+++ In ASIA , steep drops in auto sales for China and India over recent months are serving as a painful reminder that the 2 world’s most populous markets are not living up to earlier heady expectations. Take China for instance. Former BAIC president Wang Dazong confidently predicted in 2010 that annual sales in the world’s biggest car market would hit 40 million vehicles by 2020. More circumspect but still bullish, the Chinese government said 2 years ago it was targeting 35 million by 2025. Today, neither prediction gels well with the reality on the ground. Hit by a slowing economy, the U.S.-China trade war and the chaotic implementation of new emission rules, vehicle sales logged a 12th straight month of declines in June. Industry officials and analysts now expect car demand to slide some 5 % this year after a 2.8 % fall last year to 28.1 million; its first decline since the 1990s. The slump is exacerbating problems of excess capacity, with factory utilization rates at China plants for many automakers estimated below break-even point. Last year, Suzuki became the first big foreign car manufacturer to shut up shop in the country. “What we’re seeing in China, we’re seeing the market increasingly moving towards maturity, it’s a case of peaking demand”, said a head of China operations at a major global automaker, adding the market was beginning to become cyclical. Like other industry executives, he declined to be quoted by name ahead of second-quarter earnings. Shrinking markets in China as well as India spell lower earnings for many automakers, which have invested heavily in plants and vehicle development in both countries on expectations they would power global auto sales growth for years to come. The slumps in sales also come at time when car makers can ill afford them. Costs are jumping as the industry strives to meet new emissions standards and develop electric vehicles while wrestling with competition from tech firms in self-driving vehicles as well as from ride-hailing companies. Auto sales in Asia-Pacific, estimated at around 43-44 million vehicles last year, are expected to fall 2-3.5 % this year after declining roughly 1 % in 2018. While a small bounce back is expected for 2020, they expect sluggish to flat growth for some years to come; one that calls for ‘a mindset reset’ says May Arthapan, director of Asia-Pacific forecasting at LMC. “We’d better get used to an adjusted view of Asia”, she said. If China’s slowdown has had the biggest impact, India has perhaps been the biggest disappointment, failing to live up to hopes it would become Asia’s “next China”, auto industry executives say. With 1.3 billion people, its population is similar in size to China’s but annual vehicle sales stood at 3.3 million in the last financial year to end-March. That’s far short of earlier analysts’ predictions of more than 5 million by 2020. Prime Minister Narendra Modi’s decision in 2016 to abolish high denomination bank notes in a crackdown on corruption hurt India’s informal cash-based economy and with it car sales. Higher taxes and insurance costs have also raised the cost of vehicle ownership. The auto market then took a sharp turn for the worse amid a liquidity crisis in the non-bank financing sector which saw its willingness to extend car loans wither away. Monthly auto sales have tumbled 17-20 % since April, exacerbating a slump that has seen sales decline in 11 of the past 12 months. The downturn has led to cuts in production or temporary plant shutdowns with some automakers taking more drastic measures. General Motors stopped selling cars in India at the end of 2017 while Ford is looking at folding its India operations into a joint venture. But due to its market size, automakers are most concerned about China. In addition to economic and trade headwinds, in big cities across China, including Beijing and Shanghai, there just doesn’t seem to be enough space on the roads to cater to more demand. “Who wants to buy a car when the most likely outcome of your new purchase is to be stuck in hopeless traffic”, said Yale Zhang, head of Shanghai-based consultancy Automotive Foresight. That has led to a market with fewer winners. Brands with a strong presence and growing sales include Toyota, Honda and Mercedes Benz but others have seen painful slides in sales and must deal with excess manufacturing capacity. According to U.S. consulting firm AlixPartners, 2018 capacity utilization rates at China assembly plants operated by Hyundai, Kia, Fiat Chrysler Automobiles, Renault, PSA and Ford were below 50 %. Normally, rates of around 70-75 % are considered the break-even threshold. Among foreign automakers, PSA and Ford had the lowest rates at just 26 % and 24 % each. PSA’s joint venture partner Dongfeng Group was so concerned about the state of their business that Chairman Zhu Yanfeng last year tried to convince Honda and Nissan to take over one of PSA’s China assembly plants, sources with knowledge of the matter said. The sources declined to be identified as they were not authorized to speak to media on the matter. A Paris-based PSA spokesman said the automaker was working hard to change its China business model and that one option “could be ‘capacity rental’ to other car-makers”. Despite the current slump, Zhang notes the China market has much room to grow, estimating there are only 170 vehicles per 1,000 people compared to 550 per 1,000 for Japan and 800 per 1,000 in the United States. It will just take more time than most in the industry would like. “I can still see annual demand rising to 35 million, but that would probably take 10-15 years to achieve”, he said. +++ 

