|Bid||0.00 x 150000|
|Ask||0.00 x 150000|
|Day's Range||60.56 - 61.07|
|52 Week Range||58.10 - 86.71|
|Beta (3Y Monthly)||0.79|
|PE Ratio (TTM)||8.31|
|Forward Dividend & Yield||3.50 (5.75%)|
|1y Target Est||N/A|
(Bloomberg) -- Somewhere between Spotify crashing and Alexa failing to locate his favorite sushi place, Rafael Rivera decided he was dealing with an unfinished product.The software developer’s rectangular Echo Auto, perched on the dashboard of his 2005 Mini Cooper, picked up his voice seamlessly over blaring music or air conditioning. But repeated restarts and clunky mapping made the on-the-go hub for Amazon.com Inc.’s Alexa less useful.“Am I part of a beta program?” he recalls thinking. “Is this thing done?”Introduced almost a year ago and shipped to the first invited customers in January, the sometimes-buggy Echo Auto is the most visible element so far of Amazon’s ambition to take Alexa on the road.Behind the scenes, the company is trying to persuade automakers to bake the voice-activated digital assistant into their entertainment systems. Those efforts are gaining some traction—BMW and Audi earlier this year began selling select models that integrate Alexa’s software by default. But Amazon is entering a market already contested by Google and Apple Inc., not to mention automakers leery of ceding control of the dashboard to Big Tech.While colonizing the car probably won’t generate much in the way of revenue at first, just being there would help Amazon position itself for a coming era of voice-based services. “Amazon wants to get into the car in a big way,” says Mike Ramsey, a senior research director at Gartner who tracks the auto industry. “They sense that there is a big opportunity.”Amazon declined to make anyone available to discuss the program, but a spokesman pointed to comments Ned Curic, vice president of Alexa Automotive, made last month to the Automotive News: “The real North Star for us is to be embedded with all the cars,” Curic said. “We’re working very hard to get there because we believe that is the best experience.”The company has said it wants to make Alexa, its hub for trivia, music and Amazon products, ubiquitous. The company built teams in recent years charged with making the software useful beyond the living room, seeking ties to home automation and security companies, building out voice and video calling functionality and even exploring wearable devices and home robots.The first tie between Alexa and an automaker was, like many Amazon efforts, an experiment. In 2016, Hyundai Motor Co. rolled out the first application linking Alexa to a big carmaker in a tool that let owners of some models start their vehicle or set the climate control from an Alexa device.Amazon formalized its push a year later, hiring Curic, an executive with Toyota Motor Corp.’s North American subsidiary, to run the automotive efforts. Curic’s team plucked staff from Lab126, the San Francisco Bay Area hardware division behind the Echo speaker, and Amazon Web Services, the company’s cloud-computing arm. Amazon also went shopping for recruits who knew their way around the industry, seeking veterans of German stalwarts like Daimler AG, BMW and Volkswagen, companies that have been among the most aggressive in exploring voice software.Hanging over the exercise to take Alexa on the road is Amazon’s failure to build a smartphone to rival Alphabet Inc.’s Google and Apple. About 62% of people who use their voice to control music or other applications in their car today do so through a smartphone, a market dominated by Google and Apple, according to a survey by voice technology news site Voicebot and dashboard entertainment startup Drivetime. Another 32% opt for the software included in their car’s entertainment system while 6% use different technology, including the Echo Auto.“Amazon’s Achilles heel is not having a play on the phone,” says John Foster, chief executive of Aiqudo Inc. a startup working to tailor mobile applications for voice control. “They’re going at it the best way they can. But I do think they suffer from this disadvantage that Google is really starting to make clear.”Google, the company behind Android, the world’s most popular operating system, has gotten automakers on board, building ties that could be used to hook drivers into Google's Assistant, Alexa's biggest rival in the U.S. Fiat Chrysler Automobiles, Renault-Nissan-Mitsubishi and Volvo are all building entertainment systems on Android.“Google has a much bigger footprint in the auto industry than Amazon does,” says Ramsey, of Gartner. “They’re getting big wins. Amazon is just starting to scratch the surface.”Other carmakers are going their own route.Some, like Daimler’s Mercedes, have thrown their weight behind proprietary voice software. The Mercedes-Benz User Experience system, like many automaker-branded software, is powered by technology built by Nuance Communications Inc., a software company in Massachusetts.