Newsflash: Mercedes-Maybach SUV debuteert nog deze maand

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+++ Volkswagen intends to launch a fully AUTONOMOUS driving system by 2025, and the automaker is highlighting the technology behind this ambitious effort. While a number of companies are working on autonomous driving technology, Volkswagen’s effort kicked into high-gear this March when they began testing a fleet of five e-Golfs in Hamburg. The models have been equipped with an assortment of sensors including 7 radars, 11 lasers, 14 cameras and 14 ultrasound sensors. These generate approximately 5 gigabytes of data every minute and all that information is processed by an advanced computer which has the processing power of 15 laptops. As part of the development process, Volkswagen is testing their e-Golf prototypes in several phases. Each phase lasts approximately one week and the cars are driven on an approximately 3 km section of specially-equipped roads several times a day. This continued testing and development is important as Volkswagen’s Helge Neuner said, “We as human beings have learned from childhood to recognize our environment. But we first have to teach technology that”. This isn’t as easy and Volkswagen Autonomy CEO Alexander Hitzinger described it as “one of the greatest challenges of our time”. Getting vehicles to identify and recognize their surroundings is tough enough, but then comes the hard part of creating algorithms that have to deal with an “almost endless number of traffic and safety scenarios”. In order to overcome these difficulties, Volkswagen is investing €44 billion into e-mobility, autonomous driving, new mobility services and the digitization of vehicles and plants. Volkswagen says this should eventually result in autonomous vehicles without a steering wheel or pedals. As part of this effort, the automaker created Volkswagen Autonomy last month. The new subsidiary will focus on Level 4 and Level 5 autonomous driving systems and will compliment the company’s partnership with Argo AI. It will also bring the Volkswagen Group’s various autonomous driving programs under one roof. While Volkswagen is using the e-Golf as a test bed for the development of their autonomous driving system, the company noted the first applications of Level 4 and Level 5 systems are planned for the commercial sector. As a result, Volkswagen intends to develop special purpose vehicles such as robo taxis and robo vans. +++ 

+++ According to unofficial sources, BMW is expected to introduce 1 more (entry-level) plug-in hybrid version of 3-Series next year. Beside the current BMW 330e (and upcoming Touring versio)n, there might be also 320e with a smaller engine (1.5-litre 3-cylinder petrol engine instead 2.0-litre 4-cylinder petrol engine) and smaller electric motor. The engine itself would be shared with the 225xe Active Tourer. Overall system output is expected to be around 204 hp. There is no word about battery pack capacity. The 330e is using a 12.0 kWh battery. One might wonder why BMW would introduce an entry-level PHEV? Well, the answer might be that you don’t really need a 2.0-litre engine, especially if you want to go green, and the slightly lower price will further boost sales. The unveiling of the 320e in the third quarter of 2020 suggests a debut at the Paris Motor Show. +++ 

+++ A few months ago, Porsche was spied testing a mysterious Panamera prototype. Believed to have been internally named the Lion, it allegedly had more than 800 hp from an updated variant of the plug-in hybrid powertrain found in the Turbo S E-Hybrid. Now, that same powertrain is thought to have made its way into the CAYENNE . Porsche’s current SUV range-topping variant combines a 4.0-liter twin-turbo V8 with an electric motor and has a total system output of 679 hp and 900 Nm, yet the rumored output of the more extreme version is 800+ hp. This would inevitably make it quicker than its Italian sibling, the Lamborghini Urus; on the other hand, the Raging Bull is apparently considering the launch of the Urus Performante variant that will be more driver-focused and boast more power, readdressing the balance within the VW Group’s brands. +++ 

