Newsflash

0

+++ Tesla has registered a financial leasing company in CHINA , a local business registration filing shows, in the latest sign the U.S. electric car maker is attempting to speed up its push into China. The California-based carmaker, led by billionaire Chief Executive Elon Musk, has opened a wholly-owned financial leasing unit in Shanghai’s free trade zone with registered capital of $30 million. Its scope includes leasing and consultancy, which listed the firm’s legal representative as Zhu Xiaotong, Tesla’s boss in China. The company has opened a tender process to build its Shanghai Gigafactory and at least one contractor has started buying materials. The $2 billion factory, Tesla’s first in China, marks a major bet by the U.S. electric vehicle (EV) maker as it looks to bolster its presence in the world’s biggest auto market where it faces rising competition from a swathe of domestic EV makers and its earnings have been hit by increased tariffs on U.S. imports. +++ 

+++ South Korea’s SK Innovation, a supplier of ELECTRIC vehicle (EV) batteries to Daimler and Volkswagen, aims to boost production capacity more than tenfold by 2022, betting on global demand. The company expects the battery business to break even in 2020, a senior manager said. The outlook comes days after Mercedes maker Daimler said it would buy battery cells worth more than 20 billion euros by 2030 as it readies mass production of hybrid and electric vehicles. Daimler and other European automakers are aggressively expanding in electric vehicles as European regulators clamp down on diesel emissions. SK Group Chairman Chey Tae-won has put more focus on the conglomerate’s EV battery business as its memory-chipmaking unit SK Hynix faces a slowdown in demand from smartphone makers after a 2-year-long boom. On a wall at the Seosan plant, a handwritten message from Chey reads: “Til the day when all vehicles run with our batteries, and replace gasoline (vehicles), SK’s battery team will be up and running”. Late to the EV battery market compared with rivals LG Chem and Samsung SDI, SK Innovation has announced investment plans worth about $3 billion since late 2017, to build new factories in China, Hungary and the United States. China’s pledge to phase out subsidies for electric and plug-in hybrids by 2020, and an increase in the country’s EV sales quota will benefit SK Innovation, said Lee Du-beom of the company’s battery team. Currently, EVs using South Korean batteries are not eligible for generous subsidies in China. “We are not that worried about the China market”, Lee said. “We believe that global automakers as well as Chinese carmakers will need to obtain batteries from foreign battery manufacturers”. SK Innovation plans to boost annual battery production capacity to 55 gigawatt-hours by 2022, from 4.7 gigawatt-hours a year currently, said Kim Tae-hyeon, who heads SK Innovation’s battery business team. The company, which also owns South Korea’s top refiner SK Energy, counts Hyundai as a client. +++

+++ Whether you like it or not (I don’t…), FERRARI is going to launch an SUV, eventually succumbing to market pressure and the income this highly lucrative segment will bring it. Many enthusiasts were disgruntled when Ferrari announced development of an SUV, but in reality, the writing has been on the wall for a number of years. As the world’s wealthiest individuals become more and more wealthy, they are demanding ever more expensive vehicles and SUVs rule nowadays, especially in markets such as China and the U.S. What’s more, Ferrari simply couldn’t let the likes of Lamborghini, Bentley, and Porsche dominate the market. Limited details about the Ferrari SUV are known at this stage, other than the fact that it will be called the Purosangue. +++ 

