Newsflash: Mini komt met elektrische cross-over

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+++ ASTON MARTIN is testing investor appetite for risky assets days before the U.S. election with a $1.1 billion junk bond sale, one of the largest deals of its kind in Europe this year. The British luxury car maker is looking to sell dollar and sterling bonds to help redeem existing senior secured debt, repay a government-guaranteed loan and put cash on the balance sheet, according to an investor announcement. The sale started today and the book will be closed on Friday, when Aston Martin will announce the final price. The bond issue is the main tool behind a refinancing package that includes a 125-million-pound equity raise, a separate $335 million private placement of notes and an agreement that will see Mercedes-Benz lift its stake in Aston Martin to up to 20 % by 2023. “Yes, there is a risk involved (for investors) when there’s a big part of the business plan that still needs executing”, said a source familiar with the transaction. “But it’s senior secured debt with a strong brand, production facilities and a billion-pound market cap behind it”. Also on offer is a substantial yield at a time when unprecedented monetary stimulus is pushing rates to record lows. Both tranches are being marketed at the “high 8%s-9%”, wording that usually suggests an offer yield of around 8.75%-9%. “It’s unusual to see a listed business with a billion pounds of market cap offering yields at this level”, said Steven Hunter, chief executive of high-yield analytics company 9fin. “What’s also unusual is that it’s a company with a negative cashflow, so it’s going to be expensive”, he added, referring to earnings before interest, taxes, depreciation and amortization. Investors have recently shown a willingness to take on risky assets in the bond market of late, with Jaguar Land Rover, Rolls-Royce and British debt collector Lowell all accessing funds this month. JP Morgan and Barclays are global coordinators on Aston Martin’s bond sale. +++ 

+++ A joint BATTERY venture of Toyota and Panasonic aims to boost efficiency of development and production processes by 10 times to better compete with larger Chinese rivals, its chief said. The venture, Prime Planet Energy & Solutions, is now the world’s largest supplier of batteries for hybrid vehicles, and was created in April by pooling part of the battery-related equipment and engineers of the 2 firms. But it has a share of only 3 % in the high-capacity battery market for electric vehicles, lagging far behind China’s CATL with a share more than 20 %. Prime Planet is moving to standardise battery designs and helping streamline operations of materials suppliers, its president, Hiroaki Koda, told a news conference. “With efficiency 10 times higher, we can win over the Chinese”, Koda added. Toyota, which targets electrified vehicles to bring in half its global sales by 2025, has also partnered with CATL and Chinese EV maker BYD for battery procurement. Koda declined to give a time frame for the efficiency target or the scale of consequent cost reduction, but said the company would probably improve by 5 to 6 times the next version of its product, now being worked on. Asked about Tesla’s promise to halve battery costs over the next several years with new technology and processes, Koda said Prime Planet had similar plans regarding technology. “Tesla publicly announced that, so it means they will do it”, said Koda, a former procurement executive at Toyota. “I respect that”. Prime Planet has taken over Panasonic’s business in thin, rectangular-shaped prismatic batteries, while Panasonic retained its business with Tesla for cylindrical batteries of a type similar to those used in laptops. +++ 

+++ BMW is working with China’s e-commerce giant Alibaba to help drive digital transformations across businesses in the world’s largest auto market. The 2 will work on comprehensive cooperation in branding, marketing, end-to-end operations, services, and information technology, according to the memorandum of understanding the 2 signed. Jochen Goller, president and CEO of BMW Group Region China, said Alibaba has unique advantages in terms of digital technologies, mass customer platforms and channels as well as target customer operations. As BMW is speeding up digitalized transformation, cross-industry cooperation and exchanges are a must, said Goller. BMW said the partnership will help it to digitize the full business process, which will enable dealers to provide an end-to-end and online-to-offline digital experience for customers. “BMW is becoming the first auto manufacturer to leverage Alibaba Business Operating System”, said Jing Jie, vice-president of Alibaba. “This system will help accelerate the digital operations across BMW’s business segments, aiming to provide end-to-end customer-centric services throughout the product lifecycle and high-quality growth by expanding, connecting and serving customers in a more efficient way”. Among other things, customers can buy BMW and Mini branded vehicles via Alibaba’s Taobao and Tmall platforms. They can also book test drives and car maintenance online, and online financial services will be available as well. The 2 will also work to make the most of Alibaba’s other platforms including its online payment business Alipay and China’s largest navigation app AutoNavi to make it easier for customers to buy and use cars and have them serviced. Online traffic will be directed to BMW dealers to create more business opportunities for them as well, the companies said. The partnership with Alibaba is the latest move in BMW’s digitalization. In October, it launched an app for its customers and fans in China, and unveiled its newly expanded research and development center in Munich, Germany, that will develop hardware and software for future vehicles. In 2019, it established a digital business company, which is the carmaker’s first in the global market. The company is engaged in areas including digital marketing solutions, big data analytics, customer relationship management and e-commerce. +++ 

