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February 9, 2018 News of the Day: Mercedes to Pull Out of Annual Detroit Auto Show, Tesla's Model 3 Production Ramp-up Depends on Equipment Still in Germany

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【Summary】February 9, 2018 News of the Day

Eric Walz    Feb 09, 2018 3:23 PM PT
February 9, 2018 News of the Day: Mercedes to Pull Out of Annual Detroit Auto Show, Tesla's Model 3 Production Ramp-up Depends on Equipment Still in Germany
author: Eric Walz   

Mercedes Benz to Pull Out of Annual Detroit Auto Show

FRANKFURT — Mercedes-Benz, a luxury mainstay of the Detroit auto show, is poised to withdraw from the event next year, sources at the German carmaker said.

"We have to look at whether a trade show like Detroit fits with the cadence of our launch calendar and whether there's a more effective format for our needs," said a senior Mercedes executive close to the plans. "The G class was the perfect product to debut this year, but the likelihood we will be in Detroit next January is very slim. That doesn't mean however we are ruling out a return in 2020."

A withdrawal would mark the latest setback for the North American International Auto Show, which has watched brands such as Mazda, Volvo, Porsche, Jaguar and Land Rover pull out as automakers pay closer scrutiny to costs and weigh the best outlets for marketing dollars.

The absence of Mercedes from Detroit's Cobo Center would have an outsized impact. The automaker has traditionally occupied signature space near a high-traffic entrance and has supplemented its show-floor press conference with off-site presentations.

Last month, the automaker held a press conference in an historic theatre-turned-parking-garage in downtown Detroit to unveil the redesigned G class -– complete with a hill climb, shooting flames and celebrity Arnold Schwarzenegger joining CEO Dieter Zetsche on stage.

Over the years, Zetsche has played up his emotional ties to the city. They date back to the early 2000s when he led the former Chrysler Group, then a part of Mercedes parent Daimler.

Chuck Ghesquiere, owner of Mercedes-Benz of Bloomfield Hills in suburban Detroit, said he was shocked to hear about the plans. "It will be a tough break for us," said Ghesquiere, whose sons also own Mercedes dealerships in Novi and Rochester Hills, Mich. "You hate to see that loss."

Rod Alberts, executive director of the Detroit Auto Dealers Association, which oversees the Detroit show, said: "We haven't heard that news. That's all I can say."

With the onset of electromobility, connectivity and autonomous driving, Mercedes has experimented with new ways to reach consumers, including a Me Convention in September sponsored by Mercedes and South by Southwest.

A source with Mercedes parent Daimler AG cast doubt on the prospects of a Mercedes return to Detroit and said: "Trade shows were designed so potential customers could easily compare prices across brands in one day, but this is no longer contemporary."

Tesla's Model 3 Output Target Depends on Equipment Still in Germany

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SAN FRANCISCO  Tesla has all the assembly line tools to meet its planned Model 3 production ramp up in the first quarter. The only problem is they are still in Germany, Automotive News has reported.

The electric-car maker is still targeting about 2,500 of the cars a week by the end of March. To boost it production capabilities, Tesla designed a new automated system for module production for its U.S. battery gigafactory near Reno, Nevada. The line is working at its Grohmann Engineering unit in Germany, but it needs to be shipped to the U.S. next month before it can go into use, CEO Elon Musk said.

"That's got to be disassembled, brought over to the gigafactory and reassembled and then brought into operation at the gigafactory. It's not a question of whether it works or not. It's just a question of disassembly, transport and reassembly," he said on a conference call Wednesday.

Once that milestone is completed, Tesla will need to fix material handling constraints at its Fremont, California., assembly plant before it can reach its 5,000-a-week goal by the end of June.

Tesla has pushed back its Model 3 production targets several times and is banking on the more affordable model to propel it from niche EV maker to mass-market manufacturer. The slower ramp means less money is coming in from customers taking delivery, and Wall Street is watching closely for any signs the targets could slip again.

Jeffrey Osborne, an analyst at Cowen & Co., said the cross-ocean line relocation makes Tesla's first-quarter output goal an "extremely aggressive" target. George Galliers, an analyst at Evercore ISI, warned of "timing risk" around the reassembly process.

"Should Tesla miss its 2.5k unit weekly production target, for the end of Q1, investors will be left disappointed and concerns will increase," he wrote in a note to clients.

However, Tesla's CEO Elon Musk remains optimistic. "If we can send a Roadster to the asteroid belt, we can probably solve Model 3 production," Musk said on the conference call with analysts, shortly after tweeting another photo of his Roadster hurtling through space.

