Trade News

Automakers are headed for a less-drastic U.S. sales collapse than feared, helped by online sales, 0 percent financing and other incentives, according to market researchers.

U.S. retail sales are down about 50 percent, a drop-off that wouldn’t be as steep as China or Western European countries saw in the first full month following their coronavirus outbreaks, according to Jeff Schuster, senior vice president of forecasting with LMC Automotive, a partner of J.D. Power.

“We’re now expecting a pattern that is more of a sustained level of a 40 percent to 50 percent decline over a longer period of time, instead of the really deep hit and then a relatively quick recovery,” Schuster said by phone.

The industry caught a break last week when Department of Homeland Security guidelines added vehicle sales to its list of essential services. All U.S. states now allow cars and light trucks to be delivered through showrooms or online, according to J.D. Power.

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Volkswagen of America said it plans to begin recalling workers at its Chattanooga assembly plant the evening of May 3, with production set to resume in limited fashion May 4.

The plant builds the Atlas and Atlas Cross Sport crossovers as well as the Passat sedan. Production at the Tennessee plant has been shut down since March 21, with employees placed on temporary emergency furlough on April 11.

Volkswagen said Wednesday that the factory's initial production schedule will be a five-day, eight-hour workweek for most shops. Shift and break times will be staggered.

The automaker will provide personal protective equipment for employees, institute temperature checks for those entering and exiting the plant, and keep six-foot distances between workers. It will suspend an internal shuttling service, add more cleaning of contact surfaces and replace the plated cafeteria with packed lunches.

Volkswagen's assembly plant in Puebla, Mexico, remains halted fo…

DETROIT -- French seating and interiors supplier Faurecia told employees this week that work will resume at a Michigan plant May 4, after earlier asking some employees to start work next week, while the state's stay-at-home order is still in effect.

As automakers make plans to ramp up amid COVID-19, many suppliers are caught between customer needs for parts to resume vehicle assembly and state orders limiting commercial activity to those necessary for sustaining and protecting life.

In Michigan, Gov. Gretchen Whitmer's stay-at-home order that prohibits public gatherings, motor boating and in-state residence-to-residence travel is in effect until May 1. The Michigan Manufacturers Association has asked Whitmer to amend her stay-at-home order to allow automakers and suppliers to resume production, CEO John Walsh said Wednesday.

While the order makes exceptions for transportation-related work, it doesn't explicitly endorse automotive manufacturing, said Wal…

SEOUL -- As Detroit's automakers shut production in March due to the coronavirus pandemic, South Korea's Hyundai Motor cranked up its factories back home to ship cars to the United States, a move that is proving costly for the world's fifth-largest auto group.

Hyundai ramped up domestic production to as much as 98 percent of capacity by late March, not only as the Korean market was recovering from a bad February but also because it bet on demand for Tucson crossovers and other models from U.S. customers, its biggest overseas market outside of China.

Hyundai shipped 33,990 vehicles to the United States in March, or 4.3 percent more from a year ago, according to company data.

While Hyundai is one of few global automakers whose production has recovered at home, its export optimism has been dampened by the severity of the U.S. outbreak, weak consumer sentiment that battered the industry, and as rivals have quickly moved to guard their turf. Read more

Fiat Chrysler Automobiles said Tuesday it had drawn down on a 6.25 billion euro ($6.8 billion) credit line to buffer its cash reserves during the uncertainty around the coronavirus health crisis.

The funds from the revolving credit facility, originally signed in June 2015, add to the 1.5 billion euros ($1.6 billion) FCA has drawn down from other credit lines.

The outbreak has pummeled vehicle sales and production for automakers across the world, forcing many to take out multi-billion dollar loans to ride out what is likely to be a deep global recession.

Ford Motor Co has drawn more than $15 billion from revolving credit lines and last week raised $8 billion from corporate debt investors to shore up its cash.

General Motors has entered into a 364-day revolving credit agreement of $1.95 billion, which the company said will be exclusively used by its financial services business.

