Mitsubishi is profitable again, Jaguar Land Rover’s parent Tata is not, and another man got a job. All that and more in The Morning Shift for July 27, 2021.
1st Gear: Mitsubishi
I had not realized until today how hideous the fourth-generation Outlander is. It came out in February, when we were all worried about more important things, which is probably why I missed it. But, good lord, this is an ugly car, so ugly, in fact, that I respect it. Let’s have another gander:
I hereby refer to this look as light-encrusted, and I hate it, though other people disagree, and have been buying it. This has given Mitsu a boost, per Automotive News:
The redesigned Outlander crossover fueled a U.S. sales surge, while the global microchip shortage had the positive side effect of crimping production, helping Mitsubishi clear inventories.
As a result, Mitsubishi was able to pull in new, higher-level customers with the Outlander while boosting profitability, CFO Koji Ikeya said Tuesday while announcing financial results.
The Japanese automaker swung to an operating profit of 10.6 billion yen ($95.9 million) in the fiscal first quarter ended June 30, reversing an operating loss of 53.3 billion yen ($482.1 million).
Mitsubishi also reported net income of 6.1 billion yen ($55.2 million), compared with a net loss of 176.2 billion yen ($1.59 billion) the same quarter the year before.
Global sales shot up 65 percent to 230,000 vehicles in the quarter, driven by a doubling of volume in North America and Southeast Asia and a near doubling of sales in Australia and New Zealand.
Mitsubishi is probably in my top three of favorite automakers, because it is both an underdog in that people love to dismiss Mitsubishi and it is also very much not an underdog because they are part of a massive multi-industry conglomerate. Long live Mitsubishi.
2nd Gear: Volkswagen Closer To Buying A Big European Rental Car Company
That company is creatively named Europcar. This is all about The Future Of Transporation, which is something that the industry likes to call “mobility,” which is an all-encompassing term that means taxis, rental cars, car subscriptions, car shares, et al., or pretty much everything that isn’t walking up to a car dealer and handing over a bag of money and driving off with a new car.
Via Bloomberg:
A consortium led by the German carmaker increased its offer for Europcar to around 50 euro cents per share, or around 2.5 billion euros ($3 billion), [people familiar with the matter] said, asking not to be identified discussing confidential information.
[…]
While an agreement could be reached as early as this week, terms could still change and talks may also be delayed or fall apart, the people said. Negotiations are particularly complex given there are about 10 different stakeholders involved, including more than half a dozen hedge fund investors in Europcar, they said.
VW’s previous offer with its partners Attestor Ltd. and Pon Holdings BV of 44 euro cents a share was rejected about a month ago by Europcar as too low. A bid of 50 cents a share would be a premium of 27% to Europcar’s share price on June 22, the day before Bloomberg News first reported on the initial bid.
VW is interested in gaining access to Europcar’s infrastructure and technology in a bet on the future of mobility services.
A good rule of thumb is that, if you’re talking to someone in the car industry and they utter the word “mobility,” it’s best to swiftly walk away.
3rd Gear: Jaguar Land Rover’s Parent Company Isn’t Doing So Hot
Tata Motors reported a quarterly loss of $598 million on Monday, while JLR specifically reported a loss of $152 million, according to Bloomberg. This is in large part because of predictable reasons.
Raw material costs for Tata Motors jumped to 373.1 billion rupees in the latest quarter compared to 99.4 billion rupees in the same period last year.
“JLR now expects semiconductor supply shortages in the second quarter to be greater than in the first quarter, potentially resulting in wholesale volumes about 50 percent lower than planned,” Tata said in a statement. “In the second quarter, JLR expects a negative EBIT margin with a free cash outflow of less than £1 billion. JLR expects the situation will start to improve in the second half of the financial year.”
Earlier this month, Jaguar Land Rover warned deliveries in the second quarter will be 50 percent worse than anticipated as a global chip shortage shows no sign of abating.
The chip crisis forced the luxury automaker to temporarily suspend production at its Castle Bromwich and Halewood plants.
Jaguar Land Rover is in the midst of a vast transition, with Jaguar planning to be all all-electric by 2025 and Land Rover electrifying too, making this loss mostly a short-term worry, as Jaguar Land Rover has a bigger landing to stick.
4th Gear: Wall Street Is Into Lucid
The EV startup went public this week via SPAC, and the initial response has been positive, according to Bloomberg.
A Lucid Air with its limited-edition metallic paint-job called “eureka gold” glints, parked outside of the Nasdaq.
The luxury car, a part of EV maker’s Dream lineup, is evocative of the path it took to public markets via blank-check.
Lucid Group Inc.’s debut listing on Monday comes after it completed a reverse-merger with financier Michael Klein’s special purpose acquisition company Churchill Capital Corp. IV. The stock, now trading under the symbol LCID, received a warm reception. Shares rose 5.9 percent to close at $24.25 on Monday.
I like Lucid, and its business plan seems slightly more thought out than the many others that have chosen this shortcut path to the stock market. We’ll see how it goes!
5th Gear: Man Gets Job
That would be a guy from 3M going to General Motors. Congratulations to this man.
From The Detroit News:
General Motors Co. has hired Omar Vargas as vice president and head of global public policy starting Aug. 1, the automaker announced Monday.
Vargas, who was most recently senior vice president and chief government affairs officer for 3M Co., will be responsible for leading policy efforts as GM accelerates its aspiration to field an emissions-free lineup of electric vehicles by 2035. To help get there, the automaker will need buy in from policymakers that includes EV infrastructure growth and consumer buying incentives.
[…]
The hiring of Vargas comes as GM and its rivals are stepping up efforts to shape federal policy surrounding electrification, charging infrastructure and tax incentives to speed EV adoption. A top priority: changing public perceptions of the legacy auto industry’s ability to successfully navigate the transition to an electrified future.
It is unclear to me what, exactly, this guy’s role is, beyond knowing a bunch of people in DC, and GM’s press release doesn’t really help in this regard.
“Omar Vargas brings over 20 years of experience leading public policy teams and working collaboratively to find policy solutions to complex issues,” said Craig Glidden, GM executive vice president, Global Public Policy, and general counsel. “His broad experience managing issues across multiple industries and working with governments, both within the U.S. and globally, make him the right person to advocate for policy solutions in support of GM’s vision, including our commitment for an all-electric future.”
If this helps accelerate GM’s electric future then, sure.
Reverse: De Havilland
Neutral: How Are You?
I’m going to California on a big jet plane this fall, my first flight since Before. I absolutely can’t wait to post up at the airport bar, with sports on the TV and a giant beer.
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