+++ Mercedes-Benz parent DAIMLER has discreetly warned financial analysts that CO2 compliance costs and market headwinds for next year would be much higher than previously thought and asked them to reduce their earnings estimates for the automaker by billions of euros. Speaking on condition of anonymity, 4 different brokerage houses (2 based in Germany and 2 in the UK) confirmed they had been contacted in recent weeks ahead of a capital markets presentation. They were told that the analysts’ 2020 consensus estimate of just over €10 billion for group operating profit was about a fifth too high because of added costs to electrify Mercedes’ passenger car fleet that cannot be passed on to customers and an accelerated slump in demand for heavy commercial vehicles. “This wasn’t a little, this was really running through the forest with an ax in panic because the consensus estimates were too high”, said a London-based analyst. “BMW has their CO2 compliance costs absolutely under control, whereas at Daimler it’s a huge problem, so now they are trying to pull consensus down by 20 %”. During the calls, Daimler investor relations representatives said the company was forecasting that Mercedes would face between €1.2 billion and €1.5 billion in fresh headwinds while a cyclical downturn would lower results at Daimler Trucks by €700 million to €800 million. While investor relations calls are common, most often they are done as a courtesy to individual analysts to protect them from creating unrealistic expectations among their clients that could make them look foolish. “It’s quite unusual to call everyone on the street and guide down”, said a second analyst. Consensus estimates of the entire investment community dropped by more than a fifth to below €9 billion in the following days as a consequence, the analysts said. “Basically, the management team wants to clear the decks ahead of the CMD (Capital Markets Day). They don’t want to deliver any incremental bad news”. The blanket nature of the call, the dimension of the headwinds cited, the fact that nothing was flagged two weeks ago when Daimler reported third-quarter results on October 24, and the timing just ahead of the key investor presentation only a few days away all combined to suggest this was highly unusual move, according to the analysts. The analysts specified that the call only related to next year’s earnings estimates and no indications were given about midterm margin targets or concrete cost-cutting plans, or either might be announced this week. Daimler’s new CEO, Ola Källenius, who succeeded Dieter Zetsche in May, is looking to save billions in costs as the automaker adjusts to the headwinds of trade tensions, plateauing sales and a pricey electrification strategy. The company has issued 2 profit warnings this year, one in June, then another a few weeks later in July. Its credibility might take a further blow if investors had unrealistic expectations going into the capital markets presentation. Also fresh in market memory are 2 profit warnings from 2018 under the former management team. While Daimler has not issued a profit target for next year, it has said a cost-cutting program announced in February was designed to ensure its core Mercedes passenger car business would return to a target margin corridor of 8 % to 10 % by 2021. This was a key pledge to shore up confidence in the plan because the company declined to provide a concrete savings target. Daimler had explained it was enough for investors to know that the countermeasures were designed with this goal in mind. Many analysts took this to mean there would be a sequential improvement from what is now a forecast 3 % to 5 % return at Mercedes this year. Källenius said he would not give a “spoiler alert” for the financial targets during the capital markets presentation. In a statement the company said: “The issue of CO2 compliance has been discussed within the industry and capital markets for a long time now. We have addressed this topic early and have a road map for CO2 compliance. As was the case before, this considerable effort requires investments in the future and leads to costs of which everyone is aware”. Even though the German brand hasn’t issued a profit target for 2020, it is aiming to have its core Mercedes passenger car business returning to a target margin corridor of 8 to 10% by 2021. +++

+++ DS says its anti-fatigue technology could help save around 50 lives a year. The fatigue monitoring system, which combines a pair of infra-red cameras and continuous vehicle positioning data, is available on the brand’s 7 Crossback. Because the cameras point at the driver, the car can monitor behaviour for signs of drowsiness or distraction, then warn them to take a break. In particular, the cameras are looking for signs of weariness in the movement of the eyes, eyelids or neck. If any of these are detected, an audible alert is activated and a warning notice appears on the digital instrument cluster. According to DS, the United Kingdom has seen 4,000 accidents and 150 fatalities caused by driver fatigue since 2015. That’s an average of roughly 1,300 crashes and 50 accidents that the company says could be avoided every year if all cars were fitted with its technology or a similar system. “Distracted and tired drivers are a serious safety threat on roads across the UK and it is the cause of thousands of accidents a year, with some ending in fatalities”, said the company’s head of product, Vince Clisham. “This serious issue can benefit from the latest technologies available, which is why we have made our DS Driver Attention Monitoring technology available across the range on the 7 Crossback. Coupled with DS Night Vision and DS Active LED Vision headlights, DS is able to lead the way on improving the safety on the roads”. In 2022, fatigue and distraction alert systems will become mandatory for all vehicles sold in the European Union, but the technology is not required until then. On the lowlier versions of the 7 Crossback, for example, it comes as part of an option package. Only on the high-end cars the package is a standard feature. Drowsiness detection systems are just one part of a host of changes the EU has proposed for 2022, when reversing cameras or sensors, intelligent speed assistance and ‘black box’ data recorders will all be mandatory for all cars, vans, trucks and buses sold in the bloc. At the same time, lane-keeping assistance, advanced emergency braking and “crash-test improved” safety belts will all be required for new cars and vans. It isn’t entirely clear whether these rules will still apply to vehicles sold in the UK if and when the country leaves the European Union. However, the government has been urged to maintain the same standards as the EU by road safety campaigners, and the Vehicle Certification Agency has reportedly said it will match the EU’s requirements. +++ 

