+++ AUDI has suspended work on its Pop.Up air taxi and has put its partnership with Airbus to develop the vehicle up for review. Audi said it is working on a fresh direction for its urban air mobility activities as part of its new strategy announced in May. “At present we are working on a new direction for our urban air mobility activities and have not yet made a decision regarding potential future products”, Audi said in a statement. Audi said it had stopped all work on the Pop.Up concept that was developed by its Italdesign subsidiary with Airbus. The concept has a flying passenger capsule that sits on top of a car chassis. The idea was to pick up a customer up at home, drive them to a heliport where the car connects with the flight module. The Pop.Up had a successful trial flight as a scaled down model during Drone Week in Amsterdam last November. Audi executives said then they wanted to continue with the project.  “We want to have fully flightworthy prototype ready by the end of next year, that’s our development goal”, Audi board member Bernd Martens said at the time. Audi had also planned to test air taxis in Ingolstadt, its German home city. In the statement, however, Audi reversed course, citing the challenges specific to the project. “We believe it will be a very long time before an air taxi can be serially produced that does not require passengers to change vehicles. In the modular concept of Pop.Up, we were working on a solution with the highest complexity”, it said. Airbus declined to comment on the potential end of the partnership. It said the Pop.Up was not envisaged to flank its own CityAirbus and Vahana flying demonstrators. A number of automakers are working on autonomous flying cars that can be used as taxis and for ride-sharing purposes. They see flying taxis as a mobility solution in crowded urban cities because they can soar above congested roads. Daimler acquired a stake in a German air-taxi startup called Volocopter while Aston Martin last year unveiled the Volante Vision Concept at the Farnborough air show in England. China’s Zhejiang Geely Holding Group, parent of Volvo, in 2017 bought Terrafugia, a U.S. flying-car developer. Last month Volocopter undertook the first European urban flight of its flying taxi prototype in its home city of Stuttgart. Daimler CEO Ola Källenius watched the flight. Volocopter said Singapore, Dubai and Germany were the markets most open to its air taxis. Last week, Porsche and U.S. planemaker Boeing said they are working to develop a concept electric flying vehicle capable of transporting people in urban settings. A 2018 study by Porsche Consulting forecasts that the urban air mobility market will pick up speed after 2025. The study also says that urban air mobility solutions will transport passengers more quickly and efficiently than current conventional means of ground transport, at a lower cost and with greater flexibility. In a Daimler blog Volocopter CEO Florian Reuter compared vehicles that are able to take off and land vertically to the early automotive age. “I realize that for most people this is still an unusual sight. However, flying taxis will soon be part of our daily lives”, he wrote. +++ 

+++ Frustration is rising over constricting AUTONOMOUS DRIVING regulations in Europe, where automakers are still waiting for basic levels of the technology to be approved for sale. Volkswagen Group’s Audi brand was the first to develop “eyes-off” conditional Level 3 autonomous functionality with the A8 that was launched in late 2018. However, the system, called Traffic Jam Pilot, has yet to be approved for sale by regulators. Daimler is nearing the release of a Mercedes-Benz S class that should offer Level 3 autonomy as soon as it hits the market in 2020, according to executives (Automation technology is categorized on the SAE International spectrum ranging from Level 0 to Level 5). BMW in 2021 is due to debut its iNEXT electric crossover which is expected to be loaded with advanced self-driving features. That is, if engineers such as Alejandro Vukotich can make some headway with Brussels. “Take the example of emergency assist, where the car pulls over to the side of the road should the driver become unresponsive. This is better than doing nothing in such an event, but there is no type approval”, Vukotich said. The only legally safe option for a vehicle in this case is to continue on its trajectory unimpeded regardless of the mayhem that could ensue. Even certain Level 2+ advanced assistance systems that BMW offers in the United States and China, such as hands-off driving at 60 kph, is not allowed in Europe, Vukotich