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: Trying Something Very Different
Chinese automaker Geely’s plan is to let its subsidiary Volvo chase the upscale luxury market, while this new brand unveiled yesterday in Sweden called Lynk & Co. will be more moderately priced for the rest of us. The cars—which I think are handsome, if a bit busy—use a Volvo platform and will be built in China then sold in other markets, including the U.S.
But they come here with no dealer network, unless the Volvo chain is going to get expanded somehow. How sales will work remains to be seen, but as Automotive News points out, the car is designed to allow you to start your own ride-sharing business right out of the gate:
The brand has been called Lynk to emphasize that its cars will offer a high level of connectivity, including the possibility for owners to earn money by sharing their vehicles with others when they do not need them.
All Lynk models will come with a large central touch screen and telematics systems that are always connected to the Internet and to the car’s own cloud network. A share button will allow the owner to provide others with access to the vehicle via a shareable digital key. Owners can use the Lynk app to control and monitor their car from a smartphone — or directly from the car.
Lynk is collaborating with Microsoft and Alibaba to build a new digital customer infrastructure for the car industry, with new digital order, supply, sales and customer relationship management systems and custom applications for user interaction.
Ericsson teamed up with Lynk to create a car-connectivity cloud, and the digital platform will feature an application programming interface open to third-party developers.
Emphasis mine. That’s incredibly interesting, something no one else has tried before.
Our man Jason Torchinsky was in Sweden yesterday for the first part of Lynk’s briefing, and today he’s in Germany to hear more. Expect more details from him today on how this will work exactly.
2nd Gear: LeEco Also Sets Its Sights On America
Yesterday was somehow a big day for the Chinese auto industry and its ambitions to sell cars in America—high-tech cars, specifically, with an emphasis on autonomy and connectivity. Chinese tech giant LeEco had some embarrassing problems getting its LeSee prototype on stage, but they made clear they’re here to do battle with Tesla in its own backyard.
Here’s a bit more from Reuters:
LeEco executives said they envision the car as part of a shared ownership system, and said it could benefit from a strategic partnership with Los Angeles-based Faraday Future, an electric vehicle start-up also controlled by Jia. No details were given of that alliance.
Faraday will unveil its first production vehicle in Las Vegas in January at the Consumer Electronics Show, Jia said.
LeEco’s focus on the interconnectivity of screens puts the Chinese company squarely in the path of Apple and other U.S. technology giants trying to bridge the gap between hardware like phones or cars and the software that connects them to each other.
I’m a hell of a lot more skeptical of LeEco and Faraday Future than I am of Lynk, which comes from a longtime automaker proven in its own country and Volvo, which has actual cars that have been incredibly great as of late. But we’ll LeSee!
3rd Gear: Why Nissan Got Mitsubishi
Today Nissan’s acquisition of control of Mitsubishi Motors became complete, with Nissan-Renault ponying up $2.29 billion for the deal. Group CEO Carlos Ghosn pledged that “Mitsubishi will not become a subsidiary of Nissan,” but rather its largest shareholder and strategic partner. He also warned that it’s up to Mitsubishi to turn itself around.
From Reuters, a quick refresher on why this deal even happened:
Pooling resources and eliminating duplicate operations would result in estimated annual cost savings of 24 billion yen in 2017 for Nissan, the company said, rising to 60 billion yen in 2018. Mitsubishi said it expected annual savings of 25 billion yen.
The companies also plan to share technology and production platforms, while also streamlining parts procurement to keep costs down. Ghosn warned this may be “bad news” for Mitsubishi’s “not so competitive suppliers”.
Nissan stands to capitalize on Mitsubishi’s strength in developing Asian countries, where Nissan has been struggling to increase its market share. Around one-third of Mitsubishi’s global sales come from the rest of Asia - excluding Japan - with a focus on countries including Thailand and the Philippines.
“We’re not happy with our performance in ASEAN (Association of Southeast Asian Nations) countries,” Ghosn said. “I think the collaboration with Mitsubishi will help us in many areas to shore up our own level of competitiveness there.”
This one’s all about the Asian market. How it will affect the companies in the U.S., if at all, remains to be seen.
4th Gear: Hyundai Sunroofs Can Fly Into Traffic
That is not great! Via the AP:
Hyundai is recalling nearly 63,000 midsize cars in the U.S. because the panoramic glass sunroofs can come loose and fly into traffic.
The recall covers certain Sonata midsize cars from the 2015 and 2016 model years, including gas-electric hybrids.
The South Korean automaker says in government documents that a wind deflector anchor plate in front of the sunroof wasn’t bonded properly to the car. A loose deflector can detach and interfere with the roof as it closes. If the owner tries to force the roof closed, it can fly off.
5th Gear: Where Detroit Still Has The Edge
Size, scale, being able to get shit done on time. That’s the advantage the traditional automakers have over these new tech players, reports The Detroit News:
If two things are likely to test Tesla’s enviable brand equity with consumers, they’ll be the long wait for its comparatively affordable Model 3 and a strong launch of the Michigan-built Chevy Bolt. Guess building cars, and doing it right copy after copy, are proving more difficult, more fraught and more capital intensive than that may look from the West Coast.
Wall Street would thrash traditional automakers for such loose affiliation with production timetables and investor commitments, as more than one executive has pointed out in recent years. But investors apply different rules to New Economy companies — or do they?
In this business, getting a product to market on schedule still matters. Getting a much-anticipated electric car to consumers that would sell for less than $30,000 (after federal incentives) and would go more than 200 miles on a single charge would be large step forward in the mobility movement. Huge, actually.
In that, GM is poised to take that first step. It has a 50-state Chevy distribution network; Tesla does not (thanks, in part, to tough franchise laws in states like Michigan, natch). Its Bolt boasts an EPA-certified range of 238 miles; Tesla’s Model 3, the only other electric to exceed the magic number of 200, goes 215 miles on a single charge.
Reverse: RIP PV
Neutral: Can Lynk Or LeEco Make It In America?
If so, how?