+++ South Korea’s exports of ELECTRIC VEHICLES doubled in the first 10 months of this year from the same period in 2018 due to increasing demand from Europe and the U.S. According to the Ministry of Trade, Industry and Energy and the Korea International Trade Association, some 57.379 EVs were sold in overseas markets from January to October this year; an increase from 26.397 units a year ago. In money terms, exports of EVs were assessed at $2.57 billion, up 103.3 % on-year. The increase in exports was buoyed by Hyundai’s Kona Electric, as the automaker exported some 26.922 units overseas. If this trend continues, it seems certain that the amounts are on track to surpass $3 billion this year for the first time. EVs accounted for 7.3 % of total car exports here, up from 4.4 % last year. “Cost-effective Korean EVs are receiving a good response in Europe and the U.S.”, said Lee Hang-koo at the Korea Institute for Industrial Economics and Trade. Renault Samsung recently began producing the Twizy and plans to launch the Zoé next year, helping boost the overall volume of EV exports overseas. +++ 

+++ IRELAND experienced an extraordinary month in October, as plug-in electric car share out of overall car sales volume went through the roof, reaching 15 %! Part of the reason is high deliveries of EVs in a slow month, but I am happy to report on such phenomena. In total, 317 new plug-in cars were registered (3 times the number from October 2018), which allowed the YTD amount to hit 4,559 at an average market share of 3.9 %. While there is still no sign of the Tesla Model 3, two other BEVs are racing for the best-selling EV title: the Nissan Leaf (most popular EV in 2011-2018) with 54 registrations in October and 1,073 YTD; and the Hyundai Kona Electric with 80 registrations in October and 1,060 YTD. The 2 have been very close to each other for quite some time this year, but the momentum seems to be slightly on the Hyundai side. Anyway, Ireland has been in love with the Leaf since 2011. +++ 

+++ The Tata Group, the owner of JAGUAR LAND ROVER , has approached companies including BMW and China’s Zhejiang Geely Holding Group as it seeks partnerships for the beleaguered UK automaker, people with knowledge of the matter told. Tata has said it’s open to finding partners for JLR to save on costs and share the burden of investing in electric vehicles. The deliberations were at an early stage and Tata could still approach other potential partners, the people said, asking not to be identified because the information is private. Any tie-up with a Chinese automaker could potentially help JLR in that market, where its struggles led to a $3.9 billion writedown earlier this year. Deeper ties between the British luxury brand and BMW would build on an existing collaboration to develop engines and electric-drive technology, though the German automaker’s former CEO, Harald Krüger, in August ruled out any equity investment. It was not immediately clear how receptive Geely and BMW were. “There have been no talks with Tata or JLR”, Geely said in a statement. BMW declined to comment, as did Tata. Scale has become increasingly crucial in the automotive industry as automakers pool resources to tackle electrification and autonomous driving. The challenge is especially daunting for smaller players such as JLR, which has committed to an ambitious program to offer electric variants for each of its new models from 2020. JLR was an early mover among traditional automakers with the Jaguar I-Pace full-electric crossover, introduced last year. A global downturn that has hit major markets has added to the pressure, and despite the many challenges of turning fierce rivals into collaborators, the pace of dealmaking has picked up. The Volkswagen Group this year agreed to team with Ford in areas including electrification and self-driving cars. The PSA Group last month agreed to combine with Fiat Chrysler Automobiles to create the world’s 4th-largest automaker by volume. One potential obstacle for any partner with JLR is the automaker’s financial struggles. Tata has begun to address some of these issues, providing the brand with a $910 million equity infusion to help bolster its balance sheet. In China, JLR has struggled with quality and dealership issues. The company reported last month that sales had stabilized, helping parent Tata Motors post a narrower-than-projected quarterly loss. JLR is also near completion of a $3.2 billion savings drive that included thousands of job cuts worldwide. Tata bought JLR from Ford in 2008 for $2.3 billion. While the conglomerate is open to finding partners for JLR, it does not plan to sell the unit, N. Chandrasekaran, chairman of group holding company, Tata Sons, said in an interview last month. +++ 

