+++ ASTON MARTIN has appointed for the second time in recent history a former Ferrari staffer for a senior engineering role. The British firm named Jörg Ross as its new powertrain boss. Ross’ last position was head of advanced powertrain development at Maserati, and prior to that he held senior roles at Ferrari’s Formula 1 team, Ford and German engineering firm IAV. His appointment follows the hiring of ex-Ferrari chassis and body engineering boss Maximilian Szwaj by Aston Martin in December. Szwaj was hired to head R&D. As for Ross, his new role will see him develop next-generation engines, transmissions and electrification technology. He will be based at Aston Martin’s headquarters in Gaydon, United Kingdom and report to Szwaj. “I’m delighted to be joining Aston Martin at what is an exciting time for the brand”, Ross said in a statement. “The company is at a significant point in its history, with the recent announcement of its first all-electric car, the RapidE”. Ross is correct in his assertion of exciting times at Aston Martin. The automaker is in the midst of its Second Century plan which calls for 7 new vehicle lines in 7 years. The first was the DB11 launched in 2016. Later this year we’ll see a redesigned Vantage, and then we’ll see a redesigned Vanquish, a DBX SUV, a mid-engine supercar, and 2 Lagonda ultra-luxury sedans. Along the way there will also be limited edition specials such as the Valkyrie hypercar and electric RapidE. Given its low sales of less than 10,000 cars annually, Aston Martin so far hasn’t required hybrids to meet emissions regulations in major markets. That will change as the automaker launches more and more models, thus expect to hybrid and electric cars added to the lineup in coming years. The fuel-efficient vehicles are also needed in China where the government is mandating sales of low- and zero-emission vehicles. +++
+++ Strong sales performances by market leaders Toyota and Mazda helped to drive new-vehicle sales in AUSTRALIA to a July record of 92,754 units last month, eclipsing the previous July peak of 92,308 units set in 2015. Showing few signs of a hangover from its whopper sales month in June, Toyota landed no fewer than 4 vehicles in the top10 in July, with its HiLux pick-up (3,742 sales) and Corolla (3,208) taking the quinella as the best-selling vehicles in the land. Toyota’s monthly sales tally of 17,931 represented its best July since 2008 when sales were boosted by the mining boom to 20,521. Mazda sailed to a record July high of 9,528 vehicles, mainly on the back of its resurgent ‘3’, sales of which were up 64.3 per cent on July last year when it was in the middle of a model changeover, and the CX-5 which zoom-zoomed up 19.2 per cent to 2,305 units to resume its role as top-selling SUV in the land. Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber said the record July was notable because it came directly after the industry’s best-ever monthly result in June. Apart from Toyota and Mazda, the other big winners among the leading brands last month were Mitsubishi, Subaru and Kia. Mitsubishi edged up 11.2 per cent over July last year, to 6,020 units, Kia sales jumped 20 per cent to a July record 4,265 units, and Subaru’s volumes soared 27.1 per cent to 4,265 vehicles on the back of strong demand for its 2 newest models, the XV and Impreza. Market number3 Hyundai effectively marked time with 7,501 sales for the month; down 1.3 per cent as it establishes its new i30, while rivals Holden (6,467) and Ford (6,270) went backwards by 8.5 and 9.1 per cent respectively. Holden sales are now running 11.8 per cent behind the same period of last year, despite the arrival of new models such as the Astra. Ford’s Ranger came in third on the best-seller list, with 3,076 sales, effectively making up half of Ford’s retail sales in Australia, while its one-time top seller, the Falcon, all but disappeared from the market, achieving just 2 sedan and 1 pick-up registration for the month as residual stocks dry up after the demise of the company’s local manufacturing last October. Of the top 10 companies, Nissan was the biggest loser, down 22.8 per cent for the month to 4,094 units; a fall of more than 1200 units on the same month last year. Year to date, Nissan’s sales are down 12.3 per cent or 4,803 units. Year to date, the overall Australian new-vehicle market has edged 0.4 per cent ahead of last year’s sales, to 692,306 units and well on target to break through the million-unit mark again. The July tally of 92,754 was 1.6 per cent up on the corresponding month last year. The trend away from passenger cars to SUVs was again evident in July, with passenger car sales down 5.9 per cent for the month, to 35,792 units, and SUVs up 9.4 per cent to 36,979 vehicles. German car-makers BMW and Audi landed a rare punch on rival Mercedes-Benz in July, with BMW sales up 5.0 per cent to 2,152 units and Audi’s sales up 9.2 per cent to 2,114 vehicles, while Mercedes-Benz car sales slipped 5.2 per cent, to 2,628 units. +++
