Newsflash: nieuwe Jeep Grand Cherokee debuteert begin 2021

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+++ Just as CHINA ’s auto plants are recovering from shutdowns caused by the coronavirus outbreak, they are facing a new headache: potential parts shortages. The virus is now causing production disruptions in Europe, North America and Japan, which supply crucial components to automakers in China, the industry’s biggest market. Those at risk range from global automakers such as Tesla and BMW to local producers; all of whom could face disruptions if the pandemic drags on. Those fears are a reminder that economic activity in any given country is unlikely to return to normal until the outbreak is brought under control worldwide. With automaking suspended in Europe and the Americas, glitches in China could affect the only major manufacturing region where plants are ramping up, threatening to set back the recovery of the world’s second-largest economy from a months-long paralysis. “About 2 months ago, people were asking how the disruption in Chinese supply chain would impact the global auto industry”, said Stephen Dyer, managing director of consultancy AlixPartners. “Now it’s the reverse”. China imported $36.7 billion of vehicle components last year, with Germany, Japan and South Korea representing 28 %, 27 % and 6 % of the total, respectively, according to the China Automotive Technology and Research Center, a state-backed think tank. The U.S. ranked fourth, accounting for 5.9 %. Billionaire Li Shufu’s Geely, the top maker of Chinese-brand vehicles and owner of Volvo, said a potential shortage of imported components has had a minor impact on production. That has prompted the company to seek to switch to Chinese suppliers. Guangzhou Auto, whose partners include Toyota and Fiat Chrysler Automobiles, said it is taking steps to ensure supply as the company imports as much as 10 % of its components from overseas to assemble them in China. While existing inventory offers some cushion, time is running out. Automakers in China typically carry about 8 weeks’ supply of imported parts such as engines and chips, though for some components that can be as little as 4 weeks, said Xu Haidong, a vice chief engineer at the China Association of Automobile Manufacturers. Many electronic parts in particular are imported from overseas, leaving makers of higher-end vehicles that contain a lot of software and computers vulnerable. And while some automakers in China say they rely close to 100 % on local supplies, the made-in-China parts they buy may still contain smaller imported components, such as chips. That means virtually all automakers could suffer supply shocks. Take Germany’s Continental, which is among major suppliers to halt output across its factory network. The European giant supplies major automakers with electronics, tires and other parts. Robert Bosch, which provides fuel-injection systems and sensors, said on March 20 it is “drastically” cutting back German operations. Japanese component maker Yorozu suspended operations in the U.S., Mexico, India and Brazil, and is running some production lines in Japan, Indonesia and Thailand. Operations in China were halted during a government-mandated shutdown, and the company says plants in the country have now resumed 90 % of output. BMW said that it had currently secured enough key parts such but that its purchasing experts were monitoring the situation. The situation today marks a reversal from February, when companies from Nissan to Hyundai were halting production in their respective home countries because of disruptions in China. No major part shortages have so far emerged in China and component suppliers in Europe and the U.S. are preparing to re-start output in a timely fashion, CAAM’s Xu said. The German government has been talking with automotive companies to find a way to resume production, and industry groups in countries such as France are seeking green light to restart plants. One factor giving automakers some buffer is low demand, which has left manufacturers and dealerships with high inventories. Buyers are slowly returning to showrooms though: Car sales in China have been recovering since February and even rose during the second week of April, according to data from China Passenger Car Association. “Premium products that have more imported components might be under bigger threat”, said Dyer at AlixPartners. “But the need for luxury cars is also affected by the coronavirus”. +++ 

