Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news

Auto Industry Briefing — week ending 25th March 2018

PSA on course for 2021 CO2 targets, BMW would love to sell you an electric car… from 2020 onwards, Ford and Mahindra’s cooperation and a new lease of life for diesel… What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 19th March to 25th March. A PDF version can be found here.

Favourite stories of the past week…?

 

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

Find our archive here.

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News about the major automakers

BMW (history)

  • Released the 2017 annual report and outlook for 2018, warning that it would have to make substantial investments in new technologies but still hoped to have profit before tax in line with 2017. (BMW)
  • German authorities raided BMW offices looking for evidence of emissions cheating. (Autocar)
  • BMW iVentures led an investment round in lidar maker Blackmore, with Toyota also participating. (Blackmore)
  • The long-rumoured mobility asset pooling between BMW and Daimler could have a larger scope than previously anticipated and could include Daimler’s stake in ride hailing firm mytaxi. (Manager Magazin)
  • May suspend production of petrol powered X5, X6, 6 Series and 7 Series vehicles in Europe from middle of 2018 into 2019 so the company can comply with RDE, hybrids are not affected. (Manager Magazin)
  • Does not want to “scale up” with the (recently launched) fourth generation of BEVs and will wait for the fifth generation (due in around 2020) because it will deliver a “two digit” percentage cost reduction in costs. (Reuters)

Daimler (history)

  • The China-specific Denza brand (a JV with BYD) launched the updated Denza 500 BEV with a claimed range of around 500 km. (Daimler)
  • The long-rumoured mobility asset pooling between BMW and Daimler could have a larger scope than previously anticipated and could include Daimler’s stake in ride hailing firm mytaxi. (Manager Magazin)

Ford (history)

  • Announced pricing for the FordPass SmartLink dongle that can be plugged into the ODB port of Ford vehicles from 2010 onwards, enabling a certain amount of connected services. It looks expensive — $16.99 per month for a minimum 24 month contract, plus installation. (Ford)
  • Signed an MoU with Mahindra to develop a series of vehicles including a C-sized crossover and a small electric vehicle, aimed at emerging markets. The C-sized crossover will be based on a Mahindra platform; the partners will develop a connected vehicle platform; and the press release raised the possibility of Ford buying Mahindra powertrain to augment its existing offerings. (Ford)
  • Led a $65 million funding round in 3D printing company Desktop Metal. (3D Printing Industry)
  • Announced an online platform in the USA called Ready.Shop.Go that will create time-limited offers for consumers that include financing and trade-in. (Ford)
  • Announced executive changes, including the departure of the recently-recruited chief brand officer. (Ford)

Geely (includes Volvo)

  • Lotus CEO talking about parts sharing with Volvo, says that the new SUV will likely be from Volvo’s platform and that the company is looking at ways to make-up for engines being no bigger than I4.

Hyundai / Kia

  • The head of Hyundai’s South Korean union expressed concern over the effect of electric cars on factory jobs, saying “electric cars are disasters. They are evil.”. (Economic Times of India)

Nissan (includes Mitsubishi)

  • Aiming to sell 1 million electric cars per year by 2022, a mix of BEVs and hybrids. The company gave a bit more detail on its intended product portfolio saying that there will be 8 new BEVs by 2022, including a kei car and a C-sized crossover. There will also be an “electric car offensive” in China. (Nissan)
  • Told US dealers that it was slowing production at a number of plants as it aims to reduce inventory to between 50 to 60 days. (Bloomberg)
  • Opened a lithium ion battery recycling plant in Japan as a joint venture with Sumitomo. The plant will repurpose used car batteries and depending on the condition may re-use them in vehicles or put them into packs for industrial vehicle use or stationary storage. (Nissan)
  • Started offering “refabricated” battery packs for the Nissan Leaf — using a combination of new and good condition used components. At the moment, the offer is for Japan only. Pricing for a 40 kWh packs is around $7,800, giving an effective per kWh price of $195. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Opel’s R&D centre in Rüsselsheim will become a centre of excellence for a variety of Groupe PSA technologies, including manual transmissions and seats. (PSA)
    • Implication: Although at the surface this is good news for Opel workers, replacing research that was formerly conducted for General Motors, a comparison of the “new” work to technical elements that are becoming either commoditised or obsolete might worry them.
  • Signed a licensing agreement to manufacture automatic gearboxes in France designed by Aisin (the 6-speed EAT6) instead of importing them from Aisin’s factory in Japan. (PSA)
  • Announced a series of changes for powertrain plants. The PSA-developed I3 gasoline engine will be produced in Opel’s Poland and Hungary factories and manual gearbox capacity will be added in Austria (Opel) and Metz. In addition, PSA confirmed the start of electric motor production at Trémery in 2019. (PSA)
  • Peugeot’s head of brand said that the company will “absolutely hit our CO2 targets for 2021”, despite the reduction in diesel sales and without needing all-electric vehicles (although hybrid electric vehicles will be sold). (Autocar)

Tesla (history)

  • Shareholders approved CEO Elon Musk’s new pay scheme: he will receive no salary and only earn stock awards by growing the company’s business and market capitalisation. (CNBC)
  • Reportedly held talks with AI vision company Cortica that could lead to an acquisition or partnership. (Reuters)
  • Tesla says that its large battery installation in Australia is being underpaid for the grid stabilisation it provides because the current billing rules do not start counting power supplied until six seconds after the request is made (Tesla says it responds almost instantaneously). (Sydney Morning Herald)
    • Implication: Tesla’s complaint in this case is that grid stabilisation billing rules are written around fossil fuel power stations, this technicality (with real financial implications) could recur in other territories and indicates lobbying will be required to ensure that V2G charging schemes are fully competitive.

Toyota (history)

  • Suspended autonomous car testing on public roads in the USA following Uber’s accident (even though no Toyota vehicle was involved). (Business Insider)
  • Reportedly held talks with Uber about buying driverless technology for use in Toyota vehicles. (TechCrunch)
  • BMW iVentures led an investment round in lidar maker Blackmore, with Toyota also participating. (Blackmore)

VW Group (history)

  • VW will launch a five-seat version of its US market specific Atlas SUV, saying that the vehicle represented an investment of around $340 million. (VW)
  • VW Group’s CEO said that the company’s top management team needed to become more feminine, younger and more international. (Handelsblatt)
  • There was reportedly boardroom unrest with some board members believing that the discussion had been structured to reduce their oversight. Answering accusations that he and other executives were overpaid, VW’s CEO it was justified in part because he has “one foot in jail” because of responsibility for the company’s actions — a slightly odd statement given that the only person to face jail over the diesel scandal was a non-C suite executive. (Der Spiegel)
  • Audi’s CEO wants the brand to sell 200,000 all-electric vehicles by 2021 and is reportedly contemplating actions as radical as only offering the next generation TT and A8 as BEVs. (Manager Magazin)
  • Porsche employees will get a bonus of over near €9,600 due to the company’s record performance in 2017 (and a token of appreciation for reaching 70 years as a going concern. (Porsche)
  • VW’s financial services division said that although profits were up, there is a potential residual value drop of 500 euros per vehicle on diesel-engined vehicles. (Handelsblatt)
  • SEAT released its annual report an confirmed the brands modest electrification plans– one BEV (thought to be SEAT’s version of the e-Up city car) and a hybrid version of the Leon will appear in 2020. (SEAT)

