+++ Chinese tech giant BAIDU has forged a new partnership with Geely and Toyota to cooperate on areas involving artificial intelligence and self-driving vehicles. The partnership will see Geely and Toyota join Baidu’s autonomous driving platform. Current plans from Baidu call for it to provide its Apollo Minibus software product for autonomous buses to Toyota’s e-Palette vehicles in the future. Baidu will work with Toyota to explore other uses of self-driving vehicle technologies, the vice president of Baidu’s intelligent driving unit, Li Zhenyu said. As for Geely, Baidu intends on cooperating with it on a number of different AI applications such as intelligent connectivity and smart mobility. Baidu’s open Apollo platform was launched in 2017 and is now one of the largest autonomous driving ecosystems in the world. More than 130 industry partners have signed up to partner with Apollo, including car manufacturers such as Daimler, Volvo, Ford, and BMW. In addition, thousands of developers are contributing to the Apollo open-source platform. Baidu established Apollo in an effort to speed up the development of autonomous driving technologies by collaborating with many other companies. Baidu, like many other Chinese companies, is looking to take a lead not just in the world of autonomous vehicles and artificial intelligence, but also in the electrification of the industry. The company hasn’t really made its mark on the United States just yet, but it does have approval to test self-driving vehicles on select public streets across China. +++ 

+++ BMW has moved some engine output from Britain due to Brexit, its production chief said, in a further sign of the decisions firms are having to take to handle uncertainty over the UK’s exit from the European Union. Britain is due to leave the bloc on Oct. 31 and Jeremy Hunt and Boris Johnson, who are both vying to replace Prime Minister Theresa May, have said they are prepared to leave without an agreement, although it is not their preferred option. The car industry, which has posted slumps in sales, production and investment since 2017, is worried that a disorderly exit could lead to tariffs of up to 10 percent, additional bureaucracy and costs. Free trade agreements also often require a minimum amount of local content at around 55 to 60 % with British components counted alongside other European Union parts at present. That could change later this year depending on the nature of Brexit. British engines were being sent to South Africa, where BMW currently builds the X3 car, but they would no longer have EU status and the cars would lose their tax-free import status into Europe, production chief Oliver Zipse said. “The Hams Hall engine plant doesn’t build any South Africa products anymore, which is of course, bad for the UK”, said Zipse, who is the frontrunner to be the firm’s new chief executive according to sources. “It’s not a huge amount”, he added. A BMW spokesman said volumes at the central English Hams Hall site would be stable this year and that the plant would be exporting more to the United States. Brexiteers have long said that Europe’s biggest economy Germany, which exports hundreds of thousands of cars to Britain each year, would do its utmost to protect that trade. +++ 

+++ DE TOMASO used the Goodwood Festival of Speed to unveil the new P72 and it appears not everyone is a fan. While the car is pretty stunning, it also looks a bit familiar. James Glickenhaus believes there’s a good reason for this as he suggested the model is nothing more than a copy. He accused De Tomaso of putting “tracing paper over our P3/4” and then pasting “much” of the design from the P4/5. He also accused the company of stealing interior design details from Pagani. He summed up his sentiments by saying “I see Koons not Caravaggio”. This appears to be a reference to American artist Jeff Koons and Italian painter Michelangelo Merisi da Caravaggio. The tweet also quoted Jesse Glickenhaus as giving Google’s definition of a copy as “A thing made to be similar or identical to another”. I’ve reached out to De Tomaso for comment, but the P72 does share a number of similarities to the P4/5. The whole front end looks like an evolved version of the P4/5 and canopy is also similar. However, there a bigger differences further back as the P72 features more flamboyant bodywork, larger intakes and unique side skirts. While I’ll update this article when / if I hear back from De Tomaso, the company has previously said the P72 was designed by Jowyn Wong and inspired by the P70. That car was a joint project between Alejandro de Tomaso and Carroll Shelby. The partnership frayed and was eventually dissolved “on the eve of the car’s completion”. De Tomaso pressed forward with development and tapped Ghia to help him complete it. The finished model was eventually displayed at the 1965 Turin Motor Show as the Ghia-De Tomaso Sport 5000. +++ 

