+++ 2 years after the stunning arrest of Carlos Ghosn over alleged financial misconduct, discussions are underway inside Nissan that could fundamentally reshape the world’s biggest car ALLIANCE and unwind a key part of its former chairman’s legacy. The automaker is exploring ways to sell some or all of its 34 % stake in Mitsubishi, people with knowledge of the matter said. Concern is mounting within Nissan that it will take longer for the company to recover from the pandemic-induced crisis, said the people, who asked not to be identified because the discussions aren’t public. A sale may be the first step in a broader review of the 3-way alliance that also includes Renault, they said. “There are no plans to change the capital structure with Mitsubishi”, Nissan said in a statement. Mitsubishi said in a statement there were no discussions to review their capital relationship and that the automaker “will continue to collaborate within the alliance”. A representative for Renault declined to comment. When Ghosn rescued Mitsubishi in 2016 with a $2.3 billion investment and invitation into the alliance, it didn’t take long for him to boast about the “new force in the global auto industry”. He had even bigger plans: to create a holding company for a carmaking empire capable of dethroning Toyota and Volkswagen as the world’s biggest producer of automobiles. All that changed on November 19, 2018, when Ghosn and former Nissan director Greg Kelly were arrested in Tokyo and accused of underreporting the former chairman’s compensation. Both have denied wrongdoing. Additional charges were filed later accusing Ghosn of using company assets improperly, which he has denied. Chaos gripped the alliance. Ghosn loyalists were ousted while Nissan and Renault executives jockeyed for control to fill the power vacuum. There was deep resentment at the French automaker, which was kept out of the loop as Nissan insiders spent months working with Japanese prosecutors to orchestrate the powerful chairman’s ouster. Ghosn was released, rearrested and freed on bail again in 2019. He escaped trial by making a daring undercover escape in December of that year on a private jet and made his way to Lebanon. The one-two punch of a drop in global auto demand and the pandemic has wiped more than $44 billion from the combined market value of the 3 alliance partners. “The best thing is to end the alliance”, said Tokyo Tokai Research analyst Seiji Sugiura, a frequent critic of the partnership who has written extensively about the companies in Japanese periodicals. “They should either become one, or split”. One unsettled variable for Nissan is finding a buyer, according to the people familiar with its deliberations. The automaker could sell Mitsubishi. Finding another purchaser or turning to the open market also are options. Nothing has been decided, the people said. A sale would only bring in a relatively modest sum of cash. The holding was worth about $950 million at the close of trading last week, less than half what Nissan paid 4 years ago. Mitsubishi has forecast a $1.3 billion operating loss for the fiscal year ending in March and was forced earlier this year to shut down production of the Pajero and other larger vehicle lines, leaving it to focus on smaller cars and markets in Southeast Asia. Nissan’s results, released last week, suggest restructuring efforts are gaining some traction, although the automaker is still projecting a $3.2 billion operating loss for the fiscal year. It has been on a debt-issuing spree, raising a total of almost ¥900 billion in funding. While a share sale would fundamentally reshape Nissan’s capital ties with one of its key partners, the 3 automakers will probably make the case that the alliance remains intact operationally, the people said. They will emphasize the partnership can work without the shareholding and that the sale may also free them to collaborate with other partners, one of the people said. “A question that has come up in recent investor calls is can the alliance continue to work together without the cross-shareholding, and we do not see why not”, Tom Narayan, an RBC Capital Markets analyst, wrote. “We view today’s news as a positive for shares as it highlights the trapped value at the company’s Nissan stake and points out the possibility of continuing the alliance without cross-shareholding”. The alliance began 2 decades ago when Renault swooped in to save Nissan with a cash injection, saving the bigger automaker from bankruptcy. The French automaker sent in Ghosn, who turned around Nissan and eventually took over leadership of both companies. While they benefited from being able to pool their purchasing power, that wasn’t matched by meaningful joint product development. By the time Ghosn was arrested, there was deep resentment with Nissan that it had little sway over the partnership, even though it was sending billions of dollars in dividends annually to Renault, which exercised more control over the bigger Japanese company through its 43 % stake. Nissan owns 15 % of Renault and has no voting rights. To move past the turmoil since Ghosn’s arrest, the alliance unveiled a new operating structure in May, vowing deeper cooperation. The proportion of autos manufactured on common platforms will double to around 80 % by 2024, executives promised. The new strategy dubbed “leader-follower” is designed to force teams to work together by designating one company to head up specific technologies or regions and ultimately take responsibility for success or failure. “Mitsubishi is working on their ‘Small but Beautiful’ business transformation plan which they announced in July”, Nissan said in its statement. “It is essential for each alliance partner to focus on its core competences and maximize the use of each other’s asset to accomplish its midterm plan”. The plan would make the alliance so tightly intertwined that “no step backward” would be possible, Renault chairman Jean-Dominique Senard has said. The 67-year-old French national is also chairman of the alliance operating board that oversees the union of carmakers whose still relatively new chief executives haven’t had much time or opportunity to work together. Makoto Uchida took the top job at Nissan less than a year ago, while Luca de Meo started in July as Renault’s second CEO since Ghosn’s arrest. Osamu Masuko, the Mitsubishi chairman who forged the deal with Ghosn and was the automaker’s main link to Nissan, died in August. It remains to be seen whether the leader-follower plan (which is focused on costs) will deliver the meaningful innovations necessary to deal with the larger forces sweeping through the global auto industry. Regulators are stepping up pressure to embrace electric vehicles, while autonomous driving technology has the potential to reshape the concept of auto ownership. Electric vehicles are a prime example of an area in which the alliance has