+++ ASTON MARTIN is facing yet more pain and questions about its future after a first-half loss added to a difficult week in which the British luxury carmaker revised downward planned vehicle sales. Since its stock listing in October, the manufacturer has struggled to find its footing as a publicly traded company. Aston Martin shares are now worth less than a quarter of what they were when it went public 10 months ago. The stock plunged as much as 22 percent yesterday after the company reported a first-half operating loss. Aston Martin is now the third-worst performing stock this year. The challenges, and a share price in free fall, have prompted speculation about the carmaker raising more funds and becoming a takeover target. “It’s been a tough time for all of us, but we still believe that what we’ve done is the right thing for the brand”, Aston Martin CEO Andy Palmer said. Last week, Aston Martin cut its outlook on sales to dealers by more than 10 %, pushing shares sharply lower. The automaker reported a first-half adjusted operating loss of 35.2 million pounds ($43 million), compared with a 64.4 million pound profit last year. The results compounded the sense of malaise with the company citing lower vehicle pricing and higher costs of expansion. Since the day before its July 24 warning, its shares have more than halved. The developments have put Aston Martin’s market valuation of 1 billion pounds close to converging with its debt level of 723 million pounds. To fix its issues, the company should consider a cut to its midterm outlook or increase funding with a rights issue of as much as 500 million pounds, Bank of America Merrill Lynch said. The challenges may also see the company be approached by a strategic buyer, such as InvestIndustrial, 1 of 2 of Aston Martin’s largest shareholders, the bank said. Daimler also holds a small stake. “If we require some additional financing from sources with which we’re familiar, particularly in the debt market to maintain that capacity, then that’s what we’ll go out and do”, chief financial officer Mark Wilson said Wednesday on a call. The results are another blow in the automaker’s struggle to convince investors that it can make the transformation from niche player to successful listed company, and deliver on a promise to take on supercar maker Ferrari. Aston Martin listed in October at 19 pounds. Much of Aston Martin’s future will depend on the successful launch of the manufacturer’s first SUV model, the DBX, next year. The car will be built at a new plant in St. Athan, Wales, and is crucial to reach a goal of lifting annual production to 14,000 vehicles by 2023. Last year, sales to dealers amounted to 6,441 cars. +++ 

+++ BMW ’s second-quarter earnings fell by a fifth, hit by exchange rate moves and investments in manufacturing electric and hybrid vehicles to help meet stricter emissions limits. However, the German automaker stuck to its full-year forecasts, avoiding the profit warnings that have beset the industry. “There are no major hiccups and as the product momentum is improving, so will profitability and cashflow. In an extremely volatile auto world, this is very good news”, analysts at Evercore ISI said in a note to clients. Automakers are having to make huge investments into cleaner and self-driving technologies just as demand in China, the world’s biggest auto market, is falling and a trade war between Washington and Beijing is curbing global economic growth. BMW rival Daimler and industry supplier Continental have both recently issued profit warnings, although Fiat Chrysler Automobiles and Volkswagen stuck to their 2019 forecasts. BMW said earnings before interest and taxes fell to €2.2 billion in second quarter, hit by the cost of trying to meet stricter CO2 emissions rules that take full effect in Europe in 2021. Investments in property, plants and equipment jumped 39 % as the company opened a factory in Mexico and retooled its plants to introduce more flexible production lines to help it double sales of electric and hybrid cars by 2021. The Munich-based company said the operating margin at its automotive division fell to 6.5 % from 8.6 % a year earlier, despite a 1.5 % rise in vehicle sales over the same period. But analysts said the margin compared favorably with Mercedes-Benz’s 3.6 % and Audi’s 8 % given BMW sees higher volumes and a better mix of model sales in the second half of the year. BMW reiterated its forecast for a significant decrease in group profit before tax in 2019 as well as a slight increase in vehicle deliveries, and an EBIT margin of 4.5 to 6.5 % in the automotive division. +++ 

+++ CHEVROLET confirmed that the C8 Corvette Stingray would be available with an optional Z51 Performance Package from launch and now it’s emerged that another mystery ‘track package’ has been developed. While attending the global unveiling of the new ‘Vette in mid-July, Brink of Speed on YouTube had the opportunity to speak with the Performance Color and Trim Manager for the car, Brett Goliff. The interview gets particularly interesting at just before the 8-minute mark when Goliff starts to discuss the Competition Seat available for the new Corvette Stingray. This seat will be available alongside 2 other seats and ordinarily, features a host of custom touches over the ‘regular’ seats, including Chevrolet’s ‘performance textile’ on the side bolsters to hold occupants in place. At the new Corvette Stingray’s launch, the company displayed a Competition Seat bathed entirely in this performance textile. Goliff then goes on to reveal that this particular seat will be available for an upcoming track-focused variant of the car. “This version of the seat is for our track car”, he says. “There is a special track version of the vehicle that you can get that comes, essentially, with more of a blacked-out package and comes with this entire Competition Seat with the performance textile fabric”. It is believed the ‘track package’ briefly discussed by Goliff will be available alongside the Z51 Performance Package but it remains to be seen what other options it will come with alongside the full performance textile Competition Seats. Evidently, Chevrolet is very much focusing on offering the Corvette Stingray in as many derivatives as possible before ultimately turning its attention to even faster Z06 and ZR1 models. +++ 

+++ CITROEN will take a “bold step” with its replacement for the C4 when the car arrives next year, the company’s product strategy boss has promised. The Skoda Scala rival is being replaced by an all-new model. However, it won’t sit on the PSA Group’s EMP2 platform, like the Peugeot 308, but rather on the smaller CMP architecture, seen on the forthcoming Peugeot 208 and Opel Corsa. This means that the C4 will be offered with petrol and diesel power, but also as an electric vehicle; in effect, a rival for the likes of the Renault Zoé and Volkswagen ID.3. Citroen product strategy boss Xavier Peugeot declined to confirm that the C4 replacement will be arriving in 2020, but he admitted a “significant car” was coming that would be offered with the aforementioned choice of powertrains. He also promised that it would be a bolder design than the old C4; a model derided for its anonymous looks. “The car that is coming next year is a true Citroen”, Peugeot said. “And it will be a successful product. It has to be bold, but in a modern way. It’s not as bold as an Ami 6 was 60 years ago. It will shake the market; it will not be classical. It will not be conservative. This is forbidden”. Peugeot also insisted that Citroen’s place as the last of the PSA brands to deliver a pure-electric car is down to model cycles and nothing else. “You have to look at our product plan”, he said. “There is no overall decision about this; we will have electrified products coming in the next 18 months”. Citroen introduced the C3 in 2016 and the C3 Aircross in 2017. Both use the older PF1 platform, which cannot be electrified, so they will be among the last models to offer plug-in functionality, perhaps as late as 2024. +++ 

