Newsflash: Hyundai vervangt Sonata door Ioniq 6

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+++ International carmakers are revving up research and development efforts in CHINA to stay competitive, as the world’s largest vehicle market is becoming a powerhouse of innovation especially in terms of electrification and digitalization. China, as one of the first countries to promote new energy vehicles, has been the largest market for such vehicles since 2015. Last year, 1.37 million electric cars and plug-in hybrids were sold, accounting for around 41 % of the global total. Statistics from the Ministry of Industry and Information Technology show that around 15 % of passenger vehicles, both gasoline and electric ones, sold in the country last year had Level 2 functions, which enable drivers to relinquish controls under some circumstances. “In many aspects, the Chinese market has been an early adopter of technologies and provides ecosystems to a different extent than other markets. This is pushing the boundaries and, again, is supported by China’s initiative to accelerate digital transformation”, said Beatrix Frisch, managing director and automotive lead of Accenture Interactive Greater China. This has prompted international carmakers to enhance their research and development in the country. Currently, China houses BMW’s largest research and development network outside of the premium carmaker’s home country of Germany. It includes facilities that focus on electric car battery development, autonomous driving and smart connectivity, and a new joint venture dedicated to improve its digital competence, including software development and in-car digital offerings, said the carmaker. “The BMW Group considers China to be much more than just our largest single market, but rather an important origin of innovation and we are continuously scaling up our investment in this regard”, said BMW Group Region China president and CEO Jochen Goller. In late May, the carmaker started an incubator project with Alibaba in Shanghai as part of a program called BMW Startup Garage, which aims to identify and tap high-potential startups that can offer innovative solutions for the carmaker’s needs. “Vehicle innovation in China mainly revolves around digitalization, smart connectivity, artificial intelligence and autonomous driving and the digital innovations are happening at a breathtaking pace,” said Peter Lehnert, BMW’s vice-president of new technologies, research and innovation digital car. Our new joint innovation base will act as an accelerator to further strengthen engagement with top Chinese startups”, said Lehnert. BMW said more than 20 startups that specialize in digitization, electrification and sustainability have already set up their offices in the joint incubator. The figure is expected to exceed 300 in 3 years. United States carmaker Ford said it would use the experience gained from China on electric cars and onboard digitalized functions around the globe. “We see China’s customers as the most advanced in terms of the digital consumer experience”, said Ford CEO Jim Farley. “For us to be successful among those companies, this is the knowhow we can apply around the world, especially in our home market”. He said Ford’s China team will be given more autonomy in terms of electrification, and they are tasked with making Ford a leader in digitalized experiences. The carmaker showcased the Evos, a crossover, at the Shanghai auto show in April, the first vehicle developed by a China-based team and designed based on the demands of the local Chinese market. Among other things, it has a 1.1 meter long screen, which former Changan Ford president Steven Armstrong said was the result of customer feedback. “They told us that the passenger, not just the driver, wants to be engaged with the vehicle as well”, he said. “Back in the past, adapting global products worked, but now Chinese customers are much more demanding and much more technically capable than customers elsewhere. So you need to develop products for them”, he said. In a video message at the Shanghai auto show, Farley said Ford will continue its localization campaign called “Best of Ford, Best of China”. “We are working with our partners to deliver a superior and distinctive branded experience for our customers in China and around the world”, said Farley. +++ 

