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William Maley

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About William Maley

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  1. Guangzhou Automobile Group Co. (GAC) made a big splash at the Detroit Auto Show this year with a number of models destined for the U.S. The plan at the time was to begin talking with dealers at the National Automobile Dealers Association convention in March, with sales to follow early next year. But GAC has postponed plans of coming to the U.S. due to the trade war. In a statement issued to Bloomberg, GAC said “the escalation of China-U.S. trade frictions” and distribution “uncertainties” had made them decide to put their plans on hold. It's unclear how long this postponement will last, but it will likely be some months - maybe years. Many Chinese automakers have made pronouncements to sell vehicles in the U.S. for over a decade, with none coming to shore. As Automotive News notes, Chinese Automaker Zotye as recently as this month was still recruiting dealers and planning to begin sales in the U.S. late next year. Bloomberg reached out to other Chinese automakers, Great Wall: No immediate comment on whether or not it plans on adjusting its plans to coming to the U.S. Lynk & Co. (under the Geely umbrella): Spokesperson said they are "evaluating" plans for North America Source: Bloomberg, Automotive News (Subscription Required)
  2. Guangzhou Automobile Group Co. (GAC) made a big splash at the Detroit Auto Show this year with a number of models destined for the U.S. The plan at the time was to begin talking with dealers at the National Automobile Dealers Association convention in March, with sales to follow early next year. But GAC has postponed plans of coming to the U.S. due to the trade war. In a statement issued to Bloomberg, GAC said “the escalation of China-U.S. trade frictions” and distribution “uncertainties” had made them decide to put their plans on hold. It's unclear how long this postponement will last, but it will likely be some months - maybe years. Many Chinese automakers have made pronouncements to sell vehicles in the U.S. for over a decade, with none coming to shore. As Automotive News notes, Chinese Automaker Zotye as recently as this month was still recruiting dealers and planning to begin sales in the U.S. late next year. Bloomberg reached out to other Chinese automakers, Great Wall: No immediate comment on whether or not it plans on adjusting its plans to coming to the U.S. Lynk & Co. (under the Geely umbrella): Spokesperson said they are "evaluating" plans for North America Source: Bloomberg, Automotive News (Subscription Required) View full article
  3. Maven, General Motors' car-sharing service launched in 2016 will be ceasing operation in several cities in the U.S. The news was first broken by the Wall Street Journal on Monday and has been confirmed by a GM spokeswoman. Eight out of the seventeen markets that the service operates including Boston and Chicago will be closed down within the next few months. According to the spokeswoman, the shutdown is due to GM wanting to "concentrate on markets in which we have the strongest current demand and growth potential." Those markets in question include Detroit, Los Angeles, and Toronto. Another possible reason is the lack of awareness of Maven in the eight markets being shut down. There isn't enough demand for people wanting to use car-sharing or wanting to allow the use of their vehicles. Source: Wall Street Journal (Subscription Required), Automotive News (Subscription Required) View full article
  4. Maven, General Motors' car-sharing service launched in 2016 will be ceasing operation in several cities in the U.S. The news was first broken by the Wall Street Journal on Monday and has been confirmed by a GM spokeswoman. Eight out of the seventeen markets that the service operates including Boston and Chicago will be closed down within the next few months. According to the spokeswoman, the shutdown is due to GM wanting to "concentrate on markets in which we have the strongest current demand and growth potential." Those markets in question include Detroit, Los Angeles, and Toronto. Another possible reason is the lack of awareness of Maven in the eight markets being shut down. There isn't enough demand for people wanting to use car-sharing or wanting to allow the use of their vehicles. Source: Wall Street Journal (Subscription Required), Automotive News (Subscription Required)
  5. Did you know that Mercedes-Benz has nearly 30 models on sale in the U.S. at the moment? Factor in the various engine choices and body styles and you're looking at nearly 90 different models. This is causing Mercedes-Benz and their dealers a number of headaches dealing with it. "It has gotten to the point of being just too much to manage customer model confusion, vehicle logistics and manufacturing. Each of these models require marketing support, education at the dealer level, even service and parts inventory," said Jeff Schuster, president of global forecasting at LMC Automotive. Mercedes is going to do something about it. Earlier this month, the German automaker told dealers at a national meeting in Las Vegas they would be cutting back on the number of models it offers within the next twelve months. "We are going to see models go away within the next 12 months. Within the next 90 days, we might see some of those announcements," according to one unnamed dealer who was at the meeting. The automaker also announced that it would be scaling back the number of options and equipment packages it offers. Poor selling options would be dropped, while popular ones would become "standard equipment on certain models" or tacked "onto existing feature packages." What models may get the ax? We know that the SLC roadster will be leaving the lineup next year due to slumping sales. Automotive News speculates the C-Class coupe/cabrio and S-Class coupe/cabrio could also go due to sales falling. Source: Automotive News (Subscription Required) View full article
