AD #3906 - The Minivan Segment is Dying; U.S. Faces Another Chip Shortage; ICE Price War Could Start in China

Speaker 1: This is out Aligned Daily, the show dedicated to enthusiasts of the global automotive industry. The spotlight is on Stillantis

today and it seems like things are getting worse. Third

quarter sales in the US were a disaster, falling twenty percent.

For the year, they're down seventeen percent, and investors are heading for the exits. The stock price dropped twelve percent

this week and is down forty percent so far this year.

At the beginning of the year, the company's market cap was seventy billion dollars. Now it's thirty six billion, a

thirty four billion dollar drop in value in only ten months.

Stilantis will not report its global Q three sales until the end of the month, but Bloomberg reports that its production in Italy has cratered, dropping forty one percent so far this year. It only made about two hundred and

thirty eight thousand vehicles there this year, which is less than it made into twenty twenty when the COVID pandemic shut down its plants. Last year, Stilantis was one of

the most profitable full line manufacturers with double digit margins, and Carlos Tavares was hailed as one of the best CEOs in the business, but this year he's managed to turn everyone against him, his dealers, his unions, his employees, and even the Italian government. The board is also actively

looking for a new CEO when his contract expires in twenty twenty six, and it's possible he won't even last that long. The board of directors may have to buy

out his contract, if only to prove it's upholding its fiduciary duty. Okay, now over to Tesla, where the story

is a bit brighter. Tesla delivered just under four hundred

and sixty three thousand vehicles worldwide in the third quarter.

That's up six point three percent from a year ago and up four point two percent from the last quarter, but that was less than analysts expected, and investors took it as a sign to sell, sending the stock price down more than six percent and wiping out all the gains that it made this year. The days of fifty

percent annual growth and a trillion dollar valuation are probably over unless something big comes along. And one week from today,

Tesla says it will unveil its robotaxi, but we'll have to see if that's enough to convince investors that this is still a growth stock with a lot of runway in front of it.

Speaker 2: You know.

Speaker 3: Geez.

Speaker 1: Just when we thought the chip shortage was pretty much over with, Hurricane Helene showed just how vulnerable the industry is.

Two companies that mine high purity courts in North Carolina had to shut down their operations due to flood damage from the hurricane. That courtz is used to make chips,

and the sites in North Carolina are one of the only ones in the world that contain the material. The

mining companies say it's too early to know when they can start running again, but if the shutdown is long, we could have another chip shortage on our hands. And

speaking of that, Hurricane Helene also disrupted operations at Canadian supplier Linamar's two plants in North Carolina due to flood damage.

One of the sites is gradually resuming production, but the other is still without power, which may not come back on until tomorrow. Lnamar, which makes parts and components for engines, transmissions,

and drive train says it expects to be affected for at least the next two weeks. But wait, there's more.

Now automakers are grappling with a port strike along the East Coast and Gulf of Mexico. Even if it only

lasts a week, experts say automakers and suppliers could feel the impact until Thanksgiving. According to alex Partners, the ports

on strike account for sex seventy percent of the US auto imports, and S and P Global estimates they handle nearly thirty eight billion dollars worth of vehicles a year.

Automakers anticipated the strike in boosted shipments ahead a schedule, but if it goes on longer than a week, they'll need to find alternatives, either shipping vehicles to the West Coast or even Canada and Mexico and then bringing them back in by truck and rail. They could also ship

parts by air, but that can get expensive. Yesterday we

reported that BMW is pushing Germany to vote against the EU's tariffs on Chinese evs, and now Mercedes is saying the same thing. It wants a no vote and prefers

a negotiated solution rather than tariffs, but Germany says it will abstain, and Reuter's reports that the proposed tariffs have the support to pass. EU countries will vote tomorrow, which

would slap import tariffs up to forty five percent Chinese made evs to stop them fifteen at the twenty seven EU member states that represent sixty five percent of the EU's population need to vote no. However, France, Italy, Poland

and Greece will vote in favor of the tariffs, and those countries account for about forty percent of the EU's population.