+++ German luxury carmaker BMW posted a forecast-beating 7.5 percent rise in second-quarter profit as sales of motorcycles and demand for its new 5-series helped to offset slowing demand for luxury cars in the United States. Deliveries of BMW, Mini and Rolls-Royce vehicles rose 4.6 percent to 633,582 cars in the second quarter. BMW forecast a “solid” increase in automotive segment revenue for the full year, predicting “additional momentum” in sales in the second half as a new version of its 5 series is launched in markets such as China. Analysts welcomed BMW’s outlook for car sales, and the fact that the Bavarian automaker remains the only German premium brand that is not being investigated for using illegal software to cheat emissions tests. “We confirm our positive view on BMW especially as BMW seems to be less involved in the ongoing emission discussions”, DZ Bank analyst Michael Punzet said in a note. German prosecutors are investigating Daimler, Audi, Porsche and Volkswagen to see whether they used illegal software designed to cheat emissions tests. BMW’s group earnings before interest and tax rose to 2.92 billion euros, compared with an average forecast for 2.82 billion in a Reuters poll of banks and brokerages. BMW affirmed its guidance for a slight increase in full-year group pretax profit and an operating margin of 8 to 10 percent at its automotive business, which posted a second-quarter margin of 9.7 percent, up from 9.5 percent a year earlier. Germany’s auto industry is still under fire almost 2 years after Volkswagen admitted to cheating pollution tests. The share of diesel engine cars at BMW has fallen to 35.4 percent of new deliveries worldwide, and 61 percent of sales in Germany, from a level of 37 percent and 65 percent in 2016. BMW has made adequate provisions for a possible decline in residual values of diesel cars, the company said, adding that currently BMW is not seeing any residual value declines. +++
+++ HONDA is outselling its bigger, deeper-pocketed rival Toyota in China this year, data from the Japanese companies shows, helped by new model launches and strong SUV offerings. Honda said it sold 113,803 vehicles in the world’s biggest auto market last month, up 11.6 percent from a year earlier. Its sales volume for the first 7 months of 2017 amounted to 757,970 vehicles, up 17.6 percent from the same period a year ago. Toyota sold 732,900 vehicles in China during the first 7 months of this year, up 6.2 percent from a year earlier. But that was roughly 25,000 vehicles less than Honda sold in the period. Toyota sold about 108,900 vehicles in July, up 11.4 percent from a year ago. Since making a full market entry in China in the late 1990s, except for early years Toyota had generally outsold Honda in China every month and year until last year. Industry experts foresee the rivalry continuing even after Toyota refreshes its product lineup in a bid to boost sales. “Honda’s product lineup is much, much fresher”, said James Chao, Asia-Pacific chief of consultancy IHS Markit Automotive. “It’s still quite an achievement for Honda to outsell Toyota in the world’s biggest market”. Globally, Toyota last year sold roughly 9.88 million vehicles, compared to Honda’s global volume of 4.91 million vehicles, according to IHS. Chinese consumers have flocked to Honda’s raft of new models, including a significantly-redesigned version of the staple Civic, as well as its SUVs. Demand for subcompact cross-overs and SUVs is red-hot in China. Sales of its aged products are also fairly strong thanks to what rivals and industry experts describe as big discounts and other incentives on car models such as the Accord sedan. Toyota’s China sales have not been weak, either. Experts said Toyota’s comeback versus Honda will depend largely on how quickly it can refresh its product lineup. “Once Toyota introduces new products the pendulum will shift”, IHS’s Chao said, pointing partly to Toyota’s stronger position in distribution. The significantly redesigned Camry, which hit showrooms in the United States earlier this year, is expected to go on sales in China before the end of this year. A China-version of the C-HR is expected to be launched soon, but a Beijing-based spokesman said it was premature to say when the car might hit showrooms. Honda recently launched the significantly redesigned Accord in the United States. It was not immediately clear when Honda plans to launch that model in China. Honda’s target for this year is to sell more than 1.3 million vehicles, compared to 1.24 million vehicles it sold last year. Toyota said it is on target to sell more than 1.21 million vehicles in China this year, compared with 1.2 million vehicles it sold in 2016. +++