+++GERMANY has cleared away legal hurdles for carmakers to upgrade exhaust emissions filtering systems on older diesel cars as a way to avoid vehicle bans, but failed to quell doubts among manufacturers and suppliers over the effectiveness of retrofits. Carmakers have been forced to consider upgrading exhaust treatment systems on older cars after German cities started banning heavily polluting diesel vehicles to cut pollution from fine particulate matter and toxic nitrogen oxides. The fight over refits is the latest fallout from an emissions cheating scandal triggered by Volkswagen in 2015 after it admitted systematically hiding illegal pollution levels from regulators. An environmental and regulatory backlash ensued and lawmakers and the auto industry are now at odds over how to clean up dirty air in inner cities. Carmakers want customers to buy new cars with cleaner engines, while environmentalists and consumer groups argue that retrofitting older vehicles may be more cost-effective. The transport ministry has released a 30-page document setting out guidelines for getting regulatory approval to install upgraded exhaust filtering systems on older cars. “Now it is the turn of the retrofit industry to develop effective systems to meet all limits and regulations”, transport minister Andreas Scheuer said in a statement. The Federal Motor Transport Authority would grant approval quickly so that the retrofit systems could be offered on the market as soon as possible, he added. Baumot Group, which makes exhaust filtering upgrade kits, welcomed the guidelines. “Under a normal vehicle certification process, we believe we can deliver our system in 2019 in a timely fashion”, said Marcus Hausser, the company’s chief executive. German auto lobby group VDA, however, said that customers should buy new cars rather than spend money on installing new exhaust filtering mechanisms on older vehicles. “We cannot give a guarantee for a vehicle in which third-party exhaust purification systems have been retrofitted”, VDA president Bernhard Mattes told. “If a customer has his vehicle modified, then he and the retrofitter are responsible for any consequential damage”. German environmental lobby group Deutsche Umwelthilfe (DUH) won a landmark ruling in February to force diesel bans after it sued cities that failed to meet clean air rules. Cities have considered banning older vehicles which do not conform to the latest Euro-6d engine emissions standards. Hamburg has banned older diesel cars from the city center, and other cities, including Berlin and Stuttgart, the home of Germany’s car industry, are set to introduce similar bans. Of the 15 million diesel cars on Germany’s roads, only 2.7 million have Euro-6 technology. Evercore ISI has estimated that upgrading the exhaust cleaning of just the Euro-5 fleet could cost up to €14.5 billion. German carmakers have already agreed to spend up to €3,000 per vehicle to upgrade engine management software to make exhaust filtering systems more effective, but environmentalists say these measures are insufficient. Carmakers are divided over who will pay the retrofit costs, given that most older diesel cars met clean air rules at the time when they were sold. Volkswagen and Daimler announced they would cover some retrofit costs, while rival BMW has refused, only proposing incentives to trade in old vehicles for new ones. Volkswagen said that customers may not benefit from installing new exhaust systems on older cars. “All concepts known to us to date have disadvantages for our customers, such as increased fuel consumption and thus increased CO2 emissions and, in some cases, reduced performance”, VW research and development head Frank Welsch said in a statement. BMW said exhaust system upgrades that would not penalize fuel consumption or cause additional wear and tear could take up to three years to develop and certify. Selling newer cars through incentives combined with the ramp-up of electric car charging infrastructure would bring down pollution levels in inner cities much faster than trying to retrofit older vehicles, BMW said. Supplier Continental supported the carmakers’ critical stance. A spokesman said developing retrofits for each model would be extremely costly and time-consuming. Paris, Madrid, Mexico City and Athens have said they plan to ban diesel vehicles from city centers by 2025, while the mayor of Copenhagen wants to ban new diesel cars from entering the city as soon as next year. France and Britain will ban new petrol and diesel cars by 2040. +++ 

+++ France’s CGT union has called for more transparency at Renault and its DUTCH holding company and asked the French government, one of the carmaker’s shareholders, to try to shed light on its workings, a CGT representative said. Renault, and its alliance with Nissan, has been in the spotlight after the partnership’s architect Carlos Ghosn was arrested in mid-November in Japan amid allegations his Nissan income was understated. The CGT wrote to French Economy Minister Bruno Le Maire in early December questioning the way Renault had handled the affair and to denounce a lack of transparency at RNBV, a joint Renault-Nissan holding company based in the Netherlands. A CGT spokesman confirmed the union had reached out to Le Maire and to Renault’s deputy CEO Thierry Bollore, adding it was calling for clarity on additional wage payments made via RNBV to an unidentified member of the French carmaker’s executive committee. “Workers have no information about RNBV”, the CGT spokesman said. Spokesmen for Le Maire and for Renault declined to comment. The French state owns 15 % of Renault. Executives from both carmakers in the Renault-Nissan alliance looked at least twice at legal ways to pay Ghosn undisclosed income through the partners’ shared finances, including via RNBV, Reuters reported earlier in December. The 2 efforts discussed were ultimately abandoned. Ghosn, who remains Renault’s chairman and chief executive but was ousted as Nissan’s chairman, has been in a Tokyo jail since mid-November. He had been expected to possibly go free on bail but was re-arrested by Japanese prosecutors on new allegations of making Nissan shoulder $16.6 million in personal investment losses. +++

