Newsflash: opvolger Lamborghini Aventador krijgt hybride technologie

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+++ AUDI has partnered with Chinese technology company Tencent to build an intelligent and interconnected digital ecosystem, comprising smart vehicle cockpits, digital marketing and user operations. Among other things, Audi vehicles in China are expected to feature in-car WeChat and some other digital services from Tencent, according to a memorandum of understanding the 2 signed. “Deepening our strategic cooperation with Tencent further enables us to expand the Audi product eco-system for our Chinese customers in a way that is tailored to their unique needs”, said Werner Eichhorn, president of Audi China. Audi has built partnerships with leading Chinese companies, as part of the automaker’s efforts to transform itself into a provider of sustainable and networked premium mobility. Besides Tencent, Audi has been working with Baidu, Alibaba and Huawei on in-car digital services and intelligent vehicle development projects. +++

+++ The sky appeared to be the limit for South Korea’s electric vehicle BATTERY BUSINESS as the global EV boom drove up demand over the last few years. Led by 3 battery makers (LG Energy Solution, SK Innovation and Samsung SDI) lithium-ion batteries made by Korean companies accounted for nearly half of global usage of EV lithium-ion batteries in 2020. With explosive growth projected in the EV market, it seemed like Korea’s battery business had a bright future ahead of it. The hype was so big that local media even began to add batteries to the long list of industries honored with a “K-” prefix: the K-battery business was born. That dream, however, seems to be fading. Automakers, once clients, are now looking to go solo, curtailing the already competitive market. Chinese players are eating up the global market at an alarming rate, while South Korea’s top 2 battery makers have been locked in a fierce legal dispute for more than 2 years. The global market share held by 3 South Korean players dropped 11.7 percentage points this year as of February, at 29.5 % from 41.2 % last year, the SNE Research says. Volkswagen’s recent announcement that it would gradually internalize battery supply sent a jolt through the South Korean battery industry. The German carmaker is the world’s No. 2 in terms of EV sales, after Tesla. It pledged to build 6 battery cell factories in Europe by 2030 to produce 240 gigawatt hours (GWh) capacity per year through joint ventures. It was a scenario largely expected in the industry but they didn’t see it coming this soon. “A technology gap would be inevitable as of now, but through joint ventures and partnerships, automakers will strongly engage in battery manufacturing in the near future”, said Kim Gui-yeon, an auto analyst from Heungkuk Securities. “Considering global battery supply and cost structure, the need for automakers to develop their own batteries will only expand”. The latest feud between LG Energy Solution and SK Innovation might have contributed in moving up the timeline, industry sources say. “Volkswagen and Ford have to find another supplier within a certain timeline and that kind of unstable supply is a very big risk to automakers which have to launch a promised model within the promised time”, said Kim Pil-soo, an automotive engineering professor at Daelim University. “Since the feud doesn’t seem to be ending any time soon, Volkswagen, which has a 2-year shorter grace period than Ford, could have put such a plan into action faster than expected”. LG Energy Solution and SK Innovation have been engaged in a legal dispute since 2019 regarding trade secret misappropriation and patent infringement. The U.S. International Trade Commission ruled in favor of LG in the main case, effectively banning SK Innovation from doing its EV battery business in the United States for the next 10 years. Ford and Volkswagen, which have signed contracts with SK Innovation for battery supply, have been given a grace period of 4 and 2 years to find other suppliers. “Once the automakers succeed in installing even a small amount of self-made batteries in their EV lineup, it would be the start of a disaster for the battery makers”, said Park Chul-wan, automotive engineering professor at Seojeong University. “Then they will try to push down the battery price from suppliers and battery makers will not have the negotiating power that they do now”. Tesla, the biggest EV seller in the world, already announced last year that it will make its own cylindrical EV batteries. Japanese auto giant Toyota also said it is working on developing its own solid-state batteries. Hyundai and Kia recently fortified its battery R&D team at Namyang R&D Center, although they denied that they will use their own batteries in the near future. To make the situation even more difficult, Chinese players are eating up the global market at a remarkable speed. Automakers are fortifying their partnership with Chinese battery makers as it is a prerequisite in order to sell their EV models in the world’s biggest EV market: China. The Chinese government doesn’t give out subsidies to EVs that are equipped with non-Chinese batteries. Volkswagen recently announced it would change its battery type from pouch to prismatic, implying that it will further fortify its partnership with CATL, which makes prismatic as well as pouch batteries. LG Energy Solution and SK Innovation specialize in pouch-type batteries. Last year, prismatic-type batteries accounted for 49.2 % of the global market share, followed by pouch-type with 27.8 %. The Hyundai Motor Group also reported earlier this year it had chosen CATL as a major supplier for its third batch of EVs produced on its dedicated modular platform E-GMP. The third batch supply deal is reported to be worth 9 trillion won ($8 billion). Chinese batteries are 10 to 20 % cheaper on average compared to Korean ones, according to industry sources, although no specific figures are confirmed. “They are cheaper for sure, but in terms of technology, Chinese companies, especially CATL, are not that behind”, said professor Park. CATL is also cooperating with global carmakers to enhance its battery technology. At the moment, it has formed an alliance with Germany’s Daimler and Japan’s Honda to co-develop battery technology. Last year there was only 0.5 percentage points difference between CATL and LG Energy Solution in terms of global market share, compared to 17.1 percentage points difference in 2019, according to SNE Research. The gap has again widened this year, with CATL accounting for 31.7 % of the market as of February while LG Energy Solution accounted for just 19.2 %. “3 Korean battery makers, which have put up a good fight last year despite the coronavirus, seem to be backing out due to Chinese players”, the research firm said in a report. “With CATL at the head, Chinese players will trigger fiercer competition in the EV battery market in the near future”. +++

