AD #4412 – Foreign OEMs Close 13 Plants in China; Schaeffler & BMW Cut Jobs; Honda Brings ADAS to Motorcycles

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

SCHAEFFLER IS LATEST WITH EU LAYOFFS
We hate to say it but watching the European auto industry these days is like watching a slow motion train wreck. It’s struggling with overcapacity, high costs and intense Chinese competition. It’s on the brink of being forced into a major restructuring. This morning the German supplier Schaeffler announced it’s going to close 5 manufacturing facilities and is laying off over 3,400 jobs in Europe. Most of those cuts will come in Germany because the company says labor costs in country are two and a half times higher than in the rest of Europe. Schaeffler announced a restructuring two years ago, but says things are now a lot worse in the German auto industry, which is why it needs to make more cuts.

IG METALL ORDERS GERMAN WORKERS OFF THE LINE
Even so, IG Metall, the giant German union, ordered workers to lay down their tools and walk off the line at Schaeffler, Volkswagen, Audi, Mercedes-Benz and BMW plants. IG Metall is demanding a 5% wage increase and an end to layoffs and plant closings. Negotiations between the automakers and the union will resume on Thursday, but we think this is going to get a lot uglier.

   

BMW CUTS JOBS IN CHINA
The German automakers also face a situation in China that’s getting worse, which was their profit machine for the last decade. They’re rapidly losing sales and market share to Chinese automakers and are being forced to downsize their operations. This morning BMW said it’s laying off 1,800 employees in China, including both production and office workers.

FOREIGN OEMS CLOSE 13 PLANTS IN CHINA
So we decided to dig into just how much foreign automakers have cut back in China and the numbers are breathtaking. By our count, foreign automakers have closed 13 assembly plants, taking out nearly 2.7 million units of manufacturing capacity. This includes plant closings by General Motors, Nissan, Honda, Volkswagen, Stellantis and Mitsubishi. And that’s just assembly plants. The ripple effect undoubtedly includes closings for engine, transmission and stamping plants, not to mention supplier plants. Even so, taking out 2.7 million units of capacity is a drop in the bucket. The Chinese auto has anywhere from 20 million to 40 million units of overcapacity, depending on the sources that you look at. And that’s why agencies like the China Association of Automobile Manufacturers and the Ministry of Industry and Information Technology have warned automakers that they are headed for disaster.

  

THAILAND HITS CHINESE EVS WITH TARIFFS
Thailand is the largest automotive manufacturing hub in Southeast Asia and it’s racing to protect its industry from Chinese imports. Currently, BEVs face a 10% tax and EREVs face a 15% tax. EV imports to Thailand more than doubled in September, with China supplying 99% of them. So the country is raising import taxes on EVs with no local content to 35%. However, the government is willing to give special rates to companies that invest in or expand production in the country. Thailand has a lot to protect. Toyota, Honda, Mazda, Nissan, Mitsubishi, Isuzu, Ford, BMW and Mercedes all have manufacturing operations there. And Chinese automakers BYD, Great Wall Motors, MG, GAC and several more currently build cars in Thailand or are on the way.

HONDA, HYUNDAI & KIA INCREASE U.S. SALES
It’s the beginning of the month which means some automakers are starting to report October sales in the U.S. Strong demand for hybrids and crossovers helped boost sales for Honda, Hyundai and Kia. Honda, including Acura, sold just under 120,000 vehicles last month, up 8% compared to last year. Hyundai’s sales were up almost 5% to more than 73,000 units and Kia sold more than 80,000 vehicles, a 16% gain from a year ago. However, Genesis sales declined for a second straight month. Those are the only automakers to report sales so far but Toyota, Subaru and Mazda are expected to report later today and Ford will tomorrow. Most other automakers only report sales on a quarterly basis. Overall, sales in the U.S. are estimated to increase between 4-7% in October.

BMW MAKING LEVEL 2 STANDARD
BMW is planning to make Level 2 driving technology standard in several key models in Europe next year, however it still needs regulatory approval. The system will come standard in the iX3, iX4, X5, 3 Series and 7 Series starting in Germany pending approval, which BMW anticipates will happen early next year. The automaker plans to roll out the system to more European markets afterward but it didn’t reveal a timeline. The technology assists with turns, lane changes and navigates roundabouts but drivers must be prepared to take control at any time.

BMW LAUNCHES MOST POWERFUL HYPER BIKE
BMW’s motorcycle division says it’s coming out with the world’s most powerful hyper naked bike. The M 1000 RS is basically a street-legal version of its track-only superbike and delivers the same full output of 218 horsepower. It weighs just under 200 kilograms or just over 430 pounds thanks to the use of titanium and carbon fiber, so with over 200 horsepower it must be incredibly quick. BMW Motorrad says it will only make 1,000 of them and it goes on sale in March of next year with a starting price of 40,000 euros in German, including tax.

HONDA BRINGING ADAS TECH TO MOTORCYCLES
Advanced driver assistance systems are a common feature on most new cars today, but Honda also has a goal to reduce accidents involving motorcycles, so it’s bringing ADAS tech to its bikes. The new Honda SENSING RIDE system includes a millimeter-wave radar unit at the front and rear of the bike to help detect its surroundings. Just like ADAS for passenger vehicles it provides warnings or indicators on the dash and mirrors as well as with vibrations in the seat. It also provides emergency brake assist and adaptive cruise control with stop and go. The technology will first be available on the 2027 model year version of the Africa Twin Adventure Sports motorcycle.

DODGE GOING BACK TO NASCAR
Dodge is going back to NASCAR. The brand says it will compete in the Cup Series for the 2027 season, almost certainly with the Charger, but the model is still under wraps. This is part of a broader racing effort from Stellantis in the U.S. with the Ram brand announcing last year that it was going back to the NASCAR truck series.

But that’s a wrap for today’s show. Thanks for tuning in and I hope to see you tomorrow.