Volkswagen Presents New Software to Aid in Accident Prevention

Volkswagen has announced they will launch a new software in 2020 that will make accidents less likely by 2050.  Their newest cars will be equipped with software, sensors and processors that enable vehicles to anticipate and avoid accidents, as well as to keep learning new reflexes.

The company wants to abolish accidents by 2050.  The new software operating system will be launched with Volkswagen’s ID3 electric car. The software will continually be updated with algorithm improvements.

“How quickly can data and algorithms improve? Our customers should benefit from deep learning every week, and every day. We are moving from being a device company to being a software company,” said Michael Jost, strategy chief.

Volkswagen has had some software issues with the ID3 in the past, with reports surfacing that the brand was forced to abandon a planned sales launch in the summer. Volkswagen has said the timeline hasn’t changed.

The ID3 will cost approximately $27,000, once green car tax breaks and incentives are included. The brand further expects to build 1.5 million electric cars by 2025. Volkswagen Group, whose brands also include Porsche, Audi, Skoda, Bentley and Bugatti, will launch 75 electric cars by 2029 and be capable of building 26 million vehicles.

Fiat Chrysler and Ford plan to Restart Production in April

Ford and Fiat Chrysler plan to retard their production in North American plants in April. Plants have been closed due to the COVID-19 Virus.  Ford announced that their plans to restart production could happen as soon as April 6th. They were first urged to shut down due to union pressure to contain the virus outbreak from spreading through its workforce.

The majority of plants that are closed produce Ford Pickups, SUVs, vans and commercial trucks. Ford President of North America Kumar Galhotra, in a statement, said the plants will include “additional safety measures to protect returning workers” from contracting COVID-19.

Following Ford’s announcement, Fiat Chrysler announced its plants in the United States and Canada are intended to remain closed until April 14th.  The re-openings are dependent on state stay-in-place orders and the readiness of each facility to return to work. The announcement both came after President Donald Trump announced he wants the U.S. economy to open back up by Easter Sunday.

Urged by the United Auto Workers union, Ford, Fiat Chrysler and General Motors announced plans to temporarily shutter their plants due to the coronavirus on March 18. Ford initially wanted to reopen its North American plants on March 30, however withdrew that timeline earlier this week because of various stay-at-home orders.

Shares of Ford were down by almost 5% during pre-market trading, and remained down by 2% following the announcement. Fiat Chrysler shares were trading up 1.1% following the company’s announcement. GM’s stock was up 4.4%.

Neither company has released a plant-by-plant breakdown of openings. Fiat Chrysler, according to a statement, “continues to take important steps to help flatten the curve of the spread of COVID-19, and put the health and safety of our workforce, and the communities where we live and work first.”

Coronavirus Bailouts Could Extend to Auto Industry

Plans were recently announced to provide economic assistance to U.S. businesses hit hardest by the Coronavirus pandemic. Many anticipate this will extend into the auto industry.

Groups representing major automakers and suppliers asked U.S. lawmakers to consider new tax relief and delay a new trade deal as automotive sales have declined due to the virus. The proposals are due to many automakers closing plants and cutting production, including BMW AG.

The Alliance for Automotive Innovation joined forces with the Motor and Equipment Manufacturers Association to draft a letter urging lawmakers to help ensure sufficient liquidity remains available to them.  General Motors, Volkswagen, BMW and Toyota all endorsed the proposal to create credit facilities that provide loans and loan guarantees to employers with more than 500 employees experiencing loss of revenue due to COVID-19.

Automakers and suppliers have backed a series of actions to help the industry, and warn the fast approaching date for the new USMCA North American trade deal puts compliance pressures on them.  The letter notes support to lawmakers giving tax deductions or credit to maintain workforce and delay quarterly federal tax payments.

Honda Motor Co has sent their own letters to Congress in support of tax proposals. “The auto industry, like so many industries is going to be severely harmed by the dramatic economic downturn over the coming months,” Honda executive vice president Rick Schostek wrote, adding that companies based outside the United States but with significant American operations should not be “arbitrarily barred from any federal assistance or regulatory relief.”

Automotive Associations Urge Vehicle Supply and Repair Businesses to Stay Open

As the coronavirus continues to impact businesses, many automotive associations are urging dealerships and repair shops to consider the importance of motor vehicle supply and repair facilities.

The actions began with John Bozzella, president and chief executive officer of the Alliance for Automotive Innovation and National Automobile Dealers Association president and chief executive officer Peter Welch sending a joint letter to President Trump.

“As our nation continues to confront the coronavirus’s challenges, we want to underscore the importance of ensuring that consumers have access to a safe and well-functioning motor vehicle fleet,” Bozzella and Welch wrote in their letter. The federal government includes manufacturing as a critical infrastructure when it comes to economic continuity of the United States. Safe transportation remains an important aspect, and vehicles must remain properly maintained.

Cody Lusk, president and chief executive officer of the American International Automobile Dealers Association (AIADA) shared a similar message. In a separate statement, Lusk emphasized that dealerships and their service shops are essential to the communities they serve.

“These are uncharted waters for all of us. As Americans determine the best way to move forward and protect each other, AIADA asks that lawmakers keep in mind the tremendous value dealerships offer their cities and towns, and the many important services they perform — from brake repairs to addressing critical recalls to providing vehicles to essential workers who can no longer rely on public transportation,” Lusk said.

Many dealers are working overtime to ensure compliance with CDC guidelines and to further establish safe conditions for both employees and customers. Six other trade associations representing the transportation industry have called on local governments to take preventative action.

In addition to the Auto Care Association, the letter was signed by the U.S. Tire Manufacturers, American Trucking Association, Motor Equipment Manufacturers Association, Tire Industry Association and Automotive Oil Change Association.

Auto Industry Faces Uncertain Threat from Coronavirus in Europe

The cancelation of the Geneva Auto Show didn’t stop European automotive leaders from meeting.  They stayed home and met online instead. Chairman of Mercedes parent Daimler, Ola Kaellenius mentioned the possible ramifications of the coronavirus in live-stream speeches.  BMW and Volkswagen didn’t address the issue.

It’s typical that major brands express their views on the state of the world and economy at these large trade shows, but most of those companies were among those who pulled out this year weeks before the show was canceled. No-shows included Cadillac, Jaguar, Lamborghini, Land Rover, Mitsubishi, Subaru and Tesla.  “We are monitoring the situation (with the coronavirus) of course, with day to day management of the situation. Production is back up and running in China, it’s too early to say how this will work out,” Kaellenius said via an online link from the company’s Stuttgart headquarters.

Mercedes had originally planned to launch the new E-class sedan at the Geneva show, but did some online instead. Reuters recently reported that Daimler’s car production in China was stable and supply chains secure, according to Mercedes sales chief Britta Seeger. It was too early to forecast the impact of coronavirus on Mercedes’ sales, according to Seeger.

Germany’s Center for Automotive Research (CAR) has said that German auto companies have annual China business worth about $170 billion, close to 35% of its annual global sales.  They also noted that China’s  business earns high margins, and roughly 40% of German annual auto profits are in danger.

At the online show, BMW unveiled a new electric sedan, the i4, claiming it could travel 400 miles on one charge.  According to GlobalData, “Live-streaming new product presentations may well be seen as a better way forward for manufacturers concerned over the costs and diminishing effectiveness of exhibiting at trade shows.”