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+++ ASTON MARTIN , like nearly all of its rivals, has pledged to enter the SUV segment in the coming years. It’s expected to introduce a high-riding soft-roader named DBX in late 2019. The company says enthusiasts have the Chinese market to thank (or blame) for its expansion. “The DBX exists because of the booming China market. Would Aston Martin have done an SUV if not for the China market? Probably not”, chief executive Andy Palmer told in an interview. He cited the local success of the Bentley Bentayga as a source of inspiration. The luxury sports car segment in China remains small; Aston sold 350 cars last year, a figure that places it in the number2 spot behind Ferrari. There’s little demand for a coupe or a convertible and few buyers consider driving dynamics a priority. Millionaires and billionaires want luxury SUVs, preferably ones that drive themselves at least part of the time, which explains why companies who would have never considered entering the segment 10 years ago to avoid diluting their image are racing to put a car on silts. “China is important for our future because we are booming here”, Palmer noted. Rivals like Ferrari, Bentley, and Lamborghini have all reached a similar conclusion. Rolls-Royce couldn’t resist surfing the SUV wave; neither could Lotus and Maserati. McLaren remains the exception to the rule. Palmer added products like the DBX “have to work in China”, so it’s important to design them with the preferences of Chinese customers in mind. The partnership Aston Martin recently created with the College of Design and Innovation at the Tongji University in Shanghai will help product planners offer interior and exterior colors that resonate with Chinese buyers. Aston Martin believes it can sell between 3,000 and 4,000 examples of the upcoming DBX annually. At least a third of those sales will come from China. +++

+++ AUDI delivered around 160,600 automobiles to customers worldwide in May. This means that sales are up slightly by 0.7 % year-on-year. Global deliveries since the start of the year of around 785,300 units were up 6.4 % on the 2017 figure. Audi generated further growth in China (+7.7 %), Asia-Pacific region (+9.3 %) and North America (+1.6 %) in May. In Europe, around 72,150 units represent a fall of 5.2 %. With more than 287,000 SUV models sold in the year to date, the Q family continues to provide important momentum. Last week, the company presented its latest Q model at the Audi China Brand Summit in Shenzhen: the new Q8. “This premium SUV is a perfect addition to the full-size segment and is the next coup in our model initiative. Particularly in the core markets China and USA, the car will be an important sales driver and strengthen our market position”, says Bram Schot, Board Member for Sales and Marketing at Audi. The Q8 will go on sale from the third quarter in Europe, end of 2018 in the United States and in the first half of 2019 in China. With global growth of 10.9 % in the first 5 months, SUV models are the fastest-growing segment of the brand with the 4 Rings. Audi has sold around 287,500 Q models since January, with SUVs currently accounting for 36.6 % of sales. By the year 2025, one in every two Audi vehicles delivered will be an SUV. The company is already meeting this target with last month’s sales figures in North America, where the Q family accounts for around 51 % of sales. This vehicle category accounts for 33 % of deliveries in Europe and 34 % in China. The most successful member of the Q family is the Audi Q5 with around 125,750 deliveries in the year to date. In May alone, sales of the model increased by a further 16.0 % year-on-year, to around 24,700 cars. With 9.929 units, the most Q5 cars were delivered in China. The new, locally produced long-wheelbase version of the model recently went on sale at Chinese dealers. Around 1 in 5 Chinese customers opted for the premium SUV since January. Across all models, Audi delivered 51,732 automobiles in the Middle Kingdom last month, up 7.7 %. Company sales increased 27.4 % since January. With 258,413 units, Audi sold more vehicles than ever before in the first 5 months of a year in China. The Asia-Pacific region performed above average since the start of 2018. Audi sales grew by 25.7 % to 289.400 cars. Around 58.200 units (+9.3 %) were delivered in the past month. In North America, sales in May built on the high level of 2017 (+1.6 % to around 24,800 cars) despite the declining overall market. With 4,207 deliveries and sales up 9.2 %, Audi Canada once again achieved a successful month. In the United States, 19,315 units sold represent an increase of 0.6 %. Since the start of the year, the company increased its sales by 5.9 % to 88,471 automobiles. The Q7 performed well in the past month, particularly in the U.S. market (+5.5 % to 3,217 cars). Since the start of the year, sales of the full-size SUV have increased in the United States by 6.9 % to around 14,559 units. Business in May in Europe continued to be affected by the imminent model changeovers. As such, the result of around 72,150 cars is down 5.2 % year-on-year. Cumulative sales since the start of the year are down 4.7 %. In Germany, 25,574 customers decided to buy from the Four Rings last month, 9.0 % less than a year ago. By contrast, Italy grew with 6,381 deliveries (+9.5 %). In Europe, customer interest in the Q2 remains strong. Since January, the demand for the city SUV increased by 9.0% to around 38,250 units. This makes the Q2 the most popular Audi SUV on the home continent. +++