+++ The partnership between FORD and Volkswagen is set to expand as a new report is indicating the two companies have reached an agreement to share autonomous and electric vehicle technology. Sources familiar with the matter say the automakers have reached an “outline agreement” which will see Ford receive Volkswagen’s MEB platform. Details are limited, but Volkswagen’s supervisory board will reportedly discuss the matter later this week. When reached for comment, a Ford spokesperson told: “Our talks with Volkswagen continue” and “discussions have been productive across a number of areas”. While they declined to confirm the reported agreement on autonomous and electric vehicles, the spokesperson said “We’ll share updates as details become more firm”. The report is light on specifics, but access to the MEB platform would be a boon for Ford as it would give the company a purpose-built architecture for affordable electric vehicles. The platform is also highly flexible and Volkswagen has already announced it will underpin a number of different models including a crossover, hatchback and van. Volkswagen is gearing up to introduce the first production model based on the architecture later this year. As previously announced, the ID.3 will have a 170 hp electric motor and a starting price of less than €30,000 in Germany. There will also be a special edition called the ID.3 1st which will have a 58 kWh battery which enables the hatchback to have a range of approximately 420 km according to the Worldwide Harmonized Light Vehicle Test Procedure (WLTP). The MEB platform has been designed to accommodate batteries with different capacities and Volkswagen has said vehicles based on the platform will have a maximum range of between 330 km and 550 km. Of course, that range is largely dependent on the size of the battery and the vehicle’s body style. +++

+++ Australian lithium miner Pilbara Minerals said it had signed an additional deal with Chinese automaker GREAT WALL to supply spodumene concentrate, a key mineral for electric vehicles. Deliveries under the deal will begin in August, with 20,000 dry metric tonnes of concentrate to be shipped annually for 6 years. The West-Perth based company’s shares reversed course to rise as much as 13.7 % after the announcement, their sharpest gain in over 3 months. In 2017, Great Wall Motor took a 3.5 % stake in Pilbara and signed an off-take deal that would provide it with 75,000 tonnes of spodumene concentrate each year for an initial 5 year period. Pilbara said it shipped 43,214 dry metric tonnes of concentrate in the June quarter, higher than previous quarter’s figure of 38,562 dry metric tonnes of concentrate. The miner expects sales in three months ending September to be in the range of 35,000-48,000 dry metric tonnes of concentrate, impacted by a 14-day planned shutdown at its Pilgangoora project. Though sales are anticipated to be in the range of 65,000-80,000 dry metric tonnes of concentrate in the December quarter as production returns to full capacity. +++ 

+++ Every since HYUNDAI unveiled the Santa Cruz Concept pickup in 2015, there has been endless speculation about when the Korean automaker would launch the production version. That time is coming soon, apparently, and it will target buyers who are not traditional truck owners. That’s not really surprising, given the Santa Cruz Concept’s unusual and fresh approach. The study that debuted at the 2015 Detroit Auto Show was a crossover-type 5-seat vehicle featuring a 2.0-liter turbo diesel engine and a tailgate with a sliding extension. Hyundai USA vice president of product, corporate and digital planning, Michael O’Brien, said the carmaker expects to enter the U.S. pickup market soon with a North American-made model. “It’ll be a very versatile vehicle. That has the promise of creating a whole new class of buyers”, O’Brien said. While he wouldn’t reveal information about the pickup’s release date and its specifications, the executive did offer some strong clues that it will be produced in the United States. “It would have to be made in North America”, he said, without naming a specific country. However, he noted that automakers which decided to build new vehicles in Mexico have drawn the wrath of U.S. President Donald Trump. Hyundai probably doesn’t want that. Building the new truck in the U.S. would be a logical choice too as the majority of the pickup trucks will be sold there anyway. The carmaker would need to produce the new truck in North America to avoid the so-called ‘Chicken Tax’; a 25 % tariff on imported trucks. Hyundai already builds the Elantra and Sonata sedans and the Santa Fe crossover at its plant in Montgomery, Alabama. The facility has an annual output of around 400,000 vehicles a year. +++

