+++ ASTON MARTIN is seeing “phenomenal” demand, boosted by a rebound in China, the company’s executive chairman and billionaire investor Lawrence Stroll said. “Demand right now is phenomenal”, he told. “China really returned first and strongest, and is gangbusters”. Stroll led a consortium which invested in Aston Martin earlier this year as the carmaker struggled following its 2018 stock market flotation, after which its share price slumped. Since then a new chief executive has taken over and the 107-year company, famed for being fictional agent James Bond’s car of choice, did a deal in October which sees German carmaker Daimler up its stake in the firm. Shareholders approved the latest capital injection plan. Stroll said Aston Martin’s current growth trajectory meant “the public markets are the right place” for the firm whilst eying an increase in the value of its shares, which stand at 79 pence ($1.06). “They’ll be significantly worth more than they are today”, he said. +++
+++ BENTLEY , the luxury carmaker owned by Volkswagen has booked 5 Antonov cargo jets to help overcome potential supply bottlenecks in the event of a disorderly exit of Britain from the European Union, the carmaker said. Car manufacturers are securing additional supply routes as policymakers in Brussels and Westminster seek to strike a deal to determine the future trading relationship with continental Europe after Britain exits the European Union. Bentley, which makes high end sports cars, buys 90 % of its components from continental Europe and sells around 24 % of its cars into Europe, chief executive Adrian Hallmark told. “We have spent 2 years planning. We have 5 Antonovs that we have on reserve to fly bodies to Manchester”, Hallmark said, adding that in addition to shifting car bodies by air, Bentley has hiked the level of spare parts stored for production. “We used to run just-in-time with 2 days stock. Now we have 14 days stock. That’s 14 working days, so that’s 3 weeks of stock”, he said. The company has booked additional warehouses and planned new logistics routes in case traditional supply methods are hampered by bottlenecks. If Britain fails to secure a negotiated trade agreement with European policymakers, Bentley would be able to absorb 10 % import tariffs by raising prices and cutting costs. This would be less damaging than supply disruptions. “It is not existential as long as everything flows. Stopping flows is far more dangerous than Brexit tariffs”, Hallmark said, referring to supply bottlenecks. This year Bentley expects to sell more than 10.000 luxury cars and to reach breakeven, mainly thanks to a rebound in demand in China, Hallmark said. China sales are up 35 % when compared with before the Covid-19 crisis. Sales in Europe and the United States up 15 % Hallmark said. “Overall we are in a position where we will do well over 10.000 sales this year”, he said. “We are on the cusp of going beyond breakeven”. +++
+++ Dealerships might hamper General Motors’ plans to electrify its cars. Roughly 150 of them in the United States have decided to drop the CADILLAC brand and accept a buyout (ranging from $300.000 to over $1 million) rather than spend about $200.000 to upgrade the dealerships with charging stations, repair hardware and other equipment needed to sell EVs. Many of these dealerships only sell a few Cadillacs per month versus more for Buick, Chevrolet and GMC, but it’s still a significant blow when General Motors has 880 Cadillac dealers in the country. Cadillac brand leader Rory Harvey confirmed that GM was offering buyouts, but didn’t say how many dealers took them or how much they were worth. The exodus underscores the challenges for conventional car brands as well as the potential advantages for alternatives like Tesla. As brands like Cadillac are heavily dependent on dealerships, they have to please owners to have a chance of strong sales, and that’s difficult when they’re not certain about demand, even without the pandemic. Tesla and other direct-to-customer EV makers aren’t bound by physical stores and already have the infrastructure in place for service centers. Dealers might not have much choice in the future. California is banning sales of new gas-powered cars by 2035, and that will likely force automakers to electrify no matter how dealership owners feel. The buyouts now aren’t necessarily temporary, but we wouldn’t rule out some shops having a change of heart as the effective EV deadline approaches. +++
