+++ APPLE has hired Steve MacManus, at least the third Tesla engineering executive to join the technology giant in the last year. MacManus, a Tesla vice president in charge of engineering for car interiors and exteriors, left the automaker recently and has since joined Apple as a senior director. He joined Tesla in 2015 after stints at Jaguar Land Rover, Bentley and Aston Martin. His interior-design skills may be applicable at Apple beyond the development of a car. Apple did not respond to a request for comment. The tech giant also brought in former Tesla drive systems vice president Michael Schwekutsch in March and former chief vehicle engineer Doug Field last August. Apple and Tesla have been hiring each others’ engineers for years, sometimes creating tension. Tesla CEO Elon Musk called Apple a “Tesla graveyard” in a 2015 interview with German newspaper Handelsblatt. Some industry analysts and investors have speculated about the companies entering a partnership or even Apple acquiring Tesla. +++ 

+++ ASTON MARTIN’s share price has fallen by more than 20 % after it announced a huge drop in sales. It means Aston Martin’s market value has more than halved since the brand sold 25 % of its stock on the London Stock Exchange in October 2018. Aston Martin sales in the UK have plunged by 22 % during the second quarter of 2019, while sales in the rest of Europe, the Middle East and Africa have seen a slump of 28 %. Overall, Aston Martin expects sales figures for the 2019 financial year to be between 6,300 and 6,500 vehicles. Andy Palmer, president of Aston Martin, said: “We are disappointed that sales have fallen short of our original expectations, but we are committed to maintaining quality of sales and protecting our brand position first and foremost. We are today taking decisive action to manage inventory and the Aston Martin Lagonda brands for the long-term”. Despite the drop in sales for UK and Europe, Aston Martin sales are on the increase in the Americas and throughout the Asia Pacific region, with the former climbing by 83 % and the latter by 17 %. Aston Martin anticipates the forthcoming DBX crossover will be the company’s saving grace, becoming the most popular Aston model and doubling production in the process. It will play on the current market trend for premium performance SUVs, currently dominated by the Bentley Bentayga and Lamborghini Urus, with a starting price of around €280,000. The luxury marque said it was “taking immediate actions to improve efficiency and reduce the costs base as [it] heads into 2020”. Aston Martin said retail sales grew by 26 % in the first 6 months of 2019, but the poor performance in wholesale (which grew by only 6 % globally) prompted a downgrading of full-year financial expectations. Along with a revised outlook on volumes, Aston Martin is expecting full-year figures to see an adjusted earnings down 20 % and profit margin down 8 %. Palmer said: “We anticipate that this softness will continue for the remainder of the year and are planning prudently for 2020”. He has previously warned of the potential impact a no-deal Brexit could have on the car industry. Palmer said that production of its DBX and Valkyrie hypercar “remain on plan”. He added: “During the first half, we have been disciplined, as appropriate for our luxury positioning in maintaining the quality of sales with core wholesales up 9 % supporting a continued reduction in dealer inventory as we prepare the network for DBX. Whilst retails have grown by 26 % year-to-date, our wholesale performance is adversely impacted by macro-economic uncertainty and enduring weakness in UK and European markets. We are disappointed that short-term wholesales have fallen short of our original expectations, but we are committed to maintaining quality of sales and protecting our brand position first and foremost. We are today taking decisive action to manage inventory and the Aston Martin plus Lagonda brands for the long-term. We remain focused on the successful execution of the Second Century Plan and on delivering sustainable long-term growth”. +++ 