+++ JAGUAR LAND ROVER (JLR) is currently researching new artificial intelligence technology that can interpret a driver’s mood and adapt the cabin settings to improve his or her wellbeing. The system forms part of JLR’s “tranquil sanctuary” vision, which aims to improve the overall driving experience, ultimately alleviating stress behind the wheel. JLR claims the system will continually adapt to nuances in the driver’s facial expressions, essentially teaching itself to “read” their mood. It will also learn the driver’s preference in cabin settings, making increasingly tailored adjustments based on its observations. The British brand is also trialling a similar system for rear-seat passengers, with a camera mounted in the front headrests. It will be able to dim the lights, tint the windows and increase the temperature for the rear cabin when it detects signs of drowsiness, to help passengers get to sleep. The British firm’s latest technology uses a driver-facing camera, facial recognition software and biometric sensing to monitor and evaluate the driver’s state of mind. Depending on their mood, the system will then adjust a host of cabin settings, (including heating, ventilation, climate control, media and ambient lighting), to help maintain a pleasant atmosphere. Adjustments could include changing the interior lighting to calming colours should the system detect the driver is under stress, or lowering the cabin temperature and selecting the driver’s favourite playlist should it detect signs of tiredness. +++ 

+++ JEEP is recalling more than 100,000 Jeep Cherokee models worldwide outfitted with ZF’s 9-speed automatic transmission. Cherokee models built in 2014 and equipped with the available 3.2-liter V6 engine are the ones covered by this recall. Fiat Chrysler Automobiles (FCA) asserts that a valve in the SUV’s transmission can stick and prevent a clutch from disengaging, thus shifting the transmission automatically into neutral. According to FCA, at least 3 % of all cars impacted by this recall have already undergone warranty work for the transmission problem. The Jeep Cherokee, and other FCA models, have experienced a slew of transmission issues since late 2013 and in that time, no less than 11 software updates through 2016 were supplied to Jeep dealers to fix transmission issues. Among these issues included delayed downshifting, stuck gears, sluggish throttle response, surging, ‘busy’ shift behaviour, and rough coasting. Issues with ZF’s nine-speed automatic transmission aren’t exclusive to those from FCA. The Jeep Renegade, Ram ProMaster City, Land Rover Discovery Sport, Fiat 500X, Range Rover Evoque, Honda Pilot and Acura TLX all feature the same gearbox and have experienced their own issues. Of the 2014 Jeep Cherokee models involved in this recall, about 83,000 of them are located in the United States but there are also 17,530 vehicles in markets such as Canada, Mexico, and Europe which require repairs. FCA hasn’t received any reports of injuries or deaths stemming from the transmission issue and is still working on a fix. Owners will not be notified about the recall until a fix is ready. +++ 

+++ BMW will begin building its new electric MINI at its British factory from late 2019, with the first vehicles reaching customers from spring next year, the German carmaker said. “The Mini Electric will kick off our new model offensive for fully electric vehicles”, said Oliver Zipse, the firm’s production chief who, according to sources, is the frontrunner to become BMW’s new chief executive. “By 2023, 2 years ahead of schedule, we will have 25 electrified models on the market. More than half of them will be fully electric”, he said. Output of the new Mini could come at about the same time as a no-deal Brexit on Oct. 31 if Britain leaves the European Union without an agreement, leading to potential tariffs, additional bureaucracy and disruption to production. BMW built just over 230,000 cars at its southern English Oxford plant last year, accounting for 15 % of Britain’s total automotive output. The firm has previously warned that it could move some production of engines and vehicles out of Britain if there is a disorderly Brexit, an option neither Boris Johnson nor Jeremy Hunt, the 2 candidate vying to replace Prime Minister Theresa May, have ruled out. +++