“Each of these manufacturers wants to preserve their own brand” in the car, says Richard Mack, a Nuance marketing executive. “When you press that button on the steering wheel, Mercedes would much rather see their emblem come up rather than a Google or an Amazon or a Microsoft logo.”Amazon has tried to assuage carmakers worried about Google or Apple's potential automotive ambitions by suggesting Alexa could be one among several voice assistants embedded in a future entertainment system, according to two people who have heard the pitch, but aren't authorized to publicly discuss it. Amazon last year released tools that let carmakers build Alexa into their cars. The company has also tried to leverage Alexa’s popularity in the home, saying to potential partners that customers would rather use voice software they’re already familiar with than learn a new program while behind the wheel.As Curic’s team negotiated with carmakers, Lab126 engineers got to work on an end around, repurposing the Echo speaker’s microphone arrays and software, originally designed for homes, for noisy car environments. The device avoided dealing with in-car communications systems entirely by piggybacking off of customers’ smartphone to connect to Alexa servers.When it was released, analysts said the Echo Auto seemed to fill a gap in the market, offering a device that promised to bring modern voice control to older car models. It drew more than 1 million orders, Amazon said, though the device is still shipping in batches and only to invited customers.Reviewers said the device lacked polish, coming off at times like a work-in-progress. A reviewer at tech news site the Verge said some of the auto-focused applications Amazon touts on its website “are laughably bad right now.”It’s harder to get a read on how customers feel because Amazon, which helped popularize online product reviews, has disabled customer reviews for the Echo Auto.Ryan Adzima, who bought one to replace the outdated voice control system that came standard in his Jeep, is a fan. The owner of five Echo smart speakers figured the device’s introductory price tag of $25 was a bargain compared with replacing his entertainment system or buying a voice-activated navigation system.He liked the device, which heard his commands over road noise with the windows open and top down and easily handled tasks like calls and music. Connectivity, dependent on sometimes spotty wireless service around his Las Vegas home, left something to be desired, forcing him to reach for his phone to skip songs by hand when Alexa’s servers couldn’t be reached.Adzima isn’t in the market for a new car. But if Alexa is integrated in enough models by the time he is, he’ll consider it.“If I was sitting on a lot, and one car had Alexa built in, the other didn’t, and the cost difference wasn’t that much?,” he says. “That would definitely make my decision.”To contact the author of this story: Matt Day in Seattle at email@example.comTo contact the editor responsible for this story: Robin Ajello at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Stefan Moeller began this year with an ambitious target: to make his car-rental company Nextmove the biggest Tesla Inc. customer in Germany by adding 100 Model 3s to its fleet. He likened the electric car’s arrival on Europe’s shores to a tsunami washing over a region that’s been slow to embrace battery-powered autos.But the powerful wave Moeller expected has collapsed to a trickle. After weeks of back and forth over unfulfilled repair work and quality issues involving the initial 15 sedans that Tesla delivered -- from scratched bumpers to moisture trapped behind the headlights -- the order of the remaining 85 Model 3s was called off. Tesla also tried to deliver cars that had been previously registered, which would have locked Nextmove out of Germany’s electric-car incentive program and potential tax refunds, Moeller said.“The Model 3 is a fantastic car. Some of our customers totally fell in love with it,” said Moeller, whose Leipzig-based company has more than 300 electric vehicles in its fleet, including 38 Model S and a dozen Model X. “But the organization behind it doesn’t match that. It’s really sobering.”Subpar service could be a barrier to Tesla making more of an impact in Germany, where exacting car owners value how painstakingly their BMWs and Mercedes are cared for just as much as the speed of the Autobahn. Chief Executive Officer Elon Musk, who’s famously inimical to Twitter critiques, acknowledged earlier this year that a lack of service centers in Germany was hampering the company’s growth there.Tesla believes Nextmove’s decision to cancel its remaining Model 3 order wasn’t entirely due to quality issues, and was largely influenced by frustration with an unrelated dispute earlier in the year, according to a spokesperson. The carmaker was in the process of making repairs and had provided loaner vehicles to the customer at the time the order was canceled. (Nextmove insists it was Tesla that canceled the order, after the rental-car company demanded an improved process for handovers and fixes.)The Tesla spokesperson blamed the registration issue that Nextmove described on a temporary issue with matching identification numbers to vehicles and said the issue was resolved for impacted customers.Norway WoesPoor service is an issue that’s already plagued Tesla in Norway, Europe’s largest electric-car market per capita. Dented and sloppily painted vehicles have fueled the highest level of complaints per unit among all automakers, according to the nation’s consumer watchdog.In Europe, Tesla is racing against time as more established players wake up to the electric future. The continent is projected to be the world’s second-largest driver of electric cars