+++ Twitter asketh, Elon Musk delivereth. Now that he’s moved past the weird controversy over ventilators, the Tesla CEO has used his favorite social media platform to spill a few details about how the CYBERTRUCK is coming along nearly 6 months after its unveiling during the Los Angeles Auto Show. Apparently, all it took was a curious enthusiast who popped into Musk’s mentions, asking for a kernel of news about the polarizing electric truck. “We’re working on increasing dynamic air suspension travel for better off-roading”, Musk relied. “Needs to kick butt in Baja”. That’s an apparent reference to the annual Baja 1000 off-road race held each fall in Mexico, where I presume he’s eager to see the Cybertruck compete and demonstrate its off-road bonafides. Musk has previously promised an air suspension with adaptive ride height that tops out at around 16 inches, but he added on Twitter that the system would be “all new,” not based on the one found in the Models S and X. He said he planned to review the overall system with his engineering team next week. But Musk wasn’t done. Asked about the biggest change to the pickup from the prototype version seen in L.A., Musk disclosed that the Cybertruck will go on a diet that will make it roughly 3 % smaller, with a more level center line and a lower windowsill. The reduced size could help chip away at the truck’s hefty weight and make it look a little sportier, though we’ll have to wait for new images to render full judgment on how it affects the truck’s controversial aesthetics. As a reminder, the Cybertruck well be offered with anywhere from 1 to 3 electric motors, corresponding with rear or allwheel drive setups, with the tri-motor Plaid powertrain boasting 800 kilometres of range and a 3.0 second 0-100 kph launch. Meanwhile, Musk has been scouting locations in the central U.S. for a new factory where he could build the Cybertruck and the Model Y. Recent reports have suggested he was sizing up Nashville, Tennessee, while Austin, Texas and Joplin, Missouri have also pleaded their cases, the latter via offering up $1 billion in incentives. First deliveries of rear-wheel driver variants are supposed to start in late 2021, with faster versions in 2022. +++

 

+++ FORD raised $8 billion from corporate debt investors to shore up its cash reserves as the coronavirus outbreak pummeled vehicle sales and production, resulting in an estimated loss of about $2 billion for the first quarter. The Dearborn, Michigan-based company, which lost its investment-grade status in March, raised new funds with a three-part debt offering, according to a regulatory filing. Investors said Ford benefited from the Federal Reserve’s move last week to backstop debt offerings by companies that lost investment-grade credit ratings after the COVID-19 crisis accelerated in the U.S., International Financing Review reported. “Today’s deal is a good sign of the growing confidence around the improving market backdrop with respect to liquidity as well as more promising views around the economic outlook”, said Dan Mead, head of investment grade syndicate at Bank of America Securities, which was one of the lead banks on the Ford deal. In an environment where interest rates on cash savings are close to zero, Ford will pay investors interest of between 8.50 % and 9.625 % on the new debt securities. There was around $40 billion worth of demand from investors across the 3 debt packages, according to a person familiar with the matter. Ford had earlier drawn down over $15 billion from revolving credit lines to ride out the pandemic, which forced the shutdown of its North American and European factories during the past month. Separately, General Motors disclosed in a regulatory filing that it had entered into a 364-day revolving credit agreement of $1.95 billion. The automaker said it has allocated the credit line for exclusive use by its financial services business. Ford said it had to put up additional guarantees for earlier loans (not the above mentioned notes) because it has not maintained an investment-grade status. It has suspended its dividend for the quarter. Stanching the cash drain and restarting profitable operations in Europe and North America will be critical for Ford in the months ahead. The company told investors that absent new funding and a restart of production, it had cash to last to the end of the third quarter. Now, Ford has more breathing room financially, and federal and state officials this week said they expect coronavirus lockdowns to begin easing, possibly allowing auto plants to begin building vehicles again early next month. Still, the company has taken a body blow from the pandemic at a time when it was already wrestling with a difficult restructuring effort begun more than 2 years ago. Ford’s vehicle sales to dealers fell 21 % in the first quarter, compared with a year earlier. Only Ford’s joint ventures in China, where the pandemic has been receding, are currently producing vehicles, and dealers there have resumed work. Separately, Ford warned that its production of high priced versions of pickups and SUVs could be hurt due to the damage caused by a tornado earlier this week at parts supplier BorgWarner’s South Carolina factory. BorgWarner’s facility makes transfer cases for some of Ford’s most profitable vehicles, such as 4-wheeldrive F-series pickups and large SUVs. +++

