+++ AUDI is readying for another bumper year of new car launches and the latest addition spotted is a mid-life refresh for the Q7. The Volvo XC90 rival has been on sale since 2015 and an updated version will arrive not long after the A4 facelift in June 2019. The Q7’s exterior design will be brought into line with Audi’s latest large models, including the A6, A7, A8 and Q8. As such, it’s possible to see a new front fascia with a wider grille, larger lower intakes and reprofiled LED headlights. At the rear, it adopts new tail-lights inspired by the e-Tron, but it doesn’t appear to feature that car’s full-width light bar. Major changes are expected inside. The Q7 currently features one of Audi’s older interior designs, with a free-standing infotainment screen and button-heavy layout. Audi is rumoured to be investing heavily to transplant its new-style dashboard, with its minimalist look and 12.3-inch dual-screen infotainment system; necessary to extend the Q7’s life into early next decade. Powertrain changes will include the adoption of 48V mild-hybrid tech across most variants, increasing efficiency. It’s not clear yet whether the diesel-electric Q7 will make a return after going off sale due to WLTP emissions testing delays and the same goes for the SQ7. Audi might switch to a 6-cylinder petrol powertrain to bring it into line with the SQ5. +++ 

+++ FIAT CHRYSLER Automobiles (FCA) could be planning to replace its Pentastar V6 with an all-new inline-6 engine design. The Pentastar is still a relatively new engine, but FCA will soon ditch its V6 in favor of a new straight-6 design. The new engine could debut beneath the hood of the upcoming Jeep Wagoneer or possibly the next-generation Jeep Grand Cherokee. It will displace less than 3,0 litres and develop at least 370 hp thanks to turbocharging technology. The Pentastar replacement will be a totally new design rather than a modified version of FCA’s current inline-4 cylinder engine. One of the design parameters for the project is a total engine length within 3 inches of today’s 4-cylinder. The inline-6 would likely spread throughout the FCA portfolio. A version of the engine with a twin-scroll turbocharger could eventually power the Challenger, Charger and even the Ram 1500 pickup truck. FCA’s Alfa Romeo and Maserati brands might even get a version of the engine, albeit with a twin-turbocharged setup. The Jeep Wagoneer is expected to debut sometime in 2020, so we could see FCA’s new 6-cylinder engine as soon as next year. +++ 

+++ The Korea Development Bank (KDB) has caved in to GENERAL MOTORS ‘ demands to set up a research and development unit that critics feared was a preliminary to closing down car factories. The KDB, which is the second-largest shareholder in GM Korea with a 17 % stake, said that it has agreed to the U.S. automaker’s plan to set up the R&D unit. In return, KDB won a pledge that the new subsidiary will develop 2 new global models and be kept open for the next 10 years. GM Korea authorized the plan at both board and shareholders’ meetings, and the R&D unit will be launched later this month, absorbing some 3,000 staff from other operations. KDB chief Lee Dong-gull told reporters that the R&D unit will develop a new SUV and a crossover. KDB caved in because the situation was getting desperate. GM Korea has suffered cumulative losses of more than 3 trillion won since 2012. It shut down an assembly plant in Gunsan earlier this year and is expected to have racked up losses of another 1 trillion won in 2018. KDB and unionized workers both opposed the R&D unit at first because they thought it was a ruse by GM, which has been shutting down factories worldwide, to sidestep its pledge to the government to keep operations running in return for a massive bailout. But the prolonged standoff with workers made the situation worse for both KDB and GM Korea. A KDB staffer said, “We sensed a crisis when we saw GM shut down 5 factories in North America citing poor efficiency even though it made more than 40 trillion won in profits over the last 2 years, and prolonged losses at GM Korea were feared to prompt GM to pull out of the country altogether”. +++ 