+++ AUDI unveiled the facelifted Q7 last month and now the company is turning its attention to smaller Q5. The updated SUV will get a new front fascia with a revised grille, restyled headlights, a modified bumper that features new air intakes, updated taillights with horizontal graphics and a new rear bumper. The cabin is expected to follow in the footsteps of the facelifted A4. As a result, the Q5 could be outfitted with a new infotainment system that features simplified menus and a 10.1-inch display. We can also expect natural-language voice control technology and an available 12.3-inch digital instrument cluster. +++ 

+++ Newly revived Austrian car maker AUSTRO DAIMLER will make its debut in September with a high-performance hybrid grand tourer. The striking Bergmeister ADR 630 Shooting Grand, inspired by the 1931 Bergmeister sports car, has a bespoke electrified powertrain that produces 1200 hp and 1600 Nm, pushing it from 0-100 km/h in 2.5sec and onto a claimed top speed of more than 320 km/h. Only 1 example has been built so far, with limited production expected to begin after the September showing. Pricing will be confirmed at a later date. The car’s 3.0-litre straight-6 engine is taken from the Mercedes-AMG GT 4-door and mated to 3 electric motors that each produce 275 hp. A 55 kWh lithium/ion battery capable of charging at a rate of 150 kW is mounted at the rear, hence the shooting break bodywork. It provides a claimed electric-only range of 250 kilometres on the WLTP cycle. The Bergmeister ADR 630 Shooting Grand can travel farther on electric power alone than many purpose-built compact electric cars, such as the Honda E and Mini Electric, which is especially significant when you consider its substantial size. Despite measuring 4.5 meter long and more than 2.0 meter wide, the car weighs just 1650 kg as a result of its aluminium spaceframe chassis and lightweight body components. Notable styling features include its front-hinged bonnet, gullwing doors, rising rear roofline, wraparound tail-lights and double-bubble roof, although its silhouette is similar to that of the GT with which it shares some powertrain components. The minimalist but elegant interior is said to have been inspired by the 1930s Art Deco movement and features large amounts of wood and leather. Austro Daimler was established in 1899 and went on to become one of the Austro-Hungarian Empire’s most important manufacturers. It introduced the world’s fastest car, the 140 km/h Prinz Heinrich, in 1910. The company was dissolved in 1934, shortly after merging with contemporary Austrian companies Steyr and Puch. The revived brand’s new model is inspired by the 1931 Bergmeister, which became well-known for its success in mountain races. Project manager Roland Stagl said: “When we were developing the vehicle, our overriding concern was to capture the spirit of the original Bergmeister and to translate this into the future, just as if the brand never ceased to exist. Considering the ethos and values of the brand and acknowledging its position as a true automotive innovator, led us to design the Shooting Grand with what we like to describe as innovation by tradition”. The Bergmeister ADR 630 Shooting Grand will be shown at the Salon Privé motor show at Blenheim Palace in September. +++ 

+++ BMW said it would double its production capacity for electric vehicle batteries at its U.S. plant in South Carolina as it ramps up manufacturing of plug-in hybrid vehicles to include the X3 in addition to the X5. BMW said it was investing $10 million in a new battery assembly line which will be capable of operating in a 2 shift system ahead of the introduction of the X3 plug in hybrid vehicle by the end of the year. BMW made 15,000 batteries last year with a 1 shift system and currently produces a plug-in hybrid version of the X5. A new version of the X5 will be produced at the Spartanburg plant from August onwards, the company said. BMW said it planned to employ 120 staff to manufacture different types of batteries, and the additional staff gave it the capacity to double production. In the past 4 years, BMW workers assembled 45,000 batteries, the carmaker said. +++ 

