Newsflash

0

+++ The Volkswagen Group is struggling to get its planned electric vehicles to market, with last-minute development changes sparked by the Tesla Model 3. The AUDI e-Tron is currently more than a year behind schedule. The company originally expected sales of around 15,000 units in 2018, but the EV is still not on the market. The report claims the project is not only delayed but has also become “far too expensive” with more than €2 already pumped into development as engineers continue to deal with numerous problems among the fleet of 50 prototypes. The approximately 600,000 cars that must be sold for the break-even are now regarded as an illusion. The VW Group allegedly decided to revise the electric platform used by Audi and Porsche after reverse-engineering the Tesla Model 3, described as “better than they thought”. +++ 

+++ BMW will allegedly expand its portfolio of electric, i-badged models with a range-topping sedan tentatively called i7. As its name implies, it will be marketed as a green alternative to the 7 Series. The i7 will be closely related to the next-generation 7 Series, and the 2 models will be sold side-by-side. It won’t replace the 7 altogether. The rolling display of technology will boast 650 horsepower from a battery-electric powertrain and up to 600 kilometres of range when put through the European testing cycle thanks to the next generation of BMW’s battery pack. The i7 will go on sale in 2022. If that time-frame is accurate, BMW could preview the model with a thinly-veiled concept car in 2020. When it goes on sale, assuming the report is accurate, the i7 will compete against the upcoming Mercedes-Benz EQS and the Tesla Model S. +++ 

+++ Mercedes-Benz beat Audi in CHINA sales last month on demand for its longer C- and E-class sedans. Mercedes’s January deliveries rose 4.8 % from a year earlier to 71,697, with long-wheelbase versions of the C- and E-class sedans both posting double-digit sales growth. It was the first time the brand’s monthly sales topped 70,000, Daimler said, without disclosing the sales of Mercedes’s individual products. Audi, which remained China’s largest luxury brand by annual sales last year, delivered roughly 64,000 vehicles last month, an increase of 5.1 % year on year, according to Volkswagen Group. Rival BMW has not released China sales for January. In 2018, Audi and Mercedes each reported 11 % sales increases in China. Audi deliveries exceeded 663,000 while Mercedes sales reached 652,996. BMW delivered 639,953 vehicles in 2018 under the BMW and Mini brands in China, a rise of 7.7 % from 2017, BMW Group said, without divulging separate sales for the BMW brand. +++ 

+++ FORD has warned the Prime Minister that it’s working on plans to move production out of the UK due to the Brexit. The American-owned company’s bosses made the warning to Theresa May during a private call with business leaders. Ford, which has 2 plants in the UK and employs around 13,000 staff, revealed it was preparing alternative sites abroad but gave no further information. It’s currently undergoing a massive global restructuring of its business, including its European arm. It’s planning a €16 billion cost-cutting programme, involving savings in manufacturing, engineering and purchasing, and will be evaluating its production sites as part of that process. It recently cut around 400 jobs from its plant in Bridgend, South Wales. British car industry officials have repeatedly warned of the damage that Brexit could cause. Several manufacturers are working on short-term contingency plans, including bringing forward production halts to just after 29 March, the day Britain is due to leave the European Union. Other businesses delivered a similar warning during the call. Nissan recently scrapped plans to produce the new X-Trail in Sunderland, citing Brexit concerns as well as the downturn in diesel popularity. In response, May said that the Government is working on a package of financial support for businesses affected by a no-deal Brexit. +++ 

