+++ AUDI sold 2.3 percent more cars in July on growing demand for the redesigned top-selling A4 saloon, though kept trailing behind German luxury rivals BMW and Mercedes-Benz.

Audi’s global sales increased to 149,400 cars from 146,073 a year earlier, the Ingolstadt-based carmaker said on Thursday, with its year-to-date deliveries up 5.2 percent to 1.10 million cars. Daimler’s Mercedes-Benz last week posted a 9.4 percent increase in sales to 163,770 cars, its best-ever July result, compared with a 4 percent gain at BMW’s core brand to 153,392. After 7 months, Mercedes-Benz is on course to become the world’s biggest luxury carmaker by sales, replacing BMW which has kept the lead since 2005. +++

+++ HYUNDAI and Kia fared relatively poorly in the first half of the year, while Volkswagen remained a global leader thanks to hefty discounts despite the emissions-cheating scandal. Hyundai sold 2.39 million cars worldwide in the first 6 months of the year, down 0.9 percent on-year, and Kia sold 1.46 million, down 4.7 percent. Kia saw the sharpest sales drop among the top 10 global automakers. But Volkswagen sold 5.2 million cars, up 2.1 percent. Its sales dwindled in Canada, Latin America, and the U.S., but increased 4 to 7 percent in China and Europe. Volkswagen made up for losses through an aggressive sales strategy, including discounts and development of low-cost SUVs, after sales tumbled in the wake of the emissions-rigging scandal. Toyota and Honda’s sales grew 0.3 percent and 6.7 percent. Honda’s worldwide sales got a boost from a 46 percent rise in Europe after the release of the new HR-V. BMW, Daimler and Ford saw their sales increase 5.8 percent, 6.6 percent, and 4.6 percent, while GM’s sales shrank 1.2 percent. Volkswagen, GM and Toyota maintained their top rankings, followed by Ford, Hyundai, Fiat Chrysler, and Nissan. Global market prospects are gloomy in the second half. Ford expects a 1 billion dollar loss over the next 3 years in the European market due to Brexit, and Nissan expects a tumble in operating profit due to a sales drop in the domestic market and a strengthening yen. +++

+++ MERCEDES has trademarked a series of model names centered around the letters “EQ”, possibly preparing for an alternative energy sub-brand. In June, it was reported in German media that Mercedes was considering an all-EV sub-brand in the vein of BMW’s “i” models. Now, Autocar has discovered that the company trademarked the following in the UK: EQA, EQC, EQE, EQG and EQS, EQ Inside, EQ Boost, Generation EQ and Generation MEQ. In addition, the term “Telligent” has also been trademarked. The report theorizes that these names could be used for either a sub-brand of alternative energy vehicles, most likely electric, or plug-in hybrids, to take on Tesla and BMW’s i models. When asked for comment by Motoring, a Mercedes-Benz senior PR manager in Australia acknowledged that there was “some truth to the report, but we will be concentrating our electric strategy on trucks, vans and cars”. It’s expected that this new sub-brand will debut at the upcoming Paris Motor Show in October. +++

+++ MITSUBISHI on Thursday revealed its new XM Concept crossover at the Gaikindo Indonesia International Auto Show. The XM Concept denotes X for crossover and M for multipurpose vehicle (MPV). Mitsubishi considers the vehicle a combination of the power, design and utility of a SUV with the spaciousness and comfort of an MPV. The model will enter production at the company’s new plant in Indonesia in 2017. It will be a rival of best-selling models such as the Toyota Avanza, Daihatsu Xenia, Suzuki Ertiga and Honda Mobilio. Mitsubishi Executive Vice President Kozo Shiraji said about 60 percent of vehicle demand in Indonesia was for MPVs. The automaker believed this “will increase rapidly”. +++

