+++ ASTON MARTIN has previewed a new manual gearbox ‘AMR’ variant of the latest Vantage sports car, set to be revealed within the next week. AMR, which unsurprisingly stands for Aston Martin Racing, is a badge that has been used on a number of special edition Astons in the last few years, and is currently used on a more driver-focused version of the DB11 and a run-out special of the Rapide. In keeping with the theme of driving engagement, the Vantage AMR will see the return of a manual gearbox to the brand for the first time since the previous-generation model in 2017. In recent years Aston has used a 6-speed manual box in certain models, but the V12 Vantage S was fitted with a 7-speed manual towards the end of its life, making use of a motorsport-inspired dog-leg first gear layout. That allowed the top 6 gears to remain in the traditional ‘H’ pattern that most drivers are familiar with. It’s not clear yet whether the new manual Vantage will revive this format, but it’s a strong possibility. Porsche offers a 7-speed manual transmission on its 911 Carrera, a close rival to Aston’s sports car. The AMR will continue to retain the Mercedes-AMG sourced 4.0-litre twin-turbo V8, which might receive a small power boost. Expect styling tweaks, bespoke interior trim and perhaps some subtle chassis revisions, too. Previous AMR models have been available on a limited production run with a significant price increase, and that’s likely to be the case with the new car. Expect more details to emerge in the coming days. +++
+++ The Insurance Institute of Highway Safety is calling for a revaluation of rear seat restraint system after a new study revealed BACK SEAT PASSENGERS are often more seriously injured in frontal crashes than their frontseat counterparts. For its study, the IIHS evaluated 177 cases in which rear seat passengers were seriously injured or killed. The institute was surprised to find that, in many cases, rear seat passengers were more severely injured in a front-end collision than those sitting in a vehicle’s front seats. Moreover, the IIHS discovered that the majority of rear seat fatalities occurred in crashes that were deemed survivable, which means the passenger compartment of the vehicle wasn’t compromised. The most common injury to rear seat passengers was chest injuries, which was documented in 22 injuries and 37 fatalities. By examining photos, police reports, medical documents and autopsy reports, the institute found that most of the chest injuries were caused by shoulder belts. Head injuries were the second most common type of injuries recorded by the study. Of the cases examined, nine included rear seat passengers with head injuries and 18 had head injuries that led to death. “Manufacturers have put a lot of work into improving protection for drivers and frontseat passengers. Our moderate overlap front crash test and, more recently, our driverside and passengerside small overlap front tests are a big reason why”, said IIHS President David Harkey. “We hope a new evaluation will spur similar progress in the back seat”. The IIHS hasn’t made any official recommendations to improve rear seat safety, but the institute suggests seat belt tensioners and force limiters (which are commonly used in front seats to limit the movement of passengers and reduce shoulderbelt forces during a crash) could be one possible solution. The institute also postulates that airbags for rearseat passengers could help reduce the number of injuries and deaths. Ford and Mercedes-Benz have both introduced inflated seat belts intended to reduce forces transmitted to vehicle occupants. “We’re confident that vehicle manufacturers can find a way to solve this puzzle in the back seat just as they were able to do in the front”, Harkey said. +++
+++ With production of its next-generation Corvette right around the corner, CHEVROLET has announced it’ll be hiring 400 new workers and adding a second shift at the sport car’s Bowling Green, Kentucky production plant. Chevrolet will officially unveil the 8th generation Corvette on July 18, with production expected to begin shortly thereafter. As with all modern Corvettes, the C8 will be built exclusively in Bowling Green. “The Corvette’s iconic status owes so much to the men and women of Bowling Green, where it has been built exclusively for almost 40 years”, said GM chairman and CEO Mary Barra. “This is the workforce that can deliver a next generation Corvette worthy of both its historic past and an equally exciting future, and today’s announcement gets us one step closer to its reveal on July 18”. The C8 will mark a major deviation for the Corvette brand. Unlike the 7 generations that came before it, the C8 will switch to a mid-engine layout to better take on car makers like Ferrari and Lamborghini. The Corvette’s signature V8 engine, however, isn’t going anywhere. In addition to announcing a flurry of activity at the Bowling Green plant, Chevy’s press release also squashed hopes that the current C7 Corvette would soldier on as a cheaper alternative the mid-engined C8 Corvette. Chevrolet says the last C7 will rollout of the Kentucky plant sometime this summer. +++
