Newsflash IV


+++ Since Carlos Ghosn’s arrest in November, the French government has said repeatedly that its main goal is to preserve the Renault-Nissan ALLIANCE . Last night, the state proved it was serious about its promise by refusing to approve a merger with Fiat Chrysler Automobiles (FCA) without Nissan’s full support. Earlier that day, it appeared that most of the major issues had been decided between FCA, Renault, and the French government, which is Renault’s largest shareholder and, with double voting rights, effectively acts as a gatekeeper for any big decisions involving the automaker. Renault’s own directors planned to vote “yes”, while Nissan’s 2 board appointees planned to abstain. That was not enough for the government, which asked FCA for more time to go back to Japan to persuade Nissan to support the deal. Shortly after, the Italian-American automaker announced it was withdrawing its 50-50 merger offer. “It was out of the question to put the alliance in danger for a merger”, a French government spokesperson said. “There was a risk with Nissan’s abstention that Nissan would later vote against it”. Board approval would have produced a memorandum of understanding that would lead to formal merger talks between Fiat Chrysler and Renault. Nissan has been shaken by the fallout from Ghosn’s arrest on accusations of financial mismanagement, losing top managerial talent and fighting a deep slump in profits and sales. It’s in the interest of the French government to return Nissan to health, both for the billions in synergies and revenue contributions it makes to Renault, and for the sake of its own investment (The state holds 15 % of Renault shares. In turn, Renault holds 43 % of Nissan). Already upset at being excluded while Fiat Chrysler and Renault held secret talks, Nissan could have actively worked to prevent the merger from happening. It could also have restricted access to some of the key technologies jointly developed over its 20-year marriage with Renault, such as the new CMF platform and driver-assistance systems such as ProPilot. Those shared technologies would be critical to generating the billions in synergies that Fiat Chrysler said would accrue from a Renault merger. As it is, restoring trust between Nissan and Renault in the wake of Ghosn’s arrest will be hard, if not nearly impossible. But that is the job that Jean-Dominique Senard was given when he was appointed Renault chairman in January. Adding in complex negotiations with FCA (which would be focused on working with Renault, not Nissan) in the next year could have risked the collapse of the alliance. That could still happen. And the government has left open the possibility of new talks with FCA. But at least for now, it appears that the French government went with the company it knows rather than the one it doesn’t. “There are many alliances in the automobile industry that don’t work and just a few that work”, the government spokesperson said. “The Renault-Nissan alliance is among them”. +++

+++ A classic ASTON MARTIN V8 Vantage will star in the new James Bond film. As much was confirmed after an amateur video surfaced on social media showing the car on set during filming for 007’s next outing in Norway. The video provides confirmation that the latest Bond movie will feature a petrol-powered Aston, following recent speculation that Bond would be seen behind the wheel of the £250,000 all-electric Aston Martin Rapide-E. There’s nothing to suggest the Rapide-E won’t make an appearance as well but now we know for sure that Bond will get his V8 hit. Bond last drove the classic Aston in the 1987 film, The Living Daylights, with actor Timothy Dalton at the helm. Both a convertible and hardtop version of the V8 Vantage appeared in the movie. The ‘Q-branch’ hardtop version featured a range of upgrades, such as retractable skis, spiked snow tyres and an afterburner hidden behind the rear number plate. Like all Bond cars, Dalton’s V8 Vantage was also fitted with a host of gadgets, including a pair of heat-seeking missiles, a police scanner radio, laser beams built into the front wheels and a self-destruct function. Whether or not similar toys will appear on the Vantage for the latest Bond film is yet to be confirmed. +++ 

+++ BMW has apparently ruled out the possibility of a Z4 variant with a retractable hardtop. Designer Calvin Luk said that the Z4 was envisioned from its inception as a soft-top convertible. “From the beginning we knew that it was going to be a soft-top mostly just because of the performance advantage in terms of the weight, so we didn’t need to mock up an alternative to that”, he said. The engineering team apparently had the final say in whether to utilize a retractable hardtop or a traditional soft top. Previous rumors suggest the company had sketched a hardtop coupe variant but the idea was ultimately shot down due to potential cannibalization of the company’s other 2-door coupes, namely the M2 and M4. +++ 

