Newsflash: Opel ziet af van 7-persoons SUV boven Grandland X

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+++ Your first and last car might not be the most catchy of advertising slogans, but it’s undoubtedly true of the species known as ‘sub-B’, ‘ A-SEGMENT’, or ‘city cars’ as they are dubbed by in Europe. Under 3.9 metres in length (often nearer 3.5m), these are tiny but up-to-the-minute cars that are economical and cheap to run, with the most modern safety and emissions equipment. They’re bought mostly by people at each end of the age spectrum: young and old, none of them particularly wealthy. An A-segment car represents a sizeable part of their disposable income, but it means freedom to work, to socialise with family and friends, and is individual mobility in a way most wealthier folk take for granted. They’re popular, too, with A-segment sales representing a steady 8 % of the annual European new car market of about 15 million. In Italy, such cars account for about 15 % of the market. But they’re also in danger of extinction and the European Union is being blamed for this, accused of gross anomalies in emissions and safety standards for new cars, as well as undemocratic and unrealistic voting by the European Parliament. Leaders in the A-segment include: Fiat’s Panda and 500; Volkswagen’s Up and its badge-engineered spin-offs, the Skoda Citigo and Seat Mii; Ford’s Fiesta-based Ka+; Toyota’s Aygo and its spin-offs, the Peugeot 108 and Citroën C1; Renault’s Twingo; and Opel’s Karl plus Adam. With the exception of Toyota, not one of these car makers has expressed a firm commitment to replace their A-segment cars. Opel withdrew its Karl and Adam from sale this year and most of these small cars have a bleak future. “An A-segment car is often the first car young people buy”, said Olivier Murguet, Renault’s sales and marketing head, “and they are still profitable from a global perspective. We sell 200,000 in Latin America and India, but we have to be very careful where we launch. Emerging markets are still profitable”. But not Europe, it appears. At the heart of this issue is the EU’s new CO2 emissions requirements, which are not only the world’s toughest but also fall unevenly heavily on A-segment cars. PSA boss Carlos Tavares was curt about the issue at the Geneva motor show in March: “The economics of small cars is simple”, he said. “You need to look at the way the CO2 legislation structure is written: the lighter the car, the more demanding the CO2 regulation. So small cars are very demanding on CO2 and the only way is to get rid of the ICE [internal combustion engine] in them”. At the same show, Jürgen Stackmann, Volkswagen’s sales and marketing boss, told: “If Europe is pursuing this legal target, there is no single business case for cars the size of the Up. They are too small for the new technology and the engine can’t meet the CO2 targets. You’d need to sell an EV like an ID.3 just to be able to sell a city car”. The death blow to these small cars comes in the form of 2 stages of mandated CO2 requirements coming down the pipeline. From next year, the EU will require average CO2 emissions of 95 g/km from car makers with a few exceptions for 12 months, whereupon the average emissions of all newly registered cars will have to be below 95 g/km. Fines for not meeting these standards are exorbitant: €95 for each gram over the limit for each car produced. European research specialist Jato Dynamics estimates that, based on last year’s CO2 emissions, industry fines could be as much as €34 billion in 2021, with Volkswagen, PSA, Renault, Fiat and Daimler predicted to be the worst affected. Tavares said PSA will not incur fines “but there will be consequences and the EU might not like them”. The second part of the CO2 sledgehammer was voted in by the European Parliament last year and ratified in April. This mandates that, by 2030, there will be a 37.5 % cut in corporate average CO2 emissions from 2021’s 95 gram/km limit, which effectively means an average CO2 figure of about 60 gram/km. The level of these cuts surprised observers because they were much larger than those recommended by the European Automobile Manufacturers’ Association (ACEA), and even those advised by the parliament’s own technocrats and law framers, the European Commission. The targets will also be almost impossible to meet without radical and widespread adoption of battery-electric vehicles. The economics of making small cars was summed up in the 1970s by Henry Ford II when he saw his engineers’ plans for the Fiesta. “Small car, small profits”, he is reported to have grumbled. Nothing much has changed since then, as Seat boss Luca de Meo confirmed at Frankfurt. He said that even a large B-segment car with a viable price is a tough call to develop and that electric versions of these cars are unlikely to make any money for their makers until battery packs have a cost parity with internal combustion engines, which is some way off. “Zero CO2 is a target worth fighting for”, he said, “but it’s a huge stress for our company, and as for the €30,000 B-class cars at this show”. Battery-electric cars are the current darlings of a mass-media love affair with electric traction. Yet Tavares spelled out the problems. “On cars with such small price tags”, he said, “the battery can be up to 70 % of the cost of the car. So you are going to see a segment of cars A-sector disappear, because if you put a price on them to make them sustainable, that’s a price that young people can’t afford”. But how real are the fuel and CO2 savings going to be as a result of getting rid of A-segment cars? Small cars have much lower annual mileages than bigger models (typically around 12.000 kilometres for a B-segment model and even less for an A-segment car) so they simply don’t get used as much or use as much fuel as larger cars, which makes them inherently cleaner. And although the nominal CO2 contribution of an A-segment car might seem relatively high on paper, it’s hard to believe that a 2.5 tonne plug-in hybrid SUV with its WLTP test emissions of less than 50 g/km is half as polluting as a 900 kg city car producing CO2 emissions of around 100 g/km. Moreover, do we know whether the owners of these monster plug-in SUVs are actually plugging them in? It doesn’t seem fair, either, that the cost of the crash-impact safety, which has to be built into an A-segment car to enable its passengers to survive an impact with a large, heavy SUV, is carried by the A-segment car’s buyer alone. In 2001, Bernd Pischetsrieder, then head of VW, wistfully pointed out that if you took the safety and environmental equipment out of a standard VW small family car and laid it out on a workshop floor, you’d be looking at the cost of a complete VW small family car in Brazil. Since then, his example will have become more extreme. What’s