Nissan Motor Co. expects to return to profitability in 2021 if the current momentum continues, with demand in China already bouncing back from the pandemic, CEO Makoto Uchida said.
The company, which in May reported its first fiscal year loss in a decade and the biggest in 20 years, is forecasting a strong recovery in the Chinese market by year-end and plans to expand its presence there, Uchida said during a media briefing at the 2020 Beijing International Automotive Exhibition on Saturday.
China has emerged as a crucial market for Japan’s second-biggest automaker by output as it struggles to recover from a boardroom scandal surrounding former chairman Carlos Ghosn and a sales slump that threatens its alliance with Renault. Thanks to a strategic partnership with Dongfeng Motor Group Co. that was forged in 2003, Nissan is one of the strongest Japanese passenger automakers in Asia’s biggest economy.
Dongfeng Motor President and Nissan executive Shohei Yamazaki said Saturday that while other auto markets around the world face uncertainties, China is recovering well.
Nissan will launch nine new and redesigned electric models in China by 2025, including plug-in electric vehicles and hybrid electric cars that charge with a gasoline engine, Yamazaki said.
Like many automakers, the coronavirus pandemic has deepened the pain for Nissan. It posted a 671 billion yen ($6.2 billion) net loss last fiscal year, the biggest in two decades, further weakening its position in the alliance with Renault and Mitsubishi Motors Corp.
On display at this year’s show, one of the biggest on the automotive industry calendar, is Nissan’s all-electric Ariya crossover, shown publicly for the first time outside Japan. The company is also using the gathering to highlight its Formula E race car and the GT-R50 by Italdesign.
Features from the Nissan Intelligent Mobility range are also on display, including ProPILOT, an autonomous driving technology for use in single-lane traffic on highways.
Earlier this week, Nissan unveiled luxury car brand Infiniti’s new design concept for the QX60 Monograph, an upmarket three-row crossover that debuted this weekend. The automaker will sell the model in 23 countries, including the U.S., China, Canada and Russia.
Infiniti Chairman Peyman Kargar said the company plans to roll out more models than initially planned in the world’s biggest car market. Nissan’s July sales in China increased 11.6 percent from a year earlier to 120,945 units.
To further refresh its aging lineup, Yokohama-based Nissan promised in May to launch 12 new cars in the next 18 months. It plans to cut both capacity and the number of models by 20 percent, and will no longer pursue volume growth to shed the old legacy from the Ghosn era.
While COO Ashwani Gupta has stressed Nissan’s priorities of conserving cash, the Japanese government has effectively guaranteed 130 billion yen ($1.2 billion) of 180 billion yen ($1.7 billion) of in crisis loans to help the company through the pandemic. Nissan this month also raised $8 billion in its first non-convertible dollar bond sale in at least two decades.
At the nation’s franchised ultraluxury and exotic dealerships, new vehicles usually are the stars of the showroom. But with the new-vehicle production pipeline squeezed by COVID-19, 2020 has been anything but ordinary for elite brands.
Inventories are tight, used models are commanding higher prices and service has taken on even greater importance.
“Inventory levels are at a 12-to-15-day supply, where we like them to be at 45-to-60-day, so we’re woefully out of stock,” Robert DiStanislao, president of RDS Automotive Group, said of the brands he sells.
His used-vehicle inventories also are lower than he’d like.
“We’re seeing that the used-car market is stronger than it’s ever been,” said DiStanislao, whose group has stores in Pennsylvania, Connecticut and California that sell Bugatti, Koenigsegg, Lamborghini, Maserati, McLaren and Porsche vehicles.
Although sales are expected to be down this year, there are signs that things are trending toward normal. Factories in Europe have begun ramping back up, and critical product introductions, redesigns and freshenings will arrive as the year winds down.
In-person events, albeit socially distanced, have sprouted back onto the calendar for some stores, allowing for the crucial interaction between client and dealer, whether on the showroom floor or elsewhere.
“Our cars are a car where people will go to the retailer, they’ll engage with the retailer and they’ll buy a car,” McLaren CEO Mike Flewitt said in an interview last month. “It’s not so much a commodity that can move to be a purely digital transaction. There aren’t many people who would buy a McLaren just over the Internet. They actually want to know the people they’re buying the car from.”
Heath Strayhan recalls the early days of the crisis.
