Why Can’t We Be Friends: Automotive Partnerships Pick Up

The automotive landscape is in a pretty significant state of flux right now, with sales down, tariffs up, and a trade war looming around the corner. But, driven by the ever-increasing pressure to generate value for their shareholders, automakers can’t just sit back, shrug and say, “hey, shit happens, guys.” So what we’re seeing is a dramatic uptick in the number of partnerships between automakers and investment by automakers in technology companies. The largest of these is undoubtedly Nissan-Renault-Mitsubishi partnership, heralded by Carlos Ghosn, which is an alliance, but not a single company like the Volkswagen Automotive Group, which holds Audi, Porsche, Bugatti, Skoda and others. Just by cooperating, Nissan-Renault-Mitsubishi saved a collective $6.6 billion last year alone. This is by sharing development costs of new platforms, technologies, parts, components and by their increased purchasing power, being able to buy more in bulk at a cheaper price. The alliance is basically like a membership to automotive Costco. There's been talk about this alliance becoming a merger, but Ghosn squashed those rumours this week.

And when someone says their alliance saved them almost $7 billion in a year, people start paying attention, specifically that same Volkswagen Automotive Group announced a strategic alliance this week with Ford. The details of the Memorandum of Understanding signed are pretty vague, but it sounds from the statements made like it’s an awful lot like Nissan-Renault-Mitsubishi, where they will share development costs and technology, apparently primarily for commercial vehicles. I’d say this is a win for both companies since Ford has been ahead in the hybrid game for a while and Volkswagen’s infotainment system is one of the best I’ve used in a long time, but how necessary those are for commercial vehicles is another question. I’ll go ahead and take credit for the partnership since my household has been a Ford-VW garage since February.

Volkswagen isn’t stopping with Ford though. Through their Audi brand, they are partnering with Hyundai to co-develop fuel cell vehicles. Audi has apparently been tasked with developing fuel cells for the rest of the Volkswagen Automotive Group while VW works on battery cars. Audi will start working with Hyundai’s ix35 fuel cell SUV and the forthcoming Nexo and leverage collective R&D to take their fuel cell tech to the next level. The next level, of course, being a level at which someone might want to purchase a fuel cell vehicle, which I think is probably more a matter of fueling infrastructure than car quality or availability at this point. Regardless, the partnership should save both companies a lot.

But speaking of Volkswagen running the battery game, they announced this week that they have increased their stake in QuantumScape Corporation, forming a joint venture for the purpose of producing viable solid state batteries. The goal here is to put them in production vehicles by 2025. If that sounds familiar, it’s because Toyota is doing pretty much the same thing, but on their own. Future partnership incoming? As a refresher, solid state batteries, basically pack more power and energy storage capacity into smaller packages. They said that a solid state battery could increase the range of VW’s E-Golf from its current 186 miles on lithium ion batteries to a whopping 466 miles, which would beat basically every other car out there right now. Hell, that’s more range than my GTI gets on premium gas. I may be looking at the Golf GTE come 2026 or so!

Also in the Volkswagen Automotive Group, Porsche has bought a minority stake in Rimac, makers of two electric super car models, one of which was crashed by Richard Hammond on a hill climb attempt last year. As is the case with most partnerships entered into voluntarily, both companies stand to benefit, with Porsche tapping into Rimac’s experience with electric super cars for their upcoming Taycan and future electric cars, and Rimac getting access to Porsche’s suppliers and potentially greater savings on parts from increased purchasing power.

And you know what stands out to me about these partnerships? They’re all international. Every single one. To me they show the great potential for progress when companies work together, share technology and help one another out, rather than operating in silos, shutting out the competition. The market is tough right now, and if companies are going to survive, they have to work together. And the result for us petrolheads? More choices, lower costs and better, more developed options. If only more people believed in tearing down walls, huh?

Authored by
Devlin Riggs

Headlines for the week of February 5th, 2018

Super Bowl Commercial Round-up

The Super Bowl was last weekend and it may have been one of those occasions where the game was actually more interesting than the commercials. Except for the Tide ads, those were great. We seemed to have far fewer car commercials than usual this year, but a few featured prominently.