said. “The legal framework on the requirements for certifying a Level 3 system for sale in Europe has not been clarified”, he told. The auto industry’s chief lobbyist is also unhappy with the pace of regulatory progress at the United Nations Economic Commission for Europe (UNECE), the governing body responsible for setting standards for homologation in much of the world. “This is a big issue. We need to question whether the approach that Europe has been following until now on homologation for cars is something we can maintain in the future with regards to autonomous vehicles”, said Erik Jonnaert, departing secretary general at ACEA. At the core of the argument is safety, which is, paradoxically, both hindering and helping the tech. On the one hand, 1.35 million people die around the world in traffic crashes every year: “It’s as if an Airbus A320 with 150 people on board was crashing every hour of every day all year long”, Waymo CEO John Krafcik said as a way of putting the need for the technology into perspective. On the other hand, executives acknowledge that although roughly 90 percent of accidents in Europe are because of human error, an autonomous car not only has to be far better, it needs to be nearly flawless. In March 2018, authorities in Arizona suspended Uber’s ability to test its self-driving cars after one of them hit and killed a woman crossing the street at night. A year later Arizona prosecutors said Uber was not criminally and would not pursue charges, but the incident underlined the risks. “It has to be 99.999 % safe”, said Sajjad Khan, the management board member for future technologies including driverless cars at Mercedes-Benz. “I would not give the approval for an autonomous car if I was worried that my kids would be playing in the same neighborhood”. But this isn’t just a matter of regulations such as type approval. Among automakers, the issue of industry standardization is also hotly debated. The reason is simple: limit litigation risks. “The industry underestimated the complexity at the outset”, said Danny Shapiro, senior director of automotive at chipmaker Nvidia. “More computing, more sensors and more software is required”. Daimler, BMW, Volkswagen, Audi and Fiat Chrysler Automobiles have teamed up with key suppliers such as Aptiv and Continental as well as chipmakers Intel and Infineon to publish an extensive white paper detailing proposals to harmonize aspects of development, testing and validation of autonomous driving technology. Standards such as ISO 26262 that govern the safety of automotive electric and electronic architectures need to be overhauled. Part of the problem is that automakers are concerned about their liability in the event of a crash. Negligence by the driver to maintain control of a Level 3 vehicle could contribute to such an event. Therefore, one idea automakers are considering is to focus on robotaxi fleets that may be more sophisticated but are fully operated by the manufacturer itself to ensure each car can be monitored and properly serviced to minimize risks. That’s why Europe’s automakers are now finally looking at bringing such Level 4+ cars to their home markets for new pilot programs in designated geofenced areas. “Humans are not predictable. If we were to remove other human road users and their decision-making from the equations it would be a lot easier problem to solve. Therefore, I think we are going to see deployments in places where we can remove that human randomness”, Nvidia’s Shapiro said. Argo AI, controlled by Ford and Volkswagen jointly, will expand testing next year beyond the its current 5 U.S. cities to include Europe. Meanwhile Mercedes’ Khan told that the automaker and partner Robert Bosch are looking to expand beyond their pilot program in San Jose, California. “We also plan to do this in Germany”, said Khan, adding that an announcement to this effect would come “in the very foreseeable future”. In the industry’s rearview mirror is Krafcik’s Waymo. The nimble, asset-light tech rival stopped Level 3 testing citing safety concerns. Instead Waymo is concentrating on developing a drop-in hardware and software solution that can fully pilot any brand’s vehicle. Krafcik partnered last year with Jaguar Land Rover to introduce the fifth generation of its so-called “Waymo Driver” into the Jaguar I-Pace, giving variants of the car planned for Waymo’s driverless service all-season sensor capability and a new lidar scanner. In June, Waymo formed a separate partnership with Renault to bring its driverless vehicles to France. Moving past these pilot programs to actual commercial operation would require a safety