+++ New allegations brought against former Nissan and Mitsubishi executive Carlos GHOSN assert that he used company funds to pay a Saudi businessman to help him through personal financial difficulties. Ghosn was arrested for the third time and accused of aggravated breach of trust after transferring personal investment losses to Nissan. Prosecutors claim that Ghosn incurred $16.6 million in personal losses on a swap contract he had with a bank. It is then claimed that Saudi businessman Khaled Al-Huffali arranged a letter of credit for Ghosn. A company run by Al-Juffali is said to have then received $14.7 million in Nissan funds in 4 installments between 2009 and 2012. Al-Juffali is vice chairman of huge Saudi Arabian conglomerate E. A. Juffali and Brothers, a member of the board at the Saudi Arabian Monetary Authority and the majority holder of a company which owns half of the regional joint venture Nissan Gulf, the other half of which belongs to Nissan itself. Ghosn has, through a lawyer, denied that he shifted personal losses to Nissan and claims that the 4 payments made to Al-Juffali were legitimate and included a reward for handling problems at Nissan dealerships across Saudi Arabia. Al-Juffali, Ghosn’s Tokyo lawyer Motonari Otsuru, and the Ghosn family have failed to comment on the new allegations. +++

+++ Combined automobile output in JAPAN by 8 major domestic makers in November increased 5.0 percent from a year before to 843,988 units, up for the second straight month, data from the companies showed. The growth reflected positive effects from new model launches. Another major factor was a 33.7 % jump in Nissan’s production following a suspension of its shipments a year before amid an inspection scandal. Honda and 4 other makers also reported higher production. Toyota’s output fell 2.5 % as positive effects of new model launches waned for some of its models, including the Prius. +++ 

+++ JEEP ’s all-new Wrangler SUV has been a smash success with buyers. Sales are up 25 % so far this year, including an all-time monthly sales record for the nameplate in April. But despite those booming sales, inventories of the Wrangler are actually growing. There are currently 85,979 Wranglers in dealership inventories. That’s up more than 15,000 units since October. During that same time period supplies have swollen from a 109-day supply to 135 days worth of Wranglers in dealer stock. The reason for the Wrangler’s growing supply levels is pretty easy to explain: increased production. Ahead of the launch of the new JK Wrangler, Jeep added a new assembly line at the Toledo plant where the iconic SUV is made. Jeep now has the capacity to produce more than 300,000 Wranglers per year. But whether that added supply is actually a good thing is a topic for debate. That added capacity has allowed Jeep to sell more Wranglers to fleet customers. Nearly 12 % of Wranglers sold through October went to fleet companies. In 2016, Jeep sold just 4 % of Wranglers to fleet buyers. Due to its popularity, that Wrangler has enjoyed some of the highest resale values in the industry over the last several years. However, some dealers claim residuals are actually falling on the Wrangler thanks to increased supply levels and Jeep’s willingness to sell to fleet customers. “The resale value has dropped, just in the last 60 days, by $2,500 a unit”, one Jeep dealer told. “Somebody is not thinking this whole thing through”. It remains to be seen if higher production levels and more fleet sales will actually be detrimental to the Wrangler brand long-term, but it’s certainly something worth monitoring in the coming months. +++

+++ The saga of MAZDA ’s on-again, off-again rotary-engined sports car continues. The model hasn’t been confirmed for production, but it hasn’t been categorically ruled out, either. What’s certain is that we’re unlikely to see an RX-8 successor in the near future. “We are not in a business environment now where we can start building rotary engine vehicles straight away. One of my tasks is to create an environment in which we can make that dream a reality”, explained Mazda CEO Akira Marumoto in an interview. He added that the project has the enthusiastic support of nearly every Mazda employee. Building another rotary-engined sports car (an engine type more closely associated with Mazda than anyone else) is one of the company’s dreams. But the coupe market is shrinking all around the globe, so making that dream a reality would require spending a lot of money on a project unlikely to generate significant returns, however. Marumoto would rather allocate Mazda’s resources to developing new technologies like its innovative SkyActiv-X engine, which will make its debut in the next-generation Mazda3, and the rotary-electric hybrid powertrain expected to arrive around the turn of the next decade. And, like almost every company in the industry, it’s developing autonomous technology. It’s too early to tell when the time will be right for Mazda to release another rotary-engined sports car. Marumoto’s comments suggest the model won’t arrive in time to borrow styling cues from the RX-Vision concept unveiled at the 2015 Tokyo auto show. +++

