drivy. (Getaround)
  • Premium ride hailing firm Wheely raised $15 million. (FINSMES)

Driverless / Autonomy (history)

  • Waymo announced a site had been chosen for a facility to fit self-driving equipment to cars. The firm will rent space from American Axle in Detroit. (Waymo)
  • Lyft believes, that despite advances in autonomy, more drivers will be required in ten years than are currently using the network. (Business Insider)
  • Patents for a vehicle cooling system filed by Apple suggest that the company continues to work on vehicle technology beyond self-driving hardware. (Autocar)
  • Nvidia said that Tesla’s new driver assistance hardware shouldn’t be compared to Nvidia’s Xavier processor, because the latter was for driver assistance only, and that the Pegasus hardware is a better comparator (with higher computing power than Tesla’s offering). In a way this reinforces Tesla’s claims of leadership on hardware performance in terms of cost and power consumption because Pegasus is a far more expensive and power-hungry system. (Nvidia)
  • Academic researchers found that, via a neural network, camera data could create 3D views of the surrounding areas in a way that mimics lidar. This supports, but does not confirm, Tesla’s hypothesis that the lidar unit is not required. In addition to there being a healthy gap in accuracy between lidar and the best-trained camera-based system the researchers could concot, the paper didn’t explore accuracy over longer distances (50m+) or in difficult weather conditions. (Cornell)
  • Nikon will manufacture lidar units for Velodyne. (Velodyne)
  • Tesla CEO Elon Musk dismissed lidar as a “fool’s errand” and high definition maps as “too brittle” during a presentation of self-driving technology to investors. His primary objection to lidar appears to be that it operates in the same part of the spectrum as cameras already do. (Tesla)

Electrification (history)

  • Bosch will make fuel cells using technology licensed from Powercell Sweden. (Autocar)
  • Panasonic says it wouldn’t be a big deal to convert a Japanese factory from making 18650 format cells (as used in Tesla Model S and X) to producing 2170 cells instead (as used in Model 3). (Reuters)
  • Ford invested $500 million in Rivian and announced that a new all-electric vehicle will be developed using Rivian’s all-electric rolling chassis / skateboard (but it won’t be the all-electric version of the F-150 pick-up). Ford’s de facto COO will join Rivian’s board. (Ford)
  • VW has been running the numbers for cradle-to-grave CO2 emissions to compare fossil fuel powered vehicles with battery electric versions. The conclusion is that electric cars are already responsible for fewer emissions but have a far worse footprint in the production stage. VW says there are steps which will dramatically improve this. (VW)

Connectivity

  • AWS will host connected vehicle services for Ford. (Ford)
  • A hacker said that lazy password setting by account holders using iTrack and ProTrack fleet management services allowed him access to functionality that would have turned off the engines of connected vehicles, if he had been so-minded. (Motherboard)
    • Significance: Although automakers are working on their own cybersecutiry protocols, this story flags two key issues: (1) Unless OEMs change their thinking considerably, it will still be possible to fit hardwired devices in the aftermarket that create new vulnerabilities; (2) the issue here was weak password setting by users, something that has occurred in numerous non-automotive settings and will prove somewhat difficult to overcome.
  • Toyota is working with Maxar and NTT to develop high definition maps from satellite imagery. (Toyota)

Other

  • Lime was embarrassed by hackers re-programming scooters to issue rude greetings messages. (Gizmodo)
  • Electric motorcycle maker Zero Motorcycles raised $25 million. (Zero)
  • Bike taxi service Rapido raised $11 million. (Deal Street Asia)
  • Short term motorbike rental start-up Bounce raised $3 million. (LiveMint)
  • Car and bike pooling startup Quick Ride raised $14 million. (Inc42)
  • Fleet management software provider KeepTruckin raised $149 million. (TechCrunch)
  • London’s public transport operator recorded 14,862 incidents in 2018 where a bus or train has been left in an unhygienic condition by passengers and needs to be cleaned before it can return to service. (BBC)
    • Significance: Companies planning self-driving services may wish to take note. If an efficient system for detecting unclear vehicles, and swiftly dealing with them, isn’t in place, your business could go down the tubes. The vast number of occurrences on a public transport system indicates passengers have no shame.

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

Auto Industry Briefing — week ending 21st April 2019

Improving fuel economy without touching the engine; Uber’s expensive self-driving car technology; and is Audi’s thinking more mature than its rivals? Please enjoy our auto industry and mobility briefing for 15th April to 21st April 2019. A PDF version can be found here.

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

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

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News about the major automakers

BMW (history)

  • BMW’s CFO denied plans to jointly develop a compact car with “a German competitor”. (Reuters)
  • Launched a refreshed Mini Clubman. (BMW)

Daimler (history)

  • New CEO Kallenius reportedly plans to save an incremental €6 billion and set the company on a course to be CO2 neutral by 2040. The relationship with Renault-Nissan is rumoured to be on the chopping block. (Manager Magazin)
  • Hopes that van production in Russia will soon restart at the GAZ site after GAZ’s sanction-hit controlling shareholder said he was ready to reduce his stake in the firm. (Reuters)
  • Invested in battery developer Sila Nanotechnologies. (Sila)
  • Confirmed earlier rumours that a compact all-electric SUV called the EQB will launch in 2021, with a conventionally powered cousin, the GLB, on sale at the end of this year. (Reuters)

FCA (history)

  • Unions said FCA was planning to invest $355 million in the Windsor, Canada plant. (Detroit News)
  • Recalling about 330,000 vehicles to correct problems with gear changes that could lead to the car rolling away. (FCA)

Ford (history)

  • Agreed terms with Mahindra for a new C-sized SUV built on a Mahindra platform and powertrain. (Mahindra)
  • The head of Ford’s automaking division appears bullish on the economic outlook, saying that the US market peak auto “story” has been around for ages and that he would be surprised by a no deal Brexit. (CNBC)
  • Ford’s CTO says that not only do self-driving vehicles need lidar, but high definition (i.e. areas pre-mapped with lidar) are also a must. He believes that vehicles lacking these features have no more than “really good driver-assist technology” and pointed to Tesla as one such example. (Recode)
  • Told investors that switching production at Wayne from Focus and C-MAX to Ranger would increase profits by about $1 billion over the product cycle. (Reuters)

Geely (includes Volvo) (history)

  • Geely showed the Preface concept at Shanghai, suggesting the brand’s design language is moving much closer to subsidiary Volvo. (Geely)
  • Lotus revealed teaser images of the all-electric Type 130 hypercar, apparently planning to build less than 50. (Autocar)

General Motors (history)

  • PR for GM’s new emerging market models gave some insight into the cost trade-offs OEMs make on mass-market cars: $7 per unit saved by integrating a headrest on a driver’s seat; $2 per vehicle to strengthen an axle. (Reuters)

Honda (history)

  • Will eliminate the second shift at the Marysville, USA plant. (Japan Today)

Hyundai / Kia (history)

  • Confirmed the announcement of ex-Nissan executive José Muñoz as COO. (Hyundai)
  • Wants more information about government policy to decide the optimum sourcing strategy for electric vehicle components in India. (Economic Times of India)

Nissan (includes Mitsubishi) (history)

  • Vehemently denied newspaper reports that the 2019/20 fiscal year plan will reduce production by (15)%. (Nissan)
  • Suing Carlos Ghosn, alleging that he made payments to distributors that were actually going to him. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Released its annual sustainability report. (PSA)
  • Opel brand commercial vehicle sales are up 35% in Q1 2019 versus prior year. (Opel)
  • Opel will move to an importer model in the Czech Republic and Slovakia. (Opel)

Renault (history)

  • The head of Renault India says that new products will double sales because the portfolio will extend from 24% of the market to more than 50%. He is concerned that Renault’s profitability in the country is dependent on the performance of Nissan because the two firms share a 480,000-unit factory and believes that the market for small diesel vehicles will disappear by 2023. (Autocar)

Tata (includes JLR) (history)

  • JLR’s design director hates large touch screens (12” or so) in cars, revealing that he frequently changes the seat or mirror locations whilst driving at 80 miles per hour. (Detroit News)

Tesla (history)

  • CEO Musk said that Tesla’s latest iteration of Autopilot would have redundancy through two processing chips, however upon questioning he conceded that the chips and processing logic were identical so the redundancy is akin to having two engines, not independent decision making (at 9:30 on video). Once full self-driving is released, Tesla drivers will still have to keep their hands on the wheel until Tesla can determine that the system operates safely, a time period Musk predicts as six months (18:00 on video). (Lex Fridman)
  • Released an environmental impact report. (Tesla)
  • Investigating a fire in a stationary Chinese vehicle that went viral. (Reuters)
  • Planmning to shrink the size of the board down to seven and reduce the term to two years (from three). When the moves are complete, in around 2021, Tesla will have three independent directors. (CNN)

Toyota (history)

  • Took a stake in Uber’s self-driving car unit and agreed to invest $300 million over the next three years to build a commercial fleet of vehicles. (Toyota)
  • Licenced the eQ all-electric city car design to Chinese start-up Singulato, who will launch a vehicle based on Toyota’s model called the iC3. (Reuters)
  • Showed the next-generation Highlander SUV. (Toyota)
  • Unveiled the US market Yaris, based on the Mazda 2. (Autocar)

VW Group (history)

  • Audi reportedly wants to sell down stakes in engineering service providers. (Reuters)
  • Audi’s AI:ME concept car in Shanghai, previewed an interior for a car with partial self-driving abilities. The 65 kWh battery of the concept suggested that VW doesn’t see huge batteries as necessary for mid-sized cars. (VW)
  • Former CEO Winterkorn was charged by German prosecutors over the diesel scandal. (Reuters)
  • Joining a supplier traceability collaboration that uses blockchain, Ford is already a partner. (VW)
  • VW CEO Diess was accused of insensitivity over comments over Chinese camps for Uighurs. (Washington Post)
  • VW’s Slovakian operations will reduce staff by 3,000 and aim for lower wages as part of efforts to improve efficiency by almost a third. (Reuters)