+++ Ola Källenius, chief executive officer of Daimler, told the German automaker is eyeing new opportunities in China’s rapidly growing market for electric cars thanks to the Asian country’s economic recovery and the brisk demand for new energy vehicles in the world’s largest auto market. The Stuttgart-based company founded by Carl Benz, who patented the first gasoline-powered car in 1886, has recently shifted gears towards electric vehicles (EVs). “We have made a clear strategic decision for Daimler and for Mercedes-Benz that the future of premium luxury mobility will be CO2-neutral. We are on this path towards emission-free driving and China as our biggest market will play a big role in this”, Källenius said in a recent interview on the sidelines of the Web Summit, an annual gathering of tech leaders and entrepreneurs in Lisbon, the capital of Portugal, which was held virtually this year. “In the next 3 years, we will industrialize several electric vehicles in China but not just fully battery electric vehicles, also plug-in hybrids with a good range”, he said. As concerns over climate change have been rising, China has become both the largest manufacturer and buyer of EVs in the world and currently accounts for more than half of all electric cars. To meet new demand generated by green consumption, the State Council, China’s cabinet, approved a plan in early October to boost the new energy vehicle industry. The country has also made a “great leap” in all-electric vehicles with Elon Musk’s Tesla, which rolled out the Model 3 from its Gigafactory near Shanghai in January. Asked about the impact from Covid-19, Källenius said the business was gathering steam again: “This year, for the first 9 months, we were already year-to-date more than 8 % up despite the fact that we had the lockdown and the effect on the market in February and in March. This is a strong year in this unusual year already in 2020. We want to take that momentum into 2021. We feel cautiously optimistic about 2021 in China”, he said. Daimler, which has a joint venture with China’s state-owned Beijing Automobile Group, sold around 700.000 passenger cars in China last year. This compares to the German firm’s second-largest home market, where it sold between 360.000 and 370.000 cars during the same period. Källenius said that China’s economic recovery from the pandemic has also helped the German luxury car manufacturer pick up speed: “It has really been a tale of 2 halves, where the lockdowns that we’ve experienced in the first half of this year severely affected the market and we had to make a lot of business adjustments”, he said. “But in the second half of this year things are looking more and more up, especially the Chinese market has rebounded in a remarkable way. We have now grown double-digit for 6 months in a row which we haven’t expected at the beginning of this outbreak. So, we are ending the year more on a high note”. China’s economy grew by 4.9 % in the third quarter compared with a year earlier, according to official data. It is the first major economy in the world to have recovered from the coronavirus crisis. Källenius also said that he was optimistic Formula One’s world champion Lewis Hamilton would renew his contract with Mercedes, of which Daimler is the parent company, which expires at the end of this year. The British racing driver won his 7th world championship at the Turkish Grand Prix in November, becoming the most successful driver in the history of Formula One. The German carmaker has recently tapped into the engineering expertise of its Formula One team to build the EQXX, an EV that aims to become the world’s most energy-efficient passenger car, capable of driving long distances, such as from Stuttgart in Germany to Rome in Italy, on a single charge. “Formula One is the pinnacle of motorsport”, Källenius told. “Under the most extreme circumstances we test battery hybrid electric and high tech combustion technology. Of course, we take inspiration from the ultra stress test into our road cars”. +++
+++ Volkswagen’s top committee avoided discussing a potential contract extension for chief executive Herbert DIESS in a bid to defuse a looming leadership crisis at the world’s largest carmaker, a person familiar with the deliberations told. Earlier this week, Diess had demanded a vote of confidence in his reform efforts by asking for an early contract extension even though key stakeholders at the company opposed the move, 2 people familiar with the matter told. “The executive committee will not be pressured into a decision, there is no rush”, 1 of the people familiar with the matter said, commenting on the potential contract extension. The executive committee, headed by Volkswagen’s chairman Hans Dieter Pötsch, includes Wolfgang Porsche and Hans Michel Piëch, members of the carmaker’s owning families who control a majority voting stake, as well as VW labour boss Bernd Osterloh. Ahead of the meeting, Diess outlined his vision for reforming the carmaker, saying he had not succeeded in overhauling its German operations where VW’s labour chiefs can block significant decisions. “The families continue to support Diess”, a spokesman for Porsche Automobil Holding SE, the company which holds a majority voting stake in Volkswagen said ahead of the meeting. Diess, who defected from BMW in 2015 and helped Volkswagen reform after its diesel scandal with a €73 billion electric vehicle investment plan, has grown frustrated with opposition to cost cuts. Analysts said the potential crisis at Volkswagen highlighted the difficulties of reforming