+++ The DBS may be ASTON MARTIN ’s flagship sports car, but it’s in a market segment that shows little sign of significant growth. That’s why the firm has explored the launch of an SUV by reviving the Lagonda nameplate on a super-luxury 4x4. Although the design of a designstudie shown at Geneva in 2009 didn’t meet with critical acclaim, the Lagonda project is very much alive and Aston boss Ulrich Bez has recently alluded to an updated Lagonda concept “in the coming year”. A second Lagonda model, a saloon, has already been mooted. The British SUV will go a long way to better exploiting demand in the Chinese market, where the appeal of super-GTs like the DBS is limited. “The DBS sells in a global market segment that is struggling to rebound back to where it was, and that’s largely down to China”, said IHS Automotive analyst Colin Couchman. “The traditional markets for supercars (the US and Europe) are still depressed”, he added. “Although the Chinese market remains buoyant, that won’t feed through to Aston Martin because the Chinese don’t yet see the value of displaying their wealth through owning an expensive sports car”. IHS figures show (based on models in the 300,000 euro to sub-400,000 bracket) that the global super-GT coupé market won’t recover to its pre-recession high of just over 9,200 units in 2008 until 2014 at the earliest. That’s despite the launch of the successful Mercedes-Benz SLS AMG in 2010, a car that has expanded global sales by about 2,700 cars a year. The global popularity of Mercedes' second luxury coupé (the AMG-tuned CL) shouldn’t be underestimated, either. It accounts for about a quarter of the market, vying with the Ferrari 458 for the title of best-seller. A new CL AMG is due to arrive in 2015, potentially giving the segment a welcome nudge upwards. The DBS operates in a more exclusive, niche position, peaking in 2009 with 691 units and 2010 at 824 with the Volante. The coupé has averaged 475 cars a year over the past 5 years, which is just 5 per cent of global sales in the super-GT coupé segment. Even its nearest price rival, the Lamborghini Gallardo, takes about twice that, according to IHS. So with sales of super-GTs only trickling along, it’s easy to see why supercar makers are turning to SUVs, which are proving much more resilient to the recession. That’s particularly because they can be used every day in countries like China, India and Russia, where poor road infrastructure can make a low-slung two-seater impractical. It’s why Lamborghini recently showed its Urus concept in Beijing and why Bentley will give a SUV the go-ahead this year. It must be no coincidence that the Lagonda is tipped to start at about 300,000 euro in The Netherlands, so top-end models will nudge 350,000 euro, the sweet spot where the DBS, 458 Italia, CL AMG and SLS models converge. +++ Cars built in GREAT BRITAIN helped drive exports to a record high in March, as the UK sold more cars and parts abroad than it imported for the first time in 36 years. The first quarterly trade surplus in cars and automotive parts since 1976 helped total exports of UK goods climb by 5.8 percent. However there were growing concerns over demand from eurozone trading partners. The deficit in cars traded with the EU, the UK’s biggest trading partner, widened as exports remained flat. The performance was offset by a strong increase in British car exports to the rest of the world (led by the US). +++ JAGUAR LAND ROVER is to spend an extra 1 billion pound with UK suppliers, boosting the economy around its plant in Merseyside. The car maker is to increase orders for components for the Range Rover Evoque over the next 4 years because of better-than-expected demand for the vehicle, which is produced in Halewood. The spending comes on top of 2 billion pound of contracts already agreed with more than 40 UK suppliers. Vince Cable, the Business Secretary, said: "The very welcome news that Jaguar Land Rover is spending extra money with UK suppliers is another indication of the strength of the UK auto sector and the commitment to the UK of major producers and exporters like JLR". Jaguar Land Rover also said that it is to create 300 jobs in Merseyside by opening a new components warehouse. The car maker will use the site to free up space in its Halewood plant and increase production of the Evoque and Land Rover Freelander. The components warehouse will be located close to Vauxhall's car plant in Ellesmere Port. Ralf Speth, JLR chief executive, said: "The announcements demonstrate JLR's clear ambition for continued growth". +++ LOLA Cars International is to go into administration, parent company Lola Group Holdings has confirmed. The group’s fabrication arm, Lola Composites, will also be affected by the decision to appoint an administrator to handle its affairs. Both companies are based at the group’s headquarters in Huntingdon, Cambridgeshire. Lola Cars International was created by automotive engineer Eric Broadley in 1958 and enjoyed prolific success across many motor sport disciplines, particularly