Newsflash: 6 cilinder modellen van Mazda komen pas in 2022

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+++ At FIAT CHRYSLER AUTOMOBILES , Alfa Romeo, Fiat and Maserati need help. That is not new. The late Sergio Marchionne, when he was CEO of FCA, lamented these brands were not performing close to the lofty goals he set for them. His successor Mike Manley made similar noises in a call with investors to discuss third-quarter earnings. The difference is this conference call comes a day after FCA and PSA announced plans to merge. And the brands most likely to be impacted are Alfa Romeo, Fiat and Maserati. Manley said he would not elaborate much about the deal that came together quickly because the 2 companies know each other well. He did say the agreement, which will take a while to formalize, brings together 2 strong complementary businesses with significant potential for value to be released. And the move is consistent with what Marchionne said in the final years of his life: that mergers are needed for a strong auto industry. Manley said in his 15 months in the top job, Maserati is better but there is still work to be done. To get the Italian luxury brand back on track, he has changed the leadership and reduced inventory by 7,000 units this year, deciding it was worth a $50 million loss to bring stocks in line. Restructuring of the brand should be complete by the end of the year so it can start making money again in 2020. The entire product portfolio will be renewed by 2023 and electrification will be a hallmark of the brand. A Ghibli hybrid starts the motor running next year, followed by the first new addition to the lineup: the Alfieri sports car due in late 2020. The coupe will be followed by a convertible in 2021. The Alfieri will be available as a plug-in hybrid or full battery electric car. That will be the pivot point for Maserati to enter the electric world; from then on all future Maseratis will have a full battery electric option. That includes an electric Levante to take on Tesla, as well as a plug-in hybrid. And there will be a smaller SUV that slots below the Levante. The Quattroporte will also get motors and batteries. Manley may have inherited a weak Maserati brand, but with restructuring of leadership and inventory, and a new lineup in the works, “I’m excited by plans for Maserati”, he said. The other disappointment is Alfa Romeo which will see its wings clipped. “In the near term, the new portfolio for the brand is significantly scaled back with a corresponding reduction in capital spending”, Manley said. It means continuation of the Giulia and Stelvio and the addition of 2 more crossovers. The Alfa Romeo Tonale compact crossover concept from the 2019 Geneva auto show will be on display this month at the L.A. auto show. This gorgeous concept looks production ready and would be a welcome addition to the lineup. But previous plans for more sedans and sports cars have been shelved. As FCA and PSA look at potential synergies, the new automaker will choose the best platforms for use going forward. The Giorgio rear-wheel-drive platform has done a good job underpinning the Alfa Romeo Giulia and Stelvio, Manley said. It was designed to sustain electrification and the complexity of future infotainment systems. As one of the few rear-drive platforms, there is a good chance it will continue, Manley said. The Fiat brand will focus on products and regions that were successful in the past. That means emphasis on Europe. No new products are planned at this point. But Fiat recently announced it would discontinue production of the 500 and 500e small cars in North America. Where PSA might affect FCA products is its expertise in smaller electric vehicles. Because FCA has such a high carbon footprint, it buys credits from Tesla to avoid fines for not being in compliance with emissions regulations. That is a practice that will continue for a few more years. Manley said he hopes FCA’s updated lineup, with its plans to introduce electric vehicles for many brands, will help the automaker to meet regulatory compliance on its own in 2021, at least on paper, but that is not guaranteed so Tesla is a hedge. The merger will help even more, Manley said. +++ 

+++ FORD has made Americans wait 23 years for an all-new Bronco but they are glad the wait is almost over. The automaker has announced that the 6th generation Bronco off-roader will have its world premiere in spring 2020. This likely means the all-new Bronco will debut for the 2020 model year, although Ford did not say it specifically. The carmaker did not provide further details. Many things have been said about the upcoming Bronco but very few official information is available. The general consensus is the new body-on-frame SUV will use the same platform as the next generaiton Ranger pickup. Targeting the Jeep Wrangler, the 2020 Bronco will feature a boxy body with removable doors and rear-mounted spare tire, as well as strong off-road capability. The engine lineup is expected to include a base 2.3-liter EcoBoost turbocharged 4-cylinder gasoline unit, as well as a V6 and a hybrid powertrain. Ford is going to shut down an engine factory in Romeo, Michigan as part of an agreement with the United Auto Workers union for a new 4-year contract. The 600 hourly workers of the engine plant will be offered either new jobs at a nearby transmission factory or buyouts. The UAW said that the deal with Ford “secured over $6 billion in major product investments in American facilities, creating and retaining over 8,500 jobs for our communities”. Back in 2017, Ford announced a $150 million investment into said engine factory to boost production capacity and for new tooling. The plant produces engines for models like Ford Super Duty, E-Series, Ford Shelby GT 350 Mustang and Shelby GT350R Mustang, along with components for F-Series, Mustang, Explorer and Edge. U.S. president Donald Trump publicly praised Ford for the investment in Romeo and 2 other plants in Michigan on Twitter back then. The details of Ford’s deal with the UAW have not been released yet but they are expected to be similar to the deal the union signed with General Motors. A source familiar with the matter said that the deal includes a signing bonus of $9,000 per person. Union members at GM received $11,000 per person. +++ 

