Fiat and PSA’s merger is good to go, Hyundai had a bad quarter, and Jeep. All that and more in The Morning Shift for October 26, 2020.
(FYI: Some of the links below are to paywalled stories. Pay for the journalism you value!)
Fiat Chrysler and PSA are set to win EU approval for their $38 billion merger to create the world’s No.4 carmaker, people close to the matter said, as they strive to meet the industry’s dual challenges of funding cleaner vehicles and the global pandemic.
To allay EU antitrust concerns, PSA has offered to strengthen Japanese rival Toyota Motor Corp, with which it has a van joint venture, by ramping up production and selling its vans at close to cost price, the people said.
FCA and PSA will also allow their dealers in certain cities to repair rival brands.
Following feedback from rivals and customers, the carmakers only had to tweak the wording of their concessions, with no changes to the substance, the people said.
I am only interested in this merger insofar as Peugeot is coming back to the U.S. Hell, give me Vauxhall too while we’re at it.
But that is only in the short-term because of recalls and such. Long-term, Hyundai should be just fine. Still, it wasn’t what analysts were expecting.
Hyundai, the world’s fifth-biggest automaker when combined with affiliate Kia Motors Corp 000270.KS, reported a net loss of 336 billion won (228 million pounds). The average of 12 analyst estimates complied by Refinitiv was 1.2 trillion won in profit.
The automaker said it booked 2.1 trillion won to cover charges related to engine defects that increased the risk of stalling and fire. The years-long quality problems have cost Hyundai and Kia nearly $5 billion and left the pair subject to a probe by U.S. authorities over the manner of their recalls.
“Third-quarter results reflect engine-related provision expenses as the company took preemptive measures to ensure customer safety and cover any possible future increase in quality-related expenses,” Hyundai said in a statement.
Jeep is going hybrid, well, has gone hybrid. Please let’s all make a vow to move on from “hybrid” soon. Let’s just make a decision, electric or internal combustion or hydrogen fuel cell or something, I’m tired of even uttering the word “hybrid.”
From Automotive News:
Jeep’s drive to roll out battery-powered vehicles globally is counting on an assist from one of the world’s most electrified markets: Japan, where hybrid penetration is 30 percent.
The U.S. off-road specialist is banking on the arrival of the Renegade 4xe — a plug-in hybrid version of the compact crossover — to help muster a sales gain here this year, despite the pandemic.
The Renegade 4xe, Jeep’s first electrified offering in Japan, goes on sale next month. Parent company FCA Japan expects to sell 4,000 Renegades here next year, with between 10 and 20 percent coming from the 4xe.
Is ... drum roll please ... the Mercedes-Maybach GLS 600 4MATIC, which is made in Alabama.
From Automotive News:
The Mercedes-Maybach GLS 600 4MATIC arrives in stores in December and starts at $161,550, including shipping. Fully loaded, the SUV will top out at nearly $200,000.
The plant in Vance, which builds the GLE, GLE Coupe and GLS and is tooling up to launch electric vehicle production, started making the Maybach SUV in September. Despite the plant being shut down temporarily in the spring along with the rest of the auto industry because of the coronavirus pandemic, a Daimler spokeswoman said the new ultraluxury SUV is on schedule for retail distribution.
Ed Kim, AutoPacific principal analyst, said that in image and functionality, luxury SUVs speak to the tastes of luxury customers far more than luxury sedans do.
“They have money to spend, and they want the most prestige they can get for their money,” he said. “These days, luxury SUVs provide just that.”
If you buy Lordstown Motors’ stock please never speak to me ever again.
From The Detroit News:
Now that Lordstown Motors Corp. has the financial backing it needs, the electric vehicle startup is hoping to beat its competition to market by delivering its electric truck by next September.
Northeast Ohio-based Lordstown Motors and DiamondPeak Holdings Corp., a special purpose acquisition company, completed a merger that makes the EV startup a publicly traded company, effective Monday. The deal gives the truck maker the financing needed to start production next year of its electric Endurance truck.
Lordstown Motors CEO Steve Burns plans to deliver that truck as automakers Rivian Automotive Inc., Tesla Inc. and General Motors Co. plan to bring their own electric truck offerings to market around the same time. Yet Americans are still loving their big, gas-powered pickups and SUVs, with those sales leading multiple brands and providing support for the expensive electric plans automakers are trying to fulfill.
The election is next Tuesday. Go vote! I’m sure, because you are a conscientious citizen, you already have.