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

Auto Industry Briefing — week ending 8th December 2019

Blurry maps give rubbish directions; customers seeing dealers less often; and electric cars in emerging markets. Please enjoy our auto industry and mobility briefing for 2nd December to 8th December 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)

  • Invested in the Series B round of existing portfolio company May Mobility. (Deal Street Asia)
  • Spending €400 million to build the iNEXT in Dingolfing, Germany. (BMW)
  • Changed tack on Apple CarPlay and will now off the smartphone add-on free with latest level infotainment systems. Customers who have purchased subscriptions will have the featured enabled forever without charge. Owners of older vehicles will however have to stump up some cash or go without — even though BMW could enable the system remotely if it wanted to. (Autocar)
  • Suing Valeo and Denso for price fixing on air conditioning parts. (Reuters)
  • Reportedly the target of a hacking attack by a Vietnamese group. BMW says it knew of the intrusion and was keeping a close eye on the perpetrators to see what they would get up to. (ZDNet)

Daimler (history)

  • Started battery production in Thailand. (Daimler)
  • Daimler and Geely’s Chinese ride hailing joint venture is called StarRides. (Daimler)
  • Two thirds of Daimler’s planned headcount reductions will come in Germany, according to union leaders. (Reuters)

FCA (history)

  • Looks set for a fight with Italian tax authorities over the value of its US assets. FCA says that even if it loses the case, there won’t be a cash impact. (Detroit News)

Ford (history)

  • Ford is dramatically scaling back its GoRide Health non-emergency ambulance service and shifting the brand to a smaller scheme testing autonomous vehicles. It was only in May that Ford heralded the scheme’s expansion to more US cities. (TechCrunch)
  • Ford says it has recruited 3,000 technology specialists in the last three years. (Ford)
  • Recalling over 250,000 F-Series trucks because the tailgate might open by mistake. Around 4,000 Explorers and Lincoln Navigators were also recalled because of fuel leaks. (Ford)
  • Developed a way to use waste produced by roasting coffee beans in non-visible plastic parts. Ford hopes that McDonalds will send lots of the stuff its way. (Ford)
  • A presentation to a group of investors showed neatly how Ford had evolved its intended all-electric vehicle design into the Mach E (actually not all that much). (Ford – P12 to P14)

Geely (includes Volvo) (history)

  • Daimler and Geely’s Chinese ride hailing joint venture is called StarRides. (Daimler)

General Motors (history)

  • GM and LG Chem are investing $2.3 billion in a new joint venture factory for batteries with an annual capacity of 30 GWh. The chosen site is in Lordstown, where GM has just sold off a vehicle plant and the output is destined for the forthcoming line of large electric vehicles GM says it will launch in 2021. (GM)
  • Intends to relocate around half of the employees at the Detroit-Hamtramck, USA, plant once production of conventional models ends in early 2020, indicating lower volume expectations for the all-electric vehicles that will follow. (Fox)
  • Agreed to sell its stake in a Russian JV to partner Avtovaz, allowing GM to exit the country. (Reuters)

Hyundai / Kia (history)

  • Hyundai announced a new set of product objectives called Strategy 2025. The headline was a beefed-up target for electric vehicles — by 2025 the aim is now to sell 670,000 FCEVs and BEVs annually (previously it was over 560,000 BEVs and an unspecified number of FCEVs) and be in the top three EV manufacturers globally (given Tesla’s current volumes, and VW’s aspirations, Hyundai would have to be next best). The target operating margin for the automotive business in 2025 is 8% with a 5% global market share. Hyundai believes it needs to rest on two pillars — hardware and services — in an echo of Ford’s strategy circa 2016. Perhaps the most adventurous target set by the strategy is that by 2035, electric vehicles will be mainstream in emerging markets. (Hyundai)
  • Reportedly the target of a hacking attack by a Vietnamese group. (ZDNet)

Nissan (includes Mitsubishi) (history)

  • Nissan told US office staff not to turn up for work at the start of 2020, hoping to cut costs. (Detroit News)
  • Nissan’s recently departed CEO says the company discounted the Leaf too heavily to meet aggressive sales targets and this damaged the brand. (FT)
  • Nissan’s limited edition GT-R50 is going into production soon – and you can still order one. (ItalDesign)
  • Although Nissan will be introducing some plug-in hybrids in Europe, executives say the firm views the technology as a stopgap until battery electric cars fall in price. (Auto Express)
  • Appointed Renault’s Hadi Zablit as the general secretary for the Renault-Nissan-Mitsubishi alliance. (Renault)
  • Nissan and Renault both want to concentrate on improving their financial performance before returning to the subject of the correct capital structure for the alliance. (FT)

PSA (includes Opel/Vauxhall) (history)

  • Dongfeng reportedly plans to sell all or part of its stake in PSA. (Reuters)
  • Made some changes to Opel’s supervisory board, with Group CEO Tavares stepping away and PSA’s HR head becoming the new chairman. (Opel)
  • Opel says owners of the all-electric Corsa will have far lower running costs that for traditionally-powered models, but the Lion’s share of the benefit comes from the government grant. (Opel)

Renault (history)

  • Investing in Nino Robitcs, a developer of motorised mobility devices. (Renault)
  • Appointed Renault’s Hadi Zablit as the general secretary for the Renault-Nissan-Mitsubishi alliance. (Renault)
  • Nissan and Renault both want to concentrate on improving their financial performance before returning to the subject of the correct capital structure for the alliance. (FT)

Tata (includes JLR) (history)

  • Land Rover is reportedly working on two new vehicles to enter the portfolio sometime after 2021 — a high end all-electric SUV that might be branded as a Defender, and a low-end Land Rover sharing many components with the Tata Harrier and (shock horror) possibly available as front wheel drive only. (Autocar)
  • Invested in self-driving vehicle developer Apex.ai. (JLR)
  • Unveiled a major facelift for the F-Type. (JLR)
  • Hot on the heels of Audi, Jaguar has told I-Pace customers that they will be treated to improvements that will boost the range. In Jaguar’s case, only software changes (delivered over the air) are required. (Electrek)

Tesla (history)

  • Elon Musk won the defamation suit brought against him. (Reuters)
  • Tesla said the Chinese government had confirmed that locally-built models will qualify for grants. (Reuters)

Toyota (history)

  • Toyota’s North American sales team say they could shift double the amount of RAV4 plug-in hybrids, but that scare battery supplies are holding them back. (Bloomberg)
  • Invested in the Series B round of existing portfolio company May Mobility. (Deal Street Asia)
  • Announced a series of senior leadership changes. (Toyota)

VW Group (history)

  • Moving European customers to a 24-month servicing cycle. (VW)
  • VW’s offices were raided again by German authorities, seeking evidence about manipulation of diesel emissions. Worryingly, the reported line of questioning was over the EA288 engine — a product that VW have said is completely legal. (Handelsblatt)
  • VW executives said the pace of improvement at German plants was lagging other countries. (Reuters)
  • Reshuffled the design leadership, sort of demoting Porsche’s design chief by taking away his Group-wide role. (VW)
  • Audi says that by 2025, CO2 emissions from the manufacturing process will be reduced by 1.2 tons per car. (Audi)

Other

  • Critics of SAIC’s MG brand beware: the company has taken a dim view of a customer who made a YouTube video of his car being pulled by a donkey after he says the company didn’t fix it properly. MG ominously said it would be taking “appropriate action” because of the damage being done to the brand’s reputation by the stunt. (India Today)
  • Workhorse completed a transaction with Moog that saw it sell the IP to an electric air taxi it was developing and create a JV to sell a drone designed to operate from delivery vehicles. (Workhorse)
  • Mysterious Chinese investment vehicle Qingdao Wudaokou New Energy Industrial Fund took a large stake in Chery’s automotive operations and parent company. (Deal Street Asia)
  • Aston Martin is reportedly the subject of interest from the owner of the Racing Point F1 team. (Autocar) The news came at the same time the company’s new Welsh factory opened. (AML)

News about other companies and trends

Economic / Political News

  • November US light vehicle SAAR of 17.09 million units fell (1.8)% versus prior year. (Wards)
  • UK passenger car registrations of 156,621 units in November fell (1.3)% year-over-year. (SMMT)
  • November passenger car registrations in Germany of 299,127 units rose 9.7% versus prior year. (KBA)
  • French November passenger car sales of 172,735 units rose 0.7% year-over-year, despite fewer selling days. (CCFA)
  • Passenger car sales in Italy during November reached 150,587 units, a 2.2% increase over prior year. (UNRAE)
  • Spanish passenger car registration of 93,158 units in November rose 2.3% on a year-over-year basis. (ANFAC)
  • Kansas City, USA, will make public transport free at the point of use. (Curbed)

Suppliers

  • Nidec completed the acquisition of motor manufacturer Roboteq. (Nidec)
  • Garrett is suing former parent Honeywell over an asbestos indemnity Garrett says was imposed on the company just before spin-off. (Garrett)

Dealers

Ride-Hailing, Car Sharing & Rental (history)

