+++ The launch of the ALFA ROMEO Stelvio SUV at the Los Angeles motor show this month will kick-start a revival plan for the Italian marque that is mapped out to include up to nine new car launches over the next 5 years; potentially ushering in a rival for the BMW 5 Series, a flagship large SUV and a new sports car. Buoyed by the positive early reception for the 3 Series-rivalling Giulia and with the new Giulia-based Stelvio SUV set to be in dealerships in summer 2017, new boss Reid Bigland is crystallising plans to turn around faltering sales figures and re-energise the brand with a dramatic series of new model launches – hinged around the SUV boom – to create substantial sales growth by 2020. Bigland, a former head of North America for Alfa Romeo and president of the Ram and Dodge brands, was brought in to head up Alfa Romeo and Maserati in May this year, with the express goal from Fiat Chrysler Automobiles (FCA) group boss Sergio Marchionne of kickstarting Alfa Romeo’s latest faltering sales revival. Despite a 5 billion euro investment plan being unveiled in 2014, it was set back by 2 years after technical problems delayed the launch of the Giulia and investment for growth in key markets such as China was not forthcoming. “Our goal is absolutely to go toe to toe with the Germans, but that’s not a 2-year plan”, said Bigland. “We’re just not going to get there that quickly. They’re in every segment and spinning derivatives off those segments. Even with the new Stelvio, we will only have 50% coverage of the market. We need to pick our strategy and get it right. We have one chance to make the best possible car with every launch”. The turnaround is much needed but has Marchionne’s backing because it is also potentially highly lucrative. Alfa Romeo’s annual sales in the modern era peaked at just over 200,000 cars in 2001 but have since slid dramatically, as the model line-up has contracted and aged, to a current level of barely 60,000. However, the launch of the Giulia has created a potentially lucrative foothold in the premium brand heartland and the arrival of the Stelvio will drive profits further, because SUVs command a higher price than traditional saloons. The Stelvio (which is yet to be officially named but which Marchionne referred to by this name 12 months ago under questioning) will be a rival for the likes of the BMW X3 and Audi Q5. Bigland refused to be drawn on whether the Stelvio name would make production (the name Kamal has also been strongly rumoured) but he outlined why it will stand out from its rivals. “The reason people will buy our mid-sized SUV is because they will get blown away by the driving dynamics”, he said. “Every car Alfa Romeo makes must stand apart for that reason. This car will not disappoint”. It is expected to be pitched as a dynamic competitor to the Jaguar F-Pace and Porsche Macan and powered by a range of familiar four and six-cylinder diesel and petrol engines. To emphasise the SUV’s sporty credentials, a twin-turbo 2.9-litre V6-powered Quadrofoglio version is being prepared. Bigland also hinted that a larger SUV is likely to make production as part of Alfa Romeo’s 5-year plan. “The whole world is gravitating to SUVs”, he said. “A few years ago, an Alfa Romeo SUV would have been sacrilegious, but now it makes perfect sense. Our job is to keep an eye on consumer preferences and give people what they want”. It is understood the large SUV could be based on the same underpinnings as the Maserati Levante and appear in early 2018 as a BMW X5 and Audi Q7 rival. Again, it would be pitched on its dynamic capabilities, which, Bigland conceded, would rule out a utility-focused 7-seater. “Whatever car Alfa Romeo makes must stand apart for its agility, noise and general driving experience”, he said. “A large SUV can work in that space – the Maserati Levante proves that, but it’s a 5 not a 7-seater”. The large SUV’s success or otherwise is said to be the fulcrum on which Alfa Romeo’s latest revival plan will pivot. That’s because it will be a relatively high-profit car that could underpin future investment in other models and because accelerating growth in the SUV market could prompt Alfa to put off development of a larger saloon than the Giulia. Asked if an SUV could be Alfa Romeo’s halo model, potentially displacing the launch of a 5 Series rival, Bigland said: “10 years ago I’d have said we need the saloon to credibly take on the Germans. Now, the explosion in SUV sales changes that. I’m not saying we won’t do the saloon, but it might not be next on the list”. Additionally, one further SUV bodystyle is said to be under consideration, probably for launch at the end of the decade. It could be a coupé version of the Stelvio in the style of the BMW X4, but rumours persist that if the Giulietta hatchback is replaced, a BMW X1 rival would also be spun off the platform. The next new production model expected after the Stelvio is tipped to be a Giulia SW. It is set to