+++ Mini will follow up the updates to the rest of its range with a revised COUNTRYMAN due next year. The crossover is the British maker’s newest model, but was first launched in 2017, so 2020 falls perfectly in line with the usual timeframe of a mid-cycle update. Prototypes have been spotted with disguised front and rear ends, so I’m expecting mild revisions to the grille, bumpers and lights as part of a minor facelift. The introduction of adaptive matrix-beam LED headlights is also on the cards, alongside standard LED tail-lights that bring the now-familiar Union Jack, new personalisation options and a fresh range of wheel designs. The majority of the changes are likely to be aesthetic. Recent range updates have boosted standard equipment across other Minis, so that should also be the case with the Countryman. The recently updated Clubman also featured a new sports suspension option with 10 mm lower ride height. Engine choices should remain unchanged and include the familiar 140 hp 1.5-litre 3-cylinder petrol in the Cooper, a 192 hp 4-cylinder in the Cooper S and the newly launched John Cooper Works model, with a new 306 hp 2.0-litre engine. A 150 hp Cooper D diesel will also be retained, though it’s not clear yet if Mini will need to use mild-hybrid tech to reduce its fleet average CO2 figures in time for 2021’s emissions regulation changes. Expect more details of the Audi Q2 rival to emerge early next year. +++ 

+++ FIAT CHRYSLER AUTOMOBILES (FCA) took the market by surprise by sticking to its full-year profit guidance after a strong performance from its Ram pick-up brand in North America helped it to defy an industry slowdown. A broad-based auto sales downturn has rattled the sector, forcing FCA’s competitors (including Renault, Daimler and Aston Martin) to cut their sales forecasts after second-quarter results, while Ford gave a weaker-than-expected 2019 profit outlook. Nissan said it would cut 12,500 jobs by 2023 after its earnings collapsed. In its first earnings release since a failed attempt to merge with Renault, FCA said it was confident its adjusted earnings before interest and tax would top last year’s €6.7 billion. In the second quarter the group’s adjusted profit totalled €1.52 billion versus analysts’ expectations of €1.43 billion. FCA’s American shipments were down 12 % in the second quarter but the group said that the successful performance of its Ram brand resulted in an enhanced share of the large pick-up market of 27.9 %, up 7 percentage points from last year. Adjusted profit margin in the U.S. rose to 8.9 % from 6.5 % in the first quarter. FCA also cited the group’s strong performance in Latin America to support its confidence in the outlook for the year. Margins also turned positive in Europe, the Middle East and Africa, to 0.4 %, after the region lost money in the previous quarter. The company said it would continue to focus on the underperforming areas of its business in the second part of the year, including Maserati and the EMEA region. For the EMEA region “we continue to target increased margins through the impact of restructuring actions, better management of channel mix, and targeted product strategies”, FCA said. Chief executive Mike Manley said earlier the European region would return to profitability with margins of around 3 % by the end of 2019. But new models such as full-electric 500 and hybrid versions of Jeep and Maserati SUVs are not expected to hit the market before next year. Manley left the door open to continuing merger talks with Renault or listening to fresh offers from others. “We are open to opportunity”, he said on a call with analysts during FCA’s first earnings release since a failed attempt to merge with Renault. “I have no doubt why there still would be interest in it”, he added, when pressed on what it would take to revive talks with Renault. FCA last month abandoned its $35 billion merger offer for Renault, blaming French politics for scuttling what would have been a landmark deal to create the world’s third-biggest automaker. Manley said a merger is not a must-have adding that FCA’s business plan is strong. +++ 

+++ GENERAL MOTORS (GM) posted a better-than-expected net profit as high-margin pickups, SUVs and crossovers helped overcome slowing sales in the United States and China, and reiterated its full-year earnings forecast. Virtually all of the No. 1 U.S. automaker’s profit came from North America, where it posted a profit margin of 10.7 % and profits came in $400 million ahead of analysts’ expectations. Evercore ISI analyst Chris McNally, in a research note entitled, “Truck, truck and away…”, said the rest of the year and 2020 could be the company’s “time to shine”. GM executives said things will get even better as the rollout of the Chevrolet Silverado and GMC Sierra pickups continues, including the introduction of diesel-powered and heavy-duty pickups this year and large SUVs early in 2020. “We delivered a solid quarter as we begin to demonstrate the earnings power of our full-size truck business”, chief executive Mary Barra said. GM’s strong showing came despite slumping industry demand in China, the world’s largest auto market. Other automakers, including Ford and Daimler, offered disappointing forecasts last week. GM also faces an escalating price war in the lucrative U.S. pickup segment for its newly-revamped Chevrolet Silverado. Nevertheless, GM was able to add $1 billion in profits in the quarter in North America thanks to stronger pricing and higher sales of more lucrative vehicles. Fiat Chrysler Automobiles has been battling for market share with its all-new Ram pickup and outsold the Silverado in the second quarter. In the second quarter, GM’s China sales slid 12 %; a slight improvement over the 17.5 % decline in the first quarter. GM said industry-wide sales in China should remain weak for the rest of the year, but added that its vehicle lineup in that market will be boosted by the addition of new SUVs. GM’s equity income from its Chinese operations fell to $235 million from $592 million a year earlier. The automaker said Chinese equity income in the second half of the year should roughly match the $611 million it posted for the first half. The automaker also said it still expects full-year adjusted automotive free cash flow in a range of $4.5 billion to $6 billion, meaning it would need to generate between $5.9 billion and $7.4 billion in the second half of the year. Jefferies analyst Philippe Houchois said in a research note that hitting the cash flow target “still looks challenging”. GM’s capital spending in the second quarter fell $700 million from last year to $1.4 billion. GM chief financial officer Dhivya Suryadevara said the carmaker still expects capital spending for the year of $8 billion to $9 billion. She added that the impact of tariffs and commodity costs this year will be half the $1 billion the company forecast in January. GM has achieved $1.1 billion in savings so far this year related to the restructuring that included plans to cut 15,000 jobs and end production at five North American plants, Suryadevara said. GM previously forecast savings in 2019 in the range of $2 billion to $2.5 billion. The plan came under withering criticism from U.S. president Donald Trump and members of Congress. GM reported second-quarter revenue of $36.1 billion, above analysts’ estimates of $35.98 billion. GM is open to working with other automakers on the development of electric vehicles, Barra said. Asked whether the No. 1 U.S. automaker would team up to share the cost of EVs, Barra said on a conference call with analysts that GM already works with Honda on battery cell technology and other EV parts but was open to more partnerships. “We are open to working with other automakers on leveraging it even further, but we’re already doing that with Honda, and it definitely provides savings from an engineering perspective, and has scaled benefits as well”, Barra said. GM’s smaller U.S. rival Ford last month agreed to use an EV platform developed by Volkswagen as a way to mitigate those development costs. +++ 

