Monthly Archives: January 2019

Reportedly planning to name the BMW-Daimler mobility joint venture “Jurbey”. (The Drive)
Invested in roadside assistance firm Urgent.ly. (BMW)
Reorganising sales regions so that all of Asia (excluding China), non-EU former Soviet bloc countries and Middle East and Africa will fall under a single manager. (BMW)

Building a new factory for batteries in Poland on the site of a newly-launched engine plant. (Daimler)
Selling its share in electric motor JV EM-motive to partner Bosch. (Bosch)
Daimler believes that Chinese companies are more advanced than US counterparts in “many areas” of digital technology and connectivity. (Reuters)
Reportedly planning to name the BMW-Daimler mobility joint venture “Jurbey”. (The Drive)
Echoing earlier press releases by VW trumpeting their commitment to electrification, Daimler said it had placed orders for €20 billion of battery cells. It also wants suppliers to become more flexible to changes in demand between internal combustion engine and electric vehicles and make greater cost reductions. (Daimler)

Magneti Marelli will expand its US headquarters. (Detroit News)

Reported Q4 2018 revenue of $41.8 billion and a net loss of $(0.1) billion on a GAAP basis (previewed in a conference presentation a week earlier). In the full year, only the North American region was profitable. (Ford)
Said that the EBIT effect of the $11 billion of restructuring actions would have almost all been booked by 2020 (i.e. the actions would have been announced) and the $7 billion cash effects would have largely finished by 2021 (i.e. the affected people would have left the business). (Ford)
CEO Hackett told employees that he was angry with 2018’s results and would soon be planning the implementation of as yet unannounced actions to markedly improve operating performance and profitability. (Detroit News)
Analysts didn’t ask Ford how much a hard Brexit would cost it in 2019, so the figures ($800 million on top of existing sterling devaluation) were leaked, and then confirmed, to media outlets instead. (Sky News)
The limited edition suicide door equipped $110,000 Lincoln Continental sold out in 48 hours. (Detroit Free Press)

The Kandi electric vehicles JV announced a deal to supply 300,000 electric vehicles to deliver ride hailing services in China. The expectation is that they will replace privately owned cars. (Kandi)
Volvo is recalling about 200,000 cars to fix potential fuel leaks. (Auto Express)

Working towards a revamp of the Cadillac subscription service, but not until it has worked out how to increase the involvement of the dealers. (Automotive News)
Canadian unions called for a boycott of Mexican-made vehicles in protest at GM’s closure of a local plant. GM took the threat seriously enough to issue a press release saying why it thought that was a bad idea. (GM)
Investing $22 million in the Spring Hill, USA, plant to introduce an upgraded engine. (GM)

Honda ^(history)

At Geneva, Honda will unveil a near-production version of the small all-electric city car that has been developed from the 2017 Urban EV Concept and the car will go on sale in late 2019. (Honda)

Hyundai reported Q4 2018 and full year financial results. Q4 revenue of 25.67 trillion KRW (about $23 billion) was up 4.8% on the same period a year earlier. Operating income of 501 billion KRW (about $450 million) was down (35.4)%. In the full year, revenue was up 0.9% and profit fell (47.1)%. (Hyundai)
KIA reported Q4 2018 and full year financial results. Q4 revenue of 13,.47 trillion KRW was 3.5% better than Q4 2017, operating profit of 382 billion KRW was 26% up. Full year revenue of 54.17 trillion KRW (about $48.3 billion) fell (1.2) on a year earlier. Operating profit of 1.16 trillion KRW (about $1 billion) was down (74.8)%. (KIA)
Launching a new multi-collision airbag to improve crash performance from secondary impacts. (Hyundai)
Reportedly implementing a turnaround plan at its Chinese joint venture that will see 1,500 jobs eliminated. (Reuters)

The French president reportedly told Japan’s prime minister that Nissan and Renault should both have the same chairman (i.e. Renault’s recently appointed ex-Michelin boss). (Les Echos)
Following Nissan’s upheaval over executive pay the SEC is said to have started its own investigation. (Reuters)
Nissan’s CEO said he will step down once he has reformed the governance structure. (Automotive News)

Avtovaz committed to spend about $1 billion in Russia over the next ten years, create 2,300 jobs and increase the amount of localisation. (Renault)
Renault has withdrawn the Twingo from sale in the UK. Falling sales were blamed. (Autocar)
Carlos Ghosn resigned from Renault and was replaced (exactly as the French government had hoped, coincidentally) with Jean-Dominique Senard as chairman and Thierry Bolloré as CEO. (Renault)
Senard will continue in his existing role of Michelin CEO until May 2019. (Michelin)

Suzuki

Maruti Suzuki said India’s sales taxes should be reduced to stimulate demand. (Economic Times of India)

JLR factories will close from 8^th April to 12^th April as a precaution against post-Brexit disruption. (JLR)
- Significance: Since the scheduling is for the second week of April rather than the first, either JLR are holding at least one week’s supply of parts (seemingly in contradiction to industry hand-wringing over just in time supply chains), or reduced demand is also a factor.
JLR claimed the I-Pace program took only three years. This contradicts conventional industry wisdom and Jaguar’s puff piece documentary into the program “Jaguar: Going Electric” which says the project began in 2014 (02:35 in for Amazon Prime subscribers). (Autocar)
Invested in roadside assistance firm Urgent.ly. (Porsche)

Cutting production hours for Model S and Model X after dropping the 75 kWh derivatives. Tesla also said it was because of improved productivity. (Reuters)
- Significance: With demand for Model S already appearing to drop off; Model X approaching a plateau; actions from Tesla to distance bottom-end derivatives from Model 3, reductions in sales of the two models seem inevitable unless Tesla undertakes a significant refreshes (either not on the horizon or a very well kept secret).
Received a fine for safety problems in the “tent” Model 3 assembly area. The citations were for improper permits, training and risk assessment, not because accidents had taken place. Tesla objected. (Business Insider)
Tesla confirmed that it has been discussing a battery supply contract with Lishen. Although the news was received with horror by some Panasonic-watchers, Elon Musk has repeatedly said that Tesla talks with all the battery suppliers and Samsung have provided batteries for its wall units. (Reuters)

Confirmed the creation of a 49% / 51% battery joint venture with Panasonic. (Toyota)
Hopes that 2019 sales in China will rise 8% versus the prior year, even as overall industry struggles. (Reuters)

CEO Diess believes that Chinese demand will continue to grow, albeit slowly. (Reuters)
Bugatti’s CEO rejected rumours that the brand will produce an SUV. (Autocar)
Reportedly plans to build 40,000 Porsche Taycans per year and may add a second factory (Porsche previously talked about 20,000 units capacity). Audi’s e-Tron also looks set for an increase in production rate from 20 to 24 vehicles per hour. (Automotive News)
Following warning strikes, workers in Audi’s Hungarian factory stopped work for a week. (Bloomberg)
Invested $10 million in battery developer Forge Nano. (VW)
Bentley’s CEO said a no deal Brexit would pose a “fundamental risk” to the brand’s profitability. He set the costs of increased customs checks in perspective saying that he would chose a few million pounds of additional inventory over the risk of disrupted production from running supply chains too lean. (Reuters)
Porsche invested in roadside assistance firm Urgent.ly. (Porsche)
Audi is looking to make €15 billion of cost cuts by 2022. Audi believes that natural attrition will reduce the workforce by 14,000 people in a five year period. (Reuters)

Other

Subaru suspended production at the Gunma plant in Japan after discovering defective steering components. The shutdown started on 16^th January and is expected to last until 28^th January. (Subaru)
Subaru discovered that it had underpaid overtime to around 3,400 employees in Japan — a contributing factor in a member of staff’s suicide. (Reuters)
Isuzu’s local partner in the Philippines will stop CKD production of D-MAX pickups at the end of 2019. (Carmudi)
NIO’s CEO put 50 million shares into a special trust for owners — who will get a say on how the economic benefits of the stock should be used. He retains the voting rights. (NIO)
Dyson appointed a new CEO for its car project and says it will spend $1 billion on the program in 2019. (Autocar)
RONN Motor Group announced a joint venture in China to build several different fuel cell and battery powered vehicles and is scouting for a factory location. (RONN)
Henrik Fisker says his firm will launch a vehicle in 2021 at a starting price of around $40,000. The team currently numbers 100 people but is rising at a rate of one person per week and the R&D group will stay below 500 people for the medium term. (Automotive News)
SAIC’s Maxus commercial van brand will build a new plant in Vietnam. (China Daily)
Kaiyun Motors says it will start selling an all-electric pickup truck in the USA for $5,000. The low price does come with some drawbacks: top speed is 28 mph and loading capacity is small. (Detroit News)
- Significance: The vehicle’s low price is thanks to three things: Low specification, forgiving build quality and lead acid batteries. The inclusion of this cheaper technology as opposed to lithium ion does beg the question of whether in some applications alternatives to the prevailing trend are being dismissed too quickly.