+++ NEVS , or National Electric Vehicle Sweden, has officially started production of a fully electric 4-door sedan based on the old Saab 9-3. This launch will also accelerate NEVS’ timetable with regards to manufacturing in other cities in the People’s Republic, as per China’s Evergrande Group. Meanwhile, the cars are being put together at a factory in the port city of Tianjin, a location that can reportedly build 50,000 units per year. As of right now, the Evergrande Group, NEVS’ parent company, has yet to divulge any details regarding the Saab-based electric sedan. All we know is that the platform was part the assets purchased by NEVS (a company started by businessman Kai Johan Jiang in Trollhattan, Sweden) from Saab Automobile back in 2012. It’s also true that the Evergrande Group, China’s largest real estate developer, bought a controlling 51 % stake in NEVS for 6.4 billion yuan ($930 million) back in January. In addition to NEVS, the Chinese real estate giant also purchased Shanghai-based EV battery supplier CENAT New Energy, plus 2 foreign electric motor makers in UK-based Protean Electric and Dutch company e-Traction; the former transaction took place just a month ago with Protean Electric being tasked with developing in-wheel motors offering “improved powertrain efficiency and greater flexibility in vehicle design”. Also last month, Evergrande Group signed agreements totaling 440 billion yuan with local Chinese governments to produce electric vehicles, batteries as well as electric motors in Guangzhou and Shenyang. +++

+++ In RUSSIA , Ford enjoyed a sales boom in a falling market in June despite closing 2 car plants as the automaker ends sales of passenger vehicles in the country. Ford’s passenger vehicle volume jumped 43 % to 6,146 units compared with 4,305 in June 2017. In the first 6 months Ford’s sales in Russia fell 18 % to 21,027. The June sales boost was likely caused by customers buying Ford cars ahead of the automaker’s exit from the country’s passenger car market, a Ford spokesman said. Ford ceased passenger vehicle production in Russia at the end of June when the automaker closed plants at Naberezhnye Chelny, which built the Focus and Mondeo, and St. Petersburg, which produced the Fiesta and Ecosport. The closures were part of a broader restructuring of Ford’s European business to restore profits. Most other automakers had a bad month in June as total new-car sales fell 3.3 % to 151,180 units. Market leader Lada’s sales fell 2 %, while No. 2, Kia, declined 3 %. Third-placed Hyundai dropped 1 %, while No. 4 Renault was down 12 %. Volkswagen brand, in fifth place, was the only top 5 winner, with sales up 6 %. German premium brands had a good month with BMW sales up 15 %, Audi’s volume up 7 % and Mercedes-Benz up 5 %. Among the losers, Nissan fell 26 %, Mitsubishi dropped 24 % and Skoda slipped 1 %. In the first half, Russia sales fell 2.4 % to 828,750. +++ 

+++ SEAT has overhauled its entire UK line-up for 2019 with a range of new infotainment and safety features as standard on some of its most popular models. The best-selling Ateca features the biggest change, with an upgraded 8 inch infotainment system now coming as standard in place of the old 6.5 inch screen used previously. Style, FR and Xcellence trim levels gain extra USB ports for rear occupants to charge their devices, and interior trim panels have been refreshed for a more premium feel. Seat’s Dynamic Chassis Control adaptive suspension system is also now available on Xcellence trimmed models. The smaller Arona gains DAB digital radio as standard, while FR and Xcellence trimmed models get heated seats. An additional Emoçion Red colour can now also be optioned. A Sport Black Matt special option pack has been added to the Leon, ahead of an introduction of an all-new model later this year. It upgrades the exterior with black mirrors and front grille, black interior roof lining, 18 inch black alloy wheels and seats finished in ‘microsuede’, as well as the convenience pack as standard. A similar pack for the Leon ST also adds black roof rails. The Alhambra will no longer be sold in The Netherlands. 2018 was a bumper year for the brand, which posted the best annual results in its history. Seat is aiming to continue that trend with the introduction of the Mii Electric city car in early 2020, then follow it up with the Volkswagen ID.3 based El Born as a bespoke EV. +++

