Newsflash II

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+++ BMW may finally be ready to roll out the red carpet for its next SUV. It had better make it a large red carpet, because we’re talking about the first true full-size, 3-row SUV from the Bavarian brand. Yes, the upcoming BMW X7 is rumored to be making its first appearances on the auto show circuit starting next month at the 2017 Frankfurt auto show. That’s according to some news from an insider who says that not only is the X7 coming, but it’s also arriving packing a unique powertrain. You’d expect some form of high-powered V-8 and possibly a turbocharged inline-6 to be in the mix as well. But would you expect a hydrogen fuel cell setup? BMW is looking at all sorts of alternative powertrains, and while battery-electric vehicles make the most sense right now, BMW is hedging its bets by also investigating fuel cells. That’s why the X7 might just be drinking hydrogen. Lexus did the same in 2015 with a fuel cell concept previewing its new LS. Also in 2015, BMW showed off a pair of concepts that utilized fuel cell technology. An i8 and a 5-Series Gran Turismo were built to showcase what’s possible in this space. The goal stated then was that a fuel cell vehicle would enter production by 2020. It seems BMW is adhering to that schedule. The X7 will certainly offer a standard slew of engines when it arrives in showrooms next year, including diesel offerings in Europe where it’s not quite as sour as it is right now in the States. I wouldn’t recommend holding your breath waiting for the fuel cell version, though. If I see it at the Frankfurt auto show, I’ll bring you many more details. +++

+++ With many of the world’s top automakers committing to the Formula E Championship, many are wondering if Ferrari, arguably the most famous name in motorsport, is considering doing the same. Ferrari Chairman Sergio Marchionne ignited rumors in April when he said Ferrari needed to be in Formula E because of the growing importance of electrification. However, he’s now told that one of the brands from FIAT CHRYSLER , which Ferrari was also a member of until it was spun off in 2015, is more likely to enter the electric car series. In addition to serving as chairman at Ferrari, Marchionne is also CEO at Fiat Chrysler. “I do not think Ferrari enters directly”, Marchionne told when asked whether the Prancing Horse could join Formula E. “However, we are thinking of doing so as FCA, and if we will enter, with one of the brands from the group, we do not know which one it will be right now”. Of the FCA brands, Maserati is the most likely to enter Formula E considering Marchionne’s pledge last month to electrify (make hybrid or pure electric) all Maseratis by 2019. There are even rumors of Maserati developing an electric sports car based on its Alfieri concept unveiled in 2014. Maserati also directly competes with many of the brands already participating in or are committed to Formula E including Audi, BMW, Jaguar, Mercedes-Benz and Porsche, and the Italian brand has an illustrious past in motorsport. The automaker competed in Formula One during the early decades, including as a team and engine supplier. It’s also participated in top-level sports car and touring car races. Alfa Romeo is another FCA brand with an illustrious motorsport history, though so far Marchionne has been quiet on electrification plans for the brand. +++

+++ The design boss for MERCEDES has teased an upcoming concept car set to debut in the coming months, in a new video posted on Instagram. Chief design officer, Gorden Wagener, shared a short video with his team talking about a new concept, that will be a “big surprise”. The Mercedes-Benz designers say in the clip that the new vehicle will be an “icon” and “very beautiful”, while also hinting that the “front end will be quite different” from the IAA concept, which is seen in several different sketches during the clip. Further details about the new Mercedes are kept well under wraps, though Wagener says it will debut “very soon”, hinting that it could make an appearance at this year’s Concours d’Elegance at Pebble Beach, which commences on August 15. Other new vehicles making their debut at the Pebble Beach event include the BMW Roadster concept, which previews the replacement for the Z4 sports car. +++

