AD #3566 – Car Dealers Losing Market Share To EV Startups; Linamar To Open Gigacasting Factory; Baojun Yep Gets Cool Accessories
May 12th, 2023 at 12:00pm
Listen to “AD #3566 – Car Dealers Losing Market Share To EV Startups; Linamar To Open Gigacasting Factory; Baojun Yep Gets Cool Accessories” on Spreaker.
Follow us on social media:
Runtime: 10:34
0:00 Car Dealers Losing Market Share
1:01 Musk Steps Away from Twitter, Tesla Investors Rejoice
1:45 Germany Scores Big Battery Plant
2:34 VinFast To Do a SPAC
3:15 Hyundai-Kia Face Insurance Lawsuit
4:53 Mercedes Axes CLS
5:24 Honda To Export MIC EVs to EU
6:19 Linamar To Open Gigacasting Factory
7:16 Shipping Shortage Due to China Car Exports
7:53 Baojun Yep Gets Cool Accessories
Visit our sponsors to thank them for their support of Autoline Daily: Bridgestone, Intrepid Control Systems, and Schaeffler.
This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
CAR DEALERS LOSING MARKET SHARE
Car dealers in California lost out on nearly $700,000 in gross profits last year thanks to EV makers, like Tesla, Lucid and Rivian who sell direct to consumers. That’s according to a study conducted by Automotive News. California has about 1,300 dealers and collectively they missed out on $900 million in gross profits. That’s prompting some dealers to invest more in their stores to sell more EVs. But others believe it’s unrealistic to think that dealers selling traditional brands will win over Tesla or Tesla-like buyers. There’s now thirty-five states that allow at least some kind of direct to consumer sales model, and Automotive News reports that dealers in Colorado and Washington are already losing market share.
MUSK STEPS AWAY FROM TWITTER, TESLA INVESTORS REJOICE
Tesla investors are rejoicing. Elon Musk tweeted out that he is stepping down as CEO of Twitter in 6 weeks. The Wall Street Journal reports that NBCUniversal’s head of advertising, Linda Yaccarino, was in talks to be the new CEO. Musk said he will transition to become executive chairman and chief technology officer. Tesla investors welcomed that news. They worried that Twitter was diverting Elon’s attention away from the automaker. And Yesterday, Tesla’s stock jumped 2.1% when the news broke and was up another 2.4% this morning in pre-market trading.
GERMANY SCORES BIG BATTERY PLANT
Europe and Germany just scored a major victory with Swedish battery maker Northvolt announcing it will build a new battery plant in Germany. It will invest several billion euros to open the plant, which will produce enough cells a year to power 1 million EVs. Construction could start later this year and Northvolt is aiming to begin cell production in 2026. The German government, and the state government where the plant will be located, were able to lure Northvolt with subsidies that were developed by the European Commission to compete with the U.S.’s Inflation Reduction Act. The subsidies still need approval from the EU Commission but if it does, it will be the first incentives granted under the framework.
VINFAST TO DO A SPAC
We thought that SPACs had kind of lost their luster. EV startups have watched their market caps melt away over the last year. But VinFast, the Vietnamese car company, is going to use a special purpose acquisition company called Black Spade, to get listed on the New York Stock Exchange. VinFast says that will give it a market cap of $23 billion. Now the question is, can Vinfast hold that market cap? When Rivian went public through a SPAC its market cap hit $100 billion. Lucid hit $89 billion. Now both are worth about $13 billion.
HYUNDAI-KIA FACE INSURANCE LAWSUIT
Hyundai and Kia are about to get sued by insurance companies. And that’s because they decided to not equip past models with engine immobilizers, which makes them easy to steal. It could cost the automaker millions of dollars. A wave of car thefts broke out after social media videos showed how vehicles could easily be started without the key. Automotive News reports a group of U.S. insurance companies filed a lawsuit against the automaker and are seeking reimbursement for money paid to owners who have had their vehicles stolen. The suit claims it can cost more than $3,000 per vehicle to repair cars that have been broken into. It can cost another $10,000 to fix any property damage caused by thieves taking joyrides. And if the vehicle isn’t recovered, the loss can be as much as $20,000. All told, the thefts could cost insurance companies as much as $600 million. Hyundai claims the lawsuit is unnecessary and that it followed federal anti-theft requirements. The automaker did introduce a software fix but earlier this week the AP reported the rollout has been slow and thefts continue to rise.
