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+++ ASTON MARTIN says that its £1 million AM-RB 003 hypercar, unveiled at the Geneva motor show earlier this year, is already over-subscribed. The firm will produce 500 of the McLaren P1-rivalling machine, which has been co-developed with Red Bull Advanced Technologies and sits underneath the forthcoming Valkyrie hypercar. In its financial results report for the first quarter of 2019, Aston Martin boss Andy Palmer said that demand for the AB-RB 003 has already exceeded the 500 examples the company plans to build when it goes into production in 2021. “We now have the task of allocating to our customers from an ever-growing list”, said Palmer. Aston Martin sold 1.057 cars in the first 3 months of 2019; up from the 963 it sold in the same period last year, resulting in revenues of £196 million. But higher costs meant that the company posted a £2.2 million loss for the quarter, although that exceeded the expectations of analysts. The firm says that it expects the second half of this year to be the “major driver of profitability”, due to a number of special editions planned to go on sale. As part of its financial report, Aston Martin also confirmed that work on the first production trial version of the DBX, its forthcoming first SUV, began on 15 April. The company is continuing an extensive test programme with the prototype version. +++

+++ BENTLEY is likely to focus on plug-in hybrid electrification until the middle of the next decade, even though the firm’s boss admits that almost half of the customers in the luxury brand’s marketplace are interested in adding a pure-electric model to their fleet. The British firm only confirmed a single plug-in model in its range, the Bentayga, although electrified versions of its new Continental GT and next-gen Flying Spur are expected to arrive within the next 18 months. Bentley boss Adrian Hallmark said that while luxury customers appear ready for electrification, concerns about the achievable range of large electric vehicles would stand in the way of the tech being adopted on his firm’s models for the foreseeable future. “I believe customers are looking for BEVs”, he said. “Our research in the luxury sector shows that about 40 % of people who buy cars in our price bracket are looking at BEVs, not to replace their only car but to have as part of their regular fleet, and for specific usage. So we do see this pure-electric cars as an opportunity in the luxury sector too. In next 5 to 10 years, BEVs will become a much more significant part of industry than the current 3 %, or even 6 %. But look at the science: the energy density of batteries today and over the next 5 to 10 years. The Jaguar I-Pace is a great car because the battery and the car were designed as one overall unit. And because it’s a perfect-sized car for that battery technology. You could, in 5 to 10 years, have a bigger car with 500 km of range. So as battery technology improves, more products will be brought into the market. But right now, if you tried to make a big SUV or a Mulsanne as a full EV, it would go really well but for a short distance. We need occasional long-distance capability, because you can’t always use the train. So we’re committed to hybrid; we’ll hybridise everything we have. But right now, I can’t give date for the first Bentley BEV. It’ll be before 2025, though. I always thought plug-in hybrids were a very temporary stopgap and not a long-term solution. But they are mid-term solutions. We have a US customer who’s a billionaire; in fact, we’ve had to pay him a dollar every month to make him an employee so he can drive our prototype. He’s been driving a V6 hybrid and over 3 months he’s spent 67 % of his journey time on electricity alone. If you’re only travelling in the city and doing short journeys then BEVs are great. But for bigger cars that have higher loads, where BEVs wouldn’t work today because of battery power density, over the next 5 to 10 years PHEVs will be a viable solution”. Hallmark also called on infrastructure providers and legislators to do a better job on delivering a consistent message on the benefits of zero-emissions motoring. “Look at the diesel solution that we all adopted 15-20 years ago,” he said. “The duties on diesel differed from those on petrol, there were tax incentives; in terms of total cost of ownership, there was a clear economic benefit to running a diesel car. That’s because decisive action was taken. But we’ve heard no decisive action on battery-electric vehicles; it’s all ‘maybe in the future when the demand picks up’. We’ve got to be decisive: mandating charging points in every residential property, or standardised charging protocols, standardised billing systems. Why don’t people buy BEVs? Because it’s a voyage of discovery to live with the damn things. There needs to be a systemic set of policies that really help the rapid introduction of battery-electric vehicles and plug-in hybrid vehicles”. +++