“Things stopped right in the middle of March for us and our activity almost ceased for the rest of that month,” said Strayhan, general manager at the Avondale Premier Collection in Dallas, which sells Aston Martin, Bentley, Koenigsegg, Maserati, McLaren and Rolls-Royce vehicles.
“We do not see our transactions as being single transactions,” he said. “We see them as being long-term, multiple transactional relationship-style partnerships. Going into March, we benefited from that. We had a very high level of pre-sold units that were due to hit in April. That has continued through this time period.”
Still, the gravity of the unfolding COVID-19 crisis gave Strayhan pause on April 1.
“I said something that I would never say to myself on the first of a month which is: I wonder how many of these pre-sold units I’m actually going to sell?” he recalled.
By April’s end, each of the pre-sold new vehicles had been delivered. Strayhan declined to specify how many, but noted it was in the double digits, making it a robust month for the store, he said.
On the used end, Strayhan said the price of some pre-owned vehicles has shot up.
“With the ’16 to ’19 model pre-owned cars, we’ve seen values increase dramatically, upwards of 20 to 25 percent, in certain segments, as a function of the supply of new cars,” he said.
Brett David, CEO of Prestige Imports in North Miami Beach, Fla., which sells new Lamborghini, Lotus, Pagani and Karma models, said dealers initially took different approaches when it came to used vehicles.
“Nobody knew how serious or significant this pandemic was going to be,” David said. “You had dealers at the time calling each other concerned, scared, not knowing what was actually going to happen. We had dealers discussing with one another what we should do with our pre-owned cars. Should we wholesale them out just to take the blunt risk and take all the depreciation of these cars early on, so we don’t get hit if this was to get a lot worse? Some dealers did that. With us, our consensus was just to stay tight.”
David said he and his team realized that with production of new vehicles being halted, the used-vehicle market would provide an avenue for growth. It became a focus point. “We have sold out of most of our old-aged inventory, we’ve sold out of all of our newer, hotter product,” he said.
“We’re seeing buyers come from all across the country.”
Prestige Imports sells about 10 to 15 new and around 40 to 50 used vehicles per month, David said. In August, he opened a new Lamborghini showroom, roughly three times the size of the previous one.
Fixed operations has also been a positive area of business in light of tight inventories.
“Our fixed operations has been very robust,” said Strayhan. “It’s been a great business for us. It’s been a great backbone. It’s caused me to even have more optimism because people are servicing their cars.”
For DiStanislao, service has been crucial.
“While our [new] units will be down, our overall profitability will be up because there are people that have used cars and are keeping them and servicing them,” he said.
In the past, dealerships might have hosted large gatherings at the showroom or a racetrack, but social distancing has altered that.
Strayhan said Avondale only recently began hosting events again, on a smaller scale, tied to new-model launches.
“We had a three-day Rolls-Royce Ghost launch where our vendors came in, Rolls-Royce brought their experts in and we had individual appointments,” he said. “We invited our clientele to come in and have an individual presentation of the new Ghost, which was 100 percent at capacity.”
For the Ghost event, Avondale had the redesigned sedan for twice as long as it normally would have, he said, which allowed the dealership to maximize the number of individual showings.
Avondale also hosted customer launch events for the Aston Martin DBX SUV and McLaren Elva hypercar in the brand’s showrooms, complete with social distancing and masks.
In October, DiStanislao said his group will be hosting a drive-in movie screening of The Italian Job for Philadelphia-area customers to make up for the cancellation of track days and road rallies.
“Our customers are very happy to stay engaged that way in a safe environment,” he said. “The cars are going to be spaced, everyone’s going to be in their own car and we’re going to deliver food to their window.
“Even though it’s not particularly a warm and personal exchange as maybe a track day or a rally might be, they love the idea of doing anything with their car. This, we found, was a great alternative to stay in touch with our customers and keep them enthused.”
FRANKFURT — Daimler’s Dieter Zetsche will not seek to become chairman of the German carmaker’s supervisory board, he told Frankfurter Allgemeine Sonntagszeitung newspaper.
Zetsche, 67, a former CEO of the company that owns the Mercedes-Benz brand, was due to take a seat as chairman on the board of directors, which in Germany is known as the supervisory board.
“Naturally I would like to have done the job. I also believe I would have done it well. But in the end I decided that I do not want it, that I renounce this opportunity,” Zetsche is quoted as telling the paper.
“We acknowledge Dr. Zetsche’s decision with great respect,” a Daimler spokesman said.
Zetsche says Daimler’s top investors would have backed him to succeed Manfred Bischoff but that there may have been opposition from other shareholders.
