Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news, automotive intelligence, automotive strategy, .automotive research consultants

Auto Industry Briefing — week ending 5th July 2020

Teeny tiny trials to reuse electric vehicle batteries; the troubling case of falling Model S and Model X sales; and VW’s plan for not so open source software. Please enjoy our auto industry and mobility briefing for 29th June to 5th July 2020. 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)

  • CEO Zipse says BMW is taking sustainability to a “whole new level”. Although specifics were thin on the ground, they include meeting regulatory targets for CO2 emissions from vehicles (still on track, despite coronavirus he says) and focusing on the emissions of battery cell manufacturing. BMW reckons this traditionally accounts for 40% of an electric vehicle’s CO2 emissions and has told suppliers of its next generation batteries that they must use renewable energy for production. (BMW)
  • Rolls-Royce says that coronavirus has accelerated a shift towards “post-opulence”, reckoning that customers in future want a luxury that focuses on purity and exacting design. (Autocar)

Daimler (history)

  • Announced an agreement (as rumoured) with Farasis Energy to supply batteries. Daimler will also take a 3% stake in the supplier and receive a board seat. As part of the deal, some of the batteries will be produced with renewable energy (though not all, as BMW are committing to). (Daimler)
  • Wants to offload the Hambach, France, factory (the traditional home of the Smart brand). The plant’s assets will be written down in the Q2 2020 financial results. (Daimler)
    • Significance: Daimler’s intention to sell the plant as a going concern suggests a handful of buyers: Geely or one of the specialists contract manufacturers (e.g. Magna, Valmet)
  • Ending the “Collection” short term leasing (subscription) program, which was only available in selected US cities, citing poor user figures. (Automotive News)

FCA (history)

  • Reported Q2 2020 US sales of 367,086 units, (39)% worse than prior year. FCA blamed economic “havoc” wrought by coronavirus but, happily, it now has a strong order book of fleet sales to cover the next few months. (FCA)
  • Issued €3.5 billion in debt to replace the (higher cost) credit facility that it drew in April 2020. (FCA)

Ford (history)

  • Sold 433,869 vehicles in the USA during Q2 2020, a drop of (33)% on a year-over-year basis. As with FCA, Ford wanted to highlight that retail sales fared relatively well – down (14)% YoY. (Ford)
  • Booked slots across Disney’s entire US network for the Bronco’s reveal, meaning millions of Americans will have to watch whether they like it or not. (Ford)
  • The Mustang Mach E will have a more powerful motor than previously announced. (Ford)
    • Significance: The upgraded specification shows that Ford are still learning about how hard they can push the powertrain components. Lessons that others have already learned
  • Confirmed that production of the slow-selling Lincoln Continental will end this year. (Fox)

Geely (includes Volvo) (history)

  • Geely is reportedly looking to take over motorcycle maker Lifan. (Reuters)

General Motors (history)

  • Delivered 492,489 vehicles in the USA during Q2 2020, down (34)% versus Q2 2019. (GM)
  • Delivered over 713,600 units in China during Q2 2020, about (5)% worse than the same period last year. Results by brand were mixed: Buick and Wuling saw sales increases, all other brands dropped. (GM)
  • GM-SAIC’s Wuling brand has built a stationary storage facility from old electric car batteries. The size, 1,000 kWh or about 20 reused car batteries, shows it is still a pilot facility. (GM)

Hyundai / Kia (history)

  • Hyundai sold 684,683 vehicles in Q2 2020, down (38)% versus prior year. (Hyundai)
  • Hyundai Mobis invested $20 million in two Silicon Balley-based VC funds. (Hyundai Mobis)

PSA (history)

  • PSA’s wholly owned dealer group PSA Retail is closing several sites in Paris, blaming low retail sales and high property costs. By beefing up sites in the suburbs and offering drop offs to customers at their homes, PSA hopes that there will be minimal sales losses. (PSA)
  • Using vehicle data to tailor insurance premiums for French owners. Compared to Tesla’s recent, similar offering, PSA is more conservative on the value of savings, focusing on the second year, but targeting a wider user group, around five million vehicles. (PSA)

Suzuki

  • Unveiled the Across, a midsize SV based on the Toyota RAV4. (Autocar)

Tata (includes JLR) (history)

  • Revised the subscription model it offers via Pivotal (aka Carpe) from a 12 month contract to a 3 month lock-in. Prices have also been dramatically lowered – monthly fees on a Range Rover Sport have fallen from over £2,100 to £1350 (although there is now a sign-up fee). JLR says 80% of people using the scheme are new to the brand. (JLR)
  • Rumoured to be planning to decide on Ralph Speth’s successor as CEO in the coming days, with a series of ex-German premium OEM executives in the running alongside JLR internal candidates. (FT)
  • JLR’s engineering boss implied that the firm is interested in diesel plug-in hybrid variants. (Autocar)
    • Significance: Although there is no technical reason why diesel could not be used in place of petrol/gasoline for a plug-in hybrid car, thus far manufacturers have favoured petrol because the exhaust technology required to meet particulate emissions requirements is cheaper than for diesel, thus reducing overall system cost. However, the overall fuel economy logic relies on the assumption that the vehicle usage is mainly for short journeys — not true for all customers.

Tesla (history)

  • Tesla built 82,272 cars in Q2 2020, a (20)% drop versus prior year. Deliveries of 90,650 units fell only (5)%. The results were generally better than market analysts had assumed but Model S and X production dropped almost (60)% from the prior quarter whilst smaller vehicles dropped by only (13)%. Since the larger vehicles have higher margins and are built on a separate line, a drop in demand seems the likely cause. (Tesla)

Toyota (history)

  • Created a special machine to reduce waste in the plating of components. Instead of being dipped in a bath, components are plated by being held in a special tool that only plates a set design or area. (Toyota)
  • Participating in a fund with several Japanese banks to encourage projects in space. The total fund size is relatively modest – about $140 million. (Toyota)
  • Toyota Tsusho invested in battery developer APB Corporation. (Toyota)
  • The head of Toyota’s AI Ventures VC unit wrote a blog post about his unit’s strategy. (Toyota)
  • Blamed battery supply problems for a decision to constrain supply of the recently launched RAV4 plug-in hybrid to 5,000 cars. Toyota hopes that next year it will be able to produce four times as many. (Inside EVs)
  • Invested in a new round of existing portfolio company, robotics start-up Elementary Robitics. (FINSMES)
  • Announced a new structure for the most senior executives. The absolute top rank of operating officer will be reserved for chief… executives (including the CEO), whilst the next tier will be named “senior professional / senior management”. (Toyota)
    • Significance: Unlike some other organisations, Toyota has not made specialists in strategy or on-demand mobility top tier executives. The most similar is the chief digital officer who controls the advanced R&D function.

VW Group (history)

  • Porsche invested in serva transport systems, a maker of autonomous factory logistics robots. (Porsche)
  • Unveiled a facelift for the VW Tiguan SUV. (VW) The Audi Q5 also got some changes. (Audi)
  • Has a team of 60 computer vision specialists working on ways to improve manufacturing efficiency using cameras and machine learning. (VW)
  • Reportedly cancelled plans for a new factory in Turkey. (Reuters)
  • VW’s recent announcements that it was hoping to build an open source vehicle operating system that could be shared by competitors were somewhat undermined by the executive in charge of the software saying control of the architecture was the only way to ensure competitiveness in the future. (Autocar)
  • Audi is working with German energy generation firm EnBW to develop stationary storage units that can be sold alongside EnBW’s generation equipment. (Reuters)

Other

  • Nio delivered 10,331 cars in Q2 2020, up 191% on a year-over-year basis. The sales increase is mainly due to the launch of the ES6, which only started sales in June 2019, but a redesigned ES8 also saw an uptick in orders. (Nio) Nio also confirmed that it had received the first tranche of cash to shore up its Chinese operations. (Nio)
  • Byton is shuttering operations for an unspecified period of time to restructure the business. (Automotive News) Fellow Chinese electric vehicle start-up Bordrin and the Chinese sponsored rebirth of Saleen are also said to be in trouble. (Automotive News)
  • Electric commercial vehicle maker Workhorse raised $70 million. (Workhorse)
  • Ineos unveiled the Grenadier rugged off-roader. (Ineos)
  • Karma rebutted claims that it was considering chapter 11 bankruptcy and specifically committed not to reduce its staffing level to only 38 people — seemingly leaving the door open for redundancies, provided they didn’t reach that figure. (Karma)
  • SAIC is buying a nearly 29% stake in Hong Kong car rental business CAR Inc. (Deal Street Asia)

News about other companies and trends

Economic / Political News

  • US light vehicle industry in June of 13.05 million units fell (25)% on a year-over-year basis. (Wards)
  • German passenger car registrations of 220,272 units in June fell (32)% from prior year. (KBA)
  • UK June passenger car registrations of 145,377 units fell (35)% on a year-over-year basis. The fall was in part due to dealers not reopening in Scotland and Wales until later in the month. (SMMT)
  • French passenger car registrations of 233,820 units, up 1.2% on June 2019, but (8.4)% on equivalent selling days. (CCFA) Theautomotive stimulus is going great guns. Half of the available 200,000 grants have already been claimed and the government expects the program to be exhausted by the summer. (Les Echos)
  • Spanish passenger car registrations of 82,651 units fell (37)% year-over-year. (ANFAC)
  • Italian passenger car registrations during June of 132,457 units fell (23)% versus prior year. (UNRAE)
  • The Geneva motor show has been cancelled for 2021 but the London motor show will go ahead. (Autocar)
  • India’s road and industries minister said the country will shortly announce new rules for recycling of key raw materials used in vehicles. (Economic Times of India)
  • Moody’s says that because it has only downgraded nine out of the 22 large automakers it tracks, companies must be in better shape that the financial crisis. (Economic Times of India)
  • China is removing caps on foreign ownership of commercial vehicle makers, similar to the changes made to passenger vehicle companies. (China Daily)

Suppliers

  • Motherson is undertaking a restructuring of its subsidiaries. (Autocar)

Dealers

  • DigniFi, which provides financing for service and repair jobs, raised $14 million from investors including Exor (major shareholder in FCA and Ferrari). (FINSMES)

Ride-Hailing, Car Sharing & Rental (history)

  • After failing to buy GrubHub earlier in the year, Uber agreed to acquire food delivery service PostMates in a $2.6 billion deal. (Uber)
  • Multimodal service Skipr raised €7 million. (FINSMES)
  • Parking monitoring firm AIpark raised $42 million. (Deal Street Asia)

Driverless / Autonomy (history)

  • Lidar developer Velodyne listed by merging with a special purpose vehicle, valuing the company at $1.8 billion and leaving it with cash of around $200 million. (Velodyne)
  • Autonomous taxi developer Momenta says it will have driverless vehicles on the road by 2022 and all the cars in its fleet will operate without safety drivers by 2024. (TechCrunch)
  • Lyft’s self-driving division says that it uses route data from cars in service to prioritise features, implying that the company could determine appropriate geofences to target for initial robotaxi deployment. (Lyft)
  • GM’s Cruise self-driving unit published a blog post explaining the background to the moveable radar sensors mounted on the car’s wing mirrors. (GM)
    • Significance: In addition to the sensory capability, the units serve as an obvious way to communicate to other road users what the vehicle is focusing on and what it plans to do next, something Cruise do not yet appear to be working on.

Electrification (history)

  • Wireless vehicle charging developer ElectReon raised $50 million. (ElectReon)
  • Norwegian firm Freyr reckons it has enough money to break ground on a new battery factory. (Freyr)
  • Charging network FastNed acquired smaller rival MisterGreen. (Inside EVs)
  • Bharat Forge wrote down its investment in electric motor start-up Tevva Motors saying the commercial outlook for the firm is uncertain. (Autocar)

Other

  • The UK government will let fleet operators offer short term rental of electric scooters (hitherto illegal on public roads) to consumers. (UK government)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news, automotive intelligence, automotive strategy, .automotive research consultants

Auto Industry Briefing — Our Most Recent Edition

Teeny tiny trials to reuse electric vehicle batteries; the troubling case of falling Model S and Model X sales; and VW’s plan for not so open source software. Please enjoy our auto industry and mobility briefing for 29th June to 5th July 2020. 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)

  • CEO Zipse says BMW is taking sustainability to a “whole new level”. Although specifics were thin on the ground, they include meeting regulatory targets for CO2 emissions from vehicles (still on track, despite coronavirus he says) and focusing on the emissions of battery cell manufacturing. BMW reckons this traditionally accounts for 40% of an electric vehicle’s CO2 emissions and has told suppliers of its next generation batteries that they must use renewable energy for production. (BMW)
  • Rolls-Royce says that coronavirus has accelerated a shift towards “post-opulence”, reckoning that customers in future want a luxury that focuses on purity and exacting design. (Autocar)

Daimler (history)

  • Announced an agreement (as rumoured) with Farasis Energy to supply batteries. Daimler will also take a 3% stake in the supplier and receive a board seat. As part of the deal, some of the batteries will be produced with renewable energy (though not all, as BMW are committing to). (Daimler)
  • Wants to offload the Hambach, France, factory (the traditional home of the Smart brand). The plant’s assets will be written down in the Q2 2020 financial results. (Daimler)
    • Significance: Daimler’s intention to sell the plant as a going concern suggests a handful of buyers: Geely or one of the specialists contract manufacturers (e.g. Magna, Valmet)
  • Ending the “Collection” short term leasing (subscription) program, which was only available in selected US cities, citing poor user figures. (Automotive News)

FCA (history)

  • Reported Q2 2020 US sales of 367,086 units, (39)% worse than prior year. FCA blamed economic “havoc” wrought by coronavirus but, happily, it now has a strong order book of fleet sales to cover the next few months. (FCA)
  • Issued €3.5 billion in debt to replace the (higher cost) credit facility that it drew in April 2020. (FCA)

Ford (history)

  • Sold 433,869 vehicles in the USA during Q2 2020, a drop of (33)% on a year-over-year basis. As with FCA, Ford wanted to highlight that retail sales fared relatively well – down (14)% YoY. (Ford)
  • Booked slots across Disney’s entire US network for the Bronco’s reveal, meaning millions of Americans will have to watch whether they like it or not. (Ford)
  • The Mustang Mach E will have a more powerful motor than previously announced. (Ford)
    • Significance: The upgraded specification shows that Ford are still learning about how hard they can push the powertrain components. Lessons that others have already learned
  • Confirmed that production of the slow-selling Lincoln Continental will end this year. (Fox)

