Newsflash II

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+++ Britain’s car output under a no-deal BREXIT could collapse to a level last seen in “the dark days of the 1980s”, the nation’s industry body forecasted. The warning came as Jaguar Land Rover said its new Defender model would be assembled in Slovakia (but did not blame the move on the U.K.’s departure from the European Union). The Society of Motor Manufacturers and Traders (SMMT) said the worst-case scenario would be for Britain to depart the EU without a deal struck with Brussels, forcing it to endure tariffs set by World Trade Organization rules. These customs duties average 1.5 %, which is still quite low. But they can be higher in some sectors such as the crucial automotive sector where they are 10 %. “Should Britain crash out of the EU and fall back on WTO rules for a sustained period, (U.K. car) output is forecast to fall around 30 % on recent levels to just 1.07 million units by 2021, a level consistent with the dark days of the mid-1980s”, the SMMT said in a release. Britain is due to leave the European Union on Oct. 31 after 2 delays this year triggered by MPs rejecting the divorce deal British Prime Minister Theresa May has struck with the bloc. The SMMT added that in the event of “a favorable deal and transition period maintaining the status quo, U.K. car production could be 1.36 million units in 2019, down from 1.52 million in 2018, before rising to 1.42 million by 2021”. The SMMT has long argued that no-deal would ramp up costs and hurt supply chains, while tariffs would undermine competitiveness and bite into profits. “Despite the extension, the Brexit clock is still ticking and a devastating no-deal remains a threat”, said SMMT chief executive Mike Hawes. “This new period of limbo does not end the havoc for industry, with investment stopped and expensive factory shutdowns moved to avoid a Brexit deadline that has itself now moved”. Japanese carmaker Nissan recently said it would stop production of Infiniti cars at its factory in Sunderland, northeast England, and cancel the plant’s plans for the X-Trail. Japanese peer Honda has also curbed investment in Britain, and plans to close its U.K. car plant in southwest England in 2022 with 3,500 job losses. At the same time however, Toyota is to build a new hybrid car in Britain for Japanese peer Suzuki. Separately, the SMMT revealed that British car production has tumbled for the 10th month in a row, hit also by China economic fears and dwindling demand for high-polluting diesel vehicles. U.K. car production slumped 14 percent to 126,000 units in March compared with a year earlier. Jaguar Land Rover on Tuesday announced that its all-new Land Rover Defender will be assembled at its plant in Slovakia. JLR added in a statement: “Designed and engineered in the U.K., the new Land Rover Defender will be unveiled later this year. It will use the latest clean Ingenium engines built at Wolverhampton, England, reinforcing both the company’s British roots and the diversified, globalized nature of its manufacturing strategy. This decision is in parallel with plans for significant investment at the company’s Solihull plant in the UK to support the production of the next generation of flagship Range Rover and Land Rover models”. It comes after the company owned by India’s Tata Motors recently moved production of the Land Rover Discovery model to Slovakia, and is in the process of axing about 4,500 mostly U.K. jobs. +++ 

+++ BUGATTI has revealed that less than 100 units of the Chiron hypercar are still available for sale. The French car manufacturer unveiled the successor to the iconic Veyron back at the Geneva Motor Show in 2016 and in the 3 years since has delivered a touch over 180 examples. 46 of them reside in North America, while a further 3 years of production has already been accounted for. “This means that less than 100 out of the 500 units are still available”, Bugatti communications director Tim Bravo commented. What this means is that anyone who places an order for one of these 100 remaining Chiron models won’t take delivery of their hypercar until 2022 at the earliest. Buying a vehicle like this isn’t just expensive but, evidently, also requires a lot of patience. According to Bugatti North American marketing manager Cedric Davy, Chiron buyers typically spend $350.000 on optional extras; not that surprising, really, considering its pricing that, in the U.S., starts at $2.998.000 and rises to $3.260.000 for the limited-edition Chiron Sport. Bugatti presented the Chiron Sport at the 2018 Geneva Motor Show and, according to Bravo, it is currently building more Sport models than “regular” Chirons. Both use a quad-turbo 8.0-liter W16 engine pumping out 1500 hp, but the Sport features new aerodynamic elements as well as tweaked suspension and torque-vectoring systems aimed at crisper handling. Based on what happened with the Veyron, it is likely that a number of the remaining 100 Chiron models will be limited-editions. +++