+++ In GERMANY car dealerships will be allowed to resume activities effective immediately as chancellor Merkel’s government relaxes its Covid-19 lockdown measures in Europe’s biggest market. The move has been eagerly anticipated by auto lobby groups, which fired off multiple warnings regarding dealerships facing bankruptcy due to high inventory. The VDA manufacturers lobby group stated that reopening dealerships is an “important and necessary step” on the way to ramping up production. “There is no production without sales”, said VDA president Hildegard Müller. While no specific date has been set for when most dealerships will reopen, industry groups expect some showrooms to resume business activities as soon as Monday; something Opel have already confirmed will happen, thus becoming the first German carmaker to do so. “This is an important step towards normalcy that will slowly bring momentum back into sales”, said CEO Michael Lohscheller. After a nationwide lockdown was announced on March 16, new-car sales in Germany dropped 38 %, forcing the VDIK importers group to withdraw its full-year forecast for 3.35 million new car sales. Merkel and the country’s 16 state leaders hashed out a plan to open stores with retail spaces of less than 800 square meters, which include bike shops and book stores. The restriction will not apply to car showrooms, which have comparatively large areas that can facilitate social distancing measures, as opposed to supermarkets or other shops. “We are very pleased to see that there has been no restrictions placed on the size of the dealership because that would put certain businesses at a disadvantage”, said the VDA. The auto industry association joined a chorus of demands from executives and politicians calling for more incentives to revive demand for low emission vehicles in the wake of the coronavirus pandemic. Measures to curb the movement of people, imposed to contain the spread of the virus, have hit car sales hard, leading Volkswagen to abandon its full year outlook and issue a profit warning. VDA said demand needed to a boost. “There is currently no reason for optimism. It is likely that economic support measures will be necessary in order to revive overall economic demand and, in particular, the demand for vehicles”, Müller said. How such incentives should be structured and funded depends on how well demand rebounds after Germany loosens lockdown measures, she added. “We will only be able to estimate what is actually necessary once the car dealerships have opened. Then we will see how customers will behave”. Politicians and the auto industry need to act in a timely fashion, she cautioned. “It will be too late to talk about possible demand impulses in autumn”. Müller’s remarks follow calls for state aid made by Bavarian premier Markus Söder on April 8. At the time, he called for a cash-for-clunkers scrappage scheme to boost low emission cars; an idea which was immediately endorsed by BMW’s chief executive Oliver Zipse. “We need to have another very specific discussion about how we can strengthen the automotive sector. And I think it is necessary to develop a model similar to the scrappage scheme in order to give a massive boost to domestic demand”, Söder said, adding that measures were needed to boost demand for low emission vehicles in particular. “Let’s be quite honest: all the new engines have not yet been as successful on the market as we thought. Now is the chance to start a project in which we can promote cars in Germany with an innovation premium”. Stephan Weil, the premier of Lower Saxony, the German state which owns a 20 % stake in Volkswagen, this week told that the country needed an “eco scrappage scheme” to boost demand for electric and hybrid cars. Tobias Austrup, a transport specialist at environmental lobby group Greenpeace, also welcomed the idea. “It is good that Weil and Söder link any state aid for the car industry to ecological progress this time. If all taxpayers make this money available, then everyone must benefit from it, for example through better air, less climate damage and secure jobs”. +++

+++ Automakers in INDIA want a temporary tax cut on cars as well as incentives to scrap old vehicles, to try to boost sales and generate revenue after the coronavirus outbreak has brought the economy to a standstill. Passenger vehicle sales in India fell 18 % in the year to end-March; their steepest recorded fall in years, after weak economic growth in the country over the last year. That has been compounded by a nationwide lockdown to slow the spread of the novel coronavirus. The Society of Indian Automobile Manufacturers (SIAM), an industry body whose members include domestic companies such as Maruti Suzuki, Tata Motors and local units of global car makers such as Volkswagen and Toyota, said it has sought government aid. Companies want a temporary 10 % cut in tax on the sale of all automobiles and auto parts and incentives, in the form of tax rebates, for car owners to scrap their old vehicles, SIAM said in a media statement. It did not specify how long it meant by temporary. The automotive industry is the backbone of India’s manufacturing sector in terms of the employment it generates and its economic contribution. The coronavirus outbreak has left it in “deep distress”, making financial support and a revival of demand a necessity, SIAM president, Rajan Wadhera said. In common with other industries, auto manufacturing has ground to a halt and car showrooms have been shut since late March when prime minister Narendra Modi announced a 21 day lockdown to contain the virus’ spread. The lockdown has been extended until May 3 at least. The coronavirus is expected to delay the recovery of passenger vehicle sales, rating agency ICRA said in a note, adding that it expects sales to dealerships to decline by 10 % – 12 % in the current fiscal year ending March 2021, after an 18 % decline last year. Earlier, India’s central bank announced measures to discourage banks from parking idle funds with it and spur lending instead, to revive a flagging economy. +++