+++ Carlos GHOSN ’s chief defense attorney Motonari Otsuru resigned and was replaced by a team that includes hotshot lawyer Junichiro Hironaka, in a change of strategy from the ousted Nissan chairman 3 months after his arrest. Ghosn, Nissan’s one-time savior, has been held in detention since his Nov. 19 arrest and indicted for under-reporting his salary and breach of trust. He has denied the charges. The once-feted auto executive hired Hiroshi Kawatsu as head of a new defense team, his office said. Hironaka, 73, has won several high profile cases, helping acquit senior lawmaker Ichiro Ozawa and senior bureaucrat Atsuko Muraki. Hiring Hironaka would mean a more aggressive legal strategy, said Nobuo Gohara, a former prosecutor. Otsuru previously led the special prosecutors’ office that is now handling Ghosn’s case. “Otsuru was miscast. He worked at the heart of the special prosecutors office so he was not someone who was going to go after them aggressively”, Gohara said. “Hironaka is an experienced defense lawyer who has won a number of cases. He will mount a more thorough and aggressive defense”. Otsuru’s office confirmed his resignation in a statement, but gave no reason for the move. A second member of Ghosn’s defense team, Masato Oshikubo, had quit, it said. Go Kondo, Ghosn’s third defense lawyer, was unavailable for comment. Ghosn released a short statement thanking Otsuru for his team’s “tireless and diligent work”, and called him a “very capable and intelligent man and lawyer”. The sudden change in attorneys comes ahead of the expected start of informal meetings with prosecutors and judges to discuss pretrial preparations, an indication that there will be no new charges against Ghosn. “As we begin the trial phase, I have decided to engage Hironaka-sensei as my legal counsel”, Ghosn said, using a honorific suffix. “I look forward to defending myself vigorously, and this represents the beginning of the process of not only establishing my innocence but also shedding light on the circumstances that led to my unjust detention”. Ghosn, 64, told last month that Nissan executives opposed to his plans for closer ties with automaking partner Renault plotted to remove him. Ghosn was widely credited with rescuing Nissan from near-bankruptcy after he was brought over to Japan in 1999 by Renault after the French automaker bought a chunk of Nissan. Since his arrest, Ghosn has resigned as chairman of Renault and been sacked as chief of Nissan and Mitsubishi, the 3-way alliance he once captained. The scandal has roiled the global car industry and created tension between Nissan and Renault. Nissan CEO Hiroto Saikawa is scheduled to meet newly appointed Renault Chairman Jean-Dominique Senard in Japan as they look at ways to cement their partnership. +++ 

+++ HONDA predicts that sales of the hybrid version of its new CR-V will be healthy enough to compensate for the loss of the diesel model. Honda was the first automaker to sell a hybrid in Europe with the Insight in 1999 but ditched the technology in favor of diesel. Rival Toyota persisted and now hybrids account for almost half its European sales, according to the company’s 2018 figures. The CR-V hybrid marks Honda’s return to the technology in the mainstream market after ending production of the Jazz Hybrid in 2015. The automaker says there is such strong demand from car buyers for fuel-efficient alternatives to diesel that it thinks the hybrid will account for half of the 60,000 annual sales predicted for the new CR-V in Europe. The hybrid will go on sale in March, joining the 1.5-liter turbocharged gasoline model. Honda expects the CR-V hybrid to outsell the gasoline variant in the midterm. “It’s the most important Honda powertrain in the last 10 years”, said Dave Hodgetts, managing director of Honda in the UK, the company’s biggest European market. Honda said it has priced the hybrid to cost about the same as the diesel had it been continued. With CO2 emissions of 120 grams per kilometer, the 2-wheeldrive hybrid version is roughly in line with its diesel predecessor, even allowing for the different testing protocols between the old diesel and new hybrid. The CR-V hybrid uses Honda’s 2-motor Intelligent Multi-Mode Drive (i-MMD) technology. The full-hybrid system in the CR-V uses a 2.0-liter gasoline engine to both charge a 1 kilowatt hour lithium/ion battery and power an electric generator, which then spins an electric motor connected to the wheels. At higher speeds when the gasoline engine is operating at its optimum efficiency, engine power is sent directly to the wheels. The CR-V can also run on battery power alone in EV mode. Mirroring Toyota, Honda will promote the CR-V as a self-charging EV. “It’s like driving an electric car that doesn’t have any of the complications of an electric car”, Hodgetts said, “such as range anxiety”. Honda contends that the hybrid has the torque, economy and range that are comparable to what was offered in the diesel CR-V. “I see no reason why diesel customers wouldn’t buy it”, Hodgetts said. “It’s also so much more refined”. One downside: The space demands of the battery mean the hybrid is only available with a 5-seat configuration, rather than having the option of 7 seats as with the gasoline model. +++ 

