Newsflash: Bentley komt met exclusief alternatief voor Audi e-Tron en Mercedes-Benz EQ C

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+++ BENTLEY was given an ultimatum in January to become profitable fast. The message came from Wolfgang Porsche and Hans Michel Piëch, 2 top-ranking members of the Porsche-Piëch families who are the leading shareholders in the British luxury brand’s parent, Volkswagen Group. “The important thing is for every VW Group brand to generate a reasonable contribution margin”, Wolfgang Porsche, head of the families, told when asked about Bentley. “That is not currently the case at Bentley and we are not satisfied”. Eyebrows were raised at the quick turnaround timetable that Bentley was expected to meet. “It can only be 1 to 2 years”, Piëch said. Last year, Bentley suffered what CEO Adrian Hallmark called a “perfect storm”, resulting in a €55 million loss. It was Bentley’s first year in the red since it posted losses in 2009 and 2010 after the global financial crisis. In the intervening years, however, it only once posted a margin above single figures: a 10 % profit in 2013. This is about to change, Hallmark says. Through 9 months, Bentley has posted a €65 million profit, according to VW Group figures and it expects a significantly better 4th quarter than in 2018 because the long-delayed Continental GT will finally launch in China this month. Having the key model available in the world’s largest market will help the company’s revival. “Next year, it would be hard not to have a record year”, Hallmark said. The cause of the perfect storm Hallmark referenced was the painfully slow rollout of 3 key models: the Continental GT, the Continental GTC and the Flying Spur. The first-generation Continental GT was the car that propelled the relaunched Bentley brand to success in 2003, 5 years after VW bought the marque. Bentley stuck to the same successful styling formula for the third-generation that debuted last year, but underneath it underwent a radical overhaul. Adapting the Porsche Panamera’s platform, adding Porsche’s dual-clutch transmission and making extensive use of complex super-formed aluminum body panels pushed up costs and slowed development as Bentley obsessed about the look of the Continental GT’s body and the action of its gearbox . Development was delayed 18 months, but when it finally reached completion, Bentley couldn’t find space in overbooked testing stations to homologate the models under the new WLTP emissions regulations. “We spent the money then couldn’t build them. And when we could build them, we couldn’t ship them and sell them because the certification wasn’t in place”, Hallmark said. The replacement for the Continental GT, traditionally one of Bentley’s bestsellers, was unveiled at the 2017 Frankfurt auto show, but Bentley has only just started selling the coupe and the convertible versions of the car in the US. Meanwhile, global sales of the Flying Spur start in the first quarter next year. Hallmark estimates markets that account for about 40 % of the brand’s global volume didn’t have its newest models for large portions of this year. The brand’s main revenue generator in the meantime has been the Bentayga. Sales are still strong after launching in 2015 but neither it nor the niche Mulsanne could carry the company, forcing it to slash costs. Bentley cut 450 people, about 10 % of its workforce, and made efficiency improvements that reduced the time its core models spent on each station to a little more than 9 minutes from more than 12 minutes. Hallmark describes the efficiency improvements, helped by Porsche Consulting, as being some of the most comprehensive in the industry over the last 12 months. “It’s certainly more than Porsche achieved back in the 1990s when former CEO Wendelin Wiedeking did the first phase of lean”, Hallmark said. Under its 2 previous CEOs, Bentley targeted annual sales of 15.000 cars by 2018, but since 2014 the brand’s volume has stalled between 10.500 and 11.000. After joining in February 2018 Hallmark nixed talk of a Bentley sports car and, according to one source, killed the planned development of a Bentley model on the same J1 electric platform as the recently launched Porsche Taycan. Instead, Bentley is planning to launch an electric car by 2025. That model is likely to be underpinned by the Premium Platform Electric (PPE) that Bentley is co-developing with sister brands Porsche and Audi. To prepare for the shift to full-electric powertrains, Bentley is making changes at its production base in Crewe, northwest England, where it has been building cars since 1946. Development work is being moved to a new site across the road from Bentley’s headquarters to free up assembly space among the historic brick buildings. Reading between the lines of Hallmark’s statements, the electric