News about other companies and trends

Economic / Political News

European light commercial vehicle sales in 2018 of 2.13 million units rose 3.1% from 2017. Total commercial vehicle sales were 2.57 million vehicles. (ACEA)

Suppliers

The owners of interiors supplier Novem is reportedly looking at a sale or IPO. (Reuters)
Continental were apparently interested in taking on a “four digit” number of Opel engineers before PSA announced a deal with Segula to do something similar. (Handelsblatt)
Lear reported financial results for full year 2018. Although revenue of $21.1 billion was up versus 2017, net income fell and in Q4 both sales and net income were lower than a year earlier. (Lear)
Magna will help Waymo run its facility to fit self-driving hardware to cars. (Waymo)
Mahle is buying powertrain engineering specialist ZG-Zahnräder und Getriebe. (Evertiq)
TomTom is selling its telematics units to Bridgestone for €910 million. (TomTom)
Johnson Controls said it had seen a slowdown in orders for lead acid batteries in China (a unit that it is in the process of selling). (Reuters)
Nidec reported financial results for Q4 2018. Net sales dropped (3.4)% but profit was down (28.5)%. (Nidec) From the start of 2019, Nidec will consolidate CCI (in which Nidec holds a 48% stake) in financial reporting. (Nidec)
Plastic Omnium and Hella are collaborating in integrated lighting. (Plastic Omnium)
Delphi is stopping its dividend and repurchasing shares instead. (Delphi)
Bosch is buying Daimler out of the EM-motive electric motor JV. (Bosch) Bosch also announced an investment in connected vehicle firm AutoAI. (Bosch)

Dealers

On-demand repair service GoMechanic raised $5 million. (Deal Street Asia)
Porsche, BMW and JLR invested in roadside assistance firm Urgent.ly as part of a $21 million round. (JLR)
Peer to peer used car sales website Motorist.sg raised an undisclosed sum. (Deal Street Asia)

Vietnamese ride hailing firm FastGo wants to raise $50 million and expand into the USA and Brazil. (Nikkei)
Ola reportedly plans to cut investment in meal delivery service Foodpanda. (Deal Street Asia)
Didi and BAIC created a joint venture to work on connected cars. (CNBC)
Zipcar is pulling out of Brussels, Paris and Barcelona. (Auto Rental News)
BMW and Daimler’s mobility joint venture will reportedly be named “Jurbey”. (The Drive)

Apple fired 200 people from its self-driving program. (CNBC)
Waymo is opening a facility in Michigan, USA to fit self-driving hardware to FCA and JLR vehicles. Magna will help to run the operation. (Waymo)
Jaguar Land Rover says that vehicles should communicate their intention to pedestrians by projecting the proposed path onto the road in front of them. (JLR)
Uber is rumoured to be working on a range of autonomous scooters and bikes that would be able to reposition and recharge themselves. (TechRadar)

BP invested in Chinese charging provider PowerShare. (Deal Street Asia)
A comparison in charging between a Mercedes EQC, Audi e-tron and Jaguar I-Pace showed varying approaches to protecting the battery. Both the maximum charging rate and relationship between charging rate and state of charge varied across the three. The Audi charges quickest. (Inside EVs)
VW’s Electrify America charging network had to shut down several high-power charging stations due to problems with cooling. (VW) At the same time, the supplier of the affected part said that it has experienced short circuits in test parts. (Huber+Suhner)
Kaiyun Motors says it will start selling an all-electric pickup truck in the USA for $5,000. The low price does come with some drawbacks: top speed is 28 mph and loading capacity is small. (Detroit News)
Toyota confirmed the creation of a 49% / 51% battery joint venture with Panasonic. (Toyota)

Connectivity

TomTom is selling its telematics units to Bridgestone for €910 million. (TomTom)
Daimler believes that Chinese companies are more advanced than US counterparts in “many areas” of digital technology and connectivity. (Reuters)
Didi and BAIC created a joint venture to work on connected cars. (CNBC)

Other

Bicycle rental company Mobike is changing its name to Meituan Bike. (TechCrunch)
Amazon has started trials of small delivery robots. (ZDNet)
Boeing’s flying car had its first successful test flight. (Reuters)
Electric bicycle rental firm Wheels raised $37 million. (TechCrunch)
Electric bicycle rental firm Zoov raised €6 million. (Zoov)

Find our archive here.

Auto Industry Briefing — week ending 20th January 2019

January 22, 2019 Ad Punctum TeamAd Punctum, Automotive0

Paying for travel differently; Tesla’s growing pains; and more creativity needed to sell electric cars. Please enjoy our auto industry and mobility briefing for 14^th January to 20^th January 2019. A PDF version can be found here.

Favourite stories of the past week…?

Money Machine — Ola will offer more customers the chance to pay for their rides on a monthly basis. In concept it isn’t much different from a pay as you go option. It must be progress if we can get people comfortable with paying for on-demand travel (season tickets notwithstanding — a bigger upfront commitment), especially if they get used to the idea that some months cost a bit more than others.
Welcome To The Jungle — Tesla is shedding 7% of the workforce and ending the customer referral program. For a company that touts its differences, the cost cutting seems a bit unimaginative and one wonders about the long-term effects? Plus, how am I supposed to square all the previous boasts about referral-based marketing costing virtually nothing with a sudden clamp down because “it’s adding too much cost”?
Price Tag — VW’s chairman says that small cars will inevitably rise in price with electrification. It all seems a bit fatalistic to me. We live in a world where people carry around $1,000 smartphones that are more ubiquitous than $200 feature phones were a decade ago. A benefit was explained, a payment model was created and… hey presto! The thing is affordable, even for those with lower incomes. Why should electric cars be so different? Why should electric cars be the preserve of the rich? Why do carmakers tout the long-term savings of electric versus fossil fuel but leave it up to the consumer to achieve them?

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

Unveiled the new 7 Series large car in Shanghai. (BMW)
Received agreement from the majority of Brilliance Automotive shareholders to sell BMW an extra 25% stake in the Brilliance-BMW joint venture in China (in 2022). (BMW)
Secret talks between BMW and Daimler are rumoured to cover joint battery purchasing from CATL and a shared basis for smaller cars (e.g. A/B Class and 1/2 Series). Apparently the BMW team are still smarting from Daimler’s whistle-blowing on a engine technology talking-shop which could yet see BMW pay hefty fines. Autonomous vehicle technology is also believed to be under discussion but a pre-existing choice of partners (MobilEye for BMW, Bosch for Daimler) is making each partner worrying about losing ground. (Handelsblatt)

Rumoured to be working on a smaller all-electric SUV, possibly to be badged EQB that will be similar to the yet-to-be-launched GLB. (Autocar)
Will change the metrics of financial guidance and also re-calibrate the meaning of certain terms used. (Daimler)
Secret talks between BMW and Daimler are rumoured to cover joint battery purchasing from CATL and a shared basis for smaller cars (e.g. A/B Class and 1/2 Series). Apparently the BMW team are still smarting from Daimler’s whistle-blowing on a engine technology talking-shop which could yet see BMW pay hefty fines. Autonomous vehicle technology is also believed to be under discussion but a pre-existing choice of partners (MobilEye for BMW, Bosch for Daimler) is making each partner worrying about losing ground. (Handelsblatt)
Planning a new assembly plant in Egypt with a joint venture partner. (Daimler)

CEO Manley said an announcement will be made soon about additional new US capacity to build Jeeps, local media speculate that it will be at the idled Mack Avenue Engine II plant. (Detroit News)
CEO Manley called medium sized pickup truck a “gaping hole” in the company’s portfolio and is open to a partnership to get one. (Reuters)
Will trial two different schemes with small numbers of US consumers: a car swapping scheme run in partnership with Turo and a short-term subscription with help from Avis. (Detroit News)
Italian unions criticised FCA’s threat to review its production plans for the country after a new environmental tax was introduced saying that the firm’s existing plans for more efficient powertrains were insufficient. (Torino Oggi)
The next generation of muscle cars will have to use electrification says CEO Manley. (Detroit News)
Italian unions expect local production to fall from the approximately 670,000 units produced in 2018 due to weakness in Alfa Romeo and Maserati sales, and the discontinuation of Fiat Punto and Alfa Romeo MiTo. At the worst hit plants, production is scheduled to regularly stop until September 2019. (Automotive News)
The market introduction of the Ram 3500 is being delayed by the US government shutdown and the CEO is “concerned, very concerned”. (Bloomberg)

