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Runtime: 8:49
0:00 China’s EV Sales Slow Dramatically
1:04 UAW Wants Higher Tariffs on Chinese Cars
1:56 Weak Yen Turbocharges Japan’s Profits
3:17 Ford Ditching Automated Parallel Parking
4:25 Renault Teases All-New Compact SUV
4:53 SUVs More Popular Than Ever in Europe
5:43 Peugeot Boosts Worldwide Sales in 2023
6:04 Stellantis Picks Up Market Share in Europe
6:35 Lancia Gets 1st New Model in 13 Years
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CHINA EV SALES SLOW DRAMATICALLY
EV sales in China slowed dramatically last month. While they were up on a year-over-year basis, they fell more than 46% compared to December. The entire New Energy Vehicle sector, which included PHEVs, was down almost 39%, month-over-month. In fact, NEVs lost 8 percentage points of market share in the overall Chinese market, including Tesla who lost nearly a point of share. Even exports of NEVs were down 7%. Over 40 brands have cut prices in China to stay competitive, and this drop in sales will likely increase the pressure to cut prices even more. The growth in EV sales has also slowed in the US and Europe, and we’ll need to see if the drop in China is just a blip, or a sign that the EV market is starting to plateau.
UAW WANTS HIGHER TARIFFS ON CHINESE CARS
The UAW is worried about Chinese car companies coming into the U.S. market via Mexico as a way to avoid U.S. import tariffs. Vehicles imported from China are slapped with a 27.5% tariff but vehicles imported from Mexico are only hit with a 2.5% tariff. So the UAW is calling on the Biden Administration to raise tariffs on vehicles and parts because it says the current tariff isn’t strict enough to force companies to comply with the U.S.-Mexico-Canada trade agreement, the USMCA. The Office of the U.S. Trade Representative and the Interagency Committee on Trade in Automotive Goods is currently reviewing the USMCA and is expected to submit its results to Congress by July 1st.
WEAK YEN TURBOCHARGES JAPAN’S PROFITS
Japanese automakers are reporting their latest financial earnings and they must be popping champagne in Tokyo. Toyota expects to post an operating profit of $33 billion for its fiscal year, which is 9% better than it originally forecast. Honda expects to post an $8.4 billion profit, 4% higher than expected. Subaru saw profits shoot up 79% in the last quarter and says this will be its best fiscal year ever. And even though Nissan’s profits were lower than analysts expected last quarter, they were up 6%. While anti-EV critics say the Japanese are doing so well because they haven’t invested heavily in electric vehicles, there’s really two other reasons. First, car sales are up as the industry recovers from the chip shortage. But the big reason is that the Japanese yen has weakened so much. It’s down 30% over the last three years versus the U.S. dollar and down 14% in the last year alone. The Bank of Japan actually has negative interest rates, which makes holding onto the yen extremely undesirable, and that weakness is turbocharging the earnings at most Japanese companies.
FORD DITCHES AUTOMATED PARALLEL PARKING
During its earnings call earlier this week, Ford revealed that it expects to save $2 billion this year through lower freight costs, manufacturing improvements and more efficient designs. Ford COO Kumar Galhotra shared some of those examples. For one of its vehicle lines, the company is using aero shields for fuel economy and engineers came up with a way to achieve the same aero and save $40 per vehicle, which is equivalent to $10 million a year. The company is also ditching an automated parallel parking feature because its connected vehicle data shows that very few customers are using it. That will save Ford $60 per vehicle or another $10 million a year.
RENAULT TEASES ALL-NEW COMPACT SUV
Renault teased an all-new compact family SUV that it’s going to launch this spring, called the Symbioz. Slotting just below the Austral SUV, the Symbioz will offer a strong hybrid powertrain setup with a 145 horsepower engine. And the only other information it’s releasing right now is that the Symbioz will feature a new-generation glass roof, which can automatically change the level of tint.
SUVs MORE POPULAR THAN EVER IN EUROPE
Even though Paris voted to triple parking fees for SUVs earlier this week, they’re becoming more and more popular in Europe. For the first time ever, SUVs were the number one body style last year, accounting for 51% of sales. More than 6.6 million SUVs were sold in 2023, a 19% gain from the year before. And that outpaced the overall European car market, which was up 14%. The Tesla Model Y was the best-selling vehicle last year and EVs overall are helping to grow the SUV segment. BEVs accounted for 48% of premium mid-size SUV sales and 47% of mass market midsize SUV sales.
