+++ Billionaire Lawrence Stroll is said to be in early talks to sell another minority stake in his ASTON MARTIN Formula One team, a bid to capitalize on the growing popularity of the sport. Stroll, who owns the F1 team separately from his stake in luxury-car maker Aston Martin Lagonda Global Holdings, is said to be willing to sell as much as 25% in the racing business. The Canadian billionaire is hoping to improve on the $1.3 billion valuation of last November’s deal to sell a minority stake to US private equity firm Arctos Partners. +++
+++ As auto giant Volkswagen races to catch up with upstart competitors in CHINA , it has drivers like 26-year-old Ren Yiling in mind. She is young and wants to play video games in her car. The digital features of her Zeekr 001, an European-style electric car from China’s Geely Holding Group, appeals to her. She uses her smartphone to help her parents adjust their seats and tells an animated voice assistant to open the window or play music. “I once sung karaoke in the car when travelling a long way with my family”, she said. “To me, the car is more like an entertainment place. I am a singer”. Foreign automakers selling in China have been caught flat-footed by an electric vehicle boom that has shaken up the market, the world’s largest, over the last 3 years. Taking a page from Tesla, China’s automakers and hundreds of start-ups have developed EVs loaded with tablet-like screens, AI-enabled information and entertainment options and autonomous driving capabilities. EV sales in China, encouraged by green energy subsidies and tax breaks, jumped from 900.000 units in 2020 to 5.1 million last year, accounting for 24% of new car sales, according to the China Passenger Car Association, an industry group. The boom has bred a new breed of car buyers who equate an EV with digital connectivity and are demanding smartphone features in their vehicles. That has left makers like Volkswagen, which sells about one-third of its cars in China, scrambling to develop new models for a very different market than back home, and expanding far beyond its roots as a maker of no-frills sedans used by Chinese taxi fleets. The Volkswagen Group, which also includes Audi and Porsche, plans to launch 40 new models in China over the next 3 years and to have a lineup of 30 EVs by 2030 in what Volkswagen CEO Oliver Blume told investors is the company’s “second home market”. Nissan has also stepped up, saying it would develop 4 new-energy models, which can include hybrids, for the Chinese market by 2026. Ralf Brandstätter, Volkswagen’s CEO in China, said drivers use their cars differently in China, where the average age of an EV buyer is 35 years old, versus 55 in Europe. “It’s not only to go from A to B, they live in their car as additional living space. They spend time there with friends. They spend time there with families”, he told journalists ahead of the opening of the Beijing Auto Show on Thursday. “And they are highly tech-savvy. They are using their mobiles 5 hours per day and they want to have the same digital connectivity with their cars. So we will deliver these Chinese ‘wow’ effects that Chinese customers expect”. The battle is not only about digital gadgetry. Chinese EV makers have driven down battery and production costs and flooded the market with choices, depressing prices to levels that are likely unsustainable. China’s largest EV maker, BYD, has dropped the price of its Seagull model below $10.000 at home, about half of what it sells for in Mexico and Brazil. “The Chinese market remains very difficult, especially when it comes to electric vehicles”, Brandstätter said, noting that EV prices in China had fallen 30% in the past year even before a new round of price cuts started this month. Volkswagen’s response has been to shift to developing cars in China from the ground up, rather than adapting European models to the local market. The company announced earlier this month that it would invest 2.5 billion euros to expand research and development and production in the city of Hefei, where it has teamed up with Chinese EV maker XPeng Motors to develop 2 midsize VW models to launch in 2026. The company is developing a new EV platform, which includes the chassis and battery packs, just for China to try to bring down costs by 40%. That would enable VW to be profitable at current market prices, Brandstätter said, calling China an essential market for Volkswagen. “I think they are really putting their foot down and saying we need to do more, we need to speed up”, said Beatrix Keim, the China director at CAR, an automotive research center in Germany. Volkswagen still has a way to go. It sold only about 41.000 EVs in China in the first 3 months of the year, though that was up 91% over the previous year and followed the rollout of new or updated models. “I think they really learned already their