+++ On May 20 this year, AUDI and SAIC signed a cooperation agreement to jointly develop a number of high-end smart electric vehicles and build the Advanced Digitized Platform focused on the Chinese market. Recently, the CEO of the Audi and SAIC project, Fermín Soneira, revealed that the electric concept car jointly built by Audi and SAIC as part of this cooperation will unveil in November, and the mass-produced version is expected to enter the market in the second half of 2025. The production is expected to take place at the SAIC-Volkswagen Anting plant in Shanghai. Subsequently, within 18 months after the first car is launched, a SUV and a large sedan will follow, totalling 3 planned new models. At this time, it is unknown whether the new models will adopt Audi’s 4-ring logo. Although previously there were rumours that the new models will use the Audi name logo instead of the 4-ring logo. According to Soneira, China is Audi’s largest market in the world and also Audi’s most important overseas market. Furthermore, Soneira pointed out that China’s younger customer groups have more demands for smart technologies such as autonomous driving and vehicle connectivity. Compared with Audi’s consumer groups in other global markets, which are basically between 55 and 60 years old, China’s customer groups are generally younger, with an average age of around 35 years old. For the product strategy, Audi-SAIC focus more on high-end intelligence, targeting the younger generation in terms of design and intelligence, especially high-end customer groups who are willing to accept new technologies and new concepts. Soneira also confirmed that the new models will not be a rebadged version of IM Motors’ (Intelligence in Motion) vehicles, given Audi-SAIC’s focus on high-end intelligence. Additionally, CATL is the battery supplier and Momenta is the intelligent driving solution supplier. IM Motors is an electric vehicle joint venture among SAIC, Alibaba, and ZhangJiang Hi-Tech. Momenta is an autonomous driving startup headquartered in Beijing. Currently, the Audi A7L, Q5 e-Tron and Q6 are sold on the Chinese market via the Audi-SAIC partnership. +++
+++ BYD is rolling out electric-vehicle charging stations and ramping up marketing and customer incentives in Japan, aiming to boost sales in a market that has become a stumbling block in the Chinese automaker’s global expansion. Warren Buffett-backed BYD has become China’s largest EV maker after years of breakneck growth at home. Now, it is expanding overseas, including in Japan, one of the world’s largest auto markets. But Japan remains tough for foreign automakers to penetrate. Demand for EVs has long been sluggish, and the government this year changed how EV subsidies are calculated, reducing them for BYD and several of its rivals, and raising concerns about protectionism. To win over Japanese drivers, BYD has offered discounts on the first 1.000 cars sold of its newest model and is airing TV commercials starring a Japanese actor. The strategy has meant higher-than-expected marketing costs. BYD’s overseas push is being closely watched, not least because the automaker is almost as valuable as GM and Ford combined. Still, some Japanese are wary of buying big-ticket Chinese products due to quality concerns. Asia’s 2 largest economies also share a complicated wartime history and years of political tension. “The cars are great, but I don’t think they’ll sell in Japan”, said 58-year-old Yukihiro Obata, who was visiting a BYD showroom in Yokohama, which neighbours Tokyo, in July with his son. “Japanese people think Japan’s manufactured goods are superior to Chinese and South Korean ones. We just can’t believe Chinese products could be higher quality”, he said. Obata said he was not opposed to buying a foreign automobile and was also considering EVs from Mercedes-Benz, Audi and Hyundai. Shenzhen-based BYD opened its first showroom in Japan in February last year and has, so far, sold over 2.500 cars. By contrast, Toyota sold just over 4.200 battery EVs in Japan over the same period, while nearly 17.000 Tesla cars were registered in the country as of the end of March 2023, according to the most recent industry data available. BYD offers 3 models and now has more than 30 showrooms. “There are people in Japan who absolutely hate Chinese products, so it’s not a good idea to try and force ourselves on them”, said Atsuki Tofukuji, president of BYD Auto Japan. Instead, he wanted to win over people by BYD’s affordability and performance, he said. EVs accounted for just a little over 1% of the 1.47 million passenger cars sold in Japan in the first seven months of this year, according to industry data. That does not include the low-power kei mini vehicles made for the domestic market. EV sales have been slow in Japan because Toyota and other domestic automakers have focused more on hybrid technology. The government in April revamped its EV subsidy plan, saying that will promote the spread of chargers and other infrastructure. Subsidies, which were previously determined by the car’s performance, now take into account criteria such as the number of quick chargers a manufacturer has installed and after-sales service. The subsidy on BYD’s Atto 3, which sells for ¥4.5 million ($30.996), was cut by almost half to ¥350.000 from ¥650.000. The subsidy cuts have dragged on sales, Tofukuji said at a company event in July. BYD responded by offering 