+++ HYUNDAI will briefly halt the expansion of its N performance range this year, as the firm gets ready to launch its next significant hot model: the Fiesta ST-rivalling i20 N. Plans for the Korean maker’s performance sub-brand were first detailed in 2017, before the first production model, the warmly-received i30 N, followed at the end of the year. The i30 N Fastback then followed a year after. 2019 will be a quiet year for the N division, however with resources instead directed to launching Hyundai’s electrification strategy with the Kona Electric, updated Ioniq and further plug-in models to come. After years of rumours, company sources have revealed that the i20 will be the next N-car, and is likely be ready for an unveiling by early 2020.  Original rumours cited a release for such a car some time in 2018, but the launch was pushed back down the list of priorities. The i20 N’s engine changes and chassis modifications will mirror that of the i30 N, so expect significantly more firepower than the supermini’s existing engine range and suitable lowering and stiffening of the car’s suspension, alongside performance brakes and more direct ratio steering. The most likely engine candidate to boost performance to the desired level will be the brand’s widely turbocharged 1.6-litre T-GDI motor. It offers 177 hp in the Tucson, but a figure of at least 204 hp will be necessary if Hyundai wants to successfully mix with the class big hitters like the Fiesta ST and VW Polo GTI. Next in line will be a long-rumoured N-branded version of the Tucson. The hot SUV will push the envelope in terms of power for Hyundai, with 330 hp expected to give it the performance potential to take on the Cupra Ateca. It will be supplemented by a 4-wheeldrive system, and is expected to arrive a few months after the i20 N. +++ 

+++ JAGUAR LAND ROVER , reeling from a $4 billion writedown, a slump in China sales and uncertainty around Brexit, said conditions aren’t right for it to borrow from the bond market and that it’s seeking alternative funding. The luxury automaker needs to raise $1 billion within 14 months to replace maturing bonds, while feeding an investment program for electric cars that’s burning through cash. To support its needs, JLR could increase a receivables facility or turn to other bank financing, with further options including leasing assets and tapping export credit, Treasurer Ben Birgbauer said in an interview. JLR’s owner Tata Motors shocked investors when it revealed the extent of the problems its UK arm is having in China. Sales of Jaguar and Land Rover dropped 35 % in the world’s biggest auto market in the 9 months to Dec. 31, sending the unit to a $354 million loss and knocking as much as 30 % off Tata stock. “Market conditions presently are less favorable in general and our bonds are trading below par, reflecting our recent financial performance”, Birgbauer said by telephone. “We have always said we monitor the debt market and look to issue debt when market conditions are more favorable”. Jaguar Land Rover posted a $4.4 billion quarterly loss on Feb. 6 after it took a big write-down in the value of its cars and plants. The write-down was taken after some of the automaker’s newest models saw steep falls in demand. Britain’s biggest automaker is slashing 4,500 jobs, or about 10 % of the workforce, as it responds to slowing sales. That’s on top of the 1,500 people who left the company in 2018. The measures will trigger a one-off charge of $250 million in the current quarter. The company is not planning to change its preference for unsecured financing, Birgbauer said. One major problem facing JLR in China is an ineffective dealer network, according to a presentation from the UK business. Only 18 % of outlets are in so-called tier-one cities like Shanghai and Beijing, and more than one-third have been open for 3 years or less. The company now plans to overhaul the operation, cutting back on deliveries to reduce stock and investing in measures to boost its brand, logo and slogans. Executives said on a conference call with investors that it’s not possible to predict when China volumes will begin to recover, highlighting international trade tensions and how much stimulus the state chooses to provide as determining factors. JLR says it can still grow global sales in fiscal 2020 with the help of other markets and the launch of revamped Range Rover Evoque. Prior to this week concerns about JLR’s performance had centered on the impact of Brexit and a government clampdown on diesel-powered vehicles in depressing UK car sales. Royal London Asset Management had already reduced its exposure to JLR in response to “Brexit-specific risks and their ability to maintain access to the financial markets”, said head of global high yield Azhar Hussain. Appetite among investors for riskier European debt has yet to bounce back after volatility swept through the market at the end of last year. There’s been very few sales of junk debt in Europe this year and high-yield spreads remain much wider than prior to their fourth-quarter blowout. +++ 

