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+++ The ambitious Chinese car maker CHERY will reveal its first all-new car for Europe at the Frankfurt Motor Show. The new compact SUV will be shown in pre-production guise ahead of sales beginning “within the next few years”. However, it won’t be sold as a Chery: the company is planning to sell it under an “all-new nameplate,” with the brand evaluating its own Chery design and R&D centre to hone the Chinese-built range of models planned for the continent. It will also work with local importers and distributors in key markets. Based upon an all-new platform, the range of cars will be offered with a range of electrified powertrains, including hybrid electric, plug-in electric and even full battery-electric EVs. And they’ll be sold “in European markets across multiple segments”, said Chery CEO Anning Chen. The compact SUV shown at Frankfurt is aimed at “young, urban, progressive-minded customers” and will be built to European standards of design, quality, dynamics and crash worthiness, promises the firm. Chery has been China’s biggest car exporter for the past 14 years: it has sold 1.2 million Chinese vehicles overseas. Last year, it sold more than 700,000 cars overall, an annual growth rate of 28 percent. 100,000 of them were exported: this represented a full 30 percent of all cars exported from China. Now, with production capacity to make more than 1 million cars a year, it’s setting its sights on Europe. “Our brand will target open-minded, younger customers in particular, with a product rollout strategy that focuses on quality, low- and zero-emissions powertrains, and emotional engagement with customers”, said Chen. “All Chery vehicles sold in Europe will feature class-leading connectivity, be fun to drive, offer flexible and spacious interiors and will provide comprehensive personalisation, all of which are aligned with our high standards of product quality and aftersales support”. +++

+++ Governments, particularly in Europe, are under pressure to curb emissions. In July, both France and the United Kingdom agreed to ban the sale of cars powered solely by gasoline or diesel by 2040. But the government in GERMANY , a country perhaps more closely linked with its auto industry than any other, is understandably less reluctant to follow through with a similar ban. However, it’s likely that even Germany will ultimately come around. That’s the word of German Chancellor Angela Merkel who in a recent interview said the moves by France and the U.K. were the correct path, but that it was still too early to say when it would be appropriate to implement. “I can’t give you a precise year yet, but the approach is the right one”, she said. Merkel also said that diesel engines, despite the Volkswagen Group’s emissions cheating scandal, were still an ideal solution to curbing carbon dioxide (CO2) emissions because of their efficiency. She said the automakers need to introduce “modern diesel engines” that meet all nitrogen oxide (NOx) regulations. The Volkswagen Group’s diesel cars featured software that would reduce NOx levels to acceptable levels only during government testing. Merkel also said that electric car charging infrastructure needed to be built up to help spur the transition to hybrid and electric cars. Earlier this month, Germany’s transport authority, the KBA, held an emergency meeting with the BMW Group, Daimler and the Volkswagen Group. The automakers agreed to upgrade around five million diesel cars with software aimed at reducing NOx emissions by between 25 and 30 percent, including in some older cars. The automakers also agreed to participate in a fund to promote sustainable transport in cities. +++

+++ HOLDEN has revealed plans for a street party to celebrate its heritage as Australia’s last car maker. The brand will host a cruise through northern Adelaide as part of a street parade to celebrate 70 years of vehicle production. Owners of classic Holdens are being given the chance to participate in the drive and are encouraged to register for the Holden Dream Cruise. The Holden Dream Cruise will be held on Sunday October 15 and follow a 10 km route through Elizabeth, paying homage to the community which has been part of Holden’s heritage. It will be lead by the first and last Holdens to be built in Australia, an original 48-215 and a current VF Commodore, along with a number of historic models from its collection. It will culminate with a show ’n shine display at a local football oval where Holden will reveal a display that outlines its future in Australia, including the all-new imported Commodore and, potentially, a locally-designed concept car that showcases cutting edge technologies. “The Holden Dream Cruise is not just for owners of classic Holden cars made in Australia but for the wider community”, said Richard Phillips, Holden Executive Director of Manufacturing. “We want to hold an event that recognises the large community of people who care about the brand, its manufacturing heritage and its future. This includes not only customers and enthusiasts but people for whom employment at Holden has been an important part of their family, in some cases for decades”. +++

