Category: Brands

“We’re committed to actively managing production levels to balance supply with demand,” Jacobson said on the call.

“Within this portfolio target, trucks are expected to run at higher levels, reflecting greater customer-driven variation requirements, and sedans and SUVs are expected to run at this range or lower,” Jacobson added. “Throughout the year, sales seasonality, production schedules and timing of fleet deliveries may take us out of this range from time to time, but that is the targeted range at which we’ll manage.”

Keith McCluskey, CEO of McCluskey Chevrolet in Cincinnati, said Silverado supplies have reached a balanced level, with his days’ supply running at about 45 to 60 days, up from about 15 to 20 days at the height of the chip crisis. Idling the plant, he said, is “the right thing to do to just, again, keep a healthy balance on supply and demand and inventory levels.”

Cox Automotive estimated that the Sierra has more than an 80-day supply, while inventory levels top 100 days for the Silverado. GM said those and other third-party estimates are too high, but the company wouldn’t disclose more precise figures for competitive reasons.

“We have a very manageable level of inventory,” said GM spokesperson Jim Cain. “We’re trying to keep it at an optimal range to support strong pricing.”

GM also builds heavy-duty Silverado and Sierra pickups in Flint, Mich.; light- and heavy-duty versions of the Silverado in Oshawa, Ont., in Canada; and light-duty Chevy and GMC full-size pickups at its Silao plant in Mexico. All four plants typically operate on three shifts, Flores said.

Analysts said demand has not softened yet for large pickups, though concerns about the economy, higher interest rates and vehicle affordability could dent demand this year.

Sales tend to be slower in the early months of the year, and pickup sales also correlate to housing starts, which are down, said Michelle Krebs, an executive analyst with Cox Automotive.

GM’s move signals interest in preserving the elevated average transaction prices and profits on its full-size pickups that the industry has experienced while supplies were low in recent years, Krebs said.

The automaker has said its gasoline-powered full-size pickups are helping to fund its transition to electric vehicles.

GM has said, “ ’We don’t want to overproduce these vehicles and make it a situation where we do have to heavily discount them,’ ” said Jessica Caldwell, executive director of insights for Edmunds. “At this point, they are holding to what they said, but time will tell if that will carry on.”

Numerous issues over the last few years have wreaked havoc on new vehicle production, forcing manufacturing slow-downs and pauses that left many dealership lots empty. Now, General Motors will implement another temporary production pause at a major pickup truck plant in Indiana. Only this time, it’s not because of supply chain problems. It seems GM now has too many trucks.

As reported by The Detroit News, the automaker will idle production for two weeks at its large Fort Wayne Assembly location, starting March 27. This is to help “maintain optimal inventory levels” according to a letter obtained by the news outlet. The Fort Wayne plant builds half-ton versions of the Chevrolet Silverado and GMC Sierra, two of the most popular vehicles sold in North America.

Motor1.com contacted Chevrolet for a comment on the report. We will add updated information as it becomes available. A GM spokesperson confirmed the pause with The Detroit News, further stating that truck production was up in the last 30 days while demand remained steady. This aligns with a GM statement from January 31 regarding total 2022 revenue, in which the automaker pledged to maintain inventory levels consistent with demand. A supply of 50 to 60 days is targeted by the end of 2023.

Is this a sign that vehicle inventory levels are returning to normal? A representative from Cox Automotive told The Detroit News that Chevrolet Silverado 1500 inventory was over 100 days as of the end of January, but that’s not an official figure supported by GM. Furthermore, it’s unclear as of yet what might be fueling the stabilizing demand. Inflation and fears of a recession are ongoing in the US market, which could certainly lead to declining sales despite a healthy supply of vehicles.

While the Fort Wayne Assembly plant will pause for two weeks, that doesn’t mean Silverado and Sierra production will come to a complete stop. The trucks are also assembled at plants in Michigan, Canada, and Mexico, and production in those areas is reportedly unaffected.

Volkswagen Group will build a factory in the United States specifically for its new Scout brand of electric vehicles, according to a company insider speaking to Germany’s Automobilwoche. “The decision to build the plant ourselves has been taken,” the source told the publication.