more, no one has yet explained how 1.2 million new A-segment car buyers a year being forced into purchasing bigger and more thirsty cars, or used cars without the most modern safety and emissions equipment, will benefit European CO2 emissions, air pollution or road safety. The EU’s new emissions legislation has put the economics of car making into a tumble dryer where profit is as much dependent on not paying fines as it is making profitable cars as efficiently as possible. All the while, it seems car makers are free to carry any amount of penalty-free energy in a lithium ion battery car. Porsche’s new Taycan, for example, like all battery-electric cars, has zero tailpipe emissions, but it isn’t an environmental-free lunch and the Turbo model’s best-case ‘well-to-wheel’ greenhouse-gas emissions are 92 g/km. You might wonder also how it is that the buyer of such expensive battery-electric cars are subsidised with generous tax benefits. It’s inconvenient truths like this that, Tavares thinks, are examples of the “superficiality of thinking” around the issue of CO2 reduction at the level of European governments and the EU. “The reality is”, he said, “if you only look at tailpipe emissions and not the vehicle’s life cycle, then you are never going to see the true cost to the environment. And there is no European agency at the moment which coordinates and counts these things”. What’s more, Tavares has accused ministers of the European Parliament of environmental grandstanding.
“There have been extreme positions coming from countries which don’t have an automobile industry”, he said last year after the parliament’s vote. “Where was the mandate?” There were, however, equally split positions within member countries. Even in car-producing Germany, there was a desire for greater leniency on CO2 from the transport and economy ministries, while the environment and finance took tougher stances. There are, of course, other consequences of Europe’s extreme position on road transport CO2 emissions (which aren’t matched by its requirements of the aviation, energy generation, building and manufacturing industries). These include the effects on Europe’s 13 million car manufacturing jobs, as well as university funding, engineering training and research and development spending. A recent ACEA report warned that effectively mandating battery-electric cars will lead to a 38 % fall in parts sourced from European-based suppliers, with a knock-on effect on profitability, employment and high-skills training. There are also concerns about the advisability of passing production of a major part of the car’s value to China and the Far East because there simply isn’t the time to set up European battery-cell champions within the compulsory timetable. “The adoption of the legislation setting new CO2 emission standards for cars and vans is an important achievement”, said Miguel Arias Cañete, commissioner for climate action and energy, in April. “We are putting the transport sector on the right pathway towards clean mobility, helping EU industry to modernise and strengthen its competitive position on the global stage”. On its own website, the EU states it “works for social equality and tries to protect the weakest. It seeks to prevent social exclusion and discrimination”. Brushing aside Cañete’s corporate boilerplate, I contacted a number of politicians to see if they wanted to comment on the vote, the standards it has rushed in and their effect on the small A-segment cars and the individual transport choices available to their most vulnerable constituents in the most far-flung parts. To date, I have not received a single reply. “Ah yes”, said Peugeot boss Jean-Philippe Imparato when I told him about this lack of response. “You vote on Sunday and you pay on Monday”. Could kei cars be the answer? Celebrating their 70th anniversary this year, Japanese kei (light) cars were originally created in 1949 with the establishment of a set of maximum body-size and engine-capacity limits for a class of vehicle that would provide economical transport for individuals and businesses, get the country moving after World War II and encourage the establishment of a domestic car industry. With their distinctive yellow numberplates, kei cars and commercial vehicles attract significant tax advantages. They are also exempt from the requirement to prove that you have a parking space before you can own a car, a precondition that still operates in many towns and cities outside Tokyo. These Japanese ‘people’s cars’ have proved incredibly popular: witness the fact that kei cars represented almost 36 % of the 62 million cars on Japanese roads in 2017 and 33 % of the almost 4.4 million new-car registrations. Initially restricted to a maximum length of 2.8 meter, with no more than 150 cc 4-stroke or 100 cc 2-stroke engines, the requirements for kei cars have been revamped several times over the years. They now stipulate a maximum length of 3.4 meter and width of 1.48 meter, with engines displacing no more than 660 cc and producing no more than 64 hp. But could they provide an economical alternative to A-segment cars, which are so hard to produce at a profit? After all, they are small enough, their R&D costs have been amortised in Japan so they could be marginally priced, and they’re already proving a big success in countries such as India. At the recent Tokyo motor show, the signs were mixed. “Kei cars would be ideal”, said Hiroshi Nagaoka, R&D boss at Mitsubishi, which shares design and production of kei cars with its alliance partner Nissan. “Suzuki runs a big kei car business in India and it has achieved a big market share. But compared to Japan, Indian regulations are more relaxed. On the other hand, Europe is the toughest. To meet European standards on emissions and safety would be difficult”. His colleague Guillaume Cartier, Mitsubishi’s sales and marketing director, also pointed out that kei cars aren’t very profitable. It was a similar tale at Suzuki and Nissan, where engineers said the market is very tight and only just profitable (hence the number of co-operation deals), and they gave a thumbs down to getting kei cars past Europe’s tough safety and emissions requirements. Apparently, it’s side-impact protection that is the big problem and it’s almost insurmountable without radical and costly surgery. It would take a lot of innovative thinking by European legislators to find a way to allow these little cars into Europe : speed restrictors perhaps, or restricted access to motorways? The trouble is, if you allow derogations for one, then they should be for all A-segment cars, and like the 2.0-litre company car tax era in the 1980s, the unintended consequences could create a monster of unsafe tiny vehicles on our roads. So for the moment, it doesn’t look very likely that kei cars will save the day. +++
 