+++ Even with massive changes in the works for FCA given its planned merger with PSA and negotiations on a new 4-year labor agreement with the UAW, the strategy remains on track to build more, bigger, and more profitable JEEP cars and Ram pickups. It makes me tired just thinking about all the things that FCA boss Mike Manley is juggling, but the top man (at least until the merger takes effect) says his team is going full tilt on product plans and portfolio overhauls that were in the works before the merger agreement. For Jeep, construction is underway in Detroit to turn the unused Mack Avenue engine plant into a facility to make more Jeeps, a $1.6 billion overhaul scheduled to be completed early next year. Production will begin in the 4th quarter of 2020 on a new full-size 3-row SUV to compete with the next generation of the Cadillac Escalade and its GM brothers, the Ford Expedition and Lincoln Navigator duo, and big boys from a number of other premium and non-premium brands. The Detroit plant will add production of the next-generation Grand Cherokee in the first half of 2021. Mack Avenue will be 1 of 3 Michigan plants that will produce plug-in hybrids, and it will also have the capability to make fully electric Jeeps, with the first such models due in late 2021. Manley has said the Jeep brand will include at least 4 plug-in-hybrid vehicles. Plug-ins on the way include versions of the Renegade and Compass, as well as the Wrangler. There is an expectation electric motors will find their way into the upcoming 3-row Jeeps, too. The CEO says he is more encouraged by pricing on electric vehicles today, especially in Europe, than he was earlier in the year. Plans also remain on track to start building the new Wagoneer and Grand Wagoneer 3-row luxury SUVs, Manley said. FCA is spending $1.5 billion to retool its truck plant in Warren, Michigan, to build these models starting in the first half of 2021, including the electrified variants. There will be 14 weeks of downtime in the new year at the Warren plant that continues to make the Ram 1500 Classic, the previous-generation version of the pickup. For now, it acts as a more affordable, entry-level option sold in addition to the current Ram 1500. Manley said there is no date in mind for the cessation of Classic production as of now, which has been embraced by consumers. All of this is to say big trucks and SUVs geared to the North American market are least likely to be affected by the planned merger of FCA and PSA, a deal that came together quickly because the two companies are said to know each other’s strengths and weaknesses well. Manley cautioned there is still a lot of work to do to reach a formal agreement, however. He did not give a timeframe as to when the merger might be finalized. +++ 

+++ Daimler has announced that will host the world premiere of the MERCEDES-MAYBACH GLS at the 2019 Guangzhou Auto Show in China. The luxury sub-brand’s first ever SUV will debut on the eve of the event, on November 21. “State-of-the-art technology, exceptional comfort and the Maybach design philosophy make the vehicle a hallmark Maybach luxury experience”, the automaker says. “Based on the largest Mercedes-Benz SUV model, the Maybach variant likewise offers plenty of space for first-class front and rear compartments”. Compared to the rest of the GLS lineup, the Maybach has unique front and rear ends and even more updates on the inside. Occupants will enjoy heated, ventilated and massaging seats, multi-zone climate control, MBUX infotainment system with tablets in the rear passenger compartment and probably many other features, as it has been designed to challenge the likes of the Range Rover SVAutobiography, Rolls-Royce Cullinan and Bentley Bentayga. Powering it should be Merc’s 4.0-liter, twin-turbo V8, rated at 490 hp and 700 Nm, backed up by an EQ Boost starter generator. The latter will provide short bursts of performance, adding 21 hp and 250 Nm. Other vehicles that will be on display at the company’s stand in Guangzhou are the AMG A 35 L 4Matic and the Vision EQS Concept. Finally, the Denza X crossover, in EV and PHEV guises, from the car brand jointly established by Daimler and BYD, will also make its debut at the show. +++ 

