Newsflash: Mazda aarzelt over een nieuwe sportwagen met wankelmotor

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+++ Car sales in CHINA have slumped over the last year, reflecting tougher economic conditions and tax changes, as well as the saturation of some segments of the domestic market. Car sales slowed to 21.7 million in the 12 months to September 2019, down from a peak of 25.3 million in the 12 months to June 2018, according to the China Association of Automobile Manufacturers. Slowing sales have coincided with a loss of momentum across the economy, with the purchasing managers’ index for manufacturing trending lower since May 2018, data from the National Bureau of Statistics shows. Slowing sales have been both a symptom and a contributory factor to the wider economic slowdown as consumers become more cautious about buying expensive items and automakers respond by cutting output. Sales have also been distorted by changes in tax policy. Value-added tax on vehicles with smaller engines was cut by up to 50 % in 2016/17 to stimulate purchases. The impending rise in tax rates at the start of 2018 drove vehicle sales to a near-record 2.7 million in December 2017 as consumers rushed to beat the deadline. By pulling so many sales forward, however, tax changes probably contributed to the slump in sales in 2018/19 when rates returned to normal. The government has implemented another round of tax cuts, but much smaller this time, to boost sales again in 2019. The distorting effects of tax changes may be masking the saturation of at least some sections of the domestic market for passenger cars. China’s vehicle ownership rate is still low by international standards at 37.5 vehicles per 100 urban households at the end of 2017, the latest data available. But ownership had grown phenomenally over the previous decade from just 6.1 vehicles per 100 urban households in 2007, according to the National Bureau of Statistics. Ownership rates in rural areas were lower at 19.3 vehicles per 100 households in 2017, but even there ownership had almost doubled from 9.9 vehicles in 2013. Most urban middle-class households have bought a car in recent years, limiting the potential for further sales to this population segment. Lower-income urban households and the majority of households in poorer rural areas may not yet be able to afford their first vehicle. At provincial level, there is a clear correlation between per capita disposable income and automobile ownership. Households have tended to buy motorcycles as their per capita incomes have risen, and then switch to passenger cars as their incomes increase even further. Provinces and cities with higher incomes have higher rates of car ownership (and lower rates of motorcycle ownership). The principal exceptions are the provincial-level megacities of Beijing and Shanghai, where motorcycle ownership has fallen but car ownership is far below what would be predicted based on income alone. Both cities have introduced tough restrictions on car ownership and invested heavily in mass transit to cope with severe road congestion. In the rest of the country, car ownership rates correlate fairly closely with rising incomes and falling rates of motorcycle ownership. But much of the urban middle class has already purchased a vehicle. Household ownership rates were nearing 50 % in the provincial-level cities of Beijing and Tianjin and the wealthy province of Zhejiang by the end of 2017. Pushing ownership further down the income scale in urban areas as well as out into the poorer countryside is harder without generous tax incentives, plentiful credit and fast growth in incomes. China’s slowdown is compounding market saturation: as the economy grows more slowly, so does the number of households reaching the income threshold needed to buy their first vehicle. Expensive consumer durables such as washing machines or passenger cars tend to diffuse through a population following an S-curve: slowly at first, then more rapidly, before tapering off as market saturation nears. Initially, expensive durables are restricted to a small group of high-income households, before spreading to the mass middle class and finally penetrating lower-income groups. New products diffuse more quickly or more slowly depending on whether average incomes rise rapidly or more moderately. Even in a diffusion process, some groups may be excluded from new products for decades after the items have become commonplace for the middle class. Poorer households, often in rural areas where productivity and incomes are lower, may not make their first purchases until decades later, slowing diffusion in its later stages. In 2018/19, the economic slowdown and adverse tax changes have worsened market saturation effects in the short term and contributed to the slump in sales. Tax cuts and more generous loans will be needed to help reverse the slump, and the government is taking steps in this direction. But the most critical factor will have to be a return to faster economic growth and increasing incomes, especially in second- and third-tier cities and the countryside, where many households are still waiting to afford their first car. +++ 

