+++ AUDI delivered around 164,000 automobiles to customers in June. As such, sales were down 3.8 % on the strong result of the same period last year. In the United States, sales of the Four Rings were up 0.3 %, on a par with the prior-year level. As a result, Audi of America achieved its 90th consecutive record-breaking month. In China, deliveries failed to reach the record-breaking level from 2017 (-7.2 %) due to the announced tariff reductions. In Europe too, Audi sales were down 1.8 % on last year. Worldwide and across all Audi models, deliveries increased by 4.5 % since the start of the year. Cumulative sales total around 949,300 units. “Despite the difficult environment, we performed well thanks to the positive development in Asia and North America in the first half of the year”, says Bram Schot, interim CEO and Board Member for Sales and Marketing. “We expect a challenging, but also exciting second half of the year with further model changeovers and the presentation of our first all-electric model, the Audi e-Tron”. In the United States, the number of deliveries in June was up 0.3 %, on a par with the prior-year level. With 19,471 units sold the past month marks the 90th consecutive record-breaking month for Audi of America. The company has continued to grow month after month and since the start of the year has delivered 107,942 automobiles, 4.8 % more than in the same period in 2017. In Canada (+0.1 %) too, the number of deliveries in June was on a par with the prior-year level: 3,859 customers took delivery of their new Audi in the country. Overall, sales in North America fell 0.5 % in the past month. The sales balance for the first 6 months remains strong, however: In the first half of the year, the premium manufacturer increased its sales in North America by 5.3 % to around 135,000 customers. In China, 306,590 cumulative deliveries since January exceed the prior-year reference figure by 20.3 %. In June, Audi delivered 48,177 automobiles, down 7.2 % on the 2017 figure. The Chinese government’s announcement of a reduction in tariffs on some cars and certain car parts meant customers were reluctant to buy a new car. The brand achieved substantial growth with the A4L (+29.1 % to 12,763 cars). In the first 6 months, sales of this midsize model were up 65.1 % year-on-year. Since the start of the year, around one in four Chinese customers opted for the long version of the A4. With 74,741 cars sold, the model is the best-selling Audi in the Middle Kingdom in the year to date. In Europe, demand in June fell 1.8 % year-on-year to around 78,750 cars. Cumulative sales in the region of around 439,450 units were down 4.2 % at the mid-year point. As part of the model initiative, Audi will be replacing models in Europe in 2018 that account for around a third of its total sales. While the newly launched A7 (+41.7 %) and A8 (+21.3 %) models achieved high growth in the first half of the year, the imminent generation changeover of the A6 in particular, as a popular Audi model for fleet customers, continued to dampen the sales figures in Europe (-10.2 %). The market launch of the A6 Sedan is imminent, while the new A6 Avant will be available at European dealers in late summer. In Germany, 27,603 customer deliveries in June represented a fall of 2.5 %. In the United Kingdom, Europe’s second-largest market, Audi sold 14,502 automobiles last month (-4.7 %). In the year to date, sales in the UK (-0.9 % to 89,232 units) are only down slightly on the strong prior-year figure. Among the other European core markets, Spain (+8.6 % to 5,662 cars) and Italy (+6.8 % to 6,765 cars) in particular reported growth for the month of June. In cumulative terms, Italy was also among the most successful European export markets in the first half of the year (+1.5 % to 35,523 cars), followed by Spain with 31,505 deliveries (+4.1 %). The Q2 generated important momentum for European sales. With an increase in sales of 7.8 % and around 45,950 units sold in the first 6 months, it is the third most popular model among European Audi customers. +++ 