  • Uber released a safety report detailing the number of incidents such as sexual assaults and deaths of passengers and drivers. The company believes that it compares favourable to US national averages, or figures from similar services, but admits that more can be done to keep stakeholders safe. (Uber) There was some criticism that the data only covers Uber’s definition of active service. (TechCrunch)
  • Ride hailing firm Arcade City is relaunching services. (ABS-CBN)
  • MVL’s blockchain-based ride-hailing service Tada raised $5 million. (MVL)
  • Ford is dramatically scaling back its GoRide Health non-emergency ambulance service and shifting the brand to a smaller scheme testing autonomous vehicles. It was only in May that Ford heralded the scheme’s expansion to more US cities. (TechCrunch)
  • May Mobility raised $50 million from investors including Toyota and BMW. (Deal Street Asia)
  • Daimler and Geely’s Chinese ride hailing joint venture is called StarRides. (Daimler)

Driverless / Autonomy (history)

  • Waymo says it has completed 100,000 autonomous taxi journeys. (Bloomberg)
  • European car making trade body ACEA published a wish list of things it hopes governments will do to encourage automated driving. The car companies seem unclear as to how the timeline will develop, even if they get everything they want; ACEA’s plan moves year-by-year up until 2028, at which point it leaps to 2050. (ACEA)
  • Volvo Group (the one that makes trucks) is investing in self-driving vehicle developer Apex.ai, alongside JLR. (Volvo) It also put money into VC fund Autotech Ventures. (Volvo)
  • Uber has applied for a patent for a robotic car cleaner that would be stored in the boot (trunk). (Business Insider)

Electrification (history)

  • ABT and Schaeffler formed a joint venture to modify VW-brand vehicles to become all-electric. (Schaeffler)
  • Ahamani Group and Renon formed a JV to guild a 200 MWh battery pack factory in India. (Autocar)
  • Toyota’s North American sales team say they could shift double the amount of RAV4 plug-in hybrids, but that scare battery supplies are holding them back. (Bloomberg)
  • Hyundai announced a new set of product objectives called Strategy 2025. The headline was a beefed-up target for electric vehicles — by 2025 the aim is now to sell 670,000 FCEVs and BEVs annually (previously it was over 560,000 BEVs and an unspecified number of FCEVs) and be in the top three EV manufacturers globally (given Tesla’s current volumes, and VW’s aspirations, Hyundai would have to be next best). By 2035, Hyundai believes, electric vehicles will be mainstream in emerging markets. (Hyundai)

Connectivity

  • BMW changed tack on Apple CarPlay and will now off the smartphone add-on free with latest level infotainment systems. Customers who have purchased subscriptions will have the featured enabled forever without charge. Owners of older vehicles will however have to stump up some cash or go without — even though BMW could enable the system remotely if it wanted to. (Autocar)

Other

  • Nikola and Iveco unveiled the fuel cell powered truck the pair are set to sell in Europe. (Italdesign)

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

Auto Industry Briefing — Our Most Recent Edition

Blurry maps give rubbish directions; customers seeing dealers less often; and electric cars in emerging markets. Please enjoy our auto industry and mobility briefing for 2nd December to 8th December 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)

  • Invested in the Series B round of existing portfolio company May Mobility. (Deal Street Asia)
  • Spending €400 million to build the iNEXT in Dingolfing, Germany. (BMW)
  • Changed tack on Apple CarPlay and will now off the smartphone add-on free with latest level infotainment systems. Customers who have purchased subscriptions will have the featured enabled forever without charge. Owners of older vehicles will however have to stump up some cash or go without — even though BMW could enable the system remotely if it wanted to. (Autocar)
  • Suing Valeo and Denso for price fixing on air conditioning parts. (Reuters)
  • Reportedly the target of a hacking attack by a Vietnamese group. BMW says it knew of the intrusion and was keeping a close eye on the perpetrators to see what they would get up to. (ZDNet)

Daimler (history)

  • Started battery production in Thailand. (Daimler)
  • Daimler and Geely’s Chinese ride hailing joint venture is called StarRides. (Daimler)
  • Two thirds of Daimler’s planned headcount reductions will come in Germany, according to union leaders. (Reuters)

FCA (history)

  • Looks set for a fight with Italian tax authorities over the value of its US assets. FCA says that even if it loses the case, there won’t be a cash impact. (Detroit News)

Ford (history)

  • Ford is dramatically scaling back its GoRide Health non-emergency ambulance service and shifting the brand to a smaller scheme testing autonomous vehicles. It was only in May that Ford heralded the scheme’s expansion to more US cities. (TechCrunch)
  • Ford says it has recruited 3,000 technology specialists in the last three years. (Ford)
  • Recalling over 250,000 F-Series trucks because the tailgate might open by mistake. Around 4,000 Explorers and Lincoln Navigators were also recalled because of fuel leaks. (Ford)
  • Developed a way to use waste produced by roasting coffee beans in non-visible plastic parts. Ford hopes that McDonalds will send lots of the stuff its way. (Ford)
  • A presentation to a group of investors showed neatly how Ford had evolved its intended all-electric vehicle design into the Mach E (actually not all that much). (Ford – P12 to P14)

Geely (includes Volvo) (history)

  • Daimler and Geely’s Chinese ride hailing joint venture is called StarRides. (Daimler)

General Motors (history)

  • GM and LG Chem are investing $2.3 billion in a new joint venture factory for batteries with an annual capacity of 30 GWh. The chosen site is in Lordstown, where GM has just sold off a vehicle plant and the output is destined for the forthcoming line of large electric vehicles GM says it will launch in 2021. (GM)
  • Intends to relocate around half of the employees at the Detroit-Hamtramck, USA, plant once production of conventional models ends in early 2020, indicating lower volume expectations for the all-electric vehicles that will follow. (Fox)
  • Agreed to sell its stake in a Russian JV to partner Avtovaz, allowing GM to exit the country. (Reuters)

Hyundai / Kia (history)

  • Hyundai announced a new set of product objectives called Strategy 2025. The headline was a beefed-up target for electric vehicles — by 2025 the aim is now to sell 670,000 FCEVs and BEVs annually (previously it was over 560,000 BEVs and an unspecified number of FCEVs) and be in the top three EV manufacturers globally (given Tesla’s current volumes, and VW’s aspirations, Hyundai would have to be next best). The target operating margin for the automotive business in 2025 is 8% with a 5% global market share. Hyundai believes it needs to rest on two pillars — hardware and services — in an echo of Ford’s strategy circa 2016. Perhaps the most adventurous target set by the strategy is that by 2035, electric vehicles will be mainstream in emerging markets. (Hyundai)
  • Reportedly the target of a hacking attack by a Vietnamese group. (ZDNet)

Nissan (includes Mitsubishi) (history)

  • Nissan told US office staff not to turn up for work at the start of 2020, hoping to cut costs. (Detroit News)
  • Nissan’s recently departed CEO says the company discounted the Leaf too heavily to meet aggressive sales targets and this damaged the brand. (FT)
  • Nissan’s limited edition GT-R50 is going into production soon – and you can still order one. (ItalDesign)
  • Although Nissan will be introducing some plug-in hybrids in Europe, executives say the firm views the technology as a stopgap until battery electric cars fall in price. (Auto Express)
  • Appointed Renault’s Hadi Zablit as the general secretary for the Renault-Nissan-Mitsubishi alliance. (Renault)
  • Nissan and Renault both want to concentrate on improving their financial performance before returning to the subject of the correct capital structure for the alliance. (FT)

PSA (includes Opel/Vauxhall) (history)

  • Dongfeng reportedly plans to sell all or part of its stake in PSA. (Reuters)
  • Made some changes to Opel’s supervisory board, with Group CEO Tavares stepping away and PSA’s HR head becoming the new chairman. (Opel)
  • Opel says owners of the all-electric Corsa will have far lower running costs that for traditionally-powered models, but the Lion’s share of the benefit comes from the government grant. (Opel)

Renault (history)

  • Investing in Nino Robitcs, a developer of motorised mobility devices. (Renault)
  • Appointed Renault’s Hadi Zablit as the general secretary for the Renault-Nissan-Mitsubishi alliance. (Renault)
  • Nissan and Renault both want to concentrate on improving their financial performance before returning to the subject of the correct capital structure for the alliance. (FT)

Tata (includes JLR) (history)

  • Land Rover is reportedly working on two new vehicles to enter the portfolio sometime after 2021 — a high end all-electric SUV that might be branded as a Defender, and a low-end Land Rover sharing many components with the Tata Harrier and (shock horror) possibly available as front wheel drive only. (Autocar)
  • Invested in self-driving vehicle developer Apex.ai. (JLR)
  • Unveiled a major facelift for the F-Type. (JLR)
  • Hot on the heels of Audi, Jaguar has told I-Pace customers that they will be treated to improvements that will boost the range. In Jaguar’s case, only software changes (delivered over the air) are required. (Electrek)

Tesla (history)

  • Elon Musk won the defamation suit brought against him. (Reuters)
  • Tesla said the Chinese government had confirmed that locally-built models will qualify for grants. (Reuters)

Toyota (history)

  • Toyota’s North American sales team say they could shift double the amount of RAV4 plug-in hybrids, but that scare battery supplies are holding them back. (Bloomberg)
  • Invested in the Series B round of existing portfolio company May Mobility. (Deal Street Asia)
  • Announced a series of senior leadership changes. (Toyota)

VW Group (history)

