Monthly Archives: April 2018

Showed the iX3 concept in Beijing and said the vehicle will be produced in China. (BMW)

Q1 2018 revenue of €39.8 billion was up 3% versus the prior year (damped by exchange). Group EBIT of €3.3 billion was down versus prior year which Daimler attributed to no-recurring special items.
Ford C-Suite executives will have been choking on their cognac reading page 26 of Daimler’s Q1 earnings presentation which sported a near philosophically identical core-to-new-business relationship to Ford’s short-lived “infinity” symbol (as revenge, Ford might rip off slide 34 to explain their modular platform strategy — basically all modules across all platforms). (Daimler)
BAIC Motor will raise $422 million through a sale of new shares. Daimler’s stake will be reduced from 10.08% to 9.55%. (Economic Times of India)

Reported financial results for Q1 2018. Revenue of €27.0 billion was down (2)% on a year-over-year basis, despite shipments increasing 7%. FCA blamed exchange rates. Adjusted EBIT of €1.6 billion was 5% better than prior year and the company’s net debt of €1.3 billion looks set to be eradicated by year end. (FCA)
CEO Marchionne said that fines and penalties that would result from missing 2020+ EU CO₂ targets “need to be avoided like the black plague”. (Seeking Alpha)

Announced Q1 2018 financial results. Revenue of $42 billion was up 7% on a year-over-year basis. Ford called adjusted EBIT of $2.2 billion “solid”, despite a (10)% YoY drop which Ford said was all due to commodity costs. In a bid to mollify investors, the company pulled forward its target year for 8% EBIT margin to 2020. Ford also announced that by 2020 it will only sell two pure cars in North America: Mustang and the active version of the new Focus. The confirmation that the company will no longer offer Fusion in North America beyond 2020 (in line with previously leaked letters to suppliers) fuelled speculation about the future of the Mondeo in Europe (also mentioned in the leaked supplier letter). (Ford)
- Implication: Although the reduction in the “car” portfolio attracted headlines, all but the largest SUVs migrated several years from body-on-frame architectures to unibody construction, blurring the historically relevant point of distinction (larger trucks remain body on frame)
Executives said that the company would still offer “affordable” products in North America once it has phased out existing entry level products. (Detroit News)
Announced a series of executive moves and external hires in Middle East, Africa and China. (Ford)
Reportedly will not unveil full details of its “fitness” plan until September, after a planned July review with the company’s board. (New York Times)
When production of the Taurus stops at the Chicago plant in 2020, Ford will begin building the Lincoln Aviator and expects that no redundancies will be necessary. (Chicago Tribune)

Geely (includes Volvo)^(history)

Volvo announced financial results for Q1 2018, sales and revenue were both up by over 14% but operating profit rose less strongly, by 3.6% on a year-over-year basis. Net income was down. (Volvo)
Volvo announced that by 2025 it is targeting 50% of sales mix to be fully electric. The press release wasn’t clear on the exact nature of the goal — the context implied this was a China-market target for heavily electrified vehicles (BEVs and PHEVs) whilst the headlines read as though the intent is for global sales to be 50% BEVs. (Volvo)
Geely’s design boss implied that Lotus will be launching more than one SUV. (Autocar)
Established a JV for 6 speed automatic transmissions with Aisin. Geely is taking a 40% share in the factory which will have a capacity of 400,000 units per year. (China Daily)

Nissan (includes Mitsubishi)^(history)

Reported Q1 2018 financial results. Revenue of $36.1 billion was down (3.1)% from prior year (excluding the loss of Opel / Vauxhall) and adjusted EBIT of $1.1 billion was down (58.7)%. The company mainly blamed planned production stoppages in North America to allow launch of a new range of pick up trucks. (GM)
Launching an additional (third) shift — about 700 jobs — at Spring Hill from September 2018 in response to the popularity of the GMC Acadia and Cadillac XT5 products built there, reversing the elimination of the same shift about a year ago. (GM)

Honda ^(history)

Released the results for the 2017/18 financial year. Revenue of 14 trillion yen (about $128 billion) was up 9% on a year earlier but profits were down — Honda explained this as a series of one-times: exchange; pension accounting and legal expenses. (Honda)
Launched a China-market EV brand with JV partner GAC, called Everus. (Autocar)

Hyundai / Kia ^(history)

Hyundai and KIA both reported financial results for Q1 2018. Hyundai saw revenue and profit drop, by (4)% and (45)% respectively. (Hyundai) KIA fared a bit better, revenue was down (2.2)% and operating profit dropped (20)%. (KIA). Taking both affiliates together, revenue was 35 tillion KRW ($32.7 billion) and operating profit was 987 billion KRW (about $920 million).
The South Korean Fair Trade Commission appeared to side with Hyundai in an ongoing battle with an activist shareholder over the motor group’s structure. (Bloomberg)

Mazda

Global production in Q1 2018 was 419,181 vehicles, an increase of 2.9% on the prior year. (Mazda)

Nissan Q1 2018 global sales totalled 1,496,573 vehicles, a (1.5)% drop versus a year earlier. (Nissan)
Mitsubishi Q1 2018 global production totalled 378,489 units, an increase of 18% on Q1 2017. (Mitsubishi)
Nissan’s CEO said there was “no merit” in a full merger with longtime partner Renault, citing unspecified “side effects”. (Economic Times of India)
The Renault-Nissan-Mitsubishi alliance has joined Didi Chuxing’s project to increase availability of BEV and PHEV vehicles for ride sharing drivers. (Nissan)
Showed the China-market only Sylphy electric vehicle, derived from the Leaf. (Nissan)

Reported Q1 2018 automotive vehicle division revenue of €15.1 billion, a 67% increase primarily due to the inclusion of Opel and Vauxhall. (PSA)
Will switch some production of 5008 to Sochaux — partly because of the vehicle’s sales success but also to allow Rennes to create capacity for the C5 Aircross. (France Info)
Opel’s works council withdrew its support for the German voluntary redundancy scheme, saying that Opel was trying to separate more people than had been agreed. Opel countered that if extra people wanted to join the scheme, the unions should not be blocking them. (Reuters)
German regional politicians said that they were prepared to offer support for energy and property costs at German Opel plants, but would not submit to “blackmail”. (Reuters)
In contrast to German Opel unions, British representatives of Vauxhall workers said their “focus” was on the long term future of factories in the UK as they agreed a relatively paltry pay rise — a £750 lump sum in 2018 and a 1.5% increase in 2019. (Reuters)
Vauxhall has withdrawn diesel powered versions of the Corsa in the UK due to falling sales. (Autocar)
PSA Chairman Louis Gallois said he will retire in 2020. (Les Echos)

Reported Q1 2018 revenues of €13.2 billion, about flat with the prior year. Registrations were up 4.8% from Q1 2017 to 935,041. Renault blamed exchange (stronger euro) for the difference. (Renault)
The Renault-Nissan-Mitsubishi alliance has joined Didi Chuxing’s project to increase availability of BEV and PHEV vehicles for ride sharing drivers. (Nissan)
Renault announced an agreement with IKEA in France to provide a fleet of vehicles for short term rental from IKEA stores. The plan is for all vehicles to be electric by 2020. (Renault)

Suzuki

Reported Q1 global production of 897,993 units, an increase of 4.3% on a year-over-year basis. (Suzuki)

Tata (includes JLR) ^(history)

When asked about all-electric Land Rover models, CEO Speth told journalists to “watch this space”. (Bloomberg)

Lost a key electronics executive with Autopilot responsibility to Intel; the move appears to be focused on Intel’s core business rather than a defection to Intel’s self-driving effort. (Intel)

Produced 2,658,940 vehicles worldwide in Q1 2018, a decrease of (1.8)% on the same period in 2017. (Toyota)
Announced a battery electric C-HR as part of its 10 electrified vehicle portfolio for China. (Toyota)
Unveiled the new Lexus ES. The car will be on sale from September 2018. (Toyota)
Announced an investment of $170 million in the Mississippi factory to produce the new Corolla. (Toyota)
Created a European mobility group in London with a plan to recruit between 35 and 50 team members. (Toyota)

