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+++ AUDI will delay technology projects at its German base to cut costs, sources at the company said, as it grapples with the Volkswagen group’s emissions scandal and multi-million-euro investments in electric cars and autonomous driving. Audi, Volkswagen’s profit engine, has said it will scale back its conventional car programme to fund a strategic shift to green vehicles and digital services through 2025 as competition with German rivals BMW and Mercedes-Benz heats up. But cutbacks will also affect next-generation technology projects intended to help Audi clean up its image in the wake of the emissions scandal, 2 sources at Audi told. Among other projects, Audi will postpone a test-track for self-driving vehicles and facilities to make batteries and concept cars, the sources said. A spokesman for Audi said projects pertaining to a planned technology park at Audi’s home in Ingolstadt dubbed “In-Campus” would be postponed for the foreseeable future, without elaborating. Some analysts bemoan the fact that, although Audi benefits from the scale effects of its parent Volkswagen, it still invests more cash in property, plant and equipment than BMW or Daimler’s Mercedes-Benz. Evercore ISI analyst Arndt Ellinghorst said there was “room for improvement” at Audi on trimming the costs of physical assets, adding: “We welcome the fact that all parts of Volkswagen are looking to lower their excessively high costs”. That message is not well received by workers. Audi’s works council, whose members hold half the seats on the supervisory board, said the company must build more electric cars in Ingolstadt after criticizing management for plans to make Audi’s first mass-produced electric model outside Germany, in Brussels. Delaying investments in Ingolstadt could undermine employment at Audi’s base, a works council spokesman said, just as the plant is losing production of the top-selling Q5 to a new factory in Mexico. “That’s why In-Campus must not be adjourned indefinitely”, he said. +++

+++ BMW is waving the white flag on its chances of becoming the United States’ best-selling luxury brand for the third consecutive year. Although there are still more than 2 months to go in the selling season, BMW says there is no chance that it will be able to catch Mercedes-Benz for the sales crown. BMW has been the best-selling premium brand in the U.S. for 4 out of the last 5 years. BMW says its sales are lagging Mercedes because of a lack of SUVs. Whereas such cars account for about 45 percent of sales for other luxury brands, BMW’s sales mix is running at about 40 percent. “We can clearly see and compare our share of SUVs to what others have, and we are still trailing”, Ludwig Willisch, CEO of BMW of North America, told Automotive News. Willisch estimates that BMW’s share of SUVs is about “5 percent lower, and 1 percent is roughly 3,000 cars”. When asked if BMW could allocate 15,000 more SUVs to the U.S. market, Willisch said, “Don’t expect miracles”. Through September BMW’s U.S. deliveries have fallen 7.9 percent to 230,133 vehicles. BMW is now third int he luxury sales race, trailing both Mercedes and Toyota’s Lexus division. +++

+++ In a fresh sign of pressure on U.S. automakers, FORD said it will shut down production of its best-selling F-150 pickup truck for a week at a Kansas City assembly plant, and temporarily idle three other plants over the next several weeks. About 13,000 Ford hourly workers will be laid off during the temporary shutdowns. There are nearly 14,000 workers at the four plants, the company said. Some of them are salaried managers. Of the layoffs, about 4,000 will be in Mexico and about 9,000 in the United States. The cuts will hit Ford’s three highest-volume models in the United States. The F-150 is the best-selling vehicle model in North America, where Ford in the second quarter derived 90 percent of its profit, and the F-150 is a key profit-maker for Ford. However, sales of the overall F-series pickup model line fell nearly 3 per cent in September. Ford dealers had a heavy 95 days’ supply of the pickups on their lots at the end of September, according to data compiled by Automotive News. F-150 production at the Dearborn Truck Plant in Michigan will continue without interruption, Ford said. Ford is also suspending production of two SUVs, the Kuga/Escape and the Lincoln MKC, at its Louisville Assembly Plant for two of the next three weeks. The compact Kuga/Escape, the company’s second best-selling U.S. model, is under increasing pressure from Japanese rivals. Sales were down 12 percent in September. Ford said it also is shutting 2 plants in Mexico. One is a plant in Hermosillo that makes the Mondeo/Fusion and the Lincoln MKZ sedans, and the other is in Cuautitlan that makes the Fiesta. The Fusion is the No. 3 seller in Ford’s U.S. lineup, but suffered a 17.5 percent drop in sales last month. “During our second quarter financial call, we said we expected the overall retail industry to decline in the second half of the year from the same period last year. We also said to expect to see some production adjustments in the second half – this is one of them. We continue matching production to meet demand”, said Kelli Felker, Ford spokeswoman. Ford warned investors last month that its profits would decline next year, and lowered its 2016 pretax profit forecast to $10.2 billion from at least $10.8 billion because of a charge in the third quarter for an expanded vehicle recall. The U.S. workers with more than one year of experience will get about 80 percent of their normal paycheck during the shutdowns, combining state unemployment benefits and Ford supplemental pay, Ford said. The company did not immediately have details on compensation for the workers in Mexico. +++

