+++ BMW has confirmed that it will reveal the next Z4 at Pebble Beach in August before its specifications are announced at the Paris motor show in October. The upcoming Z4, which is expected to go on sale in March 2019, will be powered by a choice of BMW’s latest turbocharged petrol engines. The Z4 sDrive30i will get a turbocharged 2.0-litre 4-cylinder that produces about 252 hp, while more powerful variants will get a turbocharged 3.0-litre 6-cylinder unit that’s shared with the M240i, producing about 340 hp. Both engines will come with standard rear-wheel drive and a ZF 8-speed automatic gearbox. The Z4 shares parts with the upcoming Toyota Supra which is expected to be offered with a hybrid drivetrain. BMW announced the future Z4’s arrival back in 2015 and revealed a concept version to preview its design last year. The car’s relation to the Supra is part of Toyota and BMW’s decision to co-develop a new sports car platform. While the Z4 will be a convertible, Toyota’s new car will be a spiritual successor to the original Supra and as such will wear a hard top. Inspiration for the new Supra’s design has been taken from the striking FT-1 concept, first seen at the Detroit motor show in 2014. +++
+++ The rumors claiming DODGE would borrow Alfa Romeo’s Giorgio platform for its Charger and Challenger successors may not be accurate after all. Parent company Fiat Chrysler Automobiles (FCA) hasn’t made up its mind about which platform to use yet, though it’s leaning towards keeping the current architecture. “We may not necessarily have to go as far as the Giorgio architecture for Dodge as long as we are willing to commit to a significant upgrade to the current architecture to make it competitive. That’s something that’s already started”, FCA boss Sergio Marchionne told while presenting the company’s 5-year plan. That’s a bold move. Though heavily updated over the years, the platform both cars ride on traces its roots to the W210 generation Mercedes-Benz E-Class introduced in 1995. It’s a bad hangover from the DaimlerChrysler era. Marchionne knows this, and he defended his position by explaining the architecture will go through so many changes that there will be more FCA than Benz genes in it. “Certainly by the time we finish with that architecture, you will not recognize its origins. We may maintain its bare-bones structure”, he said. Using the Giorgio platform found under the Giulia and the Stelvio is technically feasible, but it would put a dubious spin on the concept of a high-performance, all-American sports car. “The problem with Giorgio is from size and capability standpoint it reflects much more of a European performance requirement than it does the American heritage of Dodge”, Marchionne explained. +++
+++ A range of electric Maseratis, an Alfa Romeo supercar to crown an expanded range, massive expansion for Jeep and an 10 billion dollar push towards electrification and autonomy are the major global ambitions for FIAT CHRYSLER Automobiles (FCA) for the next 5 years. For the Fiat, Chrysler and Dodge brands, however, the ambitions are smaller and based on reduced line-ups sold in limited markets; in the case of Fiat in Europe, this involves premium electric city cars. To understand why FCA will mainly concentrate on the Jeep, Alfa Romeo, Maserati and Ram truck brands, you need to follow the money, the markets and the barrage of regulations heading the way of the motor industry. Jeep, Alfa Romeo, Maserati and Ram generate 65 % of FCA’s revenue and are expected to account for 80 % of it by 2022. Of the 4 brands, 3 have a global presence and focus on the premium market, with their potential margins fat enough to cover the cost of meeting future regulations. Reducing CO2 emissions and developing fully electric cars are the most expensive of these regulatory challenges. But there is also the need to develop autonomous systems (that technology currently adds 25,000 euro to the price of a car, according to FCA chief technology officer Harald Wester) and increase vehicle connectivity. The most striking market development in the past decade is the exponential shift to SUVs and crossovers. This segment has helped Jeep sales rise from a few hundred thousand units to more than 1.9 million. That growth, along with the rise of Ram pick-ups, has enabled the company to eliminate its long-standing debt; a point that FCA boss Sergio Marchionne made by wearing a tie for the announcement, having long promised to break a sartorial habit and wear one when his goal of wiping the debt was reached. Ram, a brand created out of a Dodge nameplate in 2009, is also a major profit driver (sales are up from 263,000 in 2007 to a forecast 770,000 this year) and operates