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+++ While those at BMW don’t admit it, the BMW 5 Series GT has been regarded by many as an ugly piece of mobile machine that is full of premium features. BMW 5 Series GT could be an attempt by BMW to please as many customers as it could, but in the end, it was only able to please a few. While the 5 Series has been the best-sellers among BMW offerings, sales of its Grand Tourer version have been disappointing. The unfortunate looks of the BMW 5 Series GT could be the main reason why the German premium carmaker is transforming it as the 6 Series GT. In fact, a camouflaged prototype was recently spotted being tested with an M Package, confirming its sporty styling. Many have been considering the 5 Series GT as BMW’s version of the Pontiac Aztek, which is regarded as one of the greatest failed models in the recent history of automobiles. The unattractiveness of the 5 Series GT could be attributed to the fact that it is ill-shaped and bulky, especially its rear. Though the 5 Series GT also has positive attributes. No one will argue that it is well made, built with high quality materials, and fitted with numerous advanced technologies from BMW. Thankfully, BMW has been listening to the constant and continuous complaints about the appearance of the BMW 5 Series GT. Not only is BMW changing its name; the premium carmaker is also pushing for a total overhaul of its design. While both the 5 Series and the 6 Series are practically twins in terms of size and segment (mid-size), they differ in body styles, stance and sportiness. In short, 6 Series vehicles are sportier, wider and lower than their 5 Series siblings. What does this mean? By changing the name of the 5 Series GT into the 6 Series GT, BMW is taking efforts to make the Grand Tourer drop its ugly image, making it sportier and sleeker. The new 6 Series GT features a roofline that is more sloped rearwards than the 5 Series GT, which should solve its ugly rear-end. Of course, being promoted to the 6 Series means that the Grand Tourer would be more luxurious and more expensive. Of course, as a Grand Tourer, the 6 Series GT offers the extra practicality and roominess thanks to its rear hatch. The new 6 Series GT is expected to feature the same engines, the same transmissions and the same wheel drive systems as those offered in the 5 Series family. These engines include inline-six 3.0-liter engines and a biturbo 4.4-liter V8 powerplant. BMW may also offer plug-in hybrid versions of the new 6 Series GT. It will be underpinned by BMW’s new CLAR platform that currently underpins the newest 5 Series and 7 Series. This CLAR platform is made from several lightweight materials, allowing the new 6 Series GT to be lighter than its predecessor. +++

+++ If American consumers are in the market for a car, there are some good reasons not to buy CHEVROLET ’s new Bolt (Opel Ampera-e). Maybe they insist on leather seats, take long road-trips to the middle of nowhere, or have a boat to tow around. If not, General Motors’ new long range electric vehicle will be at the very least entirely sufficient for your needs. At best, it will be a giddy surprise. It wasn’t supposed to be this way. The first affordable electric car to top 500 kilometers on a single charge was expected to be a vehicle of compromise, a bundle of “buts.” Indeed, the most impressive things about the Bolt are the attributes it lacks. The car is not tiny, boring or slow. And it handily topped its goal, coming in with an estimated 500 kilometer range. It is not, however, a looker. “Pragmatic” is probably the best adjective to describe the car. It looks like a stubby pod, cluttered by a smattering of busy design cues—swooping creases, bits of black plastic, and too many lights. The odd design works like clown-car magic on the interior, however. Chevrolet managed to peg the driver’s seat high for a commanding view of the road, while leaving plenty of headroom for tall people in the front seats and in back. The Bolt’s design is neither futuristic nor timeless, but that’s likely the point. General Motors has boldly designed electric cars in the past and it didn’t go so well. The Bolt simply looks like a lot of other contemporary cars—a little Buick Encore (Opel Mokka), a little Honda HR-V and a dash of BMW i3. The shape grows on you. It’s athletic; small without being wimpy, sturdy without being bloated. Darin Gesse, senior manager of General Motors product strategy, admitted that design took a second seat to function. “We talked to customers about what they wanted and it all came down to range and price and range,” he said. “Everything else wasn’t even second on the list; it was like 9th”. Forget about curb appeal. On the road, the Bolt is charming. It’s quick, even for an electric car, thanks to a relative dearth of weight and