+++ AUDI , like most brands at the Volkswagen Group, is turning toward electrification in an attempt to help clean up its image in the wake of the diesel scandal. One of the major goals is to have electric cars account for almost one out of every four sales by 2025. Reaching such a lofty goal will require a lot of electric cars, and that means a lot of investment dollars, something the VW Group and its brands are short on due to the diesel scandal. Recall, the automaker will be paying more than $20 billion in penalties and settlements, and that’s just in the United States. Audi is looking to save as much as $12 billion by 2022 to help fund the development of electric cars. The bulk of the savings is expected to come from cutbacks in R&D in other areas. Cutting back on investment in diesel technology would be an obvious area. We’ve also heard that Audi may end development of high-displacement internal combustion engines. Complex transmission systems are also unnecessary for electric cars. Another strategy would be sharing more development with fellow VW Group brands. For example, Audi is likely to develop its next electric car platform with Porsche, allowing both to reduce their R&D spending. The report also claimed that Audi is planning at least 5 electric cars. Right now we only know of 3. The first will be an e-tron SUV due in 2018. It will be followed by a related coupe-like model dubbed the e-tron Sportback. The third that we know of is a city car with self-driving technology. +++
+++ The 5.0-liter V8 in the 2018 FORD Mustang GT is getting a power bump to make enthusiasts happy, and it’s also adding a Quiet Exhaust mode to make the neighbors happy. It’s part of a new active valve performance exhaust system, and owners will be able to activate the mode on the go or choose a programmable Quiet Start function to make sure the car doesn’t disturb those around it upon startup. Drivers will be able to toggle through a menu in the instrument cluster using steering wheel controls to pick the quiet startup times for their cars. For example, one neighborly setting might be 9:00 pm to 8:00 am. Ford says the Quiet Start drops the engine’s decibels by 10 to 72, which is about the level of a household dishwasher. Matt Flis, Ford exhaust development engineer, says sounds in the upper-70-decibel range start to bother people. The active valve performance exhaust system will also have different exhaust volumes for Normal, Sport, and Track modes. Those who don’t like their neighbors might like to rev their cars in the Track mode while driving down the block. The idea for the Quiet Start started when a neighbor called the police on former head of vehicle engineering for Ford, Steve von Förster, after he started up a Shelby GT350 one morning. Förster didn’t get a ticket and he didn’t even get mad. Instead he spoke with the Mustang team and together they came up with Quiet Exhaust Mode and Quiet Start. “I love the sound of the V8, but it can be loud, and you can’t annoy people like that in your neighborhood”, said von Förster. “It sounds so cool, but I thought, ‘There has to be a way to give people more control over the engine’s sound’ “. Sometimes a fussy neighbor can be a good thing. Not usually, but in this instance, one neighbor saved a lot of other neighbors some morning frustration. +++
+++ HONDA has revealed that the latest CR-V has broken from tradition by being engineered to be the most globally relevant version in the series’ 21-year history, rather than being driven solely by North American market demands. Honda Motor assistant large project leader (CR-V body design), Hiromichi Tsushima, said that several regions’ requirements were taken into account, broadening the scope and abilities of the latest version. An example of this was the introduction of a 7-seater version for the first time, which was deemed essential by major Asian markets such as Thailand and Indonesia. “The previous generations were 5-seater only models because in the United States there is a bigger 7-seater Honda known as the Pilot, so it was not necessary”, Tsushima said. “But some Asian markets demanded this. So we developed it for the new CR-V even though America did not want it”. The 28-year Honda engineering veteran added that American consumers have responded more positively than anticipated to the new 190 hp / 240 Nm 1.5-litre four-cylinder direct-injection turbo powerplant, which was developed for European, Asian and Australian markets, since they were seeking significant improvements in performance as well as fuel consumption. Honda initially expected the 186 hp 2.4-litre naturally aspirated four-cylinder engine (unavailable here) to be the most popular unit in the US, but the 1.5-litre turbo is currently running at 75 per cent of total volume despite being more expensive. Overall, there will be 7 powertrain choices available globally, including a 2.0-litre petrol-electric hybrid (US, China) and a 1.6-litre four-cylinder turbo-diesel (Europe). Development for the new CR-V commenced in 2012, with the aim of improving its interior space efficiency compared to its predecessor. “Packaging and design was very important”, Tsushima said. “Offering both 5 and 7 seater options serve to enhance the CR-V’s core strengths. Honda wanted