+++ TOYOTA recently resurrected the Supra and now it appears the company could do the same to the MR2. Nothing appears to be set in stone, but it is suggested the MR2 could return in the future and complete Akio Toyoda’s dream of having a sports car lineup that consists of three different models. Details are limited, but the publication suggests car is still several years off and won’t arrive until 2024 at the earliest. That’s a long ways away and little is known about the model at this point. However, the company has partnered with BMW and Subaru to create the Supra and GT86.  With that in mind, they believe the MR2 revival could potentially involve a partnership with another automaker. That remains unclear and so does the MR2’s powertrain. Toyota has previously said it intends to offer an electrified version of all its models by around 2025. Given this, it’s likely the MR2 would at least be offered with a hybrid powertrain. Of course, there’s also the possibility of conventionally powered variant and even the chance that the vehicle could be an EV. If the model does indeed use the MR2 moniker, it would likely embrace some of the things that made the original so great. These would likely include a low curb weight, sporty handling and a stylish design. Electric vehicles aren’t known for being particularly lightweight and that would definitely be a challenge if Toyota decided to go that route. However, it is suggested this is the most likely option and the even mentioned the possibility that the MR2 could be positioned as a rival to an electric Porsche Boxster and Cayman. That sounds a bit odd, as Toyota already bills the Supra as a Cayman competitor, but the MR2 would cost less than $45,000. Assuming, it comes at all. +++

+++ The U.S. Securities and Exchange Commission (SEC) defended the pace of its investigation into VOLKSWAGEN after a judge asked why the agency waited 2 years after a global scandal related to vehicle emissions to sue the automaker. The SEC filed a civil suit in March accusing Volkswagen and its former chief executive, Martin Winterkorn, of defrauding investors in U.S. bond offerings. Volkswagen was caught using illegal software to cheat U.S. pollution tests in 2015, triggering a global backlash against diesel vehicles that has so far cost it €30 billion in fines, penalties and buyback costs. In May, it set aside an additional €5.5 billion in contingent liabilities. U.S. District Judge Charles Breyer in May questioned the SEC’s “lateness” in suing VW more than 2 years after the German automaker settled the U.S. Justice Department’s criminal probe, pleading guilty to three felonies and paying $4.3 billion in penalties. “My basic question is what took you so long”, Breyer said, adding he was “totally mystified” as to why the SEC waited until 2019. The SEC has disclosed details of its probe in court filings and said it held extensive settlement talks with the automaker before deciding to file suit. The SEC said it received about 2 million pages of records from VW and delayed immediately issuing formal subpoenas after VW agreed to voluntarily produce materials. In its court filing, the SEC said that its “staff worked hard and as quickly as possible under very difficult circumstances to complete an investigation into numerous different securities offerings conducted by a foreign company and three of its affiliates over many years” and “treated VW fairly and afforded the company full process throughout its investigation”. The agency added that its challenges “included long delays by VW in producing documents and other information” and “uncooperative witnesses who were reluctant or altogether refused to speak to the staff”. Volkswagen said in a statement that it had “cooperated fully with the SEC’s investigation, and today’s filing confirms that the SEC is now piling on”. The company settled with the Justice Department in January 2017 over the issue of asset-backed securities and “obtained a broad release, including from fraud and misrepresentation claims”, it added. Volkswagen noted that the filing said SEC staff did not begin to investigate VW bond sales until 2017 “even though private bondholders had sued Volkswagen over those bonds in June 2016. Volkswagen has never missed an interest or principal payment for any of its bonds, which always remained investment grade”. SEC offices in New York and Chicago opened inquiries in September 2015, wrote Jeffrey Shank, an SEC attorney who supervised the probe, in a court filing, adding the agency was unaware of the existence of the VW bonds until 2017 and that it then took 10 months for VW to disclose who was responsible for statements made to VW bond investors. The SEC said former Volkswagen of America CEO Michael Horn refused to be interviewed by the SEC even after it told his lawyers in September 2017 the U.S. Justice Department would be willing to offer Horn safe passage. The SEC also was unable to interview Winterkorn. Shank said the SEC held settlement talks over several months and gave VW and Winterkorn’s lawyers an opportunity to argue why the SEC should not file suit. Regulators and investors argue VW should have informed them sooner about the scope of the scandal, while the automaker says it was not clear it would face billions of dollars in fines and penalties. VW issued more than $13 billion in bonds and asset-backed securities in U.S. markets at a time when senior executives knew that more than 500,000 U.S. diesel vehicles grossly exceeded legal vehicle emissions limits, the SEC complaint said. Volkswagen reaped hundreds of millions of dollars “by issuing the securities at more attractive rates for the company”, the SEC said. +++ 