clever gearing of the electric motor. It accelerates eagerly all the way up to its 150 km/h limit. Steering is tight and precise with plenty of weight and feedback. The ride is simultaneously forgiving and firm, thanks to GM’s chasis tuning expertise and the big slab of a battery. The 60 kwh lithium-ion monolith keeps the vehicle grounded through turns, stiffens the frame and absorbs the typical vibration that comes with pushing a box of metal through the air at highway speed. That massive battery, however, comes at a hefty price. General Motors spends about $9,000 on each one compared with a couple hundred bucks it costs to build a small gasoline engine. The yawning chasm of cost is clearly recouped somewhat inside the car. The cockpit is a cheap collage of plastic and hard rubber that feels down-market even on a $30,000 vehicle. It is “nice” in the way Ikea furniture is “nice”, which is to say it is thoughtful, pragmatic, and not terrible looking. You just don’t want to touch it too much. The important bits are better. The 10.2-inch touchscreen in the dash is both responsive and intuitive to use. There’s WiFi—which actually works. Behind the steering wheel, the 8-inch digital gauge cluster is sharp and useful. In addition to the current speed, it prominently displays a real-time array of ranges: the maximum, minimum, and average amount of miles left on the battery, which are constantly calculated based on how the car is bein g driven and how hard the climate control system is working. Chevrolet appears to be almost bragging about the car’s range and, like most electric carmakers, it subtly encourages efficient driving by gamifying the experience. One of the Bolt’s best features is a regenerative braking paddle behind the wheel, which simultaneously slows the car and recharges the battery when pulled. After 20 minutes of driving, I found myself hardly using the floor pedal. It’s addictive, engaging and a constant prompt of the car’s raison d’être. So how did General Motors pull off a $30,000 car with 200 miles of range? Tesla’s promise to deliver on the same equation is still about a year away (longer if you ask Morgan Stanley). Many have expressed surprise about how soundly General Motors beat the most innovative car company in the world to the punch. But, this race wasn’t won by engineering brilliance. It was a financial battle between David and Goliath. This time, Goliath won, which shouldn’t shock anyone who understands economies of scale. At Tesla, unit economics are a brutal reality. With only 2 cars right now, the company’s fortunes rocket or swoon every time it misses or beats production estimates by 1,000 vehicles. Musk has plenty of magic tricks to throw in the mix—from solar panels to giant garage batteries—but at the end of the day, the per-car calculation is hard to escape. General Motors can spread costs and revenue over a fleet of about 40 vehicles and 4 separate brands. It buys parts by the trainload and sourced parts and engineering solutions from across the company. The Bolt’s gear-selector comes from Buick. The nifty rear-view mirror, which is essentially a camera most of the time, is courtesy of Cadillac. General Motors didn’t need to go on a building spree either. It’s had an assembly plant outside Detroit since 1983, and it’s been building Chevrolet Sonics (Aveo) there for 5 years. Batteries, meanwhile, are just another part that can be ordered. GM was able to source its power-packs from LG Chem in Korea. The company is expected to lose somewhere in the neighborhood of $9,000 per Bolt, but it likely doesn’t crunch the numbers that way. The vehicle is part R&D exercise and part marketing expense. Battery costs are sure to come down. As they do, expect Chevrolet to keep the price static and dial up the details a bit. And with electric vehicle mandates escalating in 10 states, the Bolt will let General Motors sell more swanky Silverado pickups at much fatter margins without paying penalties or buying credits from competitors. In that sense, the Bolt is a 1,700 kilo chunk of Musk-level game theory. “Tesla loses money on every car too”, said Bill Visnic, editorial director of the Society of Automobile Engineers; General Motors is just better equipped to mitigate that loss and leverage it into gains elsewhere. Regardless of what President-elect Donald Trump has planned, California and 9 other states will require 15 percent of new vehicles to be zero-emissions (read: electric) by 2025. European countries, meanwhile, are passing resolutions to ban gasoline engines entirely by 2030. In a few years, a long-range, affordable electric car will no longer be a novelty. Chevrolet has simply made a very good version of that machine before anyone else. It’s a winner-take-all market, but only for the next few months when competitors will begin rolling off the