+++ On Brazil’s east coast, the vast parking lot off Avenida Henry Ford sits empty. FORD shut down its plant in Camaçari, Brazil 2 years ago, leaving the spaces deserted. Recently, China’s largest EV maker, BYD, has been negotiating with Ford to buy and reopen the shut-down factory. If the deal goes through, this will be BYD’s most extensive EV operation outside Asia. President Luiz Inácio Lula da Silva, or Lula, has grand industrial ambitions for Brazil. He hopes to spur a manufacturing renaissance and create blue-collar jobs. Lula sees China as an ally and benefactor, while the US under Joe Biden aims to maintain an advantage over China in key technologies. China has been making significant investments in EV-related projects in various countries, including Brazil. Lula personally lobbied BYD boss Wang Chuan-Fu to reopen the factory in Camaçari. He believes that China is capable of providing the support that the US cannot or will not offer. Lula’s efforts have paid off, as China has pledged $10 billion in investment after a meeting with Lula. Brazil is in need of economic recovery, with its industry contributing only a quarter of its GDP. Lula, who has a background in the auto industry, is particularly focused on revitalizing this sector. The first automakers arrived in Brazil over 100 years ago, with Ford leading the charge. Now, Brazil is the world’s 8th largest producer of cars, specializing in economy models. If the deal with BYD goes through, it could greatly contribute to job creation in Brazil. The governor of Bahia, where the factory is located, expects the company’s investments to create around 10.000 jobs. Lula’s strategy and alliance with China have been instrumental in these negotiations. BYD plans to invest 3 billion reais ($620 million) in a new Brazilian manufacturing hub, as it looks to build a larger presence in South America. The Chinese company plans to build 3 factories at the complex. One will process lithium and iron phosphate mined in Brazil, while the other 2 will produce hybrid and electric cars, trucks and buses. +++
+++ With other global carmakers, mainly Tesla, making forays into the growing Indian market, the Hyundai Motor Group is seeking to acquire GENERAL MOTORS ’ manufacturing plant there. But it faces challenges in its efforts. The world’s third-largest carmaker plans to complete the acquisition of GM’s Indian plant in Talegaon by this year, however, is still facing opposition from some 1.000 workers formerly employed by the US automaker. On whether the terms of the deal to acquire the plant includes rehiring workers who were laid off when the plant closed, an official from Hyundai Motor Group declined to comment citing confidentiality. But a source with firsthand knowledge said, “The company is not ruling out the possibility of hiring entirely new workers, preferably low-cost labor force”. According to media reports, GM’s unionized workers have been demanding to be part of the proposed transfer deal and employed by the new owner of the plant. A former union worker cited by India-based news outlet Financial Express on June 29 claimed that Hyundai is not communicating with the union directly and is not keen on employing the workers. General Motors had offered voluntary redundancy for employees before shutting down manufacturing in 2020, however, the union rejected the severance package and brought the matter to court. The American car company says it remains confident on its legal position regarding the workers and has terminated every employment arrangement with them. But after the Supreme Court of India ordered GM to pay 50 percent salary to the employees in October last year, it has refused to comply. Sources say Hyundai could be in a bind, since the term sheet signed by Hyundai Motor India and General Motors India is likely to stir controversy. The term sheet covers the proposed acquisition of land and buildings and certain machinery and equipment for manufacturing situated at GM’s Talegaon plant. It also stipulates that both parties are required to receive approval from relevant government authorities and all the stakeholders related to the acquisition. But it is unclear if the stakeholders include former employees, leaving room for the union workers to push for their demands. Experts say Hyundai would prefer to start operation without the burden of hard-line unionized workers. “Even if the carmaker has a knack for dealing with union strongholds in Korea, it is not easy to start business with them in a foreign country. Although it might take some time to hire new workers and train them, it’s better to start with clean slate”, said Kim Pil-su, a car engineering professor at Daelim University. “Another option could be hiring a mix of former employees and new workers, however, I don’t think the union would accept that”. But given that Tesla and other rivals are creeping their presence in the booming Indian automotive market, Hyundai is likely to consider every measure necessary including providing inducements for the Indian government to settle the union issue, Kim added. At the end of July, Tesla CEO Elon Musk reportedly met with Piyush Goyal, minister of commerce and industry of India, to discuss building an electric vehicle manufacturing plant in India. The plant is expected to produce budget-friendly Tesla cars priced around $24,000. With the acquisition of GM’s Talegaon plant, Hyundai is also mulling over expanding its EV production in India. By 2028, it plans to sell a total of six electric car lineups including the flagship Ioniq 5, after gradually transforming the internal combustion engine car manufacturing lines into EV production lines in either the existing Chennai plant in Tamil Nadu state of India or Talegaon plant. Hyundai’s annual production capacity in its 2 plants is projected to surpass 1 million units. The carmaker also signed a memorandum of understanding with Tamil Nadu in May that it will inject 200 billion rupees ($2.4 billion) for the next 10 years to set up a battery pack assembly plant there. “India is an emerging automotive market, with one of the largest populations, that could replace China, where global carmakers are withdrawing their businesses”, the company official said. “The car market has been showing huge demand for internal combustion engine cars and hybrid vehicles. We see great potential for EVs as well”. As of last year, Hyundai and its smaller affiliate Kia sold a total of 807.067 units in India, posting 21.1 percent market share. Its share came to 21.3 percent during the January-June period this year. +++