“The fact that after 40 years of work I am not regarded by some as an asset, but as a burden, I do not need that,” Zetsche is quoted as telling the paper.
Zetsche, who aside from being CEO of Daimler, was also head of Mercedes-Benz, was due to succeed Bischoff at Daimler’s annual general meeting on March 31, 2021.
Earlier this month Daimler agreed to pay $2.2 billion to resolve a U.S. government diesel emissions investigation and claims from 250,000 U.S. vehicle owners.
Polestar has reversed course on the Precept sedan, deciding to turn what was originally billed as a “vision” of the brand’s future into a production model.
It will take three years to complete development of the brand’s future flagship grand tourer, Polestar CEO Thomas Ingenlath told Automotive News Europe.
The production car will be underpinned by the second generation of parent Volvo Cars’ Scalable Product Architecture, SPA2.
Polestar decided to produce the Precept after the overwhelmingly positive response it received after the concept debuted in February.
“That is when we started to ask: ‘What would it take to make it a reality’?” Ingenlath said during a video chat from Beijing ahead of the opening of the auto show there. “Now it’s no longer a vision, it’s a challenging goal, which makes it something to strive to reach.”
Ingenlath said he wants the production version of the car to be as close as possible its first iteration, which has:
- Cameras instead of side mirrors and a wide light blade at the rear that spans the width of the car, both to enhance aerodynamics
- A front end that has been turned to a so-called SmartZone to house radar sensors, a high-definition camera as well as other driver-assistance equipment
- A spot in the roof for a lidar system.
- Sustainable materials that include flax-based composites for interior panels and seatbacks
- Seat surfaces from recycled PET bottles
- A next-generation infotainment system from its collaboration with Google with advanced eye-tracking and proximity sensors to deliver information in a more controlled manner.
Polestar will produce the Precept in China at a new facility, where the aim is to make production carbon neutral and for the plant to be “one of the most intelligent and connected automotive production facilities in the world,” the company said.
The brand’s Polestar 2 is built in a factory it shares with Volvo in Luqiao, China. The plant produced 26 metric tons of CO2.
Ingenlath has already asked his team just how low Polestar can get the CO2 number when the production version of the Precept starts rolling out of the new plant.
“Perhaps doing what we are doing now with the Precept will take us to half [13 metric tons of CO2], but I really don’t know. That is why I asked them to calculate what is possible,” he said. “It is a long journey, but if we don’t start this now we will never make it to zero.”
Polestar has already had success in slashing carbon production at its factory in Chengdu, where the Polestar 1 is made. Since last year the plant has gotten 100 percent of its electricity from renewable energy such as hydro, solar and wind power.
DETROIT — Ford Motor Co. executives are hopeful that dealers will convert an “incredibly high” percentage of Bronco SUV reservations into actual sales and believe they’ll be filling those orders for more than a year.
The automaker on Friday reached out to its U.S. retail network in a video to describe the allocation process for one of the most highly-anticipated vehicle launches in its recent history. Ford began building Bronco pre-production models at its Michigan Assembly Plant this week and plans to deliver the first off-roaders starting in late spring of next year.
Ford earlier this week said the Bronco build-and-price site will go live in October. Beginning in November and continuing through January, dealers will work with customers to convert their $100 refundable deposit into an actual sale, confirming accessory purchases, final prices and financing options. Ford expects to offer customers an approximate timeframe on their vehicle’s build date starting in February.
Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service, told Automotive News he initially expects “over 75 percent” of the roughly 165,000 refundable deposits will be converted to sales, although that conversion rate is likely to fall for customers who have to wait longer for their Bronco. He said Ford will “definitely” be filling reservations into 2022.
Dealer allocation will depend on a retailer’s market size, previous SUV sales performance, the number of reservations tied to their store and competitive off-road registrations in their market, LaNeve said.
“We’re really trying to have an equitable and fair process for allocating to dealers,” LaNeve said. “We have dealers that will get hundreds of Broncos allocated to them in 2021 and you go from there. Bigger dealers with lots of reservations will generate the most allocation, but we’re going to try and take care of every dealer who has reservations.”
He declined to offer any production estimates, but before the coronavirus pandemic Ford officials indicated they expect sales of the Bronco family of vehicles — which will include two- and four-door versions of the Bronco as well as the Bronco Sport — will hit at least 200,000 in 2021.
