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: General Motors May Be Cutting More Than Just Opel
In an attempt to increase profit margins, General Motors sold Opel and Vauxhall to France’s PSA Group last week, effectively pulling The General out of Europe entirely after 90 years in that market. This bold move came under some scrutiny from Fiat Chrysler’s CEO Sergio Marchionne, who told CNBC that GM may have “thrown out the baby with the bathwater” with that deal, because he’s definitely not mad about missing out, oh no, definitely not.
But as big of a move as that was, there may be more on the cutting block, as Automotive News quotes GM’s CEO Mary Barra as saying:
There’s a little bit more work that we’re doing in the international markets...Our overall philosophy is that every country, every market segment has to earn its cost of capital.
The news site makes note that GM has lost over $20 billion in the European market since 1999, but only now is the company doing anything about it, signaling just how serious Barra and her team are about reducing costs.
Automotive News says there’s more to come, as GM is targeting North American cars and certain international markets as potential spots for cost reduction, citing “low profit potential” and “weak franchise strength” as the driving forces.
In particular, the site says, in North America, we could see GM scaling back its small car and full-size sedan offerings in favor of more profitable SUVs and trucks, as oil will be cheap forever and ever amen. As for international markets, GM has already reduced its footprint in Russia, Australia, Indonesia, Thailand and India, and Automotive News says the company may continue to cut into those even further.
2nd Gear: Intel Is Buying Mobileye For $15.3 Billion
Computer chip giant Intel has decided to purchase Israeli tech company Mobileye, which specializes in driver-assist systems like Lane Keeping Assist, Adaptive Cruise Control, Forward Collision Warning and other computer vision system-based technologies.
The $15.3 billion deal, the Wall Street Journal says, is the biggest purchase of an Israeli tech company ever, and also the largest acquisition of any company focused on the autonomous driving field. Mobileye famously helped Tesla developed its first iteration of its Autopilot semi-autonomous system, before a bit more infamously breaking up with Tesla in a rather public spat.
The news site notes that Mobileye “accounts for 70 percent of the global market for advanced driver-assistance and anti-collision systems,” and that the acquisition is perhaps not all too surprising, since the Israeli company has been working alongside Intel on an autonomous vehicle project for BMW.
Not to mention, the two companies have also been working with American Tier One supplier Delphi on a fully autonomous vehicle system. So we might have seen this coming. The Intel-Mobileye acquisition should be complete within the next nine months.
3rd Gear: BMW Is Joining Merkel On Her Visit To See Donald Trump
Tensions between German automaker BMW and President Donald Trump are high, as the commander in chief blasted the company for investing in Mexican plants, saying earlier this year to Reuters:
I would tell BMW that if you are building a factory in Mexico and plan to sell cars to the USA, without a 35 percent tax, then you can forget that.
German Chancellor Angela Merkel is making her first trip to see Trump on Tuesday, and she’s bringing a representative from BMW and Siemens. The goal, Reuters says, is to “stress how many U.S. jobs are tied to ‘Deutschland AG’” as Trump’s protectionist “America First” policies loom.
Despite Trump’s threats, BMW is moving ahead with its 3 Series plant in Mexico.
4th Gear: China Is Feeling The Pressure On Electric Car Quotas
China’s strict EV policies, which require eight percent of sales to be fully electric or plug-in hybrid vehicles by 2018 (and then 10 and 12 percent by 2019 and 2020, respectively), are coming under fire by automakers who fear the plan is too aggressive, Reuters reports.
The news site says the policies are just going to hurt automakers:
Automakers and industry bodies have said the targets are too tough and could hurt manufacturers’ interests. New energy vehicles last year accounted for just 1.8 percent of sales in the world’s biggest autos market, according to Reuters calculations based on official data.
China, which hopes to make its domestic automakers competitive with outsiders, might actually consider some changes, as a source told Reuters about two revisions: one that reduced the quota by two percent each year (so six percent by 2018, eight percent by 2019 and 10 percent by 2020), and the other that simply shifted the quotas back by one year.
5th Gear: A Look At The Geneva Motor Show Debuts
Geneva Motor Show press days are over, so now let’s take a look back at some of the greatest debuts of the show:
Honda Civic Type R:
Mercedes AMG GT Concept:
The New Alpine:
Range Rover Velar:
Porsche Panamera Sport Turismo:
Bentley Bentayga Mulliner:
Lamborghini Hurrican Performante:
Reverse: Herbie Makes Its Big Debut On The Silver Screen
GM is on a hunt to cut costs; where do you think those cuts will come from?