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+++ Try going for a run, or even a couple of trips upstairs, wearing a 30 kg backpack and it soon becomes obvious how much hard work it takes to lug that extra weight around. Lightweight technology is even more pressing with the rise of electric vehicles (EVs), as the multiple-award-winning Jaguar I-Pace demonstrates. It makes no sense to build an EV with a heavier steel chassis and body and then compensate for that weight with a bigger, heavier battery. As far as fuel consumption goes, a lighter car needs less energy to move it: it’s as simple as that. Pushing a classic Mini on your own is easy but moving a full-sized SUV solo is anything but. So manufacturers are always looking to reduce weight or at least reduce the weight spiral, mainly by using lightweight steel and ALUMINIUM alloy in the body construction. Although far cheaper than carbonfibre, aluminium construction is expensive, partly because of the material itself and partly because of the construction methods. That’s why it only appears to any great extent in premium cars. Steel is a relatively easy material to work with and panels can be pressed and folded with crisp, sharp edges. Aluminium panels are less amenable to sharp folds, and if the radii on a swage line are too small or a shape too intricate, the material can crack. Designers and engineers have to work more closely to achieve the shapes designers want. Joining the stuff together gets trickier as well. Whereas manufacturers have been joining steel for decades using MIG or spot welding, bolting and, to a lesser extent, riveting, some different methods are needed for aluminium. A favourite for joining panels is bonding (gluing) and riveting using self-piercing rivets. A conventional rivet is pushed through a drilled hole and bashed over, but self-piercing rivets push through the first layer of aluminium without drilling and splay out into a second layer but without piercing it. In cross-section, it resembles a wisdom tooth with those large roots and once in, like the tooth, it doesn’t want to come out. A tricky aspect of mixing steel and aluminium is the possible effect of galvanic corrosion between the steel and aluminium, a battle that the aluminium generally loses and causes it to fall apart. That means adding some protection apart from the glue and, for example, Volkswagen uses a purpose-designed lacquer on the two surfaces to keep them apart by a whisker, even though they’re joined. Reducing the weight comes not just from the intrinsic weight of the material but also from its strength. Modern aluminium alloy body structures use a mix of different types of alloy and using a higher-strength grade for some body panels means they can be thinner and even lighter, creating a virtuous circle. Don’t ever expect to see a car made in pure aluminium, though: it’s too soft. An aluminium alloy contains a trace of other materials such as silicon and magnesium. It’s clever stuff and why, in some respects, car making today is more about what happens in a chemistry laboratory and a little less about spannering. +++

+++ All-electric vehicles are spreading like wildfire in the automotive landscape. AUDI is among those who are currently expanding their electrified offerings, and the next generation A8 is a potential candidate for getting a zero-emission powertrain. This isn’t just another rumor, as such a potential model has officially been hinted during the company’s annual general meeting by chairman of the Board of Management, Bram Schot, although nothing has been decided yet. In his speech, the Audi official said: “In 2020, we will launch 5 electric cars. And we will make significant progress after that; Audi will already have 20 all-electric models by 2025. The next generation A8 might well be all-electric. That has not been decided yet, but I can well imagine it. We are thinking about revolutionizing the top-end class with a completely new concept for the A8”. The 4th generation A8 will turn 2 years in mid-summer, so it’s here to stay for a few more years. Its predecessor had a life span of 7 years, and so did the one before that ,which, in all likelihood, means that the current model should remain in production until 2024. While a battery-electric powertrain for the A8 still has to be decided, Audi has already approved a more luxurious version that will be targeted at the Mercedes-Maybach S-Class. Rumored to resurrect the long-dormant Horch brand name, it will serve as the range-topping member of the family. +++ 