+++ CHINA has announced a series of measures to revive slumping car sales, but failed to meet market expectations as it included no plans to relax controls over the issuance of new licenses for traditional-fuel cars in major cities. Beijing has been trying to boost consumption of goods ranging from eco-friendly appliances to big-ticket items such as cars to fire up growth, as the world’s second-largest economy is expected to slow further in 2019 amid a bruising trade spat with the United States. Auto industry executives have expected China’s car market, the world’s biggest, would return to growth this year thanks to government support after sales contracted for the first time last year since the 1990s. The National Development and Reform Commission (NDRC), China’s state planner, said in a statement it is stopping local governments from imposing new restrictions on car purchases and cancelling existing ones that apply to new energy vehicles. The measures, which apply to 2019-2020, include support to encourage car purchases in rural areas. The NDRC statement also called for more local governments to allow pickup trucks to enter their cities. Financial magazine Caixin, citing an NDRC document, reported in April that China is planning to increase the number of newly issued car licenses in major cities including Beijing, Shanghai and Guangzhou by 50 % this year from 2018 levels, and double that next year. The NDRC, however, did not mention such steps. “The April draft was quite strong so I am quite disappointed about the policies”, said an industry association official who declined to be named as she was not permitted to speak to the media. Yale Zhang, head of Shanghai-based consultancy Automotive Foresight, said the document would likely support some new energy vehicle sales, but would not have a big impact on combustion engine cars. “Now the question comes to whether local governments are willing to support auto sales”. Vehicle sales in China fell 14.6 % in April from the same month a year earlier, marking the 10th consecutive month of decline. Automakers have been lowering prices after the government introduced tax cuts to spur consumer spending, but customers are holding off purchases in the hope of more favorable policies. “This document has positive impact on the industry in the long term, but will not boost sales very quickly”, said the industry association official. Yet, the measures, which were unveiled after mainland markets shut, helped boost shares of Hong Kong-listed automakers. Some local governments had already started to offer supportive policies in the run-up to NDRC’s announcement. Authorities in the big southern Chinese cities of Guangzhou and Shenzhen said that they will increase quotas for new car registrations from this month till the end of next year which will allow at least 180,000 more car sales. The NDRC said the new moves “strive to break the market barriers that restrict consumption and protect consumers’ legitimate interests”. +++ 

+++ The U.S. sales chief of FIAT CHRYSLER AUTOMOBILES (FCA) has filed a federal whistleblower lawsuit against the Italian-American car manufacturer. In the suit, Reid Bigland alleges that executives within FCA have made him a scapegoat over the company’s inflated vehicle sales practices. He also claims that he “inherited” FCA’s sales figures reporting practices. Bigland cooperated with a federal investigation into FCA vehicle sales practices and asserts that his pay has been slashed by more than 90 % and that the company has withheld his bonuses and stock as part of a compensation plan valued at approximately $1.8 million. The lawsuit contends that FCA intends on using his compensation to pay fines or settlements reached with the Securities and Exchange Commission (SEC). “Bigland’s unwillingness to act as a scapegoat for defendants’ 30-year practice which predated him, and his candor regarding defendants’ knowledge of this practice prior to and during his tenure as head of U.S., caused FCA to retaliate against plaintiff less than two months later by withholding his compensation”, Bigland’s lawyer said in a statement. The exec wants a federal judge to prohibit FCA from any further wrongdoing or retaliation and is asking for an unspecified amount of damages. In a statement, FCA representatives said: “Bigland’s eligibility for incentive compensation (like that of all corporate officers) is subject to a determination by the Board of Directors’ compensation committee that he has satisfied the applicable company and personal performance conditions”. FCA first had its U.S. sales reporting processes probed by federal investigators in July 2016. The company soon altered its reporting practices, which revealed that rather than enjoying 75 months of year-over-year sales increases as touted until then, FCA had instead only seen sales increases for roughly half that time. +++ 