Other

  • Chinese / Italian start-up X Electrical Vehicles (XEV) says that its modular 3D printing line will be able to produce 500 vehicles per year. The company claims a development time for a new model of 4 months. (SCMP)
  • Pininfarina is said to be planning a four-car all-electric line-up, bankrolled by owner Mahindra. (Autocar)
  • A group of carmakers launched a website that will contain details of all US recalls. (Press Release)
  • Researchers developing a next generation diesel exhaust technology called ACCT which overcomes low temperature issues with SCR said that it could be ready for production in two years. (Autocar)
  • Chinese electric car start-up CHJ Automotive raised $473 million, total funding is $908 million. (Deal Street Asia)
  • Pagani are reportedly working on an all-electric car that will launch in 2025. (Performance Drive)

 

News about other companies and trends

Economic / Political News

  • European carmakers’ body ACEA asked for UK vehicle CO2 figures to count towards 2021 fleet average targets even though the country will have left the EU and the transition period will have ended by then. (ACEA)
  • ACEA issued a new position paper on car safety, arguing for priority to be given to active safety systems, those that rely on software and sensors to prevent accidents occurring. This is in part due to a desire to keep vehicles lighter by avoiding further components that help survive a crash. (ACEA)
  • Average CO2 of new cars sold in Spain rose in 2017 versus the prior year, the first time in a decade. (Europa Press)
  • The US Environmental Protection Agency is drafting new standards that will lower fuel consumption standards in the early 2020s — since some states may keep the stricter limits, it might not make life that much easier for automakers. (Bloomberg)

Suppliers

  • Autoliv announced the executive team that will lead it, and Veoneer, once the latter has been spun off. (Autoliv)
  • Adient agreed a joint venture for automotive fabrics with Arvind Group. (Autocar)
  • Dana is planning a secondary listing on the London stock exchange as part of its takeover plans for GKN. (Dana)

Dealers

  • US dealer Group 1 gave a Q1 profit warning, citing weakening market conditions in the US and UK and a need to invest in used car sales. (Group 1)
  • Data from the UK Finance and Leasing Association for January showed that although the number of vehicles financed was down, it fell by less than the overall market and the level of finance leases by value was strongly up — potentially due to better mix or pricing, but most likely because customers are borrowing more. (FLA)
  • German online car sales broker Autohaus24 (owned by Sixt) says that demand for cash sales is so weak it will only offer financing and leasing deals. (Autohaus)

Ride-Hailing, Car Sharing & Rental (history)

  • As rumoured, Uber and Grab agreed to merge their entire Southeast Asia operations. Grab will run the combined business, with Uber taking a 27.5% stake in Grab. (Press Release)
    • Implication: Uber is now part ride hailing firm and part ride hailing-focused VC, but it isn’t clear why that makes sense as a strategy. Perhaps Uber’s future lies in being more highly valued for its stakes in other companies than its core business (a la Yahoo)?
  • The long-rumoured mobility asset pooling between BMW and Daimler could have a larger scope than previously anticipated and could include Daimler’s stake in ride hailing firm mytaxi. (Manager Magazin)

Driverless / Autonomy (history)

  • Further details emerged of the Uber crash and various pundits and experts weighed in, including the Teamsters union. Waymo’s CEO said his company’s software “would be able to handle situations like that one” and Velodyne said that they would have expected their lidar to detect the pedestrian, but made clear that it is the responsibility of other systems to interpret the lidar data and make appropriate decisions. Police released a video of the incident which appears to show the vehicle failing to recognise the pedestrian crossing the street, even after they appear in the glare of the headlights — indicating either radar and lidar failing to detect their presence, or that the object identification software wrote the sensor data off as a false positive. (Twitter)
    • Implication: Journalists were keen to seek comments from the suppliers of hardware used by Uber in its self-driving vehicles, namely Volvo and Velodyne, after the accident. It remains to be seen whether there is a reputational risk, or possibly even involvement in lawsuits, in being a supplier to self-driving programs that experience crashes
  • Apple have reportedly increased the size of their test fleet in California to 45 vehicles — second only to GM’s Cruise in the state. (TechCrunch)
  • Toyota reportedly held talks with Uber about buying the latter’s driverless technology. (TechCrunch)
  • BMW iVentures and Toyota participated in an $18 million investment in lidar maker Blackmore. (Blackmore)
  • Gatwick airport in the UK will trial use of autonomous vehicles “airside”, saying that its fleet of 300 vehicles are stationary 90% of the time. (zdnet)
    • Implication: This sort of geofenced application, with controlled conditions and relatively light traffic, is perfect for autonomous vehicles to operate efficiently but with the risk and cost of occasional failures being minimised.

Electrification (history)

  • Bollinger increased the largest battery pack it will offer to 120 kWh, providing 200 miles of range (Electrek)
  • Tesla says that its large battery installation in Australia is being underpaid for the grid stabilisation it provides because the current billing rules do not start counting power supplied until six seconds after the request is made (Tesla says it responds almost instantaneously). (Sydney Morning Herald)
  • Audi’s CEO wants the brand to sell 200,000 all-electric vehicles by 2021 and is reportedly contemplating actions as radical as only offering the next generation TT and A8 as BEVs. (Manager Magazin)
  • Nissan started offering “refabricated” battery packs for the Nissan Leaf — using a combination of new and good condition used components. At the moment, the offer is for Japan only. Pricing for a 40 kWh packs is around $7,800, giving an effective per kWh price of $195. (Nissan)

Other

  • Bicycle rental companies in Seattle including LimeBike and Spin had to issue warnings to customers after a number of bikes were found to have brake wires cut. (Geekwire)

 

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Auto Industry Briefing — week ending 18th March 2018

VW’s electric vehicle volume forecast, white label autonomous cars from Magna and Ford’s not-so-noteworthy product plans… What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 12th March to 18th March. A PDF version can be found here.

Favourite stories of the past week…?

  • Building Steam With A Grain Of Salt VW showed their hand on electric vehicles, saying that the Zwickau plant will be set up to churn out 330,000 cars a year at a comparable price to a diesel model from 2020 onwards. How many people are still saying it’s a PR move that won’t lead to any cars on the road?
  • Nothing’s Gonna Stop Us Now Magna said it will invest in Lyft and the two will collaborate on a self-driving vehicle. I think that this might be the strategic move from Magna that I’ve been waiting for. If they can prove their ability to make a proficient almost-white label product without OEM help then Magna will be on everyone’s shopping and Christmas card list.
  • Apparently Nothing Ford presented some of its plans for new products in North America. The problem is, there wasn’t really very much in there that was either new, hadn’t already been leaked or wasn’t obvious. It really boiled down to two key things: a new rugged small SUV (not the Bronco, a soon-to-be-released rugged SUV) and a scaled-back commitment on BEVs (one less than in January).