+++ ELECTRONICS and other non-automotive companies are eager to expand their businesses in the auto industry where innovations will be key factors amid the growing need for autonomous and electrified vehicles. At the Tokyo Motor Show, open to the public until Nov 4, many electronics firms including Hitachi, Mitsubishi Electric and Panasonic are showcasing their products and services. Such companies are trying to take advantage of their experience and knowledge to manufacture motors, inverters and sensors that are indispensable to assemble autonomous and electrified cars. More than 50 percent of vehicles will be fully or partly powered by electricity by 2040, according to an estimate by the International Energy Agency. Hitachi Automotive Systems, an automotive business unit of Hitachi group, produces motors and inverters for electric vehicles as well as electronic control units of advanced driving assistance systems. The company said it aims to expand its annual sales related to automotive products to between 1.2 trillion and 1.7 trillion yen by fiscal 2021 from 971 billion yen in fiscal 2018, with a new joint venture with Honda starting next year the mass-production of motors for EVs in China. Hitachi is also boosting research and development on autonomous driving technologies as another business pillar. “In addition to making good products, we can also utilize resources of our Hitachi group such as high-quality infrastructure and safety technologies”, Kimiya Yamaashi, chief technology officer of the company said Thursday at a press briefing. Home appliance maker Mitsubishi Electric is displaying its Emirai S concept car at the motor show, featuring a driver monitoring system designed to prevent fatal accidents due to a driver’s sudden sickness. A thermal sensor and an infrared camera installed near the wheel follow changes in the driver’s eye motion, body surface temperature and heart rate resulting from fatigue, drowsiness or sickness. The vehicle automatically stops if the driver does not respond to an alarm when showing some unusual signs. “We would like to promote safe driving by taking advantage of our cutting-edge technologies for artificial intelligence, sensing and infrastructure”, Hiroshi Onishi, executive officer of the company in charge of automotive equipment, told reporters. The electronics firm aims to commercially introduce the driver monitoring system by 2022, the company said. Panasonic has developed its original driverless parking technology through a “deep learning method” without using costly sensors, enabling the vehicle to park with a 20 cm clearance to other cars with a remote control system on a smartphone. The Osaka-based company offered the autonomous parking technology for Toyota’s LQ concept car displayed at the motor show. Panasonic also provided an augmented reality heads-up display that projects route guidance and traffic information to the driver through the windshield. “Electronics makers are becoming equal partners to auto manufacturers in next-generation mobility services and technologies”, said Hitoshi Kaise of consulting firm Roland Berger. “While vertical relationships between auto makers and suppliers still remain in terms of building older generation cars, automakers have to flexibly team up with suppliers to provide new value to customers”, Kaise added. Auto parts makers are also speeding up business restructuring to catch up with the ongoing electrification and automation of vehicles, as such cars need fewer components as they do not have combustion engines and transmissions made of many metal parts that the companies supply. Denso, a group company of Toyota, set up a joint venture with another Toyota group firm, Aishin Seiki, in April to develop and sell parts for EVs. “The Denso group will invest 180 billion yen during the three-year period from fiscal 2019 to further strengthen our electrification expertise”, said president Koji Arima. With regard to autonomous driving, Denso established another joint venture with 3 other Toyota group companies “to accelerate the development of integrated vehicle control software and achieve highly reliable automated driving”, Arima said. Robert Bosch is also rushing to chase the automotive transformation. The German supplier announced at a press briefing that it has set a sales target of €5 billion for its electrified mobility business in 2025, up from €1 billion expected in 2020. The company also said it will boost investment in developing technologies to detect a vehicle’s precise location necessary for automated driving as well as batteries for motorbikes and fuel-cell vehicles. “We are turning into a society where individuals can personalize the choice of transportation method to meet their needs. Bosch is also moving with mobility solutions”, said Stefan Hartung, chairman of its mobility solutions business section. +++ 