+++ MCLAREN has renewed its contract with engine supplier Ricardo for a third time, securing a powertrain partner to help the supercar maker achieve its Track 25 strategy targets. UK-based Ricardo has been the sole manufacturer of engines for McLaren since 2011. It has supplied more than 15,000 engines to date, with McLaren’s increasing popularity among supercar customers seeing around 5,000 delivered in the last year alone. The engine partnership, with Ricardo building McLaren-designed engines, began with the McLaren 12C and has included the P1 hybrid hypercar. The 2 companies’ relationship goes back much further, with Ricardo building the transmission for the original McLaren F1 road car. McLaren’s entire current line-up, including the 720S, 600LT and Senna, uses engines produced under the partnership. “Ricardo shares McLaren’s passion for exceptional performance, product innovation and quality”, McLaren Automotive CEO Mike Flewitt said of the renewed deal. “We look forward to working with Ricardo and to receiving its full support as we implement our Track 25 business plan”. The €1.35 billion Track 25 plan will see McLaren introduce 18 new cars by 2025, by which time all of the company’s mainstream models will have made the jump to hybrid power. It will include a successor to the P1, as well as the three-seater Speedtail hyper-GT. The renewed agreement is the largest in Ricardo’s history, and will see the company invest in its Shoreham assembly facility to allow for greater manufacturing capacity. The expansion will also allow for multiple product lines. 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”. Current McLaren models use a twin-turbocharged V8 engine, while a future hybrid powertrain could move to a smaller-capacity turbocharged V6. However, McLaren has said that future limited-production hypercars might still remain powered solely by internal combustion engines. +++ 

+++ The predicted rise of car-sharing programs in major cities around the world could deal a substantial blow to the mainstream car segment, according to a top MERCEDES-BENZ executive. The company wants to avoid falling into that trap at all costs. Mercedes design boss Gorden Wagener explained that car-sharing is important for the German firm but he doesn’t think it should entirely replace the ownership model a majority of motorists are familiar with in 2019. He predicted many drivers will still want to own their car in the foreseeable future. “For rich people, safety and security matter. Lots of people want privacy, security, and so on. They love having their own thing that can be driven autonomously but also manually”, Wagener pointed out. Mercedes operates a car-sharing program named Car2Go that gives anyone who signs up with a smartphone access to a CLA or a GLA. The company recently merged its program with BMW’s DriveNow in a bid to secure a greater share of the car-sharing market in key regions. Car2Go works well for urbanites who occasionally need a car to run an errand, but Mercedes wants to ensure it continues to build cars people aspire to own. “I see a big difference between the luxury segment and the mainstream segment. That is at risk of becoming a public tram. And we don’t want to build trams. We will always make sure to stay on the luxury side of things”, Wagener concluded. +++ 