+++ The Fullback pickup has been dropped from FIAT ’s range. The head of Fiat Professional, Richard Chamberlain, confirmed the demise of the vehicle. “A combination of factors has led to the Fullback no longer being on sale”, Chamberlain said. “Low sales volumes and the forthcoming Euro 6 diesel emissions legislation meant it was no longer viable for Fiat Professional to offer the Fullback”. The Fullback was based on the Mitsubishi L200 pickup. However, the Fiat did come in a number of specifications different than those available for the Japanese model, like the Fullback Cross which could be ordered with a number of exclusive colors. While Euro 6 diesel emissions legislation means it is no longer viable for Fiat to produce the Fullback, it will update the Ducato, Talento, Doblo and Fiorino with new engines that comply with new emissions regulations set to come into force in September. According to Chamberlain, these models in the Fiat Professional family, especially the Doblo, continue to sell well: “The Doblo was already the market leader in terms of payload and body variety (in the small van class), our rivals are just catching up”. It is reported that the Italian car manufacturer is preparing a number of updates to the Talento and Ducato families, including the launch of an all-electric variant of the next-generation Ducato. +++

+++ FORD ’s new Ranger Raptor is getting to ready for its European launch, with the first customer deliveries to start in mid-2019. The Raptor version of Europe’s best-selling pickup comes with a reinforced chassis, a race-bred suspension with wider tracks and increased ride height as well as a twin-turbo 2.0-liter diesel 4-cylinder engine paired to a 10-speed automatic transmission, the same one you’ll find in the F-150 Raptor. Packing 213 hp and 500Nm, the new Ranger Raptor is designed for “high-speed off-road driving and go-anywhere capability”. Compared to a standard Ranger XLT, the Raptor comes with a 150 mm wider track and 51 mm more ground clearance, featuring Fox shock absorbers with longer travel, special control arms and a bespoke coilover rear suspension that features an integrated Watt’s linkage. The brakes are bigger too while the all-terrain BF Goodrich tires now measure 33 inches in diameter (285/70 R17). The reinforced chassis also comes with optimized off-road geometry, offering a 32.5-degree approach angle and ramp-over and departure angles of 24 degrees. Ground clearance in total is 283 mm while wading depth is 850 mm. The driver can choose between six Terrain Management System modes, including Normal, Sport, Grass / Gravel / Snow, Mud / Sand, Rock and Baja, the latter priming the chassis for the aforementioned high-speed off-road driving. What’s interesting in the case of the Ford Ranger Raptor is that it doesn’t promise to be better just during off-road driving but also on-road as well, benefiting from the new suspension setup to provide more refinement than its non-Raptor siblings. “The standout experience of the Ranger Raptor, hands down, is how far you can push it off-road and still ride like a millionaire on-road”, said Damien Ross, chief program engineer for the Ranger Raptor. “Everything about the Ranger Raptor builds on the already outstanding sophisticated feel and functional capability of the Ranger, and then goes further. From a driving dynamic fun standpoint, it is really an exceptionally special vehicle”. Ford claims that the Ranger Raptor offers a combined fuel economy of 8.9 liter/100 km and emits 233 g/km of CO2. 0-100km/h comes in 10.5 seconds while top speed is set at 170 km/h. The Ranger Raptor tips the scales at 2,510 kg and can tow up to 2,5 tonnes. +++ 

+++ HYUNDAI saw its performance turn around in the first quarter of this year after suffering earnings shocks last year. The carmaker said on Wednesday that its first-quarter sales rose 6.9 % on-year to W23.99 trillion and operating profit 21.1 % to W824.9 billion (US$1=W1,150). Its net profit stood at W953.8 billion. In the 4th quarter of last year, Hyundai suffered a net loss of W203 billion, while its operating profit plunged 35.4 % on-year to W501.1 billion. “Our performance improved thanks to a positive reception for new high-end cars such as the Genesis G90 sedan and large SUV Palisade”, a company spokesman said. The G90, which was launched in November last year following a partial facelift, sold 5,554 units, including exports, in the January-March period. The Palisade, currently available only in Korea, has become a hit since its release last December with average monthly sales of 6,000 units. +++ 

