2019 was a packed year and threw up one or two surprises in the automotive business. Editor Dave Leggett’s month-by-month review picks out some highlights as seen through the prism of just-auto’s industry coverage. This first part covers the first half of the year.
January
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It is going to be a year where electrification is in the news – and Volkswagen Group is all over the subject. Diesel scandal, what diesel scandal? In early January there is a left-field glimpse of what a future mobile battery charging station could look like. Look out for them in 2020.
But that doesn’t stop VW quietly offering plenty of diesel options on the Touareg. Give the market what the market wants…
There were a few management changes in 2019. It was to be another annus horribilis for Carlos Ghosn but Mark Reuss got promoted at General Motors.
Over at the CES in ‘Vegas, things were pretty lively with automotive and supplier demonstrations and interviews for us. The Hyundai ‘walker’ caught my eye. Has someone been watching too much Star Wars or Gerry Anderson?
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By GlobalDataStill with Hyundai, it delivered its first Nexo hydrogen fuel cell vehicle in the US in January and the company would have plenty to say on hydrogen later on during the year.
It was also going to be a year of corporate coming togethers. Ford and Volkswagen tip-toed around each other in a delicate dance, but announced a commercial vehicle alliance in January. Would there be more to come later in the year (yes, but it was still all very delicate)? The logic behind scale economies and cost savings may be compelling, but these beasts are big marketplace rivals.
Do you remember how cold January 2019 was? You may if you live in the US upper Midwest where a polar vortex put quite a chill on US January light vehicle sales. Brrr. But that doesn’t stop us dreaming of sun-kissed beaches and a suitably open recreational vehicle for sand sliding fun. How about making it electric, Volkswagen?
And there’s an eye-catching rollout of the mid-cycle facelifted 7 Series with its rather large grille. Basking shark anyone?
Meanwhile, Hyundai-Kia claimed an interesting world first with a multi-collision airbag system.
We also spoke to Volvo Cars about its electrification strategy. The brand said it will launch a new diesel engine family this year – but it will be the last diesel it ever makes.
February
Another big theme for 2019 is Brexit. There are to be more twists and turns than a drive through the Italian Alps and there are also significant implications for automotive companies who trade between the UK and other parts of the EU (in finished cars and also components). One company at the centre of the debate in Britain is Nissan and it announces in February that it will cancel a plan to make the X-Trail at its Sunderland plant, citing continued Brexit uncertainty as one of the factors that contributed its change of heart. Other factors are that European demand for diesel has dropped and the EU concluded a free trade deal with Japan (so Japanese made cars can be shipped in tariff-free). Meanwhile, the SMMT points out that investment in the UK’s automotive sector has plummeted amid Brexit uncertainty.
The drive for electrification in Europe is also related to the regulatory environment and, in particular, the EU’s tighter average fleet CO2 targets. Falling foul of those targets will mean big fines, so manufacturers need strategies to roll-out more low-CO2 cars (while no longer relying on diesels to do the job). We hear from PSA’s Maxime Picat on his company’s strategy to be ready.
And the difference in costs between ICE powered vehicles and electric? The gap is closing.
As automotive companies rampup their warnings over the adverse consequences of ‘no-deal’ Brexit scenarios, Ford enters the fray again.
A look at new registrations data revealed that such has been its shrinkage at home, Italy is no longer the number one market for the Fiat brand. Fiat’s Brazilian market sales exceeded those of Italy in 2018, though not by much.
The news dropped that Honda is to close its Swindon manufacturing plant in 2021. Honda cited global industry CASE challenges and said the move was part of a broader rethink and not at all related to Brexit. There are certainly other factors at work that help to explain the decision, even if ongoing Brexit uncertainties for future trade arrangements have clearly not helped.
BMW and Daimler provided some detail on their collaboration for future mobility services. The two companies are investing more than EUR1bn in total to ‘develop and more closely intermesh their offerings for car-sharing, ride-hailing, parking, charging and multimodal transport’. It is quite something for these two rivals to come together like this, in a space that is going to become so important.
BMW and Daimler outline mobility services JV plan
The rivals also said they would work together on next-gen AD tech.
