+++ Since its launch in 2014, Mobius Motors, Kenya’s only home-grown automaker, has only produced around 50 test vehicles. Mobius is among a number of firms in AFRICA hoping for a slice of the continent’s largely underdeveloped market for new cars. As global car giants, including Toyota and Volkswagen have stepped up efforts to tap the vast market, local players including Kiira Motors of Uganda, Ghana’s Kantanka and Nigeria-based Innoson Motors, are also making a push. They face the same obstacles as their big-name peers, notably the dominance of cheap second-hand imports, but without the deep pockets and infrastructure to overcome them. “It is not an easy journey to be on”, said Joel Jackson, the 34-year old London-born founder of Mobius Motors. He first dreamt of building a car in Africa for African drivers a decade ago when he traveled across Kenya for his job with a forestry company. Mobius produces a boxy, no-frills SUV designed for both the challenges of Africa’s rugged driving conditions and the modest budgets of African consumers. The entry-level version is priced at 1.3 million shillings ($12,897), half the going rate for a second-hand SUV model imported from Japan. And though prospective customers have placed more than 400 orders, paying a $300 advance on their cars, Jackson is still crisscrossing the globe to raise financing for a full production launch that is already nearly a year behind schedule. “A large chunk of the money is going into production operations but equally there is a lot of investment in the research and development of the vehicle itself”, he said. Nigeria’s Innoson is fairing a bit better, selling 10,000 vehicles in its first 8 years of operations. Kiira, which is 96 % state-owned, is building a $40-million assembly plant in southern Uganda that will have the capacity to produce 5,000 cars per year. But the company has built just 3 prototype vehicles since 2011. Rodney Muhumuza, Kiira’s business development manager, said while the company was benefiting from state support, it would require private equity at some point. The biggest challenges at the moment, however, are policy-related, he said. Total auto sales in the East African Community (a common market including Kenya, Uganda, Rwanda, Burundi, Tanzania and South Sudan) are on track to double to 500,000 vehicles per year within the next decade, he estimates. And he wants them to be new, locally built cars. But to make that happen, governments must unite to favor domestic production by curbing cheap second-hand imports from countries like Japan and harmonizing tax rates to keep down the prices of vehicles produced in neighboring countries. “If there can be fiscal and non-fiscal incentives within the region to really facilitate local value addition, that will be great”, he said. “That is really a very good market”. +++ 

+++ For most of automotive history, vehicles could be sorted into one of two categories based on how they were built: body-on-frame, such as today’s full-size pickups and big SUVs, or unibody, which includes almost everything else in the market. Body-on-frame and unibody construction are not going anywhere anytime soon, but the development of battery-electric vehicles from Tesla and others has introduced a third manufacturing method: one offering designers far more freedom to experiment while helping automakers save money through commonality. It’s known as the skateboard, and it was developed almost 2 decades ago by forward-looking engineers at General Motors. Now it’s the method used to build Teslas as well as the AUDI e-Tron, the first of 70 full-electric models Volkswagen Group plans over the next decade, accounting for 22 million vehicles globally across its 12 brands. The e-Tron, an electric crossover, is to be one of the first non-Tesla skateboard vehicles to hit the market. It is being rolled out across Europe now and is scheduled to begin arriving this month in the U.S. Built in Brussels, the e-Tron is built in 2 sections that are mated together in a process far closer to body-on-frame than unibody construction. The lower section, or skateboard, is built around a 710 kg enclosed battery pack composed of 36 power modules in a welded aluminum spaceframe. Individual modules are connected with almost 3.9 km of wire across 600 electrical connections to deliver electricity from the 95 kWh battery pack, which is about the size of a double bed. Attached to the power pack are 2 or 3 electric motors, depending on the performance level, mounted to the rear and front axles. On a parallel assembly line in Brussels, the other half of the e-tron is built in a way that would look familiar to anyone who has worked in or toured an auto assembly plant. The top half of the 2-row performance crossover goes through body, paint and initial trim before what is known in the plant as “the marriage”. The upper and lower halves of the e-tron are slowly combined, with the skateboard’s four raised suspension elements carefully guided into their places in the top hat.
The two assemblies are joined together using a series of flow-drill screws. Most of the marriage is done automatically by robots, while humans are needed to align the suspension elements. After the 2 halves of the e-Tron are married, the vehicle is sent to final trim before being shipped to dealers worldwide. For an automaker such as Volkswagen, which has broad battery-electric plans, skateboard manufacturing is key in terms of flexibility and scale. VW’s 2 main skateboard full-electric platforms (MEB for mass market cars and PPE for performance-oriented vehicles from brands including Porsche and Audi) are flexible enough for designers to customize size and characteristics across various vehicles and even segments. In Volkswagen’s plans, for example, the Golf-sized ID, the ID Crozz crossover and the retro-styled version of VW’s former Microbus called the ID Buzz will ride on versions of the MEB platform. +++