+++ FORD will cut about 450 jobs at its Oakville assembly plant in Ontario, as the No. 2 U.S. carmaker discontinues production of the Flex and Lincoln MKT, Canada’s largest private-sector union Unifor said.  Ford’s move to stop production of the crossovers comes as the company is expanding its pickup and SUV lineup and shedding passenger cars, except for its iconic Mustang sports car. “We will stop building the Flex at the end of November. Lincoln MKT production ended earlier this month”, said Kelli Felker, manufacturing & labor communications manager at Ford. The company employs about 4,100 hourly workers at the Oakville plant. Negotiations between Unifor and Ford for a new collective agreement are scheduled to take place in 2020, the union said. “Hopefully we get some kind of announcement that Ford is going to invest some new money into Oakville and at least there’s a light at the end of the tunnel”, said Dave Thomas, president of Unifor Local 707 in Oakville. The Flex has always been an oddity as it isn’t a real SUV. However, it was a comfortable family cruiser that “dared to be different”. Unfortunately, different doesn’t pay the bills and that is why Ford has pulled the plug on the slow-selling car. The model has been built for more than a decade. Despite gaining a “loyal following”, the Flex was never popular with consumers. US sales peaked at 38,717 units in 2008 and have been hovering around 20,000 to 22,000 units for the past 4 years. Those numbers aren’t great and its little surprise Ford decided to retire the Flex to focus “on products in the heart of the fastest growing segments”. Over the course of its 11 year run, Ford sold more than 296,000 units of the Flex. The company also flexed its marketing muscle in an attempt to make the model hip. As part of this effort, Nelly, Funkmaster Flex and Chip Foose debuted customized versions of the wagon at the 2008 SEMA Show. While those efforts weren’t too successful, the Flex is a lot more memorable than the Lincoln MKT. Often seen being used as a hearse, MKT sales topped out at 7,435 units in the United States in 2010. Sales fell consistently after 2012 and the company only moved 2,324 units last year. Ford and Lincoln didn’t announce direct replacements for the Flex and MKT, but customers will likely be directed to the Explorer and Aviator. The automaker also reiterated plans to replace 75 % of its current portfolio by the end of 2020. +++ 

+++ Japan’s tax authorities have determined former Nissan boss Carlos GHOSN used company money for private use, bolstering the automaker’s case that he diverted corporate funds for personal gain. The National Tax Agency found Ghosn used Nissan money for several years to pay consultant’s fees to his sister for fictitious work and to make donations to a university in Lebanon. The former Nissan chairman holds Lebanese nationality. He is awaiting trial in Japan on charges of financial misconduct, which he denies. Nissan recorded some 150 million yen ($1.4 million) as secretary’s office expenses for 3 years through March 2014. But the agency ordered Nissan to pay tax on the amount after judging the expenditure was for private use and should not have been deducted as expenses from corporate income. While the finding has not led to a criminal case, it backs up Nissan’s claim that Ghosn improperly used the company’s money. A tax official told that the agency could not comment on individual cases. Since his first arrest in November last year, Ghosn has been charged 4 times on allegations he underreported his Nissan salary, temporarily transferred personal financial losses to Nissan’s books, and authorized payments to car dealers with the purpose of enriching himself. Ghosn’s lawyers said they had asked the Tokyo District Court to dismiss all charges against their client, saying prosecutors had colluded with government officials and Nissan executives to oust him from his post. At the time of his arrest, Ghosn was working to strengthen Nissan’s relationship with Renault, which he also chaired and which is part-owned by the French government. The effort was unpopular among Nissan management, people close to the Japanese automaker previously told. Nissan had already filed a correction and paid additional tax of around several tens of millions of yen (several hundred thousand dollars). The tax agency is investigating additional years. +++ 

+++ Canadian HYDROGEN fuel cell pioneer Ballard Power Systems has hung on for 4 decades without posting a profit, waging a battle far head of its time against the combustion engine. It says its moment may finally be arriving. Fuel cell and hydrogen costs are falling, while emissions rules are tightening. That’s broadening the appeal of a technology that allows vehicles to run on the universe’s most abundant element, releasing only water and heat as byproducts. “There’s been a real change over the last 12 months”, said Randy MacEwen, chief executive officer of Ballard, based in Burnaby just outside of Vancouver. In parts of Europe, operating a fuel cell-powered electric bus is now cost competitive with a traditional fuel-burning version, he says. Use of the technology is diversifying into ships, trains and forklifts. Ballard is the second-best performing stock on Canada’s benchmark Composite Index this year, pushing its market value to $1.3 billion. It’s more than doubled after scoring a Chinese investor and burgeoning speculation that wide-scale adoption of hydrogen fuel cells may at long last be around the corner. A string of deals this year have indicated the technology is penetrating the traditional automotive industry: 1) Power company Cummins, synonymous with the diesel engine for most of its century-old history, bought Canadian fuel cell maker Hydrogenics for $290 million in September. 