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+++ AUDI ’s product offensive continues with a display of power at the 2017 Geneva Motor Show. Described as a “coupe from Audi Sport that perfectly combines performance and aesthetics”, the new RS5 Coupe is coming to complete the new A5 Coupe family, and to sit above the S5 in the range. It’s expected to need less than 4 seconds for the 0 to 100 km/h sprint, and to reach an electronically capped top speed of 250 km/h, due to its new 2.9-liter twin-turbo V6 engine. This should produce more than 450 horses and 600 Nm of torque. Created to rival the BMW X6 and Mercedes-Benz GLC Coupe, the Audi Q8 will also land at the brand’s stand in Geneva, straight from the 2017 Detroit Auto Show, where it made its global premiere. The dynamic SUV is currently in concept form, but it will eventually hit the assembly line. Rounding up the list of premieres will be what the Germans refer to as “a natural gas model with a unique sustainability concept”. Previous reports also talked about other possible premieres at the Audi stand, such as the RS1, and RS Q5 but these remain unconfirmed for now. +++

+++ The JAGUAR E-Pace compact SUV is the next step in the car maker’s SUV sales assault and is due to be revealed in early summer. It follows just 6 months after the unveiling of the electric I-Pace at the LA motor show. With the mid-sized F-Pace SUV making up more than half of the brand’s overall sales since it was launched last year and buyers preferring highriding vehicles to traditional saloons such as the XE and XF, Jaguar’s growing range of SUVs will be key to the brand’s future success. As well as the E-Pace, F-Pace and I-Pace, a large SUV called the J-Pace will go on sale by 2019. The compact E-Pace, which is set to be a bigger seller than the larger F-Pace, is fundamental to those plans. While the F-Pace has had a major effect on Jaguar sales, the E-Pace promises to catapult the premium brand forward in the same way that the Range Rover Evoque has done for Land Rover. The 5-seat E-Pace, which will rival the BMW X1 and Audi Q3, is a similar size to the Evoque and will be smaller than both the F-Pace and the electric I-Pace. It will be built on the same LR-MS steel platform as the Evoque and Land Rover Discovery Sport and produced alongside those models at JLR’s Halewood plant. Front-wheel-drive versions will be most popular, but all-wheel-drive will be an option. Both 6-speed manual and 8-speed automatic transmissions will be offered. With the Evoque and Discovery Sport being Jaguar Land Rover’s 2 bestselling models, the Halewood factory is already at its full capacity of 200,000 cars annually. As a result, JLR is currently assessing how to accommodate production of a new model. JLR also builds the Evoque and Discovery Sport in in Brazil, India and China, but it is unlikely that Jaguar would choose to produce the E-Pace abroad without any manufacturing capacity for the car in the UK. Styling for the E-Pace closely resembles that of the F-Pace, with both the grille and roofline reminiscent of those of its larger sibling. The E-Pace will also feature the latest development of Jaguar’s InControl Touch Pro infotainment system, recently updated in the F-Pace, and showcase improvements in interior quality. InControl Touch Pro now offers so-called ‘DualView’ technology, which was first introduced on the Range Rover and allows the driver and front passenger to view different display functions on the same 10-inch screen. The E-Pace will use 2.0-litre four-cylinder petrol and diesel Ingenium engines, which are produced at JLR’s engine manufacturing facility in Wolverhampton. Echoing the engine line-up in the recently updated F-Pace, the units will include an entry-level 163 hp 2.0-litre diesel, which targets company car drivers with its good CO2 emissions and fuel economy, as well as a 180 hp 2.0-litre diesel. The compact SUV will also use the same 2.0-litre engine in twin-turbocharged form to create a new high-performance diesel model with 240 hp and “more performance at high engine speeds without compromising responses at low revs”, according to Jaguar. The E-Pace would also be an ideal car for Jaguar to launch its expected hybrid powertrain, the introduction of which would help Jaguar bring down its fleet-average CO2 output in order to achieve stricter emissions targets. The most likely option is a mild hybrid electric vehicle (MHEV) powertrain, a version of which is also expected on the Evoque and Discovery Sport. It will use an electric drive motor and a three-cylinder 1.5-litre Ingenium diesel engine equipped with an electrically powered turbocharger. The MHEV project, which was first shown at an engineering presentation in 2015, uses a 48V electrical system to power the turbo, water pump and aircon. While the electric motor is relatively modest, with an output of just 20 hp, its role is to fill gaps in the torque curve and help boost acceleration. The MHEV will also be able to shut down its engine and coast in order to preserve