+++ If you belong to those few still hoping for General Motors to roll out a manual transmission option for the new CHEVROLET CORVETTE , then we have some bad news for you. Speaking with Corvette lead engineer Tadge Juechter, I asked him whether a manual option is coming back. The answer was a rather straight-forward “No”. Juechter added that a manual C8 Corvette would simply not sell good enough to justify a supplier’s effort to develop and the costs involved. “We couldn’t find anybody honestly who’d be willing to do it. Because just like the automatic, the DCT, it would have to be a bespoke manual”, Juechter said. “It’s low volume, very expensive. The reason is it’s a low-volume industry. That industry is dying; building manual transmissions”. Fewer and fewer customers opt for the manual in the Corvette, dropping the take-rate to around 15 %, according to Juechter. “Every year it goes down, down, down”, he said. Porsche did try to drop the manual option from its hardcore GT models too, but was met with criticism from customers. They listened and eventually offered the 911 GT3 with a manual transmission again. Since then, 2 out of 3 buyers go for the 3-pedal version, according to Porsche North America CEO Claus Zellmer. Juechter says that this wouldn’t hold for the Corvette. “It’s 15 % on cars like the Z06, which historically have been only a manual. And as soon as we offer the automatic, everybody buys the automatic”, Juechter said. The new Corvette will feature a new 8-speed dual-clutch automatic gearbox. GM worked with Tremec to develop it specifically for the new ‘Vette. “We don’t just find a DCT, an 8-speed DCT that plugs into this architecture with the right dimensions”, he added. The challenge was to create a transaxle-style transmission that could work with the 6.2-liter LT2 V8. Having a dry sump enabled engineers to mount the V8 lower but that created a whole range of other issues for the gearbox during development. “That puts huge burden on the transmission, too, because it can’t have a deep sump either, so all the oil management, everything is super slammed. The belting, the transmission, figuring out how to cool it, there’s a ton of complexity around that. That’s one of the equations we had to solve”, Juechter said. While the new DCT-equipped C8 is expected to be better in every measurable way, the death of the manual Corvette still makes me feel a bit sad. +++ 

+++ DAIMLER will intensify cost cuts and plans to shrink its model lineup after legal risks for diesel-related issues and the cost of replacing Takata airbags triggered a €1.56 billion loss before interest and taxes in the second quarter. “We are intensifying the group-wide performance programs and reviewing out product portfolio in order to safeguard future success”, CEO Ola Källenius said. Daimler earlier this month raised provisions to €4.2 billion to cover vehicle recalls related to Takata airbags and a regulatory crackdown on diesel emissions. The automaker is facing investigations in Europe and the U.S. over allegedly excessive pollution from Mercedes-Benz diesel vehicles. For Daimler, the pressure to clean up combustion engines has come at a time when the industry has to invest heavily in electric and self-driving vehicles, and cope with slowing growth in China, weak markets in Europe and a rise in global trade tensions. Passenger car sales slowed 3 % during the quarter and the return on sales at Mercedes-Benz Cars swung to a negative 3 % in the quarter, down from 8.4 % in the year-earlier period. Earlier this month, Daimler pre-released earnings in what amounted to its 4th profit warning in 13 months, saying its 2019 group profit would be “significantly” lower than last year. Annual revenue will be slightly higher than a year ago, while vehicle sales will be about the same as 2018 thanks to increased product momentum in the second half, Daimler said. Sales of its trucks and buses are expected to rise, the company said. The latest warning puts greater urgency on Källenius, who took over as CEO from Dieter Zetsche in May and chief financial officer Harald Wilhelm to show they can lift poor returns. Profitability in the core Mercedes-Benz cars unit may fall to as low as 3 % this year. Daimler is battling slower demand for new cars in markets including China and the U.S.