Other

  • Subaru unveiled the next-generation Outback. (Subaru)
  • Byton says it has 50,000 orders and plans to fulfil 10,000 of them by the middle of 2020. (Economic Times of India)
  • XPENG revealed the P7 electric coupe. (XPENG)
  • Apollo started production of the IE supercar. The vehicles will be built by German engineering firm HWA. (Apollo)
  • Nikola said it has orders for over 13,000 trucks as it revealed further derivatives, including a truck aimed at European fleet customers. (Nikola)
  • Karma revealed a Pininfarina-badged concept built on the Revero’s underpinnings. It isn’t clear whether the vehicle will make it to production. The Revero is getting a light refresh. (Karma)
  • Pininfarina also helped hydrogen-only carmaker Grove to create a concept vehicle in Shanghai. (Autocar)
  • Aston Martin showed the production version of the all-electric Rapide. Although only 155 will be built, Aston Martin’s press release suggests that some are still up for grabs.. (Aston Martin)

News about other companies and trends

Economic / Political News

  • European passenger car registrations in March 2019 of 1,770,849 units fell (3.6)% versus prior year. (ACEA)

Suppliers

  • Precision toolmaker Sandvik said orders from automakers were strong (outside of Germany). (Bloomberg)
  • Panasonic disputed reports that the scrap rate at the Nevada battery factory built to supply Tesla runs to half a million cells per day, around 1/6th of output. (Business Insider)
  • AESC is building a 20 GWh /year battery factory in Wuxi, China. (Bloomberg)
  • NXP took a stake in long range radar developer Hawkeye. (Reuters)
  • Nidec is buying the automotive assets of OMRON for 100 billion JPY (about $900 million). (Nidec)

Dealers

  • Online business-to-business used car sales platform BacklotCars raised $25 million. (BacklotCars)

Ride-Hailing, Car Sharing & Rental (history)

  • Via announced two Japanese firms as investors. It hopes they will help it to break into the local market. (Via)
  • Uber sold a sizeable stake in its self-driving unit to Toyota, Denso and SoftBank in a move valuing the division at $7.25 billion. (Toyota)

Driverless / Autonomy (history)

  • Lidar developer Aeva said it had been working with Audi’s AID self-driving car unit, which appears attracted by the path to a “right cost”. AID previously disclosed it was working with Luminar so it isn’t clear whether the two lidar makers are in competition or be used as redundancy for one another. (Reuters)
  • Remote driving firm Phantom Auto raised $19 million. (CNBC)
  • Daimler’s short term car rental subsidiary Car2Go had to pause operations in Chicago after a number of vehicles appear to have been involved in committing crimes. (The Verge)
  • Byton executives say the firm will be capable of L4 autonomy within the life of the latest M-Byte SUV (one would expect about five to six years). (Autocar)
  • Ford’s CTO says that not only do self-driving vehicles need lidar, but high definition (i.e. areas pre-mapped with lidar) are also a must. He believes that vehicles lacking these features have no more than “really good driver-assist technology” and pointed to Tesla as one such example. (Recode)

Electrification (history)

  • Battery developer Sila Nanotechnologies raised $170 million from a group including Daimler. (Sila)
  • Lighyear’s solar panels will harvest about 700 kWh annually in Northern European countries, which the start-up says will be good for over 50km of driving each day in the summer. This seems about in line with claims made by Sono Motors, adjusting for differences in vehicle size. (Lightyear)
  • Continental says that the latest brake by wire regenerative system can improve CO2 performance by over 8g per mile compared to lower technology systems — all-electric cars benefit too, albeit not by as much. (Continental)
  • Toyota licenced the eQ all-electric city car design to Chinese start-up Singulato, who will launch a vehicle based on Toyota’s model called the iC3. (Reuters)

Connectivity

  • The EU backed a connected vehicle standard that uses Wi-Fi, rather than 5G. (Reuters)
  • Hyundai electric car owners can adjust vehicle performance settings — such as maximum torque, top speed and acceleration — using their mobile phones. Less clear is why anyone will choose anything other than “max”. (Hyundai)

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Auto Industry Briefing — week ending 14th April 2019

Ignoring brand history; Ford aims to be fit before the crunch; and underestimating the difficulty of developing electric cars. Please enjoy our auto industry and mobility briefing for 8th April to 14th April 2019. A PDF version can be found here.

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

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

Find our archive here.

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News about the major automakers

BMW (history)

  • Sold 605,333 vehicles in the first three months of 2019, up 0.1% on 2018. (BMW)
  • CEO Kruger criticised the amount of electric vehicle charging infrastructure in Germany, saying that Beijing had more than 2 and a half times the number of charging stations than the entire country. (Handelsblatt)
  • BMW says staff can use augmented reality to check new press tools for design mistakes. (BMW)

Daimler (history)

  • Released the sustainability report for 2018. (Daimler)
  • Sold 587,921 units in Q1 2019, a drop of (5.9)% from a year earlier. (Daimler)
  • German newspaper reports said that authorities had discovered defeat devices on GLK SUVs fitted with diesel engines but that the software had then been changed to remove the functionality. (Bloomberg)

FCA (history)

  • Expressed confidence that 2019 and 2020 financial goals would be met, despite headwinds. (Reuters)
  • Released the 2018 sustainability report. (FCA)
  • Will pay $110 million to settle a lawsuit over diesel emissions in US pick up trucks. (Detroit News)
  • Unions complained that FCA is regularly suspending engineering and management activities in Turin. (Torino Oggi)

Ford (history)

  • Announced another executive reshuffle that sees the leader of Ford’s smart mobility business retire, and the previous two roles covering automotive sales and operations amalgamated into a single job. Following the moves, CEO Hackett will have two key lieutenants: Joe Hinrichs as head of automotive and Jim Farley as head of new business. Although the roles are nominally the same status, the automotive operation is several orders of magnitude larger in both workforce and revenue. (Ford)
    • Significance: Coming only two years after CEO Hackett created the structure that is now being overhauled, the reorganisation makes Hinrichs look a more likely CEO candidate than Farley.
  • Recalling 327,000 pick up trucks that have already been recalled once because the repair procedure might have caused further damage. (Ford)
  • CEO Hackett said Ford will be ready for the recession. (Detroit Free Press)
  • Autonomous cars have been over-hyped and initial applications will be geo-fenced (i.e. the car will not be allowed to go beyond certain mapped areas), according to CEO Hackett. (Fast Company)
  • Ceasing production of the KA+ for Europe in September 2019, citing profitability problems and the expense to make the car compliant with more stringent CO2 regulations. (Car Scoops)
  • Rumoured to be near to a 49% (Ford) / 51% (Mahindra) JV that would take control of Ford’s Indian assets. (Reuters)
  • Researching solid state batteries in conjunction with Solid Power. (Inside EVs)
  • UK unions believe Ford is hiding the true scale of planned cuts. (This Is Money)

Geely (includes Volvo) (history)

  • Announced a new all-electric brand, Geometry, that intends to release 10 new vehicles by 2025. (Geely)
  • Kandi electric vehicles will be offered to around 300,000 Didi drivers via Didi’s leasing program. (Kandi)
  • Confirmed the Polestar 2 will be produced in Luqiao, China, alongside the Lynk&Co 01 and Volvo XC40. (Geely)
  • Geely have enlisted Ricardo to develop a new transmission for plug-in hybrid vehicles. (Green Car Congress)

General Motors (history)

  • Set a release date for the next generation Corvette, confirming that the car will be mid-engined. (GM)
  • Talks over GM taking a stake in Rivian have reportedly halted with the resistance supposedly coming from Rivian’s side as the business looks to keep its options open. (Detroit News)

Honda (history)

  • After previously implying that a new model would be built in Turkey once Civic production ends in 2021, Honda said that it would cease car production in the country at that point. (Japan Times)
  • Expects Honda sales in China to catch up with the US market in two to three years. (Reuters)
  • Opened a 120,000 units per year plant in Wuhan, China, in partnership with Dongfeng. (Honda)

Hyundai / Kia (history)

  • Reportedly close to announcing a new COO, Nissan’s former chief performance officer. (Bloomberg)

Mazda

Nissan (includes Mitsubishi) (history)

  • Will build the next generation Navara pick-up truck at the Rosslyn, South Africa, plant. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • CEO Tavares claimed that European CO2 regulations would mean 40% of vehicle componentry (for pure electric cars) being sourced from Asia, because of the cost of the batteries, and that it will be “chaos” between now and 2030 as OEMs try to adapt to ever-increasing emissions standards. (Autocar)
    • Significance: Tavares’s 40% figure appears to imply little to no reduction in EV powertrain cost from today’s levels, going against bother received wisdom and historical trend. In addition, major EV powertrain suppliers have been looking for EU locations as demand grows to justify regional, rather than global, sourcing.
  • Per vehicle profitability on the DS7 is apparently “sky high”. (Autocar)
  • Confirmed that a second model will be produced at Opel’s Rüsselsheim plant alongside the Insignia. Although the press release doesn’t specify the car, rumours point to the next generation Astra. (Opel)
  • Tavares says he hasn’t talked with Tata about a takeover of JLR, but that doesn’t mean he hasn’t spoken with mutual friends who might pass along a message or two. (Autocar)

Renault (history)

  • Opened a new innovation hub and design centre in Shanghai, China, in partnership with Nissan. (Renault)

Suzuki

  • Expecting that recall costs will hit full year profits by over $700 million. (Japan Times)

Tesla (history)

  • The $35,000 version of the Model 3 has been withdrawn from the website and will only be available by ordering in stores or over the phone. Tesla confirmed that the car will actually be the same as the $39,500 “Standard Plus” model but several features, including the full battery range, will be disabled via software. All cars will now come with Autopilot software enabled as standard. (Tesla)
  • Announced a leasing program for the Model 3 but, unusually, said that customers would not have the option of purchasing the car because the cars are destined for the Tesla ride-hailing network. (Tesla)
    • Significance: Since many lease customers simply move to a new vehicle, ending the option of a payment will make little difference to the program desirability. The link to an autonomous ride hailing program raises questions: what makes Tesla think it can launch in around three years (when leases expire)? How are the number of lease vehicles miraculously the same as the ride hailing network requirement?