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

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News about the major automakers

Daimler (history)

  • Will invest, along with a joint venture partner, to expand facilities in Thailand to produce electrified vehicles and batteries. (Daimler)

Ford (history)

  • Gave an in-depth new product presentation confirming it will make a small “rugged” SUV in addition to the Bronco. The company also plugged its bundled driver assistance suite called co-pilot360, measuring it against a carefully-selected set of not-best-in-class competition. The presentation included an array of examples to prove progress was being made in the battle for “fitness”, many of which predate the current management team. (Ford)
    • Implication: the presentation was long on words and short on new detail. Aside from the rugged small SUV, the company appears to have reduced its near-terms electric vehicle plans. In January Ford promised seven BEVs by 2022 . Without explanation, that number is now six. During the event, Ford also showed “several hundred” journalists a set of “never-before-seen” concepts (which one imagines includes the Bronco and rugged small SUV) on an off-the-record basis. (TechCrunch)
  • Ford said that in a few years only 14% of vehicles sold by the brand in North America will be cars. (Ford)
  • Issued a recall for around 1.4 million vehicles in North America to correct problems with steering wheel bolts, a further 6,000 vehicles for clutch problems. (Ford)
  • UK unions called for Ford’s two engine plants, at Dagenham and Bridgend, to be “repurposed for new electric models or battery technology”. Ford dismissed the suggestion. (Auto Express)
    • Implication: With the technical competences of engine building sharing little with battery and electric component production (a claim backed up only by my years of shop floor precision machining experience), it is hard to see the industrial logic for carmakers. Unions have been slow to appreciate the looming jobs crisis for those making engines and transmissions — the time to call for action line this was several years ago.

Geely (includes Volvo)

  • Volvo said that the Polestar 1, a plug-in hybrid sports car, would retail for over €130,000 — the brand would prefer for customers to rent it instead. (Electrek)

General Motors (history)

  • Reportedly planning peer-to-peer short term rentals through Maven — although new to the US, GM had a scheme in Europe when Opel ran a service underpinned by Tamya called “Car Unity”. (Bloomberg)
  • Is investing $100 million to update the factory that makes the Chevrolet Bolt, giving it the capability to produce the autonomous version starting in 2019. The investment will also create a sensor suite assembly line nearby. (GM)

Hyundai / Kia

  • US regulators are reviewing Hyundai and Kia vehicles for a potential safety risk where airbags might fail to deploy in the event of a head-on collision to see if there is a systemic problem with the design. (Reuters)

Mazda

  • Announced a collaboration with two Japanese companies, ELIIY Power and Uber Industries to develop lithium ion batteries as a replacement for lead acid starter motor products. If successful, the collaboration appears to have 48V systems in its sights. (Mazda)
    • Implication: It remains to be seen what competitive advantage this might bring Mazda. Although the lead acid technology is old, it has remained in use for 12 volt systems because, in no particular order, it is: cheap, reliable, recycling is cost neutral, apparently not in any danger of a capacity / commodity squeeze.

Nissan (includes Mitsubishi)

  • The Renault Nissan Mitsubishi alliance announced a series of joint appointments to strengthen shared operational teams. Many of the announcements were matched pairs. As part of the move, cooperation with other OEMs, such as Daimler, was made an alliance responsibility rather than sitting with the individual companies. (Nissan)
  • Aiming to produce cars with solid state batteries by 2030, with 2025 as an internal stretch objective. (Next Green Car)

PSA (includes Opel/Vauxhall) (history)

  • Partnering with the Namibian government to create a local assembly plant with a capacity of 5,000 units per annum. Initial products will be the Peugeot 3008 and Opel Grandland X. (PSA)
  • Faurecia said it had invested in Enogia, a maker of turbines that convert recovered heat into electricity. The product is currently aimed at commercial vehicles and heavy industrial applications. (Faurecia)
  • The company’s Chinese joint venture is reportedly struggling from warring factions of Peugeot and Citroen representatives, a muddled portfolio and a series of ill-plannned office moves. (China Daily)

Renault (history)

  • The Renault Nissan Mitsubishi alliance announced a series of joint appointments to strengthen shared operational teams. Many of the announcements were matched pairs. As part of the move, cooperation with other OEMs, such as Daimler, was made an alliance responsibility rather than sitting with the individual companies. (Nissan)

Tesla (history)

  • Said it had improved Model S and Model X production efficiency and that 100,000 vehicles could be produced on a two shift pattern with minimal overtime, as opposed to a three shift pattern and lots of overtime before. It wasn’t really clear if this is new information since Tesla had previously told investors in 2015 that it could produce around 150,000 units per year (which would work out at 100,000 on two shifts), or it had just taken the company two years to fully ramp-up — bad news for Model 3 if so. (Reuters)
  • Reportedly recently raised prices at supercharger stations by between 20% and 40%. The new charging costs are around $0.20 per kWh, which Tesla says is to recover the cost of electricity, making it difficult to explain how it will be able to give Tesla Semi owners electricity at a fixed price of $0.07 per kWh. (Electrek)
  • Employees speaking off the record said that Model 3 production was plagued by awful quality that led to substantial rework before parts were suitable for vehicle fit. (CNBC)

Toyota (history)

  • Toyota announced a 3.3% pay increase for workers in Japan. (Reuters)
  • Completed a long-term sales agreement with Avis to sell and incremental 10,000 vehicles. Although sales to major daily rental companies are normally considered a bad thing for margin, Toyota talked up the benefit of the connectivity suite it would provide. (Toyota)

VW Group (history)

  • Said that it would have 16 factories producing electric vehicles by 2022 and that the company had awarded €20 billion of contracts for batteries. From 2019 the company will launch a new electric vehicle “virtually every month”. (VW)
  • Audi showed teaser images of the e-tron GT, Audi’s third all-electric car to be launched in 2020 (after e-tron SUV and sportback models). (Audi)
  • Porsche said that it will make a total investment of €1 billion in the Mission E factory and will spend €6 billion on electromobility by 2022. (Porsche)
  • The VW brand said it aims to break even in all regions by 2020 and that 9,350 people have signed early retirement contracts and that fleet CO2 targets “remain a major challenge”. By the end of 2020, VW will only produce electric vehicles at its Zwickau plant, forecasting a production rate of up to 330,000 vehicles per year, re-iterating that the ID “will cost just as much as a comparable diesel model”. (VW)
  • Lamborghini executives said that a move to hybrids might see the brand get rid of turbos and sell naturally aspirated engines that were closer to its DNA. (Autocar)
  • VW and Audi dealers in Germany fear a cull in the rural network is coming after many dealers have been told that their contracts are unlikely to be renewed beyond 2023 and access to models is being restricted. (Autohaus)
  • Idled production of the US model Passat for two weeks due to declining demand, some of the capacity will be switched to the Atlas SUV. (Times Free Press)
  • VW’s inhouse sausage factory reported a (6)% decline in shipments for 2017 on a year over year basis compared with 2016, falling to 6.8 million currywursts. The plant’s 30 employees appeared unperturbed. (VW)
    • Implication: Mention capital discipline, I dare you.

