AD #2769 – DoJ Ends Antitrust Probe; Geely & Volvo Combine Businesses; Will Cybertruck Inspire More Radical Design?

“I think both the old, and new Pacifica looks pretty good, and except for maybe reliability, it’s the best minivan out there.” We’ve got your thoughts and much more on today’s Autoline Daily.

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

GEELY & VOLVO COMBINE BUSINESSES
When Geely bought Volvo, the idea was to leave it as a stand-alone Swedish car company. Not anymore. Geely is going to absorb Volvo into one global business unit. It will have listings in both Hong Kong and Stockholm and each car brand would maintain their unique identity, meaning there won’t be rebadged versions of vehicles. The auto industry is going through a slowdown, at the same time automakers must invest heavily in new technologies. So by combining their businesses, Volvo and Geely hope to create financial and technological synergies between the two companies.

DEPARTMENT OF JUSTICE ENDS ANTITRUST PROBE
In September of last year, the Trump Administration revoked California’s rights to set its own emission standards, but several automakers, including BMW, Ford, Honda and Volkswagen said they would still comply with any requirements put in place by the state. That led the federal government to launch an investigation into those automakers to see if they broke any antitrust laws. The Associated Press reports that the Justice Department found no wrongdoing and has ended its investigation. But California’s legal fight with the government is still ongoing.

TESLA’S SHORT TERM ISSUES
Tesla stock soared to the stratosphere this year. It hit a high of $887 last week, then dropped to $748 as some investors decided to sell and take some profit. Many investors believe it will crack $1,000 a share, and an investment group called Ark predicts it will hit somewhere between $7,000 and $15,000 a share in the next 5 years. But we think investors should be wary of a short-term correction, and here’s the warning signs to be on the lookout for. Sales of Tesla’s cars plummeted in the U.S. market last year and again in January. Tesla was able to overcome that by shipping cars to China and Europe. But with its gigafactory in China, Tesla won’t be exporting many cars there from Fremont. That leaves Europe, but we don’t know what’s going on there yet. Europe seems to take forever to report sales. The only January numbers we have so far are from Norway, the Netherlands and Spain. And Tesla sales are down sharply there. But those are small markets, so we really need to see what happened in the rest of Europe, and those numbers are just coming in. If they show a drop-in sales, it could trigger a stock correction. But keep this in mind. Tesla’s car sales always start out low at the beginning of each quarter and build strongly at the end of each quarter. So even if sales look weak right now, they could look good at the end of March. And we offer this insight so that all you Autoline Daily viewers can have a leg up on what’s going on in the market.    

WILL CYBERTRUCK INSPIRE MORE RADICAL DESIGN?
And speaking of Tesla, it grabbed the attention of the automotive world when it unveiled the Cybertruck last year. It’s hard to believe a traditional automaker would introduce a vehicle with such radical styling, so how are the designers that work at those companies reacting to the Cybertruck? On last week’s Autoline After Hours we were joined by John Manoogian, a design veteran in the auto industry and here’s what he had to say.

John Manoogian, Director of Design, Quadrobot Corporation
“Are the designers today, looking at that Tesla and saying ‘Should we do something? Or should we just dismiss it?’ I’d like to think, and I don’t know this for a fact because I’m not in there, but I’d like to think that they’re asking themselves some serious questions about ‘what are we going to do next? Are we going to keep doing the same thing over and over until we’re out of business? Or are we going to respond with our own Cybertruck’, whatever that is. I don’t know, we’re going to find out.”

John McElroy
“Well you know, Syd Mead before he passed away, was asked what he thought about the Cybertruck. He said he found it visually breathtaking. And he said that the form language for pickup trucks has forever changed or words to that effect.”

John Manoogian
“And I think his words will be closer than what we might think.”

You can watch that show on our website, Autoline.tv or you can find it on our YouTube channel.

DAIMLER BOOSTS NUMBER OF JOB CUTS
Daimler is ramping up its cost cutting measures. In November, it said it would cut at least 10,000 jobs by 2022, but now German newspaper Handelsblatt says there will be up to 15,000 job cuts. The previous cuts would clear up $1.5 billion to fund future products and technologies. The new report also says Daimler will reduce investments in loss-making projects that are not part of the core business.

FORD CREATES EMOJI JACKET
Ford came up with a new way for bicyclists to communicate with car drivers. It commissioned a prototype jacket that displays a number of icons, which can tell drivers what their intentions are or how they are feeling. The LED panel displays left and right arrows, a road hazard sign or one of three emojis. The cyclist activates each icon via a wireless remote that straps to the handlebars. We like the idea, but it’s not available to buy yet and we think there would be a lot of sad and angry faces. 

NEW CHRYSLER PACIFICA DESIGN FEEDBACK
On Friday, we asked what you all thought of the Chrysler Pacifica’s new styling. Some liked the look. Lambo2015 says, “The Pacifica is far better looking than the goofy looking Odyssey or Sienna.” and Kit Gerhart adds, “I think both the old, and new Pacifica looks pretty good, and except for maybe reliability, it’s the best minivan out there.” But most aren’t too fond of the styling. Max agreed with someone else who said the new front end looks like the old Chrysler 200 and adds “BORING!” BOB DE CARDENAS says, “… we have a 2018 Pacifica hybrid which is what my wife drives… I fell in love with it’s design, especially the grille… but I think the new grille looks terrible on it.” Clayton Root is right in line with Mr. DE CARDENAS. He says,”… Front End is a NO, Rear End is a YES.  Now they need to work on the Rear 3/4 view as the ‘C Pillar’ is fugly.” And with the last thought, Roger T. wonders if the new rear lighting design is a sign of things to come. “I wonder if the Pacifica tail lamp is a sign that FCA is trying to blend Chrysler and Dodge, baby step to merge the two.” Now that’s certainly an interesting thought and we’d like to thank everyone for their feedback. There was so much we just couldn’t get to it all. 

AUTOMAKERS BEGIN TO RESUME PRODUCTION IN CHINA
The coronavirus outbreak in China forced a number of automakers to suspend operations in the country but some companies are getting back on their feet. Tesla has resumed production at its factory in Shanghai with assistance from government officials. Daimler and Ford are restarting production at certain facilities and Volkswagen is opening a plant it operates with SAIC and its opening most of the factories its operates with FAW. And General Motors will resume production on February 15th. But not all automakers are getting back to normal. Toyota and Honda have extended production shutdowns in China and FCA is experiencing parts shortages at its European factories which is disrupting production.

CHINESE CONSUMERS REJECT 3-CYLINDER ENGINES
Speaking of China, car buyers there sure don’t like 3-cylinder engines. GM introduced 3-bangers in cars it sells under the Chevrolet, Buick and Baojun brands and they proved to be practically sales-proof. Chinese consumers believe they vibrate more and are noisier and are not very interested in them. The head of GM China, Matt Tsien, told analysts that GM’s key new product launches in 2020 will all have 4-cylinder engines, and it’s racing to redesign cars that only offered 3-cylinder engines so that they can accommodate a four. 

But that wraps up today’s show, thanks for watching and we’ll see you again tomorrow.