+++ DAIMLER ’s first-quarter operating profit fell 16 % as a €718 million one-off gain failed to offset costs from a production delay for its Mercedes-Benz GLE and higher raw material costs. “We cannot and will not be satisfied with this, as expected, moderate start to the year. We now have to work hard to achieve our targets for 2019”, chief executive Dieter Zetsche said in a statement to accompany his final quarterly results as boss. Earnings before interest and tax fell to €2.8 billion, below the 2.89 billion expected by analysts despite the €718 million valuation boost from the merger of the mobility services divisions of Daimler and BMW. Daimler said problems launching a new SUV platform at its plant in Tuscaloosa, Alabama caused production delays for its GLE model, leading the return on sales at Mercedes cars to fall to 6.1 %, down from 9 % a year earlier. Mercedes-Benz sales in China, the world’s largest car market, fell 3 % and sales in smaller compact vehicles helped erode margins. Daimler said it had also incurred costs after ceasing production of its X-Class in Argentina. Markets in South America were not ripe for a premium pickup truck, chief financial officer Bodo Übber said. Daimler reiterated it expected slight growth in unit sales, revenue and profit on a group level this year, but only after cost-cutting measures are implemented. At the same time Daimler lowered the outlook of its vans division saying the profit margin range would be 0 to 2 %, rather than 5 to 7 %. Jefferies analyst Philippe Houchois said: “The outlook feels slightly optimistic given the weak start to the year”. +++
+++ FORD posted a better-than-expected first quarter largely due to strong pickup sales in its core U.S. market and said it was more confident in its forecast 2019 would bring better results than last year. Chief financial officer Bob Shanks told reporters at company headquarters in suburban Detroit that Ford has more confidence its 2019 results will be better than last year’s, but said it is in a “volatile environment with very strong competition”. Shanks added the first quarter would likely be Ford’s best for the year. Ford is restructuring its business, which includes cutting costs and overhauling its product lineup in key global markets, including China and Europe. Virtually all of the No. 2 U.S. automaker’s profit in the quarter was generated in the U.S. market, thanks to a strong performance by its best-selling F-Series pickup trucks and its new Ranger midsize pickup. The company lost money in most other markets, but less than it had expected. 2 of every 5 full-size pickups sold in the United States in the first quarter were Ford F-series, with segment-leading transaction prices averaging just under $48,000, according to Jim Farley, president of New Businesses, Technology & Strategy. The company’s decision to kill off most of its unprofitable passenger cars in the U.S. market meant that its revenue rose 2 % despite a 14 % drop in wholesale unit sales. Shanks said that move was worth “hundreds of millions of dollars” and helped drive pretax margins in North America to 8.7 %; up nearly a point from a year ago. Ford also made a small profit in Europe and the profit at its financing arm also grew. But the automaker’s global market share fell to 5.9 % from 6.5 % as it lost ground in every major market except North America. “The business is now turning in a positive direction”, Shanks said. But “it’s the beginning of the game, it’s not game over”, he added. The automaker is struggling in China, where earlier this month, Ford said it planned to launch more than 30 new models over the next 3 years. China unit sales fell 48 % in the quarter, but Ford said higher-priced products helped deliver a smaller loss than in the same quarter in 2018. In March, German rival Volkswagen and Ford signed a deal to develop mid-size pickup trucks and are continuing discussions about extending the alliance to include electric and autonomous vehicles and mobility services. The 2 automakers have yet to reach agreement on a potential VW investment in Ford’s Argo AI self-driving unit. Shanks said those talks were “going very well”. +++