missed opportunities. Although Renault and Nissan were ahead of many rivals when they rolled out their respective EV models, the Zoe and the Leaf, they are still based on different platforms years after their debut. The alliance partners’ next-generation EVs will share a jointly developed base. “The alliance is clearly unfulfillled potential”, said Societe Generale analyst Stephen Reitman. The companies have thrown out Ghosn’s method of measuring the alliance’s success through synergies, a metric that was targeted to reach more than €10 billion in 2022 but based on numbers Senard has said he never understood. Renault and Nissan also have pledged to turn the page on Ghosn’s unrelenting pursuit of growth and sales volumes. Yet in the midst of the pandemic, Renault’s de Meo also has warned that Renault and Nissan need to fix their own internal problems to make sure the house doesn’t go up in flames. “Each company is now in trouble”, Ghosn said in an August interview. “I don’t think they know where they are going. There’s no more vision. In my opinion, the best people have left, or will leave”. Renault’s record first-half loss and exposure to a weakening European market complicates its turnaround efforts. While de Meo has held up rival PSA Group’s near-death experience as proof that recovery is possible, Covid-19 is rendering pre-pandemic problems such as factory overcapacity even more difficult to address. Taken together with other developments (including the French automaker’s merger flirtation with Fiat Chrysler Automobiles last year) it’s clear Ghosn’s ouster left the alliance on shakier ground. Each automaker has turned inward, leading some to question whether the partnership can survive. “For good or for worse, Ghosn was holding it together”, said Tatsuo Yoshida, a Bloomberg Intelligence analyst. +++
+++ AUDI is launching a sustainability campaign in China, that includes slashing emissions at its plants as well as enriching its lineup of electric models, according to the top executive of the carmaker’s operations in China. The brand with the 4 rings has pledged to become the leading carbon-neutral premium mobility provider globally. Audi China president Werner Eichhorn said with its dynamic environmental program, Mission: Zero, the company has committed itself to integrating sustainability into its global corporate strategy. As part of the Volkswagen Group, Audi was one of the first companies to commit itself to the goals of the Paris Agreement on climate change, and it has set some ambitious goals for itself as it aims to fulfill this pledge. Globally, Audi is striving to reduce its carbon footprint by around 30 % in just 5 years and wants to achieve net zero carbon emissions throughout the company by 2050. The German carmaker is taking measures to reduce the carbon footprint of its vehicles even before they travel on the road. The Audi plant in Brussels, where the e-Tron and e-Tron Sportback are produced, became the first volume production plant in the premium segment worldwide to be certified as CO2-neutral in 2018. In October this year, Audi’s manufacturing facility in Gyor, Hungary, became the carmaker’s second carbon-neutral site. In China, the carmaker aims to bring CO2 emissions of its production sites to zero by 2030, together with its Chinese joint venture FAW-Volkswagen. Eichhorn said the company has started to formulate detailed plans to achieve this target. To meet the goal, Audi is tapping the innovative spirit of “vorsprung”, meaning progress in German, which has been an inextricable part of the carmaker’s DNA for more than a century and has long been Audi’s guiding motto. “Vorsprung will continue to drive us forward in our journey into this new electric era to become the leading carbon-neutral premium provider, here in China and around the world”, Eichhorn said. “By applying our ‘vorsprung’ spirit to our decarbonization efforts. Audi is merging the new world of electric mobility with more than a century of experience in premium vehicle manufacturing”. Besides cutting emissions at its plants, Audi is speeding up efforts to enrich its lineup of new energy vehicles in China, which is the largest auto market worldwide and the largest market for Audi. During the China International Import Expo (CIIE) which concluded last week, Audi showcased 3 iconic models in its e-Tron family: the locally-produced e-Tron, the e-Tron Sportback and the Q4 e-Tron concept. The e-Tron, the brand’s first fully-electric series production model, is the centerpiece of this electric transformation. “The e-Tron will be the Audi icon in the sustainable mobility era”, Eichhorn said. The localized version is being produced in Changchun, capital of Jilin province, where FAW-Volkswagen is headquartered, and will be available to Chinese customers beginning early 2021. Audi said the e-Tron Sportback will be imported to China starting from early next year. Another highlight during this year’s CIIE, the Q4 e-Tron concept, a compact SUV, will be Audi’s first electric model built on Volkswagen Group’s MEB platform. The MEB platform has been developed solely for electric vehicles. The carmaker said the concept car is nearing production and will be coming to China soon. And it will be locally produced with FAW-Volkswagen in the near future. Under Audi’s electric mobility strategy, Roadmap E, Audi globally will have 30 e-models by 2025, and those will then comprise around a 40 % share of the carmaker’s total global sales. The brand has begun its electric product offensive in China, the largest market for new energy vehicles since it overtook the United States in 2015. The locally-produced Q2L e-Tron and the imported e-Tron model have been available to Chinese customers since 2019. By 2022, Audi will launch another 6 new energy vehicle models, including the locally-produced e-Tron and e-Tron Sportback together with partner FAW. To further enhance the appeal of its electric lineup, the German carmaker recently signed a memorandum of understanding with FAW for the joint production of electric vehicles based on the Premium Platform Electric, which was developed jointly by Porsche and Audi. Audi said the first new electric models on this platform are expected to be produced beginning in 2024. +++
+++ Earlier this week, the BMW M5 CS was driven at the Hockenheim, supposedly teasing us with the performance that the limited-run M5 would offer but without the exact power figures. We also saw maps of the Nürburgring on the M5 CS’s headrests, which could hint at a record-breaking run for the hardcore M5. The M5 CS will have 635 hp. The information was given by BMW Works driver Augusto Farfus. If this number is accurate, then M5 CS will be up from the Competition model by 10 hp. Apart from the power upgrade, the M5 CS will be lighter than the BMW M5 Competition model by 70 kilo; not a surprise as the new M5 CS is pegged to lose more fat than the already-light Competition model. Among other things, thinner carbon fibre seats add to the overall weight loss. Farfus, the test driver, also said that “the M5 CS will be the fastest BMW ever made”. I’ve known for a time that the new BMW M5 CS will debut in December. We’ll know more in the weeks to come. I expect BMW to disclose more information as the launch draws near. I’ll put an ear to the ground and as always, watch this space. +++