+++ New-car registrations in FRANCE rose by 8.7 % in October, with DS Automobiles, Audi and Seat the biggest winners. There were 108,989 sales in 23 selling days in the month, industry association CCFA said, the same number of days as in October 2018. The sales increase was partly due to strong performances by Volkswagen Group brands, which had slumped last autumn because of difficulties certifying models under the Worldwide harmonized Light vehicle Test Procedure, or WLTP. Because of the new regime, a number of group models and engine variants were not available for sale. In addition to big increases at Audi (up 46 %) and Seat (up 39 %), Volkswagen brand sales rose 29 % and Skoda 3 %. Overall, group sales rose 32 %. Renault Group sales rose by 19 % for the month, with Dacia up 23 % and Renault brand increasing by 18 %. Renault had also faced some delays last year in WLTP certification. An increase of 77 % at DS (fueled by the introduction of the 3 Crossback this year) led PSA Group sales, which rose by 0.8 % overall. Citroen sales were up 14 %, but Peugeot fell 3.4 % and Opel was down 34 %. Other brands reported mixed results. BMW Group sales were up 2.7 %, with BMW brand gaining 9 % but Mini losing 8.9 %. Mercedes sales fell by 14 %. Hyundai and Nissan led Asian brands, each gaining 24 %. Toyota was up 11 % and Kia by 8.3 %. Fiat Chysler Automobiles, which is hoping to merge with the PSA Group, was up 11 %, with Jeep sales rising by 29 % and Fiat by 7.6 %. Ford sales fell by 15 %. The overall passenger car market fell 0.3 % to 1.83 million through through October. Diesel accounted for 33 % of the market, compared with 36 % in October 2018. Diesel’s market share has stabilized at between 31 % and 36 % since November 2018, after falling 12 percentage points from November 2017. Overall CO2 emissions fell to 109.3 grams per kilometer, the lowest level since September 2016. +++ 

+++ In GERMANY , new-car sales increased 13 % in October, helped by higher demand from business fleets and recovering sales of diesel cars. Registrations rose to 284,593 units. Porsche, Audi, Tesla, Alfa Romeo and Renault were among the winners while Opel and Dacia had a poor month. October registrations were also high because in the same month last year sales were constrained by supply disruptions during a changeover to new WLTP emissions rules. “Following the WLTP-related bottlenecks in the previous year, the full availability of models in the market is now having a positive effect”, the KBA motor transport authority said. Fleet sales increased by 16 % last month while sales to private customers grew 7 %. Sales of diesel cars were up 9.6 % for a 30.9 % market share. Diesel’s share of the market is still at its lowest for October since 2000 but the downward trend has now halted, Reinhard Zirpel, president of the VDIK importers association, said in a statement. Diesel sales have been hit by worries over harmful emissions and plans to ban cars with the powertrain from some city centers. Gasoline-car sales rose 4.5 % in October for a 57.7 % share. Battery-powered car registrations rose 47 % for a 1.7 % share, helped by demand for the Tesla Model 3. Hybrid sales jumped 139 % to 26,382 for a 9.3 % share, including a 2.4 % rise of plug-in hybrids to 6,947 units. Porsche and Audi, which were hit hard by WLTP supply disruptions last year, showed strong gains. Porsche sales increased year-on-year by 498 % while Audi saw its volume jump 118 %. Tesla’s new Model 3 helped the EV maker to increase sales by 372 % to 293 units. Alfa Romeo, with sales up 71 %, and Renault, with 57 % rise in registrations, also showed growth. Volkswagen brand remained market leader, with volume up 39 % for a 20 % market share. Number 2 Mercedes-Benz gained 5.9 % while number 3 BMW showed 3.4 % growth. Volume at Ford, the market’s Number 4 by sales, was flat. Opel’s registrations were down 30 %. Opel is currently introducing the latest generation of the Corsa, its top-selling model, including a full-electric version, which means the former edition is out of stock. This also goes for the Karl and Adam. Other brands whose volume fell by more than 20 % were Subaru (-35 %); Suzuki (-23 %); Honda (-21 %); and Dacia (-20 %). The VDIK forecasts German full-year sales will reach more than 3.5 million this year. Sales though October were up 3.4 % to 3.02 million. +++ 

