+++ German luxury-car brand AUDI said its deliveries rose to a new record last year despite the diesel emissions scandal, although that would likely not be enough to save it from dropping into third place behind luxury rivals Mercedes-Benz and BMW in global sales rankings. The key contributor to Volkswagen group profit increased sales of luxury cars to 1.87 million units from 1.80 million in 2015, a spokesman said. Ingolstadt-based Audi raised deliveries by 4 percent in the United States where VW’s emissions test-cheating scandal broke in 2015 and reported 6.4 percent more sales in Britain, its No. 2 European market, the spokesman said. Audi is due to publish official figures for December on Monday, same as parent VW. They are expected to show it has dropped into third place from second in terms of global luxury car brands. The luxury-car maker may start selling diesel vehicles again in the U.S. after deliveries were banned in the wake of the emissions manipulations, though a decision hasn’t been taken yet, sales chief Dietmar Voggenreiter was quoted as saying in an interview. By contrast, VW’s namesake brand plans to drop the technology in the U.S. as it reboots its strategy in the Americas post-dieselgate, brand chief Herbert Diess has said. +++
+++ Global automakers reported a surge in CHINA sales last year as consumers rushed to take advantage of a tax cut on small-engine cars, but cautioned 2017 would be tougher for the industry as the incentive is rolled back and the broader economy slows. Toyota, Ford and Nissan each reported sales growth of 8 percent or better for 2016, although Honda led the pack with a 24 percent growth. Toyota, which reported an 8.2 percent rise in China sales last year, sees growth slowing in 2017 as slightly higher taxes keep some buyers away from the world’s biggest auto market. It expects to sell at least 1.2 million vehicles, steady from 2016. “We are not being strictly volume focused. We would like to do so (increase volumes) while boosting car quality and keep our customer base satisfied with our products and service”, a Beijing-based Toyota spokesman told. While Honda expects to sell more vehicles in China this year, it forecast a significantly slower growth rate of 7.4 percent, roughly in line with a slowing economy. Demand for cars in China got a shot in the arm in 2016 ahead of a planned expiry of lower taxes at year-end. Sales will come under pressure this year, but not fall sharply, given a decision to slowly roll back the incentive instead of abruptly ending it. The purchase tax on cars with engines of 1.6 litres or smaller in China, at 5 percent now, will rise to 7.5 percent this year before returning to 10 percent in 2018. Overall passenger car sales in China could have dropped 2 percent this year had the tax cut expired on Dec. 31, but are now expected to grow by 3-5 percent, consultancy Automotive Foresight said. Analysts, however, cautioned that car sales could fall in the first quarter as consumers fearing the policy would end in 2016 moved ahead their purchases instead of waiting until 2017. “In late 2016 we definitely saw pull forward effects in engines below 1.6 liter. This will effect the Q1 negatively”, a sales executive at a major foreign automaker told. Honda posted the biggest growth in China sales last year among automakers reporting this week, powered by a steady stream of new models, mainly in the hot SUV egment. Vehicle sales by Honda rose to 1.25 million in 2016, while Ford reported a growth of 11.9 percent to 1.24 million vehicles. But with premium Lincoln brand car sales, which are not consistently included in monthly data releases, Ford’s sales totaled 1.27 million, giving it an edge over Toyota and Honda. All three, however, continued to lag Nissan in China sales. Nissan’s sales grew 8.4 percent to 1.35 million vehicles in the country last year. General Motors and Volkswagen continue to be the market leaders in China. GM and its joint venture partners reported sales of 3.87 million vehicles in China for 2016, up 7.1 percent. The full-year figures come in spite of sales slipping for several brands in the final month, with GM, Honda and Toyota all reporting a year-on-year drop for December with news China was not completely ending its tax incentive making its impact felt. +++
+++ FARADAY Future staked its claim to the world’s fastest electric car with its FF91 production model, showing footage of it outracing Tesla’s Model S in a glitzy event in Las Vegas. The startup electric-car maker backed by Chinese billionaire Jia Yueting is counting on its debut offering to drum up support from investors, many of whom had been invited to the Las Vegas presentation. The FF91 can go from 0 to 100 kilometers per hour in 2.6 seconds, according to the company. That compares with 2.7 seconds for Tesla’s Model S P100D in its fastest ‘Ludicrous’ mode. The 1,050-horsepower FF91 can travel in excess of 600 kilometers of adjusted EPA range, “enough to travel from L.A. to Silicon Valley with miles to spare”, Peter Savagian, Faraday Future’s vice president of propulsion engineering, said in the presentation. The car will also feature a personalized interface for every passenger and be able to find available parking space on its own. “We are not just