0% loans during April to June, and cashbacks on home chargers in July and August. It also plans to put a quick charger at 100 locations by the end of next year, Tofukuji said, a previously unreported plan that could help it qualify for bigger subsidies. To increase its brand awareness, it started broadcasting television commercials starring Masami Nagasawa, a Japanese actor and model. That has helped bring in more customers, although the automaker has now spent more than it originally budgeted for marketing in Japan, Tofukuji said, declining to give the size of the marketing outlay. BYD’s Japanese line-up includes the Seal sedan, which retails for ¥5.28 million for the rear-wheel-drive version and qualifies for a ¥450.000 subsidy. It also sells the Dolphin, priced from ¥3.63 million and qualifying for a ¥350.000 subsidy. The subsidy change could reflect a government drive to safeguard the domestic industry, said Zhou Jincheng, manager of China research at auto research firm Fourin in Nagoya. “They had to take some kind of measures to protect their auto industry”, Zhou said. An industry ministry official said the aim of the change was to create an environment where EVs were sustainably used and promoted “in a Japanese way”. Other car makers that saw subsidies cut included Mercedes, Volkswagen, Peugeot, Volvo, Hyundai, and Subaru. Nissan and Toyota SUVs still qualified for the maximum ¥850.000, and Tesla also saw equal or higher subsidies on the models it sells in Japan. While overall EV sales are low, foreign auto brands accounted for almost 70% of the sales in the first 7 months of the year. The lower subsidy did not stop Kyosuke Yamazaki, a first-time car buyer in his early 30s, from buying a BYD Atto 3, though he missed out on roughly $2.000 in savings because he bought the car after April. He said he liked the longer cruising range of the cars compared to Japanese rivals and did not mind buying from the Chinese manufacturer. “I used to work in Shanghai”, he said. “I know BYD well”. +++
+++ The HYUNDAI MOTOR COMPANY is developing an Extended-Range Electric Vehicle (EREV) to address the so-called electric vehicle chasm, a temporary slowdown in EV demand. Unlike traditional EVs, the EREV uses an internal combustion engine solely to recharge the battery. Hyundai’s EREV, which can travel up to 900 kilometers at a full charge, is set to be tailored for markets with vast land areas, such as the U.S., Canada and China. Hyundai is ramping up the development of EREVs with plans to launch the new model in 2027, according to sources familiar with the matter on August 30. The company aims to begin mass production of EREVs in North America and China by late 2026. Initial offerings are set to include D-class (mid-size) SUVs under the Hyundai and Genesis brands, with the Santa Fe and GV70 as prime candidates. Hyundai’s goal is to sell more than 80.000 EREV units annually. Hyundai and Kia also plan to incorporate EREV technology into the pickup trucks the automakers are currently developing, codenamed TE and TV, which are scheduled for release in 2028 and 2029, respectively. An EREV features a battery, motor and engine, similar to a hybrid vehicle. But unlike hybrids, the EREV operates primarily as an EV, relying on a charged battery for propulsion like a traditional EV. When the battery runs low, the internal combustion engine kicks in to generate electricity to recharge the battery. The driving range of an EREV varies depending on the battery capacity and engine size. Hyundai believes EREVs can address the limitations of traditional EVs: short driving ranges and limited access to charging stations. An EREV can travel up to roughly 1.000 kilometers on a single charge. Battery charging times are shorter because the battery capacity is about 30% of that used in traditional EVs. Since the battery capacity is smaller, the vehicle’s price is also expected to be lower than that of pure EVs. Hyundai previously unveiled an EREV concept vehicle, the i-oniq, at the 2012 Geneva Motor Show, but the company has yet to mass-produce an EREV model. General Motors introduced the first EREV in 2010 with the Chevrolet Volt, which could travel 414 kilometers on a single charge. However, the Chevrolet Volt was discontinued in 2015 when GM introduced the all-electric Chevrolet Bolt. Hyundai plans to strengthen its EV and hybrid product lines, including EREVs, during the transition period to full EVs. Recently, Chinese automakers like Li Auto, Xiaomi and Nio have also launched EREVs. +++
+++ Products from JAPAN which are sold in South-Korea, from cars to beer, whisky and clothes, have been rising in popularity, rebounding from consumer boycotts in 2019 on the back of improving bilateral relations and the cheaper yen. Monthly sales of Japanese cars, including Toyota and Lexus, jumped 31% in August from a year earlier, taking a boost from rival Hyundai’s capacity crunch and consumer preferences shifting away from electric vehicles. South Korean President Yoon Suk-yeol, who made it a priority to mend ties with Japan since taking office in 2022, will have a summit meeting with Prime Minister Fumio Kishida in Seoul on Friday. Sales of Japanese products in South Korea took a battering in 2019 when anti-Japanese sentiment flared after Tokyo imposed export curbs in a row over wartime forced labour. The 2 countries share a bitter history that includes Japan’s 1910-45 colonization of