LaNeve declined to say how many Bronco Sport reservations Ford has recorded, noting it was “a lot less than the two-door and four-door but still significant.” He said he Bronco Sport will go on sale about the same time as the redesigned F-150, which will hit showrooms in November.
LaNeve said dealers are not required to invest in facility upgrades to sell the Bronco, although they must undergo training, add certain displays to their showrooms and develop a business plan with one of Ford’s eight accessory distribution centers.
Ford has said it will offer more than 200 Bronco accessories at launch.
BEIJING — When 32-year-old photographer Jaco Xu needed a run-around car for work in the eastern city of Hangzhou, the price tag on the latest micro EV from General Motors’ China joint venture overcame his qualms about electric vehicles.
Xu paid 38,800 yuan ($5,735) for his tiny two-door Wuling Hong Guang MINI EV, while the basic model retails for just 28,800 yuan ($4,100), making it China’s cheapest EV.
“It feels pretty good. The price is so low and the appearance is simple and beautiful,” said Xu. “Why would I hesitate at that price?”
Launched in July, the Wuling MINI is heading a trend toward a new segment of EVs in China following changes to government subsidies — smaller vehicles with less range between charges, but a cheap price tag.
Despite basic features — no safety airbags, optional air-conditioning and a driving range of less than 125 miles due to a smaller battery — buyers have been enthusiastic.
SGMW, GM’s venture with partners SAIC Motor Corp. and Guangxi Automobile Group, sold about 15,000 of the vehicles in August, making it China’s top-selling EV for the month, surpassing Tesla’s popular Model 3.
The venture plans to expand manufacturing capabilities of the new model, turning out cars at its plant in Liuzhou as well as its existing facilities in Qingdao, said Zhou Xing, SGMW’s branding and marketing director.
“We positioned this model as a ‘people’s commuting tool’,” he said, speaking ahead of the Beijing auto show which starts on Saturday. “Customers can drive their cars to work every day.”
The target market includes people like Xu who are looking for a city run-around as a second car, rural buyers who want a vehicle to move goods and young first-time buyers who are motivated by price.
Total sales of new energy vehicles — including electric, plug-in hybrid and hydrogen fuel-cell vehicles — are expected to reach 1.1 million vehicles in China this year, about 5 percent of total auto sales.
The micro car represents a shift in what typifies a mainstream electric vehicle, as policymakers push for increased EV production and sales have been bolstered by restrictions on gasoline-powered cars.
In response to government requirements to win generous EV subsidies, automakers over the past decade have developed higher energy-density battery systems to allow cars to drive for longer with a single charge.
Tesla’s Model 3, which has a range of more than 250 miles, has been the market leader in China for most of 2020, retailing for about $43,000, about 10 times the cost of the Wuling MINI.
However, China cut subsidies heavily in 2019 and is now asking for higher EV power efficiency to save energy. Automakers, in turn, are planning more smaller EVs with a moderate driving range aimed at customers who can charge cars easily, industry executives said.
The economics are skinny. Wuling MINI will not get EV subsidies due to its short range. For SGMW, the cheap price tag means it makes very little money at best, according to people familiar with the matter.
But EVs generate green credits for SGMW that can be used to offset negative credits of other companies like SGM, its sister venture which is expanding a lineup of bigger utility vehicles under the Buick, Chevrolet and Cadillac marques.
“Selling micro EVs in China makes more sense this year,” said a product planning official at a GM rival.
“Subsidies have become a less important factor of pricing as government has already cut a lot, while green credits are expected to become more expensive,” the official said.
Bidding to reverse a sales decline due to a slower economy and stiff competition, GM expects electrified vehicles to make up more than 40 percent of its new launches in China over the next five years.
The Detroit automaker is revamping plants in Shanghai, Wuhan and Liuzhou under its two Chinese JVs to enable production lines making gasoline cars to turn out EVs, public documents detailing its constructions plans show.
For now, the Wuling MINI is the cheapest EV, but it faces competition from the cheapest models from rivals BYD and BAIC BluePark.
Great Wall Motor and Toyota’s China partner GAC are also planning more electric models with a range below 250 miles, company officials said this month.
And startup Kaiyun Motors is trying to radically lower the price of its new electric pickup truck Pixel to around 20,000 yuan ($2,900) for urban delivery services, although these EVs will be sold without batteries, allowing consumers to swap them.
“China is a huge market, any product with clear positioning can attract enough customers to survive,” said Kaiyun founder Wang Chao.