Ferrari

Ferrari’s chairman was moved to make a statement saying he supported the relatively-new CEO and changes in management at the Formula 1 team were not reflective of a wider corporate overhaul. (Reuters)

Preliminary full year 2018 financial results showed revenue of $160 billion and adjusted EBIT of $7 billion. (Ford)
Received poor reviews from analysts after a presentation at the Detroit show where instead of giving a 2019 outlook, Ford simply acknowledged the potential for improvement (slide 42) whilst pointing out that sometimes things work in your favour but then again sometimes they go against you (slide 44). (Ford)
Ford and VW announced the first fruits of their collaboration, covering commercial vehicles. There will be a pick-up led by Ford (but not shared in all markets); a small van led by VW; and a 1T van led by Ford. The vehicles will launch from 2022 onwards. The two parties signed MoUs to investigate autonomous vehicles and electric powertrains — there had been some hopes that they would make firm commitments in this area. (VW) Ford executives said that the companies would incur the engineering costs directly and recover from one another in transfer pricing. (Ford)
Confirmed that there will be an all-electric version of the F-150 pick-up. Ford didn’t give a date for launch but it is possible that the vehicle forms part of the promise to have six US BEVs by 2022. (Ford)
Views a no-deal Brexit as “the least likely outcome” and is planning for a soft Brexit. (Ford)
Bill Ford said he could never see a situation where the Ford family would give up any of their share in the business and that alliances were the only form of partnership the firm would contemplate. (Click On Detroit)
Versace has made the blue oval à la mode with a menswear line incorporating the logo. Commentators were split on the value for money versus Ford’s existing official apparel, but executives must surely be contemplating purchasing a pair of flowing white trousers festooned with Ford badges. (Detroit Free Press)
Recalling about 2,700 brand new Lincoln Nautilus SUVs to fix problems with steering software. (Ford)
CEO Hackett says that revenues from subscriptions will ultimately be far smaller than the value from monetization of vehicle data. (Ford)
Ford’s Argo.ai is hiring a leading car critic to lend a greater voice to the emotional side of driverless cars. (The Drive)
There will be a Lincoln version of the Mach 1 BEV. (Green Car Reports)
Ford’s product development chief said that electric vehicles would be “contribution margin positive”. (Ford)
- Significance: Since the contribution margin excludes fixed costs, the statement is less strong than it sounds. A product could make a (20)% loss in terms of return on sales and still be breakeven at a contribution margin level.

Volvo is not developing a direct replacement for the V40 and instead will do something more “creative”. (Autocar)
According to the website of a new Geely factory in Wuhan, China, Lotus-badged cars will be made there. (Reuters)
Spy shots of what look like a medium sized hatchback Lynk&Co vehicle out testing caused confusion after earlier stories that implied the next models would be large cars based on Volvo’s XC90 and S90. (Autocar)
Named a new CEO at taxi maker LEVC. (Geely)

Chevrolet stopping using an advertisement that claimed (based on a survey commissioned by Chevrolet) that the brand’s vehicles had better reliability than Ford, Honda and Toyota after threats of legal action. (Detroit News)
Told Brazilian workers that “sacrifices” were required to turn a profit in the country, calling on them to support a mysterious “viability plan” that has been presented to the board. The company’s approach seems very similar to that used in South Korea. (Reuters)
CEO Barra said that GM would be launching more products in the US but that workers at the plants slated for closure / unallocation shouldn’t hold their breath as they would likely be used to improve capacity utilisation at the remaining US plants. (Detroit News)
Workers at Canadian suppliers have begun walking off the job in support of GM workers at plants likely to close. Unions have also threatened to humiliate the company at public events. (Detroit Free Press)
Executives were dismissive of hybrids, saying the powertrains were “countermeasures” to the decline of internal combustion engines and the smart money was on electric vehicles. (Green Car Reports)
CEO Barra said “stay tuned” when asked if the company was planning a full size pick-up truck. She might want to consider a more equivocal answer since in November GM’s strategy chief said “there will not be any AV/EV pickups”. (Electrek)

KIA revealed the 3 row Telluride SUV at the Detroit show. (Detroit News)
Recalling around 168,000 US vehicles to fix problems with engine wear. (Reuters)
Reportedly received local government approval to make electric vehicles in India. (ET)

The Renault-Nissan-Mitsubishi Alliance Ventures fund invested in dealership software provider Tekion. (RNA)
Cutting a shift at the Canton, Mississippi plant, leading to 700 job losses. (Tennessean)
Suffered the ignominy of the Infiniti QX electric concept car losing power as it drove to the stage during its big Detroit show reveal. (Detroit Free Press)
The French government took steps to impose an end to the Ghosn saga by openly championing Michelin’s CEO as an ideal replacement for Ghosn and reportedly telling the Japanese government that it wanted to integrate Nissan and Renault under a single holding company — something Nissan is resistant to and the government appeared to back away from publicly (for now). (Reuters)
Nissan and Mitsubishi said that payments of almost €8 million had been made to Carlos Ghosn by the Nissan and Mitsubishi joint venture company without properly consulting their CEOs and will take legal action to recover the money. (Nissan)
One of Nissan’s independent directors speculated that it may not be necessary to have a chairman. (Bloomberg)

PSA (includes Opel/Vauxhall) ^(history)

Sold 3,877,765 vehicles in 2018, an increase of 6.8% versus 2017. The growth is entirely explained by a full year of sales for the Opel and Vauxhall brands as the rest of the business saw volumes drop (12)%, with only Europe as a bright spot. (PSA)
Started production of the I3 gasoline engine at the Tychy, Poland, plant with capacity of 460,000 units per year. (PSA)

Renault’s lead independent director issued a cryptically-worded message which seemed to imply that the board was now actively seeking a replacement CEO, without actually saying it. (Renault)
Reported global sales of 3,884,295 units in 2018, an increase of 3.2% on 2017. Passenger car sales were down, as were Renault-badged models. Strong performance of Dacia and Lada made up the difference (but presumably at lower average revenue and profit). (Renault)
The French government took steps to impose an end to the Ghosn saga by openly championing Michelin’s CEO as an ideal replacement for Ghosn and reportedly telling the Japanese government that it wanted to integrate Nissan and Renault under a single holding company — something Nissan is resistant to and the government appeared to back away from publicly (for now). (Reuters)
Senior sales and marketing executive Thierry Koskas abruptly left the company. (BBC)
Will not stockpile vehicles in the UK ahead of Brexit, calling the approach “expensive and short-termist”. Renault instead says that it will adapt extremely rapidly to changes as they take place. (Reuters)
- Significance: Along with VW Group and Ford, Renault is in serious trouble if tariff and customs barriers suddenly restrict access to one of its major markets. Although in the short term it may be possible to simply sit out any market volatility, in the presence of longer term tariff barriers the company has little option but to ask Nissan very nicely to build Renault cars in Sunderland.

Suzuki

Started production at Gujurat plant No. 2 in India, a factory with capacity for 250,000. (Suzuki)

Announcing plans for a (7)% reduction in headcount, CEO Musk told employees that there would be a small Q4 2018 profit but said he was worried that favourable mix of high-series Model 3 was flattering the results and operational cost needed to be reduced to provide lower-priced Model 3 derivatives. The company will retain only “the most critical” temporary employees and contractors. (Tesla)
Released a new mobile, plug-in, charging unit with a 9.6kW rating. The catch is that you need a special type of plug socket so unless customers have already installed these, the new product doesn’t save on electrician fees. (Tesla)
Launched another round of charging station price increases and moved to differentiated pricing by station rather than region, increasing revenue from more popular spots. (Electrek)
Started installing automatic barriers in Chinese supercharger locations that will only lower if the owner uses an app identifying the car as a Tesla. Although the internet was quick to brand the equipment as a potential solution to US pick-up truck owners blocking charging bays, they may want to remind themselves of the ground clearance these vehicles appeared to possess. (Electrek)
Ending the customer referral program, citing affordability. (Reuters)
- Significance: Tesla has long trumpeted the value of word of mouth marketing rather than visible advertising. Either the firm feels that it will never need to advertise again, or (more likely) traditional forms of media will start cropping up.