+++ Detroit-based General Motors will voluntarily recall about 68.000 CHEVROLET Bolt electric vehicles (Opel Ampera-e), following reports of the cars catching on fire, the company announced. Chevrolet Bolts manufactured between 2017 to 2019 will be subject to recall, starting November 17. The recalled vehicles were topped with batteries made at LG Chem’s Ochang factory. The pre-emptive measure comes as the U.S. automaker considered the batteries to “pose a risk of fire when charged to full, or very close to full, capacity”. Previously, the U.S. National Highway Traffic Safety Administration received 2 reports of the cars, one from 2018 and the other from 2019, catching fire under the rear seat. The office then found a similar case involving a 2017 model. General Motors said it’s currently working with the investigation office to identify the exact cause. Owners of the affected vehicles could receive software upgrades which will limit the maximum charge rate to 90 %, the U.S. carmaker said. The company also requested that car owners change the vehicle charge settings to use the Hill Top Reserve option, which can help reduce the risk of fire. Car owners were also asked to refrain from parking their vehicles in a garage or carport before the necessary changes are made. This isn’t the first time a carmaker announced a major recall over its electric vehicles. In October, Hyundai decided to recall around 77.000 Kona Electric cars sold around the globe after 14 incidents in which the vehicles caught fire were reported. The cars were topped with batteries made from LG Chem’s manufacturing plant in Ochang. BMW expanded its recall over a number of its plug-in hybrid EVs due to a potential battery issue. The battery in question was made by Samsung SDI. Tesla also decided to recall 30.000 vehicles of 2 models (the Model S and the Model X) in China, after it found suspected defects in the batteries’ module, made by Japan’s Panasonic. +++
+++ CHINA ’s sales of vehicles including trucks and buses rose 12.5% over a year earlier in October as the industry recovered from the coronavirus, but total purchases in the year’s first 10 months still were below pre-virus levels, an industry group reported. Sales in the biggest global auto market rose to 2.6 million, according to the China Association of Automobile Manufacturers. It said sales of SUVs and other passenger vehicles grew faster than overall purchases but gave no details. Sales growth was down from September’s 17.4%. In the year through October, total vehicle sales declined 4.7% from a year earlier to 19.7 million. That was an improvement over the 6.9% contraction for the first nine months of the year. China became the first major economy to begin the struggle to restore normal activity after the ruling Communist Party declared victory over the coronavirus in March. Still, the CAAM warned automakers face a “complex and severe” international environment and potential risks. Auto demand already was weak before China closed factories and dealerships in February to fight the coronavirus. Consumers are uneasy about slowing economic growth and a tariff war with Washington. The hurts global automakers that are looking to China to propel sales growth and are spending heavily to develop electric vehicles under pressure to meet Chinese government sales quotas. +++
+++ As COVID-19 threw a wrench into the cogs of car retailing, a senior Nissan board member challenged the chief operating officer to explain what the automaker was doing to adapt to a new era where customers may be reluctant to roam showrooms. The operating chief, Ashwani Gupta, told the board meeting in late July that Nissan was racing to create a “complete, end-to-end digital journey”, according to 3 people familiar with the discussions. He said this would allow consumers to research cars online, have models delivered to their homes for test drives and make purchase plans without ever having to visit a dealership, if they chose not to do so, the sources told. The meeting offers an insight into how the pandemic is pressuring automakers in all major markets to revamp their strategies to handle more vehicle sales online, veering away from the traditional showroom approach. The change is being driven by a shift in consumer behavior. The number of cars sold via Nissan’s websites in China, Europe and North America combined accounted for 11 % of the company’s overall sales in those markets in the first half of this year, according to the sources, who declined to be named because they are not authorized to speak to reporters. That compared with 4-5% in the same period last year, although digital volumes were not as closely monitored then, said 1 of the 3 people, a senior Nissan executive. “I would say these new buying behaviors, which have come up during the Covid era, are going to stick and become permanent”, the executive added. “The pandemic is changing the way we work, the way we communicate. The same is also true with buying cars”. Some of the details and data are expected to be shared during a news conference. A Nissan spokesman in Yokohama said there was strong demand for online shopping, which had become “irreversible with Covid-19” and the firm was addressing this in partnership with dealers. “Nissan’s ‘Shop at Home’ experience puts customers in control at every step of the journey: to choose to shop both online and at physical dealerships”, he added. The company’s drive is initially focused on North America and China, its biggest markets where digital sales are more advanced than elsewhere, according to the sources. In the United States, online customers can search for a specific car from the inventories of all Nissan stores in a given area, not just one store’s stock. In China, consumers can’t do the same, but they are open to buying cars online; in the first 9 months of this year, 17 % of the roughly 758.000 new Nissan cars sold there were bought online, the sources said. They are what Nissan defines as digitally-acquired buyers, who visit the company’s main e-commerce sites and leave their contact information, and then complete purchases either completely or partially online. Shifting more sales online is, however, a big challenge for the industry because it deviates markedly from the familiar showroom strategy, and could face resistance from franchise dealers, who have a symbiotic relationship with carmakers. The stakes are especially high for Nissan, because it was struggling even