Newsflash: Volvo V40 krijgt een ‘pseudo SUV’ als opvolger

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+++ As BREXIT enters its final phase, the European Union is preparing to navigate the most complex negotiation in its history. At the end of January, the EU and UK will begin talks on their future relationship, with Britain’s auto industry at the center of discussions. The negotiations will likely be an even bigger and more complicated fight than the political skirmishes over the UK’s decision to leave, with everything from trade to security cooperation up for discussion. A deal will require the approval of the remaining 27 members of the bloc, and all have their own different national interests at stake. British Prime Minister Boris Johnson has made the path to an agreement even more difficult by pledging to use Brexit as an opportunity to break from what he claims are stifling EU rules. His decision to leave himself only 11 months to reach an accord is being taken in European capitals as a sign he intends to seek only a limited agreement with the EU. “We will now have a competitor at our front door”, German chancellor Angela Merkel said last week. “A competitor who will strive to show what it has in front of our door”. Most EU members insist they share a common agenda in the looming negotiations. They want to form a zero-tariff, zero-quota trade relationship; protect the integrity of the single market; and defend regulatory standards that ensure a level playing field. But all countries have their own individual red lines. Officials in Germany, Poland, Austria, Romania, and the Czech Republic all singled out cars and auto parts as one of the most important sectors that needs to be protected. The UK imported almost 1.5 million autos made by German, French and Italian-owned brands from the continent in 2018, worth a total estimated sales value of €35 billion. Nissan and Toyota are among automakers that build cars in the UK, along with BMW Group’s Mini and Rolls-Royce brands, Volkswagen Group’s Bentley, Tata’s Jaguar Land Rover and the PSA-owned Vauxhall unit. Any customs barriers would affect the industry’s complicated global supply chains. +++ 

+++ CITROEN will launch a new C-segment compact car with a full-electric variant. It will be based on the CMP architecture, so it’s the first C-segment car on this platform. It will replace the C4 Cactus, which is also on a stretched B-segment small car platform. It’s a very important launch for Citroen. Starting next year, every model the brand introduces will have either plug-in hybrid or a full-electric version, depending on the platform, as well as diesel and gasoline variants (as long as diesel is relevant). By 2025, 100 % of the range will have electrified versions. Citroen has consolidated in Europe and increased sales. Now it needs to be more international. There are 3 parts to the growth plan. Citroen still has aspirations to grow in Europe, where it has a 4.8 % market share and wants to get that to more than 5 %. The second is that Citroen is rebuilding its operations in China. “It’s our No. 1 market outside Europe, so we have to do it”, CEO Linda Jackson says. “The third is new frontiers, starting with India. We are developing a line of vehicles for India that we call “C Cubed” for Cool, Comfort and Clever. They will be manufactured in India, starting in 2021, and we will have more than 90 % local integration. It’s a completely new vehicle program and we will adjust it for other markets”. This is not PSA’s answer to Dacia, however. “These vehicles will have the same elements as a Citroen, with a unique and attractive design as well as comfort features relevant to that market. The way we can make it cost effective is to build it in India or other markets. The vehicles we launch in India will have an electric version. But if we come back to Europe, that is one of the reasons we are testing the Ami One concept (shown at the 2019 Geneva auto show). I’ve never done a concept car that I haven’t in some way tried to bring to market, and that may be true of the Ami One, but many, many people have tried to bring an inexpensive electric car to market and it’s tough to make the business case”. When asked about the status of the new midsize car project, Jacksons says: “We will have a D-segment car in our range. It’s a business case I need, especially for China, where there is still a strong sedan market. It will be launched after our new C-segment hatchback. If you go back to the CXperience concept from 2016 at the Paris auto show, that hints at where we are going. It is not about doing a traditional 3-box D-segment car with lots of chrome and leather, but to come up with something that is refined, unique and with ultra-comfort”. When asked if Citroen has more SUVs planned, Jackson says: “I could sell more, but 2 SUVs is sufficient for us at the moment. With the C5 Aircross, our C-segment SUV, we are trying to provide a solution for MPV owners who want an SUV but are missing the modularity of a MPV. The strategy is to try to give customers the best of both worlds: an SUV on the outside, and a MPV on the inside, with 3 independent rear seats, for example”. PSA will end its collaboration with Toyota on minicars including the Citroen C1. When asked if Citroen still needs cars in that segment, or needs a bigger car at a minicar price, Jackson answers: “Most carmakers are walking away from the A segment because nobody can make any money. I don’t think I would replace the C1 with a C1. The customer is changing, society is changing and the context is changing. This is why in a way I’m testing the Ami One. We need to think differently about how we provide vehicles for those customers who generally are living in an urban environment, where they are challenged in terms of parking, electrification and the ability to have a gasoline or diesel car because of pollution restrictions. It’s not only about volume, but about the sales channel mix. That type of vehicle would be a mix of car-sharing, of renting, leasing and purchasing. Each of those channels has a different profitability. What would you base the volume on? Would you base it on scooters, on quadricycles, on small vehicles? It’s a challenging question. Personal, or long-term leasing, is slowly and gradually coming into Europe. It’s strongest in the UK and the Netherlands right now. With a personal lease, customers still think they own the car, but they can hand it back after 2 or 3 years and get a new one. It’s like having a smartphone. I think it will be very prevalent in the future”. +++ 

