VW Warns Trade War Gloom is Getting 'Scary' as Sales Slow

First Up 09/10/19

Nissan Searches for Its Third CEO in Three Years
Nissan Motor Co. is looking for its third CEO in as many years, reports Automotive News. Following the resignation of Hiroto Saikawa after a scandal over pay, the Japanese automaker’s board needs to find a leader who can guide the company through decade-low profits and job cuts as car sales slow globally. In addition to restoring confidence among the ranks, the new CEO will have to manage a complicated relationship with top shareholder Renault SA, its partner in a global carmaking alliance with Mitsubishi Motors Corp. The board set itself a deadline of end-October — just about seven weeks — to find a replacement. The pool of about 10 candidates includes people from Nissan and Renault, as well as non-Japanese and women, according to Nissan. The right candidate must have a deep understanding of the alliance with Renault and Mitsubishi, said Masakazu Toyoda, head of the nomination committee alliance. Read more here (subscription required). 

VW Warns Trade War Gloom is Getting 'Scary' as Sales Slow
Volkswagen Group and other automakers warned that trade tensions risk dragging the global economy into a recession as the fallout starts to hit consumers. Automotive News reports that the gloom of the U.S. and China’s tit-for-tat tariffs cast a shadow over the Frankfurt auto show this week, where automakers were seeking to whip up interest in critical new electric models. The geopolitical volatility adds another layer of uncertainty to an industry in the midst of a radical overhaul as the end of combustion-engine era looms. “We come now into a situation where this trade war is really influencing the mood of the customers, and it has the chance to really disrupt the world economy,” Volkswagen CEO Herbert Diess said in an interview with Bloomberg TV. “China is basically a healthy market, but because of the trade war, the car market is basically in a recession. So that’s a new situation. That’s scary for us.” Read more here (subscription required). 

Ford Cut to Junk as Moody's Doubts Hackett's Turnaround Bid
Ford Motor Co. was dealt a blow by Moody’s Investors Service, which cut the carmaker’s credit rating to junk on doubts that a turnaround plan by Chief Executive Officer Jim Hackett will generate earnings and cash quickly enough. According to Bloomberg, Moody’s downgraded Ford to the highest junk rating, Ba1, saying the automaker’s cash flow and profit margins are below expectations and likely to remain weak over the next two years. The descent to junk status affects one of the largest corporate bond issuers in the U.S. outside the financial sector. “It’s a pretty precarious situation that they’re in,” Charlie Chesbrough, senior economist of Cox Automotive, said by phone. “When a company gets a junk status rating, it will mean they have to pay a higher interest rate and it means a lot of institutional investors will have to think twice.” Read more here. 

Ford, Porsche, Land Rover, BMW Among Can't-Miss Vehicles of the Frankfurt Motor Show
Electric vehicles and SUVs will dominate the massive Frankfurt auto show in Germany Sept. 12-22, as Europe’s new car season begins. According to USA Today, like all major auto shows, Frankfurt is struggling to remain relevant, but it has one major advantage: The German automakers association runs the show, so Mercedes, BMW, Volkswagen and Audi are committed to making news there. The attention they generate convinced a few other automakers to unveil new vehicles at the sprawling site around the corner from Frankfurt’s train station. In addition to the German automakers, Ford, Land Rover, and Honda are also introducing new models. Click here for a selection of some of the most anticipated new vehicles at the Frankfurt Motor Show. 

U.S. House Panel to Review DOJ Automaker Antitrust Probe
The U.S. House Judiciary Committee plans to hold hearings and seek documents into the Justice Department’s decision to open an antitrust investigation into four major automakers’ voluntary agreement with California to adopt compromise vehicle emissions requirements, reports Automotive News. House Judiciary Chairman Jerrold Nadler and Representative David Cicilline, who chairs a subcommittee on antitrust issues, said in a joint statement late on Monday the probe of Ford Motor Co, Honda Motor Co, BMW AG, and Volkswagen AG “is only the latest in a profoundly troubling pattern of abuse of power that has flourished under the Trump presidency.” Read more here. 

Webinar: Auto Market Trends & Outlook
Join AIADA’s AutoTalk on Tuesday, September 17th at 2:00pm EDT as Jonathan Smoke, Cox Automotive's Chief Economist, reviews:

  • Key economic and automotive market trends 

  • Latest forecasts

  • Economic fundamentals and the impact key trends have on new and used car sales, including vehicle prices and affordability

  • Wholesale market supply

  • Auto loan rates

  • Consumer credit access

  • And ongoing trade concerns and the challenges impacting dealers

To register, click here.

Around the Web

Bugatti to Sell Its 300 MPH Cars for Millions [Fox News]

The VW ID Buggy is How Normal Cars Will Be Cool Again [MotorAuthority]

Bentley Will Build 1929 Team Blower Continuation Series of 12 Cars [Autoblog]

Land Rover Unveils All New Defender at Frankfurt Motor Show [CNBC]