+++ As CHINA trudges though its first car-market recession in a generation, Japanese and German automakers are gaining on domestic companies. Brands from those countries gained market share in the first 3 months of 2019, while Chinese and American marques lost ground, the China Association of Automobile Manufacturers. China sales at BMW Group, which includes the Mini, BMW and Rolls-Royce brands rose 10 % in the first quarter, while registrations at Daimler’s Mercedes-Benz and Smart brands rose 2.6 %. Volkswagen Group sales were down 6.3 %. China car sales plunged for a 10th consecutive month in March, dragged down by a slowing economy and trade tensions with the U.S. The slump has sharpened competition, forcing automakers and dealers to offer generous discounts and creating a market of differing fortunes. The association predicted the slump could last for months. +++

+++ FIAT CHRYSLER gave an upbeat forecast for 2019 after a tricky end to last year and a slow start to this one, confirming the carmaker was on track to meet its targets and easing fears of a slowdown on the North American market. Speaking at a time when deal talk is bubbling again in the industry, Chairman John Elkann told investors the Italo-American group was ready to play a part in the “new and exciting” era for the auto industry. He also struck a positive tone on the short-term outlook. “Despite the fact that the second part of 2018 included trade difficulties in some areas that persisted in the first part of this year, we forecast a significative improvement in the second half of 2019”, Elkann said. Chief Executive Michael Manley, who took up his post last July, said the group’s operating performance this year would exceed the record results posted in 2018. In February weaker-than-expected guidance for 2019 profits and industrial free cash flow raised doubts about longer-term targets. Manley has sought to persuade investors that the 2020 goals (set by late boss Sergio Marchionne) were still achievable. “I am confident that we will successfully deliver on our guidance for this year”, he said. He added that he expected a continued strong performance in North America, the carmaker’s main profit engine which accounts of almost 80 % of core earnings, with higher margins compared to last year. Weaker margins in North America in the last quarter of 2018 had raised concerns about a potential slowing demand in the United States, where FCA also faces stiff competition in the vital SUV and pickup segments. Manley said industrial free cash flow this year was expected to be more than €1.5 billion, down on last year due to higher capital expenditure. Manley also said he aimed to make dividends at FCA a regular feature after the group paid €0.65 a share to investors on 2018 results, its first dividend in 10 years. Elkann, a scion of Italy’s Agnelli family that is Fiat Chrysler’s biggest shareholder, reiterated the family was prepared to take “bold and creative decisions” to help build a solid and attractive future. Recent media reports have said Renault could be eyeing a bid for Fiat while in March the president of Peugeot family holding company FFP said he would support a new deal and suggested Fiat Chrysler was among the options. After the sudden death of Marchionne last year, speculation about the future of Fiat Chrysler has intensified. Marchionne, who had created the group by merging a troubled Fiat with Chrysler of the U.S., had advocated industry mergers to share the cost of building electric and self-driving cars. Carmakers around the world are looking to tie-ups to cope with rising competition, the rise of electrification and the threat of a trade war between the United States and China. +++ 

+++ FORD chief executive Jim Hackett says that the car manufacturer is “turning the corner” after a disappointing 2018. Speaking at the Detroit Economic Club, the man who replaced Mark Fields at the helm of the Blue Oval admitted that “no one in the company was proud” after profit margin fell to 4.4 % from 6.1 % the previous year. Hackett addressed this in an end-of-year letter to employees. “My reason for writing about it was not to tell them they did a bad job. It was to tell myself I can be better. I’m telling myself I can’t have another year like that. Not that I’m worried about getting fired; it’s like, who wants to spend their time being average?” Hackett wrote. “We’re turning the corner. Just trust me on this. You’re going to be reading a lot about Ford performance going forward”. Hackett believes he has put Ford in such a position that it’s capable of getting through a recession and also says that he has helped drastically reduce delivery times of new vehicles. Speaking on the issue of autonomous vehicles, Hackett said that Ford intends on introducing a dedicated self-driving vehicle for commercial use that’ll go on sale in 2021. This vehicle will be used with Domino’s Pizza and Postmates to facilitate autonomous grocery deliveries. “We’ve overestimated the arrival of autonomous vehicles. We’ll be ready, but its application’s going to be narrow, what we call ‘geofenced’, because the problem is so complex. When we break through it, it will change the way your toothpaste is delivered”, Hackett commented. +++ 