Announced financial results for Q1 2018. Although sales rose by about 6.1%, revenue was up only 3.6% and operating income of €4.2 billion was down (3.6)% on a year-over-year basis. The company blamed a change in accounting rules for derivatives for the profit drop. (VW)
Audi is recalling 1.2 million cars globally to correct problems with coolant pumps. (Economic Times of India)
Porsche’s Chinese market sales could reach 50% PHEV and BEV by 2025 according to sales executives. (Bloomberg)
Introduced three new engines at a technical symposium: a 48V gasoline, a new natural gas powered engine and a mild hybrid diesel equipped with a 12V system. (VW)
VW’s head of electrification said that the ID’s initial production volume will be 100,000 units per year when it launches in 2019 — the company has already said it will install capacity for around 330,000 vehicles for the ID range from 2020 onwards. (Ecomento)
Announced an electrified vehicle brand for the Chinese market called SOL, in collaboration with joint venture partner JAC. The first product is a BEV SUV with a range of more than 300km. (VW)
VW will only be allowed to increase their fleet of Moia vehicles in Hamburg from 500 to 1,000 if they can show that public transport has not been disrupted. (Manager Magazin)
Audi announced a collaboration with Airbus’s Voom helicopter taxi business to offer a seamless door to door urban mobility service for the exceptionally well-heeled in traffic hotspots such as Mexico City. (Usine Nouvelle)

Other

MG showed the near production-ready X-Motion concept SUV, a vehicle with a design that appears to have been significantly inspired by the Jaguar F-Pace. (Autocar)
BAIC Motor will raise $422 million through a sale of new shares. Daimler’s stake will be reduced from 10.08% to 9.55%. (Economic Times of India)
NIO showed a 2+2+2 version of the ES8 crossover, a 7 seater is still planned. (NIO)
Elio Motors announced $2.5 million in fresh funding and a new cryptocurrency called the ElioCoin. (Elio Motors)

News about other companies and trends

Economic / Political News

The EU said average emissions for passenger vehicles increased in 2017, confirming previous forecasts. The announcement is based on preliminary data — a final analysis will be released later in the year. (ACEA)

Suppliers

Lear’s Q1 2018 revenue was $5.7 billion, up 15% on a year-over-year basis. Net income was $345 million. (Lear)
Borg Warner reported revenue of $2.8 billion and operating income of $334 million in Q1 2018. (Borg Warner)
Autoliv reported revenues of $2.8 billion in Q1 2018 and operating margin of 8.0%. (Autoliv)
Valeo saw sales rise 3% year-over-year to €4.9 billion in Q1 2018. (Valeo)
Denso reported financial results for its full fiscal year. Revenue of $48 billion was up 12.8% versus the prior year whilst operating profit of $4 billion rose 24.8% — Denso said cost reductions hada big effect. (Denso)
Visteon announced Q1 2018 financials. Sales ($814 million) and net income rose slightly versus prior year. (Visteon)
Plastic Omnium reported revenue of €1.9 billion in Q1 2018, up 2.8% on the prior year. (Plastic Omnium)
Mahle reported full year financial results. Revenue was €12.8 billion and net income was €102 million. (Mahle)
Michelin reported revenue of €5.2 billion in Q1 2018, down on the prior year due to stronger euro. (Michelin)
Continental is considering a spin-off of its powertrain business. (Manager Magazin)
Bosch announced a new exhaust gas recirculation (EGR) technology that it says can drastically reduce NOx emissions (Bosch claim a near 90% reduction from current levels but this recent study indicates several OEMs are already near to Bosch’s level). (Bosch)
LG acquired lighting supplier ZKW Group in a €1.1 billion deal. (LG)
Magna has created a joint venture for door modules in China with BHAP. (Magna)
Chinese battery supplier Tianjin Lishen is reportedly planning a European sales office as it chases electric vehicle contracts with Daimler and VW. (Economic Times of India)

Didi Chuxing reportedly wants a valuation of between $70 billion and $80 billion in a forthcoming IPO. (CNBC)
Didi Chuxing has created in-house teams to develop purpose-built vehicles, although the company also praised the knowledge of “traditional” OEMs. (Reuters)
Uber’s COO said the firm was going to “double down” in India, Middle East and North Africa and is prepared to make “indefinite” investments in chosen regions. (Forbes)
Go-Jek and ComfortDelGro are reportedly in talks to collaborate in the Singaporean market. (TechCrunch)
Careem suffered a data breach in January in which hackers gained access to data on 14 million customers; their credit card and password information was spared. (Careem)
Carpooling firm BlaBlaCar acquired smaller rival Less. (TechCrunch)
Peer to peer car rental start-up HiyaCar raised more than £1 million in a crowdfunding drive. (Crowdfund Insider)
The Renault-Nissan-Mitsubishi alliance has joined Didi Chuxing’s project to increase availability of BEV and PHEV vehicles for ride sharing drivers. (Nissan)

Driverless / Autonomy ^(history)

A British Tesla owner was convicted of dangerous driving after putting his vehicle on Autopilot and climbing into the passenger seat whilst on a motorway. The owner told police he was the “unlucky one who got caught”. (BBC)
- Implication: The driver in question is a perfect example of over-confident owners who misunderstand the capability of their ADAS equipped vehicles. The driver’s remarks after getting stopped are very worrying and the stunt indicates that Tesla’s efforts to stop abuse of the L2 system are failing. Will their come a time when the manufacturer is accused of negligence for giving people a system that they can misuse?
BMW will use a solid state lidar sourced from Innoviz and Magna for autonomous vehicles — by extension, presumably FCA vehicles will too; given that they are developing a shared self-driving platform. If rumours are to be believed then you can add Hyundai-Kia to the list too. (Magna)
Self-driving start-up Voyage announced an open source safety library comprising code and scenarios. The company hopes it can become a widely-used foundation for autonomous vehicle software. (Voyage)

Solid state battery supplier Ionic Materials announced that including the (previously announced) investment from Renault-Nissan-Mitsubishi, it raised $65 million in its latest round. (Inside EVs)
Dana launched a series of powertrain modules aimed at off-highway applications. (Dana)

Connectivity

Amazon has partnered with GM and Volvo to offer deliveries into the boot / trunk of owners’ cars in select US cities. GM CEO Mary Barra suggested that Amazon was paying GM for each delivery made. (Bloomberg)
Savari raised $12 million to develop V2X solutions. (Xconomy)
ZF joined the eSync open platform for over the air updates. (ZF)

Find our archive here.

Auto Industry Briefing — week ending 22nd April 2018

April 23, 2018 Ad Punctum TeamAd Punctum, Automotive0

PSA restructuring strategy, Tesla’s tolerance of failure, Porsche diversification and Waymo just wants to drive cars, not make them. Please enjoy our auto industry and mobility briefing for 16^th April to 22^nd April. A PDF version can be found here.

Favourite stories of the past week…?

Killing Me Softly — PSA is offering to keep German factories open but wants to reduce the work that goes on there. Unhappy unions are fighting back but they should respect PSA’s secret sauce for labour reductions in Europe: rather than shooting for the whole cost save of shutting a plant entirely and devoting the management team’s energy to getting a single closure, PSA take the marginal gains of removing shifts and cutting cost whilst bearing some remaining under-utilised overhead. It isn’t as clean as a business school case study but unions and politicians have a harder time fighting plant closures when the plant isn’t actually closing. “Shift reductions” just doesn’t have the same ring to it in the public psyche.
Nothing Compares 2U — Tesla is aiming for Model 3 to have tolerances 10 times better than any other vehicle. But what does it all mean? Has the company got tolerance stacks disastrously wrong and can’t meet the target range it has set or are Tesla intending to redesign all the parts at some future point to tighten tolerances? Drastic changes in tolerance while in series production can quickly become disruptive and involve massive inventory losses if mishandled. Do Tesla have an amazing new way of working up their sleeve or is this something that is supposed to sound good when “leaked” to the press? A third possibility… Tesla botched their location strategy execution and executives have told Musk the tolerance stack is to blame for the automated production failures, when it is really a location pin accuracy and machine calibration problem.
Honey To The B — Porsche is installing additional production capacity to achieve 1,000kg of honey annually at its Leipzig plant. After Porsche’s entry into the salt and pepper mill market that was long the preserve of Peugeot, surely this demands a response from the French? Might I recommend a range of Groupe PSA baguettes as a delicious way to achieve automotive breakfast duopoly rather than all-out war for honey domination?
Nevermind — Waymo’s CEO says the firm isn’t trying to become an OEM. Strategic sleight of hand or a sign that Google is truly interested in licencing the technology at a fair price to anyone who wants to use it?

