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Runtime: 10:34
0:00 Auto Industry in A Panic Over Trump Tariffs
1:26 Bosch Sees EBIT Margin Cut in Half
2:15 Continental to Close 4 Plants in Germany
2:34 ACEA Says EU Autos Face Irreparable Damage
3:01 Honda Reorganizes Corporate Structure
4:21 Renault, Volvo Reveal EV Vans
5:24 JLR Posts Record Q4 Margin
6:11 Electric Land Rover Has 57,000 Waitlist
6:36 IIHS Adopts NFL Concussion Metrics
7:43 Ford Back to Le Mans With LMDh Car In 2027
8:16 Ever Hear of EIVs?
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This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.
AUTO INDUSTRY IN A PANIC OVER TRUMP TARIFFS
Things sure are looking tough for the auto industry. Alix Partners published a survey that shows the auto industry is the most disrupted industry in the world right now, more than the media, more than telecommunications, more than consumer goods. And here’s why. Car sales have stalled out in every major market in the world. Interest rates are annoyingly high. Consumers are reeling from high car prices. Automakers are struggling to develop software defined vehicles and centralized compute platforms. Their big investments in EVs haven’t paid off. And Chinese automakers are gobbling up global market share. But those problems could be a walk in the park compared to what could happen tomorrow. President Trump is promising to slap 25% tariffs on imported cars and components and the industry is in a full-blown panic. One supplier CEO predicts that car production in North America will grind to a halt within a week. Could that really happen? Who knows? But if you want to get more details and insights, check out the latest Autoline After Hours. We’re calling it “Countdown to The Tariff Disaster” and it could be an eye-opener for you.
BOSCH SEES EBIT MARGIN CUT IN HALF
And like I said, this is a global problem. Bosch announced that its operating profit fell 33% last year. Its EBIT margin is now down to only 3.5%, half of what it was the year before. Bosch’s problems were largely in Europe, where car sales are millions of units lower than they were before Covid. In North America, Bosch’s automotive component sales actually grew by 5% to $10.7 billion. However, it has multiple plants in Mexico and Canada and they could be severely disrupted by the tariffs. With a profit margin in the low single digits, it would probably be next to impossible for Bosch to absorb the cost of those tariffs and not go into the red.
CONTINENTAL TO CLOSE 4 PLANTS IN GERMANY
Meanwhile, Continental, one of Bosch’s biggest competitors, announced it will close 4 component plants in Germany and downsize two others. That will eliminate 580 jobs, which is part of the company’s overall restructuring efforts to get rid of 7,000 employees.
ACEA SAYS EU AUTOS FACE IRREPARABLE DAMAGE
Yesterday, the ACEA, the lobbying group that represents the auto industry in the European Union, put out a press release practically begging the EU to take, and I quote, “urgent action” to prevent “irreparable damage” to the European auto industry. The ACEA is heavily worried about CO2 emission fines, sluggish EV sales and Chinese automakers who are growing their market share in the European market.
HONDA REORGANIZES CORPORATE STRUCTURE
And over in Japan, it seems like Honda doesn’t exactly like what it sees going on and it’s shaking up the way it does things. Starting on April 1st it’s bringing its EV development operations back into its general business operations. For example, EV and ICE development will be integrated together and controlled by a newly created unit called Automobile Development Operations. Honda expects it to generate new value, technology, and products for the company. Honda’s automotive strategy and SDV development units, which are currently part of its EV business, will also be integrated into its greater Automobile Operations. And it’s doing the same with motorcycles as well. The unit in charge of electrifying its motorcycle fleet will be integrated into its overall Motorcycle and Power Products Operations. Honda believes these moves will allow it to more sustainably offer the products it sells around the world.
RENAULT, VOLVO REVEAL EV VANS
Flexis, a commercial vehicle joint venture between Renault, Volvo and logistics company CMA CGM, revealed three vans it plans to start delivering to customers next year. The Panel, Cargo and Step-in vans are all derived from the same EV skateboard platform and will enter into production at a Renault factory in France in the middle of 2026. While it didn’t share battery pack or motor details, Flexis says the vans will be able to charge to 80% in less than 20 minutes and offer up to 450 kilometers or about 280 miles of range on the WLTP test cycle. The skateboard platform is equipped with a Software Defined Vehicle electronic architecture and will also offer embedded software and services that are tailored to commercial vehicle buyers. Flexis says it already has 10 potential partners signed up in France, the UK and Germany, which could represent demand of up to 15,000 vehicles over 3 years.
JLR POSTS RECORD Q4 MARGIN
Despite a drop in global sales, Jaguar Land Rover posted a 9% operating margin in the fourth quarter, its highest in a decade. Those sales dipped 2.6% to just over 106,000 vehicles in Q4 and the U.S. actually overtook China as the automaker’s number one market. U.S. sales were up 43% to 35,750 vehicles, while sales in China slumped 20% to just under 21,000 units. Even so, unlike its German luxury rivals whose profits have slumped due to falling sales in China, JLR was able to increase its margins thanks to models like the Range Rover, Range Rover Sport and Defender.