Huge costs to develop electric cars and regulatory scrutiny in Germany over its diesel-emissions have put Daimler on the back foot amid efforts toward a broad corporate revamp. Daimler is also suffering from homegrown problems. These include technical hiccups hitting the model changeover of the high-margin GLE as well as issues in ramping up a joint Mexican factory with Nissan. The Mercedes-Benz X class pickup is in doubt amid weak sales after Daimler earlier this year abandoned plans to build the pickup for South America in Argentina. The vehicle is based on Nissan technology. Daimler said yesterday that China’s BAIC has bought a 5 % stake in the company, cementing their long-standing alliance. Unblocking supplier bottlenecks, which have delayed production of GLE and GLS models, will help push sales of luxury cars in the second half of 2019, Kaellenius said. “Daimler is blaming supplier bottlenecks and quality issues pretty much across all divisions for its poor financial performance. These are certainly not external factors outside of management’s control”, analysts at Evercore ISI said. Daimler made a provision of €2.6 billion to cover diesel-related expenses in the first half of 2019 after German regulator KBA ordered a recall of 60,000 GLK models, claiming the vehicles made use of illegal engine software. Daimler has appealed the KBA ruling. The carmaker declined to break down in detail how much of the amount was allocated for recalls, updates and potential fines and litigation. Daimler’s diesel pollution levels are being investigated by prosecutors in Stuttgart, Germany, where it is headquartered, as well as by the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB). Pressure to clean up combustion engines has come at a time when the industry has to invest heavily in electric and self-driving vehicles, and cope with slowing growth in China, weak markets in Europe and a rise in global trade tensions. Daimler has no plans to spin off its trucks division or to pursue a merger with BMW as a way to raise the company’s share price, Källenius said. “There are no plans to change the capital structure of Daimler”, he told analysts on a call to discuss second-quarter results. Källenius further said Daimler was not considering deeper ties with rival BMW which involved a cross shareholding or deal. “There are no plans to combine with BMW in any way”. +++

+++ FORD is facing a lawsuit over alleged falsification of pickup fuel-efficiency tests. The company earlier this year disclosed an internal investigation after discovering that incorrect mathematical figures may have been used to estimate fuel efficiency figures submitted to the EPA and California Air Resources Board. “In September, a handful of employees raised a concern through our Speak Up employee reporting channel regarding the analytical modeling that is part of our US fuel economy and emissions compliance process”, the company said at the time. Law firm Hagens Berman claims to have completed its own tests, starting with the 2018-2019 F-150, and determined that buyers may end up paying more than $2,000 more in fuel over the life of the vehicle. “Ford’s lies about the F-150 are masking the truth: Consumers are paying far more for these trucks than meets the eye”, said Hagans Berman managing partner Steve Berman. Ford spokesman TR Reid said that the automaker has not yet been served in the apparent lawsuit but the law firm’s announcement “appears to be similar to 2 other filings by the same law firm in the same court. I’d ask you not to confuse claims with merit”. The plaintiff lawyers are seeking class-action status and damages worth $1.2 billion or more. The law firm suggests it is looking into potential mpg discrepancies across additional models and model years. +++ 

+++ GENERAL MOTORS ‘ self-driving unit Cruise said it was delaying the commercial deployment of cars past its target of 2019 as more testing of the vehicles was required. Cruise Chief Executive Officer Dan Ammann said the company would expand testing in San Francisco and added that Cruise was working with Honda and General Motors to develop purpose-built autonomous vehicles. Ammann did not say when the company now expects to deploy a ride-hailing service using self-driving vehicles. It had earlier hoped to deploy such a service here by the end of 2019, but in April, GM chief executive Mary Barra declined to repeat that goal. Cruise has raised $7.25 billion during the past year from investors including SoftBank, Honda and investment firm T. Rowe Price. As GM and Cruise executives have done in the past, Ammann said Cruise would launch its commercial service when it was sure the vehicles would be safe. “When you’re working on the large scale deployment of mission critical safety systems, the mindset of ‘move fast and break things’ certainly doesn’t cut it”, Ammann said. He alluded to broader concerns about the trustworthiness of “Big Tech” and said Cruise was in talks with regulators about how to measure when its technology “will have a net positive impact on safety on our roads”. Cruise’s decision to formally