Automakers asking the government for help again

Illustration for the article titled The automotive industry asks the government for help again

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The morning shiftAll your daily car news in one convenient place. Isn’t it your most important time?

The auto industry is returning to the well, GM’s contempt for its dealers is evident and Japan. All that and more in The morning shift for April 6, 2021.

1st Gear: Automakers Want Joe Biden’s Help

The relationship of automakers with the federal government in the US is often quite strained due to the regulatory powers of the federal government. WWhen it comes to government brochures that will help support the (very profitable) automotive industry, however, The message from the automotive industry is always clear: We will take it.

The global chip shortage It has given automakers another chance to ask for help.

Since Reuters:

The US Department of Commerce should dedicate a portion of the funds in a bill to expand US semiconductor production to the needs of the automotive sector, the Alliance for Automotive Innovation said in written responses to a government-initiated review.

US President Joe Biden in February ordered several actions by the federal agency to address the chip crisis and is also seeking $ 37 billion in funding for legislation to boost chip manufacturing in the United States.

Some funds should “be used to build new capacity that will support the auto industry and mitigate risks to the auto supply chain evidenced by the current chip shortage,” wrote the group’s chief executive, John Bozzella.

The group said the US government could specify “a particular percentage, reasonably based on the projected needs of the auto industry, to be allocated to facilities that will support the production of automotive-grade chips in some way.” .

The Alliance for Automotive Innovation is the largest auto industry trade group in DC, representing nearly every major automaker. WWhen you speak, you can be sure that you are listening from the horse’s mouth.

2nd gear: Ferrari sinks

This story is from Sunday, so my apologies for the lateness, but it’s remarkable nonetheless. Bloomberg reports that High-flying ferrari actually, it’s not doing that well, and it seems to be because investors these days are in favor of EVs. Ferrari is at the other end of that spectrum, as it said in November that it would never be 100 percent electric.

The Italian supercar maker, the top performer in the Stoxx 600 Automobiles & Parts Index for each of the last three years, has fallen 5.6% since the start of 2021 and just suffered its worst quarter since late 2018. That’s a stark contrast to strong earnings from rivals like Volkswagen AG, which owns the luxury brands Porsche, Bugatti and Lamborghini.

While competitors, particularly VW, have been buoyed by the uproar around electric vehicles, the company known for its Prancing Horse logo has run into setbacks, including a disappointing profit forecast. Without a clear electric vehicle strategy, Ferrari has also been hit by an unresolved search for a new CEO and a broader rotation of so-called growth names for a company that some investors see more as a luxury play.

“The stock has become too expensive and the earnings momentum is fading,” said Arndt Ellinghorst, an analyst at Sanford C. Bernstein, who also noted uncertainty about the CEO’s situation and a “lack of vision for electric vehicles. “.

History goes on to point out that Ferrari really isn’t in the same category as a company like Volkswagen, as Ferraris are basically only being sold to the idle rich. That helps explain Ferrari’s strong performance during the pandemic, given that the rich got richer. Still, it’s funny to me that there are apparently investors who look at Ferrari and judge it based on its strategy (or lack thereof) for EVs.

3rd Gear: Jeep has apparently convinced itself that it has finally settled Japan

Jeep expects to sell more than 15,000 cars in Japan this year, or five percent more than last year. Jeep says so means maybe it has turned a corner in Japan. This is presumably based in part on Jeep incredible confidence at the Gladiator selling there.

Since Bloomberg:

Buyers in Japan have generally opted for smaller cars with high fuel efficiency, one of the reasons Ford Motor Co. ended up leaving the country in 2016. But Jeep has managed to retain a loyal customer base. Now, amid the coronavirus pandemic, more young people are becoming interested in vehicles, drawn by their ability to handle all kinds of outdoor terrain, helping to avoid public transportation.

“We have made efforts to fit in with the Japanese market” by launching right-hand drive cars, unlike General Motors and Ford, [Hitoshi Ushikubo, the head of sales at Fiat Chrysler Japan] saying. “Young people are looking for cars that allow them to present a part of their character,” he said, adding that a strong social media presence has also helped the brand.

Almost 4.6 million new cars they were sold in japan last year, which means that 15,000 Jeeps would account for about 0.3 percent of all new car sales in Japan if 2021 keeps pace with 2020, or even less than 0.3 percent since new car sales in Japan in 2021 will likely be higher. Still, many automakers make a lot of money being a niche in various markets – just ask Volvo. Or Tesla.

4th Gear: Subaru to Inactivate Plant in Japan

The plant manufactures Foresters and Legacys. The damn shortage of chips hit again.

Since Reuters:

Subaru will restart all production lines at the Yajima plant in Gunma prefecture starting May 10, it said in a statement Monday. He added that the impact on the group’s financial results is uncertain. Some operations will resume on April 21, the company said, adding that April 28-May 9 is a previously scheduled holiday break for the plant.

About 10,000 cars are said to be affected, which in total is pretty minimal, although I’m sure the people at Subaru aren’t happy.

5th Gear: GM is downplaying dealers with the Hummer EV

Distributors, as we all know, I don’t really have a reason to exist outside of state franchise laws, and ensuring that lobbyists feed from the mouth. Automakers know this as well as anyone, although Tesla’s direct sales momentum has accelerated what could be the beginning of the end for dealers as we know them.

The latest evidence is how GMC will sell the Hummer EV. If GM thought the dealer model was working, it would presumably simply sell the Hummer EV through dealerships, as it does its other cars. But it is not doing that. Since Detroit Free Press:

Consumers who wish to purchase the new GMC Hummer EV truck or SUV will do so online with minimal dealer participation, directly from General Motors, for at least the next two years.

After that, the retail shopping experience will “evolve” as GM launches more electric vehicles.

The vehicles will eventually hit GMC dealership showrooms, but even then, the buying process will change, said Phil Brook, vice president of marketing for Buick and GMC.

“There’s no question about that,” Brook told the Free Press, although he declined to provide further details.

“This vehicle allows us to take a different approach,” Brook said. “The market is evolving and changing and we are changing, but we work through distributors. We see our distributors as a great competitive advantage for us ”.

It’s not hard to imagine this GMC VP bursting out laughing after saying GM would do everything it could to avoid using dealerships to sell the Hummer EV, and then insisting that dealerships are important to GM.

Reverse: 2001


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