+++ JAGUAR is in the process of testing an updated F-Type due for reveal next year. It will get a restyled front end with a new clamshell bonnet and slim, angular LED headlights mounted lower down the nose. There will also be a more prominent grille. It retains the same vertical bootlid, but with new wraparound taillights and a reshaped bumper. It’s expected that much of the more advanced technology and infotainment features from the I-Pace and the facelifted XE will make its way into the F-Type. That means new digital dials, a larger and more feature-laden touchscreen, and substantial upgrades to the materials. Jaguar Land Rover is now phasing out its long-running supercharged V6 in favour of a new turbocharged and hybridised straight-6 and the F-Type will benefit from this more efficient powertrain. The turbocharged 4-cylinder and supercharged V8 engines should be carried over to the new car with limited changes, however. This means the F-Type keeps its 5.0-litre V8, putting paid to rumours JLR would bring in a BMW-sourced 4.4-litre unit. What remains unclear is whether the new F-Type will retain a manual gearbox option. The current V6 is still offered with one in some markets, although it has been removed from sale in other countries. Regardless, manuals account for a tiny fraction of overall F-Type sales. We could see the revised F-Type early on in 2020, with an on-sale date not soon after that. +++ 

+++ Since LEVC ’s successful introduction of the plug-in hybrid TX Taxi in 2017, the UK-based unit of Zhejiang Geely Holding has struggled with costs. As a result, the money-losing producer of the iconic London black cab brought in longtime Audi executive Jörg Hofmann as its new CEO in February. Hofmann’s first job was to stabilize the company. Now he is leading a product push that will make the Chinese-owned brand profitable within 2 years. Since he joined LEVC in February, his main focus has been implementing a turnaround strategy in 2 phases. One is stabilization and consolidation, which is just finished. LEVC cut costs to a reasonable level and put a lot of emphasis on getting processes right. The basics of the business weren’t where they should have been. Phase two, which has just been kicked off, is growth based on the new van (the TX LCV) and exporting into new markets. Since 2014, the whole business model changed from producing a classic diesel taxi to a new electric taxi with new manufacturing techniques. This caused some turbulence, and maybe the turbulence wasn’t addressed in the right way, admits Hofmann. “That is what we are doing now. A lesson has been learned”. He addressed the turbulence by looking in all areas (purchasing, supply chain, manufacturing process, sales process, the dealer network, the import structure and the dealer margin system). Every area had some room for improvement. The sum of all that is paying off significantly, Hofmann says. But LEVC is not profitable yet. “This is something we clearly have to deliver. Geely invested €561 million in the brand in 2014, which is a big sign of trust. My job is to pay that back and, sooner or later, to deliver a sustainable, reasonable amount of profit. We will certainly be profitable 2 years from now at the latest”. The core model will be the TX Taxi, but LEVC now als has the TX Shuttle: a variant of the taxi with no taxi sign that is a people mover for mobility companies. “We expect 90 % of this product will be exported to Germany, Netherlands, France or wherever. Right now we are 10 % export, 90 percent United Kingdom. In the future we will be 70 % export, 30 % UK. The third model is our TX LCV. We plan to start production of the van at the end of the third quarter next year. 60 % of the Van parts will be the same as the taxi. The whole front will be the same, the platform will be the same, so we can create some synergies”. Hofmann would like to get a cheaper battery, the biggest cost, because it is too expensive. “It currently comes from LG Chem in Poland. We can’t walk away from the contract. But we are in discussions with LG Chem engineers to define our specifications and ask for cost improvements, which we have already gotten. Long term, there are other options for suppliers out there”. This year, LEVC will sell about 2,500 TX Taxis. “Now that we are starting exports to Europe and we expect significant volumes, I believe the combined volume of the taxi and Shuttle will be about 4,000 to 4,500 next year. With the addition of the van, we should reach 12,000 by 2021. The van has the potential to grow to 8,000 to 12,000 a year, easily. That’s when we will start to become profitable”. The TX Shuttle is the main export product for Europe. “We already see big demand from new-mobility companies in Germany that offer on-demand ride-sharing. We have sold about 50 to a company called Clever Shuttle. The car is perfect: 6 seats and purpose-built for transporting people”. Rivals for the Van will be the Ford Transit Custom plug-in hybrid. There will be more to come, but Hofmann is quite relaxed about that. “The market is huge. The 1-ton midsize Van segment is about 600,000 units in Europe. At the moment these are all diesel”.+++ 