+++ HYUNDAI MOBIS has secured substantial overseas contracts in the electric vehicle (EV) components business, marking a significant step toward global expansion. These contracts, involving bulk orders of EV components targeted at major global carmakers, show Hyundai Mobis’ competitiveness in the global market. The company announced it has successfully obtained a contract to supply battery system assemblies (BSA; a key component for EVs) to the renowned German carmaker, Volkswagen. The battery systems secured by Hyundai Mobis are intended for integration into Volkswagen’s upcoming next-generation EV platform. BSA refers to a fully integrated product combining battery packs with components such as battery management systems (BMS), ensuring the safe and efficient operation of EV batteries. High-capacity and high-efficiency battery systems are pivotal components influencing the quality and performance of EVs. Hyundai Mobis boasts a battery system portfolio applicable to all eco-friendly vehicles, including hybrids and electric cars. The company plans to establish a new production base in Spain subject to approval by the board later this year, for the supply of battery systems. Currently, the company operates battery system production lines in South Korea, China and the Czech Republic, while also constructing new EV bases in the U.S. and Indonesia. This recent influx of orders establishes a solid foundation for Hyundai Mobis to target the global EV market in major regions. The success of these large-scale EV component orders stems from proactive investment in expanding global production bases and a dedicated local customer-centric sales force, as part of an aggressive marketing approach. In light of these significant overseas contracts, Hyundai Mobis anticipates further orders for EV components in the global market. This comes as global carmakers increasingly invest in transitioning to EVs to capture the future mobility market. Although the exact terms of the contract with Volkswagen were not disclosed, the Korean car parts maker said the order signifies Hyundai Mobis’ global competitive edge in technology and mass production of electric vehicle parts. The announcement marks Hyundai Mobis’ first overseas contract disclosed to the public. “It’s the first time that we secured a large-scale order for automation parts with a major global (original equipment manufacturer)”, said a Hyundai official. According to Volkswagen, the automaker will invest approximately $131 billion in digitalization and electrification over the next 5 years to advance its market position. Volkswagen has also ramped up its eco-friendly sales target so that 80 percent of all passenger car sales in Europe are EVs by 2030. The Korean auto parts maker said it plans to build a new production site in Spain at an unspecified site near Volkswagen’s automobile plant as it seeks to obtain approval from the board of directors before the end of this year. Volkswagen operates 4 factories in Spain. With the planned Spanish site, Hyundai Mobis said the company will be able to establish a worldwide manufacturing chain for BSAs in major regions to cope with the increasing demand for EV production amid global automakers making goals of complete electrification. Hyundai Mobis pointed to strong demand for high-margin parts such as EVs and SUVs as well as the increased production of modules and key components amid an easing of the shortage of semiconductors. +++
+++ HYUNDAI MOTOR GROUP executive chairman Chung Euisun has emphasized the importance of India as a foothold for future mobility as the South Korean automaker looks to lead the country’s fast-growing electric vehicle market. According to the Korean automaker, the chief visited Hyundai Motor Company’s technical center and manufacturing site in India to discuss mid to long-term growth strategies with local employees. Hyundai Motor said Chung closely checked up on the local EV trends at the company’s technical center, showing the company’s preparation to take the next step to become a top-tier brand amid fierce competition over vehicle automation in India. The automaker said the India Technical Center will expand its role as a linchpin of future mobility research in the technological sectors of automation, autonomous driving and voice recognition of Hindi. To that end, the research site has been pushing for building new testing facilities since last year. India was the third biggest auto market as the country saw 4.76 million new units sold in last year alone, behind China and the United States. India’s auto market is expected to reach 5 million in 2030. SUVs are projected to take up 48 percent of them while EVs are forecast to account for 1 million. Following Hyundai’s release of Exter, a small SUV specifically developed for the Indian market, in July, the automaker said it plans to have 5 EV models in the local market through 2032. Hyundai added it will expand the number of EV charging sites to 439 in 2027. Kia, Hyundai Motor Company’s sister firm, will begin the production of a new EV, which will be optimized for the Indian market, in 2025 with plans to launch various EV models in the future. The Hyundai Motor Group sold 807.067 cars in the Indian market last year to become the second largest automaker there. The Korean auto giant has sold 502.821 units as of July this year, up 8.8 percent on year. The company said it will continue to expand the local production. Chung on Tuesday met with Muthuvel Karunanidhi Stalin, chief minister of Tamil Nadu, a southern state in India where Hyundai Motor’s local manufacturing facilities are located, to discuss the automaker’s future plans in the region. Hyundai Motor and the state of Tamil Nadu signed a business partnership in May to invest about 3.2 trillion won ($2.4 billion) over the next 10 years to set up an EV ecosystem by building a new EV battery pack assembly plant, expanding the EV lineup and installing 100 high-speed EV chargers, and modernizing manufacturing facilities. +++
+++ In SOUTH KOREA , midsize SUVs remain popular among motorists, increasing their share of the domestic car market.