postpone deployment of self-driving cars this year comes as rival autonomous vehicle companies and automakers acknowledge it will take more time and money than they had expected to make autonomous vehicles safe for unrestricted use on public roads. The capital and technology challenges of self-driving cars are pushing automakers to forge alliances to share the cost burdens. Volkswagen and Ford earlier this month said they would partner to develop autonomous vehicles, and invest in self-driving technology company Argo AI. BMW and Daimler also have struck self-driving car partnerships. Alphabet Inc’s Waymo robo-taxi unit has begun offering rides for hire in Arizona, but continues to operate its vehicles with human attendants ready to take the wheel. Ammann, who took over as Cruise’s chief executive last November, told last year that developing self-driving cars capable of safely navigating urban traffic was “the engineering challenge of our generation”. Against what promises to be a long period of development and technology evolution, initial delays would not be that meaningful, he said. Cruise is working with GM and Honda engineers to develop a next-generation of electric, autonomous vehicles, Ammann said. “This is not a concept car: hundreds of the best Honda, GM and Cruise engineers are working together on-site in Warren, Michigan, where they are deep into the vehicle development process. This new vehicle completely reimagines from the ground up what a car can be and we can’t wait to share more in the near future”. GM has sought clearance from federal safety regulators for self-driving cars that do not have conventional controls such as a steering wheel. The U.S. Department of Transportation has delayed action on GM’s petition to test such vehicles for more than a year, and earlier this year said it would seek public comments on the proposal. +++ 

+++ Incoming British Prime Minister Boris JOHNSON , who is the figurehead for the Brexit movement, will not be warmly welcomed by the UK car industry. Johnson won his place as the new leader of the ruling Conservatives by promising the party’s mainly anti-EU membership that he is committed to leaving the European Union on Oct. 31, even if that means leaving without the bloc without a trade deal. Automakers with UK operations have warned that a hard Brexit will hit their profits, cost jobs and hit just-in-time supply chains but in the last three years Johnson has shown little sign that he takes the industry seriously. In 2017 he brushed aside their concerns, writing on Facebook: “In the next 20 years I believe traditional car companies will vanish as we switch to automated vehicles”. There is no sign since that Johnson will listen to industry concerns even though Honda and Ford have said they are shutting factories in the UK. Ford said it is again getting ready for a no-deal exit by safe-guarding its supply chain and stockpiling parts. Carlos Tavares, CEO of PSA, which owns the UK Vauxhall car company, told analysts on an earnings call: “No-deal cannot be considered. This would be very bad for the UK, very bad for Europe, very bad for all of us”. The auto industry stands to lose $62,250 a minute should the country crash out of the EU, because friction at the border will leave plants starved of parts, the Society of Motor Manufacturers and Traders said recently. Johnson’s problem with automakers with UK operations is the same as other British politicians who want Britain to exit the EU without a trade deal. The country’s auto industry, which has boomed over the past 20 years presents an inconvenient truth, namely that the resulting tariffs and border complications will make the UK less competitive than before, not more. In June 2016, just before the UK narrowly voted to leave the EU, Johnson wrote that the country’s appetite particularly for German-made cars meant that it would be inconceivable that tariffs would be applied. “We buy one fifth of Germany’s entire car output. Tariffs would mean the Germans would be cutting their own throats. It won’t happen”, he said. But EU has proved tougher on negotiations than first imagined by the pro-Leave camp. In response Brexiteers have had to either ignore automakers concerns or claim greater knowledge of the UK car industry than the industry itself. In January this year Johnson sparked derision by claiming in a radio interview that he knew more about how to run an automaker than Jaguar Land Rover CEO Ralf Speth, who had just warned about job losses. Johnson’s frustration at the likes of BMW and aircraft maker Airbus pounding the same message out about the disaster of no-deal, that Johnson last summer reportedly declared “f**k business” at an official function, a report that he has not denied. However, Johnson is known for changing his views if it’s politically expedient to do so. In 2015 he was vigorously championing the UK car industry ahead of a general election, describing it “one of the most stunning turnaround stories in the economic history of this country”. He cited 2014’s UK carmaking tally of 1.4 million and compared it to the bad old