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+++ AUDI sold around 422,600 automobiles in the first quarter of 2017, 7.3 percent less than one year ago. International markets reported a mixed picture for the Four Rings: Western Europe (+2.4%) and North America (+8.6%) both registered the most successful start to the year in Audi history. Despite the ongoing generation changeover of important high-volume models such as the Q5 and the A5 family, the brand continued to grow in both regions. In China (-22.1%), by contrast, temporary extraordinary effects impacted the start of 2017. Audi is laying important structural foundations for the market potential of the coming decade there. In the month of March, around 173,450 deliveries worldwide were 6.8 percent below the previous year’s figure. “As expected, we have put a difficult first quarter behind us”, says Dietmar Voggenreiter, Board member for Sales and Marketing at Audi. “In light of the very positive feedback to our model initiative, we remain confident for the rest of the year. Successively, new key models will become fully available in many markets. In China we took a major step forward with our partners over the past few weeks and we jointly aim to achieve an even stronger setting for the future”. Among the large European markets, in particular Germany (+2.1% to 82,968 cars), Spain (+5.2% to 14,737 cars) and above all Italy (+16.3% to 17,190 cars) registered further increases in the first quarter compared with the same period in 2016. During the past few months, the new Q2 has been giving substantial impetus, already taking the top spot in March among Audi’s bestselling SUVs in Europe. The compact city SUV has been making inroads in Southern Europe in particular, contributing substantially to Italy achieving the highest growth among the top European markets in the first quarter. Demand for the new A4 also remains strong, with European sales up by 14.2 percent to around 41,500 automobiles in the first 3 months of the year. Across all models, sales in Europe increased by 2.0 percent to around 226,750 in the quarter. Audi closed March with around 98,500 units sold in the region, up 1.3 percent. In the U.S. market, the company’s deliveries increased substantially by 8.8 percent to 45,647 customers from January through March. 18,705 of these were achieved last month, an increase of 1.7 percent just before the launch of the new Q5 in the United States. The new generation of the bestselling model of Audi of America will go on sale in U.S. dealerships in April. In the first quarter, Audi’s SUV sales in the United States already soared above-average: deliveries of the Q3, Q5 and Q7 combined totaled 22,962 units, exceeding the 2016 reference figure by 19.4 percent. The A4 as well achieved double-digit gains year-on-year, up 25.5 percent to 8,568 units since the start of the year. In Canada, the new A4 is also one of the strongest growth drivers of the Four Rings. Overall, Audi sales in the second-largest North American market rose by 17.6 percent to 6,887 through March. In China, temporary extraordinary effects had a major impact on the sales balance for the first quarter. In its largest sales market, Audi is currently preparing with its local partners for the planned next stage of growth. In this respect, the Four Rings are also setting the course for a substantial expansion of electric mobility. To this end, Audi and its joint venture partner FAW decided in the first quarter to reinforce their collaboration and subsequently defined its operational implementation. Additionally, the premium manufacturer is also planning to cover additional market potential through a second joint venture with SAIC. With regard to these structural foundations, Audi and FAW are currently engaged in very constructive talks with their dealership partners to further develop activities in China profitably and sustainably for all partners. While talks continue, Audi dealers managed their business cautiously in the first quarter. Consequently, deliveries reported by the dealership partners fell by 22.1 percent to 108,707 automobiles, and by 18.9 percent to 41,371 units in March. +++

+++ GENESIS is working on a Gran Turismo to rival the likes of the BMW 6 Series coupe and Mercedes-Benz SL, but it will focus its efforts away from purely being on performance with larger capacity V8 engines off the table. Luc Donckerwolke, the former director of design at Audi, Lamborghini, Bentley and now the head of design at Genesis, confirmed that work on a large GT was underway. The model is undoubtedly set to become the halo for the brand, and it will unencumbered by decades of history like that of its rivals. “When you are trying to do the next-generation of a product that has 100 years of history, your impulse is basically guided by the past”, Donckerwolke said. “What we are doing here is creating the first step. To be honest, I’m not really looking at the others, I have the advantage of creating something new. I don’t have to look at others, but there’s certainly going to be a Gran Turismo 2-door”. The GT will top the Genesis range that will also consist of 2 luxury SUVs and numerous sedans and their derivatives. Nonetheless, it’s unlikely the Hyundai-owned luxury brand will make use of a naturally-aspirated or assisted V8 for any of its vehicles, as it seeks to move into future powertrain technologies, a fact reiterated by Manfred Fitzgerald, the former head of brand and design at Lamborghini and now the boss of the Genesis brand. “I stated once that alternative propulsion systems are at the very core of this brand and I truly believe that”, Fitzgerald said. “If you look at that and you look down the road at what is going to happen with the electrification of vehicles, performance will not have that dominant role anymore because it’s a level playing field. So the ICE (Internal Combustion Engines) dominances of performance, that’s going to go away”. According to Fitzgerald, once all cars utilise electric powertrains, the difference in acceleration and performance will ultimately become meaningless. Meanwhile, Donckerwolke admits that while he would personally love to see V8s in the GT and other Genesis models, the future has caught up to the car industry. “As much as I like to drive V8s, I believe electrification is going to be a main element, like the powertrain of the Genesis GV80 concept having a range-extender fuel cell for an electric vehicle or an electric powertrain, it’s a great source. Hyundai and Genesis are pioneers of fuel cell technology, being the first company that has put fuel cell technology in production and on sale, it’s the way to go”. The timing for the Genesis GT is yet to be confirmed, however, I suspect it will spearhead the brand’s model lineup within the next 4 to 5 years. +++