+++ JEEP is one of FCA’s most important brands and they’re embarking on a major product push. The first new model will be a 3-row SUV that is closely related to the next-generation Grand Cherokee. The vehicle will built at the former Mack Avenue Engine Complex as FCA is investing €1.4 billion to turn the facility into a state-of-the-art production plant. The 3-row SUV is slated to roll off the assembly line late this year and it will be joined by a new Grand Cherokee in the first half of 2021. To make room for the model, the current Grand Cherokee will be phased out early next year. Jeep hasn’t said much about the models, but both are expected to ride on a modified version of the Giorgio platform that underpins the Alfa Romeo Giulia and Stelvio. The Grand Cherokee will grow in size, while the 3-row model will be even longer. Engine options remain unconfirmed, but choices are expected to include a 3.6-liter Pentastar V6 and a 5.7-liter Hemi V8. FCA has already confirmed plans for plug-in hybrid variants and they could be joined by an entry-level model with a turbocharged 2.0-liter 4-cylinder engine. A purported interior picture surfaced last summer and it suggested the Grand Cherokee will have higher quality materials and a more modern design. Key highlights are slated to include a rotary gear selector and 16-way power front seats with heating, ventilation and massage functions. The same document suggested there will be an instrument cluster with a 7 or 10.1 inch display as well as an infotainment system ranging in sizes from 7 to 10.1 inches. 2021 will also see the introduction of the oft-delayed Wagoneer and Grand Wagoneer. They’ll be built at the Warren Truck plant and based on the platform that underpins the Ram 1500. Little is known about the models but, based on the Ram origins, we can expect them be to be offered with an assortment of different engines including a 3.6-liter V6 and a 5.7-liter Hemi V8. There will also be a plug-in hybrid variant and possibly even a 3.0-liter EcoDiesel V6. The latter could compete with diesel-powered versions of the Cadillac Escalade, Chevrolet Tahoe / Suburban and GMC Yukon. Other models are a little hazy, but FCA’s contract with the UAW called for “fresh models / features” in regards to the Cherokee. What that means remains unclear, but FCA’s Capital Markets Day presentation said there will be a new Cherokee and a new 3-row variant by the end of 2022. They’re slated to have plug-in hybrid and electric powertrains, but the company has been tight-lipped on specifics. Other upcoming models include a Wrangler plug-in hybrid, a facelifted Compass and a new Renegade. Jeep is also working on an all-new entry-level model that will slot beneath and be offered with a plug-in hybrid powertrain. Of course, FCA doesn’t have the best track record with their 5-year plans and the coronavirus pandemic could potentially delay some upcoming models. Regardless, Jeep’s future is certainly looking bright. +++

+++ The KARMA Revero lineup is expanding as the company has released the first details about the Revero GTE. Set to become the company’s first fully electric vehicle, the Revero GTE is based on the E-Flex platform and will be launched in the spring of 2021. Karma is staying coy on specifics, but confirmed there will be 2 versions at launch. The entry-level Revero GTE will have a 75 kWh lithium-ion battery pack that provides a range of 320 km. Customers will also have the option of upgrading to a longer range variant which has a 100 kWh battery and a range of roughly 480 km. In regards to charging, a 150 kW DC faster charger will provide an 80% charge in less than 30 minutes. Furthermore, an 11 kW AC charger will allow the model to recharge overnight. Karma was coy on additional specifications, but confirmed the EVs will be able to accelerate from 0-100 km/h in 4 seconds. The company also hinted the GTE will be equipped with multiple electric motors as they said there will be an electronic torque vectoring function. Following the launch of the mainstream variants, there will be a “hyper-range version”. It will arrive in late 2021 and have a range of approximately 640 km. There’s no word on pricing, but Karma says pre-orders will begin in the coming months. The company also revealed the GTE is slated to be offered in China and Europe during the fall of 2021. According to Karma’s vice president of Powertrain, Vlad Kalika, “The Revero GTE is a testament to Karma’s future and a continuation of the success of our definitive luxury electric Revero GT”. He added the model “ushers in a new era of pure all-electric technology; something we are proud to offer both our customers and the mobility industry”. +++

 

+++ Remember the rather striking LF-1 Limitless concept? LEXUS unveiled the luxobarge more than 2 years ago at the Detroit Auto Show where many people saw it a sneak preview of the next-generation LX. It seems Toyota’s premium division has something else in mind for the high-riding behemoth as the production version will be positioned above the aging LX. It will share many of its underpinnings with the LS saloon, but with an F twist as there could be a high-performance version equipped with a twin-turbo V8 engine good for more than 600 hp. The lesser versions would grab the powertrains from Japan’s S-Class rival, namely the twin-turbo V6 rated at 416 hp and the hybrid powertrain with 354 hp. The LQ will be available for the 2022 modelyear, which means it won’t go on sale until sometime next year. The base version is expected to cost somewhere in the region of €145.000 in the Netherlands and rise to about €185.000 for the flagship variant. Lexus is unlikely to launch the F model from day one, so it would probably arrive a year later to sit on top of the range with a price tag to rival the likes of the Mercedes-AMG GLS 63 and Audi RS Q8. It is worth mentioning Lexus has already secured the rights to use the ‘LQ’ moniker, and with the press release for the concept saying it has the “potential to shape the future of a flagship luxury crossover”, it might just happen. It can’t come soon enough taking into consideration the LX feels ancient compared to its much more modern rivals. The LX switches to an all-new model in 2022 and will represent a “huge departure” compared to the current vehicle launched many moons ago. It’ll be interesting to see whether he was actually referring to the new LX or the LQ. Either way, it would appear Lexus is hard at work developing an all-new large SUV. +++