+++ KIA reported a whopping 94.4 % growth in operating profit on year in the first quarter, largely because it was able to recoup funds previously set aside for overdue wage payments. The automaker posted 594.1 billion won ($511 million) in operating profit for the January-March period. Its net profit grew 50.3 % year on year to 649.1 billion won. Revenue, however, shrank 0.9 % to 12.4 trillion won. While the company had set aside nearly 1 trillion won in the third quarter of 2017 after a Seoul court ordered it to pay overdue wages for employees, subsequent negotiations with the labor union allowed the company to spend less than initially forecast. Roughly 280 billion won worth of reversed provisions were reflected in the company’s operating profit, according to Kim Nam-kyu, a vice president at Kia. Without the reversal, the company’s operating profit grew by only about 2.8 % from 305.6 billion won posted in the first quarter last year. “Considering the global auto market faced difficulties in the first quarter, we think that our figures don’t look too bad even without the provision reversal”, said Joo Woo-jeong, chief financial officer at Kia, during a conference call with analysts. “Our strategy this year is to create momentum in the second half of the year; many new cars launches are planned in the latter half”. In the local Korean market, the carmaker is planning to launch a small SUV currently developed under the project name SP2 in July. In September, a face-lifted version of the Mohave SUV will roll out. New versions of the Optima sedan will also hit the domestic market later in the year. Overseas, the company is planning to launch a new K3 in China in May and a crossover version of the Ceed in Europe. Kia’s business remained sluggish in Chinese markets but grew in the United States largely due to the Telluride SUV designed for the market. Sales in China dipped 0.3 % to 81,979 units, while sales in the United States grew by 5 % to 138,259 units. Joo said that Kia has launched a mid-to-long term plan to cut costs and increase profitability of new mobility businesses including car sharing and car hailing, adding that the company’s 2022 operating profit to sales ratio target is 5 %. Last year, the ratio was 2.1 %. “I think it’s rather a conservative target and I am confident we can make it happen”, Joo said. +++ 

+++ Japanese automaker Toyota will assemble 2 models of its LEXUS brand in Canada starting in 2022, Prime Minister Justin Trudeau announced. It will be the first time that the Lexus NX and NX hybrid are produced outside of Japan, Trudeau said. He told a news conference the Cambridge, Ontario assembly plant 80 kilometers west of Toronto would supply the Canadian and U.S. markets. Toyoto announced last year it would invest $1 billion in its 2 Ontario facilities, in Cambridge and in nearby Woodstock, which assembles its RAV4. It plans to concentrate its North American production of hybrid vehicles in the province. The 2 assembly lines can build over 500,000 vehicles annually, making Toyota the largest automotive manufacturer in Canada. +++ 

+++ OPEL is in the final testing stage of the new Corsa ahead of the start of sales this summer for its best-selling model. Opel released photos this week showing camouflaged prototypes undergoing testing in Sweden and Germany. The 6th generation Corsa is based on parent PSA Group’s CMP architecture, which it shares with the Peugeot 208 and DS 3 Crossback. The platform is designed to accept either internal combustion engines or electric motors, and like the new 208, the Corsa will be offered only in a 5-door hatchback version. Electric models will be available from the start of sales, Opel said. The Corsa is expected to debut at the Frankfurt auto show in September. It was scheduled to be built on a joint PSA/GM platform, but after PSA’s acquisition of Opel/Vauxhall in 2017, development shifted solely to PSA. Opel says the new Corsa will be 10 % lighter, making it more dynamic to drive and more fuel efficienct. European sales of the Corsa, which is also sold under the Vauxhall brand, topped 217,000 units in 2018; a decline of 6.8 % compared with 2017. Competitors include the segment-leading Renault Clio, which is expected to benefit from the launch of a new generation this year; the 208, Ford Fiesta and Volkswagen Polo. The current Corsa went on the market in 2014. That car is built in Eisenach, Germany and Zaragoza, Spain. The new generation Corsa will be built only in Zaragoza. +++ 