Motor1.com reached out to Scout for confirmation of this info.

Previously, there was a rumor that Scout would partner with Foxconn or Magna Steyr to handle the production of vehicles for the brand. Although even at that time, VW Group wasn’t ruling out building its own factory. 

Scout’s first model will be an electric pickup that will launch in 2026. An SUV EV will join the range at some point. 

There are still few technical details about either of these models. They ride on a dedicated EV platform. Teasers suggest they have retro styling with strong similarities to the iteration of the International Scout from the 1970s. The brand intends to show prototypes of the vehicles before launching the production versions.

Former President and CEO of Volkswagen Group of America Scott Keogh will run the Scout brand. The current plan is for the new automaker to operate independently from its parent, including handling product development and manufacturing internally.

The Scout brand’s focus is appealing to customers in the United States and eventually selling 250,000 units a year. “After Volkswagen’s successful turnaround in the US, we are now taking the opportunity to further strengthen our position in one of the most significant growth markets for EVs,” said former VW Group boss Herbert Diess.

Since Scout intends to operate separately from Volkswagen Group, it’s not yet clear how the brand would sell vehicles in the US. Dealer groups are also asking this question. They want to know whether the new automaker would use a direct sales model or whether there would be franchises competing against existing VW showrooms.

According to a rumor, Audi might build a rugged SUV using the same underpinnings as the Scout models. This potential vehicle would also have an eye toward luxury so that it would rival vehicles like the Mercedes-Benz G-Class or high-end versions of the Land Rover Defender.

For more discussion about Scout’s revival, check out this episode of Rambling About Cars:

The Volkswagen ID. Buzz – the modern interpretation of the legendary bus – debuted about a year ago with a funky design, purely electric powertrain, and sustainable solutions such as non-animal leather and cabin components made of recycled materials. Some of these green innovations will be now carried over to the brand’s other ID models, including the ID.3, ID.4, ID.5, and even the upcoming ID.7.

With the ID. Buzz, Volkswagen introduced extended use of recycled materials. For example, materials made of ocean plastic or old PET bottles are used for different surfaces around the interior, while the outer seat cover material is made of what Volkswagen calls Seaqual yarn, comprised of 10 percent collected marine debris. Combined, these solutions save more than 30 percent of CO2 emissions compared with conventional materials used in the automotive industry. 

Additionally, some of the headliner surfaces and floor coverings are made from recycled polyester, while other recycled plastics are used in the insulating layer of the carpet of the ID. Buzz. On the exterior, recycled materials can be found in the underbody protection cladding and the wheel housing liners. Last but not least, Volkswagen no longer uses chrome decorations for the door panels and steering wheel as the firm replaced them with liquid paint with a chrome look that has a bio-based binder. Without going into specific details, Volkswagen says most of these solutions will be now applied to the rest of the ID family, including the facelifted ID.3 and the upcoming ID.7.

Speaking of the refreshed ID.3, it will be unveiled on March 1 this year with minimal design tweaks but notable changes inside the cabin. In addition to more recycled materials, Volkswagen also promises higher-quality surfaces and a 12-inch touchscreen display, and a redesigned center console with two cupholders. The hot hatch enthusiasts are probably going to be happy to learn a performance GTX version is also under development for a launch with the facelifted model. Meanwhile, Volkswagen also works on a longer wheelbase version of the ID. Buzz, which will be sold in the United States.

The Philippines, Vietnam and Indonesia are competing to secure an electric-vehicle assembly plant for BYD Co., the world’s second-largest maker of EVs, according to a top Philippine trade and investment official.

The Chinese auto giant is in an “advanced stage of discussions” with the Philippines, the Southeast Asian nation’s Trade Undersecretary Ceferino Rodolfo said in an interview on Wednesday. BYD representatives scoured the Philippines for possible factory sites during a visit late last year and the company may decide on the site during the second quarter, said Rodolfo, who also heads the Board of Investments.