in the next decade, trailing only China. Customers can already choose between a growing number of battery-powered models from the likes of Mercedes-Benz, Jaguar and Audi.Moeller says Tesla’s issues extend beyond the Model 3. He spent two years waiting for the carmaker to replace a seat in a Model X that was delivered in July 2017 with a hole in it. A Model 3 arrived more recently with a protruding bulge on one tire. Moeller shared with Bloomberg News his email correspondence with Tesla and photos of the blemished vehicles.The Tesla spokesperson said the company’s data doesn’t indicate any unusual vehicle quality issues specific to Germany or anywhere else in the world. The company said there’s a small chance cars are blemished during transport to customers and that it addresses those issues quickly.‘Seriously Worrying’Nextmove isn’t an isolated case. German social-media platforms and online forums are abuzz with customers airing complaints about faulty parts from sensors to suspensions. Many also describe Tesla’s sales organization in the country as unresponsive.“I’m still thrilled by the car, because it’s just so much better than anything I’ve driven before, but the quality of the service and some technical parts are seriously worrying,” Rouven Volk, who said by email that he ordered his Model 3 in February and was slated to take delivery less than a month later.Volk chronicled an odyssey with Tesla that began with a car that couldn’t be handed over because of a defective main display. The company opted to source another Model 3 from its European pool and set a new handover date for a month later. Then, the car had stains on the outside and in the interior, and a cable dangled from where there should have been a light for the back seats. The charging cables and winter tires he ordered were nowhere to be found.The Tesla spokesperson said unhappy customers can return their cars for a full refund up to seven days after purchase. The company’s data shows German customers have largely been satisfied with their vehicles, including the quality and condition of cars upon delivery.“Generally, early-adopter customers forgive unconventional newcomers like Tesla a lot of things,” said Stefan Bratzel, a researcher at the Center of Automotive Management near Cologne. “But the more Tesla enters broader customer segments, the more distribution and service have to function.”Climbing the ChartsSales of the Model 3, Tesla’s most affordable model, helped make the brand the fastest-growing in Germany in the first seven months of the year, according to data from industry watchdog KBA. While 6,816 registrations is still well behind market leaders, Tesla outsold brands including Jaguar and Alfa Romeo.Tesla is in the process of doubling the number of service centers in Germany to 17 locations, with a focus largely on urban areas including Berlin, Hamburg and Munich, according to the company’s website. The carmaker is also branching out into mid-size cities such as Kiel, Ulm and Mannheim, and separately lists 16 retail stores in the country.The brick-and-mortar presence is still a far cry from the sprawling infrastructure that established carmakers have built in Germany over decades. Volkswagen AG, the top-selling automaker in the country, has hundreds of dedicated sales and repair outlets.Then again, Musk is betting the looming shift toward electric cars and digital services will upend the retail and after-sale business. Battery-powered autos have fewer components that are at risk of breaking down. Tesla also plans to expand its fleet of mobile service vehicles by 50% and increase mobile service coverage by fivefold this year in Europe, according to the spokesperson.Rust, ScratchesFor Volk, rust started showing between the front fender and the driver’s door of his Model 3 after about 100 days and 15,000 kilometers, which he attributes to friction of sheet metal that wasn’t properly sloped. Getting a hold of Tesla service personnel has been challenging because some employees familiar with his case have left the company, Volk said.Malte Ahl said in an email he withdrew the purchase contract for his Model 3 in March after Tesla didn’t respond to his concerns about glitches including poor paint quality, scratches on the passenger seat and dysfunctional switches.“I view this way of dealing with the most loyal Tesla fans as unfair and not sustainable,” he wrote in an attached letter addressed to the company’s German unit.(Updates with further Nextmove comment in fifth paragraph.)To contact the reporter on this story: Christoph Rauwald in Frankfurt at email@example.comTo contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, Benedikt Kammel, Craig TrudellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Expectations for the German economy have slumped to their lowest level since the eurozone debt crisis eight years ago amid deepening concerns over the US-China trade dispute and the potential for a chaotic UK exit from the EU. The Zew survey of financial market experts revealed on Tuesday that economic sentiment in August had dropped to minus 44.1, its lowest since December 2011 and much gloomier than estimates from analysts in a Reuters poll who had predicted it to be minus 28.5. The poll points to a “significant deterioration in the outlook for the German economy”, said Achim Wambach, president of Zew.
