Nutson's Weekly Auto News Recap - Week Ending June 6, 2020
Last Week: Chinese Virus STILL Affecting Car Production, New Car Introductions, Sales, Motorsports, Auto Events, F1, PLUS UAW Turmoil, Autonomous Car Safety Prediction Fairy-tale, VW Dieselgate, VW Invests In China AI, Ford Turns Up Heat On Covid; Nissan Recall, Drive-in Resurgence, 2020 Collector Car Appreciation Day, Porsche backs Out
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Nutson's Automotive News Review - Week Ending June 6, 2020; Important or pithy automotive news, Opinion and back stories in expert-created easy to digest news nuggets.
* May U.S. new vehicle deliveries fell 26 percent at Toyota, 17 percent at American Honda, 13 percent at Hyundai/Kia, 19 percent at Subaru and just 1 percent at Mazda. Not all automakers report monthly sales. But signs are the market is recovering from severe restrictions on business and consumer activity because of the COVID-19 outbreak, with automakers now scrambling to boost output to replenish falling stockpiles. Sales of new cars and light trucks hit a 12.2 million vehicle annual pace, the best number in three months despite the collapse in rental fleet demand.
* The plan by the U.S. auto industry to restart production after the two-month shutdown hasn't been so simple. Virus infected workers have caused production stoppages and plant shutdowns to allow for sanitizing. Parts shortages from suppliers, especially from Mexico, have caused stoppages. GM, Ford, FCA, Toyota, and Honda have all been affected. Meanwhile, if you are new vehicle shopping, dealer inventory is down especially for pickup trucks.
* Automakers and suppliers have $72 billion in debts to repay, thanks to the pandemic shock. And repaying those debts will be all the harder because the global vehicle market will lose 36 million vehicles in sales over the next three years due to the economic disruption the virus caused. Those are just some of the conclusions from AlixPartners annual assessment of the auto sector. Auto manufacturers have no choice but to cut costs to cross what he calls the "profit desert" that looms in the next several years. Sales forecasts are grim at 13.6 million for 2020 with a climb to 15.3 million in 2021. It will take until 2026 to again sell 17 million.
* Autonomous vehicles may not do as much to prevent auto accidents as advocates claim, a new Insurance Institute for Highway Safety study concludes. The IIHS said AV technology - cameras, lidar, robotic driving software - could only prevent about a third of the crashes on U.S. roads. The rest are caused by human mistakes logic-driven machines would struggle to anticipate. The study based its conclusions on a review of 5,000 police reports.
* The federal prosecutor leading the investigation into corruption at the United Auto Workers said a federal takeover of the union remains a possibility, and that the probe of financial abuses by union leaders is not over. Former UAW President Gary Jones pleaded guilty to charges of embezzlement, and has agreed to cooperate with authorities - suggesting his conviction was not the capstone of the years-long probe.
* Packing Heat: Ford is turning up the heat (to beyond 133ºF) in police cruisers to neutralize the Covid-19 virus. Ford has designed a new heated software enhancement to pilot with its Police Interceptor Utility – one that law enforcement agencies across the country can utilize to help reduce the footprint of the COVID-19 virus. Software solution temporarily raises interior temperatures beyond 133 degrees Fahrenheit – hotter than Death Valley on the hottest day – for 15 minutes to help reduce the viral concentration inside the vehicle by greater than 99 percent.
* Ford said the long-delayed reveal the new Bronco will be in July. Ford also said most of its salary workforce won't return to the office until September. We expect another web-based reveal for the Bronco which will follow that for the F-150 this month.
* Washington, D.C. is the latest U.S. city to reduce speed limits in residential areas in response to rising pedestrian deaths. Motorists will be limited to 20 miles per hour on streets where the speed limit previously was 25 mph. Chicago, New York and other large cities have been doing them same, especially to increase safety as they encourage more bicyclists to use the roads.
* Reuters reports that the German government is looking at a plan to offer 5 billion euros worth of subsidies to entice consumers to buy new vehicles, responding to pandemic-depressed demand. The subsidies would be offered on electric and conventional vehicles priced below 77,350 euros, sources said. The auto stimulus is part of a much larger economic reboot package under consideration in Berlin.
