+++ ASTON MARTIN is just days away from being floated on the London Stock Exchange. It will announce its plans in the coming days alongside interim financial and sales results. The initial public offering will involve the sale of approximately $1.29 billion of shares in the company, most from existing investors. Shares will begin trading publicly before the year is out and it is thought that Aston Martin’s owners are seeking a valuation between $5.15 billion and $6.44 billion. Included in the initial public offering will be an exclusive offering of stock to Aston Martin customers and an employee share scheme. Additionally, a new chairman and other board members are being recruited. Aston Martin has reportedly been working on an initial public offering for a number of months and may also announce a stock offering on the New York Stock Exchange before the year comes to a close. This year has been a very busy one for the British marque. It has launched a plethora of models, such as the all-new Vantage and the DB11-based DBS Superleggera. Additionally, at March’s Geneva Motor Show it revealed plans to revive the Lagonda brand and is inching towards the launch of an all-electric Rapide. The company is also making progress on the upcoming DBX crossover. Under CEO Andy Palmer’s guidance, Aston Martin has made a remarkable turnaround in the past few years, and in 2017, reported the highest sales in its history as well as pre-tax profits of $112 million. +++
+++ FORD said it is standing by its Mondeo midsize car, adding it will move forward with plans for an upgrade of the model and denying a report that it plans to halt production. The Mondeo remains a “core part” of its product line-up in Europe, and there will be improvements introduced later this year, the U.S. automaker said. However, on the long term, Ford will be dropping the Mondeo and other models as a part of a global revamp that would see up to 24,000 jobs slashed, many of them in Europe. “We have upgrades coming for Mondeo later this year, which will see new powertrains as well as exterior and interior updates as well as enhancements to the Mondeo Hybrid range”, the company said. Speculation over changes to the lineup follows an acknowledgement by Ford that its European operation needs a major redesign to deliver on targets and that it is focused on cutting costs to improve performance. Unite union, which represents workers at Ford engine plants including in Bridgend and Dagenham in the UK, said it was pressing Ford to invest and future proof its British factories. The carmaker is considering ending production of the Galaxy and S-Max. All 3 are manufactured at Ford’s plant in Valencia, Spain. The site employs approximately 3,480 people. +++
+++ Electric vehicles are becoming increasingly popular and that trend will likely continue into the future as automakers roll out new models with improved features. While range anxiety was one of the biggest issues facing early electric vehicles, it’s not too much of a problem anymore as many new models can travel more than 320 km on a single charge. That’s enough range to suit most drivers and their typical commutes, but anyone wanting to travel long distances better arm themselves with a lot of patience. While recharging times vary by model and charger, it takes approximately 9.3 hours to fully recharge the Chevrolet Bolt with a 240V connection. The Nissan Leaf, on the other hand, takes around 7.5 hours with a 220V connection. Quick chargers can deliver a partial charge significantly faster, but they’re not nearly as quick as refueling a car with gasoline or diesel. Apparently, GENERAL MOTORS is trying to fix that, as Bloomberg is reporting the company is working with Delta Americas to develop a new rapid charging system. Little is known about the system, but it would reportedly enable electric vehicles to be given a range of 290 km in less than 10 minutes. That’s a significant improvement over current charging systems and it would likely best the Porsche Taycan’s technology, which allows for 100 km of range with a 4-minute charge. There’s no word on details, but the rapid charging system would certainly increase the appeal of electric vehicles. Of course, there’s no word yet on how much the system would cost, and that could be a deciding factor on whether the technology gets widely adopted or not. +++
+++ LAMBORGHINI is one of the few automakers still producing engines with double-digit cylinder counts and no artificial assist. But the company’s R&D chief says that can’t carry on forever. Maurizio Reggiani confirmed that the Aventador’s eventual successor will remain naturally aspirated, but adopt a hybrid assist. “The successor to the Aventador will be V12 naturally aspirated. We can add a hybrid or plug-in to respect all the rules of fuel consumption and emissions”, said Reggiani. “Maybe we have hybrid boost for turbo-like performance. When I have a tank of energy, I want to use what is best for homologation. Once you fulfill that requirement, the additional energy can be used for performance”. Sant’Agata’s chief engineer went on to outline how the next-generation supercar will implement the electric assist. Using the existing Anima selector, the Strada mode would disconnect the electric assist, possible using it only for battery propulsion around town. Sport mode would implement the hybrid assist for torque vectoring. And Corsa mode would bring it on line to fill in for the internal-combustion engine’s gaps in power delivery. It’s a different approach than that which the Raging Bull marque took with the Urus crossover, which packs a twin-turbocharged (but electrically unassisted) V8. “If you want to move a car weighing 2.2 tons on every surface, even if it’s gravel or sand, you need an engine that provides huge torque at 1,500 rpm”, explained Reggiani. “Only a turbo can provide this. The decision of using a turbo was based on the mission of the car. Supersports cars don’t have this kind of mission”. +++
