Trade News

The COVID-19 crisis will cause automotive research budgets to plunge 17 percent this year and 12 percent in 2021, according to a new study.

IHS Markit, in survey results released Wednesday, said development budgets also are expected to suffer, dropping 13 percent on average in 2020 and 8 percent in 2021.

"With cash flow drying up due to sales activity grinding to a halt in core markets and little prospect for an imminent 'return to normal,' automakers and suppliers are looking to shore up their finances by preserving cash and other noncritical expenses," the research company said.

IHS Markit's automotive supply chain and technology team surveyed 140 suppliers and automakers in North America, Europe and Asia.

Twenty-eight percent of respondents said they expect revenue will be impacted beyond the next 12 months.

Respondents also said they expect some R&D activities now outsourced to be brought in-house, especially at medium and large aut…

A seven-state Midwest coalition will closely coordinate the reopening of the regional economy when the threat of the coronavirus subsidies.

Michigan Gov. Gretchen Whitmer is partnering on the effort with Ohio Gov. Mike DeWine, Wisconsin Gov. Tony Evers, Minnesota Gov. Tim Walz, Illinois Gov. J.B. Pritzker, Indiana Gov. Eric Holcomb and Kentucky Gov. Andy Beshear.

Michigan, Ohio, Indiana, Illinois and Kentucky dominate the U.S. automotive industry with several assembly plants and thousands of parts suppliers, along with R&D and other logistical support operations. 

"Phasing in sectors of our economy will be most effective when we work together as a region," the governors said in a joint statement. "This doesn't mean our economy will reopen all at once, or that every state will take the same steps at the same time. But close coordination will ensure we get this right. Over time, people will go back to work, restaurants will reopen, and things will…

Restructurings and business failures are in our near future, and merger activity will get intense in the months to come. In a sobering conversation, Automotive News Publisher Jason Stein joined Guggenheim Partners' John Casesa and PwC's Ray Telang to talk about the auto business landscape after the pandemic-driven shutdown in the first of our 8-week Congress Conversations series.

Restructurings and business failures are in our near future, and merger activity will get intense in the months to come. In a sobering conversation, Automotive News Publisher Jason Stein joined Guggenheim Partners' John Casesa and PwC's Ray Telang to talk about the auto business landscape after the pandemic-driven shutdown in the first of our 8-week Congress Conversations series.

China FAW Group Corp. broke ground on a 7.8 billion yuan ($1.1 billion) assembly plant for its Hongqi premium brand in the northeast China city of Changchun. 

The factory is scheduled to start production in 2022 with an annual capacity of 200,000 at peak output.

It will assemble electrified and connected Hongqi vehicles, FAW said. 

In early March, FAW completed an expansion of an existing plant for Hongqi in Changchun, raising annual production capacity at the factory to 150,000 from 100,000. 

The new plant will further increase Hongqi’s annual capacity to 350,000. 

A rapidly expanded product lineup has enabled Hongqi to maintain explosive sales growth despite the coronavirus outbreak in China. 

Hongqi was launched in 1958 as a limousine brand for government agencies in China. Prior to 2018, it only marketed two models -- a limousine and a compact sedan. 

But under new President Xu Liuping, FAW ha…

DETROIT -- Fiat Chrysler Automobiles' plan to resume North America production begins with its Mexico van plant on April 20 before a progressive restart of U.S. and Canadian facilities on May 4 and May 18, the company told suppliers during a webinar on Wednesday.

The automaker also said several key products would be delayed as a result of the COVID-19 outbreak, including the Jeep Grand Wagoneer and next-generation Grand Cherokee. The automaker estimates that each of those models, expected to arrive in 2021, will face three-month delays.

Fiat Chrysler's U.S. operations have struggled significantly with the coronavirus pandemic -- at least 15 hourly workers who have been linked to the disease have died, according to the UAW.

Company executives said plants will begin with one-shift patterns. Marlo Vitous, FCA's head of North America supply chain planning and global inter-regional flow, said during the supplier presentation that the company will only re…

SHANGHAI -- Beijing, aiming to help the electrified-vehicle sector pull through the coronavirus outbreak, last month extended subsidies for full-electric vehicles and plug-in hybrids for two more years. 

Despite the extra support, electrified-vehicle sales likely will shrink more severely than the broader new-vehicle market in the near future. 