(Bloomberg) -- Nissan Motor Co., BMW AG and Volkswagen AG are among carmakers in talks to bring the electric-car revolution to South Africa, as the nation’s auto-factory floors risk being left behind in the global switch to greener vehicles.The industry is preparing a unified stance on electrification to present to the government by the end of the year, Mike Mabasa, chief executive officer of the National Association of Automobile Manufacturers of South Africa, or Naamsa, said in an interview.Among the goals is persuading lawmakers to reduce or drop a 23% import tariff on electric vehicles to help ramp up nascent domestic sales, he said. Another is to roll out a charging infrastructure in a country where the state-owned power monopoly is in deep financial crisis.Taking steps to boost the popularity of electric vehicles in South Africa is just one part of the equation. The auto-manufacturing industry makes up about 7% of the country’s economy, according to Naamsa. The sector is one of the more positive aspects of an economy expected to grow at less than 1% for a second consecutive year.“The country needs to move forward and bring new technologies,” said Mike Whitfield, Nissan’s chairman for the southern Africa region. “The rest of the world will move very fast and if we don’t get going we will be left behind.”South Africa has long been a hub for global automaking, attracting plants operated by seven carmakers from Toyota Motor Corp. to Isuzu Motors Ltd. Last year, the manufacturers exported almost 210,000 cars to Europe, where Volkswagen is already retooling factories to only make electric cars. That’s just under a third of all local production and makes up 60% of exports.To date, there are no firm plans for electric-car or hybrid production in South Africa, but the government and industry agreed in 2018 to extend a manufacturing incentive program, creating jobs and enabling models like the BMW X3 sport utility vehicle and Nissan’s Novara pickup to be produced locally.“The electric-vehicle play in South Africa will not be determined by the South African consumer, but by the requirements of export markets,” Martyn Davies, an auto-industry specialist at Deloitte LLP, said by phone from Johannesburg, adding that the weaker rand is also making exports more attractive.The quality of the local plants of BMW, Ford Motor Co and Mercedes-Benz AG are good enough to make retooling quite straightforward, he said, adding that the next product made in South Africa by those automakers could feasibly be electric.Under the terms of the new manufacturing plan, the automakers will have to more than double annual production to as many as 1.4 million vehicles by 2035, and that won’t happen without making electric cars as well as gas or diesel, according to Naamsa’s Mabasa.BMW’s i3 and i8 are two of only three models currently available in the birth country of electric car pioneer Elon Musk, and only 620 units have been sold. Jaguar Land Rover introduced the I-Pace earlier this year, while Nissan is holding off on the launch of the latest Leaf until after an agreement is reached on import tariffs.Elsewhere on the African continent, a plan by Volkswagen to introduce an electric-vehicle in Rwanda stands in contrast to a lack of other developments.Another barrier to an accelerated electric-car boom in South Africa is Eskom Holdings SOC Ltd., the power provider that last week reported an annual loss of almost $1.5 billion and requires an $8.8 billion government bailout over the next three years.The utility has been forced to implement intermittent rolling blackouts and is reliant on coal, which is out of step with the environmentally friendly advantages of producing electric cars, Mabasa said. Therefore, the industry paper is likely to lay out a mixture of power sources between Eskom and privately owned renewable energy projects, he said.But the need to turn around Eskom’s financial situation is likely to be of more pressing concern to the government than using it to enable the electric-car industry, Nissan’s Whitfield said.“There is excess capacity, but quite frankly Eskom’s issues have to be addressed or we will have much bigger problems,” Whitfield said.\--With assistance from Prinesha Naidoo.To contact the reporter on this story: John Bowker in Johannesburg at email@example.comTo contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, Elisabeth Behrmann, John BowkerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
At a conference where hackers can try their hand at picking locks and discover cyber vulnerabilities in a makeshift hospital, they can also endeavor to break into the control units of cars and take over driving functions. "A big part of it is redefining the term 'hacker' away from that of a criminal to make automakers understand that we're here to make their systems more secure," said Sam Houston, senior community manager at Bugcrowd, which recruits researchers for so called bug bounty programs at Tesla Inc, Fiat Chrysler Automobiles NV and other automakers. Volkswagen AG, Fiat Chrysler and suppliers Aptiv PLC and NXP Semiconductors NV were among the sponsors of this year's car hacking village - as some have done at previous DEF CON conventions.