be revealed at the 2017 Geneva motor show and insiders say the design team has been charged with prioritising a sporty look over a need for class-leading luggage space. However, it will not be as dramatically proportioned as the Alfa 159 Sportswagon, which had less boot space than the saloon in certain seat configurations. Benchmarking is reported to have centred on the BMW 3 Series Touring. Less clear is whether Alfa will launch a 5 Series rival. It is talked about internally as the Alfa Romeo Alfetta as a nod to the saloon and fastback of the 1970s and 1980s, and launch plans are said to have been drawn up to an advanced stage. However, Bigland and other Alfa Romeo officials are said to be nervous that the rise in SUV sales and declining saloon sales – especially in larger segments – make the development costs of such a car untenable. The cost of reworking the Giulia’s Giorgio platform to fit the car are said to be substantial. “The segment size and profitability are not what they were”, said Bigland. “The discounting in those segments is brutal now, even among the established players. The market size is also interesting. It’s holding at the moment, but at the cost of profitability. For anything other than an SUV, the value proposition is increasingly challenging”. The likelihood of producing the Alfetta is also likely to hinge on Chinese market growth. Alfa Romeo has little brand presence there but has previously targeted ambitious growth in the region. Today, large saloons are highly prized in China, although that trend is again shifting towards a preference for SUVs. Alfa Romeo bosses are said to have given the green light to a successor to the relatively high-volume-selling Giulietta because of the segment’s ongoing success in Europe and its growing popularity in the US and Chinese markets. However, its launch is said to be at least 3 years away and possibly more. An SW derivative is also expected. Insiders suggest the delay in replacing the current car (which was launched in december 2009 and accounted for around two-thirds of all Alfa Romeo sales in Europe prior to the Giulia’s arrival) centres on a debate over whether to significantly upgrade the current front-wheel drive platform or to modify the Giulia’s Giorgio rear-drive platform. “The Giorgio platform is capable, but it will depend on customer requirements”, said Bigland. “How many rear-drive cars are there in that segment? It’s a dying breed. To do it would mark us out as different, but we need to look very deeply at what the market is asking for”. Although the Giorgio architecture was designed to be flexible, the costs of re-engineering it are said to be potentially prohibitively high. Even so, Alfa Romeo bosses are believed to prefer this option because it will be in line with the brand’s claims to make driverfocused cars and will allow them to charge a higher price for the car. A final decision on which route to take has been delayed for at least 12 months in the hope that Giulia and Stelvio sales will justify making the extra investment. Despite the SUV focus in the launch plans, Bigland and his leadership team are acutely aware of how far their plans take Alfa Romeo from its sports car roots. They also realise that they risk undermining their core claim of making the sportiest cars in each segment they enter if they do not have a sports car in the range. The former management team is said to have been content with the decision to switch the firm’s Mazda MX-5 spin-off from being Alfa Romeo to being the Fiat 124 Spider. However, a development team is said to be working on a modern reinterpretation of the Brera, which ceased production in 2010 and struggled to make much impact on the market after being criticised for being underpowered and overweight. The new car will be sold in coupé and spider forms but will not go on sale until at least 2020. Insiders say Alfa Romeo’s management know that the car, which will sit on the same platform as the Giulia, must be visually and dynamically stunning but balance that ambition against relatively tiny sales in the segment and the fact that, in just over 5 years, fewer than 35,000 Breras were sold. The launch of such a car would almost certainly raise questions over the need to replace the 4C sports car. The future of Alfa’s supermini hangs in the balance. The current model has been on sale since 2008, albeit with several significant upgrades, and its peak sales year of 62,000 units in Europe was in 2009. Fewer than 14,000 Mitos were sold last year, albeit accounting for around a quarter of all Alfa Romeo sales. Also against the Mito is the fact that superminis are centred on Europe, despite some uplift in the US and very limited uptake in Asia, and profit margins are, at best, slim. Alfa Romeo could lean on Fiat for a low-cost way of staying in the market, but its premium ambitions make producing the Mito unlikely in the long term. Bigland refused to be drawn on its future. “Arguably, the