+++ MAZDA bounced back to profit in the latest quarter, as earnings from a richer mix of higher-margin products and scaled-back incentives offset slipping unit sales. The results showed a gradual improvement based on the automaker’s strategy of expanding the price band of its offerings and rolling out more upscale features. In its earnings report, Mazda said that it booked an operating profit of 18.8 billion yen ($174.2 million) in the fiscal second quarter ended September 30, reversing a year-earlier loss. Net income more than tripled to 11.4 billion yen ($10.6 million) in the 3 months. Revenue held flat at 857.7 billion yen ($7.9 billion) in the period, as worldwide retail sales declined 4 % to 378,000 units, losing ground in North America and China. In announcing the results, executive vice president Kiyoshi Fujiwara said reduced marketing expenses and achieving better per-unit profit bolstered results, more than countering a slide in volume, a big hit from unfavorable exchange rates and climbing r&d expenses. “As we raise the entry price and offer better high-grade models, average transaction prices and revenue growth was achieved through this process”, he said. “We held down incentives and we also improved the quality of sales. Those are the major reasons for this improvement”. Mazda CEO Akira Marumoto in May unveiled a new mid-term business plan to lift operating profit margin to a sustainable 5 % by the fiscal year ending March 31, 2025. The new plan also set a lower long-term sales goal than Mazda had earlier floated. Mazda now targets global sales of 1.8 million vehicles in the fiscal year ending March 31, 2025. It had earlier wanted to sell 2 million vehicles in the fiscal year ending March 31, 2024. Marumoto said he wanted to alleviate the pressure to use incentives to attain volume targets. Key to the strategy is gradually introducing newer technologies to slowly extend the upper boundary of the price range that Mazda vehicles can command. Mazda did that with the redesigned 3 for instance, by introducing an all-wheel-drive variant with the full model change, Fujiwara said. As a result, Mazda has seen robust demand for Mazda3s at the high-end of its price range, boosting profitability. On the flip side, however, volume has suffered with sluggish demand for low-end models. Mazda is already implementing strategies to bolster sales of entry-level Mazda3 models for the 2020 model year, Fujiwara said. But he declined to specify what actions are being taken. Either way, waning demand for sedans is making the Mazda3 a tough sell. The nameplate is Mazda’s No. 2 seller in the U.S., but volume dropped 21 % through September this year. Fujiwara said Mazda will focus more on pushing the new CX-30 and achieving better sales of the CX-5 and CX-9, the brand’s larger crossovers. Mazda expects more upshifts in brand image and pricing power with the introductions of the Skyactiv-X powertrain, a new plug-in hybrid system and an in-line, 6-cylinder engine. Some of those technologies will find a home in a new platform for larger vehicles that is slated to debut in the fiscal year ending March 31, 2023. Meanwhile, Mazda is trying to rein in incentives to boost the brand image. “A high residual value can be maintained”, Fujiwara said. “We can encourage customers to replace with a new model in a shorter cycle”. In the July-September period, Mazda reeled in U.S. incentive spending 8.2 % to an average of $2,617 per vehicle. That outperformed the overall industry, which saw spiffs increase 4.7 % to an average of $3,951. Still, North American sales fell 4 % to 103,000 vehicles in the latest quarter. European volume advanced 2 % to 69,000 units, and China sales slumped 15 % to 55,000. The Japanese yen’s appreciation against the euro, Australian dollar and other currencies lopped 26.7 billion yen ($247.5 million) off the quarterly operating profit. Marumoto, who took office in June 2018, says his highest priority is spurring growth in the U.S., the automaker’s biggest market. To do that, he wants to focus on strengthening Mazda’s U.S. dealer network and making the most of its growing partnership with Toyota. Mazda is trying to upgrade its dealer network before it opens a new plant it is jointly building in Alabama with Toyota. Slated to open in 2021, the $1.6 billion plant will add 150,000 units of capacity to Mazda, all of which will be devoted to a new crossover for the United States. Mazda expects U.S. sales to soar after that, with the plant enabling it to sell 2 million vehicles globally. Looking ahead, Mazda cut its outlook for the current fiscal year ending March 31, 2020. It now expects operating profit to fall 27 % and net income to decline 32 %. In May, it had predicted operating profit would increase 33 %, while net grows 26 %. Mazda blamed deteriorating foreign exchange rates that are taking a bite out of earnings and weaker than expected sales. Mazda sees now global sales dipping 1 % to 1.55 million vehicles in the current fiscal year, on lower outlooks for all markets, including the U.S. It had early expected 4 % increase global sales to 1.62 million units. +++ 

+++ Chinese electric car startup NIO and Intel’s self-driving car technology firm Mobileye said they would partner to develop autonomous vehicles for the consumer market in China and eventually other countries. Under the agreement, Nio will manufacture and produce at mass scale a self-driving system designed by Mobileye, which will be integrated into Nio’s electric-vehicle consumer lines, as well as Mobileye’s driverless ride-hailing services. The self-driving kit provided by Israel-based Mobileye includes the vision processing chip, camera, radar and lidar sensors, as well as safety and mapping software. Nio will also develop a version of self-driving electric vehicles that Mobileye will deploy as robotaxis for ride-hailing services in global markets. No financial details of the partnership were disclosed. The companies plan an initial release in China beginning in 2022, Mobileye president and chief executive officer Amnon Shashua told. “The deal with Nio will also enable us to harvest data in compliance with Chinese regulations and improve mapping to support autonomous driving”, Shashua said. The Mobileye CEO added that a rollout in China was more efficient as the regulatory environment was centralized and the Chinese government was working on standardizing Mobileye’s safety model for self-driving cars into law. Manufacturers and suppliers are increasingly skeptical about the speed of adoption of fully automated self-driving systems, because of their high cost, complexity, and regulatory hurdles. In the meantime, they have begun focusing on deploying more advanced driver assistance systems (ADAS), which share components, but cost much less and can generate much-needed revenue to help defray the cost of developing full self-driving systems. Mobileye said it powers ADAS in car models of more than 27 automakers. Loss-making and cash-burning Nio is the most prominent among dozens of Chinese electric-vehicle startups vying to become the next Tesla. All are hampered by dwindling demand in the world’s largest car market, reduced government subsidies for EVs and nagging concerns over the China-U.S. trade war. Nio said the partnership with Mobileye aligned with its mission to provide premium, smart electric cars and allowed it to maintain an edge over electric vehicle competitors. +++ 