this to be the most space efficient in the medium-SUV class”. To achieve the above aim, while the all-new ‘Earth Dreams’ platform brandishing ecological lightweight efficiency is philosophically similar in approach to what the latest Civic offers, no chassis components except for the fundamental powertrain are shared with the small-car series. “They are of a similar design but even the multi-link rear suspension is completely different”, Tsushima revealed, adding that this was necessary to accommodate the CR-V’s move to 7-seats. Even the new dual-pinion electric rack and pinion steering system and brakes are not directly interchangeable. Speaking of seating, the decision was made to offer 2 different types of second-row middle-position seatbelt systems, with the 5-seater version relying on a roof-mounted set-up while the 7-seater’s is built into the backrest. “We did this because the roof-mounted system is lighter”, Tsushima said. “In the 7-seater version it adds too much weight and the whole seat is much heavier because it also has to slide forward to allow for third-row access, which is not necessary in the 5-seater CR-V”. This, as well as the need to make the latest version quieter and more refined against premium Japanese and European SUVs, meant that the CR-V in total has also put on the kilos, though a rise in ultra-high tensile steel in the body has helped keep the increases to a minimum. The CR-V is vitally important to Honda’s bottom line globally, accounting for as much as 25 percent of all sales. In the North American market it is expected to breach the 400,000 annual sales mark this year for the first time. +++
+++ Earlier this year, MERCEDES debuted a lightly refreshed GLA lineup. The compact crossover received minimal changes to its front and rear ends, new fog lights, optional LED headlights, and some additional interior bright work. However, while the refresh extends the car’s life, this model isn’t long for this world as Mercedes is hard at work designing the next generation. Like the previous model, the 2019 Mercedes-Benz GLA will again ride on the A-Class’ platform when the next-gen cars arrive. The next-generation will boast a more aggressive hood and front bumper at the front, which encompass the new headlights that resemble the GLA’s distant cousin, the AMG GT. At the rear, the wheel wells will be enlarged and given protruding fender flares, very similar to the fender flares we saw on the E-Class All-Terrain 4×4² concept shown not too long ago. Further back, the hatch will get a reshaped rear spoiler, new rear fascia, and new taillights. Engine options are likely to remain similar to the current model, with small-displacement turbocharged engines expected to make up the bulk of powertrain choices. It’s also likely that there will be another AMG-tuned model like the current GLA 45 AMG with a hotter engine. The GLA will also likely receive a host of diesel options, but with Mercedes’ recent commitment to electrification, I wouldn’t be surprised if we saw an all-electric GLA, or at the very least a hybrid GLA, further down the next-gen GLA’s life cycle. Mercedes hasn’t disclosed when the new GLA will launch, but given that the German company just released the updated GLA earlier this year, I’d guess the next generation won’t arrive until the end of next year at earliest. +++
+++ Softer pricing hit RENAULT ’s profitability in the first half, even as the inclusion of Russian Lada sales and higher earnings from partner Nissan pushed revenue and profit to a new record. Operating profit jumped 18 percent to 1.82 billion euros, Renault said in a statement, while revenue rose 17 percent to 29.5 billion, boosted by the inclusion of its AvtoVAZ Russian subsidiary’s numbers since the start of 2017. Net income was 2.38 billion euros, up from 1.5 billion euros. Small profitability gains disappointed analysts and the company’s shares fell as much as 7.2 percent, the most since June 2016. Operating profit margin increased to 6.2 percent from 6.1 percent. The automotive profit margin rose a modest 0.1 point to 4.8 percent, despite the 10.4 percent jump in deliveries. The results drew comparisons with domestic rival PSA Group, after the Peugeot maker’s stronger pricing yielded a 7.3 percent core margin on relatively flat sales. CEO Carlos Ghosn said in the statement that the results put Renault “on a solid ground” for the implementation of its next strategic plan to be unveiled in October. He said the Renault-Nissan alliance expects to surpass Toyota and Volkswagen Group this year to become the world’s largest auto group by sales, a position the alliance already holds after 6 months. Combined sales for Renault, Nissan and Mitsubishi rose 7 percent to 5,268,079 vehicles in the first half. Volkswagen Group sales were up 0.8 percent to 5,155,900. Toyota sales grew 2.7 percent to 5,129,000. Automotive revenue rose 12 percent to 27 billion euros but the result fell almost 500 million euros short of analysts’ consensus, based on the median of 12 estimates polled for Reuters. Evercore ISI analyst Arndt Ellinghorst described the first-half numbers as a “mixed bag”. “There were clearly expectations of stronger operating results”, Ellinghorst said. Bernstein analyst Max Warburton described the