 

+++ POLESTAR ‘s design boss Max Missoni has given the clearest indication yet that the Polestar Precept concept car might be more than just a design study. It could become a production model itself, a rival for the likes of the Tesla Model S and forthcoming Mercedes EQ S. “In terms of its proportions and features, it’s quite a realistic proposition”, explained Max Missoni. “We see this extreme trend towards SUVs and we are of course respecting that. But I think there is still room for cars in this specific bodystyle, so we will see”, Missoni said that Polestar was monitoring reception to the Precept, adding that it could usher in a new “premium aesthetic” in luxury cars, moving to more sustainable materials by showcasing their qualities over traditional wood and leather trims. The Polestar Precept was originally a digital concept but now exists as a physical vehicle, as shown in the latest images revealed by the Swedish electric performance brand. “Precept shows you where we’ll be heading: our design direction, our ambitions about sustainability and the great digital user experience”, says Polestar CEO Thomas Ingenlath. “Precept showcases our future, not as a fancy dream or something from a sci-fi movie. This is our reality to come”. A production version of the Polestar Precept would be a full-size electric saloon designed to rival the Tesla Model S. But, any model based on it is still at least 4 years away and technical specifications are being kept under wraps for now. Described by Polestar as a “4-door GT” (but featuring a shape that takes aim squarely at the Tesla Model 3 and Model S) the Precept is so named because it shows the styling direction that Polestar intends to take as it moves away from its initial models, the 1 and 2. Those cars are based on concepts from Polestar’s fellow Geely-owned brand Volvo. No technical information has been released apart from confirmation of an all-electric powertrain and a wheelbase (3.1 metres) that’s closer to that of the longer Mercedes S-Class limo than either of Tesla’s offerings. It’s all but certain that the car is sitting on SPA2, the forthcoming new generation of the Volvo-developed large-vehicle platform. And judging by the front and rear overhangs, it’s likely to be around 5 metres long overall. The styling looks to be enough of an evolution of what we’ve seen so far from Polestar to give the brand its own identity. At the front end, there’s a split headlight treatment and what Polestar is calling the SmartZone: a transparent panel positioned where the front air intake would normally be, that includes sensors and a high-definition camera that play roles in the car’s autonomous and safety systems. Above the SmartZone, there’s an integrated front wing which accelerates air over the bonnet, improving aerodynamic efficiency. The flanks have subtle, clean surfacing and a ‘step’ in the lower section that’s designed to mask the thicker floor required to house the Precept’s battery pack. The charging point appears to be integrated into the area just ahead of the driver’s door. The rear features a full-width taillight treatment that extends into vertical ‘aero wings’; these work in conjunction with a deeply scalloped tailgate panel and a rear diffuser to reduce the visual mass of the car. The Precept has rear-hinged back doors and this has allowed the B-pillar to be removed, improving access to the cabin. The interior shows further differentiation from the Volvo-sourced treatments in the Polestar 1 and 2. Sitting at the heart of the dashboard is a 15-inch portrait-layout display that uses a new Android-based operating system that has been developed in conjunction with Google. The fascia is almost as minimalist and uncluttered as in the Model 3, although Polestar has added a 12.5-inch digital instrument panel behind the steering wheel. In addition, it has replaced the rear-view mirror with a digital display that relays images captured on a wide-angle camera mounted at the rear of the vehicle. This is needed because the Precept lacks a conventional rear window; Polestar says it has used this design to fit wider-angle hinges on the tailgate to improve access. The 4-seat cabin makes extensive use of sustainable materials, including flax-based composites for the interior panels and seat backs that are 50 % lighter than conventional items. The car’s seat fabrics are 3D-knitted from recycled PET plastic bottles, the bolsters and headrests are made from recycled cork vinyl and the floor carpets are produced from reclaimed fishing nets. There’s no word on battery size or performance, beyond what Polestar calls a “large battery pack”. But the car does feature a Lidar sensor mounted at the top of the windscreen and Polestar refers to “a next step towards increased driving assistance”; a suggestion that it could be being lined up to offer Level 4 autonomous driving capability. This feature is also likely to frame the launch date of the car, though, because Lidar sensors of this size aren’t expected to reach even premium production cars until at least the start of 2023. The Polestar 3 will be an SUV due in 2022 but a model based on the Precept’s design could well make production by the middle of the decade. +++

