+++ Excluding the United States, Volkswagen may still fly under the radar in most parts of the globe when it comes to compensating owners of diesel cars fitted with the cheating emissions software, but in Spain a precedent is close to being set. According to Automotive News Europe, a Spanish court ordered two Volkswagen Group subsidiaries to pay €5,000 to an AUDI Q5 owner, whose SUV, which he bought new in 2013, was found to have the illegal software that makes exhaust emissions tests appear less polluting than they really are. The amount is said to be equivalent to 10 percent of the vehicle’s original value, but as small as the won battle may seem to be, it could create a precedent for other owners of diesel-powered cars made by the Volkswagen Group, which are part of the massive scandal that emerged last September. Moreover, the owner of the Audi Q5 has no reason to celebrate, as his initial demand was, besides being compensated, to be given a brand new car. The decision is not final and will be appealed by the car company, as an insider confirmed. +++

+++A new report says that six high-level positions at electric car startup FARADAY FUTURE have been vacated in the past two to three months. Faraday Future has been aggressively recruiting its top talent from established automakers’ US operations, but according to Jalopnik, a half-dozen execs in key positions have recently left. They are: James Chen – General Counsel and VP Governmental Affairs; David Wisneiski – Finance Director Syed Rahman – Operations Controller; Robert Filipovic – Head of Product Strategy; Stacy Morris – Head of Public Relations; Sarah Ashton – Associate Director Governmental Affairs; In a followup statement, Faraday Future described the market for poaching talent. “The EV market is very competitive, vying for a finite supply of quality people”, the company said. “However, Faraday Future’s turnover is extremely low compared to the industry standard”. Faraday Future reports a staff of over 1,000, including many recruited from brands such as Lamborghini, Jaguar, Porsche and Ferrari, and other, unspecified, EV companies. The company was also in the news recently when the construction company building its Nevada factory threatened to stop work if they did not receive a payment of $21 million in 10 days. +++

+++ For American Volkswagen owners that aren’t satisfied with getting a payout from the company to make up for dirty emissions, and need to rid themselves of their polluting machines, HYUNDAI may have a solution. The South Korean automaker is now offering Friends and Family Pricing Plus on new Hyundais for owners of 2.0-liter diesel Volkswagens. A Hyundai spokesperson said it’s “an alternative to potentially orphaned diesel owners that will be entering the market for a new vehicle”. This discounted pricing plan, as listed by a dealer in Tampa, Florida, starts with the gross dealer invoice price, which includes destination and advertising fees. From there, the buyer gets $1,250 off the purchase price, as well as 3-percent off of the MSRP, excluding destination charges. Also, any current Hyundai incentives can be added to the Friends and Family Pricing discounts. The list of the eligible Volkswagen models are: Beetle and Beetle convertible, Golf 3-door and 5-door hatchback, Golf Sport Wagen, Jetta, Jetta Sport Wagen, Passat and Audi A3. These incentives certainly make the prospect of a new Hyundai rather attractive, especially for Volkswagen owners with that sweet settlement money burning a hole through their wallets. The question is, will owners of these cars find any current Hyundais they like as much as their Volkswagens? +++

+++ MAZDA is reportedly working on a rotary-powered sports car as it makes plans to move upmarket. At J.D. Power Automotive Marketing Roundtable in Las Vegas, Mazda North American Operations’s vice president of marketing Russell Wager was asked about the RX-Vision Concept by Wards Auto. “That car wouldn’t come to market unless it has a rotary engine”, Wager said. “That’s what they are working on”. The “they” in that quote is presumably Mazda’s R&D arm, which is famously secretive, even within the company itself. At the same time, Mazda is also trying to move upmarket. “We’re not trying to go luxury; that’s not in our cards”, Wager said, “But we are trying to make vehicles people will pay more for”. Wager cited figures saying that Mazda is drawing more college-educated buyers. Referring to a completely revamped lineup since separating from Ford in 2008, Wager told Wards that “Our entire lineup has changed in 3 years, and our cars drive so much better now. It’s a question of getting (potential buyers) in them to experience them”. Freed from the platform sharing with Ford products, Mazda has been able to engineer dynamically handling cars with sharp styling called “Kodo”. In the late 80s, Mazda did experiment with a luxury brand, Amati, but it was decided that the returns would not make it worthwhile to pursue. Now, rather than spread themselves too thin, Mazda wants to take the entire brand upmarket and position itself as the premium alternative to brands like Toyota and Nissan. +++

