+++ The next-generation BMW M5 will be revealed this August with a variable all-wheel drive system and an uprated V8 engine producing around 600 hp, making it the most technically advanced car to wear an M badge yet. In the run-up to its public debut at the Frankfurt motor show, the car is undergoing high-speed testing at the Nürburgring, where it has been spotted this week wearing new design features including larger front air intakes to supply its twin-turbocharged 4.4-litre V8 petrol engine with more air. Despite being based on the current car’s unit, power for the new 5 Series flagship will be substantially increased from the old model’s 560 hp, overtaking the limited-run 600 hp M5 Competition Package as the most potent M5 yet and aligning the car closely with its archrival, the latest Mercedes-AMG E 63, which has 612 hp in its fastest guise. The car will use a specially developed version of BMW’s xDrive all-wheel drive system (the first time one has been used on an M5) that uses a multiplate wet clutch located in the gearbox on the output to the front driveshaft. It provides a continuously variable split between front and rear axles to enable advanced torque vectoring. This will improve agility and performance, but also enable more fuel efficient running in less aggressive engine modes. In total, the car will have up to five driving modes, including an M Dynamic setting where 100% of torque will be sent to the rear wheels, accessed through buttons mounted on the steering wheel. This widened flexibility for the car’s drive systems will be enhanced with the fitment of an 8-speed automatic gearbox in place of the outgoing car’s seven-cog system. The new torque-converter ‘box will be based around the standard ZF-produced gearbox used in other 5 Series models. This long list of technical upgrades will make the new M5 the fastest accelerating and most dynamically capable M5 yet, with the old car’s 4.3 seconds 0-100 km/h time due to be beaten by close to a second thanks to the new car’s improved traction and peak outputs. Top speed will again be restricted to 250 km/h, although an optional M Driver’s Package will enable buyers to raise it to 315 km/h with new engine management software and the fitment of Z-rated tyres. BMW senior vice-president Hildegard Wortmann told earlier this year that the model will make as significant a step forward from its predecessor as the latest 7 Series has, both in terms of performance and technology. Details of the new M5’s chassis set-up remain under wraps. However, engineers involved in its development say it adopts a largely bespoke double wishbone (front) and multi-link (rear) suspension system, together with new electro-mechanical steering that includes the active rear-steer function available on selected 5 Series models. +++
+++ FORD could cut 10% of its workforce across North America and Asia as part of the brand’s latest cost-cutting measures. A source close to the plan said that the cuts, which are part of a 3 billion dollar cost-cutting scheme, aims to maximise its profits and correct a fall in its stock price. Only salaried workers in the USA and Asia would be affected. Ford has around 200,000 employees worldwide, half of which are in the USA. Of those, 30,000 positions are salaried which means job cuts could amount to 3,000. The car maker also has around 25,000 employees in Asia, but there are no figures on how many of these are salaried. Ford told that it remains “focused on the 3 strategic priorities that will create value and drive profitable growth, which include fortifying the profit pillars in our core business, transforming traditionally underperforming areas of our core business and investing aggressively, but prudently, in emerging opportunities. Reducing costs and becoming as lean and efficient as possible also remain part of that work. We have not announced any new people efficiency actions, nor do we comment on speculation”. After seemingly appeasing US president Donald Trump last year with the cancellation of a proposed 1.7 billion dollar Mexico-based factory and the announcement of a 700 million dollar investment into a plant in Michigan, US, the move could anger the famously nationalistic Republican president. Prior to his inauguration, Trump crusaded against the outsourcing of America’s car industry to Mexico. Ford also recently called into question the future of its investments in its UK plants ahead of Brexit negotiations and stated its desire for a transition agreement if trade agreements can’t be reached within 2 years. In 2016, Ford knocked 90 million euro off of its 200 million euro investment in its engine plant in Bridgend, Wales. +++