+++ MINICARS have been a staple vehicle segment, especially in Europe where the segment represents 8 % of the market share in 2017. However, things are changing as it’s getting harder for manufacturers to gain profit from selling minicars, mainly because of stricter emission rules and the demand for more technology to be added to the cars. Volkswagen Group and the PSA Group both have expressed uncertainty in the minicar segment. VW chief Herbert Diess has complained about the tougher pollution limit that will start in 2020, which he feared that minicars could not make a positive contribution on. In order to be compliant with the pollution rules by 2030, the Up’s price tag could increase by around €3,500. “I am not sure how many customers could still afford our entry-level models”, Diess said. As for the PSA Group, it’s feared that production of its minicars would stop in a joint factory with Toyota in the Czech Republic. Toyota is foreseen to take over the said factory by 2021, which would reportedly have the PSA Group exit the segment, putting a stop to producing its small cars like the Peugeot 108 and Citroen C1. “The ability of any carmaker to make a profit in that segment is under pressure because of all the technology we have to add”, Maxime Picat, PSA’s operational director for Europe, told journalists in January. Needless to say, the increase in price tags, whether because of technologies added or to keep up with the emission demands, could negate the very reason that the minicar segment has flourished, being the cheapest option in the market. It is believed that electrification could rejuvenate the minicar segment, but that’s a development that we all have to keep an eye on. +++ 

+++ At the beginning of this year, Mercedes-Benz registered with the United States Patent and Trademark Office the GLS 600, GLS 680, and S 680 monikers that are believed to be earmarked for the Mercedes-Maybach brand. Now, less than 2 months later, the German manufacturer has another intriguing batch of new names that are possible for use in future production or concept models. Trademark applications with the European Intellectual Property Office dating from February 4th include O 120, O 140, O 180, and O 200. Filled under trademark classification reserved for “motor vehicles and motor vehicle engines”. Daimler currently uses the O names for its family of city buses. The latest Mercedes-Benz Citaro city bus is also known as the O530 internally, but registering the O name with smaller number indexes doesn’t make sense for the city bus market. Also, the recently trademarked names are different in terms of stylistics as they feature a space separating the O from the numerical digits. Also, the new patent application is following the marque’s naming convention for light passenger vehicles with a 3-digit number showing the engine size and/or power. My source’s suggestion is that Mercedes could use the new O-CLASS family of names for a range of small people movers for commercial use. That’s one possible option, but, as always, a trademark application doesn’t necessarily mean the company has plans to use the names on a production vehicle. Instead, we could see the O on a concept vehicle or even never see it in use from the brand. +++ 

+++ The board of RENAULT was poised to cancel as much as €30 million in deferred pay and severance to its ousted boss Carlos Ghosn, as directors met to approve its full-year accounts. Renault will scrap around 460,000 performance shares attributed to Ghosn since 2014-15 and now worth €26 million, under proposals backed by the French government, its biggest shareholder, 2 people familiar with the matter said. The board is also likely to drop a 2-year non-compete clause worth €4.5 million to Ghosn, who was forced out in January following his arrest in Japan for suspected financial misconduct at Nissan, Renault’s alliance partner. Ghosn, 64, was arrested in Japan and ousted as Nissan chairman last November and has since been indicted along with Nissan and a fellow director for failing to disclose more than $80 million in additional 2010-18 compensation that he had arranged to be paid later. Ghosn denies the deferred pay was illegal or required disclosure. The scandal, triggered by a Nissan internal investigation, initially strained ties with 43.4 % owner Renault as the French carmaker continued to back Ghosn until he was eventually forced to resign last month. Renault appointed new Chairman Jean-Dominique Senard on Jan. 24 and last week passed evidence to prosecutors that the company had paid part of Ghosn’s 2016 Versailles wedding costs, in a first case of his suspected misconduct at the French carmaker. Ghosn’s representatives say he was unaware the €50,000 rental had been charged to Renault and now plans to repay it. The proposal to scrap most of Ghosn’s severance package was drawn up by Renault’s remuneration committee and is unlikely to be rejected by the full board, the sources said. Left intact, his golden parachute could have been politically explosive in France, where President Macron is battling “yellow vest” street protests over low pay and inequality. Finance Minister Bruno Le Maire had asked the government’s lead board representative at Renault to “ensure that Mr Ghosn’s compensation is cut as much as possible”, a ministry official said. “We’ve always been against excessive pay”, the official said. “It’s not about the presumption of innocence but ethics and decency”. +++ 

