AD #4181 – Audi To Develop SUV On Scout Platform; UAW Monitor Criticizes Fain’s Leadership; Chinese Car Exports to Russia Plummet

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

UAW MONITOR CRITICIZES FAIN’S LEADERSHIP
The court-appointed watchdog overseeing the UAW just issued another report that’s highly critical of President Shawn Fain’s leadership as well as the Union’s culture. That watchdog was put in place to monitor the UAW after a corruption scandal sent several union officials to prison. While it has made some progress, the watchdog accuses Fain of fostering “a toxic culture of division and retaliation.” He warns that if the culture isn’t reformed that “it is only a matter of time before abuse and corruption creep back into the union.” As of this writing, the UAW hasn’t responded to the new report. But the same watchdog issued a similar report back in June, so it doesn’t seem like enough has changed yet.

FORD SHOWS OFF NEW GLOBAL HEADQUARTERS
Ford opened the doors to its new headquarters in Dearborn, Michigan and we think it’s a place where most people would like to work. There really are no offices, just lots of open work spaces with comfortable chairs and tables. Instead of long, straight hallways, the walkways flow and bend throughout the building, taking you through different departments. There’s a food court with 8 different kitchens with chefs cooking up meals from scratch. And you can grab a pizza or whole chicken on your way home if you don’t have time to make dinner. In many ways, the new HQ is the polar opposite of the old one. It was a mid-century glass box that was designed for a top down, command and control style of management. The new headquarters is designed to encourage a lot more collaboration from different departments across the company, which could lead to new products getting developed a lot more quickly. In fact, this new HQ was literally designed to change the culture of the company.

 

AUDI TO DEVELOP SUV ON SCOUT PLATFORM
A report last week that the VW Group is running out of cash had us wondering if Scout could be in trouble. But here’s something that should help keep the program moving forward. Audi’s CEO says the brand is planning to develop a large SUV for the U.S. market that will be built off the Scout platform, which itself will be heavily influenced by VW and Rivian’s partnership. It’s said the Audi model will have the range extended electric powertrain and could rival something like the Land Rover Defender. Audi will also tap Scout for manufacturing. It currently doesn’t build any vehicles in the U.S. and while Audi had considered setting up its own local production, it will instead rely on the plant that Scout is building in South Carolina, which is expected to have cars running down the line by 2027 and an eventual capacity of over 200,000 units a year. The move not only allows Audi to trim its investment in development, but also avoid U.S. tariffs and Scout gets the advantage of extra scale at its brand-new factory.

TESLA TELLS SUPPLIERS TO DITCH CHINA CONTENT
GM’s not the only automaker that wants its suppliers to cut their China content. The Wall Street Journal reports that Tesla is also requiring suppliers to get rid of China-made components that go into its U.S.-built vehicles. The automaker had already been increasing its North American content for the last couple of years, but now it wants to switch all other components to those made outside of China by 2027. That’s the same timeframe GM gave its suppliers, saying it wants to make sure its supply chain will not get impacted by geo-political problems. And we would not be surprised in the least if we hear about similar reports from other automakers.

CHINESE CAR EXPORTS TO RUSSIA PLUMMET
When Russia attacked Ukraine, foreign automakers abandoned Russia, which left the doors wide open for Chinese automakers, who quickly flooded the market. And it turns out they were a little too successful, so much so, that Russia imposed fees and tariffs to slow them down. And it’s working, exports of Chinese cars to Russia are down 58% this year. Of course, that’s not the only reason exports are down. Military spending on the war in Ukraine kicked off an inflation spike in Russia that now has the interest rates on new car loans set at 30% a year.

  

CHINA’S GLOBAL CAR EXPORTS SOAR
Meanwhile, China’s global car exports are surging ahead. They were up almost 23% last month, with 666,000 vehicles getting shipped around the world. If China keeps going at that rate, it will be exporting 8 million vehicles a year, which is twice as many vehicles as Germany makes.

JAPANESE CONTROL OF SOUTHEAST ASIA CAR MARKET EVAPORATES
And all those Chinese exports are taking market share away from legacy automakers, but no one is getting hit harder than the Japanese. They used to control about 80-90% of the southeast Asian market. But that’s evaporating quickly. In Thailand, for example, Japanese market share has dropped from 90% to 71% and BYD now outsells Honda there.

BYD INTRODUCES KEI CAR FOR JAPAN
In fact, BYD is taking the fight right into the Japanese home market with its own kei car. It’s going to launch an electric kei car next year called the Racco, that will boast a base price just a little over $16,000. Kei cars, which account for about 40% of the Japanese market, are dinky little passenger vehicles which have to meet exacting Japanese specifications, which means BYD had to specifically design the Racco for the Japanese market, not just modify one of its existing models.

EV ACCELERATION LIMIT POLL RESULTS
EVs have tremendous low-end torque, which gives them very quick acceleration. But that can be too much for everyday motorists to handle. Reports said that China wanted to limit EV acceleration from 0-100 km/h to 5 seconds or more. So we asked you in our latest poll if you want to see this become a global standard? And a third of you said yes, while 61% said no that would be a terrible idea. And the remainder said none of the above.
 
A lot of you agreed with Jeff Payne’s idea. He says “I like the idea of the default being more like “Eco” mode with modest acceleration, but with the driver option to switch to an aggressive “sport” mode that unleashed the full torque/horsepower. Don’t eliminate the power, just require a conscious choice before it is activated.”
 
Alex Pickworth wrote “Most do not need the torque but the market will decide that.”
 
EMCivicGolf said “Default of 5.5 seconds 0-60 is probably still too much for many drivers. Slower acceleration will improve range, too.”
 
And lastly Mike McAllister had this idea “Rather, the initial “tip in” should be moderate, and early acceleration should be designed to lessen risk and improve control.”
 
Well it turns out China agrees with most of you. The country’s Ministry of Public Security came out saying those initial reports were wrong. The regulation only applies to how torque is delivered at start-up and does not prevent cars from achieving faster times once additional driver inputs or performance settings are engaged. So, thanks for all of your feedback.

But that wraps up today’s show, thanks for watching and have a great day.