driver on board, barring a fundamental change in the Vienna Convention on Road Traffic, which forms the basis for most vehicle operation laws governing motorists in Europe. ACEA’s Jonnaert said he was satisfied with the pace of discussions regarding an update to the Vienna Convention to allow driverless vehicles, but he remained very concerned about the more granular aspects of homologation. Technology tends to be developed faster than detailed regulation. “The risk is that you are always in catch-up mode and it will trigger criticism because some people will say the regulator didn’t do their job”, Jonnaert said. “We know the European Commission wants to move as fast as possible since they, too, are a bit frustrated with the lack of progress at the UNECE. If it does not move fast enough, it’s clear Europe will not wait and start taking action itself”. +++ 

+++ CHEVROLET has announced a new $3,000 discount for the current Camaro to anyone who owns a Ford Mustang. Back in August, Chevrolet started offering a $2,500 discount for the Camaro to Ford Mustang owners. This promotion was then extended into September and now has been upped by an additional $500 for the month of October. The terms and conditions stipulate that someone must have owned a Ford Mustang for at least 30 days prior to purchasing a new Camaro to be eligible for the incentive. If you don’t own a Mustang and are looking to buy a new Camaro, Chevrolet will give you a $1,000 cash allowance. Those who want to take advantage of the deal must take delivery of a new Camaro by October 31st, 2019. Of course, there’s certainly a chance that Chevrolet will look to extend the incentive into November if it proves popular. The introduction of this generous cash allowance comes shortly after Q3 Camaro sales this year dropped by 15 % over the same time period in 2018. Evidently, the car manufacturer is looking to bump up sales, particularly since it emerged earlier this month that the Challenger easily outsold the Camaro by almost 6,000 units, with 18,031 vehicles sold compared to the 12,275 Camaros sold by Chevrolet. +++ 

+++ While many have been celebrating CITROEN ’s past, boss Linda Jackson’s head is firmly rooted in the future. Her firm is now 5 years into a strategy of reinvigoration, repositioning and consolidation; this plan is not only about model renewal but customer service and the buying experience. Highlights from the first 2 phases have included the renewal of the C3, currently a European bestseller, and the launch of the C3 Aircross and C5 Aircross that now give Citroën a solid foothold in the SUV arena. The third phase will see the launch next year of a new C-segment hatchback, and a big saloon part-signalled by the CXperience concept, which Jackson says “is our inspiration”. The product plan, she says, “is based on 2 key elements. One is to have a design that stands out a little bit, so it’s immediately recognisable as a Citroën, and the other is comfort. Comfort with a very modern approach, not just about suspension, not just seat technology, but also connectivity, simpler dashboards, not so much clutter, air quality, storage space, modularity”. On the customer side, there’s now scope to rent Citroëns from your dealer, a My Citroën app to track your car and book it a service, and Maison Citroën, which introduces “much warmer, more convivial areas” to the showroom. There has been fresh marketing impetus too. “Last year that strategy delivered 1.1 million sales worldwide and in Europe, which is the first region where we’ve implemented all of those things, it gave us an increase in sales since 2013 of 28 %”, says Jackson. “That means we’re approaching the objective of getting a 5 % market share in Europe. We’re well on track”. Better still, “this is a very profitable growth. What we need to do now is take that recipe and install it across all the regions of the world”, Jackson adds, “and also go into new markets like India”. India will be a target not only for growth, but from 2021 the origin of “a new range of cost-efficient products which will be specifically created for international markets”. The project is called C-Cubed because it consists of “3 words: cool, comfortable and clever, the last of these being about clever and fresh ways of reducing cost and showroom prices. The project is “also about clever design, and thinking about what goes into the vehicle”, she says. “Cars in Europe often have so much technology that people don’t use half of it. It’s working out what’s important for the customer”. That includes electrified cars, too. “Every model that we launch from next year will have a petrol