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: You Mere Mortals Are Powerless To Stop Me
Nissan-Renault’s emergency rescue of Mitsubishi Motors last year may seem perplexing to Americans who know the latter brand as a shadow of its former self. But what those familiar with the U.S. market may not realize is that Mitsubishi is huge in other markets, specifically Southeast Asia, where Nissan-Renault has struggled to gain a foothold.
How big does it make Carlos Ghosn’s conglomerate now? Within firing distance of General Motors and a few hundred thousand away from Volkswagen in terms of global sales, reports Bloomberg:
Nissan Motor Co., Renault SA and Mitsubishi Motors Corp. combined delivered 9.96 million vehicles last year, the alliance said in an emailed statement. The three automakers chaired by Ghosn finished fewer than 4,000 cars and trucks short of GM’s deliveries in 2016 and within about 350,000 units of new worldwide leader Volkswagen AG.
Ghosn emphasized the scale Renault and Nissan would add by coming to the aid of Japanese peer Mitsubishi Motors last year, following a fuel-economy scandal that dates back decades. The alliance is including Mitsubishi Motors in its sales tally despite Nissan owning only about 34 percent of the company.
“The combination of Groupe Renault, Nissan Motor and Mitsubishi Motors creates a new force in the global auto industry,’’ Ghosn said in the statement.
But this is just beginning. “Le Cost Killer” may have to go to work doing what he does best to mitigate the projected $1.8 billion loss Mitsubishi could post in March as part of the fallout from MitsuTireInflateGate that led to the rescue in the first place.
If he can, he may be too powerful for anyone to stop.
2nd Gear: Here At Volvo, Things Are Great!
How’s Volvo doing these days? Great, thanks for asking! Via Automotive News:
Volvo Cars reported double-digit improvements in 2016 earnings and revenue on Wednesday and forecast a fourth consecutive year of record sales for 2017 helped by the arrival of models such as the second-generation XC60 and the all-new XC40.
Operating profit rose 66 percent to 11.0 billion Swedish crowns ($1.24 billion) and revenue increased 10 percent to 180.7 billion crowns, the company said in a release. That helped improve the automaker’s profit margin to 6.1 percent compared with a 4 percent margin in 2015, a result that CEO Hakan Samuelsson was particularly proud of.
Their cars lately have been excellent. It’s nice to see the brand bounce back.
3rd Gear: Dammit Takata
Meanwhile, Subaru took a hit in Q4 2016 thanks to a strong yen (which has bedeviled several Japanese automakers) and having to deal with the mess from the Takata airbags. Via Automotive News:
Like other Japanese automakers, Fuji Heavy is being hammered by the yen’s appreciation. The more expensive yen erodes the profits Fuji Heavy and others make on vehicles sold overseas. At Subaru, swinging foreign exchange rates chopped $359 million off Fuji Heavy’s operating profit in the third quarter.
Recalling vehicles fitted with faulty Takata airbag inflators also hurt. Fuji Heavy took a $118.2 million charge to settle Takata claims in the quarter.
The inflators, which can be prone to explode when exposed for long periods to heat and humidity, are part of one of history’s biggest automotive callbacks, affecting millions of vehicles worldwide and almost every major auto manufacturer.
4th Gear: Everything’s Fine Here, Says Italy
Fiat Chrysler Automobiles (FCA, or as we’ve taken to calling them around the office between all the burnout videos and emissions cheating allegations, “Fuck Clean Air”) has been cleared of any pollution cheating wrongdoing by the government of Italy. Which definitely has no dog in that hunt. No, sir. Via Reuters:
Transport Minister Graziano Delrio told a parliamentary hearing that Rome had sent a separate report to German authorities refuting their allegations and showing that three FCA models — Fiat 500X, Jeep Renegade and Fiat Doblo — were compliant with regulations.
Glad that’s settled.
5th Gear: GM’s Big SUV Push
What’s General Motors’ plan this year? To go big on SUVs and crossovers while cutting back on models dragging down sales like the Camaro and Cruze, reports Bloomberg. The automaker has a massive backlog of unsold inventory, something that comes when GM is trying to convince Wall Street it can weather whatever crisis hits the industry next:
Swelling inventories, rising incentives and a flat U.S. auto market are stoking skepticism General Motors Co. can match or exceed last year’s record results.
GM is counting on new versions of the GMC Terrain and Chevrolet Equinox and Traverse sport utility vehicles to help maintain or exceed the $12.5 billion in adjusted earnings before interest and taxes reported Tuesday. Those introductions may be needed to shore up its shrinking North American profit margin, as cars like the Chevrolet Cruze crowd dealer lots. Investors have their doubts, sending the shares down the most in more than a year.
Chief Executive Officer Mary Barra has laid off or dismissed workers making slow-sellers including the Cruze and Camaro sports car to begin the year. The cutbacks contrast with the pressure President Donald Trump has put on automakers to build new U.S. plants. GM instead is trying to address inventory that would take about 108 days to work through at January’s selling rate — more than a month’s worth of extra supply compared with this time last year.
Reverse: Did You Know The Guy Who Founded Jaguar Was Named ‘Lyons’?