Major Investments by Manufacturers

MAJOR INVESTMENTS BY MANUFACTURERS

Daimler

Daimler's supervisory board signed off an investment plan worth over 60 billion euros ($67.88 billion) for Mercedes-Benz Cars & Vans between 2022 and 2026, the company said on Thursday. The statement, issued a week before the Cars & Vans division splits off from Daimler Truck & Buses on December 10, said that the luxury vehicle maker aims to be at the forefront of electric vehicle production and software following the listing.

Source: Reuters

Ford

Ford Motor Co expects to be the world's second largest electric vehicle manufacturer within two years, with annual production capacity of nearly 600,000, a top company executive said Friday. The automaker's optimism stems from increasing demand for its next new EV, the Ford F-150 Lightning pickup, with retail reservations approaching 200,000, Lisa Drake, chief operating officer of Ford North America, said.

Source: Reuters

Toyota

Toyota Motor Corp. will break ground on its first battery factory in the U.S. at a mega-site in North Carolina, joining an industrywide push as automakers accelerate efforts to electrify their fleets. The Japanese company will invest $1.29 billion in the automotive battery manufacturing facility, which is scheduled to start production in 2025, the company said Monday. It is the latest in a slew of announcements by major automakers in recent months to ramp up capacity to manufacture batteries for a coming wave of electric vehicles.

Source: Bloomberg

Stellantis Launches $23 Billion Software Push

Stellantis plans to generate around 4 billion euros ($4.5 billion) in additional annual revenues by 2026 and around 20 billion euros ($23 billion) by 2030 from software-enabled product offerings and subscriptions. Presenting its long-term software strategy on Tuesday, the automaker said it expected to have 34 million connected vehicles on the streets by 2030 from 12 million now. Stellantis said that, starting from 2024, it would deploy three new technological platforms powered by artificial intelligence, to be named STLA Brain, STLA SmartCockpit, and STLA AutoDrive.

Source: Automotive News

General Motors

General Motors plans to invest more than $50 million at its Indiana parts plant to build drive unit castings for the upcoming Chevrolet Silverado EVs and other applications, the automaker said Tuesday. The commitment will help GM prepare for its plan to launch 30 EVs globally and invest $35 billion in electric and autonomous vehicle development through 2025. Renovations at the aluminum die casting plant in Bedford, Ind., will begin immediately. GM in February invested $7 million in the plant to add die casting capability. GM plans to reveal the electric Silverado on Jan. 5 at CES. The automaker has not said when the electric pickup will go on sale.

Source: Automotive News

A DECEMBER TO REMEMBER FOR AUTO SALES – OR NOT?

The U.S. auto industry is poised to conduct bold — if involuntary — experiments this month in marketing and inventory management: how to execute the traditional year-end sell-off that consumers have been conditioned to expect when you have very little on hand to sell. December is typically one of the best months for vehicle sales thanks primarily to two segments: luxury and commercial fleet. But after November yielded another month of deliveries suppressed by dealer inventory shortages, consumers will have trouble finding something on which to place a big red bow, said Tyson Jominy, vice president of data and analytics at J.D. Power.

Source: Automotive News

VOLKSWAGEN AG CEO SURVIVES

Volkswagen AG CEO Herbert Diess is likely to survive his latest clash with labor representatives over the pace of the company’s transformation to an electric-vehicle maker after weeks of negotiations produced a compromise that would strip the outspoken executive of some of his duties, people familiar with the talks said Monday. Mr. Diess has been under fire for weeks since warning the company’s board of directors in the fall that unless VW greatly accelerated its shift to electric vehicles it could lose up to 30,000 jobs at its main operations in Wolfsburg, Germany, around half of the workforce at the plant.

Source: The Wall Street Journal

TOYOTA EMBRACING SMALL FLAWS AS SUPPLY CHAIN PRESSURES BITE

 Toyota Motor Corp on Tuesday said it is happy to use scratched or blemished parts from suppliers as the world's biggest car producer tries to trim costs amid a production-curbing global chip shortage and rising material costs. Toyota's acceptance of good enough by using parts it would have thrown away in the past marks a significant change both for a company renowned for stringent quality control and for Japanese manufacturing practices that often prioritised perfection over speed to market.

