GlobalData revised down its ASEAN market forecast this week based on latest actuals and advance September data. In August 2023, Light Vehicle (LV) sales increased by 5% MoM but dropped by 2% YoY. The lower sales results were due to negative results in Indonesia, Thailand and Vietnam. Indonesia LV sales fell by 6% YoY in August even though the GAIKINDO Indonesia International Auto Show (GIIAS) event was held in that month. Based on recent information, September sales dropped sharply by 19% YoY for the third month in row. Thus, Indonesia LV sales result dropped by 10% YoY in Q3 2023 which deteriorated from 6% YoY, increasing in H1 2023. The weak sales in the quarter were likely due to: a) demand was pulled ahead by the temporary tax cut last year and the LCGC prices hikes early this year; b) consumers awaited the new automotive policy after the government hinted that they were drafting the new policy in August but have not announced it yet; c) consumers might wait for the new government as the presidential election will be held in February 2024.

Truck forecast grim

The European truck market outlook is clouding over as GlobalData’s latest European forecasts are gloomy with sales and production now forecast to decline in 2024. That’s despite the EU+ truck market performing strongly so far in 2023 though leading indicators point to a slowdown in underlying demand drivers: EU industrial production declined by 2.4% in July and by 4.4% in August; meanwhile, PMIs and survey data are at levels that have historically been consistent with recession. Nonetheless, the European truck market appeared to defy deteriorating macro conditions this summer as selling rates rose sharply. This was not solely, or even primarily, a matter of pent-up demand becoming unleashed as supply constraints continued to ease. The recent spike in selling rates coincided with the EU Smart Tachograph 2.0 mandate (an element of the EU Mobility Package raft of legislation), which came into effect in August. The impetus resulting from the mandate affected not only core intra-EU markets, but the entire region, including Norway, Switzerland, and the UK. Smart Tachographs 2.0 are equipped with GNSS technology to monitor location, time, and working hours; they also have the ability to communicate with other vehicles and roadside infrastructure. This is a significant upgrade in surveillance capability (for example, monitoring border crossings) from Version 1.0 of the technology, which became mandatory in the EU and the UK in June 2019. Newly registered trucks and buses with GVW>3.5 t needed to be equipped with Version 2.0 by August 2023. Older vehicles involved in international road transport need to be retrofitted with the devices, with implementation staggered depending on current equipment. Vehicles equipped with older digital tachographs must be retrofitted by December 2024, whilst vehicles equipped with Version 1.0 must be retrofitted by August 2025.

Global light vehicle forecast too

The global light vehicle selling rate has ended its six-month rising streak according to GlobalData. The selling rate fell to 93 million units/year in September, from a revised figure of 100 million units in August. With 8 million units sold in September, the global LV market has grown 8.5% YoY. Year-to-date (YTD), there have been 66 million units sold, marking an increase of 10.2% YoY. For another month, the USA, Western and Eastern European countries all registered double digit YoY growth, partly due to 2022 being a weak base and partly because of an alleviation in supply-side issues. Chinese sales grew 5.7%, driven by a booming export sector while the domestic market was helped by personal income tax cuts and price reductions across automakers.

EV fleet management

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The EV market is growing, with over one million EVs in use in the UK. Alongside this, fleet electrification is also growing in commercial vehicles. Figures from July 2023 point to more than 45,000 EV vans in use in the UK and it is growing fast. As EV fleets continue to grow, energy management has become a critical component for fleet functioning. To assist with this transition, a fleet electrification specialist – VEV – helps companies manage their EV switch by supplying chargers, while also assisting with planning, investment and operational rollouts. Backed by Vitol – the world’s largest energy trading company – VEV has already aided many fleet management companies by building the right solutions for burgeoning EV fleets. We spoke to Mike Nakrani, CEO of VEV, to discuss the challenges fleet managers are facing and the problem of ‘over-investment’.

Canadian investment

The government of Canada and the province of Ontario have announced they will be investing C$1 billion into a unit of Umicore’s battery plant, Ottawa. The plant will manufacture cathode active materials (CAM) and precursor active materials (pCAM), which are critical components for EV batteries. It is the first of its kind in North America. The Government of Canada is offering an investment of up to C$551.3 million, and the Government of Ontario is investing up to C$424.6 million.

Renesas restructuring

Renesas Electronics has announced a new organisational structure and management team appointments effective 1 January, 2024, to “support the company in its next phase of growth and development to become the leader in embedded semiconductor[s]”, according to a statement. The chip maker said it was establishing a technology based organisation to provide “more comprehensive and tailored solution offerings”. This is aimed at effectively addressing the converging needs of customers and markets by leveraging the company’s embedded processing, analogue, power and connectivity expertise to create complete products. The new organisation will also enable the company to capitalise on scale advantages by fostering more cross selling opportunities and broader customer coverage. As part of these changes, the businesses will be restructured into four new product groups.