building a vehicle but a globally shared internet mobility ecosystem”, said Jia, who’s also the founder of tech company LeEco. “I’m willing to devote everything to my dream. Even my life”. Jia is working to salvage a tech-focused empire that touches everything from smartphones and electric cars to organic food and movie productions. Leshi Internet Information & Technology, the Chinese video-streaming service also backed by Jia, said it’s in talks to raise more than 10 billion yuan ($1.4 billion) from a group of undisclosed strategic investors. The LeEco group has reiterated that it won’t give up on its electric car dreams despite restructuring at a subsidiary due to cash flow problems. Jia has invested more than $300 million of his own money in Faraday, said Winston Cheng, a former Bank of America investment banker who now runs corporate finance for the LeEco group’s companies. Faraday Future is one of three electric car ventures Jia has invested in. He set up LeCar in 2014 and the company aims to manufacture its first car this year. LeEco is also one of the investors in Lucid Motors, which was earlier known as Atieva and was established in 2007 to make battery packs for electric buses in China. In November, Lucid said it has selected Arizona as the home for a $700 million facility that will manufacture luxury cars. In December, Jia reassured investors that LeEco’s fundraising plans were going smoothly and it wasn’t planning to give up on its supercar dream. The company broke ground on its car plant in eastern China’s Zhejiang province on Dec. 28 and reiterated its commitment of investing about 11 billion yuan for the initial phase of construction. Recent measures by China to tighten controls on currency outflows has affected his ability to invest overseas, Jia said on the sidelines of the Las Vegas event. The FF91 can be reserved for $5,000 and first deliveries will take place in 2018, according to the company, which didn’t reveal the final retail price. Faraday Future’s plant in Nevada will start production this year and the company will be able to pay its suppliers, said Nick Sampson, the carmaker’s research and development chief. Company officials laid out the Faraday Future vision at the presentation, vowing to “reformat the future of mobility” that will make pollution, congestion and traffic accidents obsolete. The company is working to create a “new species” that will “truly change the game”, Sampson said. “It’s very impressive”, Christoph Stuermer, an automotive analyst at PricewaterhouseCoopers, said of the presentation. “My question is, how are they going to make money?” Faraday Future acknowledged the skepticism surrounding the company’s efforts. “Despite all the naysayers and the skeptics, we will persist,” Sampson said. One such glitch was on prominent display during the event. The driverless valet function that the company touted as solving the headache of finding parking space failed to engage on stage when Jia was invited to activate it, prompting Sampson to say that the car “was a little bashful” and “as a new baby she is often very, very timid”. He later explained that the building’s steel structure inhibited some of the signals that the car needed to drive itself. The company did an outdoors demonstration via video link earlier in the presentation that showed the FF91 seeking out an empty lot and reversing into it. “We will carry on to make the impossible possible”, Sampson said. +++
+++ Will LAMBORGHINI ever offer a plug-in hybrid? The sports car maker has been known to create wonderfully dynamic products powered by potent conventional engines. It turns out, Lamborghini is also keen on offering a plug-in hybrid vehicle in the guise of the Lamborghini Urus. This was confirmed by Maurizio Reggiani, chief of research and development at Lamborghini. However, Lamborghini Urus plug-in hybrid is just one of several versions of the new SUV. Lamborghini will still offer Urus with a conventional powertrain. Yes, the top men at Lamborghini had already revealed the new Urus SUV will be powered by a 4.0-liter biturbo V8 engine, which should make this yet unrevealed model the fastest SUV in the market upon launch. Actually, this V8 engine is the same powerplant already fitted in Porsche Panamera Turbo, in which it was able to deliver 550 hp of peak output and 770 Nm of max torque. The power levels for the Lamborghini Urus remain unknown, although there are speculations that the carmaker would tune it for greater output. Once launched, the Urus plug-in hybrid will be the first of its kind at Lamborghini. Moreover, it will be the only plug-in hybrid vehicle in the sports car maker’s lineup. Lamborghini had already indicated its intentions to offer a hybridized vehicle by unveiling the Asterion LPI910-4 plug-in hybrid concept at the 2014 Paris Auto Show. Its hybrid powertrain includes a 5.2-liter aspirated V10 engine with selective IDS (Iniezione Diretta Stratificata) and three electric motors. The V10 engine provides 610 hp of max output at 8,250 rpm while the electric motors deliver 300 hp of output. This means that the Lamborghini Asterion concept offers 910 hp of total max output. Aside from having too much power, the Lamborghini Asterion concept is also very efficient, consuming