+++ ASTON MARTIN ’s market window for a sale or stock market listing may close for at least another year if no deal is reached on a Brexit transition period, the British sports car maker’s chief executive told. The luxury automaker, soon to add SUVs and electric vehicles (EVs) to its James Bond-endorsed sports cars, has said it is looking at a possible IPO or sale to an industrial bidder as its private equity owners move toward the exit. Brexit has added a layer of unpredictability, CEO Andy Palmer said, as British Prime Minister Theresa May prepares to for a March 22-23 summit at which EU leaders are expected to decide on transition arrangements to follow the country’s formal departure from the bloc just over a year later. “When you’re going through any kind of sale or IPO what you’re looking for is market stability”, Palmer said in an interview. “If you’ve got a transition agreement, to some extent you push out the problem by a couple of years”, Palmer said. Otherwise, he added, “you have to wait until Brexit has happened (in March 2019) and evaluate what kind of effect it’s had”. But he added: “We believe on the basis of what we hear from the politicians that a transition period is quite likely”. Aston Martin’s owners, Italian private equity fund Investindustrial and a group of Kuwaiti investors, have hired Lazard to prepare for a stock market listing or sale that could value the carmaker at between 2 and 3 billion pounds ($2.8-$4.2 billion), sources told in December. The company has since delivered its first annual pretax profit since 2010 after sales reached a nine-year high. “I could show you other sources that say 5-6 billion pounds”, Palmer said in the interview, referring to valuations based on discounted cashflow models. The shareholders’ sale plans contributed to Aston’s decision to go public now with its intention to relaunch the Lagonda brand as an electric car maker in 2021-22, Palmer also said. “When we talk to the financial markets, normally question 2 or 3 is: ‘What’s your EV strategy?’ ”, the Aston Martin boss said. “It’s always difficult to talk about things that are not in the public domain, so one of the reasons for getting it out there is to answer that question”. Palmer brushed aside a newsreport that Aston Martin was lining up IPO pitches from investment banks this month and preparing to recruit an independent chairman. “We haven’t started any search for an independent chairman”, he said. “I have no meetings booked for pitches”. +++

+++ DAIMLER chief executive Dieter Zetsche welcomed Geely chairman Li Shufu as a new shareholder and said any industrial alliance will depend on whether current China partner BAIC agrees. “We would like to have consensus with our Chinese partner”, Zetsche said, referring to BAIC, the Chinese company with which Daimler operates the Beijing Benz factory in Beijing. “We will examine everything if it is in keeping with the wishes of our partner”, Zetsche said, adding that Li had underlined his positive view of Daimler’s management and areas of potential cooperation. “It was a very interesting discussion with a very successful entrepreneur”, Zetsche said, adding that prior discussions with Li had included 3 main areas. “It was the relationship to Volvo, possible cooperation in China, and about a shareholding”, Zetsche told. “To the third topic, we said we welcome this. In this respect, he did what he had announced. We did not believe he would start out with a 9.69 percent stake”, Zetsche said, adding Li had not asked for a seat on the supervisory board. The Geely chairman’s move may spur BAIC into renewing efforts to take a stake in Daimler, Zetsche said, adding that this was a “speculative” assumption on his part. BAIC has in the past said it planned to take a Daimler stake. +++

+++ The accelerating demise of DIESEL , long used by carmakers to boost fuel-efficiency, is undermining their plans to meet looming European Union CO2 goals and avoid big annual fines. Executives are grappling with unpalatable choices: re-engineer existing vehicles at huge expense, restrict sales of some profitable models; or risk hundreds of millions of euros in penalties. Others are clinging to the hope that the image of the latest Euro 6 diesels may yet be rehabilitated, and their fortunes restored. “I am worried”, Volkswagen chief executive Matthias Müller said in an interview. “But it’s our job to solve these problems”, he said. “I’m firmly convinced that diesel will experience a revival”. But a fresh flurry of bad headlines and the growing prospect of outright diesel vehicle bans are already sending their sales into a steeper