GM’s DIY electric cars; Daimler’s contingency planning; and the product mix conundrum. Please enjoy our auto industry and mobility briefing for 26^th October to 1^st November 2020. A PDF version can be found here.

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

Chasing Cars — GM will start selling electric car conversion kits alongside its existing crate engine business. Using parts from the Chevrolet Bolt, owners will be able to re-build their pride and joy with electric motors and batteries, rather than roaring V8s. Pricing isn’t yet announced, but if it is reasonable, will electric car startups use anything else to build their prototypes?
United States of Whatever — Daimler Trucks announced a deal with Waymo for self-driving trucks, then a couple of days later there was a tie-up with lidar developer Luminar. We’ve seen companies with multiple, seemingly competing, initiatives before but not within the week. So what does it mean? Simply that Daimler Trucks is being smart: Since no one has self-driving sorted out, why back only one team? More to the point, who says you can have safe self-driving with only one artificial intelligence on-board. Is the plan to build redundancy by running both side-by-side?
L.I.F.E.G.O.E.S.O.N. — FCA announced consensus-busting results, Ford’s profits were great, VW Group had a barnstorming quarter. The common thread? Executives reckon that their product mix has gone great guns, more than offsetting the volume losses from coronavirus. Now that manufacturers have discovered that building fewer of their least profitable products, whilst concentrating on maximising production of the highest-earners, will they change their attitude to production planning, or revert to type once this is all over?

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 ^(history)

BMW’s joint venture partner, Brilliance, failed to repay a $150 million bond. BMW may find the company to be a willing seller of more of the joint venture (or it could cling on even more tightly!). (Reuters)
Mini announced a forthcoming portfolio expansion that will see further products get all-electric versions, along with a new model that will only be available as a battery electric car. (Mini)

Daimler ^(history)

Daimler has signed an updated supply agreement that will give Aston Martin access to a wider range of parts from the Mercedes-Benz parts bin. In return, Daimler will get enough shares in Aston Martin to increase its stake to 20%, or £286 million — whichever is lower — by 2023, subject to certain performance criteria being met. The implication is also that Aston Martin will pay less for the parts from now on. Daimler stressed that it has no interest in increasing its shareholding beyond 20% (Daimler)
Daimler Trucks’ Torc self-driving division will develop products that use Luminar’s lidar. Daimler has taken a stake in the lidar firm as part of the deal. (Daimler)
Despite its in-house Torc Robotics self-driving division, Daimler Trucks is collaborating with Waymo to develop autonomous trucks. (Daimler)
Acquired Korean rental company Star-Rent-A-Car. (Daimler)
Daimler and Volvo Group officially signed off on their fuel cell joint venture. (Daimler)

FCA ^(history)

Reported Q3 2020 financial results. Revenue of €25.8 billion fell (6)% from prior year whilst net profit of €1.2 billion was strongly improved from Q3 2020. Adjusted EBIT of €2.3 billion was more than explained by North America, which delivered adjusted EBIT of €2.5 billion. (FCA)
CEO Manley all but confirmed that there will soon be an all-electric version of the Ram pick-up, asking analysts to “stay tuned” for details. (Seeking Alpha)
FCA and PSA’s boards signed some of the merger paperwork and confirmed that they expect the merger to be complete by the end of Q1 2021. (FCA)
Honda is joining FCA’s European CO₂ pool. (EU)

Ford ^(history)

Reported financial results for Q3 2020. Revenue of $37.5 billion rose 1% versus prior year. Net income of $2.4 billion strongly improved versus a $0.4 billion profit in Q3 2020. Automotive EBIT of $2.6 billion was entirely explained by North America earnings of $3.2 billion, Europe lost $(400) million. (Ford)
Buying 2020 European CO₂ target relief from Volvo. (Volvo)
Sold the Sao Bernardo do Campo, Brazil, site. (Reuters)
Intends to sell 100,000 vehicles equipped with the new driver assistance suite that enables hands-off, but not eyes-off, motoring in 2021. Initially, customers will only get the hardware and will have to wait for a software upload later in the year before everything actually works. The cars will only work on 100,000 miles of specially analysed sections of road. (Ford)
Hired a new IT and software chief from the banking industry. Ford played up his ex-Fordie credentials. (Ford)
New CEO Farley admitted that “flexibility between battery electric [and] plugin [hybrids] is not very high”. (Ford)
Ford plans to hold a capital markets day in the spring. On the earnings call, Ford executives studiously batted away all detailed questions, leaving analysts to wonder aloud what had happened to a promise of greater transparency. (Ford)