  • Moving European customers to a 24-month servicing cycle. (VW)
  • VW’s offices were raided again by German authorities, seeking evidence about manipulation of diesel emissions. Worryingly, the reported line of questioning was over the EA288 engine — a product that VW have said is completely legal. (Handelsblatt)
  • VW executives said the pace of improvement at German plants was lagging other countries. (Reuters)
  • Reshuffled the design leadership, sort of demoting Porsche’s design chief by taking away his Group-wide role. (VW)
  • Audi says that by 2025, CO2 emissions from the manufacturing process will be reduced by 1.2 tons per car. (Audi)

Other

  • Critics of SAIC’s MG brand beware: the company has taken a dim view of a customer who made a YouTube video of his car being pulled by a donkey after he says the company didn’t fix it properly. MG ominously said it would be taking “appropriate action” because of the damage being done to the brand’s reputation by the stunt. (India Today)
  • Workhorse completed a transaction with Moog that saw it sell the IP to an electric air taxi it was developing and create a JV to sell a drone designed to operate from delivery vehicles. (Workhorse)
  • Mysterious Chinese investment vehicle Qingdao Wudaokou New Energy Industrial Fund took a large stake in Chery’s automotive operations and parent company. (Deal Street Asia)
  • Aston Martin is reportedly the subject of interest from the owner of the Racing Point F1 team. (Autocar) The news came at the same time the company’s new Welsh factory opened. (AML)

News about other companies and trends

Economic / Political News

  • November US light vehicle SAAR of 17.09 million units fell (1.8)% versus prior year. (Wards)
  • UK passenger car registrations of 156,621 units in November fell (1.3)% year-over-year. (SMMT)
  • November passenger car registrations in Germany of 299,127 units rose 9.7% versus prior year. (KBA)
  • French November passenger car sales of 172,735 units rose 0.7% year-over-year, despite fewer selling days. (CCFA)
  • Passenger car sales in Italy during November reached 150,587 units, a 2.2% increase over prior year. (UNRAE)
  • Spanish passenger car registration of 93,158 units in November rose 2.3% on a year-over-year basis. (ANFAC)
  • Kansas City, USA, will make public transport free at the point of use. (Curbed)

Suppliers

  • Nidec completed the acquisition of motor manufacturer Roboteq. (Nidec)
  • Garrett is suing former parent Honeywell over an asbestos indemnity Garrett says was imposed on the company just before spin-off. (Garrett)

Dealers

Ride-Hailing, Car Sharing & Rental (history)

  • Uber released a safety report detailing the number of incidents such as sexual assaults and deaths of passengers and drivers. The company believes that it compares favourable to US national averages, or figures from similar services, but admits that more can be done to keep stakeholders safe. (Uber) There was some criticism that the data only covers Uber’s definition of active service. (TechCrunch)
  • Ride hailing firm Arcade City is relaunching services. (ABS-CBN)
  • MVL’s blockchain-based ride-hailing service Tada raised $5 million. (MVL)
  • Ford is dramatically scaling back its GoRide Health non-emergency ambulance service and shifting the brand to a smaller scheme testing autonomous vehicles. It was only in May that Ford heralded the scheme’s expansion to more US cities. (TechCrunch)
  • May Mobility raised $50 million from investors including Toyota and BMW. (Deal Street Asia)
  • Daimler and Geely’s Chinese ride hailing joint venture is called StarRides. (Daimler)

Driverless / Autonomy (history)

  • Waymo says it has completed 100,000 autonomous taxi journeys. (Bloomberg)
  • European car making trade body ACEA published a wish list of things it hopes governments will do to encourage automated driving. The car companies seem unclear as to how the timeline will develop, even if they get everything they want; ACEA’s plan moves year-by-year up until 2028, at which point it leaps to 2050. (ACEA)
  • Volvo Group (the one that makes trucks) is investing in self-driving vehicle developer Apex.ai, alongside JLR. (Volvo) It also put money into VC fund Autotech Ventures. (Volvo)
  • Uber has applied for a patent for a robotic car cleaner that would be stored in the boot (trunk). (Business Insider)

Electrification (history)

  • ABT and Schaeffler formed a joint venture to modify VW-brand vehicles to become all-electric. (Schaeffler)
  • Ahamani Group and Renon formed a JV to guild a 200 MWh battery pack factory in India. (Autocar)
  • Toyota’s North American sales team say they could shift double the amount of RAV4 plug-in hybrids, but that scare battery supplies are holding them back. (Bloomberg)
  • Hyundai announced a new set of product objectives called Strategy 2025. The headline was a beefed-up target for electric vehicles — by 2025 the aim is now to sell 670,000 FCEVs and BEVs annually (previously it was over 560,000 BEVs and an unspecified number of FCEVs) and be in the top three EV manufacturers globally (given Tesla’s current volumes, and VW’s aspirations, Hyundai would have to be next best). By 2035, Hyundai believes, electric vehicles will be mainstream in emerging markets. (Hyundai)

Connectivity

  • BMW changed tack on Apple CarPlay and will now off the smartphone add-on free with latest level infotainment systems. Customers who have purchased subscriptions will have the featured enabled forever without charge. Owners of older vehicles will however have to stump up some cash or go without — even though BMW could enable the system remotely if it wanted to. (Autocar)

Other

  • Nikola and Iveco unveiled the fuel cell powered truck the pair are set to sell in Europe. (Italdesign)

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Find our archive here.

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

Auto Industry Briefing — week ending 1st December 2019

Rosy assumptions for fuel cells; car companies vs capitalism; and is this how FCA butters up acquisition targets? Please enjoy our auto industry and mobility briefing for 25th November to 1st December 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)

  • Changed the structure of employee bonus payments so that they are lower, linked to dividends and employees with longer contractual hours get the same fixed level as their co-workers. BMW’s CEO hopes this will avoid the need for “drastic measures”. (Xinhua)
  • confirmed the location of the new plant being built in China (in partnership with Great Wall) that will build the forthcoming Mini E. The factory will have capacity for 160,000 units per year. (BMW)

Daimler (history)

  • Daimler announced it had reached an agreement with German unions to reduce staff cost and jobs, without providing any details. Although voluntary redundancies appear inevitable, the press release proudly said the 2029 employment guarantee was untouched. The company is asking workers to reduce their hours (e.g. from 40 hour per week contracts) and will let go of temporary staff. (Daimler) Executives told journalists that the number of redundancies would be in five digits. (The Guardian)

FCA (history)

  • Reached a tentative agreement with the UAW. (FCA) FCA apparently agreed to around 8,000 new jobs in the US and unlike GM and Ford won’t close any plants. (Detroit Free Press)
  • PSA and FCA have a 50-strong team working to finalise the merger details. (Reuters)
  • Reportedly has been asking distressed electric car start-ups (amongst them Faraday Future and Seres / SF Motors) to build demonstration versions of their electric powertrains integrated into FCA models. (The Verge)
  • Tried to assuage union concerns about the risk to jobs in Italy arising from the PSA merger by saying 90% of the investments announced in the country were already underway. (Reuters)
  • Recalling over 50,000 Fiat 500 cars because the cable that controls the gearshift might come loose. (FCA) FCA is also recalling 100,000 vans because the air conditioning could catch fire. (FCA)

Ford (history)

  • A new Lincoln SUV program will apparently use a Rivian platform. (Reuters)
  • Received a fine of approximately $2.5 million from the South African regulator because Kugas sold in the country kept catching fire. (Xinhua)
  • Recalling over 75,000 Ranger pickup trucks to fix problems with the taillights. (Ford)

Honda (history)

  • Launched a minor refresh of the Civic in Europe. (Honda)

Hyundai / Kia (history)

  • Investing $1.55 billion to build a new plant in Indonesia and develop a portfolio suited to local tastes. (Hyundai)

Mazda

  • Mazda says sportscar customers are changing and that the formula for the MX-5 might need to change with them. The company appears to be struggling with the cost and weight trade-offs of an electric powertrain. (Autocar)

Nissan (includes Mitsubishi) (history)

  • The head honchos of Nissan, Renault and Mitsubishi thrashed out a new organisation structure that will see combined activities led by a General Secretary (yet to be appointed). (Nissan)
  • Is automating a series of jobs in factories that have traditionally required extensive training or put physical strain on employees such as headliner and powertrain installation on assembly, plus sealant application in the paint shop. Nissan says it has developed special ways to make minute adjustments and detect clips locking in place. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Faurecia held a capital markets day, explaining how the footprint will be reduced to improve profitability and giving an overview of some of the next generation technologies the company will offer. Faurecia confidently predicts that by 2030 fuel cells will have comparable total cost of ownership to all-electric powertrains in commercial vehicles (p63). This analysis forecasts a drop of more than two thirds in the price and operating cost of fuel cells, the justification for this extreme decline wasn’t made public. By 2030 Faurecia thinks for commercial vehicles, fuel cell market share might be almost as high as all-electric share. (Faurecia)
  • PSA and FCA have a 50-strong team working to finalise the merger details. (Reuters)
  • Reportedly closing in on a deal to sell its share in Chinese JV Capsa (with Changan) to Baodeng. The plan would be for the factory to continue producing DS models on a contract manufacturer basis. (Les Echos)
  • Has contracts in place that guarantee battery supply for the next three years, but CEO Tavares is concerned about the longer term outlook. (Automotive News)

Renault (history)

  • Unveiled a mildly refreshed Espace large MPV. Apparently, 60% of vehicles sold are of the top trim level. (Renault)
  • The head honchos of Nissan, Renault and Mitsubishi thrashed out a new organisation structure that will see combined activities led by a General Secretary (yet to be appointed). (Nissan)
  • Removing the option to lease the battery for the Zoe in the UK because residual values are stronger than expected, reducing the lease payments for the car itself. (Fleet News)

Tata (includes JLR) (history)

  • Revealed an updated version of the F-Type sports car. (Jaguar)
  • JLR said all vehicles now being sold are connected and capable of over the air updates. Some owners of recently purchased cars will receive free upgrades to bring their vehicles up to the latest standard. (JLR)

Tesla (history)

  • Rumoured to have pulled forward orders for mass production parts to support Model Y to early 2020. (Electrek)
  • Now claims 250,000 orders for the Cybertruck. (Reuters)
  • Has apparently begun deploying mobile charging stations powered by a whopping 3 MWh battery. (Electrek)
  • CEO Musk says the Cybertruck is the last unveiling for “a while”. The company still needs to deliver the previously revealed Model Y, Semi Truck, Roadster and Cybertruck into production. (Electrek)
    • Significance: If there is truly no more product forthcoming in the next two to three years, this implies that either Tesla believes the Model S and Model X can continue to hold their own against a swelling cohort of new competition, or the business is resigned to seeing their market share wilt.

