AD #2869 – Chevy Sonic Discontinued; Car Sales Fall in China; Audi Reveals Q4 Sportback e-tron Concept

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

CAR SALES FALL IN CHINA
We start out today in China where it looked like the car market was starting to recover in May. But June was a different story. Bloomberg reports that retail sales fell 6.5% last month. And the drop can’t be completely blamed on the Covid-19 pandemic. New car sales have been falling in China for over two years. What is sure to worry automakers is that sales of what China calls New Energy Vehicles, or electrified cars, are falling the fastest. They were down 35% last month.

TESLA’S SALES SOAR IN CHINA
But one thing’s for sure. Chinese consumers sure like Tesla. Its sales shot up 35% last month. Chinese customers took delivery of 14,954 Teslas, according to the China Passenger Car Association. And what has got to worry all of Tesla’s competitors is that it now accounts for one out of every four New Energy Vehicles sold in China. 

SOUTH KOREA CATCHES TESLA FEVER
But it’s not just China, South Korea also caught Tesla fever. The EV maker had its best sales month in June, with just over 2,800 vehicles sold. Reuters reports the Model 3 is now the second most imported vehicle in the country, ahead of the BMW 5 Series and Audi A6, and just behind the Mercedes E-Class. At the same time, Hyundai sold a little over 2,500 Kona EVs in June, down 31%. Even better for Tesla, it has four to five thousand orders of the Model 3, but most of those won’t be delivered until September. Consumers in South Korea get over $10,000 in subsidies for the purchase of electric cars like the Model 3. But buyers are going with Tesla because they like the brand and technology and say being associated with it is good for their image.

BMW’S MOTORCYCLE SALES STRONG IN JUNE
The Covid pandemic has hurt car sales all around the world, but that’s not the case when it comes to motorcycles. BMW Motorrad, the company’s motorcycle division, just had its best ever sales result for the month of June. BMW’s motorcycle sales were up almost 10% for the month with over 20,000 sold. While its first half sales are down 18%, the company is optimistic about the second half of the year. Here’s our Autoline Insight. People just want to get out in the sunshine and open air without a bunch of people around them. And a motorcycle is a great way to do that.

AUTOMAKERS FACE MASSIVE EU EMISSION FINES
Automakers in Europe are facing massive fines for not meeting upcoming emission standards. The EU set a target for automakers to hit a fleet average of 95 grams of CO2 per kilometer in 2021. If they’re not able to hit that, automakers will be fined 95 euros or $106 for every gram per kilometer they’re above the target, times the number of vehicle sales. And WardsAuto reports that the top 10 automakers in Europe are facing an average fine of 11.4 billion euros or $12.8 billion apiece. Toyota is the closest automaker to reach the goal, but even it still faces massive fines, while Daimler is the furthest away.

DAIMLER LOOKS TO SLASH MORE COSTS
And that’s likely one of the reasons Reuters reports today that Daimler’s CEO announced the automaker will be looking for even more ways to cut costs. On top of the fines, losses racked up in the last few months due to the coronavirus will not be recovered before the end of the year, which is expected to result in a 2nd-quarter operating loss. Factory workers could be the most affected by this. Daimler said it is in talks with labor representatives about the savings.

MORGAN BIDS FAREWELL TO STEEL CHASSIS
We’ve been known to joke around about vehicles that seem like they’ve been or at least their basic structure have been around forever, like Ford’s Econoline van. But the Morgan car company has them all beat. It produced its last steel-framed 4-wheeled car. That steel-frame, by the way, was introduced in 1936. We’ll do the math for you, that’s 84 years. Over all those years, Morgan only made about 35,000 vehicles on that steel frame. That’s really not a lot. It’s important to remember that Morgan makes fewer cars a year than Ferrari. Last year the automaker introduced a new bonded aluminum platform, which underpins Morgan’s current lineup of 4-wheeled cars, the Plus 4 and Plus 6. But wait a minute, you’re saying, didn’t Morgan make its chassis’ out of ash? Well, yes. But that was mainly a wooden structure that supported the body, and it all sat on that steel frame. 

AUDI REVEALS Q4 SPORTBACK E-TRON CONCEPT
What is it with German automakers and their love for fastback versions of their SUVs? And it’s not just gas- and diesel-powered utilities, now it’s EVs too. Audi revealed the new concept Sportback version of the Q4 e-tron. Underneath the skin the Sportback is identical to the Q4 e-tron concept that debuted in Geneva last year, but obviously, things are a little different from the B-pillar back. For a quick refresher, the Q4 e-tron concept debuted with two electric motors that combine for 225-kW of power and an 82-kWh battery pack that returns 450 kilometers or roughly 280 miles of range on the WLTP test cycle. A production version of the Q4 Sportback e-tron will go into production in 2021.

CHEVY SONIC DISCONTINUED
When JD Power released its Initial Quality Study two weeks ago, the Chevrolet Sonic was rated as the highest quality car sold in the U.S. market. Well, so much for being the best. GM just announced it’s going to stop making the car. One reason why is that sales collapsed. Six years ago, Chevrolet was selling nearly 100,000 Sonics a year. Last year it did not even sell 14,000. And that really shows how much the market has switched from passenger cars to crossovers: even though the Sonic has superb quality, consumers want something that looks more like an SUV. But there’s another reason why GM is stopping production. The Sonic is made at its assembly plant in Orion, Michigan, where the Chevrolet Bolt EV is also made. GM wants to convert that plant to making only electrics, and is coming out with a refreshed version of the Bolt called the EUV that sits up higher, has a longer wheelbase, and is 5 inches longer overall. It also gets an upgraded interior and a new infotainment system. By converting the Orion plant to making only electrics, GM should be able to reduce labor content by 20-25%.

We have a great Autoline After Hours coming up this Thursday. Our special guest is Hau Thai-Tang, the head of all product development and purchasing at the Ford Motor Company. And we’ll be taking a deep dive into the development of the new F-150. Why did Ford decide to stick with an all-aluminum body when none of its competitors are doing it? And where did they get the ideas for all those cool features they added to the truck? Those are just some of the topics we’ll want to get into. Henry Payne, the car critic for the Detroit News will also be on the show, so join John and Gary for some of the best insights as to what’s going on in the automotive industry.

And that wraps up this report. Thanks for watching.