Toyota (history)

  • Unveiled the next generation RAV4. (Toyota)

VW Group (history)

  • Reportedly having trouble with the development of both the next-generation Golf and the ID, and may fail to bring them to market within the planned timeframe. (Handelsblatt)
  • VW Group sold 2,605,600 units in Q1 2019, down (2.8)% from a year ago. (VW)
  • According to critical newspaper reports, CEO Diess has alienated labour leaders, top shareholders and many direct reports. Aggrieved parties, via journalists, caution that he must lead by consensus and his chances of becoming the Millwall of CEOs (no one likes us, we don’t care) are slim. (Handelsblatt)
  • Škoda’s boss claims the brand could have sold an additional 100,000 cars in 2018, had the production capacity been available. (Autocar)
  • Despite the overall fall in European diesel sales, Audi is withdrawing S6 and S7 petrol derivatives. (Manager Magazin)
  • Employees are going to have to make do without colour printing. Existing machines will be switched to black and white only mode and no new colour models will be purchased. The firm aims for less than five percent of print outs to be colour in future. (Handelsblatt)
  • Rumoured to be exploring options for a stake in Chinese joint venture partner JAC. (Reuters)

Other

  • Purists were in a state of shock after MG’s latest product was unveiled — a minibus based on a Maxus van. (SAIC)
  • NIO will reveal the ET7 at the Shanghai show. (Green Car Reports)
  • Byton’s chairman might be on his way out, the company stressed that they were only rumours. (Manager Magazin)

News about other companies and trends

Suppliers

  • SK Innovation said it was discussing a joint venture factory with VW, in addition to similar talks with several Chinese carmakers. (Reuters)
  • Hella’s revenue in the first fiscal nine months was €4.2 billion, with EBIT of €417 million. (Hella)
  • Faurecia acquired a majority stake in Creo Dynamics. (Faurecia)
  • Webasto acquired bought out its partner in a South Korean joint venture. (Webasto)
  • Adient said that Q1 2019 financial results would be worse than expected. (Adient)
  • Benteler and Freudenberg (Vibracoustic) are partnering on chassis systems for electric vehicles. (Benteler)
  • Panasonic won’t make further investment to increase capacity for battery production at Tesla’s Gigafactory until the firm is satisfied that existing assets are being suitably sweated for all they are worth. (Reuters)
  • LG Chem and VinFast have set up a joint venture for electric vehicle battery packs in Vietnam. (VinFast)

Dealers

  • Online used car sales portal Shift raised an additional $40 million. (TechCrunch)

Ride-Hailing, Car Sharing & Rental (history)

  • Uber released a detailed report ahead of an IPO. (SEC)
  • Via is launching an on-demand public transport service in Indonesia called Tron. (Via)

Driverless / Autonomy (history)

  • Pony.ai raised $50 million in a deal valuing the business at $1 billion. (Deal Street Asia)
  • Uber executives said self-driving cars will be a reality within 10 years but declined to forecast how widespread because it will take a “long time” to get to scale. (VentureBeat)
  • Autonomous cars have been over-hyped and initial applications will be geo-fenced (i.e. the car will not be allowed to go beyond certain mapped areas), according to Ford’s CEO. (Fast Company)

Electrification (history)

  • BMW CEO Kruger criticised the amount of electric vehicle charging infrastructure in Germany, saying that Beijing had more than 2 and a half times the number of charging stations than the entire country. (Handelsblatt)

Connectivity

  • Driver and occupant perception developer Affectiva raised $26 million. (FINSMES)

Other

  • Scooter rental firm Telepod believes it has found a competitive advantage by offering electric scooters with swappable batteries to food delivery agents. (Tech In Asia)
  • Scooter rental start-up Movo raised $22.5 million. (TechCrunch)

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Auto Industry Briefing — week ending 7th April 2019

Pollution taxes > outright bans; Tesla’s Model S and Model X lose ground; and open CO2 pools in Europe — only for the brave? Please enjoy our auto industry and mobility briefing for 1st April to 7th April 2019. A PDF version can be found here.

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

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

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News about the major automakers

BMW (history)

  • Received notification that the EU believes BMW took part in a cartel with Daimler and VW Group to control emissions regulations. BMW said the three held ongoing talks, but nothing wrong had happened. (BMW) Despite the denials of any wrongdoing, BMW will make a provision of over €1 billion to cover the cost of fines, which will reduce full year EBIT margin by 1% – 1.5%. (BMW)
  • Working with Microsoft to create a common standard for integrating various factory information systems together so that they can exchange reporting data and commands. (BMW)
  • The rumoured talks between BMW and Daimler to share electric vehicle technology are apparently concentrated on delivering an affordable electric car in China. (Reuters)

Daimler (history)

  • Celebrated the opening of the Moscow plant. (Daimler)
  • CEO Zeteche drew a parallel between the safety critical systems on aircraft and emerging driver assistance, and full self-driving technologies in cars. (Reuters)
  • Will add start producing the GLC SUV at the Sindelfingen, Germany plant from 2022 onwards, potentially depriving Valmet of the volume. (Daimler)
  • Accused by the EU of breaking competition rules by discussing emissions technologies with BMW and VW Group. Daimler expects that, as the original whistle-blower, it will not be fined. (Reuters)
  • The rumoured talks between BMW and Daimler to share electric vehicle technology are apparently concentrated on delivering an affordable electric car in China. (Reuters)

FCA (history)

  • FCA and Tesla will pool their vehicles for the purposes of EU CO2 emissions calculations in a deal said to be worth hundreds of millions. (FT)
    • Significance: The move will allow FCA to offset far more expensive fines without having to sell pricey electrification technology in cost-sensitive markets (e.g. Italy and Spain). However, it also represents a one-way bet on Tesla’s future in Europe and would leave the firm exposed overnight to large drop in sales or the firm’s failure.
  • Sold 498,425 vehicles in the US during Q1 2019, a drop of (3)% on the prior year. Only Ram pick-up trucks showed an increase, even Jeep saw decreases despite the seemingly insatiable US demand for SUVs. (FCA)
  • FCA’s chairman wants his family’s investment company to “participate” in the future of FCA but stopped short of calling for it to continue on a standalone basis. (Reuters)
  • Developed a new fuel with Enel that, FCA says, has 3% lower CO2 emissions on a WLTP basis and can be used instead of petrol. So far, the fuel has only been tested in a fleet of five cars. (FCA)
    • Significance: OEMs may hope that by developing different fuels they can claim partial delivery of European CO2 targets. It remains unclear whether the EU will be convinced, or regard the fuel efficiency as a double-count of improvements already expected.

Ford (history)

  • Revealed the next-generation Kuga / Escape SUV. The car will offer 48V, hybrid and plug-in hybrid powertrain. Ford claim the PHEV derivative will have CO2 emissions of 29 g/km. (Ford)
  • Sold 590,249 vehicles in the US during Q1 2019, down (1.9)% on the same period a year ago. The drop was more than explained by falling car sales. (Ford)
  • Will start selling a plug-in hybrid version of the Explorer SUV in Europe from late 2019 onwards. (Ford)
    • Significance: Provided the sales are high enough to warrant the effort of engineering the vehicle for Europe (several thousand per year), this looks like a smart move. The Explorer will add a 7 seat SUV; command decent margins; and be a net positive for Ford’s fleet average CO2, emitting fewer g / km than most Fiesta and Focus models, but with far higher mass.
  • Launching an all-electric version of the Transit van in 2021 and hopes to boost commercial vehicle sales in Europe by increasing the number of authorised bodybuilders and offering remote fleet management features. (Ford)
  • Announced that the small SUV already confirmed for the Romania plant will be called Puma. (Ford)
  • Executives threatened that Ford would reconsider its long-term investments in the UK in the event of a no deal Brexit, but admitted that the current round of layoffs were due to self-inflicted problems. (Economic Times of India)
  • Workers at the St Petersburg plant are going on strike in protest at plans to close the site, but since Ford intends to end sale of the cars made there, it isn’t clear if this will be a problem. (Moscow Times)
  • CEO Hackett said in an interview that he saw signs of progress in his bid to remake the company’s thinking but a continued reference to 2018-vintage examples suggests fewer green shoots than he would like. He acknowledged that he might not see the overhaul effort through, saying “I just don’t think that I have an evergreen time to get as far as I need to get”. (Detroit News)

Geely (includes Volvo) (history)

  • Volvo sold 161,320 cars in Q1 2019, up 9.4% on prior year. (Volvo)

General Motors (history)

  • Sold 665,840 vehicles in the US during Q1 2019, down (7)% from prior year. GM appeared to suggest that it was because of falling car sales, but all brands lost volume, as did several high-profile SUV nameplates. (GM)

Hyundai / Kia (history)

  • Hyundai denied media reports that it had agreed an alliance with Tencent for driverless car development. (Reuters)
  • In the first quarter Hyundai sold 1,020,374 units globally, down (2.8)% on the same period in 2018. (Hyundai)
  • KIA sold 650,143 vehicles globally in the first quarter, up 0.6% on a year-over-year basis. (KIA)
  • Working on a digital cockpit with reconfigurable steering wheel buttons that feature their own screen. (Hyundai)

Nissan (includes Mitsubishi) (history)

  • Carlos Ghosn was rearrested and will be held in detention until at least April 14th. (Reuters)

PSA (includes Opel/Vauxhall) (history)

  • Aiming to achieve 95% localisation on the first India-built Citroën vehicles. (Autocar), CEO Tavares says that a minimum localisation of 90% is “a given” for the market. He is open to suggestions about how to use the Ambassador brand that PSA previously acquired, implying no current product plans. (Autocar)
  • Rumoured to have two sourcing plans for the next-generation Astra: the first would see 75% of the cars produced in Ellesmere Port, UK with the remainder coming from Rüsselsheim, Germany; the second (to be triggered in the event of a no-deal Brexit) would be the inverse. Both scenarios imply the Gliwice, Poland plant will lose out. (Handelsblatt)
  • CEO Tavares said the company is not actively targeting an alliance or takeover with any specific company because PSA “didn’t need” any help (seemingly leaving the door open for things he might want, but not need). (Reuters)

Renault (history)

  • Completed an audit of executive payments between 2010 and 2018. Although there wasn’t anything wrong, some of the expenses paid on behalf of Carlos Ghosn were a “source of concern”. (Renault)
  • Wants to pay Carlos Ghosn as little as possible for his work in 2018, but that will require the agreement of the AGM, and even then he will still receive €1 million. Renault also will only pay out part of Ghosn’s pension pot. (Renault)

Tesla (history)

