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Runtime: 11:22
0:08 China Wants to Consolidate EV Companies
1:05 VW Takes Majority Ownership in JAC
2:02 Mercedes & BMW Will Keep Prices High
2:37 Democrats Unveil New EV Incentive Package
4:29 GM Slashes Deliveries Due to Chip Shortage
5:12 Z51’s Popularity Dents Corvette’s EPA Numbers
6:15 Subaru Reveals New WRX
8:07 Volkswagen Rolls Out OTA Update for ID Vehicles
8:36 VW Opens Battery Cell Lab
9:04 Ford Axes EcoSport From U.S. Lineup
9:51 Wolverine Introduces Ram Truck Inspired Boots
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CHINA WANTS TO CONSOLIDATE EV COMPANIES
China has too many companies making electric vehicles–at least 300 of them. And most of them are very inefficient. The average Chinese EV plant is at only 53% manufacturing capacity, which means they’re losing money. Plus, they’re all trying to get microchips and batteries, which is hurting the successful EV companies. So China wants to force consolidation and limit any new EV plants. Automakers will have to meet a minimum manufacturing capacity rate or they will not get approval for new EVs. Here’s our Autoline Insight. Let’s see if the Chinese national government can pull this off. It’s been trying to limit the number of car companies for years. But the provinces, which see car companies as a great source of jobs, keep adding more of them.
VW TAKES MAJORITY OWNERSHIP IN JAC
Meanwhile, Volkswagen just took a 75% ownership position in JAC, one of the large Chinese automakers. Last year China allowed foreign automakers to start buying a majority ownership in Chinese car companies. Reuters reports that VW’s other Chinese partners are deeply worried that VW will end up pushing them to the sidelines. VW has 50% ownership with SAIC and 40% with FAW, and has to split its profits with them accordingly. With the JAC deal, VW will be able to keep a lot more of the profits. Along the same lines, Bloomberg reports that Stellantis wants to take a majority position with Guangzhou to make Jeeps, and BMW wants to take a 75% stake in Brilliance.
MERCEDES & BMW WILL KEEP PRICES HIGH
Don’t expect car prices to come down once Covid or the chip shortage go away. Or, at least, don’t expect Mercedes or BMW to drop their prices. The Financial Times reports that both companies will keep prices high by deliberately limiting production and keeping inventory tight. Here’s why. Mercedes boosted its return on sales profits by 45% since Covid and the chip shortage hit. And BMW boosted its profits by 86%.
DEMOCRATS UNVEIL NEW EV INCENTIVE PACKAGE
Democrats unveiled an EV incentive proposal that heavily favors GM, Ford and Stellantis. All electric models would receive a $7,500 point-of-sale rebate but EVs made by union labor in the U.S. would get another $4,500. And there’s an additional $500 rebate if the battery is made in the U.S. Those incentives would be in place for five years, after that, for an additional five years, the $7,500 rebate would only apply to EVs built in the U.S. The incentives don’t apply to higher priced models or for people with higher incomes. As you can imagine not all automakers are on board. Toyota and Honda blasted the proposal, saying it discriminates against workers in non-union plants. The bill will be voted on tomorrow in the House Ways and Means committee.
GM SLASHES DELIVERIES DUE TO CHIP SHORTAGE
Last week, Toyota cut its production forecast by 300,000 units because of the chip shortage. Now, General Motors’ CFO says the automaker will deliver 200,000 fewer vehicles in the second half of the year because of the shortage. That’s double what it previously projected. The company says the third quarter will be particularly tough. But as bad as that is, GM still expects to meet its guidance of $11.5 billion to $13.5 billion in adjusted earnings this year. That’s one thing that really impresses us about Mary Barra. She sure knows how to make money.
Z51’S POPULARITY DENTS CORVETTE’S EPA NUMBERS
The Z51 package has proved to be very popular with Corvette buyers. Nearly 70% of C8’s sold this year have had that box ticked. The package gives customers more exterior accessories, better brakes, magnetic ride control, limited slip diff, performance exhaust and big, grippy summer-only tires. But the Z51’s popularity is putting a dent in the Corvette’s EPA figures. The EPA’s fuel economy numbers are based on the most popular package of any vehicle and the Z51 has a different final drive ratio that results in the EPA ratings coming in at 16 MPG in the city, 24 on the highway and 19 combined, which is one MPG higher in the city but 3 less on the highway compared to the base ‘Vette. But we’re guessing that won’t deter any would-be Corvette buyer.
SUBARU REVEALS NEW WRX
Subaru announced that the all-new 2022 WRX is going to go on sale in the U.S. early next year. For the first time, it’s built on the new Subaru Global Architecture, which allowed for a number of new components and technologies. Under the hood is a new turbocharged 2.4L BOXER engine that puts out 271 horsepower and 258 lb-ft of torque. It can be mated to a 6-speed manual or a new automatic that offers faster up and down shifts. Thanks to an inner frame construction and increased use of structural adhesives, the chassis is stiffer and the WRX now has a lower center of gravity, which will improve ride and handling. The black interior with contrast red stitching and accent panels that mimic a carbon fiber look are meant to communicate the car’s performance capabilities, while the 11.6-inch center display screen is a nod to its advanced tech. A new GT trim line is also available and it features electronically controlled dampers, front Recaro seats and unique 18-inch wheels.
VOLKSWAGEN ROLLS OUT OTA UPDATE FOR ID VEHICLES
Volkswagen just rolled out over-the-air updates for all of the ID electric vehicles in its lineup. One new update improves the image processing of the camera to recognize road users more rapidly. It also made the infotainment system more intuitive to use. In the future, VW plans to introduce a free software update every 12 weeks and it will also start charging customers for some of them.
VW OPENS BATTERY CELL LAB
And in other VW news, it just opened a battery lab in Germany that will focus on research and development of battery cells. VW says the new cell will cut its battery costs by up to 50%. In 2025, the site will be expanded to include battery cell production and by 2030, VW says it will have six cell factories across Europe it will operate with partners.
FORD AXES ECOSPORT FROM U.S. LINEUP
As part of its restructuring in India, Ford announced it’s going to stop making any vehicles there. That includes the EcoSport, and so Ford will stop selling it in the U.S. next year. The EcoSport first hit the U.S. market in 2017 and last year Ford sold about 60,500 of them. The European version of the EcoSport is built in Romania, and only 47,000 were sold last year. We think Ford may want to get rid of the EcoSport in the U.S. to clear the way for the Maverick pickup truck. The Maverick is priced about the same and it gets better fuel economy and now Ford doesn’t have to worry about the EcoSport cannibalizing sales.
WOLVERINE INTRODUCES RAM TRUCK INSPIRED BOOTS
Speaking of pickup buyers, we know they love to accessorize their trucks and now some owners will be able to match what they’re wearing with their truck. Ram has partnered with Wolverine to come out with a special series of boots that take inspiration from some of its trucks. The boots all feature names – Tradesman, Rebel and Limited – and descriptions that are meant to match up with the perceived persona of the corresponding truck. For example, the Rebel boot “is for those who not only forge their own path with purpose, they blaze it for all to see.” Prices for the Ram-inspired Wolverine boots start at $229 and go up to $400-bucks.
On Autoline Daily we bring you the latest news of the auto industry. On Autoline After Hours we bring you the analysis behind the news. So join John and Gary every Thursday for some of the best insights into the global automotive industry. But that’s a wrap for today. Thanks for joining us.
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Seamus and Sean McElroy cover the latest news in the automotive industry for Autoline Daily.