  6. Did you know that Mercedes-Benz has nearly 30 models on sale in the U.S. at the moment? Factor in the various engine choices and body styles and you're looking at nearly 90 different models. This is causing Mercedes-Benz and their dealers a number of headaches dealing with it. "It has gotten to the point of being just too much to manage customer model confusion, vehicle logistics and manufacturing. Each of these models require marketing support, education at the dealer level, even service and parts inventory," said Jeff Schuster, president of global forecasting at LMC Automotive. Mercedes is going to do something about it. Earlier this month, the German automaker told dealers at a national meeting in Las Vegas they would be cutting back on the number of models it offers within the next twelve months. "We are going to see models go away within the next 12 months. Within the next 90 days, we might see some of those announcements," according to one unnamed dealer who was at the meeting. The automaker also announced that it would be scaling back the number of options and equipment packages it offers. Poor selling options would be dropped, while popular ones would become "standard equipment on certain models" or tacked "onto existing feature packages." What models may get the ax? We know that the SLC roadster will be leaving the lineup next year due to slumping sales. Automotive News speculates the C-Class coupe/cabrio and S-Class coupe/cabrio could also go due to sales falling. Source: Automotive News (Subscription Required)
  7. There has been a prevailing thought about the likes of Uber and Lyft that once they switch from human drivers to self-driving vehicles, they would stand to see a significant reduction in overall operating costs. This possibly means consumers could see these services as an alternative to owning a vehicle. But a new study from the Massachusetts Institute of Technology (MIT) disputes that claim. Researchers Ashley Nunes and Kristen D. Hernandez examined the San Francisco market on the per-mile cost of an automated taxi service to owning a vehicle. They found an automated taxi would range between $1.58 and $6.01 per mile, while the conventional vehicle would be at $0.72 per mile. "When we started going into this work, we found there's a lot of hand-waving. There was a notion that 'All we have to do is remove the driver, assume a reduction in insurance, and there's our great number.' We said, 'Let's hold it up to scrutiny.' It didn't hold up," explained Nunes to Automotive News. The massive disparity gap isn't due to ownership or maintenance, rather a fundamental issue about the taxi market in general. Nunes said taxi operators drive too many miles without a paying customer - hence their higher costs. In San Francisco, the MIT researchers found a 52 percent utilization rate for ride-hailing. Even if they were able to reach 100 percent utilization, Nunes said they would still be "unable to provide a fare that's comparable to car ownership." "Their approach with the investment folks has been, 'Trust us, we'll figure this out and it'll be this great utopia where everyone is jumping from an Uber to a scooter to an air taxi.The future may well be all those things. But you need to demonstrate you can offer the service at a price point that consumers are willing and able to pay. Thus far, they are unable to do so," said Nunes. Source: Automotive News (Subscription Required)
  8. There has been a prevailing thought about the likes of Uber and Lyft that once they switch from human drivers to self-driving vehicles, they would stand to see a significant reduction in overall operating costs. This possibly means consumers could see these services as an alternative to owning a vehicle. But a new study from the Massachusetts Institute of Technology (MIT) disputes that claim. Researchers Ashley Nunes and Kristen D. Hernandez examined the San Francisco market on the per-mile cost of an automated taxi service to owning a vehicle. They found an automated taxi would range between $1.58 and $6.01 per mile, while the conventional vehicle would be at $0.72 per mile. "When we started going into this work, we found there's a lot of hand-waving. There was a notion that 'All we have to do is remove the driver, assume a reduction in insurance, and there's our great number.' We said, 'Let's hold it up to scrutiny.' It didn't hold up," explained Nunes to Automotive News. The massive disparity gap isn't due to ownership or maintenance, rather a fundamental issue about the taxi market in general. Nunes said taxi operators drive too many miles without a paying customer - hence their higher costs. In San Francisco, the MIT researchers found a 52 percent utilization rate for ride-hailing. Even if they were able to reach 100 percent utilization, Nunes said they would still be "unable to provide a fare that's comparable to car ownership." "Their approach with the investment folks has been, 'Trust us, we'll figure this out and it'll be this great utopia where everyone is jumping from an Uber to a scooter to an air taxi.The future may well be all those things. But you need to demonstrate you can offer the service at a price point that consumers are willing and able to pay. Thus far, they are unable to do so," said Nunes. Source: Automotive News (Subscription Required) View full article
  9. From the strange bedfellows' file; Hyundai and Kia have announced a joint investment of 80 million Euros (about $90 million) into Croatia-based Rimac Automobili. Rimac may be known to most people for the fast Concept One electric supercar - the vehicle which Richard Hammond had a serious crash when filming The Grand Tour. "The companies will work closely together to develop prototypes for an electric version of Hyundai Motor's N brand midship sports concept car and a high-performance fuel cell electric vehicle. Hyundai Motor Group will leverage the partnership to build on its existing R&D capabilities to meet its electrification plan, which includes deployment of 44 eco-friendly models by 2025," Hyundai said in a statement this week. Hyundai has been teasing the idea mid-ship sports car for the past few years with a number of Veloster based concepts like the RM16 N. Maybe something could come to fruition with the help of Rimac. What does Rimac get out of this deal? This will allow the company to grow into a Tier 1 supplier for the industry for electric