Honda robotaxi JV

Honda Motor has agreed to establish a joint venture with General Motors and Cruise to provide driverless taxi services in Japan. The JV was scheduled to be operating in the first half of 2024 to prepare for the launch of commercial operations in early 2026, pending regulatory approvals. The fully automated driverless taxi service will use the Cruise Origin, a Level 4 autonomous battery powered minibus purpose developed by GM, Cruise and Honda, to pick up customers at specific locations and drive them to their destination. Customers will use a smartphone app for the entire process from hailing to payment. Honda said the Cruise Origin, on display for the first time at the Japan Mobility Show later this month, will offer an entirely new kind of mobility experience to a wide range of targeted customers. The vehicle has a spacious cabin without the obstruction of a driver’s seat and steering wheel, with capacity to carry up to six passengers. The driverless service will start in central Tokyo with a few dozen vehicles.

Hyundai unit supplying Tata-Daewoo truck batteries

South Korean construction vehicle and machinery manufacturer HD Hyundai Infracore Company announced it would supply battery packs for a broad range of electric commercial vehicles to tap into fast growing global demand for zero emission commercial vehicles. Hyundai Infracore made the announcement after signing an agreement to develop and supply battery packs to Tata Daewoo Commercial Vehicle (TDCV), a local medium- and heavy duty truck manufacturer controlled by Tata Motors. The two companies said they would strengthen cooperation in the EV segment to improve economies of scale. Hyundai Infracore said it would source battery cells from LG Energy Solution and begin supplying assembled battery modules and packs to TDCV in the first half of 2025.

Stellantis plans CV offensive

Stand by for some big Stellantis news on 23 October: The automaker said this week it would announce a full line of “renewed connected” vans on Monday and launch the new (North American markets) Ram ProMaster EV this year. This is part of the much-hyped ‘Dare Forward 2030’ strategic plan with Stellantis noting its commercial vehicles (CV) business accounts for 1.6m unit sales and a third of annual revenue, plus EUR5bn in “connected services revenue as a 360 degree preferred business partner”. Following the new van reveal, Stellantis will be fielding six brands, five vans, 10 pickup trucks and one “micro mobility offer”. North America will see four electrified pickup trucks over the next two years, including a new Ram 1500 REV in 2024 with a hydrogen model to come.

Posco EV motor plant finished

Posco International, part of South Korea’s largest steel making group, completed construction of a new plant in Ramos Arizpe in Coahuila state, Mexico, dedicated to the production of motor cores for North America’s growing electric vehicle (EV) industry. Construction began in July 2022. The company signed a US$460m deal last year to supply motor cores to an unnamed US based automaker through 2030 while also agreeing to supply 2.7m units to Hyundai Motor Group for its EV plant currently under construction in Georgia.

Volta bankruptcy

Joint administrators from Alvarez & Marsal Europe have been appointed to handle the bankruptcy proceedings of the UK subsidiary of Swedish electric truck manufacturing start-up Volta Trucks. In an official statement released by its board earlier this week, Volta cited issues with its supply chain as the reason for initiating bankruptcy proceedings in Sweden, namely the recent collapse of battery supplier Proterra which filed for Chapter 11 bankruptcy a few months ago.

Diesel share’s new low

September’s new diesel car sales in W. Europe fell to a new low, according to GlobalData. There was further month on month decline in the diesel share of new car sales in September but at a year-on-year level, the fall was just two and a half percentage points, which is the least since April of this year. With all but Greece data available at the time of writing, the diesel share for September has dropped to 14.2%, with Germany five percentage points higher than seen in August as the market swung away from battery electric cars and towards combustion/hybrid cars as payback for August’s BEV pull forward (because of September BEV incentive changes) took effect. That resulted in a bigger German diesel market this September than last September, by more than 6,000 units. Germany was the only market to achieve this feat, with all others seeing smaller diesel sales from a YoY perspective. France was the biggest faller, seeing diesel car sales fall by more than 7,000 units. Overall, 150k diesel cars were sold in the region in September, a fall of 6% from 2022. Year-to-date, Germany’s diesel car is up on the same period in 2022 as is Italy’s (by 56k and 39k respectively) but declines elsewhere, particularly in France, led to a diesel market 13k units smaller to the end of September. Private registrations of diesel cars have been falling as a share, but not significantly.

Stellantis cans CES

Stellantis said it was cancelling its CES 2024 display and presentations “with a focus on preserving business fundamentals in the wake of ongoing UAW negotiations” and “as part of the contingency plan implemented since the beginning of the UAW strike”. In a statement, the automaker said it was “executing comprehensive countermeasures to mitigate financial impacts and preserve capital, and will continue to demonstrate its transformation into a mobility tech company through other means”.

Have a nice weekend.

Graeme Roberts, Deputy Editor, Just Auto