Newsflash: Hummer reïncarneert in elektrische vorm

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+++ BMW is keen to find additional partners for the mobility services venture it runs with rival carmaker Daimler, the new chief executive told. “We would like to welcome additional partners in this area, which has great future potential”, BMW boss Oliver Zipse said in an interview. Collaborations as well as a financial investments were options for any future partners, he said, adding that customers want a wide choice across different brands. The 2 carmakers have combined Daimler’s Car2Go car-sharing business with BMW’s DriveNow, ParkNow and ChargeNow businesses, with each holding 50 % stake in the venture. Mobility services include car sharing, parking and electric car charging services. The head of the mobility venture resigned last month in what a media report described as a dispute over how much investment the business requires. Zipse also told that BMW aims to take Daimler’s crown as the world’s largest maker of luxury cars but added there was no target by when this should be achieved. “Of course the claim of a brand like BMW has to be number 1. Sales volume is not the only yardstick here”, he was quoted as saying. +++

+++ It’s no secret that the Duster is DACIA ’s best-selling model in Europe, followed closely by the Sandero. But did you know these 2 were among the top 5 best selling models in the European Union in August? Actually, the Duster finished the month in second place, with 19,451 units sold (up 10.8 % year-over-year). It was only beaten by the Volkswagen Golf, which sold 26,411 units. However, sales of the German compact car fell 23.6 % compared to August 2018, as some buyers likely delayed a purchase until the arrival of the all-new Golf Mk8. Third place went to the much newer Volkswagen T-Roc with 18,262 sales (+27.8 %), followed closely by the Dacia Sandero with 17,764 units (+2.5 %). Another Volkswagen model, the Polo, came in fifth place with 16,692 units sold (-21.2 %), although the sharp decrease for a product launched in 2018 is a bit surprising, to say the least. The Polo’s biggest fault is probably the fact that it’s not a crossover or SUV. Interestingly, Dacia’s excellent results did not propel it into the top 5 car brands in the EU in August 2019, with the Romanian brand taking 9th place with 51,692 units (+5.5 %). This is likely due to the fact that the Renault-owned brand offers a limited number of models, of which only one is an SUV. The Renault brand, on the other hand, finished 4th with 61,294 units sold, down a massive 38.9 % year-over-year. Remarkably, Dacia isn’t that far behind its parent company, and if the French brand continues to decline so abruptly, the budget marque could overtake it and become the Group’s bestselling division. Elsewhere, we can see that Renault’s alliance partner Nissan is doing even worse in the European Union, with sales down 47.1 %, to 23,775 units. The biggest gains were recorded by Smart (+102 %) and Suzuki (+40.5%). +++ 

+++ There are plenty of puts and takes in the tentative deal the United Auto Workers struck with General Motors (GM) this week, but this much looks clear: Detroit carmakers dealing with already-higher labor costs than their international foes risk becoming even less competitive. GM’s labor costs will rise $100 million a year just due to the increases in worker pay, which “could be an even bigger headwind” for Ford and FIAT CHRYSLER AUTOMOBILES (FCA) , according to RBC Capital Markets analyst Joe Spak. And that doesn’t even account for the cost of continuing the union’s generous health care coverage; a tab Ford expects to rise above $1 billion next year. “The economics of the deal look really attractive for the GM workers”, said Colin Lightbody, a former labor negotiator for Fiat Chrysler who’s now a consultant in Windsor, Canada. “This agreement will increase the competitive labor cost gap”. GM’s average hourly labor costs (including wages, benefits and other expenses) were already about $13 above what international automakers such as Toyota and Honda pay workers at their U.S. plants, according to the Center for Automotive Research. Ford’s costs are $11 an hour higher, while FCA pays a $5 premium. The UAW will begin the process of ratifying its proposed contract with GM on Saturday, with workers casting ballots at locals across the country through Oct. 25. Assuming the deal goes through, the union will turn its attention to either Ford or FCA next. While 