Monthly Archives: January 2018

FCA’s revival, Opel’s restructuring, Elon Musk’s performance incentives and new battery technologies… What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 22^nd January to 28^th January 2018. A PDF version can be found here.

Favourite stories of the past week…?

• You’re Gonna Miss Me When I’m Gone — Analysts were tearful at the thought of FCA without Sergio at the helm. That he has created shareholder value (particularly if your surname is Elkann) is beyond dispute; but what kind of company is he leaving behind? Is it a crew with outstanding capital discipline, or have they simply refrained from building a portfolio and business structure that will see FCA through rainy days (i.e. when Americans don’t want to buy trucks anymore)?
• You’re As Cold As Ice — PSA are sending a series of very clear messages to the Opel workforce: replacing agency workers in Germany with under-utilised employees from its Polish plant and putting a pause on plans to build the next Corsa in Spain whilst it brings unions to heel. Now is the time for the PSA executive management team to play hardball — before they become complicit in the underperformance of the business.
• The World’s Greatest — Elon Musk has agreed to the world’s most stupendously performance-based pay package, if you believe his PR team. He’ll only get paid if shareholders make untold riches. Sounds great… but I can’t be the only one who marvels at the way it has suddenly taken all the focus away from whether Tesla is performing well enough to be around in 18 months’ time without dollops more cash, can I? Who am I to suggest that a company in the middle of a launch crisis (and this far into launch with this few cars, it is a crisis in anyone’s book) shouldn’t be spending time dreaming of becoming three times the size of Toyota in a decade?
• Promise Me You’ll Wait For Me — Porsche’s electronics guru agrees solid state batteries and lithium air chemistry are super cool. He also says we’re going to have to wait until 2025 and 2030 respectively before we see them in production vehicles.

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

News about the major automakers

BMW ^(history)

• Executives speaking off the record said the long-awaited deal for BMW and Daimler to merge their car sharing units may reach a final agreement next month. The companies will reportedly continue to operate separate brands, pooling technology and back office functions — BMW’s parking assets will also be part of the agreement. (Reuters)

Daimler ^(history)

• Reportedly suffering from supply problems with all-electric version of the Smart ForTwo — waiting times have apparently increased to a year for a new vehicle. (Manager Magazin)
• Executives speaking off the record said the long-awaited deal for BMW and Daimler to merge their car sharing units may reach a final agreement next month. The companies will reportedly continue to operate separate brands, pooling technology and back office functions — BMW’s parking assets will also be part of the agreement. (Reuters)

FCA ^(history)

• Reported financial results for fourth quarter and full year 2017. Although revenue and deliveries fell slightly (to €110 billion and 4.42 million respectively), adjusted EBIT of €7.1 billion was up 16% on 2016 full year. (FCA)
  • Implication: Although hailed by many as a fantastic final set of full year results by (at some point) outgoing CEO Sergio Marchionne, the company remains in a substantially worse net debt position than its major rivals and has narrowed the portfolio to align with current trends. Profitability stems almost wholly from the US market (FCA isn’t alone there) As smart as this may seem, recalling 2007/8 when Fiat’s small car and powertrain designs were hailed as the future of Chrysler shows how quickly things can change.
• During the conference call, CEO Marchionne declined to give an announcement date for his successor but said that it would be someone from within the company and they would be “in the room” during the 1^st June presentation of the company’s future strategy. (Seeking Alpha)

Ford ^(history)

• Reported financial results for fourth quarter and full year 2017 — much of which had been disclosed previously. Although revenue and wholesales were up (to $156.8 billion and 6.61 million respectively), adjusted PBT of $8.4 billion was down (18)% on 2016 full year, more than explained by North America and Europe. During the conference call, analysts gave the executive team a frosty reception when they didn’t provide clear answers to questions about how the company intends to improve. (Ford)
• Announced it will acquire existing partner Autonomic and TransLoc. In addition, Ford’s mobility unit created a raft of vice president positions. (Ford)
  • Implication: this may not be the plan, but the acquisition of TransLoc could be bad news for Stratim, who provide some of the technology that underpins Ford’s Chariot service, since the two products seem to be overlapping.
• Reached agreement with unions in Valencia, Spain on a three year agreement. Salaries will rise 5% in 2019 with lower awards in 2020 and 2021. The company will also make higher pension contributions. (Europa Press)

Geely (includes Volvo)

• Created a joint venture with VIA Motors (no relation to the ride-hailing app) to hybrid and fully electric trucks. (VIA)

Hyundai / Kia

• Hyundai reported financial results for fourth quarter and full year 2017. Global wholesales of 4.507 million units were down (6.4)% versus 2016 — more than explained by China. Revenue of 96.4 trillion KRW was up 2.9% and operating income of 4.575 trillion KRW was down (11.9)%. (Hyundai)
• Kia reported financial results for fourth quarter and full year 2017. Global wholesales of 2.708 million units were down (10.3)% versus 2016 — almost entirely in China. Revenue of 53.5 trillion KRW was up 1.6% and but operating profit of 662 billion KRW was down (73.1)%. (Kia)

Mazda

• Reportedly developing an electric SUV in partnership with Changan that will launch in China by 2019. (Nikkei)

PSA (includes Opel/Vauxhall) ^(history)

• Reportedly halted planning for the next generation Corsa at Zaragoza and began studying alternative PSA sites that will also make products on the CMP platform. The plant manager wrote to workers to say that competitiveness improvements were a “matter of survival” and that the plant is at the bottom of internal competitiveness measures. The move appeared designed to provoke so far resistant local unions into concessions. (Europa Press)
• Announced Atlanta as the site of its North American headquarters. The site will open in February. (PSA)
• Replaced temporary workers in Germany with existing Opel employees from the Gliwice, Poland, factory as part of measures to cut costs. Although affected workers were deeply unimpressed, unions approved the plan. (Handelsblatt)

Tata (includes JLR)

• Cutting production in Halewood, UK by taking down days in Q2. Although media focus was on the effect of Brexit and diesel sales, ageing of the model line-up and cannibalisation from Velar also appear plausible. (The Guardian)
• Rumoured that the replacement for the XJ luxury saloon will be all-electric. (Autocar)

Tesla ^(history)

• Announced a new incentive plan for CEO Elon Musk. He will no longer receive a salary and there will be no annual grant of stock. Instead, the company has created a 12 step programme towards a $650 billion market value, each element of which would release 1% of Tesla’s shares to Mr Musk. If he succeeds he will more from one of the wealthiest humans alive to probably the wealthiest. (Tesla)
  • Implication: We can’t help but detect a world-class sleight of hand here. By creating a set of milestones for Tesla to become one of world’s biggest companies (inflation notwithstanding), in a single move the company has silenced all talk about its medium-term outlook as a going concern. Maybe Mr Musk is motivated by money and not trips to Mars after all? With its focus on EBITDA, revenue and market capitalisation and no mention of cashflow or bottom line profit, Tesla sends a clear signal about the type of investor it welcomes.
• Refuted rumours of problems with Model 3 production, saying that it remained on track to meet its recent ramp-up guidance. (TechCrunch)

Toyota ^(history)

• Announced €300 million of new investment in its Valenciennes plant in France, adding 300 jobs now and 400 later. The factory will have a capacity of 300,000 units annually for vehicles built on the TNGA platform, suggesting that an additional product will be added alongside Yaris (anyone ever heard of Brexit?). (Toyota)

VW Group ^(history)

• During an in-house interview Porsche’s electronics head said that solid state batteries were unlikely to be in production vehicles until 2025 and lithium air would probably not appear until 2030. (Porsche)
• SEAT is converting 115 temporary employees at its Martorell, Spain, plant to permanent positions. (VW)
• Opened a centre in Beijing to research future mobility technologies and applications. VW now has three such facilities: in Asia, Europe and the USA. (VW)
• Executives said VW’s European dealer network will slim down, but not significantly reduce. (Handelsblatt)
• Audi executives are concerned about the impact of WLTP on fleet targets and taxation policy. (Journal Auto)