+++ Amazon and General Motors are in talks to invest in RIVIAN Automotive in a deal that would value the U.S. electric pickup truck manufacturer at between $1 billion and $2 billion, people familiar with the matter told. The deal would give Amazon and GM minority stakes in Rivian, the sources said. It would be a major boost for the Plymouth, Michigan-based startup, which aspires to be the first carmaker to the U.S. consumer market with an electric pickup. If the negotiations conclude successfully, a deal could be announced as early as this month, the sources said, asking not to be identified because the matter is confidential. There is always a chance that deal talks fall through, the sources cautioned. “We admire Rivian’s contribution to a future of zero emissions and an all-electric future”, GM said in an emailed statement, declining to specifically comment on any talks with Rivian. The Rivian deal would come as its much larger electric car manufacturing rival, Tesla, struggles to stabilize production and deliver consistent profits as it rolls out its flagship Model 3 sedan. Tesla CEO Elon Musk told investors last August that an electric pickup is “probably my personal favorite for the next product” from the company, though he has spoken only in general about a potential launch, saying that it would happen “right after” Tesla’s Model Y, which the company has targeted to start production in 2020. Rivian intends to begin selling its R1T, the pickup it debuted in November, in the fall of 2020. The company was founded in 2009 by CEO R.J. Scaringe. Scaringe has described the Rivian vehicle’s platform as a “skateboard” that packages the drive units, battery pack, suspension system, brakes and cooling system all below wheel height to allow for more storage space and greater stability due to a lower center of gravity. He has also said the company plans to partner with outside firms to develop advanced self-driving technology, rather than try to do so on its own. Big automakers, including GM, have not jumped into the market for electric pickups thus far. GM chief Mary Barra has said it has given a “tiny bit” of thought to developing all-electric pickups. The No. 1 U.S. automaker is counting on profit from sales of conventional large pickups and SUVs in North America to fund its electrification push. GM said last November it was doubling resources allocated to developing electric and self-driving vehicles, as part of a significant restructuring that included ending production at 5 North American plants. GM last month announced a strategy to make its luxury Cadillac its lead electric vehicle brand, revealing it would be the first vehicle built on the Detroit automaker’s “BEV3” platform to challenge Tesla. GM has said one of the first fully electric Cadillac models using the new platform would hit the market around 2022. Amazon has also invested in self-driving car startup Aurora Innovation, in a $530 million funding round announced last week. The world’s largest online retailer has steadily increased its logistics footprint, building warehouses around the world and inking deals with Mercedes as well as cargo airlines to help with delivery. Rivian’s existing financial backers include Saudi auto distributor Abdul Latif Jameel (ALJ), Sumitomo of Americas and Standard Chartered Bank. ALJ has agreed to provide almost $500 million in funding, Sumitomo invested an undisclosed amount, and Standard Chartered provided debt financing of $200 million. +++ 

+++ Just last week, Germany’s Bild newspaper reported that VOLKSWAGEN would be moving production of the Passat to a lower-volume plant to make room for high-volume electric car production, or halting Passat production altogether. However, neither of those statements, it turns out, are true. Last week, Volkswagen hosted a secret press gathering in Hamburg, Germany to preview the facelifted Passat, which debuted in Europe a few days ago, and some important statements were made. A spokesman at that event was quoted as saying “Volkswagen’s had some disappointing news regarding the Passat, so we’d like to set that straight. The press tells me the Passat will be discontinued due to changes in the automotive industry and Volkswagen is toying with turning Emden into an EV-only plant. Let me tell you right now, we are not going to discontinue the Passat”. That’s pretty cut and dry, if you ask me. It looks like the Passat is here to stay, at home and abroad. Given that the Passat is merely being refreshed and not replaced with an altogether new model, we consider that quite a vote of confidence from Volkswagen. While mid-cycle refreshes are fairly common in the industry, it’s a clear sign that they think that they have the Passat’s recipe right, and that they think it’s still competetive in the marketplace. +++

Comments are closed.