+++ CHILDREN are pushing their parents to buy electric vehicles, a new study has suggested. Some 67.8 % of children say they believe electric and plug-in hybrid cars are good for the planet, with 55.3 % of parents admitting their children would like them to buy an EV. The data came from a survey of 1.250 children (aged between seven and 12) and their parents or guardians, conducted by Peugeot. It revealed 54.2 % of children have tried to get their parents to be more environmentally friendly by recycling or reusing items, as well as by purchasing an electrified vehicle. Interestingly, 72.2 % of children surveyed said they are consulted or involved in the purchases their parents make, including buying a new car. David Peel, managing director of Peugeot UK, said: “It’s great to see the next generation of car buyers so interested in full electric and plug-in hybrid vehicles, and to know that they understand the positive impact these vehicles have on the environment. With this in mind, it’s really positive to see through our research how influential children are in the purchase decisions their parents make”. Peugeot intends to offer an electrified option for every model in its range by 2023. The 508 and 508 SW are already available to buy as plug-in hybrids, while the 3008 can also be ordered with a PHEV powertrain, alongside pure-EV versions of the 208 and 2008. +++ 

+++ Last month was the first time in history that registrations of electric, plug-in and hybrid cars overtook diesel cars across EUROPE , new figures reveal. Data published by industry analysts JATO Dynamics showed that demand for petrol and diesel cars suffered double-digit percentage drops compared to September 2019, with diesel down to just under 25 % of the European market. Petrol cars made up 47 % of the market, compared to 59 % in the same period last year. By contrast, registrations of electric, plug-in hybrid and ‘traditional’ hybrid models rose to 25 % last month; more than twice the percentage in September 2019. 327,800 units were registered across the month. The overall market posted what JATO Dynamics describes as a “timid” recovery. 1.3 million cars were registered across all 27 nations last month; up just 1 % over the same period last year. That’s of little consolation given registrations dropped by 29 % during the first nine months of the year. JATO Dynamics’ global analyst, Felipe Munoz, says the shift to electrification is “finally taking place”. “Although this is largely down to government policies and incentives, consumers are now ready to adopt these new technologies”, he continued. While Toyota leads all other brands with the highest registrations of electrified cars (primarily hybrids), the Volkswagen Group is posting rapid growth. The maker registered 40.300 electrified models last month, putting it second behind the Japanese brand. SUVs continue to top the sales charts, grabbing 41.3 % of the market, with the Renault Captur, Peugeot 2008 and Ford Puma leading the charge. Despite that, the most registered overall car in Europe was the Volkswagen Golf, closely followed by the Opel/Vauxhall Corsa. The Tesla Model 3 continued to top the fully electric category, with 15.702 registered last month. The Renault Zoe was second, with the newly introduced Volkswagen ID.3 sliding into third. 3 times as many Model 3s were registered than the most popular plug-in hybrid, the Mercedes A-Class, while the Tesla also beat the Toyota Corolla, leader of the hybrid category. +++ 