  • Delivered 63,000 units in Q1 2019, up 100% versus a year prior but down (31)% on a quarter-over-quarter basis. Tesla suggested that there were an usually high number of vehicles in transit, but a heavy drop in Model S and X seemed to be responsible too. Tesla has now stopped giving separate figures for the two older vehicle lines and said it would still deliver 360,000 – 400,000 cars in 2019. (Tesla)
    • Significance: For many quarters, Model S and X sales have appeared to be losing momentum and now sales have fallen by over (50)% in a single quarter. Tesla’s move to stop giving separate figures also appears backwards, given that the firm only produce three model lines.
  • FCA and Tesla will pool their vehicles for the purposes of EU CO2 emissions calculations in a deal said to be worth hundreds of millions. (FT)
  • A US Judge told the SEC to resolve their dispute with Elon Musk amicably. (Reuters)
  • Holding an investor day on 22nd April to provide a “deep dive” into the technology set and strategy. (Tesla)

Toyota (history)

  • Transferring the development and manufacturing operations for electronic components to Denso, the moves will be completed by April 2020. (Toyota)
  • Will offer royalty-free access on around 24,000 patents relating to electric vehicle technology and provide technical support to manufacturers making their own vehicles using Toyota’s components. The royalty-free period lasts until 2030, so it is unclear whether companies will have to start making payments after that point. (Toyota)

VW Group (history)

  • Announced a long-term lithium supply deal with Ganfeng. (VW)
  • Merging all Indian passenger car legal entities into a single company as part of organisational changes putting Škoda in charge of developing low cost cars.  (VW)
  • Will show a full size all-electric SUV dubbed ID-Roomzz at the Shanghai show. The vehicle will launch in China in 2021, with other markets following on. (VW)
  • Accused by the EU of breaking competition rules by discussing emissions technologies with BMW and Daimler. VW earlier suggested that it expects relatively light punishment after acting as a whistle-blower (without knowing that Daimler had already got there first). (Reuters)
  • The head of VW’s works council has reportedly called on the board to extend no-layoff guarantees for German workers out to 2028. (Handelsblatt)

Other

  • Karma will use small gasoline engines supplied by BMW as range extenders. The two firms have been working together since 2015, but have only now made the relationship public. (Karma)
  • NIO sold 3,989 vehicles in Q1 2019. (NIO)
  • McLaren will unveil the brand’s grand touring offering in May. (McLaren)
  • Lightyear received €2.5 million from a European Commission program. (Lightyear)
  • Maruti Suzuki cut production in India by over (20)% in March, due to falling demand. (Bloomberg)
  • Aston Martin’s CEO believes that the cost of developing self-driving cars will lead to so much M&A that in future there are only “two or three” massive car makers. He thinks that there will be no successful new luxury brands within the next ten years. (Autocar)
  • A mysterious Chinese car company is reportedly building a factory in Croatia that will produce electric vehicles aimed at central and eastern European markets. (Total Croatia News)
  • Faraday Future released teaser images of the V9 car it intends to build in China. (Engadget)

News about other companies and trends

Economic / Political News

  • US light vehicle industry in March was 17.48 million units, about 0.5% better than the prior year. (Wards)
  • March passenger car registrations in the UK were 458,054 units, down (3.4)% on a year earlier. (SMMT)
  • German passenger car registrations of 345,523 units in March fell (0.5)% on the prior year. (KBA)
  • Passenger car registrations in France for March of 225,818 units were down (2.3)% but up (2.4)% when sales days were taken into account. (CCFA)
  • Italian passenger car registrations for March came to 193,662 units, a (9.6)% drop on the prior year. (UNRAE)
  • There were 122,664 passenger cars registered in Spain during March, a fall of (4.3)% on a year earlier. (ANFAC)
  • Over 50% of vehicles registered in Norway during March were apparently all-electric. (Economic Times of India)
  • Australia’s Labor party plans, if it wins the general election, to set a target of 50% of new car sales in 2030 coming from electric models. (The Guardian)
  • The European Union published its report into 2017 CO2 fleet average emissions. (EU)
  • London’s ultra low emission zone (ULEZ) became activated. Owners of older, highly polluting, vehicles will have to pay additional surcharges to access the zone. (BBC)
    • Significance: Although there is much talk of outright city bans for vehicles with worse emissions, higher taxes, payable on a per-use basis, seem likely to gain favour amongst politicians looking for a way to improve air quality without accusations of reducing access, whilst raising revenue at the same time.

Suppliers

  • Valmet reported 2018 revenue of €662.6 million and an operating profit of €18 million. (Valmet)
  • ZF reported 2018 revenue of €37 billion and adjusted EBIT of €2.1 billion. Although the firm highlighted investments in mobility-focused companies, it also announced a large transmission order from BMW — serving as a reminder of the continued importance of internal combustion engines. (ZF)
  • Melrose held an investor day, confirming 10% margin targets for GKN’s automotive division. (Melrose)
  • Prinx Chengshan opened a 4.8 million unit capacity tyre plant in Thailand. (Reuters)
  • Lear is acquiring connected vehicle specialist Xevo. (Lear)
  • Standard Motor announced the acquisition of some of Stonerige’s automotive assets. (Standard Motor)
  • Norsk Hydro said production has almost returned to normal levels after a cyber attack. (Reuters)
  • Michelin held an investor day. (Michelin)
  • Toyota is transferring the development and manufacturing operations for electronic components to Denso, the moves will be completed by April 2020. (Toyota)

Ride-Hailing, Car Sharing & Rental (history)

  • Indian rental operator Zoomcar is reportedly looking to raise $500 million, with Mahindra considering supplying up to $400 million of the money. (Deal Street Asia)

Driverless / Autonomy (history)

  • UK self-driving start-up Wayve claimed success in using low-tech sensors, standard mapping and machine learning to teach a vehicle to navigate urban streets. (TechCrunch)
    • Significance: There are many advocates for machine learning in self-driving however, thus far, no one has programmed a machine to explain what decisions it is taking (not great for building confidence or accident investigation). Comma.ai tried a similar approach a few years ago (albeit with fewer sensors) and were ordered not to release their product by US regulators (Wayve appear content to simply test at this stage).
  • Toyota, Ford, and GM are working with the SAE (US engineering body) to create standards for autonomous vehicle testing and deployment. (Toyota)
    • Significance: Since the SAE coined the idea of levels 1-5 of autonomy, their guidance on autonomous vehicles will be closely watched. Toyota, GM and Ford have an opportunity to recommend exhaustive best practices that could make quicker routes to market appear “unsafe” when judged against the SAE’s forthcoming criteria.

Electrification (history)

  • Innolith claims to have a battery with an energy density of 1,000 Wh/kg and plans to produce it in 2022. (The Verge)
  • Nidec says it will begin mass producing wheel-hub motors rated at 100 kW in around 2023. (Nidec)
  • Electric motor developer C-Motive raised $2 million. (C-Motive)
  • Toyota is offering royalty-free access on around 24,000 patents relating to electric vehicle technology and provide technical support to manufacturers making their own vehicles using Toyota’s components. The royalty-free period lasts until 2030, so it is unclear whether companies will have to start making payments after that point. (Toyota)

Other

  • Scooter rental firm Bird published a safety report saying that accident levels were about equivalent to using a bicycle. The report implied that by replacing car journeys, overall traffic deaths would fall — presumably on the basis that collisions would be between scooters, rather than cars hitting pedestrians as they do today. (Bird)
  • Logistics start-up BlackBuck raised $36 million. (Deal Street Asia)
  • Logistics start-up TheLorry raised $6 million. (Deal Street Asia)
  • Electric trike maker Pi Beam Labs raised seed capital. (Economic Times of India)

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

Auto Industry Briefing — week ending 31st March 2019

Self-driving dominoes falling; creating new cars is too expensive; and battery range — it’s all in the manufacturing. Please enjoy our auto industry and mobility briefing for 25th March to 31st March 2019. A PDF version can be found here.

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

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

Find our archive here.

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News about the major automakers

BMW (history)

  • Rumoured to be interested in taking on the Honda’s Swindon, UK, factory. BMW issued a denial. (Autocar)
  • BMW says that to get two million kilometres of representative driving data that can then feed simulations, it needs five million kilometres of data. BMW does not explain how this is sufficient since it is far below the number of miles driven between serious accidents. The fleet of 80 vehicles collects more than 1,500 TB of raw data each day. BMW helpfully comfirms that it is impractical to store so much information using either iPhones or CDs. (BMW)
  • Will stop purchasing cobalt from the Congo by 2021. (Automobil Produktion)
  • BMW and Daimler are said to be discussing a 500,000 annual volume target for a shared electric vehicle platform that would support a BMW i2 model with a sub-€30,000 price point. (Automotive News)

Daimler (history)

  • Formed a joint venture with Geely that will own the Smart brand. Production will be based in China at a new factory that will start building cars in 2022. Daimler implied that the Hambach plant in France will only produce Mercedes cars in future. (Daimler)
  • Aiming to save 50% of travel costs in the latest austerity drive, blaming a relaxation in approval levels for an explosion in spending. (Handelsblatt)
  • Daimler Trucks purchased a majority stake in autonomous driving developer Torc Robotics. Daimler will continue working on proprietary self-driving software, and so will Torc. (Daimler)
    • Significance: Torc has substantial experience in off-highway applications, which could help build credibility with Daimler Trucks customers. The acquisition could also be the beginning of the end for the midfield self-driving efforts as investors choose to sell out whilst the businesses are going concerns rather that continue in a seemingly futile effort to compete with those spending hundreds of millions each year.
  • BMW and Daimler are said to be discussing a 500,000 annual volume target for a shared electric vehicle platform that would support small cars with a sub-€30,000 price point. (Automotive News)

FCA (history)

  • Following in PSA’s footsteps, Renault is rumoured to be interested in FCA, if it can merge with Nissan. (Reuters)
  • Reportedly planning to stop Charger and Challenger production to manage inventory levels. (Automotive News)
  • Believes that alternative fuels, such as ethanol and natural gas, will be more widely used than electrification in South America as a method of reducing emissions. (Reuters)
  • Rumoured to be in talks with PSA about creating a shared platform for small cars. (Bloomberg)
  • Extended the €6.25 billion credit line to March 2024. (FCA)
  • Cutting a shift at the Windsor, Canada, plant due to falling minivan sales. (Reuters)

Ford (history)