platform layout will push development toward a crossover with a smaller footprint than traditional Bentleys, even if the cabin space doesn’t change. “But that’s not because we want to build a small car. We just don’t want to waste space on the outside”, he told. On my visit to Crewe, Audi e-Tron and Mercedes-Benz EQ C electric SUVs were spotted undergoing evaluation. Another model line would give Bentley more resilience to boom-and-bust cycles that all automakers with limited ranges suffer from, especially in the ultraluxury segment where buyers are easily distracted by the next fashionable launch. But Bentley still has work to do, IHS Markit principal automotive analyst Tim Urquhart said. “The volumes have grown but profits really haven’t”, he said. “It’s a difficult sector. All it takes is for the global economy to catch a cold, and they are back to losing money again”. For now, however, Bentley is in a healthy place. “We had the perfect storm, now everything is running as it should”, Hallmark said. “We have built the cars. They are on quality. They are on quantity. We have turned the corner”. +++ 

+++ Backing out of a tight parking space is something 1-series drivers can now hand over to the vehicle as the automaker’s reversing assistant makes its debut in the premium compact class. It’s one of the high-tech features that BMW is adding in its entry model range as competition intensifies to widen the reach of technology that automates tasks that customers think are difficult or monotonous. Already available on the 3 series, the system, which helps the driver exit parking spots or maneuver when space is limited, represents a further step toward automated driving. The reverse assistant stores the steering movements for any distance the car has just driven forward at no more than 36 kph. The car is then able to reverse the vehicle for distances of up to 50 meters at up to 9 kph by steering it along exactly the same line it took when moving forward. The 1-series’ smart-car abilities are also extended to its transmission, which can adapt its shift strategy to the planned route and driving situation. This is possible if the car is equipped with a navigation system, adaptive cruise control and BMW’s so-called Proactive Driving Assistant. The transmission will factor in the data from all three to determine when to change gears. The car’s start-stop function also takes cues from the data supplied by the navigation system, front-mounted camera and sensors. The third-generation 1 series continues BMW’s strategic shift toward front-wheel drive from rearwheel drive for its compact lineup. Internally called UKL2, the 1 series shares the fwd system with the 2-series Tourer, X1 and X2, and the Countryman from sister brand Mini. BMW says that switching to a fwd architecture has resulted in a significant increase in interior space, despite marginally reducing the vehicle’s overall length to 4319 mm from 4324 mm and reducing its wheelbase by 20 mm to 2670 mm. At 1799 mm, the car is 34 mm wider than its predecessor while its height has increased by 13 mm to 1434 mm. Rear seats passengers have easier access and enjoy an extra 33 mm of knee room. The luggage space has increased by 20 liters to 380 liters. +++ 

+++ This year when FORD went outside the company for the first time in 70 years to hire a chief financial officer, he came with an impressive pedigree: a resume that included top jobs at Amazon and Snap. He also came with a pedigreed sidekick: a chief furry officer. Wander past Tim Stone’s glass-walled office on the 12th floor of Ford’s world headquarters on any given day and lying at his feet is his lively, 7 year old Australian shepherd, Finley, who has his own name badge and sly “CFO” title bestowed by his owner. No, Ford hasn’t gone to the dogs, but one has breached the executive suite. “He’s got a very clear job description, which is: Spirits high and stress low”, Stone explained to a group of Bloomberg editors recently in New York. “And he kills it every day!” Finley is more than just a good boy. He is the C-suite mascot for a pilot program offered to 1.300 office employees at Ford allowing them to bring their dogs to work. It’s part of a larger effort by Ford to attract hard-to-get tech talent to the Motor City. Other worker-friendly initiatives include a less hierarchical campus redesign and converting an abandoned train station in a rapidly gentrifying district of downtown Detroit into a modern office space. Ford already has hired more than 3.000 workers with advanced computing skills, but it still needs hundreds more software engineers, data scientists, app developers, digital media specialists and more, it said. Seattle and Silicon Valley have long been veritable Fido fiefdoms, where tech giants and startups alike welcome workers’ 4-legged friends as a way to