AD #3899 – Stellantis Looking for Replacement CEO; Kia Launching Commercial Vans in Japan; Chinese Exports Likely to Grow More

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

STELLA LOOKING FOR TAVARES REPLACEMENT
In a surprising revelation, the chairman of Stellantis, John Elkann, admitted that the company is looking for a replacement for its CEO, Carlos Tavares. Tavares has come under public fire from the Italian government, the UAW and the company’s U.S. dealer base. Sales and profits have dropped sharply this year, and the stock price is down 33% since January. Stellantis said it’s normal for a company to start looking for a CEO replacement well before that CEO’s contract expires. And that’s true. All major corporations always have contingency plans to replace senior executives just in case something happens, or as part of the normal rotation through the executives suites. But it’s highly unusual for a company to go out and publicly announce it’s searching for a new CEO nearly 16 months before his contract expires. Here’s our Autoline Insight. This announcement is going to put enormous pressure on Tavares to get things turned around, or his contract won’t be renewed. And it’s a signal to the U.S. dealers, the UAW, the Italian government and shareholders, that the board of directors is aware of their dissatisfaction and is ready to make changes.

STELLA FIRES BACK AT UAW
Speaking of Stellantis, it’s pushing back against the UAW, which is threatening to strike the company for allegedly failing to live up to its labor agreement. Stellantis is delaying plans to open its Belvidere assembly plant, it’s eliminating a shift at its Warren Truck Plant, and it’s planning to move production of the Dodge Durango out of Detroit and probably to Windsor, Canada. But Stellantis says it’s free to make these moves because it signed a side letter to the labor contract that allows it to take market conditions into account when deciding where to locate production and how to run its plants. We think that if the union does go on strike for contract violations, the first thing the company will do is run to the courts to get an injunction to stop the strike. And that side letter may give Stellantis all the power it needs.

VW EXPECTS “SIGNIFICANT” UNION CONCESSIONS
But it isn’t the only automaker with union problems. Oliver Blume, the CEO of Volkswagen, says he expects significant concessions from German labor unions. VW is entering negotiations to close at least two assembly plants in Germany and is looking for significant head-count reduction. But the unions say that closing plants is out of the question, and they’re going to resist any layoffs. And so this could get ugly. VW desperately needs to cut costs, while the unions are in no mood to compromise.

 

BUICK REVEALS FUTURE VAN CONCEPT
It took 25 years to do it, but Buick says it’s the first automaker in China to make 2 million premium vans. The GL8 was introduced in 1999 and the milestone example, the all-new plug-in hybrid version that debuted in April, just rolled off the assembly line. To also help celebrate the occasion, Buick revealed a new future van concept called the Organic Mobile Private Villa or OMPV for short. There’s only this one picture but it says it will have adjustable lighting and amenities as well as a transformable interior that sounds like it will take advantage of reconfigurable seating.

AUTOMAKERS COULD HAVE TO STOP SOME CHINESE IMPORTS
I really like all the wild designs and cool tech you can get in these Chinese vans, like the GL8. But it’s a Buick that will probably never make it to its home market because of the U.S.’s new rules on Chinese EVs and technology, which will essentially ban all vehicles made in China. And that’s not just limited to premium vans. A U.S. Commerce Department official said they anticipate that any vehicle that is manufactured in China and sold in the U.S. would be prohibited from entering the market. That means GM, Ford, Polestar and Volvo could have to stop importing the Buick Envision, Lincoln Nautilus and S90 sedan. The official says that the automakers are aware of this, but they are allowed to apply for special authorization to sell the models. We expect GM, Ford, Polestar and Volvo to do that, but it’s unclear how strict the Commerce Department will be.

CHINESE EXPORTS LIKELY TO RISE EVEN MORE
Despite being blocked from the U.S. Chinese automakers continue to increase their number of exports. Through the first 8 months of the year nearly 4.1 million vehicles have been exported from China, which is an increase of 27%. Russia was number 1 with over 705,000 Chinese vehicles entering its borders, followed by Mexico with more than 323,000 imports and then the UAE at roughly 203,000 vehicles. We can only expect these numbers to grow with automakers like BYD adding even more car hauling ships to their fleets. It’s about to launch the second, which can carry 7,000 cars, of seven ships that it plans to deploy in the next two years.

TOYOTA BUYS BACK HUGE AMOUNT OF STOCK
Toyota is buying back a huge amount of its stock. It already repurchased $8.3 billion worth of its stock or nearly 4% of its shares. Even so, its stock is up only 1% even though its raking in record profits. The stock buyback is part of the company’s effort to loosen up cross shareholdings with banks and insurance companies. The Japanese government is pushing large corporations like Toyota to unwind partnerships, which will allow them to concentrate on their core business and make decisions faster.

GREAT WALL DEVELOPS ITS OWN CHIPS
Western automakers are lagging behind China when it comes to smart car technology, but Great Wall Motors may have come up with a solution to help merge U.S. and European systems with Chinese tech. It says it independently developed a new automotive grade software chip that uses an open-source architecture to define the interaction between hardware and software. So, despite being behind China, the Chairman of Great Wall says “relying on open source architecture can lessen the restriction by European and American technologies and ensure the possibility of architecture expansion.”

KIA LAUNCHING COMMERCIAL VANS IN JAPAN
With the exception of luxury brands, foreign automakers have had limited success in Japan. So the Hyundai Group is taking a different approach. Instead of selling passenger vehicles, it’s jumping into the commercial segment. Kia announced that it will start offering its Platform Beyond Vehicle or PBV vans in Japan starting in 2026. The mid-size PV5 will be the first to launch, followed by the PV7 and other models and variants. The electric vans are based on a software defined platform and they’re customizable based on the customer’s needs. We’ll be interested to see if Kia is able to have any success selling commercial vehicles in Japan.

VW PARTNERS WITH GOOGLE ON GEN-AI
Volkswagen is partnering with Google to integrate generative-AI into the automaker’s mobile app. The feature is now available to all 2024 model year Atlas and Atlas Cross Sport owners in the U.S. through the myVW app. Drivers can use the AI Virtual Assistant to answer questions about the vehicle or even provide info about warning lights by pointing a smartphone camera them. VW says the new AI powered virtual assistant will roll out to most model year 2020 and newer vehicles starting next year.

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