COVID-19 has Changed the Way People Use Their Vehicles

FORD & FIAT CHRYSLER UNDER INVESTIGATION IN UNION CORRUPTION PROBE

Ford Motor remains under federal investigation as part of a multi-year corruption probe into the United Auto Workers union, according to the lead prosecutor on the investigation. U.S. Attorney Matthew Schneider told CNBC that the automaker and the UAW’s Ford unit remain targets in the probe, which initially started with Fiat Chrysler and its union counterpart.

Source: CNBC

AMAZON ORDERS 1,800 MERCEDES ELECTRIC VANS FOR EUROPE DELIVERIES

Amazon has ordered 1,800 full-electric vans from Mercedes-Benz in the online retailer’s biggest commitment to date to cut the carbon footprint of its delivery operations in Europe.

A majority of the vans will go into service this year, Amazon said on Friday. Amazon said it had ordered 1,200 of Mercedes-Benz's large eSprinter vans and 600 of the midsize eVitos.

The order is the largest for Mercedes's electric vehicles to date and includes 800 vans for Germany and 500 for the U.K.. It is dwarfed, however, by Amazon's recent order for 100,000 electric delivery vans from Rivian Automotive, a startup it has invested in. The Mercedes purchase makes it clear Amazon will also seek vehicles from other automakers to remove greenhouse gases from its delivery fleet. Amazon is increasingly delivering shipments with its own staff or contractors instead of relying on major carriers. Amazon CEO Jeff Bezos said in a statement the Daimler agreement was part of the retailer's "journey to build the most sustainable transportation fleet in the world."

Mercedes on Friday joined The Climate Pledge, started by Amazon last year, which calls on signatories to be net zero carbon across their businesses by 2040. The automaker has previously said it was aiming to have a carbon neutral fleet by 2039.

In 2018, Amazon became the biggest customer of Mercedes' non-electric Sprinter vans, securing 20,000 vehicles for delivery contractors. "Moving forward, we are prioritizing the addition of electric vehicles," Ross Rachey, Amazon's director of global fleet and products for last-mile delivery told Reuters.

Other delivery companies are pushing for more electric fleets. In January United Parcel Service said it was ordering 10,000 delivery trucks from UK-based Arrival. Other automakers are also working on bringing electric vans to market. Ford plans an all-electric version of its Transit van in North America in 2022, and General Motors aims to start production of an electric van in late 2021.

Source: Bloomberg & Reuters

AUTOMOTIVE FORECASTERS SEE LONGER PRODUCT CYCLES

Automakers once vied to introduce redone vehicle models every five years or so, with midcycle refreshes along the way. The thinking for the relatively rapid rotation: Fresh product rules the marketplace. But expect auto companies to elongate those product cycles, both to save money and redirect resources to other initiatives, such as electric- and autonomous-vehicle R&D, trend trackers say during a Society of Automotive Analysts webinar.

Source: WardsAuto

JAPAN AUTOMAKERS POST 12% SLIDE IN JULY GLOBAL VEHICLE SALES

Global sales at Japanese automakers slipped 12.2% in July from last year, the fifth straight month of losses, as demand for cars remains sluggish after factories and dealerships reopened following coronavirus-related lockdowns earlier this year. The country’s seven major automakers, including Toyota Motor Corp and Nissan Motor Co, sold a combined 2.01 million vehicles last month, according to Reuters calculations based on sales data released by the companies on Friday. Total global production at Japan’s seven major automakers fell 14.4% year-on-year to 1.99 million units last month, improving from a 26.1% tumble in June.

Source: Reuters

COVID-19 HAS CHANGED THE WAY PEOPLE USE THEIR VEHICLES

Since the proliferation of the coronavirus pandemic, cars are taking on even more functions, proving they're not just for transporting people from point A to point B. Two separate surveys showed that many people are increasingly using their cars to get away from the people they live with, get a change of scenery, take a nap, make a personal or business call, get some "me" time or just to feel normal again.

Source: Detroit Free Press

FORD TO CUT 1,000 NORTH AMERICA SALARIED JOBS AMID OVERHAUL

Ford Motor Co. is preparing to trim about 1,000 salaried jobs in North America, looking to its home market for savings as part of an $11 billion global restructuring begun two years ago as it projects an operating loss this year. The job cuts are aimed at improving the automaker’s efficiency and are not related to rising costs from the coronavirus pandemic, said people familiar with the action on Monday who asked not to be identified revealing internal plans. An announcement could come as early as this week, the people said.