2 two companies will look for ways to tailor an agreement to their unique needs, the union will seek to broadly follow the economic pattern established by the pact with GM. GM is seeking to offset wage concessions with buyouts of higher-cost production workers. It’s offering $60,000 early retirement payouts to as many as 2,060 employees. Even if overall labor costs still go higher, it may be worthwhile as long as the automakers’ deals with the union give them room to maneuver on where models are manufactured and when output needs to be curtailed. “They got the ability to continue to run the company without the union telling them what they can produce and where”, said Art Schwartz, a former GM labor negotiator who is now a consultant in Ann Arbor, Michigan. Ford’s bargaining team is likely going to understand that concessions are “part of doing business” with the UAW, said Arthur Wheaton, director of the Worker Institute at Cornell University. “The wild card is FCA, because it’s all new people at the bargaining table”, he said. FCA chief executive officer Sergio Marchionne, who died last year, played an important role in past contract talks with the UAW. Other key negotiators for the company and the union have retired or been implicated in an ongoing corruption scandal. There’s no desire at Ford or FCA to stomach a strike of the sort UAW has staged at GM. That walkout will last almost 40 days if GM’s 48,000 workers ratify the proposed pact next week. The UAW issued statements earlier this month citing progress they were making with Ford and FCA while the GM deal was being hammered out. Should the 2 companies succeed in avoiding a strike, they might save some money by paying smaller signing bonuses: they wouldn’t have to essentially compensate workers for wages lost during a walkout, as GM is doing with its record $11,000 ratification reward. 4 years ago, FCA went first in negotiations and paid roughly half the signing bonus of its rivals. Now that the company is more financially fit, it’s unlikely to get away with as big of a discount. “I can’t see the UAW allowing FCA to go down 50 % anymore, because their margins are pretty good now”, Lightbody said. “They’re gotten close to GM and Ford”. Health care remains the most intractable cost as it reaches record levels of more than $20,000 a year for family coverage, according to a study by the Kaiser Family Foundation. While the average American worker contributes 30 % of the premium for family coverage, UAW members pay for just 3 % or 4 % of their insurance plans, according to the automakers. During bargaining, GM quickly rescinded a request to have workers cover 15 % of their medical coverage and have left it to others to cut that cost. The UAW zealously defends its health care benefits, viewing them as compensation for giving up raises and jobs for years as the Detroit carmakers struggled to survive. Another concession the UAW won from GM is on the use and treatment of temporary workers, who’ve populated plants in greater numbers since GM and Chrysler reorganized in government-sponsored bankruptcies in 2009. They now represent almost 10 % of the roughly 150,000 unionized workers at the Detroit Three. GM agreed to give temps a path to permanent employment and more vacation days, and the highlights of the automaker’s agreement states the UAW will have stronger oversight over their use. While it’s possible the company negotiated wiggle room in this regard to keep a steady stream of at-will cheap labor on hand, the fine print of the proposed agreement hasn’t been made public. The cost of this compromise could fall hardest on FCA, which has the most temporary workers, Wheaton said. In the end, though, both FCA and Ford are likely to settle for paying a little more than planned rather than risk disrupting the flow of fresh models into a shrinking U.S. auto market. Labor only accounts for 5 % of the cost of a car, Wheaton said. “When you’re fighting over only 5 % of the cost, you have to ask yourself: ‘Why are we doing this?’ ”, Wheaton said. “Why risk a billion to save $100,000?” +++ 

