AD #4372 – VW Considers Selling Ducati; China Car Sales Nearly Same as U.S.; JLR Cutting Jobs

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

VW CONSIDERS SELLING DUCATI
The Volkswagen Group is looking to find cash anywhere it can and is considering selling off Ducati, which could raise up to $1.5 billion. Ducati, which is actually part of Audi, is world famous for its super bikes and is a dominant force in Moto GP. It sells about 50,000 motorcycles a year and generates $1 billion in annual revenue, but it only delivers an operating margin of 5.6%, which is rather low for a premium brand.

VW SELLS ASSEMBLY PLANT
As we keep reporting, there’s growing collaboration between the auto industry and the military. VW is selling off its assembly plant in Osnabrück to an Israeli venture capital company called Aurelius Capital. It has a project with the Israeli defense company Rafael to make military equipment for air defense at that plant. Remember the German contract manufacturing company called Karmann that made the Karmann Ghia and all kinds of cars for other automakers? Well, Osnabrück is the old Karmann plant. Karmann went out of business in 2009, which is when Volkswagen bought the plant. Here’s a trivia question for all of you that we’ll answer at the end of the show. What model did Karmann make for American Motors?

CHINA CAR SALES FALL AGAIN
China’s domestic car market is going from bad to worse. Sales fell almost 24% last month, coming in at 1.5 million vehicles. Keep in mind that U.S. sales last month were 1.38 million, and they were down, too. So, the Chinese domestic market has almost shrunk down to the size of the U.S. market. This is why exports are so important to Chinese automakers. They’re on track to export 12 million cars this year and are targeting 18-20 million by 2030.

    

JLR CUTTING JOBS
Another European automaker is making job cuts. Last week, Volkswagen approved a plan to cut 100,000 jobs in total in Germany. And now Jaguar Land Rover says it will cut 4,000 jobs over the next two years or about 9% of its global workforce. The cuts will all be salaried positions and most of the losses will be in the UK. This is part of JLR’s goal to save $2.3. billion over the next two years.

SUPPLIER PAYMENT STILL A PROBLEM IN CHINA
China is putting more pressure on automakers to pay suppliers faster. Last year, the government issued rules that ordered automakers to pay suppliers within 60 days, in an effort to help protect suppliers from the ongoing price war. Despite that, some automakers are still late on payments. For example, Li Auto and Leapmotor have taken 184 days to settle bills. So, now China is once again trying to speed up the payment process. Automakers still have 60 days to pay suppliers but now they’re being encouraged to pay in as little as 30 days. The rules also want companies to prioritize “cash” payments, like instant bank or wire transfers, instead of bank or promissory notes. And automakers now have to report twice a year on the progress they’re making.

 

DACIA MOVES SPRING PRODUCTION FROM CHINA TO EU
Production of the Dacia Spring is moving from China to Europe. As part of its new strategic plan, the Renault Group said it wanted to work at “China Speed,” developing vehicles in less than 2 years. The first was the new Renault Twingo and the Spring is the first Dacia to benefit from the new program. The entry-level EV was based on a platform co-developed with Chinese partner Dongfeng, but now the second-gen version is moving over to the Group’s small EV architecture that’s also used for models like the Renault 5 and Alpine A290. The new Spring is currently only available with a 60 kW or 80 horsepower electric motor and a 27.5 kWh LFP battery pack, which provides a WLTP rated 250 kilometers or 155 miles of range. Dacia says the entire Spring lineup will be priced below 20,000 euro and built in Slovenia, which also allows the vehicle to avoid the EU’s import tariffs on Chinese-made EVs.

AUDI REVEALS ENTRY-LEVEL A2
Speaking of entry-level EVs for Europe, Audi pulled the wraps off the all-new A2, which is based on the rear-drive version of the VW Group’s MEB platform. And like Dacia and the Spring, Audi says it developed the A2 21 months faster thanks to a new streamlined process. The model will come in four power outputs that range from 125- to 240-kW or roughly 165- to 320-horsepower as well as three battery sizes; 52-, 61-, or 84-kWh. The most efficient setup is capable of providing up to 646 kilometers or 395 miles of range on the WLTP test cycle. Pricing for the new A2 starts at just over 38,000 euro in Germany and deliveries are scheduled to kick off in December.

AUDI REORGANIZES ITS CHINA OPERATIONS
And in other Audi news, it’s reorganizing its China operations. The AUDI brand with the four letters, which is developing a new series of EVs made in China for China, will only be managed by SAIC-Audi. And the Audi brand with the four rings, which sells ICE and electrified models, will be managed by FAW-Audi. SAIC-Audi stopped producing models with the four rings in July and is aggressively trying to move models out of inventory, but further details on the reorganization aren’t available yet.

CHINA SQUEEZES MORE ENERGY FROM LFP BATTERIES
Lithium iron phosphate or LFP batteries are longer lasting, safer and cheaper than NMC batteries, but have less energy density. Currently, LFP energy densities typically range from 90 to 160 Wh/kg. But now researchers in China say they’ve developed a fourth-generation LFP battery that exceeds 200 Wh/kg. That’s still below NMC batteries which are up to 300 Wh/kg. But even still, it’s a significant improvement. In the first half of the year, 80% of EVs in China were equipped with LFP batteries, so it’s important for battery developers to continue to make improvements.

TRIVIA QUESTION ANSWER
OK, here’s the answer for the trivia question we asked earlier in the show. Karmann actually made the AMC Javelin SST for American Motors in 1969 and 1970. It assembled them at a plant in Rheine from CKD kits. They were only sold in Europe and only 281 were made, so they’re extremely rare.

All of the Autoline members already know this, but we’re dropping a teaser video this Friday for a new series we’re doing called Lessons From The Masters, What It Takes To Run A Car Company. We don’t think there’s ever been anything like this before and we can’t wait to tell you more about it. Stay tuned, more to come.

And that wraps up today’s show, thanks for watching Autoline Daily