 

+++ Toyota-backed self driving company PONY.AI said it would provide an autonomous delivery service to residents of Irvine, California, as demand for online orders surges because of the coronavirus lockdown. As some 90 % of U.S. shoppers are under stay-at-home orders, a jump in demand for package and grocery delivery has left e-commerce platforms struggling to cope. In response, Amazon has said it plans to hire 75.000 more people for jobs ranging from warehouse staff to delivery drivers. Pony.ai said in a statement it would use autonomous electric vehicles to deliver packages from local e-commerce platform Yamibuy to customers in Irvine, California, which has a population of more than 200.000. The autonomous fleet comprises 10 electric Kona cars, made by Hyundai and its deliveries will mark Pony.ai’s first attempt to deliver goods, rather than transport passengers. As part of efforts to curb the spread of the novel coronavirus, self-driving technology companies, including Alphabet unit Waymo, General Motors unit Cruise and Uber, have suspended autonomous car testing that involves back-up drivers. Pony.ai said in March it would pause its public robotaxi service in Fremont (also in California) and Irvine for 3 weeks. The company is testing cars in the Chinese cities of Beijing and Guangzhou and California’s Department of Motor Vehicles (DMV) eased regulation on autonomous delivery service last year. The DMV said at the time it would allow the testing and commercial use of light-duty autonomous delivery vehicles on California’s public roads with certain permission. Pony.ai, founded in 2016, raised $462 million in its latest funding round in February, led by an investment by Japan’s largest automaker Toyota. It is also backed by Sequoia Capital China and Beijing Kunlun Tech. +++

+++ SEAT plans to start up its plants in Spain on April 27; almost 6 weeks after it halted all output due to one of the world’s worst national outbreaks of the coronavirus, the Volkswagen unit said. Workers would return gradually as they production at its 4 sites near the eastern city of Barcelona resumes, allowing the company to keep implementing health and safety measures, a spokesman said. “We need to observes rules like distance between workers and much more cleaning on the production lines, which won’t allow us to produce at the same rate,” the spokesman said. “We will go little by little until we get to the volume we had before”. Spain has reported more than 180.000 cases of the coronavirus and more than 19.000 deaths, placing it in the top 3 worst-affected countries along with the United States and Italy. Hundreds of thousands of jobs were destroyed by restrictions on movement put in place to curb the spread of the virus. Madrid has started to relax those curbs gradually. Seat has presented a temporary layoff plan for its roughly 11.000 production staff which will allow them to start coming back to work at different times over the course of 8 weeks. +++

