Newsflash: Mazda komt met 6 cilinder motor én 8-traps automaat

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+++ FORD ’s profit last year plunged by more than $3.6 billion, weighed down by slowing U.S. sales, the cost of a botched SUV launch and some big pension expenses. The Dearborn automaker said it made $47 million in 2019; down from a $3.68 billion profit a year earlier. For the 4th quarter the company lost $1.7 billion, hit by $2.2 billion in one-time pension costs. Excluding one-time items, Ford also falled short of Wall Street’s expectations. Quarterly revenue fell 5 % to $39.7 billion, about even with Wall Street estimates. Ford had said earlier that it expected to deliver better results in 2019 than in 2018. CEO Jim Hackett said on a conference call with analysts that the company fell short of expectations for the year, and he blamed the drop primarily on the flubbed launch of the new Explorer at its factory in Chicago. New Explorers came off the assembly line with multiple problems and had to be shipped to a Detroit-area factory for repairs, delaying deliveries to customers. Hackett also referred to higher warranty costs during the year, especially for a flawed 6-speed automatic transmission in the Fiesta and Focus. He said the Explorer production is now fixed and the SUVs are selling well. “Our leadership team is determined to return to world class levels of operational execution”, he said. “I have zero question that we have identified what was at risk there, what bad decisions we made, things we have to change”. He said 2019 was a year of restructuring for the company as it downsized its white-collar workforce and shifted its products to higher-growth, higher-margin SUV and pick-up segments while exiting lower-growth sedans. Ford, he said, made cuts in Europe, restructured in South America, installed new leaders in China and cut its white-collar workforce globally to trim bureaucracy. Hackett, who replaced ousted CEO Mark Fields in May of 2017, seemed apologetic when he said the change is taking hold. “It’s just not material enough to move the needle”, he said. “It will move the needle and it will have impact”. Last year at this time, Hackett acknowledged frustration with the speed of Ford’s $11 billion restructuring effort. Ford has reported improved performance in China for the last quarter and full year of 2019, despite market headwinds. According to Ford’s 4th quarter and full-year financial results, the adjusted Q4 earnings before interest and taxes were $485 million, down 67 %, with improved results in China and Europe more than offset by a decline in North America. For the full year of 2019, Ford’s adjusted earnings were $6.4 billion, with an profit margin of 4.1 %. “Financially, the company’s 2019 performance was short of our original expectations, mostly because our operational execution, which we usually do very well, wasn’t nearly good enough. We recognize, take accountability for and have made changes because of this”, said Hackett. However, Ford’s Q4 operating loss in China was 61 % smaller than the same period of previous year, thanks to lower structural costs. This was the 4th straight quarter of year-on-year improvement in China, said Ford, which had a 2 % share in 2019 in the world’s biggest auto market. Although the Chinese auto market has seen an overall downturn, Ford’s earnings have increased significantly thanks to newer models it introduced recently, such as the Kuga and Lincoln Aviator. But Ford added that it is too early to estimate implications of the coronavirus outbreak on its business in China. Ford has already pledged to launch more than 30 new vehicles tailored to Chinese consumers in the three years starting 2019 in order to make a quick turnaround in China. As part of “Ford China 2.0” strategy, Ford is setting up 4 centers in China, focused on innovation, design, products and new energy vehicles respectively. “China is leading the world with smart vehicles and is a key part of Ford’s global vision for the future. We are excited about seeing more products developed in China, for China and from China”, Hackett was quoted as saying last year. Ford’s European business made a profit of $21 million in the quarter, compared to a $199 million loss the same period a year ago, as it restructures its operations in Europe and Russia. The automaker has ended production of the C-Max as it focuses in Europe on profitable commercial vehicles, selected passenger vehicles and iconic nameplates, such as the Mustang. The company is also closing 6 manufacturing plants and eliminating 12.000 jobs in Europe and Russia. +++ 