Geely (includes Volvo) (history)

  • Geely is reportedly looking to take over motorcycle maker Lifan. (Reuters)

General Motors (history)

  • Delivered 492,489 vehicles in the USA during Q2 2020, down (34)% versus Q2 2019. (GM)
  • Delivered over 713,600 units in China during Q2 2020, about (5)% worse than the same period last year. Results by brand were mixed: Buick and Wuling saw sales increases, all other brands dropped. (GM)
  • GM-SAIC’s Wuling brand has built a stationary storage facility from old electric car batteries. The size, 1,000 kWh or about 20 reused car batteries, shows it is still a pilot facility. (GM)

Hyundai / Kia (history)

  • Hyundai sold 684,683 vehicles in Q2 2020, down (38)% versus prior year. (Hyundai)
  • Hyundai Mobis invested $20 million in two Silicon Balley-based VC funds. (Hyundai Mobis)

PSA (history)

  • PSA’s wholly owned dealer group PSA Retail is closing several sites in Paris, blaming low retail sales and high property costs. By beefing up sites in the suburbs and offering drop offs to customers at their homes, PSA hopes that there will be minimal sales losses. (PSA)
  • Using vehicle data to tailor insurance premiums for French owners. Compared to Tesla’s recent, similar offering, PSA is more conservative on the value of savings, focusing on the second year, but targeting a wider user group, around five million vehicles. (PSA)

Suzuki

  • Unveiled the Across, a midsize SV based on the Toyota RAV4. (Autocar)

Tata (includes JLR) (history)

  • Revised the subscription model it offers via Pivotal (aka Carpe) from a 12 month contract to a 3 month lock-in. Prices have also been dramatically lowered – monthly fees on a Range Rover Sport have fallen from over £2,100 to £1350 (although there is now a sign-up fee). JLR says 80% of people using the scheme are new to the brand. (JLR)
  • Rumoured to be planning to decide on Ralph Speth’s successor as CEO in the coming days, with a series of ex-German premium OEM executives in the running alongside JLR internal candidates. (FT)
  • JLR’s engineering boss implied that the firm is interested in diesel plug-in hybrid variants. (Autocar)
    • Significance: Although there is no technical reason why diesel could not be used in place of petrol/gasoline for a plug-in hybrid car, thus far manufacturers have favoured petrol because the exhaust technology required to meet particulate emissions requirements is cheaper than for diesel, thus reducing overall system cost. However, the overall fuel economy logic relies on the assumption that the vehicle usage is mainly for short journeys — not true for all customers.

Tesla (history)

  • Tesla built 82,272 cars in Q2 2020, a (20)% drop versus prior year. Deliveries of 90,650 units fell only (5)%. The results were generally better than market analysts had assumed but Model S and X production dropped almost (60)% from the prior quarter whilst smaller vehicles dropped by only (13)%. Since the larger vehicles have higher margins and are built on a separate line, a drop in demand seems the likely cause. (Tesla)

Toyota (history)

  • Created a special machine to reduce waste in the plating of components. Instead of being dipped in a bath, components are plated by being held in a special tool that only plates a set design or area. (Toyota)
  • Participating in a fund with several Japanese banks to encourage projects in space. The total fund size is relatively modest – about $140 million. (Toyota)
  • Toyota Tsusho invested in battery developer APB Corporation. (Toyota)
  • The head of Toyota’s AI Ventures VC unit wrote a blog post about his unit’s strategy. (Toyota)
  • Blamed battery supply problems for a decision to constrain supply of the recently launched RAV4 plug-in hybrid to 5,000 cars. Toyota hopes that next year it will be able to produce four times as many. (Inside EVs)
  • Invested in a new round of existing portfolio company, robotics start-up Elementary Robitics. (FINSMES)
  • Announced a new structure for the most senior executives. The absolute top rank of operating officer will be reserved for chief… executives (including the CEO), whilst the next tier will be named “senior professional / senior management”. (Toyota)
    • Significance: Unlike some other organisations, Toyota has not made specialists in strategy or on-demand mobility top tier executives. The most similar is the chief digital officer who controls the advanced R&D function.

VW Group (history)

  • Porsche invested in serva transport systems, a maker of autonomous factory logistics robots. (Porsche)
  • Unveiled a facelift for the VW Tiguan SUV. (VW) The Audi Q5 also got some changes. (Audi)
  • Has a team of 60 computer vision specialists working on ways to improve manufacturing efficiency using cameras and machine learning. (VW)
  • Reportedly cancelled plans for a new factory in Turkey. (Reuters)
  • VW’s recent announcements that it was hoping to build an open source vehicle operating system that could be shared by competitors were somewhat undermined by the executive in charge of the software saying control of the architecture was the only way to ensure competitiveness in the future. (Autocar)
  • Audi is working with German energy generation firm EnBW to develop stationary storage units that can be sold alongside EnBW’s generation equipment. (Reuters)

Other

  • Nio delivered 10,331 cars in Q2 2020, up 191% on a year-over-year basis. The sales increase is mainly due to the launch of the ES6, which only started sales in June 2019, but a redesigned ES8 also saw an uptick in orders. (Nio) Nio also confirmed that it had received the first tranche of cash to shore up its Chinese operations. (Nio)
  • Byton is shuttering operations for an unspecified period of time to restructure the business. (Automotive News) Fellow Chinese electric vehicle start-up Bordrin and the Chinese sponsored rebirth of Saleen are also said to be in trouble. (Automotive News)
  • Electric commercial vehicle maker Workhorse raised $70 million. (Workhorse)
  • Ineos unveiled the Grenadier rugged off-roader. (Ineos)
  • Karma rebutted claims that it was considering chapter 11 bankruptcy and specifically committed not to reduce its staffing level to only 38 people — seemingly leaving the door open for redundancies, provided they didn’t reach that figure. (Karma)
  • SAIC is buying a nearly 29% stake in Hong Kong car rental business CAR Inc. (Deal Street Asia)

News about other companies and trends

Economic / Political News

  • US light vehicle industry in June of 13.05 million units fell (25)% on a year-over-year basis. (Wards)
  • German passenger car registrations of 220,272 units in June fell (32)% from prior year. (KBA)
  • UK June passenger car registrations of 145,377 units fell (35)% on a year-over-year basis. The fall was in part due to dealers not reopening in Scotland and Wales until later in the month. (SMMT)
  • French passenger car registrations of 233,820 units, up 1.2% on June 2019, but (8.4)% on equivalent selling days. (CCFA) Theautomotive stimulus is going great guns. Half of the available 200,000 grants have already been claimed and the government expects the program to be exhausted by the summer. (Les Echos)
  • Spanish passenger car registrations of 82,651 units fell (37)% year-over-year. (ANFAC)
  • Italian passenger car registrations during June of 132,457 units fell (23)% versus prior year. (UNRAE)
  • The Geneva motor show has been cancelled for 2021 but the London motor show will go ahead. (Autocar)
  • India’s road and industries minister said the country will shortly announce new rules for recycling of key raw materials used in vehicles. (Economic Times of India)
  • Moody’s says that because it has only downgraded nine out of the 22 large automakers it tracks, companies must be in better shape that the financial crisis. (Economic Times of India)
  • China is removing caps on foreign ownership of commercial vehicle makers, similar to the changes made to passenger vehicle companies. (China Daily)

Suppliers

  • Motherson is undertaking a restructuring of its subsidiaries. (Autocar)

Dealers

  • DigniFi, which provides financing for service and repair jobs, raised $14 million from investors including Exor (major shareholder in FCA and Ferrari). (FINSMES)

Ride-Hailing, Car Sharing & Rental (history)

  • After failing to buy GrubHub earlier in the year, Uber agreed to acquire food delivery service PostMates in a $2.6 billion deal. (Uber)
  • Multimodal service Skipr raised €7 million. (FINSMES)
  • Parking monitoring firm AIpark raised $42 million. (Deal Street Asia)

Driverless / Autonomy (history)

  • Lidar developer Velodyne listed by merging with a special purpose vehicle, valuing the company at $1.8 billion and leaving it with cash of around $200 million. (Velodyne)
  • Autonomous taxi developer Momenta says it will have driverless vehicles on the road by 2022 and all the cars in its fleet will operate without safety drivers by 2024. (TechCrunch)
  • Lyft’s self-driving division says that it uses route data from cars in service to prioritise features, implying that the company could determine appropriate geofences to target for initial robotaxi deployment. (Lyft)
  • GM’s Cruise self-driving unit published a blog post explaining the background to the moveable radar sensors mounted on the car’s wing mirrors. (GM)
    • Significance: In addition to the sensory capability, the units serve as an obvious way to communicate to other road users what the vehicle is focusing on and what it plans to do next, something Cruise do not yet appear to be working on.

Electrification (history)

  • Wireless vehicle charging developer ElectReon raised $50 million. (ElectReon)
  • Norwegian firm Freyr reckons it has enough money to break ground on a new battery factory. (Freyr)
  • Charging network FastNed acquired smaller rival MisterGreen. (Inside EVs)
  • Bharat Forge wrote down its investment in electric motor start-up Tevva Motors saying the commercial outlook for the firm is uncertain. (Autocar)

Other

  • The UK government will let fleet operators offer short term rental of electric scooters (hitherto illegal on public roads) to consumers. (UK government)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news, automotive intelligence, automotive strategy, .automotive research consultants

Auto Industry Briefing — week ending 28th June 2020

VW thinks about buying its former rental unit; Aston Martin the cash guzzlers; and should we bow to the inevitable dominance of Google? Please enjoy our auto industry and mobility briefing for 22nd June to 28th June 2020. A PDF version can be found here.

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

  • Trouble Man — VW is reportedly thinking about making a bid for, troubled former subsidiary, rental company Europcar. Major daily rental has always sat uncomfortably with the capital intensive on-demand mobility strategies employed by OEMs in recent years. If services that looked very similar (subscription, car sharing) were in scope, why not rental? Would an acquisition be a smart way to secure a sales channel for electric vehicles and spare capacity, or will the rental business demand incentives, refuse to only buy the parent’s products, and spend money on a market share grab (which is why OEMs offloaded them in the first place)?
  • More Than A Feeling Aston Martin announced another rights issue, this time raising £150 million. Despite positive messages from the management team, raising £650 million since January, plus debt on top, shows that it is easy enough to burn through large sums in a short time period. If this latest amount isn’t enough, where next?
  • It’s Nice To Have A Friend Volvo announced a deal to use Waymo’s self-driving kit, and that it will build a robotaxi with the technology. The growing list of Waymo partners (JLR, FCA, Renault etc) suggests that reasonable commercial terms are on offer. If that is the case, then why spend billions independently trying to develop the technology? Will the collectively cash-strapped Renault-Nissan-Mitsubishi alliance (who already have a friendly relationship with Waymo) be next?

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)

  • Opened a new additive manufacturing centre, with plans to make 60,000 parts each year. (BMW)
  • Will use a new technology in Apple devices that means a phone can double as a car key. (BMW)
  • Workers representatives on BMW’s board are pushing for the firm to change strategy and produce a platform dedicated to electric vehicles. (Reuters)

Daimler (history)

  • Shortly after calling off a plan to develop self-driving features with BMW, Daimler announced a deal with chipmaker Nvidia to create an upgradeable driver assistance suite that will launch in 2024. The partners intend to develop SAE L2 and L3 technologies and a fully automated parking assistant. (Daimler)

FCA (history)

  • Received a €6.3 billion credit facility, 80% backed by the Italian government, that will be spent on actions to improve the competitiveness of FCA’s plants in Italy. (FCA)
  • Hailed the performance of its brands in US quality surveys. Dodge had the (joint) best initial quality (i.e. when the car is still nearly new) in the survey. (FCA)
  • A judge ordered FCA CEO Manley and GM CEO Barra meet face-to-face to resolve a civil case brought by GM claiming damages because FCA’s relationship with union leaders inflated costs (through the pattern bargaining agreements including things that GM hated but FCA didn’t mind). (Reuters)

Ford (history)

  • Unveiled the new F-150 full-size pickup which continues with an aluminium body on a steel frame. There are a host of new features, seemingly aimed at builders and explorers, including a ruler integrated into the plastic of the tailgate (might be useful, costs nothing to implement). The truck will also get Ford’s forthcoming hands-off, but eyes-on, driver assistance suite. Ford confirmed a (non plug-in) hybrid version but withheld details on the all-electric model until a later date. (Ford)
  • Published its latest sustainability report and announced a goal for all Ford’s vehicles and operations to be carbon neutral by 2050. The goal does not imply all cars will have zero emissions (i.e. be fully electric or fuel cell), instead suggesting carbon capture as a possible strategy. Ford has stopped reporting any of the results from its internal employee satisfaction survey. (Ford)
  • Thinks that collaboration will be necessary for manufacturers to offer a full range of electric vehicles. (Autocar)
  • Recalling slightly under 3,000 SUVs in North America because the headrest on the seats could come loose in an accident  and a handful of large pickup trucks because one of the powertrain parts might not be structurally sound after a manufacturing process was missed. (Ford)
  • Announced the creation of a new UK 5G network with Vodafone and other partners. Connected vehicle enthusiasts will be disappointed though; the purpose is to connect manufacturing machines rather than cars. (Vodafone)

Geely (includes Volvo) (history)

  • Geely unveiled the Hao Yue large SUV. Available in 5 and 7 seat configurations, the car appears very similar to the Volvo XC90 with different sheet metal. (Geely)
  • Volvo announced a deal with Waymo (Google) for L4 self-driving technologies, and that the two companies will partner on an electric taxi. (Volvo)

General Motors (history)

  • Won a contract to supply the US army with new infantry vehicles that cost a cool $330,000 apiece. (GM)
  • A judge ordered FCA CEO Manley and GM CEO Barra meet face-to-face to resolve a civil case brought by GM claiming damages because FCA’s relationship with union leaders inflated costs (through the pattern bargaining agreements including things that GM hated but FCA didn’t mind). (Reuters)