Other

  • Eicher Motors said it was closing its truckmaking joint venture with US group Polaris after sales failed to meet expectations. (Deal Street Asia)
  • Scuderia Cameron Glickenhaus will use a Nissan-sourced V6 engine in its SCG0004S car, of which it hopes to sell 250 examples per year. (Autocar)
  • Aston Martin’s CEO said that the company has “more than two” mid-engined cars in development (the Valkyrie supercar and a Ferrari 488 rival have already been confirmed). (Autocar)
  • McLaren executives said that although the company was planning for around 50% of sales to be hybrid by 2022, there are no plans for an all-electric car “in the immediate future”. (Bloomberg)

News about other companies and trends

Economic / Political News

  • European passenger car sales in February reached 1,125,397 units, up 4.3% on a year over year basis. (ACEA)

Suppliers

  • Magna invested $200 million in Lyft and the two parties will develop self-driving vehicles for use on Lyft’s network. Importantly, the deal appears to give Magna access to Lyft’s data, a privilege which previous investors, such as GM and JLR seem to have failed to secure. (Magna)
    • Implication: If the project is a success then this could finally be Magna’s chance to sell their own vehicle, having previously largely wholesale engineered projects for others (e.g. BMW X1)
  • Schaeffer opened new offices in Silicon Valley to capture the start-up spirit. (Schaeffler)

Dealers

  • UK start-up Drover, which offers vehicle ownership on a monthly basis, raised £5.5 million. (TechCrunch)
  • UK used car website VCARS has been acquired by the AA. (Automotive Management)

Ride-Hailing, Car Sharing & Rental (history)

  • Lyft appears to be testing the price sensitivity of its customers by offering package subscription deals for 30 rides per month with prices varying between $199 and $300 for identical products. (Engadget)
  • Lyft said that it reached $1 billion of revenue in 2017 and is serving 10 million rides per week. (TechCrunch)
  • After selling its stake in DriveNow to BMW, Sixt is planning its own short term car rental service, which it will bundle with more traditional car rental and taxi products. (Manager Magazin)
  • Zūm, a US ride hailing service aimed at children, raised a further $19 million. (Press Release)

Driverless / Autonomy (history)

  • Magna invested $200 million in Lyft and the two parties will develop self-driving vehicles for use on Lyft’s network. Importantly, the deal appears to give Magna access to Lyft’s data, a privilege which previous investors, such as GM and JLR seem to have failed to secure. (Magna)
  • A test car owned by Uber had a fatal collision with a pedestrian whilst in automatic mode. (The Guardian)

Electrification (history)

  • Rimac announced a joint venture with China’s Camel Group (one of Rimac’s investors) to build an electric vehicle components factory in Hubei province, China. Rimac will take a 40% stake in the business. (China Daily)
  • EVelozcity founder Stefan Krause said the company has around $1 billion in investments and commitments. The company has grown to include 100 staff and wants 300 by year end 2018. (Forbes)
    • Implication: EVeolozcity becomes the latest company with an all-electric, three car line-up and a claimed $1 billion in funding, a list that is getting almost too long to remember. Investors may want to watch the seminal 2000 motion picture Bring It On and pay particular attention to Sparky Polastri’s spirit fingers routine and the aftermath of the team’s display at regionals to see how this one ends.
  • Nissan aims to produce cars with solid state batteries by 2030, with 2025 as a stretch objective. (Next Green Car)

Connectivity

  • Cylus emerged from stealth mode as a cyber security company dedicated to railways, looking at signalling networks and fleets of rolling stock
    • Implication: Although at present the focus is on cyber security for communication into the vehicle, the challenges in railway networks appear strongly correlated with those facing fleets of self-driving vehicles as it becomes necessary to monitor for erratic behaviour in the fleet, beyond protecting the communication with individual cars. It’s all very well making sure my car is secure but what if it relies on information from another vehicle that has been compromised and is sending rogue signals?
  • Link Motion and Irdeto created a vehicle cyber security product based on the latter’s security software and the former’s connected car platform. (Telematics News)

Other

  • Bicycle sharing network Ofo raised $866 million, after a mammoth $700 million round last year. (TechCrunch)
  • Kitty Hawk said its flying car was close to certification in New Zealand. According to the company, the vehicle is inspired by the DeLorean from Back to the Future. Anyone who looks at the pictures may disagree. (Kitty Hawk)

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Auto Industry Briefing — week ending 11th March 2018

Autonomous technology as a commodity, industrial assets that keep on going and marginal gains in electric vehicles… What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 5th March to 11th March. A PDF version can be found here.

Favourite stories of the past week…?

  • Easy As ABC Aston Martin is planning to offer the Lagonda with cutting edge autonomous technology in 2021. But, hold on a minute… the company doesn’t have any research presence to speak of in this area. The obvious implication is that Aston Martin believes it will be able to buy the technology easily from others and integrate it into their vehicles, which begs the question: if they are correct then why are so many others engaged in a multi-billion-dollar arms race?
  • Who Wants To Live Forever? — Truckmaker Navistar says it will put more emphasis on its brand of renewed products (including buses), citing cost conscious industrial customers. But auto executives have been busy telling everyone that shared robo taxis don’t mean a decline in sales because the companies that own them will simply throw them away as often as retail customers do. What’s the basis for their confidence?
  • Especially For You Goodyear has been touting its latest tyre, purpose built for electric vehicles. Whilst this might not be a breakthrough in its own right, it highlights that electric vehicles are still operating with an array of ancillaries shaped around the needs of ICE-powered vehicles, rather than tailored to them. Although the focus of EV development is on the battery technology and cost, there are plenty of gains to be made amongst other componentry. For example, although no one seems to be looking at it in any detail, Ad Punctum has been told that different connector cables bring wildly different charging rates…

 

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

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News about the major automakers

 

BMW (history)

  • Confirmed that it will build the iVision Dynamics concept vehicle, badging it as the i4. (BMW)
  • Reported full year 2017 Financial results — automotive revenue of 88.6 billion was up 2.5% versus 2016 whilst automotive EBIT was €9.9 billion, up 5.3%. (BMW)
  • Interested in creating motorcycle sharing schemes in city centres but is currently mulling over how to ensure that customers could share adequately-fitting helmets. (Bloomberg)

Daimler (history)

  • Purchased a 3.93% stake in Beijing Electric Vehicle (BJEV), a subsidiary of Chinese partner BAIC. (Daimler)
  • Trialling a new flexible leasing scheme named Mercedes Me Flexperience. Users pay a flat rate covering all costs except fuel for up to 36,000 per year. Through the offering, they can change cars 11 times throughout the year and arrange a swap with their existing vehicle via a smartphone app. (Daimler)
  • Expects that electric vehicle batteries will have far higher concentrations of nickel to reduce dependence on cobalt. Executives talked about nickel:manganes:cobalt mix moving from 6:2:2 to 9:0.5:0.5. (Reuters)
  • S-Class Maybach models will get headlights that project images onto the ground in front of the vehicle and can selectively light up objects (e.g. casting light on a pedestrian’s body but not shining light into their eyes). (Engadget)
    • Implication: is the future of aggressive driving to use technologically advanced lighting to draw a “pull over” symbol on the road ahead of the car in front, rather than simply flashing headlights in their rear view mirror?
  • Unveiled a range of plug in hybrid models that use diesel powertrains. (Daimler)
    • Implication: For most carmakers, plug-in hybrids are synonymous with petrol engines. The reason for this is quite straightforward: a diesel plug-in is in many ways a worst-of-all-worlds solution: the diesel engine still requires expensive aftertreatment even though it spends much of the time turned off. In addition, there isn’t clear evidence that drivers long for diesel when a petrol hybrid is on offer (witness Toyota’s relative diesel and hybrid mix). Perhaps some scandal will befall petrol hybrids and this will prove an amazing hedge, or perhaps in a world of overstretched capital, this is a powertrain option too far.