(Bloomberg Opinion) -- France SA’s romance with the Chinese car industry could be nearing its end.Dongfeng Motor Corp., a state-owned giant that runs joint ventures with PSA Group, Nissan Motor Co. and Honda Motor Co., is looking at options for its 12.2% stake in PSA including a sale or bond issuance backed by the stock, people familiar with the matter told Bloomberg News on Thursday.On purely financial terms, such a move makes a great deal of sense. Dongfeng bought the shares as part of a 2014 bailout of the maker of Peugeot and Citroen cars, brokered by the French government. That investment has done rather well: PSA has seen the third-best share performance in Bloomberg’s Global Automobile Valuation peer group over the past five years, after Geely Automobile Holdings Ltd. and Fiat Chrysler Automobiles NV. The 800 million euros ($897 million) Dongfeng spent at the time is now worth around 2.2 billion euros. On top of that, the operational ventures that underpinned the shareholding have seen better days. Listed subsidiary Dongfeng Motor Group Co.’s sales of Peugeot- and Citroen-branded cars fell by about half in the first six months from a year earlier and are running at less than a quarter of their level in 2015. In the key crossover SUV market, models like Citroen’s C5 Aircross and Peugeot’s 4008 have simply failed to catch fire against competition from Asian and domestic rivals.Unless there’s a serious pick-up in the second half, Dongfeng’s PSA production lines, dedicated to turning out as many as 600,000 vehicles a year, will be running at little better than 25% utilization – levels at which it should be hard for the business to make money. Losses at Dongfeng’s PSA venture were already running at the equivalent of $251 million in 2018; it would hardly be surprising if they were worse this year.Management in China clearly see little sign that sales are about to pick up. Dongfeng’s dealer network for PSA-branded cars shrank by almost 80% between 2015 and 2018, and now stands at just 666 outlets compared with 1,186 for Renault-Nissan marques. The showrooms that remain suffer low productivity, shifting an average of 400 PSA vehicles each in 2018 compared with 1,431 at Nissan outlets and 761 at Honda-branded locations. (For what it’s worth, Renault does even worse, on just 204 vehicles).There’s a more proximate issue, too. Cash has been looking a little tight for Dongfeng’s listed subsidiary of late, owing largely to a huge increase in working capital, two years of negative Ebit, and net debt of 2.15 billion euros that was running at 8.1 times Ebitda at the end of December. In the 2018 fiscal year, operating cash flows actually turned negative to the tune of about 1.25 billion euros, a relatively rare event for carmakers that aren’t in the grip of a financial crisis or corporate scandal.Dongfeng still has ample liquidity. Its ratio of short-term assets to short-term liabilities was 1.36 at the end of December, above the industry average. But China’s auto market is grim, with sales declining from a year earlier for 12 straight months even as the government ratchets up pressure to spend money on the switch to electric vehicles. Faced with such headwinds, 2.2 billion euros could come in handy.At present there’s no word that Dongfeng is planning to unwind the JV to manufacture PSA cars in China – but it would probably welcome such an outcome, especially if it could persuade its European affiliate to pay to take more control of the partnership in the manner of the deal last year between BMW AG and Brilliance China Automotive Holdings Ltd.Dongfeng’s partnerships with Nissan and Honda are clearly the better performers, and PSA may feel it needs more of a free hand to turn around its Chinese operation. If a sale of a strategic stake can help ease the path toward that happier outcome, both sides stand to benefit.To contact the author of this story: David Fickling at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- BMW AG is counting on a fresh product lineup and better efficiency to take on rival Mercedes-Benz as waning demand in key markets squeezes profit across the industry, raising the stakes for incoming boss Oliver Zipse.The push, based on a record model offensive started under outgoing Chief Executive Officer Harald Krueger, has started bearing fruit. Robust pricing and higher sales helped soften the drag on second-quarter earnings from surging expenses for new models like the revamped 3-series as well as expenses for a new factory in Mexico, BMW said Thursday in a statement.