just 4 liters of fuel per 100 km and emitting only 98 grams of carbon dioxide per kilometer. Sadly, there had been no news about the Lamborghini Asterion. So far, I’ve received no updates too on whether it would be transformed into a production model. But its hybrid powertrain is surely something. Whether Asterion’s hybrid powertrain would be fitted on the Lamborghini Urus plug-in hybrid remains unknown, but at least we have an idea on what the sports carmaker intends to use for its new electric-gasoline SUV. Underpinning the new Urus is the same platform that underpins the Audi Q7 and the Bentley Bentayga: the Volkswagen Group MLB platform. As for its V8 engine, Reggiani said it will surely employ turbocharging, since as an SUV, the Urus needs massive torque levels, unlike its super sports cars that employ normally aspirated engines that are known for their responsiveness. Lamborghini is expected to unveil the Urus in 2017 and commence its sales in 2018, although it remains unclear whether the plug-in hybrid version would be available at launch. +++
+++ The race for delivering street-wise autonomous vehicles is heating up as MERCEDES recently received permission from the German government to conduct on-the-road tests of its experimental units. This isn’t the first time that Mercedes-Benz was granted permission to test its autonomous vehicles. However, the latest approval involves the next generation of the carmaker’s autonomous prototypes, now installed with its newest software dubbed as Daimler Autonomous Vehicle Operating System (Davos). These autonomous prototypes are derived from the Mercedes-Benz V-Class (Viano) mid-size passenger van. These test vehicles are fitted with advanced Lidar sensors to allow the Davos software to do its work. Davos employs a graphic processor and deep-learning technologies to perform as expected. With these technical specs, these new autonomous prototypes should be able to theoretically operate by themselves. However, two specially trained drivers will be on board each test car for safety reasons. By having these prototypes deployed in real-world conditions, Mercedes engineers would be able to fine-tune the Davos software. These prototypes should allow Mercedes to inch closer to its goal of launching an autonomous vehicle in the near future. Mercedes has been saying it would launch a production autonomous car as soon as its self-driving technology is prepped for public use and as soon as related regulations have been put in place. These developments come as Mercedes is getting ready to make a good presentation at the 2017 Consumer Electronics Show in Las Vegas. Its presence at CES will have a definitive impact on its new Case corporate strategy that features 4 pillars: Connected, Autonomous, Shared & Service and Electric Drive. Ola Kallenius, member of the Board of Management of Daimler AG responsible for Group Research and Mercedes-Benz Cars Development, remarked that their Case strategy will help the carmaker shape the future of mobility. He noted that their goal is to transform the car into a platform for future mobility concepts as well as into a space offering a digital experience. In line with this Case strategy, Mercedes will be presenting its Concept EQ and Vision Van concept at the 2017 CES. Aside from Mercedes-Benz, fellow German premium carmakers BMW and Audi are also setting their eyes towards autonomous driving. Just recently, BMW announced its plans to commence testing of autonomous vehicles in the urban environment under its new iNext project, pending regulations. In fact, BMW has opened a new facility in Unterschleissheim, Germany, that is dedicated to vehicle connectivity and automated driving. This facility will have around 2,600 employees working to develop the autonomous iNext project. Audi, meanwhile, unveiled in December 2016 its Q2 deep learning concept that features a self-learning system. The Audi Q2 deep learning concept features sensor technology that employs two mono cameras and 10 ultrasonic sensors. +++
+++ MITSUBISHI will continue to focus on the crossover market, while cutting out the Lancer, a former mainstay in the brand’s lineup, Mitsubishi executives said ahead of the Detroit auto show. Mitsubishi won’t have a presence at the 2017 show. It hasn’t been part of the Detroit show since the Great Recession. Don Swearingen, executive vice president at Mitsubishi Motors North America, told reporters that Lancer production will end in August. In an overall weak car market, Mitsubishi sold just 14,304 Lancers in the U.S. last year, a decline of 19 percent. The high-performance (and to many, iconic) Lancer Evolution, was discontinued in 2015. While the Lancer is being shown the door, crossovers will continue to carry Mitsubishi. The Outlander Sport (ASX) leads the way with U.S. sales of 33,067 units in 2016, down 11 percent, followed by the Outlander, with U.S. deliveries of 26,576, or a gain of 40 percent, in 2016. The two crossovers accounted for 65 percent of the brand’s U.S. sales last year. Overall, Mitsubishi’s U.S. sales edged up 1 percent for the year, to 96,267. It was the fourth straight year of sales gains for the brand. The Outlander and Outlander Sport will be freshened for the 2018 model year. The Outlander is set