+++ China’s DONGFENG Motor Group and PSA are extending their business cooperation, despite the Chinese company reducing its stake in PSA to help smooth the French carmaker’s merger with Fiat Chrysler Automobiles (FCA). Dongfeng said it had agreed with PSA to extend the duration of their joint venture. Under the deal, the venture could get the rights to PSA’s new brands in China and will benefit from new technologies and intellectual properties, the Chinese company said. The announcement comes a day after the companies said Dongfeng would reduce its 12.2 % stake in PSA by selling 30.7 million shares to the French company. Analysts said the move could smooth U.S. regulatory approval for PSA’s roughly $50 billion merger with Italian-American carmaker FCA. The sale of Dongfeng’s shares in PSA, worth around €680 million, will leave the Chinese group holding around 4.5 % of the merged PSA-FCA, which is set to become the world’s 4th biggest carmaker by sales volumes. “As the cooperation between Dongfeng and PSA deepens, we expect the joint venture to continue making good progress in China”, a Dongfeng representative said. On a conference call, Dongfeng said the joint venture would have exclusive rights to PSA’s Opel cars should the partners agree to bring the brand to China, and enjoy lower prices on car parts imported from PSA. Earlier this year, a document showed Dongfeng and PSA plan to cut jobs at the Wuhan-based joint venture and reduce its number of car plants to try to make the venture more profitable. +++ 

+++ The FERRARI Purosangue SUV is edging closer to production and will take inspiration from the recently revealed Roma GT. The technological underpinnings of the newly launched are to be used to support the most controversial vehicle planned in Ferrari’s 15 car-strong new-product push. Termed an ‘FUV’ by Ferrari marketeers, and due to be unveiled in 2021, the Ferrari Purosangue will use an adapted version of a modular, multi-material, front-engined platform making its debut under the Roma. Ferrari chief technology officer Michael Lieters explained the technology at the Roma unveiling: “In general we will have 2 families of architecture: front and rear engine families”, he told. “The modularity is there, and especially on the front-engined architecture we have to foresee many more models. We have a 2+2, we have a 4+, we are thinking about Purosangue, and so on”. Plug-in power is thought to be Ferrari’s preferred option for the Purosangue, and Lieters explained that the 4-wheeldrive-capable platform is compatible with V6, V8 and V12 engines. The next V12 Ferrari is very unlikely to be the SUV, but according to chief marketing officer Enrico Galliera, attention has already turned towards what comes after this 15-strong new-car push: the brand’s next ultimate flagship model. “Yes, we are working on the next hypercar, which will come after 2022”, said Galliera. He hinted that the next hypercar wouldn’t deliver a power output to beat the new 1.000 hp, plug-in hybrid SF-90. Instead, the Ferrari exec suggested its philosophy will instead major on lightness, controllability and aerodynamics. As such, it could shape up as a rival for the Aston Martin Valkyrie, which foregoes heavy hybrid technology. Ferrari will continue to develop its 6.5-litre naturally aspirated V12, and combining this with heavy battery tech is not favoured by the marque’s engineers. “To be honest, electrifying a V12 means creating, very probably, a heavy and big car. So electrification ideally should be coupled with smaller engines”, said Galliera, who also confirmed that a fully electric Ferrari is not in the product plan. “The philosophy is to try to be ready with different technologies in order to use them with the necessary evolution”, he added. “That’s why we have a wide range of engines: V12, V8 and, in the future, the V6”. +++ 

+++ The merger of FIAT CHRYSLER AUTOMOBILES and Groupe PSA has raised a lot of questions, but one of the most common is which brands will be cut. As of right now, it appears all brands are safe as Carlos Tavares (who will become the combined company’s CEO) said “The biggest intangible asset of a car company is the brand portfolio”. Tavares went on to say: “The brands carry passion, the brands carry the history and the brands carry the emotions. This is the reason why we consider they will stay in their countries of origin: Italian brands will stay in Italy, French brands will stay in France, American brands will stay in the US and German brands will stay in Germany”. FCA and PSA echoed this in yesterday’s announcement as they said the combined business entity will have a “broad portfolio of well-established and iconic brands offering best-in-class products covering key vehicle market segments and delivering higher customer satisfaction”. The automakers added they have a complementary brand portfolio which covers luxury, premium and mainstream segments with everything from passenger cars to commercial vehicles. While FCA is heavily reliant on the United States, the companies said the merger will provide a “much greater geographic balance” as approximately 46 % of revenues will be come from Europe while another 43 % will come from North America. The 2 companies have little product overlap, but Fiat has a significant presence in Europe and Lancia is still clinging to life. Tavares’ statement suggests both brands will survive, but it’s easy to question Lancia’s future as the brand only has 1 model and the combined FCA – PSA will have 6 other Euro-focused brands. On the bright side, another struggling FCA brand could benefit from the partnership. PSA could ditch their plan to return with Peugeot to the United States and instead sell some of their models under the Chrysler brand. That remains to be seen, but it could be a more economical way to bring PSA models to America while also helping to revitalize Chrysler. Even if this doesn’t happen, future FCA and PSA models will have plenty in common as 2 companies intend to share platforms and powertrain technologies. +++ 