2) A truck maker controlled by Italy’s billionaire Agnelli family, CNH Industrial, agreed to invest $250 million in Nikola Motor, a startup aiming to put hydrogen semi-trucks on the road. 3) Robert Bosch, the world’s largest auto-parts supplier, in April announced plans to mass produce fuel cells by 2022 in partnership with Powercell Sweden. “I think the understanding of the value proposition is much stronger today”, says MacEwen, referring to the edge that hydrogen has particularly in commercial vehicles: Refueling with hydrogen is just as fast as filling up a truck or bus with diesel, while batteries can get too heavy when scaled up for larger vehicles. Ballard believes it has around a 70 % to 80 % market share of the 3,000 fuel cell buses and trucks currently deployed globally. It’s focusing heavily on Europe where the cost of a fuel cell bus has plunged to €375,000 from about €1 million in 5 years. MacEwen expects a quarter of key European cities to deploy fuel cell buses by 2025. The company’s stock price has also soared since a decision last year by China’s Weichai Power, a major dieselengine maker, to buy a 20 % stake in the company for $163 million, making it Ballard’s top shareholder. Robert Brown, an analyst at Lake Street Capital Markets in Minneapolis, called it a “blockbuster deal” that positions fuel cell technology to further penetrate the world’s biggest vehicle market. That market could boom with growing government support: vehicle manufacturers, gas suppliers, and other private-sector institutions have announced more than $17 billion in hydrogen fuel cell investments as of June, Bloomberg New Energy Finance said in a report last month. China plans to subsidize the large-scale deployment of hydrogen cars and invest in refueling infrastructure, seeking to replicate the cost reductions and economies of scale that have made the country the biggest market for electric vehicles, according to the Bloomberg report. Ballard’s success in China is a bright spot at a time of dimming business prospects for Canadian companies in China. Canada-China relations have frayed since Canada’s arrest on a U.S. extradition request of Huawei Technologies’s chief financial officer. Huawei has been at the center of U.S. concerns about Chinese intellectual property theft and national security risks. Ballard itself has seen would-be Chinese competitors trying to reverse engineer its fuel cell technology, MacEwen says. “I personally have seen a facility in China that looked very similar to ours”. So far the Chinese firms have only been able to make the technology work for a short period of time, he says. Ballard has buses in the field that have been operating for 35,000 hours; in contrast, the typical hydrogen fuel cell powered passenger car is designed for just 5,000 hours of durability. The company has kept control in Canada of its core technology, the membrane electrode assembly known as the heart of a fuel cell. “We’ve invested over $1 billion in our core intellectual property and so it’s going to take someone a significant investment and a significant period of time in order to get to where we are today”, he says. “By that time, of course, we’ve moved the yardsticks on our technology”. Still, skepticism over the technology remains, not least for the pumping infrastructure that would be required to build out the industry. At the end of 2018, there were only about 10,000 passenger fuel cell vehicles on the road globally, which doesn’t expect the technology to gain any significant share of the passenger fleet over the next 2 decades. It does see a growing role for fuel cells in the long-haul, heavy-duty trucking area that Ballard focuses on, but says scaling up the required infrastructure and bringing down the cost of clean hydrogen production will mean that progress is slow. Tesla founder Elon Musk has said hydrogen’s shortcomings make it a dead-end for vehicles. “Fuel cells should be renamed ‘fool cells’ “, he said in 2013. Ballard has already been on a long road of unfulfilled potential. The company traces its roots back to 1979. During the tech boom in 2000 its shares approached C$200 but it’s never posted a profit. Analysts don’t expect to see net income until 2022. Roth Capital Partners, based in Newport Beach, California, rates the company a sell. “The valuation in the stock has separated from the fundamental outlook, passing the highest peak made in the past 18 years, and does not seem to factor any risks related to business in China”, Roth analyst Craig Irwin said in a recent report. MacEwen, undaunted, sees the company’s losing streak coming to an end. “The growth trends look very attractive going forward”, he said. “Profitability is coming into view”. +++ 