+++ HYUNDAI ’s imminent i30 N hot hatch has entered a new stage of final testing ahead of its global rollout late this year, including an expected launch in September. The Korean company entered its first proper hot hatch (a rival for the Golf GTI, 308 GTI and Focus ST) in the VLN endurance race at the Nürburgring Nordschleife in Germany, last weekend. Hyundai wasn’t necessarily in it to win it. Instead, it took the opportunity to test a car with technical specifications very close to the final production version, against more modified production-car-based enduro racers. Engineers from its South Korea HQ and European R&D centres (one of which is situated at the ‘Ring) will do final honing based on lessons learned. Hyundai’s head of vehicle test and high performance development Albert Biermann (a former chief at BMW M) explained the rationale. “We want our high performance brand to have considerable racing pedigree so it is important that we compete with minimal modifications”, he said. “Nürburgring is where the i30 N has undergone much of its testing and chassis development”. The cars that Hyundai entered in the race were both equipped with the production 2.0-litre turbo engine and 6-speed manual gearbox. As they raced the car, Hyundai engineers identified areas of “further refinement and potential performance enhancements” for the i30 N. As I know, the i30 N will debut with 2 models: a 250 hp model and a 275 hp performance package variant. The car will also debut Hyundai’s first ‘E-LSD’ system, an electronically-controlled mechanical limited-slip front differential. The higher-output model will likely be offered with a firmer suspension tune and a track oriented setup, as we heard from Biermann last year. N models will feature unique front and rear elements, along with a larger boot mounted spoiler and side skirts. Unique wheels will round out the package. The interior comes with upgraded seats that feature extending bolsters and a new steering wheel that offers switchable drive modes. N models appear to also get quad-exhaust pipes and a unique rear diffuser. It appears that N models will initially launch with a 6-speed manual transmission only, to be followed by an 8-speed wet dual-clutch shifter from 2019. Hyundai has its own 3600 square metre testing centre at the Nürburgring. The technical team based in Germany takes advantage of the Nordschleife’s 73 corners, gradients of up to 17 percent and a difference in altitude of 300 metres. +++

+++ The resurrection of JAGUAR LAND ROVER (JLR) under its cashed-up Indian owner Tata Motors is paying dividends, with the company officially announcing record global sales last week following its best-ever haul in Australia last year. JLR looked to be in trouble at the height of the global financial crisis until previous owner Ford offloaded the British brands (part of the Blue Oval’s one-time Premier Automotive Group) to Tata Motors in 2008 for 1.4 billion euro. Since then, Tata has invested billions into building new production and research and development facilities, upgrading existing facilities and developing new models for both brands. It has also expanded its market presence in China, where it continues to grow, and has a global workforce of 37,000 employees. JLR last week announced its global sales results for its 2016/17 financial year, which ended March 31. Combined, the 2 brands sold 604,009 units worldwide over the 12-month period, representing a 16 percent lift over 2015/16 (521,571). The car-maker’s tally includes sales of models from its Chinese joint-venture partner Chery. Jaguar sales hit an all-time high of 172,848 units around the world, which is a massive 83 percent leap over the previous financial year tally. The company cited the “successful introduction” of the F-Pace (the brand’s first SUV) as a key reason for the sales surge, as well as continued interest in the still-fresh XE and XF sedans. Land Rover hit 431,161 sales, just a 1 percent increase over last financial year, with the company saying that continued interest in its Discovery Sport, Range Rover Sport and Evoque made up for the loss of the discontinued Defender. JLR is Britain’s number-one automotive manufacturer, edging out the BMW-owned Mini, GM’s Vauxhall (set to become part of the PSA Group), lower-volume premium brands such as Bentley, Rolls-Royce, Aston Martin and Lotus, as well as Japanese car-makers Nissan, Toyota and Honda. Last year it accounted for more than 30 percent of all UK car production, building 544,401 vehicles in 2016 at its three British manufacturing plants, with 80 percent of production exported to 136 global markets. In terms of sales by region, JLR grew by 32 percent in China compared with the previous financial year, while its North American sales increased by 24 percent. Sales in its UK home market were up by 16 percent and Europe grew by 13 percent, but other overseas markets dropped by 6 percent compared to the previous financial year. Both brands are unlikely to go too far backwards any time soon, with more fresh product on the way. Jaguar is set to launch a smaller SUV, likely dubbed the E-Pace, in the next 2 years as well as an all-electric crossover previewed by the I-Pace concept. Land Rover’s new Discovery has arrived in the showrooms and its new Range Rover Velar (based on the underpinnings of the F-Pace) hits showrooms in September this year. A new-generation Defender is also expected later in the decade. More performance-focused variants of models from both brands tweaked by the JLR Special Operations outfit are also likely. +++

