With a 2035 deadline, California is set to stop all car, truck and SUV gas-powered sales and switch to electricity or hydrogen power to help transition to climate-friendly vehicles.
Nikki Indelicato is a Contributing Reporter at The National Digest based in New York. You can reach her at nicole.indelicato@thenationaldigest.com.
Mercedes-Benz is a German automaker known for creating some of the most collectible/personalized cars, convertibles, limousines in the world. Within the past decade, however, car experts have noticed a shift in the type of vehicles Mercedes releases, as it seems they’re focusing more on crossover vehicles, SUVs, and other more standardized options.
The subtle “rebranding” of vehicles and advertising that’s come from Mercedes has many in the industry thinking they’re switching gears in terms of the brand to advertise to a more accessible audience. Cars that are seen as “luxurious” or are purchased out of vanity have become a lot less popular within the past few years, especially luxury cars that are large and emulate more of a SUV aesthetic; something Mercedes is known for.
Besides the fact that we’re currently enduring one of the worst financial/economic crises in US history, many individuals are stepping away from spending their money on luxury vehicles and instead saving it for something more practical. When it comes to cars, many look for safety features more than anything else, so Mercedes has had to do some serious reworking.
One of the biggest criticisms that the brand has received since the dawn of its creation is that all of its vehicles essentially have the same interior design/technological features, and the only major difference is the size and shape of the cars.
According to reports from Automotive News, Mercedes is planning on dropping seven or more cars from the US Market. The reports come after Mercedes-Benz US CEO Nicholas Speeks told dealers during a June webinar that they would no longer be selling the models, but has yet to identify which ones would no longer be available.
This decision isn’t only so Mercedes can make room for more family-friendly and accessible vehicles, but also to make production of vehicles a lot easier. Currently, Mercedes offers over 100 different kinds of vehicle variants in terms of engine and transmission options; many car experts like to customize these features within their vehicles. However, the multitude of options delays production often and can slow down the rate at which they’re able to customize vehicles.
Additionally, all Mercedes car dealers need to be completely trained in learning about over 100 different car types and their specific internal features that can be customized. This is not only overwhelming for the dealers, but the customers as well! Research has shown that having so many options laid out in front of a customer can become overwhelming for them, and can actually turn them off the idea of buying.
The reports also suggest that Mercedes could save millions of dollars by simplifying their line up, and even increase sales of whatever vehicles are left. The initial rumors suggest that the company will likely pull some of their less-popular convertible and coupe models. This rumor is the most likely to actually be true, as Mercedes is currently the only car company to offer coupe and convertible cars in compact, mid, and full-size, and that doesn’t include the sports vehicles.
Overall, coupe and convertible sales for any brand of car has seen a dramatic decrease in the US within the past few years. Instead, people are putting safety first and going for SUVs or crossover vehicles. Mercedes should announce their new reduced line up within the coming months as the Covid-19 pandemic begins to slow down, so for now, only time will tell which vehicles will get the chop or not.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at eric.mastrota@thenationaldigest.com.
A merger between two car giants has seen the world’s fourth largest carmaker formed with both companies agreeing that the new company will have the “leadership, resources and scale to be at the forefront of a new era of sustainable mobility.”
France’s PSA, who own Peugeot, and Fiat Chrysler have agreed a deal that would create a combined revenue of $189 billion. Both companies confirmed their “combination agreement” would enable them to invest more in new technologies as well as enable them to become an industry leader.
Each company’s shareholders will own 50 percent with the deal believed to be reshaping the automobile industry thanks to the current revolution and further investment into developing self-driving vehicles as well as electric systems. Currently FCA are working on an electric version of the Fiat 500 while the PSA Group are launching several EVs including the Vauxhall Corsa-e and the Peugeot e-208.
The new corporation will have a combined operating profit of over $11 billion with a workforce of 400,000 around the world and 8.7 million automobile sales, meaning the company will be bigger than Hyundai-Kia and General Motors, while in Europe they would outsell long-standing Volkswagen, who has dominated sales.
Currently the company believes to make annual cost savings of $4.1 billion while there has been confirmation that no plants will have to close.
However the stronger purchasing power will provide around 40 percent of the cost savings, with increased product, platform and technology investments equating for a further 40 percent. These savings together should create over $3 billion.
Before the announcement their market capitalizations mean the new company will be valued at over $45 billion.
Italy’s Agnelli family controls FCA and will keep John Elkann on as Chairman while Carlos Tavares of PSA receives a mandate of five years as chief executive officer and confirmed, “our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with world-class products, technology and services.”
While the transaction is expected to be completed within the next 12 to 15 months. this is dependent on both companies’ regulatory clearances and their shareholders’ approval.
In October both companies confirmed they were in discussions of a merger resulting in shares increasing in PSA by 1.5 percent on Wednesday morning, though FCA’s stocks had not moved.
The portfolio of brands that both companies will bring to the table covers not only the mainstream sectors but also the premium and luxury segments. This means their brands will now include Alfa Romeo, Jeep and Dodge from FCA while PSA will bring Vauxhall, Citroën and Opel.
And while North America will be generating around 43 percent of the sales the biggest market will be across Europe, which equates for 46 percent of all revenues. This backs up the announcement that PSA-FCA will be focusing on its core markets of North America, Latin America and Europe, although they will also “reshape the strategy in other regions.” The companies have both had difficulties in the Chinese market in recent history and it is believed the new entity will be shifting some focus there.