+++ GENERAL MOTORS forecasts flat profits for 2020 and reported a better-than-expected 4th quarter result as it kicked off a new effort to win over investors stampeding into shares of electric car rival Tesla. The automaker forecast $6 billion to $7.5 billion of automotive free cash flow this year, a range that extends above the $6.5 billion GM’s auto operations could have generated in 2019 excluding the costs of the 40-day United Auto Workers strike last fall.
GM expects U.S. car and light truck sales to fall by about 500.000 vehicles from last year’s 17.1 million. “Good enough”, J.P. Morgan analyst Ryan Brinkman wrote about GM’s 2020 guidance in a note. GM appeared to be getting better treatment from Wall Street than rival Ford, whose shares slumped after the company delivered a weaker-than-expected 2020 forecast. Ford warned of higher warranty costs, lower profits at its credit arm and continued investments in future technology such as self-driving cars. GM’s 4th quarter profits took a $3.6 billion hit from a 40 day United Auto Workers strike that shut down the automaker’s profitable U.S. operations. Profits from China also fell. Including restructuring costs, GM had a 4th quarter net loss of $194 million. Revenue in the quarter fell nearly 20 % to $30.8 billion. GM said income from its joint ventures in China fell to $200 million in the 4th quarter from $300 million a year earlier, as wholesale vehicle deliveries fell by 20 %. The Detroit company said “slower adoption of new fuel-efficient technology” by Chinese customers hit 4th quarter results from the world’s largest auto market. GM chief financial officer Dhivya Suryadevara said the automaker had “people working around the clock here to mitigate the impact” of disruptions to production and parts supply from China’s deadly coronavirus outbreak. GM will make decisions to restart idled operations in China “plant by plant”, Suryadevara said. But even before the virus outbreak, GM expected the Chinese market to be volatile this year. China’s auto market is maturing, Suryadevara said, which means more competitive pressure on prices and slower growth than in the past. “We are bullish on the Chinese industry and our position in China long term”, she told reporters ahead of presentations to analysts. GM is backtracking on an aggressive promotion of 3-cylinder engines in China that saw some Buick and Chevrolet models offered only in that option; a move which proved highly unpopular and helped sales slide, people familiar with matter said. 3-cylinder gasoline engines are cleaner and more fuel efficient than their conventional 4-cylinder counterparts and automakers are keen to promote them, particularly in China which has some of the world’s most stringent fuel economy and emission rules. GM went further than competitors, discontinuing 4-cylinder versions for many models in the world’s largest auto market. By comparison, Honda and BMW also offer 3-cylinder cars in China but the models are an option in addition to 4-cylinder versions. Many Chinese consumers, however, perceive cars with 3-cylinder engines as noisier and prone to vibrating, and sales began to tumble in third quarter of 2018. Last year, GM’s China sales fell 15 % to 3.09 million vehicles, its second straight year of steep declines and the lowest level since 2012. The move was “lacked sophisticated planning and was too quick and too radical”, a senior Shanghai-based sales manager at a Buick dealership told. The sales manager, who was not authorized to speak to media and declined to be identified, said his company was among hundreds of dealers which lobbied GM to change the plan at dealer conferences. By resurrecting 4-cylinder options for key models, the hope is that GM can regain some of the ground it has lost at a time when the new coronavirus is threatening to sink sales in the first quarter. The outbreak is only adding to pain caused by to a slowing economy, U.S.-China trade tensions, new emission rules as well as fierce competition from Toyota and Volkswagen. SAIC-GM, the Detroit automaker’s main venture with SAIC Motor, is seeking approval for 4-cylinder versions of 2 mass-market sedans, Buick’s Excelle GT and Chevrolet’s Cruze, government documents show. Those 2 versions are slated to hit the market sometime in the second quarter, 2 people with knowledge of the matter said, adding that 4-cylinder versions of the Buick Verano and Encore were also under consideration. +++
 

+++ It’s only been 24 months since the current HYUNDAI Santa Fe was unveiled to the world with a dramatic new look that’s since spread across the Hyundai range. Despite this, the South Korean automaker is readying a facelift. It will get a larger grille similar in design to the current Santa Fe. The updated SUV will retain the split headlight design of the current model but some minor tweaks will be made to the lights. Like virtually all mid-life facelift models that launch these days, expect to see modified taillights and a new rear bumper. Other than that, the refreshed Santa Fe should look largely identical to the outgoing one. A number of new powertrains are expected for the facelifted model including various hybrid and plug-in hybrid options but specifics remain scarce at the moment. +++ 