+++ BMW has released an update to its electrification roadmap, promising to have no less than 5 pure battery-powered EVs on the market within just 2 years. Joining the current i3, the all-electric Mini is scheduled to enter production this year. The group’s global EV lineup will add the iX3 in China next year, followed by the iNext and i4 in 2021. The German automaker seems more focused on plug-in hybrids than EVs in the next few years, apparently expecting EV demand to be limited in the near term. “We don’t want to tell people what to do; we want our products to inspire people all over the world”, said BMW chief Harald Krüger. “Our flexible electrification strategy underlines this approach and enables us to serve very different regions of the world, as the introduction of alternative drive trains is proceeding at a different pace in different markets”. The company plans to offer at least 25 electrified models by 2025, half of which will be fully electric. +++ 

+++ General Motors is planning to debut both the CADILLAC CT5-V and the CT4-V at a media event late next month. The company confirmed that the CT4 will make its first public appearance as the performance-focused V package. The CT5-V has already been spotted by spy photographers, hidden underneath the body if its predecessor, the CTS-V, while undergoing testing late last year. Spy shots of the CT4 appeared around the same time, hinting at similar proportions to the outgoing ATS. It is unclear if the V-badged model will be powered by a turbocharged 4-cylinder engine or a larger mill, potentially following the ATS-V with a turbo V6. More details could surface ahead of Cadillac’s May 30 event. +++ 

+++ In response to the Trump administration’s proposal to roll back Obama-era fuel economy standards, a top CALIFORNIA environmental regulator has raised the threat of total ban on internal combustion engines. California and the federal government have been sparring for the last several months over tailpipe regulations, with the back-and-forth reaching new heights when California Air Resources Board Chairman Mary Nichols raised the possibility of a state-wide ban on gas- and diesel-powered vehicles. “CARB will be exploring ways to ensure communities get the reductions of air pollution they so desperately need to keep the air clean and breathable, and continue to fight climate change”, Nichols said. “That might mean, for example, tougher requirements for low-carbon fuels, looking at tighter health-protective regulations on California refineries, doubling down on our enforcement efforts on mobile and stationary sources, and might lead to an outright ban on internal combustion engines”. California, the most stringent state for vehicle emissions in the nation, is fighting the Trump administration for the right to set its own emissions standards. California wants to retain requirements it helped put into place with president Obama that would require a 47 mpg fleet average after 2020. President Trump, meanwhile, is pushing to cap fuel economy regulations at 37 mpg. California and the federal government called off talks regarding future fuel economy standards in February, leaving the industry in a state of uncertainty. +++

+++ CHINA reported surprisingly weaker growth in retail sales and industrial output for April, adding pressure on Beijing to roll out more stimulus as the trade war with the United States escalates. The data suggested consumers were now beginning to cut back spending on everyday products such as personal care and cosmetics, while continuing to shun more expensive items such as cars. Motor vehicle production dropped nearly 16 % as demand weakened, with sedan output slumping 18.8 %, the steepest decline since September 2015. Industry data this week showed auto sales fell 14.6 % in April, the 10th consecutive month of decline. Some companies such as BMW have already lowered their prices after China cut the value-added tax from April 1. +++ 

+++ FORD plans to start production of new luxury Lincoln models in China for that market as they are launched, starting with the new Corsair later this year, to benefit from lower costs and avoid the risk of tariffs, a top executive said. “It’s a huge, huge opportunity for Lincoln because we see China as Ground Zero for Lincoln given the size of the market and how well the brand has been received”, chief financial officer Bob Shanks said. Ford has lower levels of localized production than rivals General Motors or Volkswagen, who make more vehicles in China for Chinese consumers, benefiting from lower labor and material costs, and avoiding tariffs in the burgeoning trade war between the United States and China. Shanks said all new Lincoln models, with the exception of the Navigator assembled in Louisville, Kentucky, will also be produced in China. He declined to say how much Ford will save through localized production. Ford has been struggling to revive sales in China, the automaker’s second biggest market. Ford sales slumped 37 % in 2018, after a 6 % decline in 2017. Shanks said that all of the problems the automaker experienced in China last year were related to the Ford brand, not Lincoln, which is popular with Chinese customers. +++ 