days of the 1970s, when worker strikes and poor models made Britain’s car industry a global joke. It’s possible that Johnson’s political pragmatism will see him rejecting the ‘leave no matter what’ stance now he is in the driving seat. He will have to get automakers on side. The only UK car company prepared to support Johnson’s populist Brexit policies was tiny race-car maker Ginetta, which hosted a Leave campaign event with him in 2016. As prime minister, Johnson needs to persuade the industry that staying loyal to the UK will not prove costly them in the long run. It could be that the Government’s generous loan of $626 million to JLR to invest in electrification is the start of a campaign of a financial support to the industry, which could be the only answer to sway automakers if the UK leaves the EU with no deal. Putting Brexit aside, corporate Britain has been largely welcoming of Johnson, seeing positive signs in his pro-enterprise attitude when he was London mayor. “We need that optimism and energy”, ITV chief executive officer Carolyn McCall said. “He was very pro-business, he invested in infrastructure”. Johnson has hired pay-TV broadcaster Sky’s chief operating officer, Andrew Griffith, as his senior business adviser, giving him the job of improving the government’s relations with UK companies. Johnson has pledged to restart Brexit talks with the EU, bringing “positive energy” and a “sense of mission” akin to the Apollo 11 moon landing to the negotiations. +++ 

+++ MCLAREN is developing a 2-seat open-cockpit speedster that will focus on providing exhilarating on-road driving and become the 6th model in its Ultimate Series. According to a source aware of the car, the new limited-run machine will sit alongside the track-focused Senna and the 400 km/h Speedtail hyper-GT at the top of McLaren’s range. Whereas the Senna has been designed as the ultimate road-legal track car and the Speedtail developed around high-speed aerodynamic efficiency, the new speedster has reportedly been conceived for road-driving pleasure. It will apparently highlight the more emotional, fun side to McLaren; albeit while retaining the high-performance, high-tech traits for which the Woking firm is known. The as-yet-unnamed machine will be the first pure open road car McLaren has made, with styling that will reportedly evoke open-top sports prototype racers. That will pitch it into competition with Ferrari’s recently revealed Monza SP1 and SP2 speedster models. The speedster is claimed to offer a more ‘fluid’ interpretation of McLaren’s design language than the firm’s other models, with prominent use of flowing, elegant lines. Our source has been told the interior design will closely match that of the exterior and is set to feature low-profile dihedral ‘butterfly’ doors. The flowing styling will contrast with the aerodynamically focused Senna and reflects the fact that the new car is being developed primarily for use on the road, with the intention to maximise the ‘pure pleasure of driving’. It is being honed to deliver extremely agile handling while giving high levels of driver response. Our source has been told that it will offer astonishing levels of feedback. That driving experience, combined with the open cockpit, is understood to offer a greater connection between the driver and the environment around them. Power is tipped to come from McLaren’s 4.0-litre V8 twin-turbocharged petrol engine and, unlike the 1050 hp Speedtail, won’t include any electrification or other hybrid technology. The output for the car is not yet known, although the focus on road driving pleasure suggests it will be slightly reduced from the 800 hp of the Senna. However, as part of McLaren’s Ultimate Series line-up, it is still likely to be elevated from other models in the firm’s range. As is usual with McLaren, the power will be driven through the rear wheels only, likely through a dual-clutch automatic gearbox. The new speedster is tipped to weigh less than the 1198 kg Senna, making it one of the lightest road cars the firm has ever built. This is achieved by both the lack of a roof and, as is customary for McLaren, extensive use of carbonfibre. The open-top machine will be a strictly limited-run model, with volume thought to be restricted to fewer than the 500 examples of the Senna that the company has produced. A price of around £1.5 million has been suggested, similar to the cost of the Monza SP1 and SP2. A reveal or launch date for the new model has not been determined yet, although it is likely to be produced after the 106 examples of the Speedtail. Production of that machine is due to begin in late 2019, after the final examples of the Senna GTR, which would suggest cars will start to be built in late 2020 or early 2021. McLaren models have traditionally been split into three series: Sport, Super and the range-topping Ultimate cars, although the forthcoming new grand tourer will launch a fourth. The Ultimate Series has its roots in the firm’s seminal road car, the F1, and was launched with the P1 plug-in hybrid supercar in 2013. When asked to confirm the project, a McLaren spokesperson declined to discuss the new car, saying: “Our usual position in respect of speculation about possible future models is not to comment and that’s the case here”. +++ 