+++ LEXUS has announced plans to enter the Mexican market. Toyota’s luxury division will launch with 3 stores located in Mexico’s largest metro areas: Mexico City, Monterrey and Guadalajara. It will be quite awhile until those dealership are actually open for business; Lexus is waiting to open its doors in Mexico until the 4th quarter of 2021 when its freshened lineup of 2022 model year vehicles will be available. “We are convinced that this is the right moment to introduce Lexus into the Mexican market”, Bob Carter, executive vice president of sales for Toyota North America, said. “We have high expectations with the consolidation and progress that the luxury segment has had, and that’s why we made the decision to bring Lexus to Mexico”. Lexus is hoping to take advantage of growing demand for luxury vehicles in Mexico. The country has also been receptive to hybrid models, which account for much of the Lexus lineup. Lexus has confirmed that 6 of its models will be available in the Mexican market: the LS, ES, UX, NX, RX and LX. +++
+++ It’s no secret that LOTUS is developing its first crossover. The firm is expected to begin producing the yet-unnamed model in China in the coming years. It will represent a drastic departure from the sports cars Lotus has made all of its life, but its chief executive revealed the model expansion could include other mainstream products. “I wouldn’t exclude anything: saloons, GT cars, crossovers, SUVs; it has to have Lotus DNA”, said CEO Phil Popham in an interview. The company has promised ambitious offensives in the past, but it has never had the funds to launch them. This time, it’s different. Chinese giant Geely owns a controlling stake in Lotus, which places the sports car brand under the same umbrella as Volvo, Polestar, and half of Smart. Geely can provide Lotus with the funding and the expertise it needs to expand. Popham ruled out expanding for the sake of expanding, however. “I won’t stick a Lotus badge on a Geely group platform and say, ‘that’s a Lotus’. We’d have to be involved in the engineering right from the start”, he affirmed. This suggests the company’s upcoming SUV will be a true driver’s car, which is difficult to achieve when developing a tall, heavy vehicle. As for other body styles, Popham didn’t reveal the other segments we could see Lotus compete in over the next few years. We know it’s in the early stages of developing an electric hypercar named Type 130. But the company has previous hinted at its ambitions to challenge Porsche, so it’s not too far-fetched to imagine a full range of Lotus-branded sports cars built, as Popham promised, “for the drivers”. +++
+++ MCLAREN will launch a new “rule-breaking” grand tourer in May with more of a bespoke look and feel than the 570GT, according to the firm’s boss. It’s expected to share less resemblance to existing McLaren models, although it won’t be a 4-seater. The as-yet-unnamed model is expected to be powered by McLaren’s 3.8-litre twin-turbocharged V8 engine, with more power than the 570 hp 570GT. Speaking at last month’s Geneva show, McLaren CEO Mike Flewitt said the car will be “more differentiated” than the 570GT was compared with the 570S, with a “more dedicated focus on the characteristics you want in a GT”. The first customer cars will arrive this autumn with an expected price of around £145,000, after a formal reveal in May. It’s the 4th car to reach production under the Woking brand’s Track25 business plan, out of a total of 18 new models due by 2025. When the new model was announced at Geneva, Flewitt said that it could be the first of several more practical, but still performance-focused, cars produced by the firm. Flewitt said: “It will be a car that combines competition levels of performance with continent-crossing capability, wrapped in a beautiful lightweight body. It’s a car that has been designed for distance and one that will also provide the comfort and space expected of a grand tourer. But it will also have a level of agility never experienced before in this segment. In addition, it will be the lightest of grand tourers and, by also having the best power-to-weight ratio, I promise it will be one of the quickest”. Suggesting that the new grand tourer could be the first of several such models, Flewitt also confirmed that it would sit outside its established, 3-tier line-up of Sports Series, Super Series and Ultimate Series families at the firm, instead saying that the car will be “a unique, tailored model”. Although McLaren has trademarked the GTZ name recently, insiders have told this is to future-proof potential names of products, rather then being specific to either the GT or a potential collaboration with Zagato. In a separate interview, Flewitt claimed that the brand remains on course to have part-electrified models on sale before Aston Martin. “Aston are talking about competing with us, but there isn’t anything near the road yet”, Flewitt said. “We prefer to talk about it when we’ve done it”. He confirmed that the first hybrid McLaren, the replacement for the Sports Series that is due next year, will send both petrol and electric power through the rear wheels only, while an all-wheel-drive hybrid system is being