+++ JAGUAR LAND ROVER boss Ralf Speth has played down reports the firm could be sold to the PSA Group, but not refuted them outright. Quizzed on rumours linking the firms, with JLR owner Tata Motors reported to be considering an outright or partial shareholding sale, Speth said: “There are lots of rumours flying around but I can’t confirm any of these discussions”. Asked if he and PSA boss Carlos Tavares had spoken, Speth said: “I have met Carlos Tavares at ACEA (the association of European car makers) meetings but we didn’t discuss anything about ownership”. When asked more directly if he knew of any talks between PSA and Tata, Speth replied: “There are rumours, but I cannot really confirm any of these discussions”. Last week, the Press Association reported seeing a ‘post-sale integration document’ that has been circulated within JLR, highlighting the benefits of the company being sold by Tata Motors to PSA, which comprises Citroën, DS, Peugeot and Opel / Vauxhall. A source also told the PA that “things are moving quickly behind closed doors”. In reponse to that, Tata Motors re-affirmed a previous statement saying that “there was no truth to rumours that Tata Motors is looking to divest its stake in JLR”. A PSA Group spokesperson told PA that it was in “no hurry” to make any acquisitions, but added it would “consider” any oportunities that came along. Tavares has been open in recent months about his desire to expand the group, either through acquisitions or partnerships with other car firms. A statement from PSA said the company was in “no hurry” to buy JLR, but that “If an opportunity comes, like Opel (and Vauxhall), we will consider it”, PSA, which is 13.68 % owned by the French Government, has had significant success since buying Opel / Vauxhall from General Motors, with Opel/Vauxhall bringing in an €859 million profit in 2018, compared with the €257 million loss it made in 2016 when it was owned by General Motors. Suggestions that Jaguar Land Rover could be sold follow the firm posting a £273 million loss in the final quarter of 2018, and downgrading the value of assets by £3.1 billion. The recent success of the electric Jaguar I-Pace and all-new Range Rover Evoque have done much to lift JLR’s profile, as has the introduction of more plug-in hybrid and mild hybrid models, but they come off the back of a downturn in the company’s key Chinese market, and slow-selling models like the Jaguar XE and Land Rover Discovery. +++ 

+++ KOENIGSEGG is planning to attract new customers with a much cheaper and higher-volume new model, according to boss Christian von Koenigsegg. It’s set to be revealed next year, with production beginning soon after. The Swedish hypercar maker is now able to make use of far greater economies of scale thanks to a £130 million investment earlier this year by Chinese-owned firm New Electric Vehicle Sweden (NEVS, producers of a Saab-based EV). The partnership has given the firm a 20 % stake in Koenigsegg’s parent company, with further money to be invested in a joint venture to develop a project for “new and untapped segments”. Von Koenigsegg claims the agreement, which was signed just as funding for a new model series had been secured, means “we get much more muscles and much more jobs, and that was what I was looking for”. Autointernationaal.nl understands the medium-term plan is to build and sell a new supercar at a price of £700,000 to £800,000, less than half that of the firm’s current cheapest model, the Regera. The supercar has been under development for 2 years but the NEVS deal allows Koenigsegg to raise the pace of development and present the car in the first half of 2020. The exact specifications of the new model have yet to be revealed, although we know that it will feature the tried-and-tested twin-turbocharged 5.0-litre V8 with some form of electrification. Alongside this, it will also use a ‘free valve’ system from sibling engineering firm Freevalve AB. Such tech allows the intake and exhaust valves to be controlled freely without the use of camshafts, resulting in lower fuel consumption, reduced emissions and greater performance. Other models are in the pipeline, although details have yet to be revealed. They will be developed and built at Koenigsegg’s facility in Ängelholm, Sweden, with a new final assembly plant set to be built. However, NEVS also owns the assets of now-defunct Saab, so there is potential for it to make use of a substantial production, research and development facility in Trollhätttan. Don’t expect the new investment and ambitions to make Koenigsegg a big-volume maker, though. Last year, it produced just 18 cars and its aim is to extend that up to and above 100 cars a year in the next few years with the new, cheaper car. Longer term, that could breach four figures, depending on the roll-out of future models. +++ 