+++ AUDI delivered around 163.350 cars (+23.1 %) to customers worldwide last month, more than ever before in a single month of November. Apart from the strong growth in Europe (+33.0 %), which is still due to prior-year effects, record figures in the core regions of North America (+17.3 %) and China (+16.8 %) contributed to the new record-breaking figure. In turn, the company also exceeded the prior-year cumulative figures for the first time since the start of the year: From January through November the brand with the 4 Rings delivered around 1.669.600 premium automobiles (+0.7 %). “Our model initiative is gaining traction globally at the year-end”, says Hildegard Wortmann, member of the Board of Management for Sales and Marketing at Audi. “North America has been reaping the benefits of the full availability of the new Q3 for the past few months; the 2 electric models, the e-Tron and the Q2 L e-Tron, as well as the Q8 bolstered our portfolio in November in China. Despite the increasingly difficult environment, we therefore still expect our deliveries to customers to perform robustly and to see slight growth for 2019 as a whole”. Deliveries in Europe increased to around 707.650 cars since January, a year-on-year increase of 2.2 %. The sharp increase of 33.0 % to around 58.300 units in November is once again also down to prior-year effects associated with the WLTP switchover and model changeovers. In Germany, Audi handed over 19.526 cars to customers in November, an increase of 24.3 %. Deliveries rose 4.1 % to 253.443 cars since January. The Q3 (23.303 cars, +67.7 %), the A6 (41.899, +18.4 %) and the Q8 (5.751 cars, +131.2 %) contributed positively to growth in the domestic market. The North America region saw deliveries increase in November to a new record-breaking figure of 25.230 cars (+17.3 %), with around 241.100 vehicles delivered to customers (-3.3 %) since the start of the year. In the United States, deliveries increased by 20.7 % to 20.618 cars in November. Audi delivered 198.261 cars in the United States since January, almost on a par with the prior-year figure (-1.1 %). Deliveries in Canada were once again up in November (3.416 cars, +4.4 %), with the company delivering 31.829 cars (-10.0 %) since the start of the year. Both countries generated strong demand in November for the new Q3, which went on sale in July, (USA: 2.497 cars, +256.7 %; Canada: 929 cars; +231.8 %) along with the new Q8, which remains market leader in its segment. In China, 67.402 cars delivered (+16.8 %) in November set a new record-breaking figure. Cumulative deliveries were up 3.5 % to 618.596 units. Growth was driven in part by the high demand for the A6 L (16.559 cars; +9.3 %). The Q2 L was also introduced in China as an all-electric model in November. Apart from the locally produced Q2 L e-Tron, the e-Tron also went on sale in China in the middle of last month. +++ 

+++ In today’s competitive market, 2 year old cars are considered old. Take the BMW 6-Series Gran Turismo for one, which has been in production since 2017 and is now in for a mid-cycle refresh. Previous spotted prototypes kept hiding their grilles behind plastic cladding and vinyl stickers, yet the latest batch of spy shots shows the new face, complete with a slightly larger grille, slimmer headlamps and revised bumper. The taillights seem to be unchanged from the outgoing iteration, though, yet the rear bumper has been modified. On the inside, the facelifted 6-Series GT will continue to mimic the look of the 5-Series; after all, it used to be named the 5-Series GT before BMW decided to rename it. Thus there won’t be many visual differences compared to the current model, but we do expect it to introduce a few technical changes, such as a larger touchscreen display for the latest infotainment system and perhaps updated digital dials alongside new trim and upholsteries. Most (if not all) of the engine lineup will carry over from the facelifted 5-Series. The latter is thought to add particulate filters to the petrol units, and to electrify others. The facelifted 620d will be launched with a mild hybrid system, which will improve fuel consumption and performance, and a plug-in hybrid powertrain should complete the lineup. +++ 

+++ The topic of the first new all-electric CITROEN passenger cars since the C-Zero (a rebadged Mitsubishi i-MIEV) is back and the most serious candidate is the C4 Cactus. The C4 Cactus is expected to get a successor in 2020 (possibly also a new name) and an all-electric version will be offered using eCMP platform, alongside conventional powertrain versions. It means that we should expect a 50 kWh battery and 136 hp electric motor, just like in case of other PSA models: It’s not yet known when we will see the C4 Cactus successor as a BEV, but maybe 2021? The French brand is now busy launching its plug-in hybrid C5 Aircross model (based on the EMP2 platform), a first step to electrify the entire lineup by 2025. +++ 