considered for higher-performance models. “I can’t see us doing a mechanically driven front axle”, he admitted, “but I could see an electrically driven front axle in the future. Apart from the traction benefits, which increase the appeal in certain markets, you also get a very significant ability to recharge your hybrid with an electrically powered front axle”. McLaren is also believed to be switching to a weight-saving, smaller capacity V6 to combine with electric power. The forthcoming Sports Series replacement is also expected to come with a charging port. “Plug-ins have to be part of the equation”, Flewitt said. “We’ve got to be honest: we’ve been driven to this by emissions regulations. I may be out of touch with what Fiestas can do these days, but when I look at our first car and its CO2 emissions, it looks like what I used to aspire for Fiestas to achieve in my Ford days; it’s staggeringly good”. While it won’t be possible to fully cancel out the weight penalty of a hybrid system, Flewitt hopes to minimise it. “I’ve always said my ambition was to launch the hybrid at the same weight as the outgoing car”, he said. “We’re not going to hit that, but we’re going to be within 30-40 kg. When you think the P1 hybrid system was 140 kg, we’ve done a huge amount to manage the weight. I’ve driven a prototype of it and the car is very compelling. We wouldn’t be launching it if it wasn’t going to be”. +++
+++ Tesla chief executive Elon MUSK suggested a capital raise could be imminent, as the electric vehicle maker lost $700 million in the first quarter and predicted a return to profit in the third. Tesla plans to resolve logistics issues with global vehicle deliveries after weathering a challenging few months, also marked by staff layoffs and a public spat between Musk and U.S. financial regulators. Shares of Tesla, which are down 22 % this year, were about flat after the results, which came more than an hour after they were expected. Musk is still battling to convince investors that demand for the Model 3, the sedan hoped to propel Tesla to sustainable profit, is “insanely” high, and that it can be delivered efficiently and swiftly to customers around the world. Lower deliveries had added to worries over Tesla’s cash situation and increased speculation a capital raise was coming soon. On a call following results, Musk also stepped back from an earlier prediction that the company’s Shanghai factory, which is currently being built, would likely produce 3,000 Model 3s per week by year’s end. Instead, the so-called Gigafactory would build 1,000 (or maybe 2,000) per week by the end of the year, he said. Many analysts had predicted the company would need to raise funds for its expansion, including the Shanghai factory, the upcoming Model Y and other projects. Tesla said it ended its first quarter with $2.2 billion in cash after paying off a $920 million convertible bond obligation in March. “There is some merit to raising capital”, responded Musk, after being asked why he had not done so yet. “It’s probably about the right time”. The company stood by its 2019 delivery forecast of 360,000 to 400,000 vehicles and said it may produce as many as 500,000 vehicles if its China factory reaches volume production in the fourth quarter. Tesla said a loss in its second quarter would be “significantly” less than the $702 million lost in the first quarter. Profit would return in the third quarter, Tesla said. Haris Anwar, senior analyst a financial markets platform Investing.com, called guidance for the second quarter “bleak”. “I continue to see a very volatile 2019 for Tesla and its shares”, Anwar said. Tesla’s results came 2 days after the company hosted a self-driving event, in which Musk predicted Tesla would have over a million autonomous vehicles by next year. Some analysts perceived the presentation as a way to deflect attention from questions about demand, margin pressure, increasing competition and even Musk’s ongoing battle with U.S. regulators. Musk and the U.S. Securities and Exchange Commission are expected to tell a federal judge the status of discussions to resolve their dispute over Musk’s Twitter use. Heightening uncertainty during the quarter were logistics bottlenecks at international ports, price adjustments on vehicles and a surprise announcement, later reversed, to close most of Tesla’s stores in order to financially offset the introduction of the $35,000 Model 3. Tesla said it planned to deliver 90,000 to 100,000 vehicles to customers in the second quarter, versus 63,000 vehicles in the first. Musk said that Tesla would change the costly and inefficient way it was building cars, in which it produced for international markets at the start of each quarter (to leave time for longer transport) then built for North America later. A better production blend would be less taxing on the company, Musk said. The gross profit margin on the Model 3 (a focus for investors) remained relatively steady at 20 %. Tesla also announced it would start offering its own insurance product in about a month to better reflect the safety of its vehicles. +++