+++ The 991-series PORSCHE 911 is getting a bit long in the tooth and due for replacement soon, as we’ve been tracking for close to 2 years. Earlier this year, Porsche launched a GT2 RS which is normally the last core 911 member to be introduced. Now it looks like a Speedster version could be the final 991-series 911 to be unveiled. Porsche is working on a limited-edition Speedster as a farewell for the 991-series. The automaker did the same for the previous-generation 997-series 911. The Speedsters reconnect the 911 to the days of the 356. The cars tend to feature a chopped, raked windshield plus a double-bubble rear deck that lends an almost hump-like proportion to the 911. They also tend to come with retro features. Should a new Speedster be launched, expect it to feature the pumped fenders of the Carrera 4 but with drive going to the rear wheels only. The spec, meanwhile, should match that of the Carrera GTS, which would mean the car would come with a 3.0-liter twin-turbocharged flat-6 good for 450 horsepower and 550 Nm of torque. Pricing is sure to be high, as this is a limited-edition 911 we’re talking about, and possibly the last of the 991s. If indeed the Speedster is coming, it could arrive as early as next month’s 2017 Frankfurt auto show. +++

+++ TOYOTA and Mazda plan to build a $1.6 billion U.S. assembly plant, the two said, as part of an alliance that will also see the Japanese automakers jointly develop electric vehicle technologies. The two will take small stakes in each other as part of the tie-up: Toyota, the world’s second-largest automaker by vehicle sales last year, will take a 5 percent share of Mazda, extending its dominance in Japan’s auto sector. Mazda will take a 0.25 percent share of its larger rival. The plant, something of a surprise at a time of overcapacity in the U.S. market, will be a boost to U.S. President Donald Trump, who campaigned on promises to increase manufacturing and expand employment for American autoworkers. The plant will be capable of producing 300,000 vehicles a year, with production divided between the 2 automakers, and employ about 4,000 people. It will start operating in 2021. The electric vehicles cooperation, meanwhile, comes as the tightening of global emissions regulations prompts more automakers to develop battery powered cars, as the industry struggles with hefty research costs and intense competition from technology companies over technology like self-driving cars. As part of the agreement, Toyota and Mazda will also work together to develop in-car information technologies and automated driving functions. Toyota, Japan’s biggest auto company, has been forging alliances with smaller Japanese rivals for several years, effectively engineering a loose consolidation of the Japanese auto sector. It already owns a 16.5 percent stake in Subaru, Japan’s No. 6 automaker, with which it also has a development partnership. Toyota is also courting compact car maker Suzuki to cooperate on R&D and parts supply as Toyota seeks to tap its smaller rival’s expertise in emerging Asian markets. A stake in Mazda may also prevent future incursions by tech companies, one analyst said. “For a technology company which lacks the expertise in making cars, Mazda could look like a very interesting acquisition. They’re very good, they’re not too expensive. Maybe Toyota realizes this”, CLSA managing director Chris Richter said. “By buying a 5 percent stake, Toyota takes Mazda off the table rather than having it sit out there like a free agent which could someday be used against them”. Mazda stands to gain from a deal that gives the small automaker a production foothold in the United States. At the moment, Mazda ships all vehicles sold in the country, its biggest market, from its plants in Japan and Mexico. It also gets a boost in electric cars. With an R&D budget of around 140 billion yen ($1.27 billion) this year, a fraction of Toyota’s 1 trillion yen, Mazda has said that it lacks the funds to develop electric cars on its own, a view shared by Subaru and Suzuki. “Mazda needs electrification technology. In the past they’ve pooh-poohed EVs, they’ve felt that they can make internal combustion engines more efficient, but the bottom line is that globally you need to have this technology”, said Janet Lewis, head of Asia transportation research at Macquarie Securities. Mazda, whose annual global vehicle sales are one-eighth that of Toyota, caters to a specific audience largely in North America with its design-conscious sedans and SUVs, and has been focusing on developing more fuel-efficient gasoline engines. The automakers plan to produce Toyota Corollas and a new Mazda cross-over at the new plant. Toyota initially had been planning to produce Corollas at its new $1 billion plant currently under construction in Mexico, but this will shift to the United States, and the automaker will instead produce its Tacoma truck model in Mexico. Toyota has set a goal for all of its vehicles to be zero emission by 2050. Last year it established a division to develop full-sized EVs, shifting gears after long favoring EVs only for short-distance commuting given their limited driving range and lengthy charging time. +++

