Rivian hasn't even launched any vehicles, and it's already building special editions and devising expensive accessories for its R1T electric pickup.
The latest is a camping special, not sized for a giant slide-in camper, but outfitted with a bed-top tent and an integrated slide-out kitchen for camping or tailgating cookouts.
The R1T has a unique "gear tunnel" underneath the front of the bed. It's big enough for a few sets of golf clubs and has access via fold-down doors on either end that double as sturdy, flat steps to give owners a boost into the bed. That is where Rivian installed a slide-out kitchen to wow visitors to the Overland Expo outside of Flagstaff, Arizona, last weekend. The kitchen includes storage drawers and cupboards, as well as a two-burner induction cooktop that runs on the truck's big 135-kilowatt-hour or optional 180 kWh battery.
The removable kitchen isn't the only accessory Rivian has shown for the R1T. At the Overland show, the truck was also fitted with an accessory tent mounted on racks that sit over the bed, as well as a roof rack to mount off-road accessories such as a "come-along" hand winch.
In February, the company also revealed a patent for various types of removable batteries that fit in the pickup bed, either like a traditional toolbox behind the cab or lying flat across the bed floor to take up a little depth, without impinging on bed length.
The R1T is scheduled to go on sale late next year and be followed by the R1S SUV less than a year later.
Source: The Car Connection
Moody’s cut its rating on Nissan Motor Co by one notch on Friday, citing weak sales in the United States and casting a shadow on the Japanese automaker’s move to improve its business following a decline in its annual profit. Nissan reported a 45% plunge in annual operating profit in the year ending March, and forecast a 28% drop in profit this fiscal year. Moody’s cut its rating of Nissan’s credit to “A3” from “A2”, adding that the outlook was negative.
Tata Motors, the Indian Auto giant, announced its Q4 2019 (ended March 2019) and FY 2019 results on May 20, 2019, followed by a conference call with analysts. For the year, the company missed consensus for revenue and reported $43.7 billion, down by 1.3% y-o-y. The decrease was driven largely by a fall in sales volume of Jaguar Land Rover. The earnings missed consensus and were recorded at $-0.24, lower than the $1.50 per share in FY 2018.
Canadian dealers and automakers could face some tough choices if the Canadian dollar continues to fall against its U.S. counterpart, industry experts say. with 70-80 percent of vehicles sold in Canada coming from outside the country — mainly from the United States but also from Europe and Asia — an unfavorable exchange rate becomes a critical factor in their cost. “There’s no doubt the value of the dollar does affect pricing in Canada,” said Dennis DesRosiers, president of DesRosiers Automotive Consultants in Richmond Hill, Ont. The only remaining question is who pays: the automaker, the dealer or the consumer? If the automaker passes the price increase along to the consumer, it risks losing market share. If it swallows the higher cost, that hurts its profit margin, DesRosiers said. The loonie slumped to a near four-month low of US74.04 in April after the Bank of Canada said economic growth this year would be slower than expected and held its trendsetting interest rate at 1.75 percent. Thursday, the loonie closed at US74.19.
One cent equals $250
DesRosiers estimates that for every US one-cent decline in the value of the Canadian dollar, the imported cost of a vehicle rises by $250 to $300. His figures assume an average retail price of $35,000, including cars and light trucks, with an average import cost of $21,000.
Most automakers don’t like to raise the manufacturer’s suggested retail price, especially when the market is soft, said Brian Murphy, vice-president of research at Canadian Black Book, a dealers’ guide to new- and used-car prices. Instead, they will use other strategies to cut costs, such as reducing incentives or making more standard features optional, Murphy said. The industry typically tries to manage short-term swings in currency valuations, but “ultimately it’s the consumer that pays,” said Don Romano, CEO of Hyundai Canada. Since 2014, when the value of the Canadian dollar reached US 90 cents, Canadians’ buying power has fallen, Romano said. “We’re paying more for everything,” he said, “not just cars.” Prices don’t immediately increase, but since 2016, the average transaction price of a car sold in Canada has risen to $35,200 from $33,000, Romano said, citing figures supplied by the California-based market researcher J.D. Power.
What’s for sale affected
The biggest impact of the low dollar on Canadian auto dealers is the availability of product from the manufacturers, said Shahin Alizadeh, president, and CEO of Downtown Autogroup in Toronto, which sells 12 brands across 11 dealerships. “If the car is hot in the U.S., imagine having a 35 percent advantage in making a decision where does the product land, especially in the luxury brands,” Alizadeh told Automotive News Canada. “Why would they want to collect Canadian dollars?” On the flip side, a higher U.S. dollar benefits Canadian dealers by boosting demand for Canadian-owned used vehicles from American buyers, Alizadeh said.
Automakers with assembly plants in Canada can benefit from a lower Canadian dollar, depending on how many parts they import, because they sell 85 percent of what they make outside the country, most of it to the United States, said David Adams, CEO of Global Automakers of Canada (GAC). Toyota, Honda, Ford, General Motors and Fiat Chrysler Automobiles all have assembly plants in Canada.
