AD #2675 – Cadillac Reveals New CT4, UAW Exec Arrested Over Embezzlement, Consumers Buy Cars with Bland Colors

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

UAW EXECUTIVE ARRESTED OVER EMBEZZLEMENT
Another day, and another UAW executive was arrested and charged with embezzlement. This time it involves Vance Pearson, who worked directly with UAW president Gary Jones. The Justice Department accuses Pearson of conspiring with other top UAW officials to steal hundreds of thousands of dollars to live an extravagant lifestyle. So far, UAW President Gary Jones has not been charged with anything, but federal agents recently raided his house, reportedly finding $30,000 in cash and other items that may have been bought with union funds. Tomorrow night, the union’s labor contract with General Motors expires and we think all this makes a strike more likely. The rank and file are angry with their leadership, and one way to demonstrate their anger, is to reject whatever contract their leadership negotiates.

EV SALES DROP AFTER GOVERNMENT SUBSIDIES CUT
Electric cars may be the future, but sales are highly dependent on government subsidies to consumers. Tesla’s sales in the U.S. fell dramatically when its government sales subsidies were cut in half, even though the company cut prices to try and offset that. Sales of electric cars in Denmark absolutely collapsed when the government eliminated sales subsidies in 2016. And sales of EVs are down sharply in China after the government cut back on subsidies this year. Merrill Lynch reports that sales of New Energy Vehicles in China fell 16% in August. Angela Merkel says that Germany wants to entice consumers to buy electrics, which suggests it’s going to offer more subsidies. Several years ago, Merkel set a goal for Germany to have a million EVs on the road by 2020. Last year sales of EVs and hybrids only came to 55,000 cars. 

FORD & GM RACE TO BUILD EV TRUCK BEFORE TESLA
Meanwhile, Ford and GM are racing to beat Tesla to the market with an electric truck. Ford is modifying its F-Series for an electric work truck and a performance version of the F-150 Raptor. And of course, Ford invested half a billion dollars in Rivian, the EV startup. Reuters reports that GM will get its electric truck to the market in the next couple of years. 

MERRILL LYNCH UPGRADES AND DOWNGRADES SUPPLIERS
If you’re interested in investing in the automotive industry, where should you put your money? Merrill Lynch published its latest list of upgrades and downgrades of automotive suppliers. It downgraded Adient the seat supplier and Aptiv, the high-tech spin-off from Delphi. But it upgraded Dana, the company which makes drivetrain components, Garrett Motion, the turbocharger company, and Shiloh, which specializes in the lightweighting of metal components.

CAR SALES DOWN IN MEXICO
Sales in the U.S. market are holding their own, but they dropped nearly 13% in Mexico last month and that is going to be a drag on suppliers in the NAFTA supply chain. Nissan, GM and VW, which are the biggest sellers in Mexico all saw double digit drops. So did Ford and FCA. So far this year, sales in Mexico are down nearly 7%.

FORD WORKING TO IMPROVE CUSTOMER SERVICE
Ford is working on new ways to better serve its customers. It opened a customer contact center in the Houston, Texas area, which is expected to handle 1 million calls a year. Agents are encouraged not to pass calls off to other departments, but to stick with customers all the way through. But what we find really interesting, is that Ford is running a Tesla-like pilot program that sends technicians right to customers’ home, work or wherever for maintenance and light service work.

CADILLAC CT4 BRINGS RWD AND STANDARD TURBO
Cadillac revealed the non-V version of the CT4. As you can see, it has very similar styling to the CT5. Two turbocharged engines are available, a 2.0L that makes 237 horsepower and a 2.7L that makes 309 horsepower or 325 horsepower for the V. The 2.0L is mated to an 8-speed automatic transmission and the 2.7L gets a 10-speed. Rear-wheel drive is standard, but all-wheel drive is available on every model. The uncluttered interior design is highlighted by an 8-inch touchscreen that looks like it’s been plugged into the dash just above the center air vents. Super Cruise will also be available in the CT4, which can be ordered from dealers later this year.

CONSUMERS CONTINUE TO BUY CARS WITH BLAND COLORS
Did you see Autoline After Hours yesterday with Ralph Gilles? It’s a fantastic show and if you’re at all interested in automotive design, this is a show you have to see. One of the things that Ralph touched on is how most new cars come with boring paint jobs. According to data from coating company Axalta, that’s true around the entire globe. It says white was the most popular color for the 7th straight year with 39% of owners choosing it. While white has roughly 25% of the market in the U.S and Europe, it’s super popular in China where 60% of cars are sold in the color. Black is second on the list with 16% share and is especially popular in Japan. And then with 11% of customers ticking its box, gray or silver come in third. 30% of customers in India pick silver but it’s rarer in markets like China. It’s a bit surprising that customers tend to choose such bland colors since it’s their second consideration when purchasing a car, right after picking the model.

And that wraps up this week’s worth of reports, thanks for watching and we’ll be back here on Monday.