Mito doesn’t play a role outside Europe, but it continues to make a valuable contribution to Europe, so we’re looking to continue to improve it”, he said. Despite the new model plans, Alfa Romeo faces a huge uphill battle to meet sales targets and gather the momentum (and profits) to drive this offensive. The original 2014 growth plan called for sales to rise by around 800% within four years to around 400,000 vehicles a year; around the size of Land Rover now (and more than twice the size of Jaguar). Even with the launch in the US being rolled out at pace (there are 145 Alfa Romeo dealers in the US now, with plans for 200 by the end of next year and around 280 eventually) that market is expected to account for only 150,000 sales a year initially. European growth is expected to take annual sales in the region beyond 150,000 units, but that still leaves Alfa Romeo needing to establish itself in the Asian (and especially Chinese) markets quickly and effectively, to the tune of 80,000-100,000 annual sales. Alfa Romeo also faces the challenge of developing plug-in hybrid powertrains, which will be crucial for the ongoing sales success of its SUVs in the US especially, and eventually developing a structured pure electric strategy. Although Alfa Romeo will be able to draw on established FCA dealerships and sales structures in emerging markets and FCA developed technology, the size of the challenge it faces to grow the momentum started by the Giulia remains huge. +++

+++ Sales of BMW Group vehicles were higher than ever before in October, with total sales of 196,002 units, an increase of 2.3% on the same month last year. This result brings the year-to-date sales total to 1,942,642, an increase of 5.8% compared with the first 10 months of last year. “All the BMW Group’s premium brands have contributed to this latest set of record sales results and I am confident this will continue as we head towards year-end”, said Ian Robertson, Member of the BMW Board of Management with responsibility for Sales and Marketing. “We’ve just seen the sale of our 100,000th electrified vehicle, underlining our success in the increasingly important electro-mobility segment”, he continued. “Our strategy of flexible, global sales enabled us to offset headwinds in some markets by strengthening sales in other regions, ensuring that profit can remain our focus worldwide”. In the first 10 months of the year, 1,646,743 BMW brand vehicles were sold around the world, 5.5% more than in the same period last year. In October, a total of 166,805 BMW brand vehicles were delivered to customers, an increase of 1.1% year-on-year. The global trend towards SUVs continues to be reflected in strong sales growth within the BMW X family. October sales of the X1 more than doubled year-on-year with a total of 21,072 sold around the world (+139.1%); monthly sales of the X3 increased by 5.1% to total 12,533 units while X5 sales rose by 4.9% (14,203). A year after it was launched, the brand’s flagship 7 Series achieved sales growth of 79.0% in October, with a total of 5,664 delivered to customers worldwide. In the first 10 months of the year, BMW 7 Series sales totalled 47,416 (+67.2%), making this 6th generation the most successful 7 Series ever in the year following launch. With sales of electrified models building significantly, October’s impressive BMW i and BMW iPerformance sales (5,952 units) led to an important milestone for electro-mobility at the BMW Group, with the 100,000th electrified BMW delivered to a customer at the very start of November. Almost half of those 100,000 sales have been made just this year, with a total of 47,286 BMW i and BMW iPerformance models sold in the first ten months of 2016. “Our sustained efforts in the field of electro-mobility are paying off”, commented Robertson. “BMW i and BMW iPerformance offer customers the largest range of electric drive trains across all segments and BMW i continues its role as the spearhead of innovation at the BMW Group, enabling technologies which can be applied across our entire model range”, he continued. +++

+++ CHINA ’s auto sales rose 20.3% in October from a year earlier, propelled by surging demand for SUVs, an industry group reported Thursday. Dealers sold 2.3 million cars, minivans and SUVs in the world’s biggest auto market, according to the China Association of Automobile Manufacturers. Total vehicle sales including trucks and buses climbed 18.6% to 2.6 million units. Sales growth plunged last year, slamming global brands that look to China to drive revenue. They rebounded after Beijing suspended a sales tax, though growth is expected to drop back to single digits after the tax cut expires at the end of the year. Strong demand in lower-priced market segments has helped Chinese automakers recover market share from bigger, richer global rivals. October’s SUV sales rose 43.3% over a year earlier to 896,000 units. Sales of Chinese-brand SUVs increased 60.4% to 557,000, expanding the Chinese share of that market by 6.6 percentage points to 62.2%. Sales of sedans rose 10.1% to 1.2 million, while those of Chinese-branded sedans expanded 8.3% to 243,000. Total auto sales for the first 10 months of the year rose 15.4% over the same time last year to 19.1 million. General Motors said sales of GM-brand cars by the company and its Chinese manufacturing partners rose 5.7% in October to 345,733. This year’s sales to date rose to just over 3 million units. Ford said sales rose 14% from a year earlier to 107,618. Year-to-date sales rose 10% to 966,000. Nissan said October sales rose 16.1% to 127,200. Toyota said sales rose 9.6% to 99,200. Toyota’s year-to-date sales were up 11% to 989,300. +++