lesson: that they need to be faster”, Keim said. The company has come under fire for operating a plant in the China’s western Xinjiang region, where Western governments have accused the Chinese government of human rights violations. But Volkswagen has said an audit it commissioned found no evidence of forced labor or other human rights abuses at the plant. The company showed off its digital development efforts to journalists at an R&D facility in Beijing. Drivers can pick avatars for an on-screen assistant that responds to voice requests for directions or to adjust the inside temperature. A 3D avatar to be launched this year has changeable outfits and can rock with the music. Such features are also being added to VW’s gasoline-powered vehicles, said Matthias Glodny, the vice president for products in China. “We think we have a plan,” he said, “and now we have to deliver”. +++
+++ HYUNDAI will boost sales of its hybrid cars and SUVs as part of its key strategy to ensure profitable growth amid falling sentiment for electric vehicles (EV), the company said during a conference call. The decision came as demand for hybrid vehicles is on the gradual rise, after the global EV industry entered a chasm this year. The company displayed the vision after disclosing a slight fall in its first-quarter operating profit. In a regulatory filing, the carmaker reported an operating profit of 3.55 trillion won ($2.58 billion) in the first quarter, down 2.3 percent from the previous year, hit by an overall sales fall. The company, however, generated robust sales of 40.65 trillion won, up 7.6 percent during the same period. The company said it will place its management focus on defending its profitability by widening sales for hybrid vehicles and SUVs, at a critical juncture when the global EV industry shows no immediate signs of a rebound. The carmaker also shared its plan to expand investment to widen production of hybrid vehicles. “We will make additional equipment investments on our EV-dedicated Hyundai Motor Group Metaplant America, so the facility can manufacture hybrid cars as well”, Lee Seung-jo, executive vice president at Hyundai, told investors during the conference call. “This is in response to growing demand for hybrid vehicles. The facility will start its operation sometime in October”. The carmaker displayed a pessimistic outlook on the overall car industry, as rivalries among existing players deepen and global geopolitical risks show no signs of abating anytime soon. In response, the company reiterated its strong willingness to improve its product mix by strengthening its hybrid vehicle portfolio and diversifying its Ioniq lineup. The carmaker sold a total of 1.67 million vehicles here and abroad between January and March, down 1.5 percent from the previous year. Its domestic sales reached 159.967, down 16.3 percent from a year earlier, in the aftermath of a temporary shutdown of its production line in Asan, South Chungcheong Province. But overseas sales growth helped offset the sluggish performance here. The carmaker chalked up 846.800 vehicle sales in the first quarter, up 1.9 percent from the previous year, on favorable responses from territories such as North America, Europe and India, according to the company. “Even if we face continuous uncertainties in our management environment amid geopolitical risks (sparked by conflicts in the Middle East) and its subsequent impact on the won-dollar exchange rate which has recently widened its volatility, Hyundai still maintains a stable level of profitability on demand growth from our major overseas markets”, an official from the carmaker said. “We will keep focusing on defending our profitability by improving our product mix with the focus on SUVs and other value-added vehicles”. +++
+++ KGM ’s much-touted new assembly line that can produce both internal combustion and electric vehicles shows the direction the company is pursuing on the production side, as both remain popular at the current stage of the industry’s paradigm shift. In December, the carmaker completed the integration of the formerly assembly lines 2 and 3 at its Pyeongtaek factory and launched hybrid assembly line 3 for both gasoline and electric vehicles with monocoque chassis and body-on-frame cars. The integrated production line (located in the industrial area of the city, about 65 kilometers south of Seoul) is now manufacturing KG Mobility’s flagship SUVs, such as the Torres EVX and the Rexton. The carmaker spent 50 billion won ($36.5 million) for the renovation of the facility. During a recent press visit to the renovated production line, diverse vehicles from KGM ’s SUV lineup, including the 2 aforementioned models, were lined up for assembly on a conveyor belt. However, only a few mechanics and workers were seen checking and assembling parts of the KGM vehicles, as automated robots and