tailspin. While diesels produce more toxic nitrogen oxides (NOx) and particulates than gasoline engines, their efficiency has been instrumental in cutting greenhouse gases. As consumers shun diesels, more carmakers are on track to miss tougher EU carbon dioxide goals taking effect in 2020-21. Some industry insiders predict carmakers will be forced to rein in sales of larger models by raising prices to avoid overshooting the EU’s 95 grammes / kilometer CO2 target. Ford is reviewing its European line-up in light of diesel’s slide and is likely to “restrict the sale of some vehicles that push us over the limit”, a company source said. Steven Armstrong, the carmaker’s head of European operations, played down that prospect. “We’re not having to rethink the model line-up”, he said. “Of course we’ll have to fine-tune the volume by powertrain by vehicle, but it’s not going to be a fundamental shift for us”. Volkswagen brand sales chief Jürgen Stackmann told his business would have to consider price increases for larger models and/or restricting sales. “We are required to be compliant with EU targets, which steps are necessary will become clear in 1-1.5 years. A significantly lower mix of diesels is not helpful”, he said. Initially sparked by Volkswagen’s 2015 emissions test-cheating scandal and subsequent studies exposing the true levels of NOx emissions, the diesel slump has since deepened rather than stabilizing, as Müller and others had hoped it would. Sales of diesel cars fell 8 percent in Europe last year, reducing their market share to 44 percent from a 55 percent peak in 2011. Partly as a result, average CO2 emissions increased in Europe in 2017 for the first time in a decade, according to researchers JATO Dynamics. That was before the latest PR setbacks, in which Volkswagen admitted using monkeys and humans to test exhaust gas, and a court ruled that German cities were free to ban older diesel cars; joining Paris, London and a host of other urban centers that have vowed to run them off the road. Diesel sales were down another 19 percent in Germany last month, and a whopping 24 percent in Britain, amid concern that the decline in second-hand values would give way to collapse. French carmakers, which have relied heavily on diesels to meet CO2 goals, are now scrambling for alternatives. Renault has stepped up development of a low-cost hybrid known as “Locobox”, but the powertrain won’t even begin rolling out until 2021. PSA Group chief executive Carlos Tavares insisted the Peugeot maker remained on track. In a newspaper interview, however, he urged governments to suspend penalties for non-compliance until electric car charging networks are better developed. Tavares said he would seek backing for his demands from Europe’s ACEA car industry lobby group, which he currently chairs. Fuel-saving 48-volt hybrids being rushed out across the Peugeot, Citroen and newly acquired Opel line-ups are not expected to arrive before 2022 under current plans. “It’s not just at PSA that it’s happening too late; it’s happening too late everywhere”, said Philippe Houchois, a London-based automotive analyst with investment bank Jefferies. “The cost of CO2 compliance is one of the potential triggers of the next auto recession”, Houchois said. “Manufacturers are going to have to raise prices on larger petrol cars to meet their emissions targets, and that’s going to hit sales overall”. Already last October, investment research house MSCI was warning that “all carmakers apart from Toyota are at risk of missing regulatory targets for fleet emissions in 2021”. The Japanese carmaker is dropping diesels from its European fleet as it benefits from 2 decades of dominance in petrol-electric hybrids. Fiat Chrysler is expected to announce a diesel phase-out in its mid-term plan, due in June. German premium automakers are also better resourced to absorb the shock, by ramping up sales of plug-in hybrids already in their portfolios or pipelines while rushing out 48-volt technology to curb emissions across existing model lineups, including the 2 year old Mercedes E-Class. But the strategy of leaning on costly plug-ins for CO2 compliance has limits, as well as profitability perils. BMW admits it is already taking a hit on the hybrid version of its X5 SUV, priced 600 euros below the diesel version at 72,500 euros, despite its higher cost. “The profitability of plug-in hybrids is below that of cars with pure combustion engines”, a company spokesman said. That spells bigger trouble for volume brands, which lack the lucrative luxury models to offset “compliance cars” sold at lower profit or even a loss to meet CO2 goals. “If everybody wants to sell a lot of electrified vehicles, the prices are going to collapse”, said one PSA Group engineer. +++