Jeep had several ads talking about roads and going off of them and even had Doctor Ian Malcolm being chased by a T-Rex in a Jurassic Park throwback ad, which was clever but not especially impactful. Overall I got a very “meh” feeling from Jeep.

Hyundai had an ad where they tried to be profound by telling drivers of their vehicles at the Super Bowl that they helped contribute to cancer research but it ended up looking more awkward than anything else. 

Toyota tried to go the funny route by uniting a bunch of unfunny holy people in a Tundra to go root for the same football team as some sort of “God Squad.” I guess they were trying to walk the line between a profound “look at us all being together as one” and funny buddy comedy, but it just fell flat into boringtown.

But boringtown was anywhere but where Ram went after their ad aired. Fiat Chrysler’s truck brand’s commercial focused on service and utilized a portion of Dr. Martin Luther King Junior’s “Drum Major Instinct” sermon. The backlash was swift and ruthless, calling the ad exploitative and out-of-step with the legacy of Dr. King. There’s actually some great irony in the fact that, later on in the same sermon, Dr. King warns parishioners of the dangers of advertising and capitalism, and how the man will try to sell you expensive cars you don’t need.

Conveniently, that bit was not included in the selected audio for the commercial, which showed clips of Ram owners using their trucks to apparently give back to their communities. There’s an old saying in PR that any press is good press and while Dodge, Ram and Fiat Chrysler are all feeling the burn from using Dr. King’s speech out of context, granted with the blessing of the organization that sells the rights to use Dr. King’s speeches (apparently against the will of his estate and foundation), guess what we’re all talking about? The new Ram. Well played, Ram. 

Labor Pains

I mentioned a couple of weeks ago how German steel workers were going on strike to get the option of working 28-hour work weeks for a couple of years to care for family members and some other various benefits. Well guess who gave in? Yep, the German Unions wore down the companies and factory workers will now get the option to go part time for a while and return to full time work with no penalties. Lucky bastards.

Photo by Reuters

Meanwhile back here in America, former Fiat Chrysler Automobiles labor relations chief Alphons Iacobelli accepted a plea deal for his role in siphoning off more than $4.5 million in training center funds to union and company personnel. The fact that he was offered a deal indicates Iacobelli was ready to roll over on others who played a part in paying UAW officials $1.5 million to sway union negotiations in the company’s favor, rather than looking out for the workers who paid their dues to ensure the union looked out for them. So the plea deal here isn’t the end. Instead it’s somewhere in the middle as this scandal starts to spiral out. The FBI has also begun asking questions about current contracts because although companies and the union both insist this activity was in the past, officials aren’t convinced. In related news, I’m thinking of starting an auto worker’s union. Who’s in?

F1’s GridKids and FE’s New Digs

In racing news this week, Formula E unveiled their new race cars for next year, which look like a mashup of Formula 1, IndyCar and LeMans prototype, all to good effect. But the changes aren’t just cosmetic. The cars will be faster and have nearly twice the energy storage capacity, doubling range, demonstrating the drastic evolution that’s taken place in battery technology recently. The cars also feature the protective “halo” that is being rolled out to Formula 1 cars to protect drivers. With Jaguar, Nissan, Audi and Porsche all taking part next year, and with the cars being faster and more aggressive than ever, this could be the turning point that makes Formula E a legitimate racing series. Or we could end up with a glorified marketing showcase that features precious little go-karts that operate on a slightly faster scale than you can do in some indoor arena near your house.

Photo by Formula E (Twitter)

Meanwhile in Formula 1, the changes taking place there this year won’t be limited to the cars. Following the #metoo and time’s up movements and widespread allegations of workplace abuse, F1 has decided it will no longer objectify women by using the pretty ones as Grid Girls from this season on. This doesn’t necessarily mean that the sexes are equal. We still don’t have any female F1 drivers on the horizon, but at least it’s an overdue step in the right direction. In their place will be some adorable GridKids, sort of like the ones you see walking out professional soccer players. So Formula E gets faster and Formula 1 gets less sexy, but also cuter. 