+++ HYUNDAI is marking National Heatstroke Prevention Day by announcing plans to make its rear occupant alert system standard on most new vehicles in the United States by 2022. Designed to prevent the tragic deaths of children accidentally left in vehicles during the summer, Hyundai’s rear occupant alert system comes in 2 different forms. The most basic is a door-logic system which detects if a rear door was opened or closed before the vehicle was started. Should this occur, the system will remind the driver to check the rear seats when they exit the vehicle. The technology is relatively simple and it will be installed on most new vehicles by 2022. The first to have the system will be the 2020 Sonata which arrives at dealerships later this year. The ultrasonic rear occupant alert system is more advanced as it combines the aforementioned door-logic technology with an ultrasonic sensor that detects motion from children and pets left in the second row. If motion is detected after a driver exits the vehicle and locks the doors, the vehicle will honk its horn and send an alert to the owner’s smartphone. The ultrasonic rear occupant alert system debuted as an option on the 2019 Santa Fe and is standard equipment on the 2020 Santa Fe and Palisade. The National Highway Traffic Safety Administration (NHTSA) says more than 20 children have already been killed this year because they were left unattended or became trapped inside a hot vehicle. Last year, 52 children died inside a hot vehicle and that topped the previous record of 49 deaths in 2010. The NHTSA notes children are particularly susceptible to heat as their body temperatures can rise three to five times faster than that of an adult. The agency also said the temperature inside a vehicle can climb by 19° F in as little as ten minutes. As a result, the government says parents should “never leave a child in a vehicle when running errands, not even for a minute.” They also encourage people who see a child alone in a vehicle to call 911 and get help immediately. Of course, children aren’t the only ones susceptible to dying in a hot car. PETA is reminding pet owners not to leave dogs in their vehicle as they can rapidly succumb to heatstroke. It happens far too often and the group says at least 21 dogs have already died this summer. As the group noted, even on a mild day with temperatures of 78° F (25.6° C) the temperature inside a vehicle can soar to 100° F (37.8° C) in a matter of minutes. On a 90° F (32.2° C) day, inside temperatures can hit 109° F (42.8° C) in less than 10 minutes. +++ 

+++ INDONESIA plans a series of incentives to boost production of electric vehicles (EVs), according to a copy of a draft regulation. Southeast Asia’s largest economy wants EV manufacturers and battery makers to create a downstream industry for its supplies of nickel laterite ore, which is used in lithium batteries. Aiming to become a hub for Asia and beyond, Indonesia hopes companies will start EV production in 2022 and for the share of EV output to reach 20 % of total car production by 2025. The draft regulation, which needs the president’s approval, includes incentives for manufacturers of EVs, infrastructure providers and transportation companies, as well as EV buyers. Details in the draft were confirmed by a government source with knowledge of the matter, who declined to be named because he is not authorized to speak to media. In the draft, carmakers can get a reduction in import tariffs for knocked down (or unassembled) and semi knocked down cars for a certain period, as well as lower import tariffs for machinery and materials for production. However, they must prioritize locally sourced components. Carmakers will have to increase the composition of domestic components to 80 % by 2030, while motorcycle makers will have to reach that target by 2026, according to the government source. Car owners may get benefits such as lower luxury taxes on purchases, lower annual vehicle tax rates, subsidized fees at charging stations, as well as non fiscal incentives like special parking areas and special lanes, the draft showed. In March, during a consultation with parliament, Finance Minister Sri Mulyani Indrawati presented a new luxury tax scheme designed to encourage production of greener cars. The plan includes removing luxury tax completely for EVs and a low rate for hybrid cars. Indonesian authorities said Toyota, which has the biggest market share in the domestic car market, and Hyundai would invest $2 billion and $880 million in the country, respectively, to develop EVs over the next few years. Japan’s Softbank Group would also study opportunities in investment in EVs, batteries and charging systems in Indonesia, its chief executive Masayoshi Son said last month. +++ 