PEUGEOT BOOSTS WORLDWIDE SALES IN 2023
Peugeot had a good sales year in 2023. Worldwide it registered more than 1.1 million vehicles, an increase of 6% compared to 2022. We’re also getting an idea of its electrification efforts. In Europe, BEVs and PHEVs made up 18% of its sales last year.
STELLANTIS INCREASES MARKET SHARE IN EUROPE
And the Stellantis group as a whole is continuing that momentum into 2024. Without citing specific numbers, Stellantis says in January it increased its sales in Europe by over 17.5% compared to last year, which increased its market share by almost a full percentage point. Its EV sales are also growing in Europe with volumes up 20% and the company expects to double its all-electric model offering in Europe by the end of the year.
LANCIA’S 1ST NEW MODEL IN 13 YEARS
And in one more bit of Stellantis news, it’s finally throwing a bone to Lancia. The brand is getting its first new model in over a decade. It’s an all-new version of the Ypsilon, which is the only model in its lineup. The current version, the third-generation of the car, came out in 2011 and has had two facelifts in its time. While the all-new 4th-gen is still compact in size, it looks more like a crossover and rides on a platform that’s new to Lancia. Called Common Modular Platform, it was jointly developed with Stellantis’ Chinese joint venture partner Dongfeng and is used for other models like the Fiat 600e and Jeep Avenger. It allows for a mixed powertrain setup, but Lancia is only showing off an all-electric version right now. It’s a limited edition example of the new Ypsilon that will be held to just over 1900 units. We don’t know the battery size, but the WLTP range is 394-403 kilometers or 244-250 miles. We also don’t know when it will go on sale, but Lancia is going to hold a livestream for the new Ypsilon on Valentines Day.
Say, what’s this talk about Ford doing a low cost EV? Did Kyle Vogt lie to Mary Barra about what was going on a GM Cruise? Will China enter the US market through Mexico? Plus, with the slowdown in EV sales, are PHEVs going to look a lot more attractive? Those are some of the topics we’ll be getting into on Autoline After Hours later today. We’ll have Michael Robinet from S&P Global, Tu Le from Sino Auto Insights and David Welch from Bloomberg coming on, so don’t miss out.
But that brings us to the end of this show. Thanks for tuning in.
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Can companies just ship vehicles to Mexico from China, then ship them to the US by truck or rail, and pay only 2.5% tariff? If so, I’m surprised GM and Ford aren’t doing that with Envision and Nautilus.
I guess I don’t understand how tariffs work as I would think it was based on country or origin and not border crossing. Shouldn’t matter if they bring them in through Mexico if they were manufactured in China, they should be subject to the tariff on Chinese products. Doesn’t seem like it should require any changes to the NAFT agreement.
Sean will probably clear this up but I would think if a Chinese manufacturer ships the cars not fully assembled and then completes the assembly in Mexico – boom, it’s Mexican.
SUVs are more popular because they are the modern sedan. You know the saying, “what goes around comes around”! Well, we are back to the higher seated position of the early cars like 1900 through 1940s. The sedan as of the 1950’s and 60s still sat fairly high by today’s standards but cars just kept getting lower and lower as aerodynamics came into play. Now its evolving back as people like the higher seated position and easier egress. The low-slung sedan is about as popular as a 2 door anymore. Gone right alongside the 9 ft long rear fenders and the trunk that could fit your 72″ TV.
Just maybe the industry is beginning to think that there is a market for lower priced EV’s. Perhaps GM and Ford in particular are taking a look at what Hyundai/Kia is doing. Also Tesla I suspect that it will be making an announcement that it will have a lower priced EV but nobody will believe Elon as to when it’s coming.
Chinese transplants in Mexico?
https://www.businessinsider.com/chinese-ev-companies-byd-mg-plan-factories-mexico-washington-concern-2023-12
The Chinese may ship knocked down car kits and assemble them in Mexico. I’d expect this wouldn’t fly because of the country of origin rules.
