Category: Industry

By on July 10, 2019

Toyota Motor Corp announced on Wednesday it would be building a new sport utility vehicle at its $1.6 billion joint venture assembly plant in Alabama, rather than the Corolla. This brings its strategy in line with Mazda, which announced it would also be building an SUV at the facility earlier this year.

Officially, Toyota said the change was due to “changing market demands and a growing consumer appetite for light trucks and SUVs,” while slipping in a mention of how well the RAV4 has been selling for good measure.  Read More >

By on June 24, 2019

Image: Subaru

Subaru was one of the few automakers experiencing growth going into the Great Recession. When the financial crisis struck in earnest, Subaru’s volume briefly dipped to pre-recession levels before resuming its climb. Thanks largely to an enviable public image and desirable lineup, Subaru’s annual deliveries tripled between 2009 and 2018 inside the United States.

However Subaru’s quality rankings have lapsed in its quest to meet elevated demand. There has been a surge in recalls for the brand and some unsavory claims coming from the factory. According to internal documents seen by Automotive News, one of the primary reasons for this was due to rampant supply chain issues. The papers indicate that nearly half of Subaru’s suppliers were recently operating at quality levels below the company’s internal targets. Subaru is currently overhauling its own production processes and working with suppliers to improve quality and avoid developing a poor reputation with customers.  Read More >

By on June 9, 2019

Following announcements that Toyota would be working on a shared electric vehicle platform with Subaru, as well as a jointly developed crossover, the brand conducted a press conference on Friday regarding its decision to “popularize BEVs.” While the announcement didn’t deal with the specifics of cutting-edge tech, auxiliary business opportunities, or even a total shift toward battery electric vehicles, it did represent a major commitment from a manufacturer that’s notoriously cautious in its decision making.

Opening the conference, Executive Vice President Shigeki Terashi focused largely on the challenges of electrification. Terashi said Toyota’s intent has always been to support “social progress” and curb CO2 emissions while acknowledging that it had only made formal commitments to electrification within the last couple of years. However, he showed that the automaker has been busy within that time, and had several initiatives in the works aimed at repositioning Toyota as a mobility brand, by outlining the company’s extremely complex EV strategy.

Buckle up, because there is a lot to this — including some new cars.  Read More >

By on June 4, 2019

As perviously reported, Fiat Chrysler is currently hard at work, hoping to impress Renault to a point where it will pull the trigger on possible merger. FCA is now in talks with the French government, which owns 15 percent of Renault, hoping it will also find the 50/50 proposal agreeable.

Concessions are already being made. FCA has agreed to France’s request to give the government a seat on an prospective eleven-member board, which also holds four seats for Renault and one for Nissan. Rumors have also suggested that the automaker is considering moving its headquarters to Paris to appease the country.

While France appears to be somewhat receptive, Renault appears to be taking things to the next level. Following a week of discussions with FCA, the company announced it would be taking the rest of the day to give the matter serious consideration.  Read More >

By on May 15, 2019

On Tuesday, Volkswagen announced its plan to assemble 600,000 electric vehicles utilizing the brand’s MEB platform at two plants in China. The facilities, said to be located in the cities of Anting and Foshan, will help bolster EV volume after the completion of VW’s Zwickau plant in Germany — which the company previously claimed would manufacture 330,000 cars annually.

While that facility is nearing completion and supposed to be up and running before 2020, there’s no firm timeline in place for China. But that’s the least of the issues Volkswagen must solve in order to make this dream a reality.  Read More >

By on May 14, 2019

Nissan is bracing for a bad year. On Tuesday, the automaker held a press conference at its headquarters in Yokohama, Japan, to tell the world that it’s forecasting a 28-percent decline in operating profit this year. While that sounds bad, it comes on the heels of the company’s financial results for the 12-month period ending March 31st, 2019 — which was a dumpster fire.

Operating profit plunged 45 percent to 318 billion yen ($2.9 billion), while revenue fell 3 percent to about 11.6 trillion yen ($105 billion). Vehicle sales were down 4.4 percent. “Today we have hit rock bottom,” CEO Hiroto Saikawa told the press, suggesting the company could rebound in a few years.  Read More >

By on May 12, 2019

Subaru Legacy 2018 Logo Emblem Grille

Subaru may be getting too big for its britches. Despite seeming like it was positioned for nearly incalculable growth at the start of last year, the automaker’s latest financial report showed the period was actually plagued with problems. Over the full fiscal year, which ends on March 31st for Subaru, the company basically showed that its operating profit had been cut in half.

How could this have happened? Subaru’s commitment to all-wheel drive has given its sales a shot in the arm as the crossover craze has escalated and it has one of the best reputations in the business. Seriously, ask any automotive layperson what they think of the brand and they will almost always have something positive to say. However, for all of its presumed advantages, the company is reporting a 48.5-percent decline in operating profit (to 195.5 billion yen) and a 6.3-precent loss of global sales volume.  Read More >

By on March 27, 2019

With Faraday Future and Evergrande Health having officially settled their bitter legal dispute late last year, the once-again independent automaker could finally get back to hunting for new investors. Despite Faraday’s entire existence being overshadowed by financial missteps and bizarre business dealings (resulting in an inability to deliver product), it’s extremely good at scrounging up funds. Breaking ties with its primary financial partner might have seemed like bad news, especially after so many near-death experiences, but this is where the company shines the brightest.