+++ CHINA ’s auto sales decelerated in June, adding to economic pressure on Beijing amid a worsening trade battle with Washington, an industry group reported. Sales of SUVs, sedans and minivans rose 2.3 % in the most populous auto market, down from May’s 7.9 % growth, according to the China Association of Automobile Manufacturers. That weakness adds to pressure on the economy as growth cools after the government tightened controls on bank lending to curb surging debt. Beijing cut auto import duties from 25 % to 15 %, effective July 1. But it has imposed an additional 25 % charge on vehicles imported from the United States in a worsening trade conflict with Washington. SUV sales, usually one of the brightest spots for automakers, contracted by 0.5 % from a year earlier to 738,000. Year-to-date sales were up 9.7 % at just under 5 million. Demand for sedans rebounded temporarily from a steady decline to rise 9.1 % to 963,000. For the first half, sales were up 5.5 % at 5.7 million. Sales of pure-electric and gasoline-electric hybrid vehicles rose 42.9 % to 84,000. Year-to-date sales were up 111.5 % at 412,000. On Tuesday, the U.S. electric car maker Tesla announced plans to build its first factory outside the United States in Shanghai. Tesla would become the first wholly foreign-owned automaker in China following Beijing’s commitment in April to end restrictions that required global producers to work through local partners. Also this week, BMW said it will raise the sticker price of U.S.-made SUVs exported to China to reflected the higher import duty. General Motors reported no monthly sales but said the total for the quarter ending in June rose 0.7 % over a year earlier to 858,344 vehicles. Ford said sales declined by 38 % from a year earlier to 62,057. First-half sales were off 25 % at 400,443. Nissan sales rose 10.4 % over a year earlier to 131,038. Year-to-date sales were up 10.8 % at 720,447. Toyota sales gained 11 % to 117,800. First-half sales rose 10.9 % at 680,000. +++ 

+++ The car industry in the United Kingdom has finally run out of patience with its Government on Brexit, it seems. After warnings last month from BMW and the Society of Motor Manufacturers and Traders, JAGUAR LAND ROVER (JLR) boss Ralf Speth finally broke his tactful silence on the subject last week, questioning whether the company would even be able to remain British at all if a hard Brexit were to occur. That’s a firm that has spent more than 58 billion euro in the UK over the past 5 years, and which supports more than 300,000 UK jobs, questioning whether it should  stay committed to further investment of 90 billion euro between now and 2022. And listening to some of the soundbites from politicians on how cars are really made, you can hardly blame JLR for playing hardball. Logistics, components and supply chains are one thing. But Speth also suggested that JLR is already struggling to attract international talent; the sort of brainpower that drives forward developments in battery technology, infotainment and build quality. Or, in the case of Speth himself, managerial skills. Study this year’s Brit List and you’ll see how UK talent drives much of the car industry; be it running globally significant manufacturers and suppliers, or designing and engineering vehicles for customers in Britain, Europe and beyond. There are Brits in significant roles everywhere. The British government is still deciding on how best to remove barriers to trade while sticking closely to the idea of previously impossible restrictions on the freedom of movement for people. More than 2 years after the Brexit vote, there’s increasing evidence that the second of these policies is a dangerous one indeed. +++ 

+++ MCLAREN will launch 18 new cars by 2025, by which time all of its mainstream production models will use hybrid powertrains. The new models will include a direct successor to the McLaren P1 hypercar. This will be in addition to the recently revealed Senna and the 3-seater BP23, which is due to be revealed later this year. However, McLaren said that some of its future limited-production hypercars, which sit in the brand’s top-tier Ultimate Series, might still rely solely on internal combustion engines. The 18-strong line-up will include replacements to the current entry-level Sports Series range, and mid-level Super Series range, all of which means production will reach 6,000 units per year by 2025. Last year, McLaren sold 3,400 cars. All production will remain at McLaren’s plant in Woking. The plans were announced by McLaren at the Goodwood Festival of Speed. The 1.4 billion euro Track25 business plan follows on from the Track22 strategy announced in 2016. The next generation of McLaren sportscars, to arrive from 2020, will use hybrid powertrains, starting with a replacement for the 570S. Each subsequent replacement model will also use a hybrid powertrain. Given the 720S was launched last year, that Super Series model won’t be hybridised until 2022. While current models all use a version of McLaren’s twin-turbocharged V8, the hybrid powertrain is likely to use a smaller-capacity turbocharged V6. McLaren boss Mike Flewitt would not confirm as much, but said McLaren was already testing the hybrid set-up to make production in a 720S mule. The hybridised models will be based on a new structure that is an evolution of the current Monocell II architecture. Flewitt told earlier this year: “Hybrid design is part of the next platform; it is designed-in from day one rather than having to adapt an existing chassis”. He also confirmed at the time that a hybrid powertrain will be the only option within McLaren’s core model ranges. Along with its hybrid plans announced today, McLaren is investing in “new augmented driving features”. Flewitt explained that McLaren wants to use autonomous-driving technology to fit in with the brand’s values. For example, McLaren’s track app could be developed so that it is able to overlay F1 driver Fernando Alonso’s best lap. “It would let him virtually drive the car and then you could learn from it”. It will also develop a “lighter, superfast-charging high-power battery system for performance”. Hybrid McLarens equipped with the battery system could have more than 30 minutes of electric driving range on track. The firm also intends to win the “supercar weight race” ensuring, as it does today, that each of its products is the lightest in its segment. McLaren said this complements its 60 million investment in its soon-to-open Composites Technology Centre in Yorkshire. Once up and running, it will mean 57 % of McLaren’s vehicle content is sourced in the UK. Other technology due to be launched on the next generation of McLarens includes enhanced cyber protection, improved vehicle tracking and over-the-air software updates. As part of its growth plan, McLaren also announced plans to expand its reach globally. That includes expanding its retailer network from today’s 86 sites to 100 by 2025, as well as evaluating new markets such as Russia, India and central and eastern Europe. +++