FCA (history)

  • Looking to separate Magneti Marelli via a listing that will give all shares to existing FCA stock holders, rather than raising money. (Reuters)
  • According to further rumours surrounding Geely / FCA talks in summer 2017, FCA (via its largest shareholder) was open to splitting Alfa Romeo and Maserati away from the rest of the group. (Jalopnik)
  • CEO Marchionne said that the company was open to offers but was waiting until the market “recognizes the value of what has been accomplished” in the expectation that the company’s value will rise. (Detroit News)
  • Rating agency Moody’s raised FCA’s rating from Ba3 to Ba2 with a stable outlook. (FCA)
  • A supplier strike caused production stoppages at the Windsor assembly plant. (Detroit Free Press)

Ferrari

  • CEO Marchionne confirmed that the company would launch a V8 hybrid model in 2019. (Auto Express)

Ford (history)

  • Ford’s European head said that the company would not have to make a “fundamental shift” in its line-up in order to meet 2021 CO2 targets but would “fine tune the volume by powertrain by vehicle”. (Reuters)

General Motors (history)

  • Will increase Bolt production capacity, but didn’t provide any targets, leading to speculation about whether or not the announcement was significant. (GM)

Honda (history)

  • Honda’s UK chief said he expects electric vehicle pricing will start to converge with combustion engine levels in 2 to 3 years. (Autocar)
  • Chinese JV Dongfeng Honda has halted production of some models as it argues with customers and officials about whether there are any fundamental design and reliability problems with 1.5 litre petrol engines. (China Daily)

Hyundai / Kia

  • Reportedly asked South Korean unions to cooperate in reducing worker benefits; the request was rebuffed. (Yonhap)

Nissan (includes Mitsubishi)

  • Following press speculation that it might buy the Renault stake owned by the French state, Nissan said it was not looking to change the relative ownership balance. (Reuters)
  • Selling new Leaf in Europe at a rate of one every 12 minutes — equivalent to around 45,000 units per year. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Will launch a motorcycle sharing service in selected Spanish cities. (Europa Press)
  • Investing €14 million in the Charleville foundry, leading to an additional 50 jobs at the site. (Usine Nouvelle)
  • Executives said at the unveiling of the 508 sedan that PSA expects sales of 35,000 to 40,000 units per year and diesel mix of about 70% to 80% (sounds high but down from 90% today). (France Info)
  • Published the latest results of its real-world emissions testing partnership with 3rd party Bureau Veritas. (PSA)

Renault (history)

  • Showed a concept robo taxi called EZ-GO at the Geneva show. The vehicle features novel closures, including a roof that can open, in order to facilitate entry and exit. The vehicle also relegated the Renault badge to a barely noticeable design feature on the rear 3/4 and a near transparent diamond on the vehicle windscreen. (Renault)
  • Collaborating with Alibaba to create an online sales channel in China on Alibaba’s Tmall site. (Bloomberg)
  • Recruiting 130 employees for its French logistics centres. (Usine Nouvelle)

Tata (includes JLR)

  • Tata Motors CEO said that company would have completely overhauled its product line by 2023-24, with new products based on one of two platforms — ALFA (3.7 – 4.3m) and OMEGA (>4.3m). (Economic Times of India)
  • Stopped production at the Solihull plant to help the local water utility maintain supply after cold weather burst pipes in the area. (Reuters)
  • Jaguar said it wanted to improve relationships with its UK dealers and change the dialogue from “parent-child” to “adult-adult”. JLR’s UK diesel mix is around 80% and executives said that “consumers need to know that, for many of them, diesel remains the right option”. (Automotive Manager)
  • Said the 2-door, 4 seat, version of the Range Rover will be limited to 999 examples. (Land Rover)

Tesla (history)

  • Took a week of downtime on the Model 3 line in late February to install new equipment. (Bloomberg)

Toyota (history)

  • Expects 2018 European hybrid mix to be above 47% and confirmed a new version of the Supra. (Toyota)
  • Unveiled the Lexus UX, a small crossover and Range Rover Evoque rival. (Lexus)

VW Group (history)

  • Porsche unveiled the Mission E Cross Turismo concept, following on from previous executive statements about the possibility of an expanded line-up based on Mission E. (Porsche)
  • Said it will manufacture ID Vizzion by 2022 “at the latest” as the top model in the ID portfolio. (VW on YouTube)
  • Has reportedly decided to make the truck business, containing Scania and MAN, into a separate unit that can be listed as an independent entity on the stock market. (Manager Magazin)
  • Showed newest version of Sedric from MOIA and a MOIA-branded vehicle that looked suspiciously like an electric VW e-Crafter van. No prizes for guessing which is likely to make production first. (VW)

Other

  • Aston Martin presented a concept for a new Lagonda, saying that the sub-brand will be all electric and come with “the latest advances in” autonomous technology. Production will start in 2021. CEO Andy Palmer has indicated in interviews that Lagonda sales expectations could be for several thousand units annually. (Aston Martin)
    • Implication: Aston Martin says it will have the latest autonomous technology despite having no research activities of any consequence in the field currently. This leads to one of several conclusions: (i) autonomous technologies will be freely available, and with hindsight that the current race to dominate will look like a colossal waste of effort; (ii) that autonomy will actually be really easy to master and so Aston Martin simply doesn’t need to try hard now, it can easily catch up later; or (iii) Aston Martin is going to find itself locked out of the technology required at any price and therefore unable to deliver on its promises.
  • Pininfarina said it will make 12 track-only examples of the hydrogen powered H2 Speed concept car. (Autocar)
  • McLaren unveiled the track-only Senna GTR supercar. Production will be limited to 75 examples — on top of the Senna road car production run that is limited to 500 examples. Surely a limited-production cabriolet / roadster version would be a ridiculous idea? (McLaren)
  • McLaren said its next hypercar, the hybrid-powered three seat BP23, will be launched in 2020 (production limited to 106 examples — although who knows about track-only models?), and will have a top speed in excess of 243 mph. (McLaren)
  • Navistar said it was relaunching its ReNEWed brand of remanufactured truck and bus products. (Navistar)
  • Rimac unveiled the Concept Two, an EV with a claimed 1,900 hp output. (Engadget)
  • BAIC’s chairman told reporters he believes the company will make a profit in 2019 on its own brand. (Bloomberg)

News about other companies and trends

 

Economic / Political News

  • UK passenger car registrations in February totalled 80,805 units, down (2.8)% on a year over year basis. (SMMT)

Suppliers

  • Dana said that it would take over the powertrain operations of GKN; a significant amount of the purchase will be in Dana’s shares so GKN will end up with a stake of 47.25%. (Dana)
  • Denso said it will increases its stake in chipmaker Renesas from 0.5% to 5% saying it will accelerate development of in-vehicle systems. (Denso)
  • Continental agreed a 60/40 joint venture with Chinese battery cell producer CITC to supply entire 48V systems to global markets. (Continental)
  • Magna opened a new centre for composites in Esslingen, Germany. (Magna)
  • Continental reported 2017 financial results. Revenue of €44 billion was up 8.5% versus 2016, EBIT of €4.6 billion was up 11.4%. (Continental)

Dealers

  • Despite falling sales, UK dealers reported improved profitability in January, aided by used car sales. (Motor Trader)
  • Online used car site Vroom is reportedly in trouble: the company is shrinking its footprint and laying off a large amount of staff. (TechCrunch)
  • Malaysian online used car sales site Carsome raised $19 million to consolidate its ASEAN position. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental (history)

  • SoftBank is reportedly looking to build an ownership stake of around 50% in Ola; some early investors may sell their shares in secondary markets. (Deal Street Asia)

