AD #2654 – Cyber Attacks Soaring, Finalists for Massive Postal Contract, GM & Ford Preparing for a Downturn

This is Autoline Daily reporting on all aspects of the global automotive industry.

AUTOMOTIVE CYBER ATTACKS SOARING
Did you realize that the number of automotive related cyber attacks is soaring? A cyber protection company called Karamba tracks real time cyber attacks on the auto industry and found that in July there were over 1.2 million attacks, and that only includes 4 cities: Tel Aviv, San Francisco, Tokyo and Frankfurt. Another cyber company, Upstream Security, says attacks shot up 6-fold between 2015 and 2018. These attacks are on car companies, Tier 1 suppliers, fleets, ride sharing companies and auto dealers. At last week’s Management Briefing Seminars, Karamba demonstrated there were over 11,800 attacks that took place in the Detroit area just on August 5th. Most of those attacks came from Asia, followed by Europe and North America.

OLD RAM EATING INTO NEW RAM?
Are sales of the old “classic” Ram pickup cannibalizing sales of the new truck? One supplier that ships directly to the Sterling Heights plant where the new truck is made told Autoline they were ordered to reduce shipments because of slowing sales. But others tell us that pickup sales are cyclical and tend to go up in the third quarter. It’s hard for us to independently verify this because FCA now only reports sales once a quarter. And it doesn’t break out sales of the old versus the new truck. December is usually a great month for commercial pickup sales as companies rush to buy trucks to get a tax writeoff for the entire year.

FINALISTS FOR MASSIVE POSTAL CONTRACT
The U.S. Post Office has an aging fleet of mail trucks. The average one is 27 years old, they only get about 10 miles to the gallon, and maintenance costs are high. So the Post Office is testing five different prototypes from companies that each had to build 50 prototypes. Before the year is out the Post Office will award a nearly $6.3 billion contract to build 180,000 trucks over 6 to 7 years. Here are the five prototypes; Mahindra’s mail truck is believed to be based on its Genio commercial truck, which uses a GM 2.5L engine and also offers mild hybrid technology; Workhorse, which makes an electric pickup and supplies electric vans to UPS, along with Lordstown Motors Corp and VT Hackney built a range-extended electric mail truck; Ford and Oshkosh have a version based on the Transit Cargo van, with a number of powertrain options; AM General built an ICE truck with stop/start technology; and Morgan Olson, which makes walk-in vans, teamed with Karsan, a Turkish manufacturer, to make a fully electric truck. The U.S. Post Office also wants an off-the-shelf, right-hand drive delivery vehicle to replace some of the larger vans and trucks it currently uses. We’d love to know: which one would you vote for?.

ACURA CONCEPT HINTS AT FUTURE DESIGN
Sedan sales may be dying, but they’re still one of the most elegant shapes a car can have and are a great way to show off design. And what better place to show off a new stylish sedan concept than at a classic car show? Acura will debut the Type S concept during the Monterey Car Week in California. The automaker says the concept sets the stage for the return of Type S performance variants and will heavily influence the upcoming TLX Type S.

Be sure to join us for Autoline After Hours tomorrow. We’ve got John Waraniak the VP of Vehicle Technology at SEMA and we’ll want to ask him about the industry’s push into mobility services, EVs and autonomy. Henry Payne from the Detroit News will also be on. He just came out with a story wondering if we’ll ever see a Corvette SUV. So tune in Thursday afternoon at 3PM eastern time on our website or YouTube channel.

GM & FORD PREPARING FOR DOWNTURN
General Motors and Ford are preparing for a possible economic downturn due to trade wars and a slump in global car sales. Reuters reports that GM, which has $18 billion cash on hand, has modeled downturn scenarios similar to the Great Recession to see how profitability and cash flow would be affected. GM is looking at how it could defer non-essential capital expenditure and shift to lower-priced vehicles. Ford has $20 billion in cash and is working with economists on modeling how it would be impacted by a recession. Here’s our Autoline Insight. It’s good to see GM and Ford making sure they’re prepared for a downturn, but make no mistake, the timing of their announcements come just as they’re sitting down to negotiate a new labor contract with the UAW. And doomsday scenarios like these will only help their negotiating positions.

BMW 3 SERIES PHEV GOES ON SALE
As we reported yesterday, global plug-in hybrid sales are falling but some automakers aren’t giving up on them. BMW is launching a new 3 Series plug-in. The sedan has a pure electric range of 41 miles.

GM & VW GIVING UP ON HYBRIDS
General Motors and Volkswagen are throwing in the towel on hybrids. The Wall Street Journal reports that GM and VW don’t see a place for hybrids in their lineups and will focus on fully electric vehicles. Of course, another reason they’re dropping hybrids is that they failed miserably at it. Toyota, along with Lexus, dominate the hybrid segment. In the US they have 53% market share. Ford has 21% and Honda has 12.5%. Those three brands command over 85% of hybrid sales, leaving everyone else to fight over the crumbs.

But that’s it for today, thanks for watching and please join us again tomorrow.