+++ BENTLEY will unveil a centenary concept on 10 July which will showcase the “future of grand touring”, confirmed CEO Adrian Hallmark. In celebration of 100 years of Bentley, the futuristic concept promises to display technology and design advancements envisioning the next 30 years. The innovative concept will be powered by a hydrogen hybrid. It is the first time Bentley has demonstrated an interest in hydrogen power. Its first petrol-hybrid, a variant of the Bentayga, will launch in August this year. Meanwhile, a full electric model will arrive within 5 years, said Hallmark. The concept is set to show a transparent OLED display on door cards, first talked about by Bentley in early 2017. The OLED display could overlay wood veneers and only be visible when in use, to control features such as audio. A version of the technology was shown in Bentley’s EXP12 Speed 6 e concept. Design director Stefan Sielaff said the concept is “a manifesto for how we see Bentley in the future”. “It’s a view into the future. We don’t want to show a spaceship. It should be something that everyone knows is a Bentley and that the technology we show is credible. It’s not only a design statement but a statement for the company. “It’s about sustainability, social responsibility, local sourcing, materials. It’s a big change in our thinking because society is changing”. He added that the design team has been working on the concept for 2 years. “We are far, far away from being finished. The studio is a little outside the main office because we have to keep it really secret. My team is working day and night. It has a very innovative design language, which is very important for me and my team”, Sielaff teased. “We can argue later on if the centenary concept car made a statement, and our next production cars that we are developing have to go in this direction. This did not happen by accident, we have been having these discussions with the board for 2 years”. +++

+++ There’s no doubt that Tesla changed the auto industry in many ways and its over-the-air updates are probably the most spectacular of all. The simple idea of having your car ‘magically’ fixed or upgraded without anyone physically working on it would have been the stuff of sci-fi movies but nowadays is slowly becoming standard practice. BMW is the latest automaker to jump on the over-the-air updates bandwagon although the company uses a different name for the service: Remote Software Upgrade. The automaker has just announced that all BMW Group vehicles equipped with Operating System 7.0 will be updated at all times with Remote Software Upgrade. Available with immediate effect, the feature keeps the vehicle up-to-date and is as easy as updating a smartphone, according to BMW. The first upgrade, already available from today successively in all BMW ConnectedDrive markets, includes the BMW Intelligent Personal Assistant, whose functions can now be expanded automatically and conveniently over the air. The additional functions of the BMW Intelligent Personal Assistant can be activated for models including the new X5, 3 Series and 8 Series with BMW Operating System 7.0. BMW says the Remote Software Upgrade offers vehicle-specific content and updates including adding extensions to driver assistance systems, such as Active Cruise Control and side collision protection. Future upgrades will unlock additional vehicle functions from the BMW ConnectedDrive Store. Depending on the car’s specification, Remote Software Upgrade will enable owners to activate additional functions from their home, via smartphone or from inside the car itself. According to BMW, future Remote Software Upgrades “will regularly expand and improve the BMW Intelligent Personal Assistant’s skills”, free of charge. These cyclical updates will include software adaptations and function extensions. +++ 

+++ CHINA ’s automobile sales will reach around 28.1 million units this year, unchanged from 2018 levels, state news agency Xinhua reported. Citing a report jointly released by the China Association of Automobile Manufacturers and other parties, Xinhua said that sales of passenger units will be about 23.7 million units, a level also similar to that of last year. Sales of new energy vehicles, however, are likely to remain buoyant and grow about 27 % to hit 1.6 million units from 1.26 units in 2018, the report said. The country’s auto market contracted last year for the first time in more than 2 decades due to softer domestic demand and a trade war with the United States. Monthly sales have so far declined for 10 consecutive months. +++