+++ PSA ’s and FCA’s pledge not to close factories if they merge is likely to come under heavy strain as the combined group would have spare production capacity of almost 6 million vehicles in a slowing autos market. The companies last week unveiled plans to create a $50 billion group that would leapfrog Hyundai, General Motors, Ford, Honda, Suzuki and BMW to become the world’s No.4 automaker, based on their combined 8.7 million vehicles sold last year. The new car and truck making giant would have potential manufacturing capacity of 14 million vehicles, forecasters LMC Automotive told. But the industry has entered a downturn and the European small car market in particular (where both PSA and FCA are heavily exposed) is under pressure. “The utilization rate would be low at 58 %, which would leave the group with almost 6 million units of spare capacity worldwide”, LMC Automotive said. “Europe is likely to bear the brunt of any potential plant closures”. Labor unions and politicians have already voiced concerns about job losses, and both PSA and FCA have ruled out factory closures in an attempt to quell fears. But a deadline to meet 2021 and 2025 emissions goals in Europe adds pressure on FCA to adopt PSA’s more efficient engines, calling into question some of FCA’s engine plants in Europe (mainly in Italy, as well as in Poland) in particular. “The focus will be Europe, where subscale product lines, powertrains and future EV (electric vehicle) investments could be combined”, Bernstein Research analyst Max Warburton, said in a recent note. A combined PSA-FCA would have a market share of 22 % in Europe, leapfrogging Volkswagen which, with a market share of 20%, has been the largest carmaker in Europe. PSA has already helped Opel, bought from General Motors in 2017, to make progress with emissions targets by rolling out the group’s small car platform and engines to the Opel factory in Zaragossa, Spain, where it builds the Corsa. The CMP platform is now used in factories in Poissy, France, Trnava, Slovakia, and Kenitra, Morocco to build Peugeot, Citroen and DS branded vehicles, and could be extended to fit FCA’s Lancia, Alfa Romeo and Fiat models to boost economies of scale. The market for small cars is under pressure because emissions rules are forcing entry level cars to add complex catalytic converters, making them less affordable. “Under the new CO2 targets these cars will need to get several updates that will be expensive. This will force some players to drop some of these models as the level of investment is very high”, according to Felipe Munoz, global analyst at JATO Dynamics, a forecasting firm. PSA has already axed the Opel Adam and Karl models because it became uneconomical to make these entry level vehicles emissions compliant. Overall, the market share of cars in the so-called A and B small car segments is expected to shrink to 38 % in Europe by 2021, down from 40 % last year, whereas demand for SUVs is expected to hold up well, LMC’s Sammy Chan said. As a result, low volume manufacturing plants in Europe are increasingly vulnerable, such as Fiat’s Kragujevac factory in Serbia and PSA’s Vauxhall plants in Ellesmere Port and Luton in Britain, LMC said. In terms of engine plants, PSA has major operations in Tremery and Douvrin in France, and has also retooled the former General Motors Szentgotthard factory in Hungary. FCA’s Fiat, Lancia and Alfa Romeo brands currently source their engines from plants in Termoli and Pratola Serra in Italy, as well as the Bielsko-Biala plant in Poland. “In terms of engine plants, it is likely that in the long term, 1 or 2 FCA plants in Europe would no longer be needed”, LMC said. +++ 