+++ FORD has filed an application to trademark ‘Black Diamond’ with the United States Patent and Trademark Office. In the application, Ford specifies that the name will be used for “land motor vehicles, namely, passenger automobiles, pick-ups, SUVs”. Funnily enough, General Motors previously used the ‘Black Diamond’ name with the 2013 Chevrolet Avalanche Black Diamond Edition, with its badge depicting 3 snow-covered mountain peaks. If Ford decides to use the Black Diamond name in the same way GM did, it could be used to denote a rugged, off-road-focused version of one of its utility vehicles, perhaps the upcoming Ford Bronco or a pickup like the Ranger or F-150. It could be used to denote a shade of black that’s set to be introduced in the near future. Either way, it’s difficult not to smile at Ford’s decision to snatch a name formerly used by its cross-town rival. I happen to think the Black Diamond name would work very well for the new Bronco. A host of previous patents have indicated that Ford is readying its new SUV with a series of Jeep Wrangler-like parts, such as removable doors, to make it the most rugged vehicle in its range. In addition, Ford is already developing numerous parts for the Bronco with cargo accessories manufacturer Yakima. +++ 

+++ GENERAL MOTORS (GM) plans to build a new family of premium electric pickups and SUVs at its Detroit-Hamtramck plant beginning in late 2021, possibly reviving the imposing HUMMER brand on some of them, several people familiar with the plans said. The so-called BT1 electric truck/SUV program is the centerpiece of a planned $3 billion investment in the Detroit-Hamtramck plant to make electric trucks and vans, and part of a broader $7.7 billion investment in GM’s U.S. plants over the next 4 years, according to a proposed labor deal between the automaker and the United Auto Workers union. The investments were made public by the UAW but no details were provided. The investment would move the automaker into a part of the EV market that is largely untested and where GM has a higher likelihood of turning a profit, analysts said. “It makes perfect sense to hit the high end of the market in order to generate some revenue that might actually turn a profit”, Auto Forecast Solutions vice president of global vehicle forecasting Sam Fiorani said. GM is mirroring the approach electric carmaker Tesla took by starting in the high end and then moving down the price ladder, he said. That is important for a company who previously tried to sell the plug-in electric hybrid Chevrolet Volt and all-electric Bolt (Opel Ampera-e) cars at lower prices and higher volumes, but failed to sell enough to make those efforts profitable, Fiorani said. The UAW’s 48,000 GM hourly workers are scheduled to vote next week on the proposed contract that would end a month-long strike that analysts say has cost the No. 1 U.S. automaker about $2 billion. GM’s BT1 program includes an electric pickup for the GMC brand and an electric SUV for Cadillac, both due in 2023, the sources said. Before then, GM plans to begin low-volume production in late 2021 of the first BT1 model, a pickup, under a different brand, the source said. A performance variant of the pickup will be added to that brand in 2022, followed by an electric SUV in 2023. One of the sources said the Hummer name is “under consideration” but a decision has not been finalized. The pickup is codenamed “Project O”. Bringing back the Hummer name would take advantage of a still strongly recognized brand name, Fiorani said. Hummers were rugged civilian utility vehicles with low gas mileage that were inspired by military vehicles and were popular with such celebrities as actor Arnold Schwarzenegger and former basketball star Dennis Rodman. “Putting a Hummer badge on anything is a great idea for GM because half the marketing is already paid for”, he said. “Making it environmentally friendly is just icing on the cake”. The pickups and SUVs in the BT1 family will use a new dedicated electric vehicle architecture, including a skateboard chassis that bundles electric motor and batteries, the sources said. Fiorani expects the GM electric truck to sell at around $90,000 or more, while the other vehicles will easily top $100,000. GM President Mark Reuss said in June at a UBS conference that the new EV architecture will be highly flexible, enabling the Detroit automaker to build a variety of body types in different sizes, with the capability of providing front, rear or all wheel drive models. When the plant reaches full production in 2024, it is expected to build about 80,000 electric vehicles a year, the sources said. Fiorani called that figure realistic. As part of its plans around EVs, GM plans to open a battery plant near its closed Lordstown, Ohio, factory that sources have said would be a joint venture and is part of plans to invest another $1.3 billion in non-GM plants in the United States over the next 