Other

• Daimler, BMW and VW became the focus of anger from animal rights groups after it emerged that monkeys had been subject to car exhaust fumes during research they funded into toxicity. (Economic Times of India)
• BAIC will list its electric vehicle subsidiary BJEV via an asset swap with an existing publicly traded entity. The deal will value BJEV at around $4.5 billion. (Bloomberg)

News about other companies and trends

Economic / Political News

• Figures released by the EU monitoring body showed continued progress towards the 2021 CO₂ fleet targets. 2017 provisional figures will likely be available around April/May. (ACEA)
• European commercial vehicle registrations were up 3.2% on the prior year in 2017, totalling 2.4 million units. In December, there was a (3.5)% drop on a year-over-year basis, attributed to one less selling day. (ACEA)
• Madrid will implement a city-centre zero emissions zone from June 2018. The zero emissions moniker applies to vehicles wishing to enter the zone — residents and their guests are treated more leniently. (Europa Press)
• Speaking at Davos, Chinese officials said that tariffs on imported vehicles would be reduced “gradually”. (Ecns)

Suppliers

• ZF has reportedly tapped Mahle’s CEO to head the company. (Manager Magazin)
• Prevent Group took over casting supplier Halberg Guss. (Handelsblatt)
• Gestamp and Chinese supplier BHAP (a subsidiary of BAIC) have agreed a joint venture for stamped components. The JV will not include all of Gestamp’s Chinese assets and sales to existing (non-BAIC) customers. (Gestamp)
• Lear announced fourth quarter and full year 2017 financial results. Annual revenue of $20.5 billion was up 10% on 2016. Net income of $1.3 billion was up 35%. (Lear)
• LG Electronics reported 2017 full year financial results, saying its vehicle components arm had a 26% increase in revenue on a year over year basis, but that profit dropped due to increased investment and a slowdown in high margin sales. (LG)
• American Axle and Drexler agreed to partner on electronic differentials for mass market products. (AAM)
• Bharat Forge is opening a new research centre in Israel. (Autocar)

Dealers

• Online car marketplace Carmudi raised $10 million to improve its operations in the Philippines. (Inquirer)
• Indonesian used car platform co.id raised $3.7 million in funding. (Digital News Asia)
• Online peer-to-peer car sales platform CarTrade is buying a majority stake in Shriram Automall India in order to create a physical infrastructure to support its online presence. (Deal Street Asia)
• Gumtree and eBay have merged their online used car sales businesses in the UK so that there will be two websites, but only a single back office. Vehicles will be listed on both sites. (Motor Trader)
• High numbers of UK dealers are in financial distress according to research by an insolvency firm. It says there were over 34% more new and used car dealers in distress (measured court orders to pay debt) compared with a year earlier and 26% of rental and leasing companies are also experiencing problems. (Motor Trader)

Ride-Hailing, Car Sharing & Rental ^(history)

• Maxi Mobility, the firm behind ride hailing operators Cabify and Easy Taxi raised $160 million. The money is reportedly to strengthen existing market positions rather than expand internationally. (TechCrunch)
• Ride hailing firm Blacklane (Daimler is an investor) raised around $40 million for expansion. (TechCrunch)
• French ride-haling app Heetch raised an additional €16.5 million. The company hopes to expand in two to three companies each year. (Journal Auto)
• Executives speaking off the record said the long-awaited deal for BMW and Daimler to merge their car sharing units may reach a final agreement next month. The companies will reportedly continue to operate separate brands, pooling technology and back office functions — BMW’s parking assets will also be part of the agreement. (Reuters)

Driverless / Autonomy ^(history)

• Uber’s CEO believes the company will serve fare paying customers with autonomous vehicles within the next 18 months serving fare paying customers. The initial use cases will be limited to certain areas / trips. He forecast that full autonomy, for a given vehicle to operate any trip without limitations, was 10 – 15 years away. (TechCrunch)
  • Implication: As Ad Punctum’s previous research highlights, there is plenty of value to be gained from vehicles that can operate autonomously on streets / trips with high frequency routes. Autonomous cars, and on-demand transport are likely to take over street-by-street and city-by-city, rather than someone flicking on an autonomous switch in 2025 and the whole world becomes different overnight.
• Lidar supplier LeddarTech and Optis announced a partnership to create accurate simulations of lidar signals that could be used in virtual autonomous vehicle testing. (Optis)
• Waymo will start testing AVs in Atlanta, but this may not lead to a public ride sharing program. (Fortune)

Electrification ^(history)

• Jia Yueting, the internet tycoon behind Faraday Future, Lucid and LeSEE saw affiliate Leshi say it was seeking equity stakes in the companies in lieu of debts incurred. (Deal Street Asia)
• Madrid will implement a city-centre zero emissions zone from June 2018. The zero emissions moniker applies to vehicles wishing to enter the zone — residents and their guests are treated more leniently. (Europa Press)
• Jaguar are rumoured to have decided that the replacement for the XJ luxury saloon will be all-electric. (Autocar)

Connectivity

• Thales and Vector announced a joint venture focused on cybersecurity in safety critical systems. (Press Release)
• HERE will acquire indoor mapping specialist Micello. (HERE)

Other

• Flying taxi company AirSpaceX say that it plans to have 2,500 aircraft in service by 2026. The flights will have a “reasonable” price point and will use a safety pilot. (Futurism)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Electric car converts, high resolution vehicle radar, and business class seating coming to a Transit van near you… What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 15^th January to 21^st January 2018. A PDF version can be found here.

Favourite stories of the past week…?

• If You Change Your Mind — FCA and Ferrari CEO Sergio Marchionne has spent the last week telling anyone who will listen that electrification is the future and by the mid-2020’s you’ll be in the minority if you don’t have some form of e-motor on your vehicle. If he has changed his tune then maybe the remaining electric vehicle hawks need to take a good look in the mirror (e.g. Mazda).
• I Can See Clearly Now — Magna are offering a bigger, badder, radar that can see over 300m and track a bewildering number of targets. High resolution radar is a key part of self-driving system with multiple layers of redundancy so it’s good news to see the products making their way onto the market.
• Sit Down Next To Me — Seat supplier Adient announced a joint venture with Boeing to supply aircraft cabins. Just exploring a natural adjacency, or have Adient spotted that (in time) the two sectors could move closer together in a world where road transport becomes a service?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

News about the major automakers

BMW ^(history)

• Said that the iNext BEV (launching in 2021) will have up to 435 miles of range and the iVision Dynamics (launching in late 2021/early 2022) will have a 0-60 time of 4.0 seconds and a top speed of 200 km/h. (BMW)
• CEO said BMW and will outsell Mercedes and regain top premium brand status by 2020. (Manager Magazin)
• Acquired Parkmobile, in which it already had a stake, a leading provider of B2C parking services. Is Parkopedia next on BMW’s list? (BMW)
• Will begin charging for Apple CarPlay in the US on an annual basis rather than an upfront payment. (The Verge)

Daimler ^(history)

• Daimler’s CEO said he could not guarantee the company would meet the 2021 emissions targets set by the EU and may have to pay fines as a result. He said it was Daimler’s intention to comply but worries that customers could make purchasing decisions that throw off the fleet average. (Les Echos)
• Reportedly paid German dealers €600 per vehicle for each Mercedes-Benz trade-in during 2017 because residual values were far lower than those anticipated by Daimler’s forecast models. (Autohaus)

FCA ^(history)

