Rolls-Royce is recovering, there’s a new Mercedes S-Class, and the Los Angeles Auto Show is moving to May. That and more in The Morning Shift for September 2, 2020.
1st Gear: Rolls Rolling
The very top end of the market is very much recession-proof since we’ve built a system in which the rich always do just fine. This means that Rolls-Royce is also doing just fine! Strong results in Asia in particular have helped.
From Reuters:
[Rolls CEO Torsten Muller-Otvos] said the demand meant Rolls-Royce was the first car company to resume car production in the United Kingdom on May 4.
“We see a very fruitful business now coming back from Asia, also Europe is coming back on track, the Americas just delivered an excellent July result and August result,” the boss of the BMW-owned (BMWG.DE) Rolls-Royce Motor Cars told Reuters.
“I am quite optimistic looking into 2021, particularly on the back of a very strong order bank we have already on our books.”
This is the part where I confess and say that I’ve always been confused about the desirability of Rolls.
2nd Gear: The New Mercedes S-Class Was Revealed Today
If Rolls-Royce once held the reputation of the best car in the world, now it’d be hard to say it’s anything but the Mercedes S-Class. Now its seventh generation is here. I’m sure we will have more on this as the day unfolds, but for now let’s talk about Daimler profits. Daimler hopes the new S-Class will bring big profits, though counting on an expensive sedan to do volume in the age of SUVs seems a little dubious. And it’s amid a bad economy, but it is the S-Class we are talking about.
From Reuters:
“The S-Class is an important driver of image and, measured by margin, the largest source of profits,” says Frank Schwope, an analyst at Norddeutsche Landesbank.
CEO Ola Kaellenius is leading a cost-cutting drive after Daimler reported a 30% slump in second-quarter revenue and a loss before interest and taxation of 1.68 billion euros ($2 billion).
Kaellenius flagged signs of a recovery in demand in July, especially for top-end Mercedes-Benz models and electric vehicles, and analysts have also pointed to a strong rebound in China, the most important market for Mercedes-Benz.
Daimler could sell 95,000 S-Class cars in 2021, which with prices at more than 100,000 euros each could contribute more than 2 billion euros to the company’s results, estimates Daniel Schwarz, a car analyst at Bank Mainfirst.
You can watch the reveal below:
It sure looks like an S-Class.
3rd Gear: August Sales Have Some People Feeling Optimistic
They were down across the board in the U.S. for Honda, Hyundai, Toyota, Acura, Kia, Subaru, and Lexus in August, though Automotive News says there are reasons for that beyond the pandemic.
Sales among automakers that reported Tuesday ranged from a gain of 13 percent to a decline of 23 percent in a month that was heavy with “yeah, buts.” High among them was the fact that in August 2019, sales over the Labor Day weekend were counted as part of the August tally. This year, they will belong to the September record. In addition there were two fewer selling days last month than in the year-earlier period.
Ahead of Tuesday’s results, analysts had forecast an impressive month by a separate measure, the seasonally adjusted annual sales rate. It was projected to come in around 15 million, marking the fourth-straight month of recovery since the anemic 8.66 million recorded in April.
“The selling rate in August demonstrates that there is base-level demand for new vehicles and dealers are finding ways to close deals and deliver product,” Cox Automotive Senior Economist Charlie Chesbrough said. “The market is far from recovered, but considering the overall economic conditions, it is healthy.”
An annualized rate of 15 million is still down from the 17 million new cars that were expected to be sold this year, but it’ll be interesting to see what the final number is.
4th Gear: The Los Angeles Auto Show Is Moving To May
The show had been set to take place this November but is now moved to the last couple weeks of May 2021, according to Automotive News’ sources. As they note, that means next spring will be a busy one for auto shows.
The L.A. event, which had been scheduled to run Nov. 20-29, will now take place May 21-31, 2021, according to three people familiar with the show’s planning.
An announcement could come as early as this week, two of the people said.
[…]
A rescheduled L.A. show would pit the event between April’s New York show and June’s North American International Auto Show in Detroit. The quick succession would force automakers to make tough decisions on which venues get the most significant unveilings.
Barring any further postponements or cancellations, the three shows will be compressed within a three-month window instead of being spread out over seven months.
Public days for the next New York show are set for April 2-11, while the Detroit show is planned for June 19-26. Both shows were canceled this year because of the pandemic.
Also props to Automotive News for trying like hell to get a comment from the LA Auto Show’s president.
The show’s president, Terri Toennies, did not respond to four voice, text and email messages seeking comment.
Auto News did not disclose whether they also reached out to Terri via Twitter, Snapchat, or Instagram DM, or messenger pigeon. Possibly Auto News should write Terri a letter and drop it in the mail. I myself have sent an email asking for comment, in addition to comment on Auto News’s request for comment. Given that the sun is just rising in LA I don’t expect a reply anytime soon.
5th Gear: Tesla’s Chairwoman Gains Support Of Proxy Firm
I’m sure there are layers and layers of issues with this behind the scenes, but, as Reuters reports, a proxy firm has said that they will support Tesla chair Robyn Denholm remaining in her post. This comes as a reversal of that same firm calling for her removal over an issue of liability insurance for its directors.
From Reuters:
Glass Lewis said its recommendation changed due to the satisfactory action taken by Tesla regarding liability insurance for its directors.
Tesla will hold its annual shareholder meeting on Sept. 22.
Glass Lewis said it changed its recommendation due to the move by Tesla’s board to replace its earlier liability insurance policy with a 90-day interim arrangement to resume evaluating more traditional options for liability insurance.
In June, Glass Lewis had joined Institutional Shareholder Services Inc. in opposing the chairwoman’s re-election to the board.
The recommendation was based on corporate governance concerns due to an insurance arrangement with CEO Elon Musk, after Tesla’s decision to not renew its liability policy for directors and officers over high premiums quoted by insurers.
Reverse: Bush
Neutral: How Are You?
I fell asleep on the couch last night while watching First Man. I don’t want to discuss it.
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