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

Find our archive here.

News about the major automakers

Investing €10 million in a new research centre for additive manufacturing technologies. (BMW)
Held an event to demonstrate the company’s emerging technologies and talked about its D-ACES strategy (design augments the now ubiquitous autonomous, connected, electrified and services elements). (BMW)
Said that it does not “exclude other partners” from the mobility joint venture with Daimler. (Manager Magazin)

Reportedly interested in selling powertrain to Volvo and may even be open to buying a small stake in the company to show willingness to work with Geely. (Manager Magazin)
Images of the Maybach SUV (a likely Bentayaga rival) leaked. (Autocar)
BMW said it does not “exclude other partners” from the mobility joint venture with Daimler. (Manager Magazin)

Will extend layoffs at the Valencia engine factory due to delays in the new Maverick engine. (Europa Press)
Wamyo’s CEO criticised Ford’s executive culture saying that when he worked there “it was the greatest collection of clever people who couldn’t work out how to get on”. (Autocar)
Launched a non-emergency medical transport service called GoRide. (Ford)

Geely (includes Volvo)

Geely’s CEO called for cooperation between carmakers, especially with regard to “proprietary digital platforms” and warned of the dangers of “silos”. (Bloomberg)
Daimler is reportedly interested in selling powertrain to Volvo and may even be open to buying a small stake in the company to show willingness to work with Geely. (Manager Magazin)

GM Korea won significant concessions from unions and additional government funding in last-ditch negotiations, with the threat of bankruptcy looming. (Reuters)
Announced a new credit facility that maintains the $14.5 billion available to the automotive division and creates a new $2 billion 364-day agreement to be used by GM Financial. (GM)
The head of the Cadillac brand abruptly resigned, citing “philosophical differences”. (Bloomberg)
Revealed the all-electric Buick Enspire concept in China, previewing a likely forthcoming new model. (Electrek)

Nissan (includes Mitsubishi)

Launching a voluntary redundancy program at its Sunderland, UK plant, aiming for “hundreds” of takers. Nissan called the program “short term”. (The Guardian)

Opel has terminated all its dealer contracts in Europe but promised that the main intention was new terms rather than a cull. In Germany Opel said it only wanted to shut 12 out of 385 dealers. (Handelsblatt)
Opel’s head union representative in Germany said he was comfortable that the company can reach a proposed 3,700 target for job reductions but that there was insufficient clarity on post-2020 production and job guarantees. (Reuters)
German unions were up in arms over PSA proposals for German factories. Consistent with the recent approach in France, PSA has avoided full plant closures but does intend to reduce workload. At the Eisenach plant, the company wants to end production of Corsa and Adam; at the Kaiserslautern engine factory, PSA wants to end machining. Unions say both actions would reduce staffing at the affected plants by around half. The company has responded by saying staff costs in German factories are double those of France. (Der Spiegel)
PSA executives met with German government ministers, promising to invest in the country if “performance conditions are met” and pointed to the agreements with unions in all other Opel / Vauxhall locations. (PSA)
The head of Vauxhall said that although the dealer body is being reduced by a third “nobody is being sacked”. (BBC)

Launched a redundancy plan (given the “stable European market”), offset with promises of new jobs for 5,000 young (and cheap) workers. (Renault)

Tata (includes JLR)

Land Rover is reportedly planning to launch a 4.1m long SUV (Renault Captur territory) but hasn’t decided the market positioning. (Autocar)
Detailed the employee cuts and transfers that were reported last week: 1,000 agency positions will go at the Solihull plant, partially backfilled by 392 transfers from Castle Bromwich. (Sky News)

After another short shutdown to increase Model 3 capacity, CEO Musk wrote a letter to employees calling for a demonstration of 6,000 units per week capacity — not by producing 6,000 units in a week but by producing 850 units in a 24 hours period. Musk also detailed a series of actions under the banners of precision and profit, including a distinctly old-world rule where all expenditure above $1 million will have to be personally approved by him. (Electrek)
- Implication: Musk’s email seems designed for external release. The call for design tolerances to be “a factor of ten better than any other car” and prove measuring tapes wrong implies design tolerances of hundreds and thousands of a millimetre — the realm of precision machining. This presumably is because Tesla’s push for automation has failed due to insufficiently tight tolerancing but the value of the improvement may not prove to be worth the trip is Tesla has to use far more expensive machinery (it could achieve those tolerances right now if it simply machined the Model 3 out of a solid billet of metal or threw away parts outside a tight set of nominals (almost certainly 50%+). This perhaps demonstrates a lack of imagination from Tesla in how to work within process capabilities, unless Musk has learned from Space X that things can be done differently..?
Issued a detailed rebuttal of criticisms about the safety standards at its factories. (Tesla)

Will begin offering V2X capable vehicles in the US from 2021 onwards with a view to adoption on “most” of the portfolio by the mid-2020s. (Toyota)

VW’s works council chief criticised the company’s high rate of development spending saying, “sometimes it is almost like an internal competition to see who can spend the most”. Whilst he welcomed the appointment of new CEO Diess, he also appears determined to reopen the debate on VW producing its own battery cells. (Manager Magazin)
The Truck division CFO said taking over US company Navistar “would make sense at some point”. (Reuters)
Announced it would grow its software development operation in Lisbon, Portugal to 300 people. (VW)
Porsche offices were raided as Dieselgate refused to fade away — several top managers were apparently the focus of the investigation. (Manager Magazin)
Porsche announced that it was doubling the number of bees at its Liepzig site, allowing a 250% increase in honey production, to 1,000kg annually, apparently spurred by the high sales rate of its original harvest and the potential as a hedge against the decline in diesel sales. (Porsche)
Launched a service called Porsche Flex in Italy that allows owners to choose a combination of vehicles that can be used on set days of the week. (Porsche)
VW Group sold 2.7 million units in Q1 2018, an increase of 7.4% on a year-over-year basis. (VW)

Other

Byton revealed an “85% there” version of its SUV and said it is will show its saloon in June. (Autocar)
FAW invested a “significant amount” in Byton. (Deal Street Asia)

News about other companies and trends

Economic / Political News

March passenger car registrations in Europe were 1,792,599, a drop of (5.3)% on a year-over-year basis. (ACEA)
China said it intends to phase out the caps on foreign ownership by 2022, with earlier relaxation for companies making vehicles with in-demand technology. It wasn’t entirely clear whether the changes are set in stone or are positioned with the threat of withdrawal as part of US-China trade sabre-rattling. (Reuters)

Suppliers

Continental gave a profits warning, citing surprise exchange rate and inventory effects. (Continental)
Denso invested $1.5 million to buy a 14.88% stake in mobility as a service platform provider On The Road. (Denso)
Honeywell reported Q1 results, both profits and revenue were up year-on-year and the company increased its guidance for the full year. (Honeywell)
Magna opened a new body sub-assembly plant in Mexico supplying BMW and Mercedes. When fully operational it will have 1,000 employees. (Magna)

Dealers

A survey of prospective car buyers in the UK found that only 12% are considering a diesel vehicle for their next purchase. (Autocar)
US online used car platform Carvana purchased Car360, a start-up that helps owners take slicker images of the car they are selling. (Venture Beat)

