Automakers Think Recession Resistant

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Car manufacturers have decided will jump from the top to the top, everyone and their moms are investing in semiconductor manufacturing and VinFast officially has a US showroom presence. In all and more Morning Shift For Monday, August 1, 2022.

Gear 1: 2008 Never Happened, Car Sales Will Always Go Up, We’ll Never Die

Depending on who you ask, we’re either on the verge of a recession or already in one. However, if you ask automakers, they’ll just tell you they don’t care: Everything is fine and it will last forever, fuck historical evidence. from Wall Street Magazine:

One place where buyers continue to splurge, even as consumer spending cools, is the car dealership.

Auto executives, who reported earnings earlier this week, showed confidence that not only will demand for cars and trucks remain resilient in the second half of the year, but that easing supply chain disruptions will also help power profits in the coming quarters.

The accumulation of customer orders, historically low dealer stock, and auto buyers paying higher prices for vehicles all led to a series of profitable quarters for most global auto companies. The unique dynamic is fueling industry-wide optimism that it can better weather rising economic uncertainty than past recessions.

“Inventory at dealerships hasn’t really changed for about six quarters, even as production has increased,” said Paul Jacobson, GM’s chief financial officer. “There is a huge pocket of demand that has yet to be met,” he added.

The optimism is unusual for the auto industry, which is among the first industries to be affected by any decline in consumer sentiment.

Look, okay, sure, there’s a recession just around the corner. But this will never happen we, man! We are invincible! We sell cars and who doesn’t love cars? Don’t worry, everything will be alright. So yeah, we cut thousands of jobs, but it’s just like a precaution, you know? Don’t worry, everything is fine.

2nd Gear: Come On, Invest In Semiconductor Manufacturing, All The Cool Kids Are Doing It

If there’s one thing we’ve all learned from the pandemic, clearly learned nothing about public health, the importance of semiconductors in modern life. For the last two years, getting a hold of anything with a microchip has been a huge struggle, and where there’s a struggle there’s usually a profit. From Automotive News:

In response to a catastrophic worldwide swarf shortage that has put more than 13 million vehicles out of production since early 2021, chipmakers, including Bosch, and governments, including the US Congress, are pledging unprecedented sums of money to increase semiconductor capacity. not only to address the shortage, but also to meet the ever-increasing demand for chips across multiple industries.

Last week, Congress passed a bill that would provide more than $52 billion to US companies that manufacture chips and provide tax credits to invest in chip manufacturing.

The European Commission is establishing an investment war chest of more than $45 billion, similar to the US bill.

Large amounts of financing are committed by individual companies around the world. More than 90 new wafer mills or expansions of existing wafer mills, the industry term for chip manufacturing plants, are expected to come online globally in the next four years. HALFan electronics design and manufacturing industry group.

As technology advances in general, investing in semiconductor manufacturing will likely be a pretty solid move into the future. But to do this especially for cars with chips outdated by designIt can put manufacturers in some deadlocks.

Gear 3: VinFast Now Has Stores

VinFast used to be BMW X5 powered by LSand now it does Electric crossovers similar to Pontiac Trans Ams. If that sounds like a downvote to you, then you didn’t realize how fun EVs can be – or forgot how good the ’77 Trans Am looks. But if you need a reminder, VinFast now has stores you can see for yourself. from Wall Street Magazine:

Vietnam’s Vingroup has become a corporate juggernaut in its home country, operating everything from luxury resorts to hospitals, shopping malls and supermarkets.

Now, it’s looking to enter the US auto market with a little-known electric vehicle startup called VinFast, which has a new way of pricing its models.

The young Vietnamese automaker opened its first US showrooms in California in July and is moving aggressively to expand its operations in the states, including a plan to spend $2 billion to build a new EV factory in North Carolina.

To fund its growth, VinFast has also filed paperwork with US regulators for an initial public offering this year or later, making it the latest company to test investors’ appetite for seemingly out of nowhere startups focused on increasing competition. EV market.

