+++ AUDI has temporarily stopped taking orders for its S4 and S5 models while it develops new engine management software that could potentially affect their fuel economy and CO2 outputs. The 2 performance models are among several Audis due to get new software. A source told that the resulting effects would have to be tested by German regulators before more cars can be sold. “Audi has decided on a stricter interpretation of tolerances of the regulations for measuring CO2 emissions applicable in the EU”, said an Audi spokesperson. “This may lead to adjusted CO2 figures for some Audi models”. The spokesperson said the changes to the S4 and S5 were being implemented to improve “comfort and spontaneity” and “may lead to a moderate increase in fuel consumption”. My source said changes are also being applied to the A4 2.0 TFSI, but Audi has refrained from commenting on this. No timescale has been set for the reopening of order books for the S4 and S5. +++

+++ AUSTRALIA ’s new vehicle market is now on track to grow over last year’s all-time annual record tally of 1,178,133 units. The blistering June 2017 result of 134,171 units (up 4.4 percent) propelled cumulative half-year (H1) sales to 599,552, a number that is 1.412 units (or 0.2 percent) higher than the market stood at the same time last year. June 2017 was the biggest-single selling month ever, and puts the market in the black compared to 2016 (which itself broke the all-time record set in 2015) for the first time, after we saw a few months of negative growth earlier. VFACTS figures provided by the industry’s peak body show annual SUV sales growth of 5 percent to 233,498 units; sufficient to eclipse combined sales of all conventional passenger car types including hatches, sedans, wagons, people-movers, coupes and convertibles (230,267). Medium SUVs are the clear beacon for the industry. This segment led by the Mazda CX-5, Hyundai Tucson, Toyota RAV4 and Nissan X-Trail is up by more than 16 percent this year, equating to gross numerical growth over six months of 13,763 units. A corollary of the SUV boom is that sedan and hatchback sales declined once again, this time by almost 7 percent, and all core areas from micro cars through to upper-large cars, via small/medium/large cars, went backwards against 2016. Only sports cars are notably up, thanks to the massively popular Ford Mustang. The strongest area of market-wide growth was in commercial vehicles, where light commercials (pick-ups and most vans) grew in popularity by 5.4 percent, taking their market share to about 20 percent, equating to one-in-five of all vehicle sales. Befitting this trend, the Toyota HiLux and Ford Ranger pick-ups are in fact the clubhouse sales sales leaders at the halfway mark, with 23,378 units and 21,638 units sold over H1 respectively, against 19,454 Toyota Corollas and 18,052 Mazda 3s. On a market-share basis, the overall most popular vehicle segments were small cars (eg. Toyota Corolla) on 18.7 percent, medium SUVs on 16.3 percent, 4×4 pick-ups (eg. Ford Ranger) on 13.9 percent, and large SUVs (eg. Toyota Prado) on 12 percent. Toyota was the most popular carbrand in Australia with 109,026 sales (up 6.5 percent). Next came Mazda (61,496; up 0.9 percent), Hyundai (49,819; down 8.3 percent), Holden (42,113; down 12.3 percent), Ford (40,705; up 0.8 percent), Mitsubishi (39,673; up 6.5 percent), Nissan (30,180; down 10.6 percent), Volkswagen (29,129; down 2.3 percent), Kia (28,735; up 35 percent), Subaru (25,962; up 7.9 percent), Mercedes-Benz (22,318; up 7.9 percent) and Honda (21,831; up 11.2 percent). +++

+++ China leads CADILLAC ’s global sales through June. A 12 percent slide in the US market for June was completely erased by a 35 percent jump in China. China is still on track to become Cadillac’s most important market in terms of sales volume this year. Cadillac chief Johan de Nysschen early this year predicted China would soon become the brand’s largest market. US buyers purchased more than 170,000 units last year, significantly above the 116,000 distributed in China, however the numbers have flipped due to stagnation at home and stellar growth abroad. The brand has experienced an enormous 75 percent jump in China sales for the first half of 2017, reaching past 80,000 units as US sales slid to around 72,000 vehicles during the same period. “Cadillac continues to grow globally, despite the shift away from sedans in the US market”, de Nysschen says. “The success of the XT5 and the increase in sales of the CT6 shows that we are attracting unique buyers to the brand, building momentum for our incredible product offensive beginning next year”. An Audi veteran with a stint at Infiniti before jumping ship to General Motors in 2014, de Nysschen is leading a revitalization strategy that could take years to fulfill. The brand is attempting to target a younger demographic while dropping its reliance on discounting to compete with rival brands. Lamenting Chinese regulations that effectively force foreign automakers to establish 50:50 joint ventures with local firms to build cars in the world’s largest automotive market, the executive earlier this year promised the US will remain ‘more important’ for a long time despite the sales shift. +++