4 years. GM chief executive Mary Barra said in April the automaker would make an electric full-size pickup, but provided no further details. The company has said it plans to invest $8 billion to develop electric and self-driving vehicles, launching 20 new EVs globally by 2023. Asked about the details, GM spokeswoman Jordana Strosberg said the company is committed to an electric future. “GM believes in an all-electric future and we are making great progress in that area”, she said. “We have announced that a pickup will be part of our future portfolio”. GM is aiming to be one of the first in what is soon to be a crowded market for electric trucks and SUVs. Well-funded Michigan startup Rivian has announced plans to build an electric pickup (a premium version of which will top $90,000) followed by an electric SUV, beginning in fall 2020. It also has a contract with investor Amazon to build up to 100,000 electric delivery vans for the e-commerce giant. GM previously held discussions about investing in Rivian and using its electric vehicle platform, but sped up its internal EV program when the startup turned to rival Ford. Ford invested $500 million in Rivian in April and said it planned to use Rivian’s skateboard to build a new Ford-branded electric vehicle. Ford plans to unveil an electric version of its own F-series pickup in early to mid 2022, sources previously told Reuters. It also will begin selling a Mustang-inspired electric SUV next year as part of its plan to invest $11.5 billion electrifying its vehicles by 2022, including adding 16 fully electric models. Electric pickups and SUVs (the heart of the U.S. market) could help Ford and GM generate the significant sales of EVs they will need to meet tougher emission standards and electric vehicle mandates in California and other states. The Trump administration is moving to roll back those standards (and eliminate extra credits that automakers receive from EV sales) but the electric trucks are a hedge if California prevails. Tesla CEO Elon Musk has said the company wants to add a pickup to its growing family of premium electric vehicles, but has not provided a specific timetable. Tesla is expected to unveil a prototype this year, with analysts predicting a 2022 debut. +++ 

+++ Despite the Gallardo being a commercially successful model for LAMBORGHINI , its successor, the Huracan, has proved to be even more popular with customers. The Italian car manufacturer recently confirmed that it has built 14,022 examples of the Huracan in the last 5 years. By comparison, it took Lamborghini a decade to sell that many examples of the Gallardo before it was replaced by the Huracan. The Italian automaker says it has enjoyed such strong sales of the Huracan since its launch thanks to increased demand, an improved production process and more available trims. It also happens to be the only car in its class (alongside the Audi R8 V10) to feature a naturally aspirated V10 engine instead of a twin-turbo V8 rivals such as the McLaren 720S and Ferrari F8 Tributo. It seems apparent that the Huracan will stick around for at least a few more years before being replaced. If this proves to be the case, a number of new and exciting variants can be expected to hit the production line. One of them will probably be a new, Huracan Evo-based Performante, while Lamborghini might also resurrect the Superleggera, which was last seen on the Gallardo. The company has previously indicated that the successor to the Huracan will still feature a naturally aspirated V10 and meet emissions regulations thanks to some form of electrification that will likely consist of a small electric motor and battery pack. +++ 

+++ This year marks a significant anniversary for LANCIA : The storied Italian brand was bought by Fiat 50 years ago. No celebration will take place at Fiat Chrysler Automobiles (FCA), though, as Lancia has now shrunk to a single nameplate: the Ypsilon, sold only in its home market of Italy. Lancia has virtually disappeared from FCA’s strategy since an aborted attempt to relaunch it after the 2009 Fiat-Chrysler merger. In 2010, FCA management decided that Lancia would be merged with Chrysler in Europe. U.S.