the Korean peninsula. A recent survey showed that 57% of South Korean respondents in their 20s and 30s said they have favourable views toward Japan, compared to 10% who said the same of China. “The public hostility towards Japan has been masked by economic benefits of Japanese products and tours”, said Seonglim Lee, a Consumer Science professor at Sungkyunkwan University. Japanese cars account for a small portion of the South Korean market dominated by Hyundai and Kia, but have been expanding sales in recent years. Lexus, Toyota and Honda, which generate most of their sales from hybrid cars, sold a combined 2.527 vehicles in South Korea in August, up 31% from a year earlier and 15% from the previous month. In contrast, Tesla, Mercedes and BMW saw their South Korean sales of electric vehicles tumble from July. Hyundai Motor saw its EV sales rise, helped by its new, less expensive models. An official at Toyota Korea said it had been getting more requests about hybrid vehicles after some recent EV fires, including one involving a Mercedes electric vehicle on August 1. A Sejong city resident, who asked to be identified only by the name Park, said while he “hates” Japan’s national identity, his trust in Japanese automobile technology led him to buy a Toyota Camry hybrid car. “They are separate matters”, he said, declining to give his full name, citing concerns that he could face criticism from some Koreans who don’t like Japan. Maria Hwang, a Seoul resident in her 60s, said she was not worried about public sentiment towards Japan when she bought a Lexus hybrid vehicle in late August. “I don’t want to be dogged by the history”, she said. Hwang also said she travels more to Japan thanks to the cheaper yen. The number of Korean travellers to Japan surged nearly 40% from a year earlier to a record high of 5.2 million in the first seven months of this year. In 2023, the number of Koreans visiting Japan jumped more than 6-fold from the previous year, accounting for the biggest group of foreign visitors to the neighbouring country. +++
+++ KIA set a new record in terms of monthly electric vehicle (EV) sales per brand in August, thanks to the successful market debut of the company’s new EV3 model, data showed. According to auto industry tracker CarIsYou, the number of newly registered EVs produced by Kia last month totalled 6.398 units. The figure represents a 250 percent surge from last year and a 58.7 percent jump from the previous month. The tally marks the highest monthly record across all domestic and imported brands in the country since the introduction of mass-produced EV models in Korea in 2011. The EV3, Kia’s new entry-level model launched this summer, was the main driver of this stellar performance. The EV3 accounted for 4.436 new registrations, or 69.3 percent of Kia’s total EVs sold last month. Despite the current global EV demand stagnation and heightened public concerns in Korea over safety, Kia’s performance last month highlights a significant growth in domestically produced EV sales. In August, 13.315 EVs were registered in Korea; up 79.2 percent from a year ago. Of those, domestic brands accounted for 9.197 units. Hyundai sold 2.256 units in August, up 33.2 percent from last year. Imported brands as a whole also saw a 22.3 percent on-year increase in sales to 4,118 units. The monthly tally, however, was down 10.2 percent from July. Mercedes-Benz EV sales, in particular, plunged 82 percent to 133 units after a massive fire incident that started from one of the company’s models last month. “Following the fire incident, consumers appear to be interested in purchasing electric vehicles from domestic brands”, an industry official said. “Local brands are generally perceived as safer, partly because they mostly use batteries from local manufacturers, and have more robust systems for battery anomaly alerts, inspections and maintenance”. +++
+++ The antitrust regulator in South Korea launched an on-site probe into MERCEDES-BENZ Korea on Tuesday over allegations that the carmaker provided wrongful information to customers about batteries of its electric vehicles (EVs), officials said. The Fair Trade Commission (FTC) sent inspectors to the office of the company in Seoul, and is collecting data on its car sales and other relevant materials as part of its investigation into the case where a fire broke out from a Mercedes-Benz EV parked at an apartment complex in the western city of Incheon last month. The FTC is looking into the allegation that the carmaker has failed to properly let customers know the fact that only some of its EV models employ batteries manufactured by China’s No. 1 battery maker CATL. The FTC refused to elaborate on details and simply vowed “a stern response to any violations”. +++