+++ FIAT CHRYSLER AUTOMOBILES (FCA) has challenged a claim by Italy’s tax authorities over the valuing of its U.S. Chrysler business that could leave it with an unwanted tax bill just days ahead of an expected key merger agreement with PSA. A source close to the matter said the Italian tax agency believed FCA had underestimated the value of its U.S. business, after its phased acquisition of Chrysler by €5.1 billion. “We strongly disagree with this preliminary report”, an FCA spokesperson said. The tax audit comes at a delicate time for the carmaker which is finalizing talks with PSA over a planned $50 billion merger to create the world’s 4th largest automaker. A source close to PSA said the information was public and came as no surprise for the French carmaker. The tax audit is “another complication” in the way of a binding merger agreement with PSA, but one but which FCA can manage, an analyst at Italian broker Equita said. “We think it will be less relevant than the GM lawsuit, as negotiations with tax authorities are ongoing, which are expected to be closed by year-end and possibly leading to an accord on a much lower amount”, Martino de Ambroggi said. The Italian tax authority audit, which concerns transactions dating back to 2014, could result in FCA having to pay back taxes for $1.5 billion, the source said. “We are confident we will successfully make the case for a material reduction in the assessment”, the FCA spokesperson said. In its third-quarter report in October, FCA said Italy’s inland revenue had issued the company with a final audit report in October this year. It said the issuance of a final audit report starts a 60 day negotiation period, which ends with the issuance of a final audit assessment expected to be received by the end of December 2019. If confirmed, the audit could result in a material proposed tax adjustment relating to the 2014 merger of Fiat into FCA, it said. “Any remaining taxable gain assessed would be offset by carry forward tax losses with no material cash outflow or impact on earnings”, the FCA spokesman said. FCA has lodged an appeal with Europe’s top court against an EU order to pay €30 million in Luxembourg back-taxes, seeking to overturn a lower tribunal ruling backing EU antitrust regulators. Fiat filed its appeal to the Luxembourg-based Court of Justice of the European Union (CJEU) 2 months after the General Court dismissed its challenge against the European Commission’s 2015 ruling, the company said. “We confirm FCA lodged an appeal with the European Court of Justice against the General Court’s judgment of 24 September 2019 relating to FCFE’s Luxembourg tax ruling”, the company said in a statement. As part of its crackdown against tax avoidance by multinationals, the EU executive has ordered scores of companies to pay back-taxes ranging from tens of millions to as much as €13 billion in the case of iPhone maker Apple. Ireland, which supported Luxembourg in the case, also appealed, a person familiar with the matter said. The CJEU usually takes 18 months to issue a judgment. +++ 

+++ FORD is teaming up with McDonald’s in order to convert coffee bean skin into various vehicle parts. According to the 2 companies, millions of pounds of coffee chaff (the dried skin of the bean) are dumped every year. Now, there’s something to be done about that, as the chaff can apparently be converted into a durable material using high temperatures and low oxygen levels, plus a mix of plastic and other additives. In the end, you’re left with pellets, which can then be formed into different shapes such as headlight housings and other interior and under-hood components that actually meet quality specifications. The resulting components are said to be roughly 20 % lighter and require up to 25 % less energy during the molding process. Ford also says that the heat properties of the chaff are better than what they currently use. “McDonald’s commitment to innovation was impressive to us and matched our own forward-thinking vision and action for sustainability”, said Ford senior tech leader and researcher, Debbie Mielewski. “This has been a priority for Ford for over 20 years, and this is an example of jump starting the closed-loop economy, where different industries work together and exchange materials that otherwise would be side or waste products”. With that in mind, the fast food giant will now direct a significant portion of its coffee chaff in North America to Ford so that it can be used for vehicle parts. “Like McDonald’s, Ford is committed to minimizing waste and we’re always looking for innovative ways to further that goal”, said McDonald’s senior exec, Ian Olson. “By finding a way to use coffee chaff as a resource, we are elevating how companies together can increase participation in the closed-loop economy”. This process also involves 2 other companies in Varroc Lighting Systems and Competitive Green Technologies. The former supplies the headlights while the latter is the processor of the coffee chaff. +++ 