VinFast is starting out with six outlets in California and plans to open two dozen more branches in the state this year before expanding into other US markets. The sites don’t sell vehicles, but instead act as galleries where shoppers can browse options and work with staff to make reservations online.

Founded in Vietnam in 2017, the EV company plans to sell two all-electric sports utility vehicles to start in the US: a mid-size SUV called the VF 8, starting at $40,700, and a larger VF 9, starting at $55,500. US buyers can order now, with deliveries expected to begin in late 2022.

Unlike other EV competitors in the US, VinFast has a unique business model where buyers pay a price for the vehicle, but then rent the battery for a monthly fee. The company offers two battery subscription plans, ranging from $35 to $160 per month, depending on how long the owner wants to drive, model purchased, and battery type.

The charge includes the maintenance of the battery and its replacement when its charge capacity drops below 70% of its original capacity.

Buying a car but renting out the powertrain is the kind of galaxy-brained business model I’ve come to expect from Elon Musk, but at least VinFast offers complete battery replacements – a nice balm for anyone who’s priceing a Prius battery replacement.

Gear 4: Nio’s European Basis Expands to Manufacturing

China-based Nio sells cars in Norway and wants to expand to more Europe. To help with this cause, he is establishing a factory in Hungary – but not a factory to manufacture cars. From Reuters:

Chinese electric car maker Nio plans to open its first overseas facility in September to manufacture electrical products for the European market as it accelerates expansion abroad.

Nio said Friday that the plant in Pest, Hungary will develop and manufacture energy products such as battery changing stations to serve European users.

The company is partnering with oil giant Shell PLC (SHEL.L) to set up battery replacement stations globally this year, starting in China and Europe, Nio announced on Monday. Shell will open its European charging network to Nio users.

Tesla quietly abandoned its very exciting battery replacement plans years ago, but Nio seems to be sticking with it. Battery replacement has pros (speed) and cons (unknown status of the spare battery), so it’s nice that owners have the option to at least do this. Bring it here, we love our long trips.

5th Gear: Take a Load of This Shit

Buying a car in the U.S. means interacting with frequently crooked dealers who want nothing more than to rake you over the coals and extract every penny possible, then hand you over to the service department to do the same job all over again. Because of this behavior, franchises are widely vilified by almost every living person. But listen to them here: What if they had silly names? Does this help? From Automotive News:

Van Horn Automotive Group has had a digital retail business since the start of the pandemic in 2020, with the goal of selling vehicles to consumers entirely online.

With 19 dealerships in Wisconsin and Iowa, the group initially used the established brand name and called its offering Van Horn Direct. The group’s vice president of dealer operations, Adam Gaedke, said, however, that the process is broken and it is not possible to complete a purchase entirely online.

Van Horn plans to change that with its digital brand CloudLot, which it launched for used vehicles in June. Developed with Penske Automotive Group and powered by Cox Automotive’s new Esntial Commerce digital retail tool, white-labeled for other dealers to use, CloudLot enables vehicle selection, financing, delivery and signing online by dealer group.

Other franchise groups are trying a similar approach. Titus-Will Automotive Group, which has six franchise stores in Washington state, launched CarBreezy, a digital sales platform also based on Cox’s technology, in March. Last year, Koons of Silver Spring in Maryland transformed its Inride vehicle subscription platform into a standalone used vehicle purchase brand with its own dedicated staff and a new website and mobile app.

In some ways, the launch of a digital brand takes a page from the playbook of Carvana and Vroom, online used vehicle retailers that market themselves as viable and easy alternatives to franchisees. Some dealers say they expect a separate brand to help them expand into markets outside of their region or reach customers who might not have considered a traditional dealership before.

If your business model is that bad, completely different company just to sync recipients think put up with their bullshit, maybe it’s not the brand name that’s the problem. Maybe it’s the customer experience, terrible websites, reckless (or actively collaborative) sales teams, F&I gimmicks, lack of product knowledge, or lobbying that forces car buyers to go through all this. But no, I’m sure putting Cloud in your name will fix all that.

Reverse: We’ll Never Get It winter windsWe?

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