performance as “very, very odd” in light of Renault’s recently updated model lineup. “Renault is at the peak of its product cycle, selling into what appears to be a very strong European market”, Warburton said. “All the stars should have aligned this year”. Renault Chief Financial Officer Clotilde Delbos said the automaker’s European business suffered from a “negative trend in the channel mix”, reflecting a shift toward less profitable customers and outlets. “We have also seen some pricing pressure in some countries”, she added, citing South Korea in particular. Renault may not benefit in the future from price increases in some countries as customers balk at paying for extra costs for cleaner emissions, potentially weighing on profit, Delbos told reporters. The cost of adding enhancements to its autos, called the “price mix enrichment effect” by Renault, had a negative impact of 180 million euros in the first half. Renault is expanding in emerging markets such as China, where it plans to acquire half of Brilliance China Automotive Holdings’ unprofitable minibus unit, and Brazil, where it’s getting ready to introduce the low-cost Kwid car. The company lifted its market forecasts in Russia and Brazil earlier this month. It predicts the global car market will expand by 1.5 percent to 2.5 percent this year, with growth of 5 percent in China, 8 percent in India and 2 percent in Europe. Renault confirmed its 2017 financial targets, including an increase in group revenue, at constant exchange rates and beyond the impact of the consolidation of AvtoVAZ in its accounts, and higher operating profit in euros. The group expects AvtoVAZ to break even by 2018. The company intends to present a plan in October to increase annual revenue by 37 percent to 70 billion euros by 2022 and lift its operating margin to 7 percent of sales in five years from 6.4 percent. Timing of that announcement will correspond to those of its partners, Nissan and Mitsubishi, which was folded into the alliance last year. Renault’s efficiency savings amounted to 200 million euros in the first half, compared to 6 million euros a year earlier. Last year, the company missed its own target of saving 350 million euros. +++
+++ The SELF-DRIVING car is a hot topic in the automotive industry. Who will get there first? How will it change transportation and the new car market? How safe will autonomous cars be? All of these questions and more are on the minds of those in the auto industry, as well as governments around the world. But there is one other consideration: when the driverless car arrives full force, what impact will it have on jobs? It could spell the end of employment for taxi, Lyft, and Uber drivers. With this in mind, India is choosing to pass on the driverless car. India’s union road transport and highways minister, Nitin Gadkari, told the The Hindustan Times: “We won’t allow driverless cars in India. I am very clear on this. In a country where you have unemployment, you can’t have a technology that ends up taking people’s jobs”. Gadkari also noted that India would be opening 100 training facilities to address the country’s need to recruit 22,000 more commercial drivers. Gadkari admitted the policy may not last. “Maybe some years down the line we won’t be able to ignore it, but as of now, we shouldn’t allow it”, he said. Inderpreet Kaur, an analyst at research firm Ovum, told BBC News that India’s road system would be an obstacle to autonomous car as well. “The ministry has cited job losses as a reason behind banning autonomous cars in India, a bigger challenge would be to have ready infrastructure for these self-driving cars”, he said. Meanwhile, in the U.S., Congress is looking to unify numerous state bills into a single bill to allow companies to develop and test self-driving cars. +++
+++ The TESLA Model 3 has finally reached production, albeit in small numbers. However, there’s more to come from the electric-car maker’s most affordable model. While Tesla begins to ramp up production of the Model 3 in Long Range trim, with an EPA-estimated 500 kilometer range, the automaker is also readying a performance variant to debut sometime next year. Tesla CEO Elon Musk took to Twitter to confront questions surrounding that version. The more variations of the car, the more stress is placed on the production line. Following the Long Range Model 3, the base Model 3 will become available this fall. It’s the latter version that sports the affordable $35,000 starting price, but it arrives with an EPA-estimated 350 kilometer range. The Tesla Model S has proved to the world that an electric car can become a world beater, and even be fun to drive in the process. The introduction of the Model S’ dual-motor configuration, which has spawned numerous “D” cars, has led to the ultimate expression of electric-car performance: the P100D. A high-performance Model 3 would likely use a similar dual-motor design, though, we doubt it will reach the stratospheric performance levels achieved by the P100D. Some drivers have blasted to 100 km/h in under 2.5 seconds. In the meantime, Tesla’s next big thing is supposedly coming this September. The automaker plans to reveal an electric semi truck, which will help fill out what Musk calls the Tesla Master Plan. +++