Hyundai / Kia (history)

  • Hyundai-Kia and LG Chem will collectively fund promising battery start-ups. (Kia)
  • Hyundai and LG Chem are reportedly contemplating a battery making JV in Indonesia. (Reuters)

Mazda

  • Recalling around 24,000 Mazda 3 and CX-30 because the bolts that hold the braking system on may not have been tightened properly. (Mazda)

PSA (history)

  • Opel will disband the national sales company in Bulgaria and use an importer instead. (PSA)
  • Unveiled the new Mokka compact crossover. The line-up includes an all-electric version but with pricing not yet published it isn’t clear whether PSA intend to go head-to-head with similar forthcoming models from VW or the car will be sold selectively (e.g. management scheme). (PSA)
  • Unveiled the new Citroën C4, which will come with a range of powertrain options including plug-in hybrid and all-electric. (Citroën)

Toyota (history)

  • Recalling around 270,000 Prius in the USA because the car might overreact to a fault in the hybrid system and shut down the engine. (Toyota)
  • Investing in automated forklift company Third Wave. (Toyota)
  • Invested in cashless payments company Synqa Holdings. (Nikkei)

VW Group (history)

  • Reportedly contemplating the re-acquisition of rental group Europcar, which VW sold in 2006. (FAZ)
  • Bentley has cut spending on new combustion engine models, rather than affect plug-in hybrid and fully electric cars, the plans for which are “full steam ahead”. (Autocar)
  • Thinks it will take until at least 2022 for car sales to recover. (Reuters)
  • Unveiled a minor refresh of the VW Arteon, and a shooting brake version. (VW)

Other

  • Greek firm Spyros Panopoulis Automotive is planning a new hypercar called Apeiron with a top speed of over 310 mph. Unusually for new sportscar entries, it will be powered by an internal combustion engine. (CarBuzz)
  • Mahindra worries about new tariff barriers but thinks that sourcing to multiple suppliers to overcome trade problems could increase costs by 15% – 20%. (Economic Times of India)
  • Aston Martin announced a £152 million rights issue. (AML)
  • The CEO of Lordstown Motors says the first year’s production is sold out. (Yahoo)

News about other companies and trends

Economic / Political News

  • European vehicle manufacturers trade body ACEA expects the passenger car market to drop (25)% in 2019 compared with the prior year. (ACEA)
  • The UK trade body, the SMMT, worries that one in six car industry jobs (including dealers and servicing centres) could be lost through a combination of a post-coronavirus recession and an unhelpful outcome in the EU-UK trade talks. (BBC)
  • The EU published provisional data on CO2 emissions for passenger cars in 2019 showing average emissions of 122 g / km CO2 – some way above the 95 g / km level that starts to phase in (through a complicated series of rules) this year. Data for vans was also published, showing some work left to do to close the gap to target. (EU)
    • Significance: Ad Punctum’s contention is that manufacturers have all the technology to meet 2020 and beyond targets, and the cost of that technology is lower than the fines they will have to pay for breaching the regulations. Therefore compliance makes business sense. Data from early in 2020 suggesting electric vehicle shares were climbing substantially, consistent with this hypothesis. The corollary is that 2019 represented something of a peak for legacy technology.

Suppliers

  • Martinrea says it will still pay a divided, after agreeing with lenders that Q2 financial performance won’t be part of the calculations about its loan covenants. (Martinrea)
  • Adient said that Yanfeng would pay a little bit less for the JV assets it was taking over, and the money would be paid a bit later too. (Adient)

Dealers

  • UK online used car dealer Cazoo raised £25 million and says it is worth over $1 billion. (Cazoo)

Ride-Hailing, Car Sharing & Rental (history)

Driverless / Autonomy (history)

  • As rumoured, Amazon acquired Zoox, suggesting that the firm will still create vehicles for moving people (just perhaps with packages in the back too). The value wasn’t disclosed. (Amazon)
  • Didi Chuxing is aiming to have one million robotaxis in service by 2030. (Reuters)
  • Oxbotica is developing AI that will create altered images from photographs taken by test vehicles, so that more variety can be tested, with the aim of accelerating testing times. (Autocar)
    • Significance: Whilst this solution seems neat, computers interpret photographs very differently to human eyes (they use data about the colour, brightness etc of the pixels) so however convincing observers might find the techniques, they may be unsuitable for recreating what a vehicle sensor set detects.
  • DriveU, which develops communications networks for remote vehicle operation, raised $4 million. (DriveU)
  • Lyft released a dataset of traffic movements around autonomous test vehicles, hoping to spur innovation in predicting the movement of fellow road users. (Lyft)
  • Driver monitoring start-up ADAM CogTech raised $2 million. (CTech)
  • Self-driving truck developer TuSimple reportedly hopes to raise $250 million. (TechCrunch)
  • Volvo announced a deal with Waymo (Google) for L4 self-driving technologies, and that the two companies will partner on an electric taxi. (Volvo)

Electrification (history)

  • Charger creator Trojan Energy raised £5 million in grants and new investment. (Charged EVs)

Other

  • Cummins and NPROXX have formed a joint venture to make hydrogen tanks for truck trailers and rail carriages, anticipating a boom in demand for the gas. (Cummins)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news, automotive intelligence, automotive strategy, .automotive research consultants

Auto Industry Briefing — week ending 21st June 2020

Making cars a little smarter; reading between the lines; and building cars for free.Please enjoy our auto industry and mobility briefing for 15th June to 21st June 2020. A PDF version can be found here.

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

  • Running Up That Hill Delphi and TomTom are experimenting with using map data to change a car’s engine settings in real time. Calibration engineers lovingly, and at great cost, already create an array of engine programs but they only cover discrete sets of conditions. Adding information about the journey makes engine mode changes based on prediction rather than reaction. Of course, the logic works for electric vehicles too and Delphi reckon all driving styles get a benefit. With fuel economy savings quoted at around 10%, and a renewed emphasis on the environment as emerge from our underground dwellings, it sounds like an easy win. Could solutions like be mandated in future, for the greater good?
  • Don’t Let Me Get Me FCA, GM and Ford declared that all their factories were back at work in the US after the coronavirus shutdown. But they used odd language. Instead of talking about reaching prior output levels, the press releases were stuffed with talk of pre-crisis operating patterns. But that just means when people turn up to work, doesn’t it, not how many vehicles they are actually building? Why declared victory if there is so much left to do?
  • Sisters Are Doin’ It For Themselves If you buy an electric version of the VW Golf, you can go to the factory and put it together. Well, not any of the important bits but you can stick the badge on the front. Here’s the best bit though: you’ll pay €215 for the privilege! Let’s have you put the wheels on too — must be worth €50 at least — and install the parcel shelf and trunk load floor (another €100?). As a rough rule of thumb, there is about €1,700 of labour cost in a family hatchback. The coronavirus crisis calls for out of the box thinking. Has VW worked out how many jobs the customer needs to pay to do themselves before the car costs nothing to build?

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)

  • Announced an agreement with German unions to encourage older staff to take voluntary redundancy and younger staff to retrain and do something different. Special pay-boosting entitlements for some workers (guaranteed extra hours) will be scaled back through a series of contractual changes. (BMW)
  • In addition to permanent staff cuts, around 10,000 temporary production and contract engineering staff are also reportedly set to go. (Handelsblatt)
  • Daimler and BMW decided not to deepen their partnership on next generation driver assistance systems after their experts jointly concluded that that had all done such a good job of developing systems before the partnership began that these amazing, yet totally different systems, would not benefit from being combined. (Daimler)
    • Significance: The decision seems odd in the context of an area where both firms are pouring hundreds of millions of research euros without clarity on customer reception, and therefore payback. The most logical explanation is that BMW and Daimler’s experts concluded L2+ / L3 systems have only limited commercial viability (because they will be so expensive that few users will take them) and so developing a more comprehensive technology set together was unlikely to payback.

Daimler (history)

  • Created a framework for issuing green bonds, assuring investors that more than 50% of the money will be used for zero emission vehicles. (Daimler)
  • Daimler and BMW decided not to deepen their partnership on next generation driver assistance systems after their experts jointly concluded that that had all done such a good job of developing systems before the partnership began that these amazing, yet totally different systems, would not benefit from being combined. (Daimler)

FCA (history)

  • Plans for all US plants to be operating pre-coronavirus shift patterns from w/c 21st June. (Detroit News)
    • Significance:  Ford, FCA and GM are all talking about “operating patterns” rather than production rate. It remains to be seen whether there is no real difference between the two, or if PR hungry executives are telling the media that things are back to normal just because the same number of human beings are making fewer vehicles.
  • Recalling over 90,000 vehicles globally  to fix transmission problems. (FCA)

Ford (history)

  • Rumours surfaced that the next generation Edge SUV is cancelled. Unions called for clarification. Ford’s vague answer aspired to continue in the segment, without committing to the Edge nameplate or the Canadian plant that currently produces it. (Detroit Free Press)
  • Offered US office workers the chance to work from home full time until at least the end of 2020. (Detroit Free Press)
  • Plans for all US plants to be operating pre-coronavirus shift patterns from w/c 21st June. (Detroit News)
  • Pushed back the unveiling of the new Bronco after it discovered the previous date coincided with the birthday of infamous Bronco owner O.J. Simpson, testing the limits of the any publicity is good publicity mantra. (Detroit News)
  • Following the wave of “active” models seen across passenger car brands (where customers part with extra cash for plain plastic cladding and slight suspension changes), Ford has decided that the commercial vehicle market is ready for its own version. (Autocar)
  • Will add hands-free (but not eyes-off) driving assistance on selected highways in North America. Ford plans to charge customers in two stages: there will be a “prep package” (the hardware) that customers need to specify at the time of purchase and then a second purchase for the software itself. (Ford)

Geely (includes Volvo) (history)

  • Buying a stake of slightly mote than 15% in Chinese truck and bus maker Hualing Xingma. (Gasgoo)

General Motors (history)

  • CEO Barra suggested that GM had made all the job cuts needed to survive a downturn. (Detroit Free Press)
  • Announced US operations had returned to pre-coronavirus levels. Confusingly, only 90% of the hourly workforce are back at work. (Detroit News)
  • Uses additive manufacturing (3D printing) to make up to 75% of the parts for early stage prototypes. (GM)

Hyundai / Kia (history)

  • Despite difficulties brought on by coronavirus, Hyundai says 30,000 reservations have been made for the Indian market launch of the Creta. (Autocar)
  • Launched a new app which contains car manuals. The clever bit is that, rather than having to look up tyre pressures in the index, drivers can simply point the smartphone camera at the area of interest and the app will identify relevant sections of the manual for them to read. Although this was possible before, the pain of setting it up meant Kia restricted the amount it was used. The firm now says it can roll out across carlines easily. (KIA)

Mazda

  • Believes it will take a “long time” for pre-coronavirus crisis industry sales levels to return. (Mazda)
  • Unveiled the new BT50 pickup truck, built using Isuzu underpinnings. (Mazda)

Nissan and Mitsubishi (history)

  • Allies of Nissan’s COO are rumoured to be manoeuvring in an attempt to have him promoted to co-CEO. How such a change would promote stability at the company is anyone’s guess. (Reuters)

Renault (history)

  • Stopped selling the value-engineered Captur crossover in India. High prices and cannibalisation from other models in Renault’s Indian range were blamed. (Autocar)
  • Renault’s chairman denied that the company had any problem with the timing of EU emissions rules. (Reuters)
  • Renault’s incoming CEO addressed shareholders (he hasn’t officially started work yet but the pay will presumably be sorted out later), saying he was looking forward to the challenge of turning the business around. Despite Renault’s recent restructuring announcements, he plans on revealing his own strategy at the end of the year. (Reuters)

Suzuki

  • Urged Maruti-Suzuki suppliers to prepare contingency plans for a second wave of coronavirus (mainly by building more inventory) and apologised for the firm’s slow and inconsistent production since restarting in May. (Autocar)

Tata (includes JLR) (history)

  • Reported financial results for the fiscal year ended 31st March 2020. Wholes of 1.006 million units fell (23)% on a year over year basis, whilst revenue of 261,068 Cr INR (about $34.5 billion) dropped (14)% (of which JLR was £23 billion, about $28.7 billion). The before tax loss was (10,580) Cr INR (about $1.4 billion), but Tata Motors was declared “near breakeven” on an EBIT basis. JLR ‘s PBT was £(422) million (about $530 million). In response, both Tata Motors and JLR will go on a diet; in JLR’s case this is incremental to the already announced plan and will see a further £1.5 billion of cost actions and an axe being taken to (unspecified) parts of the product plan. JLR thinks that coronavirus cost the business £599 million and without it the brand would have made a full year profit. (Tata)
  • The move to increase JLR’s cost savings target seems inevitable. Even excluding coronavirus the business was barely profitable, yet says cost actions have improved profit by £1 billion since 2018 (plus lower investment). (Tata) Part of the savings will come from further redundancies; (1,100) UK staff will go. (Reuters)
  • Moody’s downgraded Tata Motors’s debt to B1 (deeper into junk territory). (Economic Times of India)

Tesla (history)

  • Reportedly signed a lithium supply deal for up to 6,000 tones per year with Glencore. (Bloomberg)
  • Firms that advise many shareholders recommended that they reject Tesla’s proposal to re-elect chairwoman Denholm, saying she was insufficiently independent from CEO Musk. (Reuters)
  • Panasonic and Tesla expanded their long term supply agreements. (Reuters)
  • A deal to buy a 2,100 acre site in Austin, USA suggests that Tesla may have made up its mind about the location of the factory for the Cybertruck. (Electrek)

Toyota (history)

  • Will make its human body simulation tool (for crash and ergonomics) free for all users. Although it was previously openly available, there was a licence fee. (Toyota)
  • Toyota and MIT are releasing a set of videos taken by cars developing self-driving technology, in the hope that it will spur development of object recognition. (Toyota)
  • Invested in industrial engineering startup Drishti, which uses remote cameras and (ahem) artificial intelligence (definitely not human data labellers sitting in dark rooms) to conduct the sort of time and motion studies shopfloor workers often resent. (Toyota)
  • Participated in a further fund raising round for AI company SLAMcore. (FINSMES)