+++ FORD could make further UK workforce cuts beyond Bridgend in the event of a no-deal Brexit, according to the firm’s European president, Stuart Rowley. The statement comes after Ford confirmed plans to close its engine plant in South Wales as part of a wide-reaching restructure of its European business. Around 1.700 jobs could be lost as a result. According to a letter sent to employees, the job losses will be conducted in phases, starting from September next year. When asked if further job losses could come in the event of a deal with the European Union not being struck, Rowley said: “Should a no-deal Brexit happen, we will need to evaluate the environment with regards to tariffs and customs issues; we’re hoping that doesn’t happen. If the business environment changes significantly, we will have to review our business plan”. Despite this, Rowley claims that the decision on Bridgend was “nothing to do with Brexit”, stating: “If Brexit had never happened, would there be a different decision? The answer is no”. The firm has started a consultation to close the Welsh facility, talking to unions and agreeing an “enhanced employee separation programme”. Ford lists a number of factors for the closure of Bridgend, centring on the “significant underutilisation” of the plant’s capacity of 750,000 engines per year. The approaching end of production of the AJ-V8 engine for Jaguar Land Rover (moved to the firm’s Wolverhampton plant) and Ford’s Sigma engine is cited, alongside a reduction in global demand for the 1.5-litre 3-cylinder Ecoboost motor (used in the Fiesta ST and Focus). Production of the latter engine is proposed to end at Bridgend in February, with the supply of Jaguar engines stopping in September 2020, when Ford intends to close the plant altogether. It has set aside around £500 million for costs associated with the closure, the vast majority of which is set to be paid to employees as part of “separation and termination payments”. “Creating a strong and sustainable Ford business in Europe requires us to make some difficult decisions, including the need to scale our global engine manufacturing footprint to best serve out future vehicle portfolio”, said Rowley. “We are committed to the UK. However, changing customer demand and cost disadvantages, plus an absence of additional engine models for Bridgend going forward, make the plant economically unsustainable in the years ahead”. Asked about suggestions that Ineos Automotive, an arm of one of the largest global chemical companies, may want to use the Bridgend facility to produce its 4×4, Rowley said: “I cannot comment on any individual companies. What I would say is we have considered seriously any opportunity to rescue the plant, and none of those opportunities have been viable”. Bridgend isn’t the only place where Ford’s European restructure has had an impact. The firm recently ended production of the C-Max in Saarlouis, Germany; reduced shifts at a plant in Valencia, Spain; closed a transmission factory in Bordeaux, France; and shut 3 sites in Russia. Ford will maintain its UK presence by continuing to produce diesel engines in Dagenham and transmissions in Merseyside, while the company’s thriving commercial vehicle business is based at its technical centre in Dunton, Essex. +++ 

+++ FRANCE was battling to defend its business strategy after being blamed for scuppering a $35 billion-plus merger between carmakers Fiat Chrysler Automobiles (FCA) and Renault only 10 days after the plan was officially announced. Shares in FCA and Renault fell sharply in early trade after FCA pulled out of talks, saying “the political conditions in France do not currently exist for such a combination to proceed successfully”. The collapse of the deal, which would have created the world’s third-biggest carmaker behind Japan’s Toyota and Germany’s Volkswagen, revives questions about how both FCA and Renault will meet the challenges of costly investments in electric and self-driving cars on their own. The French government, which has a 15 % stake in Renault, had welcomed the merger plan, but overplayed its hand by pushing for a series of guarantees and concessions that eventually exhausted the patience of FCA, sources familiar with the talks said. Wrong-footed by FCA’s decision to withdraw its merger proposal, a French official called FCA Chairman John Elkann to see if he might reconsider, but was rebuffed, one of the sources said. While France has a long history of government interference in business, president Emmanuel Macron came to power promising a broadly market-friendly agenda. The failure of the FCA deal risks leaving Renault locked into Europe’s stagnant mass-market for cars, and deterring other potential suitors, analysts said. French finance minister Bruno Le Maire said the government had engaged constructively, but had not been prepared to back a deal without the endorsement of Renault’s current alliance partner Nissan. Nissan had said it would abstain at a Renault board meeting to vote on the merger proposal. The merger had aimed to achieve €5 billion in annual synergies, with FCA gaining access to Renault’s superior electric drive technology and the French firm getting a share of FCA’s lucrative Jeep and Ram brands. Achieving the planned €5 billion in FCA-Renault synergies would depend partly on access to technology jointly owned by Nissan, executives had said. However, a source close to FCA played down the significance of Nissan’s stance in the discussions and blamed the French government for succumbing to political pressure at home. The FCA-Renault talks were conducted against the backdrop of a French public outcry over 1,044 layoffs at a General Electric factory. The U.S. company had promised to safeguard jobs there when it acquired France’s Alstom in 2015. FCA has long been looking for a merger partner, and some analysts say its search for a deal is becoming more urgent as it is ill-prepared for tougher new regulations on emissions. It previously held unsuccessful talks with Peugeot maker PSA Group, in which the French state also owns a stake. “We remain open to any industrial consolidation opportunity, but without rushing in order to guarantee the industrial interests of Renault and the French nation”, Le Maire told. However, Evercore ISI analysts said the chances of a deal with FCA had “materially fallen”. Renault said in a statement it was disappointed not to be able to pursue the merger, but that FCA’s interest highlighted the attractiveness of the company and its alliance with Nissan. The collapse of the deal could further fray relations between Renault and Nissan, already strained by the arrest and ouster of alliance chairman Carlos Ghosn, who is now facing trial in Japan on financial misconduct charges he denies. Nissan, which is 43 % owned by Renault and has recently rebuffed a full merger proposal from its French partner, was blindsided by the FCA-Renault tie-up plan and said it would require a fundamental review of its relationship with Renault. “How can we support the deal?”, said a Nissan management source soon before the talks collapsed. “We weren’t at the table, so we haven’t had time to evaluate its impact on Nissan and the alliance”. The deal’s failure could also add to financial markets’ frustration with France. “With FCA pulling its merger offer, one has to wonder how much the French state is set on limiting Renault’s strategic and valuation opportunities despite having only a 15 % stake”, analysts at brokerage Jefferies wrote in a note to clients. Both FCA and Renault shares were down. PSA shares, meanwhile, were up, as some analysts speculated it could again be targeted by FCA. But one banker who has worked on several FCA and car industry deals in the past said: “There are few alternatives available for FCA, I think they’ll try again with Renault”. The collapse of the FCA-Renault deal also followed days of bickering between France and Italy over Paris’s demands. “When politicians try to intervene in economic matters, it doesn’t always help. I won’t comment further, if FCA withdrew its offer it’s because it didn’t see an economic advantage, or other type of advantage”, deputy prime minister and 5-Star leader Luigi Di Maio told Italian state radio. +++ 

