Volvo is an extraordinarily important car brand to me, which is why the shakiness of its leadership and uncertainty over its ultimate direction has been a bit of a bummer. The company’s board has found a new chief, and it just so happens he comes from another brand I care about.
Yes, I’ve found a new reason to talk about my favorite modern Czech automaker in The Morning Dump, but this time it’s valid because this time it will impact the cars you can buy in the United States. It’s also good news for Volkswagen Group which, yeah, needs some good news after again revising down its profit target for the year.
The biggest subprime auto lender in the United States is going to forgive the debts of 55,000 borrowers and pay restitution, even if it’s a little late for a lot of buyers. BYD is a massive, major player that doesn’t always get the respect it deserves. I can prove definitively that it’s a real OEM with the last story of the day.
Volvo, Prepare To Get Zellmer’d
Škoda has been one of the few bright spots in an otherwise dark few years for the Volkswagen Group. The brand has consistently produced attractive, affordable cars with a range of powertrain options. More importantly, the Czech carmaker has been able to sell a lot of cars while also making money.
One should never ascribe the success or failure of a car brand (or any enterprise) to one individual. Still, as CEO, Klaus Zellmer had to sit in the big chair right as the EV head fake was starting to fade and in the midst of a semiconductor shortage. As a primarily European automaker, Škoda also got hit hard by the knock-on effects of the Russian invasion of Ukraine just as Zellmer took over.
The company has done great since then. Under Zellmer, the brand didn’t lose its head chasing fads. It didn’t promise too much — just than it would make cars people wanted and sell them at a decent price. Škoda has also been relatively drama free for a VW Group brand.
Last year, as most European brands cratered, Škoda returned to sales of over one million cars, and did so while returning nearly $34 billion in revenue and profits of a little under $3 billion for a margin of about 8.3%, which is great these days.
Volvo Cars took notice, and has appointed Zellmer to the head job at the company, replacing Håkan Samuelsson, who took over for former Dyson exec Jim Rowan after a short and rocky stint, who himself was supposed to be a replacement for Samuelsson.
The old company put out a statement about Zellmer that was pretty nice:
Under his leadership, Škoda Auto has greatly strengthened its position as one of Europe’s most successful volume brands. The brand rose from tenth place in the European registration rankings in 2022 to second place in the first half of 2026. At the same time, the company achieved record results in sales volumes, revenue and profitability, consistently advanced its e-mobility strategy and accelerated its internationalisation, particularly in India and Southeast Asia.
The Supervisory Board would like to thank Klaus Zellmer for his great commitment and his significant contribution to the continued development of the Škoda brand.
Chief Financial Officer Holger Peters will run things until a full-time replacement can be found. What’s Volvo saying about this?
Via Bloomberg we’ve got a statement:
The German has “a strong record of guiding organizations through transformation and changing market conditions,” Volvo Car Chairman Li Shufu said in the statement. “His experience from both the high-end premium segment and high-volume brands is an excellent fit.”
Volvo needs all the help it can get, having overextended itself on EVs, botched the rollout of key vehicles, and killed the station wagon. A new product blitz is coming and Volvo seems to understand that there’s no one-size-fits-all solution for cars that’ll sell in Shanghai, London, and Lexington.
If anyone can save Volvo, it’s Zellmer. I just hope Škoda gets someone good as a replacement.
Volkswagen Plans To Make A 1% Margin This Year
Even if the Czech brand is profitable this year, it’s not going to be profitable enough to make up for all the losses at the various parts of Volkswagen, which revised its profit outlook down from a weak 4% to an even weaker 1%. The market’s not loving the action.
Shares were 0.5% lower in mid-morning deals, extending Friday’s 8.3% decline after Volkswagen downgraded its expected operating return on sales to 1%, from a previous forecast of 4% to 5.5%. It blamed an impairment related to its large holding in Porsche, a “further deterioration” in the market environment — particularly in China — and restructuring expenses.
“An accelerated shift in demand in favor of battery-electric vehicles … will lead to developments falling short of original expectations, especially for the Audi and Volkswagen Passenger Cars brands,” the company added.
Separately, Volkswagen was ejected from the Euro Stoxx 50 on Monday, a move announced earlier this month as part of the index’s annual update to reflect the euro area’s biggest companies across major sectors.
The last time Volkswagen was in this bad of shape it was recovering from the global financial crisis.
Credit Acceptance Corp. Accepts $710 Million Settlement
The Credit Acceptance Corporation is the nation’s largest subprime lender. It’s also been a party to a lawsuit originally brought by New York Attorney General Letitia James and the Consumer Financial Protection Bureau (the CFPB pulled out of the lawsuit without getting anything, likely because the Trump administration hates the consumer protection agency).
A group representing most of the attorneys general from across the United States kept the lawsuit going and scored a massive settlement.
From the NY AG’s office:
As a result, CAC will eliminate all debt owed by more than 55,000 consumers nationwide, resulting in more than $630 million in debt relief on auto loans that were destined to fail from the start. In addition, CAC will pay $60 million in restitution to thousands of additional consumers who were misled and lost their cars within months of taking out their loans with CAC. Finally, CAC will pay a $15.5 million penalty to the states. In total, New York will receive approximately $34 million in debt relief for consumers and restitution and penalty payments.
In addition to financial payments, CAC must adopt industry-leading practices to protect consumers. If certain at-risk borrowers default on car loans from CAC within 12 or 18 months and have their vehicle repossessed and sold, CAC must forgive 95 percent of their debt and will only be allowed to collect the remaining five percent. CAC is also barred from suing to collect the debt or reselling it to others. To prevent consumers from paying for unwanted add-ons, CAC must contact consumers outside of the dealer showroom to clearly inform them of any products they purchased and offer them a process to cancel those products while keeping their vehicles.
While CAC admitted no wrongdoing, the wrongdoing was extra wrong as Reuters notes:
In one alleged instance, Credit Acceptance awarded a $260-a-month loan to a mother of two though she made just $950 per month. The company collected $8,400 from her, and her vehicle was repossessed twice, court papers show.
BYD Recalls Trucks For Spare Wheel That Might Just Fall Off
The BYD Shark isn’t just a random, low volume product in Australia, it’s lately been the best-selling truck of any kind for non-commercial buyers. And to prove the truck is a real player, and BYD is a real car company, it’s just gotten caught in a truly embarrassing recall.
According to News.com.au, the spare wheel under the bed could fall off the car unexpectedly. Why?
The company says “in certain circumstances incorrect installation of the spare wheel, incorrect positioning of the spare wheel tray or insufficient fastening torque may cause abnormal wear of the spare wheel support cable”.
Reading between the lines, the wheel is only held in place by a thin cable. That cable will be replaced by much stronger chains.
What I’m Listening To While Writing TMD
Wait, did The Weeknd just sample the theme from Neon Genesis Evangelion for his new song “Toyko” and perform it live this weekend? Yes. Yes he did. Damn, that’s cool.
The Big Question
What dose Volvo need to do to survive?
Top photo: Golden Princess Film/Škoda
The post Volvo Just Got A Stone Cold Killer For CEO appeared first on The Autopian.