a carmaker where labour representatives control half the seats on the board of directors and local politicians have a 20 % voting stake, allowing them to vote down strategic proposals. “The company has some of the most amazing and most global brands, it has the scale to deploy any technology and the innovation power to be an early mover. What it appears to be lacking is the right corporate governance”, Bernstein autos analyst Arndt Ellinghorst said in a note. “There should be no illusion, this transformation will always trigger conflicts. Whether there is a new CEO or not, the questions will remain the same, and any CEO will need the full backing from VW’s largest shareholders: the Porsche and Piëch families”. Volkswagen is worth €77.2 billion; far below rival Toyota’s market value of $155.7 billion and Tesla’s $555 billion. That is despite the fact that Volkswagen sold 10.96 million vehicles last year (the most by any carmaker around the globe) while Toyota came in second with 10.74 million. Tesla sold only 367.500 cars in the same period. The Volkswagen Group had 671.205 employees at the end of 2019, compared with 359.542 at Toyota at the end of its fiscal year and 48.016 at Tesla last year. German companies customarily deliberate contract extensions for management board members only a year ahead of expiration. Diess, however, forced the issue after Osterloh stifled his reform efforts. They included Diess’ attempts to install allies Arno Antlitz as chief financial officer and Thomas Schmall as chief procurement officer on the management board, the 3 sources told. Rather than approving each individual appointment, the labour leaders insist on approving a “package solution” which is “harmonious”, 2 people familiar with the deliberations said. Osterloh is also said to oppose an early contract extension for Diess, 1 of the 3 sources said. In a post, Osterloh said there was no fight about management appointments because no committee on the supervisory board had been formally consulted about the issue. Diess, for his part, voiced his frustration in his own post. “When I started in Wolfsburg, I was determined to change the ‘Volkswagen system’. What I mean by that is to break down antiquated structures and make the company more agile and modern”, Diess said. “With the support of many equally motivated people around me, I succeeded in doing so in several areas, but not in others; foremost amongst them at our corporate headquarters in Wolfsburg”. +++
+++ The new Audi A3 Sportback, Kia Sorento, Land Rover Defender and Seat are among the cars that have claimed a 5-star safety verdict in Euro NCAP’s latest round of testing. The final crash tests of 2020 brought a renewed focus on “improving vehicle compatibility”, with a new Mobile Progressive Deformable Barrier (MPDB) introduced in the frontal test to evaluate how “aggressive” a car is in an impact with a smaller vehicle. The A3 and Leon (both cars that sit atop the Volkswagen Group’s MQB platform) matched the rating achieved by their Volkswagen Golf sibling at the end of 2019. The safety-testing body said that although the duo are “in no way inferior to their famous cousin”, it was the Leon that performed most favourably in their simulations, courtesy of its “more compatible front-end design”. Highlights for the Audi include its 89 % adult occupant and 81 % child occupant safety ratings, while the Seat scored 92 % and 88 % respectively. The new Defender improves substantially on the safety credentials of its blocky forebear by introducing a raft of advanced driver assistance systems including automatic emergency braking and lane-keep assist, but it was marked down for its performance in the revised frontal test. The new Sorento landed a 5-star verdict, too, with its central airbag (a first for the manufacturer) and e-Call emergency response system highlighted as especially attractive features. The “impressively equipped” Isuzu D-Max pick-up underwent crash-testing in Europe for the first time, following a successful verdict in Australia earlier this year. Its safety systems and airbags were marked out for praise, but its weight and front end, like the Defender, was deemed “aggressive to other vehicles in a collision”. Overall, it was deemed safe enough for a 5-star rating. Moving down the rankings, the Honda E missed out on a fifth star for lacking some of the advanced safety features found in its larger Jazz sibling and for sub-optimal performance in the side barrier test. The Hyundai i10, meanwhile, fared less favourably. NCAP said that the driver’s pelvis “slipped under the lap belt” in its full-width frontal impact test and that the car has a “more limited” AEB functionality than some of its rivals. +++