• CEO Marchionne reiterated previous arguments against breaking up the company (saying that the rump brands would likely not survive if Jeep / Ram were spun off). He also said it makes more sense to buy back shares than pay dividends. (Reuters)
  • Implication: The argument that FCA would not survive without Ram and Jeep seems slightly odd. Whilst probably true, doesn’t it come with the turf when allocating capital efficiently? If it makes sense to phase out underperforming car lines, why not brands and regions?
• CEO Marchionne forecast that by 2025, less than 50% of new cars will have ICE-only powertrains. (Bloomberg)
• Talking with Chinese manufacturer GAC about how FCA could help with a US expansion. (New York Times)

Ferrari

• CEO Marchionne said that the SUV would be launched around the end of 2019 and would be the “fastest SUV” on the market. (Auto Express)
• A leaked presentation indicates the company is working on a high performance 488 V8 with an upgraded engine and extensive use of carbon fibre to save weight. (Auto Express)
• The new Ferrari business plan, due in the next six months, will include hybridisation and potentially a fully electric supercar. (Bloomberg)

Ford ^(history)

• Gave a presentation in which it guided that 2018 profits would be lower than 2017 levels (and the third consecutive annual decrease). Despite a forecast of improved industry volumes, Ford believes that commodity cost and currency headwinds are responsible (page 13 in the chart deck). As a salve, the company will start reporting “Mobility” as a distinct line item — 2017 net loss is around $(300) million (page 9). (Ford)
• Having said that there will be 16 BEVs and 24 hybrid vehicles by 2022 (some of which could be the same nameplates), Ford said that there would be two platforms — a Ford version and a low cost (Zotye-led) design. There will be: 13 BEVs in Asia; 7 BEVs in North America and; 3 BEVs in Europe. Although offering only a small range in Europe, Ford says this will be a “strong” BEV portfolio. (Ford)
  • Implication: Ford’s intention to introduce fewer BEVs in Europe than the US is somewhat against contemporary orthodoxy — most manufacturers expect China and Europe to be the largest market for the vehicles. The issue seems less that Ford is planning too many vehicles in North America and more that the offering could be too thin in Europe.
• In the Q&A after the presentation, executives said Ford is exploring “every option you would imagine” to improve the South America region. In addition, despite the announcements about $11 billion being spent on electrified vehicles, total investment “is not moving a whole lot, it’s really shifting [between programs]”. Finally, there will be some “exciting” mobility announcements at the end of January. (Ford)

Geely (includes Volvo)

• The rollout of new PHEV cabs by the London Electric Vehicle Company has been hampered by problems with the meter that determines the correct fare. (The Guardian)
• Volvo will build Lynk&Co vehicles in Europe and the brand could get its own factory in future. (Caixin)
• Will hope to benefit from a $156 million fund raising by electric car sharing start-up Caocao Zhuanche — the company uses vehicles sourced exclusively from Geely. (China Money Network)

General Motors ^(history)

• Guided financial results for 2018 to be in line with 2017, after which they will improve (page 36). Interestingly, the company didn’t see currency and commodity prices as remarkable — in contrast to Ford (page 35). (GM)
• Said that material choice in the new full size pick-up truck had helped it achieve a 450 lb / 205 kg weight reduction “without a cost penalty” (page 29). (GM)
• Announced the full-size Silverado pick-up will get a 3.0 litre diesel engine, joining offerings from Ram and the recently unveiled Ford F-150. (Detroit Free Press)

Honda ^(history)

• Joined the European manufacturers trade body, ACEA. (ACEA)

Hyundai / Kia

• The South Korean government announced that the Hyundai Group (including Hyundai and Kia) would invest $21.6 billion in new technologies and create 45,000 jobs. Hyundai confirmed it had helped draft the press release but declined to offer independent confirmation of the impacts. (ET News)

Mazda

• Executives continued to make hawkish comments about electric vehicles saying that advances in ICE technology would be sufficient to meet emissions goals and doubting “the age for electric vehicles will ever come”. (Bloomberg)
• Increased production at its Thailand engine plant from 30,000 to 100,000 units per annum. (Mazda)

Nissan (includes Mitsubishi)

• Chairman Ghosn is creating a new structure in the Renault-Nissan-Mitsubishi alliance to divide operations and strategy roles after he steps down. He believes that it was appropriate to combine these functions in a single person (himself) to form the alliance but that it could harm the continued running. (Reuters)
• Nissan’s Infiniti brand said it will start selling both hybrid and BEV vehicles in 2021 and that by 2025 over half of global sales will be vehicles with electrified powertrains. (Nissan)

PSA (includes Opel/Vauxhall) ^(history)

• After setting a target of 80% of vehicles would be electrified by 2023, PSA’s CEO said all vehicles electrified by 2025. The company is planning for 80% of its vehicles to have a limited ability to navigate themselves and 10% to have L4/L5 capability by 2030. (Les Echos)
• Sold 3,632,300 vehicles in 2017 — including 403,900 Opel and Vauxhall units between August and December. (PSA)
• CEO Tavares said production costs in UK plants are twice those of France and that the company is considering alliances in South America. Ford was specifically named as a potential partner. (Reuters)
• PSA executives said that Opel’s expansion into >20 new markets by 2022 would start with Ukraine and Chile. Russia will come some time after 2020. (Les Echos)
• French unions detailed where some of the PSA job losses will take place: 200 at Poissy; 125 at Sochaux; 100 and Mulhouse; 92 at Vélizy; 34 at Metz; 57 at Trémery; 13 at Herimoncourt; 30 at SevelNord; 13 at Valenciennes and 17 at Douvrin. (Journal Auto). The severance terms are likely to be as follows: early retirees will get 70% of salary for between 2 and 3 years; voluntary redundancy will provide between 4 to 8 months salary, plus assistance in finding a new role. (France 3)
• Will increase production at its Portuguese plant by adding a third shift in April, bringing forward a plan to implement the additional capacity from the end of 2018. The additional 225 jobs could become permanent. (PSA)

Renault ^(history)

• Sold 3.76 million vehicles in 2017, an increase of 8.5% on 2016. The company recorded growth of over 25% in both France and Russia — its two largest markets. (Renault)
• Chairman & CEO Ghosn is creating a new structure in the Renault-Nissan-Mitsubishi alliance to divide operations and strategy roles after he steps down. He believes that it was appropriate to combine these functions in a single person (himself) to form the alliance but that it could harm the continued running. (Reuters)

VW Group ^(history)

• The VW Group sold 10.74 million vehicles in 2017, a 4.3% increase on 2016. (VW)
• Announced that it will start local production of VW Polo and Passat cars in Rwanda with longtime partner CFAO. The vehicles are intended for use in ride hailing and car sharing schemes that VAG will launch in 2018. (VW)
• Launched the US market Jetta, saying that it would invest $3.3 billion in North America by 2020. (VW)
• Audi is running a trial V2G scheme, installing power generation and stationary storage batteries in customer’s homes. In addition to managing the home needs, the hardware also sells surplus electricity to the grid. (Audi)
  • Implication: Although such pilot schemes have become de rigeur, the Audi example could be interesting since the vehicles involved are PHEVs, not BEVs.