+++ NISSAN has asked its creditor banks for financial support in the event of funding difficulties after the arrest and indictment of former Chairman Carlos Ghosn for on charges of financial misconduct, sources said. The move came ahead of the redemption of Nissan corporate bonds totaling ¥100 billion in March. Its main creditor Mizuho Bank is expected to meet the request, the sources said. Nissan is not necessarily facing large financial risks as its cash and deposit reserves totaled some ¥1.1 trillion at the end of Sept.1. Stemming from the Ghosn scandal, Nissan, as a company, was also indicted for nondisclosure of part of his executive compensation. With its internal control system now in question, there are concerns that institutional investors may stay away from the automaker. Nissan will produce 30,000 fewer vehicles in the coming months in China than what it had planned, as global automakers grapple with falling demand in the world’s biggest car market. After Ford and Hyundai, Nissan becomes the latest automaker to cut production in the country, where slowing economic growth and a crippling trade war with the United States have pummeled vehicle sales in the past few months. Nissan plans to cut production in China by a total of 30,000 units during the December-February period from its initial output plans, said the person who declined to be identified as the plans are not public. Automakers set initial plans on how many vehicles to produce at each of their plants. These plans can be modified due to demand, supply chain issues and other factors. It was not known how much Nissan had planned to produce in the three months. The automaker produced nearly 400,000 units in the country during the three-month period ended February this year. The period covers the first two months of the year, when sales usually slow in the run-up to the Lunar New Year holidays. Nissan plans to cut production at 3 plants in China, including one in Dalian, where it produces the popular Qashqai and Infiniti QX50, and in Zhengzhou, where it makes the X-Trail, one of its top-selling models, and Venucia brand models. China is Nissan’s second-largest market, accounting for roughly one-quarter of its annual global vehicle sales. It sold 1.5 million vehicles in China last year, and earlier this year said it planned to boost sales to 2.6 million units by 2022, making China its biggest market in terms of vehicle sales. But a stretch of booming demand for cars in China seems to have come to an end, with the market on track to post a fall in annual sales for the first time since at least 1990. Nissan’s group sales in China rose 3.9 % in the January-November period, slowing from a 12 % jump a year ago. A slowdown in the major market comes at a time when the Japanese automaker is grappling with a scandal involving alleged financial misconduct of Carlos Ghosn, leading to his arrest and subsequent ouster as chairman, and straining ties with French automaking partner Renault. +++ 

+++ RENAULT has again asked Nissan to hold an extraordinary shareholders meeting to pick ousted Nissan Chairman Carlos Ghosn’s successor, sources close to the matter said. A letter requesting the meeting arrived after Nissan rejected an earlier call by Renault, its biggest shareholder, to hold a shareholders meeting to discuss the French automaker’s representation in the Japanese firm before Nissan board members met on Dec. 17, the sources said. On Dec. 17, Nissan did not name a successor to Ghosn, who has been dismissed as chairman following the arrest for alleged underreporting of remuneration. The French automaker has meanwhile kept Ghosn as its chairman and CEO after its internal probe found no evidence of wrongdoing. In a heightening power struggle within one of the world’s largest automotive groups, Nissan wants to review the alliance to make it more equitable. Renault, whose biggest shareholder is the French government, prefers to maintain its influence, and is apparently eyeing sending a senior executive to the Nissan board, a move that would require shareholders approval. A current agreement between Nissan and Renault says the Japanese automaker is to receive senior executives from the French peer, although that does not include the post of chairman, Nissan sources have said. Nissan CEO Hiroto Saikawa has indicated that a shareholders meeting would be held when a newly set up committee to enhance governance draws up proposals by next March. The annual shareholders meeting is scheduled for June. 3 external directors at Nissan are in the process of nominating a successor from the current board members but they have said they want to make a decision based on discussions by the governance committee, according to Saikawa. Even though Nissan has contributed about 50 % of the French automaker’s net income in recent years, Renault owns a 43.4 % stake in Nissan, which holds a 15 % stake in its French peer (but without voting rights) and 34 % in Mitsubishi. Ghosn was arrested on Nov. 19 and later indicted for allegedly underreporting his remuneration in securities reports presented to Japanese regulators. He was served with a fresh arrest warrant for allegedly having Nissan shoulder massive personal investment losses. Ghosn, who remains in custody, has denied the allegations. +++ 