+++ MCLAREN will replace its current 650S models with an all-new supercar in 2018, and now the model has been spotted testing in Southern Europe. The car is influenced by the P1 hypercar, but the brand’s logo-shaped headlights seem to be gone, in favour of more conventional units, with ultra-powerful LEDs. Currently referred to as the P14, the new model forms part of the British manufacturer’s commitment to launch a new model every year, including hybrid models for the first time. The car will feature McLaren’s carbonfibre tub – albeit in developed form – and 3.8-litre twin-turbocharged engine, although its power output will be extended beyond the 650 hp of the 650S. Peak power of 670 hp would match the P14’s closest current rival, the Ferrari 488 GTB, and still allow the 675LT to top McLaren’s Super Series range. However, because the 675LT is limited to just 500 units, McLaren may choose to surpass that car’s 675 hp output as well. To beat the Ferrari, McLaren will have to ensure the P14 can reach 100 km/h in less than 3,0 seconds and achieve a top speed of more than 330 km/h. While the P14’s styling has similarities with other McLaren models, it represents a big shift from the company’s recent products and will set the design template for its next batch of models. McLaren design director Frank Stephenson has already said the P14 will be “even crazier” than the P1 hypercar, and the company’s established hallmarks, such as its distinctive side-mounted air intakes and front bumper design, look to have been ditched for a new design. An open-top variant is also planned and, like today’s 650S Spider, it will feature a folding hard-top roof. Although the 650S Spider was launched at the Geneva motor show in 2014 alongside the 650S Coupé, McLaren’s current launch strategy means the convertible P14 is likely to be seen around a year after the coupé goes on sale. Prices for the P14 are expected to rise over those of the current 650S. +++

+++ MERCEDES’ new X-Class double cab pick-up has been reworked dynamically as well as visually, according to the company’s commercial vehicle boss Volker Mornhinweg. Revealed last week in concept form, the X-Class retains the ladder-frame chassis, five-link live rear axle and McPherson strut front suspension layout of the Nissan Navara, but Mornhinweg says of the chassis: “We knew what had to be done. A hell of a lot of work, but we learned from our SUV experience”. He added that you can “hardly feel the difference between off-road and on-road. I wanted a precise line through corners, and it has crisp handling – you can feel what the car is doing”. Contributing to this improved road behavior is a wider track compared than the Navara’s, which increases stability and grip while reducing body roll. Lead engineer Klaus Benzinger says that Mercedes gave up using its original set of benchmark comparators because their dynamics were no longer relevant to the X-Class, such has been the progress made with it. Refinement has also been a priority; this is not usually an area of excellence for pick-ups. Morninhinwg added that “a lot of work” had gone into this area. The X-Class will go on sale towards the end of next year, and will be available only from Mercedes’ commercial vehicle network. It will be offered in two and four-wheel drive forms with four and six-cylinder petrol and diesel engines, and with a wide range of Mercedes-engineered options and accessories. The Netherlands will only be offered the diesel versions. +++

+++ BMW Group production chief Oliver Zipse said there is no need to decide yet whether the Brexit vote is a reason to shift manufacturing of its MINI brand away from the UK to other locations in Europe. Britain’s vote in June to leave the European Union has raised doubts on whether it can keep tariff-free access to the European common market, prompting various automakers with factories in the UK to review their production plans. Nissan said on Thursday that will build the new Qashqai and add a further model, the X-Trail, at its plant in Sunderland, northern England, despite the vote to quit the EU. Zipse said BMW is not under pressure to make any changes or decide about further investments in its assembly line in the UK. A new generation Mini has just been launched and “now is not the time to make this decision”, Zipse told Reuters on the sidelines of an event held in Landshut, Germany. “When the time comes when we have to do the next bigger investment, we will have to look at the situation”, Zipse said. Mini’s main production location is in Oxford, England, but some output is outsourced to VDL NedCar  in the Netherlands with VDL NedCar and Magna Steyr in Austria. Asked whether BMW could shift more production of the Mini to the Netherlands, Zipse said, “We have possibilities, but currently we don’t have to”. +++