+++ When John ELKANN lost his ally last year with the sudden death of Sergio Marchionne, some questioned whether the softly-spoken scion of the Agnelli clan would be able to emerge from his shadow to ensure Fiat Chrysler’s future. But New York-born Elkann, who became Fiat chairman in 2010, acted decisively to fill the vacuum left by the larger-than-life Marchionne and get closer to the big merger deal the legendary executive was unable to deliver. At just 28, Elkann was thrust into the role of Fiat vice-chairman after the deaths of his grandfather and great-uncle “because there was really nobody else” to take the wheel. For Elkann, who got his first taste of the car industry as an intern at a factory producing headlights in Birmingham, England, the first 18 months with responsibility for the family-owned carmaker and its long heritage were “terrible”. But from that low point, Elkann, 43, is now trying to merge Fiat Chrysler Automobiles (FCA) with French rival Renault to form the world’s third largest carmaker and tackle new challenges facing the industry. Elkann will become chairman of the merged FCA-Renault if the deal goes ahead, ensuring the Agnelli dynasty plays a central role in the next chapter of automotive history. At an event in Milan, the usually-shy Elkann looked happy and confident. His first big break came with an instrumental role in persuading Marchionne, who was running one of the businesses owned by the Agnelli family, to become chief executive in 2004 and give Fiat “a new start”, Elkann said in a “Masters of Scale” podcast last year. Fiat was at the time almost on the brink of collapse. This involved a “very long night … and many grappas” but proved to be a turning point in the fortunes of the Italian company founded by Elkann’s great-great-grandfather Giovanni Agnelli, which built its first car in 1899. In 2005, Elkann backed Marchionne in negotiating the breakup of an alliance Fiat had entered into with General Motors in 2000, receiving $2 billion from GM in return for cancelling a deal that could have required GM to buy the remainder of Fiat Auto. Marchionne then used GM’s money to fund a turnaround at Fiat, which involved taking the Italian carmaker into a transformation alliance and then full-blown merger with U.S. automaker Chrysler as Elkann agreed to the Agnellis loosening their grip. If Elkann can deliver a deal with Renault (which will net the Agnellis about €725 million in a dividend payout) it will be partly thanks to his pick of new CEO. Mike Manley was probably was not the obvious choice, but the transition to the post-Marchionne era has been smooth with no tensions or rivalries within the family or the FCA group. The focus has been very much on the future as FCA, like its rivals, grapples with the challenges posed for the car making industry by fast-changing technology and regulation. Elkann, who is also chairman and CEO of the Agnelli holding company Exor, appears to be taking a leaf out of his great-great-grandfather’s book. “We must always look to the future. Foresee the future of new inventions. Be unafraid of the new. Delete from our vocabulary the word ‘impossible’ ”, Elkann quotes the Fiat founder’s mantra as being. Elkann, whose French is better than his Italian, spent 7 years at a lycee in France before studying Engineering at Politecnico, the Engineering University of Turin. He has often been portrayed more as a financier who has moved key elements of Fiat away from Italy. His efforts to keep Fiat on the road, however, have not been rewarded with the popularity his grandfather, known as “L’Avvocato”, enjoyed even though he has maintained the family’s involvement with soccer club Juventus and chairs the Giovanni Agnelli Foundation. Elkann has transformed Exor’s portfolio during his time in the driving seat of the family empire. He diversified into insurance (winning a bitter $6.9 billion takeover battle for Bermuda reinsurer PartnerRe in 2015) and into media assets through The Economist magazine. Elkann, an admirer of Warren Buffett, also listed Juventus on the stock exchange, turning a hobby of Elkann’s grandfather into a serious business. During his watch, Fiat has also spun off Ferrari and truckmaker CHNI, in line with his philosophy that companies need to adapt to survive in the long-run. Exor is still the top shareholder in both companies. After all these changes, Elkann is now at the top of a family empire less exposed to the cyclical and rapidly-changing auto industry yet with a potentially key role, with a stake of just below 15 %, in a leading global carmaker. This will mean Elkann has delivered on his promise of upholding the Agnelli family’s pledge to the auto industry, which still employs thousands of workers in Italy, while at the same time bringing taking FCA onto a new stage. And if he can keep to FCA’s pledge not to shut plants, Elkann might yet become an Italian legend like his forebears. +++ 

