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+++ February marked the 100th consecutive month of year-over-year sales gains for AUDI of America. Audi hasn’t reported a sales decline in the U.S. since October 2009 and shows no signs of doing so. During the unbelievable run, gains in sales have fluctuated from as much as a 37.9 percent gain year-over-year to as little as a 0.0368 percent increase in February 2014 when sales rose by just 4 units. For a majority of the near decade-long streak, however, sales have risen by double digits each and every month. Throughout the run, the German brand has added at least 6.000 sales annually and for 2 years, enjoyed increased sales of over 20.000 additional units. What is particularly remarkable about the ever-increasing sales figures is the consistency. Even as consumer desires have shifted towards crossovers and SUVs and automakers have been forced to introduce EVs to meet CO2 regulations, customers keep flocking to Audi in unprecedented numbers. Things are unlikely to stop. Audi has introduced all-new A6, A7, and A8 models all within the last 9 months and will look to snag sales in the premium crossover segment with the Q8. What’s more, it is possible that the next-generation A1 will spawn a compact Q1 crossover that may be offered in the U.S. +++

+++ China’s BYD , backed by Warren Buffett’s Berkshire Hathaway, warned subsidy cuts for new-energy vehicles could slash its quarterly profit by as much as 90 percent, driving its shares down almost 10 percent. The squeeze on BYD’s profits underscores the challenge carmakers are facing in the world’s largest auto market, which is moving toward pure electric and plug-in hybrid vehicles with strict quotas set to come into effect next year. BYD has invested heavily in battery electric and plug-in hybrid vehicles amid Beijing’s push for greener transport. “As we are affected by reduction in new energy vehicles (NEVs) subsidies, the profitability of the business, especially for electric buses, has declined substantially so as to bring great pressure to the group’s overall profit”, BYD said. The company expects its first-quarter net profit to slump 75.2-91.8 percent from a year ago due to the subsidy cuts. That would put profits for the 3 months to March between 50 million yuan ($7.96 million) and 150 million yuan, versus 605.8 million yuan a year ago. In February, China’s finance ministry cut subsidies for lower-range NEV cars and for some buses, but raised them for vehicles with higher performance. “Even though people are still buying NEVs as subsidies fall, BYD’s plight speaks to a tough future for electric cars”, said Yale Zhang, head of consultancy Automotive Foresight. BYD’s net profit in 2017 fell 19.5 percent to 4.07 billion yuan, roughly in line with preliminary figures release last month. In 2016, the firm’s net profit had jumped almost 80 percent. China’s central government wants the country to be a world leader in NEVs and related technologies, but has been looking to phase out financial subsidies that have been behind the rapid growth of the sector. BYD said a quota system giving carmakers a “credit score” based on their NEV output and performance, set to come into effect next year, would support larger players while “eliminating weaker players in the industry”. Domestic and international industry executives have called for continued policy support from Beijing to help maintain growth in the world’s largest NEV market, where broader auto sales growth is slowing down. BYD, which is looking to diversify its businesses into electric batteries and other transport services, should see earnings growth pick up in 2018, with analysts polled by Reuters predicting a 50 percent jump in net profit this year. +++

+++ 18 months before FERRARI ’s first production series hybrid arrives on roads, footage of a test mule running the powertrain has been captured at the Italian firm’s Fiorano Circuit. Company boss Sergio Marchionne confirmed that test mules running a V8 hybrid powertrain were in use earlier this month, and at least one mule is based on a 488 GTB. The car has no audible engine tone, suggesting that the powerplant is a plug-in hybrid one to enable fully electric running. Marchionne said that the electrified powerplant will need to be a “traditional hybrid to fulfill 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. +++