+++ GERMANY is closely monitoring developments at Daimler after a second Chinese company moved to take a big stake in the maker of Mercedes-Benz cars, an economy ministry official said. Autointernationaal.nl reported earlier that Daimler’s main Chinese joint venture partner BAIC planned to double its stake to around 10 % in order to upstage rival Chinese automaker Geely, which owns 9.69 % of the German company. The ministry said that while the companies’ combined 20 % holding would not amount to a blocking minority, it could have a major impact at shareholder meetings, depending on how others voted. “So the Economy Ministry is naturally monitoring the situation closely”, the official said. The comments come amid heightened concern in Germany at the economic and security implications of increasingly fierce competition from Chinese manufacturers, especially in areas of traditional German strength such as the automotive sector. Berlin is also facing pressure from the United States to exclude Chinese telecoms equipment maker Huawei from tenders for building next-generation mobile networks. Washington argues the state-owned manufacturer poses an unacceptable risk to information security, an allegation that Huawei strenuously denies. +++ 

+++ Digital mapping company HERE Technologies sold a 30 % stake to Mitsubishi Corp and Nippon Telegraph and Telephone Corp, diluting German carmakers’ stake to 54 % amid uncertainty about the profit potential from autonomous cars. Mitsubishi and NTT will co-invest in the Amsterdam-headquartered company through their newly established, jointly owned holding firm Coco Tech in the Netherlands, HERE said. “Their investment also means we are further diversifying our shareholder base beyond automotive, which is important given the appeal and necessity of location technology across geographies and industries”, HERE’s chief executive Edzard Overbeek said. The Japanese companies said they would collaborate with HERE to develop services such as ways to tackle road congestion and improve supply chain efficiencies. High definition maps can also be used in fleet management, asset tracking, last-mile delivery, long-distance package delivery by drones and indoor mapping applications, Overbeek told. Financial details of the transaction, which they said would close next year, were not disclosed. German carmakers BMW, Audi and Daimler saw high definition mapping as a strategic asset and bought HERE from Finnish telecoms group Nokia for around €2.5 billion in 2015 to avoid becoming dependent on Google. The deal dilutes the stake held by each German carmaker from 25 % to just under 18 %, HERE said. Tech companies and automakers raced to develop self-driving vehicles after Google presented a prototype car in 2012, leading German manufacturers to develop robotaxis as a way to enter the ride-hailing business to take on Uber. However, the technology costs and regulatory hurdles have spiraled, and ride-hailing businesses have struggled to reach sustainable profitability, leading to a reassessment of the business potential of robotaxis and ride hailing. “There has been a reality check setting in here”, Daimler chief executive Ola Källenius said last month, adding that spending on robotaxis would be “rightsized”. The move comes as BMW and Daimler this week announced they will exit the North American car-sharing market, halting operations in Montreal, New York, Seattle, Washington and Vancouver, as they focus on the European market. Last year, Germany’s Continental and Bosch, the world’s largest automotive suppliers, bought a 5 % stake in HERE. In February, HERE, which employs around 8,000 people in 54 countries, partnered with Navinfo to offer location services in China. HERE is sticking to its goal of developing high-definition maps to help guide driverless cars, Overbeek said. “Fully autonomous driving in city centres will come 10, 15, 20 years from now”, he said. +++ 

+++ HYUNDAI and affiliate Kia have decided to secure electric vehicle batteries from SK Innovation for the next 4 to 5 years. The deal is worth more than 10 trillion won ($8.6 billion). Hyundai said in October it would launch 16 electric models by 2025, aiming to boost EV sales to 560.000 cars by then; a level that would be equivalent to more than 10 % of its projected global sales this year. +++ 

