+++ BMW is going to give us a full-blown M version of the upcoming second generation X4. The first prototypes have already hit the street, wearing a thin camo wrap at the usual places trying to hide its sportier nature. The more aggressive body kit includes a front fascia with bigger air intakes for the intercoolers, deeper side sills, a more muscular rear bumper and four fat tail pipes. The sportier wheels house behind them the bigger brakes that employ cross-drilled rotors and blue calipers. Under the bonnet we’ll probably find BMW’s new S58 engine which is a twin-turbo 3.0-liter straight-six unit that’s good for at least 450 hp in the case of the upcoming X4M and X3M models. Other than that, the upcoming BMW X4 looks a lot sleeker than its predecessor, especially at the rear, but as I’ve said before the styling appears to look too similar with the Mercedes GLC Coupe, the X4’s main rival. Let’s hope I’m wrong once BMW launches the X4 sometime in the first half of 2018, with the M version to follow shortly after. +++
+++ A handful of CHINA ’s many electric vehicle (EV) start-ups are considering setting up an alliance to pool resources, develop joint technology and bring cars more quickly to the world’s biggest autos market. In a sign that the country’s fledgling EV industry is already consolidating as rules get tougher and competition fiercer, Shen Haiyin, co-founder and CEO of Singulato Motors, said his company and 4 others (CHJ Automotive, Hongxing Automobile Manufacturing Co, Aiways and WM Motor) have discussed an alliance for months. Keen to push for cleaner energy cars, in part to combat air pollution and a dependence on imported oil, Beijing wants 8 percent of automakers’ sales to be so-called new energy vehicles (NEVs; battery electric or plug-in hybrids) by next year, rising to 12 percent in 2020, according to latest draft proposals released last month. Sales of NEVs this year are forecast by the China Association of Automobile Manufacturers at around 700,000, roughly 3 percent of the overall Chinese autos market. Shen, known as Tiger Shen, told the start-ups aim to finalize the move by end-September with the aim to start developing a common EV platform by the end of this year. As the industry shifts towards smart, internet-connected, battery cars, with electrified powertrains, it’s increasingly hard for automakers to differentiate, he said. “Just like smartphones, whose gut is the same Android operating system across many brands, smart EVs should compete more on ownership experience and services”, Shen told. The move to pool resources and know-how highlights how Chinese start-ups are scrambling to save time and money in developing products as they face increased pressure from established global automakers shifting into a new market, so far led by Tesla. Also, Chinese policymakers have put on hold approving new EV ventures because of concern that some start-ups have cut corners on technology or have set up just to access attractive subsidies. Regulators are reviewing licensing procedures and may bring in tougher technical requirements early next year, 3 EV start-up founders and executives told. Freeman Shen, co-founder and CEO of WM Motor, reckons the prospect of tougher new technical requirements is a big factor spurring start-ups to consider an alliance to develop basic vehicle technology. “The government worries about some new start-ups, thinking some of them actually don’t have the technology and management expertise to be a legitimate player”, he told Reuters. “This shows start-ups need to work together to face competition from traditional automakers”. David Jin, spokesman for Aiways, said the Shanghai-based start-up “welcomes cooperation within the industry permitted (under) Chinese law and anti-monopoly law and technical exchanges. We need to make a decision after we get further information”. The company’s CEO Fu Qiang declined to comment on any alliance talks, referring questions to Jin. A spokeswoman for CHJ Automotive and an official at Hongxing Automobile declined to comment. Despite years of effort to reduce costs for traditional gasoline-fuelled cars through common vehicle platform technologies, these are still often designed separately for different car models. “Gasoline car platforms are often over-designed”, said Singulato’s Shen. “Who needs cars with platforms that allow you to do a high-speed U-turn or slalom? While we want to design an advanced platform for plug-in battery cars, we don’t want to make platforms excessively over-spec’d”. WM Motor’s Shen said he supports the idea of an alliance, but is unlikely to be part of it, for now, as his company’s first vehicles are to be based on vehicle architecture it has already developed itself. Singulato’s Shen said combining resources would allow alliance members to develop a far more advanced vehicle technology, and for less money. “Let’s say each player planned to spend 200 million yuan ($30 million) to develop a next-generation platform; if 4 players each threw in 100 million yuan, we’d all save money but end up with a 400 million yuan platform rather than a 200 million yuan platform”, he said. “the benefits are clear”. He said that if the alliance does take shape, it would set up a separate company to oversee platform development, and ask independent automotive engineering companies around the world to bid for a contract to help in advanced vehicle technologies that could be shared among alliance partners. Alliance partners would also share, and possibly jointly procure from outside suppliers, basic car platform parts like axles and suspension. “We plan to ask component suppliers to join the joint venture, too”, Tiger Shen said. +++
