Newsflash: Renault komt binnen 3 jaar met Zoé RS

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+++ Canadian auto-parts maker Magna International said it would build dual-clutch and hybrid transmissions for BMW under a multi-year contract. The products will be built at Magna’s plants in Germany and Slovakia, the company said. Magna did not disclose the financial terms of the contract. +++ 

+++ Chinese electric car maker BYD said it expected full-year net profit to fall by as much as 43 %, as sales of new energy vehicles in the world’s biggest auto market plunged following a cut in government subsidies. The Shenzhen-based company, which is backed by U.S. investor Warren Buffett and whose products include battery electric and plug-in hybrid vehicles, posted net profit of 119.72 million yuan ($16.95 million) in the third quarter, down 88.6 % from 1.05 billion yuan a year earlier. It said 2019 profit would be between 1.58 billion yuan and 1.77 billion yuan, down from 2.78 billion yuan a year earlier. “As subsidies on new energy vehicles drop sharply, sales of new energy vehicles are falling short of expectations. It is expected that the profit of the company’s new energy vehicle business will also decline to a certain extent compared with the same period of last year”, BYD said. BYD’s profit drop comes as auto sales in China fell for a 15th consecutive month in September, according to industry data, dampening hopes for a second-half turnaround. Sales of new energy vehicles, which have long benefited from state support, have also been impacted by subsidy cuts, falling 34.2 % in September following a 15.8 % decline in August. Revenue dropped 9.17 % to 31.64 billion yuan in the third quarter. In the quarter ended September 30, BYD sold 107,723 cars, down 15 % from a year earlier. BYD also faces intensifying competition as Tesla started taking orders for China-made Model 3 last week ahead of mass production from its $2 billion Shanghai factory expected later this year. BYD, which has a joint venture with Daimler, said in July it would develop battery electric vehicles with Toyota. Besides car manufacturing, BYD also assembles mobile phones, makes batteries for electric and plug-in hybrid vehicles and builds Skyrail, a monorail-like product designed for commutes in smaller cities. +++ 

+++ Auto sales in CHINA may skid to 26 million this year, a drop of around 8 %, a senior industry executive warned, as the world’s largest auto market braces for a second year of contraction amid slowing economic growth and tighter vehicle emissions standards. The latest prediction, by Fu Bingfeng, executive vice chairman of the China Association of Automobile Manufacturers (CAAM), is lower than the group’s previous forecast for a 5 % drop, issued in July. Amid gathering gloom over the global auto industry’s biggest growth story of the last 20 years, carmakers like General Motors, Ford and Peugeot SA have all reported double-digit percentage sales declines. Some smaller firms have even started to shut down capacity and seek consolidation. “For this year, we now expect to see if we can hold on to sales of 26 million vehicles”, Fu told. He said sales declines should be viewed as part of the industry’s transformation towards higher production standards, lower-emission cars and new energy vehicles (NEVs), adding the association was still ultimately bullish about the future prospects of the market. Around 28 million cars were sold in China in 2018, down 3% from a year earlier, the first sales drop since 1990s. Monthly sales dropped in September to mark the 15th consecutive month of decline. A spokesman for CAAM in Beijing confirmed the industry group expects an 8 % decline in sales from the previous year, without disclosing further details. Fu said China annual auto sales were ultimately still on track to hit 30 million by 2023 with further headroom, he said. “40 million units a year cannot be the rooftop of China’s car market”, Fu said. Still, amid the current sales downturn, Suzuki became the first big foreign car manufacturer to shut up shop in the country. The sales slump has even extended to the NEV sector, due to subsidy cuts. NEV sales skidded 34 % in September year-on-year following a 16 % decline in August. “The development of new energy vehicles is still at early stage, so talking about its growth now is not very meaningful”, Fu said. +++ 

