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0:07 Renault Ends Partnership with Dongfeng
0:45 Used Car Inventory Pilling Up
1:40 Ford Running Out of Cash
2:17 Details About New Model Launches
3:07 GM’s Australia Dealers Mad About Compensation
4:13 New Corvette Convertible Likely Delayed
4:51 Ford Continues to Expand Medical Equipment Manufacturing
5:35 Hyundai Confirms DCT for Veloster N
5:57 Bentayga Hybrid Gets Worse Highway MPG Than V8
7:04 JLR CEO Asked to Delay Retirement
7:36 European Production Picking Back Up
8:20 What Tesla Will Use In-Car Camera For
8:56 Skoda’s Lesser Known SAGITTA Prototype
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RENAULT ENDS JOINT VENTURE WITH DONGFENG
Big news coming out of France. Renault announced it’s ending its joint venture partnership with Dongfeng and will transfer all its shares back to the Chinese automaker. Dongfeng has been Renault’s main partner in China since the joint venture was established in 2013. But poor sales are what ultimately ended this partnership. The joint venture sold less than 19,000 cars last year and posted an operating loss of $212 million. Renault says it will focus on light commercial and electric vehicles in China with its other joint ventures.
USED CAR INVENTORY PILLING UP
The longer this virus crisis goes on, the more worried the auto industry gets. And now the attention is turning to sales of used cars. Inventory is piling up at auction houses. 1.8 million cars are coming off lease in the next three months, which will only grow that mountain of inventory. And car rental companies will also be trying to unload a bunch of cars. Dale Pollak, a wholesale and retail expert with Cox Automotive, says that in 6 months there will be an unprecedented level of inventory which could lead to a price crash in the rush to move the metal. The in-house finance companies at the car companies will be forced to write down the residual value of lease cars, which will badly damage their balance sheets. GM and Ford are now offering lessees a month extension just so they don’t try to return their cars right now.
FORD RUNNING OUT OF CASH
Speaking of Ford, it announced it could run out of cash by the end of the third quarter unless it’s able to bring in new cash. Even though Ford amassed a $30 billion war chest, it’s burning through cash due to its fixed costs, something that is hurting all automakers. Ford’s CFO, Tim Stone, says the company is looking for other places for funding, and other ways to cut cots. One of Ford’s joint venture partners in China is building and wholesaling cars, which will help a bit. But like every automaker, Ford is anxious to restart production as soon as it safely can.
DETAILS ON NEW MODEL INTRODUCTIONS
Even though so many auto plants around the world are closed, we’re learning about some new model introductions for future launches from Autoforecast Solutions. Honda is supposed to launch the next generation Civic at its plant in Greensburg, Indiana in January. Toyota will launch the Corolla Cross at its brand new plant in Huntsville, Alabama in September of 2021. That’s the plant Toyota will share with Mazda, and we’d expect Mazda to get a version of this car. And finally Rivian, which was supposed to launch this year, moved Job One for its R1T electric pickup to March next year, and its’ R2R rally raid truck in October of 2022. You heard right, like the kind of truck like they run in the Dakar Rally.
GM’S AUSTRALIA DEALERS DON’T THINK THEY’RE GETTING ENOUGH COMPENSATION
As if General Motors didn’t already have enough problems. It’s been grappling with the virus crisis and getting attacked on Twitter by President Trump, and now its former car dealers in Australia are up in arms. When GM shut down its Holden operations it offered its 187 dealers compensation ranging from $100,000 to $3.2 million depending on the dealership. But some dealers claim to have spent much more than that on new showrooms. General Motors says those dealers could get more money, but it’s dealing with them in private. Nonetheless, the dealers say GM should be paying them five times what it’s offering. It’s estimated that closing down Holden and its dealers will cost GM over $2 billion.
NEW CORVETTE CONVERTIBLE LIKELY DELAYED
Looks like the Corvette Convertible is getting pushed back due to the coronavirus. It was scheduled to go into production in the first quarter of this year, but the plant is closed down right now and when asked about the Convertible, the assembly plant manager said it was too early to tell when they’d start rolling down the line. GM is still trying to figure out when the right time to restart plants will be. So, there’s a good chance there won’t be a 2020 Corvette Convertible. It will likely be a 2021 model. It really hasn’t been a smooth launch for the new Corvette. Remember the Coupe was pushed back by the UAW strike.