-made Chryslers would be rebadged as Lancias to beef up the product range, while some Lancias would be sold as Chryslers in the UK where Chrysler had better brand recognition. The Chrysler 300 sedan was renamed in Europe as the Lancia Thema and the Chrysler Voyager minivan sold as a Lancia. The Lancia-Chrysler combination aimed at reaching 295,000 European unit sales by 2014. The plan failed. Total sales by the 2 brands in Europe fell to 74,313 in 2014 from 112,000 in 2010, with Lancia down to 71,765 from 99,000. As a result, Lancia disappeared from FCA plans altogether. Neither the 2014-18 business plan nor the current 5-year plan presented in June 2018 made any mention of the brand. “We realized the Lancia brand has no appeal outside of Italy”, then FCA boss Sergio Marchionne said in July 2014. “It has no heritage neither in Europe nor in the U.S”. But Marchionne’s plan stopped short of killing Lancia altogether and the brand has showed a resilience in its home market despite offering only the 8-year-old Ypsilon. Lancia sold more cars in Italy in the first 9 months than Alfa Romeo sold in the whole of the European Union, according to industry association ACEA. Lancia’s Italian sales rose 29 % to 45,783 through September, while Alfa Romeo’s EU sales fell 42 % to 39,114. How can Lancia still command a 0.4 % share of the EU market with only a single aging model sold in just one country? “The Lancia brand still enjoys a wide recognition in Italy, and the Ypsilon has always been a popular model in the country”, said Felipe Munoz, a global automotive analyst JATO Dynamics. “Moreover, the small-car segment is still popular in Italy, and the Ypsilon is the only small hatchback FCA still sells in Italy after the Punto was discontinued in 2018”. The past popularity of the Ypsilon also represents a reservoir of potential buyers, given the huge and quite loyal customer base. The car has been on sale for nearly 25 years in Italy, first as the Y and then the Ypsilon, with similar body styles although on different platforms. The car used to be made on the Fiat Punto platform until 2011, and it currently shares one with the Panda. Over this time span, Lancia sold 1.6 million Y and Ypsilon cars in Italy. From a marketing perspective, a couple of figures stand out. First, 75 % of the current customers are women, according to FCA. The Ypsilon plays on a more stylish exterior than the Panda and somehow works as a 5-door version of the 3-door Fiat 500. Lancia has been nurturing Italian women’s interest in the Ypsilon with special editions based on fashion themes. It even uses the words “Ypsilon Collections” mimicking fashion industry terminology. Style is the most important factor behind the decision to buy an Ypsilon, the brand’s head, Antonella Bruno, said at the Oct. 10 launch of the latest Ypsilon special edition called the Monogram. The car turns the letter “Y” into a monogram featured around the car including on the alloy wheel centers, B-pillars, and rear screen, as well as on the headrests. Second, the version of the Ypsilon powered by liquefied petroleum gas has accounted for 30 % of the car’s total sales so far this year and was the third most popular LPG-powered car in Italy after the Dacia Duster and Fiat Panda. Through September, sales of LPG-powered cars in Italy are up 11 % to 106,820. Some sales channels may help sustain the registration level of the Ypsilon. Figures from Dataforce market analysts show that through September, more than 55 % of Ypsilon registrations were in the last 3 days of each month; 13 % above the market average. End-of-month sales are considered a proxy for self-registrations by dealers and carmakers. Is the car profitable? FCA does not reveal profitability by nameplate. “Even if it’s not very profitable”, said Munoz of JATO Dynamics, “the Ypsilon is quite cheap to produce, as it’s based on the same platform of the Fiat 500 and Panda, and it’s made in Poland alongside the Fiat 500”. Consequently, the Ypsilon is cheaper to make than the Italian-made Panda. And after 8 years, the tooling and production line are largely amortized. How long will FCA keep the Ypsilon on the market? “I see no reason why FCA should discontinue the Ypsilon, as the Italian market leader has to be present in one of the largest segments of the Italian market”, Munoz said. Moreover, he said, FCA’s traditional strategy is to keep models on the market for a long time. The Ypsilon is 8 years old but still much younger than the Fiat 500, which has been on sale since 2007. “I believe FCA will keep the Ypsilon on the market for at least 2 years”, Munoz said. Lancia sales will get a boost next year when  the Ypsilon will get a fuel efficient mild-hybrid gasoline engine. According to the 2018 FCA annual report, the automaker’s a hybridized version of the 3-cylinder, 1.0-liter gasoline