+++ JAGUAR Land Rover (JLR) Australia managing director Matthew Wiesner has slammed rival premium car manufacturers for heavily discounting vehicles in the medium and large passenger car segment to chase volume, admitting that the British brand cannot slash the price of its XE and XF sedans to the same degree. Wiesner said it was difficult to gauge the true extent of the exodus from passenger cars to SUVs given that recommended retail prices had been rendered meaningless with some premium medium and large sedans. “There’s a market there with premium sedans no question”, he said. “The challenge is, in both that medium and large premium sedan market, does anybody know what the salesnumbers really are? The behaviour in that space is not ideal, so the trading behaviour in those two segments makes it very difficult to find out exactly what the true demand is and actually what is the actual true selling price of cars in those segments. We don’t have as deep of pockets as our competitors, so we’re kind of between a rock and a hard place competing in that space. What would those segments settle down to be if everybody didn’t do what everybody does? I don’t know”. Asked to clarify whether he meant certain competitors were heavily discounting products to inflate sales, Wiesner replied: “Let’s just say that the broader offers that are available, depending on what the products are, where they are in a particular cycle of their life that they may well be in, vary dramatically. The recommend retail price doesn’t mean a lot when that sort of trading behaviour happens. Which is a shame because all of those cars, whether it’s ours or let’s face it the Benzes, the Beemers, the Audis, and our Jaguar offerings, they’re all damn good cars and quite frankly deserve better”. According to July year-to-date sales results, the premium medium sedan and wagon segment is down only 5.7 per cent to 13.413 units, despite every model except the Audi A5 Sportback (332 sales, up 22.1%) and Mercedes-Benz C-Class (4.980, up 30.8%) otherwise suffering a downturn. Other key models in the segment have dipped so far this year, including the Jaguar XE (571, down 44.3%), BMW 3 Series (1.633, down 41.4%), Audi A4 (1.399, down 9.9%) and Lexus IS (1.005, down 1.8%). Wiesner admitted that some buyers in the medium car segment were “absolutely” leaving Jaguar showrooms because an equivalent XE model grade is not available at the aggressive deals of some competitors. “And XF’s the same”, he said of the large sedan segment, in which something of a duopoly has emerged in the local market. The premium large car segment has soared by 33.3 per cent to 3.023 units to the end of July this year, but the figure is inflated only by the new BMW 5 Series (903 sales, up 159.5%) and Mercedes-Benz E-Class (1.257, up 104.7%) that combined have snared more than two-thirds of total volume in the class. Rivals such as the Jaguar XF (137, down 51.1%), Audi A6 (226, down 19.6%), Maserati Ghibli (133, down 40.9%), Lexus GS (103, down 16.9%) and Volvo S90 (33, new) are well off the pace by comparison. But Wiesner also confessed that “the SUV products that are on offer today certainly puts a lot of pressure on that sedan business”, with Jaguar joining Land Rover in dominating in the medium, large and (soon with E-Pace) small classes. “But there’ll always be, I say always, for at least for the next period of time, there’ll always be a reasonable market there of those that like driving traditional sedans”, he insisted. “And if this trading behaviour continues in that space, there will continually be outstanding deals and opportunities for people to purchase cars in those segments across all brands, because supply generally outstrips demand”. The premium medium SUV segment has snared 17.371 sales to the end of July this year, up only 0.9 per cent but still 3.958 units clear of the medium sedan segment. The Land Rover Discovery Sport (2.876, up 9.5%) leads the BMW X3 (2.073, down 10.7%) and Mercedes-Benz GLC (2.070, down 30.2%) in that SUV class. While the Germans have been bolstered by the X4 (1.024, up 6.6%) and new GLC Coupe (625), Land Rover exceeds both as well with the Evoque (1.854, up 14.6%) and Jaguar with its still-fresh F-Pace (880). The premium large SUV segment, meanwhile, with 12.775 sales is a dominant 9.752 sales clear of the premium large sedan and wagon class despite the greater percentage growth driven by the new 5 Series and E-Class. In that segment the Land Rover Discovery (576, down 67.2%) is yet to fire with the new-generation model only just arriving yet combined with the Range Rover Sport (1.833, down 1.8%) the duo are still only 117 sales adrift of the BMW X5 (2.228, down 18.6%) and X6 (298, down 22.2%) that have continued to snare class honours so far this year. +++

