AD #3558 – Detroit 3 Preparing for a Downturn?; Mercedes Turns to F1 for Help; Japanese OEMs Getting Clobbered in China

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

DETROIT THREE PREPARING FOR A DOWNTURN
What do the car companies know that they’re not telling us? GM, Ford and Stellantis are all slashing costs by $2 billion mainly by cutting employees. Last year Ford cut 3,000 jobs globally. This year Stellantis is going to cut 3,500 blue collar jobs. And General Motors offered buyouts to 5,000 white collar workers, and just got rid of hundreds of contract employees. The question is why? Car sales and profits are going well, so it’s not a reaction to an economic downturn. But maybe that’s what they see coming? After all, inflation is stubbornly high. Gas prices are going back up. The Fed keeps raising interest rates. And an uncomfortable number of banks are going bankrupt. Maybe we’re trying to read too much into this, but it sure looks to us that the Detroit Three see something on the horizon that they don’t like.

JAPANESE OEMS GETTING CLOBBERED IN CHINA
Most foreign automakers have seen sales fall off sharply in China, but that’s especially so for the Japanese. Their sales fell 32% in the first quarter, which Reuters calls a crisis. Toyota was down 14%, but some are doing much worse. Mitsubishi’s sales in China were down 58%, Mazda was down 66%, Nissan 46% and Honda 38%. Analysts say the main reason is that Japanese automakers have been slow to introduce electric cars in a market that is EV crazy and where ICE sales are falling fast. And it’s not just EVs. It’s also digital content and features. Honda’s CEO Toshihiro Mibe told reporters that Chinese automakers are ahead of them in software.

LORDSTOWN ON THE BRINK
EV startup Lordstown Motors warned that it may have to file for bankruptcy. Its biggest investor, Foxconn, claims that Lordstown breached a $170 million investment deal that would allow Foxconn to buy 20% of Lordstown. Foxconn invested over $50 million but it refuses to spend any more because Lordstown’s stock price fell under $1, and it was delisted from the NASDAQ stock exchange. Lordstown says it has until the middle of October to get relisted, but if that doesn’t happen it will probably be forced to file for bankruptcy.

BMW AUTOMATES PAINTING & INSPECTION
BMW is using cameras, artificial intelligence and robots to perfectly paint cars. AI-controlled robots sand, polish, change attachments and switch out sandpaper all on their own. Then cameras track the progress. BMW calls it Automated Surface Inspection, where black and white striped patterns are projected onto the vehicle’s surface, so cameras can scan it and detect any variation. If something is found, data showing the exact shape, size and location of any error is recorded and used as a feedback mechanism. BMW says the robots can’t handle everything because they can’t process the edges of the body or doors. So those areas still need a human touch. Even so, BMW says it saves time and boosts quality.

CORVETTE CLUB BANS HYBRIDS, THEN BACKTRACKS
Is the National Council of Corvette Clubs pushing back against EVs or just trying to be safe? I’ll let you be the judge. Last November the NCCC banned EVs and hybrids that use lithium batteries at its competition events. It mandated that anyone who drove one to an NCCC event had to park it at least 30 feet from any structure or other vehicles. But then Chevrolet unveiled the Corvette E-Ray, a hybrid with a lithium battery. And so the NCCC beat a hasty retreat. It said the ban was all just a big misunderstanding, and that it only applied to fully electric vehicles, not hybrids like the E-Ray. But we think it’s going to have to backtrack again. After all, it’s no secret that a fully electric Corvette is under development. And besides, the National Fire Protection Association says that 284,000 gasoline powered cars catch fire every year, mostly from fluid leaks and frayed wiring.

MERCEDES TURNS TO F1 TEAM FOR HELP
Legacy automakers have to pick up the pace when it comes to bringing new products to the market faster. And Mercedes is turning to its Formula One team for help. That’s how it developed the super efficient EQXX electric concept car that delivers 6 miles of range per kilowatt hour, with a battery pack half the size of the one in the EQS. And they developed that car in only 18 months. Mercedes typically took 58 months or nearly 5 years to develop new cars. Now it’s down to 40 months, and derivative models will be in the low 30-month range. Ford and Audi will get into Formula One in 2026 and General Motors is trying to get in as well. That’s because F1 gives them access to the best engineers in the world, who are experienced in designing software defined cars, developed with digital twins that run on centralized computing systems. As the old saying goes, “racing improves the breed.”

 

GENTEX & ADASKY TEAM UP
The supplier Gentex, which makes rear view mirrors, dimmable glass and lighting technology, is investing in and forming a collaboration with Israeli startup Adasky. Adasky developed low cost thermal cameras that can make ADAS technology and autonomous vehicles safer at night and in bad weather. Gentex, which didn’t reveal how much the investment is worth, will help Adasky bring its technology to market. We’ll also provide a link to an interview we did with Adasky at CES.

WANT A GREAT OFF-ROAD ADVENTURE? THERE’S AN APP FOR THAT
For a long time I’ve wanted to go on an off-road adventure, but to be honest I get intimidated by all the little details, like where do I go, will my vehicle make it and will it have the kinds of trails and scenes I’m looking for? Ford is taking some of the hassle out of planning that off-road journey of a lifetime. It’s launching the Bronco Trail App that features over 1,200 trail maps made by professionals. Users can see points of interest, like a tricky off-road spot or a scenic outlook. They get satellite imagery and topographical maps. The app will even tell users where to adjust their tire pressure to have the best chance of tackling the obstacle ahead. It covers more than 18,000 miles in the U.S., Canada and Mexico, but the only problem is that right now it’s only available to Bronco owners. I wish Ford would open it up to everyone.

GMC INTROS HD OFF-ROAD TRUCKS
Speaking of off-roading, GMC is offering the same off-roading packages that Chevy recently made available for the heavy-duty version of the Silverado. But instead of ZR2 and ZR2 Bison, GMC calls its trims for the Sierra HD, AT4X and Extreme AEV Edition. They come with a lift kit, spool valve dampers, skid plates, locking rear diff and all-terrain tires and more. And also like the Silverado, the GMC off-road trucks feature either a 6.6L gas engine or a 6.6L diesel, which are mated to a 10-speed transmission. GMC says dealer arrivals should start later this fall.

But that brings us to the end of today’s show. Thanks for making Autoline a part of your day.