+++ Chinese automakers Great Wall Motor and Changan Automobile are accelerating plans to build cars in INDIA after the initial success of rival SAIC Motor in one of the world’s biggest markets, 3 sources said. Great Wall, one of the biggest sellers of SUVs in China, expects to secure a production site in the first half of 2020, likely a General Motors plant in Maharashtra, a source familiar with Great Wall’s plans said. Buying a factory is seen as the best way to get up and running fast and Great Wall is finalizing which SUVs it plans to make in India, including whether to kick off its launch with an electric SUV, the source told. Great Wall said it would make an announcement next month about its plans for India but declined further comment. A spokesman for GM in Detroit said it was continuing to make vehicles for export at its Talegaon plant in Maharashtra state. “As we have said previously, we continue to explore options to improve utilization of the plant. We do not comment on speculation”, he said. Changan, too, is scouting for a production base and has held initial talks with suppliers, sources aware of its plans said. Both automakers, which produce electric vehicles (EVs) in China, are also considering whether to set up EV battery assembly plants in India, the sources said. The companies see India as a chance to combat slowing sales at home, which fell in November for a 17th month in a row. While car sales in India are stuttering, the market is expected to become the world’s third biggest by 2026, behind China and the United States, according to consultancy LMC Automotive. The Chinese firms also hope to capitalize on gaps left by global automakers such as FCA, Ford and GM, which have scaled back plans in a market still dominated by smaller, low-cost cars made by Maruti Suzuki and Hyundai. “It is an opportune time for China’s automakers to enter India. There is currently a gap in competition and it may take a couple of years for some of the established carmakers to bring new products to the market”, said LMC Automotive’s Ammar Master. GM’s retreat from India, for example, could help Great Wall get going quickly and it has been in talks to buy GM’s plant in Maharashtra, 2 of the sources said. GM stopped selling cars in India in 2017 and has already sold its other plant in Gujarat to SAIC, where the state-owned Chinese automaker now makes the Hector SUV it launched in June under its MG Motor brand. India is part of Great Wall’s planned global expansion into South America, South Africa, Southeast Asia and Australia, and it also plans to export from their to places such as Europe and the United States, said the source who is aware of its plans. “The plant in India is expected to be the biggest for Great Wall outside of China”, the source said. Great Wall has hired a former executive from Maruti Suzuki, India’s biggest carmaker, for its product and business planning, and appointed a former executive from SAIC’s India division as a consultant to liaise with the government. “For global automakers, India is one of the many markets they are in but for the Chinese it is the first major market outside of home and so the level of investment and commitment will be proportionately high”, said the source. One of the biggest hurdles in India will be fighting perceptions about the quality and reliability of Chinese products and winning over brand-conscious buyers for whom cars are a prestige statement, say analysts. Chinese smartphone makers such as Xiaomi faced similar perception issues when they launched in India but they now dominate the market. However, cars remain a significant outlay for most Indians and the Chinese brands will need to make their mark quickly. “Once the likes of Volkswagen and Ford start launching new models in India, the entrants from China could face tougher competition because a lot of buyers in India are still very brand conscious”, said LMC’s Master. Still, the initial success of SAIC’s Hector SUV has helped. Launched at the end of June it said it had sold more than 13.000 cars by the end of November and plans to sell 24.000 next year. “SAIC has changed the perception about whether a Chinese brand can be made and sold in India”, said Santosh Pai, partner at law firm Link Legal which advises Chinese companies setting up in India. “Fence sitters are getting in and have realized they can sell in India if the price and strategy is right”. Lessons for Great Wall and Changan from SAIC’s India launch include marketing the brand aggressively, packing the car with features to differentiate it from rivals and giving extended warranties to dispel doubts over reliability, analysts say. Another advantage for Chinese carmakers in the coming years will be their EV expertise. With the sale of EVs slowing in China they can deploy some of their existing capacity to India where the government is encouraging clean fuel cars. SAIC, which will soon launch an electric SUV in India, is also scouting for a second manufacturing site and is expected to make a decision in early 2020, said a source aware of its plans. SAIC did not respond to a request for comment though the head of its Indian division said in November it was working on an expansion plan and expected its total sales in India to hit 70,000 in 2021. +++ 

+++ When it comes to electric cars, ITALY lags far behind the other big European markets, with less than 8,000 battery-electric vehicles sold in the first 9 months of the year, according to the European Automobile Manufacturers Association. “The government hasn’t so far provided a competitive system of public incentives for electric cars compared with other European countries”, said Stefano Aversa, chairman for EMEA of consultancy Alix Partners. A minimum of about €30,000 on the price of an electric car compares with best-selling compacts priced at between €10,000 and €15,000 in Italy, he said. Although the government in March unveiled incentives that work out to as much as €6,000 per vehicle, they are languishing because they are not enough to bridge the price and cultural gap, according to Roberto Vavassori, head of the European parts supplier association Clepa. Sales could pick up next year when Fiat Chrysler Automobiles launches the first full-electric version of its Fiat 500 city car and hybrid plug-in versions of the Jeep Renegade and Compass. +++ 

+++ The JEEP Wrangler’s “poor” 1 star ANCAP rating has been improved to a “marginal” 3 star rating for 2020 with the addition of active safety technology, but the structural shortcomings that prevented it from getting a 5 star rating remain. The off-roader will be fitted standard with autonomous emergency braking (which automatically brakes if it detects an imminent rear-end accident) and blind-spot monitoring for 2020, boosting its scores in the safety assist and adult occupant protection test categories. But the car’s passenger compartment “did not retain its structural integrity in the frontal offset test” in testing, and its bonnet provided “poor or adequate protection to the head of a struck pedestrian over most of its surface”. “Consumers should be aware that the a-pillar and cross-fascia beam failure, footwell intrusion, high seatbelt loads and excessive pedal movement have not been addressed and remain a risk for occupants” said James Goodwin, chief executive of ANCAP. He also noted the Wrangler’s AEB system still lacked pedestrian and cyclist detection. The Wrangler shares its 3 star rating with the Suzuki Jimny. However, countless other capable off-roaders have 5 star ratings. The only category where the Wrangler is considered a 5 star car is in child occupant protection, where it scored 80 %. When the original 1 star ANCAP result was revealed in May, Goodwin said the Wrangler’s structural performance was “very poor”. “For a new model to have an unstable passenger cell, where the dummy has made contact with the A-pillar, with the dashboard: it’s poor”, he said. “One of the other things we’re seeing here is that the footwell ruptured, comparing it to the previous model we were not seeing any of those sort of structural problems occurring. It’s unfortunate that the vehicle hasn’t improved in a generation and I think the other concerning thing is we’ve had the brand tell consumers they were going to make improvements and it was going to be better than the model tested last year, and we haven’t seen any evidence at all”. +++ 

