AD #3858 - GM Could Start Closing Plants in China; Tavares Warns Stellantis Could Drop Brands; Chevy Reveals All-New Corvette ZR1

Speaker 1: This is Outline Daily.

Speaker 2: The show dedicated to enthusiasts of the global automotive industry.

Speaker 2: As they put COVID in the chip shortage behind them.

Speaker 2: Automakers thought that twenty twenty four would be the year Speaker 2: when things sort of got back to normal, but it's Speaker 2: not turning out that way. Earlier this week, Testa reported

Speaker 2: a disastrous quarter. Yesterday we reported that Stilantis, Renault, Nissan,

Speaker 2: and Ford had sharp drops in earnings, and today we Speaker 2: can add Mercedes Benz to the list. It sold just

Speaker 2: over six hundred thousand cars and vans in the last Speaker 2: three months, down five and a half percent from last year.

Speaker 2: Revenue dropped four percent to thirty seven billion euros, and Speaker 2: its operating profit plummeted nineteen percent to four billion euros.

Speaker 2: While Mercedes Benz vans delivered a higher profit, its passenger cars, Speaker 2: including electrics and pehabs were down. Mercedes also blames a

Speaker 2: situation in China for the drop in its earnings. Earlier

Speaker 2: this week, we reported that GM is giving up on Speaker 2: its cruise robotaxi called the Origin. What most people don't

Speaker 2: know is that vehicle was already fully tooled up and Speaker 2: GM actually built dozens and dozens of them walking away Speaker 2: from that investment was costly. GM had to take a

Speaker 2: six hundred million dollar charge just to write it off.

Speaker 2: GM CEO Mary Barra blamed regulatory uncertainty. Since the Origin

Speaker 2: doesn't have a steering wheel or other safety components like Speaker 2: turn signal stocks, it doesn't meet FMVSS regulations or federal Speaker 2: motor vehicle safety standards. She says GM needs a legislative

Speaker 2: change before the Origin can be legal. We wonder if Teslo,

Speaker 2: Weimo or Zeukes believe that their robotaxis are illegal, but Speaker 2: we're willing to bet they do not. By the way,

Speaker 2: we want to thank Autoline Daily viewer Nick Thomas for Speaker 2: sending us these pictures of Origins parked outside of a Speaker 2: GM facility. And speaking of GM, is it going to

Speaker 2: have to start closing plants in China? In twenty seventeen,

Speaker 2: GM sold four million vehicles. Last year that was two

Speaker 2: point one million, and this year sales continue to drop Speaker 2: in China. We figure GM has at least four assembly

Speaker 2: plants too many in China. Mary Bara is reluctant to

Speaker 2: say what they will do because those plants are joint Speaker 2: ventures with SAIC, which is a state owned car company, Speaker 2: and with China's economy sputtering right now, it would be Speaker 2: highly embarrassing to the government if GM and SAIC started Speaker 2: announcing plant closings. But one thing's for sure, GM has

Speaker 2: no intention of abandoning the Chinese market. Barra points out

Speaker 2: that it's a significant export hub for GM to other Speaker 2: markets in South America and Central Asia, and she sees Speaker 2: a lot of opportunity with its Durant Guild retail brand Speaker 2: that sells high end vehicles in China, like suburbans and Speaker 2: corvettes that are imported from the US. As we reported yesterday,

Speaker 2: Stillantis had a rough first half of the year, with Speaker 2: a ten percent drop in sales and a forty percent Speaker 2: decrease in operating profit, and most of the losses came Speaker 2: from North America, which had been the most profitable part Speaker 2: of the company. So Stillanti says it will cut production

Speaker 2: in North America this quarter to get more in line Speaker 2: with demand, and it will also cut vehicle prices. It's

Speaker 2: planning five hundred million euros in savings across all of Speaker 2: its operations in the second half of the year, and Speaker 2: if some of its fourteen brands don't start performing better, Speaker 2: Stillanti's CEO, Carlos Tavares, says it's ready to start dumping them.

Speaker 2: During the company's first half earnings call, Tavarres said, quote, Speaker 2: if they don't make money, we'll shut them down. We

Speaker 2: cannot afford brands that do not make money. We think

Speaker 2: Chrysler and Maserati are two obvious choices to get rid of.

Speaker 1: Since their sales are so small.

Speaker 2: But what do you think what brands do you think Speaker 2: are on the chopping block?

Speaker 3: Trusting tires designed for the long haul, because you'll always Speaker 3: go the distance for friends. That's what really matters. Breached

Speaker 3: down a lens of tires with an eighty thousand mile Speaker 3: unted warranty.