Driverless / Autonomy (history)

  • Uber has started using autonomous trucks in commercial service (with a safety driver behind the wheel). Human drivers take loads from pick-up to a transfer hub and then the automated truck drives a section of highway to another transfer hub (where a human-driven truck picks up the load once more). (TechCrunch)
  • Waymo has started testing autonomous trucks in a third location: Atlanta. (Waymo)
  • May Mobility’s CEO (BMW and Toyota are investors) said it was buying in many of the sub components for its electric autonomous vehicle and would beat Waymo and Cruise to market “with a successful product”. (Xconomy)
  • HERE published a study into consumer attitudes around privacy, with a focus on location sharing. Bad news for proponents of the “personalised advertising will pay for everything” school of thought… it was the lowest rated reason for consumers to share data (page 34). (HERE)
  • Uber is reportedly courting Waymo to provide an autonomous vehicle fleet for use on Uber’s network — similar to the intent of Waymo’s existing partnership with Lyft. (Engadget)

Electrification (history)

  • China will start trial EV battery recycling programs in four locations. (Reuters)
  • Goodyear said it has created a tyre specifically for electric vehicles. (Goodyear)
    • Implication: Although the development of the tyre isn’t ground-breaking, it reflects that there are plenty of parts of the vehicle that remain rooted in what ICE powered cars require rather than being optimised for EVs. As EV-specific components emerge in greater numbers, vehicle performance will be enhanced.
  • Daimler expects that electric vehicle batteries will have far higher concentrations of nickel to reduce dependence on cobalt. Executives talked about nickel:manganes:cobalt mix moving from 6:2:2 to 9:0.5:0.5. (Reuters)
  • The hydrogen fuelling consortium owned by Toyota, Nissan and Honda amongst others was legally established as H2 Mobility LLC. (Honda)
  • The European Union published a report into areas of standardisation and improvements for vehicle batteries; particularly second life use and recycling. (EU)

Other

  • US electric scooter sharing start-up Bird is reportedly raising $100 million just weeks after getting $15 million in funding and putting 1,000 scooters on the streets of Los Angeles. (Tech Crunch)
  • Deloitte published consumer research showing increased acceptance for autonomous vehicles and growing interest in hybrid powertrains. (Deloitte)

 

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Auto Industry Briefing — week ending 4th March 2018

Car sharing without fleet operators, Audi A6 with 48V technology, OEMs react to EU CO2 targets and Waymo driverless technology … What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 26th February to 4th March 2018. A PDF version can be found here.

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News about the major automakers

 

 

BMW (history)

  • Invested in May Mobility, a maker of autonomous buses, alongside Toyota. (Toyota)
  • Will launch digital key technology in July that allows an owner to share a vehicle with five others using a smartphone app rather than having to share the physical key. (Europa Press)

Daimler (history)

  • Invested in data analytics company Anagog. (Anagog)
  • Announced a new factory in Beijing, China with existing JV partner BAIC. (Daimler)
  • Announced a full takeover of Car2Go, buying Europcar’s 20% stake — and echoing BMW’s recent move to buy out Sixt from its car sharing service. (Daimler)
    • Implication: If rental companies are the future of fleet management for shared vehicles (witness the hysteria around Avis’s involvement with Waymo) then why are Daimler and BMW pushing out their partners? And why are the rental companies throwing in the towel?
  • Demonstrated an internally-created cryptocurrency called Mobicoins. In Daimler’s concept, the coins were earned through eco-friendly driving — a loyalty card fit for the 21st century? (Journal Auto)
  • Unveiled the new CLS, featuring a V6 engine with 48V replacing a V8 engine in the prior model. Mercedes say that the change has reduced CO2 by around 23% whilst preserving power. (Daimler)
  • Daimler’s Financial Services division is working on a chatbot with a computer-generated image of a person to act as a concierge for future car purchases and other services. At present, a fair bit of development is still required (as Daimler’s demonstration video attests). (Daimler)

FCA (history)

  • Announced it will review a separation of the Magneti Marelli electronics business in Q2 2018. (FCA)

Ford (history)

  • Will create a test fleet of vehicles in Miami aimed primarily at delivery in partnership with Domino’s (a pizza chain) and Postmates (parcel delivery). (Miami)
  • Told unions and local politicians that it will not manufacture a new 8 speed automatic transmission (dubbed 8F mid) in the Bordeaux, France factory, leaving the plant’s future in doubt. (Les Echos)
  • Recalling around 2,100 Taurus cars to correct problems with the ignition key releasing too early. (Ford)

Geely (includes Volvo)

  • Reportedly held talks with FCA about an investment before deciding on Daimler, a rumour which first emerged in August 2017 but was denied by the parties at the time. (Bloomberg)
  • Raised money to pay for its Volvo Group stake through a 12 month and five year loan. (Reuters)
  • A Reuters report explained how the Daimler stake was purchased without having to disclose the size of the holding until it was complete. (Reuters)
  • Volvo became the latest OEM to launch an investment fund. The California-based team will be headed by existing personnel and Volvo did not disclose the budget. (Volvo)
  • Volvo Cars’s CEO has not been proposed for re-election to the board of truckmaker Volvo Group because the other directors were annoyed about Geely’s stake in Daimler. (SCMP)

General Motors (history)

  • Has reportedly received around 2,500 applicants for its redundancy package in South Korea and is looking to eventually cut 5,000 posts. The figure is significant because it is greater than the number of employees at the plant GM has already said it will close (about half of the staff there have applied — the rest could transfer). (Reuters)
  • Researchers released a video of a Chevrolet Bolt battery pack teardown — they say the battery capacity is 57 kWh, not the 60 kWh stated by GM. (Green Car Reports)

Honda (history)C

  • Announced the new CR-V, which will feature a hybrid engine rather than offer a diesel version. (Honda)

Hyundai / Kia

  • Unveiled the Kona BEV, a small SUV. The car has a 64 kWh battery offering 470 km of range, a smaller 39.4 kWh is also available. (Hyundai)

Mazda

  • Announced organisational changes which abolished the electrical and electronics department and created groups specialising in electrical vehicles and infotainment instead. (Mazda)

Nissan (includes Mitsubishi)

  • Announced new initiatives for the Renault-Nissan-Mitsubishi alliance, including a deeper involvement for Mitsubishi. By 2022, the group expects to sell 9 million units from 4 common platforms (about 65% of sales) and for 75% of vehicles to use common powertrain. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Reported 2017 financial results. Revenue of €65 billion included Opel/Vauxhall for the first time, stripping this out gave a 9.9% increase in the automotive division. Automotive operating income was just under €2.8 billion, with Opel/Vauxhall registering a loss of €(179) million for the period of PSA ownership. (PSA)
  • In the earnings call, CEO Tavares said that Opel’s wage cost as a % of turnover (PSA’s favoured measure) was 15.3%; and that the company would have a new strategic plan in 2020. (Seeking Alpha)
  • Announced it will take an ownership stake in the vehicle plant owned by Malaysian group Naza Corporation and vehicles on the EMP2 platform will be built there for sales within ASEAN. (PSA)

Renault (history)