+++ FIAT CHRYSLER AUTOMOBILES pitched a finely balanced merger of equals to Renault to tackle the costs of far-reaching technological and regulatory changes by creating the world’s third-biggest automaker. If it goes ahead, the $35 billion-plus tie-up would alter the landscape for rivals including General Motors and PSA Group, which recently held inconclusive talks with Fiat Chrysler (FCA), and could spur more deals. Renault said it was studying the proposal from Italian-American FCA with interest, and considered it friendly. Shares in both companies jumped more than 10 % as investors welcomed the prospect of an enlarged business capable of producing more than 8.7 million vehicles a year and aiming for €5 billion in annual savings. It would rank third in the global auto industry behind Toyota and Volkswagen. But analysts also warned of big complications, including Renault’s existing alliance with Nissan, the French state’s role as Renault’s largest shareholder and potential opposition from politicians and workers to any cutbacks. “The market will be careful with these synergy numbers as much has been promised before and there isn’t a single merger of equals that has ever succeeded in autos”, Evercore ISI analyst Arndt Ellinghorst said. With these sensitivities in mind, FCA proposed an all-share merger under a listed Dutch holding company. After a €2.5 billion dividend for existing FCA shareholders (giving a big upfront boost to the Agnelli family that controls 29% of FCA) investors in each firm would hold half of the new entity. The merged group would be chaired by Agnelli family scion John Elkann, sources familiar with the talks told, while Renault chairman Jean-Dominique Senard would likely become CEO. Italian Deputy Prime Minister Matteo Salvini said the proposed merger could be good news for Italy if it helped FCA to grow, but it was crucial to preserve jobs. He did not comment on the French government’s 15% stake in Renault, but an influential lawmaker from the ruling League party said Rome may seek a stake in the combined group to balance France’s holding. A deal could also have profound repercussions for Renault’s 20-year-old alliance with Nissan, already weakened by the crisis surrounding the arrest and ouster of former chairman Carlos Ghosn late last year. The Japanese carmaker has yet to comment on FCA’s proposal. In a letter to employees, FCA chief executive Mike Manley cautioned a merger with Renault could take more than a year to finalize. A deal could help both companies address some of the shortcomings that have led their market valuations to lag major rivals, as well as the shift to electric and self-driving technologies amid tightening emissions regulations. FCA has a highly profitable businesses in North America with its RAM trucks and Jeep brand, but lost money last quarter in Europe, where most of its plants are running below 50% capacity and it faces a struggle with new emissions curbs. Renault, by contrast, was an early mover in electric cars, has relatively fuel-efficient engine technologies and a strong presence in emerging markets, but no U.S. business. A deal would do little, however, to address both firms’ limited presence in China, the world’s biggest auto market. It would also create the challenge of managing a large number of brands, from high-end Maseratis to budget Dacias. The huge cost of countering disruptive new entrants such as Tesla’s electric cars or future autonomous vehicles from Uber and Google has pushed other automakers to collaborate, including Volkswagen and Ford. FCA-Renault, like almost every possible automotive pairing, has been studied intermittently for years by dealmakers. But the fractious relations between Ghosn and FCA’s long-standing boss Sergio Marchionne made constructive talks impossible before Marchionne’s sudden death last July, banking sources said. Renault shares were up 15 %, while FCA’s Milan-listed stock was up 11.3 %. PSA, widely seen as an industry consolidator, was off 3 %. The French government, Renault’s biggest shareholder, supports a merger with FCA in principle but will need to see more details, its main spokeswoman said. France will be “particularly vigilant regarding employment and industrial footprint”, another Paris official said, adding any deal must safeguard Renault’s alliance with Nissan, which recently rebuffed a merger proposal from its partner. Seeking to soothe concerns, FCA said the deal plans “are not predicated on plant closures, but would be achieved through more capital-efficient investment”. The carmakers have given commitments to maintain industrial jobs and sites, one source said; leaving room for white-collar and engineering layoffs as well as some plant downsizing. Early areas