AD #2802 – Ford’s Credit Rating Downgraded; Toyota’s Product Plans Leak Out; VW Electrifies Old Bus

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

FORD’S CREDIT RATING DROPS
While the auto industry is rolling up its sleeves to make medical equipment and fight the coronavirus, it’s getting hurt by the sudden plunge in the economy. The S&P downgraded Ford’s credit rating to a non-investment grade, and warned it could cut it even further. This hurts Ford in two ways. First, it raises the cost of borrowing money. Second, many investment funds are prohibited from investing in companies with a junk credit rating, and that could hurt Ford stock even more.

GM’S CREDIT RATING COULD DROP TOO
In a related move, Moody’s warns that it could cut GM’s credit rating to non-investment grade. Moody’s expects global car sales to plummet 30% in the second quarter and 15% for the year.

LARGE DEALER GROUP BACKS OUT OF DEAL TO HOARD CASH
With car sales looking bleak, one of the largest dealer groups in the U.S., Asbury Automotive, is backing out of a $1 billion deal to buy Park Place Dealerships, which owns 17 franchises of mostly European luxury cars, including Mercedes, JLR and Porsche. Asbury is now trying to hoard as much cash as it can to get through the downturn. Even so, it will have to pay Park Place $10 million to back out of the deal.

HONDA’S AUSTRALIA DEALERS MAD AFTER CHANGES
Meanwhile, Honda’s dealers in Australia are furious with the company. Honda announced it’s going to slash the number of dealers it supports in Australia, and will adopt what it calls an agency style business, where customers deal directly with Honda, and just go to the dealerships to pick up and service their cars. Car prices will be fixed, with no haggling, and Honda will pay dealers a fee to handle the transaction. Some disgruntled dealers say that the Honda brand in Australia is in terminal decline and will probably go the way of Holden, the GM brand that is going away.

AUTOMAKERS HOPE TO RE-OPEN ASAP
Automakers in the U.S. have closed all their plants, with the exception of Kia, which will not stop production until next Monday. But they’re all hoping to re-open them as soon as possible and it looks like they’re targeting April 6 as the day they ramp up production again. But it will be slow. Ford only plans to open its Hermosillo plant in Mexico then, on one shift. But it will start bringing more plants on stream by April 14.

Don’t forget that Autoline After Hours will be going live later this afternoon. We’ll be talking about automotive history, as well as advancements in lighting technology, and of course, the impact of the coronavirus on the auto industry. If you’d like to get involved, we welcome your questions. You can submit them in the chat room, via Twitter, or send an email to viewermail@autoline.tv. Then join me and Gary at 3 pm eastern time for some of the best insights into the automotive industry.

CHEVROLET C8 CORVETTE ORIGIN STORY
While the C8 is the first mid-engine ‘Vette to make it to production, the car actually has a long history with the layout. The first CERV, which stands for Chevrolet Engineering Research Vehicle, came out around 1960. It was followed by the CERV II and CERV III as well as the Aerovette and Corvette Indy mixed in. Black Jack is the nickname of the C8’s first prototype, which we consider the spiritual successor to those other research vehicles. As you can see, Black Jack looks a lot like a Holden Ute, but it almost ended up looking like a family hauler.

In that video you’ll see all three of the C8’s prototype vehicles and learn all about the Corvette’s development process. Check it out right now on our YouTube channel.

TOYOTA’S PLANS LEAK OUT
There’s a lot of info leaking out from a Toyota dealer presentation, which lays out the automaker’s plans for the next several years. Here are some of the highlights we’ll see. This year, Toyota will get an all-new 5-seat crossover that brings back the Venza name. In 2021, the all-new Tundra comes out late in the year as a 2022 model year. It rides on Toyota’s all-new truck platform and its top engine choice will be a twin-turbo V6. Toyota will also get a Corolla-based crossover and an all-new 86 built on Toyota’s TNGA architecture with a 255HP turbo 4-cylinder. From Lexus we’ll see the next-gen IS sedan, an all-new NX crossover and maybe Lexus’ version of the Mirai. In 2022, the Sequoia and 4Runner are all-new and on the same platform as the Tundra. The new Lexus RX Crossover will come out, the LC-F will get a new twin-turbo V8 that’s shared with the all-new LX SUV. And finally in 2023, we should see the nex-gen versions of the Camry and Tacoma pickup and it’s possible that the next Land Cruiser will become a “Hardcore off-roader.” That’s just the highlights. Follow the link to get all the updates.