+++ U.S. sales of high-margin pickups and Jeeps hauled FIAT CHRYSLER AUTOMOBILES (FCA) back into the black in the third quarter following pandemic-related shutdowns, and the carmaker reinstated a profit forecast for 2020 that assumes no more disruption from a freshly resurgent Covid-19 outbreak. FCA said it had available liquidity of €27.1 billion as of September and was on track to launch 3 new models in its profitable Jeep lineup in 2021. During a conference call with analysts, chief executive officer Mike Manley said all the car maker’s plants are now operating near pre-pandemic production levels. The Italian-American company had industrial free cash flow of €6.7 billion during the quarter, which Manley described as a “nice turnaround” to the cash burn in the first half of the year due to the pandemic. FCA and PSA aim to merge by the end of the first quarter of 2021 and EU approval for that tie-up could come by the end of this year. PSA reported a return to revenue growth in the third quarter for its autos division. The results leave both car makers in a strong position as they steer towards their planned merger, where profits from gas-guzzling pickup trucks and Jeeps in America should help Stellantis (as the merged entity will be called) fund the development of zero-emission vehicles in Europe and China. But a resurgence in the Covid-19 pandemic is clouding industry prospects for the coming months. France is bracing for a possible renewed month-long lockdown and protests flared across Italy this week against a new round of government restrictions. FCA posted adjusted earnings before interest and tax profit of €2.28 billion for the July-September quarter, topping the €1.152 billion forecast by analysts. Operating profit rose 26 % to a record €2.544 billion in North America, with a record 13.8 % margin versus 10.6 % a year earlier. Adjusted EBIT was slightly positive in Latin America, while the carmaker posted an operating loss in the EMEA and APAC regions and in its Maserati unit. FCA, which earlier this year withdrew its guidance for the year, forecast a €3-€3.5 billion profit for 2020, but added that its new guidance assumed no further significant disruptions from Covid-19. +++ 

+++ FORD posted a better-than-expected quarterly profit on strong U.S. demand for pickups and SUVs, and forecast a full-year pretax profit instead of a loss. Ford CEO Jim Farley, who took over on October 1, is tasked with completing the No. 2 U.S. automaker’s $11 billion restructuring begun under his predecessor, Jim Hackett, and has promised greater urgency. He has also said he is keen to expand Ford’s operations into related technology fields, including software, data, fleet management and electric vehicle charging. Ford reported net income in the third quarter of $2.4 billion, or 60 cents a share, compared with $400 million, or 11 cents a share, a year earlier. Excluding items, Ford’s profit was $3.6 billion, or 65 cents a share, topping the 19 cents analysts had expected. The company said it now anticipates better-than-expected 4th quarter results, as well as a full-year pretax profit of between $600 million and $1.1 billion. Ford said in July that it expected a pretax profit of between $500 million and $1.5 billion in the third quarter and a loss for the fourth quarter as well as for the full year. In a conference, Farley said: “We haven’t fixed the issues that have held us back in our auto business”. But he added that his leadership team has “a clear turnaround plan”. The automaker fully repaid $15 billion in revolving credit loans and ended the quarter with nearly $30 billion in cash and more than $45 billion of liquidity. The company’s adjusted profit margin in the quarter was 9.7 %, with a full-year target of 8 %. Ford’s net margin in the period was 6.4 %. Ford began building the redesigned F-150 and the new Mustang Mach-E and Bronco Sport this month. The new full-size truck goes on sale next month, and along with the commercial business is key to Ford’s growth strategy. Farley said electric vehicles, including battery-powered variants of the F-150 pickup and Transit van, were “fundamental” to the company’s future, including the Lincoln line and Ford’s commercial vehicle business. Credit Suisse analyst Dan Levy in an earnings note said, “We expect the stock to outperform near-term; indeed, we believe Jim Farley will drive incremental urgency and accountability at Ford”. “We saw much higher demand than we expected”, chief financial officer John Lawler told reporters on the conference call. “We also saw higher net pricing, particularly in North America”. +++ 

+++ HYUNDAI suffered a W313.8 billion operating loss in the third quarter of this year due to massive warranty provisions despite generating W27.58 trillion in sales (US$1=W1,130). It was the automaker’s first loss since it began reporting earnings based on international financial reporting standards in 2010. Hyundai last week said it set aside W2.1 trillion to cover costs for recalls and quality control involving its Theta 2 GDi engine, which ended up taking a toll on its bottom line. The Korean giant sold 997.842 cars around the world in the third quarter; down 9.6 % on-year due to the coronavirus pandemic. But sales in South Korea jumped a whopping 21.9 % to 199.051 cars thanks to new models and tax cuts to stimulate spending. Overseas sales dropped 15 % on-year in terms of numbers of cars, but that was moderated by strong sales of the high-end Genesis brand, which is more profitable, so revenues increased 2.3 % on-year. Meanwhile, affiliate Kia’s third-quarter sales increased a healthy 8.2 % on-year to W16.3 trillion, though operating profit dropped 33 % to W195.3 billion. That was because Kia also set aside W1.26 trillion to cover potential warranty issues. Otherwise Kia would have achieved record profits. +++ 

