+++ BMW said Thursday its earnings and sales rose in the second quarter, helped by demand in China. Net profit after minorities in the April-through-June period was 2.19 billion euros, up 13% from 1.94 billion euros a year earlier. Earnings before interest and taxes rose 7.5% to 2.93 billion euros, beating expectations for 2.87 billion euros. Revenue grew 3.1% to 25.8 billion euros. In the automotive segment, BMW’s closely-watched margin on EBIT rose to 9.7% in the quarter from 9.5%. BMW said it would stick to its 2017 target for a margin between 8% and 10%. BMW provided a break-out of regional sales for the quarter showing vehicle sales in China up 25% and Europe rising 0.4%. In the Americas, second-quarter deliveries fell 6.1%, held down by the contracting automobile market in the U.S., it said. The company confirmed its outlook for a slight increase in pretax profit in 2017, as widely expected. BMW also said it now expects its automotive segment’s revenue to show a “solid increase” in 2017; an improvement on its previous outlook for a slight rise. +++
+++ GENESIS is to working hard to distinguish itself as the luxury arm of automaker Hyundai. Initially, it was conceived as a top-tier luxury model under the Hyundai name, but now it’s spun off to become a sub-brand. Genesis is looking to further distance itself from the Hyundai equation, and to do that it seems it will be getting separate dealerships of its own. Genesis is accelerating forward plans to separate from the Hyundai dealership network in the United States. The brand, which began selling cars in August of 2016, can currently be sold in any of the 835 Hyundai dealers. That goes only for the G80 model, though, which used to be called the Hyundai Genesis. The G90, formerly the Hyundai Equus, is offered in 352 dealers, and each needs a showroom within a showroom. The new plan moves forward by 1 to 2 years original plans to begin separating from the Hyundai network. It appears, however, that Genesis wants a clean separation, and those showroom-within-a-showroom facilities will no longer be welcome. Additionally, Genesis is making it so that only full-franchise stores will be able to do warranty work on the cars. That’s a sore point for Hyundai dealers that had hoped to add Genesis repair business to their bottom line. Genesis has retained legal counsel to extricate itself from deals made with dealers. All Hyundai dealers will be eligible to apply for a Genesis franchise, but it’s unclear how many dealers Genesis wants. That number is likely lower than the 352 that currently sell the G90. It seems that shoppers don’t particularly like the idea of buying their new luxury sedan in the same showroom as Hyundai products. On the surface it smacks of badge snobbery, but this isn’t something solely experienced by Hyundai and Genesis. No Lexus buyer would walk into a Toyota dealership just as no Audi shopper would enjoy going to a Volkswagen showroom. If they’re buying a luxury product, they want to have a luxury experience and that’s what a stand-alone Genesis store would provide. +++
+++ LAND ROVER ’s Chief Design Officer, Gerry McGovern, has hosed down any notion of a 7-seat Range Rover, suggesting such a move might confuse the market. “Range Rover is the crown jewels in our model range, so it’s things like formality, elegance, sophistication and the levels of those you dial up from one vehicle to another, which creates that hierarchy and positioning”, McGovern told at the recent launch of the new Velar. “This is why we won’t do a 7-seat Range Rover, because with this vehicle, it’s about exclusivity. The optimum 7-seat vehicle for us is the the Discovery, and it’s probably equal or not far off the Range Rover in terms of premium-ness, but overall the Discovery is about versatility, whereas with Range Rover it’s about refinement”. Land Rover, as a brand, has already demonstrated with Velar that it can stretch. Who would have ever thought it would have created a Range Rover like the Evoque. “When we first developed that car, they said I was around the twist. ‘You might sell 20,000 a year’, said the marketing guy (haven’t seen that marketing guy around for a while) and yet we’ve been selling 130,000 a year for 6 years. That car saved us. The Velar is definitely the most car-like Range Rover ever built, which is why I had to convince the PR guys that we needed to put these vehicles on 22-inch wheels. For me the car is optimum in terms of its proportion and design when it’s got 22-inch wheels on it”, said McGovern. And while a third row of seats might be out for Range Rover, dropping 2 doors seems like it’s definitely on the cards. After all, Land Rover effectively created the luxury SUV segment when it launched the original Range Rover in 1970, and that was a 2-door vehicle. “I’d like to do a 2-door Range Rover, why not? I think there are opportunities to create more unique products as opposed to traditional segments. We’ve got a fierce cadence of vehicles over the coming years, because in this age, we’ve got to be quick to market, we’ve got to be flexible and we’ve got to think outside the box”, McGovern told. +++