+++ PSA is displaying the upcoming electric versions of the Peugeot Boxer and Citroën Jumper at the Birmingham Commercial Vehicle Show that takes place between April 30 and May 2. The Boxer Electric and Jumper / Relay Electric large vans will offer 2 levels of autonomy depending on the version: 227 km in the NEDC cycle for the L1 and L2 lengths, and 272 km for the L3 and L4. PSA will build the Boxer Electric and Jumper/Relay Electric alongside the ICE-powered versions at the Sevel plant in Val di Sangro, Italy. The vehicles will then by electrified and homologated by partner BD Auto. No other details were offered regarding the battery packs and electric motors. However, the company said the move is in line with its “Push to Pass” strategic plan which calls for the electrification of its entire range of passenger cars and commercial vehicles. “This new offer is a major competitive advantage for our brands in a very competitive LCV segment. This is an opportunity to strengthen our leadership in Europe by meeting the new needs of zero-emission driving without giving up the useful services related to the demanding uses of our professional customers”, said Philippe Narbeburu, Senior Vice-President, Light Commercial Vehicles Groupe PSA Business Unit. PSA also said it will offer electrified versions of its medium vans, namely the Peugeot Expert and Traveller, Citroën Dispatch and SpaceTourer, as well as Opel / Vauxhall Vivaro and Vivaro Life, starting next year. Moreover, the Peugeot Partner, Citroën Berlingo, and Opel / Vauxhall Combo compact vans will also get electrified versions in 2021. +++