+++ The EUROPEAN UNION will aim to have at least 30 million zero-emission vehicles on its roads by 2030 as it seeks to steer countries away from fossil fuel-based transport, according to a draft document. In a strategy due to be published this week, the European Commission will lay out measures to tackle the quarter of EU greenhouse gas emissions that come from the transport sector. “The EU’s goal of climate neutrality by 2050 cannot be reached without introducing very ambitious measures to reduce transport’s reliance on fossil fuels”, the document said. Hitting the bloc’s climate targets will require “at least” 30 million zero-emission vehicles by 2030, it said. That is a huge step up from the 1.8 million electric and plug-in hybrid vehicles registered in Europe at the end of last year, according to the International Council on Clean Transportation. Hybrids are not zero-emission vehicles. With countries including France and Slovenia setting out end dates for the sale of new fossil-fuel cars, Europe’s low-emission vehicle sales are growing fast and continued to increase through the coronavirus pandemic this year. However, industry has warned that a lack of infrastructure could hamper future sales of clean cars. The EU document estimates Europe will need 3 million public charging points and 1.000 hydrogen fuelling stations by 2030 and promises a “roll-out plan with funding opportunities and requirements” next year. Europe currently has about 200.000 charging points. The Commission declined to comment on the draft, which is subject to change before publication. Next year the EU will propose tighter CO2 emissions standards for cars and vans from 2025, and the draft document says they could be expanded to cover buses. The document also said Europe’s high-speed rail traffic should double by 2030 and triple by 2050, while zero-emissions aircraft and ships need to be market-ready by 2035. +++
+++ FORD is delaying the launch of its Bronco SUV next year to the summer from the initial spring target due to coronavirus-related issues with its suppliers, a company spokesman said. “Deliveries will begin the summer rather than the spring. That’s being driven by Covid-related challenges some of our suppliers are experiencing”, Ford spokesman Said Deep said. The suppliers, which Ford did not identify, have had development work for tooling delayed by the pandemic, Deep said. Asked whether the launch could face further delays, Deep said Ford was monitoring the outbreak closely. The pandemic caused the U.S. auto industry to shutter plants for 2 months earlier in the year, but since production restarted automakers have been largely successful in preventing the spread of the virus within their facilities. Ford still expects to begin building the Bronco at its Michigan Assembly Plant in Wayne, Michigan in the spring, Deep said. The Dearborn, Michigan-based company is already shipping the smaller Bronco Sport, which is built in Mexico. Customers’ ability to place orders for the Bronco also has been delayed to mid-January, Deep said. Earlier, industry officials said a shortage of chips used in auto manufacturing could disrupt vehicle production in China well into next year. Deep said Ford’s issues were not related. +++
+++ HONDA has paused production at its Swindon factory due to transport delays causing a shortage of parts. The Japanese firm has told employees that congestion at UK ports is causing a “transport-related parts delay”. Like most manufacturers, Honda operates a just-in-time production method, whereby parts are delivered exactly when they are required. “The situation is currently being monitored with a view to restart production as soon as possible”, Honda said in a statement. Reports claim one last-resort alternative could be to air freight parts from the source countries. UK container ports, including Felixstowe, Southampton and London Gateway, are said to be heavily congested. An increasing number of consumer orders for Christmas and companies filling lockdown-induced backlogs are listed as 2 reasons for the delays, while it’s also suggested companies are stockpiling goods before the Brexit transition period ends on 1 January. Last May, Honda announced it would be closing its Swindon manufacturing plant, where the Civic is currently produced, in 2021. It claimed an acceleration in electrification plans means that “resources, capabilities and production systems for electrified vehicles will be focused in regions with a high volume of customer demand”. +++
+++ HYBRID cars are seeing a quiet resurgence as the boom in electric vehicles spurs automakers to give the older, cheaper technology a second look. This year has been an extraordinary one for electric-car manufacturers. Investors have embraced makers of pure-electric vehicles, driving the share prices of Tesla and Chinese competitor Nio to stratospheric levels. Drivers are also coming on board, with EV sales from China to Europe rising despite the pandemic. But the market risks becoming a crowded one, with more than 500 EV models expected to be available globally by 2022. Many conventional automakers are mulling their options, trying to decide which technologies will reign in the decades between now and a full transition away from combustion engines. The investment decisions they make today could determine whether