Aston Martin is spending all of its SUV money wisely, American dealers are being remade, and Tesla. All that and more in The Morning Shift for September 14, 2021.
1st Gear: It Wasn’t Too Long Ago That Aston Martin Was On Death Watch
But just look at it now, as the DBX has proven to be the hit Aston Martin needed. Now, its leader Lawrence Stroll — who also owns Aston Martin’s Formula 1 racing team — says he’ll invest up to £200 million in a new campus for said F1 team, in a bid to take on Red Bull and Mercedes, the heavyweights of the sport.
From the Financial Times:
The 37,000 square metre campus, which will include a wind tunnel to test and help improve aerodynamic performance and speed, is located near the Silverstone racetrack in Northamptonshire. Work on the site is under way and Aston Martin said it would be the first new F1 factory in the UK since rival McLaren opened its Woking campus in 2004.
Aston Martin F1 expects to complete work on its new headquarters by early 2023, after construction had been delayed by the pandemic.
Stroll is talking to banks about various funding options, including bond issuance or a traditional mortgage, though said he was less keen on sale-and-leaseback arrangements.
“Right now, I’m just financing it myself,” he said. “I’d like to be in control of the building . . . you know, I don’t wanna have to go to somebody every time we want to change a lightbulb.”
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Stroll is the kind of old-timey automaker leader in the mold of Enzo Ferrari or Henry Ford II or Ferdinand Piëch that we just don’t see too much of anymore. One might put Elon Musk in that category, too, except Elon doesn’t give a shit about racing.
2nd Gear: American Dealers Are Consolidating, And Fast
The Wall Street Journal had a nice story this weekend about how dealerships in America are changing. This is in large part because of the pandemic, as customers want to buy cars online these days, but not totally. The old model was that some sort-of-rich guy owned your local dealer; the new model is that a national chain might instead. Also, haggling is on its way out. And so, probably, is buying off the lot, too, as automakers have learned new things about inventory given the global chip shortage.
Dealers will hold fewer cars on the lot and operate more like service-and-delivery centers, using their dealerships as hubs where customers can pick up vehicles ordered online and get them serviced.
Some larger dealership chains flush with cash are already scooping up smaller rivals, hoping that scale will help them dominate this transformation. The number of acquisitions last year hit 289, according to dealership consulting firm Kerrigan Advisors, which was the highest count in years. Deals continued to climb this year, according to Kerrigan, up 27% in the first half of 2021.
“It was my time to ride off into the sunset,” said John Medved, 73, a Denver-area dealer who last year sold his six-store chain to a larger dealership group in Canada. Mr. Medved, a recognizable face and voice on local airwaves, said he wasn’t sure how to connect with consumers who wanted to shop online.
“Nobody’s seen anything. Nobody is touching anything. I can’t do that.”
As the story notes, this is also in large part because of Tesla, which has a direct-sales model and has trained a new generation of new-car buyers what to expect, and so has used car sellers like Carvana. Still, the old guard is stubborn.
Despite this surge of online competition, the dealership business is still largely dominated by small, individually held operations. The nation’s top 50 largest dealerships by new-vehicle sales accounted for only about 16% of U.S. new vehicle sales in 2020, according to Kerrigan Advisors.
Some dealers said the rise of online buying won’t diminish the importance of these local businesses to buyers. “Gradually, there’s going to be more and more done digitally,” said Paul Walser, a Minnesota dealer and chairman of the National Automobile Dealers Association. “But I don’t see a time—at least in the next few years—where the importance of that face-to-face contact is going to be eliminated.” The industry, he added, “ is still very, very dependent upon dealers all across this country, in rural markets in particular, connecting with their consumers.”
I’ve never bought a new car and probably never will but if I ever do I will be demanding the classic experience for old times’ sake. You know, walk into a dealer and let a salesperson try and really sell me on something. This will inevitably lead to me driving off in an overpriced Malibu.
3rd Gear: Ford’s Flat Rock Assembly Plant Will Restart Production Next Week
The plant was the source of a fuel leak that saw hundreds of gallons of unleaded fuel seep into a local sewer system. Ford said Monday that it had fixed the problem and the plant is to reopen next week.
“Ford repaired the leaking pipe and removed the gasoline from the tank so no more gasoline can escape,” Kelli Felker, Ford global manufacturing and labor communications manager, told the Free Press. “In addition, we are decommissioning all underground gasoline piping and replacing with aboveground piping.”
The work is being reviewed and approved with Michigan’s Licensing and Regulatory Affairs, Underground Storage Tank Division, and will be completed before any fuel-filling operations at the plant are restarted, Felker said.
“We are also evaluating whether any additional changes are needed in our system and operations to remove the potential for this leak path from occurring again,” she said.
Factory operations are expected to restart on Sept. 20, Felker said.
4th Gear: NHTSA Is Stepping Up Its Tesla Autopilot Probe
The National Highway Traffic Safety Administration has asked a dozen automakers to give it data on their semiautonomous driving systems, according to Bloomberg. This includes BMW, Honda, Toyota, and Ford.
NHTSA is seeking a variety of documents about how the different manufacturers’ driver-assistance features work, how the companies determine whether the features were engaged during accidents and how the systems detect and respond to the presence of first responder and law enforcement vehicles.
The agency opened a formal investigation into Tesla’s Autopilot system last month after almost a dozen collisions at crash scenes involving first-responder vehicles, stepping up its scrutiny of a system the carmaker has offered for the last half decade.
The probe covers an estimated 765,000 Tesla Model Y, X, S and 3 vehicles from the 2014 model year onward. The regulator — which has the power to deem cars defective and order recalls — said it launched the investigation after 11 crashes that resulted in 17 injuries and one fatality.
NHTSA asked the companies to respond to the letters by Nov. 17.
I will be surprised if anything real comes of all of this, though, for the sake of its customers, Tesla could use a real kick in the ass.
5th Gear: There Is No Detroit Auto Show This Year But There Is Something Called Motor Bella
There, the public will be able to see the GMC Hummer SUV for the first time in the flesh, according to the Detroit Free Press. GM’s display seems quite large, in fact.
GM will showcase several performance and electric vehicles, including the GMC Hummer SUV EV, at Motor Bella, the new car event at the M1 Concourse in Pontiac starting Sept. 23, GM said Monday.
GM’s display there also will feature the GM Defense Infantry Squad Vehicle and a full lineup of Chevrolet Performance and Motorsport cars including the Corvette C8.R and NASCAR Next Generation Camaro ZL1 race cars.
“For decades, GM and Chevrolet have served as industry leaders in automotive innovation, continually pushing the limits of what new technology and precision engineering can bring to the racetrack, showroom, and the aftermarket,” said Jim Campbell, GM vice president of Performance, Motorsports and Accessories. “GM’s Motor Bella display is a testament to the dedication and resolve of our performance, motorsports and production teams.”
GM also will display two 2022 International Motor Sports Association GT LeMans Championship Edition Corvette Stingrays, and a full array of special high-performance Camaros including a fifth-generation, a 2022 Big Block V-8, and the electrified drag racing concept car.
Exciting stuff, if you’re a big GM fan. Here is the complete press conference list for Motor Bella, which is a shell of what the Detroit Auto Show used to be:
All of that seemed normal to me and then I Googled whatever “Nolan Finley” is and discovered that he is a replacement-level conservative columnist. Hm.
Reverse: To The Moon
Neutral: How Are You?
I’m going to Detroit tomorrow and should touch down in time to catch the Tigers get destroyed by the Brewers at Comerica Park. First baseball game in years; can’t wait.