+++ GENERAL MOTORS said it was moving toward sustainable rubber production for the cars and trucks it produces every year, reducing contributions to deforestation in Southeast Asia and South America. Steven Kiefer, senior vice president for global purchasing and supply chain, said the move would push the auto industry and its supply chain towards “net-zero deforestation”. The new policy would also help guarantee the labor and human rights of the 6 million small farmers and 30 million workers who harvest rubber in countries such as Indonesia, Thailand and Brazil. “We want to encourage affordable, safer and cleaner options for our customers that drive value to both our organization and the communities in which we work”, Kiefer said at a news conference. “At the same time, it should help insure the supply of natural rubber as demand rises”. He was joined by representatives of tire producers including Bridgestone, Goodyear and Michelin and Continental, which supply more than 80 percent of the tires used by GM. GM said in a statement it was working with the companies to ensure traceability throughout its natural rubber supply chain. +++
+++ MARUTI Suzuki India has adopted a different model for hiring temporary workers at one of its plants, completely eliminating the role of middlemen, according to top company officials. The subsidiary of Japan’s Suzuki Motor Corp. and India’s largest carmaker is now hiring temporary workers directly, using the same selection criteria it uses to hire permanent employees, at one of its factories in India, R.C. Bhargava, chairman of Maruti Suzuki India, said, adding that this hiring method may become the company’s general policy. “We are trying out a different model to hire contract or temporary workers at our factory in Manesar (in the northern state of Haryana) now we don’t use contractors for getting them”, Bhargava said. “We select them on the same criteria that we would select regular workers and are giving assurance to these guys that when vacancies arise, the permanent workers will be taken from amongst them”, he said. “We are still seeing how this experiment is working out and whether this experiment can then be made into a general policy”. However, the company said that with a total of more than 22,600 employees, including temporary workers, it has reached maximum workforce levels at its factories in India. “Not much hiring is taking place nowadays”, said one of the company’s labor union leaders, who spoke to NNA on condition of anonymity. Maruti Suzuki, which holds over 47 percent of India’s passenger vehicle market, has adopted various industrial training institutes in the past few years to maintain a regular supply of skilled workers at its factories. In the business year that ended March 31 last year, for example, the company hired 1,749 temporary workers from various institutes in India. The firm is also setting up the Japan-India Institute of Manufacturing to train 300 Indian youths per year in technical trades and Japanese shopfloor practices such as kaizen (improvement) and quality-control circles based on curricula developed in Japan, with an initial investment of 32 million rupees. +++
+++ MITSUBISHI reported a group net loss of 198.52 billion yen (1.75 billion dollar) for the business year through March 2017 amid expanding costs related to a fuel economy data manipulation scandal. The automaker, which became part of Nissan last year, reported a consolidated operating profit of 5.12 billion yen, down 96.3 percent from a year earlier, on sales of 1.91 trillion yen, down 15.9 percent. The company, however, said it expects to return to profitability in the current business year ending in March 2018 with a group net profit of 68 billion yen, as strong relations with Nissan are likely to help boost its corporate performance. “Although our 12-month results were marred by the fuel economy scandal in Japan during the first half, we have begun a V-shaped recovery”, Mitsubishi Motors Chief Executive Officer Osamu Masuko said in a statement. “Following the strategic investment by Nissan last fall, we are now seeing the initial benefits of our partnership and the first synergies from our membership of the wider Renault-Nissan alliance”, he added. In fiscal 2016, Mitsubishi Motors’ auto retail sales in North America grew 2 percent from the previous year to 138,000 units, but they fell 22 percent to 80,000 units in Japan, 13 percent to 179,000 in Europe and 2 percent to 315,000 in Asia excluding Japan. It was revealed last spring that Mitsubishi Motors had manipulated data to make some minicar models look more fuel efficient, including models supplied to Nissan. It was later found that improper practices related to fuel economy data were prevalent at the automaker, affecting additional models. Mitsubishi is now counting on synergy effects following Nissan’s acquisition of a 34 percent stake, a deal aimed at deepening cooperation on autonomous driving and other advanced technologies. As part of the deal, Mitsubishi will supply auto parts to be produced at its factory in western Japan to Nissan, the country’s second-largest carmaker by volume, a source said. The 2 companies have agreed to make efforts to cut costs by jointly operating factories and procuring auto parts. +++