+++ Premium car brands, especially European ones, are often favored in China. But French premium marque DS of Stellantis, which was formed from the merger of PSA and FCA, is a rare exception. This is mainly because of its obscure image and a small number of models. The brand has decided to give it a new try though, considering the ever-growing middle class, who are trading in for better cars and would like to embellish their life with elements of art and fashion. So this time DS (pronounced “de-esse”, which means goddess in French) is considering learning from the success of designer clothing and bag brands in Paris. “For instance, we will launch vehicles as classic ones and limited ones”, said Li Xinyang, managing director of DS China, in an interview last week. Li, a veteran in the auto industry, joined DS late last year. He worked for more than 10 years at General Motors, making Chevrolet one of the most popular choices for young Chinese customers. Now his job is to turn DS, which he sees as a mobile artwork from Paris, into a niche brand with a distinctive following, including French culture fans, designers and artists. “We try to make art a part of life and enrich our life with art”, said Li. Li admitted the task will be tough, partly because of a weak legacy and increasing competition in the country. DS came to China in 2012. At its zenith, DS sold around 27.000 vehicles a year in the country. Last year, it was less than 1.000. The brand’s global deliveries totaled 39.481 in 2020. Yet there are around 20 dealerships in China, with owners totaling 75.000. “We hold them dear to us”, said Li, calling them the seeds of DS’s future. He said new investors are coming to open new showrooms in the country. The carmaker launched the DS 9 sedan last week in Beijing, which it called the starting point of its new journey in China. The vehicle, a flagship model of the brand, is available in seven variants and six colors. It features elements of classic French haute couture but also cutting-edge functions, some of which are not found in vehicles from other brands in the segment. Li said that 6 more product events are scheduled in the next 10 months to maintain momentum. “We don’t imagine overnight success and I tell our dealers to be patient”, said Li. “But if we repeat a correct move again and again, we will make something out of it”. He has a 3-year blueprint for the brand. One of the goals is to develop China into DS’s second-largest market after France. An even more challenging one is to project a clear image. “For me, the biggest goal will be 8 out of any 10 DS owners will use the same words when they are asked to describe the brand”, Li said. +++

+++ GENESIS , the independent luxury brand of Hyundai, said it will debut its flagship sedan and SUV in China to target the high-end segment in the world’s largest vehicle market. Genesis showcased G80 sedan and GV80 SUV in a media event in Shanghai, which will be the first duo to enter the Chinese market this year. “Genesis will bolster its luxury brand image to target the young generation, a key customer group in the fast-rising Chinese luxury car market”, the automaker said in a release. Their launching schedule will be announced at Auto Shanghai, one of the world’s largest auto shows, slated for later this month. Starting with China this year, Genesis said it plans to explore the European market to expand its global presence. Launched in 2015, Genesis has released luxury models in the United States, Canada, Russia, the Middle East and Australia. The brand launch in China is part of Hyundai’s broader plan to revitalize its sluggish Chinese business to improve profitability. Last week, Hyundai CEO Ha Eon-tae said the company will expand new models, cut incentives and maintain the appropriate inventory at dealerships in China to make a “turnaround” in the key market. Hyundai has reorganized its Chinese operations since 2019 following years of weak sales, suspending the No. 1 Beijing plant and halting production of low-end compact models to enhance profitability. +++

+++ Hyundai denied a rumor that it is about to establish a joint venture with US tech giant GOOGLE to develop a self-driving service. “The corresponding rumor is unfounded”, said an official of the company, denying the reports by a local news outlet. “Hyundai will initially spin off one of its departments, in which Google will invest to establish a joint venture”, the report claimed, adding that the new organization will be dedicated to the research and development of unmanned car services. Earlier this year, the auto company’s stock price jolted amid reports of an alleged partnership with Apple to build the Apple Car fully autonomous vehicle. Hyundai and its sister brand Kia later denied the reports, saying they are “not in talks” with Apple on the subject. +++

+++ Hyundai is suffering a shortage of parts for its all-electric IONIQ 5 set to hit showrooms here next month. The automaker said Tuesday that its plant in Ulsan that makes it will be closed from April 7 to 14 due to a shortage of engine parts. The automaker planned to manufacture 10.000 Ioniq 5 cars in April but will only end up making 6.500 due to the closure. The shortage in parts also impacts the production of its Kona Electric, whose production was decreased by 6.000 from the original production volume of 20.000 units. The engine parts are supplied by affiliate Hyundai Mobis, which is experiencing delays at its plant in Daegu. Hyundai unveiled the Ioniq 5 last month in hopes of challenging Tesla’s dominance. “Even if Hyundai Mobis’ factory resumes production, a supply shortage of microchips continues, resulting in prolonged production delays”, an industry insider said. Pre-orders for the Ioniq 5 reached Hyundai’s target of 35.000 in just a week, but now many customers will be disappointed. +++

