Auto/Transportation
Aptiv – Aptiv anticipates that semiconductor prices will not stabilize in the near future. While some supply-chain issues are improving, specific component prices remain high, impacting profits. The company conveyed this information during an investor conference.
Audi – Resolving semiconductor shortages might take several years, even with chipmakers’ intentions to establish factories in the country. Renate Vachenauer, Audi’s head of procurement, stated in a German newspaper that automakers could alleviate the bottlenecks by reducing the diversity of chips used, currently numbering around 8,000 types in vehicles. Vachenauer emphasized the need to employ various strategies to ensure a stable semiconductor supply, including engaging with the broker market.
Continental – In response to ongoing cost increases, Continental is pursuing additional price adjustments for end customers. The company aims to reduce its current working capital by 10%, although a return to pre-COVID levels is not foreseen. Continental highlighted challenges related to elevated logistics costs and strong demands from the UAW (United Auto Workers), which could lead to a new category of cost inflation.
Germany Auto Sales – Battery-electric car registrations in Germany surged by 69% to 48,682 in July, capturing a 20% market share for this drivetrain type, as per data from the German motor transport authority (KBA). Overall vehicle registrations, including gasoline and diesel models, experienced an 18% increase to 243,277. The growth in July was driven by automakers gradually fulfilling order backlogs resulting from production reductions due to supply shortages.
China Price War – The fierce price competition in China’s automotive market is showing signs of easing. Over the last two months, there has been a decrease in the proportion of vehicles that have experienced significant price reductions. In July, around 428 different versions of passenger cars, accounting for approximately 16 percent of the market, saw their prices decrease by more than 5 percent within a three-month timeframe. This insight is based on an analysis of data gathered by the research provider China Auto Market and conducted by Bloomberg. Notably, this proportion had reached its highest point in May, where it stood at 30 percent of both car and light truck models, marking the highest level since at least 2015, when the data from CAM (China Auto Market) first became available.
China EVs –During the first half of 2023, Chinese vehicle exports surged by an impressive 73% year-on-year to reach 2.43 million units, resulting in China’s surpassing of Japan for the first time in the half-year export records, as reported by the China Passenger Car Association (CPCA). This surge was predominantly driven by exports of China-produced New Energy Vehicles (NEVs), with major destinations including the UK, Thailand, France, Germany, and the Netherlands, according to the CPCA. Looking forward, the CPCA anticipates Chinese auto exports to potentially reach 5 million units in 2023, up from 3.4 million in 2022, with the European market offering significant growth opportunities.
Ford – The European debut of Ford’s first all-electric volume model, the Explorer, has been delayed by approximately six months. Originally set for an early release next year, the compact SUV is now scheduled to launch in the summer of 2024.
Li Auto – As Li Auto, the emerging Chinese automaker, accelerates its model releases and production efforts, the company has set an ambitious goal to outsell renowned brands such as BMW, Mercedes-Benz, and Audi in China by 2024. Li Auto’s CEO, Li Xiang, stated the company’s aspiration to become China’s top premium car brand in terms of sales for 2024, aiming for a substantial monthly delivery of 40,000 units in the fourth quarter of 2023 following production scaling.
Honda – Honda posted robust results for the second quarter of 2023, driven by a notable 44.7% year-on-year surge in US shipments, totaling 347,000 units. This positive performance was partly offset by a 5% year-on-year drop in units to 309,000 in China, where Honda faced deteriorating business conditions compared to its earlier full-year sales forecast of 1.4 million vehicles, according to a company official.
Magna – In preparation for potential disruptions due to a strike by the United Auto Workers (UAW) union at the Detroit Three carmakers, Magna has indicated a willingness to consider temporary staff layoffs. This decision comes amidst reported dissatisfaction from the UAW regarding initial contract negotiations with Stellantis.