Other

• Subaru sold 1.06 million vehicles in 2017 and said that it expects a 2% YoY improvement in 2018. (Subaru)
• The Welsh government has taken a small shareholding in TVR. (Auto Express)
• GFG Alliance has made a bid to acquire assets from the shuttered Holden (GM) factory in South Australia. The application envisages production of an electric vehicle. (The Guardian)

News about other companies and trends

Economic / Political News

• European passenger car sales for 2017 were 15,631,687 units, am increase of 3.3% on 2016. Only five markets saw year-over-year drops: UK, Finland, Denmark, Ireland and Switzerland. (ACEA)

Suppliers

• Adient announced a joint venture with Boeing to make seats for aircraft (Adient). Adient also said that it had reduced the weight of its seats by over 20% in the last ten years and is aiming for a further 10kg reduction by 2022. (Adient)
  • Implication: In a future of long distance travel via robo taxi rather than our own cars, seats could have more in common with aircraft cabins than the private vehicles of today. The move is an obvious adjacency but may also help Adient prepare better for the future.
• Delphi announced an investment in PolyCharge, a company with technology that improves inverter performance and cost for electric vehicles. (Delphi)
• Denso acquired 20% of Toshiba Information Systems, a partner in connectivity solutions. (Denso)
• ZF’s acting CEO implied the company is looking for further acquisitions to cover portfolio gaps. (Handelsblatt)
• Dana reported that its outlook for 2018 and 2019 was significantly better than previously expected. (Dana)
• Mitsubishi Electric said it had developed a new type of camera fused with AI algorithms that could replace rear-view and side mirrors whilst also increasing the driver’s situational awareness and reducing workload. (Mitsubishi)
• Magna released guidance for the years through to 2020, forecasting increased profitability and revenue growth in all divisions. (Magna)
  • Implication: It’s easy to forget, but Magna’s contract manufacturing business is as big — in revenue terms — as Tesla (Model 3 launch problems notwithstanding). Magna is the most OEM-like non-OEM and, although the company doesn’t ever say it, the best placed to partner with the likes of Google should they choose to make their own vehicle.

Dealers

• Softbank invested €460 million in German online car dealer Auto1. (TechCrunch)

Ride-Hailing, Car Sharing & Rental ^(history)

• Lyft said “hundreds of thousands” of passengers got rid of a car in 2017 because they use ridesharing. 83% said that they would request a ride in a self-driving vehicle when the service is available. (Lyft)
• Ride hailing start-up Go-Jek is apparently part way through a $1.2 billion funding round. (Deal Street Asia)
• Shell has applied for an operating licence for the FarePilot app in London. At present it directs drivers for services such as Uber and myTaxi to likely hotspots of customer demand, but does not offer its own service. (City AM)
• VW announced that it will launch ride hailing and car sharing schemes in Rwanda during 2018. (VW)
• Chinese electric car sharing start-up Caocao Zhuanche raised $156 million. (China Money Network)
• Lyft said that it was expanding its concierge service and making it easier for companies to sign up. It is targeted at businesses that want to provide transport for their customers rather than employee travel. (TechCrunch)

Driverless / Autonomy ^(history)

• Self-driving start-up ai raised over $112 million in funding. The company hopes to run a fleet of vehicles in Guangzhou, China, following the investment. (TechCrunch)
• Magna released the Icon radar aimed at self-driving vehicles and developed in collaboration with Uhnder, a start-up still in stealth mode. Magna claims a range of more than 300 metres for the sensor. (Magna)
• A back-to-back comparison of camera-based and lidar point cloud generation by the US Army Corps of Engineers found that, for sensors with similar resolutions, lidar data was much faster to process. (GIM International)
  • Implication: The study indicates serious drawbacks for companies pursuing a camera-only solution over those using lidar (step-change advances in processing software notwithstanding). On the other hand, it does show that a camera-based approach can work and has its place in a system with multiple redundancies. Be careful about reading too much into the study findings — the speeds involved and distance between probe and target are not highly representative of autonomous driving.
• PSA is planning for 80% of its vehicles to have a limited ability to navigate themselves and 10% to have L4/L5 capability by 2030. (Les Echos)

Electrification ^(history)

• Having said that there will be 16 BEVs and 24 hybrid vehicles by 2022 (some of which could be the same nameplates), Ford said that there would be two platforms — a Ford version and a low cost (Zotye-led) design. There will be: 13 BEVs in Asia; 7 BEVs in North America and; 3 BEVs in Europe. Although offering only a small range in Europe, Ford says this will be a “strong” BEV portfolio. (Ford)
• After setting a target of 80% of vehicles would be electrified by 2023, PSA’s CEO said all vehicles will be electrified by 2025. (Les Echos)

Connectivity

• Blackberry announced a cybersecurity product called Jarvis that is designed to test the coding used by connected and autonomous vehicles. (CNBC)

Other

• Shell purchased a 43.83% stake in solar energy company Silicon Ranch. (Press Release)
• Alibaba reportedly purchased a stake of ~30% in bike sharing company Ofo for $3 billion. (China Money Network)
• Bicycle sharing company Social Bicycles raised $10 million and rebranded as Jump Bikes. (TechCrunch)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

German OEMs showing off, Ford’s autonomous vision, Toyota autonomous partnerships, and solid state battery costs… What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 8^th January to 14^th January 2018. A PDF version can be found here.

Favourite stories of the past week…?

• We Are The Champions — BMW remains the number one premium automotive company, no… wait a minute… Mercedes-Benz is number one in the premium segment. They’re both right if you are pedantic enough but, then again, who has the time? Where is the prestige in being so widely available anyway?
• I Had A Dream — Ford spent lots of time at CES talking about the partnerships it has formed to make the world a better place and create all sort of interesting architecture that is just what the internet of things needs. The thing is… it isn’t quite clear why Ford isn’t spending more time getting on with what it should be best at… profitably building products that move people around. There are plenty of companies working on the same systems Ford is trumpeting and the company might be best to stick to the knitting.
• Not Afraid — Toyota is partnering with Amazon, Didi and Uber to develop its scalable autonomous platform… precisely the companies it is supposed to be scared are going to eat its lunch. I’m all in favour. Working with these three will help Toyota develop a better product than the competition. You might as well be the OEM that understands the future best.
• Danger! High Voltage — Henrik Fisker reckons $65 per kWh is a realistic aspiration for solid state batteries. If he’s right, and he has been talking to the same people as Toyota and Honda, then the early 2020s will be a very exciting time for electric vehicles and cost parity hawks will be eating their hats.

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

News about the major automakers

BMW ^(history)

• Said 2017 full year sales for BMW, Mini and Rolls-Royce totalled 2,463,526 cars, up 4.1% on 2016. (BMW)
• Following on from other raw materials, BMW and Codelco will create a transparent copper supply chain. (BMW)
• BMW’s Alphabet leasing subsidiary has created a contract hire offering in partnership with Deutsche Post’s StreetScooter to provides financing and maintenance packages for 3^rd party customers. (Golem)

Daimler ^(history)

• Sold 2,424,369 Mercedes and Smart cars in 2017, an increase of 8.8% on 2016. (Daimler)
• Took a stake of “around ten percent” in what3words, a mapping/location start-up that uses unique three word addresses to cover all locations on earth. The company’s address system will be integrated in Mercedes cars. (Daimler)
• Car2Go’s 2.97 million users (up 30% on year-end 2016), took 24 million trips in 2017. (Daimler)
• The proposed separation of the company is reportedly causing tension among top executives. (Manager Magazin)

FCA ^(history)

• Announced a $1 billion investment to relocate Ram pick-up truck production from Mexico to its Warren, Michigan plant by 2020, creating 2,500 new jobs. (FCA)
• Will make a bonus payment of $2,000 to US employees , partly funded by the recent US tax reforms. (FCA)
• CEO Marchionne said the company can double profits by 2022, with Jeep being a major contributor — with potential market share of 20%. (Bloomberg)
  • Implication: Whilst journalists salivated at the thought of 5 million Jeeps rolling off the production line each year, this unit volume would make the brand more ubiquitous than Kia or Hyundai. A more likely outcome is this level of share in particular market and segment niches — still potentially lucrative, just ask Land Rover.
• Partnering with fuel company Eni and the Italian government to improve alternative fuel technologies, including biofuels. (FCA)
• Is recalling about 154,000 Pacifica minivans to correct problems with the engine management software. (FCA)

Ford ^(history)

• Has set a new electric vehicle investment target of $11 billion by 2022, funding 40 electrified vehicles, of which 16 will be BEVs. (Reuters)
• Unveiled the US market Ranger, a facelifted version of the vehicle available in international markets for the past few years. (Ford)
• Previewed the Mach 1, seemingly an all-electric performance SUV concept, at the Detroit show. (The Verge)
• Recalling 3,000 Ranger vehicles to repair faulty airbags, advising customers to immediately stop driving them. (Ford)
• Ford’s Russia JV will hire 600 permanent and temporary personnel and move to a six day week. (Ford)
• Partnering with Postmates to experiment with on-demand delivery of goods (like the Domino’s tie-up). (Ford)
• Has partnered with Qualcomm to develop standardised communications technologies for vehicles to share information with other connected devices (the internet of things). (Ford)
• Is building a Transportation Mobility Cloud with software company Autonomic so that vehicles can be tracked and managed by companies and regional authorities. (Ford)
  • Implication: Although Ford makes it sound revolutionary, many companies are already offering white label solutions for managing fleets and Uber is already sharing (time-delayed) data with authorities and 3^rd The danger for Ford is that it becomes distracted with building infrastructure alternatives and neglects the product and service portfolio that would benefit from its skill set.