+++ INDIA will press ahead with its biennial auto show this week with local staff replacing representatives of Chinese automakers that will showcase cutting-edge electric vehicles and connected cars despite travel disruption from the caronavirus outbreak. With the death toll from the virus outbreak in China nearing 500 and cases of the disease spreading across the globe, organizers of the show are reassuring visitors that officials arriving from China will not be in attendance. “There will be no visitors or delegations from China at the Motor Show 2020”, Rajan Wadhera, president of the Society of Indian Automobile Manufacturers (SIAM), the show organizer, said. Chinese companies have confirmed their booths would be staffed by Indian representatives or employees. China’s SAIC Motor, Great Wall Motor and FAW Haima are set to showcase cars including electric vehicles, while more than 300 Chinese autoparts companies are also due to participate at the show. With India this week identifying a third positive case of the virus in the country, SIAM has also printed advisories for visitors and set up an on-site first aid facility in partnership with a local hospital. Several journalists and delegates were seen wearing masks as a media preview of the show opened. The Automotive Component Manufacturers Association of India (ACMA), which is organizing a parallel exhibition for autoparts companies, said that visitors from China would not be attending and that the Chinese exhibitors displays would be staffed by Indian representatives as a precaution. Chinese auto companies have been working to woo Indian buyers with internet-connected cars, filling a breach left by Western and Japanese manufacturers not participating in this year’s show, including Fiat Chrysler Automobiles, Honda and Nissan. They also hope the Indian market can help to combat slowing sales in China, which fell 8 % in 2019 and are set to decline again in 2020. Suzuki and Hyundai have long dominated the Indian market with low-priced compact cars and have in recent years expanded into other categories. Chinese automakers do not plan to compete in the entry-level segment, instead appealing to drivers with in-car technology, safety features and clean-energy vehicles. Great Wall, which is making its India debut at the show, had intended to bring more than 100 delegates but all have canceled, including the president, a local executive said. “The first and most important thing is the safety of people. Once this situation is taken care of, our senior executives will come to India”, said sales and marketing director Hardeep Brar. Great Wall outlined plans to invest $1 billion to set up a manufacturing base in India. Apart from Chinese carmakers, domestic companies such as Maruti and Tata are also also focusing on electric vehicles. Maruti, which showed its concept Futuro-e SUV, said it plans to sell 1 million green energy vehicles over the next few years. MG Motor, meanwhile, is showing off its Marvel X model, which boasts of autonomous features such as parking assist. +++ 

+++ KIA will add a plug-in hybrid drivetrain to its Sorento with the 4th generation of its SUV. The Sorento is Kia’s first vehicle to use a new-generation midsize SUV platform. It will debut at the Geneva auto show on March 3. Kia said the SUV will offer space on a par with larger vehicles. Other innovations include new advanced driver assistance systems, and new connectivity and infotainment features. Kia already offers plug-in hybrid versions of the XCeed, Niro and Optima. Automakers are adding low-emission hybrid options to their lineups to meet tougher CO2 emissions targets. Plug-in hybrids generally have emissions under 50 grams CO2 per km and are eligible for so-called “supercredits” so they are key to helping automakers meet the EU’s CO2 emissions reduction targets. The Sorento is a popular model globally for Kia (more than 3  million Sorento have been sold worldwide since it was launched in 2002) but sales in Europe are low because buyers prefer smaller SUVs. Sorento sales in Europe fell by 2.8 % to 9,980 last year. Kia’s overall sales grew by 1.7 % to 498.410. The Sorento is the largest model in Kia’s European SUV range, which includes the Stonic, XCeed and Sportage. The Sorento is positioned above the Sportage and has a 7-seat option. Europe’s midsize SUV segment has recently seen a number of new offerings as automakers seek to meet demand from buyers switching to high-riding vehicles from midsize sedans. The Sorento’s competitors include the Skoda Kodiaq, Volkswagen Tiguan Allspace, Seat Tarraco and Peugeot 5008. +++ 

+++ Some JEEP dealerships across the United States are selling the Gladiator for as much as $9,000 off the normal price. Likely in an attempt to boost sales, Jeep introduced a $2,000 bonus nationally on all Gladiator models on January 17. The incentive is offered for all trim levels except the Rubicon. One particular dealership in California, is advertising Gladiators for $9,000 off including the $2,000 bonus. While not all dealerships are selling the Gladiator so cheap, there are a host of others offering generous discounts for the pickup. Leasing is now also more affordable than ever with Gladiator models available for as little as $259 per month for 36 months with $3,970 at signing, much cheaper than a leasing deal of $310 for 36 months with $4,004 at signing that was publicized in early January. Thanks to the current incentive and dealership discounts, it’s now possible to buy a Gladiator for less than a Wrangler which ordinarily starts at about $1,750 less in 4-door Unlimited guise than the Gladiator. +++ 