BMW also said it would be adding 2,000 jobs at Dingolfing as part of its electrification plans.
And Volkswagen flag-waved its electrification efforts. Wolfsburg really leaves no stone unturned these days in letting everyone know that is heading towards clean and green. The company’s suppliers would do well to make a note. Sustainability is to the fore.
Volkswagen outlines green strategy, involves suppliers
We also tried out the latest Corolla – no longer called Auris in Europe. A good naming change, we think.
March
March means Spring is in the air and in the auto industry, so is Geneva. Electric cars are dominant. SEAT shows an MEB architecture-based electric prototype called el-Born (after the trendy Barcelona district) and Honda causes a splash with its ‘e’ prototype. As usual, we published a Geneva briefing discussing key models as well as a show list of debuts.
There was also the news from Geneva that Porsche would not offer the redesigned Macan with combustion engines. The second generation will be an 800-volt EV. But as our note at the bottom of that news item says, there could be a way to fudge it…
Schaeffler’s Automotive OEM division says it is to axe 900 jobs and “consolidate” five European plants as it reacts to the shift from internal combustion engine to electric and hybrid powerplants. The German auto industry – and economy – certainly faces a big challenge in the transition to e-mobility.
Tesla shows its new crossover, the Model Y – although it is still 18 months away from series production. And, yes, that’s the fourth model to complete the ‘S3XY’ series (cringe). Personally, I think it gets more exciting with the smaller C-segment car with its lower price point and higher volume.
Model Y is revealed – but what will Tesla do next?
Also in March, Toyota and Suzuki decided to get closer, another part of an industry-wide trend towards selective collaborations.
Russia remains an extremely ‘challenging’ market in 2019 and Ford finally throws in the towel on manufacturing there, confirming JV plant closures. The Sollers JV will carry on with the Transit but the move reflects an assessment of long-term market prospects and Ford’s under-pressure CEO Jim Hackett decides the time is right to act. Ford also axes the ailing C-Max in Europe.
At the end of the month, ride-hail firm Lyft debuts on the Nasdaq stock market: Lyft beats Uber to IPO and Daimler strikes a deal with Geely for a 50:50 joint venture based in China to develop and operate the Smart brand globally as an all-electric carmaker.
From 2022 onwards all Smart models for global markets will be produced in China. Until then, the Smart Hambach plant in France will continue to make Smart cars; after that date it is repurposed to make a compact electric car for the Mercedes EQ brand.
Nissan’s Infiniti premium brand got real and decided to stop flogging a dead horse in Western Europe.
We also picked up some not so good news from Ford: it said it is definitely ending production at its French transmissions site at Blanquefort near Bordeaux with the loss of 850 jobs, thus incurring the wrath of local mayor Alain Juppe. The former French prime minister waded into the debate after learning of what he said was Ford Europe’s decision to reject Punch’s offer for FAI. Quite a row.
The big picture for Ford is that there is a large restructuring of European operations in progress.
April
April 1st is April Fools Day and our eagle-eyed news editor spots a nice hoax from Toyota Australia. Pie warmer to go with your HiAce convertible? “An alarm on the dash lets the driver know when the pie is cooked and ready to eat. When it’s safe to do so, the driver can bring the HiAce to a complete stop to open up the rear tailgate to access the retractable PieAce.” Lovely stuff.
Still on Toyota, the hybrid pioneer announces that it will offer royalty-free licenses on its portfolio of almost 24,000 hybrid-electric drivetrain patents to other carmakers at no cost from now through 2030. Has Toyota concluded its hybrid-electric technology will have a shorter life and lower adoption rates than it has long projected? Could it be starting to write down the value of that hybrid IP, surely among its most prized corporate assets? It is food for thought as companies consider the pathway to zero-emission and ICE-free markets in the middle of this century (or earlier).
Toyota’s free hybrid patent licenses – an existential moment
The big auto show in the month is in Shanghai, where VW shows its zero-emission ID Roomzz, a ‘lounge on wheels’. VW is also planning to launch a large electric SUV with three rows of seats in China from 2021. Yes, it is somewhat roomy. Our full Shanghai Show debuts list.