+++ Mini intends to turn JOHN COOPER WORKS into its own electrified performance sub-brand, which could even have its own dedicated model. JCW models currently account for around 5 % of Mini sales, but are among the most profitable models in the portfolio. The firm’s boss Bernd Körber believes that as Mini expands its EV offerings, there’s an opportunity to develop John Cooper Works into something more than it is today. “The next phase of our portfolio is also about the next generation of John Cooper Works”, Körber explained. “The perception, I would say, when you look at John Cooper Works, it’s not the perception of a full-blown subbrand. People very often perceive it as our top model or performance model. What we would like to do is make John Cooper Works a real electric performance brand”. The first offerings from a JCW sub-brand aren’t expected until 2024 at the earliest, and are anticipated to be re-engineered versions of the 3 new ‘core’ models. These include a small 3-door hatch, all-new compact EV crossover and a larger version of the Countryman. “There will still be a market and customer demand for ICE (Internal Combustion Engine) John Cooper Works, but ultimately the performance brand will be electrified and for Mini it fits”, Körber added. Asked if it was possible that John Cooper Works could develop its own bespoke model, Körber replied: “Not at this stage, but yes”. +++ 

+++ As Tesla touts the cutting-edge nature of its new Full Self Driving software, rival MERCEDES-BENZ says it has developed a similar system but stops short of allowing members of the public to take it on urban roads. The Germans, pioneers in developing advanced driver assistance systems (ADAS), are taking a step-by-step approach to releasing new technology, waiting for their own engineers, rather than the general public, to validate their system. Both approaches (one conservative and one radical in nature) are designed to push highly automated driving on to public roads, a step that could massively reduce accidents, since computers have faster accident-avoidance reflexes than humans. Advanced driver assistance systems can provide steering, braking and acceleration support under limited circumstances, generally on highways. Carmakers have refrained from relying on their technology to let cars navigate urban inner-city traffic. Tesla broke this tradition last week when it released its FSD software which allows its computer-powered cars to practise their reflexes in inner-city traffic situations, with a warning that its cars “May Do the Wrong Thing at the Worst Time”. Mercedes does not allow members of the public to test still-experimental systems. Its engineers need to pass an eligibility exam to become test drivers, and another one for testing automated driving systems, the carmaker said. Rather than force their customers to put their trust in processors, software and the ability of machines to learn over time, the Germans want their cars to be validated by engineers so that they remain predictable for owners. “We do not want blind trust. We want informed trust in the car. The customer needs to know exactly what the car can and cannot do”, a Mercedes spokesman told on the sidelines of the carmaker’s test track in Immendingen, Germany. “The worst thing would be if the car gets into a complex situation and there was ambiguity over whether the car is in control or not”, he said. This is why the Stuttgart-based carmaker, owned by Daimler, is emphasising its decades-old experience of automated driver assistance systems as it seeks to gain global regulatory approval for its own Drive Pilot system which boasts level 3 automation. Level 3 means the driver can legally take their eyes off the wheel and the company, Daimler in this case, would have to assume insurance liability, depending on the jurisdiction. The new Tesla system forces customers to take responsibility for any crash. Mercedes-Benz started using camera-based systems in 2009, offering traffic-light recognition and lane-keeping assistance systems, switching to stereo cameras in 2013, to add depth of field and pedestrian recognition for emergency braking functions. It was on a joint development project between the Tesla Model S and the Mercedes-Benz electric B-Class that Tesla’s CEO, Elon Musk, learned about camera and radar-based assistance systems, senior engineers familiar with the project told. Mercedes plans to launch Drive Pilot next year and is pitching it as an evolution of its Distronic system, launched in 2013, which uses cameras and radar to keep cars in lane and at a distance to the car in front. Drive Pilot will add a new sensor: Lidar, to cross-reference data gathered by radar, ultrasonic sensors, high-definition mapping, radar and cameras. “It is a paradigm change from Distronic, but it is a strategic evolution. For us this is the logical next step and it is not shooting for the moon”, said Michael Decker, manager of automated driving at Mercedes-Benz Cars, while standing on the sidelines of the company’s testing campus in Immendingen, where the Mercedes hones autonomous driving systems. Decker, behind the wheel of the new S-Class, drives the car on to a stretch of road mocked up to replicate an autobahn and selects Drive Pilot. The car glides seamlessly, providing gentle braking and steering inputs to keep its place in moving traffic. “I spend most of my time dealing with edge cases, those special situations that we need to have under control”, he said. The Mercedes Drive Pilot will only work at up to 60 km/h, and reach higher speeds once the legal framework allows. It will function only on highways in Germany from mid-next year onward, if a new law is passed. “If the car crosses the border into France, it will disengage, because we use high-definition mapping as one of our validation systems and France has not created the legal framework for allowing this system to operate”, Decker said. Although Mercedes engineers are aware of Tesla’s more aggressive approach to marketing their systems, they appear unruffled. “Yes. We always followed this path. And we now see that we have the right strategy”, Decker said. “What is paramount here is safety. This is about having a mature system. Mercedes safety standards stand over and above everything, including speed”. +++ 