+++ The rise of ELECTRIC vehicles threatens the car industry as we know it, according to Peugeot SA Group electric and connected boss Helen Lees. “EVs are far simpler than internal combustion engined vehicles”, she explained. “They need less parts, less time in the workshop. Ultimately, it means less time in aftersales. That’s why we’ve chosen to diversify into areas such as shared mobility”. PSA, which owns the Peugeot, Citroën, DS, Opel and Vauxhall brands, already offers its Free2Move car sharing service in Paris, France, where 550 of its vehicles are available via a smartphone app. Lees said: “We haven’t commercialised a lot of mobility services, but we will do, such as Free2Move, which encompasses anything complementary to car ownership or substitutes such as leasing or rental, but also our use of telematics and technology to enable peer-to-peer car-sharing. On our new vehicles, you can get a digital key so you can assign the car to others remotely”. Lees added that despite the inevitable decline in aftersales revenue in the short-term, the increasing sales of EVs does bring opportunity. “Whereas a lot of consumers might service their petrol or diesel cars themselves”, she said, “they tend to come back into main dealerships for EVs, because the aftermarket operators aren’t necessarily ready for electric to the same extent as manufacturers are. We’ve got a short-term opportunity for aftersales where hopefully we can build loyalty and prove ourselves and break some of the myths about being ripped off by mainstream manufacturers”. Lees said the loss of revenue in aftersales depends on EV market penetration, adding: “Longer-term, we’ll sell fewer parts and less service hours on our EVs. When you look at the service plan pricing for Peugeot e-208, for example, it’s a third cheaper than the service plan for the equivalent petrol or diesel 208. Obviously, that helps build the total cost of ownership model at the moment, but longer-term, maybe our dealerships will become mobility hubs where there’s dealership-based rental”. Lees added that PSA will next year launch a package that will allow leasing customers to rent a petrol or diesel car as part of their EV finance package. Customer delivieries of the e-208 will commence early next year, and there will be an electrified variant of every PSA model by 2025. +++ 

+++ A proposed merger between Peugeot SA and FIAT CHRYSLER AUTOMOBILES (FCA) would give FCA access to Peugeot’s more modern and flexible vehicle architectures, potentially enabling the combined companies to achieve lower costs through higher production volumes, a global auto analyst said. But the process of integrating platforms, powertrains and other components between the 2 automakers could take 4 years or longer, according to Sam Fiorani, head of global vehicle forecasting at AutoForecast Solutions. The supervisory boards of both companies agreed to pursue the $50 billion merger, sources familiar with the matter said, moving the companies closer to a deal that could transform the global auto industry. PSA would likely get little use out of FCA’s larger pickup and SUV platforms; the ones that underpin the big Ram 1500 pickup, the Jeep Wrangler and the Jeep Grand Cherokee, he said. While those platforms have been heavily revised or replaced in recent years, the vehicles built on them, which generate substantial profit for FCA, are primarily for the North American market, with limited appeal in Europe and other overseas markets. “I don’t see the likelihood of a Ram pickup being sold with a Peugeot badge anywhere”, Fiorani said. There are numerous precedents for platform consolidation between 2 large multinational auto companies, the most recent being an agreement between Ford and Volkswagen to share VW’s MEB electric vehicle architecture. But PSA also has had recent experience in such consolidation, stemming from its 2017 acquisition of General Motors’ European brands Opel and Vauxhall. The French automaker previously had planned to jointly develop common small car platforms in Europe with GM. But since the Opel / Vauxhall acquisition, PSA has begun the process of shifting the former GM models to its own platforms. Under CEO and chairman Carlos Tavares, PSA has accelerated plans to modernize and simplify its vehicle architectures, with most of its future cars, crossovers and compact vans to be built on just two platforms, Fiorani said. The company’s Efficient Modular Platform, or EMP, was introduced in 2013, and eventually will underpin a wide range of vehicles under PSA’s 5 brands (Peugeot, Citroen, DS, Opel, Vauxhall). A newer, smaller architecture called Common Modular Platform (CMP) was launched earlier this year and is expected to provide the base for subcompact models ranging from the Peugeot 208 to the Opel Mokka X. FCA’s main car platforms, used primarily for crossovers in North America, are considerably older. The larger platform, called CUSW (for Compact US Wide), underpins the Jeep Cherokee and was first used for the Alfa Romeo Giulietta in 2010. The smaller platform, called SUSW (for Small US Wide), is the base for the European-built Jeep Renegade in North America and underpins a wide range of Fiat models in Europe, including the 500L and 500X. Elements of the platform date back to 2005, when Fiat and GM jointly developed a common small-car platform for their European models. Fiat Chrysler has an existing joint venture in Europe with PSA called Sevel that builds large commercial vehicles for both companies. The big Ram ProMaster van that is sold in the United States is a version of the Fiat Ducato. Companion models include the Peugeot Boxer and Citroen Jumper. FCA would gain much-needed scale and technology by getting access to PSA’s platforms for passenger cars and crossovers. FCA sells more vehicles than PSA, but it has been seeking a partner for several years, dating back to late CEO Sergio Marchionne’s failed courtship of General Motors. FCA’s global deliveries were 4.8 million last year, while PSA sold 3.9 million vehicles.  FCA’s main strength is in North America, where it sold more than 2.5 million units in 2018. PSA is heavily dependent on Europe where it sells 80 % of its vehicles. FCA’s platform and powertrain sharing across its 3 main regions (North America, Europe and Latin America) is marginal but in Europe FCA would benefit from PSA’s modern architectures for small and compact cars. The Fiat brand has been starved of product and its European market share has fallen to 4.3 % with most of its sales in its Italian home market. The brand currently sells only the 500, Panda, 500L, 500X and Tipo. The Punto, which competed for market leadership in the small-car segment until a decade ago, was discontinued in 2018. It could be resurrected on a PSA platform. Bernstein analyst Max Warburton said Europe would be a key focus for a merged FCA and PSA. PSA’s r&d resources and cutting-edge lightweight platforms “could revitalize Fiat’s tired product range”, he said in a note to investors. “Subscale” product lines, powertrains and future EV investments could be combined, he said. Products and brands might be rationalized and distribution networks combined, Warburton said. “The task would be huge, the politics messy and lots would probably go wrong on the way”, he said. Fiat’s Italian operations have overcapacity. Its Mirafiori assembly complex in its home city of Turin has run below 50 % capacity, with thousands of workers on temporary layoffs. Overall, Fiat has 58,000 workers in Italy, where the government has long resisted mass lay-offs by large employer. The Italian trade union UILM said any tie-up between FCA and PSA must be a “merger of equals” that leads to no job losses in Italy. The FIOM union said a deal should guarantee full utilization of the Italian factories. Joining forces with PSA would help FCA to catch up in new technologies such as electrification and autonomy where it has fallen behind rivals and is under growing pressure to increase investments. The company disclosed earlier this month that it faces a $79 million fine for falling short of U.S. fuel efficiency standards. It has agreed to pay U.S. electric car maker Tesla for credits to help it comply with European emissions standards until 2022. FCA boss Mike Manley said earlier this year FCA aims to recover 60 % of the additional vehicle electrification costs through pricing; sharing those costs with a partner will help reduce the bill. In Europe, FCA could help PSA to build up sales of high-margin, upscale cars. PSA’s upmarket DS brand, originally a subbrand of Citroen, has failed to make an impact on European buyers. FCA could offer PSA its Giorgio rear-wheel-drive/all-wheel-drive architecture created for the Alfa Romeo Giulia and Stelvio. Manley said this year the Giorgio architecture would also become the base for a future range of Maserati models. +++ 