+++ In JAPAN , automakers are likely to cut production due to Renesas plant fire. Shipment volumes from Renesas Electronics’ Naka plant are unlikely to return to normal until summer, after the plant suspended operations due to a fire. Japanese automakers rely heavily on semiconductors manufactured by Renesas and the blaze is highly likely to force carmakers to reduce production further. Many players, including the government, are working together to minimize the impact of the fire. “I sincerely apologize to residents near the plant, our customers and others for all the trouble caused by the fire”, said Renesas Electronics president Hidetoshi Shibata during a virtual press conference. The blaze happened when stock volumes at the Naka plant, located in Hitachinaka, Ibaraki Prefecture, were already low due to power outages triggered by an earthquake that occurred off neighboring Fukushima Prefecture in February. The company is shipping the untainted remaining stock from the N3 building, where the conflagration occurred so that production at automakers will not be affected. However, the stock is expected to run out in late April. Renesas aims to resume operations around that time. For unfinished products not affected by the fire, the company will complete production and ship them sequentially, tentatively scheduled for late May. Therefore, a monthlong gap in shipments is expected. Semiconductor production takes about 3 months from processing raw materials to shipping finished products. Semiconductors are used in a variety of automotive equipment, such as the power steering that helps drivers steer a vehicle, air conditioners, air bags, car navigation systems and window opening and closing systems. About 30-40 semiconductors are needed to produce a single gasoline-powered car. Automakers maintain stock of semiconductors, but they will be forced to stop production if they run out. Renesas is the world’s top manufacturer of automotive semiconductors, which are used in a vehicle’s electronic control systems and for other purposes. At the Naka plant, more than 60% of the semiconductors produced are destined for the automotive sector. An increasing number of automakers are reducing production and suspending plant operations due to a global shortage of semiconductors. The Naka plant fire will deal yet another blow to the industry. Mitsubishi UFJ Morgan Stanley Security has forecast that, even if the Naka plant restarts production in April, domestic automakers such as Toyota, Honda and Nissan will cut production by 1.65 million units in total from April to September. After reconstructing the building, Renesas will endeavor to resolve supply shortages that are expected to run through the summer and possibly beyond. Automakers understand that a quick reconstruction of the Renesas plant will help ease the situation, and several dispatched workers to assist the company soon after the fire was extinguished. More than 900 such personnel are working to get the plant functioning again, such as by repairing the clean room area where the blaze started. The government has started taking measures due to concerns that the semiconductor shortage could hinder an economy starting to recover from the ravages of the coronavirus pandemic. “We’ve asked a Taiwanese chipmaker for cooperation to produce semiconductors on behalf of Renesas as this is an emergency situation”, Economy, Trade and Industry Minister Hiroshi Kajiyama said at a press conference after a Cabinet meeting. Most semiconductors are produced by contract manufacturers that receive designs from semiconductor makers and then assemble the units. Due to the global shortage of semiconductors, it was not believed that Renesas would manage to increase the number of such contractors. “External partners are producing semiconductors for us. Such production would have been unthinkable under ordinary circumstances”, Renesas’ Shibata said. However, it is unclear if this strategy will help increase supplies in Japan given the tight supply-demand balance in the semiconductor world. +++

+++ The EV6, KIA ‘s big bet on all-electric cars, is faster, sportier and drives longer than Hyundai’s Ioniq 5, its cousin and rival in the market. The EV6 and Ioniq 5 are made on the same manufacturing platform, the E-GMP, which is shared between the sister companies. But Kia’s car has sportier proportions and exterior design and a stronger battery, hinting at how Kia wants to position itself in the electric vehicle (EV) market. “The EV6, which symbolizes Kia’s transformation into a mobility solution provider, has been designed to offer dynamic design, progressive technology and mind-blowing performance”, said Song Ho-sung, CEO and president of Kia, in an online global premiere of the vehicle. “This model is the start of Kia’s Plan S”, Song continued, “which aims to have 40 % of our sales dedicated to eco-friendly vehicles by 2030”. Kia has made an all-electric car before, the Niro, but it also came in hybrid and plug-in hybrid models. The EV6 is its first dedicated EV. Head on, the EV6 has more character than the Ioniq 5, with a reinterpretation of Kia’s signature Tiger Nose grille, which has been rechristened the Digital Tiger Face. The grille has been minimized and a rather large air intake has been placed underneath the bumper for a wide and low look. On the side, the EV6 has a wing-type roof spoiler, which Kia says reduces noise and air resistance. It also acts as a roof for the rear window, which is why the vehicle no longer has rear windshield wipers, Kia explained. Kia’s EV6 will come in 4 trims: standard, long-range, the GT Line and the high-performance GT. The high-performance GT trim will launch in the latter half of 2022 while the other three will launch in the second half of this year. The EV6 GT model will boast a dual motor that generates up to 584 hp. Kia says the high-performance models can reach 100 kilometer per hour in 3.5 seconds, the fastest of all Kia’s past cars including the Stinger GT, which took 4.9 seconds. “We wanted to give a feel similar to Kia’s dynamic cars from the past”, said Karim Habib, a senior vice president at Kia responsible for design, “like the spirit of the Stinger”. The long-range trim has a 77.4 KWh battery that is capable of driving 510 kilometers based on Europe’s WLTP (Worldwide Harmonized Light Vehicle Test Procedure) standards. On the Korean standard, Kia expects it to be able to drive 450 km per charge, longer than the equivalent trim of Hyundai Motor’s Ioniq 5, which can run 430 km per charge. The Ioniq 5’s long range version comes with a smaller 72.6 KWh battery. Kwon Hyuk-ho, vice president of Kia in charge of domestic sales, said that enhanced battery quality contributed to a price markup for the EV6. The long-range trim’s price will start in the mid-50 million won range, according to Kwon, and the GT model will sell from 70 million won. The company’s sales target is 100.000 units per year globally with 20.000 units to be sold in the United States. +++