+++ Nissan has joined Tesla in shunning LIDAR for self-driving cars, admitting the technology is too expensive and may not be necessary. Tesla chief Elon Musk recently outlined his reasons for dismissing lidar, arguing that the technology is a “fool’s errand” and gives a false sense of progress as a shortcut around “the vision problem”. The executive pointed out that road systems and traffic controls are already designed to be interpreted by human eyes. Nissan’s general manager of advanced technology development for automated driving, Tetsuya Iijima, recently told reporters that there is an “imbalance” between lidar’s cost and capabilities. “At the moment, lidar lacks the capabilities to exceed the capabilities of the latest technology in radar and cameras”, he said. “It would be fantastic if lidar technology was at the level that we could use it in our systems, but it’s not”. Importantly, Tesla believes its neural-network technology (claimed to be necessary to solve the ‘vision problem’) is far ahead of any rival, yet still requires further refinement before the company will roll out self-driving capabilities. Nissan aims to have “commercially viable autonomous-drive vehicles” on the road by 2020. +++ 

+++ LOTUS has shed more light on its ambitious Type 130 project, an all-electric hypercar that aims to transform the brand. Lotus chief Phil Popham promised the Type 130 will be a “mind-blowing hypercar”; the first such vehicle to be designed, engineered, and built in the UK. “We’re very much focused on rebuilding the sports car business. When we’ve done that this brand has the strength to go beyond that. It could be GTs, crossovers, sporting sedans”, he added. The executive acknowledged that heavy batteries posed a challenge for the weight-obsessed automaker, hinting that the Type 130 may not be an ultra-long-range EV but rather a shorter-range lightweight coupe geared for short track sessions. The company has only published a single vague teaser sketch so far, ahead of a bigger reveal sometime later this year. +++

+++ NISSAN forecasts a 28 % plunge in its annual operating profit, putting it on course for the weakest earnings in 11 years and underscoring its struggle to turn the page after former Chairman Carlos Ghosn was ousted. The lackluster outlook from Japan’s No.2 automaker (hit by Ghosn’s arrest last year and troubles at its North American business) is likely to add to the pressure on CEO Hiroto Saikawa as he tries to overhaul corporate governance and put Nissan on a more equal footing with alliance partner Renault. Nissan’s weakening profit and a growing number of departing executives and managers have raised concerns at Renault, which holds a 43 % stake in the Japanese firm and has pushed for closer ties. These issues could strengthen the argument for closer links between the 2 automakers, although some Nissan executives have opposed a full merger and what they see as an unequal partnership that gives smaller Renault more sway over Nissan. “Today we have hit rock bottom”, Saikawa told a news conference at the company’s headquarters in Yokohama, adding that he wanted the company to recover to its original performance level in next 2 to 3 years. +++

+++ The boss of the new Chinese EV firm WM Motor believes the challenge of establishing a brand means that PREMIUM START-UP FIRMS will struggle to survive, which is why his firm will focus on the mainstream market. Originally known as Weltmeister, WM Motor was founded in 2015 and last year launched the electric EX5 SUV in the Chinese market, where it sells for between £22,000 and £34,000. The firm has long-term plans to expand internationally. Chinese regulations to encourage electric car sales have made it the world’s largest market for such cars, with a number of Chinese start-ups attempting to establish themselves. These include well-funded firms such as Nio and Xpeng, both of which are pitching themselves as premium brands to rival the likes of Tesla. But WM Motor boss Freeman Shen, who previously headed Volvo’s Chinese division, questioned whether a premium-focused start-up could survive. “We have aimed for the mass market, as history shows independent premium brands don’t tend to survive”, said Shen. “Look at Lincoln, Cadillac, Porsche and more: they tried, but in the end they have been absorbed. Good luck to Tesla, we’ll see. In China, the new generation of car buyers are looking for new brands with new technology at an affordable price; that’s where we sit. The change is such that I don’t need to spend 30 years building a premium brand to then move it mainstream. The same is true in the US, where there’s not so much choice in the mainstream below Tesla”. While Shen admitted that WM Motor was “not profitable today”, he added that “we are one of the first that can be”, although he declined to give a timescale for that to happen. +++ 