Toyota (history)

  • Toyota Tsusho joined the Series C round of Indian bus aggregator app Shuttl. (Deal Street Asia)
  • Dropped non-hybrid versions of the Corolla from the European line-up. (Autocar)

VW Group (history)

  • Sold the 100,000th all-electric Golf, a fantastic sales performance from a model most would forget to mention in a line-up of top selling electric cars. Full year 2019 sales are likely to top 30,000 units. (VW)
  • Audi reached an agreement with German unions to extend the job guarantee to 2029, but only on the proviso that 9,500 German positions are eliminated by 2025. Capacities at Audi’s German plants will be trimmed too, although the firm stresses that it will continue to hire and train younger workers. Audi says the measures will save €6 billion by 2029. (Audi)
  • Audi’s next product plan calls for €37 billion of R&D and CapEx between 2020 – 2024, €12 billion of this will be for electric vehicles. (Audi)
  • The head of VW’s component division is looking for a partner to help with the seating business. (Automotive News)
  • Audi has discovered some improvements that boost the eTron’s range by 25 km (under WLTP). The changes involve new hardware and software. (Audi)
    • Significance: The changes indicate that Audi has taken unflattering comparisons to Tesla seriously.

Other

  • Sono Motors hopes to raise €50 million in a crowdfunding campaign. If successful, the company hopes to be able to use a similar route to raise further funding as the program progresses. Sono says it has discovered that institutional investors are too focused on short term profits. Sono’s unique approach is to promise early buyers that they will share in the profits made from future sales. (Sono Motors)
  • Bollinger Motors says the breakeven point for the B1 and B2 program is under 3,000 units per year. Initial orders are around 80% for the SUV version (B1) and 20% pickup. (Trucks)
  • Fisker aspires to be the number one e-mobility provider on the planet and will offer its entry level product, Ocean, on a flexible $380 per month lease. The car will have an intriguing “California mode”, which supposedly gives the feeling of being in a convertible without having to take the roof off. (Fisker)
  • StreetScooter says it will start selling electric vans in the USA from early 2020. (Reuters)

News about other companies and trends

Suppliers

  • Trelleborg is acquiring Tritec Seal. (Autocar)
  • Panasonic is selling its semiconductor division to Nuvoton. (Panasonic)
  • Autoliv has a new CFO. (Autoliv)

Dealers

  • Indian used car website Spinny is finalising a round to raise $50 million. (Deal Street Asia)
  • CarDekho, a used car website, acquired Carmudi Philippines. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental (history)

  • Uber lost its operating licence in London, again. Uber will appeal the decision but the regulator has pledged to stand firm, citing numerous instances of what it considers to be safety failures. (BBC)
    • Significance: Alongside New York, London has shown a willingness to flex its regulatory muscles regardless of a company’s size. The city appears interested in new modes of transport but doesn’t view early entry or global reach as a good enough reason for market access to continue if it is unhappy with an operator. So long as alternative providers exist, this seems a viable regulatory model and exponents of first mover advantage would be unwise to discount it.
  • An analysis of fare data in Chicago suggested that ride hailing companies are increasing the prices for shared rides more than for single user journeys. (Reuters)
  • Shuttl raised $18 million from Toyota Tsusho and other investors. (Deal Street Asia)

Driverless / Autonomy (history)

  • Cognitive Technologies and Sberbank have formed a joint venture to develop self-driving cars. (Reuters)

Electrification (history)

  • FCA has reportedly asked distressed electric car start-ups (amongst them Faraday Future and Seres / SF Motors) to build demonstration versions of their electric powertrains integrated into FCA models. (The Verge)
  • Faurecia confidently predicts that by 2030 fuel cells will have comparable total cost of ownership to all-electric powertrains in commercial vehicles (p63). This analysis forecasts a drop of more than two thirds in the price and operating cost of fuel cells, the justification for this extreme decline wasn’t made public. By 2030 Faurecia thinks for commercial vehicles, fuel cell market share might be almost as high as all-electric share. (Faurecia)
  • Tesla has apparently begun deploying mobile charging stations powered by a whopping 3 MWh battery. (Electrek)

Connectivity

  • JLR said all vehicles now being sold are connected and capable of over the air updates. Some owners of recently purchased cars will receive free upgrades to bring their vehicles up to the latest standard. (JLR)

Other

  • Good news for would-be buyers of aftermarket keys that have lusted after Awain’s bejewelled offerings but baulked at the asking prices of up to €500,000, or simply didn’t want to seem too flashy. They now offer an entry level model which retails at only €10,000. (Awain)
  • Indian two-wheeler manufacturer Bajaj invested $8 million in bicycle and scooter rental firm Yulu. (Deal Street Asia)
  • Bicycle rental firm Bounce raised $150 million. (Deal Street Asia)
  • Airbus thinks it might have an aeroplane with partial electric power in production by 2035. (Reuters)
  • The Coup scooter rental service owned by Bosch is shutting down. (TechCrunch)

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Auto Industry Briefing — week ending 24th November 2019

Ride hailing companies acting like utilities; PSA surprisingly bullish on small electric cars; and Tesla keeps it simple. Please enjoy our auto industry and mobility briefing for 18th November to 24th November 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)

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

Daimler (history)

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

FCA (history)

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

Ferrari

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

Ford (history)

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

General Motors (history)

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

PSA (includes Opel/Vauxhall) (history)

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

Renault (history)

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

Tata (includes JLR) (history)

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

Tesla (history)

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

Toyota (history)

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

VW Group (history)

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

Other

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

News about other companies and trends

Economic / Political News

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

Suppliers

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

Ride-Hailing, Car Sharing & Rental (history)

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

Driverless / Autonomy (history)

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

Electrification (history)

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

Connectivity

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

Other

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

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Auto Industry Briefing — week ending 17th November 2019

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

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

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

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

Find our archive here.

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News about the major automakers

BMW (history)

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

Daimler (history)

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

FCA (history)

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

Ferrari

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

Ford (history)

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

General Motors (history)

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

Honda (history)

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

Hyundai / Kia (history)

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

Nissan (includes Mitsubishi) (history)

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

PSA (includes Opel/Vauxhall) (history)

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

Renault (history)

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

Tata (includes JLR) (history)

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

Tesla (history)

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

Toyota (history)

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

VW Group (history)

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

Other

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

News about other companies and trends

Suppliers

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

Dealers

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

Ride-Hailing, Car Sharing & Rental (history)

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

Driverless / Autonomy (history)

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

Electrification (history)

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

Connectivity

Other

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

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Auto Industry Briefing — week ending 10th November 2019

Good news for internal combustion engines; realistic break even figures for niche producers; and futuristic concepts that need more work. Please enjoy our auto industry and mobility briefing for 4th November to 10th November 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 Q3 2019 automotive revenue of €16.7 billion, up 11% on a year-over-year basis and automotive EBIT of €1.5 billion, up 64%. (BMW)
  • BMW remains “strongly committed” to meeting 2021 CO2 standards. (BMW) The CFO said that fines “are definitely not a strategic option”. (Seeking Alpha)
  • BMW believes that the vehicle will be the most profitable part of any future mobility ecosystem. (Seeking Alpha)

Daimler (history)

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

FCA (history)

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

Ferrari

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

Ford (history)

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

Geely (includes Volvo) (history)

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

Honda (history)

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

Hyundai / Kia (history)

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

Nissan (includes Mitsubishi) (history)

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

PSA (includes Opel/Vauxhall) (history)

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

Renault (history)

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

Suzuki

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

Tata (includes JLR) (history)

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

Toyota (history)

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

VW Group (history)

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

Other

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

News about other companies and trends

Economic / Political News

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

Suppliers

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

Dealers

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

Ride-Hailing, Car Sharing & Rental (history)

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

Driverless / Autonomy (history)

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

Electrification (history)

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

Connectivity

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

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

Auto Industry Briefing — week ending 3rd November 2019

Promiscuous customers; visions of an all-powerful Tavares; and why do carmakers hate batteries but love hydrogen? Please enjoy our auto industry and mobility briefing for 28th October to 3rd November 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)

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

Daimler (history)

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

FCA (history)

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

Ford (history)

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

General Motors (history)

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

Honda (history)

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

Hyundai / Kia (history)

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

Mazda

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

Nissan (includes Mitsubishi) (history)

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

PSA (includes Opel/Vauxhall) (history)

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

Tata (includes JLR) (history)

Toyota (history)

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

VW Group (history)

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

Other

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

News about other companies and trends

Suppliers

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

Dealers

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

Ride-Hailing, Car Sharing & Rental (history)

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

Driverless / Autonomy (history)

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

Electrification (history)

  • EDF is acquiring UK charging network Pivot Power. (Reuters)
  • ABB is taking over Chinese charging provider Chargedot. (Autocar)
  • Hyundai invested in three companies focused on hydrogen fuel cell technologies: Impact Coatings; H2Pro and GRZ Technologies. (Hyundai)

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Auto Industry Briefing — week ending 27th October 2019

Yamaha says cars are a waste of time and money; remote control tanks with limited range; and Tesla gets all mushy about big cars. Please enjoy our auto industry and mobility briefing for 21st October to 27th October 2019. A PDF version can be found here.

