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: Nissan’s Demands
The people of the United Kingdom voted this summer to leave the European Union, which maybe seemed like a “cool” and “good” idea at the time but will have serious long-term economic consequences.
At the Paris Motor Show this week, Carlos Ghosn, the CEO of Nissan—which has the largest UK car plant by volume—said concerns over the uncertainty of import and export tariffs may lead him to dump a major investment in that country. Unless they get some sort of compensation, of course.
Mr. Ghosn said in remarks at the Paris motor show on Thursday that Nissan, owner of the U.K.’s largest car factory by volume, “will not make an important investment decision in the dark.” He was referring to where it would produce a coming version of its Qashqai sport-utility vehicle.
Mr. Ghosn also said London should guarantee the auto maker compensation if tariffs are imposed as part of the U.K.’s separation from the EU. “If the British government cannot respond...we will not go ahead,” he added. The nation’s auto industry exports 80% of its production, much of it to mainland Europe.
The U.K. Department for Exiting the European Union declined to comment.
He and other auto executives at the Paris show warned that Britain’s auto industry would be highly exposed in the event of a split between the U.K. and the EU that imposed tariffs on car exports and parts imports.
That part about 80 percent is important. If all those trade deals are up in the air, or lead to stiffer trade barriers, it could be a disaster for the UK’s auto industry.
2nd Gear: Jaguar Land Rover Responds
Nissan can take its ball and go play elsewhere. That’s harder to do for Jaguar Land Rover. That very British car company now says that if Nissan and other automakers get compensation from the UK, the playing field needs to be level for everyone. Via Reuters:
Chief Executive Ralf Speth told Reuters on Friday that there had been signs that some customers in Europe, Jaguar Land Rover’s biggest market, no longer wanted to buy British cars after the Brexit vote.
When asked about remarks by the chief executive of Nissan (7201.T), who said on Thursday that he would halt new investment in Britain without a pledge of compensation for tariffs imposed on UK-built cars in the event of a ‘hard Brexit’, Speth said:
“We are the only car manufacturer in the UK to do all the work in terms of research, design, engineering, production planning in the UK.”
“We want to have fair treatment and a level playing field at the end of the day,” Speth told Reuters by telephone from the Paris auto show.
Speth said the firm, which built one third of Britain’s 1.6 million cars last year, would face a double hit in the event of ‘hard Brexit’ with tariffs on exported cars and imported parts and technology from within the bloc hurting competitiveness.
What a mess!
3rd Gear: Dump Diesel? Dumb Decision, Declares Dieter
Since Volkswagen ruined everything for everybody, automakers seem poised to move away from diesel fuel. Toyota indicated as much at the Paris show this week, and VW and Audi have made clear the future is in electricity.
But Mercedes boss Dieter Zetsche disagrees, telling Autocar that their diesels will be around for some time:
“As we are proving with our new family of diesel engines, these can be as clean as gasoline engines with an on-going built-in advantage of around 15% lower CO2 emissions,” he said.
“This continues to be a key issue even though at this moment in time everyone is talking about NOx. We are seeing a highly emotional, political and illogical kind of discussion, but when you look at the facts and the technological potential, it would be absolutely stupid to forego the potential that diesel provides.”
Nor, said Zetsche, is demand for diesel showing any sign of abating among premium brands untouched by the Dieselgate saga. He said, somewhat caustically: “Beyond the politicians and media, the customer has some relevance in markets as well and neither BMWnor Mercedes-Benz has seen one basis point change in the take rate for diesel in Europe over the last year. We are convinced that we will continue to offer from both a customer benefit and an environmental point of view a good choice of diesel engines on an on-going basis.”
When asked how long he envisaged diesel engines surviving, Zetsche replied: “Exactly as long as gasoline engines.”
A bold move! We’ll see if it pays off.
4th Gear: Volkswagen’s Tough Road
Speaking of VW, brand boss Herbert Diess stressed to Bloomberg that the company’s overhaul post-Dieselgate is going to take some time:
Volkswagen AG said it will take years to overhaul its namesake brand tarnished by the diesel-cheating scandal before returning to what unit chief Herbert Diess called the “good times,” when cars like the I.D. electric concept hit the market.
By 2020, “we will have finished the hard work,” Diess said Thursday in a Bloomberg TV interview at the Paris Motor Show. “We have three to four tough years ahead of us to really restructure the company and getting more profitable and more competitive.”
Volkswagen has been using the emissions-cheating scandal as a catalyst for deeper reforms. The VW brand, the German carmaker’s biggest unit, was struggling even before the crisis, and the company is now in discussions with unions over concessions in exchange for investment guarantees and agreements to retrain workers in the transition away from traditional combustion engines.
5th Gear: The Cost Of Autonomy
Want a self-driving Volvo? Once that tech is ready for prime-time, it’s going to cost you about an extra $10,000. That’s for now, of course. Technology has a way of becoming cheaper over time and trickling downward. Via Bloomberg:
The self-driving car that Volvo plans to offer in five years will be sold to individual buyers, with the autopilot features adding about $10,000 to the vehicle’s cost, CEO Hakan Samuelsson said.
Volvo’s autopilot will be an optional feature that will let occupants completely disengage from driving, Samuelsson told reporters Thursday at the Global Mobility Leadership Forum near Detroit. The car will still have a steering wheel for when the owner chooses to drive it, he said.
“To make a car even more premium, one of the most interesting things is a full autopilot,” Samuelsson said. “Not a supervised version, but really the one that you can sit back and watch a movie or whatever. That will make the premium car even more premium.”
Reverse: Live Fast, Die Young
Neutral: What Should Car Companies Expect In The Wake Of Brexit?
And what should they demand from the UK government to invest there if trade conditions are unfavorable?