+++ In SOUTH KOREA , sales by Domestic electric vehicle makers reached 11.280 units last month, a 90% increase from August 2023′s 5.949 units and a 9% rise from July. However, many believe this growth is primarily due to new vehicle releases in July and August. The sales figures also reflect the impact of a fire involving a Mercedes-Benz EV in an underground parking lot in Cheongna on August 1st. Excluding the sales of Kia’s EV3, launched in July, and Hyundai’s Casper Electric, released in August, the decline in EV demand becomes more apparent. As EV demand cools this year and “EV phobia” spreads due to the Cheongna fire, concerns are growing about a potential contraction in South Korea’s auto market in the second half of the year. The best-selling domestic EVs in South Korea last month were the newly released Kia EV3, with 4.002 units, and the Casper Electric, with 1.439 units. Together, these models accounted for about 48% of all domestic EV sales in August. Without these new models, EV sales would have dropped by 30% compared to July, contrasting with the 4% decrease in overall domestic vehicle sales by the 5 major automakers in August, which totalled 105.504 units. Most other EVs performed poorly. Sales of Hyundai’s flagship EV, the Ioniq 5, which underwent a facelift in March, fell to 1.222 units in August, a 31% drop from the previous month. Sales of the Kona Electric, which sold 508 units in July, halved to 263 units in August. Similarly, Kia’s main EV, the EV6, saw a 55% decrease, with sales falling to 599 units in August from 1.344 units in July. KG Mobility’s EV, the Torres EVX, also saw a significant decline, with sales dropping by 52% to 377 units in August from the 600 to 700 units sold monthly earlier in the year. “The new vehicle effect seen in August likely reflects pre-contracted volumes before the Cheongna fire incident and sales to corporate fleets and rental companies. As this effect fades in September, the EV demand slump could become more pronounced”, an industry insider said. The industry is particularly concerned as the third and fourth quarters are typically the most active periods due to new model releases and increased discount sales ahead of year-end. The Cheongna fire in August could negatively impact sales in the second half of the year, worsening these concerns. Sales data from January to August this year also indicate a significant slowdown in EV demand in South Korea. Hyundai, the market leader, saw its EV sales from January to August drop about 45% compared to the same period last year, totalling around 26.000 units. As a result, more domestic and foreign automakers are considering increasing EV purchase incentives. For example, Hyundai introduced a product last month in collaboration with Hyundai Capital that offers discounts on leases based on the value of the EV battery; the first of its kind in South Korea. The plan, which factors in the retrieval of the battery when scrapping the Casper Electric after 10 years, allows customers to lease the car for 273.000 won per month for 5 years, making it about 14.000 won cheaper than leasing a comparable gasoline car. The South Korean auto industry is also closely watching the government’s EV safety management measures, expected to be announced early this month. Public anxiety surrounding EVs has grown, as comprehensive measures have yet to be released more than a month after the Cheongna fire incident. The industry believes addressing these concerns quickly is crucial to revitalizing the market. “Since the Cheongna fire, various government departments and local governments have been hastily introducing related policies, which has only added to the confusion surrounding EVs. This needs to be rectified”, an industry insider said. Sales of imported cars fell 4.7 percent on-year in August amid a substantial drop in Mercedes-Benz vehicle sales after a massive fire incident involving one of the company’s electric vehicles last month, according to industry data. The number of newly registered imported cars came to 22.263 units in August, down from 23.350 units a year ago, according to the Korea Automobile Importers & Distributors Association. BMW was the most popular brand last month, selling 5.880 units, followed by Mercedes-Benz, which sold 5.286 units. Sales of BMW fell 6.7 percent on-year, while those of Mercedes-Benz plunged 19.8 percent. Tesla, Volvo and Lexus came next, with 2.208 units, 1.445 units and 1.355 units, respectively. In terms of fuel types, imported hybrid registrations totalled 11.041 units, accounting for 49.6 percent of all import sales. Gasoline, electric and plug-in hybrid models followed at 24.6 percent, 18.5 percent and 3.2 percent, respectively. Per individual model, Tesla’s Model Y and Mercedes-Benz’s E300 4Matic were the bestselling cars last month, selling 1.215 and 1.193 units, respectively. Tesla’s Model 3 and Volkswagen’s ID.4 came in third and fourth, with 921 and 911 units, respectively. +++
+++ STELLANTIS entered the second half of the year with an 18% market share in 29 European Union markets in August and maintained its strong position as the second in the European ranking. Citroën, Dodge and Jeep brands performed especially well, increasing in sales versus last year. The company is #1 in France, Italy and Portugal in August and year-to-date (YTD). In France, Stellantis held 30% market share on an YTD basis, with 4 models (Peugeot 208, 308, 2008, and Citroën C3) in the top-10. Italy achieved over 32% market share with 4 models in the top-10 (Fiat Panda, Lancia Ypsilon, Citroën C3 and Jeep Avenger), jumping on the podium last month and consolidating its role as the most sold SUV in Italy. In Germany, sales increased by over 13%, with almost all brands recording double-digit growth versus last year and bringing market share to 14%. Opel Astra sold over 4.300 units in August, becoming the most sold C-Segment car of the market. It even sold better than the Volkswagen Golf. Bulgaria, Croatia, Czech Republic, Denmark, Ireland, and Slovenia all recorded significant sales growth, as well. +++