enhance work-life balance. Studies have shown that all-day access to man’s best friend can reduce stress, improve productivity and possibly even curb employee turnover. There’s even a ranking of the most dog-friendly companies by a Seattle-based pet service company, which is appropriately named Rover. The list is loaded with West Coast companies, while there are precious few Midwestern firms. And zero automakers. Atop the list is Amazon, which has 7.000 registered dogs, giving it a human-to-hound ratio of 7-to-1. On its Seattle campus, the online retail giant offers doggy day care, grooming and canine lunch options at Just Food for Dogs and Puddles Barkery. One of those Amazon approved pooches used to be Finley. His leash holder, Stone, 52, spent 2 decades at Amazon, rising to vice president of finance. When he started at Ford in April, he didn’t think twice about bringing his furry friend to the conservative confines of Ford’s executive headquarters building known for decades as the ‘Glass House’. “It’s been a cultural change”, Stone said. “I was the first one to bring my dog in every day and when you start doing that, the tone from the top matters”. Part of Stone’s mission at Ford is to challenge convention as the company works through a wrenching $11 billion restructuring and embraces electric and self-driving cars. And his canine deputy helps push people outside their comfort zone. “It makes meeting dialogues different”, Stone said. “When you’ve got a dog in the room, it just makes it easier”. Finley also is helping Stone make more friends at his new employer by breaking down barriers at the 116-year-old auto company known for its pinstriped pecking order. “People know the dog far more than they know me”, Stone joked. “It makes the CFO more approachable. It’s amazing how many people I run into and they’re like, ‘Oh, you have a great dog!’ ”. But Ford’s pooch policy is still in the puppy phase. A spokesman emphasized that it remains just a test and dogs aren’t allowed in common areas, like cafeterias and conference rooms. There is no doggy day care or bowls of treats doled out by receptionists, like at Amazon. Still, Stone says Finley is teaching Ford a few new tricks. “It totally changed the dynamic in so many ways”, he said. “It just relaxes everybody”. +++


+++ GENERAL MOTORS could expand the lineup of vehicles using its large pickup and SUV architecture and sees big opportunities in over-the-air software updates, president Mark Reuss told. GM, which controls about 70 % of the large SUV market in North America with 6 models, unveiled the redesigned Chevrolet Tahoe and Suburban, the first of a new generation of large SUVs whose profits will help fund development of electric vehicles that the automaker promises for the future. The new Chevrolet Tahoe, revealed at the arena where the Detroit Red Wings hockey team plays in downtown Detroit, is 6.7 inches longer than the current Tahoe and can carry as much as 122.9 cubic feet of cargo. Passengers in the third row of seats get 10 inches more legroom and a better ride thanks to a more car-like independent rear suspension. The new Chevrolet Suburban will grow by 1.3 inches to 225.7 inches long, making it one of the longest passenger vehicles on the market. GM’s big SUVs will be powered by 8 cylinder gasoline engines or 6 cylinder diesel motors. The vehicles have a new digital electronic architecture that enables over-the-air software updates and new revenue opportunities, Reuss told. “It’s huge”, Reuss said of the potential to sell customers new digital functions or avoid warranty repairs with a software update. Electric car maker Tesla has used over-the-air upgrades as money makers and to fix problems at low cost. As the industry moves toward electric vehicles, profits from large SUVs will help pay for investments, Reuss said. Those include GM’s plans to build a new battery plant and offer an electric pick-up. The new SUVs are assembled at a complex in Texas, a state where many of them will be sold. GM has invested $1.4 billion to expand the factory operation and that gives the company the option to manufacture additional models, Reuss said. “We don’t want to invest that much and not have agility”. The Tahoe and Suburban unveilings cap a substantial investment by GM over the past 5 years in its largest pickups and SUVs. GM’s Detroit rivals, Ford and Fiat Chrysler Automobiles, are also expanding their large SUV lineups, even as they promise more electrified cars for the future. Detroit automakers are doubling down again on big SUVs for a simple reason: It pays. The Arlington, Texas factory is running 24 hours a day to meet demand and profit margins on large SUVs can be as high as 30 %, or more than $15,000 a vehicle, industry executives and analysts said. Barclays estimated large pickups and SUVs accounted for 72 % of GM’s North American profit in 2018. GM did not disclose pricing or fuel consumption data on the new SUVs, but the average Tahoe sold for $57,414 in November. US fuel economy rules, instituted under president Barack Obama, encourage automakers to make SUVs even bigger. Vehicles that have a larger “footprint” because they are long and wide have easier mileage and CO2 emissions targets to meet. President Donald Trump has said he wants to ease vehicle CO2 standards but has not released a final plan. GM has sided with Trump on fuel economy policy in a dispute with California, which has sued to maintain the stronger Obama era standards. GM’s sales of big SUVs through the end of November were roughly steady year over year. But GM faces tougher competition in the segment going forward. Ford has boosted sales of its competing Ford Expedition and Lincoln Navigator SUVs by 45 % through Nov. 30. Fiat Chrysler Automobiles plans to launch a new Jeep Grand Wagoneer in 2021. +++ 

+++ It appears BMW’s agreement with Vietnam’s VinFast has made the company a target of HACKERS attempting to steal trade secrets. A hacker group known as OceanLotus targeted BMW this spring. As part of the operation, hackers installed a tool called Cobalt Strike and then used it to attempt to gather confidential information. Security experts at BMW caught wind of this and reportedly spent several months monitoring the hackers before cutting off their access this month. Thankfully, the attack appears to have been a failure as a security expert said the hackers likely didn’t get sensitive information and wouldn’t have been able to access systems at the company’s headquarters in Munich. BMW didn’t say much about the incident, but told: “We have implemented structures and processes that minimize the risk of unauthorized external access to our systems and allow us to quickly detect, reconstruct, and recover in the event of an incident”. OceanLotus has reportedly been operating since 2014 and is believed to be to be a state-sponsored hacking group supported by Vietnam. While that connection isn’t definitive, the group often targets Vietnamese dissidents and countries that Vietnam sees a potential rival or threat. The group is also said to have targeted Hyundai, but little is known about that particular effort. It also remains unclear if any other automakers were targeted. That latest hack shouldn’t come as much of a surprise as the FBI warned auto companies they could be targets of “ransomware infections, data breaches leading to the exfiltration of personally identifiable information, and unauthorized access to enterprise networks”. At the time, the FBI said several of these attacks have been successful and they allowed hackers to steal sensitive information, conduct illegal wire transfers and receive ransom payments. +++ 

+++ At a 2-day gathering for HONDA ’s suppliers in March, chief executive Takahiro Hachigo sounded the alarm. At the Hotel Higashinihon in Utsunomiya, Hachigo told them the Japanese automaker was facing a crisis after a string of costly recalls and other quality blunders and it needed to plot a new course, according to 2 people who attended the meeting. Since then, Hachigo has been quietly working on reforms to centralize decision-making by bringing Honda’s standalone research & development (R&D) division in-house and cutting some senior management roles, according to 3 insiders. Expected to be announced early next year, the reforms are meant to simplify the way Honda designs cars and put its engineering resources to more effective use at a time when it needs to develop cars for an electric age, the sources said. “Decades ago, localization was the buzz word and our tech center independence was a key driver for innovation”, said a former Honda executive who now is the head of one of its suppliers. “Those days are over”. The sources said Hachigo was poised to integrate so its technicians work more closely with key departments such as purchasing, manufacturing, quality assurance, and sales and marketing. “Honda believes strengthening the automotive business and reforming it in preparation for the arrival of next-generation mobility technologies are our most critical management tasks. This is a priority”, a Honda spokeswoman said in response to questions about the plans. In the 1980s and much of the 1990s, the name Honda struck terror into the hearts of executives at the big 3 U.S. carmakers in Detroit because they simply couldn’t match its low-cost, efficient, well-built cars. But after a slew of recalls since 2014 for problems with components such as airbags, sliding doors and engines, Honda’s status as a benchmark for quality and efficiency has been seriously damaged, and the quality crisis is hitting profits. According to 5 Honda insiders, quality blunders have helped squeeze