If we thought the automotive world had troubles last year, welcome to 2020.
It’s been quite a week for Renault. First of all Moody’s, the ratings agency, downgraded their debt to junk status. After profits have been wiped out in the past year it is clear that analysts are punishing it, worried that it will not be able to return itself to its previous healthy state. At almost exactly the same time French prosecutors have announced a probe into Carlos Goshn, their former high-profile chief executive. They are looking into misuse of funds and abuse of corporate assets as well as things like money-laundering over the past 11 years. Things don’t get much better for him, do they? How quickly you can fall from grace.
Tesla’s German operation also had an interesting week. On Wednesday they had to stop work on their new gigafactory because of claims by environmentalists that they were cutting down trees in a precious environment. They still have not got the complete go-ahead for their new site, but the courts have allowed them to restart their felling of the forest on the new 350 acre site. Remember, this is the factory that the UK thought it had a good chance of getting, but that Brexit word got in the way. Politicians had warned that the legal battle that environmentalists were waging would inflict serious damage on Germany’s image as a good place to do business.
I covered the Coronavirus in depth last week, but the headlines still will not go away. I love the report of Jaguar Land Rover getting parts out of China in suitcases – that Range Rover waiting on the production line is obviously worth it. And a couple of hours ago the company announced plans that it was shelving plans to sell bonds to raise cash. Apparently investors have looked at the risks around a severe downturn caused by the virus and backed away.
Finally, a number of manufacturers are getting their excuses in early. Coronavirus is to blame as there are claims that the first half of February has seen sales slump by 92% in China. Daimler, Nissan, Honda warning of serious adverse effects and are delaying production or pointing out that production in other countries will be affected. VW has seen its own sales in the country fall significantly at the start of this year. And as news of an outbreak in Korea gathers pace, I don’t expect Hyundai and Kia will be immune either.
Have a great weekend, summer is only 4 months away. 2021 only 10 away.
To get something done, a committee should consist of no more than three men, two of whom are absent.
One can survive everything, nowadays, except death, and live down everything except a good reputation.
Oscar Wilde (1854 – 1900)
A lie told often enough becomes the truth.
Lenin (1870 – 1924)
Always be wary of any helpful item that weighs less than its operating manual.
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