+++ LAMBORGHINI is gearing up to launch the long-awaited replacement for the Aventador in 2022 and the new V12 supercar will, unlike its predecessor, feature a hybrid powertrain as one of the first steps the brand is taking to ‘reinvent’ itself for the electric age. The new flagship machine from the Sant’Agata manufacturer is due to be revealed this year and will go on sale shortly after the arrival of a plug-in hybrid version of the Urus. It is set to be the final series-production Lamborghini supercar to use the firm’s fabled 6.5-litre V12, with the subsequent generation likely to adopt electric power. Despite the coronavirus pandemic, Lamborghini posted the second-best financial results in its history in 2020 and company boss Stephan Winkelmann, who recently rejoined Lamborghini after spells at Audi Sport and Bugatti, told that 2021 is a “moment of stabilisation” before it “starts pushing for the next level” in 2022. Beyond that, Winkelmann said a key priority is to develop “a clear vision” of what electrification means for the brand. “We have to do this so that we remain Lamborghini by reinventing Lamborghini: to change everything not to change anything”, he said. Winkelmann said the initial focus this year is the market launch of the Huracán Super Trofeo Omologato, but he hinted that two new V12 machines will be revealed in 2021. Although Winkelmann would not be drawn on specific details about these models, sources suggest one is a final Aventador-based special using similar supercapacitor technology to the 816 hp Sián FKP 37 hypercar and it is possible that the other will be the first glimpse at the Aventador’s replacement. The next-generation V12 flagship has been delayed several times, in part because of the impact of the coronavirus but mainly because of Lamborghini’s push to develop hybrid technology that will suit the needs and character of its supercar. “The challenge is how to match the requests of the legislators while not diluting the expectations of customers in the coming years”, said Winkelmann. “This is what we are working on right now”. Lamborghini technical boss Maurizio Reggiani has previously confirmed that the Aventador successor will retain a naturally aspirated V12, with a hybrid element used to add extra power and efficiency and forego the need for a turbocharger. Reggiani also hinted that the firm was considering a four-wheel drive system similar to the Ferrari SF90’s, with the V12 driving the rear axle and an electric motor on the front wheels and torque vectoring used to balance the power. The extra weight of an expansive hybrid system and its resulting impact on a supercar’s performance remains a concern for Lamborghini and it is thought the firm is working on a system pairing a lithium ion battery with a supercapacitor for boosting. Lamborghini has invested heavily in its supercapacitor technology, developed in conjunction with the Massachusetts Institute of Technology, as it seeks to maintain the character of its supercars while meeting increasingly tough emissions legislation. In the Sián, the V12 is tuned for 782 hp, with the supercapacitor, which is built into the gearbox, able to deliver an extra 34 hp. The system weighs 34 kg, considerably less than that of a traditional hybrid. However, although a supercapacitor can store more power than a comparably sized lithium ion battery, it is only designed to rapidly charge and discharge power, making it unable to offer electric-only running and limiting its effectiveness at reducing emissions. Winkelmann said: “The Sián is a success story, because we understood you have to sell electrification by giving a benefit to the owners of supersports cars”. He added that “this approach is just a small step into what we’re going to do in the future”. Although exact technical details of the next-generation model have not been disclosed, it is likely to offer something close to the 816 hp output of the Sián powertrain. As well as the Aventador replacement and updated Urus, Lamborghini will replace the V10 Huracán, probably in 2024 or 2025. Beyond that, the focus is on the brand’s future strategy, with emissions legislation pushing car firms to become electric only. Winkelmann told: “My biggest challenge is to have a clear strategy for what is happening after 2030, to follow up the next generation, not only in terms of product but to have a clear vision of what this means for the brand. The first step is what this means until 2030. “Without doubt, the legislation part will tell us what we cannot do any more. The door will be very tight and there will be a bottleneck we have to pass”. Asked about a fully electric Lamborghini, Winkelmann said the firm is currently “finalising its plans”. He added: “It’s not only what we talk about. It’s walking the walk that is the tough thing, so we are looking into the financial situation to see year on year what we are able to do. It’s clear I can have a dream, but it must be a real one”. The UK, Lamborghini’s fifth-largest market, is set to introduce a ban on non-zero-emission new cars in 2030. When asked about how that could affect the brand, Winkelmann said: “The UK is one of our top markets, so taking care of legislation is paramount for making success in the future. If we fail, we are out of business, because we need to do a super-sports car in line with the legislation, and also in line with the expectations of the customer. That’s not always the same, but we have to match these 2 things and we are expecting this challenge”. Lamborghini has been considering adding a 2+2 grand tourer as a 4th model line and could make that model electric only. Winkelmann said his “focus is on the existing models and their next generation” but added that “given our success and the analysis of the market, a fourth model is something that, in my opinion, is very possible for a brand like ours”. +++

