+++ Renault, Nissan and Mitsubishi have promised “a new start” to their ALLIANCE as they attempt to move on from the arrest and ousting of chief Carlos Ghosn. In a memorandum of understanding (MoU), the 3 car makers confirmed the creation of a new board, headed up by Renault chairman Jean-Dominique Senard. The other 3 key members will be the CEOs of each firm: Renault’s Thierry Bolloré, Nissan’s Hiroto Saikawa and Mitsubishi’s Osamu Masuko. The new board replaces and incorporates existing joint ventures and committees formed by the 3 companies under a single entity. The MoU said that operation decisions taken by the board will be “consensus-based, further the Alliance’s ‘win-win’ approach”. It added that the new board will “drive the operational co-operation between Nissan, Renault and Mitsubishi and look for new ways to generate value for its respective shareholders and employees” and promised to accelerate operational activities “through key focus on deliveries of strategic common projects” that will reported to the board for “quick decision making”.
Renault, hoping to placate Nissan after the Ghosn fallout, has also agreed to let Nissan’s Special Committee, a panel of outsiders, select a replacement for Ghosn as Nissan chairman. The MoU said Senard should be “a natural candidate” for the role of vice chairman. Relations between Nissan and Renault are understood to be strained following the arrest of Ghosn in November 2018 on charges of financial misconduct. Prior to this, there had been discussions on a full merger between Nissan and Renault, but it’s not clear whether this will go ahead. Ghosn remains a director at Nissan and Renault despite being stripped of his titles, but a meeting of Nissan shareholders due on 8 April will decide whether to oust him from the board. +++
+++ The AUDI TT might not be long for this world. The third generation of the company’s design icon could be the last because sales are dropping, and executives are embarking on a cost-cutting campaign. “That’s a very good question. I think there’s a future for an Audi icon, but I don’t know if it’s a TT. My heart bleeds when you ask that question”, replied Audi boss Bram Schot when he was asked whether we’d see a 4th generation TT. He didn’t confirm the TT will retire, but he certainly didn’t tell the nameplate has a bright future. Many will be saddened if the TT retires, but few will be surprised. Though it looks good, and it’s a blast to drive, it competes in a segment of the market that’s shrinking. Its position as a design icon might not be strong enough to save it, because Audi, like most major car brands, is investing a substantial amount of money into the development of electrification technology. “Audi has to be really prominent in future, but electrification has to be financed. I cannot afford to be in every country, in every segment”, Schot explained. Without going into details, he added the TT’s spot in the Audi line-up could be filled by another car. “I’ve got some things cooking which could replace TT, though not necessarily directly”, Schot hinted. He didn’t talk about the rumors claiming Audi will turn the TT into a 5-door coupe aimed directly at the Mercedes-Benz CLA. The current TT, which was just updated, will remain on-sale through at least 2022. +++
+++ PSA Group’s upscale brand, DS Automobiles, has packed the new 3 Crossback with technological features and given it distinctive styling to compete with models such as the Audi Q2 and Mini Countryman. The DS 3 Crossback will be the first vehicle in the segment to have an all-electric version, PSA says. The 3 Crossback will eventually replace the brand’s longest-running model, the 3 hatchback, which is being discontinued after this year. It is the second model designed expressly for DS, which was spun off from Citroen in 2013 as a stand-alone brand. The first, the 7 Crossback, was launched last year in Europe and China. 4 more new models will be presented in the next 4 years, DS says. The DS3 Crossback will be sold in 38 countries but plans for sales in China have not been finalized. The DS 3 Crossback is the first model to be built on the PSA Group’s CMP architecture, jointly developed with Chinese partner Dongfeng Motor. The CMP is designed to be a “multi-energy” platform, accommodating both internal combustion and full-electric drivetrains with no changes to the overall interior space. PSA says CMP is 30 kg lighter than the comparable current platform, a weight reduction achieved through the use of more aluminum and composite metals. At 4.200 mm long, 1.800 mm wide and 1.534 mm high, the DS3 Crossback’s dimensions are nearly identical to those of the Audi Q2 and Mini Countryman, which DS sees as its closest