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

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

Find our archive here.

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News about the major automakers

Daimler (history)

  • Reported Q3 2019 revenue of €43.4 billion (up 8% versus prior year) and EBIT of €2.7 billion, also up 8% YoY. Despite the improved headline figures, Daimler continues to worry about the outlook and said the truck division will perform more poorly in the full year than previously thought — the Q3 2019 truck order book has shrunk by around one third compared with the same period in 2018. (Daimler)
  • Daimler believes it is feasible to meet 2020 EU CO2 targets, although executives caution that there is still a risk that unforeseen circumstances could hamper the road map in place. The firm is more relaxed about 2021 and beyond because it will have a broader electric vehicle offering by then. (Seeking Alpha)
  • The capital markets day in November will be the culmination of nine months planning. (Seeking Alpha)
  • A shipment of 900 Mercedes cars was sent packing by Australian customs officials after stowaway snails were found hiding in them. (The Guardian)

FCA (history)

  • Investing €50 million to produce battery packs at the Mirafiori, Italy, plant. (FCA)

Ford (history)

  • Ford announced Q3 2019 sales of 1.244 million vehicles, down (8)% on a year-over-year basis. Revenue of $37 billion fell (2)% YoY and net income of $0.4 billion dropped (60)% YoY. Ford revised full year guidance down, blaming higher warranty costs and increased discounting in the US. (Ford)
  • The UAW announced Ford as the next negotiating target. (Detroit News)
  • A slide in Ford’s Q3 earnings deck revealed that the Russia JV will become part of the international markets group when reporting starts in 2020. (Ford)
    • Significance: This is presumably because Russia (where Ford has run up heavy losses) is regarded as an emerging market when compared with other markets traditionally within the European division. Confusingly, the (profitable) Turkish joint venture is being treated somewhat differently and will remain in European reporting.
  • Ford has learned “a lot” from self-driving trials. Amongst key insights gained by the team are that takeaway orders are delivered to privately-owned dwellings — often in the suburbs. Ford’s initial assumption had been that people would order food to locations close to the restaurant. (Ford)
    • Significance: Ford could have learned the pattern of food deliveries without any self-driving vehicles involved, offering such lessons as proof of the depth of Ford’s testing instead serves to highlight how inefficiently the firm’s self-driving experiments are planned.

Geely (includes Volvo) (history)

  • Volvo reported Q3 2019 revenue of 64 billion SEK (about $6.7 billion), 14.2% better than prior year, and net income of 2 billion SEK (about $244 million). (Volvo)
  • Volvo is absolutely sure that the all-electric version of the XC40 will be profitable and aims to boost take-up of plug-in hybrids by refunding charging costs for the first 12 months. (Detroit News)

General Motors (history)

  • UAW members approved GM’s new contract and returned to work. (CNBC)

Honda (history)

  • Appeared to bring forward the target for electrification of European vehicles from 2025 to 2022; on closer inspection Honda committed to the earlier date for all “mainstream models”. Honda also confirmed that by 2022 there would be two battery electric cars on sale in Europe. (Honda)
  • Launched the new Fit / Jazz B-Car, which will be exclusively sold as a (nearly full time) motor-as-generator powered hybrid. Emissions figures haven’t yet been released but rivals will take a keen interest when they are. (Honda)
    • Significance: Introducing a second motor-as-generator model (with some direct drive at high speed) indicates Honda’s confidence that mainstream consumers will be happy with the powertrain (something Nissan’s experience in the Japanese market supports).

Hyundai / Kia (history)

  • Kia sold 691,151 vehicles in Q3 2019, up 0.6% on a year-over-year basis. Revenue of 15 trillion KRW (about $12.9 billion) rose 7.2% and net profit of 325 billion KRW (about $280 million) was 9.4% better. (Kia)
  • Hyundai sold 1.1 million units in 2019, a (1.6)% decline versus a year earlier. Revenue of 27 trillion KRW (about $23 billion) increased 10.4% year-over-year thanks to improved mix and operating income of 379 billion KRW (about $320 million) rose 31% — which Hyundai said would have been higher if not for one off costs.  (Hyundai)
  • Hyundai showed some of its latest thinking on electrification and is now targeting sales of 560,000 all-electric vehicles in 2025. (Hyundai)
  • Lidar developer Velodyne received $50 million in funding from Hyundai Mobis. (Hyundai Mobis)
  • Hyundai is thinking about increasing its share in its Chinese heavy vehicle joint venture. (Reuters)

Mazda

  • Unveiled the all-electric MX-30 SUV which incorporates RX-8 style suicide rear doors. The car’s 35.5 kWh battery is significantly smaller than forthcoming competitor products. (Mazda)

Nissan (includes Mitsubishi) (history)

  • Despite previously announced plans to expand Datsun’s portfolio, Nissan reportedly now intends to stop development of new products and drop the brand when current cars’ lifecycle ends. (Autocar)
  • Nissan showed two concepts in Tokyo, both all-electric: Ariya, an SUV; and IMk, a small people carrier. (Nissan)
  • Mitsubishi also showed two concepts in Tokyo: an electric dune buggy called Mi-Tech and a preview of the next generation of Japanese market kei cars. (Mitsubishi)
  • Reportedly open to offers for factories in Barcelona, Spain and Sunderland, UK as part of a bid to slim down Nissan’s footprint in Europe. (Bloomberg)
    • Significance: With the likes of SAIC’s (former Rover) Longbridge factory, NEVS’s nearly empty (former Saab) Trollhättan site and Nedcar failing to generate any interest, it isn’t clear why the Nissan facilities would provoke a different reaction… unless there is a hard Brexit and you are a French manufacturer with a decent UK market share who sells products made on the same platforms Sunderland is tooled up for…

PSA (includes Opel/Vauxhall) (history)

  • Reported Q3 2019 revenue of €15.6 billion, 1% better than prior year. Automotive revenue of €11.8 billion barely budged; volume reductions and bad news exchange were balanced by positive mix. (PSA)
  • Offloaded the remainder of Peugeot Motorcycles to Mahindra & Mahindra. (PSA)
  • In the earnings call, PSA disclosed that Opel’s R&D contracts with GM will cease in 2021 and said that diesel mix had been steady at around 30% of sales for the last eight months. (Seeking Alpha)
  • Although PSA forecasts that the margin of plug-in hybrid vehicles will be lower than pure ICE powertrains, the firm plans for them to be profitmaking. (Seeking Alpha)

Renault (history)

  • Published Q3 2019 revenue (after earlier announcing headline figures). Renault sold 852,198 vehicles, a drop of (4.4)% on a year-over-year basis. Revenue of €11.3 billion, down (1.6)% YoY contained a (3.9)% YoY drop in the core automotive business excluding the finance company and Avtovaz. Renault said the biggest factor was a drop in sales to partners (primarily Nissan and Iran). (Renault)
  • Reviewing the “Drive The Future” plan, and targets; interim CEO Delbos stated that are no options off the table with the Formula One team and Alpine mentioned as two business areas that will face scrutiny. (Seeking Alpha)
  • Renault will offer fuel cell versions of the Kangoo and Master commercial vehicles — but they will be super expensive… the Kangoo (small) van will cost €48,500, plus sales tax. (Renault)

Tata (includes JLR) (history)

  • Tata (including JLR) reported Q3 2019 (fiscal Q2) revenue of 65,432 cr INR (about $9.2 billion) and PBT of 621 cr INR (about $88 million). (Tata)
  • JLR reported Q3 2019 (fiscal Q2) revenue of £6.1 billion, up 8% on a year-over-year basis. Pre tax profit was £156 million. JLR claim to have made £162 million of year over year structural cost reductions and a £285 million lower investment spending. (JLR)

Tesla (history)

