Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: China’s Electric Carmakers Are Scrambling To Beat Tesla
The Model 3 is coming, which could well be the most desirable affordable electric cars of a generation. This would upset the balance of the EV market at the moment, at least for China. At the moment in China, legacy carmakers have a lock on higher-end electrics while domestic Chinese brands cover the cheap and basic side. Think back to the Chinese Coda sedan that we kinda got here in America a few years ago to get what I mean.
In any case, domestic Chinese carmakers are now scrambling to put together Model 3 competitors before Tesla takes the car to China in 2018. The whole Shanghai Auto Show seems like an electric vehicle conference, with electric crossovers showing up at more stands than I can count. Their advantage, they hope, is that they’ll build their cars in China and skip the 25 percent import tariff that will hit Tesla, as startup Future Mobility told Reuters ahead of the current Shanghai Auto Show:
“[Future Mobility’s upcoming first car is] a bit more than $40,000, a very competitive price positioning ... because Tesla customers buying the Model 3 in China would have to shoulder the cost of a 25 percent import tariff on the car”, unless it’s produced in China, he said.
“We will be competitive because we produce the car locally,” he added.
Tesla, meanwhile, has remained committed to building in the United States. Whether or not this will screw over the company is not clear. Tesla seems to be having a hard enough time as it is building cars here in the States. Who knows how it would go in China.
2nd Gear: Two Car Companies Debut The Same Name In Shanghai
There are so many new electric car concepts in Shanghai this year that they’ve run out of names for them. Yesterday Volkswagen’s budget brand Škoda showed off its Vision-E concept car, an electric crossover that’s part of the company’s madcap rush to dig itself out of its Dieselgate hole. Today, the Chinese brand Roewe showed off its own Vision E concept car, which is also an electric crossover.
What’s fascinating is that these two vehicles could not only share the same name, but thanks to the peculiarities of joint ventures, they could actually end up being the same car, as Car News China reports:
Even more interesting is that the production version of the Skoda Vision E will be manufactured in China by Shanghai-Volkswagen. ‘Shanghai’ is short for the Shanghai Auto Industry Corporation, better known as SAIC, which happens to be the owner of the Roewe brand.
How can this mess possibly happen? Don’t those people talk to each other? There is of course an intriguing possibility that both cars somehow the same, as in based on the same platform, and therefore got similar names. Did Volkswagen sell or share their MEB platform to SAIC? Platform sharing among joint venture partners is not uncommon but in this case very unlikely.
Ultimately, it just looks like a total mixup. There are only so many words available.
3rd Gear: China’s Best-Selling Carmaker Blames Trump For Not Coming To America
That same SAIC announced at the Shanghai Auto Show that it’s no longer rushing to get into the American market, and the executive director of SAIC’s international department Michael Yang specifically called out Trump, as Automotive News reports:
“Eventually we aim to have all, but at the moment we are focusing on” China and then Europe, Yang said. “The reason is the ‘climate change’ after the new presidency.”
The decision of SAIC Motor, which operates manufacturing joint ventures in China with General Motors and Volkswagen, comes even as Trump said he declined to start a trade war with China because the country is taking steps to rein in the nuclear ambitions of North Korea.
Now, other Chinese car brands like our friends Trumpchi are still going ahead with their plans to make it to America, but this is a big reversal for SAIC. One out of five new cars in China is an SAIC product.
4th Gear: Hyundai Calls Working In China “Complicated” Right Now
Speaking of Chinese/Korean politics influencing the Chinese auto market, Hyundai is just about shitting itself over how things are going at the moment. Bloomberg reports that Hyundai is ramping up its luxury brand Genesis in China, while Reuters described a more drastic situation for the company:
The carmaker has seen its sales hit in the country and has sharply cut production amid anti-Korean sentiment over the planned deployment of a U.S. missile defense system outside Seoul and rising competition from Chinese brands.
“At the moment given the complicated political, economic and competitive market environment, Beijing Hyundai faces what we can describe as severe market challenges,” Xu Heyi, chairman of Beijing Hyundai Motor Co [Hyundai’s Chinese joint venture with BAIC], said at an event at the Shanghai auto show.
Hyundai and affiliate Kia Motors Corp saw combined China sales slump 52 percent in March from the same month a year earlier.
Hyundai and Kia sales dropped 52 percent in China last month.
5th Gear: Luxury Car Sales In China Reach Pre-Anti-Corruption Highs
Beyond the EVs, what cars are really doing well in China? Top of the line luxury, baby.
For four years, president Xi Jinping has had a massive countrywide ‘anti-corruption’ campaign that pushed the country’s wealthy to be less showy with their wealth. Showiness got you stuck in jail.
Well, it did. Now top-end luxury car sales are reaching their highest peaks in since the anti-corruption drive started as Bloomberg (who else?) reports:
Chinese sales at Ferrari and Aston Martin are approaching their 2013 peaks, following tumbles of as much as 20 percent in 2014, according to data compiled by Bloomberg Intelligence. Maserati, McLaren and Porsche enjoyed their best year ever in 2016. Lamborghini is also on the mend after deliveries plunged by more than half from 2013.
“The outlook is looking pretty good for us here in the China market,” Reid Bigland, head of Fiat Chrysler Automobiles NV’s Maserati and Alfa Romeo divisions, said in a Bloomberg Television interview at the Shanghai auto show Wednesday. “With us, we just haven’t felt it,” he said, referring to the impact of the crackdown on consumption.
Maserati announced at the Shanghai Auto Show that it’s betting on a 47 percent sales increase in China, as Reuters reports, while Bentley told the press that it sold 60 extended-wheelbase Mulsannes from the show floor.
Reverse: Ah Yes, It All Started In Beautiful Trenton
Neutral: Where do you see the Chinese car market next year?
Do you think it will be all luxury crazy? Do you think Tesla is going to get swept? Do you think it’s all gonna get nuked? If you were an auto executive here in America, what would you be betting on?