+++ A top-to-bottom reorganization at KARMA AUTOMOTIVE will see the Chinese-funded California startup try to steer a quick path toward profitability by selling its engineering, design, customization and manufacturing capabilities to other companies. Karma’s plant in Moreno Valley, California, has capacity for up to 1,000 hand-built vehicles per year. But production of the company’s Revero GT hybrid performance sedan is expected to be between 500 and 1,000 vehicles per year. Karma wants to sell excess capacity as well as its product development and vehicle integration expertise to other automakers in a new business plan it calls 4+1. Karma spokesman Dave Barthmuss said the company is open to building another company’s vehicles in its plant. The change in direction at Karma resulted in an executive shuffle. Bob Kruse, the former General Motors engineer who played a key role in the development of the Chevrolet Volt, has left his role at Karma, where he served as chief technology officer. No successor for Kruse has been named, said Barthmuss. But one of the executives behind Detroit’s VLF Automotive, Gilbert Villarreal, has joined Karma as its chief operating officer. His main task right now, Barthmuss said, will be to manage the restructuring, which could see layoffs of some of the company’s total global work force of 1,000 employees. Villarreal, along with product development wiz Bob Lutz, founded VLF in 2016 to build high-performance versions of the old Fisker Karma. Lutz and Villarreal have worked together since 2012. Production of the Corvette-engined Destino ended when the company ran out of Karmas to convert. “His role is to make sure we can grow as a high tech incubator and creator of luxury vehicles”, Barthmuss said of Villarreal. Under Kruse, Karma re-engineered and redesigned the Fisker Karma, renaming the stylish sedan the Revero GT and replacing the GM-sourced powertrain with one from BMW. Kruse had been aggressively promoting the new car, which launched this month. Barthmuss said Karma’s production plans remain to build and sell between 500 and 1,000 Revero GTs per year, and that the company needs to be staffed appropriately for that volume. “Do we need all these engineers? No, we don’t”, he said. Other projects in the pipeline at Karma (a higher performance Revero and new models including an SUV) appear to be on track, Barthmuss said. Karma is wholly owned and funded by Wanxiang Group, one of China’s largest auto parts suppliers based on revenue. Wanxiang is believed to have cut the amount of money it is investing in Karma from $400 million per year to just $100 million. +++ 

+++ A new rotary-powered sports car from MAZDA is one of the most talked-about topics in recent years, yet the car manufacturer still remains non-committal about such a model. Mazda chief designer Ikuo Maeda admitted that it remains a dream for the car manufacturer to use its rotary technology in a new sports car, but is unsure how it would be received. “I don’t know if we are having an RX-8 replacement, we have to see what the society thinks of that and what the environment is like in terms of accepting the idea of a sports car”, he said, indicating that Mazda could be seen as irresponsible for release a rotary-powered performance car in a world increasingly becoming focused on EVs and efficient hybrids”, Maeda commented. “I understand that the clock is ticking and that the environment constantly changes, and we have to see if the current and future environment would be able to accept a sports car with open arms”, he added. “We understand that we are racing against time. But if the notion of driving a sports car causes people to think negatively about the pressure that is putting on the global environment, if having a sports car itself is seen as a negative thing, then we don’t want that”. Although the future of a new Mazda sports car remains far from confirmed, Maeda said that in the more immediate future he would like to see a hot, MPS version of the sleek new Mazda 3, despite previous reports that the company doesn’t intend to make one. “If you look at the range that we have in product currently, I think we can say the Mazda 3 is quite fitted or suited to that kind of sporty vehicle. Personally, I’d like to try to have a high-performance version of this vehicle, but I said personally, and when I say personally you always say Mazda would like to”. +++ 