+++ The FORD KA+ hasn’t been doing so well in Europe in terms of sales compared to its rivals such as the Renault Twingo or the larger, but much cheaper, Dacia Sandero. As a result, it will be discontinued at the end of the year. Ford of Europe’s Product Communications Manager, Finn Thomasen, told that they will pull the plug on the Ka+ this fall. “Production of the Ka+ for Europe concludes in September and will be available for our customers as long as stocks last”. Aside from the poor sales of the city car, discontinuing it will also help Ford improve its overall CO2 emissions. “The Ka+ would be subject to CO2 penalties in 2020, making it less attractive to customers in a very competitive segment”, he said. “The decision also is in line with our strategy aimed at strengthening the Ford brand and creating a sustainably profitable business in Europe, including by taking action to improve or exit less profitable vehicle lines”. With Ford dropping the Ka+ from Europe, the Fiesta will act as the new entry-level model. Don’t be surprised if Ford decides to cut down on some of the equipment level in the Fiesta in order to come up with a new base variant that will implicitly be more affordable. +++ 

+++ Chinese electric vehicle maker FUTURE MOBILITY plans to set up operations in Korea at GM Korea’s former plant in Gunsan, which was shut down last year. Future Mobility is part of the MS Consortium, which signed a deal last month to acquire the Gunsan plant. The consortium is led by Korean parts maker MS Autotech, but Future Mobility provides the capital. It will invest W200 billion in the plant to assemble 50,000 EVs annually with parts from China starting in 2021 (US$1=W1,135). Large Korean companies are also considering investments. Future Mobility was created in 2016 by Chinese Internet giant Tencent and Taiwanese contract manufacturer Foxconn to create premium EVs. They scouted former executives from BMW, Nissan and Tesla and established a brand called Byton, which unveiled the M-Byte, an all-electric battery-powered SUV concept car, at the Consumer Electronics Show in January this year. The SUV can travel up to 520 km on a single charge and is capable of autonomous driving even on freeways. It will first go on sale in China, the U.S. and Europe in 2020 and possibly in Korea in 2021. Korean automakers are bracing for the entry of more rivals. Recently China’s Songuo Motors set up a joint venture with Korean EV maker SNK Motors and aims to build a plant in Gunsan capable of rolling out 100,000 EVs a year. And last year China’s largest EV maker Chery Automobile joined hands with Korea’s Nanos to build a W120 billion plant nearby capable of rolling out 50,000 EVs annually starting in 2021. One industry insider said, “If Chinese manufacturers enter Korea, the competitive landscape here will change completely. Rather than rejoicing at the benefits of job creation, I’m worried that Chinese companies will take over the auto industry here”. +++ 

+++ HYUNDAI management and labor union agreed to increase production of the popular Palisade SUV after a month of negotiations. Hyundai’s new large SUV was a hit even before its release in December last year, receiving over 20,000 pre-orders in 2 weeks. It sold 55,000 units until the end of last month, but only 20,000 have been delivered. “We’ve been producing 6.240 Palisade vehicles a month but agreed to a 40 % increase to make 8.640”, a Hyundai spokesman said. Hyundai’s Ulsan plant has produced equal number of Palisades and the light commercial van Starex, but now 75 % of production will be Palisades. Hyundai wanted to produce more Palisades but the union protested that this would increase the workload, so they compromised on reducing production of the Starex. +++

