AD #1460 – ZF Takes Over TRW, Mid-size Trucks Get a Boost, R&D Spending per Cars Sold

September 18th, 2014 at 11:57am

Runtime: 5:41

- ZF Takes Over TRW
- Tesla Wins MA Court Battle
- Toyota Boosts Tacoma Production
- GM Ups Mid-size Truck Production
- R&D Spending per Cars Sold

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Hi. Welcome to Autoline Daily for Thursday, September 18th. I’m Drew Winter from WardsAuto filling in for John McElroy. In today’s show, Tesla Takes a Retail Win, Tier Ones Consolidate and Lets Make More… Mid-Size Trucks.

ZF TAKES OVER TRW
So let’s start today’s news in the supplier community where there’s a big new player in town… well, sort of. German giant ZF, best known for producing mechanical components such as transmissions, is buying safety systems supplier TRW Automotive, which makes everything from seat belts and airbags to electronics for autonomous vehicles, for $12.4 billion. That will make it the world’s second largest automotive supplier, just behind its German counterpart Robert Bosch. The combined company will have $41 billion in sales with 138,000 employees.

TESLA WINS MA COURT BATTLE
Now, moving to the manufacturers — specifically one who sells its cars directly to consumers or at least wants to — Tesla continued its state-by-state marketing move by winning its Massachusetts court case this week allowing it to sell cars there… at least for now. At the same time, the luxury electric car maker has appealed a regulatory ruling just down the coast in New Jersey which has blocked the company from selling in the state.

TOYOTA BOOSTS TACOMA PRODUCTION
Meanwhile over in the mid-size truck segment, Toyota is adding a third shift to its Baja, Mexico facility as the company increases output of the Tacoma. Now to be sure, some of that production will come from moving Tacoma from Toyota’s truck plant in Texas thanks to an increased demand for the light-duty Tundra. But with a new Tacoma coming soon, we’ll see if it stays in Mexico or moves back across the border.

GM UPS MID-SIZE TRUCK PRODUCTION
And yet another facility getting a third shift is GM’s Wentzville, Missouri plant just outside of Kansas City. That’s where the Chevy Colorado and GMC Canyon are built. And thanks to very strong dealer interest in the new mid-size trucks, which are just hitting showrooms now, the company is adding another 750 employees to deal with the anticipated consumer demand.

AUTOLINE AFTER HOURS
And by the way, if you want to see both trucks up close and personal — so to speak — Join the After Hours team next Thursday, September 25th LIVE in San Diego, California from the site of the Chevrolet Colorado/GMC Canyon media drive. John will give you his impressions of the trucks and will also be talking with the executives and engineers behind both vehicles. That’s next Thursday on After Hours…

But let’s not forget tonight’s After Hours when our guest — the former head of the Center for Automotive Research Dave Cole — will dive into the history of Chevy’s LEGENDARY Small Block V8. John McElroy will be back along with Todd Lassa from Automobile magazine and yours truly for what should be an a great show. Hope to see you then.

And before we go to break, for all you Volvo lovers out there who might want to know what’s been going on with the company these past few years, you may want to check out our website where my colleague Byron Pope has a great article about the “new Volvo” and how Chinese ownership has affected it. That’s over at WardsAuto.com.

Coming up next, a look at which automakers spend the most on R&D for every car they sell.

R&D SPENDING PER CARS SOLD
Last month Autoline showed you which automakers spend the most on research and development and which ones spend the most on R&D as a percent of total revenue. But now let’s look at how many R&D dollars carmakers spend for every car they sell. Here’s Seamus McElroy with the report.

The German luxury makers obviously don’t sell as many vehicles as the mass market brands but they don’t skimp when it comes to R&D. That’s why it’s not surprising to see Daimler and BMW in the top two spots. Daimler is number one, spending over $3,100 on R&D for every car it sold. BMW is next, falling just short of $3,100. That’s more than twice than Honda which comes in at number three. Volkswagen is next coming in at about $1,450 R&D dollars for every car it sells. Next up is two of the Detroit automakers, Fiat-Chrysler and Ford. Toyota follows them, spending nearly $1,000 per car on R&D. Renault-Nissan and Peugeot-Citroen follow Toyota. But look at this, General Motors is in dead last only spending $740 per car on R&D. That’s half of what Volkswagen and Honda spend. We think this is a very telling comparison and helps you become better informed about what’s going on in the global automotive industry. But now back to Drew.

Interesting stuff, thanks for that report Seamus.

But that wraps up today’s show. Once again I’m Drew Winter from WardsAuto thanks for watching and I’ll see you tonight on After Hours.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog and WardsAuto.com

19 Comments to “AD #1460 – ZF Takes Over TRW, Mid-size Trucks Get a Boost, R&D Spending per Cars Sold”

  1. Lex Says:

    GM sells Quantity vs. Quality. You get what you pay for. If they spent more money on R&D they might not have this ignition switch to deal with now. This is an example of “Penny Wise – Dollar Foolish”!