before the pandemic struck and hammered auto sales. It was grappling with a host of financial woes that resulted from an aggressive expansion pursued by ousted leader Carlos Ghosn, and a consequent lack of new car models. The digital drive is viewed by senior executives as being beneficial from a profitability angle because online sales allow the company to reduce operational waste in distributing and marketing cars, and improve data-gathering, 2 sources said. For example, this summer Nissan opened a dedicated website for the new Ariya electric SUV, due to be launched globally next year. In the first four days, 1.2 million people visited and Nissan learned, as customers gave their preferences, that the most popular features globally were a lounge-like interior and connected services, according to the senior Nissan executive. In Europe the most favored color was a 2-tone black and Akatsuki copper option, the person said. According to the source, 56 % of European visitors preferred the 4-wheeldrive version and 18 % the 2-wheeldrive, while the rest were undecided or did not leave preferences. U.S. customers were more evenly split between the 2 drive options. That data allowed Nissan to be more precise in ordering parts and systems for different regions to match demand, said the executive. “Marketing for us is increasingly not dictated by gut feeling”, the person added. “It’s more data-driven and precise”. Chee-Kiang Lim, China managing director of Detroit-based consultancy Urban Science, said legacy carmakers were lagging pure electric vehicle companies in terms of online sales, with Tesla, Nio, XPeng and WM the leading digital players. Among traditional automakers, mass-market players like Nissan, Toyota and Volkswagen are most advanced in China, with concrete initiatives to push online sales, he added. “Volkswagen for example has trained their dealers to do live-streaming and they would even do a live-streaming of a test drive. A sales person would be driving a car and live-stream directly to you”. Another of the Nissan sources, who is close to the board, said the main purpose of the e-sales drive was to reduce the number of dealer visits an average customer makes to buy a car to 1 or 2, from several. Zhang Weichen, a Beijing primary school physical education consultant, bought his first car this summer, a Nissan Sylphy sedan, without visiting a dealer until deep into the process. By the time he visited the dealer, to view the actual model he chose and negotiate a final price, the 32-year-old had studied the car by test-driving a friend’s Sylphy and using virtual-reality walkarounds available on Nissan’s Chebaba, and picked up a purchase rebate coupon for the car on the site. “We already buy all sorts of things online. It’s the way we live”, Zhang said. ‘If I buy a car again to replace my Sylphy I would do so mostly online again”. One big question looms, though: Will dealers who have invested millions of dollars in their showrooms see Nissan’s drive as a threat? A board member put that to Gupta during the late July meeting, according to 2 of the people familiar with the discussions. In response, Gupta said the new sales model was a hybrid closely coupled to physical dealers and was not an effort to cut franchise stores out or reduce their margins, the people said. Gupta told the board Nissan needed dealers to deliver cars and provide maintenance and repair services, and that they represented a competitive edge over Tesla and other newcomers who were trying to sell cars directly to consumers without franchise stores, the sources added. Several franchise store operators in China said that most Nissan dealers were going along with the company’s online drive. “Under the pandemic, customers are very dependent on online channels, and so are dealers”, said Yin Yufen, general manager of a big Nissan store in the southern city of Guangzhou. She said about 30 % of people who bought cars from her store came via online in recent months, versus 20 % a year before. “That’s not a problem because we have a final say on price, so it doesn’t really affect our profit margins and bonuses”. Another dealership executive, the head of a large chain, said selling new Nissan cars was such a tough proposition under current conditions that many dealers were happy to hand over more control of the process. “Dealers don’t want to unnecessarily take on more inventories from Nissan, because we’re not making money”, said the boss, who declined to be named due to the sensitivity of the subject. “We don’t care if Nissan takes more control of the selling process, as long as they give us kind of a fixed margin for service,” he added. “You do whatever you like, Nissan”. +++
+++ Volkswagen is speeding up efforts to produce components in China for its ELECTRIC vehicles, as the German carmaker works to become the most popular brand in the booming segment. The first e-drive product for vehicles built based on Volkswagen’s electric car-only MEB platform rolled off the assembly line of its transmission plant in Tianjin. The company said the Tianjin plant started to produce new energy vehicle components in 2019, including the hybrid transmission. “With the start of production of the APP310 e-drive, we are strengthening our local e-components production capabilities and taking a step closer to achieving both our global e-strategy, and group-wide carbon-neutrality by 2050”, said Stephan Wöllenstein, CEO of Volkswagen Group China. He expects Volkswagen to become the No 1. choice for new energy vehicles in China by around 2025. He said the product will be used in the 2 ID.4 models that made their premieres earlier this month in Shenzhen, Guangdong province. The models are produced by its joint ventures FAW-Volkswagen and SAIC Volkswagen and are expected to hit the market in early 2021. The e-drive will also be used in other ID models as well as MEB-based models bearing other brands within Volkswagen Group. The Volkswagen brand will introduce 8 ID models by the end of 2023. Volkswagen’s 2 joint ventures, SAIC Volkswagen and FAW-Volkswagen, have a combined production capacity of 600.000 vehicles a year, with plants in Shanghai and Foshan, Guangdong province, respectively. Volkswagen is confident that e-mobility is the direction of the future for the automotive industry and the market for new energy vehicles in China will boom in coming years. In the first 3 quarters of the year, 34.190 Volkswagen-branded new energy vehicles were sold in the country; up 34 % from the same period of 2019, despite the coronavirus pandemic. In the same period, the total new energy vehicle sales in the country were 734.000, according to statistics from the China Association of Automobile Manufacturers. Their sales hit a monthly record of 160.000 in October, more than double the sales in the same month last year. +++