+++ MAZDA will launch a world-first commercially produced compression-ignition petrol engine series, to be called SkyActiv-X, in 2019. This technology cuts fuel use, which is vital as Mazda look to slash its well-to-wheel carbon dioxide emissions to half of what they were in 2010. High-efficiency compression ignition (in this context the next evolution from Mazda’s efficient high-compression SkyActiv engine family) means the fuel-air mixture ignites spontaneously when compressed by a piston. In short, it’s a proprietary combustion method called Spark Controlled Compression Ignition, which Mazda claims maximises the zone in which compression ignition is possible, and yields “a seamless transition between compression ignition and [traditional]spark ignition”. The SkyActiv-X’s lean-burning is said to improve engine efficiency by up to 30 percent over the current SkyActiv-G petrol engine type fitted to all Mazdas bar the BT-50, while equalling or exceeding the fuel economy of its SkyActiv-D diesel engines. More interestingly again, Mazda says that compression ignition in tandem with an engine supercharger slashes fuel use while increasing torque 10–30 percent over the current SkyActiv-G gasoline engine. No surprise given the latter is normally aspirated. The disclosure of this imminent 2019 compression ignition launch (not unexpected) was one part of an announcement Mazda made today detailing its long-term vision. The business plan is rather unoriginally called “Sustainable Zoom-Zoom 2030”, and it charts Mazda’s course for the next decade-plus. In overview, the plan demands to reduce corporate average “well-to-wheel” carbon dioxide emissions to 50 percent of 2010 levels by 2030, and achieve a 90 percent reduction by 2050. Also, it want to prioritise efficiency improvements that apply in the real world, meaning continued efforts to “perfect the internal combustion engine”, which Mazda believes will help power the majority of cars. From 2019, Mazda will start introducing electric vehicles and other electric drive technologies in regions that use a high ratio of clean energy for power generation (this is where Toyota will come in). The company also outlined its plans to begin testing of autonomous driving technologies in 2020, aiming to make the full pilot system standard on all models by 2025. Mazda also believes that it can create a new business model that enables car owners to “support the needs of people in depopulated areas and those who have difficulty getting around”, and further develop its ‘Kodo’ car design to “raise vehicle design to the level of art that enriches the emotional lives of all who see it”. “Personally, I have always thought that a company must become an essential part of people’s lives to earn their trust and form a bond”, Mazda president and CEO, Masamichi Kogai, said. “And that bond is strengthened when customers empathise with the company’s greater cause and philosophy, as expressed through its products, technologies and services. Around the world, Mazda has always been known for making sporty cars like the MX-5 and we’ve been supported by a passionate fan-base”. This is the second major strategic, corporate announcement out of Mazda inside the past few days. Mazda and Toyota recently agreed to buy 50 billion yen ($570 million) worth of shares in their partner. This means, starting from the beginning of October, Toyota will own 5.05 per cent of Mazda’s common stock, while Mazda will have a 0.25 per cent stake in Toyota. The expanded partnership agreement will see the small and large Japanese entities set up a new factory in the US by 2021, work together on electric vehicle technology, collaborate on infotainment technology, share vehicle-to-vehicle and vehicle-to-infrastructure findings, and potentially share or co-develop vehicle architectures. +++
