The terrible sales reports are here, including Hyundai, Fiat Chrysler, Porsche, and Europe, and the UAW is trying to shape up. That and more in The Morning Shift for Wednesday, April 1, 2020.
Let’s check in on Hyundai:
Hyundai, one of the hottest brands over the last 24 months behind an expanded crossover lineup, posted a 43 percent decline in U.S. sales last month, underscoring the sudden impact the coronavirus is having on automakers and dealers alike.
March deliveries totaled 35,118, with retail demand falling 39 percent and fleet volume dropping 54 percent, Hyundai said, even as the brand quickly rolled out a promotion that included no-interest loans and deferred payments for four months on select models.
In the first two months of the year, Hyundai’s U.S. deliveries rose 11 percent, but volume dropped 11 percent in the first quarter on the sharply weaker March results.
Let’s check in on Europe:
Industry association ACEA demanded “strong and coordinate action” to aid manufacturers, their suppliers and dealers who all face a “severe” financial hit.
“The effect of the coronavirus on the automobile industry is unprecedented,” ACEA Director General Eric-Mark Huitema said in a statement. “It is becoming increasingly clear that Covid-19 has led to the worst crisis ever to impact the automotive sector.”
EU-wide production losses from factory shutdowns amount to 1.23 million vehicles so far, with some 1.11 million workers affected, not including the supply chain, ACEA said. The wider sector provides jobs for 13.8 million people across the European Union, ACEA said.
Let’s check in on Porsche:
Porsche Cars North America, Inc. (PCNA) today announced a year-on-year decline in first quarter U.S. retail deliveries as the coronavirus pandemic slowed overall automotive sales. PCNA is the sole licensed importer and distributor of the Porsche 911, 718 Boxster and Cayman, Macan, Cayenne, Panamera and Taycan model lines. Retail deliveries by the 192 independently owned and operated U.S. dealers totaled 11,994 from January through March, down 20.2 percent from a year ago, after a record 2019 that marked a decade of sustained growth.
How about Tesla? Tesla must be doing all right, they are the future of the world after all, they are our new gods, they are
While Musk tried to salvage the quarter by introducing a “touchless” delivery option in select locations, the coronavirus pandemic is expected to have done a number on demand for all automakers.
Analysts on average estimate Tesla delivered roughly 77,400 cars worldwide last quarter, the first to include hand-overs of the new Model Y crossover. While that would be a jump from a disappointing result a year ago, it also would mark a more than 30% drop from the record deliveries Tesla reported for the last three months of 2019.
“Tesla typically delivers a disproportionate share of its quarter’s units in the last two weeks of the quarter,” Adam Jonas, an analyst at Morgan Stanley, wrote in a report Monday. “Given the disruption to production and logistics bandwidth, we would be prepared for a weak number.”
Fiat Chrysler, maybe you guys had better luck?
Fiat Chrysler Automobiles reported a 10 percent decline in first quarter sales as a virus-impacted March more than offset gains in January and February.
At FCA US, Ram was the only brand with a first-quarter gain — 3 percent. Volume dropped 14 percent at Jeep, 20 percent at Dodge, 5 percent at Chrysler, 49 percent at Fiat and 14 percent at Alfa Romeo, the company said. The automaker on Wednesday launched a new round of special incentives, including 0 percent financing for 84 months and no payments for 90 days on select 2019 and 2020 vehicles.
Ah. Hmm. This is all about as bad as we thought.
Update, 10:40 a.m.: Here’s Mazda:
Mazda North American Operations (MNAO) today reported total March sales of 15,664 vehicles, a decrease of 41.8 percent compared to March 2019. Year-to-date sales totaled 67,670 vehicles, a decrease of 4.5 percent. With 25 selling days in March, compared to 27 the year prior, the company posted a decrease of 37.2 percent on a Daily Selling Rate (DSR) basis.
CPO sales totaled 3,392 vehicles in March, a decrease of 38.9 percent compared to March 2019. Year-to-date CPO sales decreased 2.5 percent, with 13,510 vehicles sold.
Mazda Motor de Mexico (MMdM) reported March sales of 3,432 vehicles, a decrease of 43.1 percent compared to March last year. Year-to-date sales decreased 20.2 percent, with 12,922 vehicles sold.
Update, 11:46 a.m.: And Mitsu and Nissan:
Mitsubishi Motors North America, Inc. (MMNA) today reported March sales of 9,394 vehicles, down 52 percent over March of 2019. Calendar year-to-date sales through the end of March totaled 35,563 vehicles, a decrease of 15.5 percent compared with the same period in 2019.
News and Notes
In response to the ongoing COVID-19 outbreak, all MMNA headquarters and regional team members began working from home as of March 16.
As of today, 97 dealerships (28% of MMNA’s national count) have closed the sales side of their facilities, and another 94 (27%) are open by appointment-only, due to local government order.
