After months of seeing factories idled, it seems that the global semiconductor shortage has encouraged the automotive sector to rethink some production strategies. Numerous brands have opted to strip vehicles of specific features to help offset the ever-worsening chip problem, occasionally supplanting them with older hardware.
Well, well, well. It looks like the push into electromobility hasn’t gone quite as planned and the industry has come crawling back to analog in some cases. Though it would be premature to break out the campaign and declare the old ways superior for all time. The resurgence of analog hardware is likely to be short-lived, ending the second the semiconductor shortage lets up. As much as your author wants to believe the industry will learn a lesson about not putting all your eggs in one basket, it didn’t seem to in the last century and is unlikely to come around during this one.
Consumer Reports has taken umbrage with Tesla’s new cabin camera designed to monitor the driver by suggesting there might be some privacy concerns. While that sounds like the understatement of the year, we’ve seen other companies (e.g. Cadillac) deploy similar devices with little pushback. Uncoverable lenses on our laptops and phones are creepy enough. When the auto industry starts affixing driver-monitoring cameras to the dashboards of automobiles, you have to sit back and ask yourself how much longer you’re willing to be a party to the prologue for George Orwell’s Nineteen Eighty-Four.
Trapped like a dog inside the hot car of progress, we’ve been attempting to honk the horn until someone pays attention. Mercifully, Consumer Reports doesn’t seem to have forgotten its roots in consumer advocacy and is walking up to our window with a rock. It’s demanding more privacy protection for vehicle operators, and not just from a single automaker.
Last week, we discussed Volvo Cars’ plan to transition to an online sales model as a larger quotient of its product becomes electrically driven. As luck would have it, the concept hasn’t been a runaway success with auto retailers. Vehicles becoming increasingly digitized, combined with the unparalleled consumer access offered by the internet, has made numerous manufacturers wonder why the dealership role couldn’t be diminished. After all, Tesla has done alright without a traditional sales network.
But Tesla didn’t have a gross of existing showrooms ready to make a fuss. Volvo has nearly 300 and dealerships are reportedly voicing their concerns as the manufacturer does what it can to assuage fears about the possibility of their being put out of businesses in the coming years.
FedEx had kneeled before mankind, vowing to become a carbon-neutral business by 2040. That’s roughly eight years longer than it’ll probably take most of the population to forget that the promise was ever made. But this is the way of the world and we wager it won’t be long before it’s just easier to list the companies and governments that have not made informal, often empty commitments about the environment.
But, before we throw FedEx into the camp of blatant placation, let’s see what it actually has planned.
While Europe often appears as a safe haven for punchy subcompacts, the reality is that the continent’s biggest sellers happen to be reasonably sized automobiles equipped with a tepid engine option. The Volkswagen Golf, Toyota Corolla, and Škoda Octavia (especially if you happen to travel through any former satellite states of the Soviet Union) are absolutely everywhere. Europe also has a strong taste for many of the compact crossovers that are popular here in North America, giving subcompacts an increasingly small share of the overall market. And it’s projected to get smaller (globally) under the existing European regulations.
Pint-sized economy vehicles aren’t exactly profit leaders for automakers and their margins are only going to become slimmer. The EU is now reaching a point where building them won’t make sense, as tailpipe regulations will eventually force some amount of electrification. This will jack up their price to a point where the kind of people that might have been considering them will probably shop used. But don’t take our word for it; Audi CEO Markus Duesmann recently said this is probably what will kill the A1.
Unless you happen to be the primary stakeholder in Amazon, 2020 probably hasn’t’ been the kind of year you’re likely to miss. However, there is no shortage of lobbyist groups and trade organizations willing to praise it as a triumphant time for modernity. This includes the National Automobile Dealers Association (NADA) Chairman Rhett Ricart, who believes digitizing the industry is the best pathway forward. While he hasn’t forgotten that pandemic-related lockdowns closed showrooms and factories, resulting in extremely lean inventories and weak sales, he claims it has accelerated everyone’s willingness to utilize online sales formats.
But there’s little reason to assume such a move would be better for dealerships from our vantage point. Haggle-free, direct pricing and ordering over the internet removes a lot of what the showroom does. This new model runs the risk of obliterating smaller storefronts and relegating the rest into glorified service centers doubling as a delivery hub.
Over the last few years, the brunt of the automotive industry gradually swapped to quarterly sales reporting. This includes Ford Motor Co., which claimed ditching the monthly model helped smooth out variances caused by fleet orders. Most automakers gave similar answers, suggesting quarterly updates would actually paint a more accurate picture of their overall health — likely hoping this would discourage investors from being scared away during a particularly rough month.
But Ford has reportedly had a change of heart and is moving back to monthly updates. While we’re happy to see it bucking the trend, it’s curious to see any automaker doing so while the industry is so vulnerable to anomalies created by government lockdowns.
Auto dealers and manufacturers around the globe have spent the past several years examining the usefulness of digital car sales, but the practice hasn’t been embraced as warmly in the United States, where state franchise laws often prohibit direct sales from automakers to anybody but a licensed auto dealer. Critics say this allowed retailers to become middlemen that customers are forced to haggle, while advocates explain that the system promotes U.S. jobs and provides a local resource for those needing repairs.
Neither are incorrect, yet dealerships have continued to buck online sales, even after manufacturers attempted to work with them on various pilot programs.
With COVID-19 keeping a large portion of the American population at home, dealers are revisiting online sales as a way to cut their losses. Digital transactions now look to be a necessity if shops hope to survive a prolonged pandemic. While many see this as a temporary measure, once the genie is out of the bottle, he’s difficult to put back inside… and may be far less benevolent than we’d like — even if we’re desperately in need of one of those wishes.
