Parts and systems companies have become the industry's idea labs in many cases, with vast supplier investments going into R&D pursuits for new products. Automakers look to suppliers to bring them the newest and coolest additions. But since 2015, Kolodge and J.D. Power have been researching consumer attitudes toward such vehicle features, and they have a difficult message for automakers: Consumers have tried the vaunted premium electronic features, big-screen entertainment systems, adjustable seats, lane-changing warning systems and voice-activated air conditioning, and in many cases, they are underwhelmed.
Source: Automotive News
GM Financial will stop working with non-General Motors dealerships on off-lease vehicle payoffs starting July 1 to ensure GM dealerships have "priority access" to the vehicles coming back to market, according to a message obtained by Automotive News. The microchip shortage is the primary motivator of the policy change, a GM spokesperson confirmed via email, "to better support our GM dealers through the current economic environment and the challenges they're encountering sourcing quality pre-owned vehicles."
The chip shortage is not only a short-term problem for traditional auto manufacturers, it signals to investors which companies have been asleep at the technology switch and won’t survive the upcoming shakeout inspired by the move to connected electric cars and autonomous ones. Consolidation in the industry means weaker players without the financial clout to survive will be consumed by the more powerful ones. High technology outfits with massive cash resources will be on the prowl too. Auto survivors will be the ones who ruthlessly commandeer high technology supplies and embrace the new direction, quickly, and with huge investments.
Intel Corp. Chief Executive Officer Pat Gelsinger predicted the shortage of semiconductors that’s hurting industries from automotive to consumer electronics will bottom out in the second half of this year before starting to improve. “I don’t expect the chip industry is back to a healthy supply-demand situation until ’23,” he said in an interview. “For a variety of industries, I think it’s still getting worse before it gets better.” The economy’s rebound from the depths of the pandemic has caused a flood of demand for the components that are the heart of all modern electronics.
All the EV startups are saying “Phooey!” to franchised dealers. They’re pulling an end run around dealers and selling direct to consumers. There are some notable advantages to doing this, but there are even bigger drawbacks. I believe that in just a few years, franchised dealers will come out far ahead. [H]ere’s what the startups are overlooking: Franchised dealers are everywhere. They’re in every community from New York to California and Montana to Texas. The startups also need lots of local service departments to keep those cars up and running. Not everything can be fixed with an over-the-air update.
Japan now feeling the impact
Fortress Japan has weathered the global microprocessor shortage largely unscathed so far. But as the crisis wears on, output here is now getting a taste of the supply chain trouble. Mazda, Subaru, Nissan and Mitsubishi are paring output to battle the bottleneck, and production suspensions will dent output across Japan in July. The downtime amounts mostly to a smattering of days here and there, but it comes as Japan's automakers try to steer through a global shortage that began in late 2020. The Japanese industry's long tradition of flexible manufacturing and transparent supply chain management has helped the companies pivot through the worldwide trouble. But the longer the crisis continues, the harder it is to cope.
Ford Idles Key Plants
Ford Motor Co. will close several U.S. factories through much of July and cut output at others as the computer-chip shortage that has plagued the auto industry for months spills into the second half of 2021. Ford said Wednesday that its pickup truck factories in Michigan, Kentucky and Missouri will reduce or stop production for much of July, while an Explorer plant in Chicago will be idled for the entire month. Other models that will see production cut or scrapped in July include the Lincoln Nautilus and Ford Escape SUVs and the Ford Mustang sports car.
Source: The Wall Street Journal
It appears that used-vehicle prices have finally peaked. But don’t expect them to come down too much — the year is likely to end with prices still near record highs. According to a Used Market Update report from J.D. Power released Thursday, there was a 0.2% decline in wholesale prices for the week ending June 20. That snapped a 24-week streak of used-car price gains that included an “exceptional” 12-week stretch of prices averaging a 2.2% increase each week, J.D. Power said. The rise in used-car prices began tapering off the week ending May 23, following that aforementioned 12-week period.
