AD #2837 – Paying Dividends Puts Automakers at Risk; Kia Developing 800-Volt EVs; VW Atlas Cross Sport Impressions

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

GERMAN OEMs PAY BILLIONS IN SHAREHOLDER DIVIDENDS
We start out today in Germany where a lot of people are angry with the auto industry. Volkswagen, BMW, Daimler and suppliers like Continental are going to collectively pay out €5 billion in dividends to shareholders, at the same time they’re slashing the hours and pay of their employees and are asking the German government for economic stimulus for car sales.

PSA & FCA SCRAP DIVIDEND
Meanwhile, in France, PSA and FCA agreed to get rid of the billion dollar dividend that each was going to pay to its shareholders as part of their agreement to merge. FCA was also supposed to pay a €5 billion special dividend to its shareholders, but that payment seems to be in limbo. FCA burned through €5 billion of its cash hoard in the first quarter this year as car sales plunged due to the pandemic.

PAYING DIVIDENDS PUTS AUTOMAKERS AT RISK
Here’s our Autoline Insight. Any automaker or supplier that is paying dividends at a time when the auto industry is crashing worldwide doesn’t know how to manage for a crisis. In times like these you want to slash spending and hoard all the cash you can. We don’t know how this pandemic is going to evolve, and with the future so uncertain, corporate executives and their boards of directors are putting the future of their companies at risk. Even though they want to help out shareholders who have seen their investment plummet in value, they’re taking an undue risk in shoveling so much cash out the door. You may have a different view and that’s what the comments section is for.

HEAVY-DUTY TRUCK SALES PLUNGE IN APRIL
Just to put an exclamation point on this, U.S. heavy-duty truck sales took a heavy hit in April. They didn’t drop as much as the light-duty market, but sales of big trucks were down 41% compared to last year and were at their lowest level since 2011. Class 6 and 8 trucks were hit the hardests, down 66.4% and 49.4%, respectively. The only Class that did not see a double digit drop was Class 5 trucks, which were up 5.5% thanks to a big sales jump from Freightliner. Through the first quarter of the year, heavy-duty truck sales are down 23% compared to 2019.

SAFETY SYSTEMS HAVE CONFUSING NAMES
Car companies are adding advanced driver assistance systems across their model lines. But they’re also dreaming up their own marketing names for these safety systems and that’s confusing a lot of consumers. That’s why AAA, Consumer Reports, JD Power, the National Safety Council and SAE International teamed up to recommend common names for ADAS technologies. They’ve broken the systems into several categories: Collision Warning, Collision Intervention, Driving Control Assistance, Parking Assistance and Other Driver Assistance Systems. They want to make it clearer that the systems are meant to assist and not replace the driver. These names are based on system functionality, instead of all the different terminology automakers are using for marketing reasons.

LAMBO OFFERS 1ST COLLECTABLE DIGITAL STAMP
Have you ever heard of digital stamp collecting? Neither had we, but Lamborghini partnered with Bitstamps to offer its very first digital collector’s stamp, which comes with a picture of the new Huracan EVO Spyder. Each stamp is a single digital object. Its history and uniqueness are guaranteed by Blockchain technology. The stamps can be purchased, collected, or resold like a paper stamp. Lamborghini will issue 20,000 of these stamps that can be purchased by downloading the Bitstamps app.

FINN SCOOTER IS A MOTORCYCLE GOLF CART
We’ve never seen a golf cart cooler than Bubba Watson’s hovercraft, but this golf cart might be in 2nd place. The Finn Scooter is an electric, golf-bag-carrying motorcycle. It’s said to be easier to ride than a bicycle, can travel up 15 MPH with the twist of a thumb lever on the handlebar and even has its own kickstand with a golf club head on the end. I’m sure the real question everyone is wondering is price. A Finn Scooter is $3,500, which compares to about $5,000 to $7,000 for a new electric golf cart. The company says not only is the Finn more fun than a golf cart but it can save up to seven and a half minutes per hole because each golfer is driving to their own ball. And because the cart only carries one person, you can maintain social distancing as you hook into a sand trap or slice into the rough.

PORSCHE GOING DIGITAL FOR 911 REVEALS
Due to the ban on global events, Porsche is going to hold its first new model unveiling on its web TV channel. Two new Porsche 911 models will be detailed over three episodes that start on Monday the 18th. Experts will provide insight into special technical features, historical backgrounds and design of the models.