they sink or swim. While hybrids, which blend the power of a gasoline engine with electric motors and batteries, are now more than two decades old (the first Prius debuted in Japan in 1997) they’re still seeing demand even as EVs loom large. Ford and Toyota are among those releasing fresh hybrid versions of their flagship models and investing anew in their hybrid component supply chains. While non plug-in hybrids aren’t subject to the same sort of generous subsidies meted out to electric vehicles in China, Europe and California, their appeal has been rising after a multiyear slump. Hybrid sales in the U.S. rose 17 % last year from 2018; in the European Union they rose 22 % over the same period as the region braces for tightening emissions regulations. In China, Japanese brands (which claim the biggest share of the hybrid market globally) sold about 30 % more hybrids, making the segment one of the market’s fastest growing. Electric-car sales by contrast increased 6 % in 2019 from 2018, well down on previous years’ double-digit growth. The reasons are severalfold. Hybrids offer savings at the pump, while not sparking the same range anxiety as EVs. And because hybrid cars are supported by a gasoline engine, therefore requiring smaller and less expensive battery packs, their overall costs are lower; an attractive prospect for a consumer wanting a car that’s better for the environment but who’s not able to shell out top dollar for a Tesla. That’s the dilemma facing car buyers such as John Briggs, a mechanical engineer living in Massachusetts who values fuel efficiency but isn’t ready to make a complete transition to EVs. He’s keeping his trusty hybrid Prius even though he bought Nissan’s popular electric Leaf 5 years ago. “The nice thing about our Prius, it’s an efficient car and its range isn’t limiting like our EV’s is”, said Briggs, whose wife uses the Leaf for a short commute to and from work. They take the Prius for longer trips to go hiking on weekends. “It’s just not practical to have to stop and the charging time takes too long”. Ford’s 2021 inaugural F-150 truck, part of the 43-year-best-selling F-series, is set to be the first full-hybrid, full-size truck available on the market. Toyota’s 2021 iteration of its bestselling RAV4 is a plug-in hybrid that’s the automaker’s most powerful model of the car yet. In fact, hybrid sales are projected to keep growing until they peak in 2027 with a market value of $792 billion, according to IDTechEx. Hybrid RAV4s outsold their gas-only counterparts in the U.S. in June, a rare occurrence that lends credence to Toyota’s theory that there’s demand for new hybrid versions of its existing models that come with added fuel-economy, torque and power. In April, a Toyota and Panasonic-led battery venture called Prime Planet Energy & Solutions began operations. It aims to produce batteries for 500.000 hybrid vehicles a year, starting in 2022. “For now, we’re going to firmly move forward with making batteries for hybrid vehicles as they are today’s standard”, Prime Planet chief executive officer Hiroaki Koda said, acknowledging that an industry shift to full-electric or fuel-cell vehicles will require flexibility and some change in direction. That’s a question mark in some analysts’ minds, too. Will tying up too much capital in the hybrid-vehicle pipeline inhibit carmakers’ ability to invest in electric vehicles down the track? It is afterall a segment that’s expected to skyrocket to 64 million units from about 2 million units in annual sales over the next 2 decades as battery costs fall and consumer tastes shift. Similarly, while elevated oil prices and strict fuel-economy regulations can drive up hybrid sales, if either of those factors gets too strong, the market will be pushed toward full EVs, according to Colin McKerracher, head of advanced transport at Bloomberg New Energy Finance. Indeed, Honda is set to stop selling gas and diesel-only cars in Europe by 2022, Honda Europe senior vice president Ian Howells told in an interview last week, suggesting a more decisive shift to hybrids. Toyota sees hybrids making up a quarter of sales, Bob Carter, Toyota’s executive vice president for North America sales, told reporters last week. That’s up from about 16 % currently and capacity constraints are the only reason the company isn’t selling more hybrids now, he said. Toyota, which hasn’t released a mass-market all-electric car in any major market except China, will have to “quickly change its tune” on plug-in vehicles and EVs and sell more of them or risk falling short of the European Union’s regulations on fleet emissions by 2025, McKerracher said. “Eventually you reach a place where you’re at 70, 80, 90% hybrids and then you’re out of room to keep hitting those tightening regulations just by hybridizing vehicles”. Toyota however sees hybrids as a necessary stepping stone to other next-generation technologies. The world’s second-largest automaker is investing heavily in fuel-cell vehicles and battery EVs, chief competitive officer Shigeki Terashi said at a briefing last month, but until those technologies mature, “hybrid vehicles are most practical”. Toyota is expected to invest about $13.5 billion through the end of the decade in electrifying its vehicles, as it targets sales of 4.5 million hybrids and one million full-EVs and fuel cell vehicles a year by 2030 or sooner. +++
