However, although the semiconductor shortage was directly related to the Covid-19 pandemic, BMW had decided that it will not use the government’s job retention scheme to furlough workers and ensure they are paid during such stoppages, the union said. Instead the company was looking to alter existing collective agreements, which will weaken workers’ terms and conditions, it added. We asked BMW for its side of the story. “As a result of the global lack of availability of semiconductor components, an issue that has been affecting the entire automotive industry for several months, it has been necessary for Plant Oxford to stand down a number of production shifts. (Friday 30 April, Tuesday 4 and Wednesday 5 May; Thursday 13 and Friday 14 May; Thursday 20 and Friday 21 May). We are monitoring the situation very closely and are in constant communication with our associates and suppliers. BMW Group was surprised to read the press release from Unite, as the company is in advanced negotiations with the trade union regarding potential arrangements to ensure that the monthly base pay of associates is maintained during these current stand downs, including those that have already taken place. It is anticipated these negotiations will be concluded in the near future and details of what is agreed will be communicated by the end of this week at the very latest.”
Eight years ago next month BMW began manufacturing its first electric car. The i3 is not only still in production but it’s selling better than ever. Filling out the numbers between 1 and 8, which was slow at first, has lately accelerated and now includes SUVs too. Our new report this week looks at what’s already available and what’s to come.
Nissan Motor announced disastrous financial results for the fourth quarter and the 12-month period ended 31 March, 2021 and forecast no operating profit for fiscal 2021/22. In fiscal year 2020, consolidated net revenue declined to JPY7.86 trillion, resulting in an operating loss of JPY150.7bn, which the automaker said was “significantly improved from the full-year forecast at the beginning of the fiscal year” and a net loss of JPY448.7bn. This includes costs associated with restructuring of JPY61.3bn yen as Nissan focused on operational and efficiency improvements to transform the business. Free cash flow for the automotive business was a negative JPY391.0bn. Nissan said it maintained “sufficient liquidity to steer through this challenging business environment”. At year-end, cash and cash equivalents for the automotive business totaled JPY1.9 trillion. Automotive net cash was JPY636.0bn. In addition, the company continues to have access to approximately JPY2.2 trillion in unused committed credit facilities.
It was a very different results story at Toyota though, where cost cuts and a sales rebound brought a Q4 sales surge that limited the profit decline for the fiscal year just gone to little more than 8%.
No dissent allowed: Toyota Motor president Akio Toyoda has come under fire from some of the company’s largest shareholders for questioning Japan’s policy to ban the sale of new internal combustion engine cars in its quest for carbon neutrality. Toyoda, in his capacity as chairman of the Japanese Automobile Manufacturers Association, was recently critical of the country’s decision to ban the sale of conventional vehicles by 2035, saying “what Japan needs to do now is to expand its options for technology. I think regulations and legislations should follow later”. He added “a policy that bans gasoline or diesel powered vehicles from the very beginning would limit such options and could also cause Japan’s automotive industry to lose its strengths”. According to a Reuters report, five institutional investors with a combined US$500bn in assets under management said Japan’s leading carmaker risks falling behind its global competitors with more comprehensive electric vehicle programmes while also shielding other vehicle manufacturers that may be seeking to avoid meeting climate goals.
This summer Hyundai’s premium brand, Genesis, finally launches in Europe after a series of false starts over the years. In 2016, a planned European launch was postponed due to the brand lacking SUVs and crossovers in its lineup and its lack of diesel engines. With diesel sales crumbling throughout Europe the lack of suitable diesel engines is no longer an impediment. Likewise, the launch of the GV80 full-size SUV in late 2019 with the compact GV70 SUV following in Q4 2020 has seen another barrier to success removed. However, achieving success in Europe will not be plain sailing. The market’s dominated by the German premium trio of Audi, BMW and Mercedes-Benz, while Volvo and Jaguar Land Rover also have appreciable share in Europe. We can add Porsche into that mix too – its product proliferation in recent years has seen its sales rocket from the tens of thousands a decade ago to just over 270,000 last year. The existing players will not cede share to Genesis easily. Others have tried and failed in Europe in the past. Most recently Nissan’s Infiniti brand is a case in point. Its arrival in Europe was heralded by ex-CEO Carlos Ghosn at the 2008 Geneva Motor Show with the promise of a serious assault on the European market. Fast forward 12 years and Infiniti announced its exit from the European market. Its exit came after selling just over 55,000 vehicles over the period and with a highpoint of 13,775 registrations in 2016. Even Lexus, Toyota’s long-standing premium brand, has struggled for traction in Europe with the brand’s market share consistently at less than 0.5%.