+++ RUSSIA ’s new-car sales fell 2.7 % in April to 148,296, hit by low consumer confidence and the introduction of a tax hike, the Association of European Businesses (AEB) lobby group said. “Clearly, the market in its current shape is no match to the one we saw delivering consistent double-digit growth rates only 12 months ago”, AEB chairman Jörg Schreiber said. In January, the government introduced a 2 % VAT rise that was widely expected to subdue demand. Since then, monthly sales have only risen once when they increased 1.8 % in March. Market leader Lada increased sales 5 % in April, while its closest competitor, Kia, boosted volume 1 %. Third-place Hyundai fell 3 %, while No. 4 Renault was up 5 %. Volkswagen, at No. 5, rose 7 %. Other winners were Smart (+26 %), Jeep (+22 %), Porsche (+18 %), Skoda (+16 %) BMW (+13 %) and Volvo (+8 %). Through April, sales were down 1 % to 539,946. +++ 

+++ The Volkswagen Group says it will start talks for a new multibrand car assembly plant in Europe. The move was announced by VW after the automaker’s supervisory and management boards gave their approval. VW will begin “concrete negotiations” for the plant in Europe with the remaining potential locations, VW said in a statement. VW first said in November that it plans to add an additional plant in eastern Europe to expand its production capacity after 2022. The move is being driven by a capacity squeeze at VW Group’s SKODA brand. The plant is expected to make the Skoda Karoq and Seat Ateca. Bulgaria, Serbia and Turkey are all in talks to win the factory. +++

+++ In the UNITED KINGDOM , there is strong new evidence that substantial numbers of car buyers are delaying purchases as a direct result of Brexit and confusion over powertrain choices. Data shows that among those whose car is more than 2 years old, almost half said they had originally planned to replace their car before now. Younger people and those buying or leasing new cars are most likely to be delaying their purchase. An underlying level of delay is to be expected, as changes in personal circumstances often get in the way of new car buying decisions. But one in four of those surveyed attributed the delay to the effects (potential or already felt) of Brexit, and 39 % cited general economic concerns as a reason. A mix of uncertainty about the future of diesel and confusion over which powertrain to buy are the reasons mentioned by 27 % of those sampled. Both Brexit and powertrain concerns have hit the new car market harder than the used, according to the data, with both factors cited by a majority of those intending to get a new car the next time they do upgrade. The premium car category is most badly hit: around a third who mentioned the 2 factors intend to buy more expensive cars. The hiatus seems likely to continue until the Brexit uncertainty is resolved. Almost a third claim they will put off their purchase until the effects become clear, with those aged 25-44 and those intending to buy in the next 2 years most likely to delay their decision. Conversely, two-thirds claim their next car purchase won’t be affected. Brexit appears to be affecting people’s choice of brand, too. 1 in 5 say they are more or less likely to buy certain marques as a result of Brexit, with German brands such as BMW, Volkswagen and Audi and French brands such as Renault, Peugeot and Citroën all most likely to be dropped from consideration. More people are likely to buy Fords and Toyotas, although Nissan loses slightly more than it gains; possibly as a result of the decision not to build the X-Trail in Sunderland. Tom Simpson, managing director of Simpson Carpenter, said: “New car sales are clearly being damaged by a political failure to provide clarity, firstly over the future of diesel and then the seemingly neverending Brexit negotiations. The new car market is unlikely to recover until these uncertainties are resolved. And in these circumstances, it’s difficult to criticise car manufacturers if they delay decisions to invest in the UK”. +++