+++ Currently, the MERCEDES-AMG GLE 43 AMG has a 3.0-liter biturbo V6 engine that is capable of producing an impressive 367 horsepower. Now, the company decided they would give the 2018 model year an extra push of 23 horsepower, now giving it a maximum of 390 horsepower for the “43” model. The sporty model will still be equipped with the same 9-speed automatic transmission that gives power to the 4Matic all-wheel-drive system. But the other GLE models will only be getting a 7-speed gear box. As for performance, I have not heard from Mercedes just yet, but I do know that the current model can sprint from 0 to 100 km/h in just 6.0 seconds, while continuing to a top speed of 250 km/h. As part of the company’s long-term strategy, we should see an all-new GLE at some point next year, alongside a range topping GLE 63 AMG. Rumours say that it will be lighter in weight compared to the current version, thanks to the new MRA platform. Furthermore, it will likely have a 4.0 liter powertrain instead of the 5.5 liter V8 engine. My sources say that the range topping ’63’ will arrive for the 2020 model year. Similarly and just after giving the GLE 43 AMG some extra power, Mercedes also plans to give the GT and the GT S an additional 13 horsepower and 30 Nm of torque to celebrate AMG’s 50th anniversary. +++
+++ Any design restrictions created by MINI ’s distinctive styling and diminutive proportions are offset by the instantly recognisable look of its range, according to the brand. Mini senior vice president Sebastian Mackensen said that one of the brand’s great strengths was its ability to be identified by those who are not necessarily car people. “Mini vehicles should always look like a Mini vehicle”, he said. “So if I should show it to my 6-year old son, they see a Mini and they know it’s a Mini, even though they might not know immediately what model it is. If the car comes around the corner and it doesn’t have a logo on it and you think, ‘is it now a Mini or an ABC’, that would not be a good move, so I think we are limited with a purpose that it should have the character of a Mini, it should have the feel of a Mini. If you look at Countryman on one end, a Clubman here and a 3-door on the other side, I think there’s quite some variety in it but it’s still a family”. Mini head of Asia, Pacific, South Africa and importer regions Henrik Wilhelmsmeyer added that the homogeneous design of the Mini vehicles focuses the range, instead of restricting it. “Mini has a personality, Mini has a face somehow, and I think that’s important”, he said. “I wouldn’t say it limits, it helps to focus, and I think that is important that you understand what makes your product unique, what is the DNA of it, and a personality grows over time. And I think that’s the important aspect, it’s not limiting you, you grow (I mean all of us, our personalities differ over time) and I think that holds true for Mini as a brand as well”. In the last decade, Mini has expanded its range to include its first SUV in the form of the Countryman, while also releasing other models such as the Clubman, and the Roadster and Coupe pair, of which both were discontinued in 2015 following slow sales results. The Roadster and Coupe were seen to be too similar to the Cabrio and three-door Hatch models, and were cannibalising Mini sales instead of drawing customers to the brand from elsewhere. Mackensen said he was happy with the decision to consolidate the range into the 5-model line-up seen today. “We’re happy with that decision, not because they were bad cars, the total opposite is the case, the only thing is that overall what we have seen is that at a time we were basically selling seven models to the same consumer”, he said. “So we were competing maybe with some of our cars more with our own than with the external competition, because it was a similar size, similar price range, similar driving opportunity, and if you look at the Roadster specifically, a lot of that is going back and forth with the Convertible. So having reduced that on the one hand was the right way, and then having expanded those two cars, the Countryman and the Clubman, to distance themselves from the other 3 cars in body styles and length and overall package also. So now we have 5 cars in 2 different segments of the markets and competing much more with external competition than with the Mini brand. So if you asked me if we had any plans to do a Coupe and Roadster again I’d say no, but that doesn’t mean we have to stand still for the next 10 years”. The next vehicle to join Mini’s range will likely be an all-electric version of the Hatch, due in 2019. +++