+++ MINI has confirmed a major model shake-up that includes plans to develop a smaller 3-door hatchback, a new electric crossover and a larger version of the Countryman. At the same time, slow-selling models such as the Convertible and Clubman, as well as plug-in hybrids, will be dropped as Mini takes the first steps to becoming an all-electric brand. The plan for Mini’s next generation of cars is “80 %” complete, according to the head of Mini, Bernd Körber. The first of the company’s 3 ‘core’ cars to arrive in 2023 will be a smaller 3-door hatch, designed to take Mini back to its roots of developing small, functional ‘mobility’. It will come in fully electric and petrol guises. Körber told: “When I say small, I mean I want to make a small 3-door hatch again. Today there are some restrictions for pedestrian safety, but we would like to, in terms of design and exterior, make the 3-door hatch as small as possible”. The EV will be built in China on an all-new platform by Mini’s joint-venture partner Great Wall, and will be sold globally. The petrol model will have the same design and dimensions, but will be based on BMW Group underpinnings and be built at Mini’s Oxford plant. The small 3-door, whether petrol or electric, will adopt several retro styling cues while staying faithful to Mini’s current design language. Following the 3-door hatch will be a completely new model: an electric-only crossover, which is due in 2024. The newcomer is tasked with capitalising on growing consumer appetite for fully electric crossovers, as well as helping Mini gain a stronger foothold in China. “We only go into segments where we can bring the Mini DNA; this is the guideline on how we develop our portfolio”, Körber explained. “The Countryman will move into a larger segment, and the new hatch will go smaller, which makes space for another crossover”. The newcomer will be based on the same Great Wall-sourced EV platform as the hatch, and be produced in China. Körber told that the size and look of the new cars will be clearly differentiated from each other. “You cannot put the 3-door hatch face on a compact size SUV. That doesn’t work”, he added. “But customers want the face, they want the friendliness. I would say the strength of the next-generation model portfolio is that we have 3 defined characters, in 3 volume segments. And I think that also enables Mini to grow globally, but make the next steps in terms of design evolution. “Mini is very much associated with the 3-door hatch; that’s what drives the brand. But I would love to see a development. Look at Porsche, where you have the core model, the 911, but you have an evolution of the brand in authentic areas. And with that also comes design changes. You adapt the design to the segment”. As for the Countryman, Körber explained that Mini’s current largest model will get even bigger for its next generation. “I would say in terms of dimensions, we talk half a segment increase for the Countryman, so in the direction of BMW X1 size but with the Mini proportions”, he explained. It will be offered as a petrol, diesel or fully electric model. But unlike the hatch and crossover, it will be based on a single BMW Group-sourced platform. However, there will be no plug-in hybrid versions, because Körber believes that the increased range of the next generation of EVs makes the case for a PHEV redundant. “Once you get EVs to a range above 400 km, I don’t see where there is a use case for plug-in hybrids. We see with the Mini Electric. The first data that we have, it’s 40 or 50 km maximum drives per day with very few exceptions. I think once you get the EVs to a certain range, for the Mini use case, I don’t see a big market for a PHEV”, Körber told. The current Countryman is built by third-party firm NedCar at its plant in the Netherlands, but it was recently confirmed that BMW will make the next generation “in house”. That could mean a switch to Mini’s factory in Oxford, but the increase in size could make it feasible for the Countryman to be made at a BMW site elsewhere. Question marks also hang over the Clubman and the Convertible. Körber said that an official decision on the future of those models had not yet been made, but he “hoped” that the drop-top would make it to another generation, because it’s “one of the very few remaining cabrios in this world and it does a lot for the brand”. +++ 