+++ BYTON has announced a series of updates which edge its inaugural model, an electric SUV, closer to production. The company’s headquarters in Nanjing, China, will be opened this month, while construction work is nearing completion on its production facility. The plant has already produced prototype vehicles ahead of the full launch of the Jaguar I-Pace rival. In addition to these, the company has also announced a 3-figure million dollar investment to help achieve its production goals from Chinese automotive giant FAW, with company co-founder Daniel Kirchert saying: “The Chinese automobile market offers excellent conditions for our company. The infrastructure developments, the market forecasts and the keen interest of the people in our products strengthen us enormously. Of course, our deep understanding of the Chinese market as a basis for our economic success also helps us”. Byton revealed the near production-ready version of its first model, a high-tech, premium electric SUV, at its European launch as part of Milan Design Week, last year. The Concept shown at the event in Milan was described as being “85% there” by company boss Carsten Breitfeld. Minor modifications are likely needed to meet legal requirements, although Breitfeld described the touchscreen-dominated interior as being “series production ready”. The first prototype version of the SUV was completed recently at Byton’s factory in Nanjing. A small batch is being built now for crash tests, with the first development prototypes due to be completed around the middle of the year. The Byton Concept shown in Italy builds on the version that was revealed at CES earlier this year. The firm says the focus of the machine is on allowing drivers to ‘enhance’ the time they spend in the car, rather than on-road performance. The all-electric car is due to go on sale in China late next year, before arriving in Europe and the USA in 2020 as the firm’s first model. It will feature a range of up to 520 kilometers, and be available in 2 powertrain configurations, including a twin-motor four-wheel-drive system with 468 hp. Prices are expected to start from around 37,000 euro. A saloon, which will be previewed in a concept this June, and MPV are due to follow and use the same platform. The new China-based company, has development offices in the USA and Germany, and its senior management team includes several experienced car industry executives. The firm is headed by Carsten Breitfeld, who joined from BMW’s i division along with designer Benoit Jacob. The firm has also recently made other high profile appointments, including new head of vehicle engineering David Twohig, who has moved across from Alpine. The firm’s marketing chief, Henrik Wenders, has also joined Byton from BMW’s i division. While the addition of Twohig, whose new A110 has won much praise for its handling dynamics, suggests the importance of ensuring driving performance, Byton says the main focus of the brand will be on “the coming era of truly shared, smart mobility and autonomous driving”. The SUV will feature a high level of driver assistance systems, along with features such as biometric recognition and a large infotainment display that works in conjunction with a ‘Byton Life’ cloud-sharing platform. As with other new start-ups, such as the Geely owned Lynk&Co, Byton will forego traditional dealerships in favour of a focus on online and a series of ‘brand stores’ that will be set up with partners. Byton showcased the concept for its brand stores at the event in Milan, and says they will offer ‘added benefits’ to traditional dealerships by allowing customers to ‘immerse themselves in a range of topics where Byton is at home’, including digital products and services. The first brand store will open in Shanghai at the end of this year. Byton’s SUV will come with driverless car technology provided by industry expert Aurora. Aurora is headed by Google’s former autonomous driving boss, Chris Urmson, and several pioneers of the autonomous car industry. Its technology enables Level 4 autonomy, meaning it will be able to drive itself without any human input. Byton said its SUV will feature driver assistance systems based around Aurora’s suite of hardware, including cameras, ultrasonic sensors, radar and laser scanners. It has been designed so that components can be upgraded as technology develops. The vehicle architecture is designed for 5G mobile data connection, with speeds of up to 10 GB per second. +++ 

