Good morning! It’s Friday, October 25, 2024, and that is The Morning Shift, your every day roundup of the highest automotive headlines from all over the world, in a single place. Listed below are the vital tales you should know.
1st Gear: VW Doesn’t Know How To Save Itself But
The Volkswagen model wants a turnaround fairly shortly, however to date it hasn’t introduced any plan for the way to make itself extra aggressive. That is in response to a employees handout from the top of the group’s work council in Germany. It additionally mentions that administration stays keyed in on labor prices. Not nice, VW. Not nice. From Reuters:
The feedback by Daniela Cavallo come as Europe’s high carmaker and highly effective union struggle over potential manufacturing unit closures and job cuts as a part of the group’s efforts to decrease prices, with the second spherical of negotiations scheduled for Oct. 30, the day Volkswagen will launch third-quarter outcomes.
“The Board of Administration has nonetheless not introduced a coherent total idea for the way it intends to strategically lead Volkswagen into the long run with the best merchandise, processes and plans,” Cavallo stated within the handout seen by Reuters.
“As an alternative, it continues to focus solely on points reminiscent of labour and manufacturing unit prices.”
There are rising issues from Volkswagen staff over potential staffing cuts. The German automaker has declined to rule that out because it struggles to seek out methods to regulate its place in Europe following a drop in demand and a smaller market. Maybe it may construct higher, extra aggressive, automobiles, however what do I do know?
We ought to be studying extra concerning the scenario in a number of days. Employees are holding conferences at a number of VW factories in Germany — and the automaker’s Wolfsburg headquarters — on October 28. Workers might be knowledgeable concerning the present scenario at VW.
2nd Gear: Get Prepared For Value Reducing At Mercedes
Mercedes-Benz says it’s going to step up cost-cutting measures after earnings had been halved within the third quarter. Lukewarm demand and robust competitors from China had been the primary driving forces for this drop. Mercedes lower its full-year revenue margin goal twice throughout Q3. Not nice. It’s hoping a sweeping new mannequin rollout will assist gross sales in 2025.
The automaker’s automobile division’s adjusted return on gross sales fell to 4.7 % within the third quarter from 12.4 % final yr. It’s Mercedes’ worst profitability for the reason that pandemic, whereas earnings within the unit had been greater than halved. It’s really worse than analysts anticipated. From Reuters:
“The Q3 outcomes don’t meet our ambitions,” CFO Harald Wilhelm stated in a press release, including that the group will step up value cuts.
Wilhelm declined to supply extra particulars about the price cuts, however warned that “will probably be tighter and harder for positive”.
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In 2020, Mercedes launched a plan to cut back prices by 20% between 2019 and 2025, 15-16% of which was already achieved, in response to the finance chief.
The July-September earnings had been hit as Chinese language customers continued to chop again on luxurious items in a weakening economic system, which has particularly weighed on Mercedes’s profitable high-end S-Class mannequin gross sales within the nation.
Mannequin revamp prices added to the stress, particularly for brand new variations of the G-Class SUV, which is able to hit the market within the subsequent quarter, Mercedes added.
In 2024, the corporate sees automobile gross sales barely under the earlier yr, and fourth-quarter gross sales in keeping with the third quarter.
Nonetheless, Mercedes refuses to cut back costs and prefers to stay to its “worth over quantity” technique, together with in China.
Chinese language automakers are actually making each different automobile firm’s life hell, aren’t they? I get it. They make some actually nice automobiles over there.
I’m simply hoping this cost-cutting at MB doesn’t trickle down into the product in any tremendous noticeable approach. Mercedes is (or was) all about high quality, in any case.
third Gear: Stellantis Fires Again At Lawmakers
Stellantis isn’t caving to stress from lawmakers in Washington, D.C. simply but. The automaker simply reiterated that it hasn’t determined the place the next-generation Dodge Durango might be made. It additionally made clear it’s delaying — not canceling — its plans for the idled Belvidere Meeting Plant in Illinois.
In a press release, Stellantis stated its choice to delay the reopening of the plant “is in step with the present difficult automotive panorama and the plain language within the contract that the UAW agreed to.” The automaker stated this in response to letters signed by about 80 members of Congress expressing concern about what the automaker was doing relating to its contract commitments with the United Auto Employees union. Stellantis defended its choice, pointing blame for the delay on the present car market From the Detroit Free Press:
“Stellantis has repeatedly said that it has abided by and can proceed to abide by the 2023 collective bargaining settlement. It’s in everybody’s greatest curiosity to have a wholesome, sustainable firm that may compete in a worldwide market,” in response to an organization assertion offered by spokeswoman Jodi Tinson. “There may be indeniable volatility available in the market associated to the transition to an electrified future, which the signers of those letters assist. Over the previous yr, quite a few corporations throughout the trade have introduced funding and product delays in addition to outright product cancelations.”