+++ The KIA Stinger has attracted a lot of attention to the brand and the company obviously wants to keep that momentum going. Kia North America product planner Orth Hendrick confirmed the company is looking into different versions of the car as the reaction has been “phenomenal”. He went on to say the model has convinced a lot of people to move up from the Optima and he thinks there “might be other opportunities down the road”. There’s no word on what those opportunities could be but it might be awhile before anything materializes. As Hendrick explained, the car recently went on to sale so “we’ll probably wait for a while to get some data in and see what the reaction will be”. Since the Stinger is a bit of a mainstream halo vehicle, Kia will give it timely updates to keep the car fresh and on customer’s shopping list. According to Hendrick, Kia will be “very aggressive” about the Stinger’s lifecycle as “You have to keep the car going with powertrain variants and other stuff coming down the road”. This seems to suggest the company will roll out continuous updates and possibly a handful of special editions or performance variants. Speaking of special editions, Kia didn’t waste anytime as it introduced the Stinger Atlantica last month. Described as a European-inspired model, the car has a unique exterior with special paint and 19-inch alloy wheels. The special edition also boasts Espresso Brown Nappa leather upholstery, a suede-like headliner and additional equipment such as heated rear seats. Unfortunately fans hoping for additional body styles, such as a Stinger coupe, are probably out of luck. As we reported a few months ago, Kia doesn’t have any intentions to create Stinger sub-brand or anything too drastic. +++

+++ RENAULT is diversifying its business in an attempt to future-proof itself for a rapidly changing automotive landscape. Design boss Laurens van den Acker told the brand must have “its fingers in all areas” of the industry in order to achieve its ambitions for global leadership. “We believe it will be important to have both sides covered, from the private cars to driverless robotaxis”, he said. “We showed with the Symbioz (an autonomous-capable concept) how a driverless car can exist in our future line-up, but we will also still make cars to be driven”. Van den Acker said he expects Renault to work with more external businesses to fast-track development in areas of new technology. The brand and its alliance siblings, Nissan and Mitsubishi, plan to launch 15 models with autonomous driving capability by 2022. He said the race against rivals was so intense that “you can’t do it on your own so we will announce partners in the near future”. Renault’s current business model already spans a wide area of the market. Its recently relaunched Alpine brand serves at the driver-focused end, while the new EZ-Go concept demonstrates its most futuristic mobility solution. +++

+++ SKODA ’s production version of the Vision X compact SUV, as well as the forthcoming electric Vision E SUV, electric Citigo city car and Superb plug-in hybrid, will be among 19 new models or variants launched by the Czech car maker in the next 2 years. At its annual financial conference, Skoda announced a 34.6 percent growth in operating profits to 1.6 billion euro, from a sales revenue increase of 20.8 percent or 16.6 billion euro, which the firm attributed to the “successful implementation of our SUV strategy and our improved cost positions”. Skoda’s sales revenue has doubled since 2008, when it made 8 billion euro and produced only 4 models compared to today’s 7. Skoda’s 2017 profit before tax increased by 33.9 percent to 1.75 billion euro while after-tax profits rose by 34 percent to 1.27 billion euro. It also confirmed a profit margin of 9.7 percent in 2017, up from 2016’s 8.7 percent, and one of the best profit margins in the industry. By comparison, Audi, also owned by the Volkswagen Group, had a profit margin of 7.8 percent in 2017. Skoda, which has flourished since being bought by the VW Group 27 years ago, sold 1,200,500 vehicles last year, an increase of 6.6 percent over 2016. Its biggest market is China with 325,000 deliveries, followed by Germany, Czech Republic and Great Britain. Its VW Golf rival, the Octavia, remains its runaway success with 418,300 units sold globally, and holds second place in the family hatchback segment in the European market. Skoda sold 100,000 of its Kodiaq globally last year, making a massive contribution to a segment Skoda was previously absent from. The Karoq, which will have its first full year of sales in 2018, is expected to match or exceed Kodiaq volumes, production capacity permitting, something R&D boss Christian Strube has previously told is an issue. This same problem is one reason why the Kodiaq Coupe, already on sale in China, has not yet been confirmed to be sold in Europe. The Citigo is the weakest link in Skoda’s line-up: it is only sold in Europe and sales in 2017 dropped 8.8 percent, the most of any of its models. Skoda has recently confirmed an electric version of the Citigo, a sister car of the Volkswagen Up and Seat Mii. will become Skoda’s first pure electric model. Talking at the conference, Skoda CEO Bernhard Maier said: “2017 has impressively demonstrated how well our broad and attractive model range has been received: 2017 was the most successful year in the company’s history with more than 1.2 million vehicles delivered. He continued: “Not only will we be bringing out 19 new models by the end of 2020 but we will also be launching the most comprehensive investment programme in the company’s history: Within the next 5 years, Skoda will invest around 2 billion euro into electromobility and new mobile services”. The brand also confirmed it continue its global expansion, launching in Singapore later this year and with plans to launch in South Africa in 2019. Skoda is the third biggest selling brand in the VW Group. Last year, Volkswagen sold 6.2 million vehicles, followed by Audi with 1.8 million vehicles. Seat shifted 468,400 units last year. Skoda will reveal a new SUV, solely for China, at the Beijing motor show, before unveiling a second new SUV, the Kodiaq GT coupé, later this year. The 2 models will make a 4-strong SUV line-up for the Czech car maker in China, adding to the existing Kodiaq and Karoq, as Skoda strives to double its sales to 600,000 in that country by 2020. Skoda boss Bernhard Maier said the 2 new models showed it was “very serious about doubling business in China”. +++