+++ MAZDA ’s on-again, off-again rotary-powered sports car has generated an immense amount of speculation. The most recent report claims the model could receive the green light for production if Mazda’s plug-in hybrid models sell well. It’s no secret that Mazda is in the midst of developing a new Wankel engine for use as a range extender in a gasoline-electric powertrain. It won’t spin the wheels, but it will rumble to life and generate electricity when the battery pack’s charge falls below a certain threshold. It’s this same basic engine that could one day power the long-awaited successor to the RX-8. “We know that electric cars will be important in 2020 to 2025, but also that EVs are not the answer for everything. Combustion engines will stay play a part, and if you asked me if I want a rotary sports car at the top of the range, I’d say yes, I’d love to have one. Many of my colleagues would, too. So, it’s a matter of keeping the sales growth going to make sure we can do one in the future”, explained Wojciech Halarewicz, the head of communications for Mazda’s European division. Mazda’s first gasoline-electric model with a Wankel range extender is tentatively scheduled to go on sale in 2020. That means the next RX-badged model won’t arrive until 2021 at the very earliest, assuming it’s approved for production. Of course, the firm’s plans could change several more times in the coming years. +++
+++ Are you concerned about the PROFITS that car companies make for themselves, at your expense? You should be. If profitability is excessive, it’s usually a case of plain greed on the part of a firm that can easily afford to lower its retail prices. Apple, with a $48billion profit figure in 2017, proves my point. But at the other end of the scale, low or zero profit can mean little or no money for research, future products, staff development and other important stuff. Worse still, a company that regularly loses money can be deemed insolvent / bankrupt / dead / buried. Think of MG Rover, Saab, Daewoo; all 3 of those car manufacturers are now toast. So is Toyota’s $22.5billion profit in 2017 over the top? And what about VW Group’s $13.1bn, or Mercedes’ $11.9bn? Before answering that question, remember that some firms in the communications, electronics, finance, technology, tobacco and other industries are more or much more profitable. BMW ($9.7bn) joins Toyota, Volkswagen and Mercedes in the automotive top five for profitability, as does Honda ($9.5bn). Next come Ford ($7.6bn), Nissan ($6.7bn), Renault ($5.8bn), SAIC ($5bn) and Hyundai ($3.6bn). In this, the volume car business, Subaru is a tiny player with the lowest gross revenue. But those facts didn’t stop the little Japanese firm making a surprisingly healthy annual profit of $2.0bn last year, putting it ahead of Suzuki ($1.9bn), Beijing Automotive ($1.6bn), Dongfeng ($1.4bn) and Tata ($1.4bn). Still, all these Asian firms comfortably exceeded the psychologically important $1billion profit-per-annum threshold. Mazda only just made it over that $1bn line. Surprisingly and, interestingly, Kia didn’t, due to a surprising and worryingly low figure of $856million. But at least the Korean firm has its wealthier Seoul brother, Hyundai, to offer a financial helping hand if needed. The isolated minnow that is Mazda has no such cash-rich family member to rely on. But the current financial concerns of Mazda and Kia are nothing when compared with those suffered by General Motors, which lost billions in 2017. In doing so, the American corporation has given itself the dubious honour of being one of the top 10 money-losing firms on the planet. How this company pulled in colossal gross revenues in excess of $150bn for the year, then managed to end up with a ‘profit’ figure of minus $3.9bn, is beyond me. And, I suspect, the bewildered customers who paid mid-to-high prices for GM vehicles, such as Buicks, Cadillacs and Chevrolets. +++