As the coronavirus epidemic scares populations out of stores, transportation hubs, and stock markets, autonomous vehicles may be getting a leg up in China. Bloomberg reports that Neolix, an autonomous delivery company based in Beijing, has seen a surge in demand as people opt to stay home (or are forced into quarantined by the Chinese government). Founder Yu Enyuan said the startup has booked orders for more than than 200 autonomous delivery pods since knowledge of COVID-19 became public — noting it had only produced 125 units in the eight months leading up to that.
Thanks to being overhyped by an industry that wasn’t anywhere near as far along as claimed, autonomous vehicles haven’t earned a lot of love lately. Yet Neolix’s minor victory suggests they may have useful applications that previously went ignored. In the realm of humanoid robotics, the goal if often to design a platform that can successfully fill in for a living, breathing person when the surrounding environment becomes too dangerous. Why not for AVs?
With the California Farm Bureau effectively giving away the right of farmers to repair their own equipment without involving the distributor in the spring of 2019, the right-to-repair movement fell back on its heels. Horrified by the ground lost, the group has rallied to better incorporate those hoping to fix or modify mobile devices and automobiles. Despite being disparate products, members share a common goal of returning control to consumers and preventing various industries from having a stranglehold on products they were supposed to relinquish ownership of when sold.
Hoping to better illustrate the plight of farmers, Bloomberg published an article outlining one man’s struggle with John Deere. Kevin Kenney is a Nebraska-based engineer who’s also a member of a grassroots campaign to undermine the corporate mandate against repairing its tractors. He believes farmers owe it to themselves to know how to fix their own equipment or risk finding themselves perpetually at the mercy of the manufacturer — while losing the skills to be self-reliant.
Why should you care? It’s presumed automakers will follow a similar business plan as vehicles become increasingly networked and electric, and as executives redefine what constitutes ownership while using proprietary software as their shield. Pretty much exactly what John Deere is doing.
Dave Pericak, former head of Ford Performance and now responsible for the brand’s icon models, told CNET on the sidelines of the Chicago Auto Show that evolving environmental regulations have forced the automaker to reassess how it views performance.
“A lot of countries are changing regulations so quickly, and so much, they’re almost forcing the performance products out,” he said.
“Our job is going to be two-fold,” Pericak continued. “One is to figure out how to continue to make performance that will exist in some of these regulated countries, even our own, and how do you do it so it’s a global offering?”
It’s a good question. Environmental regulations have indeed forced automakers to downsize displacement and re-familiarize themselves with turbocharging. Electrification is an option growing in popularity too, with many global automakers tossing battery packs into vehicles of all sizes at no small cost to themselves.
Verband der Automobilindustrie (VDA), the organizing body of Germany’s International Automobile Exhibition (IAA), has announced it will no longer hold its bi-annual trade show in Frankfurt. Last week, representatives from Berlin, Cologne, Frankfurt, Hamburg, Hanover, Munich and Stuttgart met with VDA to present their concepts for IAA 2021.
Frankfurt has already been taken out of the running, with the group saying the event would no longer take place at the Frankfurt am Main trade fair location after “evaluating all relevant criteria.” Despite being home to the show for decades, attendance has waned, encouraging VDA to examine its options.
Other trade events have undertaken similar changes in an effort to promote turnout amid growing public disinterest. Detroit managed to keep the North American International Auto Show (NAIAS) from leaving town, shifting its timing from January to June. Officially, this was done to allow more opportunities for manufacturers to set up outdoor displays and on-road vehicle demonstrations.
But simply having it take place at a time when Michigan air isn’t bitingly cold is bound to encourage more people to turn up.
We’ve kept light tabs on Harley-Davidson over the past few years, typically to chronicle its downward progress in an effort to make parallels between it and the world’s automakers. Despite having its share of ups and downs throughout its long history, the motorcycle brand finds itself with an impressively loyal customer base willing to pay premium prices for its product.
Unfortunately, its key demographic is quickly aging out of the hobby. In response, the company turned its focus towards younger generations. While Boomers living in America remain H-D’s most important clientele, it’s seeking to branch out into other markets and age brackets. It’s also attempting to rebrand itself to achieve broader appeal without torpedoing the heritage angle that has worked so well for it in the past.
When we last checked in with Harley-Davidson, the company had just delayed its all-electric LiveWire — a bike aimed at helping the brand tap into a new market while broadcasting its ability to gaze ahead into the same vague future automakers are now struggling with. H-D has since released its Q4 earnings for 2019.
The prognosis could be better.
Porsche Cars North America is the latest automaker to join the expanding list of manufacturers abandoning monthly sales reports in favor of a quarterly format. Detroit has made the changeover entirely, with General Motors swapping to quarterly reports in 2018, only to be followed by Ford and Fiat Chrysler the following year. While Asian manufacturers tend to prefer monthly updates, both Hyundai and Nissan are considering trying quarterly reports within the next twelve months.
As for the German manufacturer, Automotive News cited Porsche as wanting to keep a better eye on the bigger picture. But the plan also runs some risks, especially when some automakers are on the monthly schedule and others report just four times per year.
We’ve got an addendum for our latest story on how automakers should view Harley-Davidson as a cautionary tale. The company, which recently began exploring electric motorcycles as a way to boost sales and spur public interest, recently told dealers not to expect deliveries of its newest model.
The $29,799 LiveWire that was supposed to start re-arriving this month is again delayed.
According to The Wall Street Journal, the manufacturer claims there’s an issue with the all-electric bike’s charging equipment — something that will obviously need to be addressed before it goes on sale. As a result, H-D is pulling the production plug on the two-wheeled EV.