Lyft said it would purchase carbon offsets to match the rides taken on its network. The company believes “in future all vehicles will operate with clean energy” and says the scheme makes it one of the largest purchasers of such credits in the world. (Lyft)
Via and Mobike now offer a subscription package covering ride hailing and bike sharing in Washington. (Via)
ComfortDelGro said it would purchase London taxi operator Dial-a-Cab. (Deal Street Asia)
- Implication: At a price of £1.2 million for a fleet of 1,100 cabs, this deal looks like far better value for money as a way to capture share than throwing cash at discounts and marketing?
Car sharing firm Turo said it had added $12 million in funding, taking its latest round to $104 million. (TechCrunch)
Moovn expanding its ride hailing service from launch city Seattle to a further five US cities. (Geekwire)
BMW said it does not “exclude other partners” from the mobility joint venture with Daimler. (Manager Magazin)

Driverless / Autonomy ^(history)

Waymo’s CEO said that the company “might disrupt the utilitarian market” and explained the company’s “Firefly” program of self-built cars as a way to exploit a short-lived loophole in testing regulations, rather than an attempt to become an OEM itself, saying he “wasn’t aware of” any longer term goal for Waymo to make its own cars. (Autocar)
Local Motors announced a collaboration with Robotic Research, a company with past experience in automating systems and vehicles for military applications. (Local Motors)
Alibaba’s CEO said the company had done “a lot of research on driverless things”, sparking speculation about what they might have in mind. (Yahoo)
Uber says it has a way to improve the accuracy of GPS in areas with high rise buildings: rather than being confused by the weak signals from satellites, it identifies “negative information” and fills in the obscured trace. (The Verge)

Hubject and Daimler announced a successful pilot scheme where the vehicle and charging point exchange encrypted certificates through the charging lead, enabling payment to be made remotely. (Hubject)
- Implication: Shell and GM announced that you will be able to pay for fuel directly from the car’s dashboard at participating garages, using the Marketplace app. (Detroit News). One of the major bugbears for EV users is the huge spectrum of charging companies, each with their own unique payment routines. These two announcements should get EV sellers thinking seriously about why it is so hard to pay for what many consider to be “living in the future”.
Indian ride hailing company Ola set a target of 1 million EVs in its fleet, including mini vehicles, by 2021. (Autocar)
A long list of OEMs are reportedly in talks with VW-BMW-Daimler-Ford European charging network Ionity to join the network. Those listed include Volvo, FCA, PSA, JLR and Tesla. (Sued Deutsche)
Indian firm Sun Mobility opened a battery swapping station for electric bikes and mini vehicles in Bengaluru, with plans to expand the network across India. (Economic Times of India)
Following reports that Dyson had relinquished solid state battery patents, seemingly contradicting its prior battery strategy, the company said the patents involved had been replaced with “better” technology and the move reflected the need for the specific patterns, rather than a turn away from solid state. (Green Car Reports)

Other

Electric scooter rental service Bird said it had completed one million rides across seven US cities. (Bird)
Scooter rental start-up Vogo is reportedly in talks with ride hailing firm Ola to raise investment. (Deal Street Asia)
NIO Capital is reportedly close to closing $500 million in funding for automotive investments. (Bloomberg)
Hyperloop said it has won a contract to create a 10km track in Abu Dhabi. (Hyperloop)

Find our archive here.

Automotive research, Automotive strategy, Automotive trends, Auto industry trends, Automotive market research, Auto industry news

Auto Industry Briefing — week ending 15th April 2018

April 16, 2018 Ad Punctum TeamAd Punctum, Automotive0

Uber’s strategy, Tesla manufacturing, Ford macroeconomic strategy and PSA’s electrification plan. Please enjoy our auto industry and mobility briefing for 9^th April to 15^th April. A PDF version can be found here.

Favourite stories of the past week…?

Jump Around — Uber is seemingly going to be the Amazon of transport. Car, bike, train, and if its futurists are to be believed, plane (quadcopter). But will investors have an Amazon-esque patience with the company’s profitability? Amazon justified faith on the basis that it demonstrated and maintained profits from sectors it had attacked for ages but then reinvested into new areas. That isn’t the same as throwing good money after bad.
Domo Arigato, Mr Roboto — Tesla used too many robots and has a newfound faith in humanity. At what point does Elon Musk stop offering car industry truisms dressed up as insights? Tesla has a gauging lab that measures things accurately… just like everyone else does. Tesla found out that automated conveyors can get in the way if the system isn’t slick enough (or….surely not… the tolerance stack has been worked out incorrectly)… as everyone else already knew. Tesla has many refreshing ideas about product and sales model but what is with the repeated “baby out with the bathwater” insistence on doing things differently, seemingly for the sake of it? Also, is it just me, or did news of Model Y procurement for a late 2019 launch come along at a conveniently distracting time?
Mad World — Ford would never be “daft” enough to exit Europe and isn’t putting much effort into looking at how to mitigate a potential US and China trade war, since it “might not happen”. Fail to plan, plan to fail.
You Spin My Head Right Round — Carlos Tavares wants to know who is responsible for developing the “360-degree view” of the electric vehicle ecosystem. Erm… fancy looking in the mirror? Carmakers might not like the answer but if they want to lead then they can build the coalitions necessary to make electric car ownership a delight rather than burden. Waiting for others to do it for you could be risky: customers might forgive you, or could come to see you as a laggard — Windows phone, anyone?

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

Find our archive here.

News about the major automakers

Sold 604,629 vehicles in Q1 2018, an increase of 3% on the prior year. Europe was up 1%, most of the growth came from Asia and the Americas. (BMW)
BMW iVentures invested in high resolution labelled map company Mapillary, citing the need for an “independent provider of street-level imagery”. (VentureBeat)

Mercedes executives said the brand is planning an all-electric luxury car at the same level as the S-Class. (Autocar)
Said that car sharing is “decisive” in the take-up of electric vehicles. (Daimler)

CEO Marchionne said the cost of making diesels reach new standards is “going to become prohibitive” and repeated that FCA’s strategy was to end production of diesel cars after 2022. (Autocar)
CEO Marchionne said the company will have the highest North American profits “by far” but “when it happens… I can’t tell you.”. (Bloomberg)
Released their 2017 sustainability report. (FCA)

Ferrari

CEO Marchionne resorted to hand gestures rather than words whilst trying to deflect interview questions about a mysterious “silent” test mule spotted near Ferrari’s Fiorano test track but ultimately conceded “there could be a Ferrari that you could run silently”. (Bloomberg)

The new Focus was unveiled; it is lighter than its predecessor and for the first time, a Focus will be available without an independent rear suspension in cheaper models. Ford said that this wasn’t to cut costs and driving dynamics would not be adversely affected. Motoring journalists raised on a diet of Ford comments about how inferior the ride of competitor products are because they didn’t feature independent rear suspension weren’t so sure. (Autocar)
Ford’s European executives said it would be “daft to exit a big market like Europe”, citing the sales volume (and leaving aside the question of long term profitability). They also said mild hybrid 48V systems are “starting to get to the same cost” as diesel. (Autocar)
Executives said that the company wasn’t putting much effort into planning for potential US and China tariff barriers because they “might not happen”. (Bloomberg)
Said its research indicated that driverless delivery vehicles would complete routes 25% more efficiently than those piloted by humans. (Autocar)
- Implication: Whilst much of the focus on fleet adoption of autonomous vehicles concentrates on the cost saving of removing the driver; efficiency benefits such as: improved fuel economy, better route choice and fewer accidents will also contribute to the business case.