They will shut down production in Japan and extend their production shutdowns in the U.S., according to Automotive News.
Subaru’s suspension will affect its main assembly operations in Gumma as well as an engine and transmission plant, taking factories offline for 17 workdays, the company said April 1.
The shutdown translates to roughly 39,100 units of lost production, given the Gumma complex’s normal output rate of 2,300 vehicles a day, Subaru said.
The move affects popular U.S. export nameplates such as the Forester and Crosstrek crossovers. Last year, Subaru of America sold 335,504 imported vehicles. The plant also produces the WRX and BRZ sporty cars for the U.S. as well as a host of vehicles, ncluding the Outback crossover, Legacy sedan, Levorg wagon and Impreza small car, for both Japan and export markets.
The automaker does not have sufficient working capital based on European Securities and Markets Authority rules because the coronavirus has created “increased and unquantifiable uncertainty” in its business, Aston Martin said.
That has made it impossible to come up with a model for a “reasonable worse case downside,” the company said.
Aston Martin, which has struggled with cash flow and dealer-inventory back-ups since going public in 2018, had hoped that the fundraising approved by shareholders on Monday would avoid the need to seek additional money. But the coronavirus crisis has added a level of difficulty to the turnaround put in place with Stroll’s arrival.
“Taking into account the proceeds of the capital raise, the company is of the opinion that the group does not have sufficient working capital to meet its requirements for 12 months” from February, when it published the original prospectus for the Stroll bailout, the company said.
There will be a hotline for members to report corruption, and they have also appointed a former chair of the National Labor Relations Board as its first independent ethics officer. These measures are all in response to, well, you know, and an effort to stave off a federal takeover.
From Automotive News:
In her new role, [former NLRB chair Wilma Liebman] will work with third-party company Exiger LLC, which the union has tapped to serve as its new ethics ombudsman. Exiger workers will screen and investigate tips placed to a new ethics hotline, which goes live today, the union said.
Gamble first announced the search for an ombudsman and independent ethics officer in November, shortly after taking over for ex-President Gary Jones, who is expected to plead guilty to charges of embezzlement next month as part of a yearslong federal corruption investigation.
“While our country and union navigate the difficult challenges of this pandemic, today’s actions mark an important step in the progress of our ethics reform agenda and underline our unwavering pledge to our members that their union is committed to operating at the highest level of integrity on their behalf,” Gamble said in a statement.
The UAW also said last week its open to meeting with federal investigators. The UAW is very sorry for all of that corruption!
This is, ostensibly, to help the car industry’s recovery there post- (or, more accurately, amid) coronavirus. China is the world’s biggest car market, and its push for electric cars has been a nudge for the entire industry. These new rules may or may not happen, according to Reuters, but I wouldn’t expect the overall picture to change when this is all over.
“Policymakers acknowledged that automakers are strained to promote electric models when overall demand is slowing. They want the auto industry to recover steadily this year,” one of the four people familiar with the matter said.
Authorities are still reviewing the details of the plan, which has yet to be finalised, sources said, declining to be named due to the sensitivity of the matter. The review is being discussed with officials at industry and environment ministries as well as automakers and industry bodies.
The policy shift comes as Xin Guobin, vice industry minister, said on Monday that China would “make adjustments on new energy vehicles and related policies to further promote the coordinated and healthy development of the automotive industry.”
On April 1, 1993, race car driver and owner Alan Kulwicki, who won the 1992 National Association for Stock Car Auto Racing (NASCAR) Winston Cup championship by one of the tightest margins in series history, is killed in a plane crash near Bristol, Tennessee, where he was scheduled to compete in a race the following day. The 38-year-old Kulwicki had been the first owner-driver to collect the championship since Richard Petty did so in 1979, as well as the first NASCAR champ to hold a college degree.
Kulwicki was born on December 14, 1954, in Greenfield, Wisconsin, a fact that later marked him as an outsider among the other NASCAR drivers of his era, who typically hailed from the southern U.S. Kulwicki’s father, Gerry, built race-car engines and as a teenager Alan became involved in Go-Kart racing. After graduating from the University of Wisconsin with a degree in mechanical engineering, Kulwicki raced stock cars, first as a hobby then as a professional. In the mid-1980s, he relocated to North Carolina and, with no financial backing, began competing in NASCAR events. In 1986 he was named the Winston Cup Series (now known as the Monster Energy NASCAR Cup Series) Rookie of the Year. Kulwicki, who earned a reputation as a hard-working perfectionist, later turned down offers to drive for other teams, opting to remain on his own.
I’m in my 18th or 19th day of isolation, depending on how I count, I’ve gone through (a few) bottles of vodka, everything’s great, you see, nothing worrying or wrong at all.