Earlier this month Fiat Chrysler said it had …

German supplier Webasto, which was hit hard in January by the coronavirus outbreak, this week restarted production at factories in Germany, Romania and the Czech Republic.

Some of those plants are already producing at 50 percent capacity and are poised to steadily increase that rate by early May, a spokeswoman told Automotive News Europe.

However, half of the roof system supplier's European factories and all of its U.S. plants remain closed.

The outlook for both Europe and the U.S. is that production will re-start at the dormant plants at a much-reduced volume by late April to early May.

All of the supplier's plants in China have resumed output and are producing at rates above 50 percent capacity, the spokeswoman said.

In the first two months of the year the company was shaken by an outbreak that infected 11 employees. All 11 people, of which nine were in Germany and two in China, made a full recovery.

Since mid-March, another 14 Webasto …

FRANKFURT -- Volkswagen will resume production of its battery-powered ID3 hatchback on Thursday, as the brand provided new, more precise guidance for its production ramp-up after the coronavirus-related shutdown.

A VW brand spokesman said the automaker is reopening its German car factories with production of the Golf-sized EV at its plant in Zwickau.

The ID3 is a key launch for VW as the first vehicle in its new generation of affordable, long-range electric cars. VW has converted the Zwickau factory to build compact-sized EVs based on its long-range MEB architecture for its VW, Audi and Seat brands.

The spokesman said the summer launch date for the ID3 in Europe remains in place despite the production shutdown that started on March 20. Manager Magazin reported in February that software glitches were threatening to delay the launch schedule.

"Our target is to deliver the 30,000 ID3 first-edition pre-booked models to all customers at the same time,"…

A cylinder-deactivation system now used in many General Motors gasoline-powered light trucks could be applied to commercial diesel trucks.

Tula Technology Inc. and diesel engine manufacturer Cummins plan to begin testing a six-cylinder semitruck diesel engine outfitted with a version of the technology, called Dynamic Skip Fire.

The system is being tested first on Cummins 6.7-liter inline turbo six X15 semi-truck engine. If testing yields positive results and it moves into production, the technology likely will appear on semitrucks.

There is also a path for commercializing the technology for diesel engines that are used in consumer pickup trucks.

The development is notable because it points in a different direction from most of the auto industry at the moment.

Powertrain programs around the world are currently focused on electrification strategies. The idea of applying Dynamic Skip Fire to commercial truck…

Amid the confusion of the coronavirus pandemic, U.S. auto retailers are pushing off expenses such as dealership purchases to the second half of the year. Asbury Automotive Group Inc. didn't have the luxury of postponing what would have been its largest acquisition ever and one of the industry's largest deals in a decade.

For the Duluth, Ga., dealership group, which on March 24 terminated its planned $1 billion acquisition of most of Park Place Dealerships in Texas, the cancellation came down to time constraints related to the deal's financing arrangements.

"The last thing I wanted to do was cancel that deal," Asbury CEO David Hult told Automotive News on Friday. "We would have prolonged the closing and finished the deal at some point. But it wasn't a traditional buy-sell situation."

The largest piece of financing for buying Park Place came from a $525 million bond that required the deal to be completed before April 30, according t…

Vitesco Technologies, the powertrain business of Continental, will build a R&D center in Tianjin to develop solutions for hybrid and electric powertrains.

The center, which is scheduled to be completed in 2021, will be added to a campus where Vitesco has been making electric axle drive systems for PSA Group and Hyundai since 2019, the company said Tuesday

“The new center in Tianjin further expands our development capacities right in the center of where we expect the biggest electrification growth over the next years,” said Thomas Stierle, who is head of Vitesco's electrification technology business unit.

The 9,000-square-meter (96,875-square-foot) complex will include a lab where electric drive technologies can be tested and validated.

"The new R&D center in Tianjin is another milestone for Vitesco," said Yanfei Cao, head of the company's electrification technology business unit in Asia. “It will help us to forge even closer links to local cus…