+++ NISSAN is preparing to axe more than 10,000 jobs globally. The car maker announced 4800 job cuts earlier this year, as part of an initiative to turn its fortunes round, having suffered its lowest profits for almost ten years. A further announcement is tipped to take place tomorrow. Global sales stagnation in the US and Europe, plus falls in Asia, political uncertainty, tariffs, the need to invest in electrification and autonomy and a part-ageing product line-up, including its successful Qashqai and Juke, and greater competition from rival manufacturers in the SUV segment have been cited as reasons for Nissan’s profits slump. The bulk of the losses will fall on workers outside of Japan. Although there have been no specific warnings of losses at Nissan’s UK operations, earlier this year the firm made headlines when it reversed a previous decision to make some X-Trail models at its Sunderland factory. That was said to have led to “hundreds” of new jobs not being created at the plant. At the time it made specific reference to Brexit negotiations undermining the company’s position in the UK, although falling diesel sales and the EU’s tariff-free trade deal with Japan were also believed to be factors. Nissan has also hit the headlines recently with the arrest of former boss Carlos Ghosn, who is now suing the firm for unfair dismissal. The firm has previously committed to making the next-generation Juke (set to be revealed at this year’s Frankfurt motor show) and Qashqai in Sunderland. In May this year Nissan reported net profits annual profits of £2.37 billion; down 5 % on the previous year. This was the lowest figures since 2009/10, in the wake of the global financial crisis. The company has also warned that the current year could be worse. Nissan warned that first-quarter profit tumbled around 90 % percent. The dismal earnings mark one of Nissan’s worst quarterly performances in around a decade. The automaker is fighting to rein in its operations after years of aggressive expansion under former chairman Carlos Ghosn, ousted last year in a dramatic scandal that shook the industry. Nissan is struggling to improve weak profit margins in the United States, a key market where Ghosn for years pushed to aggressively grow market share during his time as chief executive. Years of heavy discounting to grow sales in the world’s second-biggest auto market have left Nissan with falling demand for the Altima sedan and other models, a cheapened brand image, low resale values, and a nearly battered bottom line. “Deteriorating performance in the United States is a big issue that we’re facing”, Motoo Nagai, chairman of the automaker’s newly formed audit committee, said. “For a long time we were concerned with increasing volume. We were chasing numbers. Now it’s time to enhance the brand”, he said. The job cuts to be disclosed this week would exceed 7 % of Nissan’s 138,000-strong workforce and are part of a broad “turnaround” strategy to be rolled out later this year, said another source, a top executive who asked not to be named because he is not authorized to speak with the media. The plan would be “aimed at unwinding Ghosn’s negative legacies”, which has led to excess, he added. Regions with significantly under-utilised manufacturing capacity which could be affected by job cuts included India and Brazil, another source said. The latest job cuts highlight the extent of problems facing chief executive Hiroto Saikawa, who is also grappling with fractured relations with alliance partner Renault following the arrest of Ghosn, their shared former chairman. Ghosn has been charged with financial misconduct in Japan and denies wrongdoing. Saikawa kept his job in a vote at an annual shareholders meeting last month, fighting off a rare rebuke by top proxy advisory firms who urged shareholders not to reappoint him considering he was groomed for leadership by Ghosn. But an extended tenure for Saikawa at Nissan may be unlikely, as the automaker has tasked a newly formed nominations committee with finding his successor. “We want to start the process to find a successor to the CEO as soon as possible”, said Masakazu Toyoda, the automaker’s lead external director who also chairs the new committee which will meet for the first time later today. +++ 