+++ An electric autonomous vehicle from GENERAL MOTORS (GM) is set to serve as the first production application of a revolutionary airless tyre that was unveiled this week by Michelin. The Uptis (an acronym of Unique Puncture-proof Tyre System) is similar in concept but different in its composition to the airless Tweel, which was first shown in 2005 and subsequently made production on skid-steer loaders and lawnmowers. It was revealed at Michelin’s Movin’On sustainability conference in Montréal, Canada. The tyre consists of a flexible spoke structure made from rubber and a patented new resin-infused fibreglass reinforcement. The flexible ring is wrapped in a conventional tyre tread that could eventually be ‘recharged’ from worn using 3D printing. Just like with a pneumatic tyre, the properties of both the tread and the structure can be tuned for different types of vehicles. Michelin is working with multiple car makers to bring the Uptis prototype to full production. Engineers say there’s no reason why it couldn’t be fitted to anything from a light truck to a performance car, electric or combustion-engine powered. The only partnership that’s been made public so far is with GM, which will fit the Uptis to a fleet of Chevrolet Bolt EVs (Opel Ampera-e) for real-world testing. GM is eyeing the peace of mind provided by Uptis for future CASE (Connected, Autonomous, Shared and Electric) vehicles. “It may fit exceptionally well into the fleet autonomous vehicles that we’re conceptualising right now”, Steven Kiefer, GM’s senior vice president of global purchasing and supply chain, told. “The Bolt EV provides the framework for our Bolt AV (Autonomous Vehicle) and we see a great opportunity to be relatively maintenance-free on fleets of autonomous vehicles”. When the Uptis does reach production, expected to be in 2024, it will mark the first step towards Michelin achieving the goal of a fully sustainable tyre that was embodied in the Vision concept revealed 2 years ago. The French firm estimates that each year, some 200 million tyres worldwide are prematurely scrapped as a result of punctures, damage from road hazards or improper inflation that causes uneven wear. +++ 