+++ PEUGEOT has a very strong and relatively young lineup, but they won’t rest on their laurels, as they will continue to improve it and come up with new products on an almost constant basis, with emphasis on electrification. The new-generation 208 is available with an electric motor and the 508 and 3008 can be had with a plug-in hybrid powertrain. But what does the future hold for performance models such as the 308 GTI? The brand’s head honcho, Jean-Philippe Imparato, said that “traditional sport models such as the 308 GTI will disappear due to the stricter emissions regulations. Paying an extra €10,000 (in emissions fines) per vehicle is not an ethical way to drive the change to cleaner vehicles”, he added. “You can have a car that is fun to drive that will also respect the energy transition that we are coping with”. In other words, don’t be surprised if you the next-generation 308 GTI comes with electrification. The French automaker is reportedly dropping the current 308 GT and GTI this year due to emissions regulations and Imparato is willing to bet on cleaner alternatives when it comes to future sporty models. Peugeot has also taken an initial step in this direction with the 508 Peugeot Sport Engineered Concept, a PHEV capable of hitting 100 km/h in 4.3 seconds and a 250 km/h electronically limited top speed. The study will enter production, according to Imparato, who took to social media to answer ‘yes’ to such a question. The e-Legend sports coupe concept is another exciting vehicle. And while some reports claimed that they might put it into production if there is enough demand, the Peugeot chief isn’t so sure about that now. “Obviously, we had great feedback for the e-Legend. Once we manage the EV in the coming year, we will decide yes or no, but I prefer to put our money in the transition right now, rather than on the e-Legend, which would be an investment of about €250 million. Finding 20,000 customers at about €80,000 a car isn’t so easy”. +++

+++ It looks like talks between General Motors and RIVIAN could be in trouble as discussions have reached an impasse. Talks broke down within the past 2 weeks. Nothing is official, but one source suggested Rivian boss RJ Scaringe wanted to “keep his options open” as several other companies are interested in the automaker. Both companies have been coy on the negotiations, but GM spokesman Pat Morrissey told: “Talks occur on a regular basis in the auto industry between a variety of partners, but as a matter of policy we don’t discuss who, where or when those discussions might occur”. While Morrissey didn’t confirm discussions with Rivian, he did praise the automaker. The details of the talks are unclear, but it’s believed GM was interested in purchasing a stake in Rivian and using the company to speed up the development of its own electric trucks and crossovers. This is important to GM as the company was dismissive about electric pickups until Ford confirmed plans for an electric F-150. Now, GM has to respond and it’s playing catch up. GM hasn’t said much about its electric truck plans, but Bloomberg says the company’s next-generation electric vehicle technology wasn’t designed to be used on pickups. Instead, it’s focused on cars and crossovers. If this is correct and GM can’t strike a deal with Rivian, the automaker might have to make significant investments to build an electric truck of their own. Regardless of what happens, Rivian is slated to launch its R1T pickup in 2020. The truck will have 4 electric motors, 3 battery capacities and outputs ranging from 408 hp to 764 hp. +++ 