  • CEO Carlos Ghosn said that a merger between Renault, Nissan and Mitsubishi was not an “objective… but something that should happen in a natural way”. (Journal Auto)
  • Hiring 205 employees at Le Mans (Usine Nouvelle); 200 at Cléon (Usine Nouvelle) and 350 at Flins. (Usine Nouvelle)
  • Announced new initiatives for the Renault-Nissan-Mitsubishi alliance, including a deeper involvement for Mitsubishi. By 2022, the group expects to sell 9 million units from 4 common platforms (about 65% of sales) and for 75% of vehicles to use common powertrain. (Nissan)

Tata (includes JLR)

  • Jaguar unveiled the I-Pace with a Top Gear / Grand Tour style video and a drag race with a Tesla Model X (the Jag won but, given the stated 4.8 second 0-60 time, one wonders whether Ludicrous Mode was turned on). (Jaguar)

Tesla (history)

  • Opening a research centre in Greece that is expected to house around 50 staff. (The Guardian)

Toyota (history)

  • Will build the next generation Auris in its Burnaston, UK, plant. Toyota’s press release stressed the importance of zero tariffs and “frictionless” trade post-Brexit. (Toyota)
  • Confirmed that it will no longer offer diesel powertrains in European passenger cars after the end of 2018 (mix fell below 10% in 2017), commercial vehicles will still have diesels. (Toyota)
  • Invested in May Mobility, a maker of autonomous buses, alongside BMW iVentures. (Toyota)
  • Said it was restructuring its autonomous driving efforts and spending an additional 300 billion yen (about $2.8 billion). The effort will be led by US-based Toyota Research Institute, Toyota affiliates Aisin and Denso will also have small stakes in the organisation (90% Toyota / 5% Denso / 5% Aisin). (Toyota)
  • Launched a new 2.0 litre hybrid engine with accompanying CVT that Toyota says will reduce emissions by more than 18% and will be the mainstay of its portfolio, representing 80% of vehicles sold in major markets by 2023. (Toyota)

VW Group (history)

  • Bentley “would like” their next car after the GT to have Level 4 autonomous capability. (Wired)
  • Audi said that the new A6 will feature 48V hybridisation on all vehicles. The ICE-assistance will save fuel by allowing extended engine-off operation (while the vehicle is in motion rather than traditional stop/start). Audi claims a fuel economy benefit of around 10% for the technology (note: Magna says that on systems with greater capabilities than the Audi one, 18% is possible). (Audi)
  • Porsche executives hinted at a flying car program. (Reuters)
  • Will offer a digital key for VW customers, starting with the VW Passat in late 2018. The owner will be able to authorise up to 15 other people who can share the vehicle using a smartphone app — they can also decide whether to grant the ability to drive the vehicle or only to unlock the doors. (VW)
  • Porsche wants all US dealerships to have 800V / 350 kW chargers. (Ars Technica)
    • Implication: If Porsche go through with the plan, this might lead to increased visits to the dealer site and an improved customer relationship. A welcome side effect of the cost involved and a potential offset to the lower maintenance revenues expected to accompany fully electric cars.

Other

  • Aston Martin reported financial results for 2017. Revenue of £876 million was up 48% on 2016, pre-tax profit of £87 million reversed a prior year loss of £(163) million. (Aston Martin)
  • Lister released images of their planned Storm II supercar. (Motor 1)
  • NIO is said to be working on an IPO that would raise around $2 billion. (Economic Times of India)
  • Subaru announced the appointment of a COO. (Subaru)
  • The company working on an homage to the Lancia Stratos said that, this time, it’s totally going ahead. (Auto Blog)

News about other companies and trends

 

Economic / Political News

  • Germany’s Federal Court ruled that, if certain conditions were met and “proportionality” was applied, it was legal for cities to ban diesel vehicles. Environmentalists rejoiced, the government promised a response. (The Guardian)
  • The US imposed tariffs on imports of steel and aluminium. As the EU considered its response, President Trump said he would approve counter-retaliatory duties on EU-built cars if they dared to do anything. (Autocar)
  • US Industry in February was 17.0 million units, a drop of about (3)% on a year-over-year basis. (Wards)
  • German passenger car registrations in February of 261.749 units were up 7.4% on the prior year. (KBA)
  • France also saw increased vehicle registrations — passenger cars up 4.3%, CVs up 3.6%. (CCFA)
  • Spanish passenger car registrations increased 13% versus prior year, to 110,474 units. (Faconauto)
  • Passenger car registrations in Italy for February fell (1.4)% year-over-year, to 181,734 units. (UNRAE)
  • European trade body ACEA issued a statement attacking the EU’s planned CO2 targets for 2025 and 2030. The plain-speaking style was something of a departure from the silkier narrative normally observed. ACEA drew attention to the “social implications” of a redundant manufacturing base for traditional transmissions and internal combustion engines. ACEA also said the EU’s proposals did “not sufficiently reward” PHEVs — an odd claim since the EU targets for 2030 are well within the reach of this technology. The “fact” that a near-zero share for electric vehicles in EU countries with lower incomes “says it all” seemed especially dubious; there are 12 years to go to 2030 and similar things could have been said about Norway 5 years ago. (ACEA)
    • Implication: ACEA mustered some very real concerns, especially around the restructuring challenge confronting OEMs and suppliers as vehicle production increasingly moves towards electrification (the share of electrified vehicles is smaller than market growth since the recession so this effect has not yet manifested in a real way). However, isn’t this somewhat undermined by the laissez-faire attitude of the OEMs themselves? ACEA’s argument mainly falls into the too hard / too scary category and appears tone deaf to societal change. In addition although it references the EU’s commitments under COP21 (a climate change agreement), it fails to acknowledge two lynchpins of the EU’s own case for setting more aggressive targets: (1) that car-by-car reductions are all very well but if fleet size is growing (which it is, fast) then individual targets need to be tougher and; (2) that the EU expects costs (and prices) to rise as a consequence — anathema to the OEMs.

Suppliers

  • Dana said it is in talks with GKN about buying some of GKN’s business. (Dana)
  • Plastic Omnium will buy Mahle’s one third stake in HBPO, Hella’s shareholding is unchanged. (Plastic Omnium)
  • Bosch gave a presentation of its electromobility strategy. The company does not intend to manufacture its own battery cells, although it might revisit this decision when solid state technology matures — which Bosch sees as “the way forward… from the middle of the next decade”. Bosch’s presentation gave some clues to how BEV costs could fall dramatically, saying that solid state batteries could cut costs in half whilst doubling energy densities (meaning a cheaper, smaller, lower weight battery getting the same range as today) and that better thermal management could increase range by 20% (allowing further reductions in battery size). (Bosch)
  • Magna held an investor day. The company remains bearish on EVs in the medium term, forecasting a share of 4%-5% by 2025 (in mid 2017 the CEO said 3% to 6%), however the company does see ICE-only share falling to 16% to 21% by 2030 — take out emerging markets and that doesn’t leave many being sold in Europe and North America. The company is now forecasting significant take-up of autonomous vehicles — 30% of sales having L4/5 capability by 2030. (Magna)
  • Gestamp reported full year 2017 revenue of €8.2 billion and EBIT of €485 million. (Gestamp)

Dealers

  • Chinese online (new and used) car broker Chehaoduo reportedly raised $818 million from a number of companies including Tencent. (Deal Street Asia)

Ride-Hailing, Car Sharing & Rental (history)