+++ RENAULT SAMSUNG Motors temporarily stopped operations at its Busan factory on Monday amid a lengthening dispute with its labor union over wages and working conditions. The Korean unit of the French automaker is suspending the operation of its only plant in Korea. The factory will resume operations soon, a company spokesperson said. “We are closing our plant as we had to readjust and lower our production target for this year to 160,000 units from 200,000”, he said. The Busan-based automaker’s labor union has gone on 62 strikes since last October for a total of 250 hours, causing production losses of 14,320 vehicles, according to the automaker. The dispute has continued well past the March 8 deadline set for the conclusion of negotiations. As the operating rate for the Busan factory fell by 20 % due to continuing strikes, Renault Samsung Motors said it has suffered around 280.6 billion won ($242 million) in losses. The union has called for the company to follow the minimum wage law, claiming that the required rate is not being paid. It also demands management improve working conditions, adding that mismanagement has led to difficulties and mass layoffs. The company argued that cost increases could harm its competitiveness. A spokesperson from the automaker said workers at the Busan factory are already paid most competitively among all Renault Group employees. The union also asked for the right to participate in the human resources decision-making process. However, Renault Samsung Motors CEO Dominique Signora said in a meeting with Busan Mayor Oh Keo-don on April 18 that the automaker will not accept the union’s demand regarding personnel decisions. The union and management will meet again soon to decide the timeline for future negotiations. For a 42-year-old veteran driver surnamed Yim, the Samsung Motors QM6 compact SUV he has owned since 2017 is his pride. “QM6, without a doubt, is the strongest car from a trustworthy automaker”, said Yim, showing a photo of a car crash scene where his QM6 looks relatively unscathed while a white sedan that it had collided with it has been smashed to pieces. “The car, no matter what, has to be safe and strong. This was the biggest merit of Samsung Motors, known for high quality products. But many Renault Samsung car owners now worry that Korean customers may not be able to see such quality cars in the future”, Yim said, adding that some say that Renault Samsung will follow General Motor’s example eventually. Renault Samsung, launched in 1999 to break Hyundai’s market dominance, is set to celebrate its 20th, yet it is a gloomy anniversary this year amid an intensifying labor dispute and falling sales. From the start the automaker had the SM5, introduced to the market in March 1998. The car was the made by Samsung in heavy conjunction with Nissan, and quickly led the midsized sedan market with its durability boosted by Samsung’s brand power. But with a lack of industry experience and hit by a financial crisis, Samsung Motors soon went bankrupt, leading to its acquisition by Renault in 2000. After 2 decades of operations, the carmaker sold just 39,210 cars in the first quarter this year. The number fell below 40,000 for the first time since September 2014, when the carmaker began manufacturing the Nissan X-Trail at the company’s Busan factory for overseas shipments. In March alone, its combined domestic and global sales reported a 49 % plunge compared to a year ago, selling 13,797 cars. Its exports fell 62.3 % to 7,256 units last month from the previous year, with reduced consignment production by 47.2 % on-year. Recently, the company’s management even ordered a temporary shutdown of its Busan plant after the 26th round of wage talks with the labor union ended without an agreement, raising uncertainty in the carmaker’s business in Korea. The 2 sides have been locking horns over wages and productivity over the past 6 months, with the union staging 58 partial strikes since October. The sit-in protests have resulted in production losses of 13,000 vehicles, according to the company. The union has demanded a wage hike and less working hours, while the company wants to maintain a certain output level at the plant by securing export models from its parent company. The carmaker’s history dates back to 1994 as the automobile unit under Korean information technology powerhouse Samsung. Led with Samsung Chairman Lee Kun-hee’s passion for cars, Samsung tried to build an auto giant with technical assistance from Nissan. The company began selling cars in 1998, but went bankrupt when the Asian financial crisis hit South Korea the following year. Renault now owns an 80.1 % share of the automaker and Samsung Card holds 19.9 %. After the acquisition, the company continued to absorb Nissan’s technical skills while keeping Samsung’s brand image for high product quality. For years, its complete sedan lineup comprised the midsized SM5 sedan, SM3 compact car and SM7 large sedan to compete with market leader Hyundai. However, Renault Samsung’s position as an affiliate of a foreign carmaker and its weak decision-making power may have undermined its competitiveness in the market, experts say. “The Renault Group has been passive about the Korean market. Constant sales drops have led less attention to the Korean market, leading to fewer new cars that can compete in the market”, said Lee Ho-geun, a professor of automotive engineering from Daelim University. “For foreign carmakers that have a plant in Korea, to be honest, the Korean market is ‘just one of them’ and it is highly likely to give up and withdraw from the low-performing markets”, Lee said. In 2000, Renault Samsung was selling at least 100,000 units of cars annually. But the number dropped sharply in 2003 to 50,000 units. In 2016, the number climbed back to around 100,000 units with the hit models SM6 and QM3, but since then the number has continued its free fall. Its market share has also dropped well into the single digits, from 12.8 % in 2010 to 4 % last year. To shake off its staggering sales, the company has been diversifying its sales channels here, partnering with retail giant E-mart. It began selling its mini electric vehicle Twizy at 25 E-mart stores across the country in 2017. In the first year, it sold 700 units, while the number doubled to 1,500 units last year. The price goes as low as 6.2 million won ($5,430) with city government subsidies. Active sales promotion of Twizy here shows Renault Samsung’s effort to continue investment in the Korean market, according to the firm. Renault Samsung Motors CEO Dominique Signora said during a recent meeting with Busan Mayor Oh Keo-don that Renault Samsung Motors’ only plant in Busan is “a core asset for the company” to remain competitive in the domestic market. By manufacturing Twizy at the Busan plant from September, Signora said it will create more jobs, increase export volume and contribute to revitalizing the local economy. But experts point to the Busan plant’s production focus on overseas shipments. “Its Busan plant is mainly focused on producing export models, not for domestic sales. If the latest model XM3 does not secure significant overseas sales, there is a high possibility Renault Samsung will exit the Korean market”, said professor Kim Pil-soo of automotive engineering from Daelim University, adding that the French headquarters may transfer XM3 production to its plant in Spain, considering the Busan plant’s productivity. Currently, about 65 % of the Busan plant’s total production is for overseas shipments. The company has maintained its stance to keep a fixed production amount for export models, while the union has argued for an increase in wages with lower labor intensity. +++ 