assembly machines have replaced tasks previously done by human labor. The hybrid production system with humans and robots maximizes operational efficiency for the carmaker while increasing its profitability at a time when it has been only a few years since the company achieved a turnaround. The Torres EVX is a particularly strategic model for the carmaker, which aims to establish its identity as an SUV powerhouse in the upcoming EV era. The firm’s two assembly lines are both capable of building the model. “We mainly produce the Torres EVX at our assembly line 1, and line 3 also backs up the production for the vehicle”, Park Jang-ho, head of production and executive vice president at KG Mobility, told reporters Tuesday. “After we started operation of the renovated assembly line 3, we have been able to maximize production efficiency and respond flexibly to customers’ demands”. The carmaker has introduced a set of the latest equipment for the assembly line, such as a battery mounting automation system, for more efficient production of its Torres EVX. The firm’s sales are on the gradual rise after KG Group acquired the formerly cash-strapped SsangYong Motor in 2022, the company said. The rebranded carmaker chalked up 116.000 vehicle sales here and abroad in 2023, up 1.9 percent from the previous year. KGM’s earnings are also on track for a stable recovery after suffering years of deficits. The company generated an operating profit of 15.1 billion in the first quarter of this year, up 61.1 percent from the previous year, on export growth driven by robust sales of its strategic Torres EVX. Its net profit came in at 53.9 billion won, up 226.1 percent during the same period. Of particular note was its export growth. The firm’s export between January and March soared by 39.2 percent from a year earlier, the largest quarterly figure in a decade since the first quarter of 2014. The executive added a swift decision-making process from top management enabled the carmaker to normalize financial soundness, after KG Group acquired it. “We had a tough time making decisions quickly while we were owned by foreign capital”, Park said. “This is not the case anymore”. He added: “We conduct weekly meetings with top management and carry out tasks immediately after we make any certain decisions during the meetings”. +++
+++ KIA recorded its highest-ever quarterly operating profit of 3.42 trillion won ($2.49 billion) in the first quarter, thanks to favorable exchange rates, the carmaker said Friday. In its first-quarter earnings announcement, Kia logged sales of 26.21 trillion won, up 10.6 percent from the same period in 2023. Operating profit increased by 19.2 percent. The company said it sold 760.515 cars from January to March, down 1 percent year-on-year. Despite the decrease in sales volume, the company attributed its strong performance to stabilized raw material prices, favorable exchange rates and strong sales of high-priced models such as eco-friendly cars and recreational vehicles (RVs). The company also cited higher average selling prices as a contributor to the increased operating income in the first quarter. During the period, Kia cars’ average selling price rose by 12.2 percent to 36.1 million won from 32.2 million won in the first quarter of 2023. “The global industry demand showed a limited recovery due to a slowdown in the growth of electric vehicle (EV) demand”, a Kia spokesperson said. “Sales volume decreased year-on-year slightly due to weakened EV sales and a temporary shortage of supply for internal combustion engine and hybrid models”. Estimating its following quarters, Kia mentioned that while EV demand is slowing, there is an increase in demand for internal combustion engine vehicles and hybrid vehicles, and the company is focusing more on supplying hybrids. “Due to the slowdown in EV demand and increased competition leading to price reductions, there have been sales difficulties, and incentives are also expanding”, Joo Woo-jeong, chief financial officer of Kia, told investors during a conference call. “Conversely, there is a revival in demand for internal combustion engines, including hybrids. The company is focusing on supplying more hybrids to meet the demand”. In terms of EV business strategy, Kia plans to introduce a facelift version of its EV model EV6 and launch its EV3 in the second half of the year. The EV3 is scheduled to start mass production in Korea in June this year. The CFO mentioned that despite the slowdown in EV demand and difficulties in the Indian market, there should be no issues in achieving the early-year target of selling 3.2 million vehicles and hitting 12 trillion won in operating profit this year. “We expect that the difficulties encountered early in the EV era can actually highlight Kia’s competitiveness and demonstrate the strength to sustain a high-profit structure”, Joo said. +++