+++ FARADAY FUTURE cancels its North Las Vegas factory. The company is now looking for an existing building. Cash-strapped Faraday Future has announced it has canceled construction of a huge, and hugely ambitious, factory located on the outskirts of Las Vegas, Nevada. The $1 billion project was heavily subsidized by the state’s top officials, including governor Brian Sandoval, but critics said it sounded way too good to be true. Luckily for taxpayers, construction work stopped at the embryonic stage so Faraday didn’t get the chance to tap into the $335 million incentive package it was promised. “While I am disappointed in today’s announcement, I can say with certainty that Nevada’s citizens were held harmless financially”, said Governor Sandoval. A Faraday Future spokesperson told that the company has decided to manufacture cars in an existing building. It’s looking for a building of at least 1 million square feet in Nevada or in California. It’s an option that’s faster and cheaper than building a factory from scratch. The company is keeping the 930-acre site located in the Apex Industrial Park. It will resume construction work when it’s no longer in dire financial straits. Currently, it’s scrambling to raise $1 billion as fast as it can to start production of the FF91, a super-fast and super-expensive electric sedan previewed at CES. “We at Faraday Future are significantly shifting our business strategy to position the company as the leader in usership personal mobility. More details on Faraday Future’s new strategy will be shared in the coming weeks”, the company promised in a statement. +++

+++ MCLAREN could go all-wheel drive. McLaren’s breed of rear-wheel drive supercars are getting close to the limit. McLaren hasn’t ruled out building an all-wheel drive model. Offering great traction in the snow isn’t one of the company’s top priorities, but sending power to all four wheels could become necessary as its powertrains become increasingly powerful. “We’re not there yet, but I’d say we’re getting close to the limit. We’re not planning all-wheel drive right now, but we’re conscious it’s a direction we may well want to go in”, company CEO Mike Flewitt told on the sidelines of the Goodwood Festival of Speed. McLaren won’t ask its engineers for a transfer case, however. The gasoline engine will continue to send its output to the rear wheels, while an electric motor will zap the front axle into motion. It will be a through-the-road system, meaning there will be no physical connection between the axles. “Our hybrid architecture is flexible. From an engineering point of view there’s no point bringing a shaft down the center of the car”, Flewitt added. Using an electric motor and a battery pack adds more weight than a driveshaft and a transfer case, but it’s a setup that reduces emissions while improving gas mileage. Additionally, McLaren’s all-wheel drive hybrids will be capable of driving on electricity alone for short distances, and it’s not too far-fetched to speculate the system will provide an e-boost effect. Flewitt’s comments suggest an all-wheel drive McLaren is still several years away from making its debut. However, don’t be surprised if the 720S’ successor ditches rear-wheel drive. +++

+++ NISSAN plans to launch an electric economy car in China. The people’s EV will cost about $13,000. Nissan will attempt to boost its presence on the Chinese market by introducing an all-electric economy car. The yet-unnamed model is scheduled to make its debut next year. Many assumed the Japanese company would sell a re-badged version of the Renault Zoe, or continue selling the original Leaf in China after the second-generation model arrives. Instead, it’s taking a completely different route. Its people’s EV will be built on an evolution of the platform that underpins the Renault Kwid, a bare-bones econobox sold in a handful of emerging markets. The car is being designed strictly as an urban vehicle. Don’t expect tripe-digit range or a full suite of electronic driving aids. In short, it will be a more comfortable alternative to the electric scooter. Renault will also get its own version of the car. However, Nissan’s model will be a traditional sedan, while Renault’s will take the form of a crossover. Both cars will be built in Wuhan, China, by a joint-venture owned by Renault and Dongfeng. Nissan’s version of the car will cost 90,000 RMB, which represents roughly $13,000. The Renault-Nissan Alliance hopes to gradually bring the price down. Ultimately, the battery-powered economy car could cost as little as $7,500. +++