+++ CITROEN is gearing up for a radical overhaul of its Picasso sub-brand, and the transformation is likely to start when a more SUV-like successor to the current C3 Picasso arrives next year. The existing model is one of the dwindling number of small MPVs on the market, but recent spy shots show that Citroen is working on a new car that will look more like a baby SUV based on the recently launched C3. Passengers in the new model will be sitting higher than in the C3, which means Citroen will have a rival for everything from the Nissan Juke to the Renault Captur. The Picasso successor will share underpinnings with the C3, which itself uses a modified version of the last C3’s platform. We can expect the engine line-up of the new variant to stick closely to the C3’s, although the taller vehicle could well drop the supermini’s smaller entry-level units. That means it would use 1.2-litre PureTech three-cylinder petrols producing 82 hp or 110 hp, and 1.6-litre BlueHDi diesels with either 75 hp or 100 hp. Citroen may choose the launch of the new model to remove the Picasso badge from the C3 altogether, reflecting the car’s move away from pure MPV to a crossover. The firm already sells the off-road-influenced C3 Aircross in selected markets across the globe, and since that suffix has been used on a variety of SUV concepts in the past, it’s conceivable that it could end up on the new model, which is likely to be sold globally. The C3 crossover will be part of a more SUV-focused line-up from Citroen, which is launching 12 new vehicles over the next 5 years. In addition, there will be a Nissan Qashqai rival that’s likely to either replace the C4 hatchback or carry C4 Aircross badging to be a bigger brother to the C3. That would then leave scope for new generations of the C4 and Grand C4 Picasso MPVs; Citroen boss Linda Jackson suggested recently that there could be merit in continuing with certain MPVs; particularly larger models that have a specific customer base and larger profit margins. “The MPV segment has been so successful for us and we have an enormous customer base there”, she said. “Now, I’m not saying the market doesn’t evolve and change slightly, but right now I have an awful lot of happy customers in our MPVs. I have to keep hold of them”. She added: “Citroen has such a history of MPVs – the functionality and modularity of them – that we will continue with that”. +++

+++ Sales of MINI brand vehicles increased by 8.9% in October with a total of 28,746 delivered to customers worldwide. The premium brand’s two most recent models continue to be the biggest growth drivers. A total of 5,411 customers took delivery of a Clubman in October, with year-to-date sales totalling 49,218 units worldwide. October sales of the Convertible totalled 2,152 (+159.6%); sales of this model in the first ten months of the year totalled 25,144 (+92.0%). Combined monthly sales of BMW and Mini in Europe totalled 90,574 in October, up 6.4% compared with the same month last year. Year-to-date sales in the region are up 10.0%, with a total of 897,493 vehicles delivered. All markets in the region have contributed to this year’s strong growth with many achieving double-digit increases including Italy (68,282 / +18.0%), Spain (45,141 / +19.9%) and Scandinavia (43,433 / +14.4%). Sales of BMW and Mini vehicles in Asia also saw strong growth last month with a total of 63,006 vehicles delivered to customers in October (+6.6%). In the first 10 months of the year, a total of 611,020 BMW and Mini vehicles were sold in Asia, an increase of 8.9% compared with the same period last year. The region’s biggest market, Mainland China, achieved a 10.2% increase compared with the first ten months of last year, with a total of 423,330 vehicles sold so far in 2016. Year-to-date sales in many other markets in the region also show strong growth: Japan (60,484 / +9.1%) and South Korea (49,016 / +10.0%) are just 2 examples. Sales of BMW and Mini in the Americas decreased 11.6% in October compared with the same month last year: a total of 36,743 vehicles were delivered to customers in the region. Year-to-date sales of BMW and Mini vehicles in the region total 373,822, which is down 7.1% compared with the same period last year. While year-to-date sales are up in Canada (37,373 / +7.0%) and Mexico (27,858 / +14.0%), the exceptionally competitive market in the USA has seen deliveries decrease by 9.6% (297,015). +++

