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+++ At the edge of Nairobi’s Ngong Forest, thousands of used cars glitter in the hot sun on a dusty field, waiting for buyers. Imported from Japan or the Middle East, they offer an affordable route to vehicle ownership in Kenya and have dominated the market for decades. That is an obstacle big carmakers must overcome if they are to crack AFRICA , a market promising rapid growth as trade tensions threaten sales elsewhere. African consumers also still need conventional engines just as demand in more traditional markets is curbed by restrictions on carbon emissions. Volkswagen, BMW, Toyota, Nissan and others have joined forces to lobby governments for steps that would reduce the imports that have made sub-Saharan Africa notoriously difficult terrain and allow local production to flourish. “The question on Africa isn’t ‘Is it a market of the future?’ “, Mike Whitfield, Nissan’s top executive for Africa, told but: “It’s a case of when”. 4 years after forming the Association of African Automotive Manufacturers (AAAM) their efforts are starting to bear fruit. Carmakers that set up local assembly plants could get tax holidays of up to 10 years and duty exemptions in Nigeria, Kenya and Ghana, according to government plans. Thomas Schaefer, who heads Volkswagen’s Africa business, said there is a potential market in sub-Saharan Africa for 3 to 4 million new cars, up from just 420,000 in 2017. But that will require addressing the well-entrenched interests of second-hand car dealers, smugglers and lowering the price of new cars. “It will largely depend on how successful the African governments are in limiting the amounts of second-hand imports and how price-competitive new vehicles can be with their tariffs”, said Craig Parker, Africa research director at Frost & Sullivan, a U.S.-based market research firm. Africa’s population and household incomes are rising rapidly. But its 1 billion inhabitants account for only 1 % of the world’s new passenger car sales, industry data shows. South Africans bought over 85 % of those vehicles. The AAAM identified Kenya, Nigeria and Ghana as potential manufacturing hubs and helped draft legislation setting up standards and incentives. Details of governments’ plans demonstrate that African nations are keen to secure a spot as a beachhead for the industry. Nigeria and Ghana are preparing to offer automakers tax holidays of up to 10 years and duty-free imports of parts and components used in local assembly. Nigeria also plans to double the levy on new, fully-built imported vehicles to 70 % to boost demand for locally produced cars, though the policy’s approval has been delayed. In Kenya, automakers will pay no import or excise duties and get a 50 % corporate tax break. For African nations facing massive demographic pressures, such concessions make sense if they create jobs, said Jelani Aliyu, of Nigeria’s National Automotive Design and Development Council. “The multiplying effects are exponential”, said Aliyu, who foresees supporting industries developing around the plants. Legislative and fiscal frameworks are being finalised, but companies are already investing millions of dollars in new plants. VW and Nissan have set up operations in Nigeria, Kenya and Ghana or have pledged to do so. Honda and Peugeot have launched assembly plants in Nigeria, and Peugeot has done the same in Kenya. Carmakers sorely need the business. Their South African divisions, which typically direct operations elsewhere on the continent, face stagnating domestic sales and scant growth prospects in their main export market, Europe. A chaotic Brexit or U.S. tariff hikes could further dampen sales. Toyota South Africa’s chief executive Andrew Kirby said the strategy is: “Focus on Africa because Africa is going to grow significantly”. A pivot to Africa could also help insulate automakers from the immediate effects of the electric vehicle revolution. The continent is ill-placed to join it at the moment due to the higher prices of EVs and unreliable power grids. Just 66 electric cars were sold last year in South Africa; the continent’s most developed economy. “Africa will most likely remain as the last bastion of internal combustion engines”, Parker said. Nevertheless, industry officials say the biggest hurdle to developing the market for new cars is dumping from countries such as Japan, where strict vehicle inspections force cars out of circulation after just a few years. They say this distorts the market by allowing dealers to buy the cars at scrap prices and export them to Africa. They blame the cheap imports for killing off assembly