+++ AUDI takes a confident look at the future despite the current challenges. Following a year that was impacted by the diesel crisis, the company plans to continue pushing forward with its strategic transformation. The Board of Management explained the company’s plans for its models, technologies and business operations to the shareholders. “We are rejuvenating our model portfolio enormously and will renew 5 existing core model series by mid-2018”, stated CEO Rupert Stadler. “In addition, we will expand our successful Q family by 2019 with 2 new concepts (the Audi Q8 and the Audi Q4) and we will launch our battery-electric e-tron models”. Audi plans to launch 3 new electric models by 2020, after which the brand will gradually electrify models in each of its core series. The focus this year is on top-end models with the new generations of the Audi A8 and Audi A7. The premium manufacturer will unveil the A8 at the first Audi Summit to be held in Barcelona on July 11. With this new event concept, the Ingolstadt-based company will create an exclusive presentation format all around the Four Rings. “There, we will show the world everything that defines Vorsprung durch Technik and our brand”, explained Stadler. Audi is systematically utilizing Group synergies in order to implement topics of the future even faster and more efficiently. In April, the brand agreed on new development cooperation with Porsche for future vehicle architectures. This will result in potential cost savings across the brands in a three-digit million amount each year. Part of the cooperation is the development of shared premium architecture for electrification – an effective lever to enhance the competitiveness of electric cars. By 2025, Audi intends to achieve a proportion of one third fully or partially electric models in its unit sales. In addition to the traditional car business, the premium brand will expand its range of digital services in the future. With myAudi, the company aims to create a consistent entry into the brand’s digital world and establish a platform for a wide range of online services, which will be open also for third-party providers to offer services. Audi is also expanding its mobility services for urban areas and intends to offer them in more than 15 markets worldwide by the end of this decade. With a subsidiary founded in March 2017, Audi will take over the leading role within the Volkswagen Group in the development of autonomous driving. Autonomous Intelligent Driving GmbH is working on the technology for driverless vehicles in urban environments, which will be applicable in models of various brands. The technology is to be ready for application in a first small series of cars early in the next decade. “We are financing our transformation out of our own resources,” said Axel Strotbek, Member of the Board of Management of Audi for Finance, IT and Integrity. “Our business operations are robust also in the currently challenging situation. On the side of expenditure and investment, our ‘Speed up!’ program is helping us to achieve a high level of efficiency and thus a maximum focus on the topics of the future”. In the first quarter of 2017, Audi achieved an operating profit of more than 1.2 billion euro. With an operating return on sales of 8.7 percent, the company clearly met its profitability target. The net cash flow increased to more than 1.5 billion euro. In full-year 2017, the company intends to slightly increase deliveries of Audi-brand cars compared with the number of 1,867,738 automobiles delivered in 2016. Revenue should also slightly surpass the prior-year level of 59.3 billion euro. In terms of operating return on sales, following the 5.1 percent of last year, Audi now plans to achieve its strategic target corridor of 8 to 10 percent once again. In 2016, operating profit was reduced by 1.8 billion euro and operating return on sales by 3.1 percentage points due to special items in connection with the diesel crisis and Takata airbags. +++
+++ The Blue Oval is at the forefront of certain technological areas, as it strives to become a mobility provider rather than a traditional automaker, and that means involvement in areas such as the green current, autonomous technologies and car-sharing services. According to certain studies, Ford is the most advanced automaker when talking about self-driving technology, but that can’t be said about the green segment as well. Although it has a range of hybrids and even a fully ELECTRIC model (the Focus Electric) its impact in the segment is mostly negligible. The reason is electric models designed as reverse-engineering on a traditional platform aren’t the most attractive options: the world’s bestselling EV is the Nissan Leaf (bespoke platform), the top selling European EV is the Renault Zoe (bespoke architecture) and we all know the flagship EV of the world is the Tesla Model S. We already know that Ford is looking to develop its own electric platform, and the first model to arrive is reportedly coming in 2020 as a crossover; a very popular form that should help it become relevant. In addition, Raj Nair, Ford’s Chief Technology Officer, said in a recent interview “To get electrification volumes where we would all like them to be we have to make sure we make the affordability targets or otherwise they are going to stay as a niche item or a pure luxury item”, so “We think we have a technology path that will get us a 500 km range and an affordable crossover that will be fully competitive”, explained the executive. This means we have some details: it will be affordable, long-range, with crossover body and built in high volumes. +++