+++ FERRARI is at a crossroad. Electrification is coursing through the industry, affecting nearly every automaker, while crossover and SUVs continue to dominate. Ferrari has tiptoed into the electrified vehicle space before, though it has yet to join other high-end automakers with an SUV. That’ll change soon with its Purosangue, the company’s first high-riding model. However, it’s proving to be a challenge. In a recent interview, Michael Leiters, Ferrari’s chief technical officer, told that the recently revealed SF90 Spider was challenging to design, though the Purosangue “was another dimension of complication”. That meant the company needed “a certain culture and test procedures”. Leiters, who used to head Porsche’s SUV programme, didn’t specify those changes, though his experience with the Cayenne and Macan should be a huge benefit to Ferrari’s programme. Details about the Purosangue remain a mystery. Spy photos of the vehicle show that the model is in the early stages of development, with Ferrari using the GT4Lusso as an early testbed for the new SUV. The high-riding stance is one giveaway that Ferrari is testing something a bit different, though it’ll be a bit before we see anything that looks like the final product. Ferrari’s 2018 roadmap put the Purosangue debuting toward the end of 2022; 2 years from today. The addition of the Purosangue will put Ferrari on even footing with Lamborghini, which offers the Urus. The Ferrari SUV will likely pair a turbocharged 6-or 8-cylinder engine with a few electric motors. There’s also a chance Ferrari slips a V12 under the bonnet, too, for a top-tier offering; however, the extra doors and added luxury will add to the overall weight. The mill could make over 800 hp, all of which the SUV may need to compensate for the extra heft it’s hauling around. +++
+++ Hyundai said it will begin the sale of the GV80 SUV under its independent GENESIS brand in the United States within this year to support sales despite the coronavirus outbreak. Hyundai launched the GV80 SUV in South Korea in January and plans to introduce the first SUV model with the Genesis badge in the US as well as other markets such as Australia, Russia and the Middle East in the 4th quarter. Hyundai has already received more than 20.000 preorders for the GV80 in the US, the world’s most important automobile market. From January to October, Hyundai’s US sales fell 11 % to 500.820 vehicles from 563.450 units in the same period of last year. Hyundai has yet to release Genesis vehicle sales in the US for the same period. Hyundai sold 21.000 Genesis vehicles in the US last year. Its overall sales fell 18 % to 2.991.101 autos in the first 10 months from 3.632.381 in the year-ago period due to the impact of the Covid-19 pandemic on vehicle production and sales. +++
+++ Former Nissan chairman Carlos GHOSN believes the coronavirus pandemic will lead to more consolidation across the automotive industry. During a recent interview, Ghosn said that even when a vaccine is found and distributed, the industry will continue to suffer and believes companies lacking vision will likely become takeover targets for those that have better plans for the future or better balance sheets. With this in mind, Ghosn speculated that companies like Nissan, Renault and Mitsubishi may not survive. “I’m not very optimistic, knowing what I know”, Ghosn said. “And particularly the excuses and the explanation they are giving for the difficulties; not only in Nissan, but also at Renault and Mitsubishi models”. The former executive, credited for saving Nissan, said that Elon Musk and Tesla have been leaders in the automotive industry, in particular during the coronavirus pandemic where Tesla shares have climbed almost 400 %. “It speaks a lot about where the market is betting the future will be. And I can’t blame them”, he said. “You know, in a certain way, I can’t blame them. Now: is it excessive or not? Well, this will depend a lot on the future performance of Tesla. But I must say that Elon has done a great job into getting out all the potential of the company and exciting the markets. And this is to his benefit”. +++
+++ The Volkswagen R team is very attentive to comments about the new GOLF R . When someone recently asked: “Is there going to be a Plus model?” The answer was clear: “There is no Plus model planned”. There have been rumours about an even meaner Golf R for a little while. Speculation suggested that VW intended to take the model’s 2.0-litre turbocharged 4-cylinder and adding hybrid assistance to boost the output to around 408 hp. It allegedly wasn’t going to arrive until 2023, though. The challenge of creating the Golf R Plus is that Volkswagen Group wouldn’t want it to steal sales from the Audi RS3 Sportback. Given the brand hierarchy, the VW would probably need to be cheaper, less powerful, and not as luxurious. The turbocharged engine of the new Golf R makes 320 hp. Buyers can select a 6-speed manual or 7-speed DSG. Volkswagen quotes the performance figures as 100 km/h coming up in 4.9 seconds. The Golf R uses an all-wheeldrive system with a torque-vectoring rear differential. In drift mode, the drivetrain can send up to 100 % of the torque to a single back wheel so that drivers can hang the tail out. Inside, the Golf R packs modern amenities like a 10-inch touchscreen and digital instrument cluster. The R button on the steering wheel puts the hot hatch into its aggressive Race mode. As an option, there’s Nappa leather upholstery. +++
+++ Volkswagen has called on its commercial vehicle factory in HANNOVER to produce 3 new electric SUVs for the VW Group brands. The decision, which is backed up by an investment of €680 million, will see the factory build the ‘T’ van range, ID. Buzz van and the new all-electric passenger versions. The German company has remained tight-lipped about what the new SUVs will be called, but the firm says they will be “D-segment” vehicles. That suggests they will be Nissan X-Trail or Hyundai Santa Fe sized models, and Volkswagen has confirmed they will be built for different VW Group brands. Building the new cars will require a new production line being built at the Hannover factory. The site will become a “multi-brand” location, providing vehicles to various brands across the group, with the ID. Buzz leading the charge. That vehicle, inspired by the classic ‘Bulli’ bus, is set to roll off production lines in 2022. “Our main plant in Hannover is becoming the production site for 3 completely new premium electric vehicles in the Group”, said Carsten Intra, chairman of the board of management at Volkswagen Commercial Vehicles. “These D-SUVs are genuine flagship projects: premium, 100 % electric and highly automated. “Today’s decision by the Volkswagen supervisory board is thus an important milestone for our high-tech site and a great show of faith in the productivity of our team. We were able to secure this decision in favour of our location with our assured efficiency and top level of production quality. My thanks are due today to every one of our colleagues whose work made this pioneering decision possible”. Meanwhile Bertina Murkovic, Volkswagen Commercial Vehicles’ works council chair, said the site had been forced to compete with other VW Group factories for the chance to build the new electric SUVs. “The competition with other Group brands was tough”, she said. “But ultimately, backed by our site agreement and with our expertise in quality production we were able to win these products for Hannover. A level of utilisation that, as agreed, ensures our employment levels along the demographic curve has thus been secured for the coming years. The new Multivan, the ID. Buzz and now the D-SUVs are our portfolio for this decade. No greater security than this could be established at the current time for the location or the workforce”. +++