+++ FORD and the United Auto Workers union announced a tentative agreement for a new labor deal, allowing the No. 2 U.S. automaker to avoid a strike like the one that cost its larger rival General Motors about $3 billion. The union turned to Ford to negotiate a new 4-year agreement after ratifying a contract last week with GM following a 40-day U.S. strike that shut down almost all of GM’s North American operations. Detailed terms of the deal were not released, but they are expected to echo those agreed to with GM, as the union typically uses the first deal as a pattern for those that follow. “The pattern bargaining strategy has been a very effective approach for UAW and its members to secure economic gains around salary, benefits and secured over $6 billion in major product investments in American facilities, creating and retaining over 8,500 jobs for our communities”, UAW vice president Rory Gamble, head of the union’s Ford department, said in a statement. Ford confirmed the deal in a statement, but declined further comment. UAW leaders from the various U.S. plants will meet to approve the deal, which will then be sent to the 55,000 members at Ford for final approval, a union spokesman said. Ratification is not a sure thing, as union members at Fiat Chrysler Automobiles (FCA) in 2015 rejected the first version of a contract. Ford and the UAW began talks covering larger issues such as pay raises, the use of temporary workers and healthcare insurance coverage, but the union previously said the sides had made “significant progress” addressing smaller issues. Ford historically has had an easier relationship with the union than its Detroit rivals. Ford executive chairman Bill Ford has described the UAW as “family” in the past and in September 2018 hailed the Dearborn, Michigan, company’s relationship with its hourly workers. “The UAW doesn’t just make our workers better, it makes Ford better and stronger”, Bill Ford told UAW workers last year. Under the deal with GM, that automaker agreed to invest $9 billion in the United States, including $7.7 billion directly in its plants, with the rest going to joint ventures. It also said it would create or retain 9,000 UAW jobs. The GM contract also will provide $11,000 signing bonuses to members, and pay raises. Under its deal, GM also will close 3 plants, but it left the UAW members’ healthcare insurance coverage unchanged. Once the Ford deal is ratified, the UAW will turn to FCA to complete its quadrennial talks with the Detroit automakers. Ford said it was shutting down its oldest plant in Brazil later in the day as planned, with prospects for saving any of the jobs in doubt as talks with a potential buyer have fallen behind schedule. The plant, located in the industrial suburb of Sao Bernardo do Campo, produced buses and the Fiesta, which sold poorly. It employed up to 2,800 people earlier this year, although it is unclear how many were still working there as of October. Ford first announced it would shut down the plant in February, and said it had failed to find a buyer. But then the Sao Paulo government intervened and a local automaker, CAOA, expressed interest. CAOA, Ford and the Sao Paulo state government announced in September that they had reached a preliminary deal, but needed 45 days to carry out due diligence. That time period has already expired, and neither side has provided an explanation. CAOA declined to comment. CAOA got its start as a Ford dealership, but expanded into manufacturing with a contract with Hyundai and later bought 50 % of Chinese automaker Chery’s operation in Brazil. While Brazil is a base for many multinational automakers, CAOA is the rare manufacturer to be locally owned. +++ 