+++ FIAT CHRYSLER Automobiles plans to update software that it expects will resolve the concerns of U.S. regulators about excess emissions in 104,000 older diesels, the Italian-American automaker said. The company also said that it had formally sought approval to sell two 2017 diesel models after months of talks and testing. The software update would begin rolling out once the Environmental Protection Agency and California Air Resources Board approved, Fiat Chrysler said. The company said it does not anticipate any impact on performance or fuel efficiency. The EPA declined to comment. California said in a statement it “is continuing its discussions with FCA to fully address and resolve the issues” it raised. In January, the EPA and California accused Fiat Chrysler of illegally using undisclosed software to allow excess diesel emissions in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 pick-ups in a notice of violation. The notice was the result of a probe that arose out of regulators’ investigation of rival Volkswagen’s excess emissions. The American Justice Department is preparing to file a civil lawsuit against the automaker for selling 104,000 vehicles that emit excess diesel emissions if it does not reach an agreement with the company. Fiat Chrysler said it believes “these actions should help facilitate a prompt resolution to ongoing discussions with the Environment and Natural Resources Division of the U.S. Department of Justice and other governmental agencies”. The vehicles’ engines were manufactured by VM Motori, a subsidiary of FCA, and some component parts for the engines were supplied by Robert Bosch. Bosch faces about two dozen lawsuits from owners over the FCA diesel vehicles. The Justice Department and the EPA have obtained internal emails and other documents written in Italian that look at engine development and emissions issues that raise significant questions. A federal judge in California set a May 24 hearing on a series of lawsuits filed by owners of vehicles and some dealers against Fiat Chrysler and the Justice Department is expected to file its action by then if no agreement is reached. +++
+++ FORD is set to announce that it has fired President and CEO Mark Fields and replaced him with former Steelcase CEO Jim Hackett. The change is being made because Executive Chairman Bill Ford Jr. and the rest of the board have lost confidence in Fields’ leadership capabilities. There have also been concerns Ford is lagging in the tech race for connected cars and self-driving technology. While Ford is expecting a $9 billion pre-tax profit this year, market share is down and the company’s share price is down 40 percent since Fields took over. Furthermore, Fields was heavily criticized 2 weeks ago at the annual shareholders’ meeting for the performance of the company’s share price. Ford responded by cutting 1,400 positions, some 10 percent of its salaried workforce. Things were looking up for Fields as recently as last year. His income rose 19 percent in 2016, coming in at $22.1 million, so shareholders appear to have only turned sour in recent months. Fields assumed the President and CEO roles in 2014 after the hugely-successful reign of Alan Mulally, the mastermind behind the “One Ford” strategy for common products across all Ford markets. He started with Ford in 1989. Fields’ previous job was Chief Operating Officer and other prior roles included Vice President, President of the Americas, and Executive Vice President of Ford of Europe and the now-defunct Premier Automotive Group. As for Fields’s alleged replacement, Hackett was previously CEO of the office furniture company Steelcase for 20 years and Vice Chairman for two more. He left Steelcase in 2015 and in 2016 joined Ford as the Chairman of Ford Smart Mobility LLC, a subsidiary that aims to make Ford an automaker and a mobility company that delivers connectivity, car sharing, and autonomous vehicle solutions. He had been a member of Ford’s board of directors since 2013. Hackett is credited with transforming Steelcase from a traditional office furniture manufacturer to a global leader and innovator that was one of the first to embrace open space work environments. Hackett also served as interirm University of Michigan athletic director from 2014 to 2016, and was responsible for bringing in football coach Jim Harbaugh. In an alleged new structure, Jim Farley, President of Europe, Middle East, and Africa, will head worldwide sales and marketing; Joe Hinrichs, President of the Americas, will become Vice President of global operations; and Marcy Klevom, the current Chief Technical Officer, will fill Hackett’s vacated position at Ford Smart Mobility. Joseph R. Hinrichs, head of Ford’s critical Americas division, will expand his role to become Executive Vice President for global operations. James D. Farley Jr., who runs Ford’s European unit, has been appointed to oversee worldwide sales and marketing. Finally, Ray Day, Group Vice President of Communications, is being replaced by Mark Truby, the current Vice President of Ford’s Asia-Pacific region. +++
+++ When HYUNDAI ’s all-new i30 N hot-hatch arrives here in December, it will be a 6-speed manual transmission, exclusively. Hyundai is banking on a reasonable take up of the stick shift by enthusiast drivers before an auto option is available in around 2 years, according to Hyundai senior manager Product Planning, Andrew Tuitahi. “We’ve got an 8-speed wet dual-clutch gearbox being developed in-house as we speak”, he said. “But we’re new to this segment, and if we’re going to deliver a genuine hot hatch, it has to be a manual first up”. Hyundai’s head of performance development and high performance vehicles, Albert Biermann, elaborated further telling: “We’ve already had our dual-clutch transmission in the Kia Sorento Diesel, as well as the 380 hp version of the N car (RN30 Concept) with all-wheel drive, and the shifting is fast and smooth, as if it were an automatic box. The all-new transmission will also be used across Hyundai and Kia ranges, so we are highly motivated to get it right before going into mass production”, he added. In the meantime, the manual gearbox is the same unit from the standard i30, but with a few tweaks. The shift mapping has been modified for more precise shifts and there’s a heavy-duty clutch for better durability. Hyundai also chose to go in-house for the i30 N’s braking system too, rather than follow the usual path of using Italian brake specialist, Brembo. “It’s not a sophisticated braking system you might expect from a high-performance hatch, rather, we’ve taken an off-the-shelf system and modified it for brake feel, while using different pads matched to the car’s character, Biermann said. “Everything is on-balance; brakes, gearbox, how it handles, the powertrain: it has to have some harmony”, he added. +++
