Trade News – Page 667

Now, chip shortage threatens industry

Like canaries in a coal mine, carmakers and suppliers in China are warning that a shortage of automotive microchips is threatening to slow down the global industry's pandemic recovery.

The alarm was sounded this month by Volkswagen and German suppliers Bosch and Continental, which cited tightening supplies of semiconductors and said bottlenecks could run into 2021.

The industry is beginning to brace for impact as microchip prices rise and inventories dwindle.

Li Shaohua, deputy secretary-general of the China Association of Automobile Manufacturers, said last week that auto production in China could take a "relatively big" hit in the first quarter of 2021 as a result.

Some automotive companies around the world are still recuperating from the hit they took when China's market crashed because of COVID-19 in the first quarter of 2020.

Still unknown is how bad the chip situation will be or whether the shortage might spread to other markets.

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Some dealers ditch F&I office in digital shift

The coronavirus shuttered in-person retail sales in some states this year, and where in-store sales were allowed, some customers still were wary of face-to-face transactions. To adapt, dealers switched to digital transactions and, in some cases, eliminated the store's F&I office.

Brian McCafferty, owner of Avondale Toyota in Arizona, said his elimination of the finance-and-insurance office is partly why the virtual sales process has been a success.

McCafferty said his sales managers are trained to handle the sales process from start to finish, including F&I. This is beneficial for online sales because customers deal with only one dealership staff member for the entire transaction.

"We feel that this is something the customer has been asking for for 30 years," McCafferty said.

Avondale Toyota is a "one price, one person" store that eliminates negotiations and competition among salespeople. The ability to work …

Hyundai fuel cells for rail, auto, air cargo

Sound out the name of Hyundai's latest venture —a brand it is calling HTWO ("H-2") — and it reveals the automaker's new solution to cut carbon emissions.

HTWO will promote the use of the H2 hydrogen molecule in developing and promoting hydrogen fuel cell systems for various transportation applications, Hyundai said last week.

Hyundai Motor Co. is one of only a few global players pursuing fuel cell technology. The initiative is part of what CEO Wonhee Lee said is the company's plan to spend some $55.3 billion on new technologies through 2025.

"The launch of the new fuel cell system brand will help facilitate Hyundai's global fuel cell business and grow the hydrogen ecosystem," Hyundai said in a release.

The idea is to expand applications beyond passenger vehicles to trucks, ships, trains and even urban air mobility, a new area of focus for Hyundai. The company will develop a next-generation fuel cell system under the H…

Inventory levels grow but remain constrained

Though still low, pandemic-constrained inventory levels in the U.S. continued to ease slightly for most automakers last month as production gained ground and sales slowed.

Dealers and automakers had 2.87 million unsold vehicles on hand to open December, according to data compiled by Cox Automotive. The figure represents a 200,000-vehicle gain from the beginning of November but is still 690,000 vehicles lower than where inventory levels were a year earlier.

Cox estimates the industry has a 75-day supply of vehicles on hand, up from 65 days a month ago. Cox uses the daily sales rate from the most recent 30-day period for its calculation.

December is one of the biggest selling months of the year, and the industry historically has gone into the month with a large number of vehicles in inventory. Pickup inventory remains especially tight across most of the industry; the top-selling Ford F-Series had less than a two-month supply.

Self-driving Fords make sure kids get their veggies

Ford Motor Co. is using self-driving cars that it's testing in Miami to deliver fresh produce to families while students are unable to attend school in person.

Through the Food Forests for Schools program, run by the nonprofit Education Fund in Miami-Dade County, Ford has made weekly deliveries to about 50 families over the past two months using Fusion Hybrids. The contactless deliveries are made with employees from Argo AI, Ford's self-driving technology partner, sitting behind the wheel and in the passenger seat, although the cars largely operate in self-driving mode.

Ford says it's the first time it has integrated self-driving technology with a customer-facing partnership.

Package delivery is one way that Ford aims to commercialize self-driving vehicles. The program is helping the automaker gain valuable insight through real-world experiences, such as how long the loading and drop-off processes take and how to handle a variety of …

A trimmer Cadillac network? Just a bit

The average U.S. Cadillac dealer sold 176 new vehicles last year, while BMW and Mercedes-Benz stores sold more than 900 apiece.

By the end of next year, almost 1 in 5 Cadillac dealers are planning to give up their franchise, with hefty buyout payments in hand. But Cadillac will still have about twice as many stores as its German rivals.

That may be why, two weeks after the deadline to accept a buyout, General Motors was still negotiating with some dealers who were on the fence about sticking with Cadillac as it aims for an all-electric lineup around the end of this decade.

"They are so over-dealered compared to their competitors that it's going to take far more than 20 percent of the stores to close for the remaining Cadillac dealers to become more competitive with their luxury peers," said Alan Haig, president of Haig Partners, a buy-sell advisory firm in Fort Lauderdale, Fla.

A nearly 20 percent reduction won't necess…

Mach-E over-the-air updates may lengthen Ford product cycles

DETROIT — The Mustang Mach-E could mark a change in the way Ford Motor Co. designs and builds new vehicles.