Some 117.943 SUVs were sold in the first 7 months of this year, seeing a 24.7-percent rise on-year, compared to a rise of 8 percent for overall car sales. Kia’s Sorento was the most popular model with 42.236 deliveries made between January and July, followed by KG Mobility’s Torres (27.218) and Hyundai’s Santa Fe (18.636). Sales of SUVs have been steady, accounting for around 15 percent as the top seller in the domestic market for 5 consecutive years since 2018. Automakers believe demand for SUVs will only increase further, boosted by a series of new releases slated for the upcoming months. +++
+++ ‘Look behind you!’ is a cry increasingly being heard by leasing companies, car dealers and car buyers as that spectre which haunts the used car market threatens to disrupt an emerging part of it. We are talking about ex-fleet cars, specifically the growing number of USED ELECTRIC CARS that lease companies and businesses could soon be disposing of in a market already struggling with weak consumer confidence, heavy depreciation, over-supply of certain models and the fear that technological progress risks making even some fairly youthful EVs look old-hat. On the surface, recent new car registration figures paint a positive picture. EVs were up 39.4% year on year in June and up 32.7% year to date. However, dig deeper and the figures reveal that business and fleet registrations accounted for almost 79% (24.953) of the total number of EVs registered; a proportion that has been increasing as private buyers continue to favour petrol and hybrid cars. The Society of Motor Manufacturers and Traders’ CEO, Mike Hawes, said: “Battery-electric vehicle registrations grew again, with the segment up 39.4% as buyers chose to get behind the wheel of a zero-emission car. It’s business and fleets, however, rather than private buyers that continue to drive this growth, thanks to attractive fiscal incentives”. Those incentives include the reduced benefit-in-kind tax that EVs attract (2% at present, compared with, for example, 30% for a 1.5-litre petrol Volkswagen Golf) and salary-sacrifice schemes, whereby an employee is offered an EV on a lease through their employer at an all-inclusive monthly rate with no deposit while paying reduced national insurance contributions. Some experts fear that the incentives are leading to a 2-speed market that risks undermining EVs and disadvantaging private buyers. “The fleet market is a huge opportunity for car makers wanting to sell EVs in volume”, said Philip Nothard, insight and strategy director at services provider Cox Automotive. “Already we can see the likes of new entrant BYD targeting it with £199-per-month deals and low deposits. But where are the incentives for private buyers? There’s no clear incentive for them to transition to EVs. There’s a big imbalance”. This absence of support for private EV buyers, most of whom can only afford to buy used, presents car makers and leasing companies with a challenge: how to manage the flow of ex-company EVs into the used car market without oversupplying it and sending carefully calculated residual values into freefall as retail buyers struggle to afford them. Car finance companies are already ringing alarm bells about the weak residual values of some EVs. Startline Motor Finance CEO Paul Burgess said: “The last year has been a turbulent one for the used EV market and many dealers have been bruised by the reductions in values of stock. Very few seem to be concerned about the huge numbers of ex-company car EVs that will soon arrive in comparatively large quantities. There will need to be a corresponding increase in demand if values aren’t to suffer further”. However, Cap HPI, which has been at the forefront of tracking used EV values, believes their prospects aren’t as bleak as some would believe. Dylan Setterfield, its head of forecast strategy, said: “Values are almost 7% lower than we predicted they would be 3 years ago and there is a genuine concern at the number of ex-fleet EVs coming onto the market, but their volumes are relatively small and, as long as retail demand remains in step, we don’t expect a crash in values to occur”. Setterfield pointed to the steps that fleets are taking to manage their disposals so as not to flood the market, citing as an example Polestar, which takes back ex-lease cars to sell directly from its website. The British Vehicle Rental and Leasing Association agrees that its members are thinking more strategically about disposing of ex-fleet EVs. It said: “EVs are expensive, and the consequences of disposing of them en masse can be severe. So instead, some firms are drip-feeding cars into the market or taking them back and re-leasing them to customers attracted by their lower monthly payments. “For