for potential convergence include Renault’s next electric car platform being launched at its Douai site in France, the source said, adding all of Renault’s board members backed the decision to study FCA’s proposal with the exception of the leftist CGT union, which abstained. In a sign of potential future tensions, the CGT demanded the French state retained a blocking stake in any merged group. Appealing to Nissan, which is 43.4%-owned by Renault, FCA said the Japanese carmaker would nominate a director to the 11-member board of the new company. Nissan and affiliate Mitsubishi would also benefit from €1 billion in cost and investment savings, it added. Decision-making by such a board is unlikely to be straightforward, some analysts warned. “We now have the French, the Italians, the Japanese and the Americans needing to find consensus on the board of a Dutch company, where the French state stands to lose its special status”, Ellinghorst said. “This requires quite a bit of creativity”. +++ 

+++ The prospect of a ‘ GOOGLE car’ leaves me lukewarm because such a vehicle is swamped by hype, confusion and gross uncertainty. Like most future vehicles from tech firms with zero automotive experience, there are too many question marks and too few certainties. But the sooner Google becomes directly involved in the retailing of new cars, the better. I say this because here’s a company that currently reacts to customer demand, or the lack of it, better than any other I know. For example, the company’s original Pixel 3 XL phone wasn’t selling well at around £900, despite having what is arguably the best camera in the business. So it’s just launched a 3a XL version, which has a slightly lower (but still high) spec for £469. The icing on the cake is that 3a XL customers are invited to grab a £199, 11-inch laptop for free as a sort of ‘thank you for your custom’ gesture. This is like a vehicle manufacturer / dealer struggling to shift its high-end models at £90,000 a pop and therefore building a slightly lower-spec version, then almost halving the price to £46,900. Not content with that, it chucks in, free of charge, a second vehicle worth 20 grand. So that £90,000 car becomes 2 cars averaging £23,450 a piece. Brilliant. This is my idea of doing the right thing for the consumer in the showroom. The Google deal is real and runs until 4 June; there are no additional costs or other catches to worry about. The phones are in stock, and ready to be bought and paid for over the counter in seconds. There’s none of that nonsense about ordering online, then waiting forever for delivery from the factory to the dealer. How do I know all this? Because I have a relative with an imminent birthday. I carefully researched the subject, purchased the almost half-price product as a walk-in customer the other day, then immediately qualified for the freebie laptop (which arrives a few days later via courier). In terms of value for money it was (and still is) a no-brainer. Why can’t new car dealers operate similarly? Last time I bought a factory-fresh car from a near-premium manufacturer the discount was underwhelming, the wait for delivery unacceptably long, and the buying and servicing processes woeful, almost fraudulent. There are some car manufacturer / dealer partners who could and should halve the price of their obviously overpriced vehicles. And there are others who can afford to chuck in a bottom-of-the-range, but still brand-new, ‘second car’ when a buyer comes in and pays the full list price for a top-of-the-range example. Better still, is there a new car retailer out there who is willing and able to adopt Google-like tactics by selling a massively discounted higher-end model at the same time as chucking in a more modest car free of charge? For sure, there really should be. As Google is currently proving, the sums can and do add up. The long-established motor-manufacturing business should teach tech firms how to build cars. But let switched-on techies like Google teach it the art of modern retailing. +++ 