Launched an AWD version of the Prius. The extra driven wheels are exclusively electric. (Toyota)
Unveiled the production version of the Supra sports car, which shares underpinnings with the BMW Z4. (Toyota) The car will be built by Magna in Austria. (Magna)
Thinks that India will be the third largest market for vehicles within the next decade. (ET)
Reportedly working on a battery-making JV with Panasonic. (Reuters)

Ford and VW announced the first fruits of their collaboration, covering commercial vehicles. There will be a pick-up led by Ford; a small van led by VW; and a 1T van led by Ford. The vehicles will launch from 2022 onwards. The two parties signed MoUs to investigate autonomous vehicles and electric powertrains — there had been some hopes that they would make firm commitments in this area. (VW)
Sees great potential for CNG vehicles in India. (Autocar)
Announced an $800 million investment in the Chattenooga plant to build electric cars on the MEB platform. (VW)
Porsche launched a pay per mile insurance scheme in the US to reduce ownership costs. (Porsche)
Audi says that profits on electric cars will be similar to a well-equipped diesel. (Automotive News)
Agreed to pay €12.3 million to the Indian authorities relating to exhaust emission irregularities, but VW said it continues to dispute the fine and wants the money back. (Handelsblatt)
Audi workers in Hungary started warning strikes after demanding an 18% pay rise. Unions say that they are paid far less than Slovak and Polish counterparts, not to mention those in Western Europe. (Reuters)
Considering building a rugged BEV that “loves scratches”. (Automotive News)
Spending €250 million to develop the low cost MQB A0 platform in India. VW says the vehicles produced in the country with have 95% local content. (VW)
VW’s chairman said that entry level vehicles would have to rise in price if they had electric drivetrains. (Handelsblatt)
- Significance: Although apparently a truism at present, this type of thinking is potentially dangerous. In much the same way as mobile phone prices have increased massively since the says of Nokia’s domination, service providers have found ways to create financial propositions that customers can afford. How can carmakers do the same? (Hint: maybe the car needs to be priced more like a service)

Other

Subaru sold 1.06 million vehicles in 2018, about the same as 2017. In 2019 it hopes for a 2% increase. (Subaru)
Subaru disclosed investments in three start-ups: electric aircraft manufacturer Bye Aerospace; lidar developer AEye;and IoT specialists aptpod. (Subaru)
Nio completed a chain of battery swapping stations along the route from Beijing to Shanghai. (Auto Express)
Karma and Pininfarina announced a collaboration (presumably to design the successor to the Henrik Fisker-penned Revero model). (Fisker)
Evergrande Health, a substantial investor in Faraday Future announced it would acquire 51% of NEVS (the owner of Saab’s automotive IP) for $930 million. At the end of 2017 NEVS had $551 million of assets. (NEVS)
VinFast says it will launch a further five premium models on top of the two already shown (a large saloon and SUV). There will be a small hatchback and SUV, a midsize hatchback and SUV and a large family car. (VN Express)
GAC still plans to enter the US market in 2020. (China Daily)

News about other companies and trends

Economic / Political News

German carmakers called a no deal Brexit “fatal” for the industry, saying that UK jobs were on the line. Given that Daimler has little footprint in the country, VW Group has only Bentley and BMW produces no vehicles carrying the namesake brand in the country, it seems unclear which UK jobs the first two companies will influence. (Reuters)
European passenger car registrations in 2018 of 15,624,486 units were down (0.04)% versus 2017. In December alone, sales dropped (8.7)% on a year-over-year basis. (ACEA)
Indian carmaking trade body SIAM said that regulations preventing the use of imported steel would soon affect production because some, rarer, grades were not available locally. (ET)

Suppliers

Eberspaecher opened a new test facility in Shanghai, China. (Autocar)
Continental is building a new plant for powertrain components in Talegaon, India. (Continental)
Magna gave a financial forecast out to 2021. The firm believes that volumes in North America will stay about the same but the European market will grow slightly. It expects EBIT margin to rise to 8.1% – 8.5%. (Magna)
Dana completed the acquisition of electric components supplier SME Group. (Dana)
Adient said that preliminary results for Q4 2018 showed a drop in revenue and profits but that hopefully things would brighten up in the remainder of the firm’s financial year. (Adient)
Magna will build the Toyota Supra at Graz in Austria. (Magna)
Panasonic is reportedly working on a battery-making JV with Toyota. (Reuters)
Assa Abloy acquired automotive key specialist KEYper Systems. (Assa Abloy)
Goodyear issued a profit warning, blaming tough conditions in India and China. (CNBC)
Bridgestone will invest in promising start-ups in partnership with VC firm Iris Capital. (Europa Press)

Dealers

FCA will trial two different schemes with small numbers of US consumers: a car swapping scheme run in partnership with Turo and a short-term subscription with help from Avis. (Detroit News)
The Renault-Nissan-Mitsubishi Alliance Ventures fund invested in dealership software provider Tekion. (RNA)

Ola is launching a payment option that will see customers pay for rides monthly, rather than per trip. (TechCrunch)
South Korean car sharing start-up SoCar raised $44 million in new funding. (Deal Street Asia)
Kakao, a chat app with transport services bolted-on, appeared to run into problems in South Korea after taxi drivers demanded it cease on-demand ride hailing and car sharing services and protests erupted into violence. The company said it would stop the ride hailing offering and was open to talks about car sharing. (Reuters)
Grab is creating an insurance marketplace in partnership with ZA Insurance. (Grab)
Enterprise is buying Deem, a corporate travel provider. (Enterprise)
Recreational vehicle sharing firm Outdoorsy raised $50 million in a series C round. (TechCrunch)
Go-Jek purchased a majority stake in payments firm Coins.ph for $72 million. (Tech In Asia)

Safety simulation firm Foretellix said it had raised $16 million and has “hundreds of millions” of different scenarios that can be used to measure the operational safety of artificial intelligence. (Foretellix)
Zoox announced the appointment of a new CEO. (TechCrunch)
Stop & Shop plans to launch a fleet of driverless robo-shops that will drive to a customer’s house and then let them select and retrieve daily staples (e.g. milk and bread). (Stop & Shop)
Self-driving car developer AutoX hopes to raise $100 million. (SCMP)
Waymo say that by using machine learning to adjust the parameters of complex neural nets (i.e. a robot controlling the training of another robot) they can iteratively improve recognition far more quickly. (Waymo)

Magna’s CEO said the industry was spending money inefficiently and needed greater collaboration in order to deliver affordable vehicles for customers. (Reuters)
Powertrain engineering consultant AVL revealed a swappable battery pack for small vehicles. The 2 kWh /9 kg unit uses a 48V architecture and can provide a maximum 5 kW output. (Autocar)
Wireless charging company Momentum Dynamics received investment from truckmaker Volvo. (ET)
Indian state-owned firm BHEL and Libcoin are in talks to create a battery plant in India, initially with 1 GWh annual capacity with a view to ramping up to 30 GWh over time. (ET)
Tesla launched another round of charging station price increases and moved to differentiated pricing by station rather than region, increasing revenue from more popular spots. (Electrek)
Nio completed a chain of battery swapping stations along the route from Beijing to Shanghai. (Auto Express)
Battery developer GBatteries says it can fully charge a 60 kWh pack in five minutes by simply adding a charging adaptor that contains an algorithm to control charging conditions. (TechCrunch)
Tesla started installing automatic barriers in Chinese supercharger locations that will only lower if the owner uses an app identifying the car as a Tesla. Although the internet was quick to brand the equipment as a potential solution to US pick-up truck owners blocking charging bays, they may want to remind themselves of the ground clearance these vehicles appeared to possess. The lack of ongoing evidence suggests the entire thing was overblown. (Electrek)
VW’s chairman said that entry level vehicles would have to rise in price if they had electric drivetrains. (Handelsblatt)
Ford’s product development chief said that electric vehicles would be “contribution margin positive”. (Ford)
Audi says that profits on electric cars will be similar to a well-equipped diesel. (Automotive News)

Other

A study of electric scooter usage in the US city of Portland suggested that about one third of users were taking scooters instead of walking, whilst about 19% abandoned their cars and 15% would have other used a taxi. 6% said they had reduced the number of cars in the household because of scooters. (PBOT)
Leading Scooter rental companies Lime and Bird have reportedly seen their valuations fall by about one third in the most recent funding rounds. (Deal Street Asia)
Scooter rental firm Flash said it has raised €55 million. (TechCrunch)
Indian bicycle rental firm Vogo raised $9 million. (Deal Street Asia)
Automation bulls were saddened to hear that a Japanese hotel designed to replace staff with robots found only about half the machines were doing their job properly. They have been sacked in favour of organic lifeforms. (WSJ)

Find our archive here.