When your Kids are Sheep

In other kid news, a new service funded by Jaguar Land Rover is enlisting Land Rover Discovery LR4s to take kids to school in Massachusetts. The service, called Sheprd, is described as Uber meets the School Bus and provides parents the opportunity to book rides for their kids to one of the 70+ partner institutions in Newton, Massachusetts. It’s $17 per ride, per child, regardless of distance, which sounds like a not bad deal, considering it’s a luxury ride with a driver who faces much stricter rules than any old Uber or Lyft yahoo. This type of service has been around for a few years apparently, and I did actually see some minivans in Boston when I was there with big yellow “School Bus” signs and flashing red lights on the top. My immediate reaction was of course, “Sorry, Chrysler Town & Country, but you are not a school bus." Turns out, they are sort of sanctioned that way. Go figure. In any case, if you’re rich and think the ol’ big yellow fellow is too pedestrian for your offspring and you happen to live in Newton, Massachusetts, look up Sheprd.

Buick’s Wagon “Problem”

Despite Buick’s inability to make good commercials, they do actually make an interesting car now with the Regal TourX. Originally, Buick only figured the wagon would account for about 30 percent of their sales, but based on its popularity so far, around 50 percent of Regal sales could be the TourX wagon. But according to Phil Brook, Buick’s US Vice President of Marketing and Horrible Music Choices, its popularity all comes down to how they pitch it. Instead of calling it a wagon, Buick is all like "it's a crossover!" because instead of trying to change the ridiculous, dated perception that wagons are boring boats for big families, Buick, who themselves are trying to overcome dated perceptions, would rather take the easy route and just call their wagon something it is not. So while they say crossover, we’ll know the truth, and so will your eyes, because that thing is glorious and it’s a wagon! 

Mitsubishi’s Good News/Bad News

Hey, remember Mitsubishi? They made the Eclipse and Lancer Evolution and the Montero and they were cool and good. Well, now they make the Outlander and the Outlander Sport and a few old Mirages, but mostly crossovers. Turns out people are still buying them for some reason! Last year, for the first time since 2007, Mitsubishi sold more than 100,000 vehicles in the US, with their Outlander Models comprising more than ⅔ of that volume. With the upcoming Eclipse Cross bastardization, I mean crossover, that’s likely to tick up even further and could mean six years of steadily increasing sales for a brand struggling to find relevance in a very competitive market. 

At the same time, in the last two weeks, Mitsubishi has also had to recall more than 368,000 vehicles for parking brake, sunroof, stalling and other issues. If your math needs a bit of a refresher, that’s more than three times the total amount of cars they sold last year, which only demonstrates the scope of the problems the brand is going through. It’s difficult for me to really root for a brand that consistently kills off their interesting cars in favor of bland and uncompetitive crossovers, but it sounds like Mitsubishi needs all the help it can get, so good luck, guys.

SUVs Keep Rolling

Even though they’ve killed off the good cars, Mitsubishi does have the right idea, and it’s showing with increased sales. Crossovers and SUVs are hot. They’re the reason Honda has told us not to expect another S2000 roadster and why Nissan keeps kicking the Z can down the road, which sucks, but is understandable. As a case in point, consider Mazda. In January, Mazda sold more CX-5 compact crossovers than every other model in their lineup combined. So that’s the 3, the 6, the Miata, CX-3, CX-7 and CX-9. All of those together sold fewer than the 13,463 CX-5s that sold last month alone. And for good reason. They’re good cars. Several of my friends own them and so do many of my neighbors. But when asked by one of those friends why I didn’t consider one when buying the GTI, you may recall I mentioned that I wanted something that felt special. In all of last year, Volkswagen sold just more than 20,000 GTIs in the US. In one month, Mazda sold way more than half as many CX-5s. They’re not exactly special. But they are really, really good cars. For compact crossovers, I mean. Whatever.

But Mazda’s not alone here, and it’s not just limited to compact crossovers either. Big SUVs are going gangbusters. So much so that Ford can’t keep up with the demand for the new Lincoln Navigator. They’ve never had to make so many, so they simply can’t keep up with the number of buyers knocking down their door. And, just to prove everything is relative, “so many” in the case of the Lincoln Navigator means they sold fewer than 1,300 last month, which is actually on pace to be more special than the GTI. Then again, I don’t have $72,000 to drop on a gargantuan SUV that gets 18 miles per gallon combined.