+++ NISSAN reported a 70 % profit drop and cut its full-year outlook to an 11-year low, as the Japanese automaker was hit by falling sales that highlight its ongoing turmoil after the ouster of former head Carlos Ghosn. The latest weak showing from Nissan, already battered by weak financial performance for nearly 2 years, illustrates the scale of the work ahead for its new executive team, which is due to take over on December 1. Following the ouster of Ghosn almost a year ago, Nissan has been hit by sliding profit, uncertainty over its future leadership and tensions with top shareholder Renault, whose shares fell 2 % to their lowest since April 2013 after Nissan’s disappointing guidance. Operating profit at Japan’s second-biggest automaker by sales came in at 30 billion yen ($274.98 million) during the July-September period versus 101.2 billion yen a year earlier. That compared with a mean forecast of 47.48 billion yen from 9 analyst estimates, and marked its worst second-quarter performance in a decade and a half. “Operating profit for the first half is off our target” for full-year profit, Stephen Ma, a corporate vice president and the incoming chief financial officer, told reporters. “We are revisiting all our assumptions, and as you can see that is why we revised down our forecast for sales volume for the full year”. Nissan slashed its full-year operating profit forecast by 35 % to 150 billion yen. That would mark its worst full-year performance in 11 years. It now sees global retail sales at 5.2 million vehicles, from 5.5 million previously. The automaker in the past few weeks has announced a revamp of its top ranks with younger executives, naming the head of its China business, 53-year-old Makoto Uchida, as its next chief executive, as it seeks to draw a line under Ghosn’s legacy. Years of heavy discounting and fleet sales, particularly in the United States, has left Nissan with a cheapened brand image and low vehicle resale value as well as dented profit. The automaker is implementing a global recovery plan under which it will axe nearly 10 % of its workforce and cut global vehicle production by 10 % through 2023 to rein in costs which it has said had ballooned when Ghosn was CEO. +++ 

+++ Spy photographers have snapped the new PORSCHE 911 Turbo on numerous occasions and now the company reports the upcoming 911 Turbo S will have a twin-turbo 3.8-liter 6-cylinder engine that has been equipped with larger turbochargers and redesigned catalytic converters. Thanks to these changes, the engine will produce 650 hp and 800 Nm. To put those numbers into perspective, the outgoing 911 Turbo S has 580 hp and 700 Nm. This means the redesigned sports car will have an extra 70 hp and 100 Nm. The upgraded engine is connected to an 8-speed dual-clutch transmission which sends power to a standard all-wheel drive system. This setup will reportedly enable the car to accelerate from 0-100 kph in 2.7 seconds, before hitting a top speed of 330 kph. This is pretty impressive considering the car is slated to weigh 50 kg more than its predecessor. Other notable features include an active suspension, rear-wheel steering and a carbon-ceramic braking system. The latter will have new ten-piston calipers which grab onto massive 16.5 inch front discs. Out back, there will be eight-piston calipers and 15.4 inch discs. Last but not least, the 911 Turbo S will be offered with an optional sport suspension. It will lower the ride height by 10 mm. The 911 Turbo S will ride on wider 20 and 21 inch wheels that are wrapped in Michelin Pilot Sport 4S tires. The car will have a larger rear wing and an adjustable front splitter with additional travel. +++