+++ The new MERCEDES-BENZ EQ C will be offered alongside regular vehicles to fleet customers when the pure-electric SUV arrives at dealers in 2019, it has emerged. The EQ C is scheduled to be unveiled in production form this autumn, with a likely public debut at the Paris Motor Show, ahead of sales starting in the first half of next year. The mid-sized SUV – an all-electric sister model to the GLC, in effect is expected to cost around 87,000 euro in The Netherlands, although Mercedes has yet to issue any firm guides on pricing or detailed information on whether it plans to sell it using a traditional buying process. However, Mercedes plans to offer the EQ C alongside the rest of its range to fleet customers, which suggests that this will be part of a wide range of ways into the vehicle. “We will roll the EQ C into our overall fleet proposition”, a spokesman said. “We’re already seeing a number of buyers saying that it will fit their user profile, and it’s really just a reflection of how the market is evolving. We certainly intend to offer customers a number of flexible ways into that car. What we won’t be doing is a special fleet or business variant of EQ C just for fleet”, he added, “because in our view that’s not a tactic that works”. He said that the EQ C has already attracted “strong interest” from fleet buyers. The EQ C, which will rival everything from the Tesla Model S and X to the Audi e-Tron, Jaguar I-Pace and the BMW iX3, will boast a range of around 480 kilometres. The first concept car for the German carmaker’s EV and hybrid sub-brand, the EQ Concept, was shown at the Paris Motor Show back in 2016. The SUV is the first of ten pure electric Mercedes models slated to arrive before 2025, with the company registering various EQ-prefixed model names over the last few years. The production EQ C’s styling has been toned down a little for market release. But it still retains an unusually low stance for an SUV, necessary to keep a smooth aerodynamic profile to boost range. The imposing front-end, intricate headlights and sloping roofline remain intact, too. Overall, it’ll boast a design language subtly different to that of Merc’s latest conventional cars, specific for the EQ brand. As Mercedes’ R&D head told last year, 2 electric motors, one mounted on each axle, will produce a total output of 410 hp, while the 0-100 km/h time is estimated at around 5 seconds. It sits on a bespoke electrified platform, sharing very little with similarly-sized SUVs such as the GLE and GLC. We can expect an interior that borrows technology and features from the E-Class and S-Class models. A more futuristic design will be used, however, while colour-changing ambient lighting could help illustrate powertrain modes and charge status. I’ve no doubt that the EQ C will also feature Merc’s latest semi-autonomous driving functions and assists when it arrives in showrooms before the decade is out. +++