+++ The ousted Nissan chairman Carlos GHOSN has been re-arrested in Japan on fresh charges of arrgravated breach of trust. Ghosn had looked set to be released from prison in the country after a court rejected a request by prosecutors to extend his detainment. But prosecutors have charged Ghosn with shifting a large private investment loss onto Nissan in the aftermath of the 2008 financial crisis. Ghosn has already been formally charged with financial misconduct (over claims he under-reported his salary over a 5-year period) in Japan. Ghosn denied the charges. In a statement via his lawyer, Ghosn said: “Things as they stand are absolutely unacceptable. I want to have my position heard and restore my honour in court”. The architect of the Renault-Nissan-Mitsubishi Alliance, Ghosn was arrested in Japan in November accused of under-reporting his salary, using company assets for personal use and other claims. Ghosn was stripped of his chairman roles at Nissan and Mitsubishi after the allegations emerged, although he remains chairman and CEO of Renault. If found guilty of the crimes he has been charged with, Ghosn could be sentenced to up to 10 years in prison and fined up to €5 million by Japanese financial regulators. +++

+++ HYUNDAI plans to start producing electric vehicles (EVs) in Indonesia as part of an around $880 million auto investment in the country, the deputy minister for industry said. Hyundai’s move to set up its first car factory in Southeast Asia fits into the South Korean carmaker’s strategy of cutting its reliance on China, where competition is intense and its sales have suffered from diplomatic tensions between Seoul and Beijing. Hyundai, which together with affiliate Kia is the world’s No.5 automaker, plans to build a factory in Indonesia with a capacity of about 250,000 units, including for electric cars, Indonesian deputy minister for industry Harjanto told. Indonesia has ample reserves of nickel laterite ore, a vital ingredient for the lithium-ion batteries used to power EVs. The minister noted the plan was to export 53 % of the cars manufactured in the proposed Hyundai plant, mostly to Southeast Asia and Australia, while the remaining 47 % would be for the domestic market. Hyundai said that it was “considering various ways to expand” in new markets including Southeast Asia. It added however that nothing had been decided regarding new production facilities in the region. Hyundai briefed South Korean union officials earlier this year about a plan to build a factory in Indonesia, 3 people familiar with the matter told. One of the challenges it identified was building sales networks, the sources said. Hyundai-Kia’s think tank vice president Lee Bo-sung said the Asean market was difficult to “penetrate” as it was dominated by Japanese rivals such as Toyota and Honda. In Indonesia, Hyundai sold only 1,372 vehicles during the January to October period, compared with Toyota’s 463,565 vehicles. Hyundai does not have a car factory in Southeast Asia, although it has some assembly operations in Vietnam. Last month, Hyundai announced a $250 million investment in Singaporean ride-hailing firm Grab and a plan to offer EVs to Grab drivers in Southeast Asia. +++ 

+++ Hyundai’s KONA was named the car of the year by a Spanish national daily newspaper, beating Peugeot’s 508 and Honda CR-V. The Kona topped the list with 312 points, followed by Peugeot 508 and Seat Arona, with 264 and 182 points, respectively. A British auto magazine named the electric version of Kona the car of the year and the family car of the year, citing its reasonable price and longer driving range that is compatible with other luxury electric vehicles by Tesla and Jaguar. The publication has also named the South Korean auto giant as the car manufacturer of the year, on recognition of its efforts on electric car development. +++ 

+++ NISSAN will lay off about 1,000 workers in Mexico at two factories, citing “challenging market conditions,” the company said. The layoffs will hit Nissan’s Cuernavaca and Aguascalientes manufacturing facilities. The company is still determining how the cuts will be distributed across the two plants but has already begun laying off people in Aguascalientes, Herman Morfin, a spokesman for Nissan Mexico, told. In a separate email, Brian Brockman, Nissan’s director of corporate communications, wrote that Nissan would adjust its production levels “in response to challenging market conditions in Mexico”. Nissan attributed its decision to a “decline suffered by the Mexican automotive industry”, driven by an increase in the costs of raw materials, among other factors. In May, the Japanese auto maker said it would reduce vehicle production by up to 20 % in North America. The decision was a response to the company’s declining profitability in the United States, the world’s second-biggest auto market and Nissan’s top market for sales. Japanese auto makers have grappled with weak sedan sales in the United States as larger vehicles such as pickups and SUVs grow more popular. Nissan’s sales of the Versa sedan were down 30.7 % from January through November, compared with the same period last year. Nissan’s North American vehicle sales dipped 8.4 % during the second quarter. +++ 