+++ SKODA expects 30 % of sales of its latest-generation Octavia to be electrified versions. The Octavia will have mild hybrid and plug-in hybrid versions for the first time to enhance the compact car’s appeal to its core business customers because of their lower CO2 emissions and better fuel economy. Sales to business fleets account for about 65 % of the Octavia’s volume in Europe. “The Octavia is Skoda’s icon”, CEO Bernhard Maier said at the unveiling of the 4th generation of the car. He expects the Octavia to remain Skoda’s best-selling model. The Octavia accounts for 7 % of exports from the Czech Republic. The car’s importance to the Czech economy was underlined by the presence of the country’s prime minister, Andrej Babis, at the unveiling. Skoda’s sales and marketing chief, Alain Favey, said the addition of hybrid versions will be a key driver of future sales. “Company car drivers are a very important part of the business for us and so we are happy to have a car with real arguments in its favor, not only in terms of price but also in CO2 emissions and driver assistance”, Skoda’s sales and marketing chief, he said. The hybrid drivetrains will be available for the liftback and station wagon variants. The 2 mild-hybrids use 1.0-liter and 1.5-liter gasoline engines and add a 48-volt belt-driven starter motor. Skoda expects these versions to account for 15 % to 20 % of Octavia sales in its European markets, according to the automaker’s product boss for the Octavia and SUV product lines, Frantisek Drabek. The plug-in hybrid model uses a 1.4-liter gasoline engine mated to a 13 kilowatt-hour battery pack that is rated to give 55 km on the WLTP cycle. It will offer two power variants: a 204 hp model and a sportier 245 hp version. The plug-in hybrid models likely will account for around 10 % of Octavia volumes, Drabek said. A share of 10 % for the plug-in hybrid would mean sales of around 22,000 a year based on the Octavia’s 220,412 sales in Europe in 2018. The figure could be higher but the automaker has battery supply constraints so demand for Skoda’s newly launched Superb iV plug-in hybrid will influence the Octavia’s hybrid production. “We have installed capacity for 10 % but the response from the market is much higher so we will not be able to cover demand”, Drabek said. 7 out of the Octavia’s 16 engines will have CO2 ratings below 100 grams per km under the NEDC test cycle, appealing to fleet managers, Drabek said. “The demand will come from fleets. There are many companies with policies that call for cars below 100 grams of CO2”, he said. The addition of hybrids will reduce sales of the Octavia’s diesel versions in Europe to between 40 % and 45 % from 50 % now, Drabek said. Skoda has given the Octavia liftback a coupe-like look with a less prominent rear deck. The company expects the changes to give the liftback a bigger share of sales at around 40 % compared to 60 % for the wagon. The wagon currently accounts for 65 % of Octavia sales. It is the best-selling wagon in Europe. Compared to the outgoing Octavia the new generation “talks to both halves of your brain” Skoda’s head of design, Oliver Stefani, said. “One side is functionality and the other is emotional. You always expect functionality from Skoda, but with this car we are starting to talk to your heart”, he said. Examples include stretching the rear lights onto the tailgate on both the wagon and liftback. “It’s more expensive but you gain a lot. It stretches the car and makes it more coupe-like seen from a distance”, Stefani said. The Octavia is the first Skoda to have new camera-based safety features. Its collision avoidance system helps the driver steer away from a potential collision, while an ‘exit warning’ feature alerts drivers if they are about to open their door into the path of a cyclist or another car. Options include adaptive cruise control and 10-inch screens, including a virtual cockpit screen in front of the driver that can be configured to include information from the sat navigation. Other available technology includes ‘matrix’ LED lights that reduce dazzle to oncoming cars by automatically switching off different zones within the lights, and a 3-zone airconditioning system. The new Octavia is built on the same Volkswagen Group MQB platform as the old model. The wagon is 22 mm longer and the liftback is 19 mm longer. Both have a length of 4,689 mm. Rear knee room is generous at measuring 78 mm in the back seats. The wagon’s trunk space grows by 30 liters to 640 liters. The liftback’s cargo space increases 10 liters to 600 liters. The Octavia will continue to be built in the Czech Republic and China. The Chinese market will not get the mild-hybrid and plug-in hybrid models. The new Octavia will cost more than the current car but Skoda did not disclose pricing. +++ 

+++ In SOUTH KOREA , automakers are expected to produce fewer than 4 million cars this year for the first time since the global financial crisis in 2009. According to the Korea Automobile Manufacturers Association, the country’s 5 automakers produced 3.27 million vehicles from January to October, down 0.4 % on-year. Their monthly average production has been below 320,000 cars this year. The reasons are sluggish sales in China and the U.S. by Hyundai and Kia, the 2 major automakers that account for some 80 % of Korean production, and a crisis facing the 3 minor players: GM Korea, Renault Samsung and Ssangyong. Hyundai and Kia focused on sales in Korea and newly emerging economies with an aggressive marketing strategy to make up for their poor performance in China. As a result they sold 1.46 million and 1.18 million cars so far this year, up 4.5 % and 0.8 %. But their increased sales at home meant a much narrower market for the other 3. Renault Samsung’s sales plunged 24 % on-year to 144.727 cars in the first 10 months because it stopped making the Nissan X-Trail in September. This SUV used to take up about half of its total production. GM Korea, which has accumulated debts of W5 trillion over the past 5 years, sold 339.106 cars, down 11.1 %. This was because it lost its competitive edge compounded by a strike in September. Ssangyong, which has been in the red for the 11th quarter running, sold 109.162 cars, down 4.9 %. “Global demand began to fall last year, but here it has been falling since 2015”, said Lee Hang-koo of the Korea Institute for Industrial Economics and Trade. “The reason was the dwindling competitiveness of the Korean auto industry. There’s no other choice but drastic restructuring”. +++ 