+++ NISSAN said it has agreed to sell its electric battery business to Chinese investment firm GSR Capital for an undisclosed sum. The business to be sold to GSR includes battery plants in Tennessee, England and Japan, the Japanese automaker said in a statement. Nissan will first take full control of the business, Automotive Energy Supply, by buying the combined 49 percent minority stake held by NEC and its subsidiary NEC Energy Devices. NEC said it has approved the sale of its stake. +++
+++ You’ll soon be seeing even more TESLA models on the road. Chief executive Elon Musk said in an earning call that the electric carmaker’s upcoming Model Y SUV would be built off the engineering architecture of the Model 3, Tesla’s entry-level vehicle. This is a reversal from Musk’s decision several months ago to create an all-new battery architecture for the compact SUV, an expensive and time consuming process. The Model Y had been slated for release in 2019 or 2020. Though that date hasn’t yet been revised, Musk attributed his about-face to a desire to get more Model Ys on the road more quickly and thanked his executive team for “reeling me back from the cliffs of insanity”. The SUV is reportedly the most popular type of vehicle in the world. Indeed, between 2009 and 2016, American sales of ’trucks’ (a category that includes SUVs) have doubled. Few specific details have emerged about the Model Y, which resembles a Batmobile. Pricing has not been disclosed, though it’s expected to come with the gull-wing doors that are also incorporated into Tesla’s Model X. Musk said in the same call that his company would eventually build a new engineering platform, but not for now. “I still think we want to do the crazy thing in the future, but we will punt that until after the compact SUV”, he said. Tesla reported a loss of $336 million this year, though revenue doubled to $2.79 billion. The Model 3, its recently released first mass market car, continues to see strong demand, with 518,000 existing preorders for the $35,000-and-up vehicle. The upstart competitor to Ford and General Motors is hoping to produce 1 million cars a year by 2020. +++
+++ A few months ago, the United States Department of Justice charged several VOLKSWAGEN executives for the emissions cheating scandal, and one of the men was Oliver Schmidt. He was arrested back in January before his flight to Germany, and since then had been detained in US soil. Schmidt was the former person-in-charge of the company’s regulatory compliance office. The case was filed against 6 other executives. On Friday, August 4, he finally pleaded guilty in the US District Court in Detroit for breaking emission laws and misleading the U.S. Government. He pleaded to a single count of “conspiracy to defraud the US to commit wire fraud and violate the Clean Air Act”. By doing so, Schmidt could be fined between $40,000 and $400,000, while facing up to 7 years in prison, before being deported back to Germany. 7 years might sound like a long time but it is a much lighter sentence than he should have faced. All in all, he was charged with 11 felony counts, and that is equivalent to a total of 169 years in prison, in other words, he will be given a lifetime sentence in prison. As expected, the 48-year-old German native took a plea deal. Schmidt also said that he met with other Volkswagen employees to give the California Air Resources Board a careful answer when asked about Volkswagen TDI emissions discrepancies. He did this to convince the CARB to approve the sales of the VW vehicles even if he knew that these cars utilized a defeat device to circumvent regulations. During his plead, he admitted that he knew of the 2 fraudulent and missing reports that Volkswagen sent to the Environmental Protection Agency. He also said that the company’s marketing campaign is just a bunch of false advertising. Jean Williams, Deputy Assistant Attorney General of the Justice Department’s Environment and National Resources Division Deputy, said that the people from VW prioritized corporate sales over the environment’s safety with their scam, and that they lied to the American purchasers. Schmidt and the others who are involved in the Dieselgate scandal will have to face the consequences of their actions as the investigation continues. Today, Schmidt will be joining Volkswagen Engineer James Robert Liang and South Korean Volkswagen executive Yun (only the surname is known) in the next couple of years in prison. We are also aware that there are other members of the company that are involved in this but some of them have not pleaded guilty just yet. Schmidt will be sentenced on December 6, 2017. +++