VW Group (history)

  • SEAT unveiled a refreshed Ateca mid-size SUV. (Autocar)
  • Plans to scale down the Hannover, Germany, plant that builds commercial vehicles from around 15,000 employees to nearer 10,000. VW believes natural attrition will be sufficient. (Handelsblatt)
  • Photographs sent to the Chinese government purported to show the production version of the ID4. (Autocar)
  • Audi opened a new R&D centre in San Jose, USA, where staff will work on driver assistance systems. (TechCrunch)
  • Agreed to invest an additional sum, up to $200 million, in solid state battery developer QuantumScape. VW previously put $100 million into the company. (VW)
  • Inviting VW eGolf (the all-electric version) buyers to help build their car; they will be able to tell friends and family all about installing front and rear badges and the tail lights — and they will have paid €215 for the privilege. (VW)
  • VW declared itself open to working with rivals on vehicle software. Although many executives might be interested in VW’s declarations of an open source approach, their technical teams may well be put off by VW’s intention to “define its core” themselves (see Daimler and BMW’s self-driving technology dissolution). (Reuters)
  • Audi’s CEO took on a plethora of new roles: he will head the brand’s efforts in China and be responsible for engineering. To help, the brand has restructured the way product programs are delivered. The planning organisation will be separated from engineering. Audi announced a COO to help with the workload. There will also be a chief transition architect helping to manage the engineering side of things. (Audi)

Other

  • Ssangyong has retained an agent to sell Mahindra’s stake to a partner with deeper pockets. (Reuters)
  • BYD’s semiconductor unit raised $113 million — after recently taking in about $270 million. (Deal Street Asia)
  • Electric vehicle developer Arrival unveiled a bus. Although no timing for launch was mentioned in the press release, there were some videos of prototype units driving on a test track. (Arrival)
  • Aston Martin appointed a new CFO, who previously held the same position at JLR. (Reuters)
  • McLaren is mulling a sale of part of the F1 team. (Sky News)

News about other companies and trends

Economic / Political News

  • European passenger car sales in May of 1,444,173 units fell (57)% on a year-over-year basis. (ACEA)
  • The UK government admitted that if talks haven’t made good progress by October, the chance of a UK-EU trade deal before the Brexit transition period expires are slim. (Reuters) The EU said it wanted a deal, but only if the UK was reasonable. (Reuters)

Dealers

  • Chinese aftermarket parts marketplace CassTime raised $50 million. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental (history)

  • Multimodal app Splyt raised $19.5 million from investors including SoftBank. (SoftBank)
  • Lyft said that by 2030, every car on its ride hailing platform will have zero tailpipe emissions. (Lyft)
  • Hertz is no longer planning to issue new shares and instead hopes to raise a bankruptcy loan. (WSJ)

Driverless / Autonomy (history)

  • The US government unveiled an initiative to collect testing data from companies developing self-driving vehicles. Critics said the data would be so thin as to be meaningless. (The Verge)
  • Self-driving software firm AImotive raised $20 million, (VentureBeat)
  • Toyota and MIT are releasing a set of videos taken by cars developing self-driving technology, in the hope that it will spur development of object recognition. (Toyota)
  • Ford will add hands-free (but not eyes-off) driving assistance on selected highways in North America. Ford plans to charge customers in two stages: there will be a “prep package” (the hardware) that customers need to specify at the time of purchase and then a second purchase for the software itself. (Ford)
  • Daimler and BMW decided not to deepen their partnership on next generation driver assistance systems after their experts jointly concluded that that had all done such a good job of developing systems before the partnership began that these amazing, yet totally different systems, would not benefit from being combined. (Daimler)

Electrification (history)

  • Telecoms firm Telenor will offer Swedish customers charging bundled with their TV and broadband. (Charged EVs)
  • Hyundai Mobis reckons it has cracked the problem that many electric cars have with the artificial sounds manufacturers fit them with to meet pedestrian safety laws: what sounds great in the studio is often distorted when played through a speaker mounted in the engine bay. Hyundai Mobis makes the front grille part of the speaker (a solution which is dependent to a degree on grille design), dramatically reducing distortion. (Hyundai Mobis)
  • VW agreed to invest an additional sum, up to $200 million, in solid state battery developer QuantumScape. VW previously put $100 million into the company. (VW)

Connectivity

  • Delphi and TomTom think that using mapping data to change a car’s engine settings in real time can improve fuel economy by 10%. Tests apparently showed that this was true across a range of driving styles. (Delphi)

Other

  • Truckmaker Volvo Group plans to cut 4,100 staff jobs. (Volvo)
  • Quantron plans to offer a fuel cell powered heavy truck in Europe from 2022 onwards. (Quantron)
  • Bicycle rental firm Bird and Trailze launched a mapping service that plans optimum routes for bicycle and electric scooters. The company spies a gap in the market since current offerings are aimed at cars or pedestrians. (Bird)
  • Electric motorcycle maker Alternet Systems (AYLI) raised $25 million. (AYLI)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news, automotive intelligence, automotive strategy, .automotive research consultants

Auto Industry Briefing — week ending 14th June 2020

Tesla get outsmarted; data that isn’t all it’s cracked up to be; and VW’s managerial meltdown. Please enjoy our auto industry and mobility briefing for 8th June to 14th June 2020. 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)

  • BMW iVentures invested in Prometheus, a company developing ways to make fossil fuels via energy intensive chemical reactions, rather than sucking it out of the ground. (BMW)

Daimler (history)

  • Daimler hopes to make as much money from offering in vehicle services as from selling the cars themselves. The main target appears to be taking a cut from in-vehicle transactions, such as buying food. (Autocar)
    • Significance: Since smartphone apps have already established norms in this area – developers paying $100 or less annually to have their app available, with zero cut of the revenue for high transaction sites such as Amazon. Why would purchases made inside the car be treated completely differently?

FCA (history)

  • Recalling almost 28,000 vehicles because the 12 volt battery could catch fire. (FCA)
  • EU antitrust regulators are taking a closer look at PSA and FCA’s proposed merger, with dominance in commercial vehicles flagged as a concern. (Reuters)

Ford (history)

  • Ford’s CEO and COO reiterated that there were big headcount reductions to come in South America and Europe saying that as a result of the pandemic “everything’s on the table”. (Ford)
  • Gave a detailed presentation focused on explaining Ford Credit to investors. (Ford)
  • In the announcement confirming the VW and Ford joint vehicle programs, Ford indicated that it will build the electric vehicle engineered from VW’s MEB platform, rather than sourcing to VW. The two companies believe that the shared 1T van, pickup truck and small van will yield 8 million units over their lifetimes. (Ford)
  • Recalling 2.15 million US vehicles for faulty door latches that may have been incorrectly repaired. (Reuters)

Geely (includes Volvo) (history)

  • Geely’s Xiaolinggou unit, which rents out electrified vehicles, raised $97 million. (Deal Street Asia)

General Motors (history)

  • CEO Barra says coronavirus has helped GM make decisions more quickly than before (perhaps because line managers can’t interfere as much). (Detroit Free Press)

Honda (history)

  • Honda was hit by a cyber attack that compromised IT systems and affected some non-Japanese plants. (BBC)
  • Created a joint venture in China called Hynex to offer connected car services. (Honda)
  • There was an explosion at a Honda plant in Japan. (Reuters)

Hyundai / Kia (history)

  • Kia’s European boss says that coronavirus lockdown measures have made it easier for the brand to meet its EU CO2 targets. (Autocar)
  • Believes that fuel cells will be commercially viable by 2025 and disagrees with Daimler’s strategy to direct fuel cells only at heavy trucks (although Hyundai sees potential in that area) because the company thinks that only passenger cars have sufficient scale to lower costs for all users. Although the ultimate target is cost parity with battery electric systems, Hyundai reckons that demand will blossom because of stricter environmental regulations. (Bloomberg)
  • Invested in hydrogen infrastructure company Hydrogenius LOHC Technologies. (H2 View)
  • Suspended production of the diesel Genesis GV80 SUV because of engine vibrations that arise when the cars spend too long idling. (Yonhap) Parts supply problems then stopped production of the model completely. (Yonhap)

Nissan and Mitsubishi (history)

  • Nissan’s CEO says the brand never considered leaving Europe as part of its restructuring and that changing the cross shareholding structure between Nissan and Renault was a low priority at the moment. (Les Echos)
  • Mitsubishi is part of a consortium of 30 Japanese companies working on a “virtual power plant” (grid management by feeding in stored electricity). (Mitsubishi)
  • Nissan sources suggested there was a trail of correspondence detailing a 12 month exercise leading up to former chairman Carlos Ghosn’s ouster and arrest for mis-reporting compensation and other indiscretions. (Bloomberg)

PSA (history)

  • Won’t open the Ellesmere Port factory in the UK (which produces the Astra) until at least 1st September, but hopes to relocate some workers to the Luton, UK, factory to help build more vans. (Liverpool Echo) The company is planning something similar in France, with 500 Polish workers told to hotfoot it over to the Hordain plant and help out on the production line. (France Info)
  • Citroën thinks that, ideally, car brands should offer between five and ten different vehicles. At the lower end, the brand thinks there are too many portfolio gaps to be considered a mass-market brand, whilst with too many, complexity and investment start to hurt efficiency. The official stance is that the brand is open-minded about replacing the C1 but executive comments suggest the space will be left to the all-electric Ami. (Autocar)
  • Attempts by Opel’s HR team to broach the subject of pension changes in Germany were slapped down by unions. It is unlikely that managers will be deterred for long as they already suggest survival is at stake. (Handelsblatt)
  • A PSA executive suggested that brands within the group were allowed to chart their own destiny in terms of emissions compliance closure — suggesting the some next generation cars might offer an all-electric version, whilst some may build no more than a hybrid. (Autocar)        
    • Significance: Given PSA’s much-vaunted commonality strategy, and the work involved in engineering three different powertrain technologies into a vehicle platform, it seems unlikely that the brands have true independence, and more that this is a way of balancing the product engineering dilemma around electric vehicles by only going all-in on one design but having others on a shortcut route to launch if needed.
  • EU antitrust regulators are taking a closer look at PSA and FCA’s proposed merger, with dominance in commercial vehicles flagged as a concern. (Reuters)

Renault (history)

  • Renault’s chairman said he isn’t interested in the French state increasing its shareholding in the firm. (Reuters)

Tata (includes JLR) (history)

  • JLR is looking to make every step of the sales process contactless and sees opportunity to use online services to reduce some of the time, even if the whole purchase experience doesn’t become virtual (for instance, signing finance paperwork over the internet rather than wading through reams of paper at the dealership. (Autocar)
  • Tata is buying out its joint venture partner in the JTSV division that creates souped-up versions of Tata’s Indian passenger cars. (Tata)

Tesla (history)

  • A rocketing share price saw Tesla’s value exceed Toyota’s (and everyone else). The jump followed a “leaked” email (which CEO Musk almost immediately confirmed as genuine) saying the Semi truck was about to go into full production. The share value has since receded slightly. (Reuters)
  • Internal emails showed CEO Musk fretting about quality and output on the Model Y however he was keen to stress that he thinks such problems always occur with new product. (Business Insider)
    • Significance: With the Model Y in its sixth month of launch, there isn’t much time left before it becomes difficult to explain launch issues away as normal business.
  • A Canadian garage says it has hacked Tesla’s upgradable hardware (where Tesla installs more capable batteries or motors as standard but downrates performance for cheaper models unless the owner pays extra). It is now offering to unlock the same capabilities for reduced prices. (Electrek)
    • Significance: It remains to be seen if Tesla subsequently undoes the upgrades. If not, it undermines the company’s upgrade strategy. If it does, it raises questions about the company’s right to block modifications made by owners.

VW Group (history)

  • Forced CEO Diess to give a public apology to the supervisory board after he insinuated in meetings with senior managers that board members had leaked sensitive information. (VW) Board members, or those close to them, reacted by leaking the story of the fiery board meeting leading to the apology where several of them called for Diess’s immediate sacking. To show Diess whose boss, they stripped him of the CEO position for the core VW cars brand (he remains group CEO), handing the reigns to the brand’s COO. (Handelsblatt)
    • Significance: Diess appears to be on borrowed time, with the main arguments for keeping him in role apparently being the difficulty economic environment and the extra turbulence that would be caused on top of the troublesome Golf and ID3 launches. It looks as though in just two years, the hard-charging Diess has got from a man with a mission to transform the business to a dead man walking.
  • Announced that it had concluded an investigation into a racist social media advert, and that whilst VW agrees it is racist, says it wasn’t on purpose. In future, the brand will review new videos more thoroughly before launch. (VW)
  • VW’s procurement chief, the former CEO of ZF, left the company at short notice. (VW)
  • In the announcement confirming the VW and Ford joint vehicle programs, Ford indicated that it will build the electric vehicle engineered from VW’s MEB platform, rather than sourcing to VW. The two companies believe that the shared 1T van, pickup truck and small van will yield 8 million units over their lifetimes. (Ford)

Other

  • Mahindra & Mahindra is prepared to sell its stake in Ssangyong, if it can find a buyer. (Autocar)
  • Nio raised $430 million via a rights issue. The money will go towards funding Nio’s shares of the costs associated with its recent deal to set up Nio China and relocate its headquarters. (Motley Fool)
  • Evergrande bought the remaining shares in NEVS. Whatever you make of the deal, you have to give credit to whoever in Evergrande decided to call their purchase vehicle “Mini Minor”. (Caixin)
  • Nikola’s CEO said the company is in talks with three potential partners about contract manufacturing its forthcoming Badger pickup. (Reuters)
  • Australian start-up H2X plans to launch a fuel cell powered SUV called Snowy in 2022. (The Driven)

News about other companies and trends

Economic / Political News

  • Spain launched a scrappage incentive scheme. (Reuters)

Suppliers

  • Faurecia says it has been arranging for banks to give financing to its suppliers so that they can restructure and continue in business.  The company believes it will take until 2023 for industry to reach pre-crisis levels. Although Faurecia expects some consolidation, it isn’t making M&A a priority but pointed to some acquisitions it had made during the credit crunch at the behest of carmakers. (Market Screener)
  • A restoration company, Craft Customs, says that all our leather steering wheels are going to suffer from being lathered in hand sanitiser. Good job we aren’t driving much then. (Craft Customs)
  • Continental’s CEO reportedly told staff there was a high probability that the firm would have to resort to involuntary redundancies to save money. (Automotive News)
  • Aptiv raised up to $2.2 billion via a share issue. (Aptiv)

Dealers

  • Chinese online automotive sales platform Bitauto agreed terms for a Tencent-led takeover. (Bitauto)
  • Spare parts wholesaler Mancando raised $57 million. (Deal Street Asia)
  • Used car website Vroom’s IPO went great guns, almost doubling on their opening day. (Reuters)

Ride-Hailing, Car Sharing & Rental (history)

  • Californian authorities now consider ride hailing drivers as employees, much to Uber’s and Lyft’s dismay. (Reuters)
  • Uber’s plan to buy Grubhub were scuppered by an alternative bid from Just Eat. (Reuters)
  • Despite entering bankruptcy protection, Hertz might issue $1 billion of fresh shares. (Reuters)

Electrification (history)

  • BYD is reportedly considering building a UK battery factory to supply JLR, amongst others. (China Daily)

Connectivity

  • Upstream Security, which already counts Renault, Nissan, Mitsubishi and the Volvo Group amongst its backers, raised an additional $30 million. (Upstream)
  • Connected vehicle data company Viaduct raised $11 million. (Viaduct)
  • Otonomo will start selling vehicle data sourced from FCA. In addition to providing the information to third parties (for a fee), Otonomo takes on the role of anonymising the information to soothe any data privacy concerns the issuing OEM might have. (Otonomo)
  • Navmatic, a developer of precision navigation equipment, raised $4 million in a round led by Lear. (Benzinga)

Other

  • Air taxi firm Lilium raised another $35 million. (TechCrunch)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news, automotive intelligence, automotive strategy, .automotive research consultants

Auto Industry Briefing — week ending 7th June 2020

Self-driving cars that could crash too much; dealers that want more money; and Dyson’s late analysis. Please enjoy our auto industry and mobility briefing for 1st June to 7th June 2020. A PDF version can be found here.