+++ WAYMO is rolling out amenities to entice riders to use its self-driving taxis, creating a potential route to profitability in a money-losing industry. The Alphabet subsidiary is testing complimentary Wi-Fi in its robotaxis in greater Phoenix, where hundreds of the company’s identical, driverless minivans have been carrying paying riders since December. In late April, Waymo launched ad-free music streaming for passengers through Google Play Music, its parent company’s answer to Spotify and Apple Music. Waymo also has appealed to families with non-tech perks: It has installed a child car seat in every minivan and ensures vehicles arrive cooled to a precise 72 degrees in Arizona’s desert heat. The aim is persuading passengers that the company’s ride service, dubbed Waymo One, is less stressful than driving their own cars or riding with its rivals. Chatty or sketchy drivers, and vehicles that vary in size and cleanliness, are top gripes among fans of ride-hailing apps. “When I push the Waymo button I know exactly the product I’m buying”, said Jordan Ranous (26), a Phoenix bank analyst who said he takes four Waymo round trips each week. The city of Chandler, about 20 miles southeast of Phoenix, last month began allowing staffers to expense Waymo rides for work-related trips with an eye to boosting worker productivity. Waymo’s challenge is to prove that hospitality and connectivity can generate profits. Waymo currently charges rates comparable to Uber and Lyft, whose reliance on fares has those firms bleeding red ink. Eliminating drivers would slash Waymo’s labor costs. Consistent, quality service might enable the company to charge higher fares, while internet, music and video streaming could generate extra fees or ad sales. Wall Street investment analysts have estimated Waymo’s value at more than $100 billion, assuming in-car services contribute revenue. “Those who win this space are going to have the most convenient solution and the best experience”, said Mark Boyadjis, a global auto technology lead at research firm IHS Markit. Waymo said its core business is charging for rides, not advertising during them. Providing “personalization” perks creates a sense of freedom, it said. “Whether you want to catch up on emails or jam out to some of your favorite tunes using our music integration, we encourage riders to make this space their own,” spokeswoman Julianne McGoldrick said. Uber Technologies and Lyft, both of which are developing self-driving capabilities, declined to comment. Automotive firm Aptiv, which has a year-old operation in Las Vegas with 30 robotaxis, said it does not offer in-car entertainment. Waymo’s Chrysler Pacifica minivans currently ply a 100-square-mile territory around Phoenix. More than 1,000 users are participating in the trial, the largest of its kind in the nation. They request rides through Waymo’s app. The Wi-Fi, which has not been previously reported, is available to a subset of users who get to test features but are barred by Waymo from talking publicly about their experience. 2 riders told they first noticed laminated fliers with Wi-Fi instructions in vans in April. Whether Wi-Fi proves a big enticement remains to be seen. After all, riders can browse the web on their own smartphones. Still, Waymo users say Wi-Fi would allow them work on their laptops or stream video once the company allows longer-distance rides. The city of Chandler, which has budgeted $30,000 over the next year for employees’ Waymo fares, said its workers are not in the Wi-Fi test. Still, they stand to benefit from making full use of their phones during rides, something they are restricted from doing behind the wheels of city cars, economic development manager Micah Miranda said. Workers must document their activities during each Waymo ride. The goal is measuring productivity gains, something Chandler has not tracked with employees traveling via Uber or Lyft, Miranda said. Waymo declined to disclose when Wi-Fi testing began, its internet speeds or its providers. The company did say its network has no usage restrictions and that any data it collects from passengers is governed by its general privacy policy. Waymo said all riders can play ad-free music through the minivan’s speakers without fees. Riders select among eight playlists on seatback touchscreens or tap “I’m feeling lucky” to hear a different collection of songs. Passengers can link their Waymo and Google Play Music accounts to listen to playlists they create. 2 Waymo users told they joined the Google service for this reason. Others enjoy the opportunity to collect their thoughts while not feeling obliged to interact with a driver. Human drivers are present in each Waymo minivan in case of emergency, but they refrain from speaking during trips. “My favorite thing is it’s calm and peaceful”, said Arizona passenger Allison Lewis, who goes on date nights using Waymo twice a month. Passengers say they also like the identical set-up of each van, which can seat 3 adults and 2 kids. A child car seat is installed in the back row; a booster seat is nearby if needed. Charging cables are ready to go. “My 5 year old digs our robot car”, customer Ranous said. “There’s no curveballs”. +++