+++ LEXUS will reveal its first car with autonomous driving capability this year but buyers will not be able use the feature to take their eyes off the road until an upgrade is issued at a later date. Lexus first revealed plans to launch a car with autonomous capability in 2017 when it presented a concept previewing the new LS. The new model will be “hands off but not eyes off”, Lexus president Koji Sato told on the sidelines of a Toyota press event here. “It will start from Level 2 but it will have over-the-air updates so that for the future we can update the level”, Sato said. He did not comment on whether customers would have to pay extra to activate autonomous features, as Tesla does with its Full Self-Driving feature. Sato also did not say which the model will offer the the technology or in which markets it would be offered. The level of autonomy in the car will depend on what regulators allow in the markets where it will be sold. “Regulation and also social concerns may effect what level we can produce in the real world”, Sato said. Automakers in Europe are becoming increasingly frustrated with the slow pace of legislative approval for advanced autonomous driving, where drivers can let the car take over in highway situations but must be ready to take back control at any point. Audi was the first to develop “eyes-off” conditional Level 3 autonomous functionality with the A8 that was launched in late 2018. However, the system, called Traffic Jam Pilot, has yet to be approved for sale by regulators. Mercedes is preparing to launch Level 3 autonomy in its S-class this year while BMW has said it will debut Level 3 capability in its iNext electric SUV in 2021. The new Lexus model will feature an automated driving system called Highway Teammate developed by Denso that uses lidar as well as cameras to help guide the car. The technology will enable the Lexus to automatically change lanes, follow lanes and pass vehicles in highway driving. Except for the three premium German brands, global automakers have been wary of rolling out Level 3 autonomous capability, given the need for the driver to switch attention to the road again at a moment’s notice. At the Tokyo auto show in October Hajime Kumabe, Denso’s engineer in charge of automated driving technology, said that not many companies are saying they want to introduce Level 3 autonomy. “Denso’s opinion is that Level 3 is a bit of a compromise”,  Kumabe said. “I think that way of thinking is on the increase”. Lexus’ Sato said current system for categorizing autonomous levels was too vague to be helpful. “Level 2 can almost cross to Level 3, and Level 3 sometimes also can be Level 2”, he said. Lexus’s aim is roll out the technology to all models. “All out vehicles need to offer safe, confident drive”, he said. “Our aim is to share and roll out this technology to other vehicles”. +++ 

+++ MAZDA recently filed a patent for a new inline 6-cylinder exhaust system and a new 8-speed automatic transmission. What’s the big deal? The automaker currently fields only 4-cylinder engines across its cars and lacks either a 6-cylinder engine for that exhaust to bolt to, as well as a transmission of any kind with more than 6 forward speeds. While an inline-6 is renowned for its signature torque and smoothness, it is also quite bulky, at least in length. That’s because unlike a V6, where 2 rows of 3 cylinders overlap, meeting at their base at the bottom of the V-shaped engine block that’s relatively compact in length and width, an inline-6 is, as it sounds, a row of 6 cylinders standing in a line. The arrangement requires a long hood on rear-wheel-drive models, and faces issues when turned sideways for transverse, front-wheel-drive applications because in smaller vehicles, it might not fit between the front wheels like an inline-4 would. Given how the majority of Mazda’s current lineup is front-engine, with front-wheeldrive, the new inline-6 engine would have to be compact for a shot at fitting even in larger products such as the CX-9. On the more fun side, I’ll speculate that a smaller 6 would make an excellent addition to the MX-5. I remind everyone that Mazda is no stranger to tiny 6-cylinders. Remember the 1.8-liter V6 in the ’90s-era MX-3? The other patent revelation is the filing for a new, 8-speed automatic. Mazda has avoided most Japanese automaker’s fascination with CVTs, choosing instead to stick to its 6-speed automatic. Per the company, it was meeting its drivability and fuel economy targets with only 6 forward speeds. Still, the transmission (originally based on a Ford gearbox design, from back when Ford owned a large stake in Mazda) is getting long in the tooth. It likely is getting tough, too, for Mazda to market its 6-speed while some competitors are fielding 9 and even 10 speed transmissions. Beyond craven marketing needs, the 8-speed could squeeze some more efficiency from Mazda’s engines and, given how compact modern 8-speeds can be, likely won’t carry a weight penalty over the 6-speed. Mazda reported a 76 % slump in operating profit in the latest quarter, as unfavorable foreign exchange rates and falling wholesale volume hammered results. Mazda’s operating profit dropped to 6.5 billion yen ($59.6 million) in the fiscal third quarter ended December 31, the company said. Net income fell 37 % to 15.8 billion yen ($144.9 million) in the 3 months. Revenue declined 5 % to 849.7 billion yen ($7.79 billion), as global retail sales flatlined at 376.000 units. Wholesale shipments declined 8 % to 293.000 vehicles. Managing officer Tetsuya Fujimoto said Mazda reduced marketing expenses and was achieving better per-unit profit in the latest quarter. But falling wholesale shipments and a huge hit from the Japanese yen’s appreciation against the U.S. dollar, euro and other currencies more than offset gains from cost cutting and reductions in r&d spending. Operating profit margin shrank to 0.8 % in the quarter, from 3 % a year earlier. Mazda also dialed down its sales expectations for the second time this fiscal year. In November, it downgraded its retail sales outlook, saying it expected sales to fall about 1 % to 1.55 million vehicles in the current fiscal year ending March 31. The new outlook predicts a 4 % slide to 1.5 million. Volume will be pulled down by declines in Japan, China and markets including Australia, Mazda warned. Still, Mazda kept its earnings outlook unchanged for the current fiscal year ending March 31. Mazda forecasts a 27 % tumble to 60 billion yen ($550.2 million); the lowest level since 2013. Net income is seen falling 32 % to 43 billion yen ($394.3 million). Parent company operating profit is poised to decline for the 4th straight year. In the October-December quarter, North American retail sales expanded 5 % to 102.000 vehicles, while European volume grew 34 % to 82.000 units.But at the wholesale level, Mazda moderated deliveries to rein in inventories. Shipments to North America advanced 3 % and European wholesale volume increased 4 %. Mazda cut wholesale volume 19 % in the home market of Japan. Mazda books parent-company earnings from its wholesale deliveries. CEO Akira Marumoto unveiled a new mid-term business plan last May to lift operating profit margin to a sustainable 5 % by the fiscal year ending March 31, 2025. The new plan also set a lower long-term sales goal than Mazda had earlier floated. Mazda now targets global sales of 1.8 million vehicles in the fiscal year ending March 31, 2025. It had earlier wanted to sell 2 million vehicles in the fiscal year ending March 31, 2024. Marumoto, who took office in June 2018, says his highest priority is spurring growth in the U.S., the automaker’s biggest market. To do that, he wants to focus on strengthening Mazda’s U.S. dealer network and making the most of its growing partnership with Toyota. Mazda is trying to upgrade its dealer network before it opens a new plant it is building in Alabama with Toyota. Slated to open in 2021, the $1.6 billion plant will add 150.000 units of capacity to Mazda; all of which will be devoted to a new crossover. Mazda expects U.S. sales to soar after that, with the plant enabling it to sell 2 million vehicles globally. In the fiscal third quarter, Mazda booked an 8 billion yen ($73.4 million) charge for other costs, including outlays for the new U.S. plant and investment in the sales network upgrade. +++ 