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

  • Never Too Much A study by a US insurance think tank reckons that self-driving cars won’t save as many lives as many had hoped. They challenge the oft-repeated mantra that 90% of accidents could be avoided because they say that unforced errors are only responsible for 30% of crashes. There is a caveat though: in most other crashes, human error is still to blame via speeding and illegal manoeuvres. They conclude that autonomous vehicle developers need to make their products drive conservatively than people do — but doesn’t everyone already know that?
  • Gimme Some More Indian dealers reckon that margins are too thin and OEMs should top them up to around 7%. If they don’t, the dealer association fears many outfits will go out of business. But, with the much-predicted demise of the traditional dealer (even before coronavirus), is that so much of a worry?
  • Too Little, Too Late Dyson revealed yet more details about the company’s abandoned electric car. The videos and blog glory in the no-compromises design details the team found when planning their massively expensive SUV. The project’s demise was blamed on dieselgate “suddenly” transforming the competitive marketplace and shrinking the sales potential. But, since the project was abandoned in late 2019 and dieselgate happened in late 2015 (and isn’t responsible for the surge in electric vehicles anyway), why did it take so long to realise the car would lose money?

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)

  • Unveiled the new 4 Series. (BMW)

FCA (history)

  • Running a series of tests with hybrid electric vehicles that only operate in electric mode within city limits. BMW has long ago committed to operating such a mode. (FCA)
  • Robot making arm Comau will be spun off after PSA and FCA merge. (Reuters)

Geely (includes Volvo) (history)

  • Kandi Technologies reported Q1 2020 revenue of $6.4 million, down (65)% and a net loss of $(1.6) million. (Kandi)

General Motors (history)

  • Will run many US plants during the traditional early July shutdown period to recover lost production. (Detroit News)
  • CEO Barra says GM will emerge from coronavirus with a permanently lower cost base. (Reuters)
  • GM’s Cruise self-driving unit wrote to employees of rival Zoox offering them new jobs and expressing the view that if Amazon’s much-rumoured takeover of Zoox goes ahead, their bonuses will be reduced. (Reuters)

Nissan and Mitsubishi (history)

  • A Nissan representative in Lebanon got himself in hot water after he said in an interview that IMF aid for Lebanon’s economy was conditional upon Carlos Ghosn’s extradition to Japan. After denying the comments, he suffered the indignity of having journalists publish an audio recording. (Arab News)
  • Recalling 1.9 million cars to fix problems with the hood latch. (Detroit News)

PSA (history)

  • Relations between managers and German labour representatives at Opel appear to have hit a rough patch with unions complaining that the announcement about the closure of the transmission plant and forge in Russelsheim was presented to the workforce as though they had agreed to it. (FAZ)
  • Announced a joint venture with Punch Powertrain to develop and manufacture dual clutch transmissions. Punch will contribute facilities and PSA will put up some cash. PSA said it was part of a plan for powertrain to remain vertically integrated. (PSA)

Renault (history)

  • The French government finally put pen to paper on Renault’s €5 billion credit guarantee. (Renault)

Tata (includes JLR) (history)

Tesla (history)

  • Developing a 12-seat minibus for use in tunnels dug by CEO Musk’s pet project The Boring Company, according to  officials are considering commissioning a tunnel for their local airport. (OCR)

Toyota (history)

  • Toyota reportedly expects to exceed prior year production volumes (on a monthly basis) in North America by September. (Reuters)
  • Toyota formed a joint venture with several Chinese OEMs including FAW, Dongfeng, BAIC and GAC) to promote fuel cells for commercial vehicles. (Toyota)

VW Group (history)

  • CEO Diess reportedly told senior managers that the company was about to undertake a cost cutting drive, but did not provide much specific information, beyond an intent to reduce non-production material costs by 20%. He also apparently confirmed that not all brands will be profitable in 2020 — something that could already be inferred from the group’s financial guidance. (Manager Magazin)
  • Lifted a production freeze on the next generation Golf after solving a software problem affecting the emergency calling function. About 30,000 cars will be recalled to fix the error. (Handelsblatt)
  • Lamborghini’s CEO seems comfortable that sales are recovering, despite job cuts at competitors McLaren and Aston Martin and sister company Bentley. (Yahoo)
  • Bentley finally said goodbye to the V8. (Bentley) It will soon be doing the same to around 1,000 employees — about 25% of the workforce at the brand’s Crewe headquarters. The Bentley battery electric vehicle will be delayed by a year, to 2026. (ITV)

Other

  • Aston Martin is laying off up to 500 people in a move that will cost £12 million. The firm expects to save £18 million per year through the move, plus other spending reductions. (AML) InvestIndustrial, one of the main shareholders when the firm went public, cut its share in Aston Martin to 5%. (Reuters)
  • Mahindra Electric believes that the Indian market for electric vehicles will take off in 2023. (Autocar)
  • Fuel cell powered truck maker Nikola had its stock market debut. (Forbes) The company’s recent purchase of hydrogen production equipment suggests each filling station will cost more than $6 million. (Nikola)
  • Dyson published more details (including a video) about its abandoned electric car effort. Curiously, the company appears to blame VW’s dieselgate scandal for causing traditional OEMs to pile into the electric vehicle market, and “suddenly” diluting the market share the firm had hoped to achieve. (Dyson)
    • Significance: Since dieselgate started in 2015, and (in any case) the increase in electric vehicles has far more to do with the success of Tesla and regulations in the EU and China, it isn’t clear why Dyson didn’t realise the scale of competition until 2019 — a lack of competitive analysis perhaps?

News about other companies and trends

Economic / Political News

  • US light vehicle industry of 12.21 million units fell (30)% versus prior year. (Wards)
  • German passenger car registrations in May of 168,148 units dropped (50)% versus prior year. (KBA)
  • France had 96,310 passenger car registrations in May, down (50%) on a year-over-year basis. (CCFA)
  • Spanish registrations of 34,337 passenger cars in May were (73)% worse than prior year. (ANFAC)
  • May Italian registrations of 99,711 passenger cars were (50)% down on prior year. (UNRAE)
  • UK registrations of 20,247 new passenger cars in May fell (89)% on a year-over-year basis. (SMMT)
  • Germany launched an automotive stimulus package consisting of across the board sales tax cuts (3%) and increased incentives for electric vehicles (an extra €3,000 off the list price). There is also money set aside to fund research into new technologies and to provide charging infrastructure — including charging points at all filling stations. (FAZ)

Suppliers

  • The boss of Endurance Technologies is on the hunt for acquisitions. (Autocar)
  • Meritor aims to sack about 8% of the salaried workforce. (Meritor)
  • Wheel maker Borbet terminated its collective bargaining agreements in Germany, saying the coronavirus put the company in dire straits. Unions said they would fight it. (IG Metall)

Dealers

  • UK dealer Vertu Motors said initial sales were promising and that, despite plans by rivals to downsize (Lookers is shedding 1,500 jobs), the company thinks scale is the way forward.  (Reuters)
  • The body representing Indian dealers claims its members are given too little profit by the OEMs (the article contains a detailed table), and that margin levels need to double to make their businesses viable (presumably coming at the expense of OEM profits, rather than transaction prices). (Autocar)
  • Indian online car sales portal CarTrade is reportedly raising $43 million. (Deal Street Asia)
  • Online used car seller Vroom is hoping for a valuation of $2.3 billion when it completes its IPO. (Reuters)

Ride-Hailing, Car Sharing & Rental (history)

  • Singaporean short term car rental service Smove shut up shop. (Deal Street Asia)
  • Didi Chuxing’s boss said taxi journeys in China during May were at the same level as the prior year. Ride hailing firms normally like to tout double digit quarter-over-quarter growth rates. (Deal Street Asia)

Driverless / Autonomy (history)

  • A study by a US insurance think tank concluded that fully autonomous cars would only reduce accidents by around 30%, rather than the 90% improvement many advocates have touted. However, the headline assumed that such vehicles will not drive more conservatively than humans today, with a further 40% of accidents attributed to speeding or illegal manoeuvres; conditions that self-driving vehicles are explicitly being trained to ignore (in addition to the compounding benefits of having more cars on the road driving within sensible limits). (IIHS)

Electrification (history)

  • Mahindra Electric believes that the Indian market for electric vehicles will take off in 2023. (Autocar)
  • Nikola’s recent purchase of hydrogen production equipment suggests each filling station will cost more than $6 million. (Nikola)

Connectivity

  • Mitsubishi Corporation and NTT now own 30% of mapping company HERE, joining existing shareholders Audi, Bosch, Continental, BMW, Pioneer, Intel and Mercedes-Benz.  (HERE)

Other

  • Electric scooter firm Superpedestrian raised $15 million and acquired bicycle rental service Zagster. (PE Wire)
  • Aviation firm Kitty Hawk canned its flying car project, preferring to concentrate on larger vehicles. (Kitty Hawk)
  • Autonomous robot firm Otto Motors (a unit of Clearpath Robotics) raised $29 million. (Otto Motors)
  • Brazilian bicycle rental firm Tembici raised $47 million. (Reuters)
  • Autonomous robot developer Locus Robotics raised over $40 million. (Locus)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news, automotive intelligence, automotive strategy, .automotive research consultants

Auto Industry Briefing — week ending 31st May 2020

Simulations that are too perfect; style need not cost the earth; and Nissan’s promise to do better.Please enjoy our auto industry and mobility briefing for 26th May to 31st May 2020. 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)

Daimler (history)

  • Hot on the heels of the recently agreed fuel cell partnership between Daimler Trucks and Volvo trucks, Daimler signed a similar agreement with Rolls-Royce (the aero engine maker) for generator type systems. This is a new JV, although the Daimler-Volvo unit will be involved because it will produce the fuel cells. (Daimler)

FCA (history)

  • Breathed a sigh of relief as Moody’s left FCA’s rating unchanged. (FCA)

Ford (history)

  • Executives cryptically suggested that Ford and Rivian were working on a joint program. (Green Car Reports)

Geely (includes Volvo) (history)

  • Geely raised about $840 million through a rights issue, selling about 6.1% of the firm (after enlargement). (Geely)

General Motors (history)

  • Said that production restart had gone smoothly and production was now being increased by bringing in extra shifts. Despite the upbeat tone, even at the higher level, production will be below pre-coronavirus levels. (GM)
  • GM’s Cruise self-driving unit outlined the difficulty with simulating sensors so that AI can learn to drive in a virtual environment. The team’s to do list suggest that whilst modelling real world interference is something they are concerned about, it isn’t yet solved. (GM)

Nissan and Mitsubishi (history)

  • Nissan reported 2019/20 fiscal year revenue of 9.9 trillion JPY (about $92 billion), down (15)% versus prior year. A net loss of (671) billion JPY (about $(6) billion) compared to a profit of 319 billion JPY in 2018/19. Nissan’s consolidated wholesales of 3.35 million units fell (16)% on a year-over-year basis, a weaker performance than overall retail sales of 4.9 million which fell (11)%. Nissan impaired assets by 522 billion JPY (about $5 billion). The firm hopes that global industry will only decrease (15)% – (20)% in the next financial year. (Nissan)
  • Nissan unveiled its recovery plan, much of which had leaked in the weeks leading up to the announcement. Global capacity will be cut to 6 million units by 2023, and the straight time capacity will be 5.4 million — closer to Nissan’s real sales rate than the circa 7 million units of capacity in place today. Nissan expects that plant utilisation will be at least 80%. Cuts will be across the board, with only two plants scheduled to shut — Indonesia (already announced) and Barcelona, Spain. The brand will cull poor-performing products, with the value Datsun brand and smaller cars declared non-core. (Nissan)
    • Significance: Nissan’s plan contains two colossal assumptions: firstly, that industry will recover in time to support the brand’s volume ambitions; secondly, that despite reducing the portfolio, the market share will either grow or hold steady (depending on the market).
  • The Renault-Nissan-Mitsubishi announced a (previously advertised) plan to simplify product engineering and reduce costs. The main elements are that the different brands will share much of the bodywork, not simply the underpinning components, and are likely to be made in the same factories. A secret formula will be used to decide which company has the lion’s share of work for each product. There is a structure for technologies too. The partners believe that they could save 40% of the investment costs for a new model. (Mitsubishi)
    • Significance: Whilst the claimed savings are substantial, and the template for this engineering relationship already exists at PSA (albeit with all brands owned by the same company), there is something of a disconnect. The 40% figure is in line with PSA’s supposed savings by integrating Opel with the Peugeot and Citroën brands, but Renault and Nissan already claim lots of this through their fabled alliance synergies.
  • Settled a case Nissan brought against an Indian regional government for failing to pay the level of incentives agreed when Nissan set up a plant there. Indications were that Nissan received $185 million – $240 million, around one third of the amount claimed. (Reuters)