The UAW may be worrying unnecessarily (or not). They’ve burned a lot of bridges with the OEMs and none of them are going to help them now.
lambo, 1950s’ and 1960s’ cars were NOT high compared to today’s cars. A 1965 Chevy Impala was 1.5 inches lower than a current Camry or Accord. A ’55 Chevy was only 2 inches taller.
https://www.conceptcarz.com/s1644/chevrolet-impala-series.aspx
Yes, 1930s’ cars were closer to the height of today’s SUVs. A 1935 Ford was only 5 inches less tall than a current Explorer.
https://www.conceptcarz.com/s11900/ford-model-48-eight.aspx
Shouldn’t it just be easy to attach the higher tariff to cars by their origin, no transfer by point of entry. They could also require a ‘percentage of assembly’ clause to avoid the loophole of exclusion by country. They could also impose the tariff by ownership of the brand.
So, China’s BEV sales are declining, so also, North America; still increasing in Europe (yep, mandated).
Kit I was thinking more along the lines of a 55-57 Chevy. They 4 inches taller than the Impala.
Yeah the 60s really started the drop in height.
A 1955 Chevy is 2 inches taller than a current Camry or Accord. Early 50s cars were taller. A 1950 Chevy was only an inch lower than a CR-V, and is ~9 inches taller than the Cam/Cord.
If the Chinese OEMs ship knock down kits to be assembled in Mexico and then shipped to the US, they would be following a familiar path that has worked for many manufacturers in many different markets. Depending upon the specific rules of the mildly updated Trump NAFTA agreement, they may then qualify for the 2.5% tariff. However, they would still not qualify for the EV tax credit due to the origin of their parts. But saving more than 20% in tariff would make them formidable competition. Hence the alarm bells at the UAW.
I think car height isn’t the issue, it’s seat height. Isn’t there a name for the height of the point where the driver’s hips bend?
Chinese cars with a missing lug nut can be “assembled” in Mexico.
Ford’s game of de-contenting cars for cost savings is a very tricky one. If consumers choose to pay for park assist and don’t take advantage of it, perhaps it’s because it’s not as easy to use. What’s next, making trucks with lower capability because people usually only haul air? Most importantly, it’s obvious they will also be rewarding penny pinching throughout the company in areas that impact quality.
Albemarle, you are correct. Its called the Hip Point or H Point. It offers a driver height comparison point between different vehicles, regardless of the overall vehicle height.
Does anyone think Ford will lower the price of the vehicles that it deletes the parking feature from?
Chinese vehicles through Mexico: as Albemarle mentioned (and maybe additional posters) I believe that the USMCA treaty stipulates that 75% of all components have to from one of the three countries. Under NAFTA that percentage was 62.5%.
The percentage US/Mexico/Canada content should keep Chinese cars from just “passing through” Mexico to avoid the tariff.
I’ve heard the term “H point.” Based on what I remember, it’s probably within a couple inches of the same between a current CamCord, and a mid-50s to mid-80s sedan, or wagon back when you could buy a wagon. Of course, it’s adjustable if you have power seats, and on some cars with manual seats. I think manual seat height adjustment was rare, though, in ’50s and ’60s cars, except some Europeans.
I just found that my Chevy Celebrity wagon was ~3 inches less tall than a current CamCord, so the H point was probably lower. I don’t remember the head room being especially limited, as would be the case with a high H point.
I do not like any passenger cars made today. None of them. Ingress/egress is horrible. This is due to the roof height and the use of airbags above the door frame. They do not want to make the roof taller to fit the air bags because it would lower the fuel economy, so they just squeeze the door opening downward. For taller torso drivers, you have to bend your neck and scrape your head to get into a modern sedan. Who wants to do that every single day? This issue does not happen in the taller roof heights of most SUVs, Minivans, and trucks which also have side curtain airbags. So that is where my go to vehicles are. I do not even like those types of vehicles, but I can get in and out of them without banging my head on the door frame, so that is where it is at for the moment.
I would prefer a sedan as a daily driver, but it is not looking like that will ever be in the cards for me as none on the market have the door opening height needed and there is zero interest by the OEMs to ever correct that.
I’d like the chance to get in and out of a ’65 Impala and ’86 Celebrity and see if they are much easier to get in and out of than, say, the ’23 Mini I have now, which is easy enough to get in and out of, and I’m 77 years old. My Mini is the 2-door hatch, not the Countryman, that similar to a BMW X1. I had an ’18 Camry for about 4 years, and that didn’t seem hard to get in and out of.
I certainly agree that a Corvette or Porsche Cayman are not easy to get in and out of, especially since I am fanatical about not dragging my feet on the sill or door panel, but a Camry hard to get in and out of? I don’t see it.
just more japanese currency manipulation. will they ever compete fairly?????? hell no.