The most incomprehensible pairing in the auto industry may be coming to an end, GM dealers are OK with less inventory and Honda is streamlining. All that and more in The Morning Shift for November 16, 2020.
1st Gear: OK, Maybe Opel-Peugeot Makes Less Sense But That’s It
I’m not sure if there’s ever been a tie-up in the car world more unnecessary than Nissan buying up stakes in Mitsubishi. Nissan is a bland car company that loves cost-cutting. Mitsubishi is a largely bland car company that has a few bright spots perilously vulnerable to, well, cost-cutting. Not a great pair! In any case, it may be coming to an end, as Bloomberg reports:
Two years after the stunning arrest of Carlos Ghosn over alleged financial misconduct, discussions are underway inside Nissan that could fundamentally reshape the world’s biggest car alliance and unwind a key part of its former chairman’s legacy.
The automaker is exploring ways to sell some or all of its 34 percent stake in Mitsubishi Motors, people with knowledge of the matter said.
Concern is mounting within Nissan that it will take longer for the company to recover from the pandemic-induced crisis, said the people, who asked not to be identified because the discussions are not public.
The report outlines that either Nissan goes forward with its Ghosn-era plans of total consolidation or it splits. There’s not much sense in maintaining its current strange in-between status. I’m hoping Mitsubishi goes independent only to sell us the Delica and bring back the Evo.
2nd Gear: Dealers Happier To Have Fewer Cars, Actually
Inventory is way down at GM dealerships, and dealers don’t seem to be mad about it, as Automotive News reports:
But tight inventories have come with silver linings: high dealer margins as customers pay closer to sticker price, reduced carrying costs and a record profit in North America for GM last quarter.
It still has more ground to make up, but long term, GM doesn’t plan to replenish supplies to the level that dealers had long been accustomed to having on their lots.
“This has really taught us how we can — if we have the right products — turn it, sell it and actually be profitable selling new vehicles again,” said Charlie Gilchrist, president of Gilchrist Automotive in Texas. “It’s almost a blessing in disguise for us.”
The report goes on to immediately note that dealers “don’t miss the days of vehicles sitting on their lots for months, though they still are desperate for more pickups [and] SUVs,” which sounds about right.
3rd Gear: UK May Move Up Ban On Fuel-Burning Cars To 2030
The UK had discussed banning gas and diesel sales starting in 2040, and then moved that date up to 2035. Well, this fantasy stop-sale has been moved up again, to 2030, as the Guardian reports:
Boris Johnson is understood to be planning to ban the sale of new petrol and diesel cars within a decade, with reports that the ban will be brought forward by five years.
It follows the prime minister moving the cut-off date from 2040 to 2035 in February.
Johnson is expected to announce the measure amid a raft of new environmental policies next week, according to a report in the Financial Times, which attributes the news to industry and Whitehall sources.
The government hopes the policy will energise the market for electric cars in the UK and help the country achieve its climate targets, including reducing emissions of greenhouse gases to net zero by 2050.
As with California’s 2035 plans, the UK should just do it already. Why wait?
4th Gear: Honda Thinning U.S. Operations
You’d think that having a Honda franchise would be a license to print money here in the United States, but it’s a trickier business than you’d think. There has been at least one historic scandal of greed and excess, so it’s always fun to hear how things are going.
Apparently Honda isn’t quite rolling in it as much as you’d think and is trying to go lean, as Automotive News reports:
Honda is getting back to its leaner-operating roots by consolidating U.S. manufacturing oversight into a single unit and creating regional field manager positions that will better respond to dealer needs, the company’s sales chief told Automotive News.
The hoped-for result, said Dave Gardner, general manager of sales at American Honda Motor Co., will be the ability to get new and redesigned vehicles to market faster and take care of retailers who have specific local needs on products and marketing.
“We’re setting up the company for the future, to make sure we go back to our Honda roots, focusing on things like speed, simplicity, agility, flexibility that are all long-term traditional Honda DNA,” Gardner said. He took over U.S. sales, marketing, service and parts in May after being CEO of Honda Canada.
5th Gear: Something Has To Give On Traffic Vs. Transit
There’s a fun new feature in the Financial Times outlining troubles for New York City’s subway system and how it has struggled amid coronavirus. Buddy, the MTA struggles even when there’s no pandemic on.
I’ll say it’s an entertaining read and includes some wonderful optimism on behalf of some on the transit side:
Later, in an interview with the Financial Times, [Kevin Corbett, NJ Transit chief executive] spoke about the years after the September 11 2001 terror attacks, when he helped manage lower Manhattan’s economic recovery. People at the time questioned the future of the skyscraper. Now super tall condominiums tower above the city, he says. Until February, New Jersey Transit was operating standing-room-only trains, delivering many of the 2m people entering Manhattan every day.
Recent reports of local road congestion give him a perverse comfort. “When I hear now that [delays into] the Lincoln and Holland tunnels are 20 minutes or a half-hour, or there’s an accident and it’s 45 minutes, sort of like the old days, that’s a big factor in driving people back to us,” he says.
This is all to say that something has to give in terms of car traffic versus public transit. At the moment, a lot of the slack is getting taken up by remote working, but I don’t think that will last forever.
Reverse: No Hard Feelings, Right?
Neutral: What Was America’s Last Good Mitsubishi?
It was the i-MiEV, right?