FORD CONTINUES TO EXPAND MEDICAL EQUIPMENT MANUFACTURING
Ford gave an update about its collaboration with 3M. The two companies have developed a new powered air-purifying respirator and will begin producing it this week at Ford’s Vreeland facility near Flat Rock, Michigan with paid UAW volunteers. They will be able to produce more than 100,000 respirators but did not provide a timeline. In addition to that, Ford is making face masks for internal use at the company and is seeking certification for medical use. And the automaker is working with airbag supplier Joyson Safety Systems to manufacture reusable gowns out of airbag material. By next week, they’ll be able to produce 100,000 gowns a week.
HYUNDAI CONFIRMS DCT FOR VELOSTER N
Hyundai confirmed an automatic transmission for the Veloster N, which has only been offered with a manual up until this point. It teased the new 8-speed wet dual-clutch unit in an Instagram and YouTube video. It didn’t reveal many more details, but at the beginning of the video there is a light up ‘N’ emblem in the seatback, which is also new.
BENTAYGA HYBRID GETS WORSE HIGHWAY MPG THAN V8
Bentley’s first plug-in hybrid was just rated by the EPA. The Bentayga Hybrid’s all-electric range comes in at 18 miles from its 13 kWh of usable battery space and it’s rated at 17 MPG in the city, 21 on the highway and 19 combined. That’s 3 MPG better in the city compared to the V8 Bentayga, but it’s 2 MPG less on the highway, which is a bit surprising to see. Like we’ve said, all these plug-in hybrid vehicles coming out are about helping automakers meet stricter emission standards and allowing their customers to drive through zero-emission zones.
And hey, don’t forget to join us for Autoline After Hours this Thursday. We’ll be talking with Andre Nitze-Nelson, Head Future Digital Experience at the EV startup BYTON. So join me and Gary Vasilash at 3PM eastern time on Thursday for some of the best insider discussions in the automotive industry.
JLR CEO ASKED TO DELAY RETIREMENT
Jaguar Land Rover’s CEO is being asked to delay his retirement. Earlier this year, Ralf Speth announced he would retire from the British automaker when his contract ran out in September. But that was before the world turned upside down. Now, India’s Tata Group, which owns JLR, is asking Speth to delay his retirement to help it get through the pandemic. Speth hasn’t decided if he will stay on longer but this is another sign that automakers are deeply worried about the economic fallout of the coronavirus.
EUROPEAN CAR PRODUCTION COMING BACK ON
Car production in Europe is gradually coming back online. Audi announced that its engine plant in Hungary has restarted output but only with a single shift. It’s also looking at restarting vehicle production in the country next week. Hyundai is resuming production at a plant in the Czech Republic but with two shifts instead of three. Renault is working on restarting plants in Portugal, Romania and Russia. And Toyota will begin limited production at its plants in France and Poland starting next week. According to Bloomberg Intelligence, car sales in Europe could drop as much as 20% in 2020 due to the coronavirus shutdown, which would cost automakers $66 billion in revenue.
WHAT TESLA WILL USE IN-CABIN CAMERA FOR
The mystery of Tesla’s in-cabin camera in the Model 3 is clearing up. Every Model 3 has a camera, but they’re not being used right now. Well, Elon Musk confirmed that the camera will help support its robo-taxi service, for example, making sure no one trashes your car. Someone was even able to get on the camera’s feed to see what it sees. The camera could also have multiple uses. Elon Musk has hinted it could be used to record in-car karaoke sessions and Tesla’s looking into using it for occupant settings like for the seat or climate control.
SKODA’S LESSER KNOWN SAGITTA PROTOTYPE
Here’s another lesser-known model from Skoda’s history. This is a prototype from around 1936 called the SAGITTA. The automaker was looking to develop a smaller, more affordable car for the masses and this car served as the test bed. They were fitted with an air-cooled, 4-stroke 2-cylinder engine set up in a ‘V’ pattern that made 11 kW or 15 horsepower. The prototypes eventually led to the 995 POPULAR, which was built in 1938.
But that’s it for today, thanks for watching and please join us again tomorrow.
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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.