By on October 12, 2020

After enduring a series of rough years resulting in some unsettling financial reports, Nissan is doing its utmost to turn things around. Following its first annual loss in 11 years, the company announced a plan that would include cutting 20 percent of its global lineup to make way for newer models, eliminating unnecessary production capacity, and cutting corners (and jobs) just about everywhere in order to save $2.8 billion off of fixed costs. This is also being done to make way for a leaner, meaner Nissan, and make room for newer vehicles it believes will be essential to remain competitive.

It’s also hoping to spruce up dealerships to make them more desirable locales for customers ready to do their business. That includes an increased number of factory audits moving into 2021  partly as a way to make up for the limited number that were conducted this year thanks to the pandemic and partly as a way to make sure nobody is doing anything financially untoward. But there are some concerns among owners that Nissan may end up bullying shops unnecessarily.

(Read More…)

By on October 7, 2020

Mercedes-Benz looks poised to retreat from high-volume compacts. During an online corporate strategy meeting held on Tuesday, Daimler CEO Ola Källenius indicated that the luxury subsidiary may have overextended itself.

“Maybe we went at a bit too far to cover each and every space into each and every segment. Compact particularly comes to mind,” he explained. “This is not where the main thrust should go, we should not become a competitor of the volume makers.”

But the company only has itself to blame for that. Around a quarter of the brand’s annual sales come from compact vehicles and they’ve been taking up a larger share of its product portfolio. Källenius seems to think Mercedes has done enough to broaden its appeal and need to refocus on higher-end vehicles with better margins. “Our [current] strategy is designed to avoid non-core activities,” he said, adding that funds will be prioritized for more profitable products.

“We’re not chasing volume, we’re targeting profitable growth.” (Read More…)

By on October 6, 2020

As the manual transmission gradually joins the wheel-mounted throttle lever in the automotive history trash bin, we’ve been wondering which manufacture would be the next to take a bold stance against be-clutched vehicles. Today we have our answer, thanks to a tweet explaining the brand’s research boss had indicated Mercedes-Benz doesn’t have room for manuals in its current restructuring program.

“The head of @MercedesBenz’s R&D operations, Markus Schaefer, has confirmed the company will ‘eliminate manual transmissions’ as part of cost-cutting initiatives that will also see a ‘substantial reduction in platforms’ and a ‘very dramatic reduction in combustion engines,'” automotive journalist Greg Kable explained via social media on Tuesday.

(Read More…)

By on September 30, 2020

Volkswagen Group, the largest automotive manufacturer in the world, is reexamining its relationship with high-performance subsidiaries as it continues pouring money into electrification. Burned by a diesel emissions scandal of its own making half a decade ago, VW leadership now views electric cars as the only path forward  especially in regard to its more mainstream brands. While they aren’t getting identical treatments, VW, Audi, Seat, and Skoda are all presumed to be adding EVs to their production lines over the next few years.

Porsche’s long-term strategy also seems heavily dependent on battery power, but the road ahead is much less clear for ultra-premium brands like Lamborghini and Bugatti. With volumes and lineups order of magnitudes smaller than the core brands, Volkswagen would be incurring a gigantic expense to develop upper-echelon performance EVs that might not appeal to their existing fans. The same goes for upscale motorcycle brand Ducati as the two-wheeled world has become divided on electric and gas-powered bikes. Volkswagen’s management board and directors have decided the situation calls for an all-hands meeting in November to decide what should be done and how to remain financially prudent in a period of economic strife.

(Read More…)

By on September 2, 2020

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Barely a full day after news broke that Ford was on the cusp of announcing layoffs, Ford announced those layoffs. On Wednesday, the automaker informed employees that it needs to eliminate 1,400 salaried jobs as part of its $11-billion restructuring program. The good news is that these cuts will be handled through retirement buyouts that won’t leave the departing workforce empty handed. The automaker’s internal memo also stated that the buyouts would be voluntary.