+++ PORSCHE faces an emissions fraud investigation in Germany. Prosecutors have reportedly launched a formal inquiry to determine if individual employees violated any laws. German authorities have reportedly initiated a formal investigation into suspicion of fraud at Porsche, expanding the broader diesel emissions inquiries that have already focused on Volkswagen and Audi. VW Group’s cheating diesel engines were shared across several brands, including Porsche, leading to billions of dollars in settlements enforcement agencies in the US and abroad. Now that the dust has settled on the actions against the parent company, prosecutors are now turning their attention to individual workers involved in the scandal. The US Department of Justice last week issued an indictment accusing a former Audi manager, Giovanni Pamio, of leading an effort to create a defeat device after his team failed to meet VW’s internal design constraints with legal emissions software. He was arrested in Germany the same week, fueling speculation that investigators from both countries had cooperated. No Porsche workers have been individually named in the deeper investigation. Additional indictments could follow the initial wave of arrests as prosecutors gain a deeper understanding of how the defeat device was created, distributed and kept quiet for so long. Enforcement agencies have not revealed which current or former employees are cooperating in the investigations and if any have been offered immunity in exchange for testimony or evidence against their peers. +++

+++ British car buyers are switching on to electrified TOYOTA cars in ever-greater numbers, the firm has announced. Sales of its petrol-electric hybrid models have grown 30 percent in the first half of 2017: during the first six months of the year, 22,616 hybrid Toyotas were sold; models such as the Prius, Auris Hybrid and C-HR Hybrid. Indeed, it’s the arrival of the C-HR crossover that’s played a major role in driving up Toyota’s hybrid sales. Only 2 C-HR versions are offered, a 1.2-litre turbo and a petrol-electric hybrid, and the hybrid is currently accounting for around 80 percent of sales across Europe. Toyota doesn’t offer a diesel C-HR. “Hybrid is no longer a secret, or a mystery,” said Toyota GB sales director Mark Roden. “We’re seeing growth in sales at huge levels and that’s because customers recognise the benefits of hybrid in fuel efficiency, in environmental impact and in the smooth, quiet hybrid drivetrains”. Perhaps mindful of Volvo’s recent announcement that every new car it sells from 2019 will have an electrified drivetrain, Roden added: “Toyota has led the way for 2 decades in making hybrid technoogy available to everyone. We have proven technology, famous reliability and the most exciting range of hybrid cars we’ve ever offered”. Toyota also offered the widest range of hybrids of any brand in the UK, it added. It is fleet drivers who in particular have embraced Toyota’s hybrid models this year, perhaps encouraged by the cars’ low CO2 emissions. Company car hybrid sales are up by more than 43 percent; and fleet, remember, is a sector dominated up to now by diesel. Overall Toyota sales in the first half of 2017 grew 5 percent to 68,378. Meanwhile, Europe-wide sales were up 11 percent to more than half a million cars, with 1 in every 2 Toyotas sold in Western Europe now being a hybrid. +++

+++ VOLKSWAGEN kept a 18 billion dollar emissions estimate secret for weeks, a report claims. The timeline of VW’s internal deliberations could become a focal point in lawsuits filed by disgruntled investors. Weeks before Volkswagen’s emissions scandal first came to light, several executives were allegedly warned that the bill could reach up to $18.5 billion. Former manager Oliver Schmidt presented the estimate at an August 25 presentation attended by then-CEO Martin Winterkorn. If true, the seemingly trivial timeline clarification suggests VW was aware that big financial trouble was on the horizon but kept the deliberations secret (and investors in the dark) until the Environmental Protection Agency first went public with its notice of violation nearly a month later. Company lawyers involved in a European shareholder lawsuit last year disclosed a more optimistic internal “cost-benefit calculation” that assumed any penalties would be on par with a $100 million fine levied against Hyundai-Kia for fuel efficiency exaggeration. “Even if the fine were $100 USD per vehicle, the total penalty in the present case would amount to $50 million USD, which would have no potential effect whatsoever on share prices”, the lawyers argued. The latest allegations will presumably be vetted and debated in court as shareholders continue to seek compensation. It is unclear if the month-long delay runs afoul of Germany’s ambiguous requirement that shareholders receive timely disclosures of material news that could affect stock market valuation. +++

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