components. Source: Hyundai, Rimac HYUNDAI MOTOR AND KIA MOTORS INVEST 80M EUR IN RIMAC AND ESTABLISH A TECHNOLOGY PARTNERSHIP Hyundai Motor to invest 64M EUR; Kia Motors to invest 16M EUR; Rimac and Hyundai Motor Group form a technical partnership to collaborate on two high-performance electric vehicles by 2020 SEOUL, ZAGREB, 14 May 2019 – Hyundai Motor Company and Kia Motors Corporation have jointly invested 80M Euros in Rimac Automobili (Rimac) - the Croatian high-performance electric vehicle technology and sportscar company. The companies have announced a strategic partnership to collaborate on the development of high-performance electric vehicles. With the new collaboration underway, Hyundai Motor Group aims to speed up its transition towards Clean Mobility and position itself as a global leader in driving this change in the industry. Rimac has established themselves as a leader in high-performance electric vehicle technology and as an electric sportscar manufacturer. The company continues to deliver EV technology supporting many industry partners, including Hyundai Motor Group, to accelerate their way towards an electric future. Hyundai Motor, Kia Motors and Rimac will work closely together to develop an electric version of Hyundai Motor’s N brand midship sports car and a high-performance fuel cell electric vehicle. “Rimac is an innovative company with outstanding capabilities in high-performance electric vehicles,” said Euisun Chung, Executive Vice Chairman of Hyundai Motor Group. “Its startup roots and abundant experience collaborating with automakers combined with technological prowess makes Rimac the ideal partner for us. We look forward to collaborating with Rimac on our road to Clean Mobility.” Founder and CEO of Rimac Automobili, Mate Rimac said: “We are very impressed by the Hyundai Motor Group’s vision and prompt and decisive initiative. We believe that this technology partnership will create maximum value for our companies and their customers. Rimac is still a young and relatively small but fast-growing company. We see a strong investor and technology partner in Hyundai Motor Group and believe that this collaboration will charge the company’s position as a Tier-1 electrification components supplier to the industry.
  10. From the strange bedfellows' file; Hyundai and Kia have announced a joint investment of 80 million Euros (about $90 million) into Croatia-based Rimac Automobili. Rimac may be known to most people for the fast Concept One electric supercar - the vehicle which Richard Hammond had a serious crash when filming The Grand Tour. "The companies will work closely together to develop prototypes for an electric version of Hyundai Motor's N brand midship sports concept car and a high-performance fuel cell electric vehicle. Hyundai Motor Group will leverage the partnership to build on its existing R&D capabilities to meet its electrification plan, which includes deployment of 44 eco-friendly models by 2025," Hyundai said in a statement this week. Hyundai has been teasing the idea mid-ship sports car for the past few years with a number of Veloster based concepts like the RM16 N. Maybe something could come to fruition with the help of Rimac. What does Rimac get out of this deal? This will allow the company to grow into a Tier 1 supplier for the industry for electric components. Source: Hyundai, Rimac HYUNDAI MOTOR AND KIA MOTORS INVEST 80M EUR IN RIMAC AND ESTABLISH A TECHNOLOGY PARTNERSHIP Hyundai Motor to invest 64M EUR; Kia Motors to invest 16M EUR; Rimac and Hyundai Motor Group form a technical partnership to collaborate on two high-performance electric vehicles by 2020 SEOUL, ZAGREB, 14 May 2019 – Hyundai Motor Company and Kia Motors Corporation have jointly invested 80M Euros in Rimac Automobili (Rimac) - the Croatian high-performance electric vehicle technology and sportscar company. The companies have announced a strategic partnership to collaborate on the development of high-performance electric vehicles. With the new collaboration underway, Hyundai Motor Group aims to speed up its transition towards Clean Mobility and position itself as a global leader in driving this change in the industry. Rimac has established themselves as a leader in high-performance electric vehicle technology and as an electric sportscar manufacturer. The company continues to deliver EV technology supporting many industry partners, including Hyundai Motor Group, to accelerate their way towards an electric future. Hyundai Motor, Kia Motors and Rimac will work closely together to develop an electric version of Hyundai Motor’s N brand midship sports car and a high-performance fuel cell electric vehicle. “Rimac is an innovative company with outstanding capabilities in high-performance electric vehicles,” said Euisun Chung, Executive Vice Chairman of Hyundai Motor Group. “Its startup roots and abundant experience collaborating with automakers combined with technological prowess makes Rimac the ideal partner for us. We look forward to collaborating with Rimac on our road to Clean Mobility.” Founder and CEO of Rimac Automobili, Mate Rimac said: “We are very impressed by the Hyundai Motor Group’s vision and prompt and decisive initiative. We believe that this technology partnership will create maximum value for our companies and their customers. Rimac is still a young and relatively small but fast-growing company. We see a strong investor and technology partner in Hyundai Motor Group and believe that this collaboration will charge the company’s position as a Tier-1 electrification components supplier to the industry. View full article