+++ HYUNDAI is planning to recall a total of 50.864 Kona Electric cars and Nexo fuel cell vehicles in South Korea due to faulty electronic braking systems, the transport ministry said. Their braking systems may not function due to software defects, the ministry said, but did not mention if the defects have led to accidents. It was not immediately clear if the recall would affect other markets. Kona is one of best-selling electric vehicles in Europe and their sales outside the home market accounted for more than three quarters of the total. The South Korean recall would cover about 40.000 Kona Electric and Hybrid vehicles produced between May 2019 and November 2020 and 10.138 Nexo fuel cell crossovers made between January 2018 and November 2020. Affiliate Kia also plans to recall an additional 1.895 Soul electric cars due to a similar issue, the ministry said. Hyundai is also recalling at least 74.000 of its Kona Electric globally, after more than a dozen vehicles caught fire in Korea, Canada and Europe over 2 years. +++
+++ In JAPAN , the government’s decision to set a target of making all new cars electric or hybrid comes from concern that the global trend is rapidly moving away from gasoline vehicles, observers have said. Should Japan fall behind Europe and the United States (as well as China, the world’s largest auto market), the nation’s economy will inevitably be affected, given that the car industry has long been Japan’s key industry, they said. The Economy, Trade and Industry Ministry is expected to formally announce the electrification policy at a meeting of domestic auto giants and experts as early as Thursday, according to sources. Electrified vehicles, which include fully electric vehicles and hybrids, account for about 40 % of domestic new car sales, according to the latest data. The government currently has a target of electrified vehicles accounting for up to 70 % of new car sales by 2030, but its new goal is to stop selling new gasoline-powered vehicles by the mid-2030s. A senior ministry official expressed strong determination to realize the goal Thursday, saying: “This target is the polestar”. The accelerating global trend of “post-gasoline vehicles” has a prominent political dimension. In February, the British government changed the year when its ban on gasoline vehicles will take effect from 2040 to 2035. Then in November, it moved the year up to 2030. It seems that Britain intends to take a proactive stance ahead of the 26th session of the Conference of the Parties (COP26) of the U.N. Framework Convention on Climate Change, which it will host next year. In late October, Prime Minister Yoshihide Suga announced the goal of net-zero greenhouse gas emissions by 2050. In order to achieve this goal, it is essential to reduce gasoline-powered vehicles that emit large amounts of carbon dioxide (CO2) and shift to eco-friendly vehicles such as hybrid and electric vehicles, regarded as default policies by the government and the auto industry. A source close to the automobile industry said the current target is outdated as it was set 10 years ago. There are big differences among regions and countries in the way they introduce electrified cars. The U.S. state of California along with Britain, which lead the world in environmental policy, do not recognize hybrids as environmentally friendly vehicles. Germany and France, for their part, are putting more emphasis on the development of electric vehicles (by providing subsidies as part of economic measures in response to the novel coronavirus) than on the development of technologies that entail a certain amount of gas emissions. In contrast, a Chinese expert group considers hybrids important. The Chinese government has announced a plan for all new cars sold domestically to be electrified by 2035, with electric vehicles accounting for half of all new car sales and hybrids making up the rest. This stance results from its heavy reliance on thermal power generation, which emits carbon dioxide. In the Japanese market, which took a leading role in the development of hybrid technology, hybrids account for more than 90 % of all electrified vehicles, and the use of fully electric vehicles is not yet widespread among the general public. Minicars, whose selling point is their affordability, account for one-third of new car sales, and this makes it difficult to shift to electric vehicles: If consumers replace their vehicles with hybrids, they could take on an increased burden of hundreds of thousands of yen. “It’s not enough to go along with Europe’s strategy, which is centered on electric vehicles. Japan should follow a feasible road map based on its domestic