in concert with Fiat Professional, that brand’s successful van division. Combined, the 2 divisions are the second biggest maker of commercial vehicles in the world. Jeep, Ram and Fiat Professional dwarf Alfa Romeo and Maserati, but FCA sees the 2 Italian premium brands as the future of car making. The target for Alfa Romeo is to reach 400,000 sales annually; a previously missed target, with Marchionne admitting to poor execution of the previous plan despite the excellence of the Giulia and Stelvio. Key to this goal are smaller and larger SUVs bookending the Stelvio, a new GTV coupé and an 8C supercar halo model. There will also be long-wheelbase versions of the Giulia and Stelvio for the massive Chinese market, where much growth is hoped for, as well as a substantial facelift for the Giulietta. Despite flatlining sales, albeit at a much higher level since the launch of the Ghibli and Levante SUV, Maserati is being built up to compete with Tesla and Porsche. The new plug-in hybrid and fully electric versions of the Alfieri coupé and cabriolet supercar will spearhead the marque’s leap towards a sub-brand of all-electric models called Blue, along with the next-generation Quattroporte and Levante. A smaller Maserati SUV (likely based on the Stelvio) is also due, along with a major refresh for the Ghibli, 8 plug-in hybrids and Level 3 autonomy for all models by 2022. The goal is to generate global sales of 100,000 and a 15 % margin by that year. It’s ironic that the ‘F’ and ‘C’ of FCA are now the lesser brands. Along with Dodge, neither Fiat nor Chrysler received its own presentation at the event, prompting many to question their long-term future. The FCA line was that the event focused on its global brands. Fiat will remain centred on Europe and South America, while Chrysler and Dodge are North American only. An electric 500 and a 500 Giardiniera estate are Fiat’s big news for Europe, on the basis that the 500’s premium pricing can accommodate the extra cost of electrified tech. There will also be new Fiat crossovers for South America. Chrysler will essentially become a brand focused on MPVs and ride-sharing; a new deal with self-driving firm Waymo for 62,000 Pacifica MPVs points to this future. The 5-year plan unveiled last week is the last led by Marchionne, who was appointed the boss of a near-bankrupt Fiat in 2004. The red results figures continued with his takeover of Chrysler in 2009, but it was this audacious manoeuvre, together with the spinning out of Ferrari, that has underpinned the survival of the group; and has seen the value of FCA rise from around 5 billion dollar in 2004 to more than 70 billion dollar today. Many might question Marchionne’s handling of Fiat, Chrysler and the soon-to-die Lancia brands, but there’s no denying that his sometimes brutal bets on brand and product have paid off spectacularly. His successor will be no less busy. +++
+++ JAGUAR may be known first and foremost as a luxury automaker. But along the way, it’s been known to produce some sports cars. Supercars, even. And maybe a new electric hypercar, if the latest reports come to fruition. “EV is a very elegant solution for an automobile, and that’s transferable from something that’s a city car all the way up to a hypercar”, Dave Shaw, the engineering manager behind the new Jaguar I-Pace. “I think, personally, moving forwards, once people accept that actually there’s more benefits that come with an EV rather than negatives, why would that not work in a hypercar?” The history of mid-engined Jaguar supercars dates back to the XJR-15 developed with Tom Walkinshaw Racing in the early 1990s. It packed a 6.0-liter V12 in the middle of an industry-first carbon-fiber chassis, and yielded just 53 examples. Once Jaguar Sport was done with the XJR-15, it moved on to the legendary XJ220. Though initially designed to incorporate a V12 and all-wheel drive, the finished product ended up with a 3.5-liter twin-turbo V6 driving the rear wheels. It was still one of the fastest supercars of its time, and Jaguar produced 281 of them. Its mantle laid unclaimed until the company, now under Tata’s patronage, revealed the C-X75 concept in 2010. It was designed to accommodate an advanced turbine hybrid propulsion system, but was subsequently redesigned around a high-specific-output 1.6-liter twin-charged inline-4 hybrid powertrain. But aside from a handful of prototypes (some of which were used in the James Bond film Spectre) it was never put into production. There’s no telling what Jaguar might do with a purely electric hypercar this time around. But the costly platform atop which the new I-Pace is built was designed to be highly scalable, and Jaguar’s been gleaning valuable electric-performance expertise in Formula E. Here’s hoping that if and when the electric hypercar does arrive, it’ll prove worthy of the supercars that came before. +++