ELECTRIC LAND ROVER HAS 57,000 WAITLIST
But Land Rover’s customers aren’t just interested in its gas-powered SUVs. The upcoming electric Range Rover, which goes on sale later this year, now has 57,000 buyers on a waitlist. And that’s up from 48,000 in November. After its first EV, a smaller Range Rover electric will launch in the middle of next year as well.
IIHS ADOPTS NFL CONCUSSION METRICS
The Insurance Institute for Highway Safety or IIHS is integrating a new metric into its crash tests that could help reduce concussions and other brain injuries. It says modern cars do a good job of protecting occupants’ heads but there’s times when the head can whip after striking the airbag hard. Its current metric to evaluate head injuries measures linear impacts, but the test doesn’t capture high-speed rotations that the head and neck can experience in an accident. So, the IIHS is adopting a new evaluation that was developed by the University of Virginia, which is also used by the National Football League to evaluate helmets and the Euro NCAP, which crash tests cars in Europe, adopted it for its ratings in 2022. The IIHS says it’s not ready to add the new test to its scores yet but it will start using it in all crash tests going forward and record the results for its own technical reports. That could lead to automakers making improvements to their airbags.
FORD BACK TO LE MANS WITH LMDh CAR IN 2027
Ford is going back to Le Mans. It announced that Ford Performance will have a full factory team in the WEC racing series in 2027, including a new LMDh race car. As you probably know, Ford has a long history with Le Mans. It famously tried to dethrone Ferrari in the 1960’s, eventually winning four straight overall victories toward the end of that decade. And more recently it had class victories with the Ford GT and Mustang GT3.
EVER HEAR OF EIVs?
You’ve no doubt heard the term ‘New Energy Vehicle’ or NEV that’s used in China for all types of electrified vehicles. But battery maker CATL has a new term to describe electric vehicles, Electric Intelligent Vehicles, or EIVs. While it’s not widely used yet, it’s gaining popularity in China. CATL says that’s because electric vehicles can offer features that aren’t possible in traditional gas-powered cars.
And that brings us to the end of today’s show. Thanks for tuning in and I hope that you have a great weekend.
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Ultimately, it is inevitable that every country will manufacture most of their own cars and trucks with only a smart number of imports from nearby countries. The main reason for this is pollution reduction and cost reduction as people realize how stupid it is to ship a 2 ton or more vehicle half way around the world. More recently, a new reason has been that many countries do not trust their trade partners, especially the US and China. As that mistrust spreads, the about of vehicles traded will drop as well and international OEMs will be forced to split up so that they can be trusted ‘national’ players. Donald Trump is increasingly the pace of this change drastically, but it is still going to happen. Think it through honestly and you will see the logic.
Wow JLR has the highest margin ever! I learned a long time ago that basic accounting tells me if you have no sales with 100% margin you go out of business pretty quickly.
Way to go JLR!
Kevin,
It’s usually more efficient to manufacture things in countries or areas that are the best suited for it, rather than have each country try to do everything on its own.
Glad to see that the crack team at the ACEA is bounding into action to save the EU automakers about four years too late! I assume its staff is made up of very serious industry experts who somehow missed the obvious warning signs of adverse and downright hostile regulations and surging CCP influence. I mean, everyone else not baptized in the EU green orthodoxy saw it happening very clearly somehow. Expert or no. Maybe their ability to apply basic common sense has returned and led to this enlightenment. But at this point, good luck, you’re going to need it.
I’d always heard that large cargo ships are very efficient, so I tried to find out how efficient using google. I found an article saying that mean fuel consumption of roro vessels is 109.3 kg/NM. A little calculation shows that if that roro ship carries 5000 cars, it would take about 29 gallons of fuel per car for the trip from Japan to California. I’ll re-check my calculations, because that sounds too good to be true, but if correct, shipping alone would not be much deterrent to shipping cars all over the world, if the non-fuel costs of operating the ships is not too terrible. An article I found said that fuel was 50-60% of operating cost for ocean shipping, but that was a “generic” number, not for auto shipping.
The factors kevin a made will be a factor, though, in trade between countries.
I’m still hoping to visit an assembly plant, to see how everything works. The Corvette plant would be my first choice,but pretty much any would do.
RESIST! Do not adopt the latest ridiculous nomenclature for electric vehicles, Electric Intelligent Vehicles, or EIVs, it is just as dumb as New Energy Vehicle or NEV, since electric vehicles have been around since the early 1900s. Let all the people who can’t think for themselves use the new term and then you will know who doesn’t have half a brain in their head. And, by the way, ICE vehicles are pretty intelligent themselves, what with all the sensors they employ to cut down on pollution and jack up the nanny state with driver aids. Let’s put an end to mindlessly using terms that have no basis in reality. RESIST!
I’ve visited the Corvette plant and Honda in Marysville. Unfortunately, neither was running at the time, or it would have been more interesting.
I visited Dodge Main when I was about 9 years old. They were running, making ’55 Dodges. Those were the glory days of the US car industry.
Kit, did you visit the Corvette plant in St Louis, MO, or was it after the 80s when they moved to Bowling Green?
Ukendoit, I visited the Corvette plant at Bowling Green, during the C6 and Cadillac XLR era, I think in 2005 or 2006.