Geely (includes Volvo)

Volvo executives said that the company would not be entering new segments until after 2020 and that an XC50 was not in the current plan. (Autocar)

Will cut production of the Chevrolet Cruze to one shift from July 2018 at its Lordstown plant, with 1,500 jobs to go as a consequence. Cutting one shift at Ohio plant. (Business Standard)
EVgo announced that it would build a dedicated charging network for GM’s US Maven car sharing service to support the Maven Gig product for ride hailing drivers. (EVgo)
GM Korea said that if its restructuring plan were approved then production of the Spark would cease in 2022 and be replaced with a crosser. Talks aren’t going particularly well, with a group of workers trashing executive offices in protest at the company’s decision not to pay bonuses. (Reuters)
Sold 715,794 vehicles in North America in Q1 2018, an increase of 3.8% over Q1 2017. (GM)
GM’s Cruise self-driving unit announced the hiring of the team from Zippy.ai, a delivery robot start-up. (GM)

CEO Tavares wondered aloud about the take-up of electric vehicles in Europe “who is taking the 360-degree view?” he asked — indicating that he does not see the development of the wider electric vehicles ecosystem as something for PSA to lead or manage. (Autocar)
Announced the rollout of its Euro Repar service centre operation in Russia, hoping to win business from owners of western brands. (PSA)
Launched a new trim level called “Ultimate” for Vauxhall models in the UK. (Vauxhall)
Opel has reportedly lost a number of 2^nd and 3^rd tier executives recently with headhunters saying that current staff (“not the bad ones”) continue to look for new roles. (Manager Magazin)

Hopes that the electric Twizy quadricycle could become a competitor to motorbikes and is aiming to win a 10,000 vehicle contract from the South Korean post office to increase interest. (Renault)

Tata (includes JLR)

Jaguar Land Rover sold 614,309 cars in the financial year to end March 2018, up 1.7% on the prior year. (JLR)
As rumours circulated of a plan to cut around 1,000 jobs (focused on agency staff), JLR issued a statement calling reviews of production schedules “standard business practice” and said that while it would make some “adjustments” to the level of agency staff, the company stressed the hiring of apprentices and professionals. (JLR)

CEO Musk said Tesla will be profitable in Q3 and Q4 2018, with positive cash flow. (Business Insider)
Tesla seems to have scaled back its Alien Dreadnought ambitions for manufacturing, calling the approach “excessive” and saying that several automated processes had been stripped out in favour of manual completion. (CBS)
Has reportedly begun requesting quotes to supply Model Y, with a putative launch timing of late 2019. (Reuters)
Stopped correcting minor cosmetic damage on vehicles returned at the end of their lease; potential buyers criticised Tesla’s continued used of renderings for used car sales and not images of the actual vehicle in question. (Electrek)
Won a contract from BP for a windfarm battery storage unit at one of BP’s 12 US sites. (Reuters)
Recalling around 9,000 vehicles in China to replace steering components (mirroring a US recall). (Reuters)

VW Trucks and Hino Motors (in which Toyota has a controlling stake) concluded a strategic cooperation agreement covering new technologies and procurement. (VW)

Announced a new CEO and a series of organisational changes. VW Brand head Herbert Diess becomes group CEO whilst keeping his VW brand responsibilities. The company will have six business areas, plus China and new brand groups have been created Volume (VW, SEAT and Škoda); Premium (Audi, Ducati and Lamborghini); Super Premium (Porsche, Bentley and Bugatti); Truck & Bus. In addition, VW’s components division will be merged with the purchasing organisation. The company will also shortly appoint a COO. (VW)
VW Trucks and Hino Motors (in which Toyota has a controlling stake) concluded a strategic cooperation agreement covering new technologies and procurement. (VW)
SEAT has been chosen at the VW Group’s centre of excellence for CNG engines, seeing the technology as a potential offset to reduced sales of diesel cars. (VW)
New CEO Diess said that if sanctions on Russian companies affected JV partner GAZ then the company would review the situation but not “call into question our commitment” to Russia. (Economic Times of India)

Other

BAIC will develop an electric vehicle with help from Magna. (Magna)
Shell commissioned prototypes of the Gordon Murray designed Ox utility for trials in India. (Autocar)
Xiaopeng Motors said that it intends to raise $2.7 billion this year. (Bloomberg)
Mahindra confirmed that Pininfarina would become a standalone all-electric brand, with vehicles badged as Automobili Pininfarina. (Mahindra)

News about other companies and trends

Economic / Political News

China’s President Xi gave a speech indicating the relaxation of restrictions on foreign ownership of car companies and lower tariffs for imported vehicles might shortly become a reality. Markets cheered. (Sky News)
The EEA (part of the EU) released a report saying that countries with sufficient taxes in favour of low emission vehicles had made more progress on CO₂ reduction than those without. (EEA)

Suppliers

Tenneco is buying Federal-Mogul for $5.4 billion with a view to splitting the combined entity into two listed companies; one focused on powertrain and the other on aftermarket and performance parts. (Detroit News)
LG Chem is forming two joint ventures in China in partnership with cobalt supplier Huayou Cobalt. The factories will produce sub components for electric vehicle batteries. (Green Car Congress)
ZF announced a new €100m Serbian factory to produce motors for BEVs and PHEVs from 2019 onwards. (ZF)
BAIC will develop an electric vehicle with help from Magna. (Magna)

Dealers

Ally signed a strategic alliance with vehicle leasing firm Fair to use the former’s platform to sell used cars and give prominence to Fair’s leasing offers in the comparison tool Ally provides to dealers. (Ally)
UK dealer property valuation experts said there is an increasing number of dealers on the market and see large groups looking to sell off lower performing sites as the main driver. (Motor Trader)

Uber acquired bicycle rental firm Jump for $200 million and announced partnerships with a car sharing firm, Getaround, and a multi-modal platform, Masabi, seemingly intent on creating an Amazon Marketplace-style element to its offering. (TechCrunch)
South Korean firm Kakao took a small stake in Lyft. (Yonhap)
Ola acquired multi-modal and ticketing app Ridlr. (Forbes)
Go-Jek is rumoured to have received funding toalling over $1.5 billion in its latest round. Although the company hasn’t confirmed this, some investors have announced their participation. (TechCrunch)

Driverless / Autonomy ^(history)

Luminar, a maker of high resolution lidar, said that it would have a production rate of higher than 5,000 units per quarter by the end of 2018. The company is working with four major automakers (Toyota plus three others) at present. Luminar said that a key component has dropped in cost from tens of thousands of dollars to $3 per piece, and the entire sensor cost “a lot” less than $1,000 per unit to produce (purchase price remains unclear). (Forbes)
ai raised $5 million in funding, at present the company sells aftermarket dongles that plug into cars and offer enhanced control over vehicle functions. At the same time, it collects data from users in the hope of creating a crowdsourced self-driving platform. (TechCrunch)
Ford said its research indicated that driverless delivery vehicles would complete routes 25% more efficiently than those piloted by humans. (Autocar)

A Spanish study concluded that the current generation of electric cars only pay back the increased upfront price versus an ICE vehicle when the owner travels 13,000 km or more each year — the authors pointed out that this distance is unlikely in urban environments. (Europa Press)
Mercedes executives said the brand is planning an all-electric luxury car at the same level as the S-Class. (Autocar)
EVgo announced that it would build a dedicated charging network for GM’s US Maven car sharing service to support the Maven Gig product for ride hailing drivers. (EVgo)
Ferrari CEO Marchionne resorted to hand gestures rather than words whilst trying to deflect interview questions about a mysterious “silent” test mule spotted near Ferrari’s Fiorano test track but ultimately conceded “there could be a Ferrari that you could run silently”. (Bloomberg)

Connectivity

Valeo is partnering with NTT Docomo to offer vehicle-to-everything communication. (Valeo)

Other

Google is reportedly considering an acquisition of Nokia’s in-flight internet service. (Bloomberg)

Find our archive here.

Auto Industry Briefing — week ending 8th April 2018

April 9, 2018 Ad Punctum TeamAd Punctum, Automotive0

Trade wars, Tesla volumes, driver assistance super-sleuths and PSA’s secret agenda to mitigate Brexit. Please enjoy our auto industry and mobility briefing for 2^nd April to 8^th April. A PDF version can be found here.

