AD #3830 – Justice Dept Investigates UAW’s Shawn Fain; Japan OEMs Losing S.E. Asia to China; BYD Breaks Into Top 10 Global Automakers

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

JUSTICE DEPT. INVESTIGATES UAW’S SHAWN FAIN
Just when we thought the UAW’s legal problems were behind it, the U.S. Justice Department opened an investigation into UAW president Shawn Fain. A court-appointed watchdog for the Justice Department alleges that Fain is obstructing and interfering with an investigation into infighting amongst the top leaders in the union. Fain is tangling with the Secretary-Treasurer of the union, who’s authority he has stripped away. And he demoted Rich Boyer, the Vice President of the union who represents Stellantis workers. Boyer says that was in retaliation for him refusing to engage in financial misconduct that Fain was demanding. Worse, the watchdog opened a separate investigation into embezzlement charges against a top union official, who remains unnamed for now. Anti-union factions will undoubtedly pounce on these allegations as the UAW turns its attention to organize Toyota and Hyundai plants in Alabama, after a stinging defeat at the Mercedes-Benz plant in the state.

TURKEY SLAPS 40% TARIFF ON CHINESE CARS
The U.S. slapped a 100% tariff on Chinese made EVs. The EU is expected to hit them with a 30% tariff. And now it’s Turkey’s turn. It just slapped an extra 40% tariff on all cars imported from China, with the minimum amount being $7,000 per vehicle. Turkey says it’s doing this to protect its domestic auto industry and reduce its trade deficit. We think it’s likely that most countries with an auto industry will raise tariffs to protect what they’ve got. And there is at least one domestic EV maker. Togg is a Turkish car company that started selling EVs last year.

JAPAN OEMS LOSING S.E. ASIA TO CHINA
Japanese automakers have dominated the market in Southeast Asia for years. Only a decade ago they held 84% market share. But Chinese automakers are starting to elbow them out of the way, particularly with inexpensive electric cars. Last year Japanese automakers saw their market share fall to 80%. In some countries, like Thailand, it fell much faster, losing 7.6 percentage points of share last year alone. And the Chinese are just getting started. BYD now has 300 dealerships in Southeast Asia, with the newest one opening yesterday in Thailand. And Last week Zeekr announced it will start selling cars in Malaysia and Indonesia. The Southeast Asian market is an important part of the global automotive industry. Last year Thailand, Indonesia, Malaysia, Vietnam, the Philippines and Myanmar collectively built 4.5 million vehicles. With a combined population of 670 million, the region has nearly twice as many people as the United States. Up to now Toyota, Honda, Daihatsu, Isuzu and Mitsubishi have dominated the market. But they’re likely to lose a significant part of that.

RUSSIA BUYS MOST OF CHINA’S CAR EXPORTS
With most major automakers ditching the Russian market after the invasion of Ukraine, Chinese companies stepped in to fill that void, mainly with ICE vehicles. Bloomberg estimates that since 2021, 58% of the increase in China’s ICE exports went to Russia. According to Autostat.ru, BEVs only accounted for 1.3% of sales last year in Russia, while ICE vehicle share actually increased from 91% to 93%. While Russia’s Lada brand is still number one in the country with 30% market share, the next six-largest automakers in 2023 were from China and they have a combined 43% market share.

CHINESE OEMS RACE TO BEAT TESLA FSD
Last week we reported that a couple of Chinese automakers were given approval to test Level 3 autonomous systems on roads in their home market. And then shortly after that, 7 more brands got the go-ahead to participate in a pilot program that will allow them to deploy advanced driver assistance and automated technology. But Bloomberg reports all this action in China was spurred on by Tesla’s efforts to launch FSD in the country, which is expected to happen before the end of the year. And it’s easy to see why they all want to come out with the tech. Money. Tesla is already charging $8,800 for FSD in China, even though it’s not out yet. It did the same thing in the U.S. – take orders before launching the tech to everyone – but it is also $800 more than what Tesla charges for FSD in North America. A monthly fee, like the $99 subscription it has in the U.S., will probably be offered as well. And Bloomberg reports other companies like Great Wall and Huawei are charging anywhere from $1,100 to about $5,000 extra for their advanced driver assistance systems. But we don’t know how capable their tech is compared to FSD, so the difference in price could be because they just can’t do as much. However, we have seen video from Chinese company Momenta of its system navigating some pretty complex driving situations. Mercedes has already joined on as a partner with Momenta and we expect to see a lot more partnerships as some automakers try to catch up to others. We should find out who the AV leaders are in China pretty quick.

HYUNDAI TEASES COMPACT EV
Will this be Hyundai’s entry into the affordable EV segment? It’s an all-electric compact EV that fits into the A-Class of cars, called the INSTER, which is a mash up of “intimate” and “innovative” as well as an evolution of CASPER, a name it uses for one of its other cars. Hyundai says it has a WLTP estimated range of 355 kilometers or about 220 miles and will debut at the Busan auto show in Korea later this month.

BYD BREAKS INTO TOP 10 GLOBAL AUTOMAKERS
We saw a historical milestone reached in the industry last year. For the first time ever, a Chinese automaker broke into the ranks of the top ten automakers in the world. BYD, which built 3 million vehicles last year, came in 9th place, and pushed Mercedes-Benz off the top ten list. This year BYD will almost certainly move up another slot into 8th place, pushing past Nissan. These are some of the insights we gained from the Autoline Industry Report Card, and you can get access to all the raw data for your own analysis. Check out the Merchandise section of the Autoline website, where you can buy a copy for only $45. It also has data that was not available in the video we posted that can provide you with even more insight. In all, we logged about 40-50 hours to put the report card together, so hopefully you think it’s worth that price.

HOW BMW AVOIDED SOFTWARE GLITCHES
Is BMW’s iDrive system the reason it hasn’t had software issues like GM, the Volkswagen Group and Volvo? A BMW exec that spoke with Automotive New Europe, credits the company’s history of developing its own software, like for its user interface system, for helping it to avoid problems. Now BMW is adding even more tasks and capabilities to its software development, but says it won’t do everything in-house, so it can offer the best services and products to its customers. Again, it’s all about money. Just like Tesla and all those Chinese automakers with FSD. Everyone is doing it or aiming to. They think you pay for on-demand streaming on top of a TV, audio services on your phone and add extra storage. So, why not your car too, right?

OEMs IGNORE SOUTH AFRICAN EV PUSH
South Africa wants to boost production of electric and hydrogen powered vehicles in the country. But it can’t find any takers. Earlier this year, it offered automakers a 150% tax deduction to build EV plants. But even though at least 6 major automakers have manufacturing facilities there, none of them went for the bait. Volkswagen and Isuzu say they aren’t interested. That’s because only 7,700 electrified vehicles were sold in South Africa last year and 85% of them were hybrids. So automakers will focus on selling ICE vehicles locally and to other African countries. Isuzu says it expects ICE vehicles to dominate the African market for the next 20 to 50 years.

But that brings us to the end of today’s show. Thanks for tuning in.