+++ The United States and SOUTH KOREA have agreed to revise a trade pact with a side deal to deter competitive currency devaluation by Seoul and with concessions for U.S. autos and pharmaceutical companies, Trump administration officials said.  In addition to increased access for American vehicles that meet U.S. but not necessarily South Korean safety standards, U.S. officials said they won reductions in non-tariff barriers to U.S. vehicle sales in the world’s 11th largest vehicle market, including elimination of duplicate environmental testing requirements and recognition of U.S. replacement parts standards. In South Korea, vehicles made in the United States are a niche market, and most foreign models sold in 2017 were German and Japanese, according to South Korean vehicle registration data. In 2017, Koreans registered just over 42,000 U.S. made vehicles, many of them SUVs. Of those, nearly two thirds were vehicles made by German or Japanese automakers in their U.S. factories. The Ford Explorer was the most popular U.S. made vehicle in South Korea last year, with about 6,000 vehicles registered, according to statistics compiled by the Korea Automobile Importers and Distributors Association. South Korean consumers registered 4,843 U.S.-made models sold by Jeep, while Cadillac registered 2,008 U.S.-made models last year, according to the KAIDA figures. The data does not include the 4,739 Chevrolet vehicles imported and sold by local manufacturer GM Korea last year.  Overall, however, South Korean consumers preferred American-made vehicles offered by German and Japanese brands. German luxury vehicle brands BMW and Mercedes-Benz registered 12,947 U.S.-made vehicles in South Korea in 2017. South Korea last year became the 6th biggest market for Mercedes. Among Japanese automakers, Honda had the most success selling its U.S.-made vehicles to South Korean consumers, with 7,900 U.S.-manufactured Hondas registered last year. Under revisions in the U.S.-Korea free trade agreement, U.S. automakers will be able to bring into South Korea 50,000 vehicles per automaker per year that meet U.S. safety standards, not necessarily Korean standards, up from 25,000 vehicles previously. +++

+++ TOYOTA has big plans for the 5th generation RAV4, which debuted at the 2018 New York Auto Show a few days ago, and a 7-seater version might just be one of them. Toyota’s North America VP and General Manager, Jack Hollis, didn’t exactly confirm such a model, but he didn’t deny it either. “I think we have different options for seven seats, we have the Highlander, we have growth of Sequoia and Land Cruise and different options”, he said. “I think RAV4 in its compactness holds a certain space. But I will say there is always room for growing SUV entries. So, whether we decide to bring one in a seven-seater or something different, that is something that I will keep you waiting for those answers”. A 3-row version of the RAV4 was actually offered for a few years in North America and Japan. However, the 2 extra seats were mostly suitable for kids, but with the implementation of the TNGA platform of the new-generation, such a model will definitely offer more legroom for the third-row passengers. This should be aided by the fact that the 2019 RAV4 has a longer wheelbase, even if its overall length has dropped a bit. Another version of the SUV is a zero-emission one. Just like the 7-seater, Hollis didn’t confirm nor deny it: “Of all electrification vehicles, Toyota owns 70 percent of that market. We are going to continue to show and we have more and more offerings, whether it is plug-in or pure EV”, Hollis added. “We are going to have that in our lineup. Whether that comes to RAV4 and how soon, that is a ‘stay tuned’ moment”. Just like the 3-row model, Toyota also used to make an electric version of the RAV4. The previous-gen-based electric SUV (there was also a limited production first-generation RAV4 EV in 1997) was created in collaboration with Tesla, built in a couple of thousands of units and was discontinued at the end of 2014. +++