+++ FERRARI ’s first production series hybrid will launch in 18 months’ time, company boss Sergio Marchionne has confirmed. The Italian firm already has hybrid test mules running that feature a V8 hybrid powertrain, said Marchionne. It will need to be a “traditional hybrid to fulfil its role”, in comparison to the LaFerrari’s kinetic energy recovery set-up, which was used as “an add-on”, essentially giving performance benefits rather than efficiency gains. It’s not yet clear which model the hybrid will appear in, although the timing would suggest it could well be Ferrari’s much-hyped forthcoming SUV, which is rumoured to be coming next year. Marchionne said that Ferrari’s hybrid offering will ensure it can adhere to upcoming European Union CO2 emissions targets for 2021. He added: “We’re going to embrace electrification and make it a mainstay”. He noted that the company was currently exempt from CO2 targets because it makes fewer than 10,000 cars but added: “Once we have more than that, it will be an issue. But I think with the hybrids we will be fine”. The car is most likely to adopt a plug-in hybrid system to offer a limited amount of pure electric driving and lower CO2 emissions to achieve those targets. Such a model will directly rival Lamborghini’s Urus plug-in hybrid which will arrive before the turn of the decade. There were no further details on power or efficiency, but when asked if a hybrid powertrain meant loss of character versus a V12, Marchionne said: “Have you driven a Ferrari hybrid? When you do, I’m sure you won’t miss a V12”. Marchionne also confirmed there will still be internal combustion-engined cars in future, which sit alongside a growing number of hybrid models. +++

+++ MITSUBISHI is seriously considering a Renault Clio rival within the next 5 years that could bring back the iconic Colt name to the carmaker. European sales and marketing boss Guillaume Cartier said the brand “is working on” a Clio rival but a decision is not yet finalised. “It’s a question of what is needed”, adding that a model must sell at least 100,000 units globally to be justified. The potential to launch a B segment car comes from Mitsubishi’s alliance with Renault-Nissan, said Cartier, which means such a car’s platform would be shared with the Nissan Micra and Clio alongside other technologies, meaning there would be many economics of scale to justify the model. The new Clio is due this year on a new platform and so a Mitsubishi supermini would be built on that and also likely take Renault’s 3-cylinder turbo engine. Talking about potential names for the car, Cartier said there were 3 iconic names for Mitsubishi: Pajero, Lancer and Colt, and added that Colt would definitely be a consideration for this car. “When we have this association of an iconic name, we must make sure the car’s personality suits it”. Talking at the Geneva motor show, Cartier confirmed no all-new models would launch before 2020, believing its line up of the ASX, Eclipse Cross, Outlander, Pajero and L200 pick-up offered a good breath of options for car buyers. Mitsubishi’s current offering in the A segment market, the Space Star, was criticised from launch for being outclassed in most areas by many rivals. +++

+++ The new RANGE ROVER SV Coupe means Land Rover can compete more directly than ever before with a plethora of luxury SUVs, including the Bentley Bentayga, Lamborghini Urus and forthcoming Rolls-Royce Cullinan. Although Range Rover models have an SUV heritage that its new rivals lack, this is the first time that Land Rover has been able to offer a car at the same exclusive, high-end level. Like the SVAutobiography, the SV Coupe falls under Jaguar Land Rover’s Special Vehicle Operations division, which has been ramping up its activities over the past couple of years. As well as creating the Range Rover SVAutobiography, SVO is responsible for the Range Rover Sport SVR and for the Discovery SVX that will arrive later this year. These cars focus on the 3 core areas of luxury (SV), high performance (SVR) and off-road (SVX), with more models planned for each. The Range Rover Sport SVR is currently the division’s most successful product and sells 2.500 units a year. The SV Coupé differs in that it is a so-called Collector’s Edition, in a similar vein to the 2017 Jaguar XE SV Project 8 and 2014 F-Type Project 7. The SV Coupe is limited to a production run of 999 units and the first deliveries are due this autumn. It is the first model to be