to receive more safety features at a lower price point, while the Outlander Sport will get enhancements to the “dynamic shield” front-end design styling of the vehicle. Mitsubishi will also be introducing an all-new compact crossover at the beginning of 2018, Swearingen said. Swearingen added that the unnamed vehicle will feature a turbocharged engine and will be equipped with user friendly technology, including head-up display. “Frankly, in my opinion from test driving the new vehicle, it will be the best vehicle Mitsubishi has ever produced”, Swearingen said. To fit the new crossover into the brand’s U.S. lineup, Swearingen said the Outlander will get a little bigger in width and length, while the Outlander Sport will get a little smaller. The new crossover will fit between the existing nameplates. Swearingen also touched on Mitsubishi’s recent alliance with Nissan and Renault, making it clear that the automakers will remain competitive on the product front. “They’re bringing a lot of good things into the Mitsubishi culture and I think they will help us to grow together”, Swearingen said. “But the key is to find synergies that will help not only us, but Nissan, with reducing costs, using common parts and looking at platforms we could use together. “We’re still competitors. So at the end of the day, even if we share a platform, it has to have a unique style and for us that’s going to be the dynamic shield”. Effective Oct. 20, Nissan took a controlling 33.4 percent stake in Mitsubishi. In December, Nissan CEO Carlos Ghosn became Mitsubishi’s chairman. In December, the Japan’s Nikkei daily newspaper reported that Nissan, Renault and Mitsubishi Motors will combine their electric vehicle platforms to help bring costs and prices down to levels comparable to conventional gasoline cars. The Nikkei said Renault and Mitsubishi will use the same vehicle platform that will undergird Nissan’s remodeled Leaf electric car, expected to go on sale around 2018. However, when asked about the report, Swearigen declined to confirm it. “No, were not confirming that at all”, Swearigen told. “We’ve heard the same thing but clearly we think there should and could be opportunities for Nissan with our plug-in hybrid and for Mitsubishi with their electric vehicle”. +++
+++ NISSAN is halting joint development of luxury cars with Daimler’s Mercedes-Benz, sources close to the companies told, suspending a key project in their 7-year partnership and potentially hitting profitability at a new shared factory in Mexico. Nissan decided in October its premium Infiniti brand would not use “MFA2”, an upgraded Daimler car platform that the companies have jointly funded, in part because Infiniti was not performing well enough to absorb Mercedes technology costs, the sources said. “It wasn’t possible to close a deal on the basis of MFA2”, said one of the people. “The targets set by Infiniti were too difficult to achieve”. The move could reduce efficiency at a $1 billion shared factory opening this year in Aguascalientes, Mexico, where the companies had planned to use the same compact car architecture to cut complexity and production costs, two of the sources said. It could also ultimately force Nissan to write down part of a $306 million investment at its UK plant that included Mercedes-based tooling, they added. Daimler and Nissan pursue joint programs only when “beneficial for both sides”, the companies said in separate statements, without directly addressing emailed questions about their plans for MFA2 vehicles. Projects are constantly reviewed against targets to account for “developments beyond the control of management”, they added, and discussions about joint development of future premium compact cars are ongoing. Nissan’s decision deals a blow to the broad cooperation deal struck between Renault-Nissan boss Carlos Ghosn and his Daimler counterpart Dieter Zetsche in 2010. It also underscores the mixed results of Nissan’s battle over almost 3 decades to transform Infiniti into a significant global player in the lucrative luxury car market. The decision predates Donald Trump’s election as the next U.S. president, the sources said, and was unrelated to campaign vows to penalize Mexican imports that have rattled the auto industry. Ford scrapped a planned compact car plant in the country. Nissan and Daimler are pushing ahead with Aguascalientes, where they will build Infiniti and Mercedes models for the U.S. and other markets from a single assembly line opening in 2017. The project nonetheless faces weakening U.S. demand for smaller cars that contributed to Ford’s cancellation and has further raised profitability hurdles for new Infiniti compacts. Persistently low oil prices accelerated the market shift to larger vehicles in 2016, Ford sales chief Mark LaNeve said on Wednesday. “All the growth was SUVs and pick-ups”. Infiniti has struggled outside the United States, last year selling 16,000 vehicles in Western Europe and 230,000 globally – less than 5 percent of Nissan’s overall tally and barely one-tenth of Mercedes’s expected 2 million deliveries. The first Infiniti appeared in 1989, the same year as the launch model for Toyota’s upscale Lexus brand, which has since grown 3 times bigger by sales. Modern carmakers pursue