+++ An updated version of one of AUDI ’s biggest sellers, the A4, will arrive before the end of the year. Despite sales figures for the A4 slipping in the wake of buyers flocking to SUVs, the A4 remains Audi’s biggest seller in Europe; A reshaped front bumper will be the biggest visual change. However, new headlamps and a reprofiled rear bumper are also expected. The light disguise could indicated that Audi is focusing more on the tech beneath the skin; 48v mild hybrid technology can be integrated into the new model without huge reengineering costs as the saloon shares the same platform with the A8, which debuted the technology at Audi. It’s also likely Audi will ditch the existing 1.4-litre 4-cylinder turbo engine for the VW Group’s larger capacity 1.5-litre unit. Power and efficiency updates on the 2.0-litre petrol and diesel as well as the 3.0-litre diesel are expected, too. +++
+++ BMW will ramp up the electric performance of its plug-in hybrid 7 Series when the line-up is facelifted in 2019. The flagship range’s current electrified model, the 740e iPerformance, will give way to a 745e iPerformance that uses a hybrid electric powertrain offering more punch and increased range. Output for the 740e peaks at 326 hp and 500 Nm, but the use of a more advanced motor powered by batteries of a higher energy density is expected to provide more power to the turbocharged 2.0-litre petrol engine to edge combined output towards 400 hp. The new electrified tech will also provide the 745e with more pure electric range. The 740e is good for 45 kilometres, so it’s likely that the new hybrid will push that number to about 60 kilometres. Alongside an improved plug-in variant, the rest of the 7 Series range will also receive improvements. Expect more power and improved fuel economy for the engines, which include 6-cylinder petrols and a 4-cylinder diesel, as well the V8 750i and V12 M760Li xDrive. The facelifted car gets a new front end dominated by larger kidney grilles. They take influence from the upcoming X7. Aside from the altered front end, the rest of the car will feature more discreet alterations, including a new rear bumper design and slimmer lights at the back. Inside, the existing cabin architecture will be updated with BMW’s latest infotainment technology. Major changes are not expected, although a digital instrument cluster is likely and should significantly enhance user experience, while also helping the 7 Series keep up with tech offered by rivals such as Audi. +++
+++ As the world awaits for Sergio Marchionne to reveal his final 5-year plan, FIAT continues the development of the facelifted 500X. We can expect a new front grille, redesigned lights (which will feature LED technology), a new bumper and new LED taillights (that feature a body-colored center section) Since the cabin of the 500X was already updated for the 2018 modelyear, any new changes will presumably be more aesthetic in nature. The 500X already got a new Uconnect infotainment system with a 7-inch touchscreen display and a reversing camera, but further updates could include something like a redesigned steering wheel, a more modern gauge cluster and a refreshed range of trim options. +++
+++ Soon, Sergio Marchionne will take the stage for his last major event as CEO of FIAT CHRYSLER Automobiles (FCA). And when he does, sources expect him to announce the constriction of both those brands in favor of more profitable model lines. The departing chief executive may announce the withdrawal of the Fiat brand from the US, while confining the Chrysler brand to that same market. Instead, FCA will focus its energies on luxury vehicles under the Alfa Romeo and Maserati brands, and on the more profitable SUVs and pickups sold under the Jeep and Ram names. It could even consolidate Alfa Romeo and the Trident marque into a single unit (without ditching either brand) in preparation for a spin-off similar to what it already did with Ferrari. Marchionne spearheaded the acquisition the Chrysler Group’s acquisition in 2009, and wasted little time in leveraging its North American network to relaunch the Fiat brand here in 2010 with the arrival of the Mexican-built 500. It bolstered the little hatchback with the launch of the 500L in 2013, the 500X in 2014 and the 124 Spider (based on the Mazda MX-5) in 2016. However the Fiat brand’s fortunates have declined in recent years, from over 46,000 units sold in the US in 2014 to less than 26,500 last year. And sales have continued to drop over the first 4 months of this year. +++
+++ Japan’s SoftBank Group will invest $2.25 billion in GENERAL MOTORS ‘ autonomous vehicle unit, Cruise, the companies said, announcing a deal that validates the venerable Detroit automaker’s leadership in self-driving cars. The partnership with SoftBank’s $100-billion Vision Fund (one of the largest investments to date in self-driving technology) will help GM fund wide-scale deployment of self-driving cars, GM told analysts. The partnership values Cruise, bought by General Motors 2 years ago for an estimated $1 billion, at $11.5 billion. GM is competing with technology companies and other carmakers to produce self-driving cars that are expected to revolutionize the way people use vehicles and fundamentally change the business model of building and selling them. GM and Waymo are often cited as the 2 top contenders. GM Chief Executive Officer Mary Barra said the company is still “on track” to begin deploying its Cruise AVs in commercial ride-sharing fleets in 2019. Barra said GM still plans to launch its own ride and delivery services business, but said it might also explore “other opportunities” with some of the companies that SoftBank has funded, including Uber, Didi, Ola and Grab. SoftBank also has invested billions of dollars in “dozens” of transportation-related startups, including many involved in some aspect