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Sony Honda EV venture's plan for online sales has dealers squirming

TOKYO/DETROIT — A new joint venture formed by Japan's Sony Group Corp and Honda Motor plans to introduce a premium electric vehicle later this decade, and the automaker's U.S. dealers are anxious to be part of the sales process. Sony Honda Mobility said on Thursday it was aiming to deliver the first of the unnamed EV by 2026, starting in the United States, and will sell them online. The success of Tesla at selling EVs without franchised dealers is putting pressure on established automakers to overhaul their retail networks. That leaves dealers across most brands concerned about their place in the changing world and whether profits will be squeezed. The online aspect of the Sony Honda plan, as well as the lack of details around how the vehicle will be sold and serviced, has raised questions with the Honda and Acura brand dealers. Many nonetheless expect Honda to work through the existing retail network. "These issues are certainly a concern," said Brian Benstock, general manager and vice president of Paragon Honda and Paragon Acura in Queens, New York. "The best path forward is with the dealers." "We have a role (automakers) can't replicate," said Benstock, who also is on the Acura national dealer advisory board and has spoken with Honda officials about the new vehicle. "There's no way that Honda wants to hurt their existing dealer body." Some dealers questioned why Honda would even consider trying to work outside the current U.S. sales network given its national reach. Honda has about 1,100 Honda dealers and 270 Acura dealers. A Honda spokesperson referred questions about the joint venture to the new company. Sony Honda spokesperson Mai Nagadome said there are still a lot of details to finalize, but selling through the dealers has not been ruled out and customers would feel uneasy without some kind of after-sales service process. "The cost of continuing to develop (internal combustion engine) products along with EVs and autonomous tech and software for the next generation vehicles is proving to be quite the challenge," said Peter Hennessy, dealer principal of Atlanta-based Hennessy Automobile Companies, which includes a Honda store. "I get teaming up with Sony, but it should be done in conjunction with the dealer network, not outside it," he added.

Japan carmakers vouch for safety of some Kobe Steel parts

TOKYO — Four Japanese automakers on Thursday said they found no safety issues with aluminum parts supplied by Kobe Steel Ltd, allaying some concerns that falsified quality data on products from the steelmaker had compromised their vehicles. Kobe Steel shares surged after the car makers' statements, but the steelmaker still has to contend with a U.S. Justice Department probe, while checks continue at hundreds of companies involved in complex supply chains spanning the globe. Japan's third-biggest steelmaker admitted earlier this month it falsified specifications on the strength and durability of aluminum, copper and steel products, along with materials for optical disks. The falsifications stretch back for more than 10 years, a senior executive told Reuters this week. Since then, global automakers, aircraft companies and other manufacturers have scrambled to identify potential hazards in their products. Toyota, Honda, Nissan and Mazda said that hoods and other exterior parts used in their cars which were made from aluminum directly supplied by Kobe Steel were safe. Kobe Steel shares ended the day nearly 7 percent higher but are still down by more than a third since it announced the data falsification. Automakers are still making checks on other parts, including those that they received through their parts suppliers. "We confirmed that the materials satisfy applicable statutory standards, and our own internal standard, for key safety and durability requirements for vehicles," Toyota said in a statement. Toyota, one of the world's largest automakers, identified aluminum plates supplied by Kobe Steel for the hoods and rear hatches of Toyota and Lexus brand vehicles. Though outside the automaker's specifications, they were still safe to use. While Subaru and other carmakers said they were still investigating the issue, the announcements by Toyota, Honda, Nissan and Mazda suggest that Kobe Steel's cheating scandal may have a limited impact on product safety."SERIOUS SITUATION" Nonetheless, the company's fate hangs in the balance while checks are being carried out. It must report to Japan's industry ministry by around the end of next week on any safety concerns and provide a more extensive account of the problems a fortnight later. Industry leaders have reached a consensus that Kobe Steel is in a "serious situation," a senior Japanese manufacturing executive told Reuters.

Honda: We won't be able to sell ICE cars in China by 2025

China's push to clean up the country's woeful air pollution levels could mean the end of the traditional internal combustion engine there. In an interview with WardsAuto, Keiji Ohtsu, Honda's chief technology strategy officer at the company's automobile R&D center, predicts a lineup only of models with electric assistance in the country within a decade. He also discusses the Japanese automaker's green car goals worldwide. Ohtsu foresees China adopting some of the strictest fuel economy standards in the world in the coming years. "In 2025, we don't expect to be able to sell conventional internal-combustion engines [there], meaning we will be selling mostly hybrids including plug-in types," he said to WardsAuto. China's push to clean up its air comes as major cities continue to struggle with massive levels of pollution. For example, Beijing recently banned half of the cars from the road due to dire levels of smog. To fight back, the government has pushed automakers to launch more plug-ins, and the strategy has shown some success. China's BYD has already become the world's largest producer of plug-in vehicles in 2015. Even outside of China, Honda intends to become a far greener automaker in the coming years. In the near term, the company expects 20 percent of its global volume could be hybrids by 2020. According to Ohtsu, as much as 80 percent of Japanese deliveries could have some form or electrification by that time, but the US would be closer to 20 percent. However, the company sees hybrids more as a stepping stone than as the future of motoring, and the mass adoption of hydrogen is the real goal. "We think that fuel-cell vehicles will come into the mainstream in 2030, along with battery-powered electric cars. We also feel that going forward hydrogen will be the best fuel alternative," Ohtsu said to WardsAuto. Honda's experimental FCEV (pictured above) already hints at the brand's future direction.