+++ A U.S. appeals court restored a $210 million nationwide class-action settlement for hundreds of thousands of owners of HYUNDAI and Kia vehicles whose fuel economy estimates were inflated. By an 8-3 vote, in a case closely watched by class-action lawyers, the 9th U.S. Circuit Court of Appeals in Pasadena, California, said vehicle drivers had enough in common to let them settle as a group. It also rejected arguments by drivers opposed to the settlement that the claims process was too burdensome, and that lawyers for the class had colluded with the automakers to extract a “sweetheart deal” that undervalued their claims. The case began after the U.S. Environmental Protection Agency found flaws in Hyundai’s and Kia’s testing procedures, prompting the automakers to lower fuel efficiency estimates for about 900,000 vehicles from the 2011, 2012 and 2013 model years. Lawyers for objecting drivers had no immediate comment or did not immediately respond to requests for comment. Hyundai, Kia and their lawyers did not immediately respond to similar requests. The decision by Circuit Judge Jacqueline Nguyen upheld a settlement approved in June 2015 by U.S. District Judge George Wu in Los Angeles. Wu “made careful findings, which the objectors here largely do not challenge, and which more than support the judgment”, Nguyen wrote. The decision reversed a January 2018 ruling by a divided 3-judge 9th Circuit panel decertifying the class action. That panel said Wu failed to assess whether differences in state laws prevented certification of a nationwide class. It also said used car owners should have been excluded because it was unclear whether they had relied on the South Korean automakers’ fuel economy claims. Nguyen had dissented from the panel ruling. Circuit Judge Sandra Ikuta, who wrote it, dissented. Ikuta accused the majority of failing to determine what law should apply to the nationwide class or how the settlement, and thus attorneys’ fees, should be valued. “The majority’s failure to correct these errors may be beneficial for the class action bar, but it detracts from compliance with Supreme Court precedent”, Ikuta wrote. The 9th Circuit covers 9 western U.S. states, Guam and the Northern Mariana Islands. “We’re really pleased that drivers are finally going to get what they’re owed”, Richard McCune, a lawyer for the driver class, said in an interview. +++ 

+++ JAGUAR has issued a recall for the I-Pace to fix a problem with the regenerative braking system. The company warns that an electric failure with the regenerative braking system can cause a delay between brake pedal application and when the vehicle begins to decelerate. “A delay in deceleration, increases the distance needed to stop and the risk of a crash”, the recall notice says. The issue was apparently identified by engineers involved in validation testing for the 2021 modelyear I-Pace. Approximately 3,000 vehicles will receive a software update to reduce the potential braking delay. +++

+++ KIA will complete the refresh of its European line-up with an all-new Sorento, which has been seen testing for the first time ahead of its unveiling next year. The new large SUV, which will rival the Skoda Kodiaq, Land Rover Discovery Sport and Nissan X-Trail, shares much of its platform, mechanicals and technology with the latest Hyundai Santa Fe. It will get a more square-edged design than its curvy predecessor, offcourse with the brand’s tiger nose grille. The latest Santa Fe is actually slightly smaller than today’s Sorento, at 4.77 meter long and 1.89 meter wide. Whether Kia has slightly shortened the Sorento or extended the existing platform to suit remains to be seen. Either way, it should remain one of the more spacious 7-seat SUVs. The new Sorento is expected to initially use a 2.2-litre diesel engine mated to an 8-speed automatic gearbox and, on higher-end models, 4-wheeldrive. But Kia has confirmed that, as part of its electrification plans, there will be a plug-in hybrid version in due course. That will make use of a 4-cylinder petrol engine (likely a 1.6 T-GDI) and an electric motor mounted on the rear axle to give electric all-wheel drive. Details of that, and the rest of the range, won’t be made public until next year. +++

+++ LEXUS has launched a subscription service where drivers can access one of the brand’s hybrid models in exchange for a monthly fee. The service, called Lexus One, allows drivers to choose a car to drive for a month, at the end of which the driver has the option to keep the car they have, choose a different model or end their subscription. At launch, the service is available for the CT, IS, NX, RC and RX. The monthly charge covers the lease of the car, delivery and collection, insurance, servicing, roadside assistance and a weekly wash. The only expense drivers must cover themselves is fuel. The sign-up process can be completed entirely online, with customers required to create an account and provide details of their driving licence and current insurance. +++ 