Speaker 2: Hi, I'm Don Hatfield from in Trepting Control Systems and I'm presenting the wireless be AMSS solution from Intrepid Control Systems.

Come and see us in this demo at Booth twelve oh one at the Battery Show, and also analog devices will be there as well and be happy to talk to you and help you with your solution.

Speaker 4: Wow.

Speaker 1: Toyota is serious about developing vitals or vert takeoff in landing aircraft. Four years ago it invested three hundred and

ninety four million dollars in a California startup called Joby Aviation, and now it's investing another five hundred million bucks in the company, which will go towards certification and commercial production of Joby's electric air taxis. Its vtal can carry four

passengers and a pilot at up to two hundred miles an hour. For up to one hundred kilometers or sixty

two miles. Earlier this year, Joby signed a deal with

Dubai to launch an air taxi service in the city in twenty twenty six. While the EV price war in

China has seen the most coverage, makers of ICE vehicles have started offering deep discounts as well. Jeelee's Linking Co

brand is offering a lifetime warranty and nearly fifty seven hundred bucks off It's one model with a trade in, which brings its starting price to just over eighteen thousand dollars.

Its problem is that sales of IC vehicles are falling due to the popularity of PHVs, E revs and b evs, and the One is Lincoln Co's main model. It's based

on GLESCMA platform, is similar to Evolvo X forty and is also sold in some overseas markets, But from April to August, Linking Co sold less than thirty five hundred examples.

That's why it recently launched its first EV, the Z one O, and plans to launch another soon. The minivan

segment is dying. According to Ward's intelligence data, roughly a

million minivans were sold in the US market twenty years ago, but last year that dropped to only three hundred and six thousand, and so far this year it's less than two hundred thousand. The Chrysler Pacifica made up about forty

percent of last year's sales, leaving Toyota, Honda, and Kia to account for the rest. This helps explain why Chrysler

is probably going to keep making the current Pacifica until the end of the decade, even though it launched in twenty seventeen, and we wouldn't be surprised to see similar longevity from the Siena Odyssey and Carnival. To get its

workers more familiar with its electric vehicles, Mercedes is allowing them to take free test drives during work hours. It

launched the program last year, and more than seventeen thousand employees at ten locations in Germany, Poland and Hungary took advantage of it. For two thirds of them, it was

the first time they drove a Mercedes EV. Last year's

campaign was aimed at production workers, but now it's opening it up to all employees at those same locations, and it expanded it to include all of its passenger evs.

The automaker says it's also giving out test drives so its employees can experience its driver assistance features. In total,

Mercedes expects twenty seven thousand workers to take part in the program that year. Katerim and Yamaha are two names

you don't hear much about anymore, but the two of them are coming together to collaborate on a lightweight sports car.

Katerum says that Yamaha will supply it with a powertrain and motion control technology for the production version of its Project V concept. The model debuted at last year's Goodwood

Festival of Speed, and a specialist engineering company named Tokyo R and D is building the prototype, which is scheduled to be completed in the middle of next year. If

you're wondering why a British brand like Katerum is working with a couple of Japanese companies, it was bought by Japanese company VT Holdings in twenty twenty one, and interestingly, VT Holdings started out as an importer of the Katerum seven in Japan in two thousand and nine. At the

top of the show, we talked about Q three sales problems at Tesla and the disaster at Stalantis, and those are going to be three of the topics we get into at three pm Eastern Time this afternoon on Autoline After Hours, Warren Brown, the analyst and forecaster, and Stephanie Brinley from S and P Global Mobility will be on the show. So join John and Gary as they look

beyond the headlines and dig down into what's really going on in the industry. But that's a wrap for this show.

I hope to see you later.

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AD #3906 - The Minivan Segment is Dying; U.S. Faces Another Chip Shortage; ICE Price War Could Start in China

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