+++ The PORSCHE Mission E concept debuted 2 years ago as a signal to the automotive industry: the German sports car maker is ready to take on Tesla. However, Porsche’s electric car plans don’t involve simply introducing a Tesla Model S competitor. It wants to revolutionize charging infrastructures, too. Following through on its multi-year goal, the German marque has installed the first 350 kilowatt, 800-volt charging station at the brand’s new branch office in Berlin-Adlershof. To put the charging station into context, the current Combined Charging Standards (CCS) charging stations are capped at 50 kilowatts with today’s technology. The 350-kilowatt charging station can charge an electric car’s battery to 80 percent capacity in about 15 minutes. That’s half the time of today’s CCS fast-charging stations. The charging station uses technology not readily available today: liquid cooling. The charging cable itself is liquid cooled to ensure the charging pins do not overheat. The high rates of electricity being transferred would fry any current CCS charging cable. About 100 kilowatt hours are being transferred in 15 minutes in the prototype charging station. Porsche is powering the prototype charging station with a new solar pylon on the branch office’s campus. The 82-foot tall pylon provides 33,000 kilowatt-hours per year and will provide enough power to cover the entire electricity demand of the new office. There’s some good news and bad news, however. The technology is incredibly expensive and will require a sizable investment to make all CCS-standard cars capable of using the future technology. Porsche’s parent automaker, Volkswagen Group, was required to invest $2 billion over 10 years into fueling infrastructure for zero-emission vehicles as part of its diesel scandal settlement. Some of the $2 billion could find its way to future 350-kilowatt charging stations. That’s the bad news. The good news is any progress Porsche makes may be beneficial for all CCS-standard electric cars. All U.S.(save for Tesla) and German automakers utilize the CCS standard. That means thousands of other electric vehicles could use the future fast-charging stations, not just Porsches. Only time will tell how quickly Porsche moves on the budding technology, however. +++
+++ The UK market for volume-brand large family cars such as the RENAULT Laguna has been declining for years, but buyers are not deserting the mainstream car makers entirely. Instead, they are buying large SUVs from them instead. This is, explained Renault recently, why it is bringing the Koleos to the UK, rather than its related sister cars, the Talisman and Espace. “SUVs are where it’s at right now”, Koleos product manager Yann Le Graet told. “A large SUV is an excellent brand-builder. That’s why we chose Koleos rather than Talisman or Espace”. Renault research shows that, back in 2012, around 60,000 large SUVs (the D segment) were registered in the UK. Just 4 years later, this more than doubled, to 140,000, thanks to the popularity of models such as the Volvo XC60, BMW X3, Land Rover Discovery Sport and Audi Q5. More recently, the launch of the Ford Edge and Skoda Kodiaq has shown buyers’ appetite for large SUVs extends to volume brands, demand for them grew 60 percent in 2016. Now Renault is capitalising on the trend, which marks the return of the large Renault to Britain for the first time since the Laguna and Espace’s shock withdrawal from the UK in late 2011. “We expect sales to be split 50-50 between private and company car buyers. User-choosers will be drawn to it, but we’re planning some very competitive PCP deals that will appeal to retail buyers”. Le Graet explains this is also why Renault is selling the Koleos purely as a 5-seat large SUV. “We’ve prioritised middle seat comfort, giving more luxury to those in the back with a deeper, more comfortable seat. This also means the boot can be much larger, which is what buyers tell us they want; a real premium SUV experience. If they really need 7 seats, we can offer them the Grand Scenic”. +++
+++ Wall Street is celebrating TESLA ’s better-than-expected quarterly results, but the company’s spending needs still are a top worry, leading to fresh chatter among analysts that the electric-car maker is likely to tap capital markets again. Tesla posted a smaller-than-anticipated loss and higher-than-expected revenue. Yet concerns about another potential capital raise aren’t going away. Positives in the latest updates include the mass-market Model 3 sedan’s production starting as planned, and Model S pre-orders coming in at about 500,000; up from a prior level of 373,000, said Efraim Levy, senior equity analyst at CFRA Research, in a note. “However, while cash increased to $3 billion at quarter-end, we think that is timing related and that second half spending will be an above-consensus $2 billion, and could likely necessitate a capital raise in 2018”, wrote Levy, who has a sell rating on the stock. The CFRA analyst lowered his rating to sell from hold in February, citing execution risks and other issues. Baird analysts also are thinking about Tesla passing the hat for funding again. Back in March, Tesla raised $1.2 billion to have a cushion for the