The deal was not always FCA’s first choice as they were in talks with French rival Renault, however they fell through earlier in the year. While PSA is looking at its second high-profile agreement in the last two years after they bought Opel-Vauxhall from General Motors of the US in 2017, bringing about a huge change to the corporation.
To ensure that the balance of value between the two companies is level, FCA will be paying a $6.12billion special dividend to their shareholders. However, PSA will be distributing their 46% stake in components supplier Faurecia to its investors.
FCA is also working on a separation of its equity in Italian robot-making company Comau. Both companies will also be paying out a $1.22 billion dividend and once the merger has been completed FCA investors will receive one share each while PSA shareholders will each receive 1.742 shares.
Jefferies analyst Philippe Houchois confirmed the final terms would be “slightly improved” for PSA shareholders while the shares will be listed in New York, Paris and Milan. There will also be a seven-year period in which the group’s biggest investors – BPI, Dongfeng (which has agreed to drop their stake to just 4.5% meaning they will not be able to have a seat on the board), Exor and the Peugeot family – must keep their shareholding.
While the new name of the company has yet to be announced, FCA Chief Executive Mike Manley confirms, “this is a union of two companies with incredible brands and a skilled and dedicated workforce. Both have faced the toughest of times and have emerged as agile, smart, formidable competitors.”
Sandra Hart is a Contributing Editor at The National Digest based in the United Kingdom. You can reach her at inquiries@thenationaldigest.com.
This week saw the announcement that Sberbank, Russia’s largest lender, has agreed to join AI transport developer Cognitive Technology to create a new company, Cognitive Pilot, concentrating on developing driverless technologies. Looking to increase their portfolio of technology and artificial intelligence companies, Sberbank has agreed to a 30% stake of the new company, which aims to develop “digital economy projects in transport, agriculture, computer vision and artificial intelligence.”
Following the signing of a legally binding contract, Cognitive Technologies is now in control of 70% of the new company, yet no financial details have been released ahead of the deal’s completion in December. However this is not the first time that the state-owned Sberbank has entered the Russian digital economy with the organization spending over $1 billion on new companies. The company has recently completed deals with food delivery company Instamart, digital media company Ramber as well as with Mail.Ru after purchasing equity in the internet company.
In the same week as the announcement of the new company, Sberbank had already confirmed their acquisition of an 8% stake in Afipsky oil refinery. Cognitive Pilot is aiming to capitalize on the rapidly growing driverless car market however internet corporation Yandex are currently the market leaders, with the Russian company already testing their technology in several locations including Israel and Moscow. They have also been granted a license to start their testing on American soil in the summer of 2020.
It has also been confirmed that autonomous delivery robots were also being tested by Yandex. Olga Uskova, the founder of Cognitive Technologies and who will be in charge of the new company confirmed:
“Cutting down the number of road fatalities is one of the challenges of the new century. Saving people’s lives is what drives our team, and our technology level enables us to solve this task even today. It makes us feel like superheroes. The partnership with Sberbank will extend and speed up the use of our systems.”
It is believed that Cognitive Pilot will concentrate on working on ADAS – advanced driver-assistance systems – utilizing a mixture of autonomous control solutions as well as artificial intelligence, primarily for industrial equipment as well as land vehicles. By using solutions from Cognitive Technologies the ADAS’ will benefit from their ability to be able to adapt to all climates and weather thanks to the computer vision ‘relying on deep learning neural networks and millimetre band’ as well as the company’s high reliability.
Lev Khasis, First Deputy Chairman of the Executive Board, Sberbank explains;
“The world is about to face mainstream use of unmanned solutions and we are interested in Sberbank Group and our entire country being in the forefront of this trend. Cognitive Technologies already has products for transport, agriculture and automotive industries that are very popular among both Russian and foreign clients. This year, Sberbank has become the ultimate AI developer in Russia and we are sure that the expertise in unmanned technology will enjoy demand and contribute to the faster development of AI competence in Russia.”
Yet there are many that still argue whether or not self-driving cars are actually safe. Excitement surrounding driver-less cars has steadily grown since they were first mentioned back in 2004 with the theory that the cars need to not just be safe, but extra safe. Currently there is around 1 death per every 100 million miles driven in the United States – 37,000 people died from road incidents and car accidents in 2017 – so it stands to reason that self driving cars need to be safer than conventional cars currently are. And the companies working on these vehicles confirm that although they will be safer, how much safer nobody can guarantee as yet.
However, the RAND Corporation discovered that if driver-less cars are even just 10% safer than conventional cars they would still save more lives meaning we would not have to wait until they were 80 or 90 per cent safer before we could see them on our roads.
Senior Policy Researcher at research think tank RAND Corporation Marjory Blumenthal observed that “most people say, in a loose manner, that autonomous vehicles should be at least as good as human-driven conventional ones. But we’re having trouble both expressing that in concrete terms and actually making it happen.”
Cognitive Technologies has many high profile clients including Russian Railways and Hyundai Mobis. And thanks to the company developing autonomous control systems for trams, trains and agricultural they can also add Rusagro – a Russian agricultural company – to their growing client list. They also maintain several projects to develop systems for uncontrolled operations of locomotives, trams and agricultural machinery as well as build components for driver-less cars.
Cognitive Technologies have also won an award in the ‘Most Innovative Active Safety or ADAS Technology/Product/Service’ section of Tech.AD Berlin 2019 as well as continuously getting noted at many professional exhibitions and forums, both at home and abroad.
Sandra Hart is a Contributing Editor at The National Digest based in the United Kingdom. You can reach her at inquiries@thenationaldigest.com.