The Blue Oval previously said it expects a full-year loss in 2020 thanks to the pandemic, with a pre-tax profit of anywhere between $500 million and $1.5 billion in the third quarter. (Read More…)

By on September 1, 2020

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With a large number of automakers pinching pennies these days, it’s easy for the details of various restructuring plans to fall down the memory hole. For example, Ford has been engaged in an ambitious cost-cutting program since 2018. The $11-billion plan was said to take anywhere from three to five years to complete, requiring legitimate sacrifices at the company — including the discontinuation of all sedans in the United States, ending operations in Russia, closing facilities in Europe, and rolling layoffs around the globe.

Ford has actually accelerated its timeline to see how much it can get done before 2021, resulting in the elimination of 7,000 salaried positions globally last year. The company has decided to end another 1,000 salaried positions in the United States. (Read More…)

By on August 31, 2020

We’ve documented Nissan’s troubles for some time, breaking the situation down into numerous articles expanding upon the various elements that left the brand proclaiming this year’s financial performance will mirror 2019’s lackluster showing months ahead of the latter period’s scheduled reporting.

Everything seemed to go wrong for the company, forcing it to embrace aggressive cost-cutting measures to say afloat. U.S. sales were particularly horrendous going into the pandemic, which only added to the mounting list of hardships. Nissan is now predicting 2020 will be one of the worst financial periods in its history.

However, CEO Makoto Uchida predicts 2021 will be the point where the company finally turns a corner and begins its ascent toward sustained profitability. In fact, he believes that, with a little luck, the rebound might even begin in Q4 of this year. But that unbridled optimism is being tempered by COVID-19. Uchida worries the dreaded “second wave” could forestall Nissan’s recovery by several months. (Read More…)

By on July 30, 2020

Cox Automotive eliminated around 1,600 jobs this month as it prepared to better embrace online commerce (and nobody having any money). The company axed nearly 300 employees in June after having furloughed over 12,000 people in response to the coronavirus pandemic this spring. A large number of those positions were related to its Manheim auction arm, which suffered the hardest due to stringent lockdown protocols that prohibited public gatherings.

Now it’s talking about improving some of the digital features it added to Autotrader this year and embracing the virtual landscape to future-proof itself while forecasting a 25-percent cut in annual profits, and letting people go  with the majority of the layoffs coming to furloughed Manheim employees. (Read More…)

By on July 29, 2020

Carlos Tavares, CEO of Groupe PSA, believes the secret to mainstreaming electric vehicles may have something to do with the industry being able to sell them at a profit. The French automaker’s boss has expressed concerns about a segment that’s almost entirely propped up by taxpayers — sounds likes someone might have taken a business course before running a multinational automaker!

It’s not that EVs are bad; they’re just too novel to be a bargain. Tavares believes the high development costs associated with newer technologies have effectively made electric cars money-losers without financial assistance from the government. He thinks their ultimate success (or failure) hinges upon finding a way to make them profitable without being perpetually subsidized by the government while reducing the amount of raw materials required for battery manufacture. As a bonus, he hinted that automakers might have juicer R&D budgets if they prioritized spending  hopefully accelerating the process of making EVs a little easier on everyone’s bank account.

“Affordability will be the challenge for the next five years in terms of costs,” Tavares told the Financial Times this week. “Those breakthroughs need to come from real estate, distribution costs, sourcing all the components of cost structure will have to be combined to bring this affordability.” (Read More…)

By on July 28, 2020

Based on Mitsubishi’s bleak assessment of its own future, you might have thought it would be the automaker winning this week’s award for saddest economic forecast. But Nissan refused to be outdone. Having already warned the world that 2020 would prove harrowing even before anyone heard the term “COVID-19,” the brand now predicts an operating loss of 470 billion yen ($4.5 billion USD).

Nissan likewise estimates total revenue declining by one-fifth through year’s end to 7.8 trillion yen ($74.1 billion) as its worldwide vehicle sales continue a longstanding retreat.

