Newsflash: Volkswagen ziet geen businesscase voor een Polo R

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+++ The 4th generation A3 Sportback hatch debuted earlier this month, and AUDI doesn’t plan to waste time getting the trunked version. The sedan will likely show up in late 2020. A refreshed Q5 is also just around the corner and when the updated SUV arrives next spring, the changes will come in the form of updated in-car tech, mild-hybrid systems and a new look. Audi will also bolster its line-up with the addition of a second Q5 bodystyle: the Sportback. It will give Audi a challenger to the BMW X4. The Q5 Sportback follows the theme of Audi’s other coupe-SUV models, so it bears a close resemblance to the standard car at the front, but gets a sloping roofline at the rear. Spy shots of the standard Q5 confirm that the fresh car will have new LED lighting tech and redesigned graphics to distinguish it from its predecessor. A different treatment is expected to be applied to the Sportback to further separate it from the range. The same goes for the front, where the lights will be split by a tweaked version of Audi’s signature single-frame grille; expect the bezel to be slimmer than before and not to fully connect with the lights as on the current car. Hotter versions of the range will also gain an A1-style triple-vent design at the leading edge of the bonnet, in homage to the original Quattro. Inside, the interior is likely to be perked up with some new infotainment technology. Should it fall into line with the most recent versions of the A4 and A5, the Q5 will sport a larger infotainment screen on top of the dash, and ditch the old MMI click wheel in favour of a touchscreen interface. All the very latest in connectivity, including wireless phone charging and USB-C connections, will likely be available. There should be some changes under the bonnet, too. While Audi introduced plug-in hybrid models to the range towards the end of 2019 (the 50 TFSI e and 55 TFSI e mix a 2.0-litre turbo petrol with an electric motor) it’s likely that 48 volt mild-hybrid systems will be introduced to trim CO2 emissions throughout the existing 4-cylinder petrol and diesel models. The system is able to recover waste energy from coasting and braking, and redeploy this later; either to reduce load on the combustion engine under acceleration, or to enable quicker reactions from the stop/start system. The top of the range will continue to be crowned by the SQ5. In 2019, the SQ5 made a switch from petrol to diesel power, adopting the same 3.0-litre turbocharged mild-hybrid V6 used by the S4. Expect the 354 hp / 700Nm unit to continue its role as the fastest version. +++

+++ The sold-out Bacalar moves BENTLEY ‘s design language in a sharper, bolder direction. It’s limited to 12 units, so the odds of seeing one in the wild are low, but its head-turning lines will influence the company’s future models. “It was appreciated very well by its target audience, but also by our traditional customers. I was surprised and happy to get positive remarks. I feel encouraged to really push the subject of rejuvenating and modernizing Bentley’s design language”, Stefan Sielaff, Bentley’s lead designer, told. He added his team will accelerate this process in the coming years. “We will take steps forward”, he affirmed. Bentley remains a relatively small company and it recently overhauled a large chunk of its range by releasing the new Continental variants, so don’t expect to discover its next design language in the coming months. It’s more of a long-term goal for the firm. Luckily, it has plenty of projects in the pipeline. Company boss Adrian Hallmark strongly hinted at “an even more luxurious and even bigger” version of the Bentayga, likely to succeed the Mulsanne at the top of the line-up and he suggested Bentley is tentatively planning to release its first electric model (possibly with a cutting-edge solid-state battery pack) about halfway through the 2020s. Speaking of, electrification technology will give stylists the opportunity to explore new design avenues. “I think that, when we talk about an electric car, and only from the design point of view, we have to work on efficiency first of all. This has a certain impact on our design language. It means we need to focus more on aerodynamics and on lightweight design, and this has a direct impact on the styling. I personally think it is a big chance for us; it will help us push the design language forward”, he concluded. +++ 