+++ NISSAN has come up with a new type of gasoline engine it says may make some of today’s advanced diesel engines obsolete. The new engine uses variable compression technology, which Nissan engineers say allows it at any given moment to choose an optimal compression ratio for combustion – a key factor in the trade-off between power and efficiency in all gasoline-fuelled engines. The technology gives the new engine the performance of turbo-charged gasoline engines while matching the power and fuel economy of today’s diesel and hybrid powertrains; a level of performance and efficiency the conventional gasoline engine has so far struggled to achieve. The potential breakthrough technology comes at a time when diesel engine technology has been tarnished by Volkswagen’s emissions cheating scandal. The German automaker admitted last year to using secret software to cheat exhaust emissions tests on its diesel cars, affecting millions of vehicles worldwide, and prompting the departure of the company’s CEO and other executives. “Diesel engine is a hot topic globally. We believe this new engine of ours is an ultimate gasoline engine that could over time replace the (advanced) diesel engine of today”, Kinichi Tanuma, a senior Nissan engineer who leads product development for the premium Infiniti brand, told reporters at a pre-launch briefing last month. “Everyone’s been working on variable compression and other technologies to significantly improve gasoline engine fuel economy … at least for the last 20 years or so”, said James Chao, Asia-Pacific managing director at consultant IHS. “Increasing the fuel efficiency of internal combustion engines is critical to automakers. Not all consumers will accept a battery electric vehicle solution. But significant challenges remain, such as increased complexity and cost, as well as potential vibration issues”. The new Variable Compression-Turbo (VC-T) powertrain, expected to be officially unveiled at next month’s Paris motor show, will initially be showcased in an Infiniti car to be unveiled next year, Nissan engineers said, without elaborating. Eventually, it’s expected to be used in Nissan cars and possibly by its alliance partner Renault. The turbo-charged, 2-liter, four-cylinder VC-T engine averages 27 percent better fuel economy than the 3.5-liter V6 engine it replaces, with comparable power and torque. Nissan says the new engine matches the diesel engine in torque; the amount of thrust that helps determine the car’s acceleration. The engine is also cheaper than today’s advanced turbo-charged diesel engines, Nissan engineers said at the briefing at the company’s technical and design center in Atsugi, south of Tokyo. They said it should also meet nitrogen oxide (NOx) and other emissions rules in certain markets without requiring costly treatment systems. The compression ratio measures how much the air-fuel mix is reduced, or compressed, in the gasoline engine’s cylinders before it’s ignited and produces energy. The higher the ratio, the more efficiently the engine works, producing better fuel economy and, with the addition of a turbo-charger, more power. Traditionally, design engineers had to fix a gasoline engine’s combustion compression ratio, essentially deciding whether to go for power or economy. Nissan says the new VC-T engine can choose an optimal compression ratio variably between 8:1 and 14:1. That compares with mainstream production gasoline engines that run at compression ratios of 8:1 to 10:1. Exotic sports cars and racing cars run at 12:1 or more. “We think the VC-T engine could replace or become an alternative to some of today’s advanced diesel engines”, Tanuma said, noting the new engine’s fuel economy and performance could be significantly boosted by coupling it to a gasoline-electric hybrid system, an option Nissan said it’s considering. +++