+++ With the 2020 Tokyo Olympics in JAPAN a little over 2 years away, the government is looking to put a fleet of autonomous cars on public roads in order to drive economic growth. This strategy, presented by Prime Minister Shinzo Abe, also includes the development of virtual power plants by the end of the 2022 March fiscal year. These power plants would connect multiple small energy-generating and energy-storage systems, allowing them to work like a large conventional power plant, saving money for energy grid operators. However, so far, companies have been reluctant to invest in these networks without a change in regulations. With the self-driving car service planned for 2020, the government’s next move will be to commercialize the system as early as 2022, something that should help Japanese companies do a better job keeping up with their Chinese, European and U.S. counterparts, as autonomous vehicle and artificial intelligence technologies keep improving. Also, having an autonomous car service operational at the Olympics should open up the door for other countries to do the same, with regards to major upcoming global events. Since becoming Prime Minister in 2012, Abe has introduced several changes that have benefited Japan’s economy, such as having more women in the workforce, narrowing the pay gap between regular and contract employees, increasing tourism and more. +++
+++ The JEEP Renegade will be facelifted for 2019, with light changes to its exterior styling and new technology inside, and with a fleet of new engines confirmed. It’ll be revealed on 6 June in Turin. Jeep has previously confirmed that there will eventually be a 2.0-litre turbocharged 4-cylinder petrol, 48V mild hybrid version of every car in its line-up. This will include the upgraded Renegade when it goes on sale in Europe in early 2019. The American brand also has plans to give each of its models a plug-in hybrid variant by the end of the decade. A 1.0-litre, 120 hp petrol, as well as a 150 hp and 180 hp 1.3-litre petrol will also feature, bringing greater performance and efficiency than the current iteration’s 1.4 and 1.6-litre petrols. Exterior revisions will likely include revised LED daytime running lights and other such light tweaks, while the car’s rugged, retro-Jeep styling is a dead cert to remain. Inside, a larger infotainment screen will take the place of the current 6.5 inch unit, absorbing the buttons and controls previously surrounding it. The new unit is still housed in the shaped surround so takes up no more space than the complete previous unit. The Renegade is Jeep’s most successful model in Europe, being closely related to the Fiat 500X and occupying the same market segment as the huge-selling Nissan Juke. The new Jeep Compass, a Nissan Qashqai rival, is also pivotal to the brand’s success. +++
+++ LOTUS chief, Jean-Marc Gales, has stepped down from the Hethel-based performance car brand, with Geely Auto Group’s chief technical officer, Feng Qingfeng, taking the reins. Gales has cited personal reasons for his resignation and will instead become Chief Strategic Advisor to Lotus Chairman, Daniel Donghui Li. Donghui Ll said that Gales “turned Lotus into profitability for the first time in the iconic brand’s history, with new industry leading products and unique business models”. The new Lotus boss, Feng, said he was “honoured” regarding the new role and stated: “I am confident that Lotus has an exciting opportunity to achieve its full potential as a luxury sports brand, based around its engineering legacy and future product pipeline”. Lotus has announced the first 2 cars to be launched under Geely ownership and it’s good news: both are to be sports cars. Both will arrive in 2020 with an SUV dropping in 2021 or 2022, Lotus chief executive Jean-Marc Gales told. The 2 will be the first all-new cars from Lotus since the Evora started production in 2009. I don’t know exactly what those 2 new cars will be, but Gales gave me a few clues. One is a replacement for an existing car, and I guess either the Evora or the Exige. The other is likely to be a limited edition, track-focused road car positioned above the Evora. The cheaper of the 2 will be based on an evolution of Lotus’s current bonded aluminium tub, “It’s still a benchmark for lightweight, crash resistance and longevity”, Gales said. The other new car will use a new carbon-fibre tub and will take on the role of performance flagship in the absence of the 3-11, which finally ends production this year after Lotus added 20 final-edition