November 20, 2015
VW Cuts 2016 Capital Investment 8% Due to Cost of Fixing Emissions Cheat
According to Automotive News, Volkswagen AG today cut 1 billion euros ($1.1 billion) from its investment plan for next year, as the German carmaker braces for a multi-billion-euro hit from its emissions cheating scandal. Europe's biggest automaker plans to cut capital spending on property, plants, and equipment to around 12 billion euros ($12.8 billion) in 2016, down about 8 percent on its previous plan of around 13 billion euros, a VW statement said. Prior to today's announcement, Volkswagen had more than doubled its annual investment spending since 2008. It has space to cut capital expenditures and development costs by 10 percent, according to estimates from Evercore ISI. “What we definitely won’t do is make cuts at the expense of our future,” CEO Matthias Mueller said during a press conference at the company’s headquarters in Wolfsburg, Germany. The carmaker is facing a deadline later today to present U.S. and California regulators with a plan to fix diesel vehicles that had software to turn on full emissions-control systems only during pollution tests. The 482,000 affected cars in the U.S. were emitting as much as 40 times the permitted levels of smog- forming nitrogen oxides. For more on Volkswagen’s financial strategy, click here.
Microsoft, Volvo Strike Deal to Make Driverless Cars
According to CNBC, Volvo has struck a deal with Microsoft that will see the two companies work together in developing driverless vehicle and giving potential car buyers an interactive shopping experience using the U.S. technology giant's HoloLens headset. The two firms announced on Friday that the main focus of the partnership will be to develop autonomous cars, the use of data to create "meaningful services", machine learning, and how to modernize the car buying process. "Technology will transform when it comes to autonomous cars, connectivity and the car buying process. We believe this will happen it's naturally the tech and automotive industry comes closer to explore this together," Björn Annwall, senior vice president of marketing, sales and service at Volvo, which is owned by Zhejiang Geely Holding Group, told CNBC. The move highlights the trend for technology companies to jump into the autos space. Last month, South Korea electronics giant LG announced that it would be providing key components for General Motors' upcoming Chevrolet Bolt electric car. At the same time, Google is testing driverless cars while speculation is rife that Apple will also come to market with its own vehicle. For more on a cooperation between Volvo and Microsoft to make driverless cars, click here.
Land Rover and Subaru Lead ALG's Residual Value Awards
Land Rover and Subaru took the podium for overall brands recognized by ALG’s 2016 Residual Value Awards, which annually honor the brands and individual models with the highest retained value. According to Auto Remarketing, Land Rover was recognized for the second consecutive year as the premium brand with the best overall residual values, while Subaru was acknowledged for the same metric out of all the mainstream brands. Overall, ALG’s Residual Value Awards recognize vehicles in 26 different segments, highlighting the individual vehicles that retain the highest percentage of their respective MSRPs after a three-year period. According to the company, this year’s recipients were selected from 2016 model-year vehicles currently on sale that have shown strong value in their segments. In terms of segments, the Toyota Prius led the alternative fuel category. Subaru’s XV Crosstrek made waves in the compact segment. Click here to see the full list of winners and to read about ALG’s 16th annual Residual Value Awards.
UAW Partners with Germany's IG Metall to Push for Better U.S. Wages, Union Representation
The UAW and Germany’s largest autoworker union, IG Metall, have joined forces to push for improved wages and working conditions at the U.S. plants of German auto and parts manufacturers, reports Automotive News. The new project, dubbed the Transnational Partnership Initiative, will also advocate for German-style works councils or similar arrangements in the United States where plant workers and management make decisions about working conditions, shifts, wages, and other workplace issues, according to a UAW statement on Thursday. “The unions believe some German manufacturers are exploiting low-wage environments in the U.S. South, where working conditions – including health and safety situations – tend to be challenging for employees,” the UAW said in its statement. The push for a German-style works council at the VW factory in Chattanooga, Tenn., has been the UAW’s highest profile effort to organize workers at a foreign-owned plant in the southern U.S. recently. But in a statement that closely followed the UAW’s announcement, the U.S. Chamber of Commerce said German-style works councils contradict U.S. labor law, which places restrictions on management’s involvement with employee representation groups. Read more about the UAW’s plan to partner with a German automaker union by clicking here.
L.A. Show: Luxury War
The throaty rasp of a 505-horsepower V-6 echoed off the walls of the Los Angeles Convention Center Wednesday morning as a bright red, $70,000 Alfa Romeo Giulia Quadrifoglio rolled down a catwalk followed by a harem of gorgeous supermodels. The luxury procession didn’t stop. Audi R8, Audi RS 7, BMW M4 GTI, Land Rover Evoque Convertible, Mercedes SL-Class, Lincoln MKZ, Cadillac XT5, Buick LaCrosse, Infiniti QX30, Jaguar F-Pace, Jaguar XE, and more took a bow over the show’s two days, reports The Detroit News. There were plenty of mainstream unveils – Ford Escape crossover, Fiat 124 Spider, Honda Civic Coupe — to appeal to California’s wide variety of auto tastes, but nearly 60 percent of the 36 reveals were of the luxury variety. California and New York represent 40 percent of U.S. luxury car sales, but the Los Angeles Show also represents a shift in the auto industry where the luxury space is more crowded than ever before. The segment is poised to grow even more. Startup luxury maker Alfa Romeo will bring eight new models to market by 2018, including the Giulia. Hyundai this month announced that it is creating a new luxury brand, Genesis. Read more about the luxury emphasis at this year’s L.A. Auto Show here.
Around the Web
Can Your Dealership Have F&I Without an F&I Office? [CBT News]
The Best and Worst Insurance Deals [NBC News]
The Lamborghini for Your Inner Hooligan [Forbes]
2016 Cars with the Best Gas Mileage [Boston.com]