+++ The head of JAGUAR LAND ROVER’s parent company is open to the British firm seeking further partnerships with other car makers, saying it is the “only way” to fund the necessary investment in future technologies. Jaguar Land Rover has suffered heavy losses in recent months due to falling sales, which have also hit the profits of its Indian parent firm Tata Motors. But JLR is facing the need to invest in electric powertrains, autonomous systems and mobility services for the future. Jaguar Land Rover has agreed a partnership with the BMW Group to jointly develop electrified powertrain components. The partnership is set to expand to include engine sharing and could lead to select JLR models being built on BMW Group platforms in the future. Speaking at Tata Motors’ chairman Natarajan Chandrasekaran, he said that he was open to more partnerships in the future. “Like any other auto company, JLR has to invest in future technologies to address the move away from internal combustion engines to hybrid and electric”, he said. “It also has to invest in future models, make necessary investments in areas like shared mobility, and also beyond that. That’s very important to stay alive in this ecosystem. All this means is there is a need for capital investment if you want to be future-ready. The only way to handle this need for [capital investment] is additional investment through partnerships, because we want to spread the investment. There are many discussions underway, from tactical to strategic”. Asked about future partnership opportunities, Chandrasekaran added: “These opportunities keep coming and we keep evaluating every one of these opportunities and as long as it is in the interest of Tata Motors, we will forge such partnerships so that we are able to address the capex”. Tata was recently reported to be in talks to sell Jaguar Land Rover to the PSA Group, which it denied at the time. +++ 

+++ Taxi maker London Electric Vehicle Company ( LEVC ) says it is not planning to launch a true low-cost variant of its electrified TX, but will launch a lower-spec variant later this year. Speaking at an event to celebrate the completion of the 2500th TX model, company boss Jörg Hoffman also expressed a desire for the company to grow beyond its market in the capital. “This brand will only survive if it moves away from the London-focused niche”, he said, expressing a desire for the company to be viewed as a provider of ‘green mobility solutions’. Conversely, Hoffman said its electrified taxi is a successful product, stating: “We are happy with demand for the TX”. Hoffman, who took over as company boss in early 2019, said London’s stringent taxi regulations make development of a cheaper model impractical. Production of a slightly lower-spec variant of the TX, called Taxi Icon, will begin in October, but this will be unable to operate in London due to subtle equipment downgrades, which have yet to be detailed. The Taxi Icon will, however, be eligible for use in other UK and European cities, and could be adopted by mobility services such as Uber and Lyft. Many have viewed the current list price of the TX as inhibitive for potential buyers, but Hoffman identifies cheaper ongoing operating costs as the reason behind the model’s appeal. “Cost of ownership is the most important thing”, he argued, calling to attention the powertrain’s minimal maintenance costs and lengthy service intervals, as well as the approximate £100 per week fuel savings compared to its diesel-powered TX4 predecessor. “You speak to old TX4 drivers who are so keen to get out of their old diesel cars”, he added, highlighting the new model’s 80 mile electric-only range and ease of use as significant factors in its increasing popularity. The company views black cab drivers as its most loyal customers, but is considering ways of diversifying its product portfolio beyond the TX and recently revealed LCV van. A pure-electric version of the TX, however, is not imminent, with Hoffman stating there is no battery technology currently available that offers the right balance between range and price. LEVC is developing autonomous technology, he said, but it won’t be seen on production vehicles within the next 5 years. The TX and LCV are built at LEVC’s new production facility in Coventry. Hoffman said parent company Geely has no plans to shut down the factory in the event of a no-deal Brexit, given its recent £500 million investment in the British firm’s redevelopment. “We are a UK-based company”, he said, urging politicians “to be reasonable enough not to go down the path of no deal”. The company is reviewing its European supply chain, and would double its component stockpile to ensure continued production following a no-deal scenario. A temporary shutdown would be made inevitable by a no-deal Brexit, however, as a result of increased export fees and parts shortages. Earlier this year, around 40 LEVC staff were made redundant as part of a move to cut costs ahead of what the company called “more challenging economic conditions”. Currently, London is LEVC’s biggest market, with 2000 TX models in operation, but the company aims to export 70 % of its products by 2022. Hoffman pointed to the shrinking demand for private hire vehicles as the reason behind the ambitious expansion plans. +++ 

+++ The MASERATI Gran Turismo will return for a second generation after all. The Italian automaker confirmed the on-again, off-again grand tourer as it presented its financial results to investors. The Gran Turismo coupe and its convertible offshoot, the Gran Cabrio, were both included in the 5 year plan parent company Fiat Chrysler Automobiles (FCA) presented in 2014. Their future began looking grim when they disappeared from the company’s road map. I know Maserati is busily working on another, more hardcore sports car inspired by the Alfieri concept, and odds are insiders worried releasing 2 similar models in the same price bracket would confuse buyers and torpedo both nameplates. The latest from Maserati’s Modena, Italy, headquarters is that development of the next Gran Turismo is back on track. Additional details about the car remain under wraps, but Maserati’s presentation noted every car it releases beginning in 2020 will be offered with a battery-electric powertrain. The current, 12-year old Gran Turismo has been V8 only for its entire career, and we wouldn’t be surprised to see the 8-cylinder return as an alternative powertrain for buyers who don’t want an EV. Maserati has previously made it clear that it won’t commit to an all-electric future. Maserati’s product master plan pegs the next Gran Turismo’s debut date at some point in 2021. Keep in mind the company isn’t exactly known for timeliness. Even if we see the model during 2021, it’s unlikely to appear in American showrooms until 2022 at the earliest. The Gran Cabrio will arrive the following year, so it will likely launch as a 2023 model. That means the current Gran Turismo and Gran Cabrio will likely remain in the firm’s lineup for 2 or 3 additional years. The presentation reaffirms Maserati’s commitment to finally becoming a full-line automaker. In 2020, it will give the Levante, the Ghibli, and the Quattroporte a mid-cycle refresh, and it will release the aforementioned production version of the Alfieri concept introduced way back in 2014. Then 2021 will bring a SUV and a convertible variant of the yet-unnamed Alfieri-inspired model. Finally, the Quattroporte and the Levante will be replaced in 2022 and 2023, respectively. Maserati will need to keep the Gran Turismo and the Alfieri in 2 distinctly separate segments. While it hasn’t revealed how, it’s not too far-fetched to imagine the Gran Turismo will arrive as a grand tourer aimed at the Mercedes-Benz S-Class Coupe and the BMW 8 Series, while the Alfieri-based model will be closer to the Porsche 911 and the Jaguar F-Type in spirit and performance. +++ 