+++ NISSAN said that it altered the results of exhaust emissions and fuel economy tests of new vehicles sold in Japan, in the latest misconduct to surface at the Japanese automaker. Nissan acknowledged in September that it had been carrying out illegal post-production tests at its plants, allowing those who weren’t qualified to routinely conduct the tests. The new misconduct surfaced while Nissan was checking on its operations recently. Nissan said it found the findings “regretful,” as it was trying to correct itself, and it promised to continue to investigate. Nissan said the safety and fuel economy of all the vehicles still were within required limits. The erroneous testing does not affect exports. In the earlier scandal, workers in training had been borrowing and using the “hanko,” or stamps that are often used in Japan for signatures, of certified personnel. Because of the problems, Nissan has had to recall more than 1 million vehicles for re-inspection. Such practices had been routine for decades, beginning as early as 1979, according to Nissan. Plant workers were aware the procedure was illegal and covered it up when government inspectors visited the plants. Executives have taken pay cuts. The problems did not result in quality problems because they were the final step before vehicles were shipped out, according to Nissan. Japan’s corporate world has been hit by embarrassing scandals in recent decades that raise serious questions about company ethics. Kobe Steel also acknowledged massive fake inspections, which had spanned years and affected products sent to hundreds of companies, including aluminum castings and copper tubing for autos, aircraft, appliances and trains. Japanese scandals are often characterized by employees covering up for dubious performances and relationships to “save face,” sometimes out of loyalty to the company, rather than illegal enrichment for personal gain as is more common in some other countries. +++ 

+++ SKODAwill launch a vRS performance version of its upcoming electric SUV in 2022, likely badged eRS. Following the launch of the standalone zero-emissions model late in 2020, as previewed in the Vision E concept, a hot version will be added to the line-up, Skoda’s sales and marketing chief Alain Favey has confirmed. “There will be a vRS version of our future electric car”, he said. “It will be more about styling and experience, and not necessarily performance”. Talking more broadly about the vRS performance brand, Favey said: “Customers like the sporty experience without [the car] being a flashy sports car. The most powerful vRS is 245 hp, so it’s about the look and the sporty driving of the car”. Currently, the only vRS model on sale is the Octavia. However, a Kodiaq vRS will be launched later this year. The Fabia vRS, a model which previously existed between 2010 and 2014, could also be re-introduced on the next generation of the supermini, which won’t arrive until the next decade. Favey said he believes there is a market for a vRS variant but nothing is yet decided. “The next-generation Fabia will come after 2020 and we are working on different options”, he said. “I think there is a market for a vRS”. The next-generation Fabia vRS is likely to be hybrid. “For the next generation of Fabia, there could be an alternative. We could look at the opportunities a bit differently”, boss Bernhard Maier said at the time. Asked if this meant electrification, he replied: “That would make sense, yes”. Ahead of the arrival of a hot electric SUV, Skoda is readying for the launch of the standard model in 2020. Before that, the Czech car maker will launch the electric Citigo-e, a sibling of the Volkswagen e-Up and future Seat eMii. However, Favey said the Citigo-e is largely to gain experience in electric cars, to make sure dealers and repairers are ready. “The real first step into electric cars will be with the standalone SUV”, he said. The car, based on the Vision E concept shown at last year’s Shanghai motor show, will use the Volkswagen Group’s electric-only MEB platform, which is being used across all of the company’s brands. Favey described the production version of the Vision E as “very attractive” and said that the car should “not scare current Skoda owners, but also appeal to people that aren’t Skoda owners”. The Vision E “gives a very good idea of what the EV will look like”, he added. Inside, the car will adopt the ‘floating’ screen seen in the Vision X concept earlier this year. While the Vision X will make production next year as the smallest SUV in Skoda’s line-up, this screen will be saved for Skoda’s electric models, starting with the SUV, explained Favey. While Volkswagen is understood to be offering a number of battery capacities with different mile ranges, Favey said the electric SUV, which is between the Karoq and Kodiaq in terms of size, will offer one battery that will be capable of at least 480 kilometres of range. “If it doesn’t have 480 kilometres, it shouldn’t come to market”, Favey said. Favey said that the model would be a higher price than Skoda’s standard range. “Electric cars will always be a bit pricier than normal vehicles with diesel or petrol engines, so we need to attract people that have the buying power to buy cars that aren’t the cheapest in the market. We want to speak to a customer base that has the buying power of a Kodiaq, for example, that will be tempted by EVs”. Pricing will be comparable to a mid to upper-range Kodiaq, Favey said, so we can expect the EV to cost from around 45,000 euro. Skoda will launch its electric model later than many rivals, including Volkswagen, whose electric ID hatchback is due late next year. However, Favey said having 2 years to prepare is a good thing. “Infrastructure is not at the level it needs to be”, he said. “It’s good we have 2 more years to see infrastructure put in place. The retail network has to play a role in charging facilities”. +++