+++ From Land Rover’s Range Rover to Hyundai’s Tucson, SUV models dominate the streets of Seoul, like many other metropolitan cities nowadays. Rugged off-roaders are no longer limited to muddy tracks, steep hills or deep rivers. In fact, this all-terrain ability of SUVs has attracted drivers who prefer a comfortable and satisfying driving experience. The wide range of models (from large vehicles and pickups to compact crossovers) gives customers a variety of choices in style and size. The global trend of shifting away from sedans and hatchbacks toward SUVs has translated into increased attention in South Korea as well. The Korea Automobile Manufacturers Association data shows that SUV sales of the 5 major domestic carmakers stood at 603,066 units in 2018, rising from 544,906 in 2017 and 542,017 in 2016. In 2012, SUV sales were around 256,923 units. Meanwhile, sedans sold 694,868 units last year, making up 49.7 % of the total car sales. For the first time, their share has fallen below 50 % in a country where luxurious, coupe-style sedans were once the object of envy. The Hyundai Sonata, the best-selling car in Korea until 2015, has fallen to 7th place with sales of 65,846 units last year. The situation is similar for other popular sedans, such as Toyota Camry that saw its global sales plummet 11 % last year compared to 2017. So, why are SUVs selling more than sedans? Primarily, according to carmakers, this has much to do with the increase in the number of people enjoying outdoor leisure activities such as camping as they prefer a roomier interior and cargo area. Cars with a more spacious interior are preferred by the younger generation given their “You only live once” (YOLO) lifestyle seeking more adventures in their free time. Finding a work-life balance has also shifted Koreans’ interest to spending more time doing outdoor activities. Keeping equipment such as tents, mats or sports gear like ski in the car trunk have become more important than before, said an official from a local carmaker. “While a family car in the past was defined by a 4-seat sedan, the definition has changed to a car that can carry the entire family and their stuff for a getaway in an instant”, said a Hyundai official. Professor Lee Ho-geun from Daeduk University, meanwhile, observed the actual increase in the number of car owners. As per latest data the number of registered vehicles in Korea, with a population of around 52 million, is over 25 million. There are more individuals who drive their own cars now. Earlier, a single vehicle was responsible for transporting a larger number of people. This means that while the comfort of the rear seat was more important in the past, the convenience of the driver’s seat has become more important now, Lee said. “More customers now focus on better driving visibility and options in the driver’s seat. SUVs offer better satisfaction compared to sedans in this regard”, he noted. Larger space, better visibility due to higher driving position and the option of an all-wheel drive are the obvious strengths of SUVs. But many see the almost sedan-like ride comfort and diversified segment lineups of SUVs as another driver of the boom. “Companies have been transforming SUVs to be more compact in size and suitable for a city lifestyle to attract urban drivers. With technological development, SUVs also have enhanced safety features and engines to match the comfort of a sedan”, a BMW Korea official told. With lines between an SUV and sedan blurring, the former has become diversified. BMW launched a new segment called the Sport Activity Coupe, while Volvo did with the V90 Cross Country. Options for customization of interior features and safety functions are available as well. Besides the smooth-riding comfort and lightweight car frames of new SUV models, many of them even get mileage similar to sedans. Some of the latest SUVs powered by technologically innovated GDI engines or hybrid powertrains also offer the same feel of explosive accelerating forces offered by the previous models. “Mercedes-Benz’s SUV models proved that the fuel efficiency of SUVs can improve to a level not much different from average sedans. Customers can also choose a fuel-efficient hybrid trim, really washing away their concerns on mileage”, said a Mercedes-Benz Korea official. Some market insiders, meanwhile, also suggest that the increased SUV sales simply come from increased supply. SUVs, which are larger and cost more to manufacture, offer more profits to automakers. According to Ford, its compact EcoSport costs $20,000 in the US. With added features for the higher trim, the price can go up by 1.5 times. This equals to at least $4,500 increased profit compared to when selling a Fiesta and $2,500 profit by selling a Focus. In case of SsangYong Motor’s Tivoli, the standard model is the cheapest at around 16.2 million won ($14,178), but the price can almost double for the highest trim. With automakers capitalizing on popular, profitable SUV models, some major carmakers are ditching sedans to invest more in SUVs. GM Korea, the local unit of General Motors, has decided to discontinue Chevrolet’s subcompact Aveo for business portfolio concentration, 9 years after its launch. “It is a natural step for automakers to bet big on a popular vehicle lineup, so they can secure funds for future vehicle development such as electric vehicles and self-driving cars, especially at a time when more of them are striving to find solutions to reducing emissions linked to climate change”, said Lee from Daeduk University. With SUVs overtaking sedan sales, some automakers are exiting the sedan market to introduce new SUV models. But it does not mean the companies are giving up on sedans entirely, industry insiders say. “Car companies are focusing on boosting profit-rich large SUV production, but sedans and SUVs cannot replace each other. Each has a distinctive characteristic not only in terms of design and frame, but also geometric features such as height and length, as well as use of passenger and cargo space”, an official from a local carmaker’s design studio told. He also added that although SUVs now offer almost sedan-like silence and ride comfort, it will be difficult to have exactly the same features, as engines are located differently inside the car’s hood. Also, companies see sedans as a good way to hook customers with updated features in the face-lift models at a reasonable and affordable price. “In terms of product strategy, sedans play a powerful role in terms of brand awareness. Except for some renowned SUV brands such as SsangYong or Jeep, most carmakers’ sales are directly linked to their main sedan lineups”, said Park Jae-yong from Korea Automotive Future Research Center. Increased SUV sales do not indicate the falling significance of sedans, as the full-size sedan is a segment that can best represents the luxurious image of an automaker, some say. “A reasonable price, sporty-looking A-spec sedan is bringing in buyers from early 20s to late 60s. Carmakers will want to keep that momentum going with steady-selling entry-level products such as Hyundai’s Sonata”, he said. +++ 