+++ GENERAL MOTORS and HONDA have announced an agreement to jointly develop next-generation batteries for use in upcoming electric vehicles. Like other automakers, the duo aims for better batteries with higher energy density, smaller packaging and faster charging capabilities. Some rivals are working on solid-state batteries to achieve such leaps in performance and packaging, but Honda and General Motors will be working to improve GM’s existing plans for next-generation battery technology. The batteries will be mainly focused on the North American market. “This new, multiyear agreement with Honda further demonstrates General Motors’ capability to innovate toward a profitable electric portfolio”, said GM development chief Mark Reuss. The comment hints at the challenge automakers face in making electric vehicles that provide sufficient range without losing money due to expensive battery packs. Tesla’s strategy started with a $100,000+ roadster and led to the $35,000 Model 3 as battery prices continued to fall. Honda and GM believe their combined manufacturing capabilities will ultimately reduce costs via greater scale. +++ 

+++ JAGUAR LAND ROVER (JLR) has announced an overhaul of its UK manufacturing operations, revealing plans for a new family of Range Rover models and the relocation of Discovery production to JLR’s new facility in Nitra, Slovakia. A JLR statement also detailed plans for a refit at the Halewood production facility in Liverpool ahead of the next Range Rover Evoque’s launch next year; meaning the entry-level Range Rover will continue to be built at the plant. Alongside this, JLR says “a significant investment and technology upgrade” in Solihull will prepare the plant for other new and upcoming Land Rover models. These will be the next Range Rover and Range Rover Sport, which will be built on an all-new architecture. A company spokesman said that the refit would free up future capacity for the Solihull factory. It is possible a new family of electrified and electric JLR cars arriving from next year (including the relaunched XJ and a Range Rover EV, which is codenamed Road Rover and expected to be launched before the start of the next decade) could be produced at the plant, as part of JLR’s desire to build electric cars in the UK. No physical expansion of the Solihull factory is proposed as a result of the shift in production, but JLR claims the planned change in models helps to future-proof the plant. The investment in the UK facilities is said to be in the “hundreds of millions”. The opening of the Nitra plant was originally intended to take pressure off JLR’s UK factories, sharing Discovery production with the Solihull plant. Instead, Nitra will now produce all Discovery models. The next-generation Defender is also set to the built there, given its relationship to the Discovery’s underpinnings and the lower production costs. In a statement on the impact on jobs, JLR said: “The decision to move the Land Rover Discovery to Slovakia and the potential losses of some agency-employed staff in the UK is a tough one but forms part of our long-term manufacturing strategy as we transform our business globally”. In April, JLR laid off 1.000 of its 40.000-strong UK workforce following a decrease in demand across Europe. Around 46,000 Discoverys are made annually in Solihull, 80 % of which head for foreign markets. The move to Slovakia for Discovery production will take effect at the start of 2019. The Discovery makes up about 10 % of Land Rover’s total sales. +++ 

+++ The JEEP Grand Cherokee has received a ‘poor’ rating in the Insurance Institute for Highway Safety’s latest passenger-side small-overlap crash tests. The IIHS began testing both the driver and passenger sides after noticing that some automakers appeared to be reinforcing vehicle structures only for the driver-side impact. The Grand Cherokee experienced maximum intrusion of 10 inches at the lower door hinge pillar. “More alarming was what happened to the passenger dummy’s head”, the report notes. “It hit the dashboard hard through the front airbag and then, because the side curtain airbag didn’t deploy and the door opened, it moved outside the vehicle during rebound”. Some SUVs earned a ‘good’ rating, including the Kia Sorento. +++ 