economies of scale by increasing the number of models built on each underlying platform: an adaptable chassis accommodating different body sizes, engines and alternative component sets for every part of the vehicle. The retreat on luxury compacts leaves intact the sharing of engines between Infiniti and Mercedes, and small cars between Renault and Daimler’s Smart. The 3 groups also collaborate on vans and pickups. But joint premium car development for Mexican production was “one of the largest projects between the Renault-Nissan alliance and Daimler”, Ghosn said when unveiling the program in 2014. A year later, after upgrading its plant in Sunderland, England, Nissan began building the Infiniti Q30 hatchback on the current MFA architecture developed for the Mercedes A-Class and derivatives. The plant added the QX30 SUV in 2016, extending Infiniti’s push into smaller vehicles. Nissan has now ditched plans to use the updated Mercedes platform for successors to those models planned for Aguascalientes, the sources said, or for any future Infinitis. Other cancellations include a compact Mercedes-based Infiniti Q40 sedan earmarked for the plant in 2018. Instead the single, less efficient assembly line will build Mercedes cars including an A-Class sedan and subsequent mini-SUV alongside Infiniti vehicles based on Renault-Nissan architecture, starting with a new QX50 SUV this year. Nissan was forced to conclude that the Infiniti brand would not command the higher prices required to turn a profit on vehicles stuffed with Mercedes technology, one source explained. “One of the lessons learned is that if you have the costs of a luxury vehicle but not the pricing, it’s hard to be profitable”, he said. Nissan may end up writing down some Sunderland investment in Mercedes-based tooling that had been intended to outlast the current Q30 and QX30, people with knowledge of the matter said. The company is still paying its share of MFA2 development costs running to hundreds of millions of euros for a platform it no longer plans to use, they said, but will leave Daimler with a higher share of some production costs in Aguascalientes. The setback may also show the limits of Ghosn’s consensual approach to economies of scale as head of both Renault and Nissan, whose 18-year-old alliance is underpinned by significant cross-shareholdings. The slow pace of integration has contributed to upheaval at the recently created alliance powertrain division, charged with converging Renault and Nissan engineering. Plans to build Infinitis on Mercedes technology had encountered resistance at Nissan from the start, one source said. “Once again, Ghosn has been unable to break through the wall of engineers to force commonality”. +++
+++ Given the number of emission scandals that has grabbed the headlines last year, SOUTH KOREA ’s Ministry of Environment has banned the sales of certain Nissan, Porsche and BMW models. At least ten vehicles were found to have false emission test results, including Porsche’s Panamera S E-Hybrid, 911 GT3, Cayman GTS, 918 Spyder, Cayenne S E-Hybrid & Turbo and Macan S Diesel. Nissan’s Qashqai and Infiniti Q50 were also included as well as BMW’s X5 M. The 3 carmakers were fined a total of $5.9 million for the 4,523 affected units sold and registered locally. BMW and Nissan’s local divisions have said that something would be done to correct the fabricated documents to get back their certifications while Porsche, at this time, could not be reached to comment on the issue. South Korea last year has banned a total of 32 models from Bentley, Audi and Volkswagen following the Dieselgate cheating controversy. Volkswagen Group paid $15.98 million (or 17.8 billion won) to the South Korean government for falsification of documents. Among the vehicles banned since August 2016 are the Audi RS7 and the Volkswagen Golf. It does look like the government has grown stricter now and has broadened the coverage of its investigations. Nissan was accused of using a “cheating device” for its 20 diesel vehicles that allegedly turn off its pollution reduction system under normal temperatures. Apparently, the Qashqai diesel emits more nitrogen oxide than it has declared on the emission test findings. Due to this, the South Korean government has included the Qashqai on the blacklist. The Japanese car manufacturer however denied the allegations, stating that it did not employ cheating devices on any of its vehicles. After the initial investigations last year, South Korea’s ministry director Hong Don-kon suggested that they will give the companies more than a month to explain their side. Until such time, the government plans to withdraw the certifications as well as prevent these companies from selling their products locally. The prosecutors were then asked to conduct further investigations until a final decision was made. Based on the data released by Korea Automobile Importers and Distributors Association, foreign car manufacturers make up at least 15% of the market share. Covering January up to November of 2016, the popular cars include Mercedes-Benz and BMW. Unexpectedly, sales of imported vehicles in the peninsula dropped by 7 per cent in those 11 months. This decline in annual sales happens to be the first in the last 7 years. +++
