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: Older TDI Buybacks Reportedly ‘Likely’
Some not-so-great news for Volkswagen and U.S. diesel owners: a German newspaper reports the automaker is now likely to buy back some 115,000 TDI models, “either refund the purchase price of a fifth of the diesel vehicles affected or offer a new car at a significant discount,” Reuters says.(Originally this headline said the buybacks would occur at 1/5th the price of the car; that is incorrect and has been amended.)
Those reports come from Germany’s daily Sueddeutsche Zeitung and do not cite sources. U.S. VW officials haven’t said whether they’re discussing buybacks or not.
These buybacks would likely affect older TDI cars, as the newer ones are easier to bring into compliance. As for the older ones:
Volkswagen expects that the rest of the vehicles will need major refits, incurring significant costs for parts and a long stay at the garage as parts of the exhaust must be reconstructed and approved, the newspaper reported.
The cars affected in the U.S. date back to 2009.
2nd Gear: Can Saab Lead China’s Green Car Revolution?
We haven’t been terribly optimistic about the supposedly reborn electric Saab under Chinese concern NEVS. But Reuters reports that Chinese-born Swedish businessman Jiang Dalong, now the majority stakeholder in NEVS, is dead serious about using the company to make pollution-plagued China more green. The recent fleet deal with Panda is but one part of that.
Jiang said he sees a big opportunity for the technology given the enormous policy help Beijing has lined up for it.
“China is going to be the world’s biggest market for electric cars,” Jiang said in an interview in his office in Beijing. “China has no choice. They have to wean themselves from conventional gasoline combustion cars,” he added, describing the recent sharp uptick in air pollution levels in China’s capital as “terrible” and “crazy”.
“Big existing automakers are too big. They cannot stop producing conventional gasoline combustion cars. But we can ... switch to new energy cars.”
3rd Gear: Meanwhile In China...
The continued economic downturn there hasn’t made for good news in the European markets for BMW, Daimler and Volkswagen. Via Bloomberg:
The German carmakers were among the biggest losers in the European market, leading the Euro Stoxx autos and parts index to its lowest level since October 2015. Volkswagen, already reeling from the emissions-cheating scandal, fell 4.9 percent. BMW shares dropped 5 percent, and Daimler, the parent of Mercedes-Benz, slid 4.8 percent.
“The massive devaluation of the Chinese currency is currently seen as the single biggest threat to the global economy and the reason for panic selling,” Arndt Ellinghorst, a London-based analyst with Evercore ISI, said in a report. He estimates that a 20 percent drop in the yuan’s value will equate to a loss of about 5.5 billion euros ($6 billion) in the combined profit of the German automakers.
4th Gear: Wanna Buy A Car Plant?
Because Mitsubishi can’t seem to unload its Illinois plant where it once cranked out the Outlander Sport, not to mention countless DSM sport coupes in the ‘90s. One more from Reuters:
Mitsubishi Motors (7211.T) said on Thursday it would close its sole production plant in the United States as the Japanese automaker cuts losses on dwindling sales in North America and a strong U.S. dollar, which has stymied returns.
Mitsubishi Motors confirmed a report in Japan’s Nikkei newspaper on Thursday, which said that the automaker was unable to find a buyer for its factory in Normal, Illinois, and take on its workers.
“We have given up looking for an automaker to buy the plant, but we are looking for possible buyers from other industries,” a Mitsubishi Motors spokesman said.
The plant will make parts until May and then be shut down. Sad.
5th Gear: A $1.5 Billion Boost For Ford
And not because of vehicle sales. Automotive News:
Ford Motor Co. today said it expects its 2015 earnings to be about $1.5 billion higher than it previously estimated, due to a change in how it will report pension gains and losses.
Ford said it now expects a pretax profit of $10 billion to $11 billion in 2015 as a result of the switch to “mark-to-market” reporting, which counts pension gains and losses in the year they’re incurred rather than amortizing over longer periods of time. Officials said they are making the change because the value of the company’s pensions has become more stable, and to make its results more directly comparable with the performance of General Motors and Fiat Chrysler Automobiles.
Reverse: Man Of The Year