+++ LEXUS will focus on crossovers and SUVs to increase its share of the American market in the coming years. And, like all of its rivals, it’s debating what to do about its slow-selling sedans. “Our product plan is what I would call a work in progress”, David Christ, Lexus’ new general manager, told during an interview. The brand is goint to replace the CT with an entry-level crossover named UX. Call it a sign of the times. Crossovers are key in today’s market and Lexus is still playing catch-up. Christ announced the company will likely turn the LF-1 Limitless concept into a production flagship model around the turn of the decade. The crossover push places some of Lexus’ sedans on thin ice. The IS is approaching the end of its life cycle and Lexus hasn’t announced plans to replace it yet. “We’re evaluating this vehicle”, Christ said. The IS doesn’t sell particularly well, so don’t be surprised if it’s not directly replaced. Lexus continues to position itself as an alternative to the German luxury brands but it’s not trying to beat them at all costs. “Regarding the Germans, we’re more focused on maximizing the opportunities we have than comparing ourselves”, he said. “Of course, nobody wants to be second or third”, he conceded. +++

+++ MINI is “the most urban car brand” but also one of the hardest to switch to full electric power due to the size of its vehicles, according to boss Peter Schwarzenbauer. Highlighting the upcoming Mini E, which will be built in Oxford from 2019, and the alternative version of the vehicle, which will be produced in co-operation with car maker Great Wall in China, Schwarzenbauer, said: “Electrifying Mini is quite a challenge, chiefly because of the small footprint of the cars. It does not leave much room for batteries. But if you look at the role of electrification in the urban environment and the desire to be local emissions-free, there is no other brand with the credentials of Mini. It should be a natural fit, and that is the direction we’re moving towards for the future. The success of the plug-in hybrid Countryman shows what can be achieved, and the full electric Mini that is coming will show another step”. Schwarzenbauer also highlighted that the joint venture to build electric Minis in China (the first time Minis have been made outside of Europe) was necessary in order to qualify for the country’s New EnergyVehicles regulations, which require a proportion of the car’s parts to be sourced and manufactured there. The BMW i3 does not qualify.The BMW Group is known to be working on solid-state batteries in partnership with Toyota, with a sale date mooted to be around 2025. Both smaller and more powerful thantoday’s batteries, they could potentially pave the way for a range of fully electric Minis. +++ 

+++ OPEL has confirmed the eCorsa name for the electric version of its next-generation Volkswagen Polo rival that will arrive after the regular Corsa model in 2020. The all-electric hatchback will sit alongside the recently confirmed Grandland X PHEV, the next Ampera-e and an electrified van in Opel’s growing electrified line-up. These models will play a key role in the long-term electrification plans of Opel’s parent, PSA Group. The plans state that every Opel model will be available with an electrified powertrain by 2024, with battery electric power for small cars and hybrid and and plug-in hybrid power for larger models. These models will be sold alongside combustion-engined alternatives rather than in a standalone range. The next Corsa was originally planned to be underpinned by a structure developed by Opel’s former owner, General Motors, but it will now be built on the same CMP architecture as the next Peugeot 208. This shift has enabled the eCorsa to use eCMP underpinnings. This electrified platform will be shared with electric versions of the next 208 (and Citroën C3 and DS 3 Crossback). While no details have been given about ranges, rivals such as the Renault Zoe, Nissan Leaf and Hyundai Kona Electric offer between 350 and 500 kolometres, meaning the PSA models will need to offer similar distances from a single charge to be competitive. Synergies achieved through the use of the CMP platform have helped Opel to halve development costs for the new Corsa. It will be the first Opel car to be built on this PSA platform. PSA ownership will see all GM platforms used by Opel cars replaced by PSA ones, cutting 9 platforms to just 2: CMP and EMP2. The same will be true for engines, which will be trimmed from 10 families to just 4. Such is PSA’s commitment towards electrification that its engineers are developing the new powertrains to be compatible with hybrid power from the start, rather than adapting them at a later stage. The line-up includes a new 1.6 petrol four-pot, a 1.2 petrol triple, a lightweight 1.5 diesel and a 2.0 CDTI unit. +++ 