While it’s difficult to know what to peg these losses on, there are a few obvious suspects. Both automakers sacrificed their identities as automakers in order to spend years trying to expand globally, with a particular focus on developing countries and bland models assumed to have mainstream appeal. Nissan even re-launched the Datsun name as an affordable alternative in places like India, but it wasn’t the sales success the company envisioned.

(Read More…)

By on July 16, 2020

Nissan’s all-important turnaround has been complicated immensely by the coronavirus pandemic. Supply chains fell into in shambles as countless factories temporarily closed as a countermeasure, harming profits as demand came to a screeching halt. Now there’s a looming recession that many economists fear may surpass the Great Depression — though this was a concern years before the COVID response hit the accelerator, thanks to growing debt and the way finance has been allowed to operate for decades.

Seeing the writing on the wall, many automakers have tamped down expectations for 2020. Being in the peculiar position of restructuring before the pandemic hit — which isn’t all that unique within the industry, truth be told — Nissan is reportedly plotting a 30 percent year-on-year cut in global production.  (Read More…)

By on July 6, 2020

Nissan CEO Makoto Uchida attempted to smooth things over with investors last week by going over his company’s new recovery plan in great detail. As you undoubtedly know by now, the automaker found itself in a less than blissful situation following an ugly internal power struggle that highlighted corporate corruption and a business strategy that seemed like a liability without ideal economic circumstances and the man who penned it running the show.

With its share price already suppressed by worsening sales performance and assumed “management issues” with alliance partner Renault, the internal scandal kicked off by the arrest of former chairman Carlos Ghosn November 2018 is what really sent Nissan’s stock into a tailspin. Shares have lost more than half their value since the incident.

This placed Uchida in the undesirable position of having to explain what went wrong and how to fix it. In the past, Uchida said he’d happily be fired if he can’t turn things around, though that’s usually what happens to CEOs who can’t deliver (or need to be scapegoated and sacrificed on the alter of commerce by their board). Based on comments made at the company’s most recent shareholder meeting, Uchida seems to understand how things work.

“I said, ‘If Nissan’s performance does not improve, please fire me. Please dismiss me,’ ” he reminded the crowd on June 29th. “That’s what I said. And this policy remains unchanged.”  (Read More…)

By on June 30, 2020

Chinese electric car startup Byton will reportedly idle production next month as it attempts to reorganize itself. While the coronavirus emerged as a villain in this play, the issues confronting Byton actually seem pretty dire. The company isn’t just idling factories to address a health crisis, it’s shutting things down for six months while it engages in more fundraising and tries to pay what’s owed to employees.

That’ll be tough with no normal income. Byton has already furloughed a large portion of its staff in California and plans to cease all production in Nanjing. While we knew the PRC’s approach to electrification would ultimately result in countless EV startups going under, we didn’t expect Byton to be among them. Slick products, good marketing, and interesting designs made it seem like it could go the distance — now it seems wholly preoccupied with survival. (Read More…)

By on June 3, 2020

Ren Cen. GM

 

On Tuesday, General Motors CEO Mary Barra suggested her company would exit the other side of the coronavirus pandemic running much leaner than when it went in. While this will probably be the case for other automakers, as many (including General Motors) went into 2020 with restructuring efforts planned or already underway, GM is letting everyone know it’s doing cuts extra right.

This likely has to do with the automaker not wanting to look as though it’s in for a repeat of 2008, now that the global economy’s once again careening toward troubled times — but we’re just guessing. It also seems as though the extreme lack of industrial progress created by months of factory shutdowns has forced executives to fill the void with a lot of hot air. Fortunately, Barra’s message wasn’t totally devoid of useful information.  (Read More…)

By on June 3, 2020

Renault — struggling, like all other automakers, from the body blow called COVID-19 — has secured a financial lifeline from an unsurprising source: the French government.

France, which holds a 15 percent stake in the automaker, signed off on a $5.6 billion rainy day fund for the company, guaranteeing 90 percent of the borrowed sum. That takes a fair bit off the heat off. (Read More…)

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