and diesel and either a full-electric or plug-in hybrid until 2025 when 100 % of our vehicles will become electrified”, Jackson says. These models should strengthen Citroën’s hand as the brand’s marketshare is not as high as it has been. Jackson says that “the past couple of years have been very competitive. You can always have market share by buying it. That’s not our philosophy. We’ve moved the PSA Group from a near-death situation in 2013 to an extremely profitable business now. And that is about choosing where you compete. You have to build a sound business, and we have to accept that we do that slowly”. Slowly, but if the 19_19 and Ami One concepts are indicators, at times rather excitingly. +++ 

+++ FARADAY FUTURE founder and Chief Executive Officer Jia Yueting has filed for bankruptcy in the United States and plans to turn over his stake in the Chinese electric vehicle firm to repay his personal debts, the company said. Yueting’s plan will not affect Faraday Future’s business operations, said the company, which has ambitions to overtake Tesla. Faraday Future added that CEO Yueting will focus on its U.S.-China dual home market strategy and help prepare for an IPO. Yueting’s personal net debt is around $2 billion. +++  

+++ For America’s working poor, an often essential ingredient for getting and keeping a job, HAVING A CAR , has rarely been more costly, and millions of people are finding it impossible to keep up with payments despite prolonged economic growth and low unemployment. More than 7 million Americans are already 90 or more days behind on their car loans, according to the New York Federal Reserve, and serious delinquency rates among borrowers with the lowest credit scores have by far seen the fastest acceleration. The seeds of the problem are buried deep in the financial crisis, when in the midst of the worst economic downturn since the Great Depression, automakers slashed production. A decade later, that has made a relative rarity of used 10-year-old vehicles that are typically more affordable for low-wage earners. According to data, the average price of that vintage of vehicle is $8,657, still nearly 75 % higher than in 2010 despite some softening in prices over the last year. The average new car, in contrast, has seen a price rise of 25 % in that same time period. “This is pinching people at the worst point possible”, said Ivan Drury, a senior manager of industry analysis. “If you need basic A to B transportation, you have to get an older car that needs more repairs and has more wear-and-tear issues”. Monthly auto payments for Americans making under $40,000 have remained flat since 2017, while those in higher wage brackets have seen their payments rise, according to a Cox Automotive analysis. On the face of it, this might seem like good news. But to Cox chief economist Jonathan Smoke, it indicates poorer Americans are stretched so thin they cannot afford to pay more. “They just don’t have any flexibility to increase their payment”, Smoke said. Weak lending standards in recent years are partly to blame for the rising delinquency rates, which Warren Kornfeld, a senior vice president on Moody’s financial institutions team, said are approaching record highs despite a solid economy. Auto lenders are belatedly tightening lending standards, but it may already be too late, he said. “The economy is masking the true performance of auto loans”, Kornfeld said. “If we hit a downturn today, the performance of auto loans would not look very good”. Research from the New York Fed earlier this year showed that while delinquency rates among borrowers with high credit scores have remained steady and low, for subprime borrowers they have been rising, pushing up the overall delinquency rate. Around 8 % of loans originated by lower-score buyers with a credit score below 620 were categorized as seriously late, “a development that is surprising during a strong economy and labor market”, Fed researchers wrote. Like many Americans, for Hollis Heyward no car means no job. The 30-year-old father of 2 makes $10 an hour working at a warehouse in Freeport, a rural town of 25,000 about 115 miles northwest of Chicago. Heyward can only get to work by car. In the midst of a divorce, all he could afford was a gray 2005 Pontiac Grand Prix with close to 200,000 miles on it, which he bought for $1,300 cash; a fraction of the average new car price. Suddenly also stuck paying off the loan on his future ex-wife’s car, Heyward had to rework the loan with local used-car dealer Gordy Tormohlen of Good People Automotive. Under his “workout” deal, Heyward is paying the loan’s principal only and