And it’s still more electric SUVs for China from Audi. And Geely’s Polestar shows its 2 in Shanghai, a refreshingly un-SUV like design. Chinese manufacture and US sales means the brand will be praying for an easing of US-China trade tensions: US sales for Polestar 2 threatened by trade tariffs.
We also heard from PSA of some interesting details on the DS 3 Crossback’s electric variant (‘E-Tense’) and in particular, a range of 200 miles.
Strategies for OEMs in Europe to address tougher CO2 limits is a recurring topic in discussions through the year. The incentive might be there to really push electric even if the market isn’t necessarily quite ready.
When the QI financial results come in, there’s a common theme: 2019 is shaping up to be a tough year for top and bottom lines.
Daimler profits down 16% in Q1
BMW lowers profit expectation for 2019
Renault Q1 sales hit by lower overseas volume
Autoliv takes Q1 hit to operating income
Although Ford earnings were a relatively bright spot.
For all the talk of the inevitability of autonomous drive and more ADAS, it was refreshing to hear an alternative viewpoint from Aston Martin CEO Andy Palmer. He was particularly critical of Level 3 and transition between on-board systems and human inputs as ‘reckless’.
Dieselgate made the news again when ex-VW Group CEO was finally charged with serious fraud in Germany.
Ford and Rivian formed a partnership to make an EV, another interesting move in the competition to get the resources and capabilities in advanced technologies such as electrification. Rivian, apparently, has a ‘skateboard platform’. Right. But the start-up also has Amazon involvement (so future delivery vehicles might also be on the Blue Oval’s mind).
May
The big news in May was that FCA proposed a merger with Renault. News broke over the bank holiday here and I found myself being interviewed by the BBC at home straight after breakfast, questions asked about the industrial rationale. To sum up: It is certainly a bold move and there are potential benefits for both parties, but there are complications and the deal is not done till it’s done. And, well, it didn’t quite make it over the line.
Renault rift with Nissan widens
Continental started a big reorganisation, an ongoing theme for a number of Tier 1s.
We also noted a spat between SK Innovation and LG Chem over IP. The OEMs are sure to be keeping an eye on it.
2019 was another tough year for Tata Motors-owned Jaguar Land Rover in a number of respects. Could TM be interested in offloading the loss-making unit? Might PSA be interested. Conversations may well have taken place but they appear not to have progressed very far.
We picked up on some EV data released by ACEA illustrating how far e-mobility has to go in some European markets. EV share of Poland’s vehicle market in 2018? Just 0.2%.
June
In a shock move, FCA formally withdraws its Renault merger proposal. Political difficulties related to conditions and guarantees sought on the French side – from the French government, a Renault shareholder, rather than Renault – appear to have scuppered the proposal.
Another strategic collaboration. Tata-owned Jaguar Land Rover (JLR) and BMW Group said they were joining forces to develop next generation Electric Drive Units (EDUs) in a move they said would support the advancement of electrification technologies in automotive.
In a blow to UK Automotive, Ford confirmed the closure of the Bridgend engine plant in South Wales in 2020. The axe had been hanging over the plant for a while.
Yet more collaboration in the automotive supply chain: Faurecia/Accenture team on Connected Car Lab
And we heard quite a bit on high-tech coming out of Israel (a country with significant presence and engineering resources in high-tech areas). Here were two announcements that caught our eye: Renault/Nissan team on Tel Aviv start-up lab and Ford opens tech centre in Israel.
We’ll be hearing more about 5G, generally, in 2020. Telefonica Deutschland and network supplier Ericsson said they are putting in what is claimed to be the world’s first 5G mobile network for automobile production at Daimler’s Factory 56 in Sindelfingen. The 5G standard is being implemented for the first time into running production and experience gained will be used to extend to other plants. Once installed and commissioned, the network will be operated by Mercedes-Benz Cars.
Nissan Motor launched its new range-topping battery electric Leaf e+ with longer range and more power. It has a 217PS motor delivering 340Nm of torque and up to 239 miles of range compared with the launch models which have a 168-mile range and 150Ps/320Nm motor.
NEXT: Part 2, July-December