competitors. Other potential competitors, including the Mercedes-Benz GLA, Range Rover Evoque and BMW X1, are slightly larger. According to data from JATO Dynamics, the segment grew by nearly 20 percent in 2018. DS describes the SUV’s styling as “sculptural” and aggressive”, with distinctive touches such as retractable flush-fitting door handles, “shark fin” extensions on the rear doors that recall the DS3 (and, on the inside, house a stereo tweeter), vertical “DS wing” daytime running lights and a full-width rear light bar. The interior is characterized by DS’s diamond motif, including the central vents and controls and seat stitching in some trim levels. A customizable digital dashboard is complemented by a heads-up display. A 10.3 inch touchscreen controls infotainment functions. Overall, there are 6 trim levels to choose from, as well as 5 interior/exterior “inspirations” that are available on some of the trim levels. Buyers can choose from 10 body colors and 3 roof colors. The primary driver assistance feature is DS Drive Assist, which allows virtually hands-free lane positioning and adaptive cruise control. DS says it is particularly useful in traffic jams and highway driving. Other features are hands-free parking as well as active emergency braking that can identify cyclists, pedestrians and other hazards at night. The DS 3 Crossback will be built at PSA’s factory in Poissy, France, just outside of Paris. IHS Markit forecasts that production this year will total just under 50,000 and peak at about 77,000 units in 2021. +++
+++ A Fiesta-based small SUV, which will replace the Ecosport in the FORD range. The new compact crossover will be called Puma. The car is set to share its platform, and possibly the engine range, including the popular Ecoboost petrol powertrains, with the Fiesta. That means it’s likely to be front-wheel drive. The Puma will be presented to the press in April. It will sit alongside the Fiesta Active, a jacked-up version of the supermini. +++
+++ HONDA ’s premiumbrand Acura is preparing to expand its line-up with a range-topping sedan. The model will be previewed by a close-to-production concept scheduled to make its official debut in August of 2019 at the Pebble Beach Concours d’Elegance. Acura’s upcoming flagship might resurrect the Legend nameplate, though nothing is official yet. If that’s accurate, it would mark a drastic departure from the Japanese company’s 3-letter naming system. The sedan will borrow styling cues from the Precision concept unveiled during the 2016 Detroit auto show. Officially, the concept merely previewed Acura’s then-upcoming styling language. Executives decided it deserved better, so it will make the transition from a design study to a production model. 2019 will be a busy year for Acura. The company will also unveil the next-generation TLX, and a brand-new MDX. The born-again Legend (assuming that’s what it’s called) will either directly replace or fill in for the RLX, which isn’t long for this world. And we could see a second-generation ZDX in the not-too-distant future. The sedan we’ll see at Pebble Beach will be a concept, not a production model. Considering it has already been approved for production, and looking at Acura’s track record of turning prototypes around in record time, we could see the final version either at the 2019 Los Angeles auto show or in early 2020. +++
+++ INFINITI will stop selling its vehicles in western European markets early next year, the company has confirmed. The Japanese firm has struggled to gain a foothold on the European market since it launched in 2008. The restructuring plan means Infiniti will focus its efforts on the US and Chinese markets where the brand will electrify its entire product range from 2021. A company spokesperson said that the cost of R&D required to meet the new CO2 legislation versus the number of vehicles Infiniti sells in Europe means there is not a ‘sustainable business case’ for the brand here. Production of the Infiniti Q30 and QX30, which are both built at Nissan’s plant in Sunderland, will cease in July. Infiniti has confirmed it will honour any outstanding vehicles warranties, while customers with a vehicle on order will be contacted. Existing customers are being advised to head online and register details on the Infiniti website where they will be informed about the company’s restructure and future customer relationship. The firm has said that it is looking to ‘find alternative’ opportunities for its employees. The company will cease all European operations from early 2020. The move is part of a wider global restructuring plan for Infiniti. It will shift its focus to North America and China, and continue its smaller operations in Eastern