situation”, said Takaki Nakanishi, an analyst and chief executive officer of Nakanishi Research Institute. Domestic automakers are rushing to promote their electrification strategies. Nissan will launch its new electric car, the Ariya, which it positions as a global strategic vehicle, in 2021. It plans to increase the combined sales volume of electric vehicles and hybrid cars using Nissan’s unique technology, the e-Power system, by about 5 times the current volume to 1 million units by fiscal 2023. “We will expand our lineup of electric vehicles”, Nissan president and CEO Makoto Uchida said. This year, Toyota launched an electric vehicle for its luxury brand Lexus and is developing an electric SUV with its capital partner Subaru. Honda released a mass-produced electric vehicle, the E, this summer with an eye on the European market, which has strict environmental regulations. However, Japanese carmakers have allowed their global competitors to take the lead in the development of electric vehicles. The bestselling Japanese electric vehicle is Nissan’s Leaf, with sales of approximately 66.000 units in fiscal 2019; U.S. electric vehicle giant Tesla sold about 360.000 units in 2019. Some domestic manufacturers have called for the government to reinforce support measures such as by increasing the number of charging stations. In November, the Japan Automobile Manufacturers Association requested that the government and the ruling parties provide tax breaks for eco-friendly vehicles and promote the installation of charging stations. The focus for now will be on whether or not to exclude minicars and commercial vehicles from the government’s new goal, observers said. In particular, some manufacturers of minicars have expressed concern that electrification will raise the prices of their cars, which could decrease sales. If the new car market in Japan shrinks as a result of stricter regulations, there are concerns that domestic automakers will increasingly move their production centers overseas, the observers said. They said it is believed the government intends to set effective targets while avoiding phrases such as “banning the sale of gasoline-powered cars”. +++
+++ KIA is recalling some 295.000 cars in the U.S. and plans to recall the same models later in Korea due to a risk of engine fire. The recall came after the National Highway Traffic Safety Administration the previous day ordered Hyundai to recall 129.000 vehicles over an engine defect. The affected Kia cars are mostly those manufactured between 2011 and 2016, including Sorento. The recall also covers a couple of Hyundai models including the Santa Fe. “As the recall is being made in the U.S., we will do the same in Korea”, a spokesman said. +++
+++ MITSUBISHI said that 654 of its employees, more than its target of 550, will leave the automaker under an early retirement program as part of restructuring efforts to reduce personnel costs. The struggling automaker, which is in a 3-way alliance with Nissan and Renault, introduced the program last month for workers age 45 or over, including those in management posts, due to falling sales amid the coronavirus pandemic. The applicants will leave the company by the end of January, receiving added retirement allowances, the automaker said. Under its midterm business plan revealed in July, Mitsubishi, with a workforce of some 14.000 as of March on a parent company basis, aims to cut overall costs by more than 20 % so as to improve its financial standing. The automaker said it will book a special loss of ¥7.2 billion ($69 million) related to the early retirement program in the current business year through March, while maintaining its earnings outlook for fiscal 2020 as the impact of the expected loss has already been priced in. In the 6 months through September, Mitsubishi incurred a net loss of ¥209.88 billion due to slumping global sales and an asset impairment loss, with its sales tumbling 49.0 %. In an attempt to turn its business around, Mitsubishi is trying to focus its resources on the Southeast Asian market, where it has a relatively strong market share. +++
+++ China’s NEW ENERGY VEHICLE (NEV) market will see robust growth in the next 5 years driven by government policies and other factors, according to an industrial report. The total sales of NEVs in the country will reach 1.16 million this year and further expand to around 5.42 million in 2025, according to the global market research firm International Data Corporation (IDC). China’s NEV market is expected to grow at a compound annual growth rate of 36.1 percent between 2020 and 2025, said the report. The share of pure electric vehicles in the NEV market will soar to 90.9 % in 2025, up from 80.3 % this year, IDC data showed. The IDC attributed the surging expansion of China’s NEV market to government promotion, transformation and investment from vehicle manufacturers, advancements in battery technology, autonomous vehicle development and more open-minded consumers. +++