  • Reported Q3 automotive revenue of $5.35 billion, down (13)% on a year-over-year basis despite an increase in sales (but worsening mix between Model 3 and Model S / X). Profit before tax of $176 million was down (35)% YoY, but up on a quarter-over-quarter basis — partly due to reduced overhead and variable costs. (Tesla)
  • For the first time since Q1 2018, Tesla’s customer deposits increased, indicating a potential swell of interest in the Model 3 (especially considering that deposit amounts have been reduced). (Tesla)
  • CEO Musk said Tesla had diverted resources from stationary storage to fix problems with Model 3, resulting in an 18 month development hiatus, but the division was now back firing on all cylinders. Musk believes that the solar and stationary storage groups will eventually rival the automotive side of the business in size. (Seeking Alpha)
  • Aims to reach a production rate of 1,000 Model Y per week by “no later than the middle of 2020”. Tesla says the vehicle bill of material should be about the same as the Model 3, whilst hoping (not unrealistically) average transaction values will be higher. (Seeking Alpha)
  • Elon Musk clarified that his expectation is that by year end, Tesla cars will be capable of driving complex routes “most likely without interventions” (i.e. what many people would recognise as SAE level 3). Tesla hasn’t yet given any details on how the vehicle would hand off to the driver. (Seeking Alpha)
  • Characterised the Model S and Model X as niche products produced for sentimental reasons and without much relevance to Tesla’s future. (Seeking Alpha)

Toyota (history)

  • According to Lexus, the LF-30 previews how electric luxury cars will look in 2030. (Lexus)
  • Without offering any further explanation, Toyota announced an electrified witch’s broomstick could be part of the future mobility portfolio. (Toyota)

VW Group (history)

Other

  • Yamaha no longer has plans to develop cars. (Autocar)
  • Russian ministers believe there is huge demand in the Middle East for the Aurus limousine, claiming 600 orders for the car. (TASS)
  • Neuron added further vehicles to the company’s existing (digitally rendered) announcements: a Semi truck / tractor unit and a “multi purpose electric utility vehicle”. (Neuron)
  • BAIC plans to launch a new brand named Beijing. (Reuters)
  • The suggested price for Bollinger’s SUV and pick-up truck is $125,000. (Bollinger)
    • Significance: Whilst out of the price range for most consumers, the vehicle specification suggests a high variable cost and the lack of direct competition (outside of electric conversions of M-B G-Class) means buyers will be less price sensitive (albeit relatively low in number).

News about other companies and trends

Economic / Political News

  • US officials said that although forthcoming changes to the standards had been billed as weakening fuel economy rules, the elimination of exemptions in outer years could make them harder for OEMs to achieve. (Reuters)
  • UK electric vehicles may get green number plates so that local authorities can more easily recognise vehicles that qualify for reduced price parking. (BBC)

Suppliers

  • Lear reported Q3 2019 revenue of $4.8 billion and adjusted net income of $217 million. (Lear)
  • Goodyear reported Q3 2019 revenue of $3.8 billion, volumes for OEMs dropped (5)% from prior year. (Goodyear)
  • Michelin reported a (4)% drop in shipments to OEMs in Q3 2019 versus a year earlier with the biggest drops coming in the Africa / India / Middle East region. (Michelin)
  • Continental will recognise a €2.6 billion in Q3 2019 financial results, mainly impairments because it thinks the automotive market won’t significantly grow over the next five years. On the bright side, preliminary results say Q3 2019 is about in line with analysts’ expectations. (Continental) The complete spin-off of powertrain arm Vitesco is now the only option on the table. (Continental)
  • Mahle announced further site closures and job losses, mainly due to the decline of traditional powertrains. (Mahle)
  • Nidec reported Q3 2019 revenue of 390 billion JPY (about $3.6 billion) and PBT of 32.6 billion JPY. (Nidec) The full year guidance has been revised downward, but Nidec will increase the dividend. (Nidec)
  • Martinrea announced a collaboration with Chinese casting firm Millison. (Martinrea)

Ride-Hailing, Car Sharing & Rental (history)

  • Lyft’s founders expect the firm to be profitable by Q4 2021. (WSJ)
  • Uber’s CEO says emerging markets will be a source of far greater growth over the next ten years than western countries. (Reuters)
  • Ride hailing firm InstaCar raised an undisclosed sum. (Deal Street Asia)

Driverless / Autonomy (history)

  • Autonomous vehicle developer Zoox raised $200 million. (Forbes)
  • Lidar developer Velodyne received $50 million in funding from Hyundai Mobis. (Hyundai Mobis)
  • Sense Photonics started online sales of a $2,900 short range lidar unit. (Sense)
  • Remote controlled Russian tanks in Syria reportedly demonstrated underwhelming performance, with signals being repeatedly lost. Apparently, controllers can only reliably sit 400m from the tank. (National Interest)
    • Significance: Although part of the explanation could be electronic signal jamming, autonomous vehicle operators intending to take remote control may suffer similar problems in built-up areas (a Russian military program is unlikely to be worse-funded than many of the start-ups involved in this space).
  • Axon says it will offer police forces an automatic number plate recognition system and, so that it can protect the data, it will all be kept in a “secure cloud-based” system so that it cannot be sold. (Axon)
    • Significance: If orders meet Axon’s expectations, this will become one of the initial large scale data collection activities, testing both the ability of the system to learn and Axon’s ability to keep secrets.
  • Elon Musk clarified that his expectation is that by year end, Tesla cars will be capable of driving complex routes “most likely without interventions” (i.e. what many people would recognise as SAE level 3). Tesla hasn’t yet given any details on how the vehicle would hand off to the driver. (Seeking Alpha)
  • Comma.ai says it can develop self-driving cars with a very small team of people, recalling instances of social networks built by handfuls of engineers. (Comma.ai)
    • Significance: The appropriateness of the example depends on whether you believe that the concept of a social network was a similarly original novel project for these (post Facebook) firms, as self-driving is for vehicle developers today
  • Ford has learned “a lot” from self-driving trials. Amongst key insights gained by the team are that takeaway orders are delivered to privately-owned dwellings — often in the suburbs. Ford’s initial assumption had been that people would order food to locations close to the restaurant. (Ford)

Electrification (history)

  • Virtual charging network EV Connect raised $12 million. (EV Connect)

Other

  • Hardt Hyperloop raised an unspecified multi-million dollar amount. (EU Startups)

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Auto Industry Briefing — week ending 20th October 2019

Daimler apps overly generous with location data; OEMs that still won’t commit to meeting CO2 targets; and a battery maker with an optimistic outlook. Please enjoy our auto industry and mobility briefing for 14th October to 20th October 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)

  • CEO Zipse wants to add partners to BMW and Daimler’s joint venture for mobility businesses. (Reuters)

Daimler (history)

  • Daimler’s app reportedly suffered a technical glitch that meant users had access to other people’s data (for a short time). Daimler said it was cached location data so although strangers could see where your car had been, they didn’t know your current location (unless you hadn’t moved).  (TechCrunch)

FCA (history)

  • Will pay $79 million in fines for failing to meet US fuel economy targets in 2017. (Reuters)

Ford (history)

  • Recalling almost 20,000 Ranger pick-up trucks because the air conditioning can catch fire. (Ford)
  • Will make remote connectivity features free for all vehicles, reversing an earlier strategy where users were charged (something many competitors continue to pursue). Ford’s suggestion is that increased customer loyalty will offset the costs of running the infrastructure necessary to enable the service. (Ford)
  • Signed a deal with VW’s Electrify America charging network to allow Ford owners to use their chargers. (Ford)
  • Ford’s forthcoming electric vehicles will only be capable of charging at up to 150 kW, despite Ford being a founder member of the Ionity network that can facilitate 350 kW. (Ford)
  • Ford’s head of mobility said that although the company hopes to meet its declared target of putting autonomous taxis on the road during 2021, there isn’t any pressure being put on the team to scale up after that. (Forbes)

Geely (includes Volvo) (history)

  • Volvo will badge battery electric cars under the Recharge sub-brand. (Volvo)
  • Volvo plans to be carbon neutral by 2040. (Volvo)
  • Volvo’s CEO says that most start-ups “underestimate the challenge” of building a new car. (Telegraph)

General Motors (history)

  • Reached a deal with US unionised workers (who will stay on strike until it is ratified). (GM)
  • Agreed not to close the Detroit-Hamtramck, USA, plant and will build a new electric vehicle there. Factories in Lordstown, Warren and Baltimore will close when their product lifecycle ends. (Detroit Free Press)
  • Rumours swirled that the reprieved plant will build a Hummer badged pick-up and SUV. (Reuters)
  • Working with the US Army on cybersecurity improvements. (GM)

Hyundai / Kia (history)

  • Invested in automotive cybersecurity developer Upstream Security. (Upstream Security)
  • Has developed an adaptive cruise control system that recalibrates itself based on the owner’s behaviour (distance to vehicles in front, rate of acceleration, time to respond to actions of the vehicle in front). Hyundai makes clear that some “unsafe” driver behaviour will be ignored by the system. (Hyundai)
  • Plans to spend $35 billion on new product and M&A by 2023. (Reuters)
  • Kia says that because of shortages of batteries and electric motors it won’t launch the all-electric version of the Soul in the US market until 2021. (Inside EVs)

Mazda

  • Published the detail sustainability report and annual report covering 2018/19. (Mazda)

PSA (includes Opel/Vauxhall) (history)

  • Sold 674,055 vehicles in Q3 2019, a (4)% decline versus a year earlier. (PSA)
  • Citroën thinks that a hard Brexit would reduce UK industry sales by at least 10%, and up to 25%. The Brand also believes that UK dealers must be multi-franchise to be profitable (Automotive Manager) and “a lot” of UK dealers can only make money with an industry level of 2.5 million units or above. (Car Dealer)
  • PSA’s forthcoming all-electric 1 tonne vans will have larger batteries than some competitors are considering — 50 kWh for base models and a 75 kWh longer range (300km WLTP) version. (PSA)
  • Faurecia announced third quarter revenues of €4.2 billion. (Faurecia)