It’s already happening. Equally impacted by the viral outbreak, demand for electrified vehicles fell much more than overall new-car and light-trucks sales in March, as well as in the first quarter. 

In March, while China’s overall new-vehicle sales slipped 43 percent to 1.43 million, combined deliveries of new EVs and plug-in hybrids dropped 53 percent to about 53,000. 

In the first quarter, total new-vehicle sales dropped 42 percent to 3.67 million. Demand for new EVs and plug-in hybrids slumped 56 percent to 114,000. 

In addition to the pandemic, China’s electrified-vehicle…

Leading Chinese electric vehicle battery maker CATL has more than tripled the size of a planned overseas bond issue to raise capital for a plant under construction in Germany, as well as for other purposes. 

The supplier plans to issue no more than $3 billion in bonds in overseas markets, the company said this week. That is significantly higher than the $800 million it said it planned to raise in November with an overseas bond issue.

Proceeds from the bond sale will be deployed to fund overseas plant construction, repay bank loans and cover general operational expenses, CATL said, without disclosing additional details.

In October, CATL broke ground on an EV battery plant in the German state of Thuringia to supply BMW Group and other European automakers. 

The 1.8 billion-euro ($2 billion) factory is expected to churn out 14 gigawatt-hours of battery cells and modules in 2022, according to CATL.

CATL, based in Ningde in east China’s…

WASHINGTON -- Nissan Motor Co. said Thursday it will extend a shutdown of U.S. manufacturing plants until mid-May, citing the ongoing impact of the COVID-19 pandemic.

The automaker previously scheduled its production halt through April 27.

Nissan said last week it put 10,000 U.S. hourly workers on unpaid furlough starting April 6. Subaru Corp said Tuesday it plans to restart production at its Indiana assembly plant on May 11.

Some automakers have said they hope to resume U.S. production on May 4, but other auto executives think the industry restart may be pushed to mid-May. Industry and political leaders are discussing plans to restart the U.S. and regional economies.

MEXICO CITY -- A group representing U.S. manufacturers on Wednesday told Mexican President Andres Manuel Lopez Obrador that an economic shutdown due to the novel coronavirus could weaken North America's response to the pandemic.

U.S. business lobbies have been pressuring Lopez Obrador to label certain industries "essential" so that health emergency measures aimed at containing the spread of the coronavirus in Mexico do not halt key operations on both sides of the border.

"At a time when we need to ramp up the production of personal protective equipment, lifesaving equipment and medicines, we cannot afford to have any of these critical supply chains shut down," the National Association of Manufacturers, the group representing U.S. companies, said in a letter to the president.

The economies of Canada, Mexico and the United States are deeply integrated after decades under NAFTA and its recent successor, with manufacturers used to moving parts and products s…

Canadian auto supplier Magna International Inc. is planning for a return to production in North America on May 4, with a subsequent gradual increase in output as the industry recovers from the shutdown caused by the coronavirus pandemic, a top executive said on Wednesday.

Most U.S. states have stay-at-home orders in place through the end of April, but many automakers and suppliers hope evidence of an easing in the COVID-19 infection rate will lead to a reopening of factories. President Donald Trump has expressed a desire to get Americans back to work soon.

"As we stand today, we have everything in place as if the plants are coming back on May 4," Magna President Swamy Kotagiri said in a telephone interview.

The auto industry has already reopened in China, where Magna has some plants back at 80 percent capacity, and is just now restarting operations in Europe. In the U.S., General Motors, Ford Motor Co. and other companies are waiting for the go-ahe…

A dozen Ford Motor Co. workers are experimenting with wearable social-distancing devices that could be deployed more widely once the company reopens idled manufacturing plants.

The small group of volunteers at a Ford factory in Plymouth, Mich., are trying out wristbands that vibrate when employees come within six feet of each another, said Kelli Felker, a company spokeswoman. The aim is to keep workers from breaching the distance that health experts recommend to avoid spreading the coronavirus.

The social-distancing wearable could be part of a broader array of new safety protocols Ford deploys as it resumes production as early as next month after at least a roughly six-week shutdown.

The automaker is also expected to subject all workers entering a facility to a thermal-imaging scan to detect a fever. And it will provide staff with masks and, in some cases, plastic face shields, Felker said. The company is devising the measures along with the UAW.

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