examples. “It might be something in that mold”, Gales said. “It will be something similar, but much more civilized, because 3-11 is pretty raw”. It’s not a new Esprit. “I might need a bit more time for that”, he said. Gales had previously said Lotus was working on a new Elise for 2020 and that might still be one of the 2 cars, but if Lotus do replace it, it’s unlikely to be the cheap and cheerful sports car it is now. “Sport-car sales volumes are notoriously low, investment is notoriously high so you need to do your investment well. So it’s not an easy task, but the juicy markets seem to be a bit more upmarket”, he said, pointing out that most new sports cars are built in partnership with another company. For example, BMW and Toyota, or heavily borrow parts from more cooking cars, like the Alpine does. If the Elise wasn’t replaced there’s a chance it could still live on, much like the G-class lives on at Mercedes. “I haven’t decided whether 1 or 2 models will be build a bit longer. Look at Caterham, that’s one of our cars and it’s been built for the last 60 years”, he said. The 2 cars will be “absolutely stunning and gorgeous, in terms of design and aerodynamics” he said. They’ll both be more practical, for example easier to get in and out of, without “corrupting the fundamental character”, Gales said. The 2 cars will heavily borrow from Geely’s suppliers to upgrade the technology both for the bits you can see and the bits you can’t. For example, out goes the old electrical wiring harnesses and in comes a ‘state-of-the-art’ electrical architecture, likely from Geely owned Volvo. However, he said that Volvo’s big dash screen wouldn’t be suitable for sports cars. Gales wouldn’t be drawn on whether the 2 cars would use Volvo or Geely engines. One problem might be the lack of a V6, meaning Lotus would stick with the 3.5-litre Toyota engine, at least for the higher performance models. Neither would be hybrid. “2 powertrains is just weight, it’s inefficient”, Gales said. “For sports cars I still always look at the combustion engines or full electric”. He wouldn’t say whether either of the 2 would have an electric powertrain, but it’s unlikely to be available at launch, given the short time frame. The new model development both for the 2 sports cars and the SUV means Lotus is hiring again after its employee count dropped to 800. The company will bring in 300 new staff this year, 250 of which are engineers, with an increase in manufacturing staff in 2019 as Lotus chases its still elusive 3,000 annual target. Last year Lotus sold 1,600 cars, up 13 % on the year before. Lotus production lines are also getting a cash injection in the ‘millions’ Gales said, the first update since the Evora started production in 2009. +++
+++ Carmakers including Renault, Jaguar Land Rover and Peugeot have boosted revenues by over $1 billion in the past decade by using sophisticated PRICING software, according to sales presentations prepared by the software vendor, Accenture, and other documents filed in a court case. The software works, Accenture told prospective clients, by identifying which spare parts in a manufacturer’s range customers would be content to pay more for, how much to raise prices by and which prices should not be hiked. The latter would include, for example, radiators and body parts that may feature in French automotive insurer group SRA’s basket of parts that measures them for inflation, according to a court filing by the software creator, Laurent Boutboul. Documents relating to the case were obtained by French news site Mediapart. The client presentations and court complaints cover the period 2009 to 2015. Jaguar Land Rover (JLR) acknowledged still using the Partneo software but I was unable to determine which other car makers, if any, currently use it. Accenture denied its software was unfair to motorists and said its focus was on increasing clients’ efficiency. “Solutions of this type, which enable companies to assess and manage their products, are commonplace across industries. They help companies analyze spare part visibility and availability”, it said in a statement. Boutboul is claiming 33 million euros from Accenture over what he says is damage to his reputation because Accenture broke European competition rules. He says it did this by using non-public information taken from Renault to help configure the pricing systems it set up for PSA and potentially other manufacturers. His lawsuit did not specify the exact information. Boutboul’s lawyer said Boutboul could not comment on the details of an ongoing legal action. Accenture said it rejected his claims. Renault, Jaguar Land Rover (JLR) and Peugeot said their pricing strategies for spare