fuel. Technology on the E-Pace will include the ability to pay for fuel at Shell service stations with a new in-car cashless payment system operated via InControl Touch Pro. Owners who install the Shell App can drive up to any Shell pump in the UK, and later globally, and use the vehicle’s touchscreen to select how much fuel they want and then pay using Paypal or Apple Pay. An electronic receipt, which will be displayed once the driver has filled up, will be emailed to the driver. The new Jaguar is set to be unveiled in May, away from the motor show circuit, and will appear after the BMW X6 and Porsche Macan-rivaling Range Rover Velar. The coupé-styled SUV, which will be revealed this week and will play a key role in Land Rover’s fortunes, will sit between the Evoque and Range Rover Sport. The E-Pace’s price is expected to undercut that of the Evoque and be significantly less than that of the F-Pace. While Jaguar remains tight-lipped on the E-Pace, the model is due to go on sale later this year. Sales in the premium compact SUV class, in which the E-Pace falls, grew by a quarter globally in 2016 year on year, making it the fastest growing-segment alongside the mainstream B-SUV sector, which includes models such as the Nissan Juke and Opel Mokka. Global sales volume of premium compact SUVs was 828,000 units, with the Audi Q3 leading the way (227,310 units), followed by the BMW X1 (206,392 units) and Mercedes-Benz GLA-Class (192,496), according to data from JATO Dynamics. In Europe, SUVs accounted for 29% of all premium sales and sold more than 1 million units for the first time, at 1.04 million. In the USA, SUVs made up a huge 53.7% of overall premium car sales, at 1.15 million. Among the premium SUVs, compact models counted for only 22.7% of last year’s total global sales. “Until now, the market for premium SUVs has been dominated by mid-size and large SUVs”, said JATO’s Felipe Munoz. “However, during the past 8 years the 3 German premium brands have started to enlarge their presence in lower segments”. Other top-selling models include the Range Rover Evoque and, in the US, the Acura RDX and Lincoln MKC. “There has been a sharp growth of premium C-SUV sales during the last eight years”, added Munoz. “Consumers around the world aspire to drive a premium car. This factor, along with the fact that SUVs have become more popular, encouraged premium brands to develop smaller, cheaper SUVs alongside the traditional big ones”. +++

+++ The PSA Group has agreed to buy General Motors’ OPEL unit in a transaction valued at 2.2 billion euro, creating Europe’s second-largest carmaker in a bid to better compete in the region’s saturated market. The deal includes the Germany-based Opel, its U.K. nameplate Vauxhall, as well as the GM unit’s financing operations. BNP Paribas SA will buy 50 percent of the financing business for about 450 million euro. GM, which has owned Opel for almost 90 years, is cutting ties after the division missed a target to break even in 2016, contributing to losses that have totalled about 9 billion dollar since 2009. PSA is betting that adding Opel’s roughly 1.2 million in annual deliveries will solidify its own turnaround by spreading the costs for developing new vehicles across a larger network. Job and production cuts are likely as the two companies offer a similar slate of mass-market cars from high-cost locations in Germany, France and the U.K. The combination is expected to generate annual savings of 1.7 billion euro by 2026, with the loss-making Opel unit generating an operating profit margin of 2 percent by 2020 and 6 percent by 2026, GM and the Paris-based maker of Peugeot and Citroen vehicles said in a joint statement. “We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support”, PSA chief executive officer Carlos Tavares said in the statement. “Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner”. For GM, exiting Opel will lead to a non-cash charge of 4 billion to 4.5 billion dollar. The deal will continue efforts to shed underperforming assets and will free up about 2 billion dollar in cash to use for share buybacks, according to the statement. The U.S. automaker will also have the right to purchase PSA shares through warrants issued as part of the deal. GM and PSA will continue an agreement for Opel to supply its Australian Holden unit as well as the Buick brand with certain models. The 2 companies may also cooperate on fuel cell systems. The deal would reinstate PSA as Europe’s second-biggest carmaker after Volkswagen, pushing it past Renault following a steady decline in market share in recent years. After streamlining operations following a 2014 bailout by the French state and Dongfeng Motor. Tavares is shifting focus to growth. His vision for a combination of PSA and Opel is to create a “European champion” by slashing costs, combining development efforts and exploiting the appeal of German engineering. With the addition of Opel, PSA is set control 16 percent of the European auto market, putting it behind only Volkswagen’s 24 