the operating margin at its global automotive business to 2 % -3 %, giving it less room for maneuver just as bigger rivals are building partnerships and overhauling their operations to become stronger. That’s in stark contrast to Honda’s motorcycle business which has already brought its R&D division in-house and has a margin of 13.9 %. In J.D. Power’s study of vehicle dependability in the United States, one of Honda’s 2 main auto markets along with China, the Japanese brand fell to 18th place this year from 5th in 2015 and 4th in 2002, its highest ranking. “These moves we’re making today will decide our eventual fate: whether we’re going to be in business as an independent player 10 to 15 years from now”, a Honda source told. A senior engineer at a technical center north of Tokyo in Utsunomiya, where Honda does much of its development, said the root of the problem was the “crazy complexity” of its vehicle range and all the associated engineering processes. “Quality is acting up”, the engineer said. “Honda has created too many regional models, in addition to an array of types, options and derivatives for its global models. All that’s eating up our profit”. In the United States, for example, Honda’s Accord comes in 13 versions, including 3 hybrids. GM’s rival Malibu has 5, though it doesn’t have hybrid models. At the 2-day meeting in Utsunomiya, Hachigo and his procurement managers told suppliers to help Honda slash its range of cars and dumb down model types and options. They called on suppliers to use more common parts, from engines and transmissions to door handles, rear view mirrors and even knobs and switches, according to 2 people who attended the meeting and slides Honda used in presentations. Honda’s problems stem largely from an aggressive expansion before Hachigo took over in 2015. In addition to so-called global models such as the Civic, Accord and CR-V, Honda developed a host of regional models which now account for 40 % of its global car sales. They include the Crider sedan in China, the Brio and the Mobilio in southeast Asia, the WR-V in Latin America, which is also now sold in India, the Pilot in the United States and the N-series of micro-minis in Japan. Its global models, which account for 60 % of sales, come with an array of equipment options and vehicle trims that Hachigo, an engineer by training who has worked at Honda since 1982, has called unnecessary product derivatives. The explosion in the number of regional models had an unintended consequence: the engineering became more complex and the elevated workload led to lapses in quality and costly recalls, 2 company sources said. Even though the impact of the Takata airbag crisis had largely subsided by 2017, Honda still put aside 520 billion yen ($4.8 billion) in the 12 months through March 2017 for product warranties and over 450 billion in each of the past 2 years. In the 4 years before the Takata debacle, warranty provisions ranged from 171 billion to 274 billion yen, before surging to 727 billion in the year ending March 2016. In 2018, for example, Honda recalled about 600,000 cars in China because sludge was collecting in the engines of six models when driven in cold weather while the sliding doors on its U.S. Odyssey minivans started opening while the vehicles were moving. Hachigo flagged some of the issues at a news conference in May, saying he wanted to eliminate two-thirds of derivative products on global models by 2025 and wean Honda off its tendency to go overboard by creating colors, model types and options specific to different regions. He said he was aiming to cut engineers’ workloads by about a third to free up time and resources for Honda’s technical divisions to research technologies for the cars of the future. What Hachigo and senior Honda officials haven’t discussed publicly are the planned structural reforms to help its quality and efficiency drive, and the main target is its R&D division, 3 company sources said. Besides the quality issues and engineering workload linked to the proliferation of regional models, the advent of new technologies requires Honda’s big-spending technical division to act less independently, 2 sources said. “In many ways, Honda’s tech companies behave much like university labs, and that was fine in years past”, the former Honda executive and supplier said. By putting decision-makers in Honda’s Tokyo headquarters, the hope is that the R&D division will deploy capital and human resources more economically. Honda’s R&D and engineering units are expected to spend 860 billion yen this financial year, or 5.5 % of expected revenue. Toyota, whose revenue is double, is expected to spend 1.1 trillion yen, or 3.7 % of its global revenue, on technology. 