+++ HYUNDAI has spent years teasing enthusiasts with mid-engined hot hatches loosely based on the Veloster, but you still can’t walk into one of its showrooms and drive home in one. The former BMW engineer in charge of making Hyundais go fast shared insight into why and what’s next. The bad news is that the RM19 concept unveiled during the Los Angeles auto show isn’t a serious, immediate candidate for production. Albert Biermann, Hyundai’s head of research and development, told the recently-established N division needs to build up a reputation in the United States before it can think about releasing a halo model. That process is going to take time; as it stands, the only N-tuned model offered in America is the Veloster N released in 2018. The good news is that Biermann and his fellow engineers are already brainstorming ways to make the concept a reality. The team has already decided the production model would use the same chassis as the RM19, which is essentially a track-only Veloster N TCR with a specific rear subframe and a redesigned suspension. It would remain rear-wheel drive because it would need to drift. Sticking a V6 in the back like Renault did with the also mid-engine, rear-drive second-generation Clio V6 is out of the question. The concept’s turbocharged, 2.0-liter 4-cylinder engine wouldn’t make the transition from the auto show floor to the showroom floor, either. Biermann told he’s already working on the next evolution of the mid-engined, Veloster-esque hot hatch and he plans to power it with an evolution of the new 1.6 T-GDI unit. Its displacement would grow to 2.5 liters and it would shift through a dual-clutch automatic transmission. The executive said Hyundai is also working on an electrified variant of the RM, a revelation which asks more questions than it answers. Does this mean we’ll see 2 mid-engined concepts in 2020, or will the RM20 receive a hybrid or a plug-in hybrid powertrain? And does Rimac, the Croatian start-up Hyundai invested $90 million into, fit into this puzzle? Your guess is as good as mine. It sounds like Hyundai will continue having fun rummaging through its parts bin until it’s time to strike. The production variant of the RM (assuming there is one) will be worth waiting for, but it won’t be cheap. Biermann hinted the model would cost 2 or 3 times as much as the aforementioned Veloster N, which would mean about €130,000 in The Netherlands. How much time you have to save up depends on how quickly the project moves forward, and how long N takes to build itself a reputation. “I wish we could get it going, but there is no need for rush”, he concluded. Not that we want them to rush this car, but we also really hope it gets going sooner than later. +++ 

+++ With a sizeable delay, we finally got the JAGUAR I-Pace global sales report for the month of October, which reveals a few positive numbers. First of all, sales increased by 9.1 % year-over-year, to 1.309 units. But more importantly, while overall Jaguar sales have decreased by 23 % year-over-year (to 10.606 cars), the I-Pace share went up to 12.3 %, one of the highest this year. Within a few weeks, I should get numbers for the month of November, which will give us an answer about whether I-Pace is able to beat its best results ever of more than 2.000 sales. The average I-Pace share out of the global Jaguar volume is 10.3 %. Cumulative I-Pace sales already reached 20.945 globally (including 14.052 so far this year). +++ 

+++ KIA celebrated the completion of a new factory in Anantapur in southeastern India that will be capable of rolling out 300.000 cars a year. Affiliate Hyundai also has 2 factories in India with a combined capacity of 700.000 cars. India levies a 60 % tariff on car imports, making it necessary for automakers who want to sell their cars in the world’s second most populous country to build plants there. Kia broke ground on the Anantapur plant in October 2017, and now it employs 450 robots to drive an automated assembly line as well as around 3.000 human workers. It is also capable of producing electric and hybrid vehicles. The plant started trial operations in July by rolling out the small Seltos SUV, which has sold over 40.600 units since its release there in August, becoming the top-selling SUV. Kia plans to launch a premium MPV there in the first half of 2020 and another compact SUV in the second half. Last year, 3.37 million cars were sold in India to make the country the world’s 4th largest auto market, but a slump set in toward the end of the year that led to 11 straight months of sales declines. A Kia staffer said, “We intend to overcome the slump with high-tech functions that appeal to young consumers and establishing online and mobile sales platforms”. Kia India’s manufacturing plant in Andhra Pradesh is now fully operational and it hopes to sell 160.000 cars in the country next year. Kia is planning to showcase the MPV at the Delhi Auto Expo that kicks off in February next year. As it is targeting the premium vehicle market, the new car will have a luxurious design as well as top-notch IT technology to differentiate it from existing MPVs in India. The planned sub-compact SUV is a strategic model intended to tackle emerging markets in the Asia-Pacific region, as well as Africa and the Middle East, according to Kia. Through the lineup of SUVs and MPV, the carmaker said it hopes to bolster its brand image as a utility vehicle producer in India. As it expands its presence in the country with the factory, Kia said it will strengthen sales with a new digital sales strategy using a digital platform that puts all aspects of car purchasing online, Kia said. To enhance after sales services, the company will launch a new 24 hour, real-time mobile service for vehicle maintenance. “Now fully in operation, our new plant allows us to serve the growing Indian car market and export models like the Seltos to markets across the world”, said Park Han-woo, president of Kia Motors, during the opening ceremony. “In the longer term, it will also become a vital part of our global production network”. Kia is planning to make India a base for its mobility services as well. It invested $60 million in India’s car-hailing service provider Ola in March and partnered with Revv, an Indian car-sharing service provider, last year. With the mobility companies, Kia is preparing to offer various mobility services including on-demand test drives and vehicle subscription services. +++ 