sectors in a number of African countries including Nigeria, which built around 150,000 cars per year until the 1980s. Political will is needed to change that, and without it there is little point in considering a country for local production, according to VW’s Schaefer. “The markets are literally not functioning right now due to importation of used vehicles”, he said. In Kenya, the government plans to wind down imports of cars more than 3 years old by 2021. Exceptions will be made for passenger vehicles with 1.5 liter or smaller engines. The policy could see mid-range imported models double in price, according to the 300-member Kenya Auto Bazaar Association (KABA). The lobby group has taken out ads in local newspapers denouncing the policy and is demanding a meeting with Kenya’s president. Mark Oburu, KABA’s vice-chairman, said the move would hit an industry that delivers 85 % of Kenyan car purchases. “The middle class will not be able to own a vehicle of their choice”, he said. In the Nairobi bazaar, Grace was shopping for her eldest son’s first car. She said she could not afford to buy a new one. “If they don’t rescind that decision, we will be on boda bodas (motorbikes)”. Both Ghana and Nigeria have also pledged to tackle the issue. Nigeria hiked taxes on imported used cars in 2014, but smuggling has undermined that effort to boost demand for local production, according to manufacturers and government officials. Used cars are also among the leading imports in many African countries, and governments will have to wean themselves off the associated tax revenues. There are other stumbling blocks: access to financing is limited, and countries that don’t host assembly plants must also be persuaded to limit used imports and reduce tariffs on African-made vehicles. That will be hard to do if the only outcome they see is higher sticker prices. “The purpose is not to take the most lucrative slice of the industry”, said Ghana’s minister of trade and industry, Alan Kyerematen, suggesting that neighbours could produce components for his country’s assembly plants. Auto executives acknowledge the challenges but point to a famous precedent. When VW and GM entered China in the 1980s and 90s, vehicle ownership rates were lower than in many African markets. Today, those 2 companies alone sell over 3.5 million vehicles annually in China. “Everybody was laughing, saying China doesn’t need cars, they only need bicycles”, Schaefer said. +++ 

+++ The new BENTLEY Bentayga Hybrid has taken its time coming (it was unveiled in March 2018 and won’t arrive with customers before the third quarter of 2019), but it kicks off a new electrified era at Crewe, according to the global sales chief. Sales and marketing board member Chris Craft said Bentley intended to accelerate its electrification programme. “There’s no question that our focus is to electrify our range”, he said. “The Bentayga Hybrid comes first in Q3 2019. We intend to produce a PHEV in every model range we have by 2025. And, yes, it could include a full electric vehicle (EV)”. The new Bentayga Hybrid was first revealed at the 2018 Geneva motor show. At the time, Bentley claimed that its new plug-in Bentayga variant was the “world’s first luxury hybrid”; something Land Rover won’t be pleased to hear, given that it recently added a Range Rover PHEV and Range Rover Sport PHEV into its range. The new hybrid Bentayga uses a new-to-Bentley 3.0-litre V6 petrol engine mated to an electric motor. Back then Bentley neglected to mention how much power it produces, but did say that its emissions are rated at 75 g/km on the NEDC cycle. All-wheel drive is standard, and like the rest of the Bentayga range, it comes with a smorgasbord of driving modes depending on what you want from it. There are 4 on-road modes (Sport, Bentley, Comfort and Custom) and a separate set of modes to make the most of the electrified powertrain. EV Drive allows for up to 50 kilometres of full-electric driving, Hybrid Mode allows the engine and motor to seamlessly work together, while Hold Mode keeps charge in the battery, so you can save silent e-running for urban use later in your journey. To help keep the Bentayga Hybrid as efficient it can be, it uses navigation data to guess which drive mode is best for the current driving situation. Otherwise, it’s business as usual inside, with the same suite of controls, pleats and wood that you find in all other Bentaygas. Bentley claims the battery pack can be charged in 150 minutes via a fast-charger, or around 450 minutes from a regular household socket. Bentley has also teamed up with designer Philippe Starck to design a Power Dock for