+++ Renault will propose to NISSAN a plan to create a joint holding company that would give both automakers equal footing as Renault seeks further integration with its Japanese partner. Under the proposal, both automakers would nominate a nearly equal number of directors to the new company in which ordinary shares in both Nissan and Renault would be transferred on a balanced basis. This would effectively dilute the stake held by the French government in Renault to around 7 to 8 %, from its current 15 %. The new company would be headquartered in a third country, such as Singapore. Renault plans to make the proposal to Nissan soon, having modified an earlier merger idea which Nissan rejected on April 12. “What we always said, and we still say the exact same thing, is that what we want is the alliance to be irreversible”, Renault chief financial officer Clotilde Delbos said on the company’s first quarter conference call when asked about its plans. “This is what we are pursuing collectively with Nissan”. The report of the proposal comes as the outlook for the alliance (one of the world’s top automaking partnerships) has clouded since the arrest in November of its main architect, Carlos Ghosn, for financial misconduct.It also comes as Nissan’s financial performance struggles following years of focusing on volume sales over building its brand, particularly in the United States, its biggest market. Earlier this week, the Japanese automaker slashed its profit forecast for the year just ended to its lowest in nearly a decade, citing weakness in its U.S. operations. Renault for years has been vying for a closer merger with Nissan, which it rescued from the brink of bankruptcy 2 decades ago. Ghosn had been working to achieve a deeper integration before his arrest on financial misconduct charges in November last year. While the automakers have been consolidating many of their operations over the past decade, including procurement and production, many executives at Nissan have opposed an all-out merger with Renault. Instead, Nissan has argued for a more equal footing with Renault, which holds a 43 % stake in its bigger partner. Nissan holds a 15 % stake in Renault. It was unclear whether Renault would hold the casting vote in major decisions at the new company, as it did in Renault-Nissan B.V., a strategic management company jointly held by both companies which oversaw operations for the partnership. That company was disbanded last month after an internal investigation by Nissan following Ghosn’s arrest indicated that the company may have been involved with financial misconduct by the former chairman. Nissan’s partnership with Mitsubishi, in which it hold a 34 % stake, would remain unchanged under the new proposal. +++
+++ PANASONIC may upgrade one of its battery plants in Japan to produce advanced-format battery cells for Tesla if needed by the U.S. electric vehicle maker. Panasonic, currently the exclusive battery cell supplier for Tesla, produces cells for the EV maker at their joint plant in the U.S. state of Nevada (the so-called Gigafactory) as well as at 2 plants in Japan. The Japanese plants handle cylindrical lithium/ion ‘18650’ cells, used to power the Model S and Model X, whereas the Nevada plant produces the newer, higher-energy density ‘2170’ cells for the mass-market Model 3. The Japanese production lines would only need minor changes to switch to 2170 cells from the 18650, said the person, who declined to be identified as the matter was private. The upgrade could take place in this financial year ending March 2020. The development comes after Tesla chief executive Elon Musk said Panasonic had been “a constraint on Model 3 output since July”. Panasonic’s Nevada output is 24 gigawatt-hours (GWh), Musk tweeted this month, as opposed to the planned 35 GWh capacity. Panasonic said it had completed installation of its equipment for a Nevada capacity of 35 GWh by the end of March 2019, but that not all the installed equipment is in full operation. +++