+++ BMW chief executive Harald Krüger will bequeath a well-oiled machine when he steps down next year. The €44 billion carmaker’s boss said he won’t seek a second term after his current one runs out in May 2020. The big challenge for his successor, possibly production chief Oliver ZIPSE , will be to tune up the company’s electric-vehicle strategy. Heading up the Munich-based company is one of the more desirable jobs in the struggling automotive industry. True, the company has had problems. First-quarter operating profit fell almost 80 % from 2018, largely because of a provision for a possible European antitrust fine over alleged technology collusion with German peers. That followed a September profit warning, which Krueger blamed on intense price competition following new emissions standards. Yet BMW shares are trading at 8 times 2019 earnings, using Refinitiv Smart Estimates, compared with 7.4 times for premium peer Daimler and 5.9 times for Volkswagen. Rival-beating efficiency helps explain the premium. Analysts expect Krüger will this year turn 7.4 % of its €99 billion of revenue into operating profit, while Daimler’s margin is forecast at 6.1 %. Over the past 3 years, BMW’s selling, general and administrative costs were on average 9.7 % of sales, according to Refinitiv data; Daimler and VW reported 11.4 % and 13.1 % respectively. Still, an industry-wide shift towards electric vehicles threatens BMW’s lead. Like most carmakers, BMW is investing in cleaner engines to meet European carbon-emission rules in the early 2020s. Yet unlike VW, which is betting mostly on pure battery-powered electric vehicles, BMW retains what it calls “flexible vehicle architectures” covering fully electric, plug-in hybrid vehicles and combustion-engine cars. Hedging its bet will pay off if VW and others prove to overoptimistic about demand for electric vehicles. But BMW’s rivals plan to build greener cars by using a dedicated platform; industry jargon for reducing the number of different basic components and materials needed to produce a wide range of vehicles. That focus is likely to improve the profit margin on electric cars, whereas BMW’s more complex strategy involves higher costs. Krueger’s successor may have to refashion BMW’s electric-vehicle strategy with that in mind. +++

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