+++ SUV models and crossovers have been touted for their ability to handle rough roads, urban potholes and bad weather. But they are facing far more difficult challenges: Slowing sales and tightening emissions regulations. In the past decade, SUVs and crossovers have gone from niche vehicles with less than 10 % of the European market to nearly 40 % of all new-car sales today. Buyers love them for their image, the sense of security they give and their high seating position. Automakers have profited handsomely from healthy profit margins compared with equivalent non-SUV models. While the party may not be over, sales in the midsize D segment have declined this year by 8.2 %, and growth has slowed to 1.8 % among compact C segment SUVs. Only small B segment SUVs and crossovers are continuing to take market share, with the segment up 13 % through the first half. In the premium SUV segments, sales of large models are down 2.5 % and medium models have lost 2 %. The compact segment, however, grew at a healthy 18 %. Analysts see that as a sign of a maturing market. “Basically, the growth in SUVs is coming in the smaller segments”, said Felipe Munoz, global automotive analyst at JATO Dynamics. “Many consumers have already shifted to SUVs from regular cars. The next step will be electrification, which will be quite a challenge considering design and weight issues”. Midsize SUVs are sensitive to increased regulations that penalize high-polluting vehicles, analysts said, and small and compact SUVs are gaining in sophistication and even size. Automakers are “bringing all the utility of big vehicles into smaller ones”, said Tim Urquhart, an analyst at IHS Markit. “That’s definitely been one of the trends in the last few years”. Urquhart cited the new Mercedes-Benz GLB, a compact SUV available with 7 seats, a feature typically reserved for large or midsize models. The larger and most costly SUV segments, which include models such as the Audi Q7 (sales down 42 % in the first half) and the Mercedes GLE (down 52 %) are not likely to see much future growth because of a lack of full-electric models, Munoz said. With their added weight, larger frontal mass and less-aerodynamic profiles, SUVs and crossovers generate higher CO2 emissions than non-SUVs; an average of 14 % per automaker, according to a report from advocacy group Transport & Environment. As SUVs and crossovers have gained market share at the expense of smaller and lighter cars, it has contributed to an overall rise in CO2 emissions in recent years, the group says. And SUV-heavy model lineups are making it harder for automakers to reach their European emissions targets for 2020-21. The prevalence of SUVs and crossovers has also sparked something of a backlash, with climate change campaigners at the Frankfurt auto show calling for them to be banned. “As long as SUVs rather than small electric vehicles dominate automotive transport, cars will remain the problem child for us climate activists”, a consortium of environmental groups including Greenpeace said. None of this means, however, that automakers will stop selling SUVs or developing new models, or that consumer preferences will shift overnight. Instead, future models will gain electrification options, ranging from 48 volt mild hybrid systems to conventional and plug-in hybrids, and even full-electric drivetrains. That will come at a cost, both to car buyers and automakers. Consumers will probably be willing to absorb the higher prices associated with low-emissions technology, even for small and compact SUVs and crossovers, said Sammy Chan, an analyst at LMC Automotive. Chan said he and colleagues had been discussing whether small cars could continue to be profitable once the costs of electrification were added. His conclusion? “Our forecasts for SUVs are a lot more optimistic because of the demand for them”, he said. The number of SUVs on the market in Europe started ramping up in 2014, Chan said. The first victims of the surge were MPVs, with the number of those models dropping from 50 in 2015 to fewer than 30 this year, and a number of automakers have abandoned the segment or re-purposed MPVs models as crossovers, including the Peugeot 5008. One of the defining features of the first SUVs on the market was 4-wheel drive, but that has become much less of a consideration. According to figures from JATO, only 29 % of SUVs and crossovers sold in Europe have 4WD, while 71 % are frontwheel drive. That partly reflects improvements in traction-control technology, and also that image plays a large role in how SUVs are marketed. “The European consumer needs room, basic comfort and trunk space”, Munoz said. You can find that in both a traditional car and an SUV, but brands are telling drivers that SUVs can both meet their needs and be fun to drive at the same time”. Stationwagons have suffered, with brands such as Seat pushing its Arona while eliminating the Ibiza ST variant. Even sports cars have felt a pinch, Munoz said, from the introduction of coupe SUVs such as the BMW X6. In the premium segments, there are now more SUV models than conventional styles, and the gap is closing in the nonpremium market, Chan said. Brands such as Jeep and Land Rover, once niche players that sold burly body-on-frame trucks, have become mainstream by leveraging that cachet into a full range of unibody SUVs and crossovers. Nissan’s popular Juke, Qashqai and X-Trail SUVs led the brand to largely abandon sedans in Europe. At Jaguar, known for its sleek sports cars and sedans, 70 % of first-half sales this year were SUVs. Looking ahead, LMC predicts that SUVs will make up 44 % of the European market in 2024, with the rate of growth slowing from 5 % in 2018 to just 1 % starting in 2022. “We are still expecting aggressive expansion in the SUV segment”, Chan said, with the number of models expected to grow to 150 by 2021 from about 100 today. All this explains why automakers are desperate to keep selling SUVs, even if it will come with added costs to meet the EU’s fleet emissions target of 95 grams per kilometer starting next year, and even lower levels due in 2025 and 2030. “The consumer thirst for crossovers and SUVs should not be underestimated, giving automakers a tremendous incentive to keep on rolling them out”, Chan said. The only way to meet future CO2 targets is with electrification, analysts said, and SUVs have both drawbacks and advantages. On the plus side, relatively boxy and spacious body types make it easier to fit batteries under the floor and electric drivelines around transmissions and rear axles. “If you wanted to hybridize an existing car it’s far easier to do it in an SUV”, said Oliver Petschenyk, a powertrain analyst at LMC Automotive. “There is greater package space, but perhaps more significantly the body in white crash structure is designed to handle more weight”. This means that SUVs require fewer modifications than sedans to prevent injuries to occupants in a crash from a battery that can weigh several hundred kilograms, he said. Another less-obvious advantage for SUVs is that they have a built-in pricing buffer against some of the costs of electrification, analysts said. “Especially at the higher price points, you can absorb the prices for a plug-in hybrid or electrification”, IHS’s Urquhart said. In other words, SUVs might be a better canvas to pursue electrification developments while preserving profits than low-margin small or compact cars. For the majority of SUVs “electrification” will not mean full-electric versions, but rather a spectrum of solutions from 48 volt mild hybrids to conventional hybrids and plug-in hybrids, analysts said. “The plug-in hybrid SUV offerings, especially for premium brands, will really intensify”, said Al Bedwell, director of global powertrain at LMC, as automakers seek to take advantage of emissions “supercredits” for vehicles that emit less than 50 g/km of CO2; a figure many plug-in hybrid SUVs can reach. For example, Peugeot lists emissions for its plug-in compact 3008 as 29 g/km. “We are also seeing a mass rollout of 48 volt mild hybrids, which can deliver up to 10 percent CO2 savings”, Bedwell said. Another benefit of electrification comes from so-called “e-axles”, which can be used to provide a 4-wheeldrive system without the need for heavy and intrusive driveshafts running through the passenger compartment. On the other hand, there is no getting around the fact that SUVs and crossovers are heavier and less aerodynamic than equivalent sedans, reducing the range of full electric and plug-in models, as well as limiting efficiency gains for mild and conventional hybrids. “The biggest negative with SUVs becomes rolling resistance and aerodynamic drag due to larger wheels and frontal mass, which can’t really be improved without a downsize”, LMC’s Petschenyk said. It is this inescapable fact that is putting automakers under pressure from environmental advocates. They say that automakers’ complaints about difficulties meeting emissions targets ring hollow when, at the same time, they are pushing sales of inefficient SUVs and crossovers. “It’s just a question of physics”, said Florent Grelier, an engineer at T&E. “Crossovers and SUVs are heavier and less aerodynamic”. Grelier’s group says that increasing SUV sales are largely responsible for the recent rise in overall vehicle CO2 emissions across Europe following years of decline. This is increasing the gap automakers must close by 2021. A decline in sales of diesel engines, which emit less CO2 than equivalent-sized gasoline models, is only part of the reason for the increase, Grelier said. “Our report showed that the impact of increasing sales of SUVs on CO2 levels is 10 times more impactful on average CO2 levels than the drop in diesel”, he said. Nonetheless, Grelier said he expected European automakers to hit their CO2 targets, using a variety of regulatory and technological tools at their disposal. Even with 100 SUV and crossover models already on the European market, automakers are still creating new niches within the niche. “We are just arriving at saturation”, said Munoz of JATO. “Most brands are present in the small and compact segments”. The next trend may be coupe-style SUVs, a body type pioneered by BMW with the X6. Toyota has found success with the C-HR, and Porsche has introduced a coupe version of the Cayenne. Renault has debuted the Arkana, a coupe version of the Kadjar, on the Korean and Russian markets. From 2021 on, it will also be sold in Europa, based on the platform of the Captur. Some brands are also doubling up in the SUV segments. Ford has both the Puma and the EcoSport small SUVs in its lineup, with the Puma being the sportier and higher-priced model. Similarly, the Volkswagen T-Roc sits above the T-Cross in the B segment (or below the larger Tiguan in the C segment). Jeep offers both the Compass and Renegade compact models; Land Rover’s Velar and the Range Rover are similarly sized but with different characters. “What we are seeing now is that reference models have been established”, Munoz said, “but automakers are adding derivatives to attract new customers”. But there could be a point of diminishing returns, analysts said. Munoz pointed to the new Mazda CX-30 as an example of a model that could “confuse” buyers. “Is there really a need to have another SUV between the CX-3 and CX-5?” he said. “It could take sales from both models. On the other hand, it might bring in new ones”. +++ 