+++ Despite rumors of its delay, the next-generation Ford MUSTANG may arrive sooner than we thought. According to Ford’s own job listing, the next Mustang is due to arrive within the next few years as a 2023 model. Consider me surprised, because the last I heard was that the S650 Mustang’s sale date was pushed back to the latter half of the decade due to difficulties adapting the new Explorer’s CD6 platform for pony-car duty. As such, I was left to believe that either Ford’s sorted out the platform’s struggles, or the company is simply continuing to refer to the new car internally by its originally planned release date. Nevertheless, I anticipate the Blue Oval’s sports car will gain a gasoline-electric hybrid powertrain before the middle of the decade. Only time will tell if Ford opts to unveil the S650 Mustang in 2022 or if the brand decides to revise the current car and keep tinkering away at the next-generation model for a few more years. Regardless, I expect Ford to reveal a noticeably freshened Mustang in the coming months. +++ 

+++ A Ford engineer with information about the new MUSTANG MACH E provided some interesting pieces of information about the EV. For starters, the engineer says that the range figures and charging speeds promoted by the car manufacturer at the time of the Mustang Mach-E’s launch at November’s LA Auto Show are “conservative”. At the time of the vehicle’s unveiling, Ford said entry-level rear-wheel drive models have an overall range of 370 km and feature a 75.7 kWh battery pack. Sitting further up in the family is an extended range variant with a 98.8 kWh battery and a claimed 483 km range. Any increases in these figures will be welcomed by customers. Ford could be holding back a portion of its battery pack for better longevity, hence why the Mustang Mach-E has less range than the Tesla Model Y despite its larger battery capacity. One particularly interesting piece of tech teased by the Ford engineer is a face-detection camera built into the Mach-E’s steering wheel that will eventually be used for autonomous driving functions to determine if the driver is paying attention, similar to Cadillac’s Super Cruise function. The engineer said that the infotainment screen is even better than that in the Tesla Model 3 features. Included as standard will be Apple CarPlay and Android Auto. In terms of charging speeds, the Ford engineer defended the car manufacturer’s choice to restrict the Mustang Mach-E to a 150 kW charge rate as opposed to the 250 kW charging of Tesla models and the 350 kW charging rate that will eventually be introduced for the Porsche Taycan. The engineer said it wouldn’t make sense to use wires capable of accepting 350 kW if such charging speeds aren’t needed. The first Ford Mustang Mach-Es are expected to land towards the end of this year. +++ 