+++ In 2017, SPYKER announced plans to purchase engines from Koenigsegg. The firm’s first Koenigsegg-powered model should have been the C8 Preliator, a high-end model limited to 150 examples, but Spyker has yet to purchase a single engine. “We have not built any engines for Spyker. Spyker has not met the conditions, so we have not started building. We wish Spyker a good future and hope that they will once again be able to deliver their fascinating cars”, Koenigsegg spokesman Steve Wade told. Koenigsegg’s engine replaced the supercharged, Audi-sourced unit Spyker planned on using. The specifications sheet called for a naturally-aspirated, 5.0-liter V8 engine designed in-house by Koenigsegg and tuned to deliver 600 horsepower. In the Preliator, it should have occupied the space directly behind the passenger compartment and shifted through a 6-speed manual transmission. Spyker hasn’t commented. The specifications for the C8 Preliator listed on its official website point to a supercharged V8 engine with 525 horsepower. It’s clearly the old Audi unit, not the Koenigsegg V8 announced in 2017. It’s unclear whether the company never added the updated specifications to its website or if it took down information about the newer engine. +++
+++ A subtly redesigned TOYOTA Prius is scheduled for debut this winter. Toyota has noticed a drop in sales numbers after the introduction of the 4th and current generation Prius. In Japan, the Aqua (known as the Prius c in the US) has dethroned the Prius as the company’s best-selling hybrid model, an turn of events unthinkable during the previous-generation Prius’s reign. The reports say that Toyota seems to realize that the Prius’s controversial styling as been its downfall, and the upcoming mid-model refresh will seek to address that. The Prius will receive no drivetrain improvements, though Toyota’s latest Safety Sense system is expected and some weight savings will result in slightly better fuel economy. Most efforts will be focused on the exterior styling. My sources say the headlights will be redesigned to house 3 LED elements. The front intakes and foglamp housings will also be bigger, making for a more aggressive fascia, while flares over the front and rear wheel arches will make the flanks look less slab-sided. Finally, the taillights will adopt LED sequential turn signals.
The world premiere is scheduled for January 2019, but could come as early as December 2018. +++
+++ President Donald TRUMP has openly dismissed an offer from the European Unio for zero tariffs on cars during an interview, stating that the proposal isn’t “good enough”. Trump’s response came after Trade Commissioner Cecilia Malmstrom said that the EU would be “willing to bring down even our car tariffs to zero, all tariffs to zero, if the U.S. does the same”. Trump compared the European Union to China, saying that the EU “is almost as bad as China, just smaller”. Last month, the U.S. President met with European Commission President Jean-Claude Juncker at the White House, with the two sides agreeing not to impose new tariffs on each other right now, but negotiate in order to find a solution that would satisfy both sides. The gap between EU’s 10 % tariff and the US’s 2.5 % tariff has been used by Trump as a justification of his plan to impose new duties of up to 25 % on imported cars and parts. Bloomberg points out that Trump’s complaint ignores the existing 25 % tariff the U.S. applies on light trucks, one of the most profitable segments in the American market. Even if the 0 % tariffs on U.S. auto imports go through, they’re expected to do little for Ford (GM has no presence in the region), but they will boost companies like BMW and Mercedes, who export models like the X3 from their U.S. factories to Europe. +++
+++ VOLKSWAGEN expects that a strategic partnership with Ford would not unequally favor the German automaker even though it is nearly twice the size of its U.S. rival, said a key VW executive behind the potential deal. VW and Ford said in June that they were considering a joint development and production alliance that would include light commercial vehicles and could strengthen the companies’ overall competitiveness. The goal would be to form a “strategic alliance”, an upgrade over the industry’s more common project-based cooperations. In his first public comments about the potential tie-up, Thomas Sedran said he was confident a final deal could be reached that would ensure both sides benefit equally. “When we finalize this alliance, you can be assured it will be balanced. There is no junior, nor senior partner, but rather two companies at eye level that will closely cooperate with one another”, he said. “There might be specific years where there will be a difference in production volumes, but in the sum total it is very balanced”, he said, praising the early results from the teams performing due diligence. In his former job as VW’s head of group strategy, Sedran played a key role in bringing the companies together. Sedran recently took up a new role as CEO of VW’s light commercial vehicle division. In terms of numbers, VW dominates Ford. It delivered 10.7 million vehicles worldwide last year, generating $268 billion in revenue vs. Ford’s 6.6 million vehicle sales and $156 billion in revenue. This kind of mismatch has led to conflicts in the past. A similar strategic partnership that Volkswagen struck a decade ago with Suzuki bitterly collapsed after the Japanese company felt it was being bullied. Suzuki sued successfully to get back the 20 % stake it had sold VW. VW’s market capitalization is twice that of Ford’s. Unlike with Suzuki, however, there are no equity interests or cross-shareholdings envisioned this time. Volkswagen believes a deal could generate at least $464 million annually in gross added