+++ HONDA says it will launch by the end of this fiscal year (March 31st) a vehicle with level 3 self-driving features, which would allow the automobile to take over operations under certain conditions and let drivers take their eyes off the road. According to the Japanese Land, Infrastructure, Transport and Tourism Ministry, it would be the first level 3 self-driving car in the world to be commercially available. The ministry certified Honda’s Legend luxury sedan with automatic driving features as meeting its safety standards for a level-3 self-driving vehicle. If the vehicle gets stuck in a traffic jam on an expressway, drivers can allow it to take over control of such elements as steering, accelerating and braking at speeds of less than 50 kph. In all other situations, the driver must maintain control. In addition to on-board cameras and radar, the manufacturer has used satellite-based location measurements and highly accurate map data to achieve commercialization of the level 3 features. Honda plans to release the self-driving Legend by the end of this fiscal year; the price is yet to be determined. Self-driving is divided into five levels, depending on the level of driver involvement. Level 3 cars can now be driven on public roads due partly to amendments to the Road Traffic Law implemented in April. In emergencies, the vehicle must be driven by a person, but drivers will be able to operate their mobile phones and watch TV when the car is operating automatically. Major automakers around the world, including Toyota and Nissan, are working to develop self-driving technology. Germany’s BMW plans to launch a level 3 car by the end of 2021. Major IT firms such as Waymo, a subsidiary of Google parent Alphabet, have also entered the market, and competition is heating up. +++
+++ JAPAN ’s high reliance on fossil fuels in electricity generation is blunting the impact of the rollout of electric vehicles in cutting the country’s carbon emissions, experts say. Prime Minister Yoshihide Suga, who took office in September, recently pledged to make the country carbon neutral by 2050, but over 75 % of its electricity is still generated by coal, liquefied natural gas and oil. “To cut emissions, Japan has to increase the ratio of electricity generated by renewable energies to at least 30 %, or to the average level of European Union countries”, said Atsushi Inaba, president of the Japan Life Cycle Assessment Facilitation Center. “Japan has to accelerate a shift to renewable resources including hydrogen to build up the country’s new energy strategy to lower carbon emissions not only from EVs but also from society as a whole”, Inaba said. His organization and a research team of Mazda conducted a life cycle assessment of EVs in Japan and the EU to measure the carbon footprint they leave from extraction and processing of raw materials to manufacturing, shipment and use. Models in Japan were found to emit more carbon dioxide than gasoline engine vehicles until their driving distance reaches 111.511 kilometers, and then exceed gasoline vehicles again once their driving distance exceeds 160.000 km because their batteries need to be replaced, Inaba said. EVs in the EU, however, emit less carbon dioxide than gasoline engine cars once they have run 76.545 km regardless of battery replacement owing to the larger dependence on electricity generated by renewable energy, he said. In 2019, electricity generated by wind, water and solar power combined accounted for 30 % of the total in the EU, according to the 27-nation bloc. The EU is urging automakers to produce more EVs, with its stricter emission rules from next year requiring carbon dioxide emissions of new vehicles sold in the bloc to be 95 grams or less per km on average. Some governments have already announced schedules for full transition to zero-emission vehicles. The United Kingdom, China and the U.S. state of California will ban sales of new gasoline cars by 2035, with France following suit by 2040. With many EU member countries subsidizing consumer purchases of EVs, the number of electrified cars including hybrid vehicles sold in September in the bloc jumped 139 % from a year earlier to 327.800 units, surpassing that of diesel engine vehicles for the first time, according to data provided by Jato Dynamics. EVs are being introduced more slowly in Japan, where automakers face a milder target requiring 50 % to 70 % of their vehicles to have a “next-generation” power source including clean diesel engines by 2030. Among Japanese automakers, Honda recently launched the E, its first mass-production electric vehicle, in Japan following its earlier introduction in Europe. The company plans to make EVs, fuel-cell vehicles and hybrids account for twothirds of its cars sold globally by 2030. The model’s launch came as the automaker, which has a long history of participation in motorsports, announced a decision to stop supplying power units for Formula One racing after the 2021 season as part of its shift of focus. Nissan and Mazda are also introducing new electric cars, the Ariya and MX-30, respectively. Of the 5.04 million vehicles sold in Japan in fiscal 2019 through last March, 1.48 million were electrified vehicles including hybrid models. Sales of pure EVs, plug-in hybrids and fuel cell vehicles combined totaled 38.585 units, or 0.8 % of the overall figure, despite government subsidies worth, for instance, ¥420,000 ($4,000) for the purchase of a Nissan Leaf. But with vehicle emissions accounting for a relatively small share of overall greenhouse gasses released into the atmosphere by human activities, some auto industry experts say it does not make much sense, at least economically for now, to focus on EVs. Koichi Sugimoto, a senior analyst at Mitsubishi UFJ Morgan Stanley Securities, said tightened emission rules are restricting consumer choice. “The regulators are pushing more expensive vehicles with lower performance on consumers”, as EVs offer shorter travel distances on a single charge than internal combustion engine vehicles do, he said. “People have a right to choose their purchases from a wide range of vehicles, but they would lose that if they have to pick from a lineup unrealistically leaning toward EVs”, he said. Takaki Nakanishi, auto industry analyst and CEO at the Nakanishi Research Institute, said stricter emission regulations around the world are placing a financial burden on automakers. “EVs are currently not profitable for automakers due to large costs for batteries”, he told reporters at a recent news briefing. “It is too early to say, ‘The age of EVs has come’. The EV boom in Europe is overheating”. +++