rollout of the Model 3. The timing of another potential move to tap capital markets will “continue to become an area of focus as Tesla invests in new products and facilities”, wrote the Baird team led by Ben Kallo in a note. Tesla “did not rule out raising debt capital”, Kallo and his colleagues said. “Importantly, CEO Elon Musk expects to provide additional details on Gigafactories 3, 4, 5 and 6 in the intermediate term, and expects to maintain the majority of production in the United States, though management indicated factories in China and Europe would be useful to increase access to those markets”. The Baird team, which has touted Tesla as a top stock pick for 2017, has an outperform rating on the stock, along with a price target of $368. “Although Tesla is now in ‘production hell’, we recommend investors own shares into the Model 3 ramp, which should be a several-month period and coincide with positive catalysts as cars are delivered and reviewed”, the analysts wrote. “Demand commentary was positive for all models, and Tesla indicated it saw an acceleration in net orders for vehicles leading up to, and following, the Model 3 launch event”, they said. Tesla’s stock price isn’t accounting for what could go wrong, and investors should keep an eye on the company’s money needs, suggested RBC analysts. “What Tesla has accomplished is extremely impressive, but the stock discounts that a lot goes perfectly and smoothly for a very long time”, wrote RBC’s Joseph Spak and George Clark. “Near-term we would put wide error bands on forecasts and watch for self-funding”. The RBC analysts have a rating of sector perform, or neutral, on the stock, and they’ve hiked their price target to $345 from $314. +++
+++ Sales for major UNITED STATES auto makers sharply declined in July amid a modest slump in lease deals that have kept payments low, continuing an industry slowdown that has led to a glut of inventory on dealer lots and a spate of discounts. General Motors reported a 15.4% sales decline in July compared to the same period a year ago, selling 226,107 cars and trucks. Ford said sales slid 7.4% last month to 199,318 vehicles. Fiat Chrysler Automobiles posted a 10% decline in July, selling 161,477 vehicles, as its top-selling Jeep brand continued to struggle against rivals with newer SUV models. While pick-up and SUV demand remains strong, sales of sedans and other passenger cars have struggled amid low gas prices. Full industry results are due later Tuesday for July, which is typically a strong selling month for auto makers. J.D. Power anticipates sales fell 5.4% in July, compared to the same month in 2016. The firm notes that manufacturers typically pull back on sales incentives after the July 4th holiday, “but this year elevated inventory levels coupled with the sales slowdown, have compelled them to maintain aggressive discounts throughout July”. The U.S. auto market, which topped a record 17.5 million in 2016, has grown seven consecutive years. Analysts expect that growth streak to end in 2017 as dealership traffic slows and fleet buyers, including rental-car firms, need fewer vehicles. Car makers also facing a new problem: lenders are backing away from offering the cut-rate lease deals that kept monthly payments low and sheet metal flying off dealer lots in recent years. Leasing accounted for 31.1% of all retail sales in the first half of 2017, falling slightly from last year’s record of 32%. Buyers had been increasingly reliant on leases (which keep payments low even as car prices rise) until this year. “For a long time, we were all wondering where the ceiling was for leasing. Now, it has been hit”, said analyst Jessica Caldwell. Swelling used-vehicle supply is accelerating the pullback on leasing, The increased supply comes after used-car values had grown steadily in the years following the 2009 financial crisis. +++
+++ Geely-owned VOLVO said in a statement its sales rose 6.2 percent year-on year in July powered by sharp growth in China. Total sales for the month amounted to 44,278 cars, compared to 41,709 cars a year earlier. Volvo says continued strong demand for the new 90 series cars remains an important factor in Volvo’s positive sales performance, while the first generation XC60 remains the best-selling model overall, Volvo says a total of 2,427 new XC60 cars were sold during the month, with orders exceeding 24,500 in the first half of the year. Volvo saw sharpest growth in Asia Pacific, up 36.2 percent, with China, Volvo’s largest market, up 50.2 percent. Sales in the Americas region fell 16.0 percent year to year, with a 18.8 percent drop in the United States. Sales in the EMEA region increased by 3.6 percent. Volvo says the Americas region reported sales of 49,557 cars for the first 7 months of 2017, down 7.0 percent compared with last year. Volvo says delivery constraints affected first quarter sales in Americas, but it expects to report full-year growth after a stronger second half of the year. +++