+++ BMW is considering scaling up its investment in China as the German premium carmaker is convinced the country’s development potential in the long run remains positive, a senior company executive said. “All of our investments we committed in China will continue, and we are actually discussing investing more in China in the future”, said Jochen Goller, president and CEO of BMW Group Region China. “So China will remain our most important market worldwide”. Goller said the novel coronavirus epidemic had disrupted the country’s car production and sales during the past several weeks and the impact on the industry is likely to linger through the first half of the year. But he added that BMW is optimistic about the mid-and long-term prospects of the country. Goller said BMW resumed operations at its offices and plants in China on February 17 and that about 85 % of its dealership network is back on track as the epidemic is basically curbed in the country. “Clearly we are tackling challenges and ramping up our business”, Goller said. “Unprecedented crises like this require decisive actions and leadership, and this is precisely what China has demonstrated over the past weeks and months”. BMW has not released monthly sales figures for this year. Pieter Nota, a board member in charge of sales, said the company saw a significant sales slide last month in China, but signs of recovery have emerged in March. “Incoming orders in China have significantly increased again”, Nota said. “But it is too early to make a forecast for the entire year”. The company delivered 724.733 BMW and Mini branded vehicles in China last year; up 14 % year-on-year and accounting for 28.5 % of its global total. The German automaker in 2019 became the bestselling premium carmaker in the world’s largest car market. China is also an important pillar of BMW’s e-mobility plan. The carmaker said its electric iX3 will go into production this year as scheduled at its plant in Shenyang, Liaoning province. The model will be sold in China and exported into other countries as well. The iX3 is one of many electrified models in the pipeline. In 2021 the company will launch the iNext, a fully-electric model and enabled for highly automated driving. The i4, which made its debut online earlier this month, will hit the market in the same year. “By 2023, the BMW Group will already have 25 electrified models on the roads, with more than half of them all-electric”, BMW chairman Oliver Zipse said. He added the goal is to enable customers to choose the technology that best suits their demand: fully electric cars, plug-in hybrids or vehicles powered by combustion engines. BMW is investing heavily in new technologies including e-mobility and software know-how, with €30 billion euros slated to be invested by 2025. “Companies capable of developing and combining hardware and software in equal measure will shape the future of the automobile”, he said. “In this respect, we are quite clearly in the fast lane”. BMW said it will temporarily close its South Carolina plant in the United States for 2 weeks starting April 3. The German automaker said the “dynamic development of the corona pandemic is having a major impact on the global demand for cars. We are therefore taking a flexible approach and adjusting our production volumes accordingly”. +++ 

+++ Fiat Chrysler Automobiles, Toyota and Renault announced they will stop carproduction in BRAZIL temporarily due to the coronavirus pandemic. Earlier this week, General Motors and Mercedes Benz said they would also stop production. Volkswagen and Volvo have also announced at least temporary production halts in Brazil. The closures in Brazil have come shortly after automakers in the United States and the European Union announced similar measures. Stephanie Brinley from IHS Markit said they are currently expecting auto production in South America to fall by about 98.000 units in March and April. “I’m pretty sure that this number will be revised”, Brinley said. “It’s a very fluid situation”. Brazil is by far the continent’s largest auto producer, but Argentina also has a sizable output. +++ 

+++ This year was always going to be revolutionary for the world’s multi-trillion dollar car and battery-manufacturing businesses. After selling disappointingly few electric vehicles from 2010 to 2019, mainstream auto makers are finally embarking on their first committed, deliverable decade of EV revolution from 2020. Hallelujah! Now, and not before time, there is greater product choice, and more realistic pricing, which is essential if EVs are to become accepted by the motoring masses. And there’s a greater, wholly unexpected revolution in the air due to the Coronavirus pandemic. It has surely revolutionised the way we think about and handle cross-border travel for car people, non-car people, cars, and components (let’s have more local production, please), never mind public transport vehicles on land and sea, or in the skies. As if all the above isn’t enough, there’s further radical change in the CAR EXHIBITION INDUSTRY , which (World Wars aside) is going through its most dramatic period of change for a century or more. Close to home, the London Motor Show planned for May 2020 will instead “return in 2021”, its organisers have quietly told me. Meanwhile, The British Motor Show at the Farnborough Exhibition Centre will definitely go ahead from 20-23 August, its CEO Andy Entwistle assures me. Further afield, the Bangkok, Zagreb, Beijing and Sao Paulo motor shows are now officially “postponed”, while the Moscow event is “to be confirmed”, which I suspect means it will not be. Meanwhile, the nervous folk behind the already wobbly Detroit and Paris events, which are supposed to happen soon, seem suspiciously quiet. Conversely, Mark Schienberg, bullish president of the New York Auto Show, has played a blinder by not following in the footsteps of Geneva, which was, at eye-watering expense, cancelled at the last minute. Instead, he tells me he’s “rescheduled” his exhibition, which was originally planned for April, and pushed it back to late August / early September; very considerately opening immediately after the British Motor Show closes. Now that’s my idea of a special relationship between the US and the UK. Not that the New York Show’s understandable switch is ideal for super-busy Carlos Tavares. In recent days, Portugal’s favourite son has been declared The World Car Person of the Year, and will not now travel in April to NYC, where he was set to be officially crowned. Instead, the PSA boss will have to wait a little longer for his coveted gong. Like the rest of us, he’s having his international travel plans reviewed. But is this necessarily a bad thing? In the interests of reducing the spread of the virus, our carbon footprints, and spending less on costly travelling, shouldn’t more of us (Carlos included) be spending more of our valuable time working from home? It’s the future, I tell you. +++ 

