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0:07 Millennials Expected to Buy More New Cars
0:43 Global Car Sales Fall Again
1:26 Automakers Cut Jobs to Invest in EVs & AVs
2:41 McLaren Revenue Up but Profits Down
3:27 Cadillac CT5 Sedan Pricing Announced
4:06 Cadillac Blackwing V8 May Disappear
5:07 Lincoln To Use Rivian Skateboard in Electric SUV
5:45 EV Startup Shows Pickup in China
6:37 Magna Develops 5-Cell Bumper Beam
7:23 ZF Creates Electric Motor for Yachts
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This is Autoline Daily reporting on all aspects of the global automotive industry.
MILLENNIALS EXPECTED TO BUY MORE NEW CARS
Not long ago, it was conventional wisdom in the auto industry that millennials hate cars and had no interest in owning one. But that reasoning was bogus, since the Great Recession hurt most millennials pocket books and forced them to stay out of the new car market. But with a strong economy and many older millennials having a family and a career, they’re jumping into the new car market in full force. According to a study from CarGurus, an online automotive marketplace, millennials are expected to account for 40% of all new car purchases next year.
GLOBAL CAR SALES FALL AGAIN
But even though millennials are buying new cars at a higher rate, the downturn in the global auto industry continues. Wards Intelligence reports that automakers sold 7.56 million vehicles worldwide in October, which is a drop of nearly 4% compared to the prior year. It’s the 14th straight month sales have fallen on a global basis. Europe was the only major region that saw an increase in sales in October. Through the first 10 months of the year, automakers have sold nearly 76 million vehicles globally, which is down 5%. And this downturn is a major reason why we’re seeing so many companies in the auto industry cutting jobs.
AUTOMAKERS CUT JOBS TO INVEST IN EVs & AVs
Back in 2015 Mary Barra, the CEO of General Motors warned that the auto industry would go through more change in the next 5 years than it had in the last 50. And she sure was right. Automakers and suppliers are slashing jobs to free up cash to invest in electric and autonomous vehicles. GM is slashing 14,000 jobs, Nissan 12,500 jobs, Ford 7,000, Audi is cutting 9,500 and Daimler is getting rid of 1,100. The supplier Continental is laying off or spinning off 20,000 jobs. And BMW just announced it will cut bonuses for management by about 20%. This is just the beginning. The jobs we just mentioned are almost all white-collar jobs. In the coming decade, we expect a lot of blue collar jobs to be on the chopping block.
MCLAREN REVENUE UP BUT PROFITS DOWN
McLaren is one of the most famous racing teams in Formula One. It’s also famous for its sports cars and technological prowess. Last year its revenue shot up 44%, and is up 19% so far this year. Last year, its car sales shot up 45%. And yet, McLaren can’t seem to figure out how to make a profit. Last year, it lost about $78 million and is on track to lose about that much this year. The company is burning through cash, and car sales are down 4.5% so far this year. Hopefully McLaren can turn this around but it shows just how hard it can be to make money even when you’re at the pinnacle of luxury, technology and Formula One racing.
CADILLAC CT5 SEDAN PRICING ANNOUNCED
Cadillac’s announced pricing for the CT5 sedan. A 2.0L with rear-wheel-drive starts a little under $38,000, including destination charges. A RWD V-Series CT5, with a 3.0L twin-turbo V6, starts at $48,700, while AWD adds another $2,600. If you start checking all the boxes, a CT5 can easily creep up near $70,000. And if you’re wondering, a CT4-V has a starting price $3,200 less than a CT5-V.
CADILLAC BLACKWING V8 MAY DISAPPEAR
Speaking of Cadillac, do you remember the Blackwing engine that came out in the CT6 last year? If not, it’s a twin-turbo 4.2L V8 that cranks out 550 horsepower and nearly 630 lb-ft of torque. As awesome as that sounds, the engine could soon become an orphan. MotorTrend learned from a senior GM source that it will not be used in a higher performance version of CT5-V or the next-generation Escalade. The decision was made as a cost cutting move as sales have been falling. That only leaves the CT6 for the Blackwing engine to fit into, and as we’ve reported in the past, the CT6 could be headed for the chopping block. Earlier this year we tried to get someone from the Blackwing program to come on Autoline After Hours and tell us what the engine is all about, but we never got any response.
LINCOLN TO USE RIVIAN SKATEBOARD IN ELECTRIC SUV
Ford stunned the auto industry when it invested half a billion dollars in Rivian. And now we’re starting to learn what Ford plans to do with that investment. Reuters reports that Lincoln will use the Rivian electrified “skateboard” chassis which includes the motors, batteries and suspension. Ford plans to add other EV models to Lincoln’s lineup in the next couple of years, as part of its $11.5 billion investment into electrification. This could also be a way to compete in the market against GM, which plans to make two new SUVs around the end of 2021.
EV STARTUP SHOWS PICKUP IN CHINA
The California electric startup Neuron EV showed off a prototype of its T.One pickup at the China International Import Expo. Like Rivian and Lincoln, the T.One is also built on a skateboard chassis. It’s not known if the pickup is going to be a battery electric, as there are some canisters attached to the powertrain, possibly for fuel cells. The T.One has different body options for the shell, with either a simple chassis, a pickup or a van. This gives buyers the option to have a multitude of seating options. The inside is center-driven with no controls on the dashboard. The T.One goes on display again in China next month.
MAGNA DEVELOPS 5-CELL BUMPER BEAM
As we keep pointing out, there’s a ton of innovation coming out of the supplier industry. Magna developed a clever bumper beam that’s smaller, stronger and lighter than what’s being used today. Traditional bumper beams use what they call a 3-cell design, that are like three compartments that you can see in this cross section of the beam. It works well, but Magna’s extruded 5-cell design performs even better. Note the triangular cells at each corner that run the length of the beam. Those triangles absorb crash forces better. Not only is this 15% lighter than traditional bumper beams, Magna says this approach can be used on battery trays, hinge pillars and other parts of the structure.
ZF CREATES ELECTRIC MOTOR FOR YACHTS
Water and electricity don’t mix well and while we’ve heard of electric trolling motors for small fishing boats, we’ve never heard of them for larger boats. Well, the supplier ZF has developed a fully integrated electric propulsion system for sailing yachts. It consists of a 60-kW motor with about 370 lb-ft of torque, all the power electronics, charger and a 60-kWh battery pack. ZF has been testing the system out on the water and says, in this setup, the boat is able to hit sustained speeds of 13 km/h or about 8 miles-per-hour and travel 55.5 km or roughly 34.5 miles. There are no clutches, so switching to forward from reverse is very smooth, which helps with maneuverability as does a propeller that can spin 360-degrees.
And a quick programming note before I sign off. Autoline Daily will be off for the rest of the week since we’re taking a break for the Thanksgiving holiday. And that means there won’t be a new Autoline After Hours this Thursday either.
But that brings us to the end of today’s report, thanks for watching and for those of you in the U.S., have a Happy Thanksgiving.
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John McElroy is an influential thought leader in the automotive industry. He is a journalist, lecturer, commentator and entrepreneur. He created “Autoline Daily,” the first industry webcast of industry news and analysis.