+++ Mini has offered the first official hints about how it plans to expand its electrified line-up, following the recent launch of the all-electric Mini hatchback. Outlining its product strategy for the near future, the brand said it will “enable customers all over the world to have emission-free driving with a completely electrified model family” while still offering “highly efficient petrol and diesel engines, which continue be an ideal solution for target groups and regions whose mobility needs are not yet met by all-electric vehicles”. Confirmed to be joining the new MINI ELECTRIC in showrooms will be a new electric crossover. Developed as part of the brand’s Chinese joint venture with Great Wall Motors, it will sit atop a new platform and take its power from a new generation of cobalt-free batteries of undisclosed capacity. Further details of the new EV are thin on the ground, but it’s possible it will revive the dormant Paceman nameplate and go on to form the basis of a replacement for parent company BMW’s 8 year old i3. A date for the electric crossover’s launch has not yet been given, but the Zhangjiagang factory where it will be built, 150 km from Shanghai, is set to go into operation in 2022. The factory will also build the long-awaited production version of the 2011 Rocketman concept, which will be positioned below the Mini Electric in the maker’s line-up. Likely to share the bulk of its powertrain and platform with the Chinese-market Ora K1, the Rocketman will be heavily geared towards urban use, with a maximum range of around 350 km and ultra-compact proportions, including a length of less than 3.5 meter. The brand is marking 20 years since its resurrection at the hands of BMW following the collapse of the MG Rover Group several years previously. While it is plotting expansion into new, larger model lines, it remains committed to “creative use of space” and says every new model of the brand will “continue to be a typical Mini, with a maximum of interior space, exciting drive and individuality, achieved on the smallest footprint amongst its competitors”. Körber said: “It is part of our responsibility to the brand and the community to preserve the unique character of Mini. That is why every new model from our brand in future will be unmistakably a Mini”. +++ 

+++ PSA ‘s car revenue returns to growth after lockdowns. The Peugeot manufacturer returned to revenue growth in its core autos division in the third quarter, recovering from a slump during coronavirus lockdowns, though the prospect of new restrictions hit French shares. PSA has performed better than some rivals after dealerships swung back into action in France and elsewhere from June, a potential boost ahead of its merger with Fiat Chrysler Automobiles (FCA), due to close early next year. But a resurgence in the Covid-19 pandemic is clouding prospects for the coming months, and France is bracing for a possible renewed month-long lockdown. PSA shares were dragged 3.6% lower, even though the group which also encompasses the Citroen marque beat quarterly expectations on revenue by a wide margin, as analysts at Jefferies noted. PSA’s overall sales totalled €15.5 billion in July-September; down 0.8 % from a year earlier. But automotive revenue rose 1.2 % to €12 billion, having ending the first half of the year down 35.5 %. Financial chief Philippe de Rovira said September had ended on a strong note with a good order book, adding PSA planned to nudge up production in the fourth quarter versus a year earlier. Car inventories were 25 % lower year-on-year in the third quarter, as PSA tries to avoid getting stuck with excess stock. Bar any unexpected Covid-19 measures, the group would likely generate positive cash flow at year-end, De Rovira added, while PSA kept its target for an adjusted operating margin for its automotive division of more than 4.5 % for 2019-2021. Under CEO Carlos Tavares, PSA has focused increasingly on its more expensive and profitable models; an approach French rival Renault is trying to emulate as part of its turnaround plan. PSA’s car sales volumes fell in the third quarter, but this was offset by the popularity of higher-priced models. New launches such as the second generation Peugeot 2008 helped, it said. The group’s $38 billion merger with FCA, set to create the world’s fourth-largest carmaker under the name “Stellantis”, is due to close in the first quarter of 2021. The companies are set to win European Union approval for the merger, sources told this week. De Rovira declined to say whether PSA and FCA would speed up their merger if a decision came this year. PSA also said in a statement t had launched the sale of a 7 % stake in car parts maker Faurecia. Proceeds will be distributed to Stellantis shareholders in cash, alongside a distribution-in-kind of PSA’s 39 % remaining stake in Faurecia; a move aimed at avoiding antitrust issues that might have arisen if Stellantis controlled Faurecia. +++ 