engine will replace the current 4-cylinder 1.2-liter engine with 69 hp. The 3-cylinder is a less powerful version of the 1.0-liter turbo engine currently used on the Fiat 500X and Jeep Renegade. Should we expect new Lancia models? “For FCA, it doesn’t make much sense to invest on a brand like Lancia”, Munoz said. “Lancia has never been recognized outside Italy. Its appeal has always been much lower compared to Alfa Romeo”. Lancia was founded in 1906 by pilot, engineer and race-car driver Vincenzo Lancia in Turin, Italy. Its first car went into production in 1907. This was the Tipo 51 or 12 HP (later called Alfa). It had a small 4-cylinder engine with a power output of 28 hp. Lancia introduced various technical innovations in production cars, such as the first unibody chassis in the Lambda in 1922 and the the first 5-speed transmission in the Ardea in 1948. When Vincenzo Lancia died in 1937, his son Gianni took over. In the 1950s Lancia had a short and unlucky stint in Formula One racing. The brand took part in the 1954 and 1955 championships with the D50, but quit in May 1955 after its top pilot and past world champion Alberto Ascari died testing a Ferrari on the Monza circuit. The F1 adventure weighed on the balance sheet. Despite launching such iconic cars as the Aurelia coupe and spider, and the Flaminia luxury sedan and coupe, Lancia losses piled up and Gianni Lancia sold the company to the Pesenti family in 1956. The Pesentis started a successful involvement in rally racing with the Fulvia Coupe, but they decided to sell Lancia to Fiat in 1969 because they did not have the resources to pay for the investments needed to keep up with the growing competition. Lancia’s involvement in top-level rallying lasted until 1992. It won fifteen World Rally Championship titles with cars such as Fulvia Coupe in the 1960s, Stratos in the 1970s and the Delta between 1980s and 1990s. Production of Lancia-badged cars increased in the 1980s and 1990s with models such as the Delta and Thema to a high of 178,674 units in 1997. At the time the Y, the Ypsilon predecessor, was by far Lancia’s most popular model, with sales peaking at 145,500 in 1998. Lancia output in Italy stopped in 2014. The current Ypsilon is made in Fiat’s plant in Tychy, Poland. +++ 

+++ Tesla ’s attempts to humble Porsche with a new lap record on Germany’s legendary Nordschleife racetrack have reignited a controversy about the value of LAP TIMES , as the circuit steps in to quash claims of cheating. Porsche and Tesla are battling to establish supremacy in lap times for 4-door electric sportscars, but comparisons are not exact, as conditions, ranging from car modifications to tyre types, vary with each test. “We want to have circumstances that can be understood and replicated”, said Nürburgring spokesman Alexander Gerhard, adding that the racing circuit operator had moved to tighten rules by which a car maker can claim a certified lap time. Setting a new record time for 4-door electric cars would give Tesla’s ageing Model S a boost just as German rivals Audi, Mercedes-Benz, BMW and Porsche prepare to launch their own electric cars. Automakers use the Nordschleife, one of the world’s most treacherous courses with 40 right-hand and 33 left-hand turns, to hone a vehicle’s sporting characteristics and burnish a car’s image for marketing purposes. Tesla was spotted this week with a variant of its Model S sedan at the circuit, which is 20.8 km long, with slanted cambers and a 300-m altitude difference between its highest and lowest points. A Tesla was seen recording an unofficial time of 7 minutes and 23 seconds, which would beat a lap time set by Porsche’s Taycan, which Porsche says achieved a lap time of 7 minutes and 42 seconds. But Tesla’s challenge has prompted questions about whether the Silicon Valley car maker is playing fair. “The car was heavily modified”, said Stefan Baldauf, who photographs prototype vehicles being tested on the circuit for a living. “Aside from a roll cage and the driver’s seat, the interior had been stripped out”, he added. “The windows were blacked out, so it was hard to tell”. The Tesla also appeared to have semi-slick tyres, used only on racing circuits and unsuited for everyday use, Baldauf said. A Porsche spokeswoman told its Taycan was tested using standard tyres. “A comparison is hardly fair if this is the vehicle used to demonstrate that Tesla is faster”, Baldauf added. Notary Jens Böhle, who certified lap times by Porsche, said, “Scope for cheating is