of self-driving technology. GM will also invest $1.1 billion in the unit after the deal closes, the company said. SoftBank Vision Fund will own a 19.6 % stake in GM Cruise once the transaction is completed, and will hold 1 of 6 seats on the company’s board. Its investment will be held in a preferred security that can be converted to GM common stock after 7 years. GM said it would break out reporting on GM Cruise financials as a standalone segment, starting in the second quarter. The automaker said it expects to spend about a billion dollars this year and next on self-driving vehicle development and commercialization. The SoftBank investment comes at a time when rivals Tesla, Waymo and Uber are stepping up efforts to gain the first-mover advantage in the autonomous vehicle market. SoftBank will take a stake in a newly-created unit, GM Cruise Holdings, whose assets include Cruise Automation, the self-driving vehicle unit based in San Francisco, and Strobe, a small self-driving sensor developer that Cruise acquired last year. GM President Dan Ammann said GM Cruise also would oversee monetization of data generated by the company’s self-driving vehicles, which he has said could provide greater margins than GM’s traditional business of buying and selling cars. +++
+++ The decision last month to lay off 1000 contract staff out of a total 40,000 workforce may be a disaster for those affected but, on the face of it, it does not signal serious structural issues for JAGUAR LAND ROVER ’s business. That said, although JLR has expanded at pace since its near-death experience after the credit crunch a decade ago, it is now facing a downturn in its fortunes. In the year to September 2012, JLR sold 269,000 cars worldwide. In the year to March 2018, it sold 614,300. That’s impressive growth and backed by an expanded model line-up including strong sellers such as the Range Rover Velar and the F-Pace, Jaguar’s first SUV. The top-line results for the fiscal year to March 2018 don’t look too bad, and in fact represent growth of 1.7 %. However, the problem for the company lies in a marked fall-off in sales over the past 6 months of some of its most profitable volume models. It’s a fall-off that is most noticeable since the beginning of the year and showed no sign of slowing during March. Overall, JLR sales fell 3.8 % year-on-year between January and March. But in March alone, sales were down 7.8 %. The company’s biggest issue is the UK market, where sales were down 21 % in the first 3 months of the year and a worrying 26 % in March alone. Sales in Europe were down nearly 12 % between January and March. Across the rest of the world, however, company sales continue to grow. China, JLR’s second-biggest market so far this year, was up 11 %. Officially, the company blames its UK woes on consumer uncertainty over the future of diesel and the effect of Brexit. According to figures from research company JATO, in the first quarter of 2018 the share of UK diesel sales fell to just 33 %, down from a peak of 49 % in 2014. With diesels accounting for 94 % of Land Rover’s sales last year, that is certainly going to hit the brand hard. That said, Jaguar and Land Rover both offer petrol engines, so there should be little to stop JLR following the trend away from diesels. But it also seems likely that JLR will face some very strong new competition, especially given the lack of hybrid drivetrains in its smaller cars. One sales snapshot from JATO showed that, across 27 European markets in February, Alfa Romeo sold 2.204 Stelvio units against 1.346 of the Jaguar F-Pace. Alfa Romeo sold a modest 41,000 Giulias globally in 2017, but it seems likely that this is having an effect on Jaguar XE and XF sales, chasing the same kind of keen driver who wants a rear-driven car that isn’t German. If a revived Alfa Romeo is nibbling away at Jaguar, it also seems highly likely that Volvo’s new-generation products are proving a headache for Land Rover. Although the Range Rover Evoque has been a runaway success since it was launched in 2011, it is now relatively old and Volvo’s XC40, which is in its first year of sales, is providing hot competition. Early in April, Volvo boasted that the XC40 was its most successful new-car launch yet. Likewise the Volvo XC60 is selling prolifically in Europe, outpacing the rival Land Rover Discovery Sport. In February, the XC60 accounted for 5.285 sales across Europe alone, nearly outselling the Audi Q5. As far as hybrid drivetrains are concerned, JLR is behind the pack, perhaps because the past few years were consumed by getting its home-grown petrol and diesel Ingenium engine family into production. But the next 18 months will prove crucial. Plans for a hybrid-petrol drivetrain based on a 3-cylinder Ingenium engine were revealed at a briefing in September 2015. This set-up uses a compact electric motor sandwiched between the narrow engine and the transmission. The unit is likely to make its debut in the nose of the second-generation Evoque, and then find its way into a facelifted Discovery Sport in 2019. Jaguar is also running 1.5-litre-engine XE prototypes, but it’s not known whether this is a standard turbo unit designed to offer a low-CO2 petrol alternative to diesel or another hybrid derivative. JLR has challenges ahead, with significantly stronger SUV competition the most serious. Sales of the Range Rover Sport and Range Rover should improve after this recent model change. Slow sales of the Discovery in Europe (just 691 units in February) remain tricky and much rides on a strong reception for the new Evoque and the new petrol performance and ‘eco’ versions of the XE and XF. The E-Pace is also likely to sell briskly and the I-Pace should significantly boost Jaguar’s brand presence. But after a decade of good news, JLR will find expansion to building 1 million cars a year a fair deal tougher.