TOYOTA USING AI TO UNDERSTAND HUMANS
And speaking of Toyota, it’s launched an initiative to develop and demonstrate artificial intelligence that can understand and predict human behavior for decision making. This is incredibly important for an autonomous vehicle, so it can try and predict what pedestrians, bicyclists and other drivers will do while out on the road. Toyota has hired Uber’s former Head of Platform Data to lead the project. In addition to the advanced technology, once a proof of concept is developed, Toyota will explore how to use the AI in different parts of the company including sales and product planning.

VOLKSWAGEN ELECTRIFIES OLD BUS
Volkswagen converted a 1966 T1 Samba Bus into an all-electric van. Called the e-BULLI, it was originally from California but was bought by Volkswagen and shipped to Germany to convert it into an EV. Its electric motor delivers 82 horsepower, which is nearly twice as powerful as the four-cylinder boxer that originally powered the bus. And it has a top speed of 80 MPH, compared to 65 MPH for the original. The concept’s 45-kWh lithium-ion battery provides 124 miles of range. Volkswagen is offering this conversion to customers in Europe, but it ain’t cheap at nearly 65,000 euros.

POSSIBLE EASY SOLUTION FOR MAKING FACE MASKS
Scuderia Cameron Glickenhaus (SCG) is working on a simple solution to create virus masks. It doesn’t have the ability to make a ton of masks, so it’s taking an off-the-shelf approach. SCG wants to take already available full-face snorkel masks and mate them with in-line CPAP filters. All SCG would have to do is make a medical-grade adapter that fits between the two pieces. It thinks this would be a quicker way to make reusable masks.

MERCEDES TESTS FIRST MINIVAN EV IN THE SNOW
Mercedes first all-electric minivan, the EQV, recently completed winter tests. For several weeks, engineers subjected the vehicle to harsh winter weather in Sweden near the Arctic Circle. With temperatures reaching negative 30 degrees Celsius. They measured the effects of the extreme cold on handling, ergonomics and comfort and found that the van it’s good to go for customers who live in cold weather. The EQV is powered by a 100-kWh lithium-ion battery and has a range of nearly 260 miles on the NEDC test cycle. The van is scheduled to launch in the second half of this year.

HOW HYUNDAI IMPROVED ELANTRA’S MPG WITH HYBRID
Hyundai took the wraps off the new Elantra last week. Not only does it feature great new styling, it has a hybrid for the first time, which delivers 52 MPG combined. I interviewed Mike Evanoff, the Manager of Product Planning, at Hyundai Motor America and he explained the details of the hybrid system that allowed them to achieve that fuel economy.

Mike Evanoff, Manager of Product Planning, Hyundai Motor America
“It’s an evolution of the hybrid system from the last generation Sonata. But the engineers worked on aerodynamics, also in the transmission. There’s active shift control, which aligns the electric motor with the rotation of the engine and transmission to help shift times. It’s about 30% faster shift time, which helps fuel economy, so we really pushed it. It’s an 18% increase in fuel economy from the outgoing model.”

You can watch the full interview about the new Elantra on our YouTube channel.

HOW TO SPOT A METH LAB?
Before I sign off, I wanted to share this Facebook post from Kevin Hisel, a guy we follow because he always has something that puts a smile on our face. And this one is no different. It’s a picture of a very modest mobile home with a Bugatti Veryron parked under the carport. And Kevin, who always comes up with clever captions, says this is the way to spot the meth lab in a neighborhood.

But that’s it for today, thanks for watching and please join us again tomorrow.