+++ I don’t think you can read too much into the recent announcement that Infiniti, the posh arm of Nissan, is going to withdraw from sales in Europe. I once sat in a room with Carlos Ghosn, formerly the boss of RenaultNissan, where he said he didn’t care how many cars Infiniti sold in Europe, so long as the sub-brand’s profit margin was into double digits. Although apparently he’s not quite so influential now as he once was. Anyway, it turns out that double digits on naff all is still naff all. But in that ‘double digits’ figure you can see why having a posh brand was so appealing to Nissan in Europe. It also reveals how tight profit margins are if you’re not a premium car maker. The market is so cut-throat that normal car makers aspire to moderate single-digit figures, so if they have an underwhelming year, or if they find themselves behind the curve of a new trend, they can be scuppered for ages. So they all want a bit of what DS, the posh bit of PSA, has been similarly explicit about. PREMIUM bits of the car market account for 11 % of all car sales, DS says, but 37 % of all profits. And so DS would like to sell cars into 70 % of this profit-rich environment. Which, as Infiniti has found in Europe, is a problem. How do you convince people that your car is worth spending more than average money on? The easiest way is to be German or British or Italian and to have been doing it for a century already. Then you can claim that you’re ‘the ultimate driving machine’ or ‘engineered like no other car’. Which is fine. If it’s still true. But here’s the thing: what if it isn’t? Or, at least, what if it’s true for some of your cars but very much not true for others. Because while it’s irresistible for ‘normal’ car makers to try to sell cars in the premium market, it’s similarly tempting, for makers of hitherto posh cars, to try to sell them to people who previously couldn’t afford them. So if you want to lease a Mercedes-Benz or an Audi for not much more than £200 a month, you can. Or, in other words, give up a daily latte and a Ford Fiesta, and you can probably have an Audi A1. Doing that doesn’t sound so premium at all, and if you’ve sat in an A1, it probably doesn’t feel it, either. And so Audi will keep making R8s and Mercedes will keep making G-Classes because they need to keep reminding you that, deep down, they make top-end cars, even when, quite a lot of the time, they don’t. And I suspect the world’s ordinary manufacturers will keep trying, and, quite often, failing, to find ways of pushing above that line, because they don’t make cars that command 6-figure prices and whose performance or engineering we go gooey about. So we’ll never quite buy the fact that a DS is an Audi rival even if it looks different and feels better inside. But the lines between the premium and the ordinary have never been more blurred. And while there’s a lot to be gained, if you’re Infiniti or DS, by trying to step above it, if we start to see the reality for what it is, it strikes me there’s a lot to lose for premium car makers who step below the line, too, and expose the whole charade for what it is. +++
+++ Gilles Le Borgne, PSA Group’s longtime chief of engineering and the director of many of the automaker’s platform and vehicle projects, will be leaving the company for personal reasons, PSA said. He will be replaced by Nicolas Morel, now senior vice president for vehicle projects. PSA also said that Carla Gohin, senior vice president for research and advanced engineering, would expand her portfolio as chief technology officer. Le Borgne, 56, has been executive vice president, quality and engineering, and a member of PSA’s executive committee since April 2013. Starting in 1997, he led development of group platforms for small cars including the Peugeot 107 and 207, and the Citroen C2 and C3. In 2008 he was named to lead the group’s new EMP2 platform project, which would go on to underpin compact and midsize models such as the Peugeot 3008 and 5008 crossover vehicles. In 2012 Le Borgne was named senior vice president for platforms and advanced projects. He received a degree in industrial ceramics in 1987. PSA boss Carlos Tavares noted Le Borgne’s contributions in a statement, saying he had driven his teams “with rigor and professionalism in the execution of the vehicles and technological developments of the Push To Pass strategic plan”. Tavares said Le Borgne’s departure offered the “opportunity to position young talents in key positions in r&d” at PSA. +++
+++ RENAULT clung to full-year targets as declining overseas sales and business with Japanese partner Nissan led to a 4.8 % first-quarter revenue drop. The French carmaker reiterated that the 2 companies are pursuing talks on a more permanent structure for their alliance, which has been shaken by the ousting of former chairman and chief executive Carlos Ghosn for alleged financial misconduct. Renault’s revenue fell to €12.527 billion for January-March as deliveries declined by 5.6 % to 908,348 vehicles, hit by its withdrawal from Iran last year. Sales volumes for the quarter were down in all regions outside Europe, where they rose 2 %, as the global auto market contracted by 7.2 %, Renault’s sales chief Olivier Murguet said in a presentation to reporters and analysts. “In this context, Renault outperformed the market”, Murguet added of the French carmaker, which has struggled with tighter emissions standards and a