+++ MAZDA reported a 79 % drop in quarterly operating profit, falling significantly short of estimates, as it continues to struggle with declining U.S. and Chinese sales, while a strengthening yen also cut into its bottom line. Operating profit at Japan’s No.5 automaker was 7.0 billion yen ($64 million) in the first quarter ended June, versus around 33 billion yen a year ago and less than half of an average forecast for 18.5 billion yen from analysts. Mazda, however, reiterated its forecast for a 33 % rise in operating profit to 110 billion yen in the year ending March. The profit announcement marks Mazda’s poorest first-quarter operating performance since the June 2012 quarter. The automaker has been struggling with falling demand for its cars over the past year or so, while it is also recovering from flood-related damage to its factories in Japan that led to a quarterly loss in the July quarter of 2018. Mazda posted global sales of 353,000 units for the quarter; down 12 % from a year ago. Its sales in the United States, its biggest market, fell 15 % to 68,000 units, while in China, Mazda sold 54,000 vehicles, down 21 % on the year. A trade war between the top 2 economies and slowing growth in China, the world’s biggest auto market, have prompted a broad-based sales downturn in the global auto sector. Automakers are grappling with easing demand for cars just as they must invest heavily in new technologies including electric cars, autonomous driving technologies and ride-sharing services to survive a major industry shift away from car ownership. Many of Mazda’s rivals at home and abroad have been reporting disappointing quarterly results, with Nissan and Ford also announcing job cuts and possible plant closures earlier this month. The United States is a key source of revenue for Mazda, but it imports all its vehicles sold there, exposing it to a threatened hike in U.S. tariffs on imported cars from Japan. To limit its vulnerability to possible tariffs and currency fluctuations, Mazda is investing in a new plant in the U.S. state of Alabama, a joint project with Toyota. +++ 

+++ BMW’s chief executive said the German carmaker can move more production of its MINI to a plant in the Netherlands if Britain fails to strike a trade deal with the European Union after its exit from the common market. “We are very flexible and we could adjust volumes at Oxford and at Nedcar in the Netherlands”, Harald Krüger told analysts in a call to discuss the company’s second-quarter results. BMW said contract manufacturer VDL Nedcar had produced 211,660 cars in the Netherlands last year, a 39 % increase in production, assembling the BMW X1, the Mini Hatch, Mini Convertible and Mini Countryman models. By contrast, Oxford made 234,501 Mini vehicles last year. VDL Nedcar employs around 6,000 workers working in car assembly, compared with just over 4,500 people building Mini’s in Oxford. Krüger said he hoped that British Prime Minister Boris Johnson would consider business interests as he prepares to negotiate Britain’s exit from the European Union. Leaving the common trading bloc without a negotiated trade deal would be a lose-lose outcome for both Britain and the European Union, he said. “Listen to the economy and listen to the people. He needs to be in a dialogue with business. I would visit Johnson to tell him this”, Krüger said in response to a question about what advice he had for the British prime minister. +++ 

+++ Rimac founder Mate Rimac recently had the opportunity to test out the PORSCHE Taycan and has given it a thumbs up. According to the electric hypercar pioneer, he “would definitely consider the Taycan as a private car”. It’s not particularly surprising that Mate Rimac was granted to opportunity to test out a Taycan prototype because last year, Porsche purchased a 10 % stake in his company and the duo are set to work together to further the development of electric powertrains and electric vehicles. The Taycan prototype tested by Rimac features very little camouflage and the production car will probably look almost identical. Porsche will premiere the Taycan at September’s Frankfurt Auto Show in a number of different forms. Sitting at the base of the Taycan family will be a model outfitted with an 80 kWh battery pack and offered in 330 hp and 385 hp guises, both of which are exclusively rear-wheel drive. Those looking for more performance can opt for the Taycan Carrera 4S with a 96 kWh battery and offered in 440 hp and 500 hp forms with all-wheel drive. Sitting at the top of the range will be the Taycan Turbo with in excess of 600 hp and 880 Nm and up to 1000 Nm for 10-second periods of overboost. +++ 

+++ I was asked to comment on the many car makers releasing their financial results, and they didn’t make for good reading. Nissan took the headlines with a reported 12,500 jobs going across the world, with folk in Sunderland crossing their fingers that it won’t be them. That’s off the back of falling sales that resulted in a 98.5 % drop in net profit for the first quarter of 2019; a dreadful stat by any stretch of the imagination. It’s been a torrid time for Nissan of late, with allegations against former boss Carlos Ghosn (that he denies), reported strains in its Alliance with Renault and a product range that has dated quickly. There was bad news for Aston Martin, dropping its sales forecast, which resulted in an alarming fall in its share price, too. Even Mercedes was talking about cutting costs as it reduced its own sales forecast. There was more woe for Jaguar Land Rover (JLR), which saw an 11.6 % decline in its global sales to 128,615 for the last quarter. That contributed to further huge losses: a pre-tax figure of £395million, compared to a £264million loss in the same period a year ago. One slight glimmer of hope is that JLR’s UK sales rose in the last quarter: up 2.6 % year-on-year. Times are tough for many car makers, but not all of them. PSA posted a healthy increase in profits from its Peugeot, Citroen, DS and Opel / Vauxhall brands. This is one of the most remarkable turnarounds in recent years. PSA’s troubles are a thing of the past, with the company being touted as the potential owner for any number of firms, including JLR. I wouldn’t be surprised to see at least one of these takeover rumours come true. Much of PSA’s success is down to the impressive leadership of Carlos Tavares; a former Nissan and Renault executive. What that company (and, I suspect, many others) wouldn’t do to have him at the helm right now. +++ 