+++ Nearly 91 % of franchised new-car dealerships in CHINA have reopened despite the lingering coronavirus outbreak, but showroom traffic remains at just 53 % of normal levels; a major trade group said. The latest survey by the China Automobile Dealers Association, which covers 8.393 franchised dealerships across China, shows showroom traffic varies widely among brands. Stores operated by Chinese brands reported the lowest level of showroom traffic: 35 % of levels considered normal for this time of the year. Dealerships marketing domestically built, foreign mass-market brands saw showroom traffic climb back to 54 % of normal levels. For stores distributing luxury brands and imported cars, showroom traffic was at 57 % of normal levels. Retail passenger car sales fell 47 % in the first 15 days of March as the coronavirus outbreak slammed the brakes on consumer and business activity across the country. “Some cities are encouraging people to return to normal life, however, consumers’ confidence in car purchases is unlikely to return to normal before the end of March”, the industry group said. Beijing, in an extraordinary step to help contain the outbreak, extended the Chinese New Year holiday by an extra week to February 9, limited travel and adopted other restrictions. The survey also shows that 9.2 % of franchised dealerships remained closed for failing to obtain approval from local governments, which require businesses to provide sufficient protective resources for customers and employees. China’s top economic planning body is urging for efforts to improve ways to promote electric cars and plug-in hybrids, as part of the country’s overall eco-friendly production and consumption campaign. In a notice released last week, the National Development and Reform Commission asked departments including the Ministry of Industry and Information Technology and the Ministry of Finance to come up with better measures to boost production and sales of new energy vehicles. The commission also suggested that local authorities, if conditions permit, offer some favorable support to private buyers and procure such vehicles for use in the public sector, including buses, taxis and logistics vehicles. This is one of the nation’s latest moves to boost its automotive industry that has seen a downward spiral because of a weaker demand in the market and most recently the novel coronavirus outbreak. Vehicle sales fell for 2 years in 2018 and 2019 in the country and they plummeted in the first 2 months of this year, according to the China Association of Automobile Manufacturers. In February, carmakers delivered 310.000 vehicles; down almost 80 % year-on-year. In the first 2 months of 2020, vehicle sales totaled 2.24 million in the country; down 42 % year-on-year. Earlier this month, the commission called for relevant departments and local governments to help stimulate demand in the market. In terms of new energy vehicles, it asked them to gradually shift the focus of financial incentives from purchases to car uses, including financing building the charging network. Stephan Wöllenstein, CEO of Volkswagen Group China, said an easy access to charging infrastructure matters a lot to the country’s new energy vehicle plan. “Charging, along with a number of other benefits, will be the deciding factor whether new energy vehicles will really happen in China”, he said. “This would be for me the main point, it’s not about unsustainable subsidies”. He said carmakers should play their role as well by coming up with good vehicles that attract customers from gasoline vehicles. Volkswagen is introducing its electric and plug-in hybrid models into the country and aims to sell 1.5 million a year in 2025. Besides new energy vehicles, the commission said it encourages cities that limit license quotas to increase the number of license plates available to the public. Analysts said cities with such restrictive measures include Beijing, Shanghai as well Guangzhou and Shenzhen in South China’s Guangdong province, and people there on average have a higher income level and thus good purchasing power. Analysts and industry insiders are calling the government to take action to help the industry that accounts for around 10 % of China’s GDP over in the difficult days ahead. Great Wall Motors and the GAC Group have lowered their sales targets, and many other companies including subsidiaries of China’s largest carmaker SAIC Motor are cutting salaries of their employees because of lackluster sales. Dong Yang, vice-president of think tank China EV 100, estimated that vehicle sales could fall by 10 % year-on-year if the government does not offer favorable policies. Even with such policies in place, the market could see a fall of around 5 % from 2019, he said. He proposed that the government consider cutting purchase taxes for vehicles, a measure that worked well in the past. Wöllenstein said the measure will attract potential car buyers to place their orders earlier but will not create additional demand, but it is probably a reasonable measure to be considered under current circumstances. “What we do need now is a kick, a stimulus for the market to come back”, he said. Dong also suggested that the authorities extend China’s financial stimuli to the new energy sector by another 2 years. China introduced the stimuli in 2009 and has spent tens of billions of yuan on the sector. It has cut the subsidies over the past years and plans to stop them altogether by the end of this year. The latest slash came in late June 2019, which has since affected the enthusiasm for new energy vehicles. Their sales last year totaled 1.21 million; down 4 % year-on-year, ending years of growth. +++ 

+++ As carmakers grapple with growing signs of CORONA VIRUS damage, vehicle production could be reduced by about 1.44 million in Europe, North America and Latin America, according to an estimate by information provider IHS Markit. Automakers across the world have announced plans to idle factories as they conduct additional sanitation and cleaning procedures, raising concerns that extended periods of downtime could significantly hit the companies’ profits. The stoppage of work would cut European auto production by over 880.000 units, considering plants are shut for an average of 13 working days in the region, IHS Markit said. North America car production is likely to be curtailed by 478.000 units, factoring in an average downtime of 6 working days, while output in Brazil and Argentina combined would be hit by about 80.000 units, assuming closures between 8 and 15 days, the firm said. “Even if production does only halt for the announced periods of time, the assembly ramp-up phase that follows will cause further impacts”, said Henner Lehne, vice president, global vehicle group, IHS Markit. About 89 million light vehicles were produced globally in 2019. +++  