PSA (history)

  • Apparently poised to confirm that Opel’s Russelsheim plant will soon be allocated a new vehicle. It isn’t all good news though: the site can reportedly expect redundancies in the powertrain manufacturing area and some insiders believe the product will simply offset the seemingly never-ending decline in Insignia volumes. (Handelsblatt)

Renault (history)

  • Renault unveiled a new plant aimed at saving €2 billion over the next three years, cutting about 15,000 employees of which 4,600 heads will be lost in France. On the production side, capacity will be cut by about (20)%; planned capacity increases won’t go ahead; gearbox manufacturing will probably be hit and several French plants face periods of consultation and “reflection”. Taking a leaf out of PSA’s book, Renault seems minded to gut factories without shutting the gates, rather than closing the whole thing (although a couple of smaller plants are likely to go). By 2026, all Renault vehicles are planned to be on platforms with greater than 600,000 units per year.
  • The French government said the state backed mega loan for Renault will not be signed off until the company satisfies labour unions that job cuts are needed — and takes a dim view of factory closures. (Reuters)
  • Renault expects battery costs to fall below $100 / kWh, thanks to sharing Nissan and Mitsubishi. (Pres p.25)

Tesla (history)

  • CEO Musk hit the first of a series of stock option milestones, netting him a cool $800 million — if he decides to cash in immediately. (The Verge)

VW Group (history)

  • Sources suggest that CEO Diess is on thin ice with his board and fighting off criticism from employee representatives and state shareholders may distract from a post-coronavirus recovery. (FAZ)
  • Audi is betting on a in-house effort named Artemis to accelerate the brand’s efforts to bring technologically sophisticated electric vehicles to market, seeking a “highly efficient” electric car by 2024, and a network of services to offer alongside the vehicle. (Audi) Supposedly the aim is to out-Tesla Tesla, after internal VW group reviews have concluded that current electric products are competitive but missing that certain something. (Manager Magazin)
  • Announced that it had given board approval to three (previously announced) joint vehicle programs with Ford, the milestone indicates that the vehicles in question are commencing their (capital intensive) industrialisation. (VW)
  • Scania is cutting 5,000 jobs, with about 1,000 of these coming at head office. (Scania)
  • Launched a (previously announced) joint venture with consultancy CapGemini, called XL2, that will provide software engineering expertise for Audi. (Audi)
  • Audi launched a new initiative, starting in France, that allows buyers to make an online reservation for any new or used vehicle in dealer stock for €100. (Audi)
  • Confirming earlier rumours, VW took a 26% stake in battery maker Guoxuan (Gotion) for €1.1 billion. At the same time, VW announced a deal to buy a 50% share in carmaker JAC and increase VW’s control of the existing JV with JAC for electric vehicles to 75% (from 50%). The JAC investment is about €1 billion. (VW)
  • VW unveiled the Nivus, a small crossover aimed at value conscious buyers, mainly in Latin America. (Autocar)
    • Significance: As with Renault’s emerging market Kaptur, VW has decided that a low cost proposition shouldn’t mean compromising on styling. Brands planning on selling boring, or tired, vehicle designs may need to change course (and some non-value vehicle programs may be getting nervous too).

Other

  • Rivian appears to be planning a foray into vehicle insurance, according to job postings. (TechCrunch)
  • BYD’s semiconductor business raised $265 million ahead of a separate listing. (Deal Street Asia)

News about other companies and trends

Economic / Political News

  • France unveiled an €8 billion stimulus scheme for the automotive industry. It involves increased incentives to switch to electric vehicles and lowers the qualification criteria for an existing scheme that supported the scrappage of older, higher polluting, vehicles. President Emmanuel Macron wants his country to be the leading producer of electric cars — hoping for one million per year to be built by 2025. Someone familiar with VW’s plans, and Tesla’s designs for a German factory, should probably tell him that he might not be setting his sights high enough. (BBC)
  • European manufacturers body ACEA suggested that the EU might want to stop issuing new emissions rules (which govern pollution levels), because rules forcing lower CO2 / better fuel economy would improve fleet emissions as a by-product. (ACEA)

Suppliers

  • Autoliv reckons that production has recovered well in China, but that Europe is far less healthy with the firm calling the restart “low and unstable”. It has already laid of 15% of global production staff. (Autoliv)
  • ZF has completed the acquisition of WABCO. (ZF) The champagne will probably remain on ice however, because the company is reportedly planning to cut 15,000 jobs worldwide. (Reuters)
  • Continental and Pioneer have teamed up to offer infotainment tailored to Asian markets. (Continental)

Ride-Hailing, Car Sharing & Rental (history)

  • Ride hailing firm Ola acquired electric scooter firm Etergo, seemingly to boost corporate knowledge and technology ahead of launching a range of electric two wheelers in 2021. (Reuters)
  • Uber says that if it had to classify drivers in California as employees, it would probably sack about 75% of them because so few currently work a 40-hour week. (Uber)
  • Uber was accused of being tin-eared to the woes of bicycle lovers everywhere after tens of thousands of bikes owned by Uber’s Jump bicycle rental brand were scrapped because new owner Lime regarded them as technically inferior and surplus to requirements. Uber said “recycling” the bikes was easier than giving them away. (The Verge)
  • Mobile home rental firm Cabana raised $3.5 million, with some of the money coming from the (independently wealthy) head of Ford’s software arm. (FINSMES)
  • BlaBlaCar will integrate electric scooter rental service Voi on its platform. (TechCrunch)
  • Advantage Rent A Car filed for Chapter 11 bankruptcy. (Auto Rental International)

Driverless / Autonomy (history)

  • Didi Chuxing raised over $500 million to spend on developing self-driving cars. (Reuters)
  • Self-driving car developer Zoox will reportedly be sold to Amazon, with the two parties said to be in detailed talks. The firm is notable because it has set out to create its own vehicle, in addition to the self-driving hardware and software and would possible form a useful alternative to the larger vehicles Amazon plans to buy from Rivian. (WSJ)
  • GM’s Cruise self-driving unit outlined the difficulty with simulating sensors so that AI can learn to drive in a virtual environment. The team’s to do list suggest that whilst modelling real world interference is something they are concerned about, it isn’t yet solved. (GM)

Electrification (history)

  • Battery supplier CATL plans to develop battery swapping services. (Reuters)
  • Air Liquide hopes that a new type of filling station, which can pump hydrogen more quickly, will encourage take-up of fuel cell cars. (Green Car Reports)
  • Nio says that it has undertaken 500,000 battery swaps since launch. Take-up varies; less than half of cars sold have ever visited such a facility. (Inside EVs)
  • Renault expects battery costs to fall below $100 / kWh, thanks to sharing Nissan and Mitsubishi. (Pres p.25)

Other

  • Singaporean electric scooter rental firm Beam raised $26 million. (TechCrunch)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news, automotive intelligence, automotive strategy, .automotive research consultants

Auto Industry Briefing — week ending 25th May 2020

Broadband providers charging cars; a slightly random battery milestone; and a cheap and cheerful way to delight buyers. Please enjoy our auto industry and mobility briefing for 18th May to 25th May 2020. A PDF version can be found here.

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

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

Find our archive here.

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

News about the major automakers

Daimler (history)

  • Mercedes’s design chief says the all-electric EQS will look radically different to the forthcoming next-generation S-Class with which it shares many of its parts. He says that the brand’s production intent concept cars (such as the EQS) always herald 80% to 90% of the road-going design. (Autocar)
  • Mercedes does not believe that synthetic fuels are viable in the medium term and, if it does become a reality, the fuel will become widespread in aviation before it reaches the mass market for vehicles. (Autocar)
  • A cybersecurity researcher said he had downloaded the source code used for the Mercedes Van connectivity suite. In a classis blunder, Daimler’s software team were using an online tool to store and check code and although people needed to register to access the code, access was automatically granted without checks. (ZDNet)
  • Reportedly plans to invest in battery developer Farasis Energy’s impeding IPO. (Reuters)
  • Geely wants to explore deeper collaborations with Daimler. (Reuters)

FCA (history)

  • FCA’s chairman brushed off suggestions that the intended special dividend payment to shareholders might be at risk, given the large sum the company hopes to borrow from the Italian taxpayer. (Reuters) Government ministers said FCA would need to invest more in Italy to fully justify the money. (Reuters)

Ferrari

  • Raised €650 million in debt at an interest rate that will make Ferrari the envy of automotive treasurers. (Ferrari)

Geely (includes Volvo) (history)

  • Geely has commissioned a new design centre in Sweden dubbed the “chamber of secrets” by its architects. New cars can be viewed in natural light via a rooftop courtyard, safe from prying eyes boast the designers, unless would-be spies are equipped with low-cost drones. (Deezen)
  • Volvo raised around $1.3 billion in new credit lines, net of extensions. (Volvo)
  • Volvo has now implemented the unilateral 180 km/h speed restriction for all cars in production. (Volvo)
  • Geely wants to explore deeper collaborations with Daimler. (Reuters)

General Motors (history)

  • GM says that its engineers stand on the cusp of a million-mile battery. (Reuters)

Honda (history)

  • Honda’s Chinese vehicles will use an infotainment and connectivity suite developed with Tencent. (Nikkei)

Nissan and Mitsubishi (history)

  • Mitsubishi reported financial results for the fiscal year ended March 2020. Net sales of 2.27 trillion JPY (about $21 billion), down (9.7)% on a year-over-year basis. Operating Income of 13 billion JPY (about $120 million), down (89)% versus prior year. (Mitsubishi)
  • American officials arrested two men in connection with Carlos Ghosn’s flight from Japan (which is seeking their extradition). It isn’t clear whether the move will affect Ghosn himself. (Economic Times of India)
  • Unveiled the production version of the limited-edition GT-R 50, produced with ItalDesign. (ItalDesign)
  • Further rumours of Nissan’s turnaround plan emerged; 20,000 jobs will apparently be lost. (Reuters)
  • Spanish authorities reckon it would cost Nissan €1 billion to close the Barcelona factory. (Reuters)

Renault (history)

  • France’s finance minister worried that Renault might “disappear” without state help. He desperately wants for the firm to improve productivity, provided it doesn’t affect French jobs. (Reuters)
  • Rumours swirled that Renault’s restructuring plan will see the closure of three small plants and that the recently unveiled Mégane won’t be replaced. The future of the Flins plant supposedly hangs in the balance. (Autocar)

Tata (includes JLR) (history)

  • Jaguar’s one-make electric I-Pace racing series (which supports Formula E) will stop at the end of 2020, one year earlier than planned. (The Verge)
  • Reportedly hoping to receive a loan of around £1 billion from the UK government. (Sky News)

Tesla (history)

  • Expects that the Shanghai factory will reach output of 4,000 vehicles per week by the end of June, implying an installed capacity of around 185,000 units — higher than the 150,000 announce by Tesla. (Xinhua)
  • Panasonic said it was in talks with Tesla to expand capacity at the Nevada Gigafactory. (Reuters)

Toyota (history)

  • Recalling 9,500 RAV4 SUVs in the USA because the suspension arms might break. (Toyota)
  • Unveiled the all-new Sienna minivan (for North American markets) (Toyota) and Venza crossover. (Toyota)
  • PAVE published a Toyota-sponsored study into attitudes about autonomous vehicles. The main takeaway was, that with no mature examples of autonomous vehicles on the road, respondents are scared of them. (Toyota)

VW Group (history)

  • Found itself at the centre of a social media storm over an Instagram advert that carried several racist cues. After initially prevaricating, VW apologised and withdrew the offending video. (Handelsblatt)
  • Porsche has installed some cameras in non-sensitive areas of the factory so that anxious owners can receive a theme park-style photograph of their car in various stages of production. (Porsche)
  • Porsche says that publicity from the online launch of the 911 Turbo S (arranged instead of the Geneva show) was far higher than products using press conferences at the show received in 2019. (Porsche)
  • Agreed terms with German dealers for the launch of VW sales: dealers will get a flat commission, regardless of whether they or VW found the customer and VW will set all transaction prices and arrange all financing. The brand also appears to have granted infinite floorplan financing. (VW)
  • A German court ruled that VW will have to pay damages over dieselgate in a case that was separate to the recently concluded class action suit. (Reuters)

Other

  • Aston Martin’s CEO Palmer is leaving with immediate effect, to be replaced at the beginning of August by Tobias Moers, a recruit from Mercedes’s AMG division.
  • McLaren’s recovery efforts hit a problem when existing bond holders complained that assets underpinning a proposed new debt issue was already security for their loans. (FT) The firm subsequently announced 1,200 job losses across the car making and racing divisions. (Sky)
  • Faraday Future’s founder agreed a bankruptcy plan that saw him hand over his stake in the company to creditors, a move the firm hopes will help it raise further funding. (Faraday Future) Faraday’s CEO says the firm is in talk with several car makers about sharing technology. (Bloomberg)

News about other companies and trends

Economic / Political News

  • European passenger car registrations in April of 1.345 million vehicles fell (78)% versus prior year. (ACEA)
  • A leaked document purporting to outline a massive EU stimulus programme — with up to €80 billion targeted at clean mobility (split between vehicle purchases and grants) — set tongues wagging. (EURACTIV)
  • The UK government set out proposed tariffs on imports to apply after the transition period with the EU ceases at the end of 2020. It confirmed that cars will attract a 10% tariff, the same as non-EU imports without a trade deal attract today. Tariffs for parts are still present, although reduced in some cases. The parts attracting zero tariffs (e.g. wing mirrors) suggest a degree of industry lobbying has been considered. (UK Government)
    • Significance: Although the government said it was protecting the automotive sector, the mix of vehicles produced locally (mainly luxury cars) doesn’t reflect the wider market, so the tariffs, if they came into force on EU imports, would be likely to have a distorting effect on sales. The published tariffs suggest a producer of vehicles using knock-down kits would save ~7% of the vehicle value over importers. Contact us for more details.

