Surprising (and bad) news for Jaguar Land Rover, the prospect of a Chinese-built Lexus, and so much more in The Morning Shift for Tuesday, Oct. 9, 2018.
1st Gear: The EU Wants Strict CO2 Limits for 2030, But Germany’s Holding Things Up
In light of the recent UN IPCC report that we have, basically, until 2030 to get our shit together or else the world is gonna burn, the European Union is proposing a new restriction on CO2 emissions by that year. The problem is that Germany doesn’t want its auto industry harmed by any of this, as Reuters reports:
In a clash between concerns over the environmental risk of emissions and industry competitiveness, EU governments remained divided ahead of talks over what 2030 limits to impose on Europe’s powerful automakers.
Germany, with its big auto sector, has backed the EU executives proposed target of a 30 percent reduction by 2030, compared to 2021 levels.
France, Netherlands and a number of other countries, however, are pushing for a stricter limit of 40 percent, in line with higher climate targets backed by EU lawmakers last week.
“It’s too close to call,” said Greg Archer, an expert with Brussels-based campaign group Transport & Environment, adding that a number of nations such as Spain have yet to choose a camp.
It’s easy to think of Germany as more environmentally conscious than America, more enlightened on that side. Certainly it’s easier to recycle over there and you get the feeling that people care more. But a lot of the time Germany just ends up putting its big auto industry first at the expense of everything else.
2nd Gear: Jaguar Land Rover to Shut Down Plant for Two Weeks As Shit Has Gotten Real
Everything also seems rosy for JLR. The I-Pace electric crossover looks good, as do the other various Land Rover SUVs and Jag’s cool station wagons. But all is not well, as Reuters points out today:
Jaguar Land Rover will close its plant in Solihull, England, for two weeks after the company reported a nearly 50 percent fall in sales to China as import duties and a trade war with the U.S. hurt demand.
China’s automobile sales have been falling in recent months, with a slowing economy and trade frictions making consumers cautious about spending, an industry body said last month.
“As part of the company’s continued strategy for profitable growth, Jaguar Land Rover is focused on achieving operational efficiencies and will align supply to reflect fluctuating demand globally as required,” a JLR spokesman said in a statement.
The plant will close for two weeks starting Oct. 22. The Unite union said no jobs would be lost because hours would be banked.
All of this puts global sales down by about 12.3 percent, as The Economic Times reports, and shares in Tata Motors have “plunged” more than 16 percent because of it.
Reuters also notes that Jag sells a lot of diesels, the fate of which have been in jeopardy in Europe as of late. And Reuters also also notes that Brexit could further screw up the company.
3rd Gear: Toyota Is Torn Over Building Lexus Vehicles In China
Lexus might not make the coolest cars in the world, or the most desirable, but people largely trust that they are among the best-made and the most trustworthy. So it’s cool that the company may start making cars locally in China rather than bring them over from Japan, as a new insider report from Reuters declares:
Toyota Motor Corp., long opposed to producing its premium Lexus cars in China because of concerns over quality and profitability, is now considering it to ignite growth and narrow sales gaps with its German rivals, four company insiders told Reuters.
“All the preparation has been more or less completed,” one said. “All we’re waiting is a ‘go’ from management.”
But there is real debate going on within Toyota about whether or not it’s really ready for this. The company reportedly considered building Lexus vehicles in China back in 2011-2012 but decided against it, and has also supposedly spent the last two years working on this plan. Reuters notes:
“We’re torn over this,” said one of the insiders.
“But it makes little sense to let this opportunity slip by,” another told Reuters.
All four insiders declined to be identified because they are not authorized to speak to the media.
I’ve heard a few times that Toyota is a seriously conservative operation, and it’s interesting to see just how long it takes for things to come together with its prestige marque.
4th Gear: Daimler And Geely Reportedly Will Start Ride-Hailing Service
The big Uber rival in China is Didi, but after a spate of straight up murders from the service, things look a little shaky over there. It is in this context that Daimler and Geely are reportedly going to start a ride-hailing service of their own, as Automotive News Europe reports:
The German automaker is in talks with Li’s Zhejiang Geely Holding Group in setting up a 50-50 joint venture to offer the services, said one of the people, who asked not to be named as the plan is private. The discussions haven’t been finalized, the people said. Spokesmen for Daimler and Geely declined to comment.
The services would be a concrete step into cooperation between billionaire Li Shufu’s Geely Group and Daimler, deepening a relationship that started with the Li acquiring almost 10 percent of the German company early this year.
Geely, it should be noted, reported double-digit growth last month, so it might just have the momentum to make all this work.
5th Gear: Vietnam’s First Cars Gets A Name: Lux
I was not aware that David Beckham helped promote a Vietnamese car company run by a former General Motors lifer, that uses BMW platforms restyled by Pininfarina.
The company in question is called VinFast and it jut announced the names of its cars as Lux, as Automotive News Europe reports:
Vietnam’s first domestic auto brand, VinFast, will name its first sedan the Lux A2.0 and first SUV the Lux SA2.0.
Deliveries of the two models will start in Vietnam in June 2019, the company said, with exports starting in 2020. VinFast declined to identify any export markets.
The cars are based on modified BMW platforms and are powered by BMW 2.0-liter turbocharged gasoline engines reworked for VinFast by Austrian engine specialist AVL.
The design of the cars was created by Italdesign and modified by Pininfarina.
This will all be in addition to making rebadged GM city cars, spawning from an earlier deal to take over GM’s factory, dealer network, and employees of GM Vietnam. Production has not started yet on the new cars, but VinFast reportedly has several billion invested in the venture.
Reverse: I Prayed This Would Happen to My Baja Whenever It Broke
Neutral: Which Car-Producing Country Is the Most Protectionist?
I do wonder if I’m periodically too harsh on Germany. I know it can do better, is all.
But I also wonder if there is a car-producing country that is even more protectionist than it is. Maybe we’re the worst?