+++ NISSAN ’s long resistance to its French partner’s request to make the alliance irreversible came at a high price for the Japanese automaker, which appears to be the real loser in the proposed merger of Fiat Chrysler Automobiles and Renault. Nissan has complained for years about its unbalanced cross shareholding with Renault. Nissan has a 15 % stake in the French automaker but no board seats and no voting rights. If the FCA-Renault merger is approved by Renault shareholders as proposed by FCA, the new entity would continue to own 43.3 % of Nissan’s shares and voting rights, while the Japanese automaker’s stake in the merged companies would be diluted to just 7.5 %. Nissan would be invited to nominate a director to the 11-member board of the new combined company, under the plan presented. This means the person representing Renault at the next Renault – Nissan – Mitsubishi alliance operating board meeting would be the proverbial elephant in the room, as that executive may soon also be part of a powerhouse with combined global sales of 8.7 million vehicles and more than €10 billion in operating profit in 2018. This possible change in the size of Renault comes at a particular painful time for Nissan, which in the fiscal year ended on March saw its global volume dip 4.4 % to 5.5 million units and its operating profit slump by 45 % to roughly €2.7 billion. Nissan’s attempt to rebalance the alliance on the Japanese side would become an even more daunting challenge if Renault and FCA merge. The move would also make Renault less worried about the possible dissolution of its fractured 20-year alliance with Nissan. Nissan’s credit rating was cut a notch by Moody’s Investors Service, which cited Nissan’s weakening profitability and margins over the past 2 years. The issuer rating was lowered to A3 from A2, the rating company said. Moody’s had placed the Yokohama-based automaker on negative watch in February. The latest downgrade comes days after S&P Global Ratings placed the automaker’s rating on negative watch, saying there is a more than a 1-in-3 chance of a further delay in Nissan’s profit recovery. Earlier this month, Nissan cut its full-year earnings forecast after third-quarter profit missed analysts’ estimates, adding to the fallout from the arrest of former chairman Carlos Ghosn. “The downgrade reflects the continuing slide in Nissan’s profitability, driven by weak sales in the U.S., its largest market”, Motoki Yanase, Moody’s Japan’s vice president, said in the statement. Nissan’s sales in the U.S. plunged 19 % in January amid an industrywide slump, intensifying the pressure on chief executive officer Hiroto Saikawa as he seeks to ease tensions with partner and shareholder Renault. It will take several years to gauge the success of Nissan’s strategy of emphasizing margin-over-unit sales growth, refreshing old models and lowering discounted bulk sales, Moody’s said. The new post-Ghosn governance framework will also take time to prove its effectiveness, the ratings agency added. Hurt by slumping U.S. sales, aging vehicle models and an out-of-sync product cycle, the Japanese carmaker issued a profit outlook of 230 billion yen ($2.1 billion) for the fiscal year ending March 2020, roughly half of the average 453 billion yen projection. Nissan also reported its lowest annual profit in a decade at 318 billion yen. +++ 

+++ RENAULT ’s efforts to forge a closer bond with alliance partner Nissan have hit repeated roadblocks in recent months, but Fiat Chrysler Automobiles may have tossed it a lifeline with its proposal to merge the 2 automakers. The future of the alliance, in which Renault has a leading role, has looked increasingly cloudy since the arrest and detention of Carlos Ghosn, the executive who largely shaped its current form, last autumn in Tokyo on charges of financial mismanagement. At the time of his arrest, Ghosn was working on plans to modify the alliance’s financial structure, including the creation of a holding company or even a full merger; an idea bitterly resisted by Nissan, which worried about interference from the French government, Renault’s largest shareholder. Ghosn’s 2 successors at Renault, chairman Jean-Dominique Senard and CEO Thierry Bollore, have shuttled between Paris and Tokyo, seeking to determine what sort of structure would be acceptable to Nissan CEO Hiroto Saikawa (who is a Ghosn protege) and the Japanese government. But Senard and Bollore have not been successful, and Nissan has dug in its heels by continuing to back Saikawa as Renault pushes for new management. Rivaling Volkswagen Group as the world’s largest vehicle producer, the alliance gives Renault and Nissan the financial, technological and operational muscle to make the transition to costly trends such as electrification, autonomous driving and mobility as a service. It books the benefits from the partnership as “synergies”, which totaled some €5 billion in 2018. If Renault and Nissan cannot continue to share platforms, purchasing and off-the-shelf technology, among other functions, the 2 automakers would be sharply weakened. They would be increasingly vulnerable to threats from giants such as Volkswagen, Toyota and General Motors, as well as Silicon Valley companies such as Uber and Tesla. At the same time, Nissan’s flagging financial performance is starting to hit Renault’s bottom line. The