  • Announced the cessation of passenger car production and sales in Russia, resulting in the closure of two vehicle plants and an engine plant in the country. Ford will also relinquish control of the joint venture with partner Sollers receiving a 51% share of the restructured entity. Ford said the move will reduce profits by about $500 million, of which about $200 million will be cash. (Ford)
  • May be close to a deal to sell the Sao Paulo plant, now scheduled for closure. (Reuters)
  • Hosting a media event in Amsterdam, Netherlands on 2nd April to reveal new European products. (Ford)
  • Reached agreement with unions on the terms for stopping production of the C-MAX and eliminating a shift at the Saarlouis plant. (Ford)

Geely (includes Volvo) (history)

  • Formed a joint venture with Daimler that will own the Smart brand. Production will be based in China at a new factory that will start building cars in 2022. (Daimler)

General Motors (history)

  • Sold the Gunsan, South Korea factory to Myoungshin. The new owner plans to contract manufacture electric vehicles there. (Reuters)
  • Rumoured to have had talks with FCA to sell the Detroit-Hamtramck plant. (Crains Detroit)

Honda (history)

  • Took a 10% stake in the MONET mobility joint venture between Toyota and SoftBank. (Honda)

Hyundai / Kia (history)

  • Hyundai’s Genesis brand will lease cars with servicing and insurance included in a single payment. Shockingly, the scheme, called Spectrum, isn’t being referred to as a subscription. (Hyundai)
  • Hyundai’s forthcoming small SUV will be named the Venue. (Hyundai)

Nissan (includes Mitsubishi) (history)

  • Completed the sale of Nissan’s battery business to Envision. (Nissan)
  • Nissan has a reworked approach for determining compensation for directors and executives. (Nissan)
  • Renault reportedly wants to give Nissan a short post-Ghosn cooling off period and then resume talks on a full merger within the next 12 months, so that after that the combined entity can take on FCA. (Reuters) Nissan’s CEO said that he doesn’t know anything about it. (Reuters)
  • Released a report into the Ghosn scandal, saying he had become too powerful. Nissan’s CEO was exonerated by findings that he had been tricked into signing documents, and that Ghosn never really stopped being CEO anyway until his arrest. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Will reduce the workforce at the Aspern transmission plant in Austria by about one third. (Reuters)
  • Released the 2018 Registration Document. (PSA)
  • CEO Tavares wants senior executives who have enough spine to tell him when they disagree with him, and says he works harder than anyone to bring up difficult topics because he is a leader, not a boyfriend. He also says that he receives 1,000 powerpoint slides to read each week, but thinks only 10% of them are useful. (Les Echos)
  • Rumoured to be in talks with FCA about creating a shared platform for small cars. (Bloomberg)
  • Taking a controlling shareholding in Chinese parts distributor Longstar. (PSA)

Renault (history)

  • Renault reportedly wants to give Nissan a short post-Ghosn cooling off period and then resume talks on a full merger within the next 12 months, so that after that the combined entity can take on FCA. (Reuters)
  • The Renault-Nissan Alliance owned three private jets that apparently nobody knew about. (FT)

Tata (includes JLR) (history)

  • JLR’s North American CEO is unsure of how successful the I-Pace electric car will be (although he likes the car) and sees residual values as a major concern saying that they undermine competitive leasing deals. (CNBC)
  • JLR confirmed it had made a tidy sum by investing in Lyft at $32.15 per share. (JLR)

Tesla (history)

  • CEO Musk told staff that the firm will continue to open new stores, providing they do enough to advance interest in the brand and sell cars. (CNBC)
  • After Musk failed to master the finer points of the new return policy, Tesla decided that it was the policy that was wrong and changed it to come into line with his comments on Twitter. (The Verge)
  • Bloomberg thinks Tesla may have built 80,000 Model 3 in Q1 2019, but the model could be wrong because it is experimental, but if it is right then it is totally genius, but if not it’s just one of those things. (Bloomberg)

Toyota (history)

  • Toyota researchers suggested that battery ageing may have less to do with the charging cycle (the conventional wisdom) and could be more to do with variations in the manufacturing process. The firm sees promise in testing techniques that can grade batteries at the end of the production line and direct the highest performing units to higher revenue applications, plus improve OEM confidence in lifetime capability. (Toyota)
  • Honda and Hino took a 10% stake in the MONET mobility joint venture between Toyota and SoftBank. (Honda)
  • Believes that sales in South America and the Caribbean will grow less than 1% this year. (Reuters)
  • Announced a series of executive changes. (Toyota)
  • Suffered a cyber attack which may have affected up to 3.1 million customers. (IT Pro)

VW Group (history)

  • CEO Diess isn’t interested in making a bid for FCA. (Reuters)
  • Audi is planning two eTron GT all-electric saloons, one similarly sized to the A4, and one around A6-size. Audi will use the PPE platform for the A4 eTron but the MEB platform for the Q4 eTron, despite both vehicles being around the same size. (Autocar)
  • Executives expressed hope in closing a deal with Ford to buy a stake in Argo AI. (Reuters)
  • VW says the Group’s cars and trucks account for 2% of global CO2 emissions. (Times LIVE)
  • Scrapped 300,000 German diesel vehicles traded in under an incentive scheme. (VW)
  • Although VW will sell electric vehicles in Brazil, it won’t make them locally for some time. (Reuters)
  • SEAT will develop a version of the MEB all-electric platform for smaller cars, aiming for a starting price below €20,000. (SEAT)

Other

  • XPeng’s founder said that $1 billion isn’t enough to start a car company and he now thinks $4 billion – $5 billion is a more realistic assessment. (Detroit News)
  • Before going public, NIO reportedly agreed a yearlong non-compete clause with the investment banks leading the IPO, specifically naming several Chinese EV rivals. (Reuters)
  • Valmet said Blackrock had increased its stake in the firm to 6.5%. (Valmet)
  • South Korea’s Songuo Motors showed off the first set of vehicles for the NeuWai brand. The vehicles will be made in China but exported in semi-knock down kit form, ready for final assembly in local markets. (Songguo)
  • Chinese electric vehicle start-up Leap Motor reportedly wants to raise $372 million. (Deal Street Asia)
  • Indian group JSW Energy no longer plans to launch an electric vehicle. In 2017, the firm was prepared to commit $623 million (including charging infrastructure spending) to the project. (VC Circle)
  • Nikola reportedly purchased the land for the firm’s first factory. (Trucks)

News about other companies and trends

Economic / Political News

  • The UAW lost almost 10% of its members in 2018 but said it wasn’t bothered. (Detroit News)
  • An IG Metall negotiator suggested that the union would expect a permanent employee laid off by a Tier 1 or OEM in Germany to receive around €260,000 in compensation. (IG Metall)
  • The European Union mandated a set of safety features, including automatic speed limiting, from 2022. (EU)

Suppliers

  • Continental say 10 inch touchscreens are the norm for European cars and it will soon be 14 inches. (Autocar)
  • ZF agreed terms to acquire Wabco in a deal valuing the latter at about $7 billion. (ZF)
  • Velodyne has shipped a cumulative $500 million of lidar sensors. (Velodyne)
  • Hanon completed the acquisition of Magna’s fluid pressure and controls division. (Hanon)
  • Johnson Matthey is building a new plant for electric vehicle batteries in Poland. (Reuters)

Dealers

  • Scout24 is in an acquisitive mood, hoping to pick up pieces of eBay’s classifieds business. (Reuters)

Ride-Hailing, Car Sharing & Rental (history)

  • Lyft’s shares went great guns in initial trading, valuing the company at nearly $30 billion. (Reuters)
  • Ola plans to enter the short term rental business with a $500 million warchest. (Economic Times)
  • Uber acquired Careem in a deal worth $3.1 billion, for the time being the two brands will exist side by side. (Uber)
  • Honda and Hino each took 10% of the MONET mobility joint venture between Toyota and SoftBank. (Honda)

Driverless / Autonomy (history)

  • Waymo’s CTO said that no new breakthroughs were required for self-driving to become a reality; he believes that it is only a matter of time to learn the different permutations of road conditions. (Inverse)
  • Lidar developer Innoviz raised $132 million. (Innoviz)
  • Designated Driver showed off a six screen set up to remotely operate vehicles. (Wired)
  • Aptiv is releasing a data set that includes labelled photographs and lidar traces, hoping that researchers will find novel ways to analyse the information. (Aptiv)
  • Daimler Trucks purchased a majority stake in autonomous driving developer Torc Robotics. Daimler will continue working on proprietary self-driving software, and so will Torc. (Daimler)

Electrification (history)

  • Electric motor developer Linear Labs raised $4.5 million. (Linear Labs)
  • Toyota researchers suggested that battery ageing may have less to do with the charging cycle (the conventional wisdom) and could be more to do with variations in the manufacturing process. The firm sees promise in testing techniques that can grade batteries at the end of the production line and direct the highest performing units to higher revenue applications, plus improve OEM confidence in lifetime capability. (Toyota)

Connectivity

  • Subaru, Nissan and Mazda joined a Japanese consortium working on an emergency collision reporting system. Honda and Toyota are already members. (Honda)

Other

  • Bajaj Auto reportedly seems set to exchange its stake in the motorbike-making arm of KTM for a smaller stake in the parent company. (Autocar)
  • Bicycle rental firm VeoRide says that, rather than being late to the game, it is benefitting by learning from the mistakes of all the failed bicycle rental firms that went before it. (VeoRide)
  • A French parliamentary report suggested that changing over from internal combustions engines to electrification could cost €500 billion by 2040 – assuming the state continued generous subsidies; paid for charging stations to be built and failed to recover lost fuel duty. (Les Echos)
  • US President Trump told UAW members that their leadership should support him more and the dues they are paying have been set too high. (Detroit Free Press)
  • Mexico and Brazil concluded a free trade agreement for light vehicles. (Economic Times of India)

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Auto Industry Briefing — week ending 24th March 2019

Daimler needs to be Smarter; Ford’s new broom; and fewer powertrains could encourage sharing. Please enjoy our auto industry and mobility briefing for 18th March to 24th March 2019. A PDF version can be found here.