Tormohlen has waived the interest payments. Heyward’s monthly payment is now around $120 per month, down from around $350 before the workout. “Right now, it’s hard to make ends meet”, said Heyward. “But I am not the kind of guy to walk away from my commitments”. Tormohlen, 59, a second-generation dealer, said his business is up 10 % this year as auto finance companies tighten lending standards. He said the market feels like it did before the financial crisis hit in 2008, when consumers were over-extended with debt. “Americans have grown too comfortable with debt and the time has come to pay the piper”, he said. Tormohlen is a “Buy Here, Pay Here” dealer, offering subprime loans that he finances himself at 19 %, which is higher than a bank but lower than many finance companies. He said he can work directly with struggling customers like Heyward, whom he has known for a decade, but worries that large finance companies with tens or hundreds of thousands of borrowers will be in deep trouble when a downturn hits. Indeed, according to the New York Fed, more than 1 million more Americans are behind on their car loans now than at the peak of delinquencies in 2010 after the financial crisis. “The big lenders who do not know their customers are going to have a problem when the economy turns”, Tormohlen says. Expensive older used cars are exacerbating the problem and it may take years for them to return to more affordable levels. George Augustaitis, director of automotive industry analytics at CarGurus, an online marketplace for new and used cars, said late this spring his team started to notice an “accelerating decline” in the number of available vehicles under $10,000, which typically would include vehicles between 8 and 12 years old. In an analysis, CarGuru’s data shows a falling share of inventory of Great Recession-era cars, while the number of online “leads” from consumers seeking those vehicles has remained steady. In fact, the average American car is the oldest on record, according to IHS Markit, and CarGurus’ Augustaitis said the available inventory of vehicles costing under $10,000 will not return to more normal levels until 2022, reflecting rising car production after the Great Recession. Ken Shilson, president of the National Alliance of Buy Here, Pay Here Dealers (NABD), said American consumers have become too comfortable with debt and subprime customers have been “poisoned” by easy access to capital for much of the long economic expansion. But he added those customers will be forced by tighter underwriting to seek even older vehicles. “The American way is to always live beyond your means and Americans aren’t good at making life adjustments”, Shilson said. “But there’s a reality check coming and many subprime buyers will be forced to find more affordable transportation”. +++ 

+++ SEAT is planning to introduce a smaller electric vehicle than the El-Born as part of its electrification rollout, and a Cupra model could be on the cards, too. Seat president and Cupra board member Luca de Meo said: “We have to find a solution for a smaller car than the El-Born. We have to look at a electric solution in the B-segment because a big part of the market is not covered”. The Spanish brand will be “working with the Volkswagen Group” in developing an electric supermini, which will likely form the basis of VW’s planned sub-€22,000 ID model. It has been previously reported that Seat will lead the development of an entry-level electric car within the VW Group. Seat’s design boss, Alejandro Mesonero, also acknowledged it is “strongly collaborating with Volkswagen and taking responsibility over a small segment electric car”, claiming development is “very, very intense”. Achieving such a price will be helped by using the economies of scale made possible by the MEB platform, which, de Meo confirmed, will “give us an opportunity to redesign the thing” away from the look of the combustion-engined Ibiza. The platform is also used under Cupra’s first bespoke electric SUV, the Tavascan, of which de Meo said he has “already seen” the production version. “You need to wait until battery costs are reasonable so that you can bring the car at a reasonable price”, de Meo said. “To bring a B-segment car at €32,000: no thank you very much”. The new electric supermini is confirmed as not being part of Seat’s plan for 6 electric and plug-in hybrid models by 2021, so it is expected that the Peugeot e-208 rival will arrive by 2022. The delay is because the VW Group is prioritising the roll-out of higher-margin electric cars while also allowing for wholesale battery costs to fall in the intervening