+++ JEEP has confirmed that it will produce a production version of the V8 powered Wrangler 392 Concept. Jeep took the covers off the Wrangler Rubicon 392 V8 concept just hours before Ford unveiled the all-new Bronco. Even though this was an obvious marketing move to draw attention away from the Wrangler’s new rival, the concept left such an impression on enthusiasts that the company has confirmed it will be produced. To confirm the news, Jeep states it will provide “Adventure With Power”, while showing a pre-production prototype off-roading and sliding through some sand dunes. The soundtrack of the V8 is also something to die for. Jeep hasn’t provided specifics about the production-ready model but has confirmed it will be available next year. In all likelihood, the production model will be mechanically identical to the Rubicon 392 concept. As such, it should feature a 6.4-liter naturally-aspirated V8 engine pumping out 450 hp and 609 Nm. On the concept, this engine was coupled to an upgraded 8-speed automatic transmission sending power to a 4-wheeldrive system, allowing the off-roader to hit 60 mph (96 km/h) in less than 5 seconds. Additional parts from the concept, like the Dana 44 axles, front and rear lockers, 2-inch lift kit, 17-inch beadlock wheels, and other suspension upgrades, could find their way into the production model. +++
+++ KIA Motors has overtaken Hyundai Mobis to stand as the 11th-largest company by market capitalization in South Korea. According to the Korea Exchange, the carmaker’s market capitalization was 23.5 trillion won ($21.1 billion); up 6.61 % from the day before when the market closed. The recent bump in market capitalization leaves behind Hyundai Mobis as Kia Motors inches toward the ranks of the top 10 players in the country’s stock market. The last time the carmaker was among the top 10 was in June 2016. Kia Motors posted 16.3 trillion won in sales for the third quarter; up 8.2 % from last year, resulting in experts predicting an upward trend for the 4th quarter. In 2012, Kia Motors was the third-largest company in terms of market capitalization, trailing only Samsung Electronics and Hyundai Motor, before dropping in position on poor sales at home and abroad in the following years. Meanwhile, Kia Motors confirmed that it is considering changing the company name in various ways. One of the options is to remove “Motors” to simplify it to “Kia”. The aim is to remove the image of a manufacturer dedicated only to automobiles and accelerate the transition to a future mobility service company, according to industry watchers. Kia is also pushing for an emblem change. Park Han-woo, former president of Kia Motors, had said in January, “We will push for fundamental innovation in all fields such as brand identity, corporate image, design direction and user experience so that customers can sympathize with the change”. But Kia’s labor union is reportedly protesting the name change, fearing that a shift to electric vehicles would bring a decline in employment. +++
+++ Back in October, I saw the first-ever updated third-generation CLS prototype undergoing tests in AMG CLS 53 spec, wearing the same light units as before but with camouflaged tape all over its front bumper. I expect a full unveiling by mid 2021. It’s also possible that MERCEDES is just playing possum with not just this prototype they sent out on the Nurburgring, but also that previously-mentioned CLS 53 model. The reason I say that is because in 2014, when they introduced the facelifted version of the second-generation CLS, Mercedes gave it a completely restyled front fascia (new headlights, new grille, new bumper), and a darker shade of red for the taillights. Inside, there was a new steering wheel and a larger infotainment display, and we can expect more of the same with this facelift as well. I’m referring to the new split-spoke capacitive steering wheel from the facelifted E-CLass. Otherwise, I don’t expect many other changes, certainly not from a visual standpoint. Technically though, the updated car should get Mercedes’ latest MBUX infotainment software. +++
+++ Earlier this month, a rumour suggested MINI was developing an all-electric version of its John Cooper Works GP. The project is reportedly in the prototype phase with no clear indication of whether it’ll enter production. However, a video previewing the BMW iNext appears to have teased the all-electric Mini JCW GP. Sketches of an aggressive-looking, yellow-and-black Mini are quickly covered by the artist when the camera gets too close. Last month’s rumour said that the all-electric version would look very similar to the petrol JCW GP, and it’s easy to spot the similarities between the sketched Mini and the real GP. Both feature aggressive wing flares and a sizable spoiler. Brief shots of the front and rear appear to show a closed-off grille, just like the all-electric Mini Cooper SE, and an aggressive rear diffuser without tailpipes. The sketched Mini also features vents in the wing flares, something the real JCW GP doesn’t have. The GP moniker is reserved for Mini’s most potent models, so we’d expect an all-electric version to be no different. However, Mini’s powertrain of choice remains a mystery. The company could easily swap in the SE’s 184 hp single-motor setup while upping its output. One issue would be the system’s small battery, which only provides the SE with 176 km of range. Increasing its output would lower that, which is already a short amount of range. The idea of an all-electric Mini is exciting. An electric motor’s instant torque would make the small car a thrill to drive, though there are hurdles with putting such a powertrain in a small car. Batteries are still heavy, and the range may be an issue if the car is tuned for performance. If the electric JCW GP enters production, we expect it’ll be a limited-run model, just like the regular petrol-powered GP. +++