+++ Sports cars such as the LC 500 will continue to play a part of LEXUS ’s product line-up in the future, with the first such machine with an electrified powertrain likely due around 2025. The Japanese firm is currently in the midst of a bold expansion plan with at least 10 electrified models (using electric, hybrid and plug-in hybrid powertrains) due by 2025. Lexus has previewed its first full EV based on a dedicated platform with the new LF-Z concept, and which is set to join the current UX 300e. While Lexus has focused on expanding its SUV line-up in recent years, Hiroo Togashi, the firm’s brand management boss, hinted that the firm will continue to offer halo models such as the LC 500 in the future. “Our customers expect to have more emotional vehicles offering engagement between driver, passenger and car”, said Tasaghi-san. “One area we think we can do that is providing sport vehicles in the future. I can’t mention specifics, but towards 2025 we will be working on such a vehicle for the future”. Lexus has committed to offering an electrified version of every model from 2025 onwards, and Togashi said that any future performance models would “have some form of electrified powertrain”. The LF-Z concept showcases Lexus’s new Direct4 electrified all-wheel-drive system, which is designed to distribute power between the front and rear axles in a way that ensures the car maintains optimum weight distribution and traction. Takashi Watanabe, Lexus’s electrified engineering boss, said that system is designed to “create a new driving sensation and experience” for electrified Lexus models, and such technology is likely to be a key part of any future Lexus performance models. The Direct4 system is designed to work on both BEVs and hybrid powertrains, in line with Lexus’s strategy of offering multiple powertrains for the mid-term future. The exact mix of powertrains will depend on market demand and regulations in each region. +++

+++ American electric vehicle start-up LUCID MOTORS will turn its attention to developing affordable mainstream electric cars following the market launch of its flagship Air saloon. Speaking at the SMMT Electrified conference, CEO Peter Rawlinson hinted that the company will make cars “progressively more affordable in progressively increasing numbers” once production of the Air is under way in the second half of 2021. Rawlinson, who served as chief engineer for the Tesla Model S, said: “Our factory in Arizona is capable of being expanded from its current guise of 34.000 units per annum. We’re taking this model: start with a high-end product and gradually make it more affordable”. He believes the entry cost is the key driver for wider EV adoption in relation to all manufacturers, for the “benefit of all mankind and future generations”. “I have a clarity of vision to get to the mythical $25,000 electric car. And it’s going to take one thing to drive it: technology”. Cost of ownership and battery efficiency are, Rawlinson said, the overarching considerations for EV makers and users. But Rawlinson took issue with rival manufacturers’ “myopic” focus on battery costs. While he acknowledged the importance of affordable battery technology, Rawlinson suggested that the immediate focus should be on the efficiency of the cells. He said: “How many miles I can travel per kilowatt hour?” What’s a good number? We’re achieving 4.5 mpkWh with a relatively luxurious car like the Lucid Air. Just imagine if we can get to 6 mpkWh with a more affordable car. I believe this figure is going to be the enabler which is going to drive that pendulum swing towards widespread mass adoption. “If I can double efficiency, I can go the same range with half the battery size. That would halve the battery cost and would halve the weight of the battery. Surely that’s better than just carving battery costs?” In a stark warning to the rest of the car industry, Rawlinson said there would be “blood on the carpet” if the industry as a whole doesn’t embrace electrification. “It’s all going to be about technology and efficiency. The companies who embrace that will be the winners. This is a race all of us cannot lose. We all breathe the air, and for future generations we need that clean air. I see the technology that underpins EVs as the big driver, which gives me enormous hope and optimism for the future”. The Air is due to touch down in Europe later this year with a choice of four powertrain outputs, ranging from 400 hp to 1080 hp at the top end. Lucid claims that it is one of the world’s most aerodynamically efficient luxury cars, the fastest-charging electric vehicles on sale and the first electric saloon to be capable of covering a quarter-mile in less than 10 seconds. +++ 