Auto Industry Briefing — week ending 13th January 2019

January 14, 2019 Ad Punctum TeamAd Punctum, Automotive0

Opel names a van after a car; Daimler’s unclear sharing strategy; and a real vehicle data scare. Please enjoy our auto industry and mobility briefing for 7^th January to 13^th January 2019. A PDF version can be found here.

Favourite stories of the past week…?

Changingman — Opel unveiled the new Zafira. What was previously a purpose-built compact people carrier is now just a reworked van with a nicer interior. Sounds jolly sensible — the segment is shrinking but why lose all that hard-won brand equity just because it isn’t a standalone product anymore? What sounds better, Zafria or Transit Connect Tourneo?
On My Own — Daimler’s incoming CEO says the company is open to sharing, but not where they think the parts or technology are key to the brand. Sounds totally sensible, unless the brand criticality is just left to the gut feel of the executive team — who rule everything out whilst maintaining an open for business message. So how are they intending to objectively measure customer impact and what is the threshold for important enough to keep distinct? The one example mentioned isn’t too promising: Daimler sees the MBUX infotainment interface as an area where it needs to be different. Really? Loads of smartphone companies can all share Android but carmakers need their own unique programming?
Where’d You Go — Poorly set up security meant that real time location data for 11,000 Indian buses was accessible online for ages until the problem was stopped. Whilst perhaps no one is that interested in the number 35 bus route, the same (human) errors could recur — exactly the sort of thing privacy experts are scared of. Will this become a powerful case study that the industry strives to never repeat, or just the first of many incidents?

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 2.49 million vehicles in 2018, an increase of 1.1% on 2017. (BMW)
Rolls-Royce say 90% of customers request customisation so great that the cars can be considered one-offs (adding an average 40% to the purchase price) — up from 80% in 2016, for the Cullinan SUV it is 100%. About 5% of the Rolls-Royce workforce is dedicated to vehicle personalisation. (Bloomberg)

Sold 2.44 million cars in 2018, a 0.9% increase on 2017. Whilst BMW said it was the largest premium manufacturer, Daimler claimed the brand specific crown for itself (basically, because Mini sells far more than Smart). (Daimler)
Spending half a billion euros on automated truck technologies and intends to develop level 4 (substantial eyes off but bound by geography and environmental conditions) after mastering level 2 because in Daimler’s view the technology cost of level 3 brings insufficient benefit to operators. (Daimler)
Incoming CEO Kallenius said he is opening to sharing components and technologies with other companies but that is something is key to the brand he wants Daimler to go it alone. (Bloomberg)

Reached a deal to settle claims of emissions cheating in the US with a total of $800 million to be paid out in fines and compensation to customers. FCA said the amount had already been reserved in Q3 2018. Although it will pay fines, FCA says that there was no “deliberate” intention to cheat. (FCA)
Lost a US Supreme Court bid to prevent a civil suit from owners seeking to sue FCA for vehicle security flaws, regardless of whether any damage has been caused. (Economic Times of India)
Appointed a new global purchasing boss. (FCA)

CEO Hackett declared himself unhappy with Ford’s 2018 performance, placing a lot of the blame on product age (a self-inflicted problem). Hackett said Europe had been a problem “for a number of decades” but that it was possible to make money with the right “industrial system” and suggested that VW could build cars for Ford in Europe as the company looks to cut costs in the region. The option of leaving Europe was “never on the table”. (Bloomberg)
Launched a new Explorer large SUV, adding a sporty ST model and a (non plug-in) hybrid. (Ford)
Announced another new strategy for the European business, lowering long term profit targets from a 6% – 8% range to 6% EBIT margin in the longer term (the last turnaround plan — announced in February 2016 can be found here). The business will be organised around commercial vehicles, European built cars and imported cars, with a suggestion that any one of the three business lines could be closed in future if the returns were not better than the cost of capital. The firm is reviewing the JV in Russia with Sollers, with a decision to be announced in Q2 2019. A round of redundancies is also underway, with Ford re-announcing: the closure of the Bordeaux transmission plant; consolidating the UK administrative footprint into a single HQ; and the cessation of C-MAX and Grand C-MAX production. (Ford)
- Significance: Given Ford of Europe’s current (unprofitable) condition at a very healthy industry volume, the actions that Ford has announced appear to downplay many of the business’s key challenges: a majority Western European footprint; poor portfolio fit with the rest of the World; and a reliance on the UK market with little natural hedging resulting in Ford fighting over half a billion dollars in annual foreign exchange losses.
UK unions say they were told by Ford that it intends to cut 1,000 jobs at the Bridgend engine plant (already expected with the loss of a JLR engine contract and reduction in capacity for small Ford petrol engines) and 150 in other operations, primarily logistics. (The Guardian)
Might close further plants to improve the profitability of Europe. (Reuters)
The European CEO said Ford was only remaining in the region because of the commercial vehicle business. The head of markets said Mahindra’s approach to cost control was “eye-opening”. (Detroit News)
Shutting the Chariot on-demand bus service by 1^st February citing the changing needs of customers. (Ford)
- Significance: Ford has now shut down the most visible of its bets on consumer-facing mobility services. Unfortunately, Chariot’s business model was always questionable: make money by running bus services, an operation normally so unprofitable that public subsidies of around 50% of costs are normal — and only run services where demand is so low that public buses don’t schedule any routes.
Ford’s head of autonomous vehicles implied the company would not budge from the 2021 target for putting a driverless car on the road saying “at some point before 2021, we have to have no driver”. (TheStreet)
VW and Ford will reportedly announce specifics of their new alliance at the Detroit show with sources suggesting that press releases will concentrate on commercial vehicle ties ups and rumoured plans for VW to buy into Ford’s Argo autonomous technology unit and Ford licencing VW’s MEB platform will remain unconfirmed. (Reuters)
Building on an earlier commitment to make 100% of US vehicles connected by 2019, Ford will install vehicle to everything technology in vehicles launched from 2022 onwards. (Ford)
Will stop sponsoring bicycle rental in San Francisco. (Axios)
- Significance: Ford said that a massive benefit of the bicucle sharing scheme was access to travel data. The implication is either that sufficient data has been gathered, or the data wasn’t particularly useful.

Bloomberg said that Geely had sold half its stake in Daimler. Geely said it had not. (Geely)
The (taxi-making) LEVC division has delayed the development of a van derivative to the early 2020s. (Reuters)

Held a capital markets day where it forecast improved 2019 returns, when many analysts had feared a drop. GM said Cadillac will be the “lead” electric vehicle brand and that, following restructuring, South American operations had reduced the breakeven point by 40% and GM Korea was on a “path” to profitability. (GM)
Launching a set of battery electric vehicles for Cadillac beginning with a crossover codenamed BEV3. (Detroit News)
Oshawa plant workers continue to hold work stoppages in protest at the plan to close the plant. (Detroit Free Press)
Agreed that GM owners could access the stations of three US charging networks and pay through GM’s app. (GM)

Honda ^(history)

Will close UK facilities for the first six days in April to sit out any potential Brexit disruption. (Reuters)
The launch of Honda’s all-electric city car has reportedly been delayed from 2019 to 2020. (Electrek)

Mazda

Developed a new technique for pressing high strength steels that Mazda says allows it to make thinner (and therefore lighter) body parts. Since no additional equipment is apparently required, it seems likely that other companies can replicate the feat with sufficient experimentation. (Mazda)

Carlos Ghosn’s said in court that the foreign exchange contracts at issue had cost Nissan nothing and that he had been offered much more money by Ford and Gm to join them. (Nikkei)
Released a Nissan Leaf (dubbed e+) with a 62 kWh battery pack. (Nissan)
After a short leave of absence related to the Ghosn scandal, Nissan’s chief performance officer resigned. (Reuters)
Nissan’s board said it was committed to the alliance with Renault and Mitsubishi and would claw back control over some business decisions from executives. (Nissan) An executive has been appointed to improve governance, slightly odd in the context of an executive team where certain elements had supposedly gone rogue. (Nissan)

PSA (includes Opel/Vauxhall) ^(history)

Launched the new Zafira people carrier. Rather than create a like-for-like replacement in the shrinking segment, Opel has renamed the passenger carrying version of the Combo van. (Opel)
- Significance: This looks like smart marketing by Opel. Rather than losing the brand recognition, an already existing vehicle has been renamed. Opel have spent a bit of money on the interior to make the vehicle more comfortable than the van — far cheaper than a unique vehicle.