+++ In EUROPE , automakers are working to provide support to dealerships as showrooms close all over Europe because of coronavirus restrictions, but some dealers worry that the measures may not be enough. Government decrees limiting personal movement and commerce considered nonessential have meant that sales activities are prohibited at dealerships, but they do allow for limited aftersales and servicing. But the main problem for dealers is how to handle the loss of revenue. Online sales could be one option, but any orders would most likely have to be deferred until coronavirus restrictions are lifted. Volkswagen Group’s dealership organization has given Europe’s biggest automaker an action plan to protect the businesses of dealers and service partners. The plan, drawn up by the European dealer council (EDC), asks VW Group to extend the payment deadlines for new cars, used cars and spare parts; suspend all standards and audits; and revise the annual targets and bonus agreements. At this time, measures aimed at safeguarding liquidity are the No. 1 priority, EDC Managing Director Martin Kuhn said in a statement. The dealer council is involved in a “very constructive exchange of information with all VW Group brands”, Kuhn said. Car makers and importers are moving quickly to keep dealers liquid, but the measures may not be sufficient. “Basically, the manufacturers and importers have recognized the seriousness of the situation and are taking action”, Antje Woltermann, managing director of the German Association of the Motor Trade (ZDK), told. “However, that might not be enough”. In its package of measures, for example, Toyota Germany has focused on securing liquidity for dealers. The Toyota credit bank has extended payment terms, simplified the granting of loans and supports companies in their business with commercial customers. Hyundai Germany extended payment deadlines. In addition, individual premiums for sales to private or commercial customers are no longer paid monthly but weekly and regulations for keeping stock and demonstration vehicles will be relaxed. Another open question is how to handle dealer sales targets. Hyundai Germany told that metrics for achieving the targets in the first quarter and March were still being analyzed, and targets for the coming months would be redefined. “Almost all manufacturers’ associations are working on topics such as advance payments and payment targets as well as the suspension of audits”, Woltermann said. “As far as dealer targets are concerned, manufacturers and importers must move even more strongly”. The CNPA, the French automotive trades association that also represents dealers, noted that the government has declared the coronavirus crisis to be a situation of “force majeure”, meaning that contractual obligations may be waived in many cases. French dealers are sitting on about 4 months’ worth of stock, both registered and unregistered, representing a cash tie-up of €7 billion to €10 billion, CNPA President Francis Bartholome told. Bartholome said that discussions were underway with automakers. Renault Retail Group said it is working with dealers to ensure they remain solvent. The Renault subsidiary has a network of 275 outlets and sells about 20 % of all Renault Group, which include budge brand Dacia, vehicles in Europe. A spokeswoman said the details were still being worked out, but that Renault’s banking arm, RCI, was involved in the discussions, with both company-owned and independent dealers. Christophe Michaeli, director of the French automobile market at BNP Paribas Personal Finance, said some automakers had set up emergency support systems. Ivan Segal, Renault commercial director for France, told that the automaker was going to extend invoice terms for dealers up to 120 days in some cases. Adolfo De Stefani Cosentino, chairman of the Italian dealers’ association, Federauto, said most automakers have been “proactive in helping dealers face this difficult situation”. Cosentino said measures taken so far included guarantees of first-quarter bonus payments, and deferral of invoices for demo and courtesy vehicles, and payments for parts. Volvo Cars Italy said dealers would get an additional 110 days to pay for cars already in stock, as well as those shipped between March 11 and April 3, and the company’s partner bank would grant 90 day extensions on invoices due in March and April. Plinio Vanini, chairman of Autotorino, Italy’s largest dealer group, said that the expected economic hardship could force automakers to reassess the size of their dealer network. “As we are seeing a worldwide recession, automakers will not be in a position to keep their entire dealer networks running”, Vanini said. “They might be forced to take hard decisions on the number of outlets they actually need”. Renault Retail Group said last month that it would be closing some showrooms as part of a retrenchment of its operations, in part to prepare for expected growth in online sales. +++ 