+++ SUZUKI said quarterly profit plunged by almost a third on slumping car demand in India, its biggest market, and Japanese automaker slashed its full-year vehicle sales outlook. After decades of robust growth, India’s auto sector has been in a tailspin, hit hard by a liquidity crunch at the country’s shadow banks that has squeezed financing for car sales as well as by higher taxes and a weak rural economy. “We no longer think that growth in India will be an uninterrupted move upwards”, President Toshihiro Suzuki told an earnings briefing. “We anticipate hills and valleys, so we need to focus on recovering from the current valley we’re in to ensure sustainable growth”. Operating profit for Japan’s 4th-largest automaker tumbled 32 % to 55.9 billion yen ($514 million) in the July-September quarter from the same period a year earlier. A drop in domestic output due to the need to improve its inspection processes after a mileage scandal also hurt. That was its weakest level in nearly 3 years, but it exceeded an average forecast for 44.9 billion yen from 9 analysts. Suzuki, which accounts for roughly half of India’s passenger vehicles through its majority stake in Maruti, sold just 305,000 vehicles in India in the quarter, down 32 % and its lowest quarterly sales since the December 2014 quarter. It now expects its India vehicles sales to slide by a fifth this business year. That compares with its previous forecast of a 4 % rise. Suzuki last month cut its estimate for full-year operating profit by 40 % to 200 billion yen, a 4-year low and a long way off its record high of 374.2 billion yen hit in the business year ended in March 2018. Globally, Suzuki posted quarterly sales of 670,000 vehicles, down around 20 % from a year ago. It currently expects annual global sales of 2.85 million units, down 15 % from an earlier forecast. Suzuki and Toyota announced in August they would take small equity stakes in each other as they try to leverage their combined scale to manage costs and boost development of new vehicle technologies. +++ 