+++ GENERAL MOTORS expects to spend more on developing and selling electric vehicles (EVs) than gasoline-powered cars over the next 5 years, chief executive Mary Barra said. Barra was responding to a question from an analyst on the No. 1 U.S. automaker’s earnings conference call when she said she believed EVs would see more of the research and development and capital spending dollars in that time period. She also said EVs will require “somewhat less” labor than gas-powered cars. The United Auto Workers union, which just ratified a new 4-year labor deal with the Detroit automaker, has expressed concern about U.S. employment levels in the future as EVs make up a larger share of the market. Barra emphasized gas-powered vehicles will make up a large portion of U.S. sales into the 2030s. She added that the company’s engine and transmission plants will not be threatened and EVs will have needs for components as well. Barra also said the new UAW labor deal does not limit how many EVs the company can build. GM plans to invest $3 billion in its Detroit-Hamtramck plant to build electric trucks and vans and battery modules, according to a letter it sent to the UAW this month as part of contract talks. GM has been shifting more resources to EVs from gasoline-powered vehicles for more than a year. It restructured much of its engineering and white-collar workforce after it cut about 8,000 salaried jobs, or roughly 15% of its North American white-collar workforce. Dan Nicholson, GM’s vice president for global electrification, said in February at a national ethanol conference that at one point he led an 8,000-person global organization that was entirely focused on internal combustion engines (ICE) and “then we moved to about a 70 % ICE, 30 % electrification split. Now are we are flipping that to just 30 % ICE and focusing 70 % on electrification”. +++ 

+++ Former Nissan boss Carlos GHOSN denied any impropriety over payments he made during his time at the automaker, following a newspaper report that Japanese tax authorities determined he used company money for private use. “Mr. Ghosn categorically denies that there was anything improper about the payments or donations at issue, all of which were made for the benefit of Nissan”, according to a statement issued by a spokesman. “There is nothing new in these allegations, which arise from inquiries by the tax authorities and taxes paid by Nissan years ago”, the statement said. “The prosecutors’ decision to leak them now, only days after Mr. Ghosn publicly released court filings detailing extensive prosecutorial misconduct and previewing his defenses for the first time, is a transparent effort to distract from the failings of their case”. Japanese media reported the country’s tax authorities had determined Ghosn used money for private use, bolstering the carmaker’s case that he diverted corporate funds for personal gain. The National Tax Agency was said to have found Ghosn using Nissan money for several years to pay consultant 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. +++ 