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

  • Look DownDaimler’s Smart brand could be for the chop, if insiders are to be believed. Although it has been a money pit, the curious thing is that it seems to make a product sitting squarely in most people’s version of the future: small, all-electric city cars. Is the problem anything more than Daimler need to learn how to do better at being cheap and cheerful?
  • Send My Love (To Your New Lover) Ford’s new CFO is an automotive outsider from Snap. Since the incumbent has spent many years carefully promoting an unusually high number of potential in-house successors (five, one of whom recently left), is this an outright rejection of Ford’s finance team by the CEO?    
  • Drop It Like It’s HotBMW will sell 50% fewer powertrain combinations in 2021 than 2018. Setting targets is one thing, delivering is another but the plan seems right. Much of the powertrain complexity is driven by sales teams seeking a product staircase that walks up in 25 ps increments, rather than real customer need. Once OEMs have rationalised their powertrain line-ups, will they get better at sharing?

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

Find our archive here.

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News about the major automakers

BMW (history)

  • Released the 2018 annual report, saying conditions in 2019 would be challenging, with product cost, exchange, higher expenditure on R&D and capex for electric vehicles and manufacturing costs all adversely affecting profits. (BMW)
  • Published the 2018 sustainability report. (BMW)
  • Aims to remove 50% of powertrain combinations by 2021. (BMW)

Daimler (history)

  • Daimler sources suggested that the Smart brand could come under intense scrutiny from new CEO Källenius once he gets his feet under the table. (Handelsblatt)
  • Reportedly looking into building a bigger stake in Chinese joint venture partner BAIC. (Reuters)
  • Wants to develop in-car games for passengers. Daimler appears to believe that gaming offerings from phones, tablets and consoles cannot fully leverage the experience of sitting in a car, and a bespoke solution could do better. (Daimler)

Ford (history)

  • Announced Tim Stone as CFO, an external hire from Snap (and Amazon before that), plus some other executive changes. Ford will unravel the strategy from earlier in the decade to have more discrete market management by announcing that all markets except the Americas, Europe and China will be consolidated into an “international” group. The COO of North America becomes President of Europe, with the incumbent becoming chairman, a set up Ford last used in the early 2000s. (Ford)
    • Significance: Hiring in a CFO suggests that Hackett has lost confidence in the finance function at Ford, especially since Ford had promoted an unusually large number of finance executives (five versus two normally) to the tier below CFO ahead of Shanks’s anticipated retirement. Rowley’s new role heading Ford of Europe looks like a hedge to keep him on board in case Stone’s appointment doesn’t work out.
  • Made a series of production allocations for North American plants. Flat Rock will produce a new electric car (not the Mach 1 SUV); there will be a new facility retrofitting autonomous technology to newly built vehicles (probably at low volume given the investment levels); and Transit Connect production for North America will be sourced to Cuautitlan in Mexico. (Ford)
  • Increasing capacity of large SUVs by 20% after the summer shutdown, revealing that the average transaction price of an Expedition is now $62,700. (Ford)

Geely (includes Volvo) (history)

  • Volvo’s CEO says 20% – 25% of the brands sales will be PHEVs by the end of 2019. (Automotive News)
  • Margins on electric cars will match those on internal combustion engine products by 2025 according to Volvo’s CEO, with the caveat that both vehicle types may make less money than today. (Reuters)
  • Volvo will start to install driver monitoring cameras in the early 2020s, aimed at reducing accidents from drink driving and distraction. (Volvo)
  • Geely reported financial figures for 2018. Revenue of 106.6 billion RMB (about $16 billion) was up 15% on 2017, despite unit sales increasing 20%. Net profit of 10.63 billion RMB (about $1.6 billion) rose 18%. (Geely)

General Motors (history)

  • Building a new all-electric vehicle based on the Bolt at the Orion Township, USA plant. GM says the product was originally planned to be made outside the USA. (GM)
  • Investing $2.7 billion in two Brazilian plants. Local politicians said that the factories would have otherwise closed. GM stressed that the products were not slated for export to the US. (Detroit News)
  • CEO Barra said GM was following Lyft’s IPO with great interest. (CNBC)
  • Cadillac is moving to output-based badging, following in the footsteps of Audi. (Detroit Free Press)

Hyundai / Kia (history)

  • Hyundai and Kia will invest $300 million in ride hailing service Ola. (Hyundai)
  • Kia will launch a Ceed crossover, but won’t say what it will be called until later in 2019. (Kia)
  • Kia broke ground on an expanded UK distribution centre, which will have room for an additional 8,000 vehicles when completed — great for dealing with any post-Brexit inventory troubles. (Kia)

Nissan (includes Mitsubishi) (history)

  • Denied reports that internal mid-term Nissan targets for Chinese market sales were downgraded by 8%. (Reuters)

PSA (includes Opel/Vauxhall) (history) s

  • Board member Robert Peugeot said that the integration of Opel and Vauxhall had gone much better than expected and that the Peugeot family’s investment vehicle would support further M&A if opportunities arose — maybe even by investing further capital. He also appeared to explicitly acknowledge FCA and JLR as takeover targets. (Les Echos)
  • Unions agreed terms for the transfer of 2,000 Opel R&D employees to Segula. Through the deal, Opel will be able to resume voluntary layoffs at Rüsselsheim. (PSA)

Renault (history)

  • New chairman Senard said that decision making speed in the Renault-Nissan-Mitsubishi’s alliance needed to improve, whilst boosting autonomy for executives at each company. He also said no one was working on changing the alliance’s shareholding structure. (Reuters)

Suzuki

  • Toyota and Suzuki announced a series of actions to share vehicles and components to one another. Toyota will supply European-built cars to Suzuki, and make Suzuki-designed engines. Suzuki will sell Toyota several India-built models that will be re-badged for African markets while Toyota will make Vitaras in India. (Toyota)

Tata (includes JLR) (history)

  • JLR won a Chinese court battle to stop JMC’s Landwind brand producing the X7, a vehicle mightily similar in size, form and detailing to the Evoque. (The Guardian)

Tesla (history)

  • Removed the bottom end Model S, further separating the car from Model 3. (Business Insider) The mid-range Model 3 has also been abandoned. (Green Car Reports)
  • Launched a new referral program with substantially lower value rewards. (Tesla)
  • The SEC said that CEO Musk had not sought approval for a single tweet made since his agreement to do so in return for being let off more serious penalties following his “funding secured” debacle. (Reuters)
  • Filed lawsuits against ex-employees working at Zoox and XPENG, alleging they stole Tesla’s know-how. (The Verge)
  • CEO Musk declared deliveries to be the primary responsibility of all employees for the remainder of Q1. (Reuters)
  • Revised the maintenance policy to replace annual checks with a looser “as required” scheme. (Tesla). As of 25th March, Tesla had not made the change in all markets (see UK example)

Toyota (history)

  • Will replace the GT86, once again partnering with Subaru. (Autocar)
  • Toyota and Suzuki announced a series of actions to share vehicles and components to one another. Toyota will supply European-built cars to Suzuki, and make Suzuki-designed engines. Suzuki will sell Toyota several India-built models that will be re-badged for African markets while Toyota will make Vitaras in India. (Toyota)
    • Significance: Since the RAV4 isn’t currently built in Europe (apart from Russia), the announcement could be a clue about the future of the former Toyota-PSA JV plant.

VW Group (history)

  • Porsche’s CEO floated the idea of using subscriptions for limited edition cars to prevent speculation. (Autocar)
    • Significance: Since the increase in value stems in part from the limited supply, if controlling pricing is the only objective, Porsche could always just make more…?
  • Bugatti is rumoured to be planning a new all-electric saloon, potentially to be called Royale, that would be based on Porsche Taycan underpinnings. (CAR)
  • VW Bank wants to save €850 million per year by 2025 and plans to cut around 800 of the 7,000 staff by 2025 to help achieve it. (Handelsblatt)
  • Škoda’s CEO confirmed two MEB-based electric cars to launch by 2022, with a low-cost model planned to come after that. (Autocar) Despite resistance from German unions, he continues to plan for a new Eastern European production site to expand capacity. (Autocar)
  • Forming a new company called MOS, to sell connected car services in China in partnership with FAW. (VW)
  • VW internal analysis reportedly shows that producing battery cells in Germany would increase costs by 20% compared to other options. (Handelsblatt)
  • Porsche will end the night shift at the Leipzig plant after the summer shutdown, but says only temporary workers will be affected. (Manager Magazin)
  • Porsche launched an (expensive looking) set of new dealer standards. (Porsche)
  • After a ship carrying four limited edition Porsche 911 GT2 RSs sank, Porsche will restart production of the cars to ensure their owners weren’t thwarted by acts of God. (The Drive)
  • Škoda said that pay increases at 2018 levels would not be affordable in 2019. (Reuters)
  • The Porsche / Piëch family investment vehicle raised its voting stake in VW Group from 52.2% to 53.1%. (Reuters)
  • Porsche unveiled a “coupe” version of the Cayenne. (Porsche)
  • Comments by Porsche executives about the next generation Cayenne indicate that it could be the brand’s first mixed powertrain vehicle, with both internal combustion engine and battery electric derivatives. (Autocar)
  • VW launched a battery consortium with Northvolt. (VW)
  • Although VW continues to look for a new Eastern European factory, it won’t be in Ukraine. (Kyiv Post)

Other

  • Evelozcity changed its name to Canoo and announced that vehicles will only be available via subscription. (Canoo) Having already said that it plans to use contract manufacturing, Canoo reportedly signed a letter of intent for Magna to manufacture the firm’s US market vehicles at a new plant. (Automotive News)
  • Borgward seems to have found a new parent, in the form of UCAR a Chinese taxi service, and part-owner of XPENG, who paid $610 million for 67% of the firm. (Deal Street Asia)
  • Evergrande, sometime NEVS and Faraday Future investor, says it will soon launch electric vehicles and wants to be the world leader within three to five years. (Bloomberg)
  • Workhorse reported Q4 2018 financial results. There was a $(17.7) million loss on $21,000 of revenue. (Workhorse)
  • Faraday Future signed a joint venture with mobile phone company The9 which will see Faraday receive a $600 million cash injection. The press release implies that it will be The9, rather than Faraday, that leads the marketing for the first mass-market product, dubbed the V9. (Faraday)
    • Significance: Although $600 million is a lot of money, it would be something of a world first if Faraday Future could get a 300,000 unit production facility for electric cars up and running on this budget. Although the figure seems reasonable in the context of traditional programs, all electric vehicles are proving considerably more costly (e.g. Tesla Model 3).