+++ LINCOLN looks set to mimic Ford’s on-going shift away from sedans. The move makes sense on the surface, but analysts warn the luxury brand needs to keep some low-riding models in its portfolio. The company’s current lineup includes 2 sedans, the MKZ and the Continental, plus 5 SUVs. The sedans aren’t long for this world. Ford’s Hermosillo, Mexico, factory will stop manufacturing the MKZ in late 2020 or early 2021, and UAW documents show Continental production will continue “through its product lifecycle”. In other words, it’s the last model on the Continental branch of the Lincoln family tree. These 2 nameplates represent 23.3 % of Lincoln’s annual sales so far in 2019, which is a surprising and respectable statistic. One in four cars the company sells is a sedan. The problem is that they accounted for 27.6 % of the firm’s sales in 2018, and that number will continue to fall in 2020 as customers flock towards crossovers and SUVs. And yet, exiting the sedan market isn’t the right answer for a company that wants to re-establish its reputation as a luxury automaker. Eric Noble, the president of consulting firm CarLab, told about 40 % of American buyers in the market for a luxury car choose a sedan. The Chinese market, where Lincoln hopes to gain a secure foothold in the coming years, also has a healthy appetite for sedans. Going SUV-only is a strategy that might work well in the United States, but it doesn’t suit Lincoln’s ambitions. Germany’s big 3 luxury brands all have a flagship sedan at the top of their range. I can’t argue against sales data; the sedan market is shrinking. There are ways to keep buyers in the fold, however. The Continental is a stellar effort from the brand, and a solid foundation on which to build. Noble pointed out Lincoln could use the rear-wheel drive platform found under its Aviator and Ford’s latest Explorer to build a four-door model with a fastback-like roof line in the vein of the Audi A7. It’s a sleeker, sexier body style that tends to attract more buyers than a more conventional three-box sedan, which is often criticized as old-fashioned. Automakers can normally get away with charging a little bit more for these cars; the A7 is more expensive than the A6, for example. Electrification could be the Lincoln sedan’s saving grace. Motorists love sitting high, but they also like not having to stop for fuel (whether it’s gasoline or electricity) on a regular basis. Sedans are normally lighter than comparable SUVs, and they’re considerably more aerodynamic, so they go further on the same charge of electricity. And while developing the components of an electric car is an expensive, time-consuming process, Lincoln could dive into Ford’s parts bin and walk out with the new architecture found under the Mustang Mach-E to make a battery-powered sedan. The Blue Oval proudly explained it can stretch the platform in a number of different directions. None of this is official; we know Lincoln is working on at least 2 electric models, but it sounds like they’ll be crossovers or SUVs. One will allegedly use technology sourced from Rivian. In the meantime, I suggest that American carbuyers act fast if they want to put a Continental or a MKZ in their garage. +++ 

+++ Michael Lohscheller has accomplished in 14 months what no predecessor achieved in decades. He returned OPEL / Vauxhall to the black. The passionate marathon runner, who recently instituted a new monthly program called “Run With The Boss” did not just turn around the perennial money-loser but brought it to record results that rival those of Europe’s top-performing volume automakers. Opel appears to be on track to reach its profit margin target of 6 % in 2019, 7 years ahead of schedule. “The fact that we are on track to deliver our commitment on profitability, and we are pursuing our effort to do even better, is extremely important for our credibility externally but even more importantly internally. That’s why I’m representing Opel on PSA Group’s 4-person managing board. PSA has a great set of strong brands, however, this is the first time that Opel has a voice on the company’s top decision-making body. The move has been very well-received by our workforce. You wouldn’t believe how many employees have approached me to say how happy they are that Opel finally has a seat at this table. On an operational level everyone on the 19-member Global Executive Committee can campaign for their ideas, so it’s more of a symbolic value by emphasizing that Opel plays an important role in the group. PSA is all about performance. If you don’t deliver, then it doesn’t matter what board or committee you are on. When you have a new owner after 2 decades of never-ending restructuring plans, people know change is not going to be incremental any longer. We used the opportunity to question everything about our operations. We reinvented Opel. We started with symbolic topics. Whether it was cookies at meetings or the personal chauffeur for the CEO, cost cuts were made across the board. When we temporarily cut working hours at our Rüsselsheim factory in January 2018, we also reduced hours here at headquarters. That never happened before. We reduced the number of senior executives by almost one-third to accelerate the organization. These moves did not go unnoticed. People saw a whole new company. This had a profound effect internally and helped the team execute much more quickly and easily. We couldn’t have imagined that we would slash fixed costs by 28 % last year. The biggest levers, however, were the reduced complexity combined with improved pricing power and revenue per car. They really made the turnaround possible. We are very ambitious and will not slow down our efforts to continually improve our results. That being said, starting next year our results will be consolidated with the rest of the PSA brands. The other brands, Peugeot, Citroen and DS, don’t break out their results or issue earnings guidance, which is sensible because we are all one integrated group. You see the effects of the successful integration everywhere in the company. For example, the entire German sales team from our sister brands moved to Rüsselsheim from Cologne in November. We have made substantial progress narrowing the cost gap with PCD (Peugeot, Citroen and DS) plants, but it is correct that we in Germany are the farthest behind and Rüsselsheim in particular. While we have high wage and energy costs here, that is not a valid excuse. There is no reason why Rüsselsheim cannot reach the benchmark. It’s up to us to take out the complexity that is driving the costs. We will see tremendous improvements with the next generation Astra, built on a PSA platform as of 2021. Also, our flagship, the Insignia, which we currently build in Rüsselsheim, is the vehicle with the most options in our portfolio, but you can expect that will change in the next generation. Our model range was far too complex in the past. We want to focus on a certain number of models but get them right and then considerably reduce complexity within each model line. We are absolutely focused on managing the 2 issues driving our business: CO2 compliance and segment profitability. The era of the very large SUV is over. The market doesn’t have sufficient volume. They are impractical and opposition to them is rising within society. We are well positioned with our existing range of compact SUVs. What I can say about a next-generation Insignia is that simply assuming the body styles will continue exactly as they are now in the future is wrong. The successor to the Mokka X will be a standard bearer for our brand. It will have a much greater focus on lifestyle and will carry many elements of the very stylish GT X Experimental concept. That will help differentiate it more from the Crossland X going forward. There’s a chance for us to have greater economies of scale, but at the end of the day nothing changes in terms of our positioning in the market. Before and after, Opel and Vauxhall will still be the only German and British brands in the group. Vauxhall stays for sure. There is no other British volume brand around. We believe this is an opportunity, especially in the time of Brexit. We have seen a clear increase in volumes of our Vivaro, which is built in the UK, after we advertised it was, Made in Britain for Britain. Focusing on its unique Britishness is paying off. +++ 