+++ A big upheaval is expected for the automotive market of SOUTH KOREA in the second half as a number of changes have already influenced the car market this year. The individual consumption tax cut on vehicles expired June 30 and this month the Korean government banned the majority of Audi and Volkswagen branded cars from being sold. While foreign carmakers are targeting the gap in the market left by Audi and Volkswagen, domestic carmakers are gearing up for fiercer competition as overall car sales dropped after tax cuts expired. Local carmakers’ major battlefield has been the midsize sedan market, with their flagship models having a good fight against the traditional top model in the sector, Hyundai’s Sonata. Accumulated sales in the first half of the year still placed Sonata as the winner in the sector. Sales following the tax cut expiration also proved Sonata’s throne to be solid. In July alone, 6,858 Sonatas were sold, vastly ahead of Chevrolet’s Malibu, which sold 4,618 units. However, considering 44 percent of the Sonatas sold were liquefied petroleum gas (LPG) models, which mostly are used as taxis, industry insiders say the winner in the sedan market is Malibu. Renault Samsung Motors’ SM6 (Talisman) remains firmly in third place though sales dropped a bit in July to 4,508 units. It’s still too early to think the product has lost steam. The carmaker released the SM6 diesel model this month and as 52.4 percent of the SM6 cars sold were the car’s higher-end trim SM6 R.E., priced as high as 35 million won, signaling customers are willing to pay more for a loaded sedan. Hyundai’s sister company Kia’s K5, on the other hand, has been performing poorly even though it’s been less than a year since the second-generation model was released. K5 had the second spot in the sector after Sonata until February, but slipped to fourth in rankings after the SM6 was launched in March and the new Malibu was released in May. Still, combined market share of Hyundai and Kia reached 66.6 percent in July encompassing all car segments, easing worries that their market share could fall below 65 percent. For the remaining half of the year, the fate of local automakers will largely depend on the performance of new car releases, industry insiders say. Hyundai and Kia have a newer generation of cars: the full-size sedan Hyundai Grandeur and i30, plus Kia Morning (Picanto) scheduled for release. Genesis, the luxe-brand from Hyundai, is also preparing to launch G80 Sport, a premium sports sedan introduced at the Busan International Motor Show in June. Renault Samsung Motors aims to maintain its popularity earned through the SM6 with the release of its SUV QM6 (Koleos) in the second half. GM Korea will introduce Camaro SS sports car and electric vehicle Bolt. However, despite a number of new releases, it is yet uncertain if the car market can expand as many consumers have delayed car purchases until the first half of next year to benefit from individual consumption tax cuts offered by the government. “Though new cars are scheduled to be launched, it will be difficult for the domestic auto market to expand due to global economic slowdown and expiration of the tax cut”, said Kim Pil-soo, an automotive engineering professor at Daelim University. Import car brands also face stiff competition. With aims to grab market share that previously was held by popular German brands Audi and Volkswagen, import car providers, especially Japanese and U.S. automakers that were holding relatively lower portion of the Korean market, are rolling out aggressive promotions. Japanese brands are offering interest-free installment plans to attract customers. High interest rates of between 5 percent and 7 percent imposed by import brands’ own financial companies have been one of the major customer complaints when buying foreign cars. Toyota will offer 36-month interest-free installments to customers buying its Avalon full-size sedan in August. Its flagship Camry sedan will be offered at an interest rate of 1 percent on a 24- month installment plan. Nissan and its luxe brand Infiniti will both offer interest-free plans, a strong swing to the market. Nissan’s full-size sedan Maxima and mid-size Altima will be offered without interest on 24-month payment plans while Infiniti’s Q50S hybrid sedan can be purchased through a 48-month interest- free installment plan. U.S. based automaker Ford Korea took a leap from its eighth ranking among import cars in June to fourth in July, taking over Volkswagen’s place. It sold 1,008 cars in July, an 11 percent year-on-year increase. Its popularity was backed by sales of the Escape (Kuga), which surpassed 3,000 units in the first half of this year. Having fewer diesel vehicles proved advantageous for the U.S. automaker. +++

+++ The head of VOLKSWAGEN’s South Korean unit apologised Thursday as he presented himself to state prosecutors for questioning over the German carmaker’s emissions fraud scandal. Johannes Thammer, CEO of Volkswagen Korea, was summoned by the Seoul Central District Prosecutors’ Office a week after South Korea banned the sale of 80 Volkswagen models. “First of all, I want to say that I am sorry for the situation and we will do everything, faithfully, to cooperate with the prosecutor”, Thammer was quoted as saying by the Yonhap news agency as he arrived at the office. Thammer, who has been in his current post since December 2012, is expected to be questioned over allegations that Volkswagen Korea fabricated test results on engine noise levels, fuel efficiency and emissions. The world’s second-largest automaker faces legal action in several countries, after it admitted in September last year to faking US emissions tests on some of its diesel-engined vehicles. Last week the environment ministry said it was revoking the certification for 80 Volkswagen models, or a total of around 83,000 vehicles, largely because of forged documentation. It also slapped the company with a $16 million fine. In November last year, Seoul had ordered the company to recall more than 125,000 diesel-powered cars sold in South Korea and imposed a fine of $12.3 million. Sales of Volkswagen in South Korea plunged 33 percent to 12,463 vehicles in the first half of this year from a year earlier. The German carmaker sold around 69,000 cars here in 2015. Foreign carmakers, especially German brands like Volkswagen, have steadily expanded their presence in the South’s auto market long dominated by the local giant Hyundai and its affiliate Kia. +++

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