+++ NISSAN ’s fiscal year profit has improved 27% to 663.5 billion yen (5.8 billion dollar) as strong sales in the U.S., China and Europe offset damage from the strong yen. But Nissan is forecasting a 19% drop in profit for the fiscal year through March 2018 at 535 billion yen (4.7 billion dollar) as research investment and raw material expenses bite into bigger sales and cost-cut efforts. Sales for the fiscal year ended March 2017 dipped nearly 4% to 11.7 trillion yen (103 billion dollar). Nissan, which did not break down quarterly numbers, said Thursday that it sold 5.63 million vehicles globally for the fiscal year. It expects sales to grow to 5.83 million vehicles for the fiscal year through March 2018. Yokohama-based Nissan’s U.S. sales rose 4% on-year on solid demand for the Rogue (X-Trail) and Altima. Sales in China rose 8%, while sales in Europe excluding Russia rose 7% for Nissan, which is allied with Renault. All the major automakers are working on autonomous driving and mobility connectivity technology, but Nissan, which makes the Leaf electric car and Infiniti luxury models, has been among the most aggressive. Hurting Nissan’s bottom line in recent years is an unfavorable exchange rate. A strong yen erodes the value of overseas earnings by Japanese exporters like Nissan. Toyota reported Wednesday its profit fell for the fiscal year ended March, its first annual profit drop in 5 years. Toyota expects its profit to drop for the fiscal year through March 2018 as well. +++
+++ Carlos Ghosn, chief executive officer of RENAULT , sees the embrace of globalization by France’s president-elect Emmanuel Macron as a harbinger of faster growth for the country’s economy. He also signaled that Macron’s policies could pave the way for a deeper alliance between Renault and Nissan. “The fact that he’s somebody who believes in the global market, in the integration of Europe and the importance of Europe, it’s obviously very good news for all companies and for all enterprises”, Ghosn, who is also chairman of partners Nissan and Mitsubishi, said in an interview. Ghosn spoke a day after independent candidate Macron was elected president of France, defeating anti-European Union politician Marine Le Pen. His large margin of victory helped make Ghosn and other chief executives more optimistic about Macron’s ability to carry out his promises and to open a new chapter in France’s economic development, he said. The ballot was critical for Renault amid questions about the French government’s 19.7 percent stake in the carmaker. Ghosn has said a state exit from Renault, which is based in the Paris suburb of Boulogne-Billancourt, could be a catalyst for restructuring the company’s cross-shareholding structure with Nissan, potentially enabling a deeper alliance. Nissan owns 15 percent of Renault, though doesn’t exercise voting rights, while the French company holds about a 44 percent stake in its Yokohama-based partner. A full merger won’t take place as long as France is a Renault shareholder, according to Ghosn. The CEO said it’s too soon to know what specific steps Macron will take with the Renault shares and therefore too soon for him to comment. Ghosn has chafed at the state’s holding, which authorities boosted in 2015 to secure extra voting rights. That, in turn, thwarted efforts to increase Nissan’s sway in the alliance. The frictions arose in part because Ghosn didn’t find out about the increase until Macron (who at the time was economy minister under President Francois Hollande) told him about the move in a late-night phone call just hours before the news became public. The government’s move also raised concerns at Nissan that France might seek a role at the Japanese partner, though that dispute was defused when the state pledged not to interfere in the alliance’s governance. And while Macron has supported Ghosn’s overall strategy at Renault, the president-elect has criticized the CEO’s remuneration and threatened to come up with laws limiting executive pay. Still, Macron is more of a free-market proponent than his predecessor and considered likelier to reduce the government’s involvement in private enterprise. Officials originally portrayed the state’s purchase of the extra 4.7 percent stake as temporary, although the holding hasn’t changed since. Under the new president, France stands to be more inclined to sell some of its stake in Renault, Evercore ISI said in a note, calling the implications of the vote “positive” for the carmaker. “Macron may be key to unlocking value” in the Renault-Nissan alliance, Bloomberg Intelligence analyst Michael Dean wrote in a note. “Selling off state-owned assets is a potential source of funding”. Renault and Nissan established their tie-up in 1999, when Nissan was on the verge of bankruptcy. Nissan has since become bigger and more profitable than Renault. Tensions over France’s stake are lingering. In observations from a report by the country’s Court of Audits earlier this year, Renault argued the purchase of the additional stock was made “in an insider-dealing situation”. Macron’s victory thwarts policy plans by Le Pen’s National Front to ditch the euro currency and restrict France’s international trade, which would have disrupted Ghosn’s globalization strategy, which also includes a controlling stake in Russian carmaker AvtoVAZ. “He’s been elected for many reasons. One of them is: Do you want to be part of the larger economy, or do you want to be more on a protectionist mode?” Ghosn said. +++