Bentley Hybrid buyers. The charging station is a “statement piece” that “showcases exquisite attention to detail”. The charger’s surround uses ‘eco-linen’ mixed with resin and aluminium casting. The infotainment system displays charging points and allows you to set your destination to them. And to show the world you’ve going electric with your choice of Bentayga, the Hybrid badging and wheel centres come in a very fetching shade of copper. The socket for the charger is subtly hidden on the opposite side to the fuel filler cap but there’s little else to differentiate the PHEV from the rest of the range. Inside, it’s subject to much the same finish as any other Bentayga. Which is to say, it’s mega opulent. An official price is still to be confirmed, but expect it to be … expensive. +++ 

+++ BMW will recall 360,000 vehicles in China as part of the worldwide effort to root out defective airbags made by now-defunct Japanese supplier Takata, regulators in Beijing said. Around 20 people have died in accidents linked to defects in Takata airbags since 2013, prompting a massive worldwide recall of at least 100 million cars from a wide range of manufacturers. The recall will affect nearly 273,000 models built by BMW’s joint venture with Chinese manufacturer Brilliance Automotive and more than 87,000 imported BMW cars, China’s State Administration for Market Regulation said. The agency said in statement that a defect could cause the airbags to eject debris at passengers if deployed. It did not mention any specific incidents caused by the BMW-installed airbags. The China recall affects more than 2 dozen different BMW models built between 2000 and 2018, including several each in the i, X and M series, along with other models. The suspect parts will be replaced for free, the notice said. Founded in 1933, Takata went out of business in 2017 because of the airbag crisis. +++ 

+++ Global automakers are positioning for a brave new world of on-demand transport that will require a car of the future (hyper-connected, autonomous, and shared) and CHINA may become the concept’s laboratory. With ride-hailing services booming and car-sharing not far behind, the need for vehicles tailored to these and other evolving mobility solutions is one of the hottest topics among global automakers gathered for this week’s Shanghai Auto Show. Nearly all agree that there is no better proving ground than China: its gigantic cities are desperate for answers to gridlock and its population is noted for its ready embrace of high-tech new services. To take advantage of this, manufacturers are competing not only to sell conventional and electric vehicles in the world’s biggest auto market, but also to develop new technologies and even specific interiors designed for the on-demand world. “We cannot just develop electric cars. They will have to be smart, interconnected and of course shared”, Zhao Guoqing, vice president of Chinese auto giant Great Wall Motors, said on the auto show’s sidelines. Discussion of China and ride-hailing inevitably involves Didi Chuxing, the country’s omnipresent answer to Uber. The eagerness of Chinese travellers to hail rides with a smartphone click has unleashed a colossal market: on-demand transport reached $28 billion in turnover in China last year, or about half of global volume, and is expected to double by 2022, according to data firm Statista. Didi accounts for about 90 % of the Chinese market. The on-demand potential is bringing automakers and service providers together. Last year, Didi unveiled an alliance of Chinese and foreign manufacturers including Renault, Toyota and Volkswagen, dedicated to exploring ways forward. And in February, Chinese technology giants Alibaba and Tencent joined hands with several manufacturers to develop a future platform for on-demand transport. “We can no longer be a conventional manufacturer, we must offer mobility solutions, connectivity”, Stephan Wollenstein, director of Volkswagen China, told reporters. Although a relative newcomer to China’s automotive market, French brand Renault is plunging ahead: its local joint venture with Chinese manufacturer Brilliance Auto delivered 600 personal minivans to Didi in February. “Didi wants to develop such vehicles with many carmakers, which are more adapted to Didi’s business, redesigned around the passenger”, said Michael Dong, vice president of Renault-Brilliance-Jinbei. For one thing, most passenger cars today are designed to squeeze in a family, and thus feature limited space in the back because that’s where the kids normally sit, said Lawrence Petizon, an analyst with AlixPartners. But for ride-hailing or