period. De Meo claims that a bespoke approach to EV platforms will create a less compromised car with better efficiency, extra space and a more distinctive style than the PSA route of designing a joint petrol / diesel / electric platform. Although de Meo wouldn’t officially confirm it, a Cupra variant of the small EV is also believed to be in the pipeline. Linking to the discussion of that model, de Meo said: “Our next hot hatch could come without smoke from the exhaust”. Seat already offers a small EV, the Mii Electric, but it sits in the smaller, city car segment and isn’t a particularly profitable venture, de Meo acknowledged: “Because of the price positioning and because of the battery, those cars are only done for CO2 regulation”. The Cupra Ibiza is officially “dead”. First shown as a concept in 2018, the Ford Fiesta ST rival was tipped for production within a year, but Seat president Luca de Meo has finally confirmed rumours that the decision has been reversed. He said: “We couldn’t find the technical base to do a really serious contender. More importantly, for the volumes that we see in that segment, we didn’t find the business case, not at all because this hot hatch market is very specific to a couple of countries”. Although that contrasts with the idea of a Cupra version of Seat’s EV supermini, the relative ease of uprating the power of a battery electric powertrain combined with being able to design the car with a Cupra version in mind from the outset would, in theory, allow the financial case to stack up better. +++ 

+++ Germany’s car industry built its world-class reputation on sedans such as the Audi A4, the BMW 5 series and the Volkswagen Passat, reliable models that look good in the family driveway or company lot. But a shift in consumer taste to more hulking vehicles is coming at the worst possible time. Demand for SUV cars that initially took hold in America has spread across the globe, dramatically changing the product mix of carmakers along with their production footprint. Higher sales of the lucrative vehicles, while good for German automakers overall, threatens to hurt the workforce in factories at home that are heavily geared toward traditional sedans and hatchbacks. At BMW, sales of SUVs made mostly in the U.S. account for 44 % of all global deliveries; up from 24 % a decade ago, with a corresponding drop for models such as the bread-and-butter 5 series made at the Dingolfing plant near Munich. The trend is similar at Audi, which churns out SUVs mainly in Mexico, Hungary and Slovakia, and Mercedes, whose workers in Tuscaloosa, Alabama, can’t make the massive GLE fast enough to satisfy demand. Germany’s auto industry, the largest employer with about 830,000 workers, is already straining under the biggest production drop in nearly a decade. That has helped push Europe’s largest economy closer to recession. The decline, led by trade tensions and a slowing global economy, comes at a delicate time for an industry already facing a future when fewer hands will be needed to assemble battery-powered vehicles. A car’s combustion engine alone counts more than 1,000 parts, compared with just a couple of dozen components in an electric motor that doesn’t require an exhaust, transmission or fuel tank. The repercussions from the simpler setup cascade through the making of an electric car, with fewer people involved in development, testing, parts purchasing and service. “The SUV trend will certainly have implications for production structures”, said Rolf Janssen, a partner at Roland Berger consultancy. “For workers, this adds additional pressure to the overall transformation trend”. Like the pickup, a model that is popular in the U.S. but largely absent from European roads, SUVs were a fringe phenomenon on the continent 2 decades ago. Instead, motorists aspired to own an Audi A3 or the Mercedes C-class, while their larger luxury siblings chauffeured around captains of industry and politicians. Mercedes opened a factory in Alabama in 1995, making SUVs near consumers in a key market, while BMW’s sprawling Spartanburg plant in South Carolina, its biggest globally, builds X3 through X7 models. VW manufactures its T-Roc, credited with lifting results in its most recent quarter, in Portugal, while the Audi Q7 and Q8 are produced in Slovakia and the Q3 in Hungary. Forecaster LMC Automotive expects domestic German car production to sag to a 10-year low this year, with the export market in particular facing trouble. Justin Cox, director for global production at LMC, singled out Audi’s Neckarsulm plant in Baden-Württemberg, the Passat factory in Emden in northern Germany and