On Sunday, Faraday Future signed into a 50-50 partnership with Shanghai-based internet gaming operator The9 — which amassed its fortune after gaining exclusive licensing rights to operate and distribute the extremely popular World of Warcraft in China. Faraday said the deal marks the first step in its plan to officially launch its dual-home-market strategy in both China and the United States.  Read More >

By on March 14, 2019

Ontario Labor Relations Board Chairman Bernard Fishbein recently ruled that Unifor’s actions over the winter were illegal under the province’s Labor Relations Act, stipulating that the union must “cease and desist from engaging in, authorizing or counseling unlawful strikes or engaging in any act that is likely to cause employees at the Inteva, Lear or GM plant (or any other supplier of the GM plant) or any employees having notice of this decision to engage in any unlawful strike.”

However, Unifor President Jerry Dias says the board’s finding that the union engaged in unlawful strikes against General Motors and its suppliers will not stop its workers from walking off the job in the future.  Read More >

By on March 13, 2019

A recent report from Bloomberg frames Tesla CEO Elon Musk as quite the jerk in relation to his actions toward a former employee. This worker is the whistleblower who, last year, shared internal documents that suggested the company’s Nevada Gigafactory was blowing through raw materials at an alarming rate. Martin Tripp offered up information showing Tesla wasted $150 million in materials and accused the automaker of pursuing unsafe production procedures during its push to increase Model 3 volume.

Tripp, who tried briefly to maintain his anonymity, said he was concerned that Tesla was shipping cars that were potentially dangerous to consumers. However, Tesla quickly responded by suggesting the claims against it were ridiculous and the amount of waste cited in the report was an overstatement.

“As is expected with any new manufacturing process, we had high scrap rates earlier in the Model 3 ramp. This is something we planned for and is a normal part of a production ramp,” Tesla told Business Insider in 2018.

Following an intense Twitter rant from Elon Musk, the story died down. But the corporate task force charged with finding out who leaked the information would eventually lead to even more ridiculous claims.    Read More >

By on March 13, 2019

Volkswagen Group just announced a restructuring plan aimed at raising the company’s operating margin to 6 percent. Unfortunately, the strategy involves a staffing reduction of up to 7,000 individuals by 2023 — with the automaker saving an estimated 5.9 billion euros in the process.

While legitimate layoffs aren’t expected to take place for at least a few more years, VW claims the “automation of routine tasks” will make the jobs unnecessary, adding that the staffing cuts could be done by simply not replacing employees who take an early retirement package.  Read More >

By on March 13, 2019

A meeting rumored to be targeted at developing a new board to oversee the Renault-Mitsubishi-Nissan Alliance took place earlier this week at Nissan’s global headquarters, sans Carlos Ghosn, with the automakers agreeing to a consensus-based governing strategy. At the heart of this pact is the need to diffuse tensions between France and Japan.

If you’ll recall, Nissan had grown perturbed by its perceived lack of autonomy within the alliance and repeated merger talk coming from Ghosn prior to his arrest. The man himself claimed that the corporate conflict is ultimately what led to his undoing — suggesting Nissan’s CEO simply wanted him out of the picture before he was fired. Read More >

By on February 28, 2019

China might not be the kind of market everyone thought it was — one without a ceiling, boasting unlimited potential for growth. One by one, automakers find themselves having to confront economic reality.

Despite amassing a network of factories that could theoretically outproduce the rest of the world, the Asian country’s automotive sector only operates at about half its total capacity. That’s disconcerting. Even Europe, site of some serious industrial headwinds of its own, manages to operate around 70 percent capacity.

While the reasons for China’s woes are ludicrously complicated, one of the most pressing issues is that its economy is slowing much earlier than anticipated. Automakers, both foreign and domestic, almost universally believed that The People’s Republic would surpass the United States as the world’s largest automotive market — and they were right. But investments kept pouring in, factories were built, and the market started to cool prematurely. The situation only grew worse as incentives dried up and people began buying fewer cars; now, 2019 is shaping up to be a very bad year for the nation’s automotive sector.  Read More >

By on February 20, 2019

2011 Hyundai Sonata

In 2017, United States safety regulators opened a formal investigation into the recall of roughly 1.7 million vehicles built by Hyundai Motor Co and its affiliate, Kia Motor Corp, after being tipped off by a former employee. The informant claimed the automaker wasn’t handling the issue properly. That same year, South Korean civic group YMCA filed a complaint with local prosecutors alleging the automakers delayed fixing engine defects that prompted the same recalls.

According to Reuters, South Korean prosecutors raided the offices of Hyundai Motor Group’s quality division in Seoul on Wednesday. While the investigation concerns the company’s Theta II engines, both investigations seek to nail down a timeline of the recalls and establish whether or not Hyundai handled the situation responsibly.  Read More >

By on February 11, 2019

Fiat Chrysler Automobiles paid $77 million in U.S. civil penalties late last year due to its failure to adhere to 2016 model year fuel economy requirements. In December, the National Highway Traffic Safety Administration (NHTSA) issued a report claiming the industry faced millions in fines from 2016 and that one manufacturer was expected to pay significant civil penalties.

You can probably guess which one. But FCA is by no means the only automaker affected by stringent fuel rulings. Read More >

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