car-sharing, more space is needed in the back to accommodate grown-up passengers. “The family car is not the right answer”, he said. Didi drivers typically supply their own vehicles, but Chinese authorities are encouraging service firms to build their own fleets, partly to spur the industry and push forward the futuristic transport concept. Some manufacturers are even dipping their toes into ride-hailing, with Germany’s BMW offering a high-end service in the southwestern Chinese city of Chengdu, and Volkswagen and Mercedes-Benz doing so in Shanghai. “Admittedly, the volumes ordered are still insufficient for mass production but the potential is enormous”, says Dong. The idea is not confined to China. Daimler and BMW announced in February they would jointly invest “more than one billion euros” to deepen cooperation between their Car2Go and DriveNow services in Europe, in which cars are available for short-term point-to-point use. One thing that seems to certain to eventually change is how cars are bought and sold. “Car manufacturers will no longer provide customers with cars via a one-time sale, but rather with a brand that connects them to the users on a daily basis through the mobility services they offer”, said a recent report by Eurogroup Consulting. This automotive evolution is expected to accelerate development of autonomous vehicles, which are already viewed as the future of overall car transport, but seem especially suited for urban car-sharing services. Valeo, the French manufacturer of ultrasonic sensors, cameras, and navigational technology, said it received orders totalling one billion euros last year related to the development of “robot-taxis”. Francois Marion, president of Valeo China, said the global advent of driverless cars is just around the bend. “They will hit the road in carefully charted urban environments, with dedicated lanes on the streets, connected infrastructures guiding them, and programmed itineraries”, he said of the futuristic vision. “And the companies operating them will always be able to intervene if anything happens to one of the vehicles”. Valeo also is working with Meituan, China’s leader in meal deliveries, to develop a robotic vehicle. +++ 

+++ Automakers are showcasing ELECTRIC cross-overs and sedans with more driving range and luxury features at the Shanghai auto show, trying to appeal to Chinese buyers in their biggest market as Beijing slashes subsidies that have propelled demand. Communist leaders wanting China to lead in electric vehicles have imposed sales targets. That requires brands to pour money into creating models to compete with gasoline-powered vehicles on price, looks and performance at a time when they are struggling with a Chinese sales slump. General Motors, Volkswagen, China’s Geely and other brands on Tuesday displayed dozens of models, from luxury SUVs to compacts priced under $10,000, at Auto Shanghai 2019. GM unveiled Buick’s first all-electric model for China. GM says the 4-door Velite 6 can travel 300 kilometers before the battery needs charging. VW showed off a concept electric SUV, the whimsically named ID.Roomzz, designed to travel 450 kilometers on one charge. Features include seats that rotate 25 degrees to create a lounge-like atmosphere. Communist leaders have promoted “new energy vehicles” for 15 years with subsidies to developers and buyers. That, along with support including orders to state-owned utilities to blanket China with charging stations, is helping to transform the technology into a mainstream product. “People’s mindset and governmental policies are more encouraging toward e-cars than in any other country”, said VW CEO Herbert Diess. Electric vehicles play a key role in the ruling Communist Party’s plans for government-led development of Chinese global competitors in technologies from robotics to biotech. Those ambitions set off Beijing’s tariff war with President Donald Trump. Washington, Europe and other trading partners complain Chinese subsidies to technology developers and pressure on foreign companies to share know-how violate its market-opening commitments. Electric car subsidies end next year, replaced by sales quotas. Automakers that fall short can buy credits from competitors that exceed their targets or face possible fines. “Most of the traditional car makers are under huge pressure to launch NEVs”, said industry analyst John Zeng of LMC Automotive. Last year’s Chinese sales of pure-electric and hybrid sedans and SUVs soared 60 % over 2017 to 1.3 million, or half the global total. At the same time, industry revenue was squeezed by a 4.1 % fall in total Chinese auto sales to 23.7 million