+++ Volvo’s POLESTAR unit has confirmed that the Polestar 2 will take direct aim at the Tesla Model 3. Consistent with previous speculation, the company’s North America head, Greg Hembrough, recently told that he can’t confirm specific pricing but the Polestar 2 will be “competitive” in the Model 3 segment. Reports have pointed to a price tag around $40,000, which is below the Model 3’s current entry price but higher than its ultimate target of $35,000 for the base configuration. Taking a dig at Jaguar, the executive said the I-Pace has a very “polarizing design” and some people love it while others “wonder what planet it comes from”. The Polestar 2 has been designed with a “Scandinavian pen” and will try to avoid controversy. “When I sit in the showroom at Polestar, as recently as 2 weeks ago, to see the design language of the vehicles, they are refreshing and surprising but not polarizing”, Hembrough added. The Polestar 2 will make its debut in Geneva in March. Confirmed specs include 400 hp and 550 kilometres of range, presumably according to the WLTP test cycle. +++

+++ How big should executive pay packets be? How widespread is lax corporate governance in Japan? And what’s the future of the alliance between Nissan and RENAULT ? These are the broader issues brought into focus by the indictment of ousted Nissan chairman Carlos Ghosn. Ghosn, who has been detained since his arrest, has denied the allegations. Sky-high executive pay is a touchy topic in Japan, where conspicuous consumption is frowned upon and wealth gaps are contentious. Ghosn’s undisclosed compensation charge is also politically sensitive in France, where President Emmanuel Macron has been battling anti-government protests. Japanese CEOs on average are paid just 11 % of their U.S. counterparts, showed a report by Nicholas Smith, Japan strategist at CLSA. “In many cases, investors probably ought to worry more that executives are being paid too little and so are being underincentivised”. Ghosn’s reported pay in the latest financial year of $16.9 million from Nissan, Renault and alliance member Mitsubishi made him among the most well-paid executives at global auto companies. Since 2010, Japanese firms have been required to disclose details of executive remuneration including stock options and bonuses when the total exceeds 100 million yen. 3 years ago, Prime Minister Shinzo Abe introduced a corporate governance code setting rules on disclosure, shareholders’ rights and independent directors as part of his “Abenomics” economic policies. But the code is not legally binding. At Nissan, the Ghosn affair has exposed big gaps in governance, experts agreed. “It’s a textbook case of poor governance”, said Nicholas Benes, director of the Board Director Training Institute of Japan. Nissan’s board has created a special committee to improve governance, which will likely recommend an increase in external board members and creation of a committee to oversee compensation. The lack of such a committee gave Ghosn huge scope to decide his own remuneration. The role of outside directors has also come into focus since they are supposed to provide oversight. More Japanese firms now have more external directors than in the past, but experts question how much clout they have. Nissan has 3 (a female race car driver, a former trade and industry bureaucrat and a retired Renault executive) but is likely to increase that number. The governance problem is probably not limited to Nissan. Japanese firms are not required to have a compensation committee and only 26 % of listed firms do, although the practice is more common among bigger companies, CLSA’s Smith said. Abe is keen to keep the Ghosn affair from giving his governance reforms a black eye. “As economic globalisation makes rapid progress, Japan will continue to step up efforts to make corporate governance effective”, he told reporters his week. The crisis also reflects underlying strains in the 2 decades old partnership between Renault and Nissan and threatens to shake the alliance further. Some media and analysts have posited that other senior Nissan figures used investigations into Ghosn’s alleged financial misdeeds to oust the automaker’s one-time saviour as a way to prevent any attempt by Renault to strengthen control of the more profitable Nissan. Ghosn remains chairman and CEO of Renault but the French government is seeking candidates to replace him. Nissan CEO Hiroto Saikawa has denied the “coup d’etat” theory but Nissan has clearly been dissatisfied with the unequal alliance. Renault owns 43.4 % of Nissan, which in turn holds a 15 % stake in its parent company but without voting rights. +++ 