+++ A NISSAN car has completed a 370 kilometre journey autonomously in Britain, the longest and most complex such a trip in the country as carmakers race to develop driverless technologies which are revolutionising travel. Britain has been wooing developers of autonomous vehicles, hoping to grab a slice of an industry it estimates could be worth around $1.2 trillion worldwide in 2035. The Nissan Leaf undertook the 370 km journey from the Japanese carmaker’s European technical center in Cranfield, southern England, to its Sunderland factory in the north east, alongside conventional road users. It included roads with no or minimal markings, junctions, roundabouts and motorways, using advanced positioning technology helped by GPS, radar and light detection and ranging equipment, allowing vehicles to navigate roads and obstacles. “The project allowed us to develop an autonomous vehicle that can tackle challenges encountered on UK roads that are unique to this part of the world, such as complex roundabouts and high-speed country lanes with no road markings, white lines or kerbs”, said Nissan Technical Centre project manager Bob Bateman. The project, known as HumanDrive and led by Nissan as part of a consortium, also received government funding. Nissan has previously said Britain’s approach to testing autonomous vehicles helped it pick London for its first European tests in 2017 when a driverless vehicle traveled up to 80 kph. But the advancement of self-driving cars around the world has been hampered by safety concerns and problems regarding insurance liability. “Safely completing the longest autonomous drive in Britain is an incredible achievement for Nissan and the HumanDrive consortium, and a huge step towards the rollout of driverless cars on streets”, said junior business minister Nadhim Zahawi. +++ 

+++ It’s no secret the EPA estimated range for the PORSCHE Taycan Turbo and Turbo S models is a little lackluster. However, based on recent range tests, it appears as though careful driving can see the Porsche comfortably exceed what the EPA says is its maximum range. In one test, the Taycan Turbo was lined up against a Tesla Model 3 Long Range on the German Autobahn to see how the 2 stack up against their EPA ranges. Of course, the Porsche is significantly more expensive than the Model 3 and is a rival to the Model S but this was a test focused purely on range and what was available to the driver. According to the EPA, the Tesla Model 3 Long Range can travel 523 km between charges. The Porsche’s range sits at a lowly 323 km by comparison. During the testing on a section of the Autobahn at 150 km/h, the Tesla managed to drive 332 km on a charge; 191 km less than the EPA estimate, while the Porsche did 314 km between charges; just 9 km less than its EPA estimate. It’s not surprising that the ranges achieved for both cars were down on their EPA estimates as long, high-speed motorway driving can be the kryptonite of all-electric cars and their respective ranges. In a separate test in the U.S, the Taycan Turbo was able to achieve 461 km during around-town driving; around 43 % higher than the EPA rating. +++ 

+++ RENAULT will build a Mitsubishi-branded version of the Trafic at its factory in Sandouville, where it also makes versions for Nissan and Fiat. The Mitsubishi van will be exported to southeast Asia, the Renault-Nissan alliance said in a news release announcing a regional restructuring. Adding the Mitsubishi van will increase synergies at minimal cost to alliance because the factory already builds the Nissan NV300 and Fiat Talento alongside the Trafic. An Opel version, the Vivaro, was discontinued in 2018 after PSA Group bought the German brand and brought Vivaro production in house. Production of Mitsubishi vans will start this year with an initial volume of 4.000 annually. Talento production would continue at the factory even though Fiat Chrysler Automobiles and PSA are planning a merger. The plant in Sandouville employs around 2.000 production workers. In 2018 it produced 135.000 vans, of which about 94.000 were branded as Renaults, 6.000 as Nissans and the remainder as Fiats or Opels. The project to develop the Mitsubishi van was launched about 2 years ago under Ashwani Gupta, the alliance’s first head of its light commercial vehicles business unit. Gupta was later named COO of Mitsubishi and he is now Nissan’s COO. The Mitsubishi van will appear in showrooms in southeast Asia and Australia in the middle of 2020. Last year, Renault sold 103.204 Trafics worldwide; an increase of 6 % compared with 2018, with 88.189 in Europe. About 85 % of the overall total were commercial versions, with the remainder sold as passenger vehicles. +++ 