+++ MERCEDES-AMG introduced the CLA 35 Shooting Brake yesterday, but now I can confirm performance specifications for the highly anticipated A45 and its siblings. Set to be powered by an all-new turbocharged 2.0-liter 4-cylinder engine, known as the M 139, the high-performance hatchback will have a base output of 387 hp and 480 Nm. There will also be an S variant which has 421 hp and 500 Nm. Those are some truly impressive numbers for a 4-cylinder engine and they mean the mill develops up to 211 hp per liter. That’s even more powerful than the A 200 which has a turbocharged 1.4-liter engine developing 163 hp. Besides the mind blogging performance specs, the engine revs up to 7.200 rpm and has a torque curve which is said to deliver power in a fashion similar to a naturally aspirated engine. Compared to the turbocharged 2.0-liter four-cylinder in the A35, the new engine is rotated 180 degrees and this allows the turbo and exhaust manifold to be positioned at the rear. This might not sound too important, but it enables the engine to be equipped with a front-mounted intake and improved ducting. Besides that switch, the engine has a new twin-scroll turbocharger that features a turbine housing with 2 different flow passages that run parallel to one another. This, along with divided ducts in the exhaust manifold, helps to prevent individual cylinders from negatively influencing one another during load cycles. Speaking of the turbo, it also adopts roller bearings for the first time. This helps to reduce friction and improve responsiveness. As for the engine itself, it has an all-aluminum crankcase, a forged steel crankshaft and forged aluminum pistons which reside in Nanoslide-coated cylinder liners. Other highlights include a new 2-stage fuel injection system as well as repositioned injector nozzles and spark plugs that allow for larger exhaust valves. Given the engine’s high-performance, cooling was an important consideration. To cope with the issue, the A45 will have an electric water pump that operates independently of the engine. The car will also be equipped with an additional radiator that supports the main radiator up front. +++

+++ BMW sees no reason to change its plans for MEXICO in the wake of U.S. threats to slap duties on Mexican imports, a board member of the German carmaker said, adding the company sells cars globally despite tariffs placed by most countries on imported vehicles. The automaker also foresees no immediate change to its investment plans for the North American region, said Oliver Zipse, BMW board member in charge of production. Zipse was in the central Mexican city of San Luis Potosi for the inauguration of a $1 billion BMW plant. Still, other automakers have warned that the imposition of punitive duties on Mexican imports could be damaging to the industry, with Toyota saying the proposal could cost its major suppliers $1 billion. Last week, Trump said Mexico must take a harder line on stopping the flow of migrants across the U.S.-Mexico border or face 5 % tariffs on all its exports to the United States from June 10, rising to as much as 25 % later this year. BMW is producing its 3 series at the San Luis plant, which started up in April and has a capacity of up to 175,000 vehicles per year. The company plans to ship 2,000 vehicles to the United States from the new Mexican plant in April to July. “It will increase our already strong footprint in North America and provide us with further model variety in addition to our big SUV production plant in Spartanburg”, said Zipse. +++ 

+++ China’s National Electric Vehicle Sweden ( NEVS ), which also owns Saab, has purchased Protean Electric, a British technology company with expertise in in-wheel electric motor technology. Protean Electric has been developing in-wheel electric motors since 2008 and currently has more than 160 patents globally for electric motor and power electronics design, control, and manufacturing. A statement released by NEVS asserts that the company’s in-wheel motors “offer improved powertrain efficiency and greater flexibility in vehicle design”. NEVS intends on using Protean’s tech in future products, but the acquisition could prove to be even more important for Chinese real estate developer Evergrande, which holds a 51 % controlling stake in NEVS. In late March, Evergrande Group chairman Hui Ka Yan said that, after establishing itself as China’s second-largest property developer, it is striving “to become the world’s biggest, and the strongest, electric vehicle group within 3 to 5 years”. Evergrande recently became the majority investor in Swedish hypercar manufacturer Koenigsegg as well, and last year, purchased a 45 % stake in struggling electric car startup Faraday Future. With Protean Electric now on board, it claims it has now formed a “highly competent ‘New Energy Vehicle’ Group” and could use in-wheel electric motors for many of its future electric vehicles. It is possible that future products from Koenigsegg will use electric motor and battery technologies from within the group. On a side note, vehicles with in-wheel electric motors have been around for more than a century, but they have yet to find their way into mass production in a road-going vehicle. Guess the Chinese conglomerate that’s hellbent on EV dominance will be the first to do so. +++