General Motors ^(history)

• Unveiled a Bolt without a steering wheel, and requested permission to use the vehicle on public roads in the US. Following Waymo’s example, the company released a “safety report” that explains the workings of an autonomous vehicle without providing any technical substance beyond widely-agreed and long-standing principles. (GM)

Hyundai / Kia

• Hyundai invested in Grab; the two companies will partner on electric ride-hailing fleets. (Hyundai)
• Kia will launch the WiBLE car sharing service in Europe during 2018. (Kia)
• Following the announcement that Hyundai and Kia collectively would launch 38 “green cars” by 2025 covering hybrids, BEVs and fuel cells, Kia said it was planning 16 electrified vehicles — 10 x hybrid/FHEV; 5 x BEV and 1 Fuel cell — leaving 22 for Hyundai. (Kia)

Mazda

• Selected Huntsville, Alabama for the site of the new 300,000 capacity plant it will build with partner Toyota — close to existing Toyota factories. The plant will cost $1.6 billion; reportedly supported by $700 million of incentives. (Mazda)
• Was named as a technology partner in the Toyota e-Palette mobility vehicle program. Mazda executives suggested that the vehicle could have range-extended PHEV variants that use Mazda rotary engines. (Green Car Reports)

Nissan (includes Mitsubishi)

• Nissan, Renault and Mitsubishi announced their venture capital fund. The rumoured €200 million investment turned out to be only the first year amount with the partners prepared to commit up to $1 billion over five years. (Nissan)
• Will end production of the Pulsar and a passenger derivative of the NV200 at its Barcelona plant, with increased production from new pick-ups for Mercedes and Renault compensating for the lost workload. (Europa Press)
• Has sold 75,000 vehicles equipped with its latest L1/L2 ADAS suite, almost all of them were in Japan. (Nissan)

PSA (includes Opel/Vauxhall) ^(history)

• Announced targets for 2018 labour redundancies and hiring; PSA wants to shed 1,300 experienced employees and has committed to hire 1,300 new (presumably cheaper) permanent employees. Overall the company will take on 2,000 young people but many will be on temporary contracts. (PSA)
• Cutting 250 jobs at the Ellesmere Port, UK, plant on top of the 400 redundancies previously announced. Following the changes, the plant will operate on a single shift. (Sky News)

Renault ^(history)

• Nissan, Renault and Mitsubishi announced their venture capital fund. The rumoured €200 million investment turned out to be only the first year amount with the partners prepared to commit up to $1 billion over five years. (Nissan)

Tata (includes JLR)

• JLR sales for 2017 totalled 621,109 units, an increase of 7% on 2016; Jaguar sales were up 20%. (JLR)
• Invested in US ride-hailing start-up Voyage — a company that previously said it believed fares could be paid for by advertising. (JLR)

Toyota ^(history)

• Showed the e-Palette concept vehicle at CES; a scalable electrified and autonomous vehicle. Toyota announced partnerships with Didi, Uber, Amazon and Pizza Hut to develop applications for the vehicle and said it was sharing technology development with Mazda, Uber and Didi. (Toyota)
  • Implication: Toyota seems to have decided that it is overkill to have a platform where mission-specific top hats can be quickly exchanged (an approach favoured by Ad Punctum) — perhaps they are right. Choosing Uber, Didi and Amazon as partners sends a strong message: Toyota wants to work with the companies it thinks are most switched-on, and it isn’t afraid of the consequences.
• Forecasting 2018 US light vehicle industry of 16.8 million units, according to executives. (Reuters)
• Selected Huntsville, Alabama for the site of the new 300,000 capacity plant it will build with Mazda — close to existing Toyota factories. The plant will cost $1.6 billion; reportedly supported by $700 million of incentives. (Mazda)

VW Group ^(history)

• Settled a class action lawsuit (covering 20,000 owners) in Canada over diesel vehicles. (Reuters)
• The VW brand is creating a e-mobility division, headed by a board-level executive, in order to reflect the importance of electrification. (VW)

Other

• Genovation showed the all-electric GXE at CES. In a departure from conventional BEV engineering, the vehicle will be offered with a conventional manual 7-speed gearbox as an option. (Genovation)

News about other companies and trends

Economic / Political News

• Draft documents shared between German political parties during coalition talks appeared to target refits for diesel engines. (Economic Times of India)

Suppliers

• Continental said that it was analysing its structure in response to media reports of a re-organisation. The company gave no specifics by said it was being supported by external advisors. (Continental)
• Bosch completed the sale of its starter motor division, now rebranded SEG Automotive. (Bosch)
• GKN was the subject of an unsolicited bid by Melrose. (Bloomberg)
• Panasonic has developed a scalable electric vehicle platform suitable for bikes and small EVs. (Panasonic)
• Intel/MobilEye added SAIC to the list of partner OEMs that will help it crowdsource mapping data. The company will work with Ferrari to add racetrack analysis to vehicle capability. (Intel)

Dealers

• Ford’s wholly owned dealer group, sold four UK dealerships to current Ford dealer Gates Group. (Motor Trader)
• 56% of executives by KPMG polled predicted 30%-50% of dealerships could disappear by 2025. (KPMG)

Ride-Hailing, Car Sharing & Rental ^(history)

• Singaporean fund BM Mobility is set to buy Malaysian electric car sharing firm UNiRide. (Deal Street Asia)
• Hyundai invested in Grab; the two companies will partner on electric ride-hailing fleets. (Hyundai)
• Kia will launch the WiBLE car sharing service in Europe during 2018. (Kia)
• JLR invested in US ride-hailing start-up Voyage — a company that previously said it believed fares could be paid for by advertising. (JLR)

Driverless / Autonomy ^(history)

• US transport officials said that new rules for self-driving cars would be released in the summer. (Reuters)
• Navya and VIA announced the integration of the Navya AV features into VIA’s app so that customers can summon and then control certain aspects of the Navya vehicle. (VIA)
• Gett, in partnership with MobilEye, will install mapping equipment on 500 London black cabs in order to map streets ahead of autonomous vehicle deployment. (Auto Express)
• Baidu announced a JV with Singaporean group Asia Mobility Industries, in addition to a joint investment fund with $200 million to spend on advanced mobility projects. (Press Release)
• GM unveiled a Bolt without a steering wheel, and requested permission to use the vehicle on public roads in the US. Following Waymo’s example, the company released a “safety report” that explains the workings of an autonomous vehicle without providing any technical substance beyond widely-agreed and long-standing principles. (GM)
• Toyota debuted the e-Palette concept vehicle at CES; a scalable electrified and autonomous vehicle. Toyota announced partnerships with Didi, Uber, Amazon and Pizza Hut to develop applications for the vehicle and said it was sharing technology development with Mazda, Uber and Didi. (Toyota)

Electrification ^(history)