  2. Lex Says:

    I can hear Bob Lutz now blaming those damn “Bean Counters”! I guess the Engineers are only able to speak to their calculators.

  3. Lex Says:

    I will praise Toyota if they truly do bring production back to the US from Mexico. Mexico is no friend, and we need those jobs in the US.

  4. Mike Says:

    Hey John re; ZF buying TRW. Last week, there was discussion of Visteon splitting, Federal Mogul splitting. What other deals in the making? Will there be a company to consolidate Automotive Electronics? How about another to consolidate braking and suspension? Yet another to consolidate interiors. Will the OE’s be reduced to final assembly, marketing and finance? Will everything else come from a handful of specialized international suppliers that are common to all the car companies?

  5. Dave Says:

    Comparing R&D cost/car doesn’t make much sense. You don’t need to innovate on each individual vehicle. Cost/model or cost/vehicle line would make a lot more sense.

  6. Kit Gerhart Says:

    Probably VW’s R&D budget is relatively high for a “mass market” company, because they are a big player in the “mass market” of Audi, Bentley, Porsche, Lamborghini, etc.

  7. Kit Gerhart Says:

    1, Mercedes-Benz has had a similar ignition switch “problem,” but they are exempt from the continuous bashing GM has suffered for the last 50 years.

  8. Bradley Says:

    #1
    Agree 100%.

    Wow, the new Colorado/Canyon Duo are still not on dealer lots! So much hype…Yes, it looks nice, yes on paper seems to be a sound product…but its MID-SIZE…Yawn…

  9. Rob Says:

    If Tesla spent $4000 per car sold on research they would still not have a fraction of the budget GM has at $700. Money per car sold is very misleading and has more to do with volume of cars sold than money spent. Will one manufacturer be any further ahead the other if they have the same exact budget?

  10. Gerry P Says:

    I think we have to be careful about how we interpret R&D dollars per car. Some companies have a business plan that supports it, some do not. GM may be in last place, but their business plan is to sell to the mass market and market share, and they do ok with that. You don’t have to invent and develop something new if you can find a supplier that will do all that for you. However, there are a couple of downsides to that approach. Your high end luxury cars will suffer when compared to the others in the same class, and the real important item, suppliers will not show you their best stuff if they know there is little to no chance of selling it.

  11. DH Says:

    >>>”If they spent more money on R&D they might not have this ignition switch to deal with now.”

    False. GM redesigned the faulty switch long ago (almost a decade ago). They didn’t drop the ball when it came to discovering a flawed design & fixing it.

    They dropped the ball on their customer service/recalls (as did Toyota with its oil-sludging engines & voiding customer warranties). This is a lack of caring about the customer which is more of a MORAL issue than a dollar issue.

  12. G.A.Branigan Says:

    @ Bradley: Some people such as myowndamnself need a pickup,but don’t need a fullsize.Given that the taco is almost 10 years old,the frontier almost the same age,can’t see spending any loot on a brand new old truck.The full size are just to damn big for some of us old phartz ;}>

  13. Bradley Says:

    #12

    Definitely agree, I am a true “compact” truck fan.

  14. Kit Gerhart Says:

    12, 13
    There is still a market for someone like Mahindra or Chery to exploit. They’d need to keep them basic, and cheap, at least until they got established.

  15. Rick Wakefield Says:

    What has happened to John doing the Daily show.????

    Not that I don’t like his replacement’s…..but am just wondering where the heck has John been.

    BTW, I think his son Sean does an excellent job. I’m assuming he’s being groomed to take over for John when and if that time comes.

    Just my $0.02

    Rick

  16. Rick Wakefield Says:

    Trying to log on to AAH @ 6:02 PM Eastern Time and am only getting last weeks AAH of the Hellcat.

    What’s up..????????

  17. w l simpson Says:

    Manufacturer’s outlets would still need almost the same number of structures & employees, but the historic sleaze factor would be gone, just like Tesla.

  18. Chuck Grenci Says:

    #15, Rick

    John was driving the new Mustang and missed the show (or was on his way back into town); he was doing AAH (so he’s back).

    #16, Rick

    I missed the live show, but it was ‘up’ for viewing this morning (with Dr. Dave Cole; history of the Chevy small block).

  19. Kit Gerhart Says:

    Yesterday, there was a discussion about the VW Jetta’s competition, and the Jetta was dismissed as being “below” the Toyota Corolla. That may be the case, as far as reliability, but the Jetta and Corolla are very direct competition, as far as passenger and trunk space. The Corolla splits the difference in fuel economy between the 1.8 turbo gas, and TDI Jetta.