+++ Hitachi will merge its vehicle components unit with HONDA ’s 3 suppliers in a bid to cut development costs and better respond to a rapid industry shift to electric vehicles (EV) and self-driving. The deal to create Japan’s third-biggest auto-parts supplier by sales also marks intensifying consolidation in the country’s auto industry, as it struggles to adapt to technological change. Honda’s bigger rival Toyota announced last month it would raise its stake in Subaru to more than 20 %. Toyota has also been cementing ties with smaller rivals such as Suzuki and Mazda, which have acknowledged that they lack the investment firepower to invest in developing new vehicle technologies. The merged company aims to focus on developing components for EV and self-driving systems, along with new, on-demand mobility services, combining their scale in a bid to come up with products more quickly and efficiently. Hitachi said that increasing complexity of vehicle technologies required bigger R&D firepower, a bigger global footprint and access to a bigger pool of talent. “The merged company will be a mega supplier and will deliver competitive advanced technologies and solutions”, Hitachi executive vice president Keiji Kojima told reporters. “We will leverage our strengths and our scale to expand globally”. Hitachi, will take a 66.6 % stake in the newly formed company by merging its component unit with 3 Honda affiliates (Keihin, Showa and Nissin Kogyo), while Honda takes the remaining stake. The merger is expected to be completed in about a year. Hitachi, which makes everything from television sets to elevators to trains, said that its majority stake in the merged company would make it easier to attract new customers. Traditionally, Japanese automakers have deep ties to their group suppliers, sharing technology and talent. While the deal will loosen Honda’s grip over its long-time suppliers, it will allow better access to technology developed by Hitachi’s automotive arm, whose 971 billion yen annual revenue dwarfs Showa and Keihin’s combined sales of 636 billion yen. Hitachi Automotive Systems, whose name will be used for the merged company for the moment, produces a wide range of components from electric power steering systems, millimetre-wave radar used in self-driving cars, and EV invertors. Honda’s Showa specialises in shock absorbers and steering systems, Keihin in engine parts, and Nissin manufactures brake systems. Hitachi executives acknowledged that some of its products would overlap with those of its new partners, but did not offer specific details on how the issue would be addressed. “All of Honda’s suppliers have been relatively small entities. Now it can have a stake in a major auto parts supplier”, said Chris Richter, senior research analyst at brokerage CLSA. “Whatever control they are losing over Keihin for example, is not a big loss compared with what they’re going to gain”. Honda has struggled to shore up its automobile operations, as its profitability has more than halved in the past two years due to a series of quality-related issues, constraining its financial firepower to invest in new vehicle technologies. The proposed deal will further deepen the 2 automakers’ ties after they established a joint venture to develop, produce and sell EV motors in 2017. +++ 

+++ MERCEDES-BENZ is recalling some new EQ C electric cars because of a potentially defective bolt in the differential, the company said. “Daimler has determined that on certain vehicles the bolt in the front axle differential transmission might not meet durability specifications. Thus, it cannot be ruled out, that the bolt breaks over lifetime”, the automaker said. The fault could interrupt torque transmission to the front axle, leading to a vehicle stall. Additionally, if parts of the broken bolt become lodged within the differential transmission, this might affect the ability to control the vehicle, increasing the risk of a crash, Daimler said. +++