line. Almost every automaker has now committed to making electric vehicles, most recently Fiat-Chrysler and Mercedes. It’s unlikely the Bolt will crush Tesla’s nascent Model 3. It has made essentially the anti-Tesla, a vehicle long on utility and short on sexy. What the Bolt will do is lure thousands of buyers who would otherwise buy a conventional car and immediately make obsolete almost every other electric car on the road. At this very moment, thousands of Nissan Leaf owners are quietly kicking themselves. “You go after the big piece of the pie and hopefully get a lot of it”, Gesse said of the car’s broad approach to the market. So how will the Bolt sell? Chevrolet says early demand is outstripping supply, but when we strolled through GM’s Orion Assembly Plant, it was only making about 100 Bolts a day. Chevrolet churns out Camaros twice as fast. But General Motors didn’t make the Bolt because it thought it would outsell its most popular models. It made it because it could. +++

+++ The global auto market next year is expected to see the rise of carmakers from JAPAN, taking advantage of a cheaper yen and a transition to a new modular platform aimed at producing better cars at lower costs, a Hyundai executive said. Park Hong-jae, vice president of Hyundai’s global economic institute was referring to Toyota New Global Architecture, a platform sharing strategy designed to lower the production costs and enhance the quality of engine and power trains instead. The shift in production strategy will place the Japanese carmaker at a favorable position, which has been competing with Hyundai in terms of price competitiveness and Volkswagen in quality. “The biggest challenge Hyundai will be facing next year will be Japanese carmakers taking a stronger position in the market with vehicles in enhanced quality and a cheaper yen”, said Park in a seminar in Seoul, pointing out the planned roll out of Toyota’s Camry next year. Amid intensifying geopolitical risks and slowing economy, the global auto market is expected to grow 1.9 percent next year in the slowest pace since the 2008 financial crisis. “The growth of the global auto market appears to have reached a plateau”, he said. “With the growth of Chinese market slowing next year at 4 percent (from 15 percent this year), the global market is likely to have no strong force to take the lead in growth”. The rise of oil price will partly boost stagnant markets in Russia and the Middle East. In terms of segments, demand for sports utility vehicles will continue. Car sales in South Korea are expected to drop further to 3.5 percent next year, due to economic contraction and no sales tax benefit planned ahead. +++

+++ Are auto shows becoming more irrelevant in this digital age? If you ask the marketing director of French carmaker PEUGEOT, Guillaume Couzy, the answer could be yes. This comes as Couzy disclosed that the Peugeot would not be taking part in the 2017 Frankfurt Motor Show scheduled for September next year. To note, Peugeot participated in the previous edition of the auto show, unveiling several remarkable vehicles in the process. Missing an auto show could mean loss of several opportunities for a carmaker. Carmakers are usually selective in which auto shows they would want to take part in. Auto shows serve as good marketing tools to introduce upcoming and new products as well as to excite customers about future and possible offerings. Thus, if a European carmaker wants to market a certain SUV in the United States, it could unveil its new vehicle in the New York Auto Show or in the Detroit Motor Show. Likewise, if a Japanese carmaker wants to make it big in Germany or France, it could showcase its offerings in the auto shows in Frankfurt or Paris. Automotive press and journalists attending these events offer wide coverage and reach. Thus, missing an important auto event like the Frankfurt Auto Show could result to lesser coverage, and ultimately lower sales. However, in the past few years and past major auto shows around the world, such wasn’t the case. Peugeot’s reason for its decision to skip the 2017 Frankfurt Auto Show could shed some light on why carmakers are increasingly missing major motor shows. Couzy has remarked that instead of taking part in the 2017 Frankfurt Auto Show, Peugeot will focus more on web marketing. It should be noted that carmakers Ford, Volvo, Aston Martin and Rolls-Royce skipped the recent Paris Motor Show as they focused on digital marketing. Couzy remarked that money saved from skipping the 2017 Frankfurt Auto Show would be invested by Peugeot in digital marketing. According to Couzy, the allocated funds for digital marketing used to account for just 15 percent of the total marketing budget 3 years ago. However, that chunk has grown double to around 30 percent. Couzy added that the share of digital marketing on the total marketing budget could reach 50 percent by 2020. According to Couzy, Peugeot will focus on events that would further allow potential customers to try its cars. But it seems there is another compelling reason why Peugeot is skipping the 2017 Frankfurt Auto Show – it only holds a diminutive 1.7 percent share of the German auto market. So, practically, there is little reason for Peugeot to spend so much on a show when it only expects a little return. +++