Europe, the Middle East, and Asia. With the vast R&D sums needed to be invested in electrified technology, and a lack of buyers to help fund the development, the decision has been taken not to invest in the brand in Europe to meet the stricter European targets. A spokesman said that the targets could be met by Infiniti, like any other car maker, with investment in electrified technology, but there was no viable way of the company to do so. The early axing of the Q30 and QX30 from Sunderland, which were never big sellers but have been hit further by the drop in demand from diesel, would leave Infiniti with only the Q50 saloon as the sole model in its range. Instead, the company will focus on producing more SUV models for China and North America. +++
+++ KIA may halt operations at its No.1 plant in China as part of its longer-term efforts to enhance competitiveness, a source familiar with the matter said. Kia said in a statement that the company is reviewing various plans to strengthen production and sales competitiveness in China. Kia makes cars in China in a tie-up with Dongfeng Motor Group and Jiangsu Yueda Investment Co. They run 3 factories in Jiangsu Province in China. Sisterbrand Hyundai also said the automaker was considering suspending production at its oldest plant in China as sales tumble and it struggles with overcapacity in its biggest market. +++
+++ A top MAZDA engineer has confirmed more details about the company’s upcoming rotary engine range extender. Mazda’s unique motor design, once used to power high-performance sports cars, will now work as part of a hybrid engine. Powertrain lead Ichiro Hirose revealed that the new rotary engine was so flexible, it could help Mazda curb emissions in countries with even the most stringent limits on emissions. Because the rotary engine is much more compact than a traditional piston engine, the setup lends itself to packaging in a wide variety of platforms. “With this combination you can vary the amount of battery and also the amount of fuel tank supply”, Hirose explained. “What that allows us to do is, depending on the ratio between the two, is that we can have a derivative that can work more like a plugin hybrid”. It can operate as almost a pure battery-electric, using the rotary only in case the battery runs out of juice, or as a series-hybrid, where the rotary helps provide the motive force. However, there, appears to be one hurdle left before the rotary can return to production. They need to figure out how to get the catalytic converter working as soon as the rotary begins turning, to reduce as many emissions as possible. If they can figure that out, Hirose says the system is flexible and adaptable enough to pass regulations in a number of markets, including the US’s. He’s even coined a term for it: XEV. Perhaps this isn’t the rotary return RX-7 fans were hoping for, but it sounds like a promising technology nonetheless. +++
+++ The Volkswagen Group has officially confirmed 6 NEW MODELS , including the Porsche Cayenne Coupé, the Audi Q3 Sportback and an unnamed B-segment SUV. A replacement for the current Bentley Flying Spur is also due. The final two models, the Volkswagen Bora and Lavida, which are already sold in China, will have electric variants launched this year solely for the Chinese market. The cars appeared briefly on screen during the company’s financial presentation. The Group also revealed that there will be a second wave of as many as 15 new MEB-underpinned electric cars as part of its aim to get to 22 million battery electric vehicle (BEV) sales by 2025. These are likely to arrive from 2022 and follow the first wave which includes a host of already announced EVs including the Porsche Taycan and Mission E Cross Turismo, the Audi E-tron GT, E-tron Sportback and E-tron, the Volkswagen Buzz, Vizzion, Crozz and ID hatchback and the Skoda Vision E. The company also showed predictions that by 2040, 70 % of the European new car market will made up of BEV sales and about 10-20 % plug-in electric vehicles, though these will be powered by fuels made from renewable electricity. By the same time, China’s market should be 85 % BEV and around 10-15 % fuel cell. The US market, however, may only be up to 60 % BEV by 2040. +++