• Valeo said that a BEV with a 48V system could achieve a retail price of $7,500 for a city car. (Valeo)
• Henrik Fisker said in an interview that his company’s research into solid state batteries indicates unit costs of around $65 per kWh are realistic when the technology matures. (CNET)
• Ford has set a new electric vehicle investment target of $11 billion by 2022, funding 40 electrified vehicles, of which 16 will be BEVs. (Reuters)
• Kia said it was planning 16 electrified vehicles — 10 x hybrid/FHEV; 5 x BEV and 1 Fuel cell — leaving 22 for Hyundai (based on prior announcements). (Kia)
• Panasonic has developed a scalable electric vehicle platform suitable for bikes and small EVs. (Panasonic)

Connectivity

• Ford partnered with Qualcomm to develop standardised communications technologies for vehicles to share information with other connected devices (the internet of things). (Ford)
• Baidu’s COO said that in time the company believed that HD maps for self-driving cars could become a bigger business than search. (Technology Review)
  • Implication: Absent a complete monopoly, its hard to see how this assessment can be correct. Maps are already largely commoditised and the value of HERE indicates that even global coverage is only worth a few billion dolllars in enterprise value. In addition, mapping companies will need feedback from the vehicles to improve the mapping service, weakening pricing power… unless they owned the vehicles themselves.
• TomTom launched a service that streams HD maps for AVs (rather than the vehicle carrying an out of date map in its memory), signing up Baidu and Zenuity as launch customers. (TomTom)

Other

• LimeBike said it will introduce e-bikes (LimeBike), as will the Ford-sponsored San Francisco scheme. (TechCrunch)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

Tesla’s crisis, financing for AVs, Toyota’s diesel strategy, Aurora’s collaborations and ICO-funded disruptive start-ups… What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 2^nd January to 7^th January 2018. A PDF version can be found here.

Favourite stories of the past few days…?

• #EpicFail — The Model 3 launch is now officially a catastrophe. Five months in and less than 3,000 cars manufactured, with ramp-up targets pushed back once again. For reference, take a look at the launch of the Mercedes X-Class, two months in and 3,000 produced already. Not fair because it’s based on an existing Nissan (and ignoring the point that it is low on Daimler’s priority list)? What about Nissan Leaf launch? Or Ford Fiesta? Tesla should be taking the existing best practices of the car industry and improving them. Instead, they are bottom of the class and are yet to test the run at rate of the suppliers (where more bad news probably lurks). One upside? All the glib talk of alien dreadnoughts has gone for the foreseeable future.
• Baby I Got Your Money — Local Motors announced a financing scheme for companies interested in buying its autonomous vehicles. Interestingly, they’ve convinced some downstream service providers (they people who would maintain the physical assets) to guarantee financing if they win the operational business. Whether or not this particular product succeeds, it shows an innovative approach to funding at that their may be life after retail.
• You Can Go Your Own Way — Toyota is continuing to withdraw diesel cars from sale in Europe. The company has telegraphed its intent for some time and the momentum is building. Other carmakers are going to have a tough time arguing that diesels are indispensable if Toyota is getting by without selling any…
• Jenny From The Block — BlaBlaCar-esque ride sharing start-up SnagRide launched an initial coin offering (ICO). It’s the second company to try this method of gathering resources for a push into mobility services in recent weeks following CarSmartt. Both companies want the money first and then you’ll get the service second (even though we know success is pretty dependent on ease of use, coverage, quality of service and location — none of which are established upfront). Trends in other industries suggest these won’t be the last two mobility ICOs we see.
• The Man With The Midas Touch — After quietly going about their business since founding, Aurora announced partnerships with VW, Hyundai and Nvidia. Although the three partners didn’t reference each other in their press releases, could this be the first step to a self-driving consortium to rival BMW/Intel/FCA?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

News about the major automakers

Daimler ^(history)

• Sold 401,000 Mercedes-Benz vans in 2017, an increase of around 12 % on a year-over-year basis. The X-Class pick-up deliveries reached 3,300 units since launch in November. (Daimler)

FCA ^(history)

• Increased stock trading volumes led to suggestions that a possible buyer was acquiring shares. (Detroit Free Press)

Ford ^(history)

• Following a letter to suppliers cancelling a Fusion/Mondeo program for North American and European markets, sources told media the products would be part of the line-up for “at least three to four years”. (Detroit News)
• Announced a diesel derivative of the F-150, using a version of the 3.0L V6 engine built in Dagenham, UK. (Ford)
• US sales for 2017 were 2,586,715 units, a (1.1)% decline from 2016. Increases of 2.9% for SUVs and 4.3% for trucks failed to offset a (14.2)% drop in car sales. Despite heavy investment, Lincoln struggled, down (0.5)%. (Ford)

Geely (includes Volvo)

• Volvo reported 2017 sales of 571,577 units, an increase of 7% on a year-over-year basis. Sales were up in all major markets except the USA. Q4 sales were down YoY in EMEA. (Volvo)
• Proton said that 2017 sales in its home market (Malaysia) were 70,991, a drop of (2)% on a year-over-year basis. The company said that expertise from Geely and Volvo had improved “quality points threefold”. (Proton)
• Proton was forced to deny rumours that it would begin accepting Bitcoin as a payment method. (Proton)

General Motors ^(history)

• Announced 2017 sales results for USA (GM), Canada (GM) and China (GM). GM sold 3,002,241 vehicles in the US, a decrease of (1.3)% on a year-over-year basis. Only GMC saw an increase in the US, with many car models suffering. A high point was Bolt deliveries of 23,297 cars. In China, sales were up 4.4% YoY, and with 4,040,789 units sold, represents GM’s biggest market by some margin.

Honda ^(history)

• Honda and AutoNavi will work to create a new payment service for connected cars in China. They will use Alipay (owned by AutoNavi parent Alibaba). (Business Insider)
• Will undergo a slight re-arrangement of its Chinese JVs as GAC Honda takes over Honda China. The move will leave GAC Honda and Dongfeng Honda as the company’s partners in the country. (China Daily)

Hyundai / Kia

• Announced a partnership with start-up Aurora — founded by the former head of Google’s program — to develop a level 4 capable car by 2021 (Hyundai’s earlier target was “possibly” 2022). (Hyundai)
• Will show a pair of concept cars at CES; an all-electric model for KIA and a connected fuel cell vehicle for Hyundai.
• Hyundai reported total 2017 sales of 4,504,825 units, a decline of (6.5)% versus 2016. Kia sold 2,746,188 units, a decrease of (7.8)% versus 2016 (Hyundai)

Mazda

• Applied for a patent to increase driver awareness through gamification — the idea is for the vehicle to monitor whether the driver is paying attention and, if not, challenge them to improve driving characteristics such as throttle control in order to get them to concentrate on the road properly. (Wired)

Nissan (includes Mitsubishi)

• Expected to announce a €200 million fund to invest in mobility companies with 40% of the capital from Nissan, 40% from Renault and 20% from Mitsubishi. (Les Echos)
• Will demonstrate advances in brain-to-vehicle technology at CES. Nissan says that it can be used to improve reaction times and enhance computer-assisted driving. (Nissan)

PSA (includes Opel/Vauxhall) ^(history)

• Will hire 600 people at its SevelNord plant to staff a fourth production shift (for the next 18 months) and has made the night shift permanent. When the shift is in place, annual capacity will be around 175,000 vehicles. (PSA)
• Said that 6,000 internal transfers had taken place during 2017, in part enabled by a revised HR system that has 20 functions and 102 job roles. PSA said that the aim of the previously announced 9^th January meeting with unions is, in part, to further develop this with a new jobs and skills alignment system (dubbed DAEC). (PSA)
• Citroën said that the C3 Aircross had an order backlog of 20,000 units and was running with 75% high series trim. The brand hopes that in 2018, French market share will exceed 10%. (Journal Auto)
• Faurecia signed a memorandum of understanding with Accenture to collaborate on mobility innovation, targeting user experience and services that enhance health and wellness. (Faurecia)