+++ The performance of modern PEDESTRIAN DETECTION SYSTEMS varies widely between carmakers, with high-end luxury brands generally faring better and other models failing to recognize pedestrians altogether, according to a study by a U.S. insurance research group. The assessment comes at a time when pedestrian deaths on U.S. roads are spiking, with an estimated 6,283 people on foot killed by vehicles in 2018, a year that saw the highest number of cyclist and pedestrian deaths since 1990. Automakers are beefing up crash avoidance technology on new cars, increasingly making the systems part of their standard equipment in 2020 models. Pedestrian detection systems, enabled by windshield-mounted cameras or radar sensors in a vehicle’s front grill, are coupled with a car’s automatic emergency braking system and intended to stop the vehicle if it detects a pedestrian in its path. The study by the U.S. Insurance Institute for Highway Safety (IIHS) found that not all systems perform equally well. Of the 19 latest-year editions and models IIHS tested, 13 avoided pedestrians entirely, or at least managed to reduce speeds significantly. While the best-performing cars included luxury models Audi A4, BMW 3 series and a version of the Mercedes-Benz C-class, IIHS also gave its best rating to the Nissan Maxima and Volvo S60. The Chevrolet Malibu, a Ford Fusion, Hyundai Sonata and Kia Optima, were among tested cars that did not reduce speeds in some tests or failed entirely. The IIHS testing scenarios included an adult crossing the road, a child darting out from behind an obstacle and an adult walking near the edge of the road – situations that account for more than half of all pedestrian deaths. All tests were conducted during the day and on dry roads, as those are the only scenarios for which automakers currently commit their technology, said IIHS President David Harkey. “This technology is in its infancy”, Harkey said in a phone interview. “But let’s acknowledge what the automakers are doing well and encourage them to do more”. Tests by the American Automobile Association (AAA) earlier this month showed more devastating results when the technology is tested at night, a time when 75 % of pedestrian fatalities occur. None of the 2019 test cars (a Chevrolet Malibu, Honda Accord, Tesla Model 3 and Toyota Camry) was able to detect an adult pedestrian in the dark. IIHS’s Harkey called on automakers to also develop better headlights to allow systems to spot pedestrians at night. +++ 

+++ Major automakers are SIDING WITH THE TRUMP ADMINISTRATION in its bid to bar California from setting its own fuel efficiency rules or zero-emission requirements for vehicles, the companies said in a filing with a U.S. appeals court. The move by firms including General Motors, Toyota, Hyundai and Fiat Chrysler Automobiles, follows legal challenges by California and 22 states and environmental groups in September. Those challenges aim to undo the Trump administration’s determination, issued in September, that federal law bars California from setting stiff tailpipe emission standards and zero-emission vehicle mandates. In their filing with the U.S. Court of Appeals for the District of Columbia, the automakers and the National Automobile Dealers Association said they backed the administration bid to bar individual emissions rules by states. They asked to intervene, arguing the administration’s rule provided “vehicle manufacturers with the certainty that states cannot interfere with federal fuel economy standards”. The decision to side with President Donald Trump could prompt a furious backlash from Democrats and environmentalists. It also poses a risk for automakers if a Democrat wins the White House in next year’s election and reverses Trump’s actions, and also reinstates California’s right to set its own rules and tougher national emissions standards adopted by president Barack Obama. A spokeswoman for California Attorney General Xavier Becerra said the action “doesn’t change our resolve to fight as long and hard as necessary to protect our standards”. She added, “The courts have upheld our authority to set standards before and we’re hopeful they will yet again”. Other automakers, such as Ford, Honda and Volkswagen, which announced a voluntary deal with California in July on emissions rules, are not joining the bid to intervene on the administration’s side. The group backing Trump also includes Mazda, Nissan, Kia and Subaru. John Bozzella, president and chief executive of Global Automakers, a trade group representing major foreign firms, said the companies had little choice but to back the administration. “It’s been the federal policy for the better part of 40 years that the federal government has the sole responsibility for regulating fuel economy standards, but it doesn’t have to get to that”, Bozzella told reporters, speaking for an ad-hoc group, the Coalition for Sustainable Automotive Regulation. “We can still reach an agreement” on fuel economy rules, Bozzella said, adding that companies still support a “middle ground” between California and the administration that would see rising attainable fuel efficiency requirements. He said the Trump administration did not ask the automakers to intervene. Senator Tom Carper, the top Democrat on the Senate Environment and Public Works Committee, had harsh words for the automakers. “Instead of choosing the responsible path forged by four automakers and the state of California, one that will move us toward the cleaner, alternative fuel vehicles of the future, these companies have chosen to head down a dead-end road”, Carper said in a statement. A group of major