+++ TESLA has named 2 independent board directors as part of a September deal with federal regulators to move past the turbulence that followed Chief Executive Elon Musk’s tweet about taking the electric carmaker private. The company said Oracle Corp co-founder Larry Ellison and Walgreens Boots Alliance’s global head of human resources, Kathleen Wilson-Thompson, joined the board. Ellison, who calls himself a close friend of Musk, bought 3 million shares of Tesla earlier this year. “In Larry and Kathleen, we have added a preeminent entrepreneur and a human resources leader, both of whom have a passion for sustainable energy”, Tesla said. Under an agreement with the U.S. Securities and Exchange Commission, Musk agreed to pay a $20 million fine and step aside as Tesla’s chairman for three years to settle charges that could have forced his exit. Tesla also agreed to pay a $20 million fine. Tesla further consented to the appointment of an independent chairman, 2 independent directors and a board committee to control Musk’s communications. A U.S. judge in October approved the deal, which resulted from tweets by Musk on Aug. 7 that he was considering taking the company private and had secured funding. The SEC subsequently filed fraud charges against him, citing what it said were his “false and misleading” tweets. In November, Tesla named director Robyn Denholm as board chair, fulfilling one of the demands. She joined Tesla as an independent director in 2014 and agreed to step down from her job as finance chief of Australian telecoms firm Telstra. Tesla said it conducted a “thorough, expansive” search process for the directors, calling Ellison a “preeminent entrepreneur” and Wilson-Thompson “a human resources leader” and said both had a passion for sustainable energy. The larger-than-life Ellison, who through a spokeswoman declined to comment, is known for his combative personality. Ellison previously disclosed his stake in Tesla and defended Musk. “I’m very close friends with Elon Musk, and I’m a big investor in Tesla”, Ellison said on a Oct. 26 conference call with analysts. “This guy is landing rockets”, Ellison added about Musk, referring to his leadership of SpaceX. “He’s landing rockets on robot drone rafts in the ocean, and you’re saying he doesn’t know what he’s doing. Well, who else is landing a rocket?” In addition, Ellison has ties to Denholm, who spent 11 years as a senior vice president at Sun Microsystems, a unit of Oracle. Wilson-Thompson, who could not be immediately reached for comment, spent 17 years at Kellogg Co before joining Walgreens, and serves on the boards of 2 U.S.-based manufacturing companies. Musk has gained fans for his bold approach to business and technology, using his almost 24 million Twitter followers to promote Tesla, SpaceX and tunnel venture Boring Co. But the August claim that he had the funding to take Tesla private, and a subsequent U-turn, stunned Wall Street and came as Musk was filmed briefly smoking marijuana during a live Web show and when he called a British diver in the Thai cave rescue a “pedo”. Tesla’s market cap exceeds that of traditional, established U.S. automakers that make millions of vehicles and billions of dollars in profits annually, and the company has garnered legions of fans despite repeated production issues. +++ 

+++ TOYOTA is considering a hot hatch to rival the likes of the Volkswagen Golf GTI and Honda Civic Type R. It would use the Corolla Hatchback as the basis for such a performance car. Toyota’s interest in developing a hot hatch was sparked by the success of Hyundai’s recently launch N performance sub brand. Although we only get the Hyundai Veloster N in the United States. Known as the i30 N, Hyundai’s first crack at a hot hatch has been a successful one. Sales have exceeded expectations and the i30 N has been widely praised by the motoring press. Hoping to emulate the success of the i30 N, Toyota executives have been lobbying for the company to fast-track a high-performance version of the Corolla Hatchback. Such a model would be sold under Toyota’s Gazoo Racing performance sub-brand, or GR for short. Although there’s support for a Corolla Hatchback GR, it remains to be seen if it will actually get the production nod. Tetsuya Tada, the chief engineer for both the GT86 and Supra sports cars, says Toyota is still working out the best strategy for the roll out of the GR sub-brand. “We have lots of requests from different countries, so it’s really, really challenging to decide on the order of performance models”, he said. +++

Comments are closed.