+++ It seems like everyone is rushing to build an electric pickup, but RAM has been the notable exception. Speaking back in August, Fiat Chrysler Automobiles boss Mike Manley said “The reason we haven’t spoken much about electric pickup trucks is not because we view that market as nonexistent, but we’ve always had a slightly different view of timing and adoption rates, particularly in North America in terms of full electrification”. He went on to note the importance of truck sales and promise they’re “not going to sit on the sidelines if there is a danger that our position gets diluted going forward”. Given that statement, many people assumed FCA would take a wait-and-see approach to monitor the response to electric pickups from Ford, General Motors, Rivian and Tesla before jumping into the market. It now appears Manley has seen enough as he used the company’s third-quarter earnings report to say “I do see that there will be an electrified Ram pickup in the marketplace, and I would ask you just to stay tuned for a little while, and we’ll tell you exactly when that will be”. That’s still pretty vague, but it seems to suggest an electric or plug-in hybrid Ram is on the horizon. Of course, there’s no word on timing and it’s probably safe to assume they’re a ways off. Regardless, trucks are massively important to FCA as the company sold 156.157 pickups in the United States in the third quarter alone. Ram trucks were FCA’s bestselling product by a landslide as the company’s second most popular model was the Jeep Grand Cherokee which racked up 56.447 sales in the quarter. +++ 

+++ Fiat Chrysler Automobiles (FCA) and Groupe PSA have cleared another hurdle in the path leading to their merger under STELLANTIS , the world’s 4th largest global automotive OEM by volume. The companies announced that a further step forward in this regard was taken on October 27 when their respective boards signed the cross-border merger terms that will apply to the combination. FCA and PSA expect to complete the combination by the end of the first quarter 2021, subject to the customary conditions set forth in their “Combination Agreement”. The boards also agreed to allow Groupe PSA to sell up to approximately 7 % of auto parts supplier Faurecia’s outstanding share capital prior to the completion of the merger. Consistent with the terms of the original Combination Agreement, the 2 parties also agreed to take such other steps (excluding additional disposals of shares) as may be necessary to ensure that Stellantis will not acquire control of Faurecia. These decisions are expected to facilitate the securing of the necessary regulatory approvals in relation to the merger. FCA and PSA also decided that the cash proceeds from the disposal of Faurecia shares will be distributed to the Stellantis shareholders along with the distribution in kind of the remaining stake in Faurecia. PSA is currently the French auto parts supplier’s majority shareholder, with a stake of 46 %. As already announced on September 14, this will happen promptly after the completion of the merger and subject to approval by the Stellantis board and shareholders. +++ 

+++ According to a recent hands-free driving test conducted by Consumer Reports, TESLA ’s Autopilot driver-assistance system came in “a distant second” to General Motors’ Super Cruise. A total of 17 vehicles equipped with active driving assistance systems (ADAS) were tested, with Autopilot present on a Tesla Model Y and Super Cruise on a Cadillac CT6. Super Cruise will be available on more than 20 General Motors vehicles within the next 3 years, including on the new Hummer EV truck. This isn’t the first time Super Cruise got the better of Autopilot during a Consumer Report (CR) test. Back in 2018, another Cadillac CT6 managed to score better than a Tesla Model 3 during a 4 car ADAS test. In this latest test, which took place this summer on both public roads as well as a track, the Cadillac scored 69 points out of a possible 100, while the Tesla managed 57. A Lincoln Corsair equipped with Ford’s Co-Pilot 360 system finished third with 52 points, Audi‘s Pre Sense took 4th-spot overall with 48, while Hyundai’s Smart Sense / Kia Drive Wise, Mercedes‘ Driver Assistance and Subaru’s Eyesight all tied for fifth with 46 points. CR’s head of connected and automated vehicle testing, Kelly Funkhouser, said that the reason why Super Cruise came out on top was its driver-facing infrared camera, which monitors the person behind the wheel, making sure he or she is ready to take over manual control at a moment’s notice. Funkhouser added that “the best systems allow drivers to activate the steering and speed control independently so that drivers can decide exactly how much assistance they want to use, and only have a single lane keeping system that performs consistently”. The test also concluded that Autopilot will shut off abruptly in some instances, while Super Cruise did a better job of notifying the driver when the system is disengaging. On a related note, Tesla released a beta version of their brand new full self-driving tech last week, and road tests have so far looked very promising. +++ 