SCISSOR DOOR KIT FOR NEW CORVETTE
The Chevrolet Corvette is more supercar than ever before, but it’s missing one classic supercar feature… scissor doors. Eikon Motorsports is charging to the rescue with its Lambo Door Kit for the new C8. It comes with two gas shocks, two scissor door hinges and all the mounting hardware. The kit can be pre-ordered now for $3,000, which includes installation.

HYUNDAI’S IDEAS FOR VEHICLE SANITATION
Making sure vehicle interiors are sanitized is more important than ever. So Hyundai is exploring different ways to keep the inside of your car clean. One solution is detachable seat covers that can be easily removed with a zipper or Velcro. But it’s also experimenting with ultraviolet light, located in the dome light, to sterilize seats, the steering wheel and dashboard. UV light is already used in subways and hospital operating rooms to disinfect areas. But certain UV wavelengths can pose a health risk, so it would only be used when no one is in the vehicle.

KIA WILL MAKE 800-VOLT EVs
One complaint about electric cars is how long it takes to charge one. So Kia is developing an 800-volt charging system for its electric vehicles. Currently the only car from a large automaker that uses 800V technology is the Porsche Taycan. Kia says it will provide charging times below 20 minutes. But for those that don’t want to spend the money for an 800V system, it will also offer a 400V version. Kia will introduce the technology in its next-gen EVs in Europe starting in 2021. It didn’t reveal what models will get the system but they’ll be built on a new EV specific platform.

VOLKSWAGEN ATLAS CROSS SPORT IMPRESSIONS
Volkswagen has struggled for years in the U.S. market. It once dominated sales of imported cars, but that was way back in the days of the Beetle. Since then it has never figured out how to get Americans to buy Volkswagens like they used to. But maybe that’s starting to change. It finally has a full size, 7-passenger, SUV in its line up, and it didn’t give it some weirdo name that sounds goofy to American ears. They call it the Atlas, and last month it was the second best selling model in the lineup, second only to the Tiguan, a CUV.

To extend the model line, Volkswagen recently added a 5-passenger version, the Atlas Cross Sport, that is 5 inches shorter and 148 pounds lighter than the 7-passenger version. You can easily tell the two models apart because the Cross Sport has a forward leaning D-pillar and much faster backlite.

VW offers two engines, a 3.6 liter V6, and a 2-liter turbo four with 235 horsepower and 258 pound feet of torque. That’s the engine I got to test drive in a SE model with an 8-speed automatic.

VW finally understood that if it wanted to sell SUVs to Americans that it had to be big, especially inside. Its last effort, the Touareg, was a bulky, heavy vehicle that wasn’t very roomy, was really expensive and had one of those weirdo names. Fortunately the Atlas Cross Sport feels as wide as the Mississippi, has headroom as tall as the Rockies and it feels like you can stretch your legs out the length of Montana. This is exactly the package that will appeal to a lot of American families.

It’s an easy vehicle to drive, with the engine producing decent acceleration. It’s a bit loud under heavy acceleration, but certainly not annoying. VW engineers did a nice job calibrating the ride. It’s quite supple on rough pavement, something that’s not easy to do in all-wheel-drive vehicles with big 20-inch wheels like this one had. I did feel that it had a bit too much wind noise at highway speeds that seemed to be coming from the rearview mirrors.

The EPA rates this at 20 miles to the gallon which is pretty unimpressive for a 4-cylinder engine. NHTSA hasn’t given it a safety rating yet, but the 7-passenger Atlas gets a 5-star rating and there’s no reason why the Cross Sport shouldn’t get the same. The model I drove cost just over $40,000 including destination charges.
So here’s my bottom line. It’s a good vehicle but doesn’t have any outstanding features. It will primarily appeal to people who want a SUV but don’t want to be driving what everyone else has. And they will be completely satisfied with the Atlas Cross Sport .

President Trump praised Elon Musk for defying local health officials in California and reopening Tesla’s assembly plant there. Is Mr. Musk, really that fed up with California, or is this part of a greater marketing plan? That’s going to be one of the topics we dive into today on Autoline After Hours. We’ll be going live at 3 pm eastern time, and the consultant Paul Eichenberg and Jamie Butters from Automotive News will be on the show, so join me and Gary for some of the best analysis of what’s going on in the automotive industry.

And that wraps up this show, thanks for watching.