+++ The PSA Group delivered a sharp increase in first-half profit, defying a global industry downturn as new models and cost savings from the integration of Opel / Vauxhall more than made up for weaker emerging market sales. Standing out against profit warnings from peers such as Daimler, PSA said its efficiency drive produced a 10.6 % operating income gain even as deliveries went the other way, with a 12.8 % decline posted earlier this month. That lifted the Peugeot maker’s operating margin to a new 8.7 % record from 7.8 % a year earlier, boosted by a €270 million increase in cost savings on purchasing, research and development and overheads. “Our results are proving the sustainability of our performance despite the weakness of global markets”, chief financial officer Philippe de Rovira told. The recurring operating income came in at €3.34 billion, with net income up by almost a quarter to €1.832 billion as revenue slid 0.7 % to €38.3 billion. “PSA continues to buck the trend being seen among most carmakers”, Citi analyst Raghav Gupta-Chaudhary said. Barring any new merger opportunities, PSA could have about €3 billion in excess cash to return to shareholders, he added. PSA’s pricing and profitability also benefited from new models such as the Citroen C5 Aircross and a trio of commercial van launches, with strong gains in evidence at Opel -Vauxhall, acquired from General Motors in 2017. Much of the operating-cost improvement stemmed from steady integration of the vehicle technologies and architectures underpinning new models across the Peugeot, Citroen, DS, Opel and Vauxhall brands. PSA’s bottom-line improvement came despite a €302 million hit from China that included a €139 million asset writedown reflecting a steady plunge in the group’s sales; down another 61 % in the first half. The French carmaker is seeking to cut capacity at its manufacturing venture with its 12.2 % shareholder Dongfeng, De Rovira said. For the full year, PSA predicted further auto-market contractions of 1 % in Europe, 4 % in Latin America and 7 % in China, with Russia growing 3 %. But European sales disruption in late 2018 (when tougher emissions rules forced competitors to suspend key models including the Volkswagen Golf) means the market is likely to grow in the latter half of 2019, the CFO said. The risk of a hard Brexit, however, make it “difficult to predict what the operating environment will be”, he added. PSA said its positive free cash flow came to almost €1.6 billion at group level in the first half, with €2.29 billion at the core car-manufacturing business. Reflecting on the record margin, PSA boss Carlos Tavares told media during the conference: “Can you imagine that despite this number, we still continue to argue and express that we are not happy with everything we do. They [board members] accept that we continue to push, to steer the company in the right direction. “We want to be a great car maker, not the biggest one, but the most efficient car maker in the world”. Tavares claims PSA has achieved its objectives of improving market share in “all the major markets in Europe” and made significant improvements in customer satisfaction, claiming it’s in the top 4 in Europe for sales satisfaction and that, according to analysis firm JD Power, Peugeot is the UK’s most reliable brand. However, Tavares acknowledged significant global challenges, including the fact that PSA’s market share has more than halved in China down to 0.5 %. The slump in diesel sales, a huge ongoing investment in electrifying its model line-up and “significant” over-capacity issues in factories such as Britain’s Ellesmere Port are also highlighted. The CEO took the opportunity to criticise global market regulators, such as the EU, for creating a situation of “regulatory chaos”. He said: “We are in a situation where there is no notice of regulatory changes. How do we know that in a number of years somebody will impose on us another technology? We have been imposed a certain kind of technology that needs a huge financial investment and there is significant risk”. On the EU’s decision to impose a fleet average target of 95 g/km of CO2 emitted by 2021, Tavares says PSA is “fully on track”. “It’s clear that companies that did not prepare for the European CO2 rule changes will be in trouble. We have been working on it for 18 months. We are also well prepared for the WLTP changes”. PSA is on track to have 29 % of its line-up electrified by 2020 and 100 % of it electrified by 2025. However, Tavares also confirmed there will be a further reduction in “diversity and complexity” of PSA’s model range. The brands have a combined 62 models on the market in 2019, but that will be reduced to 49 this year. The target is to have 41 models on sale by 2025 across all brands. Tavares also said he has “one model in the CEO’s pocket” for a brand halo flagship of some sort that will be detailed “later on”. Tavares also launched a frank assessment of the UK’s handling of the Brexit negotiations, saying that leaving the EU without a deal “can’t be considered”. “We are business people, we are responsible people, we need clarity. The only thing we have to say on Brexit is ‘hurry up’. Decisions are suspended and if we continue to suspend these decisions something bad will happen”. When asked about the rumoured merger with Jaguar Land Rover, Tavares refused to comment. However, he stated that PSA is “of course open” to mergers and acquisitions. “We aren’t doing deals for the egos of our executives”, he said. “We are ready and able to implement synergies that create value. We are not in a position where we want a deal, were are not in a position where we need a deal”.+++

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