+++ In SOUTH KOREA , Hyundai on January 6 released its electric compact SUV, the Kona. The electric version is the latest model of the car, which was first introduced in 2018 and sold 47.000 units last year alone. The maximum distance that the electric vehicle (EV) compact SUV travels on a single charge according to the Ministry of Land, Infrastructure and Transport is 406 kilometers. Rival General Motors Korea plans to release its own EV passenger car, the Volt, whose maximum travel distance is 414 kilometers, soon. Although the distance that these EVs can travel has increased over the years, it still falls short of consumer expectations. Even an EV that could cover 400 kilometers on a single charge would require the driver to recharge the vehicle once when traveling from Seoul to Busan, because while the distance between the 2 cities is 325 kilometers in a straight line, the actual distance one needs to drive on the road is 456 kilometers. Automotive companies and battery developers are currently working on developing a third-generation EV that can travel more than 500 kilometers on a single charge. The first generation of EVs covered 160 kilometers on a single charge while the second has evolved to cover between 320 to 500 kilometers. On January 14, Kia announced its plan to develop a third-generation EV. “We will increase the ratio of EV vehicles to 12.3 % of all of our models, from 2 models last year to 4 by 2022 and 11 models by 2025”, said Park Han-woo, Kia’ CEO. “Additionally, in the near future, we will have the technology that will cover more than 500 kilometers in a single charge and a high-speed charge to within 20 minutes”. According to IHS Markit and Posco Research Institute, the global EV market will expand from roughly 1.2 million in 2018 to 5 million this year. This is a significant increase considering the global EV market was only 450.000 units in 2016. In order to grab the lead of the rapidly growing EV market, increasing the traveling distance of EVs is no longer a choice for carmakers, but a necessity. This year, Tesla will begin production on the Model Y. The traveling distance of the 4-wheeldrive car approved by the U.S. Environmental Protection Agency is 506 kilometers. Volkswagen and Toyota, which until recently received batteries from suppliers, has jumped into developing batteries of their own. Volkswagen has decided to invest $1 billion into EV batteries, while Toyota made an agreement with Panasonic to develop EV batteries. Korean battery companies are putting everything into securing related technologies and productions. LG Chem in December made an agreement with GM to form a joint company. Recently, the company purchased 639.000 square meters of land in Ohio and plans to break ground in the first half of this year. The new Ohio plant will be manufacturing 30-gigawatt-hour batteries for GM. The batteries will be installed in 400.000 EV cars. Once the new plant is built, the annual supply of LG Chem’s EV batteries will increase from a total of 70 to 100 gigawatt hours. “The Ohio plant will not only secure a supply of LG Chem batteries to GM’s third-generation EVs but also creates an advantageous position in North America’s EV market”, said Lee Dong-wook, a Kiwoom Securities analyst. Samsung SDI is currently developing a battery that could cover more than 600 kilometers in a single charge. The target is a mass production of such batteries in 2021. In its latest earning reports on January 30, Samsung SDI laid out its fifth-generation battery plans. The company said under the “Gen 5” project, which will adopt a new production system, it will increase the energy density by more than 20 %, which will lower production. The company will be supplying the battery to BMW. Under the contract signed between Samsung SDI and BMW in September, starting this year, the EV battery cell and module will be supplied to German battery system manufacturer Akasol for the next 7 years. SK Innovation is also planning to mass-produce a third-generation EV battery starting in 2022. The company is currently constructing a plant in Georgia, the United States, that is scheduled to be completed in the second half of 2020. The production plant in Georgia will have a capacity of producing 10 gigawatt hours of batteries. SK Innovation is targeting to secure an annual production of over 100 gigawatt hours by 2025. “Sometime next year we will be able to produce and test an EV battery that can cover a distance of more than 500 kilometers in a single charge”, said a SK Innovation official. The company said it will be working with SK Technology on EV battery development. Experts say one of the key points in developing batteries that could cover long distance is stability. “The key point in increasing the battery capacity is stability”, said Kim Pil-soo, an automotive engineering professor at Daelim University. “The increase in voltage means higher temperatures. If the cooling system doesn’t work properly it could increase the risks of explosion or fire”. The key component that determines the battery’s capacity and power is nickel. The increase in nickel raises instability. The minimum nickel content in a third-generation battery is 80 %, which is more than the first-generation battery of 33 %. +++ 