Favourite stories of the past week…?

And Then I Go And Spoil It All By Saying Something Stupid — China threatened punitive tariffs on US-built vehicles. Although the car industry is full of good and bad examples of how to do things, it’s always a bit of a shame when someone gives the underperformers an opportunity to distract from their relative achievement. What’s the point in slogging away to improve first time through by 3% this year if your product’s bottom line is 25% underwater because of a trade war?
Losing My Religion — Tesla’s quarterly build figures failed to satisfy all but the most ardent fanboy. I’m looking straight past Model 3 though and wondering what it means that Model S continues to plateau in the sales charts (here’s a historic view). The Tesla legend is built on the assumption that people will buy all the cars they can make, but in the case of their larger models, I’m not sure that’s true. Tesla say their order book for Model S and X has never been stronger, but why isn’t that feeding through into deliveries?
I Go Driving In My Car — Some Tesla owners took to the streets to recreate the fatal accident and discover why Autopilot didn’t save the driver. They concluded that it wasn’t very good at telling the difference between new and old road markings. More interesting (and worrying) to me though was the fact that they took it upon themselves to conduct this important research. Will OEMs find themselves on the hook for negligence if there are copycat accidents, in addition to the original crash?
A Little Bit Of This And A Little Bit Of That — PSA announced that it will invest in the UK van factory it inherited from GM, whilst also producing in France. PSA didn’t mention it but they are surely too clever for it to have escaped their notice that this is a fantastic Brexit hedge. In the event of tariff barriers, they will be the only large-scale producer of commercial vehicles insulated from the penalties. Even with imports of critical components, this would leave them with a price advantage nearing 10% (compounded by benefits of a weak sterling) — with no need to send vehicles the other way. I’m not saying that will happen, but if it does they will look like very smart cookies.

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

Find our archive here.

News about the major automakers

Announced pricing for the monthly subscription scheme it is piloting in the USA. Prices start at $2,000 per month for lower end vehicles, with $3,700 for the highest performance derivatives. (Bloomberg)
- Implication: BMW isn’t alone in failing to display imagination in a monthly subscription product. Rather than offering flexibility, OEMs are simply pricing schemes as though customers will walk shortly after joining and loading in all the classic costs into payments so high that they can only appeal to people who want a car for very short durations. This area seems ripe for an alternative approach that more intelligently matches customers and inventory, perhaps with less of a focus on the new car being brand new.

Daimler’s CEO believes that customers are “still showing confidence” in diesel and that recent commentary about the technology’s decline is overblown. (Autocar)
Exploring potential collaborations with new shareholder Geely. (Market Watch)

Announced the separation of electronics subsidiary Magneti Marelli from the rest of the group, as expected. Following Ferrari’s example, FCA will issue shares in the separate firm to existing FCA stockholders rather than have a separate flotation. Magneti Marelli will also take responsibility for some of the group’s debt. (FCA)

Received approval for German banking licence, meaning that it can provide financing to customers in Europe unimpeded by Brexit — Ford is the OEM most exposed to the loss of passporting rights. (Reuters)
Ford executives said that it would not be worth producing electric cars with annual volumes below 40,000. (Reuters)

Geely (includes Volvo)

Daimler is exploring potential collaborations with new shareholder Geely. (Market Watch)
Volvo sold 147,407 cars in Q1 2018, a 14% increase on a year-over-year basis. (Volvo)

Didn’t specifically deny rumours of plans to cease production of Chevrolet Sonic and Impala but said it would retain a presence in US car segments, citing the size of the sales volume. (Detroit News)
Moving to quarterly, rather than monthly, US sales reporting to avoid having to explain seasonal effects. (GM)
Reportedly proposed to end a shift at one of its South Korean plants, a move unions say they will oppose. (Reuters)

Honda ^(history)

Reportedly idling US production of the Accord due to slow sales. (Auto Evolution)
Waymo’s CEO said talks with Honda were likely to yield a collaboration focused on delivery vehicles. (Bloomberg)

Hyundai / Kia

Elliott Management, an activist investor with a history of taking on Korean chaebols, announced that it had built stakes in Hyundai, Kia and an affiliate, raising speculation about their motives. (Yonhap)

Announced it would invest in a capacity increase at the Vauxhall Luton, UK factory to enable production of up to 100,000 medium commercial vehicles annually. The plant will make the successor to the Vauxhall Vivaro, in addition to sister Peugeot and Citroën products. (PSA)
- Implication: As the UK’s only high volume commercial vehicle factory, although the announcement does nothing to deal with Opel / Vauxhall’s legacy footprint inefficiency, it is a good hedge against Brexit uncertainty. In the event of tariff barriers, the vans produced at the plant would likely find themselves with a near-10% price advantage over all other competition in a notoriously close-fought, yet profitable, segment.
CEO Tavares said that European CO₂ regulations are “going to create a Chinese trojan horse in Europe” because they could (in his opinion will) bring at least one carmaker to their knees, creating the opportunity for a Chinese company to buy them up on the cheap. (Reuters)
- Implication: The analysis seems flawed to us — primarily justifying scare tactics in ACEA’s lobbying. Firstly, Tavares dismisses that a European-only merger option would be viable on anti-trust grounds, even though PSA has just accomplished such a deal with Opel. Secondly the assumption seems to rest on a Chinese carmaker using its electric vehicle technology to easily meet the targets, begging the question: if the Chinese can do it, why not the Europeans? Thirdly, the theoretical Chinese suitor would have to pay EU fines until the portfolio met targets, presumably requiring deep pockets if the OEM had been brought to bankruptcy? Finally, it isn’t really necessary for carmakers to have loads of BEVs or PHEVs to meet 2021 targets, some already appear on course to meet targets (including… PSA!)

Tata (includes JLR)

Tata Motor’s Indian market sales in the financial year ended 31^st March 2018 totalled 586,639 units, a rise of 23% over the prior year. (Tata)

Released Q1 production numbers, saying it had built 34,494 vehicles, with the much-watched Model 3 weekly figure rising to 2,020 cars in the final week of the quarter (totally unrepresentative of the three-month average). (Tesla)
- Implication: Model 3 launch continues to disappoint, and although the company says it is taking the problem seriously, hyperbole about Q1 Model 3 numbers versus Q4 seems out of place given that both are a massive disappointment. Keep an eye on Model S and Model X: Although Tesla says orders are “at an all time high”, deliveries are some way off their peak. In Model X’s case, transfer of labour to Model 3 is a plausible explanation; it’s more difficult to make the same argument for Model S.
- Check out our chart of deliveries by quarter.
People trying to recreate last month’s fatal Autopilot accident said that they had found the system may become dangerously confused when confronted with replacement road markings. (Business Insider)
- Implication: Whatever their motives, amateurs trying to recreate the circumstances that led to an accident is a worrying development. It could lead to a rash of unintended accidents as people unnecessarily investigate collisions that professionals are already working on. Furthermore, it raises the spectre of criminals exploiting known blind spots to cause accidents and claim on insurance. If the findings of these driver assistance sleuths is correct and Tesla doesn’t react quickly enough, is there a case for negligence?
Said it does not need any cash from debt or new stock “this year”, leaving the door open for potential fund raising once it has demonstrated a decent run rate on Model 3. (Reuters)
Received a telling off from US safety authorities for releasing unauthorised crash data. (The Guardian)

Recalling around 6,000 vehicles in the USA to correct potential braking problems. (Toyota)

Porsche invested in Anagog, a company that makes in-app data analysis tools so users do not have to send personal data to the cloud. (Porsche)
Not planning to replace the VW Beetle at the end of the current product cycle saying a “new new new Beetle” would be too much of a stretch. (Forbes)
Terminated all contracts with Prevent Group, who are now threatening legal action. Prevent were the source of substantial misery for VW when they unilaterally stopped shipments of several critical components. (Handelsblatt)
Škoda employees have negotiated a 12% pay increase in their latest 1 year contract. (Handelsblatt)