“Globally, we were able to significantly reduce the difference between the brand BMW and Mercedes-Benz in the first half-year,” Krueger said on call with reporters. “In the month of June, BMW was ahead of Mercedes.”The comments show rivalries in the carmaking world remain front of mind, even among mushrooming partnerships to help stem the transformation to self-driving and electric cars. BMW’s growing sales gap to Daimler AG’s Mercedes-Benz in recent years has been a thorn in the side during much of Krueger’s tenure, and the Munich-based carmaker has vowed for the brand to retake the number one spot next year. BMW’s growing lag to its German competitor and deteriorating margins contributed to the imminent CEO changeover.BMW sent “a strong message to peers” as product momentum, profitability and cash flow are poised to improve, Evercore ISI analyst Arndt Ellinghorst said in a note to clients. “In an extremely volatile auto world, this is very good news.”BMW’s shares rose 1.5% in Frankfurt trading, paring its decline for the year to 4%.While BMW was forced to cut its guidance earlier this year following a large provision for a possible cartel fine, Daimler has warned of worsening outlook four times in just over 12 months, partly due to manufacturing hiccups hitting key models. The lowered expectations have made for a difficult start for new CEO Ola Kallenius, who took over from Dieter Zetsche in May. Trade woes, uncertainty over Brexit and large-scale restructuring programs also took their toll on Ford Motor Co. and Nissan Motor Co.In Krueger’s final quarter before Zipse takes over on Aug. 16, BMW’s earnings before interest and taxes tumbled 20% to 2.2 billion euros ($2.4 billion). Capital expenditures surged 39% amid a push to retool factories to toggle between battery-powered and conventional vehicles.To help shoulder the spending, the maker of BMW, Mini and Rolls-Royce vehicles vowed to boost efficiency as part of an ongoing 12 billion-euro savings program. BMW has accelerated plans to introduce 25 electrified models by two years to 2023.After suffering a loss in the first quarter, BMW’s car unit bounced back, boosting the company’s expectations for a stronger second half of the year. Still, the auto margin narrowed to 6.5% from 8.6% a year earlier.“Those of us watching BMW from the outside can chose either to admire BMW’s relative resilience, or complain that margins should be higher,” Bernstein analyst Max Warburton said in an note. “The lack of profit growth on the second-quarter’s great sales growth is sobering.”BMW’s confidence is built around new models like the full-sized X7 sport utility vehicle and 8-Series coupe, which both compete at the lucrative top-end of their segments. The company stuck to a goal of a slight increase in car deliveries for the year and an automotive profit margin between 4.5% and 6.5%, including charges.Electric FutureWith Krueger stepping down as CEO, the turnaround into an electric future will now fall to Zipse. BMW’s current production head has championed maintaining maximum flexibility in the company’s approach to electric cars, opting to upgrade the company’s factories to make all kinds of vehicles instead of introducing a dedicated production platform and retooling whole plants.To meet uncertain demand, BMW is readying a mix of fully-electric and hybrid vehicles in coming years to compete in a varied regulatory landscape of tightening emission rules globally.“The customers are different and the infrastructure is different as well in individual markets,” Krueger said Thursday.Cooperation projects with peers and technology firms will help share costs for expensive technology like self-driving cars. The carmaker has recently agreed to cooperate on a car sharing and ride hailing offering with Daimler, as well as autonomous cars. BMW is also collaborating with Jaguar Land Rover on electric cars, while Krueger on Thursday ruled out entering equity ties with the Tata Motors Ltd. division.“It’s primarily about speed, not sheer scale” to remain competitive, he said.(Adds CEO comments from telephone conference.)To contact the reporters on this story: Christoph Rauwald in Frankfurt at email@example.com;Oliver Sachgau in Munich at firstname.lastname@example.orgTo contact the editors responsible for this story: Elisabeth Behrmann at email@example.com, Chris ReiterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- California just notched a victory in its battle with the Trump administration over environmental policy. What makes this win especially notable — and especially encouraging — is that an alliance with car manufacturers helped bring it about. Some background: For more than half a century, California has been permitted to set its own targets for auto emissions and fuel economy — standards that more than a dozen other states, representing more than 30% of the U.S. auto market, now follow. Car makers came to treat the state’s high standards as de facto national benchmarks. That worked well enough until last year, when the Environmental Protection Agency, under President Donald Trump’s direction, said it would set new and less demanding national standards — in effect, driving a wedge between California’s rules and the targets to be applied elsewhere. In talks with the Trump administration to establish consistent — and looser — national standards, California stood its ground. The White House angrily broke off the discussion; California threatened to adopt “extreme” new rules if the president didn’t