+++ NISSAN said the intention among European governments to shift from diesel and petrol cars to electric vehicles would be positive for the automaker as it would help to boost sales of its Leaf electric model. “Europe is shifting closer towards electric cars from gasoline and diesel cars, and Tesla Motors is changing the way people think about electric cars. This is positive for us”, Nissan Corporate Vice President Joji Tagawa told reporters. France’s ecology minister said earlier this month that he aimed to end the sale of petrol and diesel cars by 2040, a position echoed by Britain’s environment minister this week. +++
+++ Carlos Ghosn has won praise for his deft handling of the often unwieldy RENAULT -Nissan alliance, thrusting it into the world’s top3 automakers by volume. In France, however, he has clashed with the government over its minority ownership of Renault, his compensation and other issues, raising the question of how much longer he will continue as CEO of Renault, a post he has held since 2005. In the most recent flare-up, the French government joined other shareholders opposing Ghosn’s compensation ahead of the June shareholders’ meeting. The pay proposal passed narrowly. The election this spring of President Emmanuel Macron would seem to add to the pressure on Ghosn. As economic minister under former President Francois Hollande, Macron criticized Ghosn’s pay and engineered an increase in the government’s stake to 19.7 percent (with double voting rights). But the relationship between the 2 seems to be improving, analysts said, citing Macron’s promises to improve the competitiveness of French industry and Ghosn’s praise for the new president’s efforts to strengthen the European Union. There have been no credible reports that Ghosn, 63, is considering stepping down at Renault, but he is reportedly seeking a potential No. 2 executive for the alliance. Earlier this year, Ghosn handed the reins of Nissan to his co-CEO Hiroto Saikawa, though he retained his title of chairman. He also holds that post at Renault, at the alliance’s newest member Mitsubishi, and at Renault-Nissan BV. Renault has rarely been healthier. The company said it sold a record 1.88 million vehicles through the first half of this year, a 10.4 percent increase year over year. All the group’s brands (Renault, low-cost Dacia, Russia’s Lada and Renault Samsung in South Korea) posted increases in volume and market share. Renault is now the No. 2 brand in Europe behind Volkswagen, and well-positioned for a boom in electric vehicles. The Renault-Nissan alliance came together in 1999 when Ghosn was sent by Louis Schweitzer, CEO of Renault at the time, to Japan to revive Nissan. Renault owns 43 percent of Nissan; Nissan, now a larger company than Renault, owns 15 percent of Renault, but has no voting rights. “Ghosn has been exceptionally diplomatic in dealing with the 2 sides of the business”, said Ian Fletcher, principal analyst at IHS Automotive. “One is very much a French company and one is very much a Japanese company”. Ghosn’s current CEO term ends next June. That might seem a logical time for a succession to take place, but Ghosn has been granted a waiver from the company’s mandatory retirement age of 65. Ghosn’s presentation this fall of a new midterm strategic plan for Renault will be closely watched for signals a change is coming. “I think it would be taking a risk to remove Carlos Ghosn from Renault at the moment”, said Isabelle Chaboud, a professor at the Grenoble Ecole de Management, a French business school. “They are doing well financially, they are paying dividends, they are employing lots of people, so why would they choose someone else?” Nonetheless, a number of unresolved issues haunt the relationship. Ghosn has said the French government’s stake in Renault prevents closer financial ties with Nissan. “It would be very difficult to create a full merger because the Japanese government has not been keen for the French government to have any sort of direction over the way Nissan is working”, Fletcher said. This month, Economic Minister Bruno Le Maire affirmed Macron’s campaign promise to finance a 10 billion euro “innovation fund” by reducing the government’s stakes in certain companies, excluding critical industries such as defense, which would seem to open up a door to sell part of Renault. Renault stock, however, is trading around $95 a share, less than the $103.20 the government paid in 2015. Selling at a loss may be unattractive as Macron tries to lower France’s heavy debt burden. The government has voted against approving Ghosn’s pay package at Renault for the past 2 years. Last month, shareholders at the company’s general meeting in Paris narrowly approved his 2016 salary and bonus total of $8.03 million by just 53 percent to 47 percent. At that same meeting, Ghosn was forced to defend himself against a report from Reuters that the alliance was considering a secret bonus pool for executives that would be serviced by a Dutch company. It would be funded by operational synergies among the alliance partners, which last year rose 16 percent to $5.73 billion, and are expected to reach $6.31 billion this year. After a public outcry, Ghosn denied the alliance had agreed to the fund. Renault is also 1 of 4 automakers, along with