* Volkswagen is investing $1.11 billion in the Chinese auto maker JAC Motors and a further $1.1 billion in a local battery maker Gotian High-Tech in its bet on the expected strength of the Chinese electric vehicle market. China's EV market has slumped 4% last year to 1.2 million units. But, VW and others expect new growth. VW said it will launch 80 EVs globally by 2025. China wants 25% of new vehicle sales to be EV by 2025.
* Volkswagen has finalized a deal that will see it invest $2.6 billion in Argo AI as part of a partnership with Ford to develop self-driving technology. Ford said the arrangement involving the Pittsburgh-based startup would allow the Dearborn automaker to share the cost of self-driving technology development with Germany's VW. A VW news release last week also referenced a few other projects likely to come from the partnership with Ford, including the use by Ford of VW's Modular Electric Toolkit for an electric vehicle in Europe, a midsize pickup developed by Ford and adapted by VW and development of two vans.
* And the bad news. Volkswagen's Dieselgate scandal keeps flaring up, stubbornly resisting VW's attempts to quell it. A U.S. appeals court ruled that counties could seek damages from the company, even though the federal government has agreed to settle charges that VW rigged diesel emissions tests. The appeals court acknowledged its decision could expose Volkswagen to "staggering" additional liability if local governments decide to seek damages one at a time.
* Nissan is recalling hundreds of thousands of midsize cars in the U.S. and Canada to fix a nagging latch problem that may allow the hood fly open while cars are moving. The latest recall covers nearly 1.9 million Altimas and includes cars from the 2013 through 2015 model years that were recalled earlier. It’s also been expanded to the 2016 through 2018 model years.
* Drive-in movie theaters are one of the few businesses experiencing a renaissance amid the coronavirus pandemic. As one of the few entertainment destinations you can still visit outside of the home, they’ve experienced a boom in popularity and demand over the past couple months. The open-air venues are uniquely suited to thrive while many brick-and-mortar theaters have temporarily closed. Though there aren’t many left in the U.S. — about 330 still exist, compared to over 5,400 multiplexes — they’ve been bright spots of entertainment, comfort and nostalgia at this difficult time.
* After racing was put on hold because of the coronavirus outbreak, Formula 1 has confirmed the 2020 season will begin in Austria next month – and revealed details on the first eight races of a new calendar. The season will kick off with the Austrian Grand Prix at the Red Bull Ring on July 5, followed a week later by a second race at the same track. The Hungarian Grand Prix will follow a week after that, before a break. Then there will be two back to back races at Silverstone, followed by the Spanish Grand Prix at Barcelona. The Belgian Grand Prix will follow that, with the Italian Grand Prix at Monza a week later on September 6. F1 currently expect the opening races to be closed events but hope fans will be able to attend again when it is safe to do so.
* The 2020 Collector Car Appreciation Day has been set for July 20, the date announced by the SEMA Action Network. “Intended to celebrate the classics of the past and the future, the U.S. Congress has helped launch CCAD by introducing resolutions each year at the SAN’s request,” the group said. However, it seems likely that the emphasis this year might be on moving rather than in-a-parking-lot gatherings.
* NHRA Drag Racing will return to the world stage in mid-July, relaunching its Mello Yello Drag Racing Series and associated programs with events on back-to-back weekends at Lucas Oil Raceway in Indianapolis that will serve as the launch point for 15 more NHRA Mello Yello Drag Racing Series events that will follow. The two events will be run on consecutive weeks, July 11-12 and July 18-19.
* Autoweek reports citing economic pressures related to the the COVID-19 pandemic, Porsche Motorsport announced on Thursday that it will be ending its factory involvement with the 911 RSR in the IMSA WeatherTech SportsCar Championship after the 2020 season. The Porsche Motorsport 911 RSR program captured the drivers', team and manufacturers' championships in the IMSA GTLM class in 2019. The support of customer teams in the GTD class in the IMSA WeatherTech series, as well as the Michelin Pilot Challenge and the GT3 Cup Challenge USA, will continue unchanged in cooperation with Porsche Motorsport North America and Porsche Cars North America.
* Indy car racing started up almost three months late this weekend at Texas Motor Speedway in Fort Worth with no fans in the stands.
Stay safe. Be Well.