+++ LAMBORGHINI is on course for a global sales record for the 9th consecutive year in 2019. Starting in 2020, however, its volume is expected to stabilize at less than 8.500 vehicles a year to preserve the brand’s exclusivity and protect resale values. To push annual sales above 10.000, the Volkswagen Group subsidiary needs a 4th model, which isn’t due before 2025. Lamborghini CEO Stefano Domenicali said: “Last year we increased sales by 51 % to 5.750 units and revenue by 40 % to €1.42 billion. This year we will set once again new records for sales (about 8.200 units) and revenue. Recognition and appreciation of the brand has also grown significantly. To give an example, we have customers who are willing to pay €25,000 more than the list price of a new Urus to get immediate delivery of a used model. This shows the waiting time for the Urus is still a big issue. On average, we are at about 9 months, which is fine for a high-end SUV. It takes about a year to get the S version of the Aventador while the Aventador SVJ is sold out. It takes 6 months to get a Huracan. These waiting times are OK in most markets, but we see a growing trend in the Far East, Middle East, California and Florida where customers want to buy the car they see in the showroom. About 70 % of the Urus customers are new to the brand. For the Lamborghini supercars, more than 70 % are repeat customers. Most Urus buyers are 45 to 55 years old, while supercar customers are between 30 and 45. Domenicali said: “The Urus will account for about 55 % of our 2019 sales. That is roughly 4.500 units, which it its full capacity for a year. Lamborghini has the capability to expand Urus production, but not the willingness right now. This year sales in Russia will grow twofold to 126 units and twofold in India to more than 40 units. Sales in Italy have grown threefold to about 200 units. We could eventually boost Urus production to help shorten the waiting times in markets such as these, where the model has performed well above our expectations. We plan to reach about 8,500 units in 2020 and then to stabilize there for a while. The supercar segment is expected to grow about 3 % a year and we can’t expect the Urus to keep growing forever. Therefore, a 4th model would be needed to get us to 10,000. The model won’t arrive before 2025 at the earliest”. When asked if the 4th model will be the rumored 2+2 GT, Domenicali said: “This is what we have in mind. The package and the design are almost final, but the entire project is on standby. As our target is to reach the market between 2025 and 2027, we need to see what the available platform and powertrain options (including full electric) will be then within the Volkswagen Group. The only thing clear is that any Lamborghini model should offer the best performance within the group from that specific architecture”. When asked if revenue growth will be handicaped if sales hover at about 8.500 cars from 2020 until 2025-2027, Domenicali said: “We expect moderate but stable revenue growth. One contributing factor is spare parts. Not only will the number of cars on the road grow at a steadier pace, by more than 8,000 units a year from less than 4,000 two years ago, but the mileage is also growing. Urus customers drive about 15,000 km a year, compared with about 4,000 km for the Aventador and 6,500 for the Huracan. Other factors contributing to our bottom line are increasing revenue per unit and the expansion of our few-off and one-off projects. The €2 million Sian is the first. It will have a 63 unit run, which we sold out in 3 months, just showing potential customers a 1-to-3 scale model and some computer-generated videos of a model that did not exist yet. The next “few-off” model will be a track-only hypercar developed by Squadra Corse (Lamborghini’s motorsports arm) and designed by the Centro Stile in Sant’Agata Bolognese. The car will debut in 2020. The limited-edition car’s aerodynamic and mechanical specifications will be optimized to bring out the best from our iconic 6.5-liter, naturally aspirated, 830 hp, V12 engine. We have 2 clients for bespoke Aventadors. These models will have one-off exteriors and interiors but will remain street legal. They should be delivered by the end of next year. They start at €3.5 million”. When asked, if Lamborghini is still planning to introduce a plug-in hybrid version of the Urus, Domenicali said: “The plan is for a V8 plug-in hybrid, which will be the most powerful Urus, but we are still working on the performance, which is impacted by the added weight of the batteries, e-motor and power electronics. This variant will be the leading powertrain offering in markets with CO2-based taxation”. +++ 