+++ FORD has announced it is suspending production at its European sites as a result of the Coronavirus outbreak. The American giant has also closed its Dagenham plant in London. In a statement, the company confirmed that it closed doors to all but maintenance and security employees at its Valencia body and engine manufacturing plant after 3 employees based at the site tested positive for the Corona disease. Ford of Europe will follow this up by temporarily suspending” vehicle and engine production at the rest of its European plants from Thursday, with the closures anticipated to last for a number of weeks. “While the impact of coronavirus at our facilities so far has been limited thankfully, its effects on our employees, dealers, suppliers and customers, as well as European society as a whole, is unprecedented”, said Stuart Rowley, president Ford of Europe. “Due to the dramatic impact this ongoing crisis is having on the European market and the supplier industry (together with the recent actions by countries to restrict all but essential travel and personal contact) we are temporarily halting production at our main continental Europe manufacturing sites”. Manufacturing at Ford of Europe headquarters in Cologne, Germany, will be suspended, as will the company’s other German plant in Saarlouis and its Romanian plant. Ford has confirmed that supplies to these sites have become increasingly interrupted during the outbreak, while declining sales of vehicles means that some dealerships in Europe will need to temporarily close down. The announcement comes shortly after PSA decided to suspend production at all of its European factories, while the Volkswagen Group has begun the process of selectively suspending activity at manufacturing sites in the worst affected areas of the continent. FCA has closed nearly all its European plants. Ford will bring forward part of the summer shutdown for its British engine plants to Easter due to the coronavirus outbreak. It will temporarily stop production at its London site and from the end of March 25 at its Welsh facility. “Due to the dramatic impact this ongoing crisis is having on the European market and the supplier industry, we have decided to bring forward part of the summer shutdown period for our UK operations to the Easter period”, Ford said. Ford said its employees would receive payments at least equivalent to their base pay during this 4 week period. The firm built over 1 million engines at its Dagenham facility in east London and its Bridgend plant in south Wales last year. Many of the engines are made for Jaguar Land Rover, which last week announced it would be closing its British factories because of the outbreak. Ford said it will temporarily shut down vehicle and engine production at its factories in India, South Africa, Thailand and Vietnam in response to the growing impact of the coronavirus. +++ 

+++ China’s top pickup maker GREAT WALL MOTOR is not willing to enter a price war as sales slow down because of the coronavirus epidemic, but will keep trying to develop overseas markets, its chairman said. “Great Wall does not want to enter a price war in the market slowdown because price represents brand value”, Wei Jianjun, chairman of Great Wall, which is also one of the biggest SUV makers in China, told. “Blindly occupying the market with price cuts will hurt the brand, especially when automakers’ cash flow cannot be fully guaranteed”, Wei said. “We are now adjusting the production cycle and slowing it down. If production causes a large backlog of products, it will not be good for the entire operation”. Great Wall was among the first major automakers to cut car prices in late 2018, when China’s car market, the world’s biggest, started to drop. However, since 2019, Great Wall started to dial back the aggressive price strategy to regain profit. The Baoding-based automaker, which is also building a car plant with BMW in China’s eastern province of Jiangsu, has cut its sales target by 8 % to 1.02 million units and profit target by 13.8 % to 4.05 billion yuan for this year. Rival state-owned automaker GAC, which has joint ventures with Toyota and Honda, also lowered it sales target from a 8 % growth to 3 %. Great Wall sold 1.06 million cars last year. In February, in the midst of the coronavirus outbreak, it sold 10.023 units; down 85.5 % from a year earlier, while the overall market dropped 79 %. An official at China Association of Automobile Manufacturers (CAAM) told that if the outbreak in China is effectively contained before April, the decline could shrink to around 5 % for the whole year. Great Wall agreed to buy 2 plants in India and Thailand from General Motors earlier this year as the Detroit automaker retreats from unprofitable markets. Wei said Great Wall considered entering Indian and Thai markets around seven years ago but did not progress as the firm was not ready. Great Wall now expects transactions of both plants to be completed in the second half of 2020 and will revamp their production line to make its own models. +++ 

+++ In INDIA , Toyota, Honda, Suzuki and Nissan have halted operations at their plants in India due to the spread of the new coronavirus. Toyota has suspended operations at its 2 plants in Karnataka state as employees could not commute to the sites after the Indian government instructed public transportation operators to suspend business. Toyota, which produced some 116.000 units in India in 2019, including the Corolla and Innova minivan, said it was undecided about operations at the 2 factories from Tuesday onward. Honda stopped operations at 2 vehicle factories making the City compact sedan and other models as well as four motorcycle plants until March 31. Suzuki, the market leader in India with 30 percent of group sales coming from the South Asian country, stopped output at its Gurgaon and Manesar plants in the state of Haryana, operated by its local subsidiary Maruti Suzuki. Suzuki also suspended business at its research and development center in Haryana. Nissan said it has halted its auto plant in the state of Tamil Nadu for the safety of employees and does not know when it can be restarted. The automaker will also suspend its vehicle manufacturing in Mexico from Wednesday to April 14. Mitsubishi meanwhile stopped operations at its factory on the northern Philippine island of Luzon and will continue the measure until April 12 in line with the Philippine government’s measure restricting residents from going outdoors. Toyota and other Japanese automakers have resumed operations in China, where the coronavirus epidemic started, but have been shutting operations at its factories in the United States and Europe in line with governments’ requests for residents to stay indoors to prevent the spread of the coronavirus. +++ 