+++ There’s a worrying trend in the motor business to appoint ‘non car guys’ to the top jobs. Some analysts say car guys are too nerdy. Hearts may rule heads. Forget petrol flowing through your veins; what you need are dollars flowing through your brain. They’ll point to the success of Alan Mulally at Ford, an aeroplane guy from Boeing and self confessed non-petrolhead. Or the late Sergio Marchionne, an accountant who never worked in cars until taking the helm of Fiat in 2004. Well, Mulally and Marchionne were certainly good for Ford and Fiat. But the case for the ‘car guy’ would cite Carlos TAVARES , the mercurial boss of PSA. No car maker has enjoyed a more spectacular recent turnaround. Tavares is surely the ultimate car-guy car boss. He spends 20 weekends a year motor racing. Currently that means a 1983 Ralt RT3 in historic Formula 3 and a 1969 Lola T70 Mk3B with Chevrolet V8 power in classic endurance racing. He does historic rallying (in a Peugeot 104 ZS). He’s a regular at the Nürburgring 24 Hour. “Motor racing is a disease”, he confesses. He spends his spare time tinkering with cars. He owns a classic restoration business in his native Portugal. Somehow he also finds time to run Peugeot, Citroën, DS, Opel and Vauxhall. He is the one-time protégé at Nissan-Renault of Carlos Ghosn, and for a long time was Ghosn’s number 2. While Ghosn awaits trial in Japan, accused of financial wrongdoing, Tavares is the auto exec who can do no wrong. “I learnt business focus from Carlos”, Tavares says. He left in 2013, and took the top job at Peugeot in 2014. At the time, Peugeot was the sick man of European car makers and close to bankruptcy. The year before the affable Lisboan joined, PSA lost €5 billion. A year after Tavares’ arrival, the company was profitable. Last year it made €5.6 billion and had record revenue, sales and profits. “5 years on, we are now on the podium of all car makers when it comes to profitability”, he notes with satisfaction, if not complacency. Tavares turned around PSA with a “much sharper business focus, being more demanding of management and staff, we had to push harder, and more external benchmarking”. The one-time sick man of Europe also bought the perennially unprofitable Opel-Vauxhall, increasing PSA’s size by 35 %. A battling company buying a failing company is not advice you’ll find in too many business books. Opel-Vauxhall had been losing money for 20 years. Under PSA ownership, it turned a profit within 18 months. “We reduced fixed costs and variable costs because of economies of scale, and increased our pricing. But a bigger company is only a better and more efficient company if you manage your business better. It’s all about execution”. He seeks further expansion. “We’ll look at new opportunities but above all we want to continue to be a very profitable car company that continues to seek to do more for less. The opportunities will come and go and we’ll select the ones we’re most interested in”. Including JLR? The rumours say Tata wants to sell and PSA wants to buy. “The opportunity is not on the table. Land Rover is interesting. But right now we’re not thinking about it”. Besides, PSA already has a ‘highly profitable’ premium brand: DS, a Tavares creation. The 7 Crossback is France’s best-selling premium SUV. Mind you, to get to the pricing and global appeal of BMW or Mercedes “could take 30 years”. That’s how long it took Audi, points out Tavares. Why no successful French premium car maker before, when France dominates in other luxury goods? “No car maker in France has been able to combine the emotional creativity with the engineering and financial rigour”. The future is of course electric and Tavares says making money from EVs will be tough. “Clean mobility is going to be more expensive. It’s like organic food. No politician is telling the consumer this but it’s true: new emissions regulations and electric mobility will cost more”. He expects 30 % of all new cars sold in Europe by 2030 will be electrified; battery electrics or plug-in hybrids. +++ 

+++ German prosecutors filed charges against a current VOLKSWAGEN manager as well as a former manager and 2 former board members, accusing them of a breach of fiduciary trust in connection with salary awards to works council members. Managers responsible for personnel issues at the VW brand stand accused of awarding works council members inflated salaries and bonuses between 2011 and 2016, causing damages worth €5.05 million, the prosecutor’s office in Braunschweig said in a statement. Upon awarding salaries to works council members, members of VW’s personnel committee deliberately chose a peer group that would ensure that works council members got higher salaries, the prosecutor’s office said. An amount equivalent to €3.125 million was awarded to the works council chief, the prosecutor’s office said. Such awards were to the “disadvantage” of the company, the Braunschweig prosecutor’s office said. +++ 

+++ The VOLVO S90 is the Swedish automaker’s largest sedan, and the redesigned model has been on sale for a few years now. That means it’s time for a refresh. Changes will be made to the taillights, the rear valance, the bumpers and the foglights. I expect the interior and tech to be lightly refreshed. Expect an updated infotainment system and other tech additions to keep it competitive. A more complete redesign of the flagship sedan is likely in the works, but it’ll be a few more years till we see that. +++

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