+++ HONDA plans to build a new factory in China that will produce passenger cars from 2019, boosting its output capacity in the country by about a fifth, two people familiar with the matter said. Honda and partner Dongfeng Motor Group are experiencing explosive growth in China with sales for their joint venture soaring 48 percent for the year to date thanks to the popularity of the XR-V sport-utility vehicle as well as the recently launched Civic sedan. At the same time, the venture, Dongfeng Honda, is coming close to its capacity limits at its 2 factories, targeting sales of 450,000 vehicles for 2016 – not far off current annual capacity of 480,000. The new factory will be located in Wuhan, central China, a major auto hub. It will initially produce 120,000 cars a year, with capacity likely to double eventually, the sources said, declining to be identified as there had not been a formal announcement by the companies. Honda confirmed that it was discussing the additional plant in Wuhan with Dongfeng, but that it had nothing official to announce now. A Beijing-based spokesman for Honda said the project had yet to be formally approved by the company or the government. The plan was initially reported by the Nikkei business daily, which said the venture planned to spend “hundreds of millions of dollars” on the factory. The new factory would be Honda’s seventh in China. Honda also has a joint venture with GAC Group called Guangqi Honda which has 3 plants. The Japanese automaker also has a separate plant for exports. Honda said in April it was looking to boost car sales in China to 1.07 million cars this year. It sold 1.01 million vehicles in 2015, a 33 percent jump over the previous year. Auto sales in China strengthened in September for a consecutive fifth month, rising to a three-and-a-half year high. +++

+++ MERCEDES has announced a new program in Germany in which owners can rent their cars to others. CEO Dieter Zetsche has described it as “Airbnb for cars”. “Your car can be equipped with a box that connects it to an online platform. Then your photograph of your Mercedes creates yours car’s profile”, Zetsche described at a speech during the Paris Motor Show. “Next you enter your free dates and give thousands of members the ability to rent, unlock and drive your car, all with a smart phone”. The program is similar to other car-sharing startups that have popped up since the popularity of Airbnb, but this will be a first-of-its-king program coming from a manufacturer itself. “Cars are parked for nearly 23 hours per day on average. Why not use this extra time to earn some extra money for the owners?” asked Zetsche, who rocked a typical Silicon Valley outfit — a sportcoat, blue jeans and sneakers — in his speech instead of the traditional auto exec suit and tie. Mercedes-Benz has also teamed up with a San Francisco-based startup to launch a pilot program in the US. The company’s German version will launch this November. +++

+++ The Dutch agency that approved electric carmaker TESLA ’s “Autopilot” driver assistance system for use throughout Europe is concerned the name could be misleading, a spokeswoman said, after Germany asked the company to stop using the term in advertising. Therese de Vroomen added, however, she was not sure whether the agency – the Dutch Road Traffic Service (RDW) – would take any action to follow up on its concerns. Tesla’s Autopilot driver assistance system has been the focus of intense scrutiny since a Tesla Model S driver was killed while using the technology in a May 7 collision with a truck in Florida. During the weekend Germany’s transport ministry said it had asked Tesla to stop using the term “Autopilot” in advertising because it might suggest drivers’ attention was not needed. Tesla said in response to that request that autopilot had been used in the aerospace industry for decades to describe a system operating in conjunction with a human driver, and the company had always made it clear to customers that the system required drivers to pay attention at all times. In 2015, the RDW approved Tesla’s Autopilot feature for use throughout Europe. The agency’s concerns only relate to the name and not to the system itself. De Vroomen said there had been discussions within the RDW about whether the name was appropriate, but was unsure whether it would, like Germany, ask Tesla to stop using it. The Dutch Advertising Code Authority, which oversees standards in the advertising industry, said it had not received any complaints about Tesla’s use of the name Autopilot. Germany’s KBA road transport authority has told Tesla owners that the Autopilot function does not mean the vehicle can be operated without the driver’s constant attention. German consumer protection agency vzbv said however that the Autopilot system should not be on the roads. “A letter to Tesla drivers urging them not to use the Autopilot is not sufficient. That shifts to consumers the responsibility for a failure that happened in the approval” the vzbv said in an e-mailed statement. +++

+++ VOLKSWAGEN should commit to investing in the development and production of batteries for electric cars, the carmaker’s works council chief Bernd Osterloh told a German newspaper. “Volkswagen has to build its own competencies in the area of cells and batteries on the research and development side”, the paper quoted Osterloh as saying in an interview. “That is important for the sites in Germany. We need a commitment to the production of batteries in exchange for job cuts”, he added. Volkswagen is under pressure to make cuts at high-cost operations in Germany to fund a shift to electric vehicles following its emissions scandal. The German group’s top executives have been in talks with works council leaders representing Volkswagen staff since June in an attempt to agree cost savings to fund this transformation. Osterloh warned in the newspaper interview that talks could fail if Volkswagen did not agree to invest in battery production. He also said he wanted management to commit to production of certain car models in Germany to ensure high utilization at Volkswagen’s plants in its home country and avert any closures. Management is due to update workers on progress of the talks on Thursday. Last week, Osterloh said that Volkswagen could cut up to 25,000 staff over the next decade as older workers retire to help the carmaker achieve cost-cuts needed to revive the Volkswagen brand. +++

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