+++ VOLKSWAGEN will offer incentives to drivers of older diesel models of its 5 main passenger-car brands to switch to cleaner vehicles in a bid to help cut pollution, it said. VW said incentives are currently being prepared for owners of models designed to meet the Euro1, Euro2, Euro3 and Euro4 emissions standards and will be on offer soon, but it did not disclose any financial details. The incentives will apply to models of the Volkswagen namesake brand, Audi, Seat, Skoda, Porsche and VW commercial vehicles, it said. The carmaker reiterated it will install a software upgrade on around 4 million Euro5 and Euro6 models in Germany as part of a deal agreed with German top-level politicians to help prevent diesel cars being banned from driving into city centers. +++

+++ VOLVO , a unit of Zhejiang Geely Holding Group, has agreed to make some engines available for Geely-branded vehicles, sources said, deepening ties between the carmakers who already share technology through third brand Lynk & Co. Three people close to Geely and Volvo said the first Volvo-powered Geely model was expected to hit the market as early as late next year as a 2019 model year car. The car will be equipped with a new 1.5-liter turbo charged gasoline engine which Volvo has been developing for smaller cars, the knowledgeable individuals said. Volvo is expected to share a 2.0-liter turbo-charged engine at a later date and will also allow Geely-branded cars to use a common vehicle platform the 2 automakers developed jointly for Volvo and Lynk & Co. “The terms of the recently announced joint venture between Volvo Cars and Geely Group mean that existing and future technologies can be shared by Volvo, Geely Auto and Lynk & Co, under license agreements”, a Volvo spokesman said. As part of this deepened technology-sharing arrangement, Geely said it has completed the formation of a joint-venture with Volvo, called GV Automobile Technology Co, to “cooperate on automotive technologies, purchasing and the future development of” Lynk & Co, Geely said. The new joint venture creates a platform where all 3 brands (Geely, Volvo and Lynk & Co) can formally share the technologies and know-how they jointly develop and collaborate in purchasing, a Geely spokesman said. Analysts questioned Geely’s ability to absorb the best of Volvo when it acquired the automaker from Ford almost 7 years ago. Yet Geely has been working progressively to improve its technology with Volvo knowhow. Better designed cars following its 2010 purchase of Volvo (such as its GC9 sedan and Boyue SUV) have helped lift Geely’s fortunes. Its China sales grew 50 percent last year to 766,000 vehicles and it expects sales to climb well above the 1 million mark this year. Ultimately, it aspires to sell more outside China. Earlier this year, Geely bought 49.9 percent of struggling Malaysian carmaker Proton. Geely officials have told the Hangzhou automaker is planning to improve Proton cars by sharing Geely and Volvo technologies. Analysts have said one big risk for Volvo, as it combines more with its parent, is the dilution of Volvo’s brand image by sharing its technology and know-how with a Chinese auto upstart. Volvo Chief Executive Hakan Samuelsson said the key was to differentiate the brand sufficiently, even if the 2 groups share more technology. For Volvo, that is about more and better safety equipment, among other aspects. “The progress Geely has been able to make in improving products and brand image over the past several years makes me feel more confident they can execute this process successfully”, Yale Zhang, head of Shanghai-based consultancy Automotive Foresight, said. Last month Geely and Volvo said they plan to go beyond Lynk & Co and create a joint venture to share technology, such as vehicle architecture and engines via cross licensing arrangements managed by that joint venture. Samuelsson told Reuters last month the deal would provide Volvo with greater development resources and efficiency in purchasing parts. It also should help Volvo speed up introduction of new technology in areas such as components for electric vehicles, he said. +++

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