Geely (includes Volvo) ^(history)

Polestar issued another recall for the Polestar 2 to replace faulty power electronics and cooling systems. (Polestar)
Kandi Technologies created a ride hailing company, Zhejiang Ruiheng Technology Company, as a joint venture with two other partners. Kandi will own 10% of the business. (Kandi)
Volvo will beat its 2020 European CO₂ target, meaning that it can sell the benefit of the surplus to Ford. (Volvo)
ECARX, a technology developer founded by Geely, raised $194 million. (Deal Street Asia)
Kandi Technologies is listing its battery swapping subsidiary. (Kandi)

General Motors ^(history)

Announced a new CFO, Paul Jacobson, recruited from Delta Air Lines. (GM)
Will start selling electric car conversion kits in 2021, aimed at classic GM models and based on the Chevrolet Bolt parts bin. (GM)

Honda ^(history)

Produced 1.286 million vehicles in Q3 2020, up 1% on a year-over-year basis. (Honda)
Honda is joining FCA’s European CO₂ pool. (EU)

Hyundai / Kia^(history)

Announced Q3 2020 financial results. Revenue of 27.6 trillion KRW (about $24.3 billion) rose 2.3% on a year-over-year basis. A loss before tax of (362) billion KRW (about -$320 million) fell from a loss in the prior year. (Hyundai)

Mazda

Produced 327,485 cars in Q3 2020, down (11)% on a year-over-year basis. (Mazda)

PSA ^(history)

Reported Q3 2020 automotive revenue of €12 billion, up 1.2% on a year-over-year basis. Unit sales were down, but product mix more than compensated. (PSA)
PSA sold down 7% of its Faurecia stake sell down, taking the company to 39%. Once PSA merges with FCA, the plan is to distribute the remaining shares to the new entity’s stockholders. (PSA)
FCA and PSA’s boards signed some of the merger paperwork and confirmed that they expect the merger to be complete by the end of Q1 2021. (FCA)
The Citroën brand is resetting its UK prices, revising them sharply downwards, in a bid to reflect transactional amounts and get away from heavy discounting. Sales to rental companies will also be cut. (Autocar)

Subaru

Sold 261,651 vehicles in Q3 2020, up 11% on a year-over-year basis. (Subaru)

Tata (includes JLR)^(history)

Reported financial results for Q3 2020 (Tata’s fiscal Q2). Revenue of 52,530 Cr. INR (about $7.2 billion) fell (18.2)% versus prior year, of which JLR’s revenue was £4.35 billion, down (28.5)%. There was a loss before tax of (815) Cr. INR (about -$110 million), with JLR’s £65 million failing to offset the wider group. (Tata)
Unveiled a facelift for the Jaguar E-Pace. The car’s seats incorporate a Jaguar tag, a design detail seemingly taken from JLR’s former stablemate Volvo (it’s even in nearly the same place). (JLR)

Toyota ^(history)

Sold 2.52 million vehicles in Q3 2020, down (8)% versus prior year, although September was up on a year-over-year basis. (Toyota)
Expanded a recall for faulty fuel pumps — 5.84 million cars will now have replacement parts fitted. (Reuters)
Slightly increased its shareholding in KDDI Corporation, a mobile phone network and the carrier for Toyota’s telematics network in Japan via an investment of around $500 million. (Toyota)
Invested in Spanish car subscription startup Bipi. (Toyota)
The Hino truckmaking division agreed a joint venture for electric vehicles with VW’s Traton, building on an existing collaboration. (Traton)
Starting an investment fund focused on manufacturing technology. Toyota won’t say how large the investment will be until early December. (Toyota)

VW Group ^(history)

Sold 2.6 million vehicles in Q3 2020, down (1)% on a year-over-year basis. (VW)
Reported financial results for Q3 2020. Revenue of €59.4 billion fell (3)% versus prior year. Profits of €3.2 billion fell (30)% versus Q3 2019. (VW)
Ducati published financial results on a major newswire — possibly part of a plan to raise the brand’s profile within the investment community as part of a rumoured sale. (Ducati)
The Traton truckmaking division agreed a joint venture for electric vehicles with Toyota’s Hino, building on an existing collaboration. (Traton)
Bugatti unveiled the Bolide, a track-only hypercar. The company says it hasn’t yet decided whether or not to put the car into series production. (Bugatti)