  11. When General Motors announced that it would be potentially selling its Lordstown plant to electric car start-up Workhorse Group Inc, there was a fair amount of head-scratching. The company is best for their W-15 range-extended pickup (which has been delayed) and electric vans. They are also known for the Surefly octocopter drone their former CEO Steve Burns is trying to sell. Why the skepticism? Workhorse isn't looking so good on the financial sheets. Back in March, Trucks.com published a report talking about the various financial setbacks the company has been facing. From their story, The news hasn't gotten any better in 2019. Their most recent financial statement to the SEC reveals the company has $2,847,936 of on-hand cash at the end of March. They also reported a net loss of $6,264,172. "Workhorse appears to be a very slow-moving venture that has a lot of risk, and no massive amount of funding. Lordstown is a massive facility, and despite some investments over the years, I don't believe it would be easily converted to build electric pickups without substantial investment," said Jeff Schuster, an industry analyst for LMC Automotive to The Detroit News. But Workhorse has a plan for this. Both the News and Trucks.com report that “newly formed entity” would be created and Workhorse would be a minority stakeholder. The entity "would own Lordstown and use Workhorse technology and intellectual property to build a vehicle." Where would the business get the capital to this is unclear. Workhorse spokesman Tom Colton declined to comment when asked about possible funding sources. “There’s got to be some big contract behind this because Workhorse’s financials and forecasts just don’t merit a plant that makes 450,000 units a year,” said Kristin Dziczek, director of the labor and industry group for the Center for Automotive Research. There is also the issue of utilizing all of that space that Lordstown offers - 6.2 million square feet. Analysis done by LMC says Workhorse would need to produce 410,000 trucks and vans per year to reach full capacity. At the moment, LMC forecasts Workhorse producing between 5,000 to 10,000 vehicles. Again, Workhorse may have a solution. Here is GM Spokesman Jim Cain speaking to The Detroit News, As mentioned earlier, Workhorse is one of the five finalists on building new trucks for the U.S. Postal Service. They are teamed up with VT Hackney - a company that builds specialized bodies for work trucks - Emergency services and Beverage trucks to give some examples. The contract is worth $6.3 billion. But Jalopnik reported yesterday that the post office truck would not be built in Lordstown. As it stands, there are a lot of questions and unknowns about this possible deal. Source: The Detroit News, Trucks.com View full article
  12. When General Motors announced that it would be potentially selling its Lordstown plant to electric car start-up Workhorse Group Inc, there was a fair amount of head-scratching. The company is best for their W-15 range-extended pickup (which has been delayed) and electric vans. They are also known for the Surefly octocopter drone their former CEO Steve Burns is trying to sell. Why the skepticism? Workhorse isn't looking so good on the financial sheets. Back in March, Trucks.com published a report talking about the various financial setbacks the company has been facing. From their story, The news hasn't gotten any better in 2019. Their most recent financial statement to the SEC reveals the company has $2,847,936 of on-hand cash at the end of March. They also reported a net loss of $6,264,172. "Workhorse appears to be a very slow-moving venture that has a lot of risk, and no massive amount of funding. Lordstown is a massive facility, and despite some investments over the years, I don't believe it would be easily converted to build electric pickups without substantial investment," said Jeff Schuster, an industry analyst for LMC Automotive to The Detroit News. But Workhorse has a plan for this. Both the News and Trucks.com report that “newly formed entity” would be created and Workhorse would be a minority stakeholder. The entity "would own Lordstown and use Workhorse technology and intellectual property to build a vehicle." Where would the business get the capital to this is unclear. Workhorse spokesman Tom Colton declined to comment when asked about possible funding sources. “There’s got to be some big contract behind this because Workhorse’s financials and forecasts just don’t merit a plant that makes 450,000 units a year,” said Kristin Dziczek, director of the labor and industry group for the Center for Automotive Research. There is also the issue of utilizing all of that space that Lordstown offers - 6.2 million square feet. Analysis done by LMC says Workhorse would need to produce 410,000 trucks and vans per year to reach full capacity. At the moment, LMC forecasts Workhorse producing between 5,000 to 10,000 vehicles. Again, Workhorse may have a solution. Here is GM Spokesman Jim Cain speaking to The Detroit News, As mentioned earlier, Workhorse is one of the five finalists on building new trucks for the U.S. Postal Service. They are teamed up with VT Hackney - a company that builds specialized bodies for work trucks - Emergency services and Beverage trucks to give some examples. The contract is worth $6.3 billion. But Jalopnik reported yesterday that the post office truck would not be built in Lordstown. As it stands, there are a lot of questions and unknowns about this possible deal. Source: The Detroit News, Trucks.com
  13. On Wednesday, Honda CEO Takahiro Hachigo announced plans for the future of the company's automobile division. Efficiency was the theme in Hachigo's speech in terms of their lineup. manufacturing, and driving. One of the initiatives put forth by Hachigo was to cut down on the number of variations on offer in their global lineup, along with the dropping of various regional nameplates. "However, as a result of accommodating regional needs somewhat excessively in each individual region, we recognize that the number of models and variations at the trim and option level have increased and our efficiency has declined. So, we will undertake initiatives to further strengthen our inter-regional coordination and collaboration and advance our art of making automobiles in order to simultaneously increase the attractiveness and efficiency of both global and regional models," he said. "With this initiative, by 2025, we will reduce the total number of variations at the trim and option level for our global models to one-third of what we have now.In addition, we will increase efficiency by eliminating and consolidating some similar regional models into even more competent models shared across multiple regions." This will allow Honda to simplify model allocation at their various assembly plants around the road. According to Hachigo, this