+++ NISSAN and Panasonic launched a service on Friday in which information such as the charging status and location of private cars is sent to home appliances, using the internet of things (IoT), which connects various devices online. The companies aim to deepen the linkage between cars and home appliances to enhance the convenience for both companies’ products. With the service, relevant information will be displayed on TV screens or provided in audio through home appliances such as a light fixture when an electric vehicle has finished charging or seems at risk of theft, among other situations. The new system will allow family members to share a wider range of information, compared to previous cases where such information was mainly sent to a registered smartphone. Nissan and Panasonic home appliances, both compatible with the new service, are required for its use. Some predict that 85% of vehicles sold in the world will be “connected cars,” or those connected to the internet, by 2035. Nissan hopes to differentiate itself from the competition by expanding services that utilize home appliances. +++
+++ STELLANTIS is planning to lay off an unspecified number of workers at its U.S. factories in the coming months to deal with a rapidly changing global auto market, the company said. The statement comes as the company faces increased capital spending to make the transition from gasoline vehicles to electric autos. It also has reported declining U.S. sales in the first quarter, and it has higher costs due to a new contract agreement reached last year with the United Auto Workers union. Stellantis has about 43.000 factory workers. “These actions will help improve productivity and ensure the company’s long-term sustainability in a rapidly changing global market”, the Stellantis statement said. The company wouldn’t give details of when the indefinite layoffs would start or state specific reasons for them, a trade publication reported that Stellantis had laid off 199 full-time workers at its Ram pickup truck factory in Sterling Heights, Michigan, north of Detroit. The company also has laid off some white-collar workers this year. Stellantis CEO Carlos Tavares has said his company has to work on cutting costs globally in order to keep electric vehicles affordable for the middle class. Electric vehicles, he has said, cost about 40% more than those powered by gasoline. Without cost reductions, EVs will be too expensive for the middle class, shrinking the market and driving costs up more, Tavares has said. Stellantis reported that its vehicle sales were down nearly 10% from January through March compared with a year earlier. +++
+++ TOYOTA said Thursday its global production in fiscal 2023 grew 9.2 percent from a year earlier to a record 9.97 million vehicles but fell short of its goal of 10.1 million, impacted by recent data-rigging scandals at its group firms. Its overseas production in the year ended March rose 5.0 percent to a record 6.66 million vehicles, helped by robust demand in North America and Europe, the company said. The automaker saw its domestic production increase 18.7 percent to 3.31 million vehicles for the yar thanks to strong post-pandemic demand at home despite the scandals, it said. Toyota temporarily stopped part of its domestic production after affiliate Toyota Industries Corp said in January data had been rigged for engines including those supplied to Toyota. The automaker was also negatively affected by another data-rigging scandal at small-car unit Daihatsu, which said in December that it had falsified safety testing data for most of its models, including vehicles supplied to Toyota and sold under the Toyota brand. Toyota’s global sales for the year rose 7.3 percent to a record 10.31 million units, surpassing 10 million for the first time on a fiscal year basis, helped by its solid performance in North America, Europe and Japan. The record figure came as its overseas sales increased 7.0 percent to a record 8.78 million units as the automaker ramped up sales of the hybrid versions of popular models, such as the Corolla and the RAV4 in North America and Europe, it said. Domestic sales rose 8.7 percent to 1.53 million vehicles, although the company noted that the scandals at its group firms negatively impacted the figure in the second half. Its worldwide group sales for the fiscal year, including those of Daihatsu and truck subsidiary Hino, rose 5.0 percent to a record 11.09 million units. Domestic production at Japan’s 8 major carmakers combined, including Nissan and Honda, for fiscal 2023 grew 8.2 percent to 8.27 million cars as a chip shortage eased, according to data released by the companies. Nissan saw a 21.5 percent rise in domestic output to 724.838 units, helped by strong sales of the Ariya and the X-Trail. Honda posted a 9.9 percent increase to 706.846 vehicles. +++