+++ In JAPAN , the coronavirus pandemic is having a big impact on the auto manufacturing industry, the head of a Japanese lobby group said, adding that its members will need to keep adjusting production, amid a projected slump in demand. “The truth is, it was shocking just how much the world could change in an instant”, said Akio Toyoda, who also leads Japan’s biggest automaker, Toyota. “At this point, we can’t foresee what’s ahead for automakers”, he added. Toyoda is the chairman of the Japan Automobile Manufacturers Association. In separate announcements last week Toyota, Nissan and Honda said they would temporarily halt North American factories to protect worker health and amid an expected hit to demand. They also suspended production at several plants in Europe, with Honda closing its facility at Swindon in Britain until at least April 5. Despite the uncertainty, Toyoda said he did not expect the virus outbreak to hit spending on research into advanced technologies, such as autonomous driving and electric cars. +++ 

+++ MERCEDES-BENZ will halt production at its 2 U.S factories to contain the spread of coronavirus virus. The German automaker was one of the last holdouts to announce production shutdowns in the wake of the pandemic. Mercedes will stall assembly lines at its SUV plant in Alabama and its Van factory in South Carolina. Production will wind down for 2 weeks. The disruption could last longer. “Management is monitoring the situation constantly and will take further measures as required”, the company said. “Operations will be resumed when the situation improves”. The more than 6 million square foot Alabama plant employs about 4.200 people and is the global production hub for the GLS, GLE and GLE Coupe. The factory, which has the capacity to build more than 300.000 vehicles each year, is the second largest vehicle exporter in the U.S. About twothirds of SUV volume produced in the plant is exported. Mercedes-Benz builds Sprinter vans in the South Carolina factory. +++ 

+++ Chinese electric car startup NIO is confident about its prospects this year despite the coronavirus outbreak, expecting its gross profit margin to become positive in the second quarter. “Based on the current trend, we would hope the daily new order rate to return to the level of last December in April”, said William Li, founder and chairman of Nio, on an earnings call last week. He expected production, which resumed in late February at its plant in Hefei, Anhui province, to return to normal in April as well. Due to the coronavirus outbreak, Nio delivered 2.305 vehicles in January and February, which was lower than the company’s target set prior to the outbreak. Li expected 1.100 to 1.300 vehicles to be sold in March, bringing sales in the first quarter to around 3.500. “Facing the pressure of the outbreak, we are still confident to achieve the preset sales target for 2020”, Li said. He did not make public the sales target though. In 2019, the company delivered 20.565 vehicles; up 81 % year-on-year. Nio’s new models are hoped to help drive sales. In April, it will start the delivery of the updated ES8. In September, the EC6, which is expected to take on Tesla’s Model Y, will roll off the assembly line. In the 4th quarter of 2020, its 100 kWh battery pack will hit the market. Li said the company will continue to expand its sales network by building more Nio Spaces, with an estimated 200 of them by the end of this year. Gross margin improvement is one of Nio’s top objectives in 2020. Last year, its gross margin was negative 15.3 %, with net loss standing at $1.62 billion. Li said the gross margin will turn positive in the second quarter and reach the 2-digit level by the end of the year as it has been optimizing the supply chain, winning a better deal with battery producer CATL, and reducing manufacturing costs as it ramps up production. The company has also become stricter about expense control and further improved its efficiency, with its headcount cut to around 7.000 from 10.000 in early 2019. “We are pleased to see encouraging results to date and expect around 35 % expense reduction compared to the prior quarter even under the pressure of the outbreak”, said Li. Nio has made steady progress in financing efforts over the past months. It has issued $435 million convertible notes this year to several unaffiliated Asia-based investment funds, which are to support the company’s daily operations and business development. In late February, it inked a 10-billion-yuan framework agreement with the Hefei city government in Anhui province, and Li said the definitive deal will be signed in April. +++ 

+++ From the Audi A1 to the Q8, there’s always a performance S equivalent, which is something that the German brand has been known for. However, its parent company, Volkswagen, isn’t taking the same route with its lineup. Sure, the company is ramping up its R range, with the T-Roc R getting released early last year and the Touareg R debuting last month. Even the electric ID range will get an R version, which will be the road-going equivalent of the highly-successful ID.R electric race car. The latest one, the Golf R, is already underway and VW’s pretty confident with the go-faster Golf, calling it an ultimate driving machine. But the Golf R will be the smallest of the R range, according to R chief Jost Capito in a recent interview. “The POLO R would not work when we see what the clients have in this range, there is an interest but the volume would be too low, and the cost would be too high”, he explained. Demand is the main driving force for a brand to introduce a new model, so if VW doesn’t see the Polo R as a high-demand model, it definitely won’t spend so much in developing one. Rumours about the Polo R has been a volley since 2014 when Volkswagen announced that it won’t happen. However, a report in 2017 pointed to a 300 hp Polo R that’s allegedly already in the testing phase, which kind of gave us enthusiasts a tiny bit of hope for a small hot hatch. But then again, with Capito’s confirmation, it seems like all hopes for a Polo R are lost at this point. +++ 