+++ MAZDA Australia expects another record sales year in 2017, with the market’s number2 brand projecting it will move about 119,000 units. This figure would give the company market share of around 10 percent, and supplant the all-time full importer record it set last year of 118,217 units. Mazda’s strong sales goal will be supported by the rollout of significant new product such as the just-launched, second-generation CX-5 that is expected to remain Australia’s number one SUV, plus mid-cycle updates for the Mazda 2 and CX-3. The Japanese brand (which has an unusually strong foothold in Australia compared to most other markets globally) is off to a strong start in 2017, belying an industry-wide sales drop of 2 percent to be tracking even, at 30,462 units to the end of March, growing its market share to 10.9 percent. This makes it the clear number2 behind Toyota (48,514, 17.4 percent share), well ahead of Hyundai on 8 percent, Holden on 7.2 percent, Ford and Mitsubishi on 6.6 percent, and Nissan on 5.4 percent. Doing much of the heavy lifting is the new CX-9, which is performing “above expectations” with 2.314 units over Q1, almost on a par with the Toyota Kluger. This more than offsets declines on the Mazda 2, Mazda 3 and Mazda 6, all of which are suffering from the market-wide fall in passenger car sales. The BT-50 pick-up (3.531) and CX-3 (4.555) are tracking about even, while the MX-5 is avoiding major second-year sports-car blues thanks to the still-new RF hardtop. Despite the market-wide drop of 2.1 percent so far in 2017, Mazda Australia believes the market will stabilise thanks to a strong second half and hit a new record level of 1.19 million annual sales. Mazda Australia’s double-digit market share is among the highest in the world, and its model mix is certainly the richest. +++

+++ Sales of MINI brand vehicles achieved their best-ever March with a total of 42,447 delivered to customers around the world, an increase of 8.7% compared with the same month last year. March rounded off the brand’s record first quarter with sales totalling 83,059 (+6.1%). “Mini continues to demonstrate solid growth around the world”, said Peter Schwarzenbauer, member of the BMW Board of Management and responsible for Mini. “The Clubman in particular has shown strong growth of over 21% in the first quarter, proving that its perfect blend of everyday usability and Mini typical emotional characteristics is exactly what our customers want”, he continued. “With the new Countryman we’ve just recently brought to market, I’m sure the momentum we’re seeing at Mini will continue through the year”, he added. +++

+++ MITSUBISHI fans have been asking when (if ever) they are likely to see a new generation of the legendary and still widely-liked Pajero off-roader. The answer is, not anytime soon, according to Mitsubishi. “We cant speculate on whether we are developing a new Pajero”, Mitsubishi Motors Head of Product Planning James Tol explained. “We will continue to upgrade and tweak the current one for the foreseeable future”. Part of that process of updating the current Pajero includes tighter emissions regulations that have seen it meet strict Euro5 guidelines. “That’s part of it, we’ve invested to keep it compliant with Euro5 regulations”, Tol said. “We didn’t invest all that money not to sell the car, put it that way. Outside of that, we really can’t speculate”. What, then, of the comment recently that hinted at a Nissan/Mitsubishi shared platform for what would be the new Pajero? “We don’t know what the alliance will decide to do, honestly”. “The Pajero and Patrol are a good mix, or it fits or something like that, but with the current car, we are spending a lot of money keeping it current and there’s no reason to stop that. It’s still quite competitive, specification-wise and price-wise”. The most obvious benefit of the alliance comes in the form of the volume that both manufacturers would be able to tap into. “Combined, the whole business case is obviously a lot more healthy and you need that volume to be viable”, Tol said. “Remember, though, that the bones of the current Pajero, the independent suspension, the monocoque, are still very contemporary and in touch of its time. We might be lacking some of the advanced driver assist technology and infotainment of newer vehicles, but the Pajero is still very competitive”. +++

+++ Following the second highest annual sales record in 2016, ROLLS-ROYCE sales in the first quarter of 2017 were up year-on-year. This was based on full market availability of Dawn compared with the same period last year. In total, 733 Rolls-Royce motor cars were delivered to customers across the globe (+33.0%). Demand for Rolls-Royce models remains strong in most regions, although this is set against ongoing market volatility in the global luxury industry as a whole. Rolls-Royce continues to strive for long-term sustainable growth. +++

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