2 company sources said Hachigo plans to eliminate the top management roles at Honda R&D and will probably turn some into divisional managers within the company. One source said the aim was: “to centralize the company’s fragmented, localized decision-making power back at the mothership in Tokyo”. According to the engineer, Honda has also introduced an internal quality target to cut global recalls by two-thirds in the next few years from a crisis level of 6 million in 2017. It was clear at the 2-day suppliers’ powwow that Hachigo meant business. Without naming names, Honda executives discussed exemplary product development projects (and bad ones) so lessons could be learned. It was fairly obvious within Honda’s small community of suppliers who was being singled out and they weren’t happy, said one supplier at the meeting. So much so that some skipped golf on day 2. +++ 

+++ INDONESIA is aiming to start making lithium batteries for use in electric vehicles in 2023, alongside plants that are already slated to produce chemicals used in the batteries, according to the minister who oversees the energy and mining ministry. Coordinating Minister for Maritime and Investment Affairs Luhut Pandjaitan said he wants investors to start putting money into plants to make batteries alongside the plants that will soon be producing battery chemicals extracted from nickel ore. “We are in coordination with GEM and CATL to build lithium battery plants in Indonesia”, Pandjaitan told reporters, referring to Chinese battery firm GEM and CATL. The companies and their partners, which include stainless steel maker Tsingshan Holding Group, are building Indonesia’s first plant to produce battery chemicals. Pandjaitan said the government is looking at Patimban in West Java as a potential location for building battery plants. “I asked them to work on this at the same time (with the battery chemical plants)”, he said. “In 2023, everything must be finished”. GEM expects to start trial production at its Indonesian battery chemicals plant in August 2020, with the first phase of operations up and running by the end of next year, its president said in November. GEM and its partners are currently waiting for environmental approval to proceed further with the development of the plant. Pandjaitan said the government hopes the environmental impact studies can be completed by the end of the year. The government moved forward a ban on nickel ore exports by 2 years to January 2020 to process more of the country’s mining output domestically. +++

 

+++ One would think that with 12 brands in its portfolio, the last thing the Volkswagen Group needed was to create a new marque from scratch. Yet that’s exactly what the German giant did in China earlier this year by elevating the popular JETTA budget sedan to the status of a standalone brand with a 3-model lineup. This marks the first time in Volkswagen history that a model is transformed into a brand with its own model family. The new brand targets the entry-level segment, specifically first-time young buyers from China’s large cities where vehicle ownership levels are still very low. So far, the gamble seems to have paid off as Jetta sold nearly 30,000 units in its first 3 months on the market; the most successful first 3 months of any new car brand in China. That’s quite remarkable, especially considering this was achieved with only 2 models, the VA3 sedan (formerly known as the VW Jetta) and the VS5 compact SUV (a rebadged Seat Ateca), with the latter accounting for almost 80 % of Jetta deliveries. Sales are expected to grow further with the launch of the brand’s third model, the VS7 midsize SUV (a rebadged Seat Tarraco) which made its market debut last month. All 3 models are built by FAW-Volkswagen in their Chengdu plant. “The entry-level segment has so far been served almost exclusively by Chinese brands. The Jetta brand closes the gap between the entry-level segment and the volume segment, at the top end of which the Volkswagen brand is positioned”, explains Jürgen Stackmann, sales board member of the Volkswagen brand. “We see tremendous potential there, and the flying start of Jetta proves us right”, the executive added. The entry-level segment currently makes up about one third of all passenger cars in China, and around 80 % of customers buy a car for the first time in their lives. Interestingly, VW says first-time buyers in China are on average 20 years younger than those in Europe or America and are willing to spend between €8,000 and €15,000 for their first car. The Jetta brand is positioned independently in the world’s largest car market, with an almost completely digital sales process and its own dealer network with digitalized showrooms that are either standalone or integrated within existing Volkswagen dealers. By the end of the year, the number of Jetta dealers is expected to grow to 200. +++

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