earnings in the midterm by focusing its initial efforts on the joint development and manufacture of light commercial vehicles such as delivery vans and utility trucks. “I wouldn’t rule out anything on the car side, but the focus is let’s first get the LCV projects running”, Sedran said. “We want a concrete project vehicle that has a start of production and a certain volume, and then can talk about other issues”. Ford and VW previously cooperated on large minivans with the Volkswagen Sharan and Ford Galaxy built at the jointly owned AutoEuropa plant near Lisbon, Portugal, starting in 1995. Ford later sold its share to VW and moved the Galaxy onto its global C/D-segment platform that also underpins models such as the S-Max and Mondeo. “Ford was a logical partner. Other companies are already in alliances, but now the 2 market leaders in Europe are joining forces”, Sedran said, adding that each only controls about 15 % of the European light commercial vehicle market. That means he sees little risk that antitrust authorities might try to prevent a deal. “The product life cycles are a good match. We will build for them. They will build for us”. Sedran declined to reveal the range of planned projects, but several people familiar with the matter told that Volkswagen was looking to save development costs on a second-generation Amarok pickup. First debuting 8 years ago, the VW truck that competes with Ford’s Ranger is the only one of the group’s 300-plus models to use body-on-frame construction common to pickups. The Amarok, built in South America and Europe, is not homologated for sale in the U.S. When rival Mercedes-Benz became the first premium brand to offer a pickup in November, it saved costs by using the Frontier’s body-on-frame architecture supplied by partner Nissan. The X 250 d model even borrows the Japanese automaker’s 2.3-liter engine; only the flagship V6 model comes with a Mercedes power plant. VW unveiled the Tanoak concept in March at the New York auto show. While the vehicle earned plaudits, insiders say it is unclear whether truck buyers would consider a unibody truck like the Tanoak when others, except the Honda Ridgeline, are body-on-frame. While the Amarok is the most obvious project in which VW is interested given its unique characteristics and advanced age, it is not the last. VW’s Crafter cargo van had been a largely badge-engineered Mercedes Sprinter built in a Mercedes factory until the cooperation ended in 2016. Mercedes wanted to redirect the 50,000-unit annual capacity set aside for the Crafter for its own growth. The volume for the new Crafter, launched last year and developed by Volkswagen, has been modest compared with ambitions, however. Only 31,100 vans were delivered to customers through July worldwide, a fact officials attribute to the complex ramp-up of a model offered in various dimensions, body styles and drivetrain combinations. Ford is successful with the Transit commercial van and its Tourneo passenger version, achieving global volumes that exceed those of VW’s respective Transporter and Multivan, the sixth-generation of the vehicle better known as the Microbus. “The problem is Volkswagen’s other light commercial vehicles are all only a few years old; the Caddy and Transporter were launched in 2015 and the Crafter only last year”, said a source familiar with the talks, doubting these models would be able to contribute materially to VW’s midterm synergy target. Many light commercial vehicle models are in the market for a decade or longer before being replaced, so it could be years before any of the trio is built on a Ford-VW joint architecture. Although Sedran’s predecessor succeeded in lifting VW’s light commercial vehicle division’s operating margin by 310 basis points to 7.2 % last year, he is still being benchmarked against Mercedes’ 9 %. Sharing costs with a partner would help protect returns. “We have to undertake enormous efforts to fulfill our emission targets and we see in the plans that the expenditure per vehicle is increasing considerably”, he said. When Sedran sells a car version of a commercial vehicle, European regulators apply the same stringent fleet emission targets it applies for a Golf even though a Multivan is much larger. “That was one of the drivers behind the talks with Ford, which has similar challenges”, Sedran said. One aspect that might help forge ties is Sedran’s skepticism about launching any commercial vehicles like the Crafter or Transporter in the U.S., which he does not believe is growing fast enough to support the entry of another player such as Volkswagen. The first product he thinks could have a realistic chance to compete there would be the full-electric I.D. Buzz van expected in 2022, Sedran declined to comment on whether Ford might gain access to VW’s scalable MEB architecture for battery-powered vehicles. When asked whether he expected a deal between VW and Ford to be signed by year end, Sedran said he was optimistic. “We realized fairly quickly that it worked from a cultural perspective and there was the right chemistry with the main actors”, he said. “At the end of the day both sides need to sign, but I’m confident since it’s all been constructive and in a spirit of partnership”. +++