shift away from diesel. Under new Chairman Jean-Dominique Senard, Renault is pursuing tie-up talks that had begun under Ghosn to give the alliance a more permanent structure, as mandated by the French government, which owns a 15 % stake in Renault. “What we want is for the alliance to be irreversible”, chief financial officer Clotilde Delbos told analysts. “This is what we’re pursuing collectively with Nissan; that hasn’t changed”. Renault said forthcoming model launches including a new Clio will lift sales later in 2019 as it reiterated full-year guidance including higher revenue, positive automotive cash flow and an operating margin close to 6 %. The carmaker also cut its 2019 global auto market growth forecast to a negative 1.6 % from a previously stable outlook. The European market is expected to be broadly flat, providing a hard Brexit is avoided, it said. During the quarter, pricing improvements and a demand shift to more expensive vehicles boosted automotive revenue by a combined 1.3 %, countering exchange-rate setbacks. Sales to partners had a negative 3.1 % revenue effect, as Nissan and Daimler bought fewer diesel engines and U.S. sales of Renault-built Nissan SUVs dwindled. “Volumes were softer than expected, and price did not come close to offsetting the currency headwind in the quarter”, Citi analyst Raghav Gupta-Chaudhary said. But markets are more focused on how the alliance can survive Ghosn, he added. Last year’s pullout from Iran under threat of U.S. sanctions resulted in a 31 % decline for Renault’s Africa, Middle East and India sales region, the carmaker said. Excluding Iran, global deliveries would have fallen a more modest 1.7 %. Sales volumes fell 5.3 % in the Americas region and 18 % in Asia-Pacific, including China. +++
+++ Small, relatively cheap electric vehicles such as the SEAT Minimo could save the city car, according to the firm’s boss Luca de Meo. Discussing the future of cars like the Mii (a joint venture alongside the Skoda Citigo and VW Up), De Meo said: “When we sell a Mii, I don’t make any money, the dealer makes maybe €200 and maybe they’ll then get €100 from the first service, only for the car to be taken to a local garage afterwards. There is not much business in that over 10 years. But how do most people use those cars? Would it be better for them and for us to buy transport by the kilometre, rather than the car? A Mii is massively over-engineered for a car that will most often be used for 5 kilometres to get across town. Wouldn’t the customer and our business be better off if they could rent a cheaper, but more fit for purpose vehicle for 20 cents a kilometre? If that vehicle was in more use, shared by users, and it covered 200-300 kilometres a day I’d be looking at €15,000 over 3 years. If a vehicle like the Minimo can be made for half the cost of a Mii then there is a business case for it. Not overnight, but there could be a solution there. And this is especially true when a car like the Mii, even at its most efficient, produces about 90 g/km of CO2. If the target you need to hit is below 80 g/km, then you may as well build a car than emits 0 g/km”. +++
+++ SUBARU has announced a major milestone for its Lafayette, Indiana factory: the production of the facility’s 4 millionth vehicle. The 4 millionth vehicle to roll out of the Indiana factory was a silver 2019 Outback. In addition to Subaru’s popular wagon, the plant also makes the Ascent, Impreza and Legacy. “This is an incredible milestone for our associates and our company”, said Scott Brand, senior vice president of Subaru of Indiana Automotive. “We’ve come a long way since building our first Subaru vehicle more than 30 years ago”. The Lafayette plant opened its doors in 1989 and remains the automaker’s only production facility outside of Japan. It currently employs 5,700 people and has the capacity to build 370,000 vehicles per year. Fittingly, the milestone-setting car will be one of the last of its kind to be built at the plant. In July, the Indiana factory will switchover to production of the all-new 2020 Outback. +++
+++ SUZUKI cut its forecast for full-year operating profit by 7.4 % as the Japanese compact car manufacturer expects to take a hit from a domestic vehicle recall stemming from improper vehicle inspections. Japan’s 4th-largest automaker now expects operating profit to come in at 324 billion yen ($2.90 billion) in the year ended March, down 13.4 % from a record-high 374.2 billion yen booked the previous year and easing from a previous forecast of 350 billion yen. Earlier this month, Suzuki booked a loss about 80 billion yen due to costs related to recalling around 2 million vehicles to re-do inspections, which had been completed by uncertified inspectors at the automaker’s plants for the Japanese market. The recall costs add to Suzuki’s struggles in the financial year that just ended, in which profit in India (its biggest market) took a hit due to a depreciating rupee and sluggish sales growth, while performance in Indonesia and Pakistan have also lagged. +++
