Welcome to brandchannel‘s first Automotive Roundup, a recurring column that will highlight news, developments and trends in the marketing and advertising of cars, SUVs, trucks and the industry’s latest technologies, including autonomous driving.
In today’s edition, we look at the troubles at the top for Nissan-Renault, Fiat Chrysler’s plan for a new assembly plant in Detroit, Waymo’s next step on its self-driving journey, Volkswagen’s vast remake, and auto-sales prospects for this year and 2019.
Turmoil at the Top of Nissan-Renault
Japanese prosecutors indicted ousted Nissan-Renault chief Carlos Ghosn on Monday, but a new report said that Ghosn himself had been targeting Nissan CEO Hiroto Saikawa for ouster.
They are the latest twists in a globe-spanning struggle for the future and control of the Nissan-Renault alliance that had emerged as one of the great automotive success stories of this generation.
Ghosn, who put together and ran the alliance of Nissan, Renault and Mitsubishi, was charged with under-reporting his compensation on company financial reports for five years. Greg Kelly, his right-hand man at Nissan, also was charged in the alleged scheme. They sat in detention in Tokyo after the board of Nissan considered evidence from an internal investigation of the alleged financial misconduct and ousted him as chairman.
The drama threatens progress by the alliance. The three companies have been demonstrating great results from their unique governance arrangement, including Nissan’s taking a pioneering position in electric cars.
Nissan CEO Saikawa apparently was a driving force behind the investigation of Ghosn for the compensation issue and for allegedly misusing corporate assets, and has criticized Ghosn for having too much power.
But it turns out, according to the Wall Street Journal, that Ghosn actually was planning to oust Saikawa at a Nissan board meeting late last month. Ghosn was dissatisfied with Saikawa’s handling of slowing sales in the US and quality problems in Japan.
Meanwhile, it’s reported that Nissan as a company could be charged alongside Ghosn for his alleged misdeeds.
“Imported From Detroit,” Indeed
Fiat Chrysler Automobiles reportedly will convert an idled engine factory in Detroit into a new assembly plant in a move that squarely backs up the brand created by the company over the last several years that associates itself with the Motor City more than any other marque in the auto industry.
In one of his biggest acts since taking over as Fiat Chrysler CEO last summer from the late Sergio Marchionne, Michael Manley apparently decided to build a new three-row Jeep Grand Cherokee SUV on the site of Mack Avenue Engine II, a plant in central Detroit that has been idle since 2012 and is adjacent to a working engine plant.
Sources told the Detroit News that the vehicle, which will be the brand’s largest, will be produced for the 2021 model year and the move could add as many as 400 new auto jobs in Detroit. It would be the first new assembly line to open in Detroit in 27 years and the first new US assembly plant to be built by any of the Detroit Three in at least a decade.
Fiat Chrysler’s plan is a welcome contrast in Detroit to the recent announcement by General Motors that it will be closing five North American plants, including a big assembly plant in the city.
An official announcement of Fiat Chrysler’s plan is expected this week.
Waymo to Go
It’s not really “driverless” driving, because human operators remain in charge of the vehicles for now. But Google’s Waymo automotive unit has launched its commercial self-driving service, Waymo One, in the Phoenix area, to hundreds of early riders who’ve already been testing the company’s technology.
“Over time, we hope to make Waymo One available to even more members of the public as we add vehicles and drive in more places,” Waymo CEO John Krafcik wrote in a blog post. “Self-driving technology is new to many, so we’re proceeding carefully with the comfort and convenience of our riders in mind.”
The launch, even with people monitoring performance behind the wheel of the autonomously driven cars, puts Waymo on the leading edge of a technology that is reshaping expectations for the future of the industry.
Lyft beat ride-sharing rival Uber in one leg of their ongoing race for dominance of the industry they created: filing for an initial public offering.
Like many revolutionary digital-tech businesses, ride-hailing has gotten off to an unprofitable start even as its popularity booms, and its prospects are murky as self-driving automobiles encroach. Meanwhile, last week’s downdraft in the stock markets would be a daunting prospect for many companies considering IPOS.
But none of that stopped Lyft from beating bigger rival Uber in filing for an IPO. Lyft was last valued at about $15 billion in a private fundraising round. It could go public as early as the first quarter of 2019 at an estimated valuation of $20 billion to $30 billion.
Strengthening the Core
Volkswagen Group’s core brand, Volkswagen, aims to raise its profit margin faster than previously planned even while taking into account its rising investments for electric vehicles.
VW aims to invest more than $12.5 billion on e-mobility, digitalization, autonomous driving and mobility services by 2023, with most of the outlay going to boosting the number of battery-powered Volkswagens to 20 by 2025, from just two nameplates now.
At the same time, VW plans a massive reduction in the complexity of its model portfolio by discontinuing 25 percent of its powertrain variants in Europe.
The transformation will be dramatic for a company that has been identified for decades with fuel economic small cars powered by diesel and gasoline engines.
At the same time, VW continues talks with Ford about potentially putting together a broad global alliance.
US Sales Holding Up
Amid their flurry of year-end “sales events,” auto brands in the US are keeping their eye on the potential to post overall sales of at least 17 million units for the fourth consecutive year, which would rank as a major achievement even as sales levels have dipped slightly each of the last two years.
Some analysts are even laying out the possibility for a fifth consecutive year of 17 million sales in 2019, buoyed by a strong US economy, rising disposable income and record employment.
The massive turn away from sedans by American consumers is roiling the industry because it is requiring companies to rather suddenly reconfigure their lineups and their manufacturing footprints. Consider that Fiat Chrysler and Ford already were cutting sedan brands and then GM recently announced that it’s axing six sedan models, including its luxury flagship, Cadillac CT6, and its electrification pioneer, Chevrolet Volt.
All of those developments mean it’s easy to lose sight of the fact that record sales of SUVs and trucks are offsetting most of the losses from sedans.
Meanwhile, Mercedes-Benz continues to maintain its lead for the US luxury car sales title over BMW and Lexus, which would extend Mercedes’ first-place position for a third year.