Automakers think they’re in a recession-prove

The automakers decided they will jump from vertex to vertex, everyone and their mother are investing in semiconductor manufacturing and VinFast officially has a showroom in the US. All that and more in Morning shift for Monday, August 1, 2022.

1st gear: Never happen 2008, Car sales will go up forever, we will never die

Depending on who you ask, are we on the verge of a recession or already in a. However, if you ask the automakers, they will tell you they simply don’t care: Everything is fine, and will be forever, the historical evidence is damnable. Are from The Wall Street Journal:

Even as consumer spending cools, one place where buyers continue to splurge is a car dealership.

Automotive executives reported earnings earlier this week that showed confidence that not only will demand for cars and trucks stay steady in the second half of the year, but that easing supply chain disruptions will help increase profits in the coming quarters.

A backlog of customer orders, historically low dealer numbers, and car buyers paying higher prices for cars have all led to a string of profitable quarters for most global car companies. bridge. The sole driver is driving optimism across the industry that it can weather growing economic uncertainty better than it did in previous recessions.

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“On the ground inventory at dealers didn’t really change for about six quarters, even as production increased,” said Paul Jacobson, GM’s chief financial officer. “There is a huge amount of demand that remains unmet,” he added.

The upbeat tone is unusual for the car business, which is often among the first sectors hit by any downturn in consumer sentiment.

Look, okay, sure, there’s a recession coming. But that will never happen to we, Man! We are invincible! We sell cars, and who doesn’t love cars? Don’t worry about it, everything will be fine. I mean, yes, we cut thousands of jobs, but that’s just as a precaution, you know? Don’t sweat, all is well.

2nd gear: Come on, invest in semiconductor manufacturing, all the cool kids are doing it

If there’s one thing we’ve all learned from the pandemic, it’s because we clearly ignorant of public health, which is the importance of semiconductors in modern life. Over the past two years, getting your hands on anything with a microchip has been a major struggle, and where there is struggle there are often profits. Are from Automotive News:

In response to catastrophic worldwide chip shortages that have so far removed more than 13 million vehicles from production since the start of 2021, chip manufacturers, including Bosch and governments, including including the US Congress, is pledging unprecedented amounts to increase semiconductor capacity – not only to address shortages but to meet growing demand for chips across multiple sectors.

Congress last week passed a bill that would provide more than $52 billion to American companies that make chips and provide tax credits to invest in chip manufacturing.

The European Commission is setting up an investment war arsenal of more than $45 billion, similar to the US bill just passed.

Massive grants are being committed by individual companies all over the world. Follow HALFan industrial group that designs and manufactures electronic equipment.

As technology in general moves forward, investing in semiconductor manufacturing is likely to be a future-proof move. But do so specifically for cars, where there are chips Outdated by designcan lead manufacturers into some dead ends.

3rd gear: VinFast now has a store

VinFast once created a BMW X5 powered by LSand now make electric crossover that looks like the Pontiac Trans Ams. If that sounds like a downgrade to you, you either don’t realize how fun EVs can be – or you forgot how good the Trans Am ’77 looks. But if you need to reiterate, VinFast now has stores that you can check out for yourself. Are from The Wall Street Journal:

Vietnam’s Vingroup has become a popular conglomerate back home, running everything from luxury resorts to hospitals, shopping malls and supermarkets.

Now it wants to enter the US car market with a little-known electric vehicle startup called VinFast that has a novel way of pricing its models.

The young Vietnamese automaker opened its first US showroom in July in California and is actively expanding operations in the states, including plans to spend $2 billion to build an EV factory. new in North Carolina.

To finance its growth, VinFast has also filed paperwork with US regulators about an initial public offering to be held later this year or next. , making it the latest company to test investors’ appetite for startups that seem to have nothing to do with growing competition. Electric vehicle market.

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VinFast is starting with six stores in California and plans to open another two dozen locations in the state this year, before expanding into other US markets. The sites don’t sell cars, but act as a showroom, where shoppers can browse options and work with staff to book online.