+++ In SOUTH KOREA , the coronavirus pandemic is forcing automakers into survival mode, with both Renault Samsung Motors and GM Korea announcing that the companies have officially resolved long-standing disputes with their labor unions over last year’s wages to avoid potentially crippling strikes. GM Korea said that its unionized workers voted to endorse a tentative wage agreement reached between union leaders and management last month. The deal was approved by 53.4 % of 7.233 unionized workers. More than 500 union members didn’t vote. The union and management agreed to freeze wage levels and provide no performance-based pay. In lieu of the union’s original demands for the wage hikes, GM Korea said it will provide “incentive vouchers” for workers to buy new GM Korea cars. The vouchers allow GM Korea employees to get discounts of between 1 million and 3 million won per person ($820 to $2,500), depending on the price of the model. GM Korea and its employees also agreed to continue working together to launch 15 all-new or facelifted models through 2024 to regain sales targets in the local market. The 2 sides said they will hold additional talks to discuss management’s legal actions against employees who participated in unauthorized strikes last year. GM Korea’s management has emphasized that increased labor costs could undermine the profitability and competitiveness of the automaker. The company’s sales for the first 3 months this year fell 24 % from the same period a year earlier to 86.528 units. GM Korea is reported to have lost production of 20.000 vehicles due to the union’s strikes last year. Renault Samsung announced that its unionized workers voted to accept an agreement on last year’s wages reached earlier this year. The Busan-based automaker said 70.2 % of its roughly 1.700 union members voted to accept a wage freeze and bonus of 8.88 million won per worker. The Korean unit of French automaker Renault Group said the deal was made as a consensus of 2 parties to combine efforts into overcoming the impact of the coronavirus outbreak on the automobile industry’s sales and profits levels. Increased labor costs could have been especially risky for Renault Samsung Motors, which has experienced deep cuts to sales and production since last year. In 2019, Renault Samsung Motors sold a total of 90.591 cars; down 34 % from 137.208 in 2018. Following the end of contract with Nissan for its manufacturing the X-Trail last year, Renault Samsung has been asking Renault Group to assign some orders to be processed at the Busan factory. But Renault Samsung Motors said its French parent company has been reluctant to assign more volume, as higher wages for Busan plant workers could threaten the cost competitiveness of vehicles produced at the Korean plant. Industry experts said the wage settlements will stall the losses from walkouts. Both the automakers launched new SUV models in the first quarter (the Renault Samsung XM3 and the Chevrolet Trailblazer) which have shown relatively good sales. According to GM Korea, 3.187 units of Trailblazer were sold in March, since its launch in January. It has also been received well in overseas markets, recording 41.5 % increase in exports at 14.897 units. Renault Samsung’s XM3 has also pulled up the automaker’s total domestic sales by 83.7 % to some 12.000 units; the first time it has sold over 10.000 units per month since July. An accumulated 20.000 units of XM3 have been sold a month after its launch. “While automakers have been tightening their belts to secure profitability, both Renault Samsung and GM Korea have managed to take care of their most urgent problem”, said professor of automotive engineering Kim Pil-soo from Daelim University. “While it is unclear when the impact of Covid-19 outbreak will subside, it is important that the management and workers reach an agreement and join hands together to overcome the situation”, he said. According to industry insiders, Renault Samsung’s success in resolving the risk of its labor union demands may have increased the opportunity of its Busan plant securing the export volume for XM3, which will be named Arkana in overseas markets. Another possible candidate is Renault’s Valladolid factory in Spain. After its Busan plant ended production of Nissan’s X-Trail in September last year, the main model which took half of the production amount there, there has been no follow-up model to produce for exports. But amid factory shutdowns in US and Europe as well as dwindling sales, it remains unclear whether the Busan plant will have export volume allocated for production. The Renault Group has closed down a majority of its manufacturing plants globally, including 6 factories in France. It has also scrapped its recruitment plan to secure cash under emergency management mode. As for GM, the management decided to accept part of requests from the labor union, while the workers have also abandoned some of their benefits due to the strained market situation. But the relief may be short-lived, considering that the labor union may raise more requests for a 2020 wage deal, industry sources said. “While there have been forecasts that the industry will struggle to recover even during the second quarter this year, the automakers will see a severe market contraction, even worse than during the 2008 financial crisis”, said Lee Ho-geun, professor of automotive engineering at the Daeduk University. +++

 

+++ A federal judge said TESLA and chief executive Elon Musk must face a lawsuit claiming they misled shareholders when Musk tweeted that he had secured funding to take his electric car company private in a $72 billion transaction. U.S. district judge Edward Chen ruled that shareholders could try to prove Musk intended to defraud them with his August 7, 2018 tweet and follow-up messages about plans for his Palo Alto based company. The judge said shareholders could also try to prove Musk’s tweet was the “proximate cause” of volatility in Tesla’s stock price that caused billions of dollars of losses. The lawsuit arose after Musk stunned investors by announcing on Twitter: “Am considering taking Tesla private at $420. Funding secured”. Musk’s tweet helped push Tesla’s stock price more than 13 % above the prior day’s close. But it soon gave those gains back and by August 17, 2018 had fallen 11 % below where it was before the original tweet. Some investors called the tweet a ploy to squeeze short-sellers, long an irritant for Musk, who were betting Tesla’s stock would fall. Musk tweeted on August 24, 2018 that Tesla would remain public. A month later, he agreed to pay a $20 million civil fine to settle fraud charges by the U.S. Securities and Exchange Commission. The SEC also required Musk to step down as chairman, and Tesla lawyers to vet some of his tweets in advance. Tesla reached a separate $20 million settlement with the regulator. Tesla’s stock price has since roughly doubled and Musk is worth $37.6 billion. In letting the shareholder case, which combined 9 lawsuits, go forward, Chen said reasonable investors could have viewed Musk’s August 7 tweet as signaling he had unconditionally obtained enough financing to take Tesla private. “So read, the statement is not true”, Chen wrote. The judge rejected Tesla’s and Musk’s argument that the tweet was not false or misleading because Tesla’s directors would have still had to approve the transaction. The proposed class action covers shareholders who bought and sold Tesla stock from August 7 to August 17, 2018. +++ 