+++ MERCEDES could axe around three quarters of its AMG performance range to meet strict CO2 targets. The downsizing of Mercedes’ performance offering could be the manufacturer’s only choice if it is to bring its current fleet emissions rating of 138 g/km down to a target of 100 g/km. AMG models are among the brand’s most polluting, typically using much larger, more inefficient powertrains than their Mercedes-Benz-badged counterparts. Several Mercedes dealers expect a 75 % reduction in the availability of AMG models, which industry analyst Max Warburton claims would be a “catastrophe for profitability”. Mercedes’ performance models command a significant premium over standard cars, but threaten the car maker’s ability to bring its CO2 average down. Such a move could even be extended to Mercedes’ mainstream line-up, where the firm could restrict sales of cars equipped with 3.0-litre engines. This could force powertrain alterations for models such as the new GLE Coupe, which is available exclusively with a 3.0-litre straight-6, even in standard form. A Mercedes spokesman said that “Mercedes-AMG is a significant strategic pillar for Mercedes-Benz cars with a clear powertrain strategy for the future”, but did not respond directly to the comments allegedly made by some of the firm’s retail representatives. He added: “Starting with the first plug-in hybrids coming to the market in 2020 and followed by a new model range equipped with electrified powertrains, Mercedes-AMG will also contribute to lowering the average fleet emission of Mercedes-Benz Cars”. Earlier this year, Autointernationaal.nl reported that the next-generation C 63 performance saloon, arriving in 2022, will swap the current model’s 510 hp 4.0-litre V8 for a hybridised 2.0-litre 4-pot. The motor will be largely based on the new M139 unit featured in the latest A45 hot hatchback, which is the most powerful 4-cylinder production engine on sale. It is also possible that Mercedes could bring another manufacturer on board in order to enjoy a lower combined fleet average and avoid EU-imposed fines. Fiat Chrysler and Tesla signed a similar agreement in April, which allows FCA to count Tesla’s EV-only models as part of its fleet, thereby lowering its average CO2 output. Mercedes is one of a number of manufacturers being forced to consider drastic line-up reshuffles to meet the quotas. Despite the recent launch of its EQ C, and the imminent arrival of the cheaper EQ A, the maker cannot rely on its relatively low-volume EV sales to offset the environmental impact of its conventionally fuelled cars. Max Warburton told that if the industry sold the same mix of vehicles in 2021 as it did last year, car makers would face €25billion in penalties. +++ 

+++ Mercedes’ parent Daimler and BMW should quit fumbling around the backseat. Faced with slumping global demand for their pricey cars, MERGING would reap synergies worth more than the €13 billion in annual savings they’re currently targeting. As PSA and FCA consummate their marriage in 2020, the German heavyweights will model one of their own. Analysts forecast almost no sales growth over the next 2 years for cars. And luxury brands’ winning streak (premium car demand has grown above global demand each year since 2009) is coming to an end due to a Chinese slowdown. Even in the Middle Kingdom, upmarket vehicle sales hit 11 % of the total, in line with the global proportion. Ola Källenius and Oliver Zipse, bosses of Daimler and BMW respectively, are feeling the strain. Together with incoming European Union fines for dirty fleets, Daimler, worth €53 billion, plans to save €1 billion in staffing costs by 2022 and accelerate its transition to electric vehicles. BMW, worth €48 billion in mid-December, is seeking €12 billion in total savings by then to offset higher technology spending. The FCA-PSA deal suggests an alternative. The Germans already cooperate in mobility services and autonomous vehicles. And there are additional financial benefits. The Italo-French combo is seeking to save about 2.4 % in combined operating costs. Applying the same proportion to Daimler-BMW would result in savings worth €38 billion, assuming a 28 % tax rate and €9 billion in restructuring costs, to shareholders today. But given their greater overlap in products and geographies they could probably achieve synergies worth twice that much. BMW’s controlling Quandt family has a strong independent streak and might not take kindly to having significant Chinese carmakers as shareholders. Together, Geely and BAIC Motor own a combined 15 % of Daimler, although that could rise to 20 %. Again, they can look to FCA, where the Agnelli family will emerge as the largest shareholder in the group. Assuming a nil-premium merger, Stefan Quandt and his sister, Susanne Klatten, would hold nearly 17 % of “BMDaimler”. The Chinese would be diluted to around 12 %. True, German unions would howl at the prospect of potential job losses. But given the financial and industrial logic in a stagnant market, the FCA – PSA playbook will be scrutinised heavily in Stuttgart and Munich, where Daimler and BMW are respectively based, in the year ahead. +++ 

