Mercedes-Benz Facing Challenges Despite Strong Q2

First Up 08/01/22

Mercedes-Benz Facing Challenges Despite Strong Q2

Despite a solid quarter financially, thanks to the company’s ability to raise prices in key markets, Mercedes-Benz Group AG acknowledged its operations are facing serious difficulties due the disruptions created by the war in Ukraine. “The team at Mercedes-Benz delivered another strong quarter in an uncertain environment,” said Ola Källenius, chief executive officer of Mercedes-Benz Group AG. “We are enhancing our vigilance and resilience to manage increasingly complex macroeconomic and geopolitical challenges. At the same time, we have good reasons to remain confident, with ongoing strong demand, a fresh vehicle portfolio and further key product launches this year.” The adjusted return on sales at Mercedes-Benz Cars rose to 14.2 percent in the quarter and reached 10.1 percent at Mercedes-Benz Vans, despite the COVID-19 lockdowns in China, the ongoing semiconductor supply-chain bottlenecks and the war in Ukraine reports The Detroit Bureau. Mercedes-Benz’s revenue rose 7 percent to $37.1 billion and adjusted EBIT increased 8 percent to $5 billion as the company’s focus on top-end luxury vehicles, battery-electric vehicles and premium vans as well as an ongoing focus on costs, helped to offset lower sales and higher raw material costs, the German automaker said. Click here for the full story.

Majority of U.S. EV Buyers Made the Switch for the Tech, Not the Planet

According to a new study commissioned by Polestar, 55 percent of U.S. EV owners bought their vehicles for reasons other than the environmental benefits. Carscoops reports respondents, instead, pointed to in-vehicle technology, seamless connectivity, and infotainment systems as more important in their decision to buy an electric vehicle than the powertrain and the consequent lack of local emissions. “The idea of luxury being defined by what’s ‘under the hood’ has been replaced in the electric era with the prioritization of seamless connectivity, integration into existing digital ecosystems, and good UX design,” said Gregor Hembrough, Head of Polestar North America. “People are switching to electric cars for more than just environmental reasons, and Polestar’s focus on in-vehicle technology means they can have everything they want in an environmentally friendly package.” Although environmental factors weren’t necessarily the most important factor for EV buyers, that may change with time. Younger drivers, the study found, were much more concerned with appearing to be environmentally conscious than older buyers. Click here for the full story.

Aging Cars Mean More Parts and Service Work – and Income

The new-vehicle shortage is generating more demand for parts and service, as customers keep their cars and trucks longer, say some of the nation’s biggest new-vehicle retailers. In response, dealership groups report they’re adding shifts and increasing service hours, making it easier for customers to make their own service appointments online and, as always, working extra hard to recruit and retain technicians. Wards reports the idea is to add service capacity without adding service bays as digital marketing agency Hedges & Company predicts the average age of cars on U.S. roads will hit 12.3 years in 2023.“The car parc (population) is continuing to age, so there’s more work to be done on these cars,” Daryl Kenningham, Group 1 Automotive president-U.S. operations, says in a conference call. Houston-based Group 1 reports its second-quarter U.S. parts and service revenue was $376.8 million, an increase of 14.5 percent vs. a year ago on a same-store basis, the biggest percentage increase of the Top 6 publicly traded new-car groups. Click here for the full story.

Toyota, Honda, Nissan Want EVs — But Not Current Focus

Toyota, Honda and Nissan have ambitious plans for electrification, but halfway through 2022, all three automakers are still overhauling the offerings in their existing lineups. Mid-decade, Nissan will launch a pair of U.S.-made electric sedans for its Nissan and Infiniti brands. Further out, Nissan could bring an electric pickup to the U.S., while Infiniti has plans for an electric midsize crossover reports Automotive News. Honda is still two years out from delivering its new full-electric vehicle, the Prologue compact crossover, which it is co-developing with General Motors. The same goes for Acura, which will get a same-size EV from the GM collaboration. But Honda is busy redesigning its crossover lineup and getting ready to turn up production of hybrid variants for the Accord and CR-V. Acura launched the new Integra compact car, including a forthcoming Type S variant, as well as a special edition of its NSX supercar, with a limited-run TLX sedan on deck. Toyota's first EV, the bZ4X, went on sale this spring, although with a modest sales plan. In December, Toyota Motor Corp. CEO Akio Toyoda unveiled 16 Toyota and Lexus BEVs the company is studying. Click here for the full story.

Made-in-Vietnam Electric Vehicles Are Heading to the U.S. Market

Vietnam’s Vingroup became a corporate juggernaut in its home country, operating everything from luxury resorts to hospitals, shopping malls and supermarkets. Now, it wants to break into the U.S. car market with a little-known electric-vehicle startup, called VinFast, that has a novel way of pricing its models. The young Vietnamese car manufacturer opened its first U.S. showrooms in July in California 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. The Wall Street Journal reports to fund its growth, VinFast has also filed paperwork with U.S. regulators for an initial public offering to be held later this year or next, making it the latest company to test investors’ appetite for seemingly out-of-nowhere startups focused on the increasingly competitive EV market. “We are well on the way to entering this market,” Craig Westbrook, VinFast’s chief customer officer, said of the retail store openings in California. Click here for the full story.

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