+++ Dongfeng Peugeot Citroen Automobile, a 50-50 joint venture between PSA Group and Dongfeng Motor Group, lost nearly 3.7 billion yuan ($552 million) in 2018 on plunging sales. That was about 8 times the loss of 465 million yuan the partnership incurred in 2017, according to Dongfeng, a Hong Kong-listed, state-owned Chinese automaker. After hitting a high of 704,000 vehicle sales in 2015, the JV’s annual deliveries have slumped for the past three years. In 2018, sales plunged 33 % to around 253,000. As a result, 2018 revenue fell 31 % to 28.3 billion yuan. The JV, headquartered in the central China city of Wuhan, can produce up to 840,000 vehicles annually for the Peugeot and Citroen brands at full capacity. This year did not begin well for the venture as sales tumbled 63 % in January to around 12,300, according to the China Passenger Car Alliance, a Shanghai consultancy. PSA also operates a joint venture with Changan Automobile, which builds and markets DS cars. But this JV has fared no better than Dongfeng Peugeot Citroen. With annual production capacity of 200,000 vehicles, Changan PSA sold fewer than 3,900 vehicles last year, according to China Passenger Car Alliance. +++
+++ SKODA is close to choosing the location for a new factory with Serbia emerging as the favorite. Speculation about the plant’s location has been intense since Skoda parent, Volkswagen Group, said it wanted to build a multi-brand factory in eastern Europe, with Skoda likely to take the lead. Skoda CEO Bernhard Maier said the automaker has reduced the number of candidate countries to four but declined to name them. “We are still in the analysis phase. It’s not an easy decision”, he said. A decision could be made in the first half, Maier said. The plant is scheduled start production after 2022 but a potential roadblock is opposition from Volkswagen workers in Germany. Volkswagen’s IG Metall union has said it would like to see excess capacity filled at German plants before a new plant is built. Earlier this month, Serbian daily Vecernje Novosti reported that the Volkswagen Group has already chosen Serbia to build Skoda and Seat SUVs. Other reports said Turkey was the preferred choice, but the country has fallen out of favor as its economic problems threaten the country’s position as the world’s number one exporter of vehicles into the EU. Last year the dramatic fall in the value of the Turkish lira cut local sales of cars and light commercial vehicles by 35 % and contributed a 9 % fall vehicle production to 1.75 million units Bulgaria and Romania had been considered for the planning but were now out of the running. Serbia is the location of Fiat’s factory in Kragujevac, which currently builds the 500L. The factory was idled for 2 months over Christmas as demand for the model fell, but local media speculate Fiat will add a new small SUV to the plant within the next year. Record production at Skoda’s 2 plants in the Czech Republic has increased delivery times and restricted sales for the brand. Last year the Mlada Boleslav and Kvasiny plants built 886,100 vehicles; an increase of 3.1 % the year before. In February Skoda started production of the new Scala, a replacement for the Rapid, in Mlada Boleslav, and is about to start production of a new vehicle, the Skoda Kamiq small SUV. Maier said the capacity problems could restrict sales of the Kamiq. “Currently we are still limited with capacity”, he said. VW Group is reorganizing European production to focus output of its new mass-market electric cars for the VW, Audi and Seat brands in Germany. The change means that production of the Volkswagen Passat will shift to Skoda’s plant in Kvasiny in 2023 from Germany. The Passat will be produced alongside the related Skoda Superb and the Kodiaq. Skoda has been negotiating with the unions at its Mlada Boleslav plant to increase the number of shifts and improve productivity. The company is facing demands for higher wages as the country’s low unemployment rate strengthens the workers’ bargaining position. +++
+++ The well-received S-FR concept TOYOTA presented during the 2015 Tokyo auto show looked ready for production. Rumors even claimed it would offer a turbocharged, 1.2-liter 4-cylinder engine. We haven’t seen the final model yet, and we never will, according to Toyota, because it would be too expensive to build. “I believe most people are looking forward to the smallest of the ’three brothers’. And when people say the smallest, they expect it would be the most affordable. But, in reality, coming up with a compact small sports car is quite difficult”, explained Tetsuya Tada, the head of Toyota Gazoo Racing, during a recent interview. He explained developing a coupe positioned below the GT86, making it compliant with safety and emissions regulations all around the world, and selling it profitably would be an incredibly difficult task. It sounds like even designing the S-FR with the technical and financial help of a partner, which Toyota has done to bring the GT86 and the Supra to the market, wouldn’t allow the company to make a profit on it. Even if it could be made profitably, the model would need to clear another hurdle. Tada pointed out it would compete directly