The upcoming electric crossover's over-the-air update capability allows Ford to continuously make improvements and move away from the traditional method of redesigning a vehicle every five or six years and sprinkling a more modest freshening in between. It's a strategy popularized by Tesla Inc., which hasn't significantly changed the sheet metal or powertrains of some of its older electric vehicles since they were introduced but has boosted performance and battery range through regular software upgrades.

"It gives us that optionality," Hau Thai-Tang, Ford's product development and purchasing boss, said in an interview last month. "I think we now have the ability to make the vehicle physically better for the customer with these OTA updates, and that's something that's game-changing in terms of the business model."

Thai-Tang a…

VW, Napleton do battle as retailer goes after stores

Volkswagen Group of America is trying to block Napleton Automotive Group from buying Volkswagen and Audi stores in two states — the latest twist in an ongoing legal entanglement between the automaker and the retailer.

Volkswagen on Oct. 30 sued the Napleton group, its three Volkswagen dealerships and company President Ed Napleton Sr. in New Jersey federal court, alleging violations of a 2018 agreement stemming from Volkswagen's diesel emissions scandal. Three days later, Napleton filed counterclaims that alleged Volkswagen was the one to violate terms of the sealed settlement.

The court battle comes amid an apparently long-strained relationship between the dealer and automaker. The two have been embroiled in lawsuits, including a 2016 class-action Napleton led against Volkswagen on behalf of U.S. dealers over claims related to the emissions scandal. As part of the latest dispute, Volkswagen is alleging fraud on the part of the Napleton group, w…

Fiat Chrysler’s Manley in pole position for Ferrari CEO job, paper says

MILAN -- Fiat Chrysler Automobiles CEO Mike Manley is in pole position to take over the top job at Ferrari, Italian daily Il Messaggero said.

Names of possible candidates to lead Ferrari are emerging in the Italian press after the automaker said on Thursday that Louis Camilleri, 65, was retiring as CEO with immediate effect. Camilleri is recovering at home from COVID-19 after a spell in hospital.

Ferrari and FCA Chairman John Elkann, the scion of Italy's Agnelli family, is leading Ferrari on an interim basis until a permanent successor is found.

Elkann, who is CEO of Exor, the family's investment company that controls Ferrari, could entrust the automaker, the family's most valuable asset, to Manley Il Messaggero said in the unsourced report published on Saturday.

Manley's long auto industry experience could revive Ferrari's fortunes in Formula One racing, the paper said. Ferrari has not won a F1 championship race all year and is in 6th place …

McLaren 765LT shows strength of subbrand

Launching a lightweight, high- performance variant of a supercar in the midst of a pandemic might not seem like opportune timing, but McLaren Automotive is finding the opposite with its 765LT.

Despite the 765LT not having a glitzy Geneva auto show introduction — McLaren, like other automakers, had to scramble to host an online reveal after the show was canceled — interest in the 765LT was strong throughout 2020 and the automaker's newest model is sold out.

The coupe's name provides two indicators as to why. The British exotic brand will build just 765 cars, while "LT" refers to Longtail. The nomenclature harks back to McLaren's F1 GTR Longtail race car that ran in the 1997 FIA GT Championship and 24 Hours of Le Mans.

The 765LT, based on the 720S coupe, is McLaren's fifth LT production model.

The 675LT coupe launched in 2015 and a 675LT convertible followed in 2016. In 2018, McLaren added the 600LT coupe, and a convertibl…

Tavares: Both FCA and PSA can deliver more

SA Group CEO Carlos Tavares already had a busy 2020 ahead of him when the COVID-19 pandemic hit. He and his teams were preparing for a merger with Fiat Chrysler Automobiles to create Stellantis, the world's fourth-largest automaker by volume, and to roll out a full slate of electrified models to meet Europe's new emissions standards.

Tavares, 62, was able to navigate these stormy seas, keeping the merger on track, growing PSA's electrified sales substantially and outperforming rivals by recording an operating profit in the first half despite lockdowns around the world.

Tavares spoke with Automotive News Europe Associate Publisher and Editor Luca Ciferri and News Editor Peter Sigal via video chat about how these challenges were overcome and what is ahead for Stellantis. Here are edited excerpts.

Q: You have said the COVID-19 pandemic boosted the rationale to create Stellantis. Have there been any side effects from the crisis on the agreement?

A: …

Dealers turn to Snapchat to attract younger buyers

Consumers, particularly those younger than 30, are spending more time on social media during the pandemic. But many dealerships have yet to venture beyond Facebook to apps such as Snapchat that have become a haven for millennials and Generation Z.

Data shows that the age groups drawn to Snapchat aren't shying away from the car market. Millennials and Generation Z were the only two segments for which vehicle registrations rose from the first quarter of 2020 to the second quarter, according to an Experian study. Snapchat says it reaches 75 percent of Americans born from 1981 through 2010 who make up those two generations.

Jeff Gonzales, CEO of marketing company AET Automotive, said dealerships that invest in Snapchat tend to have little competition at the moment. Most are active on Facebook, where there are plenty of baby boomers and Generation X consumers, but Snapchat is still largely uncharted territory, he said.

Gonzales said hi…