+++ Fiat Chrysler Automobiles (FCA) and Peugeot owner PSA plan to join forces through a 50-50 share swap to create the world’s 4th largest automaker, triggering a new wave of consolidation in the car industry. FCA and PSA said they aimed to reach a binding deal to create a $50 billion company domiciled in the Netherlands, with listings in Paris, Milan and New York and with PSA’s Carlos Tavares as CEO and FCA’s John Elkann as chairman. The move comes less than 5 months after FCA abandoned merger talks with PSA’s French rival Renault and at a time when carmakers are grappling with a global downturn in demand, as well as costly new technologies such as self-driving vehicles and cleaner models to meet tough new emissions rules. “The supervisory board of Peugeot and the board of directors of FCA have each unanimously agreed to work towards a full combination of their respective businesses by way of a 50/50 merger”, the companies said in a joint statement. The management teams of FCA and PSA will seek to finalise the discussions in the coming weeks to create a group with 8.7 million in annual vehicle sales and make savings of €3.7 billion, even without plant closures, they said. The multi-brand group will include the Fiat, Dodge, Ram, Chrysler, Alfa Romeo, Maserati, Peugeot, DS, Opel and Vauxhall brands, allowing it to serve mass and premium passenger car markets as well as trucks and light commercial vehicles. Around 80 % of potential synergies could be achieved within 4 years, at a cost of €2.8 billion, the companies said. “In a rapidly changing environment, with new challenges in connected, electrified, shared and autonomous mobility, the combined entity would leverage its strong global R&D footprint and ecosystem to foster innovation and meet these challenges with speed and capital efficiency”, FCA and PSA said. French Finance Minister Bruno Le Maire welcomed the deal, saying it would give the 2 companies the critical mass needed to thrive in a fast changing industry. Paris, which has a 12 % stake in PSA, was blamed for the collapse of FCA’s merger talks with Renault as it urged the French firm to focus on its existing alliance with Nissan. The French government also owns 15 % of Renault. The combined group will have an 11-person board, with 6 members coming from PSA including chief executive Tavares, and 5 from FCA including chairman Elkann. As part of the deal, FCA will pay its shareholders a €5.5 billion special dividend and hand them shares in its robot-making unit Comau, they said. Jefferies analyst Philippe Houchois said PSA was effectively paying a 32 % premium to take control of FCA. “We continue to see FCA-PSA as the most logical and attractive combination in autos”, he said. Stricter anti-pollution rules from 2021 have triggered heavy investments into electric and hybrid vehicles as European lawmakers forced a 37.5 % cut in carbon dioxide emissions between 2021 and 2030, after a 40 % emissions cut between 2007 and 2021. A combination with PSA would give FCA access to the French group’s more modern and more flexible vehicle technologies, including the CMP modular platform, which was launched in 2019 for Peugeot’s second generation 208 and donated the technology which allowed Opel to build the new Corsa. Strategy firm PA Consulting has forecast FCA faces a fine of €700 million unless it radically changes its emissions profile to sell more electric and hybrid cars. Meanwhile, the deal would give PSA a stronger position in north America, where FCA makes the vast bulk of its profits. PSA has already integrated Opel and Vauxhall, which it bought from General Motors in 2017, shifting them from 9 GM platforms to just 2, a step which helped Opel to return to profit after more than a decade of losses. +++ 

+++ RENAULT is set to launch a hot Zoe RS within 3 years as it looks to lead the way for electric performance vehicles. Renault created the 460 hp Zoe e-Sport concept car, officially a nod to Renault’s involvement in Formula E, but the model has not yet come to fruition. Renault product planning boss Ali Kassai said: “Society is changing so fast. We need to find a way to make passion of performance cars socially acceptable. I believe Renault is best placed to find that way because of our history as a leader in EVs and one of the historic players in performance cars”. He continued: “We have been thinking about this for a long time. It will happen the day when the technology road blocks are removed. This means high performance but also sustainability of performance and making economic sense”. Asked how soon we might expect a hot electric Renault, Kassai said: “It has to be short, because we were the leader in EVs, so we need to keep up the pace. I hope in 3 years”. Kassai also said Renault wants to continue its traditional RS line for as long as feasibly possible. “We will not let our fan club down”, he said. “As long as we can offer these cars, regulatory-wise, we will”. +++ 

+++ General Motors said president Mark REUSS would now oversee North America, South America, China and international regions. Reuss, who was named president in January 2019 to drive GM’s global product development, will continue to report to chairman and chief executive officer Mary Barra, the company said. The announcement comes as the No.1 U.S. automaker is investing in developing self-driving cars, while cutting back on the production of traditional sedans. GM also promoted Doug Parks, vice president of autonomous and electric vehicle programs, to the role of executive vice president, global product development, purchasing and supply chain. Steve Kiefer, senior vice president, global purchasing and supply chain, was named as senior vice president and president, GM South America and international operations. Both Parks and Kiefer will report to Reuss. +++ 

