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Here’s How Car Companies Make Money


An Indian student of ‘Japan-India Institute for Manufacturing’ (JIM) attends a workshop supported by Maruti Suzuki India Ltd., at Ganpat University in Kherva, some 85 km from Ahmedabad on July 4, 2018.

These past years in the auto industry have been strange. Plants have shut down over Covid, supplies dwindling to a trickle, yet profits are up. How do they do it? Maruti Suzuki in India makes the case clear. All that and more in The Morning Shift for January 26, 2022.

1st Gear: Maruti Suzuki Profits Up As Sales Down

The continuing refrain from the car industry during the pandemic is that profits are up as sales are down. That is to say, even amid production cuts, car companies have been able to make even more money than ever before. How are they doing it? A Bloomberg report on India’s automotive powerhouse Maruti Suzuki gives a clearer picture:

Maruti Suzuki India Ltd., the nation’s biggest carmaker, reported better-than-expected quarterly income, as higher vehicle prices and cost cuts boosted margins.

Net income was 10.1 billion rupees ($135 million) in the three months ended Dec. 31, compared with 19.4 billion rupees a year earlier, the unit of Japan’s Suzuki Motor Corp. said in a statement Tuesday. The average estimate of analysts tracked by Bloomberg was for profit of 9.1 billion rupees. Revenue of 232.5 billion rupees beat the 231.1 billion rupees forecast.

Maruti shares jumped 6.8% to 8,602.60 rupees in Mumbai, reaching their highest level since September 2018. It was the best performing stock of the day on the S&P BSE Sensex.

The automaker raised prices of some models including its popular Swift last year to help offset higher input costs.

With production slowing due to a global shortage of semiconductors, Maruti said “there was no lack of demand” and 240,000 customers were awaiting delivery of vehicles as of the end of December.

Basically, demand is so high that Maruti Suzuki can raise prices or simply just build higher-priced, higher-profit-margin vehicles and people will fork out the extra for them. That’s the trick! That’s the whole thing. It’s been working in America, and it seems to be working fine in India, too.

2nd Gear: UK: People In Self-Driving Cars Would Be No Longer Responsible

This is a wild one from The Guardian, proposing that people not be responsible for bad things that happen while they’re in a self-driving car:

Users of self-driving cars should have immunity from a wide range of motoring offences, including dangerous driving, speeding and jumping red lights, Britain’s law commissions have jointly recommended.

The Law Commission for England and Wales and the Scottish Law Commission propose creation of an Automated Vehicles Act to reflect the “profound legal consequences” of self-driving cars. The person in the driving seat would no longer responsible for how the car drives; instead, the company or body that obtained authorisation for the self-driving vehicle would face regulatory sanctions if anything went wrong.

In a summary of the report, published on Wednesday, the commissions say: “While a vehicle is driving itself, we do not think that a human should be required to respond to events in the absence of a transition demand (a requirement for the driver to take control). It is unrealistic to expect someone who is not paying attention to the road to deal with (for example) a tyre blow-out or a closed road sign. Even hearing ambulance sirens will be difficult for those with a hearing impairment or listening to loud music.”

I guess this makes sense, as people riding a bus are not at fault if the driver of the bus, say, crashes into a building. Still, it feels weird.

3rd Gear: Nissan Recalls 689,000 Rogues For Fire Risk

Making cars is hard, and we have a new recall over some bad wiring at Nissan. From Automotive News:

Nissan North America is recalling nearly 689,000 Rogue compact crossovers in the U.S. for potential corrosion to the electrical connector under the dash that may increase the risk of a fire.

The affected Rogue vehicles are from the 2014-16 model years.

“If water and salt collect in the driver’s side foot well, it may wick up the dash side harness tape and enter the connector,” according to a defect information report submitted to NHTSA Friday.

Water and salt on the roads? Perish the thought.

4th Gear: What’s Going On With Bentley’s EV

I’ve seen some pretty plain reporting on Bentley’s upcoming EV. Here’s what’s behind it:

5th Gear: VW Boss Tests Positive For Covid

Herbert Diess is in quarantine, per Bloomberg:

Volkswagen Group CEO Herbert Diess tested positive for coronavirus late last week and is continuing to work in quarantine at his home.

“He has been available for all phone calls and meetings,” spokeswoman Nicole Mommsen said by phone. Diess has not experienced any symptoms “that might have prevented him from doing his job.”

Diess, 63, is vaccinated and has received a booster vaccination, which means he can leave quarantine after seven days if he tests negative. He did not have any major meetings planned in the next week.

Reverse: We Love You, Ranger 3

Shout out to Ranger 3, which decided it had better things to do than look at the Moon, and went on a vacation instead. From Wikipedia:

Ranger 3 was a space exploration mission conducted by NASA to study the Moon. The Ranger 3 robotic spacecraft was launched January 26, 1962 as part of the Ranger program. Due to a series of malfunctions, the spacecraft missed the Moon by 22,000 mi (35,000 km) and entered a heliocentric orbit.

Neutral: How Are You?

The last parts I need to get the old Litespeed up and running are coming this week, so that means it’l be time to sell off my wonderful old 1980s Fuji Sundance. I just have to un-seize this seatpost first. It is currently soaking in PB Blaster and I’m looking for someone I know who has a vice.



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