Speaker 2: A split window Corvette is back for the first time Speaker 2: since nineteen sixty three. Chevy revealed the all new ZER

Speaker 2: one version of the VET, which it claims has the Speaker 2: most powerful V eight ever produced in America by an automaker.

Speaker 2: That engine is a twin turbo version of the five Speaker 2: and a half lead flat plane crank V eight found Speaker 2: in the Z six, but instead of producing six hundred Speaker 2: and seventy horse power, it generates over one thousand and Speaker 2: fifty horse power and nearly eight hundred and thirty pound Speaker 2: feet of torque. It dubbed it the LT seven and

Speaker 2: made changes to the heads, valve, train, intake system, cooling, Speaker 2: and more to make and handle all that extra power.

Speaker 2: The ZR one's eight speed dual clutch trans and braking Speaker 2: system also had to.

Speaker 1: Go through upgrades.

Speaker 2: In fact, the fifteen point seven inch carbon ceramic rotors Speaker 2: are the largest front brakes ever put on a corvette.

Speaker 2: Magnetic ride control dampers and a host of aero dynamic Speaker 2: improvements are standard as well on the ZR one, But Speaker 2: for those that want a little bit more, there's the Speaker 2: ZTK package. It adds more aggressive arrow including a big

Speaker 2: rear wing and underbody panels, different suspension tuning that comes Speaker 2: with stiffer springs and Michelin performance tires. Chevy claims the

Speaker 2: ZR one will do over two hundred and fifteen miles Speaker 2: an hour, which is three hundred and forty six kilometers Speaker 2: an hour, and it will run the quarter mile in Speaker 2: under ten seconds. It will be built in Kentucky and

Speaker 2: production starts sometime next year. China wants to get old,

Speaker 2: less environmentally friendly vehicles off of its roads, so it's Speaker 2: boosting subsidies for a cash for clunkers like program. Car

Speaker 2: buyers who scrap their old car for a new energy Speaker 2: vehicle now get a twenty eight hundred dollars incentive, double Speaker 2: what it was before. Subsidies for buying a new ice

Speaker 2: vehicle are now twenty one hundred bucks also double, and Speaker 2: there's incentives to upgrade old commercial vehicles, agricultural equipment.

Speaker 1: And buses as well.

Speaker 2: The vehicle incentives are part of a larger forty one Speaker 2: billion dollar program to upgrade large scale industrial equipment and Speaker 2: other consumer products in China. More and more Chinese automakers

Speaker 2: are setting up shop in Europe to avoid tariffs.

Speaker 1: On imported evs.

Speaker 2: The EU is trying to prevent a wave of cheap Speaker 2: Chinese evs from flooding the market and hurting European brands.

Speaker 2: But while they don't want imported evs, several European countries Speaker 2: are luring Chinese EV makers to build vehicles there. Cherry

Speaker 2: will soon start operations in Spain, Leap Motor is assembling Speaker 2: vehicles at a Stalantis plant in Poland, Buid is planning Speaker 2: factories in Hungary and Turkey, and Seic and Zeker are Speaker 2: also looking for production locations in Europe. This will allow

Speaker 2: them to avoid the import tariff on Chinese evs, which Speaker 2: is up to forty eight percent. EV's from legacy automakers

Speaker 2: outperformed Tesla. According to JD Power's Appeal study. It ranks

Speaker 2: owner satisfaction of new vehicle design and performance based on Speaker 2: a one thousand point scale, and this year, non Tesla Speaker 2: evs had a satisfaction rating of eight hundred and seventy seven, Speaker 2: which is an all time high and also beat Tesla's Speaker 2: score of eight hundred and seventy. And if Rivian had

Speaker 2: met JD Power's criteria for the study, it would have Speaker 2: come out on top of everybody else, no matter the Speaker 2: powertrain type, with a score of nine hundred. The average

Speaker 2: score for a luxury vehicle regardless of powertrain was eight Speaker 2: hundred and seventy, and it was eight hundred and thirty Speaker 2: eight for mass market cars. JD Power says improved battery

Speaker 2: range and better interiors is why other automakers passed up Tesla.

Speaker 2: But speaking of Tesla, it says if you're using a Speaker 2: wet rag on the charging cable to speed up the Speaker 2: charging rate, to stop doing it. It has nothing to

Speaker 2: do with water getting between the plug and connector rather, Speaker 2: it says, it can interfere with the temperature monitoring system, Speaker 2: increasing the risk of overheating and damage, and it can Speaker 2: make it harder for the system to determine if there's Speaker 2: actually a problem with the charging.

Speaker 1: That brings us to the end of this show and Speaker 1: this week.

Speaker 2: Thanks for tuning in, and I hope that you have Speaker 2: a great weekend.

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