New Vehicle Inventory – The new-vehicle inventory in the US remained largely stable from June to July, maintaining equilibrium between production and sales, according to Cox Automotive. The total available unsold new vehicle supply in the US stood at 1.96 million units by the end of July, slightly down from the beginning of the month. The days of supply also held steady at 56 days. Cox notes that incentives continued to rise in July for the tenth consecutive month, reaching the highest level since October 2021, averaging $2,148 per vehicle, which equates to 4.4% of the Average Transaction Price, compared to 2.4% a year ago.
VW – Reports from Asia indicate that sales of VW’s electric vehicle (EV) ID.3 in China have experienced a threefold increase in July compared to June. This surge is largely attributed to the $16,000 price reduction implemented at the beginning of July.
UK Car Sales – In July, new-car registrations in the UK witnessed a significant growth of 28%, reaching a total of 143,921 registrations, as reported by the SMMT industry association. Notably, battery-electric vehicles saw a remarkable 88% increase, constituting 16% of all new registrations for the month. The growth in registrations was primarily driven by large fleet and business registrations, while private retail demand remained stable year-on-year.
US Used Vehicle Prices – Cox Automotive reveals that wholesale used-vehicle prices, adjusted for factors like vehicle mix, mileage, and seasonality, saw a decline of 1.6% in July compared to June. After six consecutive months of declines, the used vehicle pricing index has returned to levels last observed in April 2021. Cox notes that while used retail inventory continues to rebuild, and with retail sales showing summer strength, significant wholesale price declines are not anticipated through December.
US Auto Dealer Sentiment – Dealer sentiment in the United States showed a slight improvement in the second quarter of 2023, rising from 43 in the first quarter to 45. However, this figure remains below the threshold of 50, indicating that more dealers perceive the current auto market as weak rather than strong. The forward-looking market outlook index dropped from 52 to 47 in Q2, suggesting that a majority of auto dealers anticipate the market to be weak in the next three months rather than strong.
Semiconductors
Allegro MicroSystems – In a strategic move to drive innovation in TMR sensing technology for burgeoning applications in eMobility, Clean Energy, and Automation, Allegro MicroSystems has announced its intention to acquire Crocus Technology for $420 million in cash.
Renesas – Renesas has revealed its acquisition plans for cellular IoT chip and module designer Sequans at a value of $249 million. This strategic move will enhance Renesas’ offerings in the WAN/PAN/LAN markets, strengthening its market position.
Semis – The US Administration has enacted an executive order that will restrict US investments in Chinese entities operating within the semiconductors, microelectronics, quantum technology, and certain AI systems sectors. While specifics are yet to be outlined, the proposal is subject to public input.
Semi Sales – Global semiconductor sales experienced a 4.7% increase quarter-on-quarter in the second quarter, as reported by SIA. In June, sales witnessed a 1.7% month-on-month uptick. Regional variations included increases in the Americas, China, Japan, and Europe, while the Asia Pacific/All Other region saw a slight decrease. On a year-to-year basis, sales increased in Europe but decreased in Japan, the Americas, Asia Pacific/All Other, and China.
Hynix – Hynix unveiled a sample 321-layer 3D NAND chip boasting a 1 terabit TLC capacity at the Flash Memory Summit 2023. Anticipated to enter mass production in the first half of 2025, this chip marks an early-stage development milestone.
TSMC – TSMC’s plans to form a joint venture (JV) named European Semiconductor Manufacturing Company with Bosch, Infineon, and NXP have been announced. This JV will operate an advanced 300 mm semiconductor fab in Germany, focused on automotive and industrial semiconductors. The fab will employ TSMC’s process technologies with a monthly capacity of 40,000 wafers, and construction is set to commence in 2024 with production slated for late 2027. The ownership split will be 70% TSMC and 10% each for Bosch, Infineon, and NXP, with investments surpassing $10 billion.
TI – Texas Instruments (TI) is planning a significant investment of up to $1 billion to expand its Philippines back-end facility, according to an announcement from the president’s office of the country.