will allow the company to achieve "100 percent capacity utilization worldwide by 2020" and cut production costs by 10 percent by 2025. Part of that initiative involves a new modular architecture that will debut in a global model next year. No details on the vehicle were provided, but Honda says the goal of the architecture "is to commonize about 70 percent of the components" used in a vehicle such as the engine bay and passenger cabin. Honda is also planning to have two-thirds of their global lineup electrified by 2030. Furthermore, it wants 100 percent of its European lineup to be electrifed by 2025. To do this, Honda is readying a new electric city car known as the e, along with deploying their two-motor i-MMD hybrid setup to all of their models in Europe. In the U.S. Honda is planning to launch more hybrid models, and increase their electric car lineup with some help from General Motors. “In North America, we will jointly develop battery components with General Motors and introduce highly-competitive battery EVs in the market,” said Hachigo. Press Release is on Page 2 Summary of Honda CEO Speech on Automobile Business Direction Remarks by Takahiro Hachigo, President & CEO, Honda Motor Co., Ltd. May 8, 2019 Honda has been working on two top-priority management challenges in the midst of abrupt changes in the global business environment surrounding the automobile industry: to strengthen the structure of our automobile business and to further increase the speed of business transformation for future generations. So, today, I would like to introduce some initiatives we are taking for our automobile business, especially how we are strengthening the structure of our automobile business, the direction we are taking with electrification, as well as some progress we have made to date. Strengthening automobile business structure Ever since I became the president of the company, I have been conveying the message that we will make Honda strong by creating strong products and also by strengthening our inter-regional coordination and collaboration. We put special emphasis on the strengthening of our global models, which have been the source of Honda's core competence, and also the enhancement of our regional models. As a result, we currently have the five global models, namely Civic, Accord, CR-V, Fit/Jazz and Vezel/HR-V, and these five strong models now account for 60% of our global automobile sales. At the same time, our regional models such as the N Series for Japan, Pilot for North America and Crider for China are playing an important role as a source of growth for each respective region. However, as a result of accommodating regional needs somewhat excessively in each individual region, we recognize that the number of models and variations at the trim and option level have increased and our efficiency has declined. So, we will undertake initiatives to further strengthen our inter-regional coordination and collaboration and advance our art of making automobiles in order to simultaneously increase the attractiveness and efficiency of both global and regional models. Strengthening inter-regional coordination and collaboration As for inter-regional coordination and collaboration, under the new operational structure we adopted for our automobile operations starting from April, we began reviewing and sharing the product lineup by grouping some of our six regions outside Japan based on a similarity of key factors, such as market needs and environmental regulations. With this initiative, by 2025, we will reduce the total number of variations at the trim and option level for our global models to one-third of what we have now. In addition, we will increase efficiency by eliminating and consolidating some similar regional models into even more competent models shared across multiple regions. Advancement of our art of making automobiles (automobile development) As for the advancement of automobile development, since I became the president, we have been increasing the efficiency and speed of our Monozukuri (the art of making things) by innovating the entire process, from planning and development all the way through production, by enabling the S-E-D-B (sales, manufacturing, R&D, purchasing*1) functions to collaborate beyond the boundaries of their divisions. Moreover, we have already introduced the Honda Architecture in our development. The Honda Architecture is a company-wide initiative which will increase the efficiency of development and expand parts-sharing for our mass-production models. The first model being developed with this new method will be the global model we are launching next year. And we will continue increasing the number of models to which we apply this new architecture. With the strengthening of global and regional models through inter-regional coordination and collaboration and with the introduction of the Honda Architecture, by 2025, we will reduce the number of manhours we use for the development of mass-production models by 30%, and we will repurpose those manhours to accelerate our research and development in advanced areas for the future. In this way, we can continue creating new technologies which will support the future of Honda. Strengthening our operational structure in the area of production In addition to the area of development, we are further strengthening our operational structure in the area of production as well, so that we can create strong products with high efficiency. We are making steady progress in optimizing our production capacity in all regions. When this is complete, we are expecting to see that our global capacity utilization rate, excluding China, will increase from 90% recorded in 2018, and we will be producing at full capacity by 2022. In China, the third plant of Dongfeng Honda became newly operational, and this put us in a position where we can definitely accommodate market demand in China. We believe that this progress we made paved the way for the optimization of our global production capacity. From here onward, we think it is important to increase our competitiveness by increasing the efficiency of our production system in North America. For our business in North America, while keeping pace with sales expansion, we