+++ NISSAN ’s former top lawyer, who led an internal investigation into alleged financial misconduct by Carlos Ghosn, has said he endured retaliation, demotions and even corporate surveillance of his family after questioning the integrity of the probe. Speaking for the first time about the arrest of Nissan’s celebrated ex-chairman Ghosn and his daring escape out of Japan, former Global General Counsel Ravinder Passi described what he views as a toxic corporate culture, rife with fear and reprisals for those who step out of line. “This is just not normal behavior”, said Passi of what he claims was heavy surveillance of his family. “This is a car company. This is not the KGB”. In an interview, Passi said he knew of similar instances of Nissan’s top managers having security teams tail individuals. “I had seen the Nissan security department behave in a very, very egregious manner with others, in terms of following, surveilling”. According to Passi, there was scant oversight by the automaker’s board of directors regarding internal conflicts of interest by senior staff, as well as executive compensation and stock option award policies. Ghosn faced criminal indictments in Japan that he had underreported his remuneration by more than ¥15 billion ($140 million), misused company money and funneled millions of dollars into secret, offshore entities for his own benefit. At the same time, Ghosn’s key accusers (former chief executive officer Hiroto Saikawa and senior vice president Hari Nada) received inflated stock-based awards, according to people familiar with the matter. Saikawa resigned in late 2019 after those compensation irregularities came to light. Nada also lost some of his operational responsibilities, but still works at the company and testified earlier this year in the financial misconduct trial against former Nissan director Greg Kelly, who is being tried in Tokyo for allegedly helping Ghosn hide his compensation. Kelly has denied the charges. “You had a revelation that a number of executives had benefited from share appreciation rights”, said Passi. “Substantive amounts of money had been taken by these guys, when they weren’t entitled to take them”. Passi was part of a select inner circle who had advance knowledge of Ghosn’s arrest in November of 2018. He left Nissan last fall and is pursuing legal action in London against the automaker for wrongful termination under the U.K.’s whistleblower statute. “Nissan is contesting a claim by Mr. Passi which contains numerous mischaracterized allegations”, said Nissan spokeswoman Lavanya Wadgaonkar, who declined to make Nada available for comment. “We are unable to comment further on a matter which is subject to ongoing litigation”. During his final months in Japan last year, Passi was stripped of key responsibilities, demoted and pressured to move his wife and four children back to the U.K. in the middle of the Covid-19 pandemic, he says. In addition, the family was subjected to a surprise Nissan-initiated raid of their home after a Yokohama court ordered the seizure of Passi’s company-issued laptop and smartphone. Passi alleges the devices contained evidence of “misconduct and other forms of inappropriate conduct” by Nissan executives. As Nissan’s most senior corporate attorney, top management turned to Passi to help lead an internal audit of Ghosn’s alleged financial misconduct in tandem with the criminal investigation by Tokyo prosecutors. However, as the Nissan inquiry progressed, Passi said he became aware of serious conflicts of interest by key executives. Passi reported to Nada, who was a central player in a campaign to dethrone Ghosn amid concerns over his plan to further integrate Nissan and its alliance partner Renault, according to email communications disclosed last June. Nada also had a deal with Tokyo prosecutors to cooperate in exchange for immunity as part of their case against Ghosn and Kelly, which raised questions about his true motivations in investigating Ghosn. “I had doubts about the process right from the start”, said Passi. “It didn’t smell right”. Passi says he was under pressure to move fast and come up with the evidence supporting the allegations by prosecutors that Ghosn had underreported his remuneration and mishandled Nissan funds. Those efforts would be for naught. In late 2019, Ghosn escaped from Japan after being smuggled onto a private plane in a music equipment box. His alleged accomplices, American security consultant and ex-Green Beret Michael Taylor and his son, Peter, were extradited to Japan in early March to face trial, and were indicted in Tokyo last week. Prior to Ghosn’s escape, as Passi gathered information around Ghosn and Kelly’s alleged crimes, the lawyer began to share his conflict-of-interest concerns with Nada. He says they were largely ignored, so he took the fateful step in September of 2019 of writing a detailed memo spelling out his worries about the probe’s credibility to independent directors on Nissan’s board. Within 3 days of submitting that letter, Passi said, he was removed from the Ghosn investigation. Soon after, he was shut out of board meetings, despite his responsibilities as global general counsel. Next, Passi lost his oversight over corporate legal affairs and a team of more than 200 lawyers and staff worldwide. His new assignment: vice president for “projects and transformation” with a staff of 3 in the U.K. “You can imagine what this feels like at this stage” said Passi. “An almost arbitrary removal from Japan, where I have lived for 8 years and had 3 children”. Then the surveillance started. While driving in March of 2020, Passi became aware that he was being followed by what he said was a security detail in a grey van. “And I noticed that somebody in the van was taking pictures”. After that, Passi said, sightings of small surveillance teams, usually of 2 or 3 burly security men, were commonplace for the family. Later came the shock raid at his home one morning, which unnerved Passi’s children and his wife, Sonia. “It was just another form of intimidation, another form of harassment, forcing me almost to leave the company and the country”, Passi said. Passi’s journey into the dark recesses of corporate Japan is not without its ironies, starting with his relationship with the key figure behind Ghosn’s demise. Nada had recruited Passi into the U.K. branch of Nissan, was his mentor and sold him on working at the company’s Japanese headquarters. “I have a long-standing relationship with him, or did have a long-standing relationship with him”, Passi said. “It’s only toward the latter part of that career, given some of the things that he was involved in, that I started to see a very different side to him. In many respects, he was acting as an agent, I think, of the Tokyo prosecutors”. Nissan has maintained since late 2019 that the financial misconduct allegations against Ghosn and Kelly were based on “substantial and convincing evidence” the automaker had uncovered, which was the sole reason why they were arrested and removed. Unlike Passi, Nada appears to be in good standing with the current Nissan management regime, led by CEO Makoto Uchida, who’s trying to return Nissan to long-term profitability and keep the carmaking alliance between Nissan, Renault and Mitsubishi intact. In late 2018, with the industry still in shock over Ghosn’s detention in Japan and the allegations being leveled against him, Nissan supplied Nada with a bodyguard, car and driver, and rented him a $12,000-a-month luxury apartment in the Roppongi district of Tokyo, according to a person familiar with the matter. And what of the main character in this bizarre corporate drama, Carlos Ghosn? He now lives in his childhood home of Lebanon, which doesn’t have an extradition treaty with Japan. Whether he thinks Ghosn crossed a line into criminal behavior or not while at the top of Nissan, Passi doesn’t have a ready opinion. In any case, the industry legend turned international fugitive will probably never have to face his accusers in a Japanese courtroom. But Passi was somewhat taken aback at how some reacted to Ghosn’s downfall at Nissan, a company that he, and the financial resources of Renault, saved from financial ruin in the early 2000s. “It generated a lot of angst on one side of the fence. And on the other side of the fence it was almost vitriolic in that sense, like we’ve got them”, said Passi. “That was quite a strange thing to experience because these guys … they haven’t killed anyone”. +++