The EV company, founded in 2017 in Vietnam, plans to start selling two electric sport utility vehicle models in the US: a midsize SUV, called the VF 8, which starts at $40,700 dollars and a larger VF 9, starting at $55,500. . US buyers can order now with deliveries expected to begin in late 2022.

Unlike other EV competitors in the US, VinFast has a unique business model in which a buyer pays one price for the vehicle, but then leases the battery for a monthly fee. The company offers two battery subscriptions, which range in price from $35 to $160 a month, depending on how much the owner wants to drive, the car model purchased, and the type of battery.

The fee includes maintenance and replacement of the battery when the charging capacity drops below 70% of the original capacity.

Buying a car and renting out the powertrain is the kind of galactic brain business I’d expect from Elon Musk, but at least VinFast offers a full battery replacement service – a great option for those Prius battery replacement pricing.

4th Gear: Nio’s European foothold expands into manufacturing

China-based Nio sells cars in Norway and want to expand to more Europe. To help achieve that goal, they are building a factory in Hungary – but not one that will make cars. Are from Reuters:

Chinese electric car maker Nio plans to open its first overseas factory in September to produce electric products for the European market as it accelerates its overseas expansion.

The plant in Pest, Hungary, will develop and manufacture electrical products such as battery swapping stations to serve European users, Nio said in a statement late Friday.

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The company is also working with oil giant Shell PLC (SHEL.L) to build battery swap stations globally, starting in China and Europe this year, according to a Nio statement. on Monday. Shell will open its charging network in Europe to Nio users.

Tesla quietly abandoned its hyped battery swap plan years ago, but Nio seems to be moving on with it. The battery swap has its pros (speed) and cons (unknown replacement battery status), so it’s good for owners to at least have the option to do it. Bring it here, we love our long drives.

5th gear: Get a bunch of this damn

In the US, buying a car means interacting with dealers who regularly want nothing more than to get you coal and extract every penny possible – then send you to service to do it again. similar work. Because of this behavior, dealers are widely deprecated by pretty much every living person. But, and listen to them here: What if they have stupid names? Would that help? Are from Automotive News:

Van Horn Automotive Group has been in the digital retail space since before the pandemic began in 2020, with the goal of selling cars to consumers entirely online.

The group, with 19 dealerships in Wisconsin and Iowa, initially based its name on its existing brand name and called the product Van Horn Direct. The process is fragmentary, and it’s impossible to complete a purchase entirely online, said Adam Gaedke, corporate vice president of agency operations.

Van Horn plans to change that with CloudLot, a digital rebrand the company launched in June for used vehicles. Underpinned by Cox Automotive’s new Esntial Commerce digital retail tool – co-developed with Penske Automotive Group and white-labeled for use by other dealers – CloudLot enables online vehicle selection convenience, sponsorship, delivery and signature.

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Other dealer groups are trying a similar approach. Titus-Will Automotive Group, with six franchised stores in Washington state, in March launched CarBreezy, a digital sales platform also based on Cox technology. Last year, Koons of Silver Spring in Maryland transformed its vehicle registration platform Inride into an independent used-car repurchase brand, with its own dedicated staff and a mobile website and app. new movement is active.

In some respects, launching a digital brand takes a page from the guidebooks of online used-car retailers Carvana and Vroom, which have advertised themselves as alternatives. convenient and easy for franchisees. Some dealers said they hoped a private brand could help them expand into markets outside of their home turf or reach customers who might not have been traditional dealers before.

If your business model is so bad that you have to pretend to be a completely different company just to attract buyers consider bear with your bullshit, maybe the brand name isn’t the problem. Maybe it’s customer experience, bad websites, a disinterested (or actively informed) sales team, F&I rigor, product ignorance, or aggressive lobbying. forcing car buyers to do all of that. But, no, I’m sure putting Cloud in your name solves all of that.

Reverse: We never received The winds of winterWe?