example, a used Jaguar I-Pace is cheaper on a lease than an F-Pace and cheaper to run, too. It also helps that brand allegiance is fading. People are more prepared to consider alternatives like Kia and MG”. Other ways to manage used EV supply include more flexible lease arrangements, says Nothard: “Terms of as little as 3 to 6 months keep cars circulating, which is better for residual values. Keeping an EV in their leasing ‘ecosystem’ also allows a company to continue to make money from it, regardless of what is happening to values. “EV residuals will remain volatile in the short to medium term, but leasing companies are evolving to become mobility operators rather than fixed-term leasing operators. That’s good for them and, in terms of helping to remove the threat of EV dumping and its impact on residual values, good for retail buyers”. +++
+++ VOLKSWAGEN will mark the 50th anniversary of the Golf next year with the introduction of a facelifted 8th generation model, and company CEO Thomas Schäfer has hinted that it could be the last combustion-engined version of the world’s best-selling hatch. Featuring updated styling, revised hybrid powertrains and a reworked cabin with larger displays and upgraded digital functions, it is set to be launched in Europe during the second half of next year. The scheduling forms part of a strategy that will see the model cycle of the existing Golf extended beyond the traditional 7 years of its predecessors, in line with VW’s planned transition to an all-electric European line-up by 2033. As previously reported by Autointernationaal.nl, VW intends to offer the new Golf exclusively with a dual-clutch automatic gearbox in certain models, as part of efforts to further reduce its fleet-average CO2 emissions. As with the upcoming third-generation Tiguan and the 9th generation Passat, the 2024-model-year Golf adopts VW’s new MQB Evo platform. It features a revised structure with stiffened mountings for the rear axle, among other changes that are claimed to boost its overall rigidity. VW has focused much of its attention on the Golf’s plug-in hybrid powertrains. Both the eHybrid and GTE adopt the EA211 Evo turbocharged 1.5-litre petrol engine in place of the older EA211 1.4-litre unit of today’s models. In combination with a new-generation electric motor and an updated electronics package, this results in an 11 hp increase in power for the eHybrid, now with a claimed 215 hp, and a 15 hp increase for the GTE, to 260 hp. A larger-capacity battery is also said to provide both models with a WLTP electric range of more than 100 km. Insiders at VW’s Braunschweig R&D centre confirm efforts to accelerate the start-up process of the Golf’s infotainment system. The replacement of the original Qualcomm chipset with a more advanced Samsung unit in late 2021 is described as “just the first step” in a dramatic technology overhaul. Among new driver assistance systems planned for the facelifted Golf is an updated Park Assistant with automated functionality. It allows the revamped hatch to be manoeuvred into parking spaces remotely via a smartphone, not only in a straight line but also with a degree of steering input. An additional Trained Park Assist function allows you to download parking manoeuvres up to 50 metres in length, enabling the Golf to autonomously park itself. VW has reacted to criticism of the 8th generation Golf with updated digital controls and higher-quality materials for the 2024 model. Included is a new 10.4 inch instrument display and a 12.9 inch central infotainment screen, and the climate control ‘slider’ now lights up for use at night. The digital menu for the infotainment system is also simplified, with larger icons introduced in an attempt to make it much easier to use. Further changes centre on the steering wheel, which receives traditional buttons in place of the capacitive controls of today’s Golf. There is also a new centre console and reworked door trims; the latter with what Volkswagen calls ‘Atrilur’, a recycled material similar to Alcantara, in upper-end Golf models. VW is planning a shift towards mild-hybrid electrification as part of a move to make the Golf compliant with strict new emissions rules. The existing EA211 1.0-litre and EA211 Evo 1.5-litre petrol units are expected to retain similar outputs, with the former delivering 110 hp and the latter either 130 hp or 150 hp. Changes to mid-hybrid eTSI models are set to offer added electric power for improved acceleration and economy. The 2.0-litre four-cylinder petrols and diesels also get mild-hybrid assistance in new eTSI and eTDI models. The same applies to the highly tuned EA888 petrol 4-pot used by the GTI and R, along with the EA288 2.0-litre four-cylinder diesel in the GTD. +++