as big as you can imagine. Is it a prototype vehicle, a standard road legal vehicle, or is it a specially modified racing version of a standard road car? These are just some of the questions that need to be answered”. Tesla chief executive Elon Musk responded on Twitter this week: “The final configuration used at Nürburgring to set the record will go into production around summer 2020, so this is not merely for the track”, Musk said. Tesla declined to comment on its lap record effort. Officials are trying to standardise speed record attempts, Gerhard, the Nürburgring spokesman, said. In some runs for the record, cars were allowed to make a flying start using a 20.6-km stretch of the track. “We now mandate that the full 20.8 km is used”, Gerhard added. “And we employ a notary to measure the time following rumours that another manufacturer had cheated, by speeding up video footage”. It also mandates where timing devices should be located. On Twitter, Musk confirmed that Tesla is using the Nordschleife to market its “Plaid” mode on a Model S. “We expect these track times to be beaten by the actual production Model S Plaid variant that goes into production around Oct/Nov next year”, Musk said. Porsche says its 919 Evo hybrid racecar now holds the overall record for all vehicle categories, with a lap time of 5 minutes and 19 seconds, set in 2018. The Nürburgring hopes the new rules, introduced this year, will help revive the circuit’s popularity as a venue for competitive benchmarking. “We want to be a believable benchmark”, Gerhard said. +++ 

+++ PORSCHE must invest in companies looking to solve issues such as traffic in cities rather than rely on selling cars to survive in the future, according to Porsche finance and IT boss Lutz Meschke. “Cities want to reduce traffic, therefore we have to look for solutions which fit our brand. Shared mobility is not enough: it will not bring us significant profit share”, said Meschke. “If you want to get a piece of the cake, you have to think about investments in other brands or in traffic solutions. Just to talk about Porsche cars to get the right fit for future mobility, that’s not enough. We must think about investments, starts-ups, to get profitability in other businesses. Today our customers are willing to buy 2, 3 or 4 Porsches, but in future, maybe they will buy 1 or 2 and for mobility in cities, they will use other services. We have to think about business models that can balance these potential losses”. One example is Porsche’s subscription service, already launched in a handful of cities in America. Described by Meschke as a “good starting point”, he said it supports Porsche’s business and reaches younger customers. It will launch in Asia and Europe over the next 2 years. However, he added, in 5 years it will not compensate for the reduced mobility in cities, and in turn, reduced sales. “If 60 % of people will live in major cities, then car sales in those cities will be reduced significantly. With our brand, we are limited. It will be a niche and we will not earn enough money to keep the profitability level at 15 % (Porsche’s margin aim) and that’s the problem. We must think about new business models, not only with our own brand but with investments”. Meschke acknowledged there would come a time when Porsche’s main revenue stream would not come from selling cars. He didn’t give a timeframe, but said: “Of course, we have to try to keep direct selling cars as long as possible”. +++ 

+++ SKODA has sought to reassure its employees after reports suggested that its owner, the Volkswagen Group, is considering repositioning the brand downward to compete with low-cost marques such as Renault’s Dacia. In an internal letter to employees, Skoda boss Bernhard Maier wrote that brand values of space, functionality, value for money and forward-looking design “will not change in the future”. German media said Skoda could be the biggest loser in a review of the market positioning of VW Groups brands including the core VW marque, together with Seat, Porsche, Audi, Bentley and Lamborghini. Volkswagen Group CEO Herbert Diess aims to reduce overlap between brands as he pushes to improve profitability at the automaker. In particular, Diess wants to boost the VW brand by reducing competition with sister brands Skoda and Seat. “If 3 or 4 brands with similar products fight for the same target group, then all the brands suffer”, Diess was quoted as saying. “That’s why we need to broaden our positioning, adjust our positioning