AD #2755 – Mahindra Roxor Drops Jeep-Like Grille; Cruise Calls for Better AV Metrics; Jeep’s Sales Worrying

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

MAHINDRA ROXOR DROPS JEEP-LIKE GRILLE
As we’ve reported, Indian automaker Mahindra is under fire over its Roxor off-road vehicle because of its resemblance to a Jeep. FCA filed a complaint with the International Trade Commission and a judge made a recommendation to the ITC that Mahindra should have to stop making and selling the Roxor in North America. So it’s no surprise to see that Mahindra has redesigned the Roxor for 2020 and it no longer features its Jeep-like grille. The ITC is likely to make its final decision in March and while Mahindra is hoping this redesign will appease regulators, it still does not address Jeep’s trade dress issue, which says other aspects of the Roxor make it look like a Jeep.

CRUISE CALLS FOR BETTER AV METRICS
GM’s self-driving startup Cruise put its plans to launch its autonomous ride-hailing fleet in California on hold for further testing and evaluation. And now Cruise co-founder Kyle Vogt is saying we need new ways to determine if autonomous vehicles are ready for the public. One of the factors the California DMV monitors is disengagements, which is when the vehicle is switched from autonomous to manual mode for a safety reason. Vogt says that metric is inadequate and would rather see “data on the true performance of human drivers and AVs in a given environment and an objective, apples-to-apples comparison with statistically significant results.” We’re still in the very early stages of self-driving vehicles and there’s still a lot of questions that will have to be answered. But we’ll learn more later tonight about Cruise’s plans at event it’s holding in San Francisco, which it has been teasing with a series of cryptic Instagram messages.

MAGNA STOPS DEVELOPING FULL AUTONOMOUS TECH
Another question facing autonomous vehicles is, how do you make money with them? The supplier Magna has been developing autonomous components for years, but says it’s no longer going to develop fully autonomous technology because it’s going to be a long time before that market really takes off. Instead, Magna will focus on driver assistance technology, up to Level 3 autonomy. That’s where it’s going to get higher volume. As part of the move, Magna and Lyft are ending their partnership to develop self-driving technology.

TESLA SLAMS BRAKE ON UNINTENDED ACCELERATION CLAIM
Accusations of cars accelerating out of control all on their own have been around for decades. In fact, they started when the automatic transmission became popular in the 1950s. It’s called unintended acceleration, and in the U.S. in the 1980s lawsuits almost drove Audi out of business. More recently Toyota was accused of building cars that accelerated out of control. And now it’s Tesla’s turn. But Tesla is firing back. The company put out a scathing post on its website yesterday saying the accusation was false and was started by a short seller, who hoped to drive the company’s stock down. Tesla pointed out it collects all kinds of data from its cars in real time. And it has reviewed complaints with NHTSA. In every case it was able to prove that the vehicle functioned perfectly, meaning people were hitting the accelerator pedal instead of the brake.

NISSAN SCANDAL AFFECTING U.S. SALES?
There’s a couple of worrying developments on the sales side that we need to point out. We start with Nissan, which is going through a terrible time, because of the scandal with its former CEO Carlos Ghosn. The effects of that are rippling through the company. Last month Nissan’s sales in the U.S. plummeted by 44,000 vehicles, a 27% drop. Now why would a scandal in Japan affect sales in the U.S.? We think it’s because Jose Munoz, who used to run Nissan North America, left the company. He was one of Carlos Ghosn’s top lieutenants, and anyone who was associated with Ghosn is gone. Worse yet for Nissan, Munoz went to Hyundai, which is enjoying strong sales. No doubt Carlos Munoz knows exactly how to attack Nissan in the marketplace.

JEEP’S SALES WORRYING
The next brand we need to worry about is Jeep. Yes, Jeep. Its sales were down 5% in the U.S. market last year, and were off nearly 6% last month. We thought the addition of the Gladiator to its lineup would boost sales. Instead, every Jeep model, with the exception of the Grand Cherokee, saw its sales drop last year. What’s going on here? Jeep was the hottest brand in the hottest segment. Mike Manly, who used to run Jeep and oversaw its impressive growth, is now CEO. Is that the reason, or is something else going on? We welcome your viewpoints.

DETROIT THREE STRUGGLE IN CHINA
Now let’s move over to China, where car sales are down for just about everyone, but have been an unmitigated disaster for the Detroit Three. Zo Zo Go reports that last year, GM’s sales in China fell 16%, FCA’s were down by 41% and Ford’s plummeted 48%. All three say they need to refresh their product lines and get more Chinese influence in their business. Collectively their sales fell by 822,000 vehicles in 2019 which will take them years to recover from, if they ever recover.

HOW MUCH CYBERTRUCK DESIGN WOULD CUT COSTS
The wild styling on the Tesla Cybertruck is polarizing to say the least. But we believe one of the reasons the truck has flat surfaces and hard breaks may have more to do with reducing tooling costs. To answer that question, we invited Sandy Munro from Munro & Associates on last week’s Autoline After Hours. And he detailed just how much the Cybertruck’s design will help to cut costs.

Sandy Munro:
“We were looking at the Tesla (Cybertruck) and we think that the blanks are going to come in two size(s). Why not?

John McElroy:
“You’re talking about the steel blanks that would then be formed to make body panels?”

Sandy Munro:
“Yeah, because you could water jet it or laser cut it or whatever. Water jet is what I’d pick because, to me, it goes faster and it works well. And with 3mm stainless (steel) it would work just fine. And I don’t want to take a heat treat away. I don’t know what that stainless steel is, they just call it 300X, but I know it’s a stainless steel they’re using on the Falcon and SpaceX. So, I know that…”

John McElroy:
“So, they’re using SpaceX technology in the Cybertruck!”

Sandy Munro:
“No doubt about it. The steel is definitely that. I think that we’re going to be looking at press breaks and simple stamping. I don’t see a reason for a paint shop. And where painted parts are needed, I think what they’re going to do is they’re going to come in painted by the supplier. I think the body shop will be manual (unintelligible), and this is based on 50,000 a year, I don’t know what they’re real target is, but I’m looking at 50-grand a year because I don’t know enough about their marketing strategy. I don’t think they’ll have a paint shop. It’s (parts) going to come in painted. The body shop will be manual load, auto clamp. We’ll have manual tack and then robotic tig welding because it’s just simple that way. I think the CapX (capital expenditure) for 50,000 (trucks) would be about $30 million bucks.”

John McElroy:
“Which is nothing.”

Sandy Munro:
“Well, I’ve got the other stuff too. So, let’s look at an F-150-type truck. And we’re going to use everything like an F-150, but we’re looking at 50,000 a year. If we look at it, we’ve got, qual stock will come in and will go into blank dies and whatnot. That’s about $25 million. The body shop with partial automation and multi spot welders, about another $35 million. Paint shop, another $155 million. That means the CapX total for that is $210 million. So, you’re looking at a difference between $30…”

John McElroy:
“$210 million for an F-150 built at a 50,000 a year volume is what you’re saying?”

Sandy Munro:
“Right. And I need $210 million. Whereas with the truck (Cybertruck) we just looked at it’s like $30 million.”

It looks like Elon Musk even watched that show because he tweeted out that Sandy’s analysis is accurate, both pro and con. And he went on to say that Sandy will appreciate some elements of the Model Y body design. So for more of Sandy’s analysis, you can watch that entire show right now on our website, Autoline.tv or you can find it on our YouTube channel.

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