vehicles. That skid that worsened this year. First-quarter sales fell 13.7 % from a year ago. Still, China is a top market for global automakers, giving them an incentive to go along with Beijing’s electric ambitions. Total annual sales are expected eventually to reach 30 million, nearly double last year’s U.S. level of 17 million. Under Beijing’s new rules, automakers must earn credits for sales of electrics equal to at least 10 % of purchases this year and 12 % in 2020. Longer-range vehicles can earn double credits. That means some brands can fill their quota if electrics make up as little as 5 % of sales. Nissan and its Chinese partner displayed the Sylphy Zero Emission, an all-electric model designed for China. Based on Nissan’s Leaf, the lower-priced Sylphy went on sale in August. Mercedes Benz displayed its first all-electric model in China, the EQ C. The Germany automaker says it can travel 400 kilometers on one charge and can go from 0 to 100 km/h in 5.2 seconds. Mercedes plans to release 10 electrified models worldwide, with most built in China, according to Hubertus Troska, its board member for China. Some Chinese rivals have been selling low-priced electrics for a decade or more. China’s BYD Auto, the biggest global electric brand by sales volume, unveiled three new pure-electric models last month. All promise ranges of more than 400 kilometers on one charge. Last week, Geely Auto unveiled a sedan under its new electric brand, Geometry, with an advertised range of up to 500 kilometers on one charge. Geely’s parent, Geely Holding, launched a joint venture with Mercedes parent Daimler in March to develop electrics under the Smart brand. Geely Holding is Daimler’s biggest shareholder and also owns Volvo. Beijing wants to force automakers to speed up innovation and squeeze out producers that rely too heavily on subsidies. But the technology minister acknowledged in January that China faces a difficult transition as that spending is ending. Keeping development on track “will be a challenge”, said Miao Wei, according to a transcript on his ministry’s website. The shift creates an opportunity for fledgling Chinese automakers that lag global rivals in gasoline technology. They have just 10 % of the global market for gasoline-powered vehicles but account for 50 % of electric sales. The end of subsidies should lead to dramatic changes, said Zeng of LMC Automotive. He said longer-range, feature-rich models from global majors will replace small producers that cannot survive without subsidies. Electric vehicles “will be much more competitive”, said Zeng. As the cost of batteries and other components falls, industry analysts say electrics in China could match gasoline vehicles in price and become profitable for manufacturers in less than 5 years. EVs carry a higher sticker price in China than gasoline models. But industry analysts say owners who drive at least 16,000 kilometers a year save money in the long run, because maintenance and charging cost less. +++ 

+++ Japanese prosecutors indicted former Nissan chairman Carlos GHOSN on a charge of aggravated breach of trust, a Tokyo court said, bringing a 4th charge against him on the day his detention period was set to expire. The charge, which ensures Ghosn will remain in custody pending another likely bail attempt by his lawyers, comes after authorities arrested him earlier this month for a fourth time on suspicion he enriched himself by a total of $5 million at Nissan’s expense. Ghosn, who had been released on $9 million bail last month after spending 108 days in jail, has denied all allegations against him. His defense team has launched a public battle against the prosecutors, calling the latest arrest “illegal”. Nissan said it had filed a criminal complaint after determining payments made by the automaker to an overseas vehicle sales company through a subsidiary had been directed by Ghosn for his personal enrichment. A spokesman for the company said it believed it had been harmed by Ghosn’s misconduct. “Such misconduct is completely unacceptable, and Nissan is requesting appropriately strict penalties”, the automaker said in a statement. Prosecutors had to indict or release Ghosn under the terms of his detention. Ghosn already faces 3 other charges, related to allegedly understating his income and for allegedly transferring personal investment losses to Nissan. He has denied all the allegations against him. +++