built from the ground up at SVO’s Technical Centre in Coventry. While the Project 8 starts with a standard XE body and is then modified, SVO has created a unique body the SV Coupe. It uses the platform of a standard Range Rover with minor modifications and builds its own bodyshell on to that. The only remaining parts from a standard Range Rover are the bonnet and the lower half of the tailgate. The 2-door SV Coupe has very similar dimensions to a standard 4-door Range Rover. The car is 8 mm lower and 13 mm longer. It is also offered with 23 inch wheels, a first for Land Rover. Land Rover design director Gerry McGovern described the model as a “lady or gentleman’s chariot”. He said: “It has compelling proportions and real presence. This isn’t a vehicle for the shy. It is a very sophisticated design”. He said he had tried to create a balance of “performance prowess” and formality. Although the SV Coupe is a nod to the first Range Rover, the 2-door Series 1, it wasn’t the reason for the car’s creation. “It pays homage but we weren’t trying to replicate that vehicle”, said McGovern. The optional 2-tone seats (the rear seats are a darker leather and the front ones are lighter) are intended to highlight the model’s driver focus. “Chauffeurs who drive the Queen have the seat colours the other way round (dark in the front, light in the rear)”, said McGovern. “This way makes it far more road-oriented”. He also said the model “talks to exclusivity” and will have “a very good halo effect on Range Rover in terms of building its equity”. When asked whether a standard Range Rover coupe could ever make production, he said: “It depends on what volume potential is there. Coupes generally don’t have a high uptake. For the same price, you can get a car with 4 doors, so it’s a practicality issue. So as a mainstream vehicle, I don’t know. You could argue a Velar Coupe would look great. But we know the volume doesn’t normally justify it”. Although the SV Coupe is a design-focused model, it is also the fastest full-sized Range Rover yet, achieving 100 km/h in 5.3 seconds and a top speed of 266 km/h. The Range Rover Sport SVR remains the quickest in the line-up, covering the 0-100 km/h sprint in 4.5 seconds. The SV Coupe uses the same powertrain as the Range Rover SVAutobiography LWB: a 5.0-litre supercharged V8 petrol engine producing 565 hp and 700 Nm mated to an 8-speed automatic transmission with a rotary drive selector and paddle shifters. It has permanent 4-wheel drive with a 2-speed transfer box and active locking rear differential assisted by Land Rover’s Terrain Response 2 system, which has 6 settings that alter the car’s responses to suit different terrain. The 8 mm lower ride height over a standard Range Rover delivers “enhanced dynamic performance and aesthetics”, claims Land Rover. The car can lower itself by 15 mm above 100 km/h to improve stability and fuel economy. The suspension has 5 height settings, including the most extreme Off Road 2, which raises the car 75 mm above its normal ride height at up to 50 km/h. On top of that, it increases by 30-40 mm if an obstacle is detected and a further manually selectable 30-40 mm rise above that is available. The SV Coupe has a 3.500 kg towing capability, the same as a standard Range Rover and Bentley Bentayga, and a 900 mm maximum wading depth. Inside, the 2-tone leather interior is available in a choice of 4 dual colours as well as 4 single-tone colours. There are heated and cooled 20-way- adjustable front and 10-way- adjustable rear seats with a unique diamond quilt design. SVO has also created a new veneer inspired by boat design and called Nautica veneer, which will eventually be rolled out to other special models. It uses a patented new form-following process to fuse walnut and sycamore together. 2 other veneer options are also available. The car features powerclose doors for the first time on a Range Rover. “The doors are so large (1.4 meter long) you can’t reach”, said SVO director Mark Stanton. “It’s an essential”. The SV Coupe’s ifotainment system echoes that of recent Range Rovers such as the Velar. Its InControl Touch Pro Duo system includes a 10.0 inch display, 10.0 inch control panel and 12.0 inch interactive driver display. There is also a 10.0 inch head-up display and a 1.700 W 23-speaker Meridian 3D Signature sound system. +++