sports cars and Indycar racing. Former racer and entrepreneur Martin Birrane acquired the company in 1997. In recent years, the firm diversified into other industry areas, creating Lola Composites Limited to work in the defence, aerospace, communications, renewable energy, automotive and motorsports markets. The company worked with Caterham on elements of the latter’s hardcore SP/300R track day car. The move to appoint an administrator has been blamed on "the economic downturn and the decision of HM Revenue and Customs not to pay ongoing research and development tax credits". The combined effect of those factors has caused a serious cash flow problem for the 2 elements of Lola’s business. A statement from Lola said appointing an administrator would allow “the Lola board to continue its discussions with possible investors and prospective purchasers with a view to securing the best outcome for the staff, creditors and customers of both businesses”. The company said it would make no further comment on the situation until 21 May. +++ The new MERCEDES-BENZ A-Class will offer class-leading performance, economy and emissions thanks to a range of specially developed turbo petrol and diesel engines, all with the latest stop-start tech. Leading the charge will be the Renault-derived 1.5-litre diesel in the A180 CDI. It emits 98 gram/km of CO2 (the lowest of any Mercedes) and means exemption from tax, while 110 hp and 260 Nm of torque should mean decent pace. Next in the diesel line-up is the A200 CDI. It uses Mercedes’ tried and tested 1.8-litre, but is revised to meet Euro VI emissions rules: it offers 111 gram/km of CO2. This engine delivers 136 hp and 300 Nm of torque. Topping the diesel range is the A220 CDI, featuring a 170 hp 2.1-litre with 350 Nm of torque, for 0-100 km/h in 7.8 seconds. Economy and emissions figures for this car have yet to be released. All diesels get new hydraulic engine mounts to help reduce vibration and noise. Petrol A-Class buyers can pick from 3 new turbos. The A180 has a 1.6 with 122 hp and 200 Nm of torque and emits 128 gram/km. A higher-performance version of this engine is used in the A200; power and torque are increased to 156 hp and 250 Nm. Finally, there’s the flagship A250, which gets a 2.0-litre petrol turbo with 211 hp and 350 Nm, does 0-100 km/h in 6.6 seconds and hits 250 km/h. This engine still offers 143 gram/km, but is only available with Mercedes’ all-new 7-speed dual-clutch automatic box. +++ The head of General Motors’ OPEL arm told that he would have to restructure production of a key model in order to help return the European operation to profitability. GM is in the midst of making intricate and politically sensitive decisions on future product allocation at its plants, including for vehicles made in conjunction with PSA (Peugeot Citroën), its French alliance partner. GM, which made a $747m pre-tax loss in Europe last year, is barred under its current agreement with unions from closing plants or sacking workers at Opel/Vauxhall before 2014. But workers fear cuts could follow that date as weak European demand has left Opel’s plants under-used. Mr Stracke is set to present a full business plan to Opel’s supervisory board in June but outlined some of its key themes already. “It is in no way a pure cost-cutting plan, rather it will be a comprehensive strategy under which we will quickly return to profitability”, he told a gathering of several thousand employees. “By 2016 we will clearly improve our margins, market share and revenues”. Management’s goal is to move to a 3-shift production at all Opel factories in order to raise capacity utilisation, Mr Stracke said. But due to demand levels in Europe, this would only make sense if the next version of the Astra is produced at 2 plants, instead of the current 3. “If we operate 2 plants on a 3-shift basis, the production costs for the next generation of the Astra will clearly be below today’s level. Today we have three factories operating with two shifts”, he said. Although Mr Stracke did not specify plans for individual plants, labour representatives say the UK’s Ellesmere Port and Poland’s Gliwice are likely to continue making the Astra, while Rüsselsheim could lose out. Worker representatives fear GM may compensate Rüsselsheim by shifting production of another model from Bochum, Germany. Therefore, the Bochum plant is considered by workers to be most at risk. As an alternative to plant closures, workers have urged GM to export more vehicles from Europe in order to raise capacity utilisation. Mr Stracke said Opel would gain new markets, such as Australia, North Africa and the Middle East, while Opel’s activities in China, Russia and Turkey would also be increased. However, exports alone would not be sufficient. “We have to do our homework in Europe”, he said. He also confirmed talks with GM management about the possibility of shifting some Chevrolet production to Europe; a move which trade unions support) and reiterated that Opel would seek to raise margins by reducing material costs and