MERCEDES AXES CLS
One of the prettier cars on the market is getting the axe. Mercedes is going to stop making the CLS in August after 19 years in production. The current generation has smooth lines and good proportions, which seems to resonate with a lot of people. But Mercedes has too many cars in its lineup and it’s getting rid of the CLS a couple years ahead of time to make room for the all-new E-Class at its plant in Germany. And the new E-Class will be on sale before the end of the year.
HONDA TO EXPORT MIC EVs TO EU
It looks like Honda is going to start shipping Chinese-made EVs to Europe. It revealed that its second all-electric model for the European market will be the e:Ny1, which it calls a B-segment SUV. But it’s identical to the e:NS1 that Honda builds and sells in China with its joint venture partner Dongfeng. It rides on Honda’s e:N Architecture F, features a nearly 70 kWh battery pack and an integrated drive unit with up to 150 kW or 201 horsepower. On the WLTP cycle the e:Ny1 is capable of 412 kilometers or 256 miles of range. The e:NS1 is already on sale in China, but no word on when the e:Ny1 might launch in Europe.
LINAMAR TO OPEN GIGACASTING FACTORY
More gigacasting capacity is on the way, this time in Canada. The supplier Linamar is building a new plant that will have three 6,100-ton high-pressure casting machines. For reference, Tesla’s casting machines are 8,000 tons. Linamar’s plant will get built on a brownfield site in Welland, Ontario, not far from Niagara Falls, and it will start production in early 2025. What we want to find out is, who will Linamar make parts for? GM, Ford and Stellantis all have assembly plants within about an hour of where Linamar’s gigacasting facility will go. Toyota has two plants and Honda has one. Linamar will not say who its customer is, but that it’s getting a lot of interest from automakers.
SHIPPING SHORTAGE DUE TO CHINA CAR EXPORTS
China is on an export binge for cars and that’s causing a shortage of cargo ships. Mazda is running into problems finding ships to export its all-new CX-90 from Japan to the United States. China is expected to export 4 million vehicles this year, up from 3 million last year. And keep in mind that pre-Covid, Germany made 4.7 million vehicles. So that’s almost the equivalent of China exporting the entire German auto industry every year.
BAOJUN YEP GETS COOL ACCESSORIES
When your profit is only $22 on every vehicle you sell, you’ve got to come up with other ways to bring in money. That’s the amount we calculate Wuling earns for every Mini EV, but if you’re a regular viewer of the show you know we hardly ever show the plain-Jane Mini EV. It’s almost always some wild-looking one with bright colors and I especially like to use this one with big unicorn-like wings. These models, like the GameBoy Edition, bring in more money, sometimes thousands. And now it’s doing the same to the Baojun Yep, which like the Mini EV, comes from under the GM-SAIC-Wuling umbrella. One version with a two-tone paint job, roof rack, white wall wheels and chrome hubcaps reminds us of a retro beach buggy. Many of you have said the Yep looks like a baby Bronco or Suzuki Jimny. But now it’s even more so. Sales are said to kick off in May and with affordable starting prices – about $4,700 for the Mini EV and $14,500 for the Yep – buyers are more willing to spend extra to personalize their car.
But that brings us to the end of today’s show. Thanks for making Autoline a part of your day and I hope you have a great weekend.
Thanks to our partner for embedding Autoline Daily on its website: WardsAuto.com
Share
Permalink
Comments (26)
May 12th, 2023 at 12:20 pm
Who started exporting first from China? Oh, first mover advantage with all the cargo ships all ready under contract. Maybe Tesla is using most of them as ship to Europe.