French automaker could once count on hundreds of millions of euros in dividends and other payments from its 43 % ownership stake. However, Renault recently said Nissan would have a negative contribution to its first quarter net income of €56 million. In addition, a planned 30 % cut in Nissan dividends this year will cost Renault an estimated €130 million. In that context, a “friendly” merger with FCA might be a much better option than remaining in an uneasy marriage with a money-losing Nissan, or in the worst case, a messy divorce. FCA’s access to the lucrative North American pickup and SUV market, through Jeep and Ram, fills both product and geographic holes in Renault’s portfolio. More volume in Europe through Fiat sales spreads out development costs, especially for costly electric vehicles. FCA would also be a more natural cultural fit, and the proposed 50-50 shareholding and management structure would, in theory, eliminate some of the pain points Renault and Nissan have endured. A Renault merger with FCA is almost certainly not the endgame that Carlos Ghosn expected when he vowed in February 2018 to make the Renault-Nissan alliance more durable. Relations between the 2 automakers soured in a very public way after Ghosn’s arrest, but privately, tensions within the 20-year-old alliance had been simmering for years, as Nissan had reportedly come to resent being a junior partner, despite being financially stronger and much larger. In autumn 2017, Ghosn, who had been CEO of Renault since 2005, decided to seek a final term, one that would extend past the automaker’s mandatory retirement age of 65. But it was clear that he was not going to get the same level of compensation, a sticking point with the French government and many shareholders, who believed he was overpaid. He agreed to sharply reduced pay while taking on a new mandate: find a way to strengthen the Renault-Nissan alliance so it would outlast his stewardship. “My job has changed. That is quite clear”, Ghosn said in February 2018. “I have to keep a sharp eye on the development of the alliance and ensure its durability”. He was, he said, expecting to bring about a “gentle transition”. That prospect did not play out, and it may be up to FCA to provide a relatively soft landing for Renault. +++ 

+++ Even before the latest-generation TOYOTA Supra premiered, there has been hopeful talk that a 6-speed manual would soon be offered alongside the current 8-speed automatic. Hopes were heightened last week following confirmation that the entry-level BMW Z4 sDrive20i in Europe with which the Supra shares its underpinnings will come standard with a manual. While BMW has yet to say whether or not the 6-cylinder variants of the Z4 could also get a stick shift, a Toyota spokesman said: “We may have heard a time or 2 (or more) that there’s a desire for a manual transmission in the Supra. However, we’re confident in the performance of the current setup. We feel it’s the optimal combination for the U.S. market at this time and we’re anxious for customers to drive the new Supra and experience it for themselves. We’ll be sure to check back into the conversation at that time and see what people have to say”. Evidently, Toyota is thinking about offering the new Supra with a manual transmission but it doesn’t seem sold on the idea of such a model, at least not in the United States. I imagine that if the Supra does get a 6-speed option, this transmission option would initially be rolled out to select markets, perhaps including Japan where Toyota knows the Supra has a strong cult following among hardcore driving enthusiasts. +++

+++ The UNITED STATES will find it “very difficult” to defend President’s Donald Trump’s proposed car tariff against any challenge at the World Trade Organization, a veteran trade adjudicator who has ruled on a related case told. Trump said this month that some imported vehicles and parts pose a “national security” threat, justifying tariffs under Section 232 of the Trade Expansion Act of 1962, the basis for tariffs put on steel and aluminum last year. The car tariff of up to 25 %, applying to vehicles and components from everywhere else in the world, would be automatically illegal were it not for a WTO exception granted in cases of national security. Until 2016, using the national security clause was taboo because trade experts feared it could become a common way to get around the rules and erect the kind of trade barriers the WTO was designed to remove. But it has arisen in disputes between Russia and Ukraine and between Qatar and several of its neighbors, as well as in Trump’s tariffs. In a rare comment by a senior trade arbitrator, Georges Abi-Saab, a former chairman of