+++ NISSAN will stop offering diesels in its next Qashqai, a source close to automaker said, as it puts electrification at the forefront of its European strategy. Along with gasoline-powered variants, Nissan will offer the third-generation Qashqai, which is due to be revealed next September, with the automaker’s e-Power system. The serial hybrid drivetrain, which is popular in Japan, lets a car function like an electric vehicle because its combustion engine is only used to charge the battery. The Qashqai may also offer a plug-in hybrid option using a system from Renault-Nissan alliance partner Mitsubishi. Nissan’s move away from diesels comes as European demand for the powertrain has declined to roughly 30 % now from 45 % in 2017, according to figures from industry association ACEA. Nissan’s share is also about 30 % now, down from 47 % 2 years ago, according to JATO Dynamics. “We have seen a significant drop in diesel”, Nissan Europe chairman Gianluca de Ficchy told. “We are adapting ourselves to follow that trend”. De Ficchy wants more than 40 % of Nissan’s sales in Europe to be electrified models by 2022 to make sure it avoids EU fines that loom for automakers that fail to comply with tougher emissions regulations that start to take effect next year. “We assumed the overall electrified market will be about 20 % to 24 % by 2022, but we want 42 % in Europe”, he said. Along with helping to meet CO2 targets, a high penetration of electrified models will be good for Nissan’s brand image, de Ficchy said. “If you want a sustainable business model in Europe that meets both corporate and customer regulations, you need to be far above that average”, he said. There are risks, however, the come with pulling the diesel from the Qashqai, which competes in a segment that had the highest number of diesel sales through 10 months (621.242) and where models with the powertrain accounted for 44 % of overall sales, according to JATO. Switching to gasoline variants is difficult for customers in SUV segments because they are not as efficient, which results in a higher fuel bill. The Volkswagen Tiguan, which overtook the Qashqai in terms of 10-month sales to lead the compact SUV sector, was also Europe’s top-selling diesel model overall through October. When Nissan makes it move away from offering diesels in the segment it will join Toyota and Honda, which don’t offer the powertrain in the RAV4 and CR-V, respectively. Both brands focus on offering their compact SUVs as gasoline-electric hybrids instead. +++ 

+++ VOLKSWAGEN ’s namesake core brand is on track to post a record operating profit this year thanks to cost savings and its increased sales of SUVs, a senior manager of the unit said. The Wolfsburg-based group faces heavy investments into cleaner and self-driving technologies and is has increased sales share of higher-margin SUVs to help fund an industry-wide shift toward low emission vehicles. VW’s core brand in 2019 has gained market share and has increased its operating profit substantially, chief operating officer Ralf Brandstätter said. He added the division had increased its share of SUVs sold to 42 % in the United States and 37 % in Europe. Of envisaged cost savings of €3 billion by 2020, €2.6 billion have been realized at the end of 2019, Brandstätter said. “On this basis, we can secure profitability so that we can systematically invest in the electrification and digitization of our products”, the executive said, referring to both cost cuts and the increased share of SUVs. He cautioned though that costs in German plants were still too high and that productivity must be increased there. Volkswagen will launch 34 new models globally in 2020, including the first 2 models in its electric ID range, alongside 6 other electrified vehicles. The company will launch the ID.3 in the summer and Volkswagen says it will “soon be followed” by what it refers to as the ID Next. That is the mid-size SUV that was revealed in concept form as the ID Crozz, and is likely to use the ID.4 moniker when it reaches production. It is set to be offered in Europe, China and North America. The 6 other electric and hybrid models will include the new Golf GTE, which is due to go on sale shortly after regular versions of the family hatch hit showrooms in the spring. Volkswagen has yet to specify every model it will launch this year, but it says that the 34 machines will include 12 SUVs, a category that has been key to the firm’s success in recent years. While final figures are not set yet, Volkswagen says it is on track to post a record operating profit this year, despite its overall sales slipping slightly. While the global car market has shrunk, Volkswagen has increased its market share, largely thanks to the higher operating profit it can command from SUVs. Brandstätter said that 2019 would be “a very successful year” for the firm. He added: “In a shrinking overall market the Volkswagen brand has won market shares worldwide and significantly improved its operating result. Ongoing restructuring of core business, including the positive effects of the pact for the future, and the success of the worldwide SUV offensive, have been key to this achievement”. Brandstätter also played down any concerns over meeting the forthcoming tough EU fleet CO2 targets coming into force next year, following reports that rival Mercedes-Benz might have to restrict offerings from performance arm AMG. Asked if VW would face problems in 2020, Brandstätter said: “We don’t anticipate problems, we prepare solutions”, adding that selling emission-free electric vehicles would be a key part of that. He said that Volkswagen has committed to investing €18 billion in future technology by the end of 2024, including €9 billion in electric technology. Volkswagen is reportedly looking to ditch at least one of its MPV models, with most customers clearly preferring SUVs and crossovers as opposed to good old fashioned people carriers. So while the automaker’s MPVs are still putting up decent sales figures, at least 1 of them could end up just like the Beetle, Scirocco, Phaeton and Eos: gone. The only question is which one, or even which pair? “We need to see whether we still need to have 3 MPVs in our range with the Golf SportsVan, Touran and Sharan”, said VW brand finance chief Arno Antlitz. The best-selling of the 3 is currently the Touran. However, its sales in Europe are down 14 % to 69.814 units for the first 11 months of 2019. Sales for the Golf SportsVan on the other hand are down 26 % to 40.215 units, while Sharan numbers have climbed 1.7 % to 20.854 units. To put things into perspective, the brand’s T-Roc and Tiguan are doing much better in Europe. Tiguan sales are up 2.2 % to 245.056 units through November, while T-Roc sales increased 46 % to 193.963. These numbers could theoretically go up even more if, for example, the Golf SportsVan wasn’t there to cover its niche. Of course, there’s no way to tell right now which people carrier might get axed. Volkswagen’s SUV lineup has expanded in recent years not just with the T-Roc, but also the T-Cross. There has been a lot of talk about Volkswagen’s decision to pick Turkey as the location for a new multi-brand vehicle assembly plant. Despite opposition from German labor unions, the carmaker went through with the plan and announced in July that the plant would be built in Manisa, a city on Turkey’s western coast. The facility was scheduled to manufacture the next-generation Passat and Skoda Superb from 2022, with a maximum annual capacity of 300.000 units. Since then, the Turkish military invaded Syria, prompting even stronger opposition to Volkswagen’s planned investment. Volkswagen Group CEO Herbert Diess was thus forced to postpone a final decision until the end of this year. However, the decision will not be made until February. More importantly, the Volkswagen Group is not considering other locations outside Turkey for its new multi-brand factory, said sources familiar with the matter. In the wake of the VW board’s postponement of the investment amid international criticism of Turkey’s military operations in Syria, countries including Bulgaria, Romania and Serbia were hoping to attract VW’s interest concerning the new plant. Apparently, that won’t be the case as Volkswagen seems determined to go through with the plan to build the €1.3 billion plant in Manisa, Turkey or not build it at all. If the Turkish plant is canceled, VW could decide to build the next-generation Passat and Skoda Superb in its factory in Bratislava, Slovakia. Currently, the Passat is built in Germany at the Emden plant, but from 2022 the facility will switch to building exclusively all-electric vehicles. Right now, the Skoda Superb is made at the Kvasiny factory in the Czech Republic. +++ 