Suppliers

  • Benteler reckons that plans by many European OEMs to have output at pre-lockdown levels by the summer are “ambitious”. (Autocar)
  • Battery producer Exide entered Chapter 11 bankruptcy. (Exide)
  • Gestamp reported Q1 2020 revenue of €2.17 billion and EBIT of €110 million. (Gestamp)

Ride-Hailing, Car Sharing & Rental (history)

  • Hertz filed for chapter 11 bankruptcy after lenders would not agree to extend re-payment deadlines. (Detroit News)
  • Uber cut a further 3,000 jobs, brining the total to almost 7,000 in the last few weeks (about 25% of the global workforce). The CEO says the firm needs to become profitable and will withdraw from non-core activities, without fully describing what they are. (Business Insider)
  • Ride hailing operator Ola cut 1,400 jobs, saying revenue fell (95)% in the last two months. (TechCrunch)
  • Ride hailing service Bolt raised €100 million. (Reuters)
  • The owner of ride hailing firm Tada raised around $5 million. (Deal Street Asia)

Driverless / Autonomy (history)

  • The CEO of Intel’s Mobileye reckons there will be massive consolidation amongst companies developing self-driving technology because (he thinks) specialists will find it too hard to collaborate. (Reuters)
  • Lumotive says it will have a new lidar sensor in customer’s hands by the end of 2020. With a range of around 120 metres — far less than some boast — the main selling point will be “competitive” cost. (Lumotive)
  • Labelling company Scale AI and lidar developer Hesai launched an open source dataset of lidar traces that can be used to train systems on object recognition. (TechCrunch)
  • Autonomous technology developer Hongjing Drive said it had raised millions of dollars. (TechNode)

Electrification (history)

  • British battery start-ups AMTE Power and Britishvolt want to build a factory with a capacity of 30 GWh (or more), which would make it one of the World’s largest facilities. The scheme appears to have government backing. (AMTE)
  • SVOLT says 2021 will see the debut of its cobalt-free batteries in vehicles made by Great Wall. (Autocar)
  • Suspension supplier KYB signed a deal with in-wheel motor developer REE, enabling REE to develop packages incorporating wheel hub, power, braking and suspension. (REE)
  • InoBat acquired a site in Slovakia for a low-volume battery production line and R&D centre, with plans to expand to a 10 GWh facility by mid-decade. (Green Car Congress)
  • Media behemoth Liberty Global plans to start a high speed charging network in the UK using power from the kerbside cabinets that house its broadband equipment. (Bloomberg)

Connectivity

  • HERE signed deals with address database Loqate and parking provider APCOA to embed its maps in other software (HERE) and map out European parking lots. (HERE)
  • Alpine and Telenav are launching a usb stick that will upgrade an infotainment unit with smartphone integration so that it can access media streaming services and send vehicle data to the cloud. The device sounds in principle like a smartphone without a screen. (Telenav)

Other

  • University researchers in Japan are trialling an inflatable electric scooter which bears a passing resemblance to a child’s Trunki rideable suitcase. Although the prototype has several drawbacks, the idea could develop into something that would be suitable for integration into a vehicle’s boot space. (IEEE Spectrum)
  • Electric rickshaw developer Euler Motors raised an additional 20 Cr INR (about $2.7 million). (Autocar)
  • Electric scooter rental service Tier has launched foldable helmets stored within the scooter. (Tier)
  • By Miles, a mileage-based insurance company backed by JLR’s InMotion VC fund raised £15 million, but JLR did not participate. (By Miles)
  • Autonomous drone developer Xwing raised $10 million. (Alven)
  • A majority stake in bicycle rental service CityBike was sold to a private equity firm. (PE News)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news, automotive intelligence, automotive strategy, .automotive research consultants

Auto Industry Briefing — week ending 17th May 2020

Remote working converts; fighting water with water; and a dent in the limited edition bubble? Please enjoy our auto industry and mobility briefing for 11th May to 17th May 2020. A PDF version can be found here.

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

  • Sofa Song PSA say that coronavirus has proved that teleworking is the way forward. In the near future, staff will only spend one and a half days in the office, and all the time they spend there will be a constant whirlwind of high-energy creative meetings. By implementing these measures, PSA hopes to save on office space, and money. Clearly, PSA executives believe they have cracked communication problems often associated with remote working on this scale. How should we interpret the silence of their competitors?
  • November Rain VW’s ItalDesign unit is working on a safety system to reduce aquaplaning. It sounds hard to believe, but the idea is to clear the water by spraying a jet of… water… at the ground. It remains to be seen how reliable the feature could be but it demonstrates the kind of innovation that could be feasible for frequently serviced autonomous vehicles but which would never work in a world of privately owned cars where owners often run out of fuel, not to mention ancillary water tanks. Are we underestimating the potential safety improvements?
  • Pop Goes The Weasel Aston Martin admitted that there had been cancellations for some of the highly-priced “special” cars the firm relies on for so much of its (ahem) profits. In the same breath, company representatives reassured investors by saying waitlisted customers had immediately taken the newly vacated slots, but it indicates a weakness for these must-have products. Is this the normal ebb and flow of product ordering and nobody normally asks about it, or is there a softening of demand?

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)

  • BMW’s CEO is expecting several large markets to be “very slow” to recover and believes that the Chinese market might not be a good guide to consumer confidence elsewhere. (BMW)
  • Says that plans to commission a new plant in Debrecen, Hungary, are unaffected by coronavirus. (BBJ)

FCA (history)

  • PSA and FCA jointly decided not to issue any ordinary dividends in 2020. (PSA)
  • Working on a credit facility backed by the Italian government that would be open to FCA and Italian automotive suppliers, worth up to €6.3 billion. (FCA)
  • The breakdown of a deal by major FCA shareholder Exor to sell an insurance unit, after the prospective buyer tried to negotiate a price reduction, was seen by some as a warning to PSA not to re-open the merger valuation. (Reuters)

Ford (history)

  • Confirmed that over the air updates for the forthcoming all-electric Mustang Mach-E will be capable of upgrading “nearly all” of the software on the vehicle, and extend far beyond the infotainment-only upgrade functionality that some brands are touting. (Ford)

Geely (includes Volvo) (history)

  • Lotus chose UK utility Centrica to provide electricity for owners. Unusually, the partners say that their aim is to establish global infrastructure — such deals normally only cover a country or region. (Centrica)

General Motors (history)

  • Believes that lessons learned from the recent UAW strike will help it ramp up North American factories to full capacity within four weeks of returning, demand permitting. (Detroit Free Press)
  • Shut down the Ariv electric bicycle project. (The Verge)
  • Laid off about 8% of staff at the Cruise self-driving unit, despite indicating that spending would be ring-fenced. GM’s CEO said the cuts were “prudent”, focused on non-technical areas and called the company’s commitment to the business “unwavering”. (Reuters)

Honda (history)

  • Reported financial results for the fiscal year ended March 2020. Sales of 4.8 million automobiles fell (10)% on a year-over-year basis. Automotive revenue of 10 trillion JPY (about $93 billion) fell (8)% net of currency effects (group revenue was 14.9 trillion JPY). Automotive operating profit of 153 billion JPY (about $1.4 billion) fell (27)% (group profit was 634 billion JPY). (Honda)

Mazda

  • Reported full fiscal year (April 2019 to March 2020) financial results. Net sales of 3.4 trillion JPY (about $32 billion) fell (3.8)% on a year-over-year basis. Operating income dropped (47)% to 43.6 billion JPY (about $405 million). Mazda’s cash balance dropped about $(1.2) billion during the year, despite the relative stability and the company refused to provide guidance for the current year. (Mazda)
    • Significance: Toyota already holds significant stakes in Mazda and Subaru with a full takeover a likely response to severe financial distress by either brand.

Nissan and Mitsubishi (history)

  • Ahead of Nissan’s announcement of its new strategy (set for 28th May), details reportedly leaked: the Barcelona plant is set for closure; Nissan will make Renault products (said to be Captur and Kadjar — sister vehicles of the Juke and Qashqai) at the Sunderland, UK, factory. (Nikkei) Datsun will be chopped entirely, rather than being scaled down, according to some as part of moves to save $2.8 billion annually. (Bloomberg) Nissan didn’t deny any specific points but said the plan was still in progress. (Nissan)
  • Looking to raise up to $4.7 billion in bonds to fund restructuring. (Nikkei)

PSA (history)

  • PSA and FCA jointly decided not to issue any ordinary dividends in 2020. (PSA)
  • Implementing widespread teleworking in response to coronavirus has convinced PSA that this is the way forward. Staff can expect to spend around 1 – 1.5 days per week in the office, with the remainder working from home. As a by-product, PSA expects to reduce floorspace thereby cutting carbon emissions (oh and cost too). (PSA)
  • The breakdown of a deal by major FCA shareholder Exor to sell an insurance unit, after the prospective buyer tried to negotiate a price reduction, was seen by some as a warning to PSA not to re-open the merger valuation. (Reuters)

Renault (history)

  • Renault’s forthcoming all-electric SUVs will be sleeker than conventionally powered vehicles because the brand hopes to harness aerodynamics to improve range. (Autocar)
  • Reportedly taking an axe to the large car product plan with replacements for the Espace, Tailsman and Scénic apparently cancelled with only one or two years to go until launch. (Reuters)

Subaru

  • Subaru reported full fiscal year revenue of 3.3 trillion JPY (about $31 billion), up 6% versus prior year on sales of 1.03 million units, up 3.3%. Operating profit of 210 billion JPY (about $2 billion) rose 15.7%. Subaru is expecting a bumpy year ahead and refused to provide guidance. (Subaru)

Tesla (history)

  • CATL’s CEO says Tesla has a firm plan to make its own batteries. (Inside EVs)

Toyota (history)

  • Reported full year (April 2019 to March 2020) financial results. Sales of 8.958 million units was a whisker below the prior year. Revenue of 30 trillion JPY (about $274 billion) dropped (1)% versus prior year whilst operating income of 2.4 trillion JPY (about $22 billion) was also (1)% worse than prior year. Although the results weren’t much affected by coronavirus, Toyota thinks the current fiscal year will be much worse, predicting that sales will fall by almost 2 million units to around 7 million. (Toyota)
  • Announced a series of down days at plants in Japan in response to falling demand. (Toyota)
  • Toyota AI Ventures invested in animation company Ziva Dynamics. (FINSMES)

VW Group (history)

  • Suffering problems launching the Golf 8 (and some sister products) because of faults with the equipment used to send notifications to emergency services when the vehicle has an accident. (Handelsblatt)
  • VW’s China team say customers are returning to market more quickly than they initially expected but also believe that many domestic brands will fall by the wayside as the industry recovers. (China Daily)
  • It sounds like an April Fool’s joke; VW’s ItalDesign is working with Bosch and a company called EasyRain to develop a system that combats aquaplaning in wet weather by squirting water from the car at the water on the road thereby clearing some of the road surface and enabling the vehicle to grip better. (ItalDesign)

Other

  • The British government reportedly told McLaren to try harder to raise money rather than asking for aid (beyond the furlough scheme). The company appears willing to mortgage many of its most high-profile assets. (Sky News)
  • Mahindra’s Ssangyong brand reported Q1 2020 revenue of €649 billion KRW (about $530 million) and an operating loss of (98.6) billion KRW (about $(80) million), excluding around $(60) million of asset impairments. (Ssangyong)
  • Henrik Fisker thinks most electric vehicle start-ups will go bust in two to three years (statistically correct), pointing to likely manufacturing and quality problems and a likely lack of patience from customers for such errors. He did not explain why his, eponymous, firm would be different.  (Business Insider)
  • Dyson showed off the electric car it had worked so hard on before canning the project last year. The 5 metre long, 7 seat SUV would have put the company squarely up against the likes of Range Rover. A business case that apparently needed (wholesale) revenue of £150,000 per unit would suggest volumes in the low thousands. (Engadget)
  • WM Motor unveiled an all-electric concept car called Maven. (Inside EVs)
  • Aston Martin reported Q1 2020 financial results. Sales of 578 units dropped (45)% on a year-over-year basis with massive declines in all regions apart from the UK. Aston Martin said this was a conscious effort to reduce dealer stocks and move to build to order. Revenue of £79 million was smaller than the before tax loss of £(119) million. In the earnings call, Aston Martin confirmed that there had been some cancellations for the brand’s limited series, very expensive, “specials”. Although company representatives quickly pointed out that the cancellations had been swiftly placed with other customers, it may be an early indication of softening in this hitherto highly profitable segment. (Aston Martin)

News about other companies and trends

  • China light vehicle sales in April of 2.07 million units rose 4.4% year over year with a 31.6% increase in commercial vehicles offsetting a small drop in passenger cars. (CAAM)
  • European sales of battery electric and plug-in hybrid vehicles in Q1 2020 represented 6.8% of all passenger cars, up from only 2.5% in the prior year. (ACEA)

Suppliers

  • Administrators were called into the UK operations of supplier Arlington Automotive. (BBC)
  • Experts believe that hygiene is the next frontier in automotive interior technologies, with UV lights and disinfectants mentioned as potential advances. (Detroit Free Press)
  • Martinrea reported Q1 2020 revenue of $873 million and operating income of $49 million. (Martinrea)

Dealers

  • Over 40% of UK dealers responding to a survey said they had already made redundancies, in addition to furloughing staff. (Automotive Manager)

Ride-Hailing, Car Sharing & Rental (history)

  • Chinese ride hailing firm Shouqi Limousine says it is profitable (on a gross profit basis) in China overall and in several different cities. The company expects positive EBITDA by the end of the year. (Shouqi)
  • Lyft is raising $650 million – $750 million of unsecured debt. (Lyft)
  • Uber raised $900 million of debt. (Uber)
  • Hertz reported a net loss of $(356) million in Q1 2020 and confirmed that it was reliant on the patience of debt holders to remain afloat. (Hertz)
  • Uber is reportedly looking to acquire food delivery firm GrubHub. (WSJ)

Driverless / Autonomy (history)

  • Waymo’s massive funding round continued to gain momentum: the self-driving developer got its hands on another $750 million, taking the total to $3 billion. (Reuters)
  • GM laid off about 8% of staff at the Cruise self-driving unit, despite indicating that spending would be ring-fenced. GM’s CEO said the cuts were “prudent”, focused on non-technical areas and called the company’s commitment to the business “unwavering”. (Reuters)

Electrification (history)

  • Electric powertrain supplier IRP Systems raised $17 million. (IRP)
  • Kia will offer electric cars with either 400V (standard today) or 800V (Porsche Taycan) charging capability. The model-by-model decision will be based on Kia’s view of the usage profile. (Kia)
  • Charging company Wallbox raised an additional $13 million. (Wallbox)
  • Triggo’s forthcoming electric quadricycle can retract the front wheels to make it narrower. (Triggo)
  • Lordstown Motors licenced the in-wheel motor technology of Elaphe for inhouse manufacture. (Detroit News)

Connectivity

  • European manufacturers’ body ACEA is worried that draft rules about data privacy for connected cars could be overly restrictive around data gathering, especially information from sensors looking outside the cabin. (ACEA)

Other

  • Electrically assisted bicycle maker VanMoof raised €12.5 million. (EU Startups)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news, automotive intelligence, automotive strategy, .automotive research consultants

Auto Industry Briefing — week ending 10th May 2020

Rental companies confirm they aren’t buying; FCA’s rotten performance; and upper or lower for lidar? Please enjoy our auto industry and mobility briefing for 4th May to 10th May 2020. A PDF version can be found here.