relent; and lengthy litigation loomed. Auto makers faced the debilitating prospect of dueling regulatory mandates. In June, a group of 17 asked the president to resume negotiations, but he refused: Industry leaders would have to choose sides and fall into line. They did. They chose California, and the state recently announced that it had negotiated its own deal with four major companies: BMW, Ford, Honda and Volkswagen. This new agreement slightly relaxes the state’s standards, but the rules are far stricter than the White House envisaged. Other companies are thinking about joining the pact. And Canada says it will bring its own rules into line.The Trump administration has dismissed the deal as unimportant. In fact, it matters a lot. It shows that car manufacturers, which seek regulatory certainty above all, find it easier to achieve that by dealing with California and other environmentally responsible states, rather than with an erratic, ill-managed federal regulator. Best of all, of course, if Trump’s initiative on cars is defeated, there will be large collateral benefits in the form of cleaner air and carbon abatement. The administration has pledged to carry on fighting, but if the manufacturers unite in opposition, it will lose — and the country as a whole will win. \--Editors: Tracy Walsh, Clive CrookTo contact the senior editor responsible for Bloomberg Opinion’s editorials: David Shipley at firstname.lastname@example.org, .Editorials are written by the Bloomberg Opinion editorial board.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Based on Bayerische Motoren Werke Aktiengesellschaft's (FRA:BMW) earnings update in March 2019, analyst forecasts...
(Bloomberg Opinion) -- Turns out that overturning the Obama administration’s fuel-economy rules isn’t as easy as it seems.Honda Motor Co., Ford Motor Co., Volkswagen AG and BMW AG struck an agreement with the state of California on Friday that will push through tighter fuel-economy regulations than those proposed at a national level by the Trump administration. Other major automakers are likely to follow that lead. Since states representing the most profitable third of the U.S. car market tend to follow California’s standards, that’s a significant blow to Washington’s attempt to roll back stringent Obama-era rules.Carmakers aren’t doing this out of the goodness of their hearts. The original rules would push the average passenger car sold in 2025 to achieve around 55 miles per gallon. That’s roughly the level of a latest-model Toyota Prius Prime plug-in hybrid running off its gasoline engine. Achieving those sorts of improvements (equivalent to a roughly 50% increase in mileage over the course of a decade) is challenging. Indeed, the deal with California will marginally wind back the state’s original fuel-economy target while handing out more electric-vehicle credits.So why didn’t the auto industry simply throw in its lot with the Trump administration’s maximally lenient approach? The answer comes from looking at the global picture, where shifts among the biggest car markets make divergent standards a problem. Two decades ago, U.S. rules could more or less define the shape of the world’s car market. America accounted for about two out of five new cars sold globally, and the European Union, with its tougher rules, was an outlier. That picture has been changing for a while. Japan has gradually moved from having fuel-economy rules close to U.S. standards to ones rather more ambitious than Europe’s, according to data from the International Council on Clean Transportation, a fuel-efficiency lobby group. Canada has been moving in the same direction too, and India – which had only rudimentary fuel economy policies in 1999 – now uses Europe as a model.Even China, where regulations have long been somewhat weaker than those in the U.S., is sharply upgrading its ambitions to reduce the toll of vehicle pollution on its cities by 2025. Tough rules around the share of new-energy vehicles in carmakers' fleets were put in place this year, and electric-car sales will top 2 million next year, according to BloombergNEF. Against that backdrop, the Environmental Protection Agency’s proposed rule would make U.S. states that don’t abide by California standards the odd ones out globally.For decades, carmakers have been trying to minimize the complexity of their global supply chains by having unified platforms and modular designs that can allow most of their output to follow a similar pattern, rather than developing bespoke vehicles for each market. So while companies generally like lenient regulation, they also want rules to be moving in a consistent direction.Consider metal-bashing. One of the main ways carmakers have worked to improve fuel economy has been to use aluminum instead of steel for the panels and parts that make up so much of a car’s mass. That can reduce the weight of individual parts dramatically –yet because aluminum sells for about three times as much as steel, it’s not a cost-free move. When the entire