if necessary and still intensify synergies”, he said. The comments by Diess echo similar remarks made by VW Group’s product strategy chief Michael Jost told. He said the VW Group wanted to manage brand identities more clearly in future. “Seat could represent even more emotional cars, as exemplified by its Cupra models. Skoda could serve eastern Europe markets more intensively, as well as customers seeking functionality even more intensively”, he told. Skoda would concentrate on selling cars priced between €10,000 and €20,000, although the brand will keep its Superb flagship car for at least another generation. Skoda’s Maier played down worries about a big change at the brand. “Reviewing brand positioning is one of the core tasks for the strategy department of a multi-brand corporation. This is a normal process”, he told staff in his letter. Maier pointed to VW Group’s decision to build a new plant for the next Skoda Superb and Volkswagen Passat as evidence of the group’s confidence in the Skoda brand. VW had picked Manisa on Turkey’s western coast for the €1.3 billion plant, with production scheduled to start in 2022 but the automaker has postponed a final decision amid international criticism of the country’s military operation in Syria. Bulgaria, Romania and Serbia are hoping that VW returns to its earlier shortlist of sites, which featured the Balkan nations and North Africa. Maier praised Skoda workers for their “daily commitment that makes the Skoda brand so strong”. Skoda has been a profit powerhouse for VW in recent years with margins consistently higher than those of the VW brand. Skoda’s costs are relatively low because it uses VW technology and its production is centered in its home country of the Czech Republic where costs are lower than in Germany. Skoda’s profit margin fell to 8.0 % last year from a record high of 9.7 % in 2017. The brand has been hit by a downturn in the Chinese market. Analysts Evercore ISI forecast that the margin will fall to 7.5 % this year and to 7.0 % in 2020. Skoda’s success has brought it powerful enemies in the VW Group empire. VW’s labor leader, Bernd Osterloh, who sits on the group’s supervisory board, has demanded in the past that the brand should not get the latest technology from VW, according to German media reports. Osterloh also opposed VW Group’s initial decision to give Skoda the operational lead on the automaker’s proposed new plant in eastern Europe or Turkey. The Volkswagen Group reversed the decision on the factory and said it will now be a VW plant building Volkswagen, Skoda and possibly Seat models. The Skoda range has grown recently to include 3 SUVs, which have helped boost its global vehicle sales by 9.6 % to 559,900 in the first half. Skoda is poised to launch its first full-electric car next year, the production version of the Vision iV concept unveiled at the Geneva auto show in March. It will based on VW Group’s MEB modular EV platform. Skoda is due to launch 2 further battery-electric cars but these have yet to win approval while the brand’s positioning is figured out. +++ 

+++ TESLA seems to be readying a series of mechanical upgrades to complement the ‘Track Mode’ in the Model 3 Performance. A parts catalog indicates that Tesla will offer a ‘Track Mode Package’ for the Model 3 Performance that includes new tires, revised brakes and a carbon fiber wheel cap. The parts catalog reveals that Michelin Pilot Sport Cup 2 tires measuring 245/35 ZR20 at all 4 corners will be included in the Track Mode Package, and are said to be the same ones used by the new Tesla Roadster prototype and the Model S Plaid prototypes that are testing at the Nurburgring. As for the new brake pads, it doesn’t appear as though they will be complemented with larger discs or calipers. The current Track Mode available at a press of the Model 3 Performance’s touchscreen does a remarkable job of amping up the car’s abilities through the corners and bumping up its regenerative braking capability at the same time. Some owners have complained about the brake pads quickly showing signs of fade when the car is driven hard on a track, although in my experience, on the street they do the job just fine. Nonetheless, I’m sure Tesla fans will be happy to know that some mechanical upgrades are on the way. It remains to be seen if they will be offered exclusively as a factory option or if current Model 3 Performance owners will be able to purchase them individually. +++

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