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

  • Get Get Down Rental firms are slamming the brakes on new vehicle purchases. I know I raised similar questions last week, but now there are more specifics: Hertz have said they have enough stock to last the rest of 2020 and US OEMs are reportedly trying to reallocate units that rental companies had already agreed to buy. A poorly-kept industry secret is that rental companies often buy more cars and vans than they need because manufacturers give them such massive incentives. Why? For no better reason than it helps underpin market shares, especially when you need to sell lots of cars in a hurry to meet your monthly sales target. Can automakers cope with rental demand dwindling or is it about to blow a hole in production forecasts?
  • Bad Apple!! Fiat Chrysler’s latest financial results hit the headlines due to the €(1.7) billion net loss but the detail hid plenty of scary detail. Specifically, the operations outside of the Americas have cumulatively lost money since Q3 2017. In a world where GM is showing the benefits of brutally culling underperforming areas and we are staring a recession in the face, will big cuts in these regions be the price FCA has to pay to maintain its merger valuation with PSA?
  • Up On The RoofVolvo announced that it will soon be making cars with lidar fitted into the roof, just above the windscreen. The arrangement looks neat, although aerodynamicists might initially have reservations. It is a philosophical departure from the design advanced with Audi where it was mounted in the grille. Are we about to witness a battle between uppers and lowers about which execution is best?

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)

  • Released financial results for Q1 2020. Automotive revenue of €18.0 billion fell (6.4)% versus Q1 2019 (group revenue rose slightly, thanks to financial services) whilst EBIT of €229 million was much improved versus a loss in the prior year. Although BMW refused to provide a detailed outlook for 2020, the firm still expects for the automotive division to be profitable on an EBIT basis (somewhere between 0% to 3% margin). (BMW)
  • Says it will save over €1.7 billion in capital expenditures this year and is confident of meeting European CO2 targets regardless of how the economic situation develops. (BMW)

FCA (history)

  • Reported Q1 2020 revenue of €20.6 billion, down (16)% year-over-year, and a net loss of €(1.7) billion from continuing operations (which included €643 million of asset impairments). Even using FCA’s preferred “adjusted” EBIT measure, operations outside the America’s have cumulatively lost over €(200) million since Q3 2017. Maserati’s €(444) million of losses in the last 12 months — a stonking (32)% of revenue — raise questions over FCA’s earlier financial allocation methods that made the brand’s performance look so rosy. (FCA)
    • Significance: The weak performance in Europe and Asia highlight how much FCA needs the PSA deal to pass. Without it, a politically unpalatable restructuring beckons.

Ferrari

  • Ferrari shipped 2,738 units in Q1 2020, up 5% on prior year despite closing the factory in the middle of March. Revenue of €932 million fell (1)%, blamed mostly on F1, whilst EBIT of €220 million fell (5)%. (Ferrari)
  • Proclaimed itself “back at full capacity” as of 8th May. (Ferrari)

Ford (history)

  • Ford’s COO purchased $1 million of Ford stock, in an apparent show of confidence in the recovery. Cynics suggested it was a move aimed at chairman Bill Ford rather than the stock market and that the executive’s pay would soon be increased to refund the move. (AutoExtremist)
  • Releasing a package of data collected from self-driving test vehicles roaming the streets of Michigan, USA. Ford says the information is notable because it centres on the same routes over time and therefore allows third party researchers to explore the effects of changes in the local environment, and even sensor crossover when one or more of the cars was in the same location. (Ford)

Geely (includes Volvo) (history)

  • Volvo will use a roof mounted Luminar lidar on forthcoming SAE L3 to L4 self-driving features (“fully autonomous highway driving”). Volvo provided an image of how such an integrated system might look, without commenting on possible aerodynamic drawbacks that have led to others mounting similar units in the grille. Volvo has an option to increase its stake in Luminar and expressed a vague aspiration to fit lidar as standard to vehicles on its next-generation platform (implying a ~2025 timeframe and lower specification unit). (Volvo)

General Motors (history)

  • Reported Q1 2020 revenue of $32.7 billion, down (6.2)% on a year-over-year basis, and net income of $294 million, down (86.7)% versus 2019. The company said it was imposing cost cuts, whilst protecting spending on “key franchises”, GM-speak for high margin SUVs and future state bets (electric cars and autonomy). (GM)
  • Raised another $4 billion in secured debt and expects a further $2 billion credit facility to be formalised soon. GM is paying an interest rate of 5.4% – 6.8%, much lower than Ford’s recent, similar, offering. (GM)

Hyundai / Kia (history)

  • Hyundai appears over-pleased with its in-house transmission engineering expertise, claiming (wrongly) that it is uncommon for car manufacturers to make their own and using language that suggests the business still views the product as a significant competitive advantage. (Hyundai)
    • Significance: As long-time readers will recall seeing on many occasions, Ad Punctum’s analysis is that many manufacturers are already in a position where commoditising the transmission (and the engine) by sharing with third parties is an overdue step. The transmission is especially vulnerable because even if the world adopts plug-in hybrids more readily than fully electric vehicles, these use a transmission different to most conventional vehicles (and for series hybrids, it can be far simpler). Thus, transmission assets are likely to become a millstone around the neck of manufacturers who persevere with them.

Nissan and Mitsubishi (history)

  • Nissan reportedly plans to focus only on Japan, North America and China, with slimmed-down portfolios in European markets. (Reuters)

PSA (history)

  • Opel lost a series of employment cases brought by disgruntled German engineers who had refused to switch to engineering services provider Segula when Opel offloaded much of its Rüsselsheim product development centre to the French firm. (FAZ)

Renault (history)

  • Moves to restart production at the Sandouville, France, plant hit trouble when unions won a court judgement saying that safety measures were unclear. (Reuters)

Tata (includes JLR) (history)

  • JLR’s InMotion VC team shared their thoughts on how investments by OEMs can help reduce the environmental impacts of the cars they build. (JLR)

Tesla (history)

  • CEO Musk said, because of local government rules forcing Tesla’s Fremont factory to stay closed, he would move the businesses headquarters and future programs to locations in Texas and Nevada “immediately” and that the site’s future was in peril. It was not clear how the company would carry out such a move logistically, or whether this was a board-approved tweet. (BBC)

VW Group (history)

  • Škoda’s new Enyaq all-electric SUV was unveiled (in camouflage at least). (Škoda)
  • Škoda says that it lost 100,000 vehicles in Q1 2020 because of coronavirus. (Škoda)
  • Volkswagen is going to own the buildings used by the battery-making joint venture the company has formed with Northvolt. (VW)
  • Audi plans to train all sales and service staff about the new A3 using digital tools, foregoing the normal method of delivering train-the-trainer sessions in person. (Audi)
  • Audi says it cannot get SAE L3 self-driving features working in the A8, despite saying at the car’s launch that it was only a matter of time until legislative problems were resolved. (Automotive News)

News about other companies and trends

Economic / Political News

  • April US light vehicle SAAR of 8.58 million units fell (48)% from prior year. (Wards)
  • French passenger car registrations of 20,997 units fell (89)% versus 2019. (CCFA)
  • German registrations of 120,840 passenger cars in April, down (61)% versus prior year. (KBA)
  • Italian passenger car sales of 4,279 units in April fell (98)% on a year-over-year basis. (UNRAE)
  • Spanish passenger car registrations in April of 4,163 units dropped (97)% year-over-year. (ANFAC)
  • UK April passenger car sales of 4,321 units fell (97)% from prior year. (SMMT)
  • Russia’s government plans to pull forward vehicle purchases planned for 2021 and 2022 to support the local automobile industry. (TASS)
  • A UK consumer survey suggests plenty of (retail) customers are still planning to buy a car when dealers reopen, with government advice to drive rather than use public transport reckoned to be a big plus. (Motor Trader)

Suppliers

  • Lear reported Q1 2020 revenue of $4.5 billion and net income of $76 million. (Lear)
  • Delphi’s Q1 2020 revenue was $945 million, with an operating loss of $(20) million. The company said it was on track to be acquired by BorgWarner after resolving a disagreement over Delphi’s use of a credit line. (Delphi)
  • BorgWarner reported Q1 2020 revenue of $2.3 billion and EBIT of $186 million. (BorgWarner)
  • Adient reported definitive financial results for Q1 2020 (after making a preliminary filing in April). Revenue was $3.5 billion with EBIT of $66 million. (Adient)
  • American Axle (AAM) reported Q1 2020 sales of $1.34 billion and a net loss of $(501) million, more than explained by a goodwill impairment of $510 million. (AAM)
  • Aptiv reported Q1 2020 revenue of $3.2 billion and adjusted net income of $173 million (excluding the effect of the autonomous technology JV with Hyundai). (Aptiv)
  • Tenneco reported Q1 2020 revenue of $3.8 billion and an adjusted net loss of $(26) million. (Tenneco)
  • Yazaki is shedding 20% of its Mexican workforce (about 14,500 jobs), suggesting it doesn’t share the rosier predictions for a recovery. (Reuters)
  • Magna reported Q1 2020 revenue of $8.7 billion and net income of $261 million. (Magna) The company’s CEO expects consolidation in the supply base but is waiting to see how well the restart goes before making any big moves. Around 200 suppliers are under intensive monitoring because of concerns they are in financial distress. (Motley Fool)

Dealers

  • Chinese new and used car sales website Cheheoduo (formerly Guazi.com) raised $200 million. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental (history)

  • Uber reported Q1 2020 financial results. With gross bookings of $15.8 billion, Uber’s take was $3.5 billion, up 14% on a year-over-year basis. The net loss was $(2.9) billion although Uber claims that on an “adjusted EBITDA” basis ride hailing made $581 million in the quarter. The rate of cash burn suggests that, despite a bump in the stock price, Uber needs to do something drastic soon to remain financially stable. (Uber)
  • Lyft reported Q1 2020 revenue of $956 million, up 23%, and a net loss of $(398) million. (Lyft)
  • Rental firm Hertz is teetering on the edge of bankruptcy, winning a short reprieve for loan repayments due in late April to late May. The company now says it does not think it will need any new cars in 2020. (Reuters)
  • Rental businesses in the USA have reportedly slammed the brakes on new car purchases with various OEMs rumoured to be trying to reallocate stock, with FCA apparently hawking a list of 30,000 vehicles. (Bloomberg)
  • Confirming earlier rumours, Intel bought Moovit for $900 million. (Intel)
  • Uber invested in scooter rental firm Lime’s $170 million round, handing over Jump (Lime’s smaller rival owned by Uber). Although the move to shed scooter services might appear contrary to Uber’s earlier praise of the vehicles, it would be explained by a reportedly secret pact giving Uber an option to buy Lime. (TechCrunch)
  • Investors are betting that massive increases in unemployment will see more people turning their hand to driving using apps like Lyft and Uber with the resulting supply increases allowing the companies to scale down on expensive driver incentives, whilst increasing revenue. It remains unclear whether this view is consistent with existing complaints by full time drivers that revenues in mature markets were barely keeping pace with costs. (Reuters)
  • As rumoured, Uber announced plans to make 3,700 employees redundant, with about one third of the job losses coming in Egypt and Dubai (Careem). (Reuters)

Driverless / Autonomy (history)

  • Continental says that deferring investments in autonomous technology by a few months won’t hurt. (Reuters)
  • Magna’s CEO thinks car companies will reduce spending on SAE L3 to L5 autonomous features but investment in driver assistance (up to L2) will be unaffected. He also implied that Magna and Waymo have held substantive discussions about making complete (white label) vehicles for the self-driving company (Motley Fool)
  • Ford is releasing a package of data collected from self-driving test vehicles roaming the streets of Michigan, USA. Ford says the information is notable because it centres on the same routes over time and therefore allows third party researchers to explore the effects of changes in the local environment, and even sensor crossover when one or more of the cars was in the same location. (Ford)
  • Volvo will use a roof mounted Luminar lidar on forthcoming SAE L3 to L4 self-driving features (“fully autonomous highway driving”). Volvo provided an image of how such an integrated system might look, without commenting on possible aerodynamic drawbacks that have led to others mounting similar units in the grille. Volvo has an option to increase its stake in Luminar and expressed a vague aspiration to fit lidar as standard to vehicles on its next-generation platform (suggesting a ~2025 timeframe and lower specification unit). (Volvo)
  • Audi says it cannot get SAE L3 self-driving features working in the A8, despite saying at the car’s launch that it was only a matter of time until legislative problems were resolved. (Automotive News)

Other

  • Google pulled the plug on a plan to build smart technology into a neighbourhood in Toronto, Canada, that is being redeveloped. (Reuters)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.