VW’s massive Wolfsburg site as vulnerable. “The sedan localization issue is not helping Germany”, Cox said. Factory staff are starting to push back. In June, Neckarsulm worker representatives estimated the site’s utilization rate at a poor 60 %, despite model revamps for the A6, A7 and A8. The factory, which employs almost 17,000, is missing out on the SUV sales boom and lacks firm commitments to assemble upcoming electric models, the powerful works council said, vowing to not budge on concessions as Audi seeks talks to cut costs. Since 2009, sales of the A6 have sagged to make up 12 % of the total, down from 20 %, while the A4 made at the Ingolstadt headquarters has declined to 18 % from 31 %. “We urgently need plan to improve capacity utilization now and a medium-term solution for the future”, Neckarsulm labor head Juergen Mews said in a statement. Audi said its German sites remained the backbone of its global production network. In Ingolstadt, which already makes the Q2 alongside sedans, the brand is in the midst of construction work to make the plant more flexible, a spokeswoman said. Talks with the labor council on future allocation plans are ongoing, she said. Volkswagen’s factory in Emden has likewise faced problems as SUVs like the Tiguan cannibalize the trusty but staid Passat. Falling demand for the former drawing card has forced VW to put some 10,000 staff at Emden on reduced working hours and cut temporary employees. Volkswagen is shifting the Passat to the Czech Republic and Turkey, and will retool Emden to make only electric vehicles by 2023; a move VW has said will require still fewer workers. Even VW’s headquarters plant in Wolfsburg, the world’s largest single car-manufacturing complex, faces risky times. The ubiquitous Golf, the car that brought VW back from the brink in the 1970s and set the tone for compact city hoppers, has struggled to maintain its allure amid mushrooming offerings of popular compact crossovers. As an offset, the 20,000-worker plant also makes the popular Tiguan, and should get a boost from Golf production being moved from Puebla in Mexico, Cox said. SUVs make up 42 % of production at Wolfsburg with the Tiguan and Seat Tarraco, and VW plans to build compact electric SUVs in Germany, a spokeswoman said. SUV sales should account for half of VW brand deliveries by 2025 and the group will step up bundling similar products across its 12 automotive brands to boost efficencies, according to the company. BMW has also sought to balance its SUV footprint, adding the X1 to its Regensburg site in Bavaria. BMW said its global production network was able to react to changes in demand and customer behavior, while utilization at its eight German plants was “good”. Mercedes began German production of the GLA at Rastatt in 2013 and Sindelfingen last year, in addition to the GLC in Bremen. But its lucrative GLE and GLS vehicles are still made in Tuscaloosa, and the top-priced G-class is largely hand-built in Austria at contract manufacturer Magna Steyr. Mercedes upgraded its facilities early to quickly react to changes in demand, a spokeswoman said, as demand for Mercedes SUV models has increased every year since 2009. Switching production to new models is difficult, expensive and time-consuming. Roland Berger estimates that it can take as long as a year to retool a plant to start making SUVs alongside sedans; provided the legwork to accommodate the bigger and heavier vehicles has already been done. BMW’s Dingolfing factory, its biggest in Europe, last year made 330,000 sedans, from the entry-level 3 series all the way up to the top-range 8-series coupe. The factory’s hopes now lie partly on the iNext crossover, a technology flagship in the mold of the i3 electric car and the i8 sports car, which use a carbon fiber chassis, that will go on production in 2021. “Some of the juggernaut or brownfield plants with deeply ingrained structures will face a tougher task”, said Roland Berger’s Janssen. +++ 

+++ Volkswagen has postponed its final decision to build a car plant in TURKEY amid international criticism of the country’s military operation in northern Syria and concerns about potential reputational fallout. “We are observing the situation with great concern”, a company spokesman told. Earlier this month, Volkswagen established a subsidiary in Turkey’s western Manisa province, while the company said that it was still in the final stages of negotiation and that it had not made a final decision on the factory. +++ 