+++ David Einhorn’s Greenlight Capital renewed criticism of Elon Musk and TESLA , saying the electric car company appeared to be “on the brink” of failure again, according to a letter sent to clients of the hedge fund. The letter cited a lack of demand, “desperate” price cuts, layoffs, “closing-and-then-not-closing” stores, closing service centers, slashing capital expenditures, rushed product announcements and “a new effort to distract investors from the demand problem with hyperbole over Tesla’s autonomous driving capabilities”. “We believe that right here, right now, the company appears to again be on the brink”, the letter said. Greenlight is shorting Tesla stock, recently a profitable bet. Tesla’s share price declined from $332.80 to $279.86 in the first quarter. On Friday, shares of Tesla were trading around $268 per share. Greenlight said its funds gained 11 % over the first 3 months of 2019, slightly below the gain of the S&P 500 Index. Despite the gains so far this year, “it continued to be a challenging environment for our investment style with growth stocks performing much better than value stocks”, the letter said. “In the context of this headwind and a sizable short portfolio, we are pleased with the quarterly result,” it added. Greenlight noted that last summer, Musk had promised Tesla would be profitable and cash flow positive in every quarter going forward. “He repeated that forecast as recently as the end of January”, Greenlight said. “That promise has failed to materialize. The question at hand is: in a few months will Musk be again bragging that he saved the company from the brink of failure, or will Tesla in fact fail this time?” Greenlight Capital and its founder Einhorn first rose to prominence for making a prescient call on Lehman Brothers’ accounting troubles before the firm’s collapse. Late last year, Greenlight compared Tesla to Lehman. In Greenlight’s letter, Einhorn said the fund’s biggest gainers during the first quarter included AerCap Holdings, Brighthouse Financial, Deutsche Pfandbriefbank, General Motors and Green Brick Partners. Einhorn said Brighthouse has been misunderstood because GAAP accounting requires that hedges get marked to market each quarter while liabilities are not. “This creates a mismatch between how BHF’s assets and liabilities are treated in response to market moves”, Einhorn said. “All else being equal, BHF benefits from rising equity markets and higher interest rates, as the economic gain from lower expected claims more than offsets the company’s losses on its hedges”. +++ 

+++ The VOLKSWAGEN Group is currently developing a family of all-electric city cars, but doing so isn’t without its challenges. The Seat brand is heading up the conglomerate’s development of electric city cars based on a shortened version of the Modular Electric Drive Toolkit (MEB) set to underpin a multitude of EVs from the VW Group. The car manufacturer is currently developing an all-electric city car which will replace the VW Up, Skoda Citigo and Seat Mii triplets. The aim is to price the vehicle at less than €20,000, and to meet this goal, engineers are exploring innovative cost-cutting methods. According to VW brand development chief Frank Welsch, the company is looking at shrinking certain drivetrain components and using less steel, plastics, fabrics, and other materials for its entry-level EVs. Another solution is to fit the 2 banks of battery modules longitudinally across the vehicle’s floor. “That would give us more space between the battery and the sills, and hence a greater cushion should an accident occur”, Welsch explained. “Safety is a major priority at Volkswagen and a lot of money is spent trying to protect the battery cells in the event of a crash”. The German automotive group is also investigating whether it will have to outfit its baby EVs with smaller electric motors than those used by the upcoming family of I.D. models. “We have to see for example whether the range of electric motors we currently have planned for the MEB need to be supplemented with a smaller one, for example”, Welsch said. Current plans call for Seat to launch VW’s first electric city car in 2023, and shortly after, a number of different versions will be offered across VW’s other brands. Production of the current Up, Citigo and Mii will continue until 2022. +++ 

+++ VOLVO has started producing its XC40 in China to bump up capacity and cater for growing demand, the Swedish carmaker said. As the cost impact of Washington’s trade war with Beijing spreads, Volvo has been shuffling manufacturing facilities for its models. The dispute has been squeezing capacity at Volvo’s Ghent plant, the only site where the XC40 is currently produced. Volvo, which is owned by China’s Geely, said that it now was also being manufactured in Luqiao, south of Shanghai. “Demand for the XC40 has exceeded our most optimistic expectations”, Volvo CEO Håkan Samuelsson said. “Building it in Luqiao creates extra capacity, adds flexibility to our global manufacturing network and is a clear proofpoint of our strategy to ‘build where you sell’ “. The model has sold more than 100,000 units since its launch in late 2017. The XC40 is based on a platform Volvo developed with Geely designed to share the costs of developing and manufacturing a competitive vehicle. The platform, called Compact Modular Architecture, is shared by vehicles produced by sister brands Lynk & Co and Polestar, with Geely also planning to base a new Coupe SUV on it. Automakers are going through one of their most uncertain periods, hit by trade wars, rising costs for developing electric cars and an industry downturn that has dented even the most profitable brands. The Luqiao plant, owned by Geely and operated by Volvo, currently builds the 01 SUV sold by car subscription-focused brand Lynk & Co. Polestar, Volvo and Geely’s electric performance brand, said separately on Friday that starting next year it would also use Luqiao to produce Polestar 2, its first fully electric sedan that is intended to rival Tesla’s mass market Model 3. Geely has forecast flat sales in 2019 due to uncertainty about domestic demand, while Volvo has said it expects margins to remain under pressure. +++

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