+++ The new generation of the RENAULT Zoé seems to be in high demand as the French manufacturer received some 6,100 orders in the month of October. According to Emmanuel Bouvier, Commercial Director, Electric Vehicles Business Unit, the pace of sales continued in November. The most orders come from France, Norway and Germany (currently order books are open only in part of Europe). At 6,000+ sales per month (if continued), the Zoé might be able to exceed 70,000 sales per year, compared to the expected record of 45,000-50,000 in 2019. Renault did not reveal sales expectations, but the manufacturing capacity potential is probably up to 80,000-100,000 in 2020, especially since the production of the Clio was moved from the Flins plant to Slovenia. Other interesting findings are that a third of orders are for the new R135 drive unit and that more than half is for the 2 top trim levels (Intens and Editions One). +++ 

+++ In SOUTH KOREA , vehicle sales remained weak last month, suffering a 1.9 % on-year decline amid a slump at home and abroad, industry data showed. The country’s 5 carmakers (Hyundai, Kia, GM Korea, Renault Samsung and SsangYong) sold a combined 707.009 vehicles in November, compared with 720.706 units a year earlier, according to the companies’ monthly sales data. The weak sales were mainly driven by lower demand in China and emerging markets amid uncertainties over a yearlong trade battle between the United States and China; the world’s 2 biggest automobile markets. Domestic sales declined 2.5 percent to 136.414 units last month from 139.862 a year ago, and overseas sales decreased 1.8 percent to 570.595 autos from 580.844 over the cited period. Hyundai and Kia, the country’s 2 biggest carmakers by sales, reported no significant rebound in sales last month due to weak sales in China, the world’s biggest automobile market. Hyundai’s sales fell 2.8 % to 392.247 units last month from 403.368 a year earlier. On the other hand, sales at its smaller affiliate, Kia, rose 0.8 % to 248.942 from 246.942 during the same period. The 2 sold a combined 6.57 million units from January to November, down 2.7 % from 6.75 million units in the year-ago period, the data showed. Sales of imported cars recovered last month and jumped to 25.514 units, up 14 % on-year and the most since April last year. Mercedes-Benz sold 6.779 cars, down 6 %, but still remained at the top as the most popular foreign brand. BMW came second with 4.678 cars. Audi, buoyed by the release of its new Q7 and A6 models, sold 2.655 cars, followed by Volkswagen with 2.024. Tesla was the No. 5 imported car brand in November on strong sales of its Model 3, the company’s most affordable offering. As of the end of November 2018, a total of 118 Teslas were registered in the country. This November, 1.258 of the cars were newly registered. Tesla debuted the Model 3 in Korea on November 22. In a week, the company sold 1.207 of the cars. It was Tesla’s best performance since it opened its first store in Korea in 2017. Unlike the Model S and Model X, which cost more than 100 million won ($897 million), the Model 3 is relatively affordable , starting in the 50-million-won range. Model 3 sales are expected to remain strong. Tesla operates 2 stores in Korea, 1 in Cheongdam-dong, southern Seoul, and the other 1 in Hanam, Gyeonggi. It also has 2 service centers, one in Gangseo District, western Seoul, and the other in Bundang, Gyeonggi. “We plan to open Tesla centers that are equipped with exhibition centers and service centers in Busan and Bundang in the first half of next year”, said a spokesperson for Tesla. “There are currently 24 Tesla supercharger stations and we plan to open 8 more by the end of the year in areas including Incheon and Busan”. Although Tesla is gaining a presence in Korea, it could be a temporary phenomenon with the sudden inflow of the cars. Consumer complaints about Tesla include the lack of infrastructure for charging and the cars themselves. The high price is also controversial. Although the imported car market slightly recovered on promotions, overall, it has been weak, especially with the collapse of Japanese car sales. The number of newly registered Japanese vehicles last month dropped 56.4 % on year to 2.357 units. The on-year fall started with a 17.2 % decline in July, when Korean consumers started refusing to buy from Japanese brands. The rate was 56.9 % in August, 59.8 % in September and 58.4 % in October. The most affected brand was Lexus, followed by Toyota, Honda, Infiniti and Nissan. But sales of Japanese vehicles in November rose 19.2 % compared to the previous month. Toyota’s recovery was especially pronounced, with the company selling 780 units in November, up 91.2 % on month. The rebound in sales for Lexus, Infiniti and Nissan was 13.8, 89.3 and 106.5 % respectively. Honda reported a decline in sales. The Japanese automakers are still behind for the year. Sales from January to November totaled 32.991 units, a 19 % decrease from the 40.663 units in the same period a year ago. Korean customers have been shunning Japanese products as tensions with Japan increased following its establishment of export restrictions. Japanese automakers have been introducing aggressive promotions ahead of the year’s end. Infiniti offered a rebate of up to 10 million won ($8,370) for the QX30 AWD, and Nissan will provide 17 million won of free gas for customers when they make a purchase using company financing. Honda is offering discounts of 6 million won on the Accord 1.5 Turbo. Toyota and Lexus, which seldom hold promotional events, have joined the pack. The brands are offering free gas for buyers of the Prius and the Lexus LS500. The Japanese companies are working to improve goodwill by making cultural and social contributions. Toyota held various social events, such as 100 staff and executives making kimchi on a volunteer basis and a classical music concert. “With Korean consumers’ distaste against Japanese auto brands still remaining, those automakers are pouring efforts into social contribution events as part of an indirect marketing strategy”, said an industry official. The recent bestseller among foreign brands was the Volkswagen Tiguan 2.0 TDI, with sales of 1.640 units. The Audi Q7 45 TFSI Quattro and A6 45 TFSI Quattro were ranked second and third, at 1.150 and 1.008 units, respectively. The plug-in hybrid Chevrolet Volt took the 4th place at 824 units, followed by the Mercedes-Benz C 200 and E 250 at 757 and 755 units respectively. +++ 