Renault ^(history)

• Expected to announce a €200 million fund to invest in mobility companies with 40% of the capital from Nissan, 40% from Renault and 20% from Mitsubishi. (Les Echos)

Tesla ^(history)

• Tesla reported Q4 2017 production and delivery figures. Total production was 24,565 vehicles, with 29,870 units delivered. The company made 2,425 units of the all-important Model 3, delivering 1,550 vehicles to customers. The company pushed out its ramp-up targets again, hoping to have a weekly run rate of 2,500 units by the end of Q1 and reaching 5,000 units per week by the end of Q2 (six months behind the original target and three months later than it said in November). Although the company had its best ever quarter, Model S continued to plateau, with 2017 overall production down versus 2016 (deliveries were improved). (Tesla)

o   Implication: The Model 3 launch is officially a disaster. Since Job #1 in early Q3, Tesla has built just 2,685 cars and has to find solace in nearly hitting 1,000 units per week (equating to about 1/5^th of the intended production rate and 10/10^th of its perceived requirements). Compare that to the Mercedes-Benz X-Class, a vehicle of limited importance that has shipped over 3,000 units in a month and a half since launch.

Toyota ^(history)

• Ceased offering diesel cars (diesel 4×4, pick-ups and LCVs are available) in Italy from 1^st January 2018. (Europa Press)
• Published details of its latest self-driving test vehicles. The basis is a Lexus LS 600 PHEV saloon and uses four Luminar lidar sensors to provide longer-range (up to 200m) data, with four shorter-range lidar sensors (which look like 100m range Velodyne pucks) in the front wings and bumpers. (Toyota)

VW Group ^(history)

• Porsche was affecting by warning strikes called by IG Metall ahead of negotiations with employers on a new wage agreement. (Handelsblatt)
• Announced a partnership with start-up Aurora — founded by the former head of Google’s program — to develop self-driving systems. Unlike the similarly-timed Hyundai announcement which appears aimed at a retail product, VW have set their sights squarely on mobility as a service. VW said that the two companies have already been working together for six months. (VW)

Other

• BYTON unveiled a production-intent SUV that will go on sale in China at the end of 2019 and US and Europe in 2020. The vehicle makes extensive use of facial and gesture recognition, including for door entry; and does away with side mirrors in favour of cameras. The vehicle will apparently offer level 3 autonomous driving capability from launch, with level 4 enabled via a software update. Two battery sizes will be offered: 71 kWh and 95 kWh. (BYTON)

o   Implication: BYTON is planning a three-vehicle line-up from this platform, with a sedan and MPV to join the SUV after 2020. A starting price of $45,000 for a vehicle with extensive use of technology, a large battery capacity and an autonomous sensor set seems a stretch. Either the company has found a new paradigm in vehicle purchasing and cost management that will shock the industry or profits will be scare.

• Aston Martin sold 5,117 cars in 2017, a 38% increase on 2016 levels. The company said that there had been “sell out demand” for the DB11 model; with the new Vantage and (yet to be launched) new Vanquish, 2018 sales look set to be substantially better. The company said it will exceed its previous £180 million EBITDA target. (Aston Martin)
• McLaren sold 3,340 cars in 2017, a slight increase from 2016. In 2018, overall production could be near capacity of around 4,500 units thanks to the sales rate of the recently-launched 720S and the new Senna model. (McLaren)
• NIO and established Chinese automaker GAC have signed a strategic cooperation agreement and will create a joint venture, 55% owned by NIO and 45% for GAC, investing around $200 million in total. (NIO)
• Chinese carmaker Qoros announced Baoneng Group as a strategic investor in the company, joining erstwhile joint venture partners Chery and Quantum. The partners will inject 6.5 billion yuan into the brand.  (Qoros)
• Local Motors said it had created a financing agreement for its autonomous vehicles that would allow operators to lease over 84 months, subject to teaming up with Local Motors’s approved partners. (Local Motors)

News about other companies and trends

Economic / Political News

• US light vehicle industry for December was 17.76 million; full year sales were 17.2 million units. (Wards)
• UK 2017 full year passenger car registrations of 2,540,617 units were down (5.7)% on a year-over-year basis. (SMMT) The industry trade body tried to rally support for diesels and scrappage incentives by reporting that 2017 sales mix had contributed to an increase in the average emissions of new cars of 0.8% over 2016. (SMMT)
• German passenger car registrations for 2017 were 3,440,000 units, a 2.7% increase over 2016. (KBA)

Suppliers

• Faurecia signed a memorandum of understanding with Accenture to collaborate on mobility innovation, targeting user experience and services that enhance health and wellness. (Faurecia)
• Denso said it would partner with FLOSFIA, a spin-out from Kyoto University, to develop next generation inverters for electric vehicles (Denso). Denso also provided seed capital for ActiveScaler, a developer of mobility as a service management. (Denso)
• LG Chem will expand its Michigan battery plant that supplies the Chevrolet Bolt, amongst others. Capacity will increase from around 40,000 packs annually to 50,000 (note that in 2017, Bolt sold about 27,000 units). The company is reportedly investigating the additional of a further 2 assembly lines. (ET News)
• Bosch and Continental both took “indirect ownership” stakes of 5% each in HERE. (Continental) & (Bosch)

Dealers

• Malaysian conglomerate Samling is considering an IPO of part of its automotive dealer group, aiming to raise $250 million. (Economic Times of India)

Ride-Hailing, Car Sharing & Rental ^(history)

• Following an earlier investment, Didi acquired Brazilian ride hailing firm 99 Taxis in its entirety. (TechCrunch)
• Former Uber CEO Travis Kalanick is reportedly looking to sell 29% of his stake in the company. (TechCrunch)
• Chinese carmaker FAW has taken a 10% stake in a new car sharing operation set up by Mobike. (Reuters)
• Luxury peer-to-peer car rental service Ryde started operations. The company hopes to expand beyond Los Angeles soon. (Ryde)
• SnagRide, a long distance peer-to-peer ridesharing service, launched an initial coin offering, with hefty bonuses for early subscribers. The company is planning to launch full-scale in Q4 2018. (SnagRide)

o   Implication: This is the second recent ride hailing venture funded from an ICO in recent weeks, following on from Carsmartt. It remains to be seen whether either operation will be a success, but if combining “blockchain”, “ICO”, “AI”, “disruptive” and “ridesharing” into a press release results in funding, expect plenty more people to try the same formula.

Driverless / Autonomy ^(history)

• Aurora announced tie-ups with VW and Hyundai. The focus of the VW project is mobility as a service (robo taxis), whereas Hyundai are aiming for a level 4 vehicle by 2021 (presumably for retail). The company also said it would partner with Nvidia to create new hardware for self-driving cars based on existing Nvidia chips. (Nvidia)
• Lidar maker Ouster said that it would sell its recently released OS-1 sensor for $8,000 per unit to research and educational customers — subject to them passing eligibility requirements. (Ouster)
• Autonomous technology developer AIMotive said it had raised $38 million in a Series C round with investors including Samsung, Cisco and Bosch. (AIMotive)
• Local Motors said it had created a financing agreement for its autonomous vehicles that would allow operators to lease over 84 months, subject to teaming up with Local Motors’s approved partners. (Local Motors)

o   Implication: One of the ongoing questions around on-demand fleets is how they will be funded in the absence of retail customers. Local Motors’s initiative represents the first attempt by a non-traditional OEM to answer that question and provides an interesting possibility: service providers (in this case operational support companies) could leverage their balance sheets to provide funding in return for long-term contracts with guaranteed income streams. Not quite a perfect analogy, but almost as if airports provided financing for planes if the airlines guaranteed for fly from there twice a day for ten years.