+++ TESLA , fresh from a successful bond sale, is likely to have seen the worst of its money spending and cash burn. That’s according to analysts at Guggenheim, who on Tuesday tweaked their earnings expectations for the electric car maker. They are expecting the company to burn through about $600 million in cash in the fourth quarter, but said the second quarter “already likely represented the company’s peak cash-burn quarter”, at around $900 million. Tesla has sold $1.8 billion worth of notes due 2025 at a 5.30% interest rate to help shore up its balance sheet ahead of the Model 3 production ramp this fall. It was Tesla’s first foray into pure bonds, and the deal lacked many of the customary bondholder protections for its risk. Despite that, it was increased from an expected $1.5 billion due to strong demand. The bonds are trading above par Tuesday to yield 5.173%, according to MarketAxess. Tesla’s most-active bonds, the 2.375% notes that mature in March of 2022, traded at a premium of 129 cents on the dollar, to yield 3.426%, according to MarketAxess. Those notes are convertible bonds, which means they can be converted into equity, and thus have benefited from the rise in the underlying stock. Guggenheim analysts remained in the Tesla bull camp, saying they continued to believe the company can turn profitable next year and then scale up per-share earnings to nearly $15 in 2019 and more than $20 by 2020, “as ramping Model 3 volumes drive significant leverage off the high-fixed-cost structure it has been building”. Tesla earlier this month reported a narrower-than-expected loss and larger sales in the second quarter, boosting the stock to a 12% gain in August, versus a loss of 0.1% for the S&P 500 SPX, -0.05% in the same period. The shares have gained more than 61% so far this year, outpacing the benchmark’s gains of 10% for the year. +++

+++ With the rise of connected and self-driving cars, a nearly unlimited amount of data is being created for companies to harness and mine. It’s easier said than done, and that’s precisely why TOYOTA and Intel have formed an alliance with a handful of other companies to create a definitive ecosystem for big data. The data that will form the ecosystem will become even more valuable as more vehicles are equipped with active safety and self-driving technology. Besides Toyota and Intel, telecom equipment maker Ericsson, Japanese auto parts supplier Denso, and telecom firm NTT DoCoMo have all joined the newly founded consortium called Automotive Edge Computing Consortium. Toyota hopes to use the data to support emerging services, including self-driving technology, maps with real-time data, and driving assistance based on data input from the cloud. Just how much data is expected to be created? Toyota believes data volume between vehicles and the cloud will reach 10 exabytes per month around 2025. In non-geek speak, that’s 1,000,000 terabyte hard drives worth of data every single month and 10,000 times more data than what is created at present. +++

+++ Automakers traditionally turn to high-tensile steel, aluminum alloys, and carbon fiber to reduce the WEIGHT of their vehicles. But in the future, a new material made from wood pulp could be added to that list. Researchers at Kyoto University in Japan say the material, cellulose nanofiber, is one-fifth as heavy as steel and can be 5 times stronger. They’re hoping it can become an economically viable solution by 2030. In collaboration with other companies such as Denso, Toyota’s biggest supplier, the Kyoto University researchers are looking into plastics mixed with cellulose nanofibers, which are made by breaking down wood pulp into several hundredths of a micron, or one thousandth of a millimeter. Cellulose nanofibers have been used in other industries, but researchers see big potential for their application in cars. In a procedure appropriately named the Kyoto Process, wood fibers are kneaded into the plastics while at the same time being broken down into nanofibers. This process is said to reduce production costs to one-fifth that of other processes. “This is the lowest-cost, highest-performance application for cellulose nanofibers, and that’s why we’re focusing on its use in auto and aircraft parts,” research leader and Kyoto University Professor Hiroaki Yano told. Despite the potential benefits, cellulose nanofibers won’t replace other lightweighting materials in cars for many years, the publication reports. Not only would automakers have to revamp their production lines, but costs would need to come down. Currently, it takes around 1,000 yen (roughly $9 USD) to mass produce a kilogram of cellulose nanofiber. Compare that to around $2 USD per kilogram for aluminum alloys and high-tensile steel. By 2030, researchers hope to slash prices for cellulose nanofiber mass production in half, a feat that would make it competitive with some other materials because it would be combined with plastic. Meanwhile, carbon fiber prices are expected to hover around $10 USD per kg by 2025. Before the material is ready for prime time, researchers are working on a prototype car using cellulose nanofibers, and it’s expected to arrive in 2020. Meanwhile, plastics aren’t making their way into just cars. A group in the U.K. is testing roads made from recycled plastics that are said to be stronger and longer-lasting than traditional asphalt. +++

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