+++ NISSAN is to set up a new regional business unit for Africa as it seeks to boost manufacturing capacity and penetrate one of the world’s biggest undeveloped new car markets. The move marks a reorganisation of the company’s disparate operations on the continent, bringing them within one entity headed by Mike Whitfield, who has previously served as managing director of Nissan’s units in both South Africa and Egypt. “Beyond internal operating enhancements, this also positions Nissan to focus on the massive opportunity that Africa presents to the organisation globally”, the company said in a statement. Sub-Saharan Africa’s population and household incomes are rising. But its 1 billion inhabitants account for only 1 % of the world’s new passenger car sales, based on industry data. Most carmakers have focused manufacturing and sales in South Africa (the continent’s most developed economy) which accounts for 85 % of Africa’s new car purchases. Nissan, along with competitors Volkswagen, BMW, and Toyota, have been lobbying African governments to grant conditions that favour local assembly and manufacturing while curbing imports of cheap used cars. Carmakers are also hoping to take advantage of the African Continental Free Trade Area, which is expected to come into force early next year and will reduce tariffs and ease the flow of goods between its members states. +++
+++ The auto industry faces a new wave of consolidation as cars become electric, connected and add highly automated driving functions, Alexander Hitzinger, head of Volkswagen’s PROJECT ARTEMIS said. “There will be consolidation. Not everybody will be able to afford these complex platforms. We will see emerging a smaller number of very large players who will drive this transformation”, Hitzinger told. The need to connect autonomous driving sensors to electric motors, batteries and high-definition maps is forcing carmakers to design vehicle underpinnings and car software operating systems in house rather than stitching together legacy code and systems provided by a myriad of suppliers. Project Artemis is VW’s attempt to do just that. “Cars are so complex that the traditional concept where you outsource to tier one manufacturers does not work any more”, Hitzinger explained. The investment sums and the complexity of the technology favours larger players since falling sales, caused by the Covid-19 pandemic, is making it harder for smaller companies to stem the investments needed to develop cutting edge cars, he said. +++
+++ VOLKSWAGEN will build an electric car plant at its controlling joint venture in Hefei, East China’s Anhui province, with the first model to roll off the assembly line in 2023, according to the German carmaker’s senior executives. Herbert Diess, chairman and CEO of Volkswagen, made the remarks in a video message, when the group and its partner JAC Motors announced that their joint venture has changed its name into Volkswagen (Anhui) from JAC Volkswagen. The joint venture’s R&D center was unveiled on the same day. It is expected to employ 500 engineers and technicians, said the carmaker. Earlier this month, Volkswagen scaled up its stake to 75 % from 50 % in the joint venture, according to a deal the 2 sides signed in May. The move has made it the first international passenger carmaker to have a controlling stake in a Chinese partnership. Volkswagen is planning to introduce its electric car-only MEB platform into the joint venture, and the plant will have an annual production capacity of 350.000 vehicles, said Volkswagen Group China CEO Stephan Wöllenstein. The plant, which has an estimated investment of 20 billion yuan ($3.06 billion) from both Volkswagen and JAC Motors, will be finished by the end of 2022, and its first vehicle will roll off the assembly line in 2023. Volkswagen has set a goal of selling 1.5 million electric cars and plug-in hybrids a year in China by 2025. It said Volkswagen Anhui will play a significant role in its e-mobility strategy. Globally, it expects to sell 19 million electric cars based on its MEB platform by 2030. In China, its other two joint ventures, FAW-Volkswagen and SAIC Volkswagen, have built MEB plants with a combined annual capacity of 600,000 vehicles. +++
+++ Hyundai has won the WORLD RALLY CHAMPIONSHIP , one of the world’s biggest motor racing events, for the second straight year. The carmaker said on Monday it secured the WRC manufacturers’ title in the final round of the season, which took pace in Monza, Italy. The WRC, a rallying series organized by the Fédération Internationale de l’Automobile (FIA), consists of more than a dozen rallies driven on surfaces ranging from gravel and tarmac to snow and ice, unlike F1 events which take place on circuits. It has 3 events: for drivers, co-drivers and manufacturers. Hyundai was 21 points behind Toyota when the rally was suspended due to the coronavirus epidemic, but came from behind to win the title by 5 points after it resumed. Hyundai became the first carmaker to win 2 consecutive WRA manufacturers’ titles since Volkswagen in 2016. +++