Source: Reuters

GM SEES 'BETTER FLOW' OF CHIPS, RUNS OVERTIME AT SOME PLANTS

General Motors Co. has no plants down this week because of the ongoing global semiconductor shortage, and the Detroit automaker has scheduled overtime at several plants in recent weeks. “We are currently seeing a better flow of semiconductors in our supply chain, our North American assembly plants are now back to running regular production, and volumes are increasing in the fourth quarter,” GM spokesman Dan Flores said in a statement, noting several plants, including those making full-size trucks, are running weekend overtime shifts.

Source: The Detroit News

BUT…CHIPS ISSUES ARE NOT GOING AWAY

Chip-Delivery Wait Times Grow Again, Signaling Shortages Will Drag On

Delivery times for chips lengthened again in November, dashing hopes that the end of shortages that have hammered many industries is finally in sight. The lead times – a closely watched gap between when a semiconductor is ordered and when it’s delivered – increased by four days to about 22.3 weeks last month compared with October, according to research by Susquehanna Financial Group. That lag marks the longest wait time since the firm began tracking the data in 2017. The results are a setback for industries that need more of the electronic components.

Source: Bloomberg

Toyota Halts Production at 2 Japan Factories Due to Supply Shortage

 Toyota Motor Corp has halted production at two factories in Japan due to a supply shortage, a spokesperson told Reuters on Thursday. The stoppage means that Toyota cannot return to normal operations in December as it had originally planned. The automaker had previously said that it hoped to return to normal production for the first time in seven months in December, after supply shortages disrupted production.

Source: Reuters

BMW Signs Long-Term Chip Deal After Global Shortage Hits Output

BMW AG signed a long-term deal to secure semiconductors for in-car lighting systems after a global shortage of the components led to shutdowns at some of its factories. The automaker said Wednesday it signed an agreement with Inova Semiconductors and Globalfoundries Inc., guaranteeing the supply of “several million” chips per year. The components will provide controls for ambient lighting systems that will first be used in the BMW iX electric sport-utility vehicle.

Source: Bloomberg

Volkswagen’s Outlook

 Volkswagen AG's Americas chief sees the global chip shortage lasting into the third quarter of next year, but believes the auto industry will maintain the discipline that has led to strong vehicle pricing and corporate profits even when the flow of semiconductors returns to normal. The COVID-19 shutdown last year and the subsequent chip shortage reduced vehicle inventories, but also resulted in strong profits for most companies. VW Group of America Chief Executive Scott Keogh is optimistic the industry can maintain those profits without returning to past bad practices.

Source: Reuters

VOLKSWAGEN EXPLORING IPO OF LUXURY CARMAKER PORSCHE - SOURCES

 Volkswagen is still exploring a possible initial public offering of its luxury brand Porsche AG as a way to fund its costly shift towards software and electric vehicles, two people familiar with the matter told Reuters on Tuesday. Speculation about a Porsche listing, which could be a record-breaking IPO, has surfaced over the year, but no decision has been made due to a complex stakeholder set-up, the sources said, adding it was unclear whether a listing would happen.

Source: Reuters

THE DIGITAL CAR IS COMING. IT MIGHT NOT BE MORE PROFITABLE

Investors have high hopes that car manufacturers will make money from software-based services delivered “over the air” to drivers. For now, though, the cost to manufacturers of upgrading vehicles is clearer than the new profit streams that might one day emerge. Stellantis, the trans-Atlantic company formed earlier this year through the merger of Fiat Chrysler and Peugeot, laid out a new software strategy Tuesday. At the heart of its new approach is the “STLA Brain,” a new technology platform that will pave the way for much more powerful vehicle software updates from 2024. This is the point when new Jeeps and RAM trucks will likely start to feel much more like smartphones in terms of their potential for personalized services and continuous improvement—benefits Stellantis hopes it can charge for, as Apple does to some extent with iPhones.

Source: The Wall Street Journal