+++ PORSCHE has announced record sales for 2019 at its annual financial presentation, just 2 days after closing its production facilities for 2 weeks as a result of the coronavirus pandemic. Porsche boss Oliver Blume also confirmed that the company would launch a ‘very powerful’ hybrid version of the latest 911 and would make a decision this year on a hybrid version of the 718 mid-engined sports car. Blume again confirmed that a pure electric Macan is on schedule for launch in 2022. Porsche says that, between now and 2024, it will be investing €10 billion in hybridisation, electrification and digitisation, but it still expects to see double-digit profit margins in future. On this issue of connectivity, Blume said that Porsche wanted to see a much quicker roll-out of 5G mobile technology in Germany, especially along motorway corridors and main roads. 5G plays an essential role in connecting vehicles to each other, as well as in enabling future safety innovations and autonomous driving tech. 5G will also enable vehicles to rapidly upload the huge amounts of data that’s collected by a car while it is being driven; from localised weather forecasts to the locations of ice and potholes. +++ 

+++ RENAULT may seek French government guarantees to bolster its finances in the face of the coronavirus crisis but a renationalization is not being considered, chairman Jean-Dominique Senard told. “We may seek state guarantees like other companies”, he said. Invoking the last global financial crisis, when Renault received a €3 billion government loan, Senard said a renationalization was “not on the agenda” as things stand. “Remember that in 2008-2009 we never got to that point”, he said. Orders for some models were currently down 90 percent, Senard also said. In February, Renault reported its first loss in a decade. The French government nationalized Renault after World War 2, then privatized the company in 1996. The government has a 15 % stake in the automaker. +++ 

+++ SOUTH KOREA said it would provide logistical and financial support to help the auto industry through the coronavirus crisis, warning of disruptions to supply chains from Europe and the United States. The government said it would speed up customs clearance, arrange freight transportation and provide liquidity support for the industry which employs about 12 % of South Korea’s workforce, according to official figures. The coronavirus pandemic has led to shutdowns at auto factories and dealerships in the United States and Europe, which are expected to affect South Korean automakers such as Hyundai and Kia. “It’s time to prepare for the shock of a global demand contraction and European supply issues”, Industry minister Sung Yoon-mo said in a meeting with parts supplier executives and industry associations, according to a readout from the ministry. “Survival is the most crucial thing in this unprecedented crisis when both demand and supply contract at the same time”. The ministry gave no details on how much liquidity support the government would provide or what form it might take. The assistance is part of 50 trillion won ($39 billion) in emergency financing announced last week to boost the economy. South Korea has reported 8.961 coronavirus cases and 110 deaths from the disease. Hyundai closed its Alabama, assembly plant on Wednesday after an employee there tested positive for Covid-19. It also suspended production at its plants in the Czech Republic and India due to the coronavirus outbreak. Europe and the United States account for about 70 % of Korean automakers’ exports and 54 % of Korean parts exports. A trade ministry official said South Korean exports would deteriorate in April and May, after rising 10 % year-on-year in the first 16 days of March. Car exports rose 13.7 % in the period, customs agency data showed. “For the time being, a drop in exports of cars and auto-parts are inevitable as car factories and dealerships are closing”, Sung said. South Korean automakers had stocked up on inventories which could last up to 2 months. +++ 

+++ TOYOTA said it would suspend production on one of its vehicle production lines at a plant near its headquarters in Japan through Wednesday, after a second plant worker tested positive for the Covid-19 virus. In a statement, the Japanese automaker said another employee at its Takaoka plant in Toyota City, Aichi Prefecture, tested positive for the virus, after it announced its first case of infection at the plant on Thursday. Toyota said the 2 employees had worked in close proximity to each other, and that it had asked a total of 33 employees at the site who had come into contact with the 2 workers to remain at home. +++