+++ A capital raise for TESLA will not come cheap and chief executive officer Elon Musk must finally prove to investors that he can produce and deliver Model 3s and higher margin electric cars on time. After unveiling a $700 million loss in the first quarter, Musk conceded that he needed to pull in more capital for the car world’s highest profile venture of recent years. Seven Wall Street brokerages said they expected Musk to tap investors for between $1 billion and $3 billion in the near future. The results also stressed the company’s paying off of $920 million in existing debt in the first quarter, but bond yields in the company surged on the news, while shares fell, as investors began to price in what that might cost. In European trading before the start of the U.S. business day, investors were already demanding a record risk premium for holding Tesla’s $1.8 billion junk bond, pushing the yield on the 5.3 % note due in August 2025 to the highest in six months at 8.51 %. After months of uncertainty following Musk’s swiftly retracted claim last summer that he was set to take the company private, and a series of failures to meet production targets, they said the cost of new capital would now be far higher than a year ago. “Obviously, investors would have appreciated that confession to raise capital when the shares were higher, the fundamental performance better and Elon Musk less erratic”, Evercore analyst Arndt Ellinghorst said. Tesla’s first quarter results disappointed both in terms of sales and a sharp drop in the number of vehicles delivered to global customers, and there was scepticism over promises of a return to profitability in the third quarter. “Ultimately we believe the company’s guidance is aggressive”, analysts from Wedbush Securities said. Musk has long resisted the need to raise capital, but he told a conference call with analysts it was now the right time. Several analysts covering the company argued Tesla needed to simplify operations. “For investors we think the question is whether or not people want to put capital into Tesla for Robo taxis and autonomous when Uber or Lyft or Nvidia could end up being better alternatives”, Roth Capital analyst Craig Irwin wrote. “We don’t think Tesla would need to raise capital as urgently if they weren’t spending so much money on these initiatives outside of their core mission of producing awesome EV’s”. CFRA analyst Garrett Nelson said Tesla’s timing (with the stock down more than 22 % year-to-date) is quite inopportune to raise capital and that Tesla should have completed an equity issuance months ago. +++
+++ VOLKSWAGEN ’s joint venture with China’s Jianghuai Automobile Co (JAC) plans to invest 5.06 billion yuan ($750.8 million) in a new electric car factory in eastern Hefei city, according to local authorities. Volkswagen and JAC have obtained approval from environmental authorities to build a plant capable of producing 100,000 all-electric battery cars a year. Volkswagen confirmed the numbers that had been included in previous official documents and said JAC-Volkswagen would launch its first model soon. A spokesperson for the joint venture confirmed plans for the plant, saying the approval represented an “orderly advancement of the project”, and the venture’s first electric model, the E20X, will be launched this year. The German company, China’s largest foreign automaker with sales of 4.21 million cars on the mainland and Hong Kong in 2018, has pledged to ramp up production of zero-emission vehicles as part of its growth strategy in the country. Volkswagen has said it plans to produce more than 22 million electric cars in the next 10 years, with over half of them built in China. It plans to launch 14 new energy vehicle models in China this year. VW’s joint venture with JAC, approved in 2017, said last year it would launch a research and development center. It also planned to introduce the Seat brand to China by 2020-2021. Volkswagen is in talks with South Korean battery maker SK Innovation to accelerate electric vehicle development. China’s car market, the world’s largest, contracted for the first time last year since the 1990s. However, the new energy vehicle (NEV) segment is still growing rapidly with sales jumping 61.7 % to 1.3 million units in 2018. The China Association of Automobile Manufacturers has said new energy vehicle sales could hit 1.6 million units this year. Volkswagen has started building a $2.5 billion new energy vehicle plant in Shanghai with SAIC Motor, which will make Audi cars. SAIC Volkswagen said the new plant would have an annual capacity to make 300,000 cars and begin production from 2020. +++