Said that an internal probe had concluded payments to the executive team for 2017 and 2018 were lawful and had been properly disclosed. The investigation will continue to look at previous years. (Renault)

Confirming earlier rumours, JLR announced plans to shed about 4,500 jobs, hoping to save over £1 billion (of which it says £500 million is already on the way). JLR will start making electric motors (at the Wolverhampton engine plant) and assembling battery packs at a new site in Hams Hall (where BMW have an engine factory). (JLR)
JLR sold 592,708 vehicles in 2018, a drop of (4.6)% versus 2017. (JLR)

New car buyers can reportedly still pre-order the fully self-driving feature by emailing Tesla directly but sales advisors are warning anyone who does that it could be a “very long time” before the feature is usable. (Electrek)
CEO Musk suggested the forthcoming Roadster would have a hover function going so far as to outline a potential power mechanism and package. But nobody was sure why. (Electrek)
Will only offer Model S and Model X with 100 kWh battery packs, dropping the 75 kWh version. (Elon Musk)
- Significance: As sales of Model S have already plateaued for some time, it will be interesting to see what the effect on demand is.

Hopes to offer “Toyota Guardian” driver assistance features to other car companies. (Toyota)
Recalling an additional 1.3 million vehicles in the US to replace airbags. (Toyota)
Helping to develop a new type of strawberry through DNA analysis. (NRGene)

VW Group sold 10.83 million vehicles in 2018, a 0.9% increase on a year earlier. (VW)
Creating a subsidiary called Elli that will provide charging services. (VW)
VW and Ford will reportedly announce specifics of their new alliance at the Detroit show with sources suggesting that press releases will concentrate on commercial vehicle ties ups and rumoured plans for VW to buy into Ford’s Argo autonomous technology unit and Ford licencing VW’s MEB platform will remain unconfirmed. (Reuters)

Other

Aston Martin has activated Brexit contingency measures, including the use of alternative ports (with longer shipping times but hopefully less traffic) and airfreight. It has also built up an inventory of finished vehicles on the continent, potentially a risky move with a customer base that values personalisation. (Reuters)
Karma announced a call for suppliers and the start of car sharing operations. (Karma)
McLaren sold 4,806 cars in 2018, an increase of 43.9% versus 2017. (McLaren)
Byton wants to raise another $500 million, after being given a similar sum by investors last year. (Reuters)

News about other companies and trends

Economic / Political News

Chinese passenger car sales of 28.1 million units in 2018 were down (2.8)% on 2017. (Reuters)
The UK government tested whether there was a good system for managing slower freight movements in the event of Brexit by driving 87 trucks in convoy across Kent, an exercise derided by critics. (Reuters)
UK car registrations of 2,367,147 units for 2018 were down (6.8)% on the prior year. (SMMT)

Suppliers

Delphi appointed a new CEO, an external hire. (Delphi)
Lear launched an in-house VC fund. (Lear)
Denso is launching a new R&D site in Montreal, Canada to work on mobility applications. (Denso)
Continental released preliminary 2018 full year results showing revenue of €44 billion and an EBIT margin of 9.2%. Revenue in 2019 is expected to be slightly better but profit margin is likely to fall to 8% – 9%. (Continental)
Autoliv’s CFO is resigning to take on the same role at former subsidiary Veoneer. (Autoliv)
Bosch settled US claims relating to faulty emissions control software in FCA vehicles for $131 million. (Reuters)
ZF is buying Romanian engineering services provider BeeSpeed to beef up the brake controls team. (ZF)

Ola’s latest fund raising paperwork indicates the business is now valued at $5.7 billion. (TechCrunch)
Uber’s CEO said the firm might delay the planned 2019 IPO citing market volatility. He believes the company does not need to go public yet, thanks to a strong balance sheet. (WSJ)
Gotcha launched an on-demand bus service in Florida using electric vehicles. (Gotcha)
Go-Jek’s application to open a ride hailing business in the Philippines was rebuffed but the setback is likely to be temporary, assuming a deep-pocketed local partner can be found. (Reuters)
Ford’s Chariot on-demand bus service is shutting by 1^st February citing the changing needs of customers. (Ford)

Aurora is reportedly looking to raise $500 million in a round that will value the company at $2 billion. (Recode)
Navya published a safety report. Because the company is developing autonomous buses, it still envisages having an operator on board who can take control if necessary, whilst normally functioning as a conductor. (Navya)
WeRide welcomed Ai developer SenseTime as an investor and plans to deploy a fleet of 500 self-driving vehicles in 2019, with a target of 5 million cumulative test kilometres. (WeRide)
Blackmore’s new lidar has a claimed range of greater than 450m and a $20,000 price tag. (Laser Focus World)
AEye had to buy a visitor to CES a new camera after the company’s lidar sensor damaged his camera, resulting in lines permanently across the field of view. AEye said there were no implications for eye safety because cameras were far more sensitive, and that it might have been coincidence anyway. In response to concerns for the cameras that feature in car safety systems and encounter such vehicles, competitors pointed to wavelength (Ouster) and pulsing (Blackmore) as potential culprits and declared themselves immune. (Ars Technica)
Harman and Innoviz have partnered to deliver integrated lidar to OEMs. (Innoviz)
Waymo’s CEO said autonomous vehicles “will always have some constraints” and that even in several decades a degree of “user interaction” will be required. (Auto Express)
- Significance: Although at first sight, the comments appear to call into question the future of autonomous cars, they are a reflection of what could become infrequent problems, the solution to which might be controlled by remote operators, rather than a driver inside the car.
Bose claims to have mastered the art of cabin noise cancellation, moving beyond engine noise to road noise stemming from the vehicle suspension and tyres. (The Verge)
- Significance: although the technology is likely too expensive to see much mainstream use in the next future, systems that focus on comfort will become a more significant factor in purchase choice as vehicles become less driver-oriented.
Ford’s head of autonomous vehicles implied the company would not budge from the 2021 target for putting a driverless car on the road sying “at some point before 2021, we have to have no driver”. (TheStreet)
Daimler is spending half a billion euros on automated truck technologies and intends to develop level 4 (substantial eyes off but bound by geography and environmental conditions) after mastering level 2 because in Daimler’s view the technology cost of level 3 brings insufficient benefit to operators. (Daimler)

Panasonic demonstrated a concept electric vehicle that uses a 48V electric drive (probably fine for relatively low speed applications) and features removable modules for different job types. (Panasonic)

Connectivity

Amazon said it received one million pre-orders for the Echo Auto aftermarket personal assistant. (TechCrunch)
An incorrect password setting reportedly led to the real-time GPS location of 11,000 Indian buses being available online. The site apparently included identifiable information such as licence plates and routes. (ZDNet)
Toyota will use technology from KDDI and AT&T to provide connected vehicle services in the USA. (Toyota)
MobilEye is providing technology to the UK government’s Ordnance Survey map making unit that will help maps update more quickly. (OS)
- Significance: Whilst map-making for cars is assumed by many to be an entrepreneurial endeavour that will impact the rollout of autonomous vehicles to the advantage of a particular company, the Ordnance Survey’s work shows the possibility of an alternative model in some markets: government-mandated and controlled HD maps.
Otonomo is supplying the technology used by Daimler to provide data to third parties. (CTech)
Building on an earlier commitment to make 100% of US vehicles connected by 2019, Ford will install vehicle to everything technology in vehicles launched from 2022 onwards. (Ford)

Other

Ojo launched an electric scooter rental scheme with a (small) difference — there is a seat to sit on. (Ojo)
Electric scooter rental firm Bird is looking to raise a further $300 million. (Axios)
Lime was forced to cease operations in Switzerland after scooters stalled without warning, throwing hapless hipsters to the floor, sometimes at high speed. (TechCrunch)
iOttie is offering a mobile phone mount with motorised jaws that engage the device automatically. (The Verge)
- Significance: At a retail price of $54.95, while the phone mount may not ultimately be a raging success, it begs the question of why the coolest currently available feature is Tesla’s pop-out door handles.

Find our archive here.

Auto Industry Briefing — week ending 6th January 2019

January 8, 2019 Ad Punctum TeamAd Punctum, Automotive0

Smart cars for smart homes; sales planning the old way; and docking driverless pods on the move. Please enjoy our auto industry and mobility briefing for 31^st December 2018 to 6^th January 2019. A PDF version can be found here.

Favourite stories of the past week…?

These Words — Amazon has sold 100 million Alexa-enabled devices. These are products that customers have chosen specifically because they want to talk to them. Whilst the user experience often leaves something to be desired, many users already find it acceptable for basic tasks. How much longer will customers accept that their cars are not part of this ecosystem — even for simple functions like checking the fuel level? OEMs proudly point to commitments to make new cars connected in the coming years, but what about the legacy fleet?
This is How We Do It — Renault’s head of sales planning outlined the approach his team uses. The overriding impression is of art rather than science as the central team try to reconcile market forecasts, factory flexibility and breaking news that could render all previous information obsolete. Without wishing to criticise Renault (other OEMs follow the same approach), it does serve to highlight the fragility of a model that is wholesales led (i.e. sales to the dealers, rather than the end consumer).
Plug In Baby — Aprilli dreams of an autonomous vehicle that plugs into a hotel when it reaches a new city, expanding the space available. I find the idea of purpose build structures a bit clunky, but what about a roving fleet of autonomous amenities that can dock with your pod as you speed between locations? What productivity savings could be in store if the service station came to us, on the move?