+++ VOLKSWAGEN workers backed a restructuring of the world’s largest carmaker after chief executive Herbert Diess pledged to spend €1 billion on a new battery cell production plant near its headquarters in Lower Saxony. Diess needs the support of Volkswagen’s powerful unions as he attempts to slim down and simplify the German company, which has 12 brands spanning trucks, buses, motorbikes, cars and electric bicycles. VW’s leadership has embraced a strategic shift towards e-mobility, which requires less manpower to produce cars, to help it shed the shadow of the diesel emissions test cheating scandal which damaged its finances and reputation. Labour opposition has stifled previous restructuring efforts at VW, which also said it plans to list its trucks business, integrating its MAN and Scania divisions to create a global challenger to Daimler and Volvo. “The employee representatives on the supervisory board welcome the decisions, which they expressly support. These decisions set the course for sustainable further development of secure jobs as well as profitability”, labor chief Bernd Osterloh said in a letter to VW’s employees. VW had said it would resume preparations for listing the trucks business, which is called Traton, before the summer break, reversing an earlier decision to postpone the listing due to shaky markets. It also said it is exploring a sale of MAN Energy Solutions, which makes diesel engines for use in ships and power stations, as well as a full or partial sale, joint ventures or partnerships for transmissions maker Renk. VW has approached several companies to gauge their interest in buying MAN Energy Solutions, which is expected to achieve a valuation of about €3 billion in a potential sale. Threats by the United States to impose tariffs of up to 25 % on Chinese imports sparked fears of a protracted global trade dispute which has rattled investors and sparked a sharp sell-off on equities markets in the past week. Finance Chief Frank Witter said in a statement that “current market assessments” had encouraged VW to proceed with the Initial Public Offering (IPO), which could yield up to €6 billion if a 25 % stake is listed. Jefferies analyst Philippe Houchois estimated Traton was worth €15 to €16 billion. “A listing should be positive as the current VW balance sheet is in our view a constraint on Traton’s ability to execute on its ‘Global Champion Strategy’ ”. This could allow Volkswagen Truck & Bus to build a war chest to deepen its relationship with Navistar, a U.S. truckmaker in which it owns a 16.85 % stake. Osterloh said talks between labor representatives and VW management over working conditions and restructuring plans were going well and a conclusion could be reached in May. VW said it would seek to build a battery cell production factory in Salzgitter, Lower Saxony, if economic pre-conditions, such as subsidized electricity, could be met. And executive board member Stefan Sommer told journalists that VW was already looking into opening additional battery production sites in Europe. Diess’ predecessor Matthias Müller failed to sell non-core assets like Ducati, stifled by supervisory board members from Lower Saxony and the company’s labor representatives who control more than half the seats on the 20-member board. Osterloh said he would agree to divestments and a transformation if the terms and conditions for employees in units which have been earmarked for disposal are not watered down and if there is industrial logic behind the deal. “You can rely on one thing, there will be no lazy compromises here”. +++ 

+++ VOLVO could yet be open to producing models smaller than its 40-series, the company’s boss has revealed. The Swedish brand has been focusing on filling its line-up across the 40, 60 and 90 ranges of models. The XC40 is currently its smallest car, as the V40 hatchback will go out of production next month. Volvo sources have consistently denied that the firm would even consider producing a smaller SUV model than the XC40 (based on Volvo’s most compact platform, the Compact Modular Architecture), to rival the likes of the Audi Q2 or even the Mini Countryman. However, CEO Häkan Samuelsson admitted that changing customer views on the price of smaller items could yet make such a move feasible. “I’ve said that we’ll fill our portfolio and right now we’re doing that”, Samuelsson said. “We took one step down with XC40 which is our smallest SUV. We have a very strong line-up of SUVs. So never say never. There is a trend now that premiumness is more and more decoupled from size. Small cars can also be premium. Just because you have a small suit, it doesn’t have to be polyester. So let’s see. Right now it’s not planned, but it’s a good idea also”. Samuelsson also admitted, meanwhile, that Volvo may consider offering a charging infrastructure or an allowance of electricity as part of its Care by Volvo subscription model, once its pure-electric vehicles arrive on the scheme. “That could very well happen”, he said. “It’s an interesting idea because in some way when somebody has an electric car they need a good concept on how to charge them”. If Volvo were to launch a sub-40-series car then it’s more than likely that the model will have an all-electric powertrain. +++

 

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