May 12th, 2023 at 12:39 pm
I will be interested to see how much Tesla changes under new management. Have a PR department? What about large random price changes? Who’s going to make outrageous promises that are always delayed?
May 12th, 2023 at 12:56 pm
With the discontinuation of the CLS, the car that started the “4 door coupe” thing has been replaced by lifted, bulbous, and much less attractive “4 door coupes.”
May 12th, 2023 at 12:58 pm
2 Is Tesla, as well as twitter, getting new management?
May 12th, 2023 at 12:58 pm
Its hard to see $10,000 more value in the Baojun EV ute over the Wuling model. With an EV market flush with many choices and plant overcapacity at an alarming level, this vehicle may well be a swing and a miss. (It may also get a price reduction announcement fairly soon)
May 12th, 2023 at 1:01 pm
1 – Ironically, I believe that would be GM. The Buick Envision is the first vehicle I can recall being exported from China. Others have followed, including several models from Nio. It wasn’t long after Tesla’s Shanghai plant opened that they started exporting small number of cars to Europe. Seems like that will likely stop with the opening of the Berlin plant, and its announced expansion.
May 12th, 2023 at 1:04 pm
2 Oops, I mistook him leaving Twitter for Tesla. Shows how much attention I pay to Elon.
May 12th, 2023 at 1:04 pm
Car dealers had better get used to losing money from sales. Thats an outdated sales model and selling direct is the future. If they cant see that they are in denial. Even the online car shopping for used cars is already popular. Better get on board and start making plans to change their business plans.
AWWW Did the insurance companies lose on their bet to insure Hyundai’s? Maybe didnt do their due diligence when preparing a premium? Insurance is a gamble and they’re betting you wont need it while we all pay premiums in case we do need it. Well I would toss their lawsuit so fast they would have whiplash. Too bad your loss. If Hyundai followed federal guidelines then sorry insurance company you picked a bad horse this round.
May 12th, 2023 at 1:12 pm
6 I think some Volvos were the first Chinese cars imported to the U.S., but Envision and CT6 plug-in followed shortly.
May 12th, 2023 at 1:13 pm
7 I thought maybe that was the case.
May 12th, 2023 at 1:51 pm
Could be wrong but thought the first model Y’s made in China going to port of Tacoma WA then on to Canada so technically will be on American soil first
May 12th, 2023 at 1:58 pm
I think that the rules that dealerships must follow should be re-evaluated and a new structure of sale should be implemented to include any sale, whether online, dealership or virtual. As a metaphor, looked what is happening to the traditional Cab companies; underregulated Uber and other drive services, whether rightly or wrongly, affected Cab services due to the fact they had to compete on different playing fields (for the same service).
May 12th, 2023 at 2:22 pm
Thanks GM veteran, For export correction. Tesla is exporting in volume right now. 35,800 last month.
May 12th, 2023 at 2:46 pm
@1, 6, 9, 11, 13 all of these elements add up to a significant number of Chinese-made vehicles for export
May 12th, 2023 at 2:54 pm
#8.) I agree with you, yet, whether the insurance companies win this lawsuit or not, we will ALL pay for it with even HIGHER premiums! I guess there no way to go after the social media individuals who created the hack?! What about when and if they catch a car thief, they make the penalty and automatic 10 year felony sentence (no exceptions), to discourage stealing them in the first place?
As many have said, it may be time for a different approach to the dealership/salesman approaches. Not by getting red of them, but, a rethink of their interaction with the customer. Instead of them working off commission, but make the like the other members of the hourly staff? I mean, look, many (most?) start there car search today online anyway. Perhaps a costumer can reach a vehicle on either the OEM’s or dealerships website, build their vehicle, or select a model the dealership has on their lot and from there a they schedule a test drive, all online. THEN, the salesperson reaches out to them, confirms the appointment, later meets them at the dealership for the test drive, afterwards reviews any pertinent/important information and answers questions they may have (rebates, incentives, etc.). A flat wages gets them out of the play-to-play mark-ups, yet, gives the potential buyer an actual person to talk to for this major purchase, while also demonstrating the benefits of having a local dealership to quickly handle issues that may come up with the vehicle purchase, making the customer feel more secure!