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

BMW’s product development head hinted that a PHEV supercar was in the works. He also said that, for the foreseeable future, the brand prefers hybrid vehicles to pure electric ones for sporty models because the weight penalty of larger batteries compromises dynamic performance. (Autocar)

Renaming the NuCellSys fuel cell subsidiary to Mercedes-Benz Fuel Cell. (Daimler)

Sold 2,235,204 vehicles in the US during 2018, an increase of 9% over 2017. The outlook for the Fiat brand is bleak, with sales down (41)% year-over-year. The Chrysler Pacifica and Dodge Journey and Caravan people carriers, bucked the trend for falling car registrations, with over 364,325 units sold, a rise of 9% on the prior year. (FCA)
Italian unions called for FCA to take back control of the Termini Imerese plant from Bluetec, which took on the plant with (so far unfulfilled) promises to provide work for the nearly 700 Fiat employees. (Il Sole 24 Ore)

Sold 2,497,318 vehicles in the US in 2018, down (3.5)% from 2017, explained by an (18.4)% fall in car sales. (Ford)
Issued two recalls for around 953,000 vehicles, mainly to correct further Takarta airbag problems. (Ford)
Will only report sales figures quarterly, as opposed to monthly, going forward, citing GM’s experience that monthly sales are too short a snapshot to draw meaningful conclusions about market conditions. (Reuters)

Volvo sold 642,253 cars in 2018, an increase of 12.4% on 2017 with sales increasing in all major regions. (Volvo)
Geely and Lynk&Co sold 1,500,838 cars in 2018, some way short of the 1.58 million target for the year — the 2019 target has been lowered to 1.51 million. Sales of Lynk&Co appear to have stumbled badly in December with the 01 model mysteriously dropping over (80)% from October and the 02 seemingly selling no units at all. (Geely)
Showed a silhouette of the first Geely-badged model to come from the CMA platform shared with Volvo. (Geely)

Appointed the PD chief as company president; it seems that he will continue in his existing role. (GM)
Sold 2,954,037 vehicles in the key US market in 2018, with 785,229 in Q4. GM is “bullish” about 2019 sales. (GM)
Cruise vehicles will trial home food delivery in partnership with DoorDash. (GM)
One Maven user reports that he is receiving $800 a month for renting out his car on the platform. Since the owner gets 60% of the total fees, that implies $1,330 in monthly gross revenues. (Detroit News)
The UAW union is suing GM, complaining that it is using temporary workers in preference to full-time employees who are out of work at other plants. (Reuters)
The CTO (and ex-CEO) of Cruise continued to play down rumours that GM might spin-off the self-driving unit saying that it was better to develop the technology alongside vehicle engineers. (Bloomberg)

Unveiled a Hyundai concept vehicle featuring wheels on the end of articulated legs. Hyundai says the vehicle offers unparalleled mobility over rough terrain (without explaining the shortcomings of caterpillar tracks). (Hyundai)
KIA sold 2,812,200 vehicles globally during 2018, a year-over-year increase of 2.4%. The 2019 sales target for the brand is 2.92 million units. (KIA)
Hyundai reported 2018 sales of 4,586,775 units, an increase of 1.8% versus 2017. The company set a 2019 sales objective of 4.68 million vehicles. (Hyundai)
Hyundai and KIA aim to have a level 4 vehicle on sale around 2025 and a level 5 car by 2030. The two brands will “commercialise” self-driving vehicles in smart cities from 2021 onwards. (Hyundai)
Increased long term targets for electric vehicles, between Hyundai and KIA, 44 models are planned for 2025, up from 38 previously, expecting them to account for 1.67 million sales annually. (Hyundai)
KIA demonstrated a concept cockpit at CES that will analyse the driver’s facial movements to determine the appropriate cabin lighting, smell and temperature, all through a yet-to-be-created AI algorithm. KIA presented no evidence from existing vehicles that vehicle inhabitants frequently change these settings today. (KIA)

Mazda

Dealers will upgrade infotainment systems on cars up to five years old to integrate Apple CarPlay and Android Auto capability, for around £300. (Motoring Research)

Carlos Ghosn’s son said the former Nissan CEO will mount a vigorous defence. (Detroit News)
Created a concept car that features augmented reality to show information that is either in a blind spot or beyond the driver’s visual range. (Nissan)
Released images of the Infiniti QX concept car to be unveiled at the Detroit show which promises to show the brand’s future direction with an all-electric portfolio. (Nissan)
Abruptly placed two more senior executives on a leave of absence, apparently related to the probe into Carlos Ghosn’s financial affairs. (Financial Times)

Renault’s head sales planner outlined the volume forecast process. Ultimately, because Renault do not work on the basis of a retail customer “pull” (in common with virtually all other brands), the method is a series of checks and second-guessing as market demands are compared to central production flexibility and overlaid with changes in the market between the time the process kicked off and when it ends. (Automotive Logistics)

Recalling 68,828 JLR vehicles in China to fix problems with the crankshaft bearings. (Xinhua)
The R&D head of Tata Technologies described in an interview how the company approaches material choice for optimum weight reduction and cost optimisation. (Autocar)

Q4 deliveries were 90,700 vehicles, of which 61,394 were Model 3. Model S sales continued to fall on a trend basis as the product ages and, possibly, customers opt for the cheaper Model 3. Model X continues to grow. Tesla also announced a $2,000 per unit price reduction in the US to partially offset the $3,750 drop in federal tax credits. The company said the year-end production rate was around 350,000 units annually, implying current Model 3 production of around 5,500 cars per week. (Tesla)
Tesla’s public relations team appears to be shifting towards the same kind of media-grooming expected of mainstream automakers, recently inviting selected journalists to the Alaskan cold weather testing facility it uses in exchange for glowing reviews. (CNET)
Broke ground on the new Shanghai factory. (Bloomberg)

Showed photographs of the latest-level Toyota self-driving test vehicles. (Toyota)

Said that proposed hardware retrofits in Germany would reduce reliability and change the driving characteristics of vehicles. VW believes that some vehicles will be impossible to retrofit and that even those that can be modified may fall short of the envisaged emissions levels. (VW)
The Porsche and Piech families, majority owners of VW Group, have declared the performance of Bentley to be unsatisfactory and want a turnaround to yield results within two years. (FAZ)

Other

Faraday Future settled a legal wrangle with major investor Evergrrande and said the firm’s value had actually increased, to $3.25 billion, during the disagreement. (Faraday Future)
Aspiring electric car maker Laureti said is has identified a manufacturing location in India that will have an annual capacity for 10,000 cars by 2021 and 20,000 by 2023 and will launch the DionX vehicle in 2019 with a 6,000 km trip between 7 cities. (Laureti)
Volvo Trucks said it will make a provision of 7 billion SEK (about $780 million) to repair exhaust systems that will degrade over time and ultimately fail to meet emissions rules. The company has yet to work out how to fix the problem. (Volvo)
- Significance: Without further clarity, it is dangerous to draw firm conclusions but it remains possible that the issue Volvo has could affect other companies that have followed a similar design direction.