Electrification ^(history)

• Denso said it would partner with FLOSFIA, a spin-out from Kyoto University, to develop next generation inverters for electric vehicles. (Denso)
• LG Chem will expand its Michigan battery plant that supplies the Chevrolet Bolt, amongst others. Capacity will increase from around 40,000 packs annually to 50,000 (note that in 2017, Bolt sold about 27,000 units). The company is reportedly investigating the additional of a further 2 assembly lines. (ET News)
• Sales of electrified vehicles in Norway passed 50% in 2017. 20.9% of vehicles were fully electric, 18.4% were PHEVs and 12.9% were non-plug in hybrids. There were also a number of used fully electric cars imported from other markets. Average new car CO₂ emissions were 82 g/km. (BIL)

Connectivity

• Denso said it had provided seed capital for ActiveScaler, a developer of mobility as a service management. (Denso)
• Bosch and Continental both took “indirect ownership” stakes of 5% each in HERE. (Continental) & (Bosch)
• Blackberry and Baidu announced a partnership that will see Blackberry’s QNX software underpin Baidu’s self-driving car software. (Reuters)
• HERE partnered with EPAM to extend HERE’s object tracking technology to non-automotive markets. (HERE)
• MapBox has acquired the IP and a development team from MapZen. (TechCrunch)
• TeleNav is launching an in-car advertising platform that aims to help OEMs with both sales and targeting. The idea is to create revenue that would pay for services customers could subscribe to. (Telematics News)
• Honda and AutoNavi will work to create a new payment service for connected cars in China. They will use Alipay (owned by AutoNavi parent Alibaba). (Business Insider)

Other

• Didi is reportedly buying Chinese bicycle sharing operator Bluegogo. (South China Morning Post)
• Chinese bicycle sharing start-up Gonbike raised $15 million. The company offers bicycles equipped with invisible locks. (Deal Street Asia)
• NIO Capital participated in the Series A round of AI digital imaging company Black Sesame. (Deal Street Asia)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.

VW’s resurgence, re-badged SEATs, labour problems, half-price lidar and Mission E sales forecasts … What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 28^th December 2017 to 1^st January 2018. A PDF version can be found here.

Favourite stories of the past few days…?

• Guess Who’s Back? — After making 6 million vehicles in 2017 it looks like the VW brand has been rehabilitated after the diesel scandal. But what can we really learn from the episode? VW didn’t do a particularly great job of dealing with the situation — including accusations of taking European consumers less seriously than Americans… Do customers even care?
• Underneath Your Clothes — VW are reportedly planning to create a new brand in China by simply selling SEATs badged as something else. Could the cast-offs from underperforming marginal Western brands / nameplates become the new way to satisfy government officials that technology transfer is taking place whilst protecting key brands?
• This Is My Fight Song — Ford and Hyundai start 2018 with labour unrest. Over the past few years, automakers have benefitted from rising sales whilst costs have stayed pretty well under control (emissions technologies notwithstanding). Will managers be able to maintain discipline if workers threaten sales?
• It’s No Secret — Porsche’s PR strategy for Mission E seems to rely on giving selected journalists scoops on juicy details every few months. This week we got some more. Three power levels, pricing for an entry level car in the $75k – $80k range (previously we knew it was “like Panamera”) and a production target of 30,000 vehicle annually. Begs the question though… if the car is going to be so good and at the same price level as a Model S, why do Porsche only expect to sell about 60% as many? Under confidence? Or are they anticipating a wave of all-electric vehicle launches that saturate the market?
• The Price Is Right — Velodyne are slashing the price of their entry-level product by 50% (it should be <$4,000 now). Just being nice to customers or defensive tactics?

News is arranged by company and topic. Stories that apply to more than one company or topic are duplicated.

Find our archive here.

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

News about the major automakers

FCA ^(history)

• An executive said that the next all-new Alfa Romeo product, an SUV, will be a “little bit bigger” (by around 200 kg) than the recently launched Stelvio. They also implied that the likely powertrain is a 48V 2.0 litre gasoline engine, citing some DNA problems with a plug-in hybrid. (Detroit Bureau)

Ford ^(history)

• Experienced industrial unrest in Craiova, Romania — employees staged an impromptu strike just before Christmas and this may continue in the new year. A recent internal memo reportedly asked whether workers wanted “a higher salary increase or to secure the future of this factory”. (World Socialist)

Hyundai / Kia

• Union leaders in South Korea pencilled in strike action beginning on January 2^nd after talks on a new labour agreement failed to reach an agreement by the end of 2017. An earlier tentative agreement was rejected by workers in a ballot. (Wards)

PSA (includes Opel/Vauxhall) ^(history)

• Reportedly meeting with French unions to discuss a new labour law that came into force during December. There is speculation that PSA wish to use the new regulations to make it easier to separate employees. (Les Echos)

Renault ^(history)

• Reported final 2017 French market registrations of 673,869 units in total — 554,505 Renault cars and LCVs and 119,357 Dacia vehicles. The total share was 26.4%, slightly down on 2016. (Renault)

Toyota ^(history)

• A director at Toyota’s Indian JV said the government’s plan for all-electric vehicle sales by 2030 was “not practical and not the way forward”, calling for more leeway in meeting the underlying environmental aims. (Times of India)

VW Group ^(history)

• Will reportedly create a new brand in China with joint venture partner JAC Motors with a portfolio made-up of re-badged SEAT vehicles. As part of the plan, some models may launch in China before traditional markets, including SEAT’s first electric vehicle. (Autofactil)
• Porsche sources told a reporter at a recent test that the Mission E all-electric sports car will have three power levels: 300 kW, 400 kW and 500kW, with the higher power levels delivered through upgraded rear wheel drive units. The target starting price was said to be $75,000 – $80,000 with an annual sales goal of 30,000 units. (Automobile)
• The German constitutional court ruled against VW’s attempts to stop a special auditor appointed by shareholders from looking into the diesel scandal. (Der Spiegel)
• Confirmed that the VW brand manufactured more than 6 million units in 2017, setting a new record and marking a return to form following the diesel scandal. (VW)

Other

• Ssanyong announced global sales of 143,685 units in 2017, a decrease of (7.8)% from 2016. A 3% increase in South Korea partially offset a (29)% fall in export markets, mostly a c.(13)k drop in Tivoli. (Ssanyong)

News about other companies and trends

Economic / Political News

• China acted to improve emissions levels by banning 553 vehicles from sale effective 1^st January 2018. (Xinhua)
• Spain’s passenger car market had 1,234,931 registrations in 2017, an increase of 7.7% over 2016. (ANFAC)

Ride-Hailing, Car Sharing & Rental ^(history)

• SoftBank said it had successfully closed its tender offer for 15% of Uber. Based on the share sale, Uber is valued at around $48 billion. (TechCrunch)

Driverless / Autonomy ^(history)

• Didi Chuxing’s CEO said that he believes the company could be the second-best developer of self-driving cars — behind only Waymo/Google. (QZ)
• Velodyne said it was reducing the price of the VLP-16 lidar unit by “up to 50 percent”. Although the press release contains no specific pricing, this implies unit costs of around $4,000 for the 16-line unit. (Velodyne)
  • Implication: In addition to being a market share grab / defence following on from a number of recent lidar announcements, recent improvements in signals processing hardware may mean that some groups are interested in using an array of 16-line units rather than waiting for more capable products to fall in price.

Electrification ^(history)

• Shenzhen completed the transition of its public transport bus fleet to 100% all-electric vehicles, meeting an earlier target commitment. The Chinese city has around 16,500 buses in service. Taxis are next on the list. (EV Obsession)

Connectivity

• Zurich Insurance acquired telematics hardware supplier Bright Box. (Telematics News)

Other

• Repair bills in the 2020s could be lower thanks to advances in self-healing glass by Japanese researchers. (Autocar)

SIGN UP TO GET THE WEEKLY BRIEFING EMAILED TO YOU

Find our archive here.