+++ TOYOTA is adding 1.5 million U.S. vehicles to recalls from early this year to fix fuel pumps that can fail and cause engines to stall. The company says the latest recall brings the total to 5.8 million Toyota and Lexus brand vehicles that need to be repaired worldwide. The recall affects more than 40 vehicles in the U.S. dating to the 2013 model year, covering much of the Toyota and Lexus model lineup. Toyota said in a statement that the fuel pumps can suddenly stop operating, and that can cause the vehicles to stall. Drivers may not be able to restart them. If the stall happens at high speeds, the risk of a crash could increase. Toyota wouldn’t say if the problem has caused any crashes or injuries. Toyota and Lexus dealers will replace the fuel pumps at no cost to customers. Toyota began recalling the vehicles in January with about 700.000, and added 1.2 million in March. The company said that it didn’t recall all the vehicles at once because it was monitoring data and investigating to see if vehicles outside the scope of the original recalls would experience the same problem. The additions announced cover the 2019 and 2020 RAV4, the top-selling vehicle in the U.S. that isn’t a pickup. Also included are the 2013 to 2015 Lexus LS 460; the and Lexus IS-F; the 2014 and 2015 Toyota Land Cruiser; the Lexus LS 500h; the Lexus LC 500; the Lexus LC 500h and the Lexus LS 500. +++ 

+++ A lemon yellow electric VOLKSWAGEN branded SUV rolled off from the production line in Shanghai, marking the start of production at the German carmaker’s first plant specially built for its electric car-only MEB platform. The model, called ID.4X, which has a driving range of 550 km on one charge, is the first electric vehicle its joint venture SAIC Volkswagen is producing at the 17-billion-yuan ($2.53 billion) plant. SAIC Volkswagen said the plant, with a designed capacity to produce 300.000 vehicles a year, will also produce the Volkswagen ID.3 and electric vehicles of other brands within the Volkswagen Group. The plant, which took two years to build, is a sign of Volkswagen’s new energy ambition in China’s booming new energy vehicle market, which is also the largest worldwide. Statistics from the China Association of Automobile Manufacturers show that China sold 138.000 new energy vehicles in September, soaring 67.7 % year-on-year, despite the coronavirus pandemic. Volkswagen, which has a roughly 20 % market share in China’s passenger vehicle market, has set a goal to sell 1.5 million new energy vehicles a year in the country by 2025. The carmaker said it will produce 15 different new energy vehicle models locally by 2025, with 35 % of them fully electric, as part of its strategy of electrification and digitization in China. Late in September, Volkswagen Group China CEO Stephan Wöllenstein said it is planning to invest a total of roughly €15 billion with its joint ventures in e-mobility between 2020 and 2024. The figure comes on top of the €33 billion investment plan already announced by the group for developing e-mobility around the globe. SAIC Volkswagen is Volkswagen’s first Chinese joint venture. It has produced 23 million vehicles since its establishment in 1984. +++

+++ The VOLKSWAGEN GROUP was profitable in Q3 of this year, thanks in part to surging Chinese demand for luxury models from the likes of Audi and Porsche. The carmaker expects to post a profit for the full year as well, adding that its business “recovered noticeably” in Q3, with premium car sales increasing by 3 %. A series of cost-cutting measures launched earlier this year to counter the impact of the pandemic also aided this growth. Overall net liquidity went from €18.7 billion at the end of Q2 to €24.8 billion. “The cost cuts had as much of an impact as the continuing improvements in the situation in key sales markets”, said VW, whose third quarter operating profit was €3.2 billion, compared to €4.8 billion euros the previous year. However, while its full-year 2020 profit will be “severely lower” than in 2019, the figure will still be in “positive territory”. Volkswagen had posted a loss of €1.7 billion in the second quarter of this year following a massive hit in demand caused by the Covid-19 pandemic that led to restrictions on movement, economic crises and people losing their jobs around the globe. In the end, having multiple premium carmakers in your portfolio can be extremely beneficial to any automotive group, especially when certain markets have an affinity for expensive products. Take Porsche, for example, who shipped more cars this year in the Asia-Pacific, Africa and Middle East regions than in the first 3 quarters of 2019. +++

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