News about other companies and trends

Economic / Political News

  • A French parliamentary report suggested that changing over from internal combustions engines to electrification could cost €500 billion by 2040 – assuming the state continued generous subsidies; paid for charging stations to be built and failed to recover lost fuel duty. (Les Echos)
  • US President Trump told UAW members that their leadership should support him more and the dues they are paying have been set too high. (Detroit Free Press)
  • Mexico and Brazil concluded a free trade agreement for light vehicles. (Economic Times of India)

Suppliers

  • Aluminium producer Hydro suffered a cyber-attack, forcing some factories to close whilst others had to run under manual control. (Reuters)
  • Schaeffler started consultations with German unions over plans to close four plants. (Handelsblatt)
  • ZF acquired a 60% share in automated pod maker 2getthere. (ZF)
  • BorgWarner appointed a new CFO. (BorgWarner)

Dealers

  • Driverbase launched a service that will collect driving data from customers and then recommend the best car for them. It is unclear whether badge snobbery by your friends make will be part of the data set used. (Driverbase)
  • Singaporean peer-to-peer used car website Carro raised $90 million. (Deal Street Asia)
  • Indonesian online new car sales website Mobilkamu raised an undisclosed amount in Series A and claims to sell 150 cars per month, four years after founding. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental (history)

  • Goodyear is running a trial providing mobile servicing to a fleet of cars run by Envoy. (Goodyear)
  • Lyft’s IPO roadshow is apparently going very well. (Reuters)
  • Multi-modal app UbiGo has been acquired by Via ID. (Fleet Europe)
  • South African firm FlexClub, which matches ride hailing drivers with investors who are willing to provide cars in return for a percentage of the takings, raised $1.2 million. (TechCrunch)
  • A consortium of Chinese carmakers (Changan, FAW, Dongfeng) and internet firms (Alibaba, Tencent) will spend $1.5 billion setting up a ride hailing venture. (Reuters)
  • Hyundai and Kia will invest $300 million in ride hailing service Ola. (Hyundai)

Driverless / Autonomy (history)

  • Denso joined a consortium that is trying to work out how to check if autonomous cars smell. The high-tech effort begs the question of how taxi drivers suffering from Anosmia overcome this problem today. (Denso)
  • Lidar developer Lumotive came out of stealth mode, claiming a 200m range for its solid state lidar. (IEE Spectrum)
  • ZF acquired a 60% share in automated pod maker 2getthere. (ZF)
  • Millions of Americans developed a newfound interest in autonomous cars after hearing President Trump doesn’t trust computers to drive the car and believes that no one has thought to install a kill switch. (Futurism)
  • Waymo opened a new depot in Phoenix, leading to speculation that it could now service more than double the current fleet size. (TechCrunch)
  • Russian internet company Yandex enlisted Hyundai Mobis to bolster its self-driving car efforts. (Hyundai Mobis)
  • Lidar developer TriLumina announced a distribution agreement with Nagase. (TriLumina)
  • A European effort to develop a high-accuracy vehicle positioning system using Galileo (Europe’s answer to GPS) said that so far it can provide position to within 0.3m – 0.5m, insufficient for autonomous cars. (ESCAPE)
  • Lidar developer Ouster raised $60 million. (Venture Beat)

Electrification (history)

  • BMW, Daimler and VW have reportedly agreed to pursue a single strategy for electric vehicles that will enable the German industry association, the VDA, to lobby effectively. (Handelsblatt)
  • VW internal analysis reportedly shows that producing battery cells in Germany would increase costs by 20% compared to other options. (Handelsblatt)
  • Oslo will install wireless charging at taxi ranks in a bid to encourage take-up of an all-electric fleet by 2023. (Reuters)

Connectivity

  • VW and FAW are forming a new company called MOS, to sell connected car services in China. (VW)

Other

  • Indonesian cargo scheduling start-up Kargo raised $7.6 million. (TechCrunch)
  • Flight hailing firm Blade has started operations in California. (TechCrunch)

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

Auto Industry Briefing — week ending 17th March 2019

European CO2 targets thin the herd; the no-deal Brexit tariff plan; and BMW and Daimler might put E-FIRST. Please enjoy our auto industry and mobility briefing for 11th March to 17th March 2019. A PDF version can be found here.

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

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

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News about the major automakers

BMW (history)

  • Released summary financial results for 2018. Automotive revenues of €97.5 billion was (0.8)% lower than 2017 despite a 1.1% increase in unit sales. Automotive EBIT of $6.2 billion was down (21.6)% down versus the prior year, part of the explanation was capital expenditures rising from 4.8% of revenue to 5.2%. (BMW)
  • BMW and Daimler are rumoured to be in talks to share platforms for small and mid-size vehicles, believing that each could save around €1 billion per year by pooling efforts. The sources talk of an “electric first” approach, indicating that it may not be for purely electric products. (Reuters)
    • Significance: The actual nomenclature quoted in the article is “electric first”, could this be a veiled reference to the Evercore ISI / Ad Punctum E-FIRST research piece from Q4 2018, or are we drinking our own Kool-Aid?
  • CEO Kruger says that although BMW will continue to recruit, net hiring will be zero. (Handelsblatt)
  • Started production of the refreshed 7 Series. (BMW)
  • Announced a mini-restructuring of senior executives that will eliminate one of the sales roles. (BMW)

Daimler (history)

  • Mercedes’s performance sub-brand AMG will have plug-in versions of all products, ruling out 48V mild hybirds because emissions savings are too small. (Autocar)
  • BMW and Daimler are rumoured to be in talks to share platforms for small and mid-size vehicles, believing that each could save around €1 billion per year by pooling efforts. The sources talk of an “electric first” approach, indicating that it may not be for purely electric products. (Reuters)

FCA (history)

  • More than 50% of Fiat 500s sold in 2018 had a retail price in the €22,000 – €24,000 range. (Top Gear)
  • Recalling around 48,000 vehicles to fix problems with the steering. (FCA)
  • Recalling 862,820 US gasoline-powered vehicles that do not meet emissions regulations. (Reuters)
  • Agreed a new four-year contract with Italian unions. (FCA)

Ferrari

  • Agreed a new four-year contract with Italian unions. (Ferrari)

Ford (history)

  • Chairman Bill Ford expressed confidence in CEO Hackett, praising his ability to see the near and far term pictures. He also said that Ford is looking at options to secure reliable supplies of lithium. (Reuters)
  • Confirmed plans to cut 5,000 jobs in Germany and an unspecified number in the UK. Voluntary redundancy schemes are already open in both countries and this includes the Saarlouis shift reduction previously announced. (Ford)
  • Changan executives expressed confidence that new models will recover the market position of Ford’s Chinese passenger car joint venture. (Bloomberg)
  • Spoke out against the UK Government’s proposal for no deal tariffs that would see finished vehicles subject to rates of 10% – 22% of wholesale price. Ford said it risked paying tariffs on UK built engines twice. More likely, it is concerned about the potentially far higher bill for importing every vehicle sold in one of the company’s largest markets globally. (Detroit News)
  • CEO Hackett saw an increase in pay for 2018 versus 2017, partly reflecting a full year of CEO duties. Reporters took a dim view of the bump in salary, especially because it came at the same time as news of further job cuts. (FT)

Geely (includes Volvo) (history)

  • Volvo restructured the leadership group, aiming to draw a distinction between traditional car making (e.g. factory builds and then franchise dealer retails) and emerging trends (e.g. factory sells or leases directly to the consumer. The CEO of Polestar will also no longer report to Volvo’s management. (Volvo)
    • Significance: separating the direct to consumer group from the rest of the business appears to be an attempt to give plausible deniability to dealer-facing personnel about their control over new consumer trends whilst the new function gets on with trampling over long-held norms, for instance with all inclusive leasing.
  • Volvo will pay a dividend of about $300 million to shareholders (mainly Geely). (Volvo)
  • Lotus‘s recently appointed CEO is working on an expanded line-up for the future but will start with a new sportscar built on the existing architectures. He thinks Geely is prepared to invest billions in the right business plan. (FT)
  • Polestar’s US pricing already takes into account potential US import tariff increases, so the launch plan will be unaffected — perhaps they could get cheaper. (Polestar)

General Motors (history)

  • Aiming to double headcount at the Cruise self-driving division, to around 2,000 by the end of 2019. (Reuters)

Hyundai / Kia (history)

  • Showed off some details of the new platform that underpins the forthcoming Hyundai Sonata and others. (Hyundai)
  • The demands of an activist fund met resistance from South Korean institutional shareholders. (Reuters)

Mazda

  • Announced a series of management changes affecting the leadership of North America (Mazda) and Europe. (Mazda)

Nissan (includes Mitsubishi) (history)

  • Nissan announced a number of senior executive moves effective 1st April. (Nissan)
  • The Infiniti brand will no longer be sold in Western Europe after 2020 and production of vehicles in Sunderland will also cease as the company focuses on electric vehicles in China and North America. The cost of investing in technology to meet EU CO2 regulations for 2020 and beyond was a key reason for the move. (The Guardian)
  • Mitsubishi announced a series of executive moves effective 1st April, including a new COO. (Mitsubishi)
  • Nissan and Mitsubishi launched four new kei cars (two each). (Mitsubishi)
  • Nissan is testing invisible-to-visible (I2V) technology that the company claims can create 3D images of objects, people or even cartoon characters in a vehicle cabin. (Nissan)
  • Renault, Nissan and Mitsubishi published an MoU for their new governance structure. Although the existing joint operating companies will not be dissolved, they will become vassals of a new supreme council made up of CEOs from each OEM, plus Renault’s chairman. As part of the deal, Renault appear to have accepted a demotion: Renault’s chairman will be a “natural candidate” to become vice chairman of Nissan. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • The Opel brand will return to Russia with a three vehicle line-up. The Grandland X SUV will be imported from Germany and the Vivaro and Zafira Life will be locally produced. An initial dealer body of 15 – 20 locations with a medium term plan to reach around 50 suggests either limited ambitions or high per-dealer expectations. (PSA)
  • Appointed a new sales and marketing boss, Renault exile Thierry Koskas. (PSA)

Renault (history)

  • Iranian ministers said that a “mechanism” had been found to allow Renault to reenter the country without falling foul of US sanctions. Renault didn’t comment. (Radio Farda)
  • Renault, Nissan and Mitsubishi published an MoU for their new governance structure. Although the existing joint operating companies will not be dissolved, they will become vassals of a new supreme council made up of CEOs from each OEM, plus Renault’s chairman. As part of the deal, Renault appear to have accepted a demotion: Renault’s chairman will be a “natural candidate” to become vice chairman of Nissan. (Nissan)

Tata (includes JLR) (history)

  • JLR will recall 44,000 cars in the UK that emit more CO2 than they are should. (BBC)
  • Postponed a planned £500 million investment in a new R&D campus for JLR. (Solihull Observer)

Tesla (history)

  • Unveiled the Model Y, an SUV based on the Model 3 (vloggers struggled to differentiate the cabins of the two models). Tesla says the starting price will be $39,000 from 2021 onwards but more expensive versions will be available in 2020. Unlike the Model 3, the car will have a 7-seat option. (Tesla)
  • CEO Musk forecast that Model Y would outsell Models S, X and 3 combined . (Tesla)
  • Markets gave the Model Y unveil a lukewarm response, with some analysts suggesting it was a smokescreen to distract from ongoing problems with achieving profit and sales targets from existing products. (Reuters)
  • The release of the $35,000 Model 3 has seen waiting times lengthen — but only to around two months. (Electrek)
  • Leaked emails suggest CEO Musk can create bureaucratic slowdown with the best of them by revealing that all new hiring requests must be signed off by him personally. (Business Insider)
    • Significance: In Ad Punctum’s experience, this type of move has an impact for a few weeks before the pace of requests overwhelms the affected executive and they resort to signing off requests in bulk via a pre-prepared spreadsheet that allows them to randomly refuse a subset of requests in order to satisfy their inner desire for control.