And Sean, unicorns are the horses with horns and pegasus is the horse with wings! LOL
May 12th, 2023 at 3:13 pm
14 I suspect the US will be about the last to import Chinese brands, but at some point, it will happen.
May 12th, 2023 at 3:17 pm
15 I agree that a dealership will remain be needed, as vehicles need a place to be delivered, serviced and repaired. I just expect the role of salesman to morph into more of a vehicle concierge. Be there to answer questions offer assistance at pick-up. But I fully expect the ordering and financing portion to move predominantly on-line. Then walk into your dealership when your order arrives and that sales staff will likely be reduced significantly and as you proposed more likely salary or hourly without commission.
I would think the luxury brands may even go the extra mile with home delivery with other perks to stand out. Customers will likely be much happier too as the sales concierge wont have to get a manager to complete a sale, or all the stuff people gripe about with sales folks. Just be more like a dealer service. Who knows maybe they’ll get tips.
May 12th, 2023 at 3:37 pm
I think the Volvo S90 was the 1st Chinese vehicle imported into the USA.
With respect to the Hyundai/Kia v. Insurance industry lawsuit, the insurance industry might have a case if H/K incorrectly claimed the vehicles were equipped with immobilizers. If H-K never made the claim yet still met Federal law, then the case is baseless.
May 12th, 2023 at 4:27 pm
I read that S60 Inscription was the first Volvo imported to the US from China. Could be wrong, though. I guess Inscription is a “performance” version.
May 12th, 2023 at 6:05 pm
19 It looks like the S60 Inscription was more a stretch “luxury” version, than a performance version.
May 13th, 2023 at 2:20 pm
It is WAY past time to abolish the dealership chicken laws like we have in Michigan. If the consumer perceives that there is value in buying from a dealer rather than direct, they will do so.
May 13th, 2023 at 4:18 pm
21 It seems that dealers serve a purpose, for now. A Tesla owner friend has not been happy with the service experience compared with other cars he’s had, like Honda, Mazda, Toyota, and Chevy.
May 15th, 2023 at 7:55 am
22 Seems dealerships should evolve into ASE certified service centers and are needed for that reason which will set them apart from Tesla. When people buy a vehicle, they will still want a place locally they can go to get service and repairs done. Just the sales side of dealerships need to change. Its the worse part for most people anyway.
Where I live, like many towns we have a road where most all the dealerships are located. Which could be replaced with a mega service center and mega body shop. Consolidating those services among many manufacturers could offer a couple advantages. The cross training and buying power of a large shop may allow work to be done cheaper.
May 15th, 2023 at 8:04 am
For those confused about what Musk is doing, I read the article, and as the caption and transcript here say, he is stepping down from Twitter to focus on Tesla (not leaving Tesla). From the article: “The boat anchor called Twitter is loosened from Musk’s ankle. Now he can get back to spending more time creating value at Tesla”.
The question I still had after reading the article is: what about SpaceX? It didn’t say anything about his involvement with SpaceX in the article, but that hadn’t been quite the distraction lately for him like Twitter was.
May 15th, 2023 at 8:26 am
23 The sales “service” dealers provide, is taking trades. They often, or usually give ridiculously low offers, but in most states, you pay sales tax on the difference, not on the price of the new car. That being the case, you need to get ~7% more for your car selling it yourself, as opposed to trading it.
May 15th, 2023 at 8:34 am
24 I don’t know Elon’s current involvement with SpaceX, but they are putting a lot of space debris in orbit, in the form of thousands of Starlink satellites. There is a launch about every two weeks in Florida, and are also launches in California.
Starship, the big SpaceX rocket has had a few launches, many with failures. While the smaller Falcon 9 has been very reliable, including recovery of boosters, Starship is very much a work in progress.