+++ New RENAULT boss Luca de Meo is planning on turning Alpine from a 1 model niche brand into something much larger as far as its reach, both internally and globally, is concerned. “I would give Alpine a target of developing a line of products, maybe based on Renaults, with the target to break even and to pay for racing and all the activities within the Alpine world”, he said in a recent interview. De Meo had previously said that future Renault performance versions and trim levels could end up using the Alpine name, similar to what Fiat does with Abarth. He also wants to boost profitability by selling cars with higher trim specifications, claiming that buyers want sports-oriented trims such as Peugeot’s GT Line. “My experience is that equipment levels that have a more dynamic, sporty look are more popular in the market, such as PSA’s GT Line. So I think we need to go in that direction”, he explained. “An Alpine line could be a way for us to ensure that we have 25 % to 30 % of the mix on the higher equipment levels, where you make money”. While discussing Renault Sport, he went on to praise their technical expertise, as well as the small factory in Dieppe that now builds the Alpine A110. “It’s very flexible, very capable of doing craftsmanship and work similar to the M division at BMW or Neckarsulm at Audi or AMG”, he said, while acknowledging that Alpine remains a work in progress. “I know that Alpine has potential, maybe not to compete with the German premium brands but it’s a business opportunity. You can argue that Alpine is a relatively unknown brand, but it certainly has the pedigree and the heritage”. +++
+++ RENAULT SAMSUNG , the South Korean unit of Renault, will focus on promoting SUV models to revive sales amid the coronavirus pandemic, the company’s country manager said. Renault Samsung has suffered a sharp decline in sales this year in Asia’s 4th biggest economy due to lack of new models and the Covid-19 pandemic’s impact on production and sales. “We don’t really know about the market because of the coronavirus, but the QM6 and the XM3 (set to be exported to Europe as the Arkana next year) will help boost sales (in South Korea), though Europe is in a very shaky situation for now”, Renault Samsung chief executive Dominique Signora told during the QM6 media test-drive event. Renault Samsung launched the upgraded QM6 in the domestic market last week and plans to start exporting the XM3 to European markets sometime next year. Looking ahead, Signora expected global carmakers to continue to struggle with weak sales until the middle of next year. “It is a very difficult time for worldwide automotive companies, and we really have to concentrate on what we can do and concentrate on keeping our activity at the utmost level”, he said. Renault Samsung suspended the operation of its sole plant in Busan, 450 km southeast of Seoul, from November 2-3 to control its inventory as the virus continues to drive down sales. The Busan plant was shut down from September 25 to October 18 due to the same reasons. The company also demanded its employees at the plant work during the daytime from November 10-30. The company said it will conduct more upgrade and maintenance work at the plant’s production facility ahead of the manufacturing of the XM3. The XM3 comes with either a gasoline hybrid engine or a 1.3-liter gasoline direct-injection turbo engine. From January to October, its sales plunged 32 % to 99.077 autos from 144.736 in the same period of last year. The company’s passenger car lineup are the all-electric SM3 ZE all-electric sedan, the all-electric Renault Zoé, the SM6 sedan, the XM3 SUV, the Renault Captur and the QM6 SUV. The Renault Zoé and Captur are manufactured in France and Spain and imported for sales in Korea. Meanwhile, the company and its labor union have yet to sign a wage and collective agreement deal for 2020. “The company wants to have a smooth negotiation with the union and seeks smooth understanding for the benefit of all”, Signora said. Renault holds an 81 % stake in Renault Samsung. +++
+++ The latest-generation Volkswagen TOUAREG is now offering customers the opportunity to park using their smartphone as a remote control. Designed for tight parking spaces that make it difficult to enter or exit the car, the system allows the car to edge into or out of a space without anyone in the driving seat. The system uses the existing Park Assist feature, which is also offered on Touareg models. The device already allows the car to park semi-autonomously in or out of parallel parking spaces, taking over the steering while the driver operates the gear selector and pedals. However, VW has upgraded the system so the engine and brake are also operated by the vehicle, further reducing the driver’s workload. Using this technology as a baseline, Volkswagen has expanded the offering so it can be controlled from a smartphone. Normally, the driver would have to select the system using the infotainment screen, then allow the car to park itself. However, the new technology means the driver can now exit the car before parking – or drive the car out of the space without getting in. As before, parking requires the driver to drive slowly until the system detects a suitable space using its arsenal of cameras and sensors. However, by hitting the button marked “Park Assist with remote control”, the driver can take the vehicle key, get out of the vehicle and then activate the parking manoeuvre via the app. For safety reasons, the button on the smartphone screen must remain pressed throughout the manoeuvre. Perhaps more usefully, though, the system will also extricate the car from a space if the driver returns to find an inconsiderate motorists parked too close to the door. Rather than squeezing into the car, the driver can start the engine through the VW Remote Park Assist Plus app, before getting a choice of manoeuvres. The car will offer drivers the option of departing the space in different directions, such as “forward left” or “forward right”. The driver can select his or her chosen option, then press the ‘drive’ button to make the car crawl out of the gap. Again, the digital button must be pressed throughout the manoeuvre, which is displayed in parallel on the smartphone screen. It’s the first time the system has been fitted to a Volkswagen product, making the Touareg the first VW capable of “assisted manoeuvring” without a driver on board. +++
+++ VOLKSWAGEN said it will invest $233.5 million in a new production line for motors at a existing plant in central Mexico. “Volkswagen has found in Guanajuato fertile ground for a new generation of economic development”, Steffen Reiche, president of the executive council of Volkswagen’s Mexico unit, said in a presentation at the plant in the central state of Guanajuato. Christopher Glover, executive vice president of production and logistics, said the investment would increase the plant’s production capacity by 75 %. The company said it would begin manufacturing the new line of motors, called EA211, in 2021. The announcement follows the election defeat of U.S. president Donald Trump. Trump took office in 2017 threatening to punish car makers who built up capacity in lower-cost Mexico, leading to a marked chill in investment in the United States’ southern neighbor. +++