+++ Inclimate weather can quickly cause hazardous road conditions, but Continental has developed new technologies which could make your commute safer and more comfortable. The first system is called eHorizon and it has a ROAD CONDITION OBSERVER function which uses a vehicle’s cameras and electronic stability control system to classify road conditions as dry, wet, very wet, snow-covered or icy. Once the determination has been made, the system estimates the friction coefficient caused by current conditions. The friction coefficient data is transmitted to the cloud and compared to the friction coefficients of other vehicles in the area. The company also examines weather data such as precipitation and the temperature. All of this information is then processed using artificial intelligence to help predict hazardous situations. The information is then sent back to the vehicles and it can warn drivers about potential issues ahead. As eHorizon product manager Anton Klöster explained, “Think of the eHorizon as an additional, virtual sensor that networks data from various different sources, assesses it intelligently and relays it to other vehicles”. PreviewESC builds on that technology and takes things even further. It uses the friction coefficient and the curve radius of the road ahead to determine whether or not a vehicle is traveling too fast to take the next bend. If this occurs, the system can warn the driver to slow down. Should they fail to respond, the system can automatically apply the brakes to slow the vehicle. Some people might not like that, but the company says it’s useful for blind bends. It also helps if the driver is distracted or misjudged road conditions. Since the system factors in road conditions, Continental says braking intervention will occur “significantly earlier” on roads that are wet or icy. It’s not only a benefit now, but in the future as well as autonomous vehicles will have to know how to handle bad road conditions. The company is also exploring other uses for the technology including the possibility of determining the optimal time to perform emergency braking functions. As Continental noted, emergency braking maneuvers “need to be initiated at different times depending on the road’s current friction coefficient to safely avoid a collision with an obstacle”. +++ 

+++ SMART is readying a facelift for its Fortwo and Forfour, and electric prototypes have been spotted testing ahead of the city cars’ Frankfurt motor show debut. The German maker is expected to be using the update, likely to go on sale towards the end of the year, to remove all of its petrol engine options and go electric-only. It follows on from an announcement last year that the brand would become “a fully electric urban mobility brand” under new leadership. With combustion engine variants gone, Smart will be looking improve the current weaknesses of the EQ models, namely the uncompetitive electric range. Under the new WLTP system, the current models promise just 120 kilometres from their 22 kWh battery, far below that of any of the latest crop of small electric cars. Expect developments in battery technology, plus a larger capacity, to be able to take that up to or above 200 kilometres. Charging speeds should hopefully improve, too, as the current models are only able to charge at a rate of up to 7kW. It’s not clear yet if the 82 hp electric motor will receive a power boost, however. Alongside this, expect revisions to the cars’ exteriors to include new headlight and bumper designs. Expect upgrades to the infotainment and interior too, so features such as wireless smartphone charging could be coming. The facelifted Fortwo and Forfour will be the last Daimler-only Smarts before Geely, now a 50 % stakeholder, takes over the engineering for the next generation. Mercedes-Benz will continue to design the cars’ visuals, with all-new models expected in 2022. +++ 

+++ The recent burst of publicity around the mandatory introduction of SPEED LIMITERS on new cars from 2022 has certainly brought them to the attention of car buyers. But how will they be received? Are they seen as a brilliant safety initiative that will save lives or an Orwellian intrusion adding to the danger of our roads by taking control away from the driver? Market research firm Simpson Carpenter questioned more than 1000 car buyers to find out. Supporters of speed limiters outnumber opponents by 2 to 1: 49 % are in favour of speed limiters, while 24 % are opposed. But those with strong feelings on an issue are always the most vocal and here the gap is much narrower: 18 % are strongly in favour while 12 % are strongly opposed. Support for speed limiters is strongest among women and those intending to buy a hybrid or electric car next time. The most strongly opposed are those whose car has an engine size of 2.0 litres or bigger. Among this group, there are as many opponents as supporters (39 % in each camp) and opponents are nearly twice as likely to feel strongly about the issue as supporters. Reasons given spontaneously for favouring speed limiters focus on the expected improvement in road safety and the reduction in the number of people speeding. Among supporters, those intending to buy a hybrid or electric car next time round are much more likely to point to road safety and reducing accidents as the reasons for their support. Older drivers are more likely to cite the reduction in the numbers speeding. Questioned in more detail, a strong majority of car buyers agree that reducing speeds will be good for the environment and will save thousands of lives each year. Nevertheless, there are major reservations: more than half think that drivers are better than technology at deciding on the right speed. Nearly half (47 %) think speed limiters are a major intrusion into personal liberty and 41 % believe they’ll cause more accidents than they prevent. What is remarkable is the stark difference in opinion between those in favour and those opposed to speed limiters, particularly in relation to their safety benefits and their intrusiveness. 9 in 10 of those in favour believe speed limiters will save thousands of lives each year. In contrast, more than eight in 10 of those opposed believe speed limiters will cause more accidents than they prevent. Almost 9 in 10 opponents see them as a major intrusion into personal liberty, with as many as 6 in 10 feeling very strongly about their intrusiveness. The bad news for the industry is that many new car buyers plan to take avoiding action. Half of those against speed limiters say they will delay their next purchase so they can keep on driving without restriction and a further 30 % say they will buy used rather than new. Even among those in favour of speed limiters in principle, nearly 1 in 4 will seek to avoid them. The good news is that 1 in 4 of those who support speed limiters say they would now be more likely to buy a new car. However, the net effect looks like being another drag on new car sales. +++ 