percent. The deal is the second run at linking the 2 carmakers after savings from a purchasing and development cooperation project fell short of expectations, prompting Detroit-based GM to sell its 7 percent stake in its French counterpart in 2013. Still, that cooperation is now starting to pay off. In February, Opel unveiled the new Crossland X compact SUV, which shares underpinnings with PSA’s Citroen C3 Air Cross. A larger Opel SUV is set to follow later this year, which will be built at a PSA facility in France. At Opel, Tavares will seek to replicate the turnaround he engineered at PSA, including cutting jobs, freezing pay and eliminating slow-selling, unprofitable models. The French company went from net losses starting in 2012 to profit in 2015, and generated 2.7 billion euro in cash in 2016. This year, for the first time since 2011, the company will pay a dividend. +++

+++ The PEUGEOT 3008 has been named European Car of the Year, seeing off competition from new models such as the Mercedes E-Class, Nissan Micra and Alfa Romeo Giulia. The winner was decided by a team of 58 European judges, taking in factors like design, comfort, safety, performance and driver satisfaction. Judges have 25 points to award across at least 5 of the 7 cars, making for a balanced shortlist. The 3008 topped the points list, garnering a total of 319 points. The Alfa Romeo Giulia took second place with 296 points and the Mercedes E-Class clinched a podium position, taking 3rd with 197 points. Next came the Volvo S90/V90 (172 points), the Citroën C3 (166 points), the Toyota C-HR (165 points) and the Nissan Micra (135 points). Jean-Philippe Imparato, CEO of Peugeot since last September, is visibly very touched: “We are so happy. It is a great moment and I am very proud to receive this prize for our Peugeot 3008”. Last year’s winner was the Opel Astra, and the victor the year before was the Volkswagen Passat. The Peugeot 308 won in 2014. +++

+++ PSA (Peugeot, Citroen, DS) has announced it has acquired GM’s European arm Opel/Vauxhall in a deal worth 2.2 billion euro. The announcement was confirmed at a press conference in Paris this morning. Globally, PSA sold 3.5 million cars last year compared to the Opel/Vauxhall brand’s 1.0 million. The deal is expected to be completed by Q4 2017. “We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround”, said Carlos Tavares, chairman of the Managing Board of PSA. “Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level”. At press conference this morning, Tavares added “this acquisition is a game changer for PSA”. General Motors chief executive officer Mary Barra said “We are very pleased that together, GM, our valued colleagues at Opel/Vauxhall and PSA have created a new opportunity to enhance the long-term performance of our respective companies by building on the success of our prior alliance”. At the press conference the GM CEO added that the sale had been a “difficult decision for General Motors” but ultimately the right one. Regarding the relationship of GM and PSA going forward, Barra revealed that the 2 companies could collaborate on electric vehicle and fuel cell vehicle technology, sharing the investments GM has made in partnership with Honda. By 2026 the deal could help PSA make annual savings of 1.7 billion euro; a proportion of this expected by 2020. Manufacturing, purchasing and R&D are the key areas where costs can be cut. PSA has promised to honour existing job guarantees at Opel and Vauxhall, though, securing jobs at least until 2021. Opel CEO Karl-Thomas Neumann said Opel would have broken even in Europe in 2016 if not for Brexit. Regarding Vauxhall, he said that regardless of the deal it would remain a “true British brand”. Carlos Tavares previously met with Opel Vauxhall’s European Works Council to discuss job guarantees and labour agreements. In a statement, the PSA Group said: “PSA Group reaffirmed its commitment to respect existing agreements in the European countries”. Tavares has also since met with UK’s Unite union boss Len McCluskey. The union boss said: “It was a relatively positive first meeting in which Mr Tavares gave assurances that current production commitments would be met”. However, McCluskey added that while Tavares “talked in terms of not being here to shut plants”, there were still other issues, like pension plans that needed clarifying under the new ownership. Tavares was said to have made similar commitments to the UK’s prime minister, Theresa May, whom he had a telephone conversation. In the UK, the job guarantees imply that the production of the current Astra at Ellesmere Port would be guaranteed until 2021 and the Vivaro van in Luton would be secure until 2025 – after which the company will decide where to produce the next generation vehicles. General Motors Europe has 9 plants in Europe, but despite reassurances from PSA that all will remain in operation under the French carmaker’s ownership, experts still believe that for PSA to make a profit from the acquisition it would have to cut jobs and