Automakers should expect more chips in the second half of the year but the overall squeeze on supply is likely to continue into 2022, according to one of the industry’s largest suppliers Infineon. However, the Munich-headquartered company said it would only start to make up lost volume in 2022 and blamed supplier issues for not expanding chipmaking capacity fast enough. “We predict that the imbalance between supply and demand will continue for a few quarters yet, with the risk that it lasts into 2022,” said Infineon CEO Reinhard Ploss in a virtual press conference.
The eponymous CEO of Dell has joined the choir of top industry executives predicting that the ongoing global semiconductor shortage “will probably continue for a few years”. Michael Dell, who founded the company which bears his name in 1984, voiced his concerns as automakers and tech companies fear that global chip scarcities will hold back production and threaten bottom lines. Dell’s annual orders of about $70bn worth of semiconductors make it one of the biggest customers in the sector. “The shortage will probably continue for a few years,” Dell said on Tuesday, Reuters reported. “Even if chip factories are built all over the world it takes time.” The company will particularly struggle to get a hold of older and cheaper semiconductors in the one-dollar range that “are used practically everywhere,” the CEO said, adding that “newer technologies are not easy to come by.” The statement echoes similar sentiments shared by the likes of C C Wei, CEO of giant chipmaker the Taiwan Semiconductor Manufacturing Company. In April Wei estimated that the shortage would last into 2023.
Shock. Ford Romania chief races trains. Not quite. Nonetheless she reckons she can ride a bike faster than the trains that transport cars from the factory. Freight trains which carry cars from the Ford plant in Craiova, southern Romania, to western Europe frequently need about 26 hours to travel the 400km (250 miles) to Romania’s western border with Hungary. Then, they spend another nine hours on border control because Romania is not part of Schengen. This generates high costs for the carmaker, romaniainsider.com reported. “The average speed (of trains) is 15-20 km/h which is slower than I can go by bike. And I’m no Olympic athlete, I don’t pedal very fast, but I can overtake this train. Certainly, this is a problem for us,” Ford Romania president Josephine Payne told local TV station PRO TV.
Tesla has halted plans to buy land to expand its Shanghai plant and make it a global export hub, Reuters sources have said, due to uncertainty created by US-China tensions. With 25% tariffs on imported Chinese electric vehicles imposed on top of existing levies under former US president Donald Trump still in place, Tesla now intends to limit the proportion of China output in its global production, two of the four sources told the news agency. Tesla had earlier considered expanding exports of its Chinese made entry level Model 3 to more markets, including the US, sources told Reuters, a plan that had not previously been reported. Tesla currently ships China-made Model 3s to Europe where it is building a factory in Germany.
Argo AI, the US-based self-driving vehicle developer has revealed a new self-designed LiDAR sensor. The sensor should give Argo’s autonomous vehicles (AVs) an edge over the competition and enable them to see further and with more accuracy than ever before.
INEOS Automotive said it had completed the next phase of dynamic testing for its Grenadier SUV. The latest generation Grenadier prototypes were approved by INEOS Chairman, Sir Jim Ratcliffe, after testing on the Schoeckl mountain near Magna Steyr’s HQ in Austria, as part of an engineering gateway assessment.
Have a nice weekend.
Graeme Roberts, Deputy Editor, just-auto.com