+++ U.S. consumers have filed a lawsuit against Kobe Steel and TOYOTA accusing the companies of violating consumer protection laws and engaging in fraud by concealing the use of substandard metal components in vehicles. The proposed class-action lawsuit represents the first U.S. consumer complaint filed against Kobe Steel over data fraud, and highlights the legal risks the company faces even after Chief Executive Officer Hiroya Kawasaki announced he would quit to draw a line under the scandal. The 112-year-old company, which supplies steel and aluminum parts to manufacturers of cars, planes and trains around the world, admitted last year to supplying products with falsified specifications to around 500 customers, throwing global supply chains into turmoil. Kobe, Japan’s third-largest steelmaker, said that the data fraud had gone on for nearly 5 decades, and that it found new cases of impropriety, widening the number of affected clients to 605, including 222 overseas. The company said Kawasaki would quit on April 1. The U.S. lawsuit was brought by 2 California residents who seek to represent a nationwide class of consumers who bought allegedly defective Toyota vehicles. According to the complaint, Toyota’s Prius, Camry, Land Cruiser and Lexus vehicles have all been manufactured with “sub-standard” steel, aluminum and copper. The plaintiffs allege that Toyota and Kobe Steel both violated federal and state consumer protection laws by claiming that the vehicles complied with U.S. quality standards. “We have not grasped the whole content of the case and we are now looking into the matter”, a Kobe Steel spokesman said. Toyota declined to comment on the lawsuit. In a special order in November, the U.S. National Highway Traffic Safety Administration asked 29 automakers, including Toyota, to disclose any safety issues for any of their vehicles or engines containing products supplied by Kobe Steel. The regulator did not immediately respond to a request for comment on what data it had received in response and whether there was any evidence of faulty materials in Toyota cars. The 40-page lawsuit outlines the ways in which the companies allegedly concealed poor metal quality. It demands compensatory and punitive damages of an unspecified amount. According to the complaint, at least 6 Toyota car models sold or leased to U.S. consumers were manufactured with substandard metal from Kobe Steel. Plaintiffs said the metal could impact vehicle safety and performance. Toyota had the duty to disclose any defective vehicle components because it has consistently marketed its automobiles as safe, functional and reliable, the lawsuit says. Kobe and Toyota had superior knowledge and access to the facts, the lawsuit alleged, giving rise to fraud by concealment claims. 4 individuals in Canada who bought cars that use Kobe’s products have already brought class-action lawsuits seeking unspecified damages against Kobe and it subsidiaries. Kobe is also undergoing a separate U.S. Justice Department probe. A company executive said that it is fully cooperating with the U.S. probe, but it was hard to predict how it would develop. +++

 +++ The VOLKSWAGEN Beetle will not be replaced and will go out of production after its current generation, the firm’s R&D boss Frank Welsch has confirmed. The future of the retro-styled Beetle has been in doubt for some time. Welsch said that the production version of the ID Buzz electric concept (which takes cues from the Type 2 Transporter) would take the place of the Beetle as a retro-inspired model in the VW range. Welsch said that “2 or 3 generations is enough now” for the Beetle. He said the car was “made with history in mind but you can’t do it 5 times and have a new new new Beetle”. The Beetle is sold as a coupe and a convertible, and Welsch said that the recently confirmed T-Roc convertible was a replacement for the Beetle cabriolet as much as the Golf and Eos convertible models. The role of a ‘heritage’ model in the future for VW would instead be served by VW’s recreation of the Microbus rather than a Beetle, with a production version of the ID Buzz due around 2021/22 based on the VW Group’s new electric platform. “With MEB (the VW Group’s electric car platform), you can do a bus and be an authentic vehicle with the original shape, and steering wheel mounted like the original. You can’t do that with an engine in the front. The shape you see on the concept is realistic”, said Welsch. “People asked when production starts on the car, so we decided to go that way. Better to have that than having 5 generations of a new Beetle. “We had all these Microbus concepts in the past but all were front engined. The physicality of bringing it on MQB or PQ-something to life does not work”. Volkswagen launched the New Beetle in 1997, with a second generation model following in 2011. +++

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