+++ Hiroto SAIKAWA , chief executive of Nissan, runs a company in crisis; waiting for him is a corporate alliance in crisis and every fresh statement, revelation and attempt at stonewalling suggests he is a manager in crisis. He may survive the next few weeks, but Saikawa’s days as CEO could be numbered.“It is hard to imagine a scenario where Saikawa survives. He has thrown Nissan, the alliance and Renault into crisis”, said CLSA analyst Christopher Richter. His failure to pay a visit to the alliance’s headquarters in Amsterdam to explain things in person to Renault’s top executives raises questions about his handling of the scandal. The Paris-based carmaker, which holds a 43 % voting stake in Nissan, is actively demanding responses to critical questions on the extent of co-ordination between Nissan, Saikawa and the Japanese prosecutors still holding Ghosn in a Tokyo cell.There is much he is still not sharing with Paris, say analysts. If this whole debacle was, as some analysts suspect, a rebellion from within Nissan against Renault, Saikawa has allowed the spectacular downfall of Ghosn to unfold without any clear road map for what happens next. The selection of a new chairman could rock an alliance that faced tensions before the removal of Ghosn, who had been considering a merger between Nissan en Renault. Ghosn, who remains chairman and chief executive of Renault, was indicted on charges of falsifying his pay in financial documents over a 5-year period. Nissan as a corporation was also charged with the same offence. Analysts say the Nissan management should voluntarily step down, including Saikawa. Nissan, however, is not an ordinary company. Its fate and every decision is tied intricately with its biggest French shareholder. For investors, the future of the alliance is also their main concern, regardless of who heads the company. Whether Saikawa can stay, will depend on whether investors can believe that he could have been left unaware of what Ghosn was doing, and whether he was not at fault for not being more aware. +++ 

+++ SSANGYONG has established an overseas sales subsidiary in Melbourne, Australia, last week, as part of efforts to expand its global operations, the company said. The Australian unit will lead SsangYong’s overall operation in the country, building dealership networks and bolstering customer service. The carmaker expects to expand shipments to Australia, following its previous entries into Europe, South America and the Middle East. The carmaker is re-entering the Australian market 2 years after it dropped a partnership with a local dealership network. SsangYong’s return to Australia comes as the carmaker seeks a breakthrough in its slowing overseas sales. The carmaker’s sales in South Korea grew 17.8 % to 10,330 units last month but its overseas shipments dropped 14.2 %. “The launch of SsangYong’s first overseas sales subsidiary will be a milestone for the company in becoming a global SUV maker”, said SsangYong president and CEO Choi Johng-sik in a statement. “The company will cement its market position and seek growth as soon as possible by expanding its sales network, promoting brand recognition and strengthening marketing efforts”. +++ 

+++ TESLA is working to slash the time it takes a buyer to walk in and drive away with a new vehicle. The ‘Instant Drive Away’ program is said to set a target of just 5 minutes to complete the purchase and delivery process. The hasty method is associated with cash purchases or Tesla’s own financing and leasing options. Third-party financing is not expected to be eligible due to the longer paperwork process. CEO Elon Musk earlier this year lamented the transition from ‘production hell’ to ‘delivery logistics hell’ as Model 3 output volume continues to increase. The Model 3 is on track to become America’s best-selling sedan, despite carrying a base price more than $10,000 higher than its eventual $35,000 entry point. The company is expected to pull out all the stops for the last few weeks of the year to reach its 4th-quarter delivery goals. +++

+++ Renault Samsung Motors’ micro electric vehicle (EV) TWIZY will be produced in Busan from next year. The Korean unit of the French carmaker Renault inked a partnership with the Busan Metropolitan City and local car parts manufacturer Dongshin Motech to relocate Twizy production from Valladolid, Spain, to Korea. The good news is welcome for a car industry that has suffered a tough year with GM Korea shutting down its Gunsan factory and Hyundai still struggling with a plan to create a new joint venture company with the Gwangju government. “It is a rare opportunity that a foreign car production facility relocates to Korea”, Renault Samsung Motors said in a statement. “We expect the factory will create new jobs in Busan and boost the regional economy”. Under the deal, all Twizys will be produced in Busan for 5 years starting next September. The lines in Spain will be recreated at a part of Renault Samsung Motors’ Busan factory while local car body maker Dongshin Motech will take charge of the actual production. According to the Korean carmaker, the Busan factory will eventually have the capacity to produce 5,000 Twizys per year. In the first year of domestic production, however, about 3,000 Twizys are expected to be produced, similar to the production level at the Valladolid factory. Production will gradually increase as the carmaker creates new demand for the micro EV, a spokesperson from Renault Samsung Motors said. Over the 5 years through August 2024, the automaker plans to produce and sell 15,000 units of the tiny electric vehicle in domestic and overseas markets. The Twizy is selling well in Korea. As of November, over 1,400 units were sold domestically, which is nearly 60 % of the total produced in Spain. While the ultra-compact car has not yet entered the Southeast Asian market, the carmaker plans to use Busan as a base to develop new export markets far from Spain. As Southeast Asian countries like Vietnam and Malaysia depend a lot on motorcycles and electric bikes that are able to get through heavy traffic and traverse narrow roads, the carmaker sees good market potential in the region. Busan’s government promised administrative and financial support to attract the deal. Dominique Signora, CEO of Renault Samsung Motors, said the Korean government also gave legal support to make the relocation happen. The carmaker and the Busan government are discussing ways to expand sales of Twizy in the region, such as using it for the car sharing industry. +++ 