Other

Aston Martin signed an updated supply agreement that will provide access to a wider range of parts from the Mercedes-Benz parts bin. In return, Daimler will get enough shares in Aston Martin to increase its stake to 20%, or £286 million — whichever is lower — by 2023, subject to certain performance criteria being met. The implication is also that Aston Martin will pay less for the parts from now on. Daimler stressed that it has no interest in increasing its shareholding beyond 20% (Daimler) Aston Martin is raising $1 billion in debt, and looks set to incur an interest rate of over 10%. (Reuters)
Berkley Coachworks announced a limited edition two seat roadster, which the firm hopes to start producing in 2021. (BBC)

News about other companies and trends

Economic / Political News

By 2035, 50% of new cars sold in China will have to be fuel cell, plugin hybrid or battery electric. The remainder must be full hybrids, capable of at least some electric-only range. (Nikkei)

Suppliers

Stoneridge reported Q3 2020 sales of $176 million and operating income of $8 million. (Stoneridge)
Lear reported Q3 2020 revenue of $4.9 billion and net income of $174 million. (Lear)
Nidec’s Q3 2020 sales were 414 trillion JPY (about $4 billion), with operating profit of 41 billion JPY (about $400 million). (Nidec)
Visteon reported Q3 2020 sales of $747 million and net income of $6 million. (Visteon)
Kongsberg reported Q3 2020 revenue of €255 million and EBIT of €14 million. (Kongsberg)
Grammer reported Q3 2020 revenue of €462 million and operating EBIT of €22 million. (Grammer)
AAM reported Q3 2020 revenue of $1.4 billion and net income of $117 million. (AAM)
BorgWarner reported Q3 2020 sales of $2.5 billion and operating income of $284 million. (BorgWarner)
Gestamp reported Q3 2020 revenue of €2.1 billion and EBIT of €94 million. (Gestamp)
Goodyear’s Q3 2020 sales were $3.5 billion, with a net loss of $(2) million. (Goodyear)
Aptiv’s Q3 2020 sales were $3.7 billion, operating income was $364 million. (Aptiv)
Valmet says car demand is so high that it urgently needs 400 new staff for its Finnish plant, indicating that it wants to add a shift. (Valmet)
Continental’s CEO is stepping down. (Continental)
Continental took a minority stake in lidar developer AEye. (AEye)
Dana announced an investment in electronic controls company Pi Innovo. (Dana)
Shiloh reached a deal to sell itself and emerge from bankruptcy protection. (Shiloh)
PSA sold down 7% of its Faurecia stake sell down, taking the company to 39%. Once PSA merges with FCA, the plan is to distribute the remaining shares to the new entity’s stockholders. (PSA)

Dealers

Malaysian car sales website iCar Asia has received a $150 million takeover offer. (Deal Street Asia)
Toyota invested in Spanish car subscription startup Bipi. (Toyota)

Driverless / Autonomy ^(history)

Waymo released a new safety report, made up of the usual PR-speak about how the company was developing autonomous cars. In addition, the company published safety statistics showing a series of actual crashes and near misses avoided by the intervention of the safety driver. There was a single accident in a completely driverless vehicle and one 50:50 where there was an airbag deployment. In all other situations either the Waymo vehicle was not at fault, or the avoiding actions of the safety driver prevented a collision. (Waymo)
Autonomous vehicle simulation company Applied Intuition raised $125 million. (Applied Intuition)
Lidar supplier Aeva is going public via a merger with a special purpose vehicle. (Aeva)
Daimler Trucks’ Torc self-driving division will develop products that use Luminar’s lidar. Daimler has taken a stake in the lidar firm as part of the deal. (Daimler) At almost exactly the same time, Daimler Trucks announced a collaboration with Waymo to develop autonomous trucks, seemingly separate from the first initiative. (Daimler)
Continental took a minority stake in lidar developer AEye. (AEye)

Connectivity

ECARX, a technology developer founded by Geely, raised $194 million in a round valuing it at $1.5 billion. Investors included Baidu. (Deal Street Asia)

Other

Triton EV showed off a hydrogen powered heavy truck. The firm said it had brushed aside the counsel of experts who told them it was a five year, $100 million+ effort and built the vehicle in 35 days. If the company had listened more carefully it might have discovered that this was timeline and cost to industrialise a design. (Triton)
Volvo Group and Isuzu finalised the terms of their strategic alliance. (Volvo Group)

Find our archive here.