+++ Until very recently, Li Shufu, chairman of GEELY that owns Volvo and a major stake holder in Mercedes parent Daimler, was ribbed from time to time because of a remark he made 22 years ago that “cars are nothing more than 2 sofas on 4 wheels”. Without the context it easily tricks people into believing that the boss of China’s first and largest private carmaker doesn’t have a clue about the sophisticated automotive industry. The remark was part of a plea that Li made to then head of China’s top economic planner Zeng Peiyan in 1999, during Zeng’s trip to Zhejiang province, asking for permission to produce sedans, said He Dan, in her book New Manufacturing Era. The second part went: “I would not regret even if we fail, but could you please give us an opportunity first?” Today China, as the world’s largest and most vibrant market, is seeing new startups mushrooming. But back then, though already at the turn of the century, the sedan segment was still an exclusive domain for State-owned companies and their joint ventures. Li had already started his carmaking business in 1997, with a license he acquired by investing in a bankrupt State-owned carmaker. But the license allowed Geely to produce only less popular wagons but not sedans. Its vehicles, due to their record-making low prices, had been well accepted in the market, winning customers from models by State-owned Xiali and international marques including GM. “If we succeed, we can help explore a new road to develop China’s auto industry, and if we fail, we are not wasting the nation’s money”, said Li to Zeng. Li’s remarks won the nod of Zeng personally, but it would take another 2 years until November 2001, when China was admitted to the WTO, for the authorities to relax the restrictions, and Geely became the first private company in the list of carmakers. Experts said the move was revolutionary, as it soon saw the rise of a slew of private carmakers across the country, from Chery, which later became the partner of Jaguar Land Rover, to China’s largest SUV maker Great Wall Motors. The structural reform introduced competition, which helped improve China’s auto industry by forcing out incompetent ones and, more importantly, allowing more people to own their first cars, they said. The private companies have also proved to be the vanguards of Chinese carmakers that went global. In 2010, Geely wowed the auto industry by acquiring Swedish brand Volvo from the United States carmaker Ford, which was reeling due to the global financial crisis. Last year, Volvo sold over 660.000 vehicles globally, more than double the figure when Geely bought it. “In 10 years, Volvo Cars has grown from a niche Swedish marque into a global premium carmaker”, said Yuan Xiaolin, president and CEO of Volvo Car Asia-Pacific. Jia Jiangwei, vice-president of Beijing-based Car Research Consulting, said the acquisition was a remarkable event in the history of Geely and even the Chinese auto industry. “It changed the stereotype of Chinese private businesses and won the respect of the global auto industry”. Its purchase of Daimler’s stake and building satellites for smart vehicles have made it one of the biggest and globally competitive carmakers. Great Wall Motors, headquartered in Baoding, Hebei province, is another private carmaker that has helped reshape China’s auto industry. With its philosophy of “a bit progress day by day”, the garage-turned-carmaker is the country’s most popular SUV maker, with its Haval H6 the bestselling model for 95 months in a row. Following Geely’s Lynk & Co, Wey brand, unveiled in 2016, was one of the first moves by Chinese carmakers to launch an upscale model to take on international rivals. The carmaker has an ambitious plan to become the largest SUV producer globally. Its plant in Russia’s Tula region started operations in 2019, which marked the first overseas complete vehicle manufacturing factory of Chinese carmakers. It has also acquired plants from other carmakers in Thailand and India as it steps up expansion in the Southeast Asian market. “We cannot make do with being the top player in China. We must go to explore the global market and compete with international brands”, said Great Wall Motors chairman Wei Jianjun. +++ 

+++ HONDA said it will permanently shut down an engine parts plant in Mooka, Tochigi Prefecture, in 2025 to improve efficiency through factory consolidation. The closure is part of an effort by the automaker to restructure its vehicle manufacturing operations that has been underway since 2017. As part of the effort, Honda has already announced a plan to close an assembly plant in Sayama, Saitama Prefecture. The company will move some 900 workers at the Mooka plant to new locations in order to keep them employed. The shutdown of the Mooka plant is linked to a move by automakers to cut back on engine development as they are racing to electrify vehicles. In April, Honda said it aims to sell only electrified vehicles globally by 2040. +++ 

+++ Once South Korea ’s most popular sedan and HYUNDAI ’s flagship model, the Sonata is apparently losing out to all-electric vehicles as the automaker moves to convert its Asan plant for the production of Ioniq 6. A number of factors have weighed down the once-bestselling model, including an unsuccessful facelift and the increasing diversity of alternative models in the market, observers noted. The automaker is planning to suspend its Asan plant for about a month during the July-August summer holiday season, and may close for another 2 weeks in November, officials said. Market observers see the planned closure as a preparation for Sonata’s phase-out. The corresponding manufacturing site (with a maximum manufacturing capacity equivalent to 300,000 units per year) is exclusively devoted to the production of the Sonata and Grandeur, the company’s longtime flagship sedans. “The idea of suspending the Asan plant and converting it into an EV manufacturing facility is still in progress, with details yet to be confirmed”, an official said. But industry observers largely agree that the carmaker will likely cut production capacity of Sonata, which has been waning over recent years. Sonata has sold 26.230 units from January to May this year, down 12.3 % from the same period last year and saw 67.440 units in total yearly sales last year, down 32.6 % on-year. The midsized sedan sector in general contracted 13.4 % on-year during the same period, reflecting the growing popularity of SUVs as family cars and the rise of battery electric vehicles as eco-friendly solutions. Hyundai and its sister brand Kia sold a combined of 61.820 midsized sedans during the January-May period, down 13.4 % from a year earlier. The Grandeur, however, has performed relatively well, selling a record 145.000 units last year. Taking into account its upcoming face-lift, the sale figure is anticipated to climb further next year. Meanwhile, the Ioniq 6 (the sequel of the company’s landmark Ioniq 5) is slated to be fully unveiled next year, in line with Hyundai Motor Group chairman Chung Eui-sun’s vow to expand the group’s EV sales volume to the 1 million-unit mark by 2025. “The Ioniq 6 will be similar to Sonata in size, which makes it easier for the company to convert the production lines”, said Lee Hang-gu, analyst at the Korea Automobile Technology Institute. Also, the prolonged shortage of automotive chips will be less of a problem for the Ioniq 6 than the Sonata, as the model will be receiving supplies from LG Energy Solution’s domestic plant in Ochang, North Chungcheong Province, which is near the Asan plant, according to the analyst. The Sonata uses chips from various sources, including TSMC in Taiwan. The Ioniq 5, which is the company’s first all-electric vehicle to adopt an exclusive EV platform, is currently produced at the Ulsan plant but has been facing delivery delays due to the prolonged chip shortage. Some raised more concerns about the possibility of another round of labor-management conflict down the road as EVs require less labor input than conventional engine-operated models. Earlier this year, production of the Ioniq 5 was temporarily halted due to union protests in Ulsan. +++ 