BYD, which is already set to build its first EV production facility in Southeast Asia in Thailand, is still exploring whether the new factory will be a full-blown assembly plant or a final-assembly facility with car parts shipped in from overseas, said Lanie Dormiendo, director for the Philippines’ International Investments Promotion Service.

A spokesperson for Shenzhen-based BYD said the company doesn’t have “any relevant information to disclose.”

Talks between BYD and Indonesia over a potential investment in an EV factory in the country are ongoing, according to a person familiar with the matter who asked not to be named as the discussions are private. The Indonesian government is offering a slew of tax holidays, incentives and access to battery raw materials to convince the carmaker to set up there rather than expanding in a neighboring country like Thailand, the person said.

BYD didn’t immediately respond to a request for comment on Indonesia.

Southeast Asian nations are racing to attract investments in EVs as global carmakers pivot away from the combustion engine, a transition that China has been dominating. Great Wall Motor Co. has already set up a production line in Thailand, while nickel-rich Indonesia has drawn interest from both BYD and rival Tesla Inc.

With an economy that expanded the most in nearly half a century last year, the Philippines is courting top-tier producers of EVs and batteries like BYD with tax breaks and other incentives under a law passed last year as rising oil prices help accelerate the global shift away from gas-fueled cars.

Indonesia and the Philippines, which together account for almost half the world’s nickel reserves, are a good fit for electric-car and makers of batteries where the metal is a key component. Rodolfo said BYD, which uses lithium iron phosphate in its EV batteries, is considering the Philippines for its growth potential.

“We’re not a low-cost destination, but we are a destination for companies who are looking for solutions for their Net Zero carbon commitments,” he said.

The Philippines has previously lost out on investment opportunities to its neighbors given its power rates are among the costliest in the region. But it is positioning as a hub for sustainable manufacturing facilities, Rodolfo said. The country aims to increase the share of renewable energy to half of its electricity mix from around 30% currently by 2040.

Chinese battery making giant Contemporary Amperex Technology Co., or CATL, is also in talks with Philippine government officials to invest in a plant to process nickel for electric car batteries, along with its subsidiary Brunp, said Rodolfo, 52, who’s been with the government’s trade and investment agencies for a decade.

CATL did not immediately respond to a request for comment.

Rodolfo was part of President Ferdinand Marcos Jr.’s entourage in the U.S. and China, two of nine nations the Philippine leader has visited since he assumed office nearly eight months ago. Those trips generated about $63 billion in investment commitments, according to his office.

Volkswagen Group wants to remain a strong player in Europe and China, but in the face of growing geopolitical tensions and an increasingly complex regulatory environment, the automaker is looking beyond the U.S. for markets with growth potential, Chief Financial Officer Arno Antlitz said.

“We are turning our attention to India to be more robustly positioned in this new world,” Antlitz said in an interview with Porsche Consulting Magazin.

“India has enormous growth potential in my view,” the CFO said.

The effort will mark yet another attempt by the company to break into the Indian market in a significant way.

The automaker’s earlier efforts to boost its presence in India have often been bruising experiences. An alliance with Suzuki ended in a fierce legal dispute before a single car was built and talks over teaming up with Jaguar-maker Tata Motors did not go anywhere.

But as U.S.-China tensions mount and the Asian giant’s seeming support of Russia after its invasion of Ukraine raises hackles, India’s large potential market is once again drawing the company’s attention.

India’s population surpassed that of China’s at the end of last year, and with half of that population under the age of 30, it has potential to become the world’s fastest-growing major economy in coming years.

Public adoption of electric passenger transport has been slow in India, with high upfront production costs deterring manufacturers and a dearth of charging infrastructure deterring consumers. But demand for low-cost battery-powered SUVs is growing, and homegrown automakers are now finding themselves competing with Chinese and South Korean manufacturers for market share.

VW said in August it was moving forward with a component supply deal for five new electric SUVs from India’s Mahindra & Mahindra, adding that it wanted to explore ways of working together to electrify the Indian market more quickly.

Antlitz said it remained unclear how the global economy would develop under the continued pressure of supply chain bottlenecks, which limits the number of cars that can be manufactured and sold.