+++ PSA Group is increasing and reallocating its European production capacity to meet higher demand for SUV models and to increase plant utilization rates. PSA has recently introduced 11 new SUV and crossover models, including the Peugeot 3008 and 5008, the Opel Crossland X and Grandland X, and the Citroen C3 Aircross and C5 Aircross. European production of the C5 Aircross is now starting in Rennes, western France, ahead of the compact model’s European launch later this year. The C5 Aircross has been built in Chengdu, China, for the Asian market, since last year. Once C5 Aircross production reaches full capacity in March 2019, some production of the Peugeot 5008 will be moved from Rennes to PSA’s factory in Sochaux in eastern France, where the Peugeot 3008 and Opel Grandland X are built. The Rennes factory had been under threat of closure during PSA’s financial crisis in 2012/2013, but its future seems more certain with the allocation of the 5008 and C5 Aircross, which are both built on PSA’s EMP2 platform. When Sochaux reaches capacity, Grandland X production including an upcoming plug-in hybrid version will transition to Eisenach, Germany, in mid-2019, eventually reaching 2 shifts. PSA reached an agreement on wages and future investments at Eisenach and other German sites with the IG Metall union. PSA said it was also conforming to an agreement with French unions in 2016 to maintain production levels in France at a minimum 1 million vehicles annually. An analysis by LMC Automotive when PSA’s purchase of Opel from General Motors was announced in 2017 found that the Eisenach factory was at 65 % capacity. In addition to the Grandland X, Eisenach is scheduled to add Mokka X production in 2019. PSA CEO Carlos Tavares is counting on high-margin SUVs and crossovers to help drive growth and profits. The 3008 has become Peugeot’s second-best-selling model after its repositioning as an SUV from a MPV when the new generation was introduced in 2016. 5008 sales have surged with a similar redesign in early 2017. Citroen is hoping for the same boost from the C5 Aircross, its second SUV for the European market after the C3 Aircross last year. The C3 Aircross is now Citroen’s second-best seller. PSA says about 250,000 of the company’s SUV models, across 5 brands, were registered in Europe in the first quarter, representing 17 % of the total market. +++
+++ The diesel version of the TOYOTA RAV4 has become the latest victim of the brand’s commitment to remove oil-burning models from its line-up. As part of its pledge to focus on petrol and electrified powertrains, Toyota has taken the sole 2.0-litre diesel variant of the RAV4 out of production. A brand spokesman told that “there will still be cars in stock or in allocation from production” based on predicted demand, but that “no new specific orders can be placed”. The only remaining RAV4 variants in production use 2.0-litre petrol and 2.5-litre hybrid power. The diesel RAV4’s departure occurs as the current-generation SUV enters its “run-out phase”, according to the spokesman. It will be replaced by a new, more rugged successor in 2019. That car was revealed at the most recent New York motor show. The next-generation model will be based on the Toyota New Global Architecture (TNGA) platform. It will be larger and is expected to come with the current RAV4’s powertrains in updated forms. No diesel engine will be offered. Last year, Toyota executive vice-president Didier Leroy said the firm’s success with petrol and hybrids means diesel is no longer relevant. He said: “My personal opinion, and this is my personal opinion, not a company one, is no, we’ll not launch another diesel car”. Toyota dropped the diesel version of the Auris at the end of 2017. The remaining diesel-powered cars are its largest vehicles: the Verso, Proace Verso, Land Cruiser, Proace Van and Hilux pick-up. +++
+++ UNITED STATES president Donald Trump has revealed to French President Emmanuel Macron that he wishes to raise levies on imported cars to 25 % and obliterate European luxury car sales in the US. The comments could spark a trade war between the US and the EU, with Germany’s car industry being a heavy source of income to the union. Trump has been outspoken in his tirades against the car industry, first taking aim at domestic brands that import into the US from Mexico, then at European countries’ appetite for domestic car brands over US ones. He has previously expressed his distain at German luxury brands, particularly Mercedes, and its prominence in New York’s Fifth Avenue. It’s reported that Trump said the tax would be upheld until Fifth Avenue was devoid of Mercedes models. In the US, Trump has launched an investigation into whether vehicle and automotive parts imports are hindering the sector’s ability to compete globally. Under the US’s Trade Expansion Act of 1962, such a scenario could allow Trump to raise import tariffs to protect national interests. This was the process undertaken last month when Trump raised tariffs for steel and aluminium imports. Tariffs for those materials now stand at 25 % in a move to protect local producers. Currently, the US charges