Renault (history)

  • Renault sold 852,699 vehicles in Q3 2019, a (4.4)% decrease on a year-over-year basis. (Renault)
  • Pre-announced Q3 2019 revenues of €11.3 billion, down (1.6)% on a year-over-year basis and issued a profits warning. Renault say that full year revenues will fall about (3)% – (4)% and operating margin will be around 5%. Even worse, the executive team is re-assessing whether it can meet medium term targets.  Renault said the problem was the economy and higher regulatory costs (less clear was why this was a surprise). (Renault)
  • Reorganising the UK sales network, but doesn’t intend to reduce the number of dealer sites. (Automotive Manager)
  • A French minister suggested it was very likely Renault’s new CEO would be an external candidate. (Reuters)
  • Invested in automotive cybersecurity developer Upstream Security. (Upstream Security)

Tata (includes JLR) (history)

  • Tata’s chairman said JLR would not be sold and that although he was interested in new partnerships, Tata wouldn’t give up operational control because automotive was a core business and his job is to “run companies”. (Live Mint)

Tesla (history)

  • Delivery times for US customers imply that Tesla could be adopting a process of producing vehicles for export early in the quarter and US customers later (so that they can all be delivered before the end of the quarter). (Electrek)

Toyota (history)

  • Unveiled the fourth generation of the Yaris B-sized car. (Toyota)
  • Planning to release an ultra-compact all-electric car in Japan in 2020. (Toyota)

VW Group (history)

  • VW Group delivered 2.64 million vehicles in Q3 2019, a 1.1% rise on prior year. (VW)
  • Extended the deadline for proving that sufficient managerial and cultural changes had been made in the aftermath of the diesel scandal from early 2020 to the middle of the year. VW said the extra time was for testing of the changes made, rather than because it needed to do more. (VW)
  • Said there are “concrete” plans for VW Group’s CO2 emissions to meet EU targets in 2020 and beyond. (VW)
  • Suffered a setback in settling a case with Australian authorities over diesel cheating after the judge took issue with the implication that VW’s senior management hadn’t been aware of the scheme. (The Guardian)
  • CEO Diess expects full year sales of 20,000 Audi eTron SUVs and says that margins won’t be negatively impacted by the application of electric vehicle technology because of the VW Group’s component sharing strategy. (Reuters)
  • Announced an “entry level” Porsche Taycan with a lower power motor and smaller battery. (Porsche)
    • Significance: The model is a strong signal that Porsche believes it will far outstrip initial volume expectations.
  • VW said Turkish incursions into Syria has caused it to put plans for a new factory in the country on hold. Romania claimed that it was being considered as an alternative. (Reuters)

Other

  • Evergrande and Pininfarina announced a strengthened collaboration agreement to jointly develop new electric vehicles. (Pininfarina)
  • Rivian’s manufacturing director revealed that the all-electric trucks being built for Amazon are “significantly larger” than the pick-up trucks the brand has shown so far. (WGLT)
  • Subaru suspended production at several Japanese plants because Typhoon Hagibis damaged some supplier facilities. The stoppage is expected to last around ten days. (Subaru)
  • Faraday Future’s founder has declared bankruptcy in the US and looks set to give up his stake in the firm; the company hopes it won’t be affected. (Reuters)
  • Uniti opened the order book for its electric city car. (Uniti)
  • Mahindra’s Ssangyong brand reported Q3 revenue of 836.4 billion KRW (about $710 million) and an operating loss of (106) billion KRW (about -$90 million), mostly due to a (10)% drop in volume. (Ssangyong)

News about other companies and trends

Suppliers

Economic / Political News

  • European passenger car sales in September of 1,285,494 units rose 12.9% versus prior year, with increases in all markets except Bulgaria and Iceland. On a year to date basis, sales remain about (2)% worse. (ACEA)

Suppliers

  • Piston Group acquired Marion Industries. (Piston Group)
  • Faurecia is buying Continental’s share of the SAS joint venture that makes interior components in a deal worth €225 million. (Faurecia)
  • Hungarian state aid for a Samsung battery factory is under investigation by the EU. (Reuters)
  • Faurecia announced third quarter revenues of €4.2 billion. (Faurecia)

Dealers

  • Used car sales site Cars24 raised $100 million. (Deal Street Asia)
  • Used car sales website AutoScout24 is expected to fetch over €2 billion. (Reuters)

Ride-Hailing, Car Sharing & Rental (history)

  • German ride hailing firm Clever Shuttle is ending services in almost half the territories it operates, highlighting the difficulty of running a profitable service — especially with drivers who are employees. (Handelsblatt)
  • In-car advertising start-up StickEarn raised $5.5 million. (Tech In Asia)

Driverless / Autonomy (history)

  • A project called Earth Archives intends to create an open source, lidar-derived, map of the entire earth’s surface, with the promoters claiming a resolution of 20cm. Unfortunately, it looks set to arrive too late to be a serious basis for self-driving vehicle technology. (The Guardian)
  • Although it has long disappeared from the headlines, Uber’s fatal self-driving vehicle crash is still under investigation by US authorities. (Reuters)
    • Significance: As demonstrated by the Boeing 737-MAX debacle, self-driving vehicle fleets could find themselves waiting a long time if bureaucrats need to step in and evaluate accidents in detail. The current standard of “safety reports” — long on jargon and truisms, short on meaningful detail indicate that this lesson has yet to be learned.
  • Hyundai has developed an adaptive cruise control system that recalibrates itself based on the owner’s behaviour (distance to vehicles in front, rate of acceleration, time to respond to actions of the vehicle in front). Hyundai makes clear that some “unsafe” driver behaviour will be ignored by the system. (Hyundai)

Electrification (history)

  • LG Chem executives expect battery costs of $100 / kWh in 2025, by which time the firm believes all-electric and plug-in hybrid vehicles will account for 15% of total industry sales. (Reuters)
  • Electric platform developer Motiv raised $60 million from investors including recreational vehicle builder Winnebago. (Motiv)
  • Ford’s forthcoming electric vehicles will only be capable of charging at up to 150 kW, despite Ford being a founder member of the Ionity network that can facilitate 350 kW. (Ford)

Connectivity

  • Upstream Security raised $30 million from a group of investors including Renault, Hyundai, Volvo Group and Maniv Mobility’s fund. (Upstream Security)
  • Ford is making remote connectivity features free for all vehicles, reversing an earlier strategy where users were charged (something many competitors continue to pursue). Ford’s suggestion is that increased customer loyalty will offset the costs of running the infrastructure necessary to enable the service. (Ford)

Other

  • Volvo Group (Trucks) created a new division dedicated to autonomous vehicles. (Volvo) The company says that demand for new vehicles is declining. (Volvo)
  • Bicycle sharing firm Wheels raised $50 million. (TechCrunch)

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Auto Industry Briefing — week ending 13th October 2019

GM needing US workers as much as they need it; how long it really takes to reach automotive grade; and no more Dyson. Please enjoy our auto industry and mobility briefing for 7th October to 13th October 2019. A PDF version can be found here.

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

  • Party In The USA The UAW strike at GM drags on into its fourth week. The upside of being a business focused on the US and China is you don’t have those pesky Europeans dragging your profits down and forcing you to make tiny cars filled with exotic technology. The downside is that when the US business stops, everything does. Is GM’s labour strategy fit for purpose?
  • Time Keeps on Slipping Denso took seven years to develop a new electric power steering system with in-built redundancy. It’s a good reminder of the grind involved in developing components to automotive standard — especially in areas where the technology needs to be made smaller and / or faster without getting more expensive. Something for startups promising clean sheet of paper vehicles within three years to think about?
  • Gone Dyson shut down its electric car program, saying it couldn’t make the business case add up. Whilst it is better to have stopped early than failed gloriously later on, the confusing thing is how it took so long to reach this stage? A £1 billion price tag (excluding batteries) for a car that, in its initial guise, was expected to only sell 10,000 units; a brand-new factory nowhere near a premium car supply base; a development centre with only 10 miles of test track…

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)

  • Delivered 613,361 cars in Q3 2019, up 3.6% on a year-over-year basis. (BMW)
  • Despite Daimler’s Smart brand going all electric in the next couple of years, Mini will continue with internal combustion engines for the next ten years (although it will also have some all-electric and PHEV models during that time). (Autocar)
  • VDL’s Nedcar plant is shedding temporary labour, indicating that extra Mini volume isn’t moving there in the near future, despite BMW’s warnings to UK politicians. (Dutch News)
  • Said it is committed to meeting European CO2 targets without paying fines. (Bloomberg)

Daimler (history)

  • Delivered 590,514 cars in Q3 2019, a 12.2% increase on a year-over-year basis. On a year to date basis, sales have only just started to climb above 2018’s level, so the quarterly figure represents a significant acceleration. (Daimler)

Ford (history)

  • Started production of the Puma small crossover in Craiova, Romania. (Ford)
  • Launched updated versions of the S-MAX and Galaxy people movers. (Ford)

Geely (includes Volvo) (history)

  • Geely (excluding Volvo) sold 306,430 cars in Q3 2019 (down 17% on a year-over-year basis), of which 33.213 units were from Lynk&Co (down 18% YoY). Geely stopped reporting Lynk&Co’s model line breakout. (Geely)