+++ SUBARU said it will invest 150 billion yen over the next 5 years to improve vehicle quality. The investment is designed to help the automaker restore customer trust after a string of scandals, including vehicle inspections by unqualified workers, came to light starting in autumn last year. The spending will cover such measures as boosting the number of personnel in charge of product quality management. “I want to make Subaru a company that never repeats a mistake”, President and Chief Executive Officer Tomomi Nakamura told a press conference. Subaru was ordered by the transport ministry to submit a report in about a month when the company disclosed the discovery of misconduct in its vehicle fuel economy and emission tests on June 5. Asked about being behind schedule, Nakamura said, “A thorough investigation is the most important thing”. The automaker aims to boost its global vehicle sales by 20 percent to 1.3 million units in fiscal 2025, which ends in March 2026, compared with its fiscal 2018 plan. While maintaining the current annual sales level of 150,000 units in Japan, Subaru predicts growth in other parts of Asia as well as North America. The automaker set a goal of eliminating traffic accident-related deaths involving Subaru cars in calendar 2030. It aims to improve vehicle safety using advanced telecommunications and artificial intelligence technologies. Subaru also plans to make connected vehicle sales account for over 80 % of its sales at major markets by fiscal 2022. +++ 

+++ TOYOTA is cooperating with the Indonesian government to develop eco-friendly vehicles by lending the Prius and other models to 6 major universities in the Southeast Asian country. Toyota says it is providing each school with a package of a Prius electric-gasoline hybrids, a Prius plug-in hybrid, a Corolla Altis sedan and a power-charging facility for data comparison for 2 years to help the Ministry of Industry promote its low-carbon emission vehicle project. PT Toyota-Astra Motor and PT Toyota Motor Manufacturing Indonesia, the automaker’s local sales and manufacturing arms, will work with the ministry and 6 institutions on research into the development of so-called electrified vehicles, including internal combustion engines. The research will include analyzing the fuel efficiency, charging efficiency, and mobility and battery durability of 3 types of cars with 1,800 cc engines under various weather conditions. Toyota will collect real-time data and submit a report to the industry ministry, which will utilize it to draw up policies for technology development and power-charging infrastructures, as well as environmental regulations. The 6 universities are Institut Teknologi Bandung, Universitas Gadjah Mada, Universitas Indonesia, Universitas Sebelas Maret, Institut Teknologi Sepuluh Nopember and Universitas Udayana. Yoshihiro Nakata, head of PT Toyota-Astra Motor, expressed hope that Toyota’s collaboration with Indonesia and its selected educational institutions will promote public awareness of electrification technology and availability of human resources, and help local engineers prepare for a new era in the Indonesian automotive industry. At a recent Toyota car handover ceremony in Jakarta, Industry Minister Airlangga Hartarto said, “The automotive industry is expected to be the production base of internal combustion engines and electrified vehicles for both domestic and export markets”. +++ 

+++ In the UNITED KINGDOM , new homes will have to be built with electric vehicle charging points under Government plans to increase uptake of low-emissions vehicles. Expected to be announced as part of the Department for Transport’s ‘Road to Zero’ document later today, building regulation in the UK will be overhauled to ensure all new flats and offices come with external charging points for EVs. The ‘Road to Zero’ document aims to prepare the UK for the 2040 ban on petrol and diesel vehicles, as previously announced by the Government. Crucially, the document is said to contain a clause confirming the Government “sees a role” for hybrid cars for the future, meaning the ban is only likely to affect pure petrol and diesel vehicles. The strategy also aims to “future proof streets by ensuring all new street lighting columns have charging points in areas with on-street parking”. Included are also plans to invest in wireless charging tech for EVs where vehicles would be charged by underground pads without the need to plug in cables. Companies building and installing charging points are expected to receive 500 million euro extra in Government funding. Transport Secretary Chris Grayling will say today the plan will make “for the biggest overhaul in road transport technology since the development of the Benz patent motor car 130 years ago”. +++ 

+++ VOLKSWAGEN has had to adjust its production strategy for the Up GTI because the pepped-up city car has been more popular than it anticipated. Following the car’s launch in February, Volkswagen had to temporarily pause orders so that it could ramp up the pace of output and reduce lead times. It has since reopened order books, and deliveries for the car are now estimated to come 5 months after orders are placed. +++

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