+++ In the UNITED KINGDOM , car production fell 4.4 percent in February, dragged down by the 7th consecutive monthly decline in domestic demand as sales in Europe’s second biggest car market continue to slump, an industry body said. Factories churned out 145,475 vehicles last month, according to data from the Society of Motor Manufacturers and Traders (SMMT). “Another month of double-digit decline in production for the UK is of considerable concern, but we hope that the degree of certainty provided by last week’s Brexit transition agreement will help stimulate business and consumer confidence over the coming months”, said SMMT Chief Executive Mike Hawes. London and Brussels agreed a deal which will see Britain retain free and unfettered trade with the European Union until at least the end of 2020 (21 months after it formally leaves the EU) although trading arrangements after that date are subject to future talks. The SMMT has called on Prime Minister Theresa May to secure a long-term agreement that maintains Britain’s competitiveness, since several investment decisions loom in the next 12 months. PSA will decide whether to keep open its Vauxhall Ellesmere Port plant with new model investment, while Britain’s biggest automaker Jaguar Land Rover is due to choose whether to build electric cars in its home market. +++

+++ 16 percent of VOLKSWAGEN Group cars that received the post-Dieselgate ‘fix’ have since suffered from engine power loss, a new survey has found. Of the 17,000 respondents to the survey, which was compiled by specialist law firm Slater and Gordon, 11,600 said that their car had received the new software, and 40 percent of those said that it had negatively affected their car. The most common (18 percent) issue was a reduction in fuel economy, followed by poor running (11 percent claimed their car juddered), while a small portion (2 percent) said they suffered complete engine failures or dangerous limp mode activation while driving on the motorway. This latter scenario was described by more than 1.200 respondents, one of whom said their car slowed to 15 km/h while travelling in the outside lane of the motorway due to the error. “When you stop and think about what could have happened, it’s really scary”, said one respondent. “It’s unbelievable that Volkswagen thinks it can get away with putting people’s lives at risk”. Slater and Gordon has compiled the survey in the run-up to a group litigation hearing in which it will represent more than 40,000 affected car owners in a legal case against Volkswagen. It’s thought that this will be the largest case of its type in the legal history of England and Wales. The Volkswagen Group has hit back stating that the survey was compiled to encourage more people to “sign up to the court case”. It said in an official statement that it does “not believe such surveys have been reliable or representative of the experience of owners of affected vehicles in the UK or elsewhere in Europe. We have made it clear that we do not anticipate that our UK customers have suffered any loss or financial detriment as a result of the NOx issue. In particular, we note that an adverse financial impact on the residual value of affected vehicles as a result of the NOx issue has not been identified”. The VW Group has rolled out its fix in over 840,000 vehicles in the UK and in over 6.4 million vehicles in Europe. It said that “the overwhelming majority of customers with these vehicles are satisfied”. The UK case follows suit of a similar one in the US, which resulted in Volkswagen paying out 14 billion dollar in civil and criminal sanctions. The UK case will argue that affected customers on this side of the Atlantic deserve a similar payout for their issues. Volkswagen has maintained that the US and European situations are not comparable. The German brand has also maintained that its fix has no adverse effect on engine running, although it has also pledged to “very carefully” assess complaints from customers. Last year, a study showed that Dieselgate ‘fix’ cars can suffer from worsened fuel economy and increased CO2 output. A report by the Volkswagen Diesel Customer Forum said that owners of models with the 2.0-litre diesel fix had also experienced breakdowns and mechanical issue last year. Volkswagen has since said that it will “act responsibly and swiftly, in line with its goodwill policy” to respond to any “reasonable” consumer concerns. It has promised to evaluate potential issues relating to cars that have fewer than 260,000 kilometres on the clock and have received the fix within the past 24 months. +++

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