+++ SSANGYONG reported improved earnings for the first quarter this year compared to the same period a year earlier, posting record revenues and decreased operating losses due to the popularity of newly released models. The automaker said in a statement that first-quarter revenue rose 15.4 % on year to its highest-ever for the quarter at 933.2 billion won ($805.4 million). Meanwhile, operating loss was at 27.8 billion won in the period, making it the 9th consecutive quarterly operating loss by the company since the first quarter of 2017. It explained that earnings still improved as operating loss decreased from the previous year when it recorded 31.3 billion won. Net loss was at 26.1 billion won in the quarter compared to 34.2 billion won from the previous year. The company credited the release of new models such as the Rexton Sports pickup and the new Korando for the improvement. Sales volume for its vehicles in the January to March period increased 13.7 % from the same period last year, at 34,851 units. Domestic sales for the quarter were at the highest in 16 years at 27,350 units, accounting for nearly 80 % of the total. Exports increased 12.4 % to 7,501 vehicles. SsangYong, a subsidiary under India-based Mahindra, has been working toward making a turnaround and has vowed to improve its situation with new releases. The popularity of its Tivoli helped the company become the country’s third-largest automaker by sales last year (for the first time in 15 years) and it hopes to strengthen that position. SsangYong plans to sell 30,000 of the latest Korando cars in the domestic market this year. “We expect that the new product lineup will help us expand global sales in new markets with high potential and help improve our profitability”, said SsangYong CEO Yea Byung-tae in a statement. +++ 

+++ TESLA has launched an unexpected new Model 3 variant in Canada with a software-limited range of just 150 kilometres. The Canadian government limits availability of its $3,500 rebate to electric vehicles that have a starting price of less than $33,584. To comply with the EV rebate regulations, Tesla secretly launched the range-limited variant as an “off menu” item that does not appear on its website. Notably, the move appears to take advantage of a loophole that allows the incentive to be applied to higher-spec versions of the same car. In effect, selling a range-limited variant allows all buyers to qualify for the $3,500 incentive, even if they are buying the Standard Range Plus edition that starts at $45,000 and has a range of 384 kilometres. +++

+++ The new TOYOTA Supra will be available with a turbocharged 2.0-liter 4-cylinder in Japan and it looks like the engine could potentially be offered in the United States in the future. The California Air Resources Board recently certified BMW’s 2.0-liter 4-cylinder engine for use in a number of different models including the 2-, 3- and 4-Series as well as the Z4. That’s not too unusual, but the paperwork also mentions a Toyota Supra 2.0. That’s interesting as the Supra’s turbocharged 2.0-liter 4-cylinder engine is available with 2 different outputs. The entry-level unit produces 197 hp and 320 Nm. This allows the coupe to accelerate from 0-100 km/h in 6.5 seconds. Likewise, the Supra SZ-R has an upgraded 2.0-liter engine with 258 hp and 400 Nm. Thanks to the extra power, the dash to 100 km/h is cut to 5.2 seconds. Those numbers aren’t too shabby, but the US-spec model has a turbocharged 3.0-liter inline-6 with 340 hp and 494 Nm. This allows the car to run from 0-100 km/h in approximately 4.1 seconds. While the document suggests the 2.0-liter engine could be offered in the US-spec Supra, Toyota downplayed this possibility. As a spokesperson explained, “BMW took steps to certify an engine for a variety of uses” and “at this point, Toyota’s plans for the Supra in the U.S. include only the 3.0-liter inline-6 that will be in the Supra when it goes on sale this summer”. The statement is interesting as it seems to suggest the 4-cylinder engine could eventually be offered in the United States. However, there are no plans for it at “this point” as the spokesperson noted. We could be reading too much into this, but Supra chief engineer Tetsuya Tada has previously said the “Supra needs to continue to evolve each year”.  This suggests we can expect continuous updates, but whether or not those plans include a 4-cylinder variant for America remain to be seen. +++

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