+++ The victory of U.S. president-elect Donald TRUMP has sent shares of Hyundai and affiliate Kia shares into freefall. The stock’s performance contrasted starkly with Samsung Electronics and SK Hynix, which both rebounded on Thursday. Some industry watchers believe Korea’s car industry stands to suffer the biggest impact from a Trump presidency, but others say the real estate mogul is unlikely to make good on his stump braggadoccio. The trouble is that Kia has a production plant in Mexico, which started operations in May. Capable of producing 400,000 automobiles a year, the idea was to sell them to the U.S., but Trump’s talk of building a wall and slapping a 35-percent tariff on cars from Mexico and Canada has sent jitters through the firm. “The output capacity of the U.S. manufacturing plant has reached its saturation point, while wages have also risen so the Hyundai-Kia group built a factory in Mexico in order to keep manufacturing costs down”, said Kim Ki-chan at Catholic University. “If Trump applies tariffs on Mexico, the impact will be huge”. Last year, U.S. sales accounted for 21.4 percent of Hyundai’s total sales and 15.7 percent for Kia. But other analysts believe Trump will fail to realize his campaign pledges. Detroit’s Big Three automakers (General Motors, Ford and Fiat Chrysler) all have production plants in Mexico. “If Trump slaps high tariffs on Mexican-made cars, U.S. automakers stand to suffer the most, so I wonder if he will actually follow through on his campaign pledge”, said Lee Jong-gon at the Washington office of the Korea Trade-Investment Promotion Agency. Meanwhile, General Motors said Wednesday that it plans to lay off more than 2,000 workers at two plants in the U.S. The Financial Times reported that General Motors has sent a clear message it will not repatriate jobs from its assembly lines in Mexico to the U.S. as Trump has been demanding. +++

+++ The cyclical motion of the UNITED STATES auto market (the second largest in the world) is apparently ready to reach another end, with the good times of increases apparently behind us, according to Nissan and Toyota. Both Japanese automakers apparently agree there’s no potential future growth on the US market, and this is especially troublesome for the world’s largest automaker of 2015, Toyota. This is because the latter depends on the US market to fight the assault coming from Germany’s Volkswagen, which is way stronger in China, the world’s biggest auto market. This means that Toyota might be fighting a losing battle, because after four years of comfortable leadership, after the first 9 months of the year Volkswagen has sold 7.61 million vehicles around the world compared to just 7.53 million from Toyota. The automaker has also had some issues with suppliers, while the latest generation Prius hasn’t performed well due to the low gasoline prices in the US. On the other side, Nissan has also had its fair share of problems (including a profit cut due to higher incentives) so they don’t believe they can expand more in North America. “It’s a peak and we don’t see a potential for further growth”, commented Hiroto Saikawa, co-chief executive officer at Nissan. “The market turned out to be somewhat weaker”, added Takahiko Ijichi, Toyota executive vice president. +++

+++ VOLKSWAGEN ’s new ID electric car will completely reinvent vehicle instrumentation systems when it is launched at the end of the decade, according to Volkswagen brand design boss Klaus Bischoff. He told that by moving the motor to the rear of the car and much of the climate control system into the nose, he and his team have been able to push the dashboard forward by at least 200 mm. Releasing this extra space will enable Volkswagen engineers to use a new technology called ‘augmented HUD’ (head-up display). Bischoff said the new system will be able to project information and pictograms to appear as if they’re some 15 metres ahead of the driver. The upshot is that navigation directions such as turn arrows will appear as if they are on the surface of the road itself. By the time the technology hits showrooms, this feature will expand well beyond navigation. It will also be able to highlight approaching hazards, such as pedestrian crossings and stationary obstructions in the carriageway, and zero in on parts of a slippery road surface. This depth of information will become available as more and more vehicles are connected to the HERE mapping cloud. The HERE system (owned by Audi, BMW and Daimler) uses both hyper-accurate Lidar-based 3D maps and information gathered from millions of vehicle sensors to distribute live information and safety warnings to vehicles currently being driven on those roads. +++

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