production complexity. German politicians have raised pressure on GM to find a solution that avoids job cuts but have so far ruled out state aid. +++ Initial tests of the PORSCHE 918 Spyder have resulted in performance and economy figures “in line with the high expectations” Porsche initially claimed, the German sports car firm has confirmed. The 918 Spyder, due on sale in September 2013, has an innovative petrol-electric hybrid system. An electric motor drives the front wheels, and a mid-mounted 4.6-litre V8 mated to an electric motor within the transmission housing drives the rear wheels. Porsche claims a combined power output of the system of 770 hp. Despite this huge power figure, CO2 emissions are just 70g/km. Porsche confirmed it was meeting development targets and the car remains on schedule for launch. Porsche has also explained the livery of the prototypes is inspired by the classic Porsche 917 racer liveries. +++ Akio Toyoda has coped with a global recession, a disastrous recall and devastating natural disasters since becoming president of TOYOTA. Now the car giant expects double-digit sales growth and to nearly triple net profits this fiscal year. As with a new car on an open road, investors might now get to see what Mr Toyoda, grandson of the company’s founder, can really do. Start with how this clear-road-ahead Toyota looks. Sales, and talk of new models, are attractive, but perhaps a little flashy. Selling 18 per cent more cars is based on expecting racy growth in North America and Asia, outside Japan. Industry expectations are for double-digit growth (just) in those markets, but Toyota is gearing up for 26 per cent and 34 per cent respectively. And this is not off a very low base: despite last year’s supply disruptions overall sales were steady. As ever, the real power must come from under the bonnet. The good news is that Toyota’s financial division has produced more than 90 per cent of operating profits over the past 3 years. Fire up car production and avoid costly shutdowns, supply chain disruptions or recalls, and extra horsepower should not be hard to find. The company anticipates a 180 per cent, or 560 billion yen, improvement in operating profits. Assuming it hits its targets, that would more than double its operating margin to 5 per cent, a level still only barely at its pre-financial crisis average. There is also the yen to factor in. Currency effects took 250 billion yen out of net income in the past year, almost halving it along the way. Toyota, which has openly committed to maintaining domestic production, does not think the yen will strengthen, even though that has been a vain hope over the past 3 years. Still, its shares have gained a fifth this year, well ahead of Honda or Nissan. At 16 times forward earnings, they are just below their long-term average. Mr Toyoda may be on open roads, but he has navigated enough problems to know that most drives rarely go according to plan. +++ General Motors will deliver a significant economic boost to the UK by announcing that it is keeping its Ellesmere Port factory and saving 2,100 jobs; if workers vote in favour of a new pay deal. Workers at the VAUXHALL plant in Merseyside will vote on proposals to change their working conditions, which are thought to include round-the-clock manufacturing, weekend working, and more staff. If the proposals are passed then GM is scheduled to hold a press conference this morning to confirm that it will pour millions of pounds of new investment into the plant and end months of uncertainty about its future. There have been major fears that the Ellesmere Port plant could close because GM is looking to cut capacity in Europe to stem years of losses. However, the US car maker is instead set to increase production at the plant and create around 700 jobs by deciding that the next-generation Astra will be manufactured at Ellesmere Port. The decision follows weeks of negotiations with the Government, which could fund the training of workers, and unions. It is major vote of confidence in UK workers over their counterparts in German, where GM could now close its Bochum plant. Vince Cable, the Business Secretary, said: "Huge efforts have been made to try to secure the future of the Vauxhall plant at Ellesmere Port and the Government has played an important role in making the progress we have so far. “The decision to ballot the workforce signals a very strong vote of confidence by General Motors in the UK automotive industry and is the culmination of weeks of hard work and behind the scenes talking between the company, the unions and the Government. "This is a positive step. But we are not there yet. Important decisions lie ahead and I strongly encourage the workforce to support the recommendations of the union leadership and to see Ellesmere Port continuing to make great quality cars beyond the turn of the decade. We hope that there can now be a speedy resolution so that the uncertainty can be removed and Vauxhall’s workers can get back to doing what they do best: making cars”. +++