Source: Auto Remarketing
Ohio's Supreme Court on Tuesday cleared the way for the state's attorney general to move forward with a lawsuit against Volkswagen AG over its "Dieselgate" scandal and manipulation of emissions-control systems. The court ruled 6-1 that the federal Clean Air Act did not pre-empt state law-based claims that Ohio Attorney General Dave Yost is pursuing, or prohibit state oversight after a vehicle or engine is sold. "This is a major decision that will ensure that Volkswagen can be held accountable," Yost said in a statement.
A year ago, Ford Motor Co. dealer Rhett Ricart had a lot full of cars and hardly any customers. This year, he has a lot full of customers and hardly any cars. The global semiconductor shortage that hobbled auto production worldwide this year is leaving showrooms with few models to showcase just as U.S. consumers breaking free of pandemic restrictions are eager for new wheels. With dwindling inventory over the last three months, U.S. auto sales have taken a sharp turn for the worse. From a near-record annual pace of 18.6 million vehicles in April, sales slowed to a 17.1 million rate in May and fell to 15.7 million in June, estimates Emmanuel Rosner, an analyst with Deutsche Bank.
The number of vehicles entering the auction market these days is down significantly, and in its Used Market Update released Thursday, J.D. Power explains why. There were approximately 79,000 wholesale auction sales of vehicles 8 years old or younger the week ending June 20, according to J.D. Power. That’s a 31% drop from the same week a year ago, the company said. While that’s steady with the week ending June 13, a J.D. Power chart shows auction sales moving downward for most of the spring and early summer.
Panasonic sold its entire stake in key battery customer Tesla—worth an estimated $3.6 billion—last fiscal year, Nikkei Asia reported Friday. The move gives Panasonic funds for new strategic investments, such as the $7.1 billion purchase of logistics and supply-chain firm Blue Yonder, the report noted. It's an indication Panasonic could wish to diversify its business away from the current battery boom. The company has notified Tesla about the share sale, which was completed in March, and will continue supply the automaker with batteries, according to the report. A Panasonic executive told Nikkei Asia the company's business relationship won't change.
After signing its first supply contract with Tesla in 2009, Panasonic bought into the automaker in 2010. The two companies subsequently developed a close relationship, with Panasonic becoming Tesla's sole battery supplier and a partner in the automaker's Nevada "Gigafactory" battery plant.
However, the two companies may now be moving in different directions. Panasonic's EV battery boss earlier this year expressed some skepticism about Tesla's plan for a broad shift to the 4680 cell format. Tesla CEO Elon Musk has said these large-format cells will be key to the automaker's future product plans. Panasonic also appears headed for joint development of some battery technologies with Toyota. Although Toyota is taking it slow, that could result in lucrative global contracts as Japan's largest automaker ramps up EV production.
Tesla meanwhile has turned to other battery suppliers, in addition to its own aspirations to ramp up large-scale production of cells. It turned to CATL for lithium iron phosphate (LFP) cells in China-built Model 3s, and has been reportedly planning to use LG NCMA cells in China-built Model Ys.
Panasonic and Tesla did renew their long-term battery supply commitment, however, and a serious boost in battery energy density remains due for the cells that Panasonic plans to keep supplying to the automaker.
Source: Green Car Reports
Nissan Motor Co. said it will create a new 1 billion pound ($1.4 billion) hub for making electric vehicles in Britain, part of the carmaker’s revamp of its U.K. electric-car strategy and a post-Brexit boost for Prime Minister Boris Johnson. Nissan will spend as much as 423 million pounds to produce a new all-electric crossover vehicle at its Sunderland plant in the north of England and Envision AESC will invest 450 million pounds to expand battery-cell making, the carmaker said Thursday in a statement.
Porsche AG is planning a global recall of its Taycan electric car to fix a software issue that can cause a sudden loss of power, according to people familiar with the matter. The move follows reports of cars switching to emergency mode in the U.S. that prompted an investigation by the National Highway Traffic Safety Administration in May, said the people, who asked not to be identified as the plan isn’t public. An official announcement may be made in coming days, the people said. There have been no reported accidents or injuries, one of the people said. A spokesman for Porsche declined to comment. A recall of Porsche’s first all-electric car underscores the technical challenges of rolling out vehicles packed with increasingly sophisticated software gadgetry on a large scale.
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