General Motors (history)

  • Striking UAW members will receive $275 per week in strike pay, $25 more than previously as the union bids to keep them on picket lines. There was also a relaxation of rules around temporary work — as long as they still picket, it’s okay. (Reuters)
  • In official statements, the UAW complained about GM’s bargaining tactics saying employees wanted to be back at work but the company had not been negotiating in good faith. Despite all this it made a counter proposal late on Friday (but didn’t say what was in it). (UAW)
  • GM said it had made an upgraded offer on Monday but hadn’t hear back all week. (GM) Details then started to leak out from people familiar with the matter — $9 billion of investment, guaranteed permanent positions for temporary workers with more than three years’ service and higher signing bonuses all round. (Bloomberg)
  • The UAW strike will reportedly delay the market introduction of the new Corvette as GM will prioritise catching up on missed production. (Detroit Free Press)

Hyundai / Kia (history)

  • Hyundai sold 1.1 million cars in Q3 2019, a (1.5)% drop on a year-over-year basis. (Hyundai)
  • Settled a case brought by US owners over defective engines. The deal will cost about $760 million. (Hyundai)

Nissan (includes Mitsubishi) (history)

  • Announced that Makoto Uchida, the head of Nissan’s operations in China, as the new CEO with Mitsubishi’s COO, Ashwani Gupta, taking the same role at Nissan. Jun Seki, seen as one of two frontrunners was given a new role as deputy COO, the fate of current interim CEO Yasuhiro Yamauchi is unclear. All the changes will be effective from 1st January 2020. (Nissan)
  • Said that a no deal Brexit, with accompanying tariffs on finished vehicles sent between continental Europe and the UK would potentially render the entire European business “unsustainable”. (BBC)
  • Ending the night shift at the Sunderland, UK, plant but beefing up the line rate so that the factory’s output and workforce will remain the same. (BBC)
  •  

PSA (includes Opel/Vauxhall) (history)

  • Started production of the next generation Corsa in Zaragoza, Spain. (PSA)

Renault (history)

  • Fired CEO Bolloré and installed the CFO as interim chief executive. (Renault) Bolloré was understandably dismayed by the decision, having only officially held the job since January. Before the decision was officially announced, he told reporters that the move was a “coup”. (Reuters)
  • Working on plans for enough electric cars to cover all segments of the portfolio. Executives said it was too early to say Renault would be in competition with Tesla, “Renault plasns bigger electric car to rival Tesla” boomed the headline. (Bloomberg)
  • Renault and Waymo are working with authorities in Paris, France, to start a geofenced robotaxi service that would operate between the airport and city centre. No fixed timeline was given. (Renault)
  • Created a new mobility division to house its various car sharing and ride hailing assets, most of which have been held within the finance company up until now. (Renault)

Tesla (history)

  • Acquired Hibar Systems, a Canadian firm that makes equipment to produce batteries. (CNBC)
  • Revised the pay of US sales staff to increase the regular salary and reduce the sales commission element. (Electrek)
  • Reportedly believes that if it opens stores superficially geared towards sales of energy storage products and solar panels then it will be able to get round laws in many US states restricting opening times for car dealerships. (Electrek)

Toyota (history)

  • Invested in electric moped rental firm Revel. (TechCrunch)
  • Acquired UK leasing firm Inchape Fleet Solutions for £100 million. (Fleet Europe)
  • Even Toyota has a place in its heart for diesel — the latest Japanese market Granace (large MPV) relies on it. (Toyota)
  • The LQ concept car suggests that the name Yui might be adopted for Toyota’s in-car personal assistant. (Toyota)
  • Says that the next generation Mirai fuel car will have a 30% greater range, partly through a bigger tank, but it won’t say exactly how much until a later date. (Toyota)

VW Group (history)

  • Admitted increasing inventories of finished vehicles in the UK ahead of a potential no deal Brexit. (Reuters)
  • Confirmed that VW Groups three passenger car companies in India are now a single legal entity. (VW)
  • Porsche is collaborating with Boeing’s Aurora Flight Sciences subsidiary on air taxis. (Porsche)
  • Denied that it was seriously considering an IPO of the Lamborghini brand. (Reuters)

Other

  • Dyson stopped working on electric cars, saying that the business case didn’t add up. The company apparently tried to sell the vehicle, but couldn’t find any buyers. (BBC)
    • Significance: The Dyson electric car program looked odd in a number of ways: A £1 billion budget for the car itself (part of a larger figure that included batteries), yet a firm plan only for a model with ambitions to sell 10,000 units;  a test track that seemed far too small; ambitions for a 700 strong development team, yet still far below that two years later. Dyson’s automotive squad included many experienced hands (and a few friends of Ad Punctum) and at least the program appears to have been realistic about the potential market reception.
  • Nio reported Q3 2019 deliveries of 4,799 cars, a 35% increase on the year earlier. (NIO)
    • Significance: Although the announcement was taken positively by the markets, volume of around 20,000 units per year at mass market prices is unlikely to sustain the costs associated with a two model portfolio in the longer term.
  • Subaru suffered stoppages at its Indiana, USA, plant after a nearby supplier was subjected to a ransomware attack and couldn’t provide enough parts to keep the assembly line going. (Journal & Courier)
  • US factory workers at Volvo Group’s Mack Trucks division have gone on strike over pay. (Detroit Free Press)
  • BYD started a new technology investment fund in partnership with a property company. (Deal Street Asia)
  • Airbus and Local Motors created a joint venture to 3D print parts for cars. (Local Motors)

News about other companies and trends

Suppliers

  • Schaeffler plans to make further job cuts in Germany, eliminating around 1,300 positions. (Handelsblatt)
  • Michelin will close the La Roche-sur-Yon, France, plant at a cost of €120 million. (20 Minutes)
  • Minda is buying lighting supplier Delvis. (Deal Street Asia)
  • It took Denso seven years to create an electric power steering system with in-built redundancy. (Denso)
    • Significance: This example serves to illustrate that new automotive technologies often take a long time to develop as solutions must be found that advance the concept (in this case, small enough motors that two can fit in what was previously the space for one); preserve quality and meet cost targets. Companies planning aggressive development targets for entire vehicle may want to read about Denso’s experience.

Ride-Hailing, Car Sharing & Rental (history)

  • Uber is buying a majority stake in online grocer Cornershop. (Uber)
  • Renault created a new mobility division to house its various car sharing and ride hailing assets, most of which have been held within the finance company up until now. (Renault)

Driverless / Autonomy (history)

  • Autonomous delivery vehicle developer Einride raised $25 million. (TechCrunch)
  • CATL will supply batteries for VW’s South American truck business. (CATL)
  • Abu Dhabi and Dubai unveiled plans to test learner drivers using an array of driver monitoring systems, checking whether they are using mirrors correctly and assessing the quality of their manoeuvring. (The National)
    • Significance: Although there is still uncertain timing over the advent of fully autonomous vehicles, what is already known categorically is that driver assistance systems reduce accident rate and severity. By also acknowledging that computers can be better than humans at monitoring driving (because, correctly calibrated, they miss less), drivers tests under such conditions are likely to be more comfortable that, because they are so good at watching, computers might be better at driving too.
  • Comma.ai has around 1,000 active users for its open source driver assistance product. (Comma)
  • Self-driving truck developer Ike Robotics released a safety report. (Ike)
    • Significance: Ike’s chosen examples demonstrate that there are areas where the firm (and its peers) are presently making their own assessments of safety, such as on page 61 where Ike judge that the vehicle is operating safely provided the localisation error is less than 0.3m. Without a standardised approach (driven by regulatory blessing), Ike and its competitors run the risk that their systems could later be judged unsafe and, if they have followed a neural net learning approach rather than using a rules-based method, it could take a long time to update the driving artificial intelligence to meet the new criteria. This is an acute risk when looking to use the vehicles in new regulatory territories. Ike suggests that it has a substantial rules-based approach by declaring that it can encode laws directly into the vehicle behaviour (page 78). Ike point out that certain existing licensing considerations, such as occupant protection, are irrelevant if there is no truck driver. Reading between the lines, the firm could be implying that it will design its vehicles to crash by leaving the road in certain circumstances rather than risk collision with other road users. (Ike)
  • Chipmaker ARM (owned by SoftBank) created a working group, along with Bosch, Continental, DENSO, GM, Nvidia, NXP and Toyota to develop common architectures for self-driving vehicle hardware. (AVCC)
    • Significance: The creation of this group, the second such entity Toyota and GM have joined this year following an effort spearheaded by the SAE, suggests that either no one involved feels they have a good solution at present, or they are very happy to bin it if someone else has a better idea.
  • Renault and Waymo are working with authorities in Paris, France, to start a geofenced robotaxi service that would operate between the airport and city centre. No fixed timeline was given. (Renault)

Electrification (history)

  • Hanergy Glory says that a car with solar panels fit for 20km of range will virtually never need to be charged (1.6 KWh by their maths). It has developed such a vehicle and hopes to raise $25 million to bring it into production. It says that it already has a contract to supply 140,000 units to a delivery company. (Hanergy Glory)

Other

  • Electric moped rental firm Revel raised $28 million. (TechCrunch)
  • German electric scooter rental start-up Tier raised €55 million. (EU Startups)
  • Flying taxi developer Lilium apparently reckons it will need $500 million to realise its products. (TechCrunch)

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