environmental groups, including the Sierra Club, the Union of Concerned Scientists and Natural Resources Defense Council, sued in September to block the determination. Last week, 7 U.S. states, including Alabama, Ohio, Texas, Utah and West Virginia, also filed in support of the Trump regulation, arguing that without the rule their residents would have to pay “higher vehicle costs”. In Aug. 2018, the Environmental Protection Agency and National Highway Traffic Safety Administration proposed freezing fuel efficiency requirements at 2020 levels through 2026. The Obama-era rules adopted in 2012 called for a fleetwide fuel efficiency average of 46.7 miles per gallon by 2026, with average annual increases of nearly 5 %, compared with 37 mpg by 2026 under the Trump administration’s preferred option. The final rule is expected to modestly boost fuel efficiency from the initial proposal, with some automakers anticipating annual increases of about 1.5%, but still much less stringent than the Obama rules. The group was not taking a position on what those requirements should be, Bozzella emphasized, but reiterated they should continue to rise annually. “The decision to intervene in the lawsuit is about how the standard should be applied, not what the standard should be”, Bozzella said. The announcement showed an industry split. After the 4 automakers, including BMW, announced the voluntary California pact, the Justice Department warned them the agreement “may violate federal antitrust laws”. +++ 

+++ SUBARU is recalling over 400,000 vehicles in the U.S. to fix problems with engine computers and debris that can fall into motors. The first recall covers 466,000 Imprezas from 2017 through 2019, and 2018 and 2019 Crosstreks (XV in Europe). Subaru says the engine computer can keep powering the ignition coil after motors are shut off. That could cause a short circuit and blown fuse. Dealers will update software and replace coils and front exhaust pipes if needed. The second covers 205,000 Imprezas from 2017 through 2019 and 2018 Crosstreks. The aluminum positive crankcase ventilation valves can fall apart. Debris can enter the engine and cause power loss. Dealers will replace valves if needed. If a valve has separated and parts can’t be found, engines will be replaced. Both recalls start on December 13. +++ 

+++ The TOKYO MOTOR SHOW opened this week with plenty of futuristic technologies but absent one of the auto industry’s hugest influencers: Nissan’s former Chairman Carlos Ghosn. Since Ghosn’s arrest for alleged financial misconduct in November 2018, Nissan has sunk into deep losses and its global vehicle sales have tumbled. At a presentation to reporters, 2 senior Nissan executives talked up electric vehicles featured at Nissan’s booth. Ghosn was palpably absent, but his legacy was evident in the many initiatives he spearheaded while running the company for nearly 2 decades. The Tokyo show gives automakers a chance to showcase some of the industry’s upcoming mobility technology, including ecological fuel cells and personal transport devices that look like scooters. The company’s newly named CEO, Makoto Uchida, and his predecessor Hiroto Saikawa, who resigned last month over his own financial scandals, did not make appearances at the media presentation. Nissan officials said Uchida had yet to officially take up his post and was still in charge of Nissan’s China joint venture, and his successor there had not yet been chosen. It’s unclear if all that will be done within this year, they said. At the auto show, instead, 2 senior executives, in charge of research and of design, introduced 2 concept model electric vehicles. One was a SUV and the other a tiny car, known as “kei” in Japan, that they said would become commercial products soon. Nissan pioneered electric vehicles, leading the industry with its Leaf, said Kunio Nakaguro, executive vice president in charge of research and development. Nissan has sold 430,000 Leafs. Design chief Alfonso Albaisa, who also took stage, stressed how Nissan models boasted futuristic sleek and what he called “charming” forms characteristic of Japanese culture to highlight a bright future. Running on a loop on huge screens at Nissan’s booth was a video of tennis superstar Naomi Osaka, who has signed to promote Nissan. “Exactly a year ago, an upset of the century”, it said, referring to Osaka’s Grand Slam win. On the minds of those watching was the year of upsets at Nissan, which has appeared rudderless at times after Ghosn’s departure. The Nissan executives also highlighted plans for bringing new technologies, such as “hands off driving” and “automated parking” to market. “We are not just going big on electrification. We are also thinking big on next generation driver assistance technology”, said Alfonso Albaisa, a senior vice president for global design. While Nissan struggles to keep its market share, the company has yet to fully emerge from its leadership shakeup. Ghosn was released on bail after a dramatic months’ long struggle with prosecutors who insisted he should stay in detention. He is awaiting trial, likely