+++ China’s PICK-UP market continued robust growth in February with sales soaring year-on-year, industry data showed. A total of 32.000 units were sold last month; up 507 % from the low base of the same period last year due to Covid-19 disruptions, according to the China Passenger Car Association. The figure exceeded that of February 2019 when 28.000 units were sold, the association said. Pickups, which combine the features of passenger and commercial vehicles, have become increasingly popular in the country in recent years. The association expects continuous recovery of the pickup truck market, citing the increase in passenger car demand driven by steady rebound of China’s economy and the new business models that emerged amid the epidemic. China has made efforts to facilitate the entry of pickups into cities in recent years. Earlier this month, the country’s commerce ministry issued a guideline calling on local authorities to promptly relax restrictions on the entry of pickups into cities to further boost automobile consumption. +++

+++ PORSCHE expects China’s premium vehicle market to grow further this year, after the segment hit a record high in 2020 despite the Covid-19 pandemic. Jens Puttfarcken, president and CEO of Porsche China, said he estimates the segment to continue the momentum this year. He made the remark in an interview following the carmaker’s annual press conference late last week. In the first 2 months of this year, it sold 13.910 new vehicles in the country. That was a surge of 54 % from the same period of 2020. Since September 2020, Porsche has maintained a double-digit growth in sales in China. Last year, the carmaker delivered 88.968 new vehicles in the country; up 3 % year-on-year, through 134 sales outlets across the country. This helped boost Porsche’s global performance. Statistics show that Porsche achieved record revenues of €28.7 billion in the fiscal year 2020. In total, it delivered more than 272.000 vehicles to customers worldwide; down by 3 % compared to the company’s best year ever in 2019. China has been the largest single global market for Porsche for 6 years in a row. +++

+++ In SOUTH KOREA , carmakers’ sales rose 12 % last month from a year earlier helped by robust overseas demand for SUVs amid the Covid-19 pandemic, industry data showed. The 5 carmakers (Hyundai, Kia, GM Korea, Renault Samsung and SsangYong) sold a combined 672.643 vehicles in March; up from 601.082 units a year ago, according to data from the companies. Their domestic sales fell 6.7 % to 140.971 units last month from 151.025 a year ago. But overseas sales climbed 18 % to 531.672 from 450.057 during the same period, the data showed. Hyundai and its affiliate Kia saw their strong overseas sales help prop up the monthly performance. In March, Hyundai’s sales jumped 22 % to 375.924 units from 307.176 a year ago, and Kia’s climbed 8.6 % to 251.362 from 231.543 over the cited period. “Hyundai and Kia reported increased sales in March due to a base effect as their sales were affected by disrupted productions and sales following the outbreak of Covid-19 virus in the same month of last year”, the companies said in their statements. The monthly results were helped by strong overseas demand for Hyundai’s Tucson and Santa Fe SUVs and Kia’s Sportage and Sorento SUVs. Brisk sales of the GV70 and GV80 SUVs under Hyundai’s independent Genesis brand at home also buoyed Hyundai’s sales results last month. This year, Hyundai and Kia said they will continue to focus on promoting their SUV models, including Hyundai’s all-electric Ioniq 5 crossover, to ride out the virus crisis in global markets. The carmakers aim to sell a combined 7.08 million vehicles this year; 1.7 % lower than the 7.2 million units they sold last year. 3 other carmakers suffered declines in their March sales amid the prolonged pandemic. Renault Samsung Motors reported a 43 % on-year drop in sales at 8,572 autos last month from 15.100 due to lack of new models. GM Korea’s sales declined 22 % to 29.633 units last month from 37.918 a year ago, while SsangYong’s were down 24 % to 7.122 from 9.345 over the cited period. SsangYong’s Indian parent Mahindra is in the process of selling its controlling stake as part of its global reorganization plans. The SUV-focused carmaker filed for court receivership on December 21 after it failed to obtain approval for the rollover of existing loans from its creditors. From January to March, the 5 carmakers’ combined sales rose 7.4 % to 1.82 million units from 1.69 million in the year-ago period. The global semiconductor chip shortage is expected to affect carmakers’ vehicle production in the second quarter and their sales. Carmakers are readjusting their vehicle production volumes while competing with electronics companies to get more chips to minimize output reduction. Hyundai plans to suspend production at its No. 1 plant in Ulsan from April 7-14 due to parts shortages. +++