+++ VOLKSWAGEN boss Herbert Diess warned that the coronavirus crisis may force the company to keep its factories shut for longer than initially planned. “Most of our factories are closing for 2 weeks and in some regions for 3. It is likely that these measures will last”, Diess said. “The spreading of the virus will not have come to a standstill in several weeks from now. So that we need to be ready, to live with this threat for a long time, until effective medicines or a vaccination are available”, Diess said. Volkswagen is taking measures to secure liquidity, its supply chains, and to continue with strategic projects such as the launch of the company’s ID.3 electric car and the supply of battery cells. Germany’s number of confirmed coronavirus cases rose by 2.705 to reach 16.662, the Department for Infectious Diseases at the Robert Koch Institute said. Volkswagen will also temporarily close its factories in Mexico’s Puebla and Guanajuato states in a bid to preserve public health, the company’s Mexican unit said amid growing worries over the spread of the coronavirus. The shutdowns will take effect on March 30 and extend through April 12. The company also pointed to slowing demand and the risk of shortages of parts as factors in the decision to suspend production in the factories. Another German carmaker also with operations in Mexico, BMW, said in a statement that it would extend an already-scheduled Easter stoppage at its factory in San Luis Potosi state. The stoppage is set to begin on March 28 and will now extend at least through April 19. The 2 automakers’ decisions follow other measures taken broadly by companies in Mexico, including an emphasis on working from home if possible as well as restrictions on travel and in-person group meetings. Volkswagen is calling for favorable policies in China to boost consumption as the country recovers from the novel coronavirus epidemic. Stephan Wollenstein, CEO of Volkswagen Group China, hopes authorities will postpone the introduction of the stricter State VI emissions standard and roll out non-monetary measures to stimulate sales of new energy vehicles. “The automotive industry and other related industries together account for around 10 % of GDP, so if China really wants to generate more GDP growth, then stimulating the automotive industry is key”, Wollenstein said. Volkswagen is one of the most popular carmakers in China, with sales of its brands ranging from the namesake Volkswagen to premium brands Audi and Porsche combining to account for about 20 % of the country’s passenger car sales. But the company is suffering from the epidemic. In the first 2 months of the year, sales nosedived to 400.000, with China’s total passenger car sales 1.81 million; down 43.6 % from the same months last year. Wollenstein said the impact of the epidemic would continue for a while and the auto industry won’t return to last year’s levels until May, June or July. The carmaker estimated the country’s overall passenger sales this year will slide by 600.000 to 3 million, representing a fall from 3 % to 15 % year-on-year. Wollenstein said he hopes the government will consider delaying the introduction of the new emission standards, which are scheduled to take effect on July 1. Other carmakers including General Motors made a similar plea earlier this month. “It is not because we or the industry are not technically ready for the new standard, but because the crisis really affected our ability to sell the older models”, Wollenstein said. He also called for the government to consider non-monetary measures to boost the popularity of new energy vehicles as the subsidies are expected to be gone by the end of the year. He added that authorities should make it easier to use the cars, including no-ban days on roads and improving the charging infrastructure so that such vehicles can be charged easily. China had 1.24 million charging poles, both private and public, by the end of January 2020, according to the country’s charging infrastructure promotion alliance. That’s up 45.8 % compared to a year ago, but it still lagged far behind the number of new energy vehicles, which total 3.85 million. “Charging, along with a number of other benefits, will be the deciding factor whether new energy vehicles will really happen in China”, said Wollenstein. “This would be for me the main point, it’s not about unsustainable subsidies”. Volkswagen aimed to sell 400.000 new energy vehicles this year, but it seems the goal will be difficult to achieve considering the epidemic-driven decrease in demand. But Wollenstein said the company will not change relevant investment plans. Late last year, Volkswagen said it would spend €1.6 billion this year in China on electrification and digitalization. That would account for 40 % of its total investment in the country. Volkswagen is still aiming to see its sales of new energy vehicles reach 1.5 million in 2025. Wollenstein said by then the company will have purpose-built electric car platforms, the MEB and the PPE, in place as well as vehicles with a range of 400 to 650 km. He said within the next 2 to 3 years the company will achieve a share in the new energy vehicle sector as it does in the overall market. Volkswagen branded vehicles account for around 15 % and the group’s vehicle sales, around 20 %. “With the MEB platform in place in 2021 and 2022, we should be on track”, he said. +++ 

+++ VOLVO is recalling more than 700.000 vehicles globally because of an issue with the automatic emergency brake system. The recalled vehicles are the S60, V60, V60 Cross Country, S90, V90, V90 Cross Country, XC40, XC60 and XC90 models built in 2019-2020. The vehicles’ automatic emergency brake system may not always engage, which could increase the risk of collision and injury, according to documents from the NHTSA in the U.S. “There have been no injuries or accidents”, Volvo spokesman Jim Nichols told. “This is a proactive measure out of an abundance of caution”. In the U.S., the recall effects more than 100,000 vehicles, Nichols said. Volvo notified NHTSA on March 12 and began notifying dealers Monday. Owners of recalled vehicles will be notified starting May 1, according to the documents. The supplier is Aptiv. Volvo’s solution is to update the associated software. +++

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