not until next year, for allegedly falsifying financial documents to hide future compensation as well as charges of breach of trust in making dubious payments to businessmen for personal gain, according to Tokyo prosecutors. In statements and comments on videotape, Ghosn has insisted that other Nissan executives plotted against him out of fears the company might lose some of its autonomy in a merger fears among some at Nissan of a fuller merger with its alliance partner Renault. Even before Ghosn’s arrest, the company was grappling with scandals over quality control that have plagued many automakers in Japan. Nissan’s reshuffling of its top leadership and measures to strengthen its governance should have come earlier, analysts say. Such serious problems send negative signals to managers and employees throughout a company, and enable cover-ups that result in poorer quality products, undermining profits in a competitive market, said Cindy Schipani, a professor of business law and governance expert at the University of Michigan. “The bottom line is that corporate governance requires leadership with integrity. Otherwise, they could send the company into a downward spiral”, Schipani said. Nissan announced earlier this year that it’s slashing 12,500 jobs, or about 9 % of its global workforce, to cut costs and achieve a turnaround amid tumbling profits. +++ 

+++ The VOLKSWAGEN GROUP is setting up an autonomous driving unit led by a former Apple executive that will target bringing self-driving cargo vans and robotaxis to market. Volkswagen Autonomy will be based in Munich and Wolfsburg, with subsidiaries in Silicon Valley in the U.S. and in China. “Around the middle of the coming decade, we want to start commercializing autonomous driving on a large scale”, Alexander Hitzinger, the unit’s head, said in a news release. VW hired Hitzinger in January from Apple to head technical development at its commercial vehicles division. Hitzinger worked on Apple’s Project Titan electric car project. Volkswagen Autonomy will be a center of excellence for autonomous driving for solution from Level 4 and above, VW said. Its expertise will be available to all VW Group brands, which include Audi, Porsche and Bentley in the luxury sector and the VW, Skoda and Seat mass-market marques. Volkswagen Autonomy and VW’s light commercial vehicles unit, which is based in Hannover, Germany, will develop and build special purpose vehicles such as robotaxis and robovans. The LCV division will be the first user of Volkswagen Autonomy self-driving systems. VW expects that autonomous vehicles will most likely be first used in logistics and shared mobility to transport people and goods in urban areas. In July, VW announced closer cooperation with Ford in autonomous driving and acquired a stake in Ford subsidiary Argo AI, which develops systems for autonomous vehicles. More than half of the Volkswagen Autonomy employees will be based in Wolfsburg and in Munich, where the VW subsidiary AID has its headquarters and Argo AI its European base. Volkswagen Autonomy and Argo AI will work closely together, VW said. By 2023, VW plans to invest about €30 billion in electromobility. About €14 billion will be spent on digitization, the development of new mobility services and autonomous driving. Waymo also expects driverless trucks to be the first use of AV technology. “Trucking is a really interesting application of the Waymo driver and we want to bring that to market as quickly as possible”, Waymo CEO John Krafcik told. +++ 

+++ VOLVO claims its new infotainment system, based on Google’s Android operating system (OS) and developed with the help of the American tech giant, will “be as good to use as your mobile phone”. The new system will make its debut in the XC40 Recharge and Polestar 2 electric cars and then be rolled out across the Swedish brands’ model line-ups. It replaces Volvo’s bespoke system with an Android-based OS that uses apps such as Google Maps to offer sat-nav with real-time traffic information. Users will be able to download third-party apps (such as Spotify or Amazon Music) for functions including navigation and media streaming. The aim is to offer a suite of online services without the need for a smartphone to be connected. The system can be controlled via touchscreen or voice control, with the latter powered by the Google Assistant system that also operates on devices such as smartphones and smart speakers. Volvo’s software boss, Ödgärd Andersson, said the new system offers “a radical improvement” and has voice control software “well above anything that’s in any car right now”. The system is permanently online and so will be able to transmit the car’s location and other data, but Andersson suggested that drivers shouldn’t have privacy concerns, because they will have to opt in to sharing information through third-party apps. “It will work fine if you don’t want to share anything with Google”, he said, “but there’s great personalisation if you do. Users can customise it to their own needs and wishes”. +++

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