+++ The VOLKSWAGEN GROUP said global sales of its cars dropped by 23 % on the year to 2 million in the January to March period. In March alone, sales were down 38 % overall at 623.000 vehicles; reflecting the coronavirus crisis which triggered plant closures and falls in demand as consumers remained at home in lockdown measures across the world. More specifically, March sales were down 44 % year-on-year in western Europe, down 23 % in central and eastern Europe, down 42 % in North America and down 35 % in China, the company said. Experts believe that declines in April sales could be steeper as the full impact of the lockdowns works its way through the system. Volkswagen withdrew its outlook for 2020 due to the uncertainty related to the virus outbreak which caused operating profit to drop 81 % in the first quarter. The group’s return on sales margin is expected to be around 1.6 %; down from 8.1 % in the first quarter of 2019. The full year outlook “can no longer be achieved”, Volkswagen said, and added it aimes to achieve customer deliveries in line with the previous year, revenue growth of 4 % in 2020 and slightly higher passenger car deliveries. In its passenger cars unit, the Volkswagen Group had predicted an operating return on sales between 6.5 %-7.5 % in 2020 and an operating return on sales of 4 %-5 % in its commercial vehicles unit. VW said negative fair value impacts from commodity derivatives and currency effects hit the first quarter 2020 result by €1.3 billion. The company now expects first quarter revenue of €55 billion; down 8 % from €60.01 billion in the year-earlier period. Its auto business had a negative cash flow of €2.5 billion due to higher inventories and a reduction in its liabilities, VW said. VW’s luxury arm Audi said measures to contain the coronavirus pandemic had led retail sales to come to a near standstill. Sales revenue in the first quarter was €12.5 billion; down from €13.8 billion in the year-earlier period. The Volkswagen Group, which owns Audi, Bentley, Bugatti, Skoda and Porsche, is due to publish full first quarter results on April 29. It said sales of its cars dropped by 23 % on the year in China to 2 million cars in the January to March period but was hopeful on Friday that the market would recover soon as it moves out of the coronavirus crisis. China is Volkswagen’s single biggest market accounting for a big chunk of its profits. Sales reductions due to the virus’s spread in China had slowed in April, the head of Volkswagen’s China business Stephan Wöllenstein told. Referring to the country’s car market overall, Wöllenstein said the decline in sales in April was estimated to be between 15 % and 20 % from a year earlier, while the drop in March, at the height of the pandemic, had been 40 %. “If things continue as they do now, we could have reached last year’s level again in June”, he said. “We see a normalisation with view to the summer”. Volkswagen’s sales were faring slightly better than the Chinese market as a whole, he said. But any further recovery hinged on whether Beijing implemented economic relief measures. Reporting its global sales in March, Volkswagen said deliveries were down 37.6 % at 623.000 vehicles year-on-year. This came after the pandemic triggered plant closures and falls in sales as consumers were tied up at home under lockdown measures, and business activity came to a halt, raising fears of a global recession. +++ 

+++ VOLVO will reopen its Torslanda factory and offices in Sweden next week after overhauling its production processes to help prevent coronavirus infections, following a 3 week shutdown caused by the pandemic, the carmaker said. Volvo’s factory in Ghent, Belgium, will reopen on 20 April, but at reduced production output and the carmaker plans to reopen its South Carolina plant in the United States on 11 May after adapting sanitation and cleaning routines. “We have introduced new health measures. We will work with gloves and masks in the areas where we come too close. The production rate will depend on the market. We can produce at full speed, but this depends on the orders”, chief executive Håkan Samuelsson told. The Swedish carmaker, which is owned by China’s Geely, has a good order intake, but 3 weeks’ worth of production has been lost, Samuelsson said. Because the European economy has ground to a halt, Volvo will continue to make use of shortened working hours, he added. In Sweden, the layout in all meeting rooms, office spaces and restaurants has been adjusted to allow for social distancing, ensuring that desks are spaced out and limiting the number of people allowed in meeting rooms and restaurants. Employees in Sweden can also take voluntary temperature tests and measure their blood oxygen levels. Office workers in other markets will continue to follow local guidelines. The engine plant in Skövde and the body component manufacturing site in Olofström (both in Sweden) will continue to plan their production on a weekly basis and adapt according to needs in the other plants, Volvo said. +++

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