Toyota (history)

  • Announced an additional $789 million of investments in US plants. (Toyota)
  • Invested in connectivity company Airbiquity. (Airbiquity)
  • Patented a system that uses the in-car fragrance function to blow tear gas in the face of would-be thieves. (CNET)
  • Toyota employees in Japan received a smaller pay rise than they hoped. (Reuters)
  • Toyota and SoftBank are reportedly considering a $1 billion investment in Uber’s self-driving unit that could value it at up to $10 billion. (Reuters)
  • Developing a fuel cell powered lunar rover with the Japanese space agency. (Toyota)

VW Group (history)

  • VW upped the planned number of electric vehicles to around 70 by 2028 from a previous plan of 50 by 2025. Cumulative sales targets will rise from 15 million to 22 million units (about 3 million in 2025). By 2030, the Group forecasts that 40% of sales will be electric models. (VW)
  • VW now sees PHEV and BEV as more cost efficient for reducing CO2 emissions than improving technology on engines [slide 5]. The firm also appears to be redistributing compliance costs and benefits across vehicle lines to better reflect “real” profits [slide 6]. VW expects costs of battery electric vehicles and those with internal combustion engines to meet before 2025. (VW)
  • VW believe that cost parity (customer view) between internal combustion engines and battery electric vehicles will only be achieved through including ownership costs. The firm is therefore exploring all-inclusive packages that ensure the customer realises the benefits. VW will put more effort into used car sales too — having woken up to the dominance of retail customers in that market. (VW)
  • Reportedly considering leaving the German trade association, the VDA, over differences in strategy. (FAZ)
  • CFO Witter said the Group was failing to fully leverage the available synergies between different brands, mainly because it allowed too much independence when there was no financial benefit. (Handelsblatt)
  • Thinks that the Chinese market for electric vehicles will be 80% BEV and 20% PHEV by 2025. By then, VW hopes to have 40 products on sale, with annual volumes of 1.5 million units. (VW)
  • Lamborghini sold 5,750 units in 2018 and “evidenced” how it could be profitable. (VW)
  • Audi increased the 2025 target for all-electric and plug-in hybrid vehicles from “more than 20” to “about 30”. The brand also wants to share more with the rest of the VW Group, particularly Porsche. (VW)
  • CEO Diess found himself in hot water after saying that “[high] EBIT sets you free”, seemingly echoing the phrase used on the gates at Auschwitz. He apologised and said the similarity was unintentional. (Handelsblatt)  
  • CEO Diess denied rumours that VW Group was interested in taking a stake in Waymo. (Reuters) He believes that 90% of future innovation will come from software — without explaining how that is measured (software will apparently account for 50% of development costs in the 2030s). The next generation VW Golf will consolidate the 70 processors in today’s car into three units. (Reuters)
  • Recruiting 1,200 drivers for the fleet of 500 Moia vehicles in Hamburg, paying around €12 per hour. (Handelsblatt)
  • Will not proceed with the IPO of truck division Traton, citing market conditions. (VW)
  • The US SEC is seeking to sue former CEO Winterkorn over the diesel scandal. VW will help defend him. (Reuters)
  • Gave an overview of the production planning system used by Volkswagen to schedule smooth production. The downside is that with a four week planning horizon is needed. Build to order advocates look away now. (VW)
  • A glowing profile of Porsche boss Oliver Blume, suggested he is being backed as the next CEO of VW Group when Diess’s tenure expires. (Handelsblatt)
  • Porsche says that electric cars have €6,000 – €10,000 higher material cost than comparable conventionally powered cars. (Porsche)
  • Will cut 7,000 jobs to save money and because VW believes that electric vehicles have 30% lower labour hours per units than conventionally powered cars. (Reuters)

Other

  • Sono Motors unveiled the production version of the Sion, a plug-in hybrid that uses onboard solar panels to charge the battery. The 248 cells that cover the vehicle generate a peak 1.2 kW, which Sono says equates to 34 km of additional range per day. The firm shows over 9,500 pre-orders. (Sono)
  • Ineos will use BMW-sourced engines for the Projekt Grenadier SUV. (Ineos)
  • WM Motor raised $446 million. (China Money Network)
  • Fisker released a teaser image of its entry level electric car and said the real thing will be on show soon. (CNET)

News about other companies and trends

Economic / Political News

  • European passenger car sales in February of 1,148,775 units were down (0.9)% on a year earlier. (ACEA)
  • Egyptian car sales continued to fall, despite the removal of tariffs on EU-built vehicles. (Economic Times of India)
  • European parliamentarians are considering mandating speed limiters on new cars. (MEN)
  • The UK Government published the intended import tariff regime in the event of a no-deal Brexit. Although the headline was that tariffs would drop to zero, this wasn’t true for the automotive industry. Finished vehicle tariffs would apply at the 10% – 22% level that non-EU products are currently subject to, but parts imports would be set to zero. The Government cautioned that the measures would only be temporary, for about a year. The UK car industry trade body went nuts. The EU said they would be illegal under WTO rules. (UK Government)
    • Significance: The tariff schedule, whilst positioned as a temporary measure, confirms the worst fears of the market leaders, who just happen to be pure importers (e.g. VW, Ford, Renault). Not only would finished vehicles see large tariffs, but UK-built vehicles would have zero tariffs on imported parts, handing a 10%+ price advantage over imported products. If the tariff schedule became permanent, it would considerably strengthen the case for knock-down kit production in the UK.

Suppliers

  • ZF’s CEO says that transition to electric cars will take more than 20 years. (Handelsblatt)
  • Mahindra CIE Automotive acquired Aurangabad Electricals in a $119 million deal. (Live Mint)
  • Faurecia and Michelin will merge their fuel cell divisions under the banner of Symbio. (Michelin)
  • Hyundai Mobis is investing $5 million in Chinese object recognition company Deep Glint. (Hyundai)
  • Denso invested in connectivity company Airbiquity. (Airbiquity)
  • Continental announced a series of changes aimed at supporting the newly created automotive group. (Continental)
  • Lear invested in a fund to be managed by Maniv Mobility. (Lear)

Ride-Hailing, Car Sharing & Rental (history)

  • Lyft has started pre-IPO investor roadshows, apparently aiming for a valuation north of $20 billion. (Reuters)
  • After recently closing a $20 million round, car sharing firm Drivezy wants $100 million more. (Deal Street Asia)
  • Meshek is creating a car sharing scheme for rural areas in Israel. (CTech)

Driverless / Autonomy (history)

  • Google is reportedly offering outside investors a stake in Waymo, with the twin aims of raising cash and justifying a dizzying valuation for the self-driving vehicle developer. (The Information)
  • Uber apparently hoped to have 13,000 robotaxis in service by 2019, growing to a fleet of 75,000 in 13 different cities by 2022.  The targets appear to have been motivated by desperation to provide a path to profitability, rather than because of promising test results. (FreightWaves)
  • CEO Diess denied rumours that VW Group was interested in taking a stake in Waymo. (Reuters)
  • Toyota and SoftBank are reportedly considering a $1 billion investment in Uber’s self-driving unit that could value it at up to $10 billion. (Reuters)
  • GM is aiming to double headcount at the Cruise self-driving division, to around 2,000 by the end of 2019. (Reuters)

Electrification (history)

  • Sono Motors unveiled the production version of the Sion, a plug-in hybrid that uses onboard solar panels to charge the battery. The 248 cells that cover the vehicle generate a peak 1.2 kW, which Sono says equates to 34 km of additional range per day. (Sono)
  • Ford is looking at options to secure reliable supplies of lithium. (Reuters)
  • Porsche says that electric cars have €6,000 – €10,000 higher material cost than comparable conventionally powered cars. (Porsche)

Connectivity

  • The next generation VW Golf will consolidate the 70 processors in today’s car into three units. (Reuters)
  • Airbiquity raised $15 million from Toyota and Denso. (Airbiquity)
  • Nissan is testing invisible-to-visible (I2V) technology that the company claims can create 3D images of objects, people or even cartoon characters in a vehicle cabin. (Nissan)

Other

  • Flight hailing firm Blackbird raised $10 million. (TechCrunch)

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

Auto Industry Briefing — week ending 10th March 2019

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

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

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

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

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News about the major automakers

BMW (history)

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

Daimler (history)

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

FCA (history)

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

Ford (history)

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

Geely (includes Volvo) (history)

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

Honda (history)

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

Hyundai / Kia (history)

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

Mazda

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

Nissan (includes Mitsubishi) (history)

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

PSA (includes Opel/Vauxhall) (history)

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

Renault (history)

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

Tesla (history)

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

Toyota (history)

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

VW Group (history)

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

Other

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

News about other companies and trends

Economic / Political News

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

Suppliers

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

Ride-Hailing, Car Sharing & Rental (history)

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

Driverless / Autonomy (history)

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

Electrification (history)

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

Other

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

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