enhanced our model lineup and established a flexible production system where our plants sometimes produce various models in duplication to accommodate changes in market demand. However, as a result of the pursuit of high flexibility, an increase in the investment amount and a decline in production efficiency started to become an issue. Therefore, in North America as well, we will reduce the number of variations at the trim and option level, and at the same time, we will simplify the production model allocation at each plant. Through this initiative, we will re-establish a highly-efficient production system and realize the growth of North American business through the pursuit of quality. By implementing these initiatives to increase production efficiency in each region, we are expecting to reduce global cost in the area of production by 10% by 2025, compared to the cost recorded in 2018. Through all these initiatives I have mentioned, we will steadily strengthen the structure of our automobile business and realize the solidification of our existing automobile businesses by 2025, and, at the same time, we will accelerate our preparation for the future. Direction for the electrification of our automobile products Striving to realize a carbon-free society, Honda set a goal to electrify two-thirds of our global automobile unit sales by 2030. When we talk about the introduction of electrified vehicles, there are two perspectives. One is the improvement of fuel economy, and the other is zero emissions. Regulations for the Corporate Average Fuel Economy (CAFE) standards are becoming increasingly stringent in every country around the world and complying with CAFE standards is one of the most important challenges for the automobile industry. At Honda, in light of the required infrastructure and how people use automobiles, we believe that hybrid technology is, at this moment, the most effective way for us to comply with CAFE standards. Therefore, we will electrify our products mainly with hybrid technologies. By increasing sales of our hybrid models all around the world, Honda will contribute to the global environment through the improvement of fuel economy. To this end, we will expand the application of our 2-motor hybrid system to the entire lineup of Honda vehicles. In addition to the 2-motor hybrid system which is compatible with mid-to-large-sized vehicles, we developed a new, more compact 2-motor hybrid system suitable for small-sized vehicles. This small-sized 2-motor hybrid system will be adopted first by the all-new Fit which we are planning to exhibit as a world premiere at the Tokyo Motor Show this fall. In addition to the expansion of the lineup of products equipped with the 2-motor hybrid system, we also will expand the application of the 2-motor hybrid system on a global basis. With that, by 2022, we are expecting to reduce the cost of the 2-motor hybrid system by 25% compared to the cost of this system in 2018. As for zero emission vehicles, with our battery EVs we will comply with the Zero Emission Vehicle (ZEV) program being adopted by California and other states in the U.S. and China's New Energy Vehicle (NEV) mandate. We will efficiently introduce our battery EVs to the market by selecting the most appropriate partners and resources to satisfy the different needs in each region. In North America, we will jointly develop battery components with General Motors and introduce highly-competitive battery EVs in the market. In China, in order to keep up with the fast speed of electrification, we have already begun introducing battery EV models developed together with our local joint venture companies in China. While envisioning the introduction of battery EV models from the Honda brand, we will continue utilizing local resources in China and introduce more battery EV models in a timely manner to fulfill local market needs in China. In Europe and Japan, we will introduce the Honda e, a new battery EV model, which was recently introduced as a prototype at the Geneva Motor Show. To summarize, Honda will popularize and improve the business feasibility of electrified vehicles by focusing on hybrid vehicles and battery EVs. Changes in operational structure In order to ensure the solid implementation of these initiatives I just introduced for our automobile business, we renewed our operational structure as of April. The aims of this structural change are to establish an organization which brings all regional operations together to strongly facilitate inter-regional coordination and collaboration and to increase the speed of our business operations by enabling prompt decisions and prompt execution. Today, I introduced our initiatives to strengthen our automobile business structure and the direction of our electrification. Under the new organizational structure, we will realize our goals with a keen sense of speed. Closing As we stated in our 2030 Vision, Honda is striving to grow through the pursuit of quality so that we can fulfill our vision to "Serve people worldwide with the joy of expanding their life's potential." Honda will continue taking on new challenges while being driven by strong passion, so that we can continue to be a company that society wants to exist even in 2050 after Honda becomes more than 100 years old. *1 S-E-D-B: Sales, Engineering (Manufacturing), Development (R&D), Buying (Purchasing)