+++ SUZUKI on Friday forecast a 10% fall in its full-year operating profit on increased research and development costs, even as the Japanese automaker expects vehicles sales growth to continue in India and Europe. Japan’s fourth-largest automaker said it expected operating profit to come in at 240.0 billion yen (2.11 billion dollar) in the year to March 2018. Suzuki, which specialises in compact cars and dominates the Indian market through its majority stake in Maruti, posted a stronger-than-expected, 36.5% jump in operating profit to 266.7 billion yen in the year ended in March as higher sales in the South Asian country and in Europe offset negative currency impact. Suzuki said it would pay a full-year dividend of 44 yen per share for the year ended March, up from 32 yen per share a year earlier, and forecast a dividend of 44 yen this year. The company took an accounting impairment loss of 39.9 billion yen in the year ended March, including an extraordinary loss on its Thailand operations. Suzuki’s latest forecasts are based on an assumption for the yen to average around 110 yen to the U.S. dollar, stronger than its trading rate around 114 yen on Friday, and 1.65 yen to the Indian Rupee. It expects global consolidated vehicle sales to increase 5.2% in the year to March to 3.07 million vehicles. In India, where it sells one in every 2 cars, it expect vehicles sales to rise 8% from a year earlier. Suzuki owns 56.2% of Maruti, and gets the bulk of its revenues from the Indian partnership, which has a market value of around 30 billion dollar, higher than Suzuki’s market capitalisation of about $20.5 billion. +++
+++ TOYOTA said Wednesday that its net profit declined for the first time in 5 years in the business year that ended in March, a downward trend it expects to continue in the near future amid a stronger yen and global political uncertainty. The Aichi Prefecture-based auto giant, which lost its crown as the world’s top-selling automaker to Volkswagen last year, has forecast a 1.5 trillion yen net profit for the business year to March 2018, an 18.1 percent drop from a year earlier. It also said its operating profit is expected to fall 19.8 percent to 1.6 trillion yen. The forecast followed the company’s announcement that it posted 1.83 trillion yen net profit for fiscal 2016 that ended in March, or a 20.8 percent drop from the previous year. The last time Toyota recorded a decline in its net profit was in fiscal 2011. Toyota also said its operating profit for the last business year was 1.99 trillion yen, a 30.1 percent drop year-on-year. Sales also declined 2.8 percent to 27.6 trillion yen. The company said the declines in its earnings are due mostly to a stronger yen and cost increases. Despite declines in earnings, the company said unit sales remain firm as worldwide consolidated sales increased 3.3 percent year-on-year to reach 8.97 million vehicles in fiscal 2016, although the sales in North America declined slightly. Sales also declined in the Middle East, Central and South America, Oceania and Africa. The nation’s major auto companies, which rely heavily on exports, were beneficiaries of a weaker yen in recent years. “It is my view that our latest financial results demonstrate Toyota’s desire to steadily and continuously advance our investment in the future, rather than place top priority on short-term profits”, president Akio Toyoda said at a news conference following the release of the earnings report. Meanwhile, when asked how Toyota would deal with uncertainty caused by emerging protectionism in Western countries, Executive Vice President Osamu Nagata said the company would “work to deepen understanding” of its contributions to local communities and its vision for the future. In January, U.S. president Donald Trump (through his Twitter account) singled out Toyota, urging the company to build plants in the U.S. instead of Mexico or face a “big border tax” on its imports. Following the threat, Toyota announced it would invest 10 billion dollar in the U.S. over the next 5 years, although the company reportedly denied the move was in response to Trump’s remarks. Under the new plan, the company in April announced it would invest 1.33 billion dollar to upgrade its factory in Georgetown, Kentucky, in a bid to boost production of its Camry, long the top-selling car in the U.S. While it plans to keep investing in the U.S., Toyota said it would continue building a new factory in Mexico unless there is “a massive change” in circumstances, Nagata said. “Once we decided to build a factory in Mexico, I think we incur responsibility to contribute to the local community and employment there”, he said. +++