+++ In the UNITED KINGDOM , output from car factories fell by 19.6 % in November compared with the same period last year, with the Society of Motor Manufacturers and Traders (SMMT) describing the fall as “very concerning”. A total of 129,030 cars were manufactured across the month, down from over 160,000 in November 2017. It marks the 5th consecutive month that car production has fallen, while exports dropped by an even steeper 22.8 %, down to 105,000 cars.  Year-to-date the industry has experienced an 8.2 % decline on last year’s output, down to 1,441,334 cars produced. Mike Hawes, SMMT Chief Executive, says output has been “seriously impacted by falling business and consumer confidence in the UK allied to weakening export markets”. A substantial 16.8 % fewer cars manufacturered were sold in the UK. Hawes also reiterated his call for a deal with the European Union prior to the UK’s exit, saying “the automotive industry needs certainty and a ‘no-deal’ Brexit must be ruled out”. “Thousands of jobs in British car factories and supply chains depend on free and frictionless trade with the EU, if the country falls off a cliff-edge next March the consequences would be devastating”, Hawes continued. Previously, Hawes said the car industry welcomed the Brexit Agreement that Prime Minister Theresa May had agreed with the EU, but called for further work to ensure a long-term free trade agreement. The Mini plant in Oxford and the Rolls-Royce plant in Goodwood are bringing forward their scheduled shutdowns to coincide with 29 March (the day the UK leaves the EU) with Mini workers downing tools for several weeks. +++ 

+++ VOLKSWAGEN may have to step up its plans for mass production of electric vehicles in order to meet tougher-than-expected European targets to cut greenhouse emissions from cars, its chief executive said. The remarks came after the European Union agreed to cut CO2 emissions from cars by 37.5 % by 2030, and follow warnings from Germany, home to the bloc’s biggest automotive industry, that tough targets could cost jobs and harm the sector. This is more than the 30 % Volkswagen, still reeling from an emissions cheating scandal, expected and would translate into a share for electric vehicles of more than 40 % of its expected total vehicle sales in 2030, CEO Herbert Diess said. “This means that our planned restructuring programme, which is needed to address this systemic change, is not yet sufficient”. German Economy Minister Peter Altmaier said the targets were at the limit of what was technically and economically feasible. Around 436,000 industrial jobs in Germany are tied to building petrol and diesel engined vehicles. “This is a tough stretch and is at the higher end of expectations, however we are convinced that this will help the industry to finally accept that combustion engines and platforms need to be standardized”, Evercore ISI analysts wrote. VW, Europe’s largest carmaker, has earmarked about €30 billion for the next 5 years to make sure it can achieve CO2 cuts of 30 % by retooling its production process to focus more on electric vehicles. The tougher EU targets, Diess said in e-mailed remarks, would require further changes to its strategy. “Restructuring our product portfolio, possibly further reducing our combustion engine-based offering and a significant adjustment of our plant structures and additional battery cell and battery factories would be necessary”, Diess said. He added the group’s plans needed to be reviewed in autumn 2019, in line with the carmaker’s planning calendar. Overall, VW plans to spend almost €44 billion on developing electric cars, autonomous driving and new mobility services by 2023, aiming to become the most profitable manufacturer of battery-powered vehicles. German rivals BMW and Daimler declined to comment on the EU targets, referring instead to statements from industry groups. German car association VDA said the targets were too high and criticised the lack of a clear roadmap for how the reductions would be reached. +++

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