Chip Shortage Forces Automakers to Leave Out Some High-End Features
When automakers were first hit with chip shortages at the end of last year, they tried idling factories until the trouble passed. But with the crisis stretching into its fifth month and getting worse, they are getting creative to keep at least some production moving forward, reports Automotive News. Nissan is leaving navigation systems out of thousands of vehicles that typically would have them because of the shortages. Ram no longer offers its 1500 pickups with a standard "intelligent" rearview mirror that monitors for blind spots. Renault has stopped offering an oversized digital screen behind the steering wheel on its Arkana crossover – also to save on chips. The crisis is an historic test for the century-old auto industry just as it is trying to accelerate a shift toward smarter, electric vehicles. Read more here (Source: Automotive News).
Chip Crisis to Eat Into Volkswagen's Q2 Profits
Volkswagen boss Herbert Diess said Europe's top carmaker was in "crisis mode" over an ongoing lack of badly needed automotive chips, adding the impact of the shortage would intensify and hit profits in the second quarter, reports Reuters. Speaking after bumper results for the first three months of the year, during which operating profits increased more than five fold, Diess said the bottleneck would "substantially burden earnings" in the quarter to June. The shortage has been caused by a mix of factors, including the car industry's sharper than expected rebound from the coronavirus crisis and a fire at key automotive chip maker Renesas Electronics Corp. Snow storms in Texas earlier this year have made the situation worse, hurting local production of chipmakers such as Samsung Electronics, Infineon, and NXP Semiconductors. "We will do everything to offset a significant amount of the lost cars in the second half of the year," Diess told journalists. "But the incidents in the U.S. and in Japan will hurt us definitely." Read more here (Source: Reuters).
GM Expects to Offer Personal Self-Driving Vehicles to Consumers This Decade
General Motors CEO Mary Barra expects the automaker to offer self-driving vehicles to consumers later this decade, reports CNBC. While autonomous vehicles for deliveries and ride-hailing services are currently undergoing rigorous testing, manufacturing them for retail customers hasn’t been a priority for automakers because the technology needed for the systems is prohibitively expensive. “Later in the decade, I believe, and there’s a lot to still unfold, but I believe we’ll have personal autonomous vehicles,” she told investors Wednesday during the company’s first-quarter earnings call. She did not specifically say GM would sell such vehicles directly to consumers. It could lease them or offer customers a subscription service like it did previously for Cadillac vehicles. A GM spokesman said the company has no further comment at this time. Barra’s comments come after GM showcased a personal autonomous vehicle concept car for its Cadillac brand in January. The vehicle was based on the Origin, an autonomous shuttle from its majority-owned subsidiary Cruise. Read more here (Source: CNBC).
Aston Martin Revenue Tops Estimates as SUV Drives Volumes
Aston Martin Lagonda Global Holdings Plc reported better-than-expected sales for the first quarter as the British luxury-car maker gets a significant boost from its first-ever SUV, reports Bloomberg. Revenue soared 153% to 244.4 million pounds ($340 million), beating analysts’ average estimate for 196.7 million pounds. The DBX sport utility vehicle accounted for 55% of the vehicles sold to dealers in the first three months of the year. Aston Martin racked up significant losses after going public in 2018 and has spent the last year restructuring itself after a rescue by Canadian billionaire Lawrence Stroll. The 61-year-old fashion mogul has injected much-needed cash and forged closer ties with Daimler AG’s Mercedes-Benz to ensure the company survives tumultuous times for the auto industry. Soon after taking over as chairman last year, Stroll shook up Aston Martin’s management and brought in Tobias Moers, who previously led Daimler AG’s Mercedes-AMG performance division, as chief executive officer. He also set a target to earn 500 million pounds on 2 billion pounds of revenue by 2025. Read more here (Source: Bloomberg).
Customers with High FICO Scores Transact Fully on Digital Retailing Platforms
Lithia Motors Inc. and Asbury Automotive Group Inc. shared early learnings from their recently launched omnichannel retailing solutions in first-quarter earnings last month, with both retailers reporting that higher-credit consumers transacted entirely online and made larger down payments on expensive vehicles. However, the inventory shortage may be driving more customers to transact online and pay more for scarce inventory, Asbury CEO David Hult warned last month. In March, Asbury completed the rollout of its Clicklane omnichannel platform — which refers to offering a seamless buying experience to consumers whether they shop online, in-store, or both — across all of its 91 dealerships. Current market conditions may be impacting what the dealership group is seeing on the tool, Hult said. Higher down payments are likely a reflection of government stimulus and tax refunds, he said. Read more here (Source: Automotive News).
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Beloved Nebraska Car Museum Shuts Down [MotorTrend]
Least and Most Expensive Cars to Keep on the Road [Consumer Reports]