+++ A court-led restructuring process for SSANGYONG is set to begin as early as next week as a sole potential investor didn’t submit a letter of intent to acquire the financially troubled carmaker, industry sources said. SsangYong’s Indian parent Mahindra has been in talks with US vehicle importer HAAH Automotive Holdings Inc. to sell its majority stake in the Korean unit as part of its global reorganization plan amid the COVID-19 pandemic. The talks come as SsangYong filed for court receivership in December after failing to obtain approval for the rollover of 165 billion won worth of loans from creditors. But it obtained a 3-month suspension of its obligation to pay the debts due to the talks with HAAH. The Seoul Bankruptcy Court ordered SsangYong to submit HAAH by March 31, but the US company didn’t send the documents, a SsangYong official said over the phone. The court reportedly called on SsangYong’s creditors to express their view on whether to begin the court-led debt rescheduling process for the company. But main creditor Korea Development Bank (KDB) said it hasn’t receive any notice or documents from the court. When contacted by Yonhap News, HAAH declined to comment on the matter. SsangYong was planning to submit its plan for a speedier rehabilitation procedure under a “prepackaged” bankruptcy plan if HAAH had submitted. The prepackaged plan is a combination of workout and court protection under which a restructuring plan is agreed upon in advance of a company declaring its insolvency. It is intended to shorten and streamline the bankruptcy process. This is the second time for SsangYong to place itself under court receivership after undergoing the same process a decade ago. China-based SAIC Motor acquired a 51 % stake in SsangYong in 2004 but in 2009 relinquished its control of the carmaker in the wake of the economic downturn. Court receivership is one step short of bankruptcy in South Korea’s legal system. In receivership, the court will decide whether and how to revive the company. In 2011, Mahindra acquired a 70 % stake in SsangYong for 523 billion won and now holds a 74.65 % stake in the SUV-focused carmaker. Mahindra has said it does not have a plan to inject fresh capital into SsangYong and will give up its status as the biggest shareholder of the Korean unit if it finds a new investor. KPMG Samjong Accounting, the auditor of SsangYong, declined to give its opinion on the carmaker’s annual financial statements for the year of 2020. SsangYong could be delisted if its accounting firm again refuses to offer an opinion on the company’s annual performance for the following year after the one-year period. +++

+++ TOYOTA will form a joint venture with Chinese fuel-cell maker Beijing SinoHytec to manufacture key systems for fuel-cell vehicles. Toyota and SinoHytec signed a contract Monday to set up the 50-50 venture, Toyota Sinohytec Fuel Cell, with a total investment of about 8 billion yen ($72.8 million). The Japanese automaker and SinoHytec are currently engaged in research and development activities on fuel-cell buses. The new venture will be located in the Beijing Economic-Technological Development Area, a hub for high-end manufacturing in the Chinese capital, and start operations in 2023 with an initial production capacity of 3.000 units a year of fuel-cell components. Last August, Toyota and 5 other companies formed a joint venture, United Fuel Cell System R&D to develop systems for fuel-cell vehicles. The Toyota Sinohytec Fuel Cell venture is designed to manufacture and sell these systems. +++

+++ It’s not often that you celebrate operating profits around half what they were the year before, but after the challenges of the past 12 months, the VOLKSWAGEN Group’s revelation that it banked around €10 billion in the toughest of years is a testimony to its enduring appeal, resilience and global spread, most notably in China, where sales, especially of plusher models, drove impressive results. It was also notable that the commentary merely paused on these figures, underlining that the group (and especially chairman Herbert Diess) is in a rush to look ahead, rather than back. Alongside the accounts came news of ambitious EV battery plant investments (six in Europe), EV charging infrastructure (18.000 new fast chargers, half of them in conjunction with BP) and plans to halve the cost of EV battery production through a new unified cell structure. This avalanche of EV-focused news should leave you in no doubt that the Volkswagen Group is set on a path to electrification, albeit one that pragmatically phases out the engine rather than drop it (highlighted by the awkward admission that it missed its EU emissions target in 2020, likely costing it some €90 million in fines). It was notable, too, how Diess has put the group’s money where his mouth is, committing €35 billion of investment in EV tech over the next 5 years. Tesla spends around €1.7 billion on R&D each year, albeit with very different ambitions. But perhaps the bigger news was the commitment to spend a further €27 billion in digital transformation over the next 5 years, from software creation through to the optimisation of the connected car, which can link to the mothership for over-the-air updates or the nearest dealer for repairs. This is spending that has been justified for bringing the group closer to its customers and making its processes leaner, faster and thus cheaper. But it’s not without controversy, with concerns ranging from its ability to build the multibillion-dollar expertise of big tech firms to the moral issues over data collection. The argument will rage on the latter point, but the freedoms (and stock values) that are afforded to Tesla, Byton, Nio et al leave all car makers with little choice but to chase the same goals. It’s also a reminder that going electric is just part of the journey the industry faces. Despite the wealth they generate, car makers don’t have many cheerleaders outside their own walls. But after the years of turmoil, the robust financial health and heavy investment of the Volkswagen Group will come as some comfort to its more than 600,000 staff and the estimated five million more workers who rely on it. +++

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