  14. On Wednesday, Honda CEO Takahiro Hachigo announced plans for the future of the company's automobile division. Efficiency was the theme in Hachigo's speech in terms of their lineup. manufacturing, and driving. One of the initiatives put forth by Hachigo was to cut down on the number of variations on offer in their global lineup, along with the dropping of various regional nameplates. "However, as a result of accommodating regional needs somewhat excessively in each individual region, we recognize that the number of models and variations at the trim and option level have increased and our efficiency has declined. So, we will undertake initiatives to further strengthen our inter-regional coordination and collaboration and advance our art of making automobiles in order to simultaneously increase the attractiveness and efficiency of both global and regional models," he said. "With this initiative, by 2025, we will reduce the total number of variations at the trim and option level for our global models to one-third of what we have now.In addition, we will increase efficiency by eliminating and consolidating some similar regional models into even more competent models shared across multiple regions." This will allow Honda to simplify model allocation at their various assembly plants around the road. According to Hachigo, this will allow the company to achieve "100 percent capacity utilization worldwide by 2020" and cut production costs by 10 percent by 2025. Part of that initiative involves a new modular architecture that will debut in a global model next year. No details on the vehicle were provided, but Honda says the goal of the architecture "is to commonize about 70 percent of the components" used in a vehicle such as the engine bay and passenger cabin. Honda is also planning to have two-thirds of their global lineup electrified by 2030. Furthermore, it wants 100 percent of its European lineup to be electrifed by 2025. To do this, Honda is readying a new electric city car known as the e, along with deploying their two-motor i-MMD hybrid setup to all of their models in Europe. In the U.S. Honda is planning to launch more hybrid models, and increase their electric car lineup with some help from General Motors. “In North America, we will jointly develop battery components with General Motors and introduce highly-competitive battery EVs in the market,” said Hachigo. Press Release is on Page 2 Summary of Honda CEO Speech on Automobile Business Direction Remarks by Takahiro Hachigo, President & CEO, Honda Motor Co., Ltd. May 8, 2019 Honda has been working on two top-priority management challenges in the midst of abrupt changes in the global business environment surrounding the automobile industry: to strengthen the structure of our automobile business and to further increase the speed of business transformation for future generations. So, today, I would like to introduce some initiatives we are taking for our automobile business, especially how we are strengthening the structure of our automobile business, the direction we are taking with electrification, as well as some progress we have made to date. Strengthening automobile business structure Ever since I became the president of the company, I have been conveying the message that we will make Honda strong by creating strong products and also by strengthening our inter-regional coordination and collaboration. We put special emphasis on the strengthening of our global models, which have been the source of Honda's core competence, and also the enhancement of our regional models. As a result, we currently have the five global models, namely Civic, Accord, CR-V, Fit/Jazz and Vezel/HR-V, and these five strong models now account for 60% of our global automobile sales. At the same time, our regional models such as the N Series for Japan, Pilot for North America and Crider for China are playing an important role as a source of growth for each respective region. However, as a result of accommodating regional needs somewhat excessively in each individual region, we recognize that the number of models and variations at the trim and option level have increased and our efficiency has declined. So, we will undertake initiatives to further strengthen our inter-regional coordination and collaboration and advance our art of making automobiles in order to simultaneously increase the attractiveness and efficiency of both global and regional models. Strengthening inter-regional coordination and collaboration As for inter-regional coordination and collaboration, under the new operational structure we adopted for our automobile operations starting from April, we began reviewing and sharing the product lineup by grouping some of our six regions outside Japan based on a similarity of key factors, such as market needs and environmental regulations. With this initiative, by 2025, we will reduce the total number of variations at the trim and option level for our global models to one-third of what we have now. In addition, we will increase efficiency by eliminating and consolidating some similar regional models into even more competent models shared across multiple regions. Advancement of our art of making automobiles (automobile development) As for the advancement of automobile development, since I became the president, we have been increasing the efficiency and speed of our Monozukuri (the art of making things) by innovating the entire process, from planning and development all the way through production, by enabling the S-E-D-B (sales, manufacturing, R&D, purchasing*1) functions to collaborate beyond the boundaries of their divisions. Moreover, we have already introduced the Honda Architecture in our development. The Honda Architecture is a company-wide initiative which will increase the efficiency of development and expand parts-sharing for our mass-production models. The first model being developed with this new method will be the global model we are launching next year. And we will continue increasing the number of models to which we apply this new architecture. With the strengthening of global and regional models through inter-regional coordination and collaboration and with the introduction of the Honda Architecture, by 2025, we will reduce the number of manhours we use for the development of mass-production models by 30%, and we will repurpose those manhours to accelerate our research and development in advanced areas for the future. In this way, we can continue creating new technologies which will support the future of Honda. Strengthening our operational structure in the area of production In addition to the area of development, we are further strengthening our operational structure in the area of production as well, so that we can create strong products with high efficiency. We are making steady progress in optimizing our production capacity in all regions. When this is complete, we are expecting to see that our global capacity utilization rate, excluding China, will increase from 90% recorded in 2018, and we will be producing at full capacity by 2022. In China, the third