Volkswagen, PSA Peugeot and Fiat Chrysler, targeted by the French consumer watchdog agency as having unacceptably high real-world diesel emissions. A leaked report on Renault’s case this spring suggested Ghosn bore responsibility and said Renault could face a fine of several billion euros. The company has not been charged with any wrongdoing, and Renault has said repeatedly its vehicles meet all applicable regulations. In the end, the relationship between Macron and Renault may be transactional at heart, analysts and experts said. Macron is under intense pressure to enact promised reforms to French work rules that would increase competitiveness, and Renault remains one of the crown jewels of French industry, with 125,000 employees, 46,000 in France. Ghosn himself has been conciliatory toward Macron, saying that it is “good news for all companies” that the new president “believes in the global market”. “He’s been elected for many reasons”, Ghosn said. “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?” +++
+++ TESLA chief executive Elon Musk is so confident in the entry-level Model 3 that he thinks owners will rarely have to take it in for a service. In fact, at the global launch of the first Model 3 production vehicles in Fremont, California, Musk said that “the next generation powertrains used in the Model 3 are designed to be 1.6 million kilometers between services”. Obviously, consumables used by the electric vehicle will have to be serviced more regularly than that, including the brakes and tires. Nevertheless, Musk is very optimistic about the longevity of the electric motor, drivetrain and battery cells. In the U.S., the Model 3 comes standard with a 4-year warranty and an 8-year battery warranty. Despite the company’s outspoken leader believing that EVs will require little maintenance in the future, Musk did say Tesla is embarking on a worldwide service center expansion and eventually wants to offer the ability for vehicles to be serviced at the owner’s home. The standard Tesla Model 3 starts at $35,000 before any incentives and will have an EPA-estimated range of 350 km. For $9,000 more, customers can opt for the Model 3 Long Range and have 500 km of range at their disposal. +++
+++ VOLKSWAGEN Group’s core VW brand could exceed its 2017 profit margin target, the automaker’s finance chief, Arno Antlitz, said. The brand, VW Group’s largest division by sales, expects its operating margin to come in at the upper end of its 2.5 percent to 3.5 percent target after 1.8 percent last year, Antlitz said. However, “if markets, especially in regions such as Russia or Brazil continue to stabilize, we do not rule out the chance that we might even slightly overachieve the 3.5 percent”, Antlitz told a conference call on Volkswagen brand’s first-half results on Friday. The brand’s first-half margin was 4.5 percent. Potential headwinds could be increasingly strict worldwide CO2 and emission legislation as well as VW’s goal to become a leading mobility provider. “We will evaluate the sustainability of our progress in our next planning round in November”, Antlitz said. Part of the reason why the brand’s targets may need to be adjusted is a decision to reclassify billions of euros in revenue initially booked at the brand but now moved to Volkswagen Group to create better transparency. Unrelated revenue generated by the sale of vehicles from other group brands had heavily diluted returns and has been retroactively stripped out of the VW brand’s top-line as of this year. This meant revenue fell by 13.1 billion euros to 39.9 billion euros on an unadjusted level in the first half. Adjusted for the change, revenue rose 8 percent, VW said. Operating profit doubled to 1.78 billion in the first half, mainly driven by positive mix and pricing effects, helping the brand to reach a 4.5 percent margin. The brand’s restructuring is making headway, helped by strong demand for new models in the United States, Latin America and Russia, VW said on Friday. Volkswagen brand’s vehicle deliveries grew by just 0.3 percent to 2.9 million in the first half. Vehicle sales increased by just 0.2 percent in China and Europe and were down 5.5 percent in Germany. The brand expects revenue to rise by 10 percent for the full year. VW brand still targets a minimum 4 percent margin in 2020 and 6 percent in 2025, goals that were presented last November during a strategy review. “Our ambition is to reach our 2025 target earlier”, Antlitz said. +++
+++ VOLVO trademarks the S50 name. Trademark filings in the automotive industry usually ask more questions than they answer, and this is no exception. There’s never been a Volvo S50, so we can’t look to the past for clues. Volvo’s nomenclature system is pretty straight-forward; a 50-badged car would slot between the 40 and the 60 clusters. There’s not much space to fill between the 2 families, so the possibility of a 4th cluster is unlikely at best. S50 could be the name affixed to Volvo’s next coupe. The name suggests a 4-door coupe would be an off-shoot of the next S40, and it would ride on the company’s modular CMA platform. Of course, Volvo might just be trying to protect its intellectual property, while making sure a rival doesn’t try to imitate it. Skeptics point out Volvo’s recent coupes and convertibles have all worn names that begin with a C, e.g. the C70 that was axed in 2013. Volvo hasn’t commented on the rumor. It hasn’t formally announced a return to the coupe segment but it hasn’t denied it, either. +++