+++ With fully self-driving cars many years from mass market adoption because of the high cost and complexity of the technology, auto supplier Aptiv is seeing soaring demand from automakers for more basic SEMI AUTOMATED DRIVING FEATURES , the company’s top executive said. “We have contracts with 7 automakers to provide them with those sorts of solutions that they’re launching across all of their vehicle platforms”, Aptiv chief executive officer Kevin Clark told after the company reported third-quarter results and lowered its full-year earnings forecast due to a 40-day U.S. labor strike at General Motors. “That’s where we’re seeing the most demand”. Because of the strike, Aptiv now expects to earn between $4.62 and $4.68 per share, down from its previous forecast of $5.05 to $5.15 per share. Fully self-driving vehicles require lidar-sensing technology. But the tremendous cost of lidar (prices for individual sensors currently range from about $6,000 to more than $70,000) is a major stumbling block to the mass rollout of self-driving vehicles, whether in commercial delivery and robotaxi fleets such as those being developed by Ford and GM, or in passenger vehicles aimed at consumers. In September, Hyundai Motor Group announced it will invest $1.6 billion in a joint venture to develop self-driving vehicle technologies with Aptiv. Clark said that joint venture will help it meet its latest target of 2022 to develop fully self-driving car technology, with orders from robotaxi firms expected to generate $500 million in revenue in 2025. “You’ll first see adoption of automated driving systems for the robotaxi market”, he said. “There’s a financial incentive for them to pay more for the technology”. Other industry executives and investors have predicted that fully automated driving systems could appear in delivery vehicles, from long-haul trucks and to mid-size vans, before their widespread use in robotaxis. In the meantime, Clark said the cost for more basic semi-automated driver assistance packages, including automated emergency braking, lane keeping assist or parking assist, is somewhere between $700 to $1,000 per vehicle, which automakers can then sell to safety-conscious consumers for double that or more. “It’s a very profitable option that helps them sell cars”, he said. +++ 

+++ SKODA ’s new Octavia will come with plug-in hybrid and mild-hybrid versions. The Octavia is Skoda’s best-selling model globally and offers the widest range of drivetrains and body styles in the brand’s lineup. The Octavia iV PHEV will use the same 1.4-liter base engine as fitted to the recently launched Skoda Superb iV but will offer 2 power variants: a 204 hp model and a sportier 245 hp version. No range or emissions figures have been released but they are expected to be similar to the Superb iV, which Skoda said could travel 55 km on electric power only and record CO2 emissions of under 40 g/km. The PHEV will be available in both hatchback and wagon form. Mild-hybrid technology will be fitted to versions of the 1.0 liter and 1.5 liter gasoline models with the automatic DSG gearbox. The cars come with a 48 volt belt-driven starter motor that recovers lost energy and allows it to coast with the engine off to save fuel. No emission figures were given. Other engines include a 2.0 liter gasoline with 190 hp and a 2.0 liter diesel with 115 hp, 150 hp and 200 hp outputs. Allwheel drive is available on the 2.0 liter gasoline and the 2 higher-powered diesels. Skoda has dropped the smaller 1.6 liter diesel powertrain. Skoda says the new MQB platform gives the new Octavia more space for rear passengers and a bigger trunk. The new Octavia is “a big step into the future” compared to the 3 generations that preceded it, CEO Bernhard Maier said in a statement. The car is the first Skoda to receive 2 new camera-based safety features. Collision Avoidance Assist helps the driver steer away from a potential collision, while Exit Warning alerts drivers if they are about to open their door into the path of a cyclist or another car. The car will also come with adaptive cruise control. The Octavia will become “one of the safest cars within its segment” Christian Strube, Skoda’s head of technical development, said in the statement. Interior technology on the car includes the option of two 10-inch screens, including a virtual cockpit screen in front of the driver that can be configured to include information from the navigation system. Skoda has migrated more buttons to the central screen, which sits above the dashboard. Users can pinch-to-zoom the navigation map in and out, while the volume can be controlled with an on-screen slider. Other available technology includes the Matrix LED lights that reduce dazzle to oncoming cars by automatically switching off different zones within the lights, and a three-zone air conditioning system. The new Octavia is built on the same VW Group MQB platform as the previous model but is 22 mm longer in its wagon form at 4.689 mm and 19 mm longer for the hatchback. Skoda says knee room is “luxurious” in the new model, measuring 78 mm in the back seats, while trunk space grows by 30 liters in the wagon to 640 liters, and by 10 liters in the hatchback to 600 liters. Skoda will launch the wagon first to highlight its popularity over the hatchback, the automaker said. Deliveries of the first cars in Europe will start toward the end of the year, with the hatch arriving in the first quarter. The wagon version was Europe’s best-selling wagon in the first half of the year, according to figures from JATO Dynamics and it outsells the hatchback by more than 2:1. The Octavia was the biggest seller in Skoda’s range in the first 9 months, representing almost 30 % of overall deliveries at 268,900. The number declined by 9.6 %, partly because of a tail-off in demand for Skoda models in China, its largest market, according to company figures. The design of the new car has been given more “emotional appeal” Skoda said. It borrows heavily from the look of the bigger Superb, for example using rear lights that stretch into the trunk lid, rather than just sitting on the body itself as with the current car. Skoda said the Scout and RS variants will follow later in the year. The PHEV models are expected around the middle of 2020. +++ 