+++ After nearly 10 years on sale, the ageing NISSAN Juke is finally set to be replaced, with a new car that embraces hybrid tech. The next-generation model will arrive early next year. The Juke is widely considered to be the car that kick-started the compact crossover frenzy back in 2010. Since then, the model’s popularity has prompted every rival manufacturer to develop practical, affordable and stylish alternatives. The Seat Arona, Citroen C3 Aircross and Volkswagen T-Cross are its main competition. While all of those cars are relatively new to the market, the Juke will be entering its second generation. Nissan’s engineers have already been putting prototypes through their paces in Europe ahead of the model’s official unveiling later this year. The latest spy shots clearly show that the next Juke will retain the current car’s distinctive look, with its compact proportions, sloping roofline and raised ride height. The new model will get a more chiselled front end and slimmer LED headlamps will ensure the Juke retains its distinctive face, while the tail-light design is similar to that found on its Micra stablemate. In addition to the exterior redesign, engineers have been getting to grips with a completely new platform. To allow the brand to quickly and efficiently offer the Juke with hybrid technology, the second-generation crossover will switch to the Renault-Nissan alliance CMF-B platform that underpins the new Renault Clio and forthcoming, second-generation Captur. As a result, the Juke will be one of the first cars in the compact crossover sector to be available with plug-in hybrid tech. It’s expected that the powertrain will comprise a 1.6-litre 4-cylinder petrol engine and an electric motor powered by a 9.8 kWh battery, which should allow the Juke to travel around 30 kilometres on electric power alone. Nissan bosses have even hinted that there could be the possibility of a fully electric Juke further down the line, given the increased competition from models such as the Hyundai Kona Electric and Kia e-Niro. Nissan’s European product planning chief Peter Bedrosian told: “People are moving from sedans and hatches into SUV-type vehicles, and that’s happening globally, not just in Europe. On top of that there’s electrification, so it’s a perfect combination. We’re working on several powertrain options at the moment”. Mild-hybrid technology is almost certain to play a role in the next Juke across the engine range, while the Nissan will also have the option of several conventional internal-combustion engines, such as a turbocharged 1.0-litre 3-cylinder petrol and a 1.5-litre diesel. The new Juke will address one of the biggest criticisms of the current model: passenger space. Its new platform should significantly increase both overall size and wheelbase length, which will add vital millimetres to rear head and kneeroom. It’s also expected that the boot capacity will increase from 354 litres to around 380 litres; a similar amount to that found in a family hatchback such as the VW Golf. Elsewhere inside, spy shots have also revealed that the Juke will get a big tech update. The small central infotainment system will be swapped for a dash-mounted touchscreen that should give Apple CarPlay and Android Auto smartphone compatibility. A new suite of safety tech will also appear, including Nissan’s ProPilot system that enables the car to take control of acceleration, braking and steering when engaged. Like the current model, the next Juke will be produced at Nissan’s Sunderland facility. Over 1 million examples have been built at the site since the car’s launch. +++ 

+++ PEUGEOT chief Executive Carlos Tavares may be the biggest winner from the collapsed merger talks between rivals Fiat Chrysler Automobiles (FCA) and Renault. An alternative deal between the Italian-American carmaker and Tavares’ €19 billion group would have a few features to recommend it over the stalled Renault combination. Fiat chairman and controlling shareholder John Elkann withdrew a proposed 50:50 merger after the second inconclusive Renault board meeting in as many days. Fiat concluded that “political conditions in France” made it unviable. The French state owns 15 % of €15 billion Renault. A tie-up between Fiat and Peugeot could be easier to negotiate. True, Tavares’ group is also backed by France, which like the founding Peugeot family and Chinese partner Dongfeng Motor Group has a 12 % stake and the right to propose 2 board members. Yet those shares only had 10 % of the voting rights at the end of 2018, compared with the state’s 29 % at Renault. And the Peugeot family and Dongfeng’s 20 % voting stakes dilute the government’s influence. France has historically been less meddlesome at Peugeot than Renault, where in 2015 it executed an overnight raid to secure double voting rights. Crucially, Peugeot’s larger size and €9.3 billion cash pile, using Refinitiv consensus estimates for end-2019, would probably make for a cleaner transaction than the delicate Renault-Fiat merger of equals. Assume Tavares offered a 20 % premium over Fiat’s share price before the Renault offer. He could pay 65 % of the €21.3 billion equity in cash and keep net debt minimal at the combined entity. Peugeot shareholders would own 71% of the new group. Elkann’s stake would sink to 8 %; below the Peugeot family, French state and Dongfeng’s hypothetical 9 %. He might not consider less influence a problem though, as he and the 2 other large stakeholders could outvote Paris. Besides, his holding company would get a €4.1 billion cash payment, and an easier partial exit from the troubled auto industry. That might seem more appealing than getting stuck in a difficult 50:50 marriage with the French government for the foreseeable future. +++