just 2.5 % on car imports; this is lower than the EU’s 10 % and China’s 25 %, although the latter will lower its tariff to 15 % from 1 July. Trump had previously described China’s unusually high import tariff as “stupid trade” and threatened to raise tariffs on EU-imported cars. Although a large portion of the US’s most popular car models, including those from foreign brands (such as the upcoming BMW X7), are already manufactured within its borders, many are imported from other countries. Most imports come from Asia, but several European brands, including Land Rover, don’t have US factories. In fact, the US is the largest export market for cars built in the EU. Last year, 200 billion euro worth of cars were exported from the EU, with the US accounting for 25 % of them. Of those cars, just over half were exported by German car makers. Leaders in China and South Korea have already said they will monitor the situation closely and react accordingly to protect the interests of brands in their countries. Although China is the world’s largest new car market, with 23.9 million vehicles sold there last year, the US remains a core focus for most global brands. In 2017, 17.2 million vehicles were sold in the US, compared with 15.6 million in the EU and European Free Trade Association countries. Felipe Munoz, global analyst at JATO Dynamics, said: “While German-made cars accounted for 4 % of first quarter US sales, American-made cars made only 1.3 % of German registrations in the same period. Most of the units imported from Germany are premium cars, which tells a lot about the position of American car industry in the premium market. Germans are the world’s leaders in the premium market as they hit before American and Japanese cars, and have been evolving fast, with large ranges of products. Any attempt to increase taxes on German cars would have a larger effect on BMW and Mercedes, and a lower effect on Volkswagen, as most of the sales of the premium brands correspond to imported models (63 % for Mercedes and 64 % for BMW). It would also hurt the operations of Porsche, which imports all of its cars from Germany. If the trade conditions get tough for German imported cars, this would have a bigger effect on sedans and sport cars, which are the largest part of their imports. As these segments don’t grow anymore, both BMW and Mercedes could consider axing some of the models or increase local production of SUVs”. +++
++ The new VOLKSWAGEN Golf R hot hatch shapes up with a new look and potent 4WD drivetrain. Volkswagen will turn up the heat with the next Golf R to create the most ‘extreme’ version of the hatchback there has ever been. The new Golf is due to go on sale next year, and has been described by VW Group boss Herbert Diess as “the versatile car”. However, while the Golf has continually topped sales charts across Europe, bosses want to strengthen the brand’s position in the hot hatch segment. At the moment, the Golf R has been left trailing by rivals from Honda, Mercedes and Audi. “The R brand is going extreme”, VW’s sales and marketing boss Jürgen Stackmann told. “The role of R is that it can go beyond the rational; nobody needs a compact car with 400 hp, but is there a place for it?. Certainly, and that’s the turf of R”. The exact mechanical layout of the next Golf R has yet to be confirmed, but the new 400 hp powertrain is expected to stick closely to the set-up in today’s model. That means a 2.0-litre 4-cylinder turbo under the bonnet, VW’s 4Motion all-wheel-drive system and a 7-speed DSG gearbox. Mild-hybrid 48v technology could also play a role in the next Golf R, as VW has already confirmed the set-up will be rolled out across the new Golf range. The mild-hybrid tech would give the Golf R an electrical boost under hard acceleration, while also aiding fuel economy during stop-start traffic. As well as a boost in performance, VW will give the next Golf R a more aggressive look over today’s model. The hot hatch will be marked out as the flagship Golf through its more liberal use of carbon fibre, more aggressive bumper designs and quad tailpipes. Stackmann added: “With a little more expressive design, R can go beyond the rational side of things. The R brand can find its place in a different league of pure performance and there’s a space where customers are willing to pay a significant amount of money”. Beyond the Golf, Volkswagen also has plans to broaden its R portfolio with 2 new additions: the T-Roc R and Tiguan R will increase the line-up to 3 models and give VW credible rivals to the upcoming Audi SQ2 and Audi SQ5 respectively. Once the R brand has strengthened its position, VW will turn its attention to the I.D. electric car range. “The I.D. R Pikes Peak car shows that the R strategy needs a dimension on the electric world”, Stackmann explained. “It cannot stick to just conventional powertrain solutions; it is a new dimension to our brand”. The Pikes Peak car develops 670 hp from an electric motor on each axle and shows “how powerful we can get with our MEB [electric platform]idea” and “where can we take the R idea when it comes to the electric family”, Stackmann told. +++