Given the possibilities of a worsening economy and shrinking demand, VW is keen to avoid price discounts in coming months.

“We expect that the worldwide semiconductor supply will improve in 2023,” he said.

“That means a reduced demand would meet improved supply. And at that point we should not allow ourselves to fall back into the habit of rebates. We have to maintain price discipline.”

Hedging remains a key tool for VW’s ability to cope with rising raw material costs, Antlitz said, but that will be secondary to a vertical-integration strategy.

“The bigger lever is entering the raw material chain yourself and keeping value creation more firmly in your own grasp,” he said, adding that investment in vertical integration should occur “very, very selectively.”

Ford is betting big on the electrification of its European lineup and wants to sell only battery-powered vehicles on the continent by the end of the decade. The light commercial segment will play a key role in this strategy and in support of its progress, the Blue oval announces a partnership with LG Energy Solutions for a new battery plant in Turkey. The two sides – together with the local Koc Holding – have signed a non-binding memorandum of understanding to form a new joint venture. The deal is subject to final agreement by all three parties involved.

Ford aims to build one of the largest commercial vehicle battery cell factories in Europe with its partners. It will be located in the industrial zone in Baskent, near Ankara in Turkey. Ford is confident the project is on track and expected to break ground later this year with actual production planned to begin in 2026. Ford, LG, and Koc commit to at least 25 GWh of annual production capacity with a possible expansion to up to 45 GWh per year.

“Ford continues to ramp up our electric vehicle plans as we scale to be a leader in the electric vehicle revolution,” Lisa Drake, vice president, Ford EV Industrialization, comments. “We are delivering on the commitment to produce batteries in the same region where we build electric vehicles. Establishing the new joint venture with LGES and Koc Holding will lay a solid foundation that is fundamental to building a thriving electric vehicle future for Ford in Europe.”

Turkey is a key location for Ford’s European operations. The automaker has been partnering with Koc Holding for decades and the two companies run the Ford Otosan joint venture which was established more than 60 years ago. Since April last year, Ford has been producing the E-Transit in the country for the European markets. The factory in Kocaeli is the second manufacturing site to assemble the electric van after Kansas.

LG isn’t a new partner for Ford either. The tech giant provides the batteries for the Mustang Mach-E from its plant in Poland. The two companies have been working together for more than a decade.

Chevrolet has been producing the Corvette at its plant in Bowling Green, Kentucky, since 1984 when the then-new Corvette C4 hit the assembly lines. The automaker, however, will have to pause production at the factory for about a week as it has been experiencing problems with the parts supply chain.

GM spokesman Dan Flores confirmed the information to Automotive News but didn’t provide additional details regarding the nature of the problem. However, Flores told the online publication the shortage “is not semiconductor chip-related.” In a different statement, GM spokesman Rachel Bagshaw said “our supply chain, manufacturing, and engineering teams are working closely with our supply base to mitigate any further impact on production to meet the strong demand for our products.”

The production was paused earlier this week and according to current estimations, it is expected to be resumed on Monday, February 27. The Kentucky plant currently has over 1,300 employees and builds the Chevrolet Corvette Stingray and Corvette Z06. It’s worth mentioning that this isn’t the first case of a production pause for the new Corvette as the same week-long interruption occurred in August last year “due to a temporary parts supply issue.” Another temporary closure of the production site was needed when a tornado caused a fire at Bowling Green Plant in December 2021.

Last year, General Motors produced a total of 25,831 Corvettes at its Kentucky plant, slightly down from 26,139 in 2021. In 2020, the first year of production for the Corvette C8, a total of 20,368 Corvettes were built at the factory. The eight-generation of the performance coupe is the first Corvette in history with a mid-engine layout. It shares less than 5 percent of its components with its predecessor.

2021 was especially challenging for the team assembling the Corvette as a few supply chain issues caused the assembly line to stop for several days. This is the first production pause at the plant for 2023, and with the current unstable global parts situation, more interruptions don’t seem unlikely at this point.