+++ TESLA ’s third-quarter revenue tumbled 39 % in the United States, its first drop in more than 2 years, but sales in China and other regions surged, the electric car maker’s break down of sales by geography. U.S. sales, which account for the biggest share of the company’s total revenue, fell to $3.13 billion from $5.13 billion a year earlier. Sales in China rose 64 % to $669 million and its other segment, which covers the rest of the globe, rose by more than a billion dollars to $1.83 billion, a regulatory filing showed. “Musk is laser-focused on Europe and China for growth, while domestically, core demand is fading relative to other regions”, Wedbush analyst Dan Ives said, adding that U.S. growth will remain more challenging going forward. In its earnings report earlier this month, Tesla reported a nearly 8 % drop in total revenue to $6.30 billion, missing analysts’ average estimate of $6.33 billion. It did not break down sales by geography in the report. The company, however, surprised investors with a quarterly profit, making good on chief executive officer Elon Musk’s promise, as it delivered a record 97,000 cars. The company has said it plans to deliver 360,000 to 400,000 vehicles for all of 2019, and that it was “highly confident in exceeding 360,000 deliveries this year”. The drop in sales in its domestic market in the latest reported quarter compares with a 55 % rise in the second quarter ended June. Tesla is expanding its service in other markets including China and Europe, as Musk is under pressure to make Tesla sustainably profitable, while still spending on major initiatives ranging from a Shanghai factory and assembly-line to upcoming models such as the Model Y crossover and a Semi commercial truck. The company forecast capital expenditure to be slightly below $1.5 billion in 2019. In the filing, Tesla also said it had a provision for warranty of $138 million in the third quarter versus $187 million last year. The filing shows warranty adjustments and other one-time items are a large driver of perceived strength, Roth Capital analyst Craig Irwin said, who downgraded stock to “sell” from “neutral”, adding that he sees margins as unsustainable. +++ 

+++ In the UNITED KINGDOM , car output dropped by an annual 3.8 % in September, hit by weakening demand overseas and political and economic uncertainty at home as Brexit remains unresolved, an industry body said. Production stood at 122,256 vehicles, with volumes in the first 9 months of the year down 15.6 % to just under 1 million cars according to the Society of Motor Manufacturers and Traders. The global automotive industry has undergone a torrid year, hit by declining sales in China, trade-war worries between the world’s two biggest economies, a slump in diesel sales in Europe and the need to invest heavily in electrification. “Another bitterly disappointing month reflects domestic and international market contraction”, said SMMT chief executive Mike Hawes. “Most worrying of all though is the continued threat of a ‘no deal’ Brexit, something which has caused international investment to stall and cost UK operations hundreds of millions of pounds”. Brexit has been delayed for a third time, now until the end of January, and Britons will head to the polls in December for a snap election designed to break the impasse. +++

+++ VOLKSWAGEN lowered its full-year sales outlook, warning of slowing demand even as 9 month adjusted operating profit jumped 11.2 % on increased demand for SUVs as well as Skoda and Porsche cars. The German carmaker said a slowdown in global demand would result in 2019 vehicle deliveries being in line with last year’s figures, adjusting its previous forecast for a slight rise. “Despite the gain in market share, the Volkswagen Group anticipates that vehicle markets will contract faster than previously anticipated in many regions of the world”, it said. Increased demand for higher-margin Tiguan and Touareg models helped to offset an overall drop in sales of the VW brand in the 9 months ending September, with Porsche and Skoda deliveries up 8 % and 15.3 % respectively. Revenue for its passenger cars division is still expected to rise 5 % this year and the company reiterated that it expects an operating profit margin for the passenger cars division and the group to be in the range of 6.5 % to 7.5 % for the full year. The updated guidance follows Ford’s cut this week to its operating profit forecast, blaming a slowdown in demand in China and other headwinds. Volkswagen said special items from legal risks, caused by the 2015 diesel emissions cheating scandal, had fallen to €1.3 billion from €2.4 billion in the same period last year. Third-quarter adjusted operating profit jumped 37 % to €4.82 billion, with analysts at Evercore ISI estimating Porsche’s profit margin at 16.8 %, well ahead of Audi with 7.5 % and the VW brand at 4.1 %. “The divisions beat expectations which will help the perception of quality of earnings”, Evercore’s Arndt Ellinghorst said in a note. +++

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