+++ The €33 billion merger between Fiat Chrysler Automobiles (FCA) and RENAULT has hit the skids little more than a week after its inception. Despite public support from key stakeholders, the companies now risk losing out on synergies worth €5 billion a year, while the French state has sabotaged its pro-business credibility. The Italian-American carmaker withdrew its 50-50 merger proposal after Renault’s board failed to reach a conclusion on the deal on its second day of trying. France’s government, a 15 % shareholder in Renault with a long history of meddling in its affairs, sought to delay a vote. Finance Minister Bruno Le Maire had favoured the tie-up, but wanted guarantees over jobs, future headquarters and governance. Fiat’s statement said that “political conditions in France” made a combination unviable. It is possible the deal might be salvaged somehow. If not, there will be 4 big losers. Renault and Fiat can no longer share cost savings with a net present value of €19 billion. That’s more than half their combined market worth before the Fiat proposal surfaced. The group controlled by Agnelli family scion John Elkann stands to lose one of the few partners that could have made it a viable player in electric vehicles. Renault and Nissan, meanwhile, remain stuck in a frayed alliance that’s suffered since the ousting last year of mutual former chairman Carlos Ghosn. Nissan Chief Executive Hiroto Saikawa rebuffed tighter integration proposed by Renault Chairman Jean-Dominique Senard. A merger of their own would boost their sagging valuations, but as with the Fiat transaction, perhaps, politics and egos have stalled progress. The biggest loser of all is the French state, which may have pushed Elkann too hard for concessions on governance, jobs and Renault’s implied valuation. Government interference is not unusual in a country where the state owns stakes in companies deemed strategically important, but president Emmanuel Macron came to power on a broadly market-friendly agenda, and promised privatisations. And yet his government has retained its outsize influence at Renault, a major grievance for Nissan and now Fiat. Macron may have now consigned a national flagship carmaker to M&A limbo. That’s an embarrassing, and potentially very expensive, mistake. +++

+++ SUBARU and TOYOTA have embarked on an initiative that will see the 2 marques share development of electric vehicle platforms, and jointly produce an electric SUV. As well as a dedicated electric platform for mid-sized and large cars, the 2 brands will jointly develop an electric SUV to rival the Jaguar I-Pace and forthcoming Tesla Model Y. The machine will be sold in both Toyota and Subaru versions, in a similar way to the Toyota GT86 and Subaru BRZ sports coupes. The firms’ new platform will be multi-purpose, like Volkswagen’s MEB framework, and will be used for a range of models, including saloons and SUVs. Both sides bring specific areas of expertise to the agreement: Subaru has experience in developing 4-wheel-drive powertrains, while Toyota has invested heavily in electrification. The pair’s relationship goes beyond 2012’s dual-badged sports car, with Toyota aiding development of Subaru’s XV Hybrid. It follows Toyota’s purchase of a controlling stake in Subaru’s owners, Fuji Heavy Industries, in 2008. Toyota says the main factors prompting further collaboration are the time-critical nature of EV development, and ever-increasing competition in the segment. A statement from Toyota said: “Subaru and Toyota are required to conduct technological development with a sense of speed across a broader-than-ever spectrum of initiatives. Building on their collaborative ties thus far deepened, the agreement announced today represents a new area of collaboration that especially focuses on the urgent need to respond to CASE’s ‘E’ domain, or electrified powertrains and components”. The companies also make reference to the need for manufacturers to collaborate given the high costs and supply problems associated with battery production. Such announcements are becoming increasingly common, with Jaguar Land Rover and BMW recently announcing the first details of a similar scheme, and Toyota itself recently confirming that some of its hybrid models will be sold by Suzuki in parts of Europe. Subaru has expressed its commitment to the new alliance, claiming to have redirected all of its existing EV research and development resources to the shared platform and SUV. +++

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