On Wednesday, quite a few members of Michigan’s congressional delegation joined others from throughout the nation in calling on Stellantis to honor its commitments, mentioning that tax cash is getting used to assist the automaker. A few the signers, U.S. Reps. Debbie Dingell, D-Ann Arbor, and Rashida Tlaib, D-Detroit, rallied with UAW staff and leaders, together with President Shawn Fain, at a union corridor in Trenton the identical day.
“Taxpayers are presently funding shopper incentives for a number of Stellantis automobiles, and Stellantisis slated to obtain $585 million beneath the Home Manufacturing Conversion Grant Program.
“Beneath this program, Stellantis is on monitor to pocket $335 million to reopen the Belvidere Meeting plant in Belvidere, Illinois,” in response to the letter from U.S. Home members to the Stellantis board of administrators. “As stewards of taxpayer funding, we’ve got a duty to make sure these investments profit the general public curiosity. We hope it’s clear to you that the American individuals won’t tolerate taxpayer subsidies for a corporation that’s chopping manufacturing and slashing jobs — all of the whereas it will increase government compensation, dividends to shareholders and inventory buybacks.”
“In 2024 to date, Stellantis has paid $5 billion in dividends to shareholders and bought $3.3 billion of its personal inventory. Within the first half of the yr, Stellantis was among the many most worthwhile automotive corporations on the earth, with a ten% international revenue margin. If Stellantis is performing so nicely that Mr. Tavares can earn 518x greater than the common Stellantis employee, we’re inclined to imagine market situations are constructive,” in response to the Home members’ letter.
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The Senate letter famous that “we’re deeply involved that Stellantis shouldn’t be conserving the guarantees it made to strengthen and increase good-paying union jobs in America,” and pointed to the corporate’s said intent to shift extra manufacturing to lower-cost international locations.
Stellantis responded by saying, “the corporate stays dedicated to investing within the U.S. to create jobs and assist our communities as evidenced by the announcement final month to speculate greater than $400 million in three of our Michigan services.”
These commitments embrace the manufacturing of the Ram 1500 REV (an electrical pickup) at Stellantis’ Sterling Heights Meeting Plant. Some people are involved that the corporate is planning to increase its truck plant in Saltillo, Mexico.
4th Gear: Mazda Trims 2025 Outlook
Mazda is only a quarter away from a document gross sales yr in 2024, however the automaker isn’t anticipating its exponential development to proceed in 2025 because it initially anticipated. Its North American CEO Tom Donnelly, stated there are “no scarcity of headwinds.” CEOs love speaking about headwinds, man. From Automotive Information:
“The as soon as in 100-year-plus transformation the trade goes via — all of us are coping with that,” Donnelly stated, noting that he does count on strong trade gross sales. “The core enterprise remains to be going to be strong.”
Whereas Mazda had estimated its gross sales would soar to 500,000 subsequent yr, Donnelly stated the model is extra prone to finish north of 450,000, though it stays on an “upward trajectory.” Introduction of the CX-50 hybrid subsequent month in addition to a brand new model marketing campaign referred to as “Transfer and Be Moved” might be Mazda’s main development drivers subsequent yr, he stated Oct. 23.
Mazda sees marginal development within the U.S. EV market subsequent yr as adoption stays in flux, Donnelly stated. Mazda not has an EV in its lineup after it cancelled the low-volume, low-range MX-30 bought solely in California final yr. However he stated Mazda’s new hybrid compact crossover might be a boon as extra customers flock to the fuel-efficient know-how as a approach to save cash and dabble in inexperienced.
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The launch of the CX-90 and CX-70 midsize crossovers — which each supply plug-in hybrid powertrains — in addition to a manufacturing improve of the CX-50 compact crossover on the Mazda-Toyota joint-venture manufacturing unit in Alabama helped spur gross sales. Via the primary 9 months of the yr, CX-50 gross sales elevated 85 % to 58,515.
Mazda’s prioritization of constructing extra of what’s in demand — together with particular trims and powertrains — and placing these automobiles in markets with retail companions the place they’re turning quickest has additionally yielded outcomes, Donnelly stated. And Mazda continues to work carefully with its captive, Mazda Monetary Providers, to react shortly to market suggestions on lease packages and APR incentives.
“We’re happy with the agility we’ve proven and the outcomes we’ve been capable of obtain,” he stated.
In 2024, Mazda expects to hit 400,000 gross sales within the U.S. It will be the very best gross sales quantity for the automaker because it entered the U.S. market in 1970. In 2023, Mazda’s gross sales grew 23 % to 363,354 automobiles. The Japanese automaker is now near surpassing that determine… via September. Gross sales have elevated 15 % to 313,452 in contrast with final yr.