Volvo Sets Earnings Record, Expects More Growth Under Geely

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STOCKHOLM — Sweden's Volvo Car Group expects stronger earnings and sales this year after the Chinese-owned automaker topped previous sales records in 2017 thanks to strong demand for its new models, particularly in China.

Volvo Cars,purchased by Zhejiang Geely Holding Group in 2010, reported on Thursday its fourth straight year of record sales as a revamped, pricier model lineup helped it take on larger rivals such as Daimler's Mercedes-Benz.

The Gothenburg, Sweden-based company, one of the country's biggest by sales, said operating earnings rose to $1.76 billion in 2017 from $1.3 billion a year earlier, as revenues climbed 17 percent to $26.5 billion.

After the launch of new SUV models, the mainstay of Volvo's business, and with its first U.S. plant set to begin production later this year, Chief Executive Hakan Samuelsson said the automaker was poised for further growth in 2018.

"We believe we will see another strong year of growth with higher profitability," he told Reuters. "We now have all we need to keep growing and improve our profitability in order to reach the level where we want to be."

After languishing for years under the Ford Motor Company's ownership, Volvo Cars has found a new lease of life under Geely, whichm investing in a broad overhaul of its models and making rapid inroads the world's biggest auto market, China.

In recent months, Geely has been spreading its net wider, striking a deal to buy an 8 percent stake in truck maker AB Volvo, once the owner of Volvo Cars.

Geely has also bought shares in Daimler in the hopes of forging an alliance over electric cars technology, sources told Reuters this week.

Volvo Cars has set a goal of reaching sales of 800,000 cars within the next few years.

The company sold 571,577 Volvos last year, up 7 percent from 2016, boosted by demand in China, its biggest market, and brisk sales of its new 90-series station wagons and sedans and XC60 SUV.

Rimac's Next Electric Hypercar to Have 120 kWh Battery and Full Autonomy

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Rimac's second hypercar, to be revealed at the Geneva motor show later this year, will feature a high level of autonomy and a 120 kWh battery.

Rimac confirmed it will reveal its next hypercar at the Geneva motor show later this year, showing the car in a new preview video ahead of its launch.

Rimac Automobili is a Croatian car manufacturer that develops and produces electric supercars, headquartered in Sveta Nedelja, Croatia.

The company's upcoming 'Concept Two' will be more comfortable, more expensive and faster than the Concept One, and will feature cutting edge autonomous technology.

A source close to the car revealed the battery specs, but did not confirm what performance the car can achieve. It's likely to feature level 4 autonomy where legal, this means that the car can drive itself completely, without the driver's attention, but with a driver behind the wheel just in case.

Sources say targets for the new car changed when Tesla announced its new Roadster, which, it is claimed, will accelerate from 0-62mph in 1.9sec in its slowest form and will have a 200 kWh battery pack.

The Croatian supercar firm confirmed to Autocar last year that a new model would arrive in 2018. It has since announced it will be revealed at the Geneva motor show. At the time, Monika Mikac, the Croatian firm's chief operating officer said the car will be more comfortable and expensive than the Concept One, but also capable of even better performance. Rimac also described the model as "a true game-changer".

With the working name Concept Two - "it definitely won't be called that", said Mikac - the model will be "comfortable luxury" and a little bit bigger than the Concept One, but still a two-seater. Mikac said there are no plans to build a four-seater.

She added that it will be "even more high-performance" than the Concept One. That car delivers 1224bhp and 1180 lb ft of torque and has a 0-60 mph sprint time of 2.5 seconds.


The upcoming supercar will have a production run of only 100, with Mikac anticipating that Rimac would sell 20 units in the first year.

Concept Two will still be "in a league with Pagani, Koenigsegg and Bugatti", Mikac claimed, and cost more than the £1 million Concept One.

It will also have more range than the current model – which has 205 miles depending on driving style – although Mikac acknowledged that range isn't a major concern for its customers, given these cars aren't used as daily drivers.

Following the launch of the standard coupé, there will be track and spider variants of the Concept Two arriving in the next few years.

Mikac said that any new cars will have the same design DNA as the Concept One. She pointed out that the sidelines of the car are a homage to the neck tie, which was created by a Croatian and would continue in future models.

While Rimac is keen to grow its car offering, its main revenue comes from being a supplier to other companies. It supplies the battery for the Koenigsegg Regera and will be supplying the battery and infotainment system for the upcoming Aston Martin Valkyrie.


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