+++ RENAULT SAMSUNG, the South Korean unit of French carmaker Renault, will be fully in charge of the research and development of new SUVs for the Renault group, the company said. The decision follows the success of the mid-size SUV QM6 which sold more than 10,000 units in Korea since its launch in September. QM6, also known as the Koleos overseas, was developed by the Renault Samsung Technical Center in Yongin, Gyeonggi Province. The technical center in Korea, which has 1,000 workers, is one of the group’s five R&D centers around the world. The facility has the full capacity to oversee the process from car design to production, the company said. +++

+++ SSANGYONG has sold its 100,000th Tivoli on home ground in the shortest span of time than any other brand it has launched, the company said. Tivoli, released in early 2015, is SsangYong’s first vehicle since Indian conglomerate Mahindra Group acquired the South Korean carmaker in 2011. The compact SUV has been leading the market segment since its release last year. As of November this year, the sales of Tivoli surged 28.9 percent compared to last year, the company said. SsangYong also expects to see a continuous growth in its Tivoli sales next year with its new 2017 version released in September. The latest model adopted the Advanced Driver Assistance System to enhance its performance. Led by Tivoli’s rapid sales growth, SsangYong is expecting a turnaround for the first time in 9 years. Between January and September, the carmaker reaped a 38.7 billion won ($19 million) profit. +++

+++ I will be frank. TESLA’s electric technology, exterior looks, aerodynamics, speed and quickness are all superb – except for its interiors. Yes, the inside of the Model S is sporty, but it is not luxuriously and comfortably sporty. In short, Tesla’s interior doesn’t live up to the brand’s reputation as a manufacturer of all-electric premium cars. However, Tesla’s recent move indicates how serious it is of turning things around and putting the focus on interior quality and design. The California-based electric carmaker has tapped Anders Bell as its senior director of engineering. According to Bell’s LinkedIn profile, he served as the head of the interior engineering department at Volvo Cars. His position gave him global responsibility for strategy, concept development and design & release as well as industrialization & launch of all future Volvo models. This department – consisting of 360 engineers in Sweden and 40 in Shanghai, China, is in charge of designing and creating the interior of Volvo’s vehicles. These include functional areas like the instrument panel, center console, and all interior surface materials as well as interior soft and hard trim. The department is also responsible for designing door panels, overhead system, luggage trim, interior light, seat belts and cargo restraints as well as front and rear seat systems. He served as chief of interior engineering department at Volvo Cars for 2 years. Prior to that, Bell served in China for years, being responsible for building Volvo Cars China’s interior and climate engineering department. He also oversaw the launch of the XC60 in the Asian country. With Bells on board, Tesla could now afford to create a luxurious and elegant interior for all its models. Comparing the interiors of the 2017 Volvo S90 and of the Tesla Model 3, there is large gap in terms of design, comfort and elegance. Bell lists his accomplishments at Volvo to include the launch of interiors of the Volvo XC90 and the Volvo S90/V90. He was also responsible for the development, design and release of interiors that will be launched in these Volvo models in 2017 and 2018. Bell was likewise responsible for concept definitions of interiors for models 2019 and beyond. Tesla’s move to recruit Bell away from Volvo should allow the carmaker to significantly improve the interiors not only of its current models, but also of future ones. After all, Bell has an impressive resume and he has proven at Volvo that he has the talent and skills to lift the overall quality of Tesla’s vehicles. A year or more from now, we expect to see a Tesla vehicle with an elegance we’ve never seen before. +++

