Elm Analytics - Automotive Supply Chain Risk Digest #77 - July 27 - August 2, 2018
CHANGE IN MANAGEMENT
Audi has appointed previous VW Brazil Sales and Marketing head Thomas Owsianski as the new head of Audi's operations in China. Owsianski will replace Joachim Wedler who has served as the brand's China chief since 2015.
Jaguar Land Rover has reported a loss of $276m for the second quarter of 2018. The automaker said higher incentives in China and planned dealer stock reduction in other market have weighed on its business.
Despite higher vehicle sales and aggressive cost cutting, Mazda has reported a 17% drop in operating profit for the second quarter of 2018. Factors for the drop are said to include rising incentives, foreign exchange rate losses and increased investment in the U.S. retail network.
Volkswagen says that a shortage of engineers is making it harder for them to make cars that meet new EU Worldwide Harmonized Light Duty Vehicles Test Procedure (WLTP) standards. The new WLTP standards go into effect in September.
Waymo has formed a new partnership with Walmart and a few others for its early rider autonomous vehicle program in Phoenix, Arizona. The partnerships are aimed to get more people using autonomous vehicles in preparation for the launch of its commercial service later this year.
CASE, ACES, SAEV? What acronym should be used to describe electric shared self-driving cars?
Carvana is currently constructing a seven-story "car vending machine" in Indianapolis. The structure will serve as both a delivery center and a brand-booster.
FCA is recalling 1.4m Ram pickup trucks in North America over a faulty tailgate lock that could cause it to open while driving. The recall affects certain 2015-2017 Ram 1500, 2500 and 3500 trucks.
Volkswagen has recalled around 57,000 Golfs and Golf Sportswagens in the US and Canada over a rollaway risk. The recall involves eight models from the 2015-2018 model years.
MERGERS, VENTURES, ACQUISITIONS
Dana Incorporated has agreed to purchase the driveline division of Oerlikon for $600m. The purchase also includes a controlling interest in a Chinese joint venture.
BMW is planning to build a new $1.17b vehicle assembly plant in eastern Hungary. The plant will have capacity for up to 150,000 conventional and electric cars per year and will create more than 1,000 jobs.
Jordan automaker Siag Arabian Auto Manufacturing Company is planning to build a new $1.5b assembly plant in Aqaba, Jordan. The plant will produce around 50,000 cars per year.
Chinese automaker BAIC has opened a new $834m assembly plant in Port Elizabeth, South Africa. The plant will employ 120 workers by year's end and is aiming to produce 50,000 compact SUVs per year by 2022.
Japanese plastic parts supplier Uchiyama Manufacturing Corp. is investing $50m into a new plant in Merida, Mexico. The plant will make engine seals and washers and eventually employ 1,000 workers.
French automakers are concerned that a lowering of tariffs between the US and the EU could benefit their Asian rivals.
According to Mexican and Canadian officials, the US and Mexico are close to reaching a deal on the automotive rules of origin section of NAFTA.
The Trump administration will reportedly move to rollback Obama-era fuel efficiency standards and revoke California's authority to set its own rules. The move will escalate the administration's legal battle with California and a dozen other states that have adopted California's emissions rules.
Officials from Canada, the EU, Japan, Mexico and South Korea are meeting in Geneva this week to discuss how to respond to US tariff threats. Further details of the potential response plans have yet to be announced.
President Trump instructed trade officials to look at increasing tariffs on $200b in Chinese imports from 10% to 25% earlier this week. Despite the threat, China's government hasn't shown signs of bending to Washington's pressure.
Despite a drop in both auto demand and production, a 6% rise in exports is helping to prop up UK car production. The UK has still not reached a trade deal with the EU ahead of Brexit.