+++ VOLKSWAGEN sold 341,888 cars last year in China; in December alone. Across 2017, VW’s three Chinese operations (its own brand and two joint ventures) delivered 3,177,000 cars, accounting for just over half the company’s 6.23 million global sales. That total, equating to 8.704 sales per day, or one every 10 second, makes VW the best-selling car firm in China and explains why boss Herbert Diess says “China will have a decisive effect on the success of our future strategy”. Both the sheer size of the Chinese car market (24.2 million cars were sold there last year) and its potential for further growth explain why it is a priority not just for VW but for almost every global car firm. That, in turn, is why just about every major current global trend in the car industry can be traced back to China. The 3 biggest current car trends in the automotive world (namely SUVs, connected cars and electrification) are all being accelerated by China. Since 2012, sales of saloons in China have remained static, Boyue maker Geely was third-leading car firm in China in 2017 while SUV sales have increased by more than 10 million per year and now account for half the total car market. That’s why VW will expand the range of SUV models it offers in China from three to a dozen by 2020. Chinese buyers are drawn to SUVs because of the prestige of bigger vehicles (hence the number of elongated saloons sold in the country). Chinese tastes are also why many SUVs, such as the new Touareg, are getting front designs that are bold by European standards. The SUV growth is driven by youth: 65 % of cars in China are sold to first-time buyers, and the average age of car buyers is 34, compared with mid-50s in Europe). That younger demographic is also demanding connected cars: the country has 350 million smartphone contract subscribers, and the online shopping industry is worth 600 billion euro. China’s electric ambitions Younger buyers are keen on electrified cars too, but that push is being driven by the Chinese government, which has introduced tough CO2 rules to accelerate growth in new energy vehicles (NEVs) as a cornerstone of its ‘Made in China 2025’ initiative. That’s why VW is planning to launch 10 electrified vehicles by 2020 before its electric MEB platform (upon which the ID range of models sits) is due, with 10 MEB-based NEVs following soon after. VW estimates it will sell 1 million EVs worldwide by 2025 and 650,000 of those in China. Sven, Patuschka, VW China’s R&D boss, says: “China is like a revolution. There’s rapid growth, so people are leapfrogging technologies. There are no estate cars in China, with younger buyers leapering straight to SUVs”. VW has had a presence in the Chinese car market since 1984 and has become the largest manufacturer in the country through a 3-pronged approach. It initially entered China with a joint venture, the Shanghai-based SAIC Volkswagen, and in 1990 launched a second (FAW-Volkswagen), in the north- eastern city of Changchun. The third prong is Volkswagen Import, based in Beijing. Each of the 3 companies is focused on different regional markets and has a unique model line-up. VW sales boss Jürgen Stackmann says the firm works to ensure equality between the 2 joint ventures, which have roughly the same number of dealers and models. That’s why VW is greatly expanding its line-up of Chinese models and why, for example, the company has launched 2 similar-sized China-only SUVs: one will go to each joint venture. How does VW decide which one gets which model? “It can be a big fight”, says Stackmann. In 2010, just 1 of the 8 most popular car makers in China was Chinese, and Chery sneaked onto that ranking in 8th place. Last year, 3 of the top8 car firms were Chinese, with Geely 3rd (behind VW and Honda), Baojun 7th and Changan 8th. The interesting dynamic is that although global firms have long dominated in Beijing and Shanghai, the growth of the home brands has come from the regions. The Chinese car makers have embraced their lack of legacy, fuelling growth with bang-on-trend electrified SUVs. Their models are no longer copycats of European designs, either; VW’s China boss Stephan Wöllenstein describes modern Chinese cars as “great products”. Despite being the foreign firm, VW is battling local ones by drawing on its past. “Almost everybody with automotive experience in China has spent time in our heritage cars: the Santana and Jetta”, says Wöllenstein. “It gives our brand an emotional foundation”. +++

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