+++ VOLVO will launch a ‘pseudo-SUV’ as an indirect successor to the recently discontinued V40, the company’s European boss has confirmed. It will go on sale in 2 to 3 years time, joining an ever expanding marketplace of compact premium crossovers, currently dominated by the Audi Q2, BMW X2 and Mercedes GLA. Until the V40’s death in August 2019, it was the only model in Volvo’s line-up which hadn’t migrated to the firm’s larger SPA or smaller CMA underpinnings: it was still based on an adapted version of Ford’s C1 platform, which was acquired during Volvo’s stint under the American company’s control between 1999 and 2010. The V40 is poised to be the next new Volvo to appear, as the firm moves to complete its 40, 60 and 90 line-ups. However, Lex Kerssemakers, Volvo’s senior vice-president for EMEA (which includes Europe, the Middle East and Africa), said that customer trends and the need for electrification would probably rule out a conventional low-slung hatchback replacement for the V40. “We need to do something more creative”, said Kerssemakers. “That’s why we have decided to not just replace the V40 on a one-to-one basis. There’s 2 things you can’t exclude in the thinking process towards the next generation of V40. The high seating position is really an issue and we see a lot of people moving from V40 into XC40. “I was part of it and ran the project when we started the XC40; that polarisation between high and low was much stronger 5 years ago. Now you see even the die-hard low seating people moving to the higher seats. I personally think they may move back in a while, because it’s a different driving experience, but it’s a trend”. He added, “There’s also the fact that you cannot offer a new car any more (now, already) which is not equipped to be fully electrified. And to be fully electrified you need capacity to put the batteries in. If you try to achieve that through width and length then you’re instantly into the C/D segment, where we already have V60, S60 and XC60. “So then you need to use height, so you’re going into an SUV. And that’s where you need creativity. Can we in some way satisfy the hatchback customers at the same time as satisfying the high ingress-egress people and the battery package? That’s the cocktail we’re playing around with now”. When asked if this plan would deliver an XC40 related version of the V40 (similar to the relationship BMW has built between its X1 and X2, Kerssemakers said: “Potentially, yes. You see that we are not the first to realise this, of course; look at what our competition is doing. We’re not geniuses. I don’t want to talk too much about our competitors but the original Mercedes A-Class was a genius car when it was launched. It was just 15 years too early. It fulfilled all of the demands that I’ve just talked about. So we need to learn from the past as well as looking to the future”. In recent months, speculation has grown that the new V40 could look like Volvo’s 40.2 concept. It appeared alongside Volvo’s 40.1 concept back in 2016, which eventually morphed into the production-ready XC40. However, Kerssemakers told: “We’ve given that car to Polestar now in effect”. Kerssemakers also ruled out the idea of building a smaller model to sit below the 40 range, insisting that Volvo can achieve its goal of rising from nearly 650.000 sales globally to 800.000 without additional models. “Of course we’ve looked at it a smaller model”, he said. “But we’ve clearly decided that there’s probably room for another body style alongside the XC40 in the next 2 to 3 years and that’s what we’re exploring. But that’s it then. Then we go into more depth: keeping our powertrains up, keeping the infotainment up to spec, and so forth. That means, indirectly, that we are not in the rat race of filling every niche. We have increased our coverage of the market from a product line-up perspective and that’s okay. If you talk about small cars it’d be a different type of car: fully electric probably. So I can tell you right now that we have no plans to do so. We’ve no plans in the near future to extend our portfolio, other than through electrification of existing models”. +++

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