+++ Japan’s transport ministry has ordered automakers to look into the safety of their products after a new problem seems to have been discovered in airbags produced by the now-defunct TAKATA . The order was issued after a fatal car accident in Australia this year is believed to have been caused by the malfunction of a Takata airbag inflator. 7 automakers, including Toyota, Honda and Mazda, received the order. The inflator, manufactured between 1995 and 1999, is different from the one blamed for earlier massive worldwide recalls, the ministry said. In the latest case, the reason for the bag exploding and spreading metal fragments remains unknown. The 4 other automakers that received the order are Suzuki, Mitsubishi, Fuso and BMW. The 7 automakers have been asked to report to the ministry whether they need to recall any vehicles. Australian transport safety authorities said last month they were informed by BMW of a voluntary recall of some of its models after the discovery of the suspected new defect. Besides the fatal accident, there was another incident in Australia this year that resulted in a serious injury that is believed to have been due to a malfunction of the inflator. Similar accidents have also occurred in the United States and Cyprus, but the ministry said so far it has received no such reports domestically. About 150,000 cars equipped with the air bags in question, are estimated to be in use in Japan, according to the ministry. In 2017, Takata filed for bankruptcy with debts of over 1 trillion yen ($9.2 billion) after its faulty air bags led to the deaths of more than 20 people and massive recalls around the world. That was the biggest bankruptcy for a Japanese manufacturer in the postwar era. In November the same year, Takata reached a $1.588 billion asset sale agreement with U.S. auto parts maker Key Safety Systems, later renamed Joyson Safety Systems. +++ 

+++ TESLA has announced that it will launch the Tri Motor AWD version of the Cybertruck 1 year earlier than initially announced while pushing back the launch of the entry-level Single Motor RWD variant. When the Tesla Cybertruck was first presented to the world, Tesla said it would first sell the Single Motor RWD and Dual Motor AWD models with the Tri Motor AWD arriving approximately 12 months later in 2022. Now, production of the Tri Motor AWD will start in 2021 while the Single Motor RWD will land in late 2022. To hear that Tesla has shuffled around the launch dates of these 2 models isn’t a surprise. After all, it followed the same strategy with the Model 3, hitting the market with higher-spec models to generate maximum profits before offering, albeit briefly, the long-promised $35,000 base-level Model 3. As a reminder, the base Single Motor RWD Cybertruck will be good for just over 400 km of range and hit 96 km/h in a respectable 6.5 seconds. One step up in the range will take customers to the mid-level Dual Motor, capable of 0-96 Kph in 4.5 seconds, and a range exceeding 480 km. Last, but definitely not least, is the Tri Motor AWD capable of hitting 96 Kph in a stunning 2.9 seconds and good for a range exceeding 800 km. +++ 

+++ VOLKSWAGEN ’s German plants need to boost efficiency to match overseas operations, production chief Andreas Tostmann was quoted as saying, targeting €2 billion in savings by 2023. German carmakers, including Audi, have announced thousands of job cuts in recent weeks to address an expected 5 % drop in global auto sales this year, with declines likely to spill into 2020. “The pace of improvement is better abroad. In Germany, despite all the successes we’ve achieved, we have to do better”, Tostmann told. Tostmann wants to implement the savings in the production of VW branded cars through a bundle of measures on top of automation, including a leaner logistics operation. “The result is that we need 15 % less space, 60 % fewer logistics vehicles and are able to move 20 % more product”, said Tostmann. Audi last month said that it would cut up to 9.500 jobs, equating to 10.6 % of total staff, by 2025 in a move to free up billions of euros to fund the shift toward electric vehicle production. Rival Daimler haS also recently announced staff and cost cuts. +++

 

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