+++ In the UNITED KINGDOM , 1 in 3 automotive firms is cutting jobs as Brexit nears, up from 1 in 8 just under a year ago, according to a survey conducted by a group representing the industry which risks being a big loser from Brexit. 80 % of firms feared leaving the European Union would hurt their future prospects and nearly two-thirds said they would be unable to invest in their British operations, the Society of Motor Manufacturers and Traders (SMMT) survey showed. “Make no mistake, every day ‘no deal’ remains a possibility is another day of lost investment, another day that makes it harder to recover investor confidence in the UK”, SMMT Chief Executive Mike Hawes said. “As yet, the damage is not irreversible. But we need a deal. A deal that, in the short term, enables a ‘business-as-usual’ transition for as long as it takes to negotiate and implement the future trading relationship”. In the longer term, the industry needed frictionless trade with the EU, he said. Prime Minister Boris Johnson has said he is prepared to take Britain out of the EU without an agreement on Oct. 31 if necessary, although lawmakers have passed legislation that they say will force him to seek a delay from Brussels. The autos sector, Britain’s biggest exporter of goods, is concerned that World Trade Organisation tariffs of 10 % on vehicles alongside new customs checks and border delays could halt production if there is a disorderly Brexit. Last week, Nissan, which runs Britain’s biggest car factory, said such tariffs would make its business unsustainable in Europe. The SMMT said its survey was based on responses from 158 member companies polled in September. +++ 

+++ The largest employers on the planet, the likes of the Chinese Army, McDonalds and the VOLKSWAGEN GROUP , don’t get everything right. For instance, despite having more workers, brands, versatility and street cred than its closest rival (Toyota), the German giant sells fewer cars, suffers bigger fines (mostly Dieselgate-related) and makes lower profits. Yes, I’m impressed that the group employs up to 700,000 people across the globe, but more of these staffers must start the long-overdue process of separating out the 4 (5 if we include Cupra) mainstream sister brands within this ever-growing family. The way I see it, Skoda and Seat sit at the bottom, Cupra and Volkswagen hold the middle ground, and Audi resides nearer the top. That said, they are all far too close in terms of bottom-mid-range model line-ups, product quality (each is about the same), prices and more. Often these brands and their products pointlessly compete with each other in their own showrooms. That’s daft, and horrendously expensive. And it is you, dear consumer, who pays for this in-house competition, which merely converts, say, a Seat customer into a Volkswagen buyer. Ridiculous. A perfect example of illogical overlapping is that while the marketing team at Skoda spends fortunes promoting its Citigo, there are near-identical versions of the car being expensively marketed by a different army at Volkswagen (Up), then a third bunch at Seat (Mii). What’s the point? It’d be more sensible for the VW Group to have just one entry-level/sub-supermini range. The most natural bargain/value brand is Skoda, so give the Czech firm the sole rights to produce, badge and sell this little runabout. And if it’s a must for the 3 brands to continue with their own versions, let’s at least have very distinct first-time-buyer, utility/commercial, and perhaps even luxury versions. Michael Jost, product strategy boss at the VW Group is coming around to this, and has confessed that he needs to “manage brand identities more clearly”. About time too, mate. Having driven them all, I can tell you that there is very little (apart from badge snobbery) between the bog-standard 1.0-litre versions of the Audi A1, Seat Ibiza, Skoda Fabia and Volkswagen Polo. None of them feels like a bargain-basement or a premium product. All are better-than-average, boringly similar, and their prices aren’t that different. A stripped-out, bargain-basement Fabia at the bottom, followed by a slightly higher-spec Ibiza, an even higher-spec Polo, then a truly premium A1 (the current one isn’t) would be a far more sensible and diverse supermini mix for the VW Group. It could, and should, be so cost-effective and simple. All Seats and Skodas would be frontwheel drive, modestly equipped and such great value that Dacia would wince. Then Cupras and VWs could be slightly more luxurious and classy. Audis that are premium and, in turn, pricey will then sit proudly at the top of the pile. Think of this as the end of ill-thought-out overlapping, and the start of proper choice for VW Group customers. +++

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