+++ SUBARU of America announced the sale of its 2 millionth Forester in the US market, which was first introduced there in 1997. Subaru’s consistent growth in annual sales helped the Forester to hit the 2 million mark in under a third of the time it took to reach the 1 million mark, which was achieved in June 2013. “Subaru has achieved 11 consecutive years of sales growth in the United States with Forester as a key driver of that success”, said Thomas Doll, president and CEO of Subaru of America. “Accomplishing this milestone reflects our commitment to providing customers with vehicles made to the highest standards of safety, capability and reliability”. Back in 1997, the first Subaru Forester aimed at customers looking for the same performance and versatility as the Outback but in a smaller vehicle. It shared many of the same features with its larger sibling, including a 2.5-liter boxer engine, Subaru’s Symmetrical All-Wheel Drive and 7.5 inches of ground clearance. The new 2019 Subaru Forester is fitted with the most comprehensive suite of safety features in its 22-year history; the company’s EyeSight Driver Assist is fitted as standard and was awarded with the IIHS Top Safety Pick+ award, when equipped with the steering-responsive headlights. Flagship Touring models also get the DriverFocus system, which monitors the driver for fatigue or distractions, in case you didn’t get it from the name. Power comes from a 2.5-liter flat-four engine producing 182 hp and paired to a Lineartronic CVT transmission exclusively. +++ 

+++ TESLA has committed to paying roughly $323 million in annual Chinese taxes starting at the end of 2023 as part of the electric automaker’s lease agreement with the Shanghai municipal government where its new Gigafactory is located. In addition, Tesla has committed to invest approximately $2.04 billion in the next five years into the new production site, Tesla’s 10-Q filing with the Securities and Exchange Commission reveals. If the automaker is unable to meet these terms, it will have to return the site to the local government and receive compensation for the remaining value of the land lease. Tesla broke ground at its Shanghai Gigafactory in January, and evidently, the site will require substantial investments in the years to come. Nevertheless, the company is confident that, by building certain vehicles in China, it will be able to slash the price of locally-sold vehicles. In late May, it was revealed that Chinese-made Tesla Model 3s will be priced from 328,000 yuan ($47,628), or 13 % less than the ones currently imported from the United States. Production is set to kick off by the end of the year, with up to 150,000 Model 3s being built at the site annually. The Model Y will also be produced at the same plant, and at Hawthorne, California, for other markets. +++ 

+++ VOLKSWAGEN ’s forthcoming, all-electric ID.4 crossover has been caught on camera, wearing its production bodywork for the first time. The finished product is due to arrive in showrooms by summer 2021, roughly 12 months after the firm’s new ID.3 hatchback goes on sale. The ID.4 adopts more conventional SUV proportions than the ID.Crozz concept, which first appeared at the Shanghai Auto Show in 2017. The concept’s coupe- inspired rear liftback has been ditched in favour of a practical tailgate, while its missing B-pillars and wing mirrors have been reinstated. Some of the concept’s design features have been retained, though. Volkswagen’s trademark ID daytime running lights, LED headlights and blanked-off radiator grille feature relatively unchanged, as does the concept’s raked windscreen line and rugged black plastic mouldings for the wheel arches and side skirts. Given the modular nature of the MEB platform on which the ID.4 is based, Volkswagen could also offer the SUV with a range of other drivetrain options. Less expensive variants may feature a single electric motor, two-wheel drive and smaller battery packs, while range-topping models will feature a pair of motors and four-wheel-drive. Expect battery packs to range from 45 kWh and 77 kWh in size, which will offer between 320 and 480 kilometres of electric range. The German brand is yet to officially announce the ID.4’s performance specifications, however, the ID. Crozz concept featured a pair of electric motors that provided a power output of 306 hp, a top speed of 200 km/h and an all-electric range of 500 km. It will get a “floating” infotainment screen and a digital instrument cluster. The ID.3 hatchback is due to receive a similar system featuring both satellite navigation and voice control, which we expect will be transferred wholesale into the ID.4. +++ 

+++ A prototype for the new BMW X5 M has been filmed out and about near the Nurburgring bathed in camouflage. The new X5 M will probably premiere before the end of the year and like the previous-generation model, be extremely fast. In fact, it should offer up enough power to make owners of the competing AMG-branded SUVs a little nervous, including the upcoming GLE 63 and GLE 63 Coupe. Sitting beneath the skin of the new X5 M will be BMW’s flagship 4.4-liter twin-turbo V8 engine which will pump out 625 hp and 750 Nm of torque in the range-topping Competition model and roughly 25 hp less in the standard X5 M. Thanks to an all-wheel drive system, the super-SUV should hit 100 km/h in less than 4 seconds. The following prototype was filmed at a gas station near the famous German circuit and was sitting on a set of custom gloss black wheels and featured absolutely huge brakes. Additionally, it features quad tailpipes and a subtle yet aggressive spoiler stretching off the roof. The particular prototype doesn’t sound as impressive as the previous model and while there’s a good chance it doesn’t feature a production-spec exhaust, the vehicle is probably so quiet to ensure it complies with new noise regulations across Europe. In addition to fitting the X5 M with a potent engine and beefed-up brakes, considerable work is also being done to the SUV’s suspension system to ensure it’s even more suited to sporty driving than lesser variants. +++

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