AD #3954 – VW Offers 14% Pay Increase to UAW; BYD Delays European Production; EU Won’t Back Off CO2 Targets

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

VW OFFERS 14% PAY INCREASE TO UAW
If negotiations with the Detroit 3 last year were any indication, the UAW will throw VW’s first contract offer in the trash. Volkswagen put out a statement that it offered line workers at its plant in Tennessee a 14% raise over the four-year contract, profit sharing for the first time ever, and improvements to health care benefits. But the UAW got a 25% raise for members from the Detroit 3, so we expect it to try and get as close to that number as possible. And we’ll be interested to see if UAW president Shawn Fain goes after VW with the same amount of passion as last year.

BYD DELAYS EUROPEAN PRODUCTION
BYD is changing course slightly in Europe. Not long after the EU started talking about raising tariffs on imported Chinese EVs, BYD announced it would build a new plant in Hungary. It’s expected to start producing cars by the end of next year, but instead of building a new version of the Seagull right away, BYD will start with larger, more expensive EVs at the plant. First will come the Dolphin and Atto 3, followed by a model called the Atto 2 and then the Seagull. And CarNewsChina claims the plant could build as many as 12 models at the same time. Annual capacity is expected to be around 200,000 units, but the ramp up to that will take two to three years as BYD tries to increase sales in Europe. Last year it sold a little more than 15,500 vehicles in the region. And until it can start making vehicles in Hungary, BYD will import plug-in hybrids to avoid the EU’s EV tariffs. 

STELLANTIS EXTENDS ITALY PRODUCTION STOPPAGE
And speaking of manufacturing in Europe, Stellantis is extending a production stoppage at its Mirafiori plant in Italy for another two weeks, which means cars won’t start rolling down the line again until January 20th of next year. The automaker previously stopped production at the plant due to slowing demand for the models that are made there, the Fiat 500 and several Maserati vehicles. The Italian government has already voiced its displeasure with Stellantis’ moves in the country, so no doubt this doesn’t make that relationship any better. 

HYUNDAI INVESTS $1 BILLION INTO CHINA OPS
Hyundai is struggling in China. It has only sold 137,000 vehicles as of October this year with its joint-venture partner BAIC, a 41% decline from a year ago. That forced it to close plants in the country and led to a nearly $360 million loss in the first nine months of the year. Hyundai’s sales are slumping because of the rapid transition to EVs in China, plus more car buyers are choosing local brands. So to help reverse its slide, Hyundai and BAIC will pour $1.1 billion into their JV, with both companies splitting the cost of the investment. The money will go towards boosting exports and speeding up the development of EVs that are designed for Chinese customers. 

MERCEDES’ KALLENIUS NAMED ACEA PRESIDENT
That was quick. As we reported earlier in the week, Stellantis applied to rejoin the ACEA, or European Automobile Manufacturers Association, a lobbying group that represents the European auto industry. And yesterday, the group officially approved the automaker’s membership and it will rejoin on January 1 of 2025. Stellantis left the group two years ago because then-CEO Carlos Tavares was unhappy with the ACEA’s support of the EU’s EV transition plan. But now that he’s gone, Stellantis is back. And the ACEA also named a new president, who is picked from the CEOs of its 14-member companies. Mercedes CEO, Ola Kallenius, will become head of the organization on January 1. He replaces Renault CEO Luca de Meo, who has held the position for the last two years. This follows the group’s normal progression. The ACEA president is elected for 1 year and can be renewed for a second year.

EU WON’T BACK OFF CO2 TARGETS
Automakers in Europe are pushing the EU to soften or delay stricter CO2 rules that go into effect next year because they potentially face fines of €15 billion for missing the targets. But the EU’s climate commissioner says it won’t back off the regulations. The largest lawmaker group in the EU, the European People’s Party is also pushing back against the rules. But when asked if the CO2 targets will be weakened, the EU’s climate policy chief said “No. The answer is no.” 

HYUNDAI EXPANDS PARTNERSHIP WITH GOOGLE
The Hyundai Group is expanding its partnership with Google. The automaker previously announced it will integrate Google’s Android Automotive Operating System into its vehicles and now Hyundai will integrate the Google Maps Platform. Kia vehicles in North America will be the first to get the feature and it will then roll out to other Hyundai, Kia and Genesis models globally.

KIA PLANNING ELECTRIC TASMAN PICKUP
Speaking of Kia, the head of the automaker’s marketing in South Africa said that an electric version of the Tasman pickup truck is coming. However, no other details were provided. The ICE version of the truck is expected to arrive later next year or in early 2026. 

CHINA 2024 CAR DELIVERIES TO EXCEED 30 MILLION VEHICLES
China is on pace to exceed 30 million vehicle deliveries for a second straight year. According to the China Association of Automobile Manufacturers, automakers have delivered nearly 27 million vehicles through November, up about 4% from a year ago. That number also includes commercial vehicles. But light-duty vehicles are driving most of that growth with more than 23 million sales, a 5% increase. Commercial vehicle deliveries are down 4% this year. Passenger vehicle sales are strong thanks to China’s cash-for-clunkers policy that gives buyers up to $2,750 for scrapping their old vehicle. That policy is set to expire at the end of the year, but as we reported yesterday, automakers are pressuring the government to extend it into next year because EV exports dropped 29% last month.

CHINESE EVs PILE UP AT BRAZIL PORTS
And that’s mostly because of the EU’s new tariffs on Chinese-made EVs. But Chinese automakers are also running into issues with one of their biggest export markets, Brazil. Bloomberg reports that there are around 70,000 unsold Chinese EVs at Brazilian ports. They’re piling up because the country reinstated import taxes on EVs that grow from 10% to 35% next year. So, in order to avoid those tariffs, Chinese EV makers flooded Brazil with vehicles. BYD alone says it has 35,000 vehicles at ports, which is about four months of inventory. As we said yesterday, the export market is something of a safety valve that’s absorbing some of the excess manufacturing capacity in China. And if exports continue to fall, weaker Chinese automakers are going to be financially crippled if they can’t sell more vehicles in China.

Don’t forget to tune into Autoline After Hours at 3PM EST today. We’ve got Jeff Gilbert and the Pauls, Paul Eisenstein and Paul Waatti coming on the show to discuss the hottest topics of this week. But that’s all for this show. I hope to see you later.