Good morning! It’s Friday, October 25, 2024, and that is The Morning Shift, your day by day roundup of the highest automotive headlines from world wide, in a single place. Listed here are the vital tales you have to know.
1st Gear: VW Doesn’t Know How To Save Itself But
The Volkswagen model wants a turnaround quite rapidly, however thus far it hasn’t introduced any plan for how you can make itself extra aggressive. That is based on a employees handout from the pinnacle 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 facility 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 longer term with the fitting merchandise, processes and plans,” Cavallo stated within the handout seen by Reuters.
“As an alternative, it continues to focus solely on points resembling labour and manufacturing facility prices.”
There are rising issues from Volkswagen employees 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 might construct higher, extra aggressive, vehicles, however what do I do know?
We must be studying extra in regards to the scenario in just a few days. Employees are holding conferences at a number of VW factories in Germany — and the automaker’s Wolfsburg headquarters — on October 28. Workers will probably be knowledgeable in regards to the present scenario at VW.
2nd Gear: Get Prepared For Value Slicing 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 powerful 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 p.c within the third quarter from 12.4 p.c final yr. It’s Mercedes’ worst profitability for the reason that pandemic, whereas earnings within the unit had been greater than halved. It’s truly 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 more durable 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, based on the finance chief.
The July-September earnings had been hit as Chinese language shoppers 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 can 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 according to 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 vehicles over there.
I’m simply hoping this cost-cutting at MB doesn’t trickle down into the product in any tremendous noticeable manner. Mercedes is (or was) all about high quality, in spite of everything.
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 will probably 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 according to 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 concerning its contract commitments with the United Auto Employees union. Stellantis defended its choice, pointing blame for the delay on the present automobile 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,” based on 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 employees and leaders, together with President Shawn Fain, at a union corridor in Trenton the identical day.
“Taxpayers are at present funding shopper incentives for a number of Stellantis autos, 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,” based on the letter from U.S. Home members to the Stellantis board of administrators. “As stewards of taxpayer funding, we have now a accountability 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 govt compensation, dividends to shareholders and inventory buybacks.”
“In 2024 thus far, 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 planet, with a ten% world revenue margin. If Stellantis is performing so nicely that Mr. Tavares can earn 518x greater than the common Stellantis employee, we’re inclined to consider market situations are constructive,” based on the Home members’ letter.
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The Senate letter famous that “we’re deeply involved that Stellantis just isn’t conserving the guarantees it made to strengthen and broaden good-paying union jobs in America,” and pointed to the corporate’s said intent to shift extra manufacturing to lower-cost nations.
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 broaden 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 progress 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 by — all of us are coping with that,” Donnelly stated, noting that he does count on sturdy trade gross sales. “The core enterprise remains to be going to be stable.”
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 known as “Transfer and Be Moved” will probably be Mazda’s major progress drivers subsequent yr, he stated Oct. 23.
Mazda sees marginal progress 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 will probably be a boon as extra shoppers flock to the fuel-efficient know-how as a manner to economize and dabble in inexperienced.
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The launch of the CX-90 and CX-70 midsize crossovers — which each provide plug-in hybrid powertrains — in addition to a manufacturing improve of the CX-50 compact crossover on the Mazda-Toyota joint-venture manufacturing facility in Alabama helped spur gross sales. Via the primary 9 months of the yr, CX-50 gross sales elevated 85 p.c to 58,515.
Mazda’s prioritization of constructing extra of what’s in demand — together with particular trims and powertrains — and placing these autos 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 rapidly 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 could be the best gross sales quantity for the automaker because it entered the U.S. market in 1970. In 2023, Mazda’s gross sales grew 23 p.c to 363,354 autos. The Japanese automaker is now near surpassing that determine… by September. Gross sales have elevated 15 p.c to 313,452 in contrast with final yr.