plant of Dongfeng Honda became newly operational, and this put us in a position where we can definitely accommodate market demand in China. We believe that this progress we made paved the way for the optimization of our global production capacity. From here onward, we think it is important to increase our competitiveness by increasing the efficiency of our production system in North America. For our business in North America, while keeping pace with sales expansion, we enhanced our model lineup and established a flexible production system where our plants sometimes produce various models in duplication to accommodate changes in market demand. However, as a result of the pursuit of high flexibility, an increase in the investment amount and a decline in production efficiency started to become an issue. Therefore, in North America as well, we will reduce the number of variations at the trim and option level, and at the same time, we will simplify the production model allocation at each plant. Through this initiative, we will re-establish a highly-efficient production system and realize the growth of North American business through the pursuit of quality. By implementing these initiatives to increase production efficiency in each region, we are expecting to reduce global cost in the area of production by 10% by 2025, compared to the cost recorded in 2018. Through all these initiatives I have mentioned, we will steadily strengthen the structure of our automobile business and realize the solidification of our existing automobile businesses by 2025, and, at the same time, we will accelerate our preparation for the future. Direction for the electrification of our automobile products Striving to realize a carbon-free society, Honda set a goal to electrify two-thirds of our global automobile unit sales by 2030. When we talk about the introduction of electrified vehicles, there are two perspectives. One is the improvement of fuel economy, and the other is zero emissions. Regulations for the Corporate Average Fuel Economy (CAFE) standards are becoming increasingly stringent in every country around the world and complying with CAFE standards is one of the most important challenges for the automobile industry. At Honda, in light of the required infrastructure and how people use automobiles, we believe that hybrid technology is, at this moment, the most effective way for us to comply with CAFE standards. Therefore, we will electrify our products mainly with hybrid technologies. By increasing sales of our hybrid models all around the world, Honda will contribute to the global environment through the improvement of fuel economy. To this end, we will expand the application of our 2-motor hybrid system to the entire lineup of Honda vehicles. In addition to the 2-motor hybrid system which is compatible with mid-to-large-sized vehicles, we developed a new, more compact 2-motor hybrid system suitable for small-sized vehicles. This small-sized 2-motor hybrid system will be adopted first by the all-new Fit which we are planning to exhibit as a world premiere at the Tokyo Motor Show this fall. In addition to the expansion of the lineup of products equipped with the 2-motor hybrid system, we also will expand the application of the 2-motor hybrid system on a global basis. With that, by 2022, we are expecting to reduce the cost of the 2-motor hybrid system by 25% compared to the cost of this system in 2018. As for zero emission vehicles, with our battery EVs we will comply with the Zero Emission Vehicle (ZEV) program being adopted by California and other states in the U.S. and China's New Energy Vehicle (NEV) mandate. We will efficiently introduce our battery EVs to the market by selecting the most appropriate partners and resources to satisfy the different needs in each region. In North America, we will jointly develop battery components with General Motors and introduce highly-competitive battery EVs in the market. In China, in order to keep up with the fast speed of electrification, we have already begun introducing battery EV models developed together with our local joint venture companies in China. While envisioning the introduction of battery EV models from the Honda brand, we will continue utilizing local resources in China and introduce more battery EV models in a timely manner to fulfill local market needs in China. In Europe and Japan, we will introduce the Honda e, a new battery EV model, which was recently introduced as a prototype at the Geneva Motor Show. To summarize, Honda will popularize and improve the business feasibility of electrified vehicles by focusing on hybrid vehicles and battery EVs. Changes in operational structure In order to ensure the solid implementation of these initiatives I just introduced for our automobile business, we renewed our operational structure as of April. The aims of this structural change are to establish an organization which brings all regional operations together to strongly facilitate inter-regional coordination and collaboration and to increase the speed of our business operations by enabling prompt decisions and prompt execution. Today, I introduced our initiatives to strengthen our automobile business structure and the direction of our electrification. Under the new organizational structure, we will realize our goals with a keen sense of speed. Closing As we stated in our 2030 Vision, Honda is striving to grow through the pursuit of quality so that we can fulfill our vision to "Serve people worldwide with the joy of expanding their life's potential." Honda will continue taking on new challenges while being driven by strong passion, so that we can continue to be a company that society wants to exist even in 2050 after Honda becomes more than 100 years old. *1 S-E-D-B: Sales, Engineering (Manufacturing), Development (R&D), Buying (Purchasing) View full article
  15. Yes, this is my final 2018 model year review. If you're wondering why it got published in May, it was because I have been quite busy with my new job back in February. But I'm glad to get it out of the way. The good news is that I should be having 2019 model year reviews start coming out within the next few weeks.

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