the WTO’s Appellate Body, the world’s top trade court, said he doubted the national security argument for cars would withstand a legal challenge. “Frankly I think, if I were a lawyer working on the case, I wouldn’t accept to take such a case; not only on moral aspects, but I think it would be very difficult to make it prevail”, he said. The car tariffs have not yet materialized, since Trump has given the European Union, Japan and other major exporters 180 days to negotiate. A legal challenge from any of the parties cannot be considered until tariffs are active. Last month Abi-Saab chaired a dispute panel which issued the only ruling in WTO history on the national security question, settling the dispute in favor of Russia, which was found to have a bona fide legal defense against Ukraine because of an armed conflict recognized by the United Nations. But the ruling set a high bar for national security claims, saying they needed to be based “objectively” on an emergency in international relations, and the less a claim had to do with actual war, the harder it would be to make the case. “I would say strategic raw materials may be easier to prove than a final product like a car”, Abi-Saab said. “The further you get away from it (armed conflict and the breakdown of law and civil order), the more you have to prove how this relates to national security”. That contrasts with the U.S. view that national security claims are “self-judging” and WTO adjudicators must automatically dismiss any challenge. WTO rulings do not set formal precedents, but adjudicators routinely refer back to previous cases, so the Russia-Ukraine ruling could influence the handling of ongoing challenges to the U.S. steel and aluminum tariffs by China, Turkey, Switzerland, Norway, the EU and India. They reject U.S. claims that protecting metals output is needed for “defense requirements and critical infrastructure”. 2 other complainants, Canada and Mexico, lifted their opposition this month after reaching a deal with Trump. +++ 

+++ The next-generation VOLKSWAGEN Golf R will have more power than the current 300 hp model. It will be considerably more high-tech than its predecessor, too, but don’t expect a drift mode or 4-wheel steering. The now-retired Ford Focus RS tried to lure buyers away from the Golf R with a built-in drift mode. Volkswagen studied the system, but it decided not to offer it on the next Golf R, according to one of the firm’s top executives. “The Focus RS feels geared up for fun above everything. Drift mode is a free piece of technology that comes from the drive systems they’re using. But it’s not for us”, said Jost Capito, the head of Volkswagen R, in an interview. He didn’t explain why a drift mode wouldn’t work on the Golf R. However, he confirmed that 4-wheel steering is out of the question, too. “It’s just not necessary on a car the size of a Golf”, he said. Capito didn’t reveal how much horsepower the next-gen Golf R will get. We know it will most likely return with a turbocharged, 2.0-liter 4-cylinder engine and 4Motion all-wheel drive, and some reports claim it will make about 340 hp in its most powerful configuration. We’ll learn more about the model when the 8th generation Golf makes its global debut before the end of 2019. +++

+++ VOLVO chief executive Håkan Samuelsson has expressed his concerns about the possibility of a trade war between the United States and the European Union. He said that it is increasing the number of vehicles it builds in the United States and hopes that it will be spared from potential new taxes.“The Trump administration wants us to build cars in U.S. and reduce the U.S. trade deficit. By coincidence, we are doing exactly that”, he said. “We will eventually build 150,000 cars in the U.S., of which half will be exported. And we will sell about the same number there. I hope the administration sees that and taxes somebody else”. Volvo announced plans to build a factory in the United States in 2015, well before president Donald Trump was elected and threatened imported vehicles with steep tariffs. Not only is Volvo looking to minimize the impacts of trade tensions between the U.S. and the European Union, but it is also doing the same with the ongoing trade war between the U.S. and China. Volvo no longer imports Chinese-made vehicles in the States, as they faced a 27.5 % tariff. Now, models like the XC60 are being imported to the U.S. from Europe instead. Last year, the Swedish automaker started preparing for an initial public offering; however, the IPO, which could have seen it valued at around $30 billion, was scrapped in September 2018 due to trade tensions. +++

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