Subaru's success is depleting its resources, Toyota has a whistle-dream car in the works and the truck battles are hotter than ever. All this and more in The Morning Shift for Monday, February 11, 2019.
1. Gang: Subaru's Success is a Double-Edged Sword
Subaru has been at record sales in the US for ten years. and there's no reason to think that 2019 will turn out to be different. However, according to Automotive News this success comes with a price:
At the end of last month, the automaker responded to public accusations that Subaru operated a pressurized boiler environment, forcing some facilities in Japan to force thousands of unpaid wages in the millions to give up by doing overtime outside the clock.[…]
A series of production disruptions in Japan has shaken Subaru's reputation in the domestic market, torpedoing sales in Japan and sparking corporate uprisings. The problems are now creeping back into the United States in the form of recall and lost shipments.
"We remain concerned that [Subaru] will not make the necessary investments and changes to ensure vehicles are produced with the vehicle quality that the brand and its customers deserve," wrote US National Retail Marque Advisory Board issued a resolution on September 18 to take Subaru's management to the top in the US and Japan after a year-long rollout of Ascent's US-built crossover rollover. 19659012] The great demand for Subarus – and with the outback of the next generation – to celebrate its comeback, surpasses the supply. Quality control is lacking, production has been discontinued, workers are canceling, and those who do not have to do ridiculous overtime – 105 hours a month, in one case
Subaru's CFO Toshiaki Okada has said the company "would have had our capacity in terms However, in order to meet the growing demand, it did not do so. Now, Subaru is looking for ways to "cautiously" expand in the midst of the crisis.  2nd gear: Toyota sells a self-driving car in one year
At least that's what the company proposes.
Toyota, Japan's largest automaker, has plenty of plans to get there, but also a lot of work, according to a report from Automotive News Europe . The idea is only the first step.[Toyota] needs to develop hardware and software for the vehicle, drastically reduce the cost of the technology and dramatically increase the hiring of software engineers who will make it all possible.
This is the challenge faced by James Kuffner, CEO of Toyota Research Institute's Advanced Development Inc. or TRI-AD. His Tokyo-based company was founded in March to fuel Toyota's attempt to bridge the gap between research and showrooms.
The first milestone will be reached in 2020, when Toyota wants to introduce vehicles that can drive on highways. Kuffner said they would roll supercomputers.
"The prototypes and pre-production vehicles the team builds here at TRI-AD will be … the smartest supercomputer on wheels," said Kuffner late last month at TRI-AD Temporary Office near Tokyo Station. "We have called it the lunar shot of my generation to build and bring this technology to market."
"Supercomputer in operation". "Moon Shot". These are usually not phrases that one would expect from a technology for sale next year. To make this dream come true, Toyota has invested $ 2.8 billion in a partnership with Aisin Seiki and Denso
to develop self-driving software, some of which are not yet in production. According to Nikos Michalakis, Vice President responsible for the software platform, they will have to develop a "Silicon Valley Mindset". And they need to figure out how to make this new technology affordable if they want to attract customers.
. 3 Gear: The truck wars are heating up
Trucks have proven to be one of the biggest trusted staples in today's automotive market. Companies such as Chevrolet and GM are offering substantial discounts (such as Ram Truck Month and Silverado Sell Down) to get people to choose the from another automaker's truck. As Automotive News reports:
It is expected that the fight for the pickup series will continue this year, if not escalated. GM and Ram are launching redesigned heavy-duty pickups for refurbished Ford HD models. Ford and Jeep again compete in the mid-range segment against GM's aging Chevrolet Colorado and GMC Canyon and the segment-leading Toyota Tacoma.
GM has sold the lightest pickups (midsize, full-size and HD) for five consecutive years, and it's not planned to let this title go without a fight. It is preparing for a fight with Ford's reawakened Ranger and the upcoming Jeep gladiator.
It was a tough fight to fight. Brand loyalty prevails in the truck world, so updated models and incentives are so popular:
According to JD Power, the average incentive spend on the full-size pickup segment last year was $ 5,670. Incentives for the segment were $ 5,560 in January, down slightly on the prior year and just under $ 81.
The slight increase was partly due to a seasonal decline in incentives in January, which led to significant year-end discounts for Chevrolet's employee pickup and other models in December.
In January, Chevrolet offered on average incentives of approximately $ 4,600 per Silverado sold, according to internal JD Power data of more than $ 6,000 in December. Ford's F-Series spending slipped 8.3 percent to $ 4,500 in January, and Ram's pickup incentives slumped 5.9 percent to $ 5,178.
GM is determined to capture the light commercial vehicle market this year but the Ford Ranger and Jeep Gladiator are coming to run GM for its money. It's going to be a damn big battle to play this year.
. 4 Gear: Nissan and Renault Prepare for the Ghosn Blowback
This week will really show what a mess the Carlos Ghosn affair has caused for Nissan, Renault and the auto industry as a whole – that's right, everyone. Income releases come out. Pierre Quemener, an analyst at MainFirst Bank AG in Paris, put it succinctly: "The automakers will start with a hangover in 2019."
If you want to get an idea of what these earnings reports might confirm, Bloomberg has some predictions:
Nissan's operating income is forecasted to grow by 10 percent in the year ended March $ 517.1 billion ($ 4.7 billion), the lowest level in five years, according to analysts surveyed by Bloomberg. Renault is expected to record a decline in operating income by 8.8 percent last year to 3.47 billion euros (3.93 billion US dollars).[…]
The shares of both companies have fallen sharply since Ghosn's arrest on 19 November. Renault had barely changed in the afternoon afternoon on Monday and Paris lost 31 percent last year. Nissan declined 1.5 percent in Tokyo and has dropped 19 percent in the last 12 months.
That's a pretty sizeable sum to lose – especially with Nissan's Chinese market (predicted to be the automaker's largest market). Electrical engineering and autonomous technology are becoming the norm, and of course the Brexit is making a raging cloud over Nissan -Renault's head is hovering.
And do you remember the Nissan plant in Mississippi, which broke 700 workers? Yes. This is because the sale of trucks and vans has also slowed down on the country side. If there has ever been a good time for an internal scandal, this is certainly not true.
. 5 Gang: Highlights of UAW Profit Sharing Market Downturn
Since 2015, automakers have written nearly $ 5 billion in bonuses to United Automobile Workers Union's $ 1.8 billion profit sharing alone in 2018.
But this sum is not quite applauding yet. In fact, it shows the current decline in the automotive market. Automotive News has more:
But the checks for 2018 paid out to March represent the lowest total payoff since Ford, General Motors and Fiat Chrysler Automobiles have ratified their current dealings with the UAW in 2015 and could be controversial Talks – and potential changes – this summer and fall mean when the sides are working out a new four-year contract.
The industry is feeling more uncertain than during the final round of negotiations, when Ford and GM were at record levels and the industry was about to set a new brand in US sales. Now GM is closing assembly plants and dismissing paid employees, Ford is being restructured worldwide and FCA is directing the life after the death of CEO Sergio Marchionne, who has been instrumental in getting the company out of net debt last year for the first time since Insolvency.
What does lower industry profits mean for the UAW? Lower profit sharing – or, in other words, an unstable paycheck from year to year. While GM, Ford, and FCA 2019 all expect net profit to improve, they are definitely not the exciting numbers that dominated the market in 2015
Reverse: GM signs first contract of Autoworkers Union
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Neutral: What Truck Will Take the Market by 2019?
Everyone and their brother are drooling over the shiny new trucks planned for the coming year – trust me, I'm not a truck driver and even I'm really into the new of the Ram tailgate. Which manufacturer dominates the truck market in 2019?