parts were legal, did not take advantage of car owners and were focused on efficiency and ensuring availability for motorists. Peugeot said in a statement its replacement parts strategy “consists in offering ranges of spare parts that meet the needs of all customers, regardless of their budget, at the highest level of reliability and safety”. Renault said it “strives to provide its customers with a wide variety of quality spare parts, the price of which is calculated based on parameters that Renault considers fair and equitable”. JLR said it used Partneo to “deliver consistency in pricing across our spare parts range to ensure that we are appropriately priced against our competition”. France’s competition regulator said it had examined the software and did not see a reason to open a full anti-trust investigation, without explaining its thinking. Renault said it was unaware of any of its non-public pricing information being shared with other carmakers. PSA said it rejected Boutboul’s accusations, but did not answer detailed questions about how its software was configured. Accenture said its pricing software, called Partneo “does not share confidential or sensitive data between clients”. In the past 2 decades, pricing software has become widely used. Aaron Roth, Associate Professor of Computer and Information Science at the University of Pennsylvania, said using software to try and identify the highest prices people were willing to pay was merely an extension of long-established practice among manufacturers and retailers. “Already, prices for products are set trying to maximize profits”, he said. In a 2013 presentation to BMW, Accenture claimed its software had, on average, allowed clients to increase parts prices by 15 %. But the recommended increases varied widely from product to product. Accenture recommended in presentations to 6 clients, including PSA, Honda and Volvo, that prices of many replacement parts should be doubled. An October 2013 presentation to carmaker Volvo said that the software had led to “yearly gains achieved” at 7 car and truck makers of a combined $415 million a year. Volvo said it did not use Partneo but declined to comment on the presentation. PSA declined to comment on whether or how much it increased prices. Honda did not respond to a request for comment. Accenture said in its presentations that Partneo relies on a “perceived value pricing methodology”. While manufacturers often seek a specific margin on parts, the software attempts to identify those parts for which consumers would be happy to pay above the typical mark-up. It selected these based on a product appearing to a car buyer to be more valuable or expensive to produce, client presentations show. Accenture noted in a 2009 presentation to France’s PSA that customer perceptions of the intrinsic value of a part are often based on factors like size, weight, and material of an item like a shiny brand badge or a cog. In one presentation to Mitsubishi, it suggested the Japanese carmaker lift the price of a silvery model badge from 14.42 euros to 87.49 euros, an increase of 507 %. Mitsubishi declined to comment on whether it used the software or increased its prices. The car parts business has long been highly profitable, industry analysts say. While manufacturers struggle to make a profit margin of more than 10 % when selling a vehicle, “spare parts gross margin can go up to 90 %”, Accenture said in a presentation for BMW’s South African arm in 2013. BMW said it decided not to use Partneo but declined to elaborate further. Although the market for new cars is highly transparent and competitive, the market for spare parts is less liquid and transparent, partly because some components can be protected by trademarks or patents, analysts say.
Car manufacturers have long been accused by insurers and motoring groups from Australia to the United States of charging too much for spare parts. Partneo mainly focuses on increasing parts prices based on their appearance but it also has a feature that tries to avoid potential insurer reaction to price increases of certain items. The software categorizes components as those “with or without 3rd party pricing supervision” (prices monitored by specialist publications or insurers) according to 3 client presentations. For example, in France, Securite Reparation Automobile (SRA), a group backed by insurers, measures car parts inflation and publishes this in the hope it will help exert downward pressure on parts inflation. According to Boutboul’s complaint, Partneo avoided hiking prices of the specific parts whose price is closely followed by SRA. Accenture declined to comment on whether the software still operated in this way. +++