+++ TESLA has 42,000 employees globally and 3,200 staff in China, its chairwoman Robyn Denholm said. Denholm was speaking on the sidelines of a week-long import expo in Shanghai, where Tesla has started trial production at its $2 billion factory as it races to reach an ambitious target of an annualized production rate of 500,000 vehicles by end-2019. +++ 

+++ In the UNITED KINGDOM , the new-car market suffered a significant decline last month, with 6.7 % fewer registrations than in October 2018. A total of 143.251 new cars were registered last month, down from 153.599 in October last year. A drop in private sales drove the majority of that fall, with 13.2 % fewer individual buyers signing on the dotted line as consumer confidence continues to plateau, though fleet sales remained stable, rising 0.3 %. October also saw a crystallisation of recent market trends. Diesel fell for the 31st consecutive month, with 28.3 % fewer oil burners registered compared to 2018, and diesel cars now making up 24.2 % of the market. Petrol registrations fell by 3.2 % last month, though for the year-to-date 65.2 % of all new cars run on unleaded, up from 61.9 % last year. Registrations of alternatively fuelled vehicles were up significantly in October, driven by 3,162 pure electric cars being sold; a 151.8 % rise. EVs make up 1.4 % of all registrations in the year to date. Conventional hybrids such as the Toyota Prius were up 28.9 %, comprising 5.5 % of the new-car market. The market for plug-in hybrids dropped by 2.2 %, with 3,119 such cars being registered. The monthly registration figures from the Society of Motor Manufacturers and Traders (SMMT) also show Sales of mild-hybrid (MHEV) diesel powertrains, such as those available with the new Range Rover Evoque, rose 378.1 %, with 3,251 such cars registered. MHEVs are not classified as alternatively fuelled vehicles in the SMMT’s figures, however, and rose from a low base of just 680 registrations in October 2018. UK market leaders Ford (the No. 1) and the Volkswagen brand (the No.2) had flat sales during October. BMW was the No. 3-seller for the month with volume up 6.8 %. No. 4 Mercedes-Benz saw registrations drop 3 %. Audi, at No. 5, boosted volume by 17 %. Among other brands, Vauxhall’s registrations fell 36 %; Dacia and Renault were both down 28 %; Jaguar dropped 27 %; Citroen declined by 23 % and Land Rover was down 17 %. +++ 

+++ This year’s Frankfurt motor show was arguably a very green-themed event with a strong focus on electrification. The VOLKSWAGEN Group doubled-down on this by showcasing the stunning Porsche Taycan, the Audi AI:Trail off-road concept and the production-ready VW ID.3. However, tucked away in one corner of VW’s display was also another electric vehicle, the ID.4 crossover. Based on the aforementioned ID.3, you may have missed it due to its special camouflage wrap, yet peel it back and it’s largely the production variant all good to go. So let’s illustratively explore further. First previewed by the 2017 I.D. Crozz concept, the ID.4 carries over many styling themes from the show car into production. Like the ID.3, the front-end features wrap-around LED daytime running lights to emphasis width, whilst lower front bumper has aggressive cut-outs to reduce visual mass. The doors now have more traditional frames, yet the glasshouse still looks futuristic with satin trim inlays running from the base of the a-pillar right back to the rear hatch opening. Sheetmetal surfacing incorporates rugged black wheel arch moldings, and is vastly more sculptured compared to the ID.3; this bodes well for VW’s traditionally more stylish Seat and Skoda siblings that are yet to come. As with ID.3, the ID.4 will employ the same MEB electric architecture that’ll underpin a whole range of electric vehicles from VW, Skoda, Seat and even Ford, which recently confirmed the agreement with the Germans. The battery-powered SUV appears slightly bigger than a Tiguan and will offer a larger, more practical cabin with a flat floor, no center tunnel and a higher driving position. Cabin styling will largely mirror the bionic design ethos of ID.3 as well; with a free-standing digital instrument gauge cluster, large driver-oriented infotainment screen and colour-contrasting trim inlays. Technophiles will have access to a myriad of driver assists, augmented reality (AR) head-up display, inductive charging for smartphones, and an intelligent voice command system that works in conjunction with an LED strip embedded in the dashboard. The latter pulses, blinks and changes color to communicate various commands; shades of Knight Rider perhaps? Whilst the top-spec ID.3 makes do with a 204 hp electric motor driving the rear wheels, conjecture has it another motor powering the front wheels will be added for enhanced grip and performance. This setup will also help overcome the ID.4’s larger body mass compared to its traditional hatchback sibling. I anticipate 3 battery options (mirroring the ID.3) ranging from 45, 60 and 77 kWh with ranges varying from 330 km and 420 km to 550 km. The largest battery can be AC/DC charged with up to 125 kW at a DC power source. Home charging will be enhanced by an ID Charger wall box available in 2 versions, with remote access and different charging outputs. +++

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