+++ With the country seeing 37 percent of new car sales belonging to the electric segment and after reaching the 100,000 units milestone late last year, nobody can blame an automaker for first delivering an Electric Vehicle in Norway. This is exactly what OPEL did with the Ampera-e, the twin model of Chevrolet’s Bolt, as they chose to first deliver the car to customers in Norway instead of their home market of Germany. Opel’s local division took 3 units and delivered them to their proud new customers, Turid Høiem, Helmer Teksdal and Bente Østreng next to Oslo’s town hall. “I’ve been looking forward to this for a long time”, declared Bente Østreng, the recipient of the blue Ampera-e. “We are already looking forward to taking it for the first long journey to our cabin in Sweden”. Which shouldn’t be a problem – the Ampera-e has been rated through the NEDC in Europe at a range of 520 kilometers. Of course, real world conditions will take a toll on this figure, so something akin to almost 400 km is to be expected. Germany and the Netherlands will be the following European markets to get deliveries, with Switzerland to follow later this summer. By the way, after reaching the EV milestone in December 2016, today there are more than 150,000 electric cars on the roads in Norway, a country with a population of 5.3 million. +++
+++ SUBARU is considering electric versions of its existing models for the carmaker’s first foray into the technology, as it joins peers around the world in pouring cash into battery-powered vehicles amid tightening emissions rules. The Japanese company, which plans to make record investments in research and development in this financial year, is weighing installing electric powertrains in current models rather than designing an all-new car, chief executive officer Yasuyuki Yoshinaga, 63, said in an interview. The move would allow Subaru to capitalize on its reputation for safety while eliminating the need to partner with another automaker, he said. Such a strategy would contrast with the approach of other manufacturers like Daimler’s Mercedes-Benz. The luxury-car maker has bundled its electric-vehicle technology, including charging boxes and energy storage, under the EQ sub-brand, giving it more visibility to better compete with Tesla. Yoshinaga sees advantages in sticking with a single nameplate. “If there’s already an attractive Subaru model, for example the XV crossover, and if a customer in Beijing wants one but is only allowed to buy an electric vehicle, if there’s no electric version then he can’t buy it”, he said at the automaker’s headquarters in Tokyo. “Providing the choice of an EV means the customer can still desire the same Subaru”. Subaru is prioritizing spending on electrification over other technologies, like autonomous driving and connected cars, as it races to bring a plug-in hybrid model to market next year and an all-electric vehicle by 2021. The company is budgeting 134 billion yen on research and development in the 12 months through March 2018, more than double what it spent in the year ended March 2014. Still Subaru’s spending on R&D is lot less than the big Japanese automakers that are also stepping up efforts to produce electric vehicles. Toyota, which owns 16.9 percent stake in Subaru, plans to spend 1.05 trillion yen on R&D in the current fiscal year and Honda will invest 750 billion yen. Toyota aims to introduce a global electric vehicle model and Honda has said it plans to set up a joint venture with Hitachi Automotive Systems to develop and produce motors for electric cars. Toyota in 2014 sold some of its stake in Tesla and decided to end sales of the jointly developed electric version of the Japanese automaker’s RAV4. While Yoshinaga said he’s not against a partnership, adding an electric powertrain to one of Subaru’s existing vehicles would make a tie-up unnecessary. Instead the key will be the selection of suppliers for the battery and motor. A decision on this will have to be made in about a year, he said. Subaru can take this approach because what defines the brand now is safety, not the boxer engine that is currently found in its entire lineup of only gasoline-powered vehicles, according to Yoshinaga. The XV crossover and the Impreza were awarded the top prize this year with the highest score ever in the state-run Japan New Car Assessment Program, which included tests for crashworthiness and pedestrian protection. Subaru’s EyeSight driver-assist system comes a close second in terms of R&D spending, although Yoshinaga said he would seek to limit any increase in the price of the technology to enable the carmaker to offer the same safety suite across all models. EyeSight is the first driver-assist set-up to use only stereo cameras to detect objects such as vehicles, pedestrians, cyclists and motorcyclists, according to the company. It’s due to be updated this year with plans to add functionality for autonomously following a car on congested highways, with a further upgrade in 2020 to add fully autonomous highway driving, including the capability to change lanes. The automaker is considering Autoliv Inc.’s cameras for EyeSight as it looks for options beyond Hitachi Automotive that has been a supplier for almost a decade, people with knowledge of the matter said this month. Subaru needs to cast a wide net when looking at suppliers to find the best balance of quality and cost, said Yoshinaga. In the connected car space in particular, the CEO said he favours forming partnerships with companies in the U.S., because the technology there is more highly developed. “We need to work with parts makers on joint development right from the start,” said Yoshinaga. “If we don’t, we won’t be able to keep up in this era of rapid change”. +++