automotive industry is adopting lighter-weight metal, the increase in costs won’t worsen your competitive position. But if your rivals are taking advantage of lax regulations and sticking with cheap, heavy steel instead, you’re in trouble. That explains why the oil lobby and the auto lobby have been on different pages around this issue. For oil producers and refiners, weaker fuel-economy standards are an unambiguous win, promising higher sales to a key market. For carmakers, they’re a mixed blessing at best, and probably an absolute negative.Several decades ago, a concerted push from Washington could feasibly have switched global auto emissions onto a more carbon-intensive path. These days, America just isn’t a significant enough part of the world car market, especially when you leave out the California-aligned states. “The trend will not likely reverse,” energy analyst Philip Verleger wrote in a note to clients Monday. “The Trump administration’s failure to compromise with California on fuel economy will probably accelerate it.”As major investors in research and development, it’s little surprise that carmakers are relatively open to tougher regulation. A laissez-faire global auto market is one where any upstart can muscle its way in, but the current standards represent a competitive moat that will ensure only the fittest manufacturers can survive. Despite the Trump administration’s attempt to grab hold of the industry’s steering wheel, its destination is already fixed.To contact the author of this story: David Fickling at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Ford Motor Co, BMW AG , Volkswagen AG and Honda Motor Co said on Thursday they have reached a voluntary agreement with the state of California to adopt compromise vehicle emissions rules. The four major automakers' agreement to recognize California's legal authority to set vehicle rules is at odds with a White House plan to strip the state of that right. “Ensuring that America’s vehicles are efficient, safe and affordable is a priority for us all,” the automakers said in a joint statement that described the accord with California as a move to maintain a nationwide set of fuel efficiency requirements.
BMW Group said on Wednesday it would double its production capacity for electric vehicle batteries at its U.S. plant in South Carolina as it ramps up manufacturing of plug-in hybrid vehicles to include the X3 vehicle in addition to the X5. BMW said it was investing $10 million in a new battery assembly line which will be capable of operating in a two shift system ahead of the introduction of the BMW X3 plug in hybrid vehicle by the end of the year. BMW made 15,000 batteries last year with a one shift system and currently produces a plug-in hybrid version of the X5 offroader.
The European Union is keen to work with Washington to reform the World Trade Organization and cooperate on common challenges to global trade, but will retaliate if Washington makes good on its threat to raise car tariffs, a top EU official said on Monday. Sabine Weyand, the European Commission's director general of trade and former deputy Brexit negotiatior, struck a conciliatory but firm tone in remarks during her first official visit to Washington since taking on her new role a month ago.
WASHINGTON, July 22 (Reuters) - The European Union has seen little movement thus far in talks with the United States about reducing industrial tariffs, a top EU official said on Monday before meetings with U.S. officials. Sabine Weyand, the European Commission's new Director General of Trade, said it was important to build trust by moving forward in areas where the two economic blocs agreed, rather than focus solely on contentious issues. "It's a very mixed picture," Weyand told an event hosted by the Center for Strategic and International Studies think tank during her first official visit to Washington since taking over her new role. (Reporting by Andrea Shalal and Jonas Ekblom Editing by Chizu Nomiyama
BMW has named Oliver Zipse as its new CEO, continuing the German carmaker's tradition of promoting production chiefs to the top job even as the auto industry expands into new areas such as technology and services. Hailing Zipse's "decisive" leadership style, BMW hopes the 55-year-old can help the company regain its edge in electric cars and win back the premium market lead lost to Mercedes-Benz under his consensus-seeking predecessor. Current BMW CEO Harald Krueger, and former chiefs Norbert Reithofer, Bernd Pischetsrieder and Joachim Milberg were all heads of production before they took the top job.
BMW has named Oliver Zipse as its new CEO, continuing the German carmaker's tradition of promoting production chiefs to the top job even as the auto industry expands into new areas such as technology and services. Hailing Zipse's "decisive" leadership style, BMW hopes the 55-year-old can help the company regain its edge in electric cars and win back the premium market lead lost to Mercedes-Benz under his consensus-seeking predecessor.