+++ For years, TOYOTA focused on pushing its hybrid models in Europe, avoiding a diesel-for-diesel competition with market leaders including the Volkswagen Group. The Japanese carmaker’s strategy is finally paying off. In the first full year since Volkswagen’s emissions scandal threw the German giant into disarray, Toyota is on track for roughly a 40 percent jump in annual sales of gasoline-electric vehicles in Europe. Hybrids are set to account for more than half of Toyota’s deliveries for the region by the end of the decade, according to Karl Schlicht, executive vice president of the carmaker’s European division. Toyota’s Europe dilemma was a product mismatch rather than a regulatory crisis. At the beginning of the decade, when demand for its Prius was surging in other markets like the U.S., the model barely attracted buyers in Europe, where more than half of industrywide sales are diesels. After Volkswagen’s scandal undermined those powertrains, Toyota’s strategic decision to avoid pitting its models directly against diesel vehicles and force its dealers toward hybrids is now yielding results. “When you have a strategy driven by necessity and it’s doing the right thing for the customers and the world, it’s a very powerful force”, Schlicht said in an interview. “We kind of had to do it, and that made us focus”. Toyota is still a small player in Europe, where it had a 4.3 percent market share in the 11 months through November (Lexus sales included), well behind the leader Volkswagen Group’s 24.1 percent, according to the European industry association ACEA. Still, it’s in an enviable position with Volkswagen and diesel-reliant peers including BMW, Daimler and Fiat Chrysler Automobiles now needing to shift gears to electrified powertrains. Eric Felber, a VW spokesman, declined to comment on the rise in hybrid sales at the expense of diesel cars. Shares of Toyota have fallen 8.7 percent this year, compared with Daimler’s 8.7 percent drop and gains of 2.1 percent at Volkswagen and 2.4 percent at Fiat Chrysler. UBS analysts in a report this month forecast that diesel will almost disappear by 2025 and be replaced by hybrids and battery-electric vehicles. Athens, Madrid, Mexico City and Paris have pledged to phase out diesel vehicles by 2025 in a bid to curb pollution. “Diesel is on its way out for cars; we’ve seen the beginning of the end”, Alexander Nix, a Toyota dealer in Germany since 1980, said by phone. “Once we see further restrictions on emissions, it’s just going to be too expensive. We’ve already seen that now”. Dealers were singing a different tune when Schlicht, the Toyota Europe sales chief, returned to an executive role in the market in 2012, after a stint managing Lexus product and marketing planning in Japan. His assessment of the carmaker’s position at that time was grim: Toyota lacked the scale, visibility and pricing power to compete. “Our dealers at the beginning of this period were very much like, ‘You guys need more diesels’ “, Schlicht said. Before auto shows in Geneva, Paris or Frankfurt, he braced for criticism. “Put your helmet on; you’re going to get beat up because we don’t have enough diesels”. Toyota started directing its distributors and dealers to focus entirely on hybrids, even though they were accounting for just a fraction of the company’s sales mix. If a customer wanted to go for a test drive in, say, a Yaris, they had to take a spin in the hybrid before they could try the diesel. When Toyota coupled this retail strategy with an all-hybrid marketing campaign, its auto buyers started becoming hybrid converts. Dealers had little trouble reselling used hybrids that were traded in by customers because they tend to retain more of their residual value. “There is no strategy that the carmaker can make if the front line doesn’t buy in”, Tom Fux, the Cologne-based president of Toyota Germany, said by phone. “For us, hybrid is the key focus”. By the time hybrids reach about 50 percent to 60 percent of Toyota Europe’s sales mix, the company will be selling about 400,000 or 500,000 units per year, Schlicht estimates. In the January-November period, hybrids accounted for about 32 percent of its sales in the region. Corporate fleet operators and leasing companies, which play an outsize role in Europe’s auto market, have begun to feel exposed as residual values for diesels begin to shrink, and they’re starting to talk with Toyota about increasing hybrids as a portion of their business mix. Another significant factor will be the newly introduced C-HR, a latecomer to the fast-growing compact SUV segment. Toyota will build the model at a plant in Turkey, and about 75 percent of initial orders have been for the hybrid version, Schlicht said. The model won’t offer a diesel engine option. “We’re not anti-diesel, but the mindset has shifted”, Schlicht said of Toyota Europe’s dealers and distributors. “It’s moved on, and now they’re really into selling hybrids”. +++

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