News about other companies and trends

Economic / Political News

Despite reporting mixed year-end US market sales, major brands expressed confidence in the market outlook saying that consumers still had a healthy appetite for car purchases. (Reuters)
US light vehicle sales for 2018 totalled 17.2 million units. (Wards)
German passenger car sales of 237,058 in December were down (6.7)% on a year earlier, the full year total of 3.44 million was (0.2)% worse than 2017. (KBA)
Passenger car sales in France fell (14.5)% in December versus a year earlier to 165,390 units. For 2018 overall, sales of 2,173,481 cars was up 2.6% on a like-for-like basis with 2017. (CCFA)
December passenger car sales in Italy of 124,078 units were up 2% on a year-over-year basis. 2018 sales of 1,910,025 cars dropped (3.1)% versus 2017. (UNRAE)
Spanish passenger car registrations came to 99,291 in December, a (3.5)% fall on a year earlier. On a full year basis, sales were 1,321,438 units, up 7% on 2017. (ANFAC)

Suppliers

Samsung will supply the chips used in Audi infotainment system. (Autocar)

Dealers

India used car site CarDekho raised $110 million. (Economic Times)
US new car transaction prices at the end of 2018 were up versus 2017 but trending lower month-over-month. (Kelly)
Youche Yihou, a website providing car news, purchase information and discounts, raised $29 million from investors including Tencent. (Deal Street Asia)

Changes in ride hailing permit regulations in China may cause a reduction in vehicles available. (TechCrunch)

Ouster said it would start selling a 128 line lidar unit for $18,000 in mid-2019 and implied that rival devices are currently retailing at over $100,000 each. The new unit is claimed to have equal power consumption to the existing 64 line model, thanks to improvements in the electronics. (Ouster)
Velodyne launched new short range, low resolution lidar units aimed at driver assistance applications that currently use cameras and radar. No price was mentioned but a “quantum leap” in performance is claimed. (Velodyne)
Robosense said its M1 model would retail for $200 and five units would be enough to provide 360o visibility with a range of 200m for autonomous cars. (Robosense)
Uber has reportedly commissioned McLaren to provide back-up safety systems for the firm’s autonomous driving program. (Telegraph)
Start-up Imagry is developing a driverless vehicle that does not require HD mapping. (Imagry)
Design firm Aprilli showed a concept autonomous vehicle that boasts a lounge-like interior that could function as a valet vehicle and hotel room extension. The idea is that the pod would be provided for travellers, moving them between cities and then docking into purpose-built hotel rooms for a more comfortable sleep. (Futurism)
- Significance: Although the footprint of the proposed vehicle seems outlandish, could this be the start of an idea for autonomous vehicles that dock in transit to provide greater space or additional amenities?
Lidar developer Baraja raised $32 million. (Baraja)
GM’s Cruise vehicles will trial home food delivery in partnership with DoorDash. (GM)
Toyota showed photographs of their latest-level self-driving test vehicles. (Toyota)

Tesla CEO Elon Musk said Singapore was not supportive of electric vehicles. (Straits Times)
BMW prefers hybrid vehicles to pure electric ones for sporty models because the weight penalty of larger batteries compromises dynamic performance. (Autocar)

Connectivity

Data analysis firm Carmen Automotive raised $730,000. (Deal Street Asia)
Delphi and TomTom will work together to integrate real-time mapping data into vehicle controls so that the system can provide feedback and advice to the driver. (Delphi)
Continental has won its first customer project for a 5G vehicle to everything network that uses both existing mobile phone communications and dedicated infrastructure. (Continental)
Upstream Security and Arilou will partner to create cloud-based cyber security for connected cars. (Upstream)
Hyundai has joined the Automotive Grade Linux group. (Linux)
Amazon has sold 100 million Alexa devices. (The Verge)
- Significance: Although the user experience of Alexa – in common with other voice activated assistants – remains patchy, the sales volume implies that large numbers of consumer will expect to have at least basic levels of voice interaction and connectivity with their vehicles (e.g. “tell the car to warm up” or “how much fuel is left in the tank?”). Sales of Alexa are more significant in this respect than mobile phones with personal assistant because these are devices where the customer has explicitly chosen voice activation capabilities.

Find our archive here.

Auto Industry Briefing — week ending 30th December 2018

January 1, 2019 Ad Punctum TeamAd Punctum, Automotive0

Pick-up truck drivers hate electric cars; and BMW has a worry-free outlook on battery costs. Please enjoy our auto industry and mobility briefing for 24^th December to 30^th December. A PDF version can be found here.

Favourite stories of the past week…?

Hakuna Matata — BMW has no worries about getting the battery supplies it needs in future. Are worries about raw material shortages (and/or price increases) as demand grows overblown?
Block Rockin’ Beats — Pick-up truck drivers in America are apparently parking their gas guzzlers in front of Tesla charging stations to block access. Is this really a thing? If so, how much should we expect passive aggressive protests of this nature to grow in future?

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

Does not think there will be any supply risks for batteries, even if demand grows, thanks to the long term contracts it has signed with “reliable” suppliers. BMW says that it is working to reduce dependence on hard-to-source raw materials and has already eliminated the use of rare earth metals in the latest generation of electric motor. (BMW)
Says its battery technology is equal or superior to the competition, when all characteristics are considered, and believes that electric motors are more important to make in-house than batteries. (BMW)
South Korean regulators fined BMW $10 million, saying the company had delayed recalls for engine fires and referred the matter to prosecutors. (Reuters)

Expects the Russian market to grow by 5% to 6% in 2019. (Reuters)

Nissan’s US operation said that it had learned several things about marketing electric vehicles: customers really want a decent range (200 miles+); because there is less of an existing infrastructure for electric cars than gasoline and diesel vehicles the customer needs to be provided with additional services; people want a wide choice of bodystyle; cultural and other factors mean that response is different across markets. (Green Car Reports)
Will reduce production in China by 30,000 units between December and February because of slow sales. (Reuters)

PSA (includes Opel/Vauxhall) ^(history)

CEO Tavares believes that electrification will benefit cars more than SUVs because they have better aerodynamic efficiency and will therefore require smaller batteries to accomplish the same range. He also said PSA’s strategy for re-entering the US market is not based on sharing with other OEMs, but he remains open to the idea. (Automobile)

One of the main French unions has called upon the company to be more transparent about the financial dealings of the Dutch registered entity that carries out some of Renault and Nissan’s joint business. (Reuters)

Suzuki

Maruti Suzuki is looking for a new site to move the Gurgaon factory to because the fields that once surrounded the plant have given way to urban sprawl which has made logistics far more challenging. (Bloomberg)

Tata Motors has reduced its tier 1 supplier list from 1,100 to 800 in the last 12 months. (Autocar)

CEO Musk promised 100% supercharger coverage for European customers. (Futurism)
According to leaked internal emails, Tesla has stepped up its internal testing program for a new level of self-driving software and plans to retrofit new computers to existing cars but will not need to adjust the sensor set. (Inverse)
Increased the number of independent board directors to fulfil Tesla’s settlement with the SEC. (Reuters)

Reported a set of newly-discovered “abnormalities” with the upgraded emissions control software of 1.2 litre diesel engined cars to the German regulator. VW has stopped updating vehicles and hopes to find a resolution during January. (Handelsblatt)
Porsche says the Taycan is sold out in the US for a year if all reservations turn into firm orders and that the biggest cohort of buyers are defecting from Tesla. (CNET)
According to US sales representatives, the all-electric Porsche Taycan (formerly Mission E) will have three models, the base version will retail in “low $90,000” range, the 4S will have a “high $90,000” price tag whilst the range-topping Turbo will be “over $130,000”. (Green Car Reports)
According to Audi’s new chief, getting a CEO spot should be on more new year’s resolution lists. He claims the new job has helped him shed 10 kilos. (SZ)
Showed off a prototype charging station that uses the same batteries as MEB platform vehicles (either new, or more likely, used) to provide high capacity and fast charging, regardless of local infrastructure. The 360 kWh unit can provide charging rates of 100 kW. (VW)

Other

Great Wall launched an electric city car under the Ora brand in the Chinese market. The R1 will have ~150 miles of range thanks to a 33 kWh battery but a starting price of $8,860 (after incentives). (Electrek)
GAC announced the completion of a new 200,000 unit capacity plant for electrified vehicles (to be expanded to 400,000 at a later date) and a 400,000 unit capacity automatic transmission plant (a joint venture with Aisin). (GAC)

News about other companies and trends

Economic / Political News

Germany’s government has reportedly finalised technical specifications for diesel emission upgrade retrofits and will publish them in the new year. (Manager Magazin)

Suppliers

Following GM’s announcement that it will (probably) shut the Lordstown, Ohio plant, Magna said that it will cease production at its nearby seat factory. (WTOL)
ZF will have a €100 million charge in Q4 2018 due to likely EU-imposed fines against TRW for being in a cartel of safety systems suppliers, before it was acquired by ZF. (ZF)
Denso announced a restructuring (Denso) and that joint ventures announced earlier in the year have been formally agreed for control software (Denso) and electric drive modules. (Denso)
BASF is building a new plant in China to produce components for exhaust systems. (Autocar)

After raising almost $3 billion in 2018, Grab seems to have upped its target by another $2 billion. (TechCrunch)
Careem launched a bike messenger service. In addition to providing a simple way to order couriers, customers will be able to order the rider to spend up to $80 on an item for them and then pay when it arrives. (Careem)

Nikon invested $25 million in Velodyne and the two will collaborate on ways to use Nikon’s optics know-how in lidar units. (Velodyne)
Self-driving start-up Ottopia raised $3 million. (Ottopia)