+++ SUBARU reported a 42 % plunge in operating profit in the latest quarter amid falling wholesale volume, surging warranty outlays and a big hit from foreign exchange rates. Operating profit dropped to 57.8 billion yen ($530 million) in the fiscal third quarter ended December 31. Net income declined 42 % to 43.4 billion yen ($398 million). Revenue fell 2.3 % to 878.9 billion yen ($8.06 billion) in the period, as worldwide wholesale volume fell 5.9 % to 267.200 million units. In announcing the results, chief financial officer Toshiaki Okada said higher costs to cover recalls, including a callback to fix coil springs, took a 29.3 billion yen ($268.7 million) bite out of quarterly results. Unfavorable foreign exchange rates delivered another 13 billion yen ($119.2 million) blow. The parent company’s profit woes contrast with the seemingly invincible face of Subaru in the United States, the Japanese automaker’s biggest and most important market. Subaru’s U.S. sales climbed 2.9 % to 700.117 in 2019, and the company forecasts a 4 % increase to 725.000 units in 2020. Attaining this year’s target would represent a remarkable 12th year in a row of record U.S. sales for the all-wheeldrive niche player. But even as retail sales increased, U.S. wholesale volume declined 5.2 % to 183.700 vehicles in the 3 months to December 31. Western European wholesale shipments more than doubled to 12.700 vehicles, while volume in the home market of Japan fell 28 % to 26.700. Subaru books parent-company earnings from its wholesale deliveries. Okada said Subaru made progress reining in incentive spending, thanks to the introduction of the redesigned Legacy and Outback. For the full fiscal year ending March 31, incentive spending should drop 34.7 billion yen ($318.2 million), he said. Subaru kept its earnings outlook unchanged. The automaker sees operating profit increasing 21 % to 220 billion yen ($2.02 billion), while net advances 15 % to 163 billion yen ($1.49 billion). Subaru predicts results will be bounce back thanks to an uptick in business in the January-March quarter amid strong demand for the Legacy, Outback and Ascent. “Our January sales in the U.S. surpassed those of last year, so we think our U.S. sales have been going well, and we believe this trend will continue into fiscal 2020”, Okada said. A big expected falloff in quality costs will also help the bottom line, Subaru said. But Subaru nonetheless trimmed its fiscal-year wholesale delivery outlook. It now predicts global wholesale shipments to increase 4 % to 1.04 million vehicles. In November, it had forecast an increase of 5.7 % to 1.06 million vehicles. U.S. sales will advance 6.1 % to 700,000 vehicles. Subaru had earlier expected U.S. wholesale to climb 6.4 % to 701,800 in the current fiscal year. With regard to the coronavirus outbreak in China that has forced production shutdowns, Okada said Subaru was still investigating its possible impact on the company’s supply chain. But he said Subaru sees no impact on output from its Japanese or U.S. factories. +++ 

+++ Elon Musk, the billionaire chief executive officer of TESLA , went on Twitter to ask users if the electric carmaker should build a new gigafactory in Texas. “Giga Texas?” Musk tweeted here giving 2 options: “hell yeah” and “nope”. The poll garnered over 102.000 responses with about 80 % voting in favor of the new gigafactory. Tesla currently has 2 gigafactories in the U.S. and 1 in Shanghai, China. The carmaker in November announced plans to build its first European factory and design center near Berlin. During an earnings conference call last week, Musk said that Tesla needs to increase its battery capacity to produce high-capacity models like Cybertruck. “We’ve got to scale battery production to crazy levels that people cannot even fathom today. That’s the real problem”, he said. Tesla shares have been on a tear recently, more than doubling the company’s market value since the start of the year as more investors bet on Musk’s vision. The stock has surged nearly 400 % since early June. The latest bump was partly fueled by a quarterly profit at Japanese battery maker Panasonic battery business with the U.S. car maker. +++ 

+++ In the UNITED KINGDOM , the car market tumbled by 7.3 % year-on-year in January, figures published by the Society of Motor Manufacturers and Traders (SMMT) reveal. A total of 149.279 vehicles were registered across the month, down by just under 12.000 from the same month last year. Diesel car sales again declined substantially, and has a market share of below 20 % for the first time in 20 years. Petrol car registrations also dropped by 9.5 %. The SMMT blames “continued confusion surround diesel and clean air zones and ongoing weak consumer and business confidence” for the fall. Private sales were hit the hardest (down 13.9 %) with fleet registrations taking a less substantial 2.2 % hit. There is some good news, however: alternatively-fuelled cars continued their steady but significant rise throughout 2019, capturing a record 11.9 % of the market. The influx of mild-hybrid models was the biggest driver (diesel mild hybrids are up 721 % year-on-year), but hybrids (up 20.6 %), plug-in hybrids (up 111 %) and battery electric vehicles (up 204 %) are all growing in popularity. EVs now make up 2.7 % of the market, compared to just 0.8 % in the same period the year before. SMMT chief Mike Hawes called the overall market decline “unsettling”, however. “Consumer confidence is not returning to the market and will not be helped by the government’s decision to add further confusion and instability by moving the goalposts on the end of sale of internal combustion engine cars. While ambition is understandable, as we must address climate change and air quality concerns, blanket bans do not help, the government must lead the transition with an extensive and appropriately funded package of fiscal incentives, policies and investment to drive demand”. +++

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