Source: Bloomberg

BMW CUTTING U.S. JOBS IN A DOWN MARKET

BMW will make work force cuts in the U.S. to adjust for a business slowdown in the wake of the coronavirus pandemic. A spokesman declined to disclose the number of jobs being axed but noted the cuts do not affect the automaker's large assembly plant in Spartanburg, S.C. BMW sales in the first half of the year tumbled 28 percent, with second-quarter sales down nearly 40 percent from a year earlier, as many dealerships were forced into a COVID-19 lockdown in the spring.

Source: Automotive News

SOUNDS LIKE…

While Lincoln selected sounds created by Detroit Symphony musicians for its luxury Aviator SUV, Ford Motor Co. has gone in a totally different direction for the all-electric Mustang Mach-E. The company revealed Friday the SUV made in Cuautitlán, Mexico that's scheduled to debut later this year will have a unique and "thumping" new sound to accompany driver experience. Ford said its sound designers were "inspired by classic '80s sci-fi cinema" and crafted "electronic oscillations that emanate in and outside of the Mustang Mach-E while the vehicle is in motion."

Source: Detroit Free Press

ROLLS ROYCE SALES DEMAND REBOUNDS

The chief executive of Rolls-Royce said demand for his company’s luxury cars is rebounding, helped by sales in Asia, and he is optimistic about the outlook for next year after the coronavirus pandemic hit consumer confdence and closed dealerships. Torsten Muller-Otvos said the demand meant Rolls-Royce Holdings Plc was the first car company to resume car production in the United Kingdom on May 4. 

Source: Reuters

TIGHTENING AUTO CREDIT SLOWS SALES REBOUND

Demand for auto loans has been on a steady decline since the first quarter, when the Covid-19 pandemic first took hold in the U.S. and now it’s getting more difficult for consumers who are seeking an auto loan to land one. Don’t blame lenders’ skittishness entirely on Covid-19, said David Snitkof, Vice President, Analytics at New York-based data analysis firm Ocrolus. He points out that delinquency rates for auto loans, measured by 90-day delinquencies, “are up to recession-era levels. That’s not all because of Covid. That was actually a trend happening already for the last several years, probably driven by expansion of credit, particularly by subprime auto lending and the availability of capital to sub prime auto lenders from the capital markets.”

Source: Forbes

FIAT CHRYSLER SHOWCASES NEW JEEP MODELS, STAND-ALONE SHOWROOMS

Fiat Chrysler Automobiles NV is trying to put a bigger spotlight on Jeep, asking dealers to build stand-alone showrooms and rolling out larger, more expensive models to appeal to more luxury-minded buyers, including a modern-day Grand Wagoneer. The company’s efforts come as Jeep is facing more competition than ever in the U.S.’s highly lucrative SUV market and as sales of its other mass-market brands such as Chrysler and Dodge have struggled in recent years.

Source: The Wall Street Journal

GENERAL MOTORS & HONDA JOINT VENTURE IN NORTH AMERICA

General Motors Co. and Honda Motor Co. plan to jointly develop new vehicles for North America through an alliance that would deepen existing ties between two longtime rivals. The companies said Thursday that the strategic alliance would entail cooperation on everything from engineering the underlying components of a vehicle to purchasing parts. The work could begin next year, the car makers said, declining to estimate cost savings or specify any future models that could be included.

Source: The Wall Street Journal

JEEP GRAND WAGONEER

Fiat Chrysler Automobiles revealed a plug-in hybrid concept of the Jeep Grand Wagoneer, showcasing its electrification strategy as it expands the prized Jeep brand into the high-margin three-row SUV segment. The Italian-American automaker said Thursday it’s bringing back the nameplate of the Wagoneer, a boxy station wagon retired in the 1990s, as a sleeker and more upscale sport-utility vehicle that can compete against rivals such as General Motors Co.’s GMC Yukon and Toyota Motor Corp.’s Sequoia.

Source: Bloomberg

INDUSTRY RECOVERY WILL TAKE AT LEAST TWO YEARS

It's going to take at least two years for auto manufacturers to restore the sales and production numbers seen before the start of the coronavirus pandemic, an industry expert told Michigan lawmakers in Lansing on Wednesday. Despite successful efforts from suppliers and manufacturers to keep their doors open and employees safe, staffing shortages and some overall drop in demand means the industry needs to continue to adapt and work collaboratively, said Carla Bailo, president and CEO of the Ann Arbor-based Center for Automotive Research.

Source: Detroit Free Press

COVID 19’S IMPACT ON VEHICLE SHOPPING

In the current climate, consumers are more equipped than ever to shop digitally, especially with COVID-19 moving e-commerce even further online. Consumers feel increasingly comfortable shopping for vehicles virtually and even completing steps of the car-buying process online. Yet, uncertainty remains when it comes to online matters relating to the dealership service department. But now, as digital solutions in the auto industry become the new normal, dealerships should focus on expanded transparency in order to reach service shoppers virtually.

Source: WardsAuto