+++ The car industry in the UNITED KINGDOM has been assured that the deal offered to Nissan – which would eliminate any tariffs imposed on the companies’ exports to Europe – will be offered to all car manufacturers, according to business secretary Greg Clark. Talking on the BBC’s Andrew Marr Show, Clark said: “It is my job to provide the assurances to Nissan and others that Britain is going to continue to be a great place to invest. I was able to do that and Nissan’s continuing investment was the result that we saw. “One of the assurances I was able to give is that our intention, our negotiating remit when it comes to the discussions with our European partners is to have a constructive and civilised dialogue to look for the common interest here. The government’s promises, which were made earlier this month to the UK’s largest producer of cars, Nissan, prompted the firm to continue investment in its Sunderland plant. Nissan boss Carlos Ghosn had previously warned at the Paris motor show that a so-called ‘hard Brexit’ could cause the car giant to reconsider its future investment in Sunderland, saying “If I need to make an investment in the next few months and I can’t wait until the end of Brexit, then I have to make a deal with the UK government. Our objective would be to ensure that we have a continued access to the markets in Europe and vice versa, without tariffs and without bureaucratic impediments. That is how we will approach the negotiations. It is important to manufacturing they get the minimum or no tariffs and no impediments”, Clark added. In the wake of the UK’s vote to leave the European Union, there were fears that large automotive businesses, such as Nissan and Opel/Vauxhall, would pull out of the UK. Several manufacturers have already raised their prices since the vote because the value of the pound has fluctuated. Both car production and car registrations have yet to be affected by the vote, according to statistics from the SMMT, but industry figureheads are still warning that the damage may not yet have come into play. A smaller UK manufacturer, MG, has already ceased assembly in the UK for this reason, although it represents a very small percentage of overall production. Mike Hawes, SMMT CEO, said: “We’re greatly encouraged by the Secretary of State’s comments and those made by the Prime Minister last week. It is important that the Government makes it a priority to safeguard the competitiveness of this important and globally successful sector as we leave the EU. This means maintaining a competitive business environment, ensuring talent can be recruited from abroad and securing the benefits we currently enjoy in the single market – including tariff free trade unhindered by any customs bureaucracy”. After Nissan boss Ghosn’s talk with Theresa May, which he described as “positive and productive”, Ghosn said the government “will continue to ensure the UK remains a competitive place to do business”, but did not clarify exactly what was said. He later said: “The support and assurances of the UK government enabled us to decide that the next-generation Qashqai and X-Trail will be produced at Sunderland. I welcome British Prime Minister Theresa May’s commitment to the automotive industry in Britain and to the development of an overall industrial strategy”. +++

+++ Profits at VOLKSWAGEN core brand plunged more than a half in the 3 months through September, turning up the pressure on the German carmaker to strike a big cost-cutting deal with its powerful works council. Europe’s biggest automaker is still struggling with the fallout from its admission more than a year ago that it rigged U.S. diesel emissions tests, a scandal set to cost it billions of dollars in compensation and vehicle refits and which has led it to announce a costly shift to more electric vehicles. The group as a whole raised its full-year profit and revenue forecasts on Thursday, helped by a strong third-quarter performance at its premium Porsche brand. But quarterly operating profit at the mass-market Volkswagen brand, the group’s largest by sales and seen as crucial to any long-term revival in fortunes, dropped more than expected. ” Volkswagen has maneuvered itself into a cost and complexity situation that needs to be solved”, said Evercore ISI analyst Arndt Ellinghorst. He has a “buy” recommendation on the stock, in part because of turnaround hopes for the Volkswagen brand. Volkswagen has said it expects to reach a deal with the brand’s labor leaders on cost cutting and strategy in the coming weeks, but sources close to the matter told Reuters last week that talks were faltering. Although the group has been pledging for more than a year to bring down research and development (R&D) costs, spending on R&D climbed almost 2 percent in the first 9 months of the year to 10.1 billion euros ($11 billion), its quarterly results showed. Operating profit at the Volkswagen brand dropped to 363 million euros ($396 million) in the third quarter from 801 million a year earlier, when the emissions scandal broke in the final two weeks of the reporting period. Analysts had expected an operating profit of 462 million euros. They said the decline was partly due to a brief dispute with suppliers in August, and also to the widespread use of incentives to attract buyers. Volkswagen said earlier this month Volkswagen brand sales jumped 6.7 percent year-on-year in September and that group sales growth was the strongest for two-and-a-half years. “Some of those gains, especially in the U.S., are in part due to a massive use of incentives”, said NordLB analyst Frank Schwope, who has a “hold” rating on Volkswagen shares. The quarterly results showed distribution costs, which include buyer incentives, totaled more than 5 billion euros in the first nine months of the year, broadly in line with the same months in 2015 but up from 4.6 billion in the 2014 period. The Volkswagen brand’s profit margin in the third quarter was just 1.5 percent, well below its long-term target of 6 percent and the high single-digit percentages at some rivals such as Toyota. The group also raised the amount of money it has set aside to cover the costs of its emissions scandal to 18.2 billion euros from 17.8 billion. Its Volkswagen and Audi brands are still to find a fix for 85,000 polluting 3.0-litre vehicles even after the group this week agreed a record settlement with U.S. authorities and the owners of 475,000 smaller diesel cars. Group operating profit, adjusted for one-off items, came in higher-than-expected in the third quarter at 3.3 billion euros, reflecting strong demand for Porsche’s top-selling Macan SUV. The group said it now expected revenue this year to match last year’s record 213 billion euros, having previously predicted it might fall as much as 5 percent. It also said the group operating margin might come in at the upper end of its 5-6 percent target range, before one-off items, this year. However, Audi – the biggest contributor to group profit – cut its margin guidance due to rising costs for the emissions scandal. +++

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