Other

Aston Martin is reportedly aiming for a £4 billion valuation in its forthcoming IPO. (Sky)
Aston Martin’s CEO said the new DBX SUV will not feature BEV or PHEV powertrains. (Motoring)
Mahindra announced a (35% / 65%) joint venture with Ideal Motors to assemble vehicles in Sri Lanka. (Mahindra)

News about other companies and trends

Economic / Political News

China published a list of retaliatory tariffs in response to action announced by the US Vehicles imported from the US could face additional tariffs of up to 25%. (Detroit News)
The US Government said that they would issue less “stringent” fuel economy targets for 2022-2025. Automotive industry lobbying groups cheered the move whilst the companies themselves (somewhat unconvincingly) declared themselves to have been in favour of the original targets. (EPA)
US light vehicle industry SAAR in March was 17.4 million, a year-over-year improvement that about offset the YoY declines seen in January and February. (Wards)
German passenger car sales for March were 261,749 units, a year-over-year increase of 7.4%. (KBA)
UK March passenger car registrations of 474,069 units were down (15.7)% on a year earlier, pullahead of sales in 2017 to avoid a tax increase were partly blamed but on a YTD basis sales are still down (12.4)% YoY. (SMMT)
French registrations of 231,110 passenger cars in March represented a 2.2% increase on March 2017. (CCFA)
Italy saw 213,731 passenger cars registered in March, down (5.75)% on the same month a year earlier. (UNRAE)
Spanish registrations for March were 128,715 cars, a 2.1% increase on a year-over-year basis. (Europa Press)

Suppliers

Continental and Osram announced the finalisation of talks on a 50/50 lighting JV. (Continental)
Motherson Sumi Systems said it had agreed to acquire interior components supplier Reydel from its private equity owners for $201 million. (Autocar)
Magna said it was forming a JV in China with Guangzhou to produce composite liftgates. (Magna)
American Axle announced a JV with a Guangxi Automobile subsidiary for driveline manufacturing. (AAM)
FCA announced the separation of electronics subsidiary Magneti Marelli from the rest of the group, as expected. Following Ferrari’s example, FCA will issue shares in the separate firm to existing FCA stockholders rather than have a separate flotation. Magneti Marelli will also take responsibility for some of the group’s debt. (FCA)

Dealers

US start-up Mobiliti launched an all-inclusive $549 per month car subscription offer, sourcing stock from dealers and using financing provided by Ally. (Mobiliti)

Alibaba is reportedly considering an investment in Grab. (TechCrunch)
Grab’s CEO gave an interview containing some commentary on the merger with Uber’s ASEAN operations. Pressed on the impact for customers and drivers, he answered that some drivers would be better off and so would some customers (but the reverse would be true), failing to answer the central anti-competitive challenge: that Grab would be better off. (CNBC)

Driverless / Autonomy ^(history)

Waymo’s CEO indicated during an interview that Honda would shortly be announced as a partner, with a focus on delivery vehicles. Ford and Hyundai were also mentioned as partners (as part of the Waymo / Uber trial it was disclosed that Ford and Waymo came close to a deal in 2015/16). (Bloomberg)
Three Chinese companies — GLP, G7 and NIO Capital — formed a JV to develop smart trucks. (Deal Street Asia)
Visteon launched a machine learning and data processing platform, called DriveCore. (Visteon)

Deutsche Post is reportedly looking at an IPO for its electric van producing Street Scooter (Bloomberg)
Ford executives said that it would not be worth producing electric cars with annual volumes below 40,000. (Reuters)

Other

Bicycle sharing giant Mobike was acquired by Meituan-Dianping for $2.7 billion. (Economic Times of India)
Brazilian bike sharing company Yellow, founded by veterans of 99Taxis raised $9 million. (TechCrunch)

Find our archive here.

Auto Industry Briefing — week ending 1st April 2018

April 3, 2018 Ad Punctum TeamAd Punctum, Automotive0

Tesla’s privacy policy, VW’s diesel guarantee, self-driving companies that are smarter than the rest and ride hailing market dominance Please enjoy our auto industry and mobility briefing for 26^th March to 1^st April. A PDF version can be found here.

Favourite stories of the past week…?

The Sharing Song — Tesla released data showing that it had nothing to do with the fatal crash of a vehicle in Autopilot mode. Yet again, Tesla looks thin skinned by choosing to publish data others might keep private. How will this behaviour (assuming it continues) affect its standing with customers? And does it undermine the company if it tries to withhold information from police investigators in non-fatal crashes?
Comfort And Joy — VW is guaranteeing that diesel buyers in Germany won’t be affected by diesel bans. But only for three years. And only if it affects the owner’s work or home address. Doesn’t sound all that reassuring to me…
Clever Trevor — Intel joined the scrum of companies saying that the fatal collision between one of Uber’s autonomous cars and a pedestrian could never have happened to them. Intel’s analysis stood out because they claimed to have proof that even with the crummy-quality of the video the police released they detected the victim early enough to mitigate the crash. But where does all this dog-eat-dog action get us? More fatal collisions will happen and they won’t always involve Uber. Will speaking now be regretted further down the road?
I Am The One And Only — Uber’s tie up with Grab is under scrutiny from competition authorities worried it could result in an all-powerful monopoly. When discussing the merit of the ride-hailing business model, I find that people invariably sit in one of two camps: those that believe monopolies will allow price increases (justifying massive valuations) and those that think ride-hailing will be a commodity with mandated competition (making those “investing” in unprofitable market share now look a bit silly). Who will feel vindicated after this round?

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

Find our archive here.

News about the major automakers

Officially announced the merger of BMW and Daimler’s mobility operations into a new company, with both holding a 50% share. Services will cover multimodal; car sharing; ride hailing; parking and charging. However, a number of investments by both companies into these areas were not mentioned by name so it appears as though both will continue to invest in start-ups that interest them. (BMW)
Customers are reportedly availability problems for plug-in hybrids with the introduction of WLTP test procedures being blamed. (Honest John)
Reportedly planning a trial subscription service called Access by BMW in the USA. (Bloomberg)
BMW’s Parkmobile said its app can now identify free parking spaces, for a $0.99 monthly fee. (Parkmobile)

Officially announced the merger of BMW and Daimler’s mobility operations into a new company, with both holding a 50% share. Services will cover multimodal; car sharing; ride hailing; parking and charging. However, a number of investments by both companies into these areas were not mentioned by name so it appears as though both will continue to invest in start-ups that interest them. (BMW)

Extended its revolving credit facility to 2023. (FCA)

Lincoln unveiled the Aviator, a three row SUV that the company hopes will do well in China. (Lincoln)

Geely (includes Volvo)

Lynk&Co revealed the 02 — confusingly, its third vehicle, and that European sales will begin with a series of high-profile stores augmenting the main offering via its website. The first locations will be Amsterdam, Barcelona, Berln, Brussels and London. (Lynk&Co)

Gave unions in South Korea an ultimatum: the company will declare bankruptcy in the country if there is no agreement by April 20^th that cuts labour costs enough to allocate a new model program. (Reuters)
Newer Cadillac models are seemingly not being offered with GM’s L2 Super Cruise driver assistance system, with limited explanation from company spokespeople. (The Verge)
A Cruise test vehicle received a citation from San Francisco police for driving too close to a pedestrian, although GM disputed that there was any safety issue, the police replied that they rely on the observations of their personnel rather than any data output from the car. (Business Insider)
- Implication: In future, both groups will be compelled to shift position. Self-driving companies will have to accept that “safety” is a measure interpreted by law officials, regulators and court; police will find it difficult to rely on the wealth of data from self-driving cars when trying to unravel mysterious accidents whilst retaining the right to ignore it when it suits them.