+++ HONDA is slowing production of Accord and Civic as U.S. buyers continue to favor SUVs and pickups. The Japanese automaker said that it will temporarily idle a second-shift production line in August at its Marysville, Ohio, assembly plant, in part to prepare the factory to produce future electric vehicles. The shift is expected to resume production in several years. The line being shut down produces about 55,000 vehicles a year, most of which are Accord sedans, Honda said. In addition, some production of the CR-V in Marysville will go to a factory in Greensburg, Indiana, where production of the Civic will be reduced. While production is slowed in Marysville, Honda will update the plant’s manufacturing capability to prepare for new technology including electric vehicles, Honda said in a statement. There will be no layoffs, a company spokeswoman said, but Honda will offer voluntary buyouts to some employees. The reduction also will affect production at engine and transmission plants in Ohio, Honda said. Sales of the Accord this year are up 4.6 % through March but fell nearly 10 % last year. Civic sales are down nearly 5 % so far this year to 78,185. They fell almost 14 % last year. CR-V sales, however, are up 6.4 % through March to 87,280. Pickups and SUVs have made up almost 70 % of U.S. new vehicle sales this year. +++

+++ HYUNDAI ’s sales in China in the first 3 months of this year were even worse than during an unofficial boycott in 2017 and the lowest first-quarter figures in 10 years. Hyundai said that it sold just 132,678 cars in China from January to March of this year, down 18.4 % on-year. Sales of key models like the Elantra (sold as the Avante in Korea) and Tucson were both slow. Sales of commercial buses and trucks were even the worst ever at just 1,210 vehicles, so the division was forced to eat into its capital reserves to stay afloat. Hyundai has decided to halt production at its oldest Beijing plant with a capacity for 300,000 cars a year and started drastic downsizing. Affiliate Kia will also halt production at one plant in Yancheng next month. Industry watchers believe more downsizing will be needed as local rival are in the ascendant. Chinese carmaker Geely rose to the No. 3 spot after rolling out cheaper cars with high-tech functions, while Japanese rivals Honda, Nissan and Toyota are also seeing sales grow in the luxury segment due to their solid image. “We can’t afford to give up on the Chinese market”, a Hyundai executive said. “We will implement adequate restructuring and adjust output while rolling out new models that appeal to Chinese consumers”. +++ 

+++ Hyundai and its sister company KIA said they have developed the world’s first mobile tune-up technology for their electric vehicles. According to the automakers, the technology allows a driver to control an electric car’s performance, efficiency and driving comfort by setting the car’s torque, acceleration, deceleration, power generation during braking, speed limit, responsiveness and air conditioning, via mobile devices including smartphones or tablet PCs. They plan to apply this technology to their new electric vehicle models in the future, Hyundai and Kia said in a statement. Such customization would offer “unprecedented performance”, the companies said, adding that it is the world’s first technology that allows drivers to accurately change settings via mobile devices. Furthermore, a driver can download the customized settings of a car through the tune-up technology and apply this even when driving a different electric car. To prevent security issues regarding uploading personalized settings on a server, the company said it has applied blockchain technology to encrypt the data. “Hyundai and Kia plan to add 44 environment-friendly vehicle models, including 23 EV models, to their lineups by 2025, amid increasing necessity to develop vehicle-centered technology and service”, Hyundai and Kia said in a statement. “We will make EV models that can offer customer experience based on one’s lifestyle by developing mobility technology”, they added. Hyundai and Kia have been beefing up its pure-electric car lineup, in line with global carmakers’ push to go electric. In the 4th quarter of last year, the automakers announced that they aim to be among the top 3 in the global electric vehicle market by 2025 and to launch an exclusive platform for electric vehicles by 2020 to increase efficiency. During the Seoul Motor Show earlier this month, Hyundai had promoted the air-purifying capability of its fuel-cell electric vehicle Nexo, which requires a shorter charging time but runs a longer distance compared to electric vehicles. It also unveiled the Sonata Hybrid, which deploys a solar roof that can generate electricity and recharge the battery while driving under the sun. +++

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