Most automakers use foreign-exchange hedging to minimize the impact of currency fluctuations on their business, Adams said. It’s too soon to say what impact the lower loonie is having on Canadian new-car dealers, said Oumar Dicko, an economist with the Canadian Automobile Dealers Association (CADA). “We have not heard this concern from our dealers. That’s not to say it’s not there.”
The Canadian dollar is expected to end the year at about US 75.5 cents, said Jennifer Lee, senior economist with BMO Capital Markets. That could change depending on how the Canadian economy performs and whether the U.S. dollar strengthens. Sales of new vehicles in Canada are expected to fall to 1.93 million units in 2019 from 1.98 million in 2018 and 2017’s all-time high of 2.04 million, said Scotiabank economist Juan Manuel Herrera.
Source: Automotive News Canada
When the U.S. auto industry was looking down a barrel in 2008, General Motors did the unthinkable and quietly proposed a merger with cross-town rival Ford Motor. It didn’t happen – GM ended up filing for Chapter 11, while Ford managed to avoid a bailout. But the fact they even broached the matter spoke volumes about the pressures those rivals were under.
Now, Europe’s auto industry has its own pause-and-gasp-for-breath equivalent. On Monday, Fiat Chrysler Automobiles said it hopes to merge with Renault to form the world’s third-largest carmaker (or by far the largest if you include Renault’s alliance partner Nissan, which arguably one should).
There are attractions in collaboration, but this merger proposal goes well beyond a more limited alliance or partnership. So why is Fiat’s billionaire chairman, John Elkann, taking such a big risk? Unlike their U.S. counterparts in 2008, neither Fiat nor Renault is losing money or facing imminent collapse. But both face painful industry upheaval: car sales are slowing, just as the costs of developing electric vehicles and of complying with ever-stricter emissions targets are surging. Fiat thinks the answer is to achieve huge scale and thereby share the financial burden in meeting those challenges. Is it?
Due to its limited financial resources, Fiat is a laggard in electric vehicles while Renault is an acknowledged leader. But thanks to its acquired Jeep and Ram brands, Fiat has a very profitable truck and SUV business in the U.S. By contrast, Fiat’s European operations are hardly profitable, which may explain why it picked Renault as a potential merger partner over Peugeot SA, whose sales are more heavily skewed toward Europe.
Then there are the cost and investment savings, which Fiat estimates could total 5 billion euros ($5.6 billion) annually. There are reasons to be skeptical about that figure. No factory closures are planned, which is typically one of the quickest and most painful ways to slash expenses. Instead, the savings are expected to come from common purchasing, shared vehicle platforms, and R&D. Factoring the lengthy timespan the synergies will take to achieve, plus integration costs and that headline figure might be worth only about 3.5 billion euros of value creation to each side, by my rough calculations.
Before today, both companies were valued at just 4 times estimated earnings -- poor even by the standards of the auto industry. Doubtless, the merged entity would hope to enjoy a stock market re-rating which might improve the financial benefits of a deal to about 5 billion euros for each side. For all that promise, Fiat and Renault each gained only about 2 billion euros of market value on Monday in European markets. That discount doubtless reflects the risk that the deal may not happen or deliver the promised benefits.
Merging the two companies would create huge complexity and governance risks that the promised large slate of independent board members might still struggle to alleviate.
Neither side was likely to countenance being the junior partner in a tie-up. It’s fortunate, then, that Fiat and Renault’s market capitalization weren’t all far apart, so a merger of equals is possible, at least on paper. The slight valuation disparity would be offset by a cash payment to Fiat shareholders.
But mergers of equals rarely work, and automotive M&A especially has a poor track record. Fiat’s acquisition of Chrysler was a success, but Daimler’s earlier acquisition of Chrysler was a disaster. It’s odd that Fiat has pitched a merger while Renault is in a tussle with its alliance partner Nissan. Perhaps the Japanese will view this as a helpful distraction that will stop Renault’s managers trying to deepen their alliance for the time being. A merger with Fiat would also dilute the influence of the French state, which currently holds 15 percent of Renault’s shares and even more of the voting rights. However, it’s also possible Nissan will see this is an attempt to swing the weight of the Renault-Nissan alliance even more toward Europe. As with the alliance, politics presents a huge challenge to this merger. Expect France and Italian interests to battle for every cent of investment spending. If job cuts become a necessity, things could get even more tense. But politics also explains why this deal is even being discussed. By demonizing diesel vehicles while clamping down on carbon emissions, governments have backed carmakers into a corner. As in 2008, this is what happens when an industry gets desperate.
Source: Automotive News Europe
The latest vehicle sales forecast from J.D. Power and LMC Automotive shows a new-car market challenged by “rising inventories of unsold vehicles.” But some dealers are getting a shot in the arm from their used-car sales, which for franchised dealers have grown nearly 6% month-to-date, according to J.D. Power — though other analyses show mixed results for the overall used retail market. Starting with the new-car side, J.D. Power and LMC are predicting 1,226,800 retail new-car sales for May, which would be a 3.1% year-over-year dip and the fifth straight month of softer sales.
Source: Auto Remarketing