against the growing number of used GT86s showing up on dealer lots, and in the classifieds. “In the actual market there are now plenty of second-hand GT86s that are fairly compact, so in order to compete with these second-hand cars it’s difficult to come up with a smaller version”, he told. Tada and other executives have often told the media they envision a 3-strong line-up of Toyota sports cars; the trio is usually referred to as ’the three brothers’. While nothing is official, the long-rumored, born-again MR2 will slot between the GT86 and the Supra rather than below both coupes as an entry-level sports car. The 4th generation MR2 (a car that has always been mid-engined) hasn’t been approved for production yet, however. +++
+++ The VOLKSWAGEN Group’s global car sales crept up to 10.9 million last year from 10.77 million in 2017, largely down to gains in the European Union (EU) and China. The group’s sales in the EU were up 1.2 % and sales in the Chinese market rose 0.5 %, despite both markets contracting overall. However, Volkswagen Group sales were down 2 % year on year in the US, with a total of 960,000. The overall rise was largely thanks to the success of the Group’s expanded SUV line-up, and that trend is set to continue following the recent launches of the Volkswagen T-Cross and Skoda Kamiq. Despite that, however, long-standing saloon and hatchback models remain highly popular, still accounting for several of the Group’s best-sellers in 2018. Here’s how each of the main Volkswagen Group car brands fared last year, with their 2018 best-sellers: The Volkswagen brand itself sold 3,715 million vehicles in 2018 and achieved a profit margin of 3.8 %; down from 4.2 %. It’s operating return was hit by continued ‘special’ payments relating to the Dieselgate scandal. Volkswagen’s bestsellers were: the Tiguan (861,331 units), the Polo/Virtus (855,179) and the Golf (805,752). The upmarket volume brand sold 1.812 million cars in 2018, down 3.5 % on the previous year. As a result, profit margins fell from 8.5 % to 7.9 %. According to Volkswagen Group boss Herbert Diess, Audi was the brand hardest hit by the new WLTP test procedures, and it’s still likely to be affected by that during 2019. Audi’s best-sellers were: the A4 (344,623 units), the A3 (304,903) and the Q5 (298,645). Skoda sold 1.254 million cars, up 4.4 %. Its profit margin fell to 8,0 % from 9.7 %, but the drop was largely attributed to the effects of exchange rates. Notably, the Czech firm has experienced production issues in that it has struggled to find enough capacity to meet demand for its Karoq and Kodiaq. Skoda’s best-sellers were: the Octavia (400,210 units), the Rapid (195,270) and the Fabia (186,213). Seat sold 528,029 cars in 2018, up 10.5 %, fuelled by the success of its Ateca, Arona and Tarraco SUV line-up. The Spanish firm’s profit margin was up to 2.5 % from 1.9 %. The bestsellers from Seat were: the Leon (159,486 units), the Ibiza (120,287) and the Arona (110,926). Porsche sales in 2018 were up to 268,451 from 255,683, but the profit margin was down to 17.4 % from 18.5 %, attributed to extra research spending on electrification. Its bestsellers were: the Macan (93,953), the Cayenne (79,111) and the 911 (36,236). Bentley sales dipped to 9,115 from 10,552, while profit margins dropped from 3 % to -18 %. The delay in the start-up of the new Continental GT and a restructuring of the firm’s pension fund were the key reasons for that fall, according to the Volkswagen Group. Bentley’s bestsellers were: the Bentayga (4072 units), the Continental GT (2841) and the Flying Spur (1627). Lamborghini is managed under the Audi brand and Volkswagen doesn’t break out its profits, but sales in 2018 jumped from 6571 to 4056, driven by the new Urus. This SUV was the bestseller with 2565 units. Next came the Huracán (1669) and the Huracán Spyder (1121). +++
+++ Volkswagen has not considered taking a minority investment in Google’s autonomous cars project WAYMO , Chief Executive Herbert Diess said, adding that talks about developing self-driving cars with Ford continue. The German carmaker said developing self-driving cars requires investments amounting to a high single digit billion euros amount, costs that would better be shared with a potential partner. “We are in good talks with Ford”, Diess said, adding that Volkswagen had been in talks with numerous potential partners, including Waymo. “The question is how do you make this technology safe, that is the key question”. Diess said, adding that getting regulatory approvals and convincing authorities that self-driving cars are safe are key questions guiding VW’s thinking on alliances. Volkswagen hopes to take a decision about a partnership this year. +++