Hyundai / Kia

South Korean union officials complained that the updated US-South Korea free trade is “humiliating” and made local production of a planned Hyundai pick-up unlikely — probably music to the ears of US negotiators. (Reuters)
Will simplify its governance structure by spinning off the core module business of supplier Hyundai Mobis and merge it with logistics firm Hyundai Glovis. (Yonhap)

Nissan (includes Mitsubishi)

Both companies continued to deny persistent rumours that Nissan and Renault are engaged in merger talks with a view to a new company headquartered in either London or the Netherlands. (Les Echos)
Signed an agreement to produce Datsun cars in Pakistan from 2019 onwards. (Nissan)

Said it was “no longer necessary” to retain its 25% stake in logistics provider Gefco now that the end of its lock-in period (which started when it sold 75% of the business) has ended. (Les Echos)
Reportedly planning a massive reduction in Vauxhall dealers — 100 of the 324 sites to go. (Automotive Manager)
Opel is reportedly trying to gain union agreement to suspend the German industry-wide 4.3% pay increase; is offering separation terms of up to €275,000 per employee plus a €20,000 bonus for those who sign up quickly. (Handelsblatt)
PSA and Dongfeng agreed a joint venture to offer leasing arrangements to customers in China. (PSA)
Executives said the company has chosen which brand to use for its re-entry into the North American market but it is “too early” to talk about it. (Car and Driver)

Both companies continued to deny persistent rumours that Nissan and Renault are engaged in merger talks with a view to a new company headquartered in either London or the Netherlands. (Les Echos)

Suzuki

Agreed a two-way supply agreement with Toyota in India. Suzuki will supply Baleno and Vitara-based products and Toyota will reciprocate with Corolla. Volumes and pricing methods are still under discussion. (Toyota)

Tata (includes JLR)

Waymo will use Jaguar’s I-Pace as its first all-electric autonomous vehicle, planning for up to 20,000 purchases between 2020 and 2022 — a fleet that Waymo says could operate 1 million trips per day. (Waymo)

Released a series of blog posts detailing a recent fatal crash of a Model X. The company said that Autopilot was engaged but pointed to a series of safety warnings it said had been ignored by the driver and the reduced level of safety guarding at the scene of the accident. (Tesla)
- Implication: Tesla continues to show scant regard for driver privacy, offering up detailed analysis in order to defend against real or perceived criticism. The company is potentially setting a murky precedent. If it can release data as it sees fit then is it implicitly lowering the bar for others to demand to see it? Tesla also draws heavily on the comparison to average US crash statistics, but when adjusted for lack of seat belts and removal of drink driving, the benefit of Autopilot is less flattering.
Moody’s downgraded Tesla’s debt rating to B3 over cashflow concerns. (Business Insider)
According to a company-wide memo, Model 3 production is between 200 and 300 vehicles per day. (Bloomberg)
Announced a recall of 123,000 Model S vehicles to correct problems with power steering. (CNBC)

Agreed a two-way supply agreement with Suzuki in India. Suzuki will supply Baleno and Vitara-based products and Toyota will reciprocate with Corolla. Volumes and pricing methods are still under discussion. (Toyota)
Lexus said that the new UX crossover will be available through a subscription service with more details to be announced later this year. (Toyota)
Issued a recall for around 2,000 Camry vehicles to correct problems with the engine. (Toyota)

Lamborghini’s boss said the company would produce 7,500 cars in 2019 and that it might launch an additional model to take annual sales to nearer 10,000 units, but not until around 2025. (Motoring)
Porsche executives said that they expect charging networks to start returning a profit after three years. (Electrek)
VW will guarantee that German buyers of new or nearly-new VW diesels can exchange for something else if the vehicle has its access restricted around the owner’s home or work address in the next three years. (VW)
A potential scandal looms, with rumours the CEO was part of a 2013 hit-and-run in South Africa. (Der Spiegel)

Other

Magna announced that it was developing two new vehicles for Vietnamese group VinFast. The cars are being designed with help from Pininfarina. (Magna)
Bollinger engaged engineering services provider Optimal Inc to develop their all-electric off-rod vehicle. (Electrek)
There was speculation that BYD will spin off its battery division. (Gasgoo)
Chinese-owned industrials group CCA said that it will invest £100 million into a plant in Coventry, UK for production of the MetroCab, a purpose-built taxi. (MetroCab)
SF Motors unveiled two of their planned all-electric three car portfolio — both SUVs. (TechCrunch)
Egyptian officials implied that SAIC is close to agreeing to build a car factory in the country to serve as an export hub for North Africa and the Middle East. (China Daily)
OEM April Fools press releases included an Aston Martin monster truck, enhanced quality control of floor tiles at McLaren and a roadster Honda CR-V. (Autocar)

News about other companies and trends

Economic / Political News

The existing US-South Korea trade deal was renegotiated. Tariffs on pick-up trucks entering the USA, scheduled to be phased out, were extended and sales of US-made vehicles to South Korea were made easier. (CNBC)

Suppliers

Dana’s attempted merger with GKN Driveline fell apart as GKN’s shareholders chose an alternative bid by takeover specialist Melrose. (Dana)
Denso announced it was opening a technical centre in Israel. (Denso)
Federal Mogul announced a joint venture with Dong Feng to make pistons. (Federal Mogul)

Uber’s deal with Grab is under investigation by competition authorities in ASEAN who fear that a powerful monopoly will be created, against the best interests of the consumer. (Reuters)
Grab announced a collaboration with RideCo where the latter will provide dynamic on-demand shuttles that will be available on Grab’s app. (RideCo)
Careem is reportedly in initial talks for a new fund raising round with a target if $500 million. (Deal Street Asia)
An in-depth profile of Uber’s CEO suggested that his performance incentives for a $120 billion IPO might be so extravagant that they are driving many of the company’s strategic decisions (e.g. converting competitive market position in Russia / China / ASEAN into stakes in dominant operators). (New Yorker)
US rental company Ryder said that a trial fleet asset sharing scheme had been highly successful and it is now planning a nationwide rollout, believing that 25% of fleet vehicles are totally idle at least one day per week. (Reuters)

Driverless / Autonomy ^(history)

Cepton launched the Vista “120 line equivalent”, 200m range lidar; mass production will begin in Q2 2018. The company said it was “a cost point nobody can touch with this type of performance” without providing specifics and pointed to the units relatively low power consumption (at 9W, its about the same as many 16 line units). (Cepton)
Waymo’s CEO said the company was doing “zero” work on data gathering but that it might “be a workstream in future”. (Telegraph)
Uber reached a settlement with the family of the woman recently killed in a collision with a self-driving car. (Reuters)
Uber gave up its testing permit for California. (Engadget) The company also shut down its on-demand package delivery service. (TechCrunch)
Local Motors will use Elite Transportation Services to provide fleet management for its AVs. (Mass Transit)
Intel’s MobilEye division released the results of using its proprietary object recognition algorithms against the publicly-available video of Uber’s fatal self-driving crash. The company said that even with the (assumed to be) low resolution version of the camera feed, it could have detected the pedestrian a minimum of 1 second prior to the collision. (Intel)
Scotty Labs, a start-up developing remote control for autonomous vehicles said it had raised $6 million and formed a partnership with Voyage. (Scotty Labs)
Nvidia announced a virtual testing platform for autonomous vehicles saying that it can simulate data inputs from a variety of sensors. (Nvidia)
ai announced that it would start awarding drivers “gold stars” for good driving whilst the company’s data logging equipment is operating. The value of the gold stars does not appear to extend beyond a warm feeling in the driver’s heart. (Comma.ai)
- Implication: Comma.ai are implying that, although not ready to unleash a self-driving solution, they can recognise the difference between good and bad driving. The value of this gamification in improving the rate at which the company’s AI learns how to drive and develops maps is unclear but this is the first attempt we’ve seen to attempt to create a feedback loop between the two (Comma.ai is not the first company to use fleet generated data to feed into self-driving AI)
Waymo will use Jaguar’s I-Pace as its first all-electric autonomous vehicle, planning for up to 20,000 — a fleet that Waymo says could operate 1 million trips per day. (Waymo)