production in Europe – which they state is at overcapacity. John Colley, a professor at Warwick Business School said PSA has “little choice but to close the UK Vauxhall plants to make the Opel acquisition work”, as the cost of cutting jobs at the German plant would be far higher. However, not all share such pessimism. Garel Rhys, professor of motor industry economics at Cardiff Business School told that Vauxhall’s Ellesmere Port and Luton plants are some of the most efficient in Europe, and PSA would surely value this over any uncertainty associated with Brexit, or other geographical factors. The UK’s biggest union, Unite, has called for the Government to grant Vauxhall similar post-Brexit assurances it promised Nissan, which prompted the Japanese carmaker to continue production at its Sunderland site, protecting over 7,000 jobs in the process.  Unite boss, Len McCluskey met with Business Secretary Greg Clark and asked the Government to guarantee Vauxhall similar assurances in order to protect jobs at the two UK plants. McLuskey said: “The important thing for us is to get the Government engaged so that we can defend British jobs”. Clark has since met with PSA executives and promised the Government’s “unbounded commitment” to protect jobs at Vauxhall. PSA already has dealings with Opel and is currently supplying the GM brand with components. For instance, the upcoming Grandland X – a new C-segment SUV headlining Opel’s SUV boom – will sit on a PSA platform. It’ll get the EMP2 architecture underpinning the Peugeot 3008 and 5008 models, and could event be built at Peugeot’s factory in Sochaux, France, alongside those 2 models. General Motors and PSA claim that the deal is a ‘win-win’ for both companies. But how can this be so? GM’s situation is relatively simple: the firm gets shot of a division that has failed to make any money since the turn of the millennium. And it rids itself of uncertainty over how its European set-up could and would work post-Brexit. This, in turn, will allow GM to focus on areas where it can see real opportunities for ‘straightforward’ growth: its domestic market, the United States, and China. PSA’s reasoning is more complex. It’s hard to see how it will have need of the new structure’s 24-odd factories across Europe – not least because Opel’s and Vauxhall’s plants have had spare capacity for years. But there are potential gains in even greater economies of scale, as PSA stretches components, platforms, engines and transmissions across an even wider range of models. Perhaps the most significant reason is that the deal could allow PSA to stop being a ‘French car company’ and start being a European one. Buyers in Germany or eastern Europe who simply refuse to consider even the idea of a French car may soon be offered Opels containing quite a bit of Peugeot or Citroen technology. And if they carry on buying them, then Tavares’s gamble could pay off handsomely – especially if he’s managed to squeeze out a bit more profit margin on each vehicle in the meantime. And British customers? Expect some frenzied market research from PSA into whether we’re hung-up on the idea of buying a Vauxhall or open to the prospect of having an Opel badge on the fronts of our Astras and Corsas as we move into the middle of the next decade. The new owner is sounding very conciliatory at the moment – but PSA’s recent history shows that if it ultimately does judge Vauxhall to be complexity that it doesn’t need, it won’t think twice to strike a line through it on the balance sheet. +++

+++ Established brands and models dominate the top10 list of best-selling cars in the UNITED KINGDOM and the hatchback rules supreme. However, the latest sales figures show that some newer additions to Britain’s roads are growing in popularity, perhaps foreshadowing a change in preferences among buyers. The latest figures cover the year to the end of February and show that superminis and hatchbacks are the most popular. The Ford Fiesta continues to fly out of dealerships, with the Vauxhall Corsa is chasing hard but some way behind in overall sales. The Focus is still attracting plenty of fans but not quite as many the Volkswagen Golf, which is second overall despite VW’s recent tribulations. Nissan’s Qashqai and Juke shows the continuing popularity of small SUV, meanwhile, Vauxhall’s Mokka has been knocked out of the top 10 by the Audi A3. The Vauxhall Astra continues to sell well and is chasing the Focus, while the Volkswagen Polo shows that there are plenty of buyers willing to pay extra for a more classy supermini. Here is the top10: 1: Ford Fiesta – 12.777 registrations, 2: Volkswagen Golf – 8.404 registrations, 3: Ford Focus – 6.767 registrations, 4: Vauxhall Astra – 6.235 registrations, 5: Mercedes-Benz C-Class – 5.990 registrations, 6: Nissan Qashqai – 5.329 registrations, 7: Vauxhall Corsa – 5.260 registrations, 8: Nissan Juke – 4.759 registrations, 9: Volkswagen Polo – 4.742 registrations, 10: Audi A3 – 4.650 registrations. +++

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