But where Mazda and Ford are seeing success, Fiat Chrysler is being, well, Fiat Chrysler. Turns out, nobody wants or trusts that their Maserati Levante SUV will hold up to the rigors of driving. Demand is so low for the big, expensive, pointless SUV that the factory in Turin, Italy will have its working hours cut by 59 percent until July, when they’ll reevaluate their life choices, or at the very least their product mix.

Robocop (But for Real)

Autonomous vehicles aren’t just going to make driving easier for us, they’re apparently going to make catching us when we’re driving quickly even easier too. That’s because this week we learned that Ford has filed a patent for an autonomous police vehicle that would be fitted with a learning brain that will know how to find good hiding spots to catch speeders and other various vehicular evildoers.

Fortunately, it seems like this is yet another one of those patents that is intentionally vague because the people filing it have no idea how it would work or how they might create such a machine. Again, this makes me wonder what the function of patents are other than to settle the “I thought of it first” legal fights, but I’m comforted to know that if SkyNet ends up happening and the robots take over, it won’t start in our cars.

Airbnb for Garages

As society continues to compact itself into cities, life with a vehicle becomes a little tougher. Whether it’s finding a place to plug in your hybrid or just finding a flat spot to change your oil, garages are pretty useful for car owners. Yet some lucky jerks who have more money than cars may have some free garage spots sitting unused while a gear head is looking for a spot to get some quick wrenching done. Well, like everything else, now there’s an app for that. Garage Time is like the Airbnb for garages, where garage owners with space to spare can list their garage for an hourly rental fee to others interested in using it. Similar services with DIY car workshops have started cropping up in some cities, but nothing quite this peer-to-peer yet. I think it’s a neat idea, and I could certainly spare someone my garage if they needed it, but strangers? I have enough trouble losing hammers by myself.

Yet Another Meaningless Degree

Great news this week in believers of an impossible future, you can now receive a degree in flying car engineering! That is, if you don’t mind going to a school nobody has ever heard of and attending classes digitally. Udacity, which is apparently an online school started by a former Stanford University professor, already teaches a self-driving car program that has attracted 50,000 students since it started in 2016 and founder Sebastian Thrun is expecting at least 10,000 students to sign up for the flying car program. Although this doesn’t offer anything like a bachelor’s degree, it doesn’t cost nearly as much, running around $1,200 per term and also doesn’t require you to take electives like Mongolian Literature or Intro to Sub-Sarahran Political Science. Thrun says that this program is intended to solve the huge shortage of engineers capable of working on such technology, but if the choices are wait a little longer for a well-engineered flying car or get one sooner but it’s been designed by someone who paid less than three grand and took courses in his parents basement in between Overwatch gaming matches, I think I’ll pick the former.

VaLet’s take the Ferrari

Back when I lived in Los Angeles, I remember vividly an occasion in Malibu where I gave a valet my keys and, when sitting down at my table on the patio, definitely heard the squealing tires and unmistakable NISMO exhaust of my G35 as the asshole peeled out in my car, going to park it. I was pissed but wrote it off as some kid having fun. I would have been a whole lot more pissed if he had given my keys to someone else who simply insisted my G35 was their car, even without a valet ticket.

Well, that’s just what happened, except instead of Malibu it was St. Petersburg, Florida and instead of my crappy old, but lovely G35, it was some lawyer’s Ferrari 458 Spider. Fortunately for the attorney, police caught the would-be thief as he tried to enter a highway because he apparently didn’t have the lights on and wasn’t able to drive the supercar very well. When asked for a reason why he might trick a dumb valet into giving him the keys, the driver said he was trying to impress his date. And nothing impresses a date more than a rap sheet including grand theft and possession of cocaine. Because of course he had cocaine. It’s Florida!

One Giant Leap Backwards for Man

In other rich people news, you may know that money can’t buy you happiness, but it can buy you a highly customized Aston Martin Valkyrie. It can also buy you an actual rock from earth’s moon. Apparently some entrepreneur and instagram user with a bunch of fancy cars is having his moon rock ground into dust and used in the mix of his Valkyrie’s Karosserie Lunar Red paint. Not that you’ll probably be able to tell. It’s not like the moon is sitting up there in the sky sparkling like a diamond. It’ll probably just make the paint’s finish a little more dull. But Spacepaint! 

Authored by
Devlin Riggs