+++ TESLA vehicle orders in China fell by nearly half in May compared to April, as it continues to grapple with a backlash caused by its inappropriate handling of a woman customer complaining about her Model 3’s brake failure in April. The electric car’s net orders in China dropped to about 9.800 in May from more than 18.000 in April, said the US-based digital media company on Thursday citing a source familiar with the data. Tesla does not make public its sales figures on a monthly basis, and the China Passenger Car Association has not released the carmaker’s sales figures in May. Tesla is one of the most popular electric carmakers in China, and its sales went to a record high of 35.478 in March. But it soon caused a public outcry when a woman who protested at its booth at the Shanghai auto show in April was dragged away and a senior Tesla executive accused her of a plot. The company did not apologize until the incident had grown into a violent public backlash, and some Tesla owners said they were reluctant to drive their vehicles. The backlash, though less violent now, is still raging as the dispute between the woman protester and Tesla has not been resolved. Tesla released the data about her vehicle, but the data has not been verified so far. Tesla’s China sales slumped in April from March as well. It sold 11.671 Model 3 and Model Y vehicles in April in the country, down from 35.478 in March, according to the China Passenger Car Association. In a statement, Tesla said the sales fall was primarily due to a 2-week production halt to update its manufacturing equipment at its Shanghai plant, where it is producing the Model 3 sedans and the Model Y SUVs. China is the electric car maker’s second-biggest market after the United States and accounts for about 30 % of Tesla’s sales. +++ 

+++ TOYOTA has reached a settlement with the family of an engineer whose suicide was ruled a job-related death due to harassment from his boss. Toyota vowed to crack down on harassment in the workplace to ensure employees’ safety and expressed deep remorse, “facing up with true sincerity to the fact that a precious worker’s life was lost”. The engineer, then 28, was repeatedly ridiculed by his boss, prevented from taking days off and told to die. His suicide in 2017 was ruled by a regional labor bureau as a job-related death in 2019, entitling his family to compensation. His name has been withheld due to privacy concerns, standard in Japan. To prevent future harassment, Toyota will improve workers’ health care, better evaluate management, educate workers and encourage a workplace culture where employees can speak up, the company said in a statement Monday. “Toyota promises to work on developing people who, each and every one, can take an interest in those around them, under our stance that power harassment should never be tolerated”, it said. The attorney for the victim and his family, Yoshihide Tachino, said Toyota was responsible for mismanagement in allowing the harassment to continue. The amount of compensation the family will receive was not disclosed. He stressed the settlement includes the preventive measures promised by Toyota as well as a thorough investigation into the death. Company president Akio Toyoda met with the family of the deceased and promised to bring about change, but the company needs to be monitored to make workplace culture changes, Tachino said. “We believe that the legacy of efforts to curtail power harassment pays respect to his tragic death, which came too soon at 28, although nothing will ever be enough”, he said. The case has drawn attention as highlighting a common problem in workaholic Japan, where such abuse often goes unchecked or undetected. Complaints in Japan about various workplace abuse, including sexual harassment and problems over parental leave, have climbed to about 88.000 cases a year, more than tripling in the last 15 years. They have been widespread, involving the police force, schools and judo athletes, as well as various companies. In the Toyota case, the young engineer’s boss bullied him constantly, including referring to his educational background. Although he had a graduate degree from the prestigious University of Tokyo, his undergraduate degree was from a less elite school, according to an investigation into the case. Such background details can be painfully crucial in conformist Japan. The engineer, who joined Toyota in 2015, told those around him that he would rather die than endure the suffering. He took some time off in 2016, citing mental stress. When he returned to work, Toyota assigned him to another section, but he was still working on the same floor as his former boss, records show. The family said in a statement that their son won’t return despite the compensation. “My heart still aches over what has happened to my beloved son. And when I think of him, all I want is to have him back”, the statement said. +++

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