  • Uber launched UberHealth, similar to its existing UberCentral offering that helps companies book journeys for their customers. The new service can be used for non-emergency trips to a from hospitals and clinics. (TechCrunch)
  • Uber criticised a MIT report into the earnings potential for its drivers, saying the methodology underestimate pay by asking confusing questions. (Uber)
  • Chinese firm Meituan is reportedly planning to launch ride hailing services in several major cities. (Technode)

Driverless / Autonomy (history)

  • Aurora (partnering with VW, Hyundai and Byton) raised $90 million in a Series A round. (TechCrunch)
  • ai said that it had been successfully trialling autonomous vehicles on the streets of Nansha and that it has agreed a partnership with Guangzhou Automotive Group. (Pony.ai)
  • California will allow test autonomous vehicles that do not have safety drivers behind the wheel. (California DMV)
  • Pix said it was running an event to create a self-driving car in five days using a team of 15 (Pix)
  • Waymo said its fleet has now covered 5 million miles on public roads and celebrated by releasing a short video with real time information overlaid onto video a vehicle in motion. Although the video looks cool, note the limited range (the long range view from 1:40 is illustrative here) and resolution of the real time data versus some of the cleaned up images other companies have showed off in the past. Also note that the conditions are about as perfect as you can get for video. (Waymo)
    • Implication: Waymo is stepping up its campaign for public acceptance, at a cost of greater transparency. Although at present there is plenty for advocates to cheer, the hyperbole leaves room for critics too. For instance, Waymo trumpets the progress of “one of the most experienced drivers on the road”, ignoring the fact that this driver would have an abysmal safety record if they were an actual human and would have long ago lost its drivers licence.
  • Toyota and BMW iVentures invested in May Mobility, a maker of autonomous buses. (Toyota)
  • Toyota is restructuring its autonomous driving efforts and spending an additional 300 billion yen (about $2.8 billion). The effort will be led by US-based Toyota Research Institute. (Toyota)

Electrification (history)

  • Mahindra and LG Chem will jointly develop batteries with the intent of creating a low cost, high energy density, chemistry that will aid market share growth for electric vehicles in India. (Mahindra)
  • CHAdeMO are working on a 400 kW / 1,000V standard, for release soon. (Inside EVs)
  • US rules saying that electric cars will have to make noise have been pushed back so that full compliance is not required until September 2020. (Engadget)
  • Dyson is recruiting 300 engineers to add to its existing 400 person electric vehicle team. (BBC)
  • Researchers released a video of a Chevrolet Bolt battery pack teardown — they say the battery capacity is 57 kWh, not the 60 kWh stated by GM. (Green Car Reports)

Connectivity

  • Net4Things and UST will partner to develop connected vehicle applications, focused on Spanish and Portuguese speaking markets. (UST)
  • Argus Cyber Security and Ericsson announced a partnership to work on cyber security for connected cars. (Argus)
  • Mapbox launched an augmented reality map platform that can display information about locations on top of their image (e.g. using a heads-up display in a car). (Press Release)
  • Amazon will make voice-controlled artificial assistant Alexa open source for automotive applications, provided that the vehicle runs automotive grade linux. (Bloomberg)

Other

Harley Davidson took a stake in electric bike maker Alta Motors and the two companies will collaborate on electric urban motorcyles, Harley Davidson is aiming to release its first all-electric product in 2019. (TechCrunch)

 

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Auto Industry Briefing — week ending 25th February 2018

Tesla Semi truck total cost of ownership, blockchain in cars, electric delivery vehicles and implications of electric cars for Big Oil … What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 19th February to 25th February 2018. A PDF version can be found here.

Favourite stories of the past week…?

 

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News about the major automakers

 

BMW (history)

  • As previously rumoured, BMW has been in talks with Great Wall about a joint venture to produce electric Minis in China and has now signed a letter of intent. (BMW)
  • Ended production of the 3 Series in its Rosslyn, South Africa, factory. The plant is switching to X3 SUVs. (BMW)
  • The redistribution of the Quandt family’s controlling shareholding has been finalised. It does not affect board positions or the free float of shares. (Manager Magazin)
  • Moovit raised an additional $50 million from various sources including BMW iVentures and Intel. (FINSMES)

Daimler (history)

  • Daimler’s Moovel subsidiary will pilot an on-demand shuttle service in Germany. (Daimler)
  • Confirmed that Li Shufu of Geely had purchased a 9.7% stake in an announcement that was flattering yet also stressed the company had no plans to changes its partnerships in China. (Daimler)

FCA (history)

  • FCA has reportedly decided to stop production of diesel vehicles from 2022 onwards. The move is set to be announced at the capital markets day in June. (Les Echos)

Ford (history)

  • Ford’s North America head departed for unspecified improper behaviour and the company launched a wider reshuffle, including a number of moves amongst the finance leadership — possibly in a continued quest for a successor to the CFO. (Ford)

Geely (includes Volvo)

  • Geely’s CEO took a 9.7% Daimler stake — larger than the 6% or so previously rumoured. (Manager Magazin)
    • Implication: Having now purchased large stakes in both Volvo group (the non-carmaking one) and Daimler, Geely’s strategy isn’t fully clear. Yes, it could help smooth the way for component sharing, but at the cost of tying up a substantial amount of capital. Unless the plan was to ultimately get Volvo to buy Daimler trucks and Daimler to buy Geely’s automotive operations with the money..? Surely not.

General Motors (history)

  • Will build the Cadillac XT4 at its Fairfax plant in Kansas. (US News)
  • Will reportedly keep its Oshawa, Canada plant on a single shift until late May, longer than previously expected. (Globe and Mail)
  • Planning an extended summer shutdown at its Flint truck plant in order to increase capacity. (Detroit Bureau)
  • Will invest 1.2 billion Brazilian reals in its Sao Caetano do Sul plant to increase capacity from 250,000 units annually to 330,000 units. (GM)
  • Convened meetings with South Korean politicians and labour leaders in an attempt to finalise a plan to make operations in the country viable. Amongst the reported initiatives were a fresh injection of funds by GM, government support and wage freezes. In return, GM may allocate two new vehicles to factories in the country. (Reuters)

Honda (history)

  • Announced a series of management changes. (Honda)

Nissan (includes Mitsubishi)

  • Said that tests of its previously announced Easy Ride robo taxi pilot scheme would start on March 5th. (Nissan)
  • Will start Datsun sales in Zimbabwe. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Collaborating with Qualcomm on vehicle to infrastructure and vehicle to vehicle communications. (PSA)

Renault (history)

  • Unveiled the all-electric Master Z.E. 1T commercial vehicle, which Renault claims has a 120 km real world range. The new van will be an early adopter of Renault’s Easy Connect fleet management software. (Renault)

Tata (includes JLR)

  • Reportedly hired an investment bank to manage the sale of its Tata AutoComp Systems components subsidiary. (Deal Street Asia)

Tesla (history)

  • Researchers found Tesla AWS cloud accounts were being used to mine cryptocurrency; the company said it corrected the problem soon after being alerted. (BBC)
  • Executives at DHL said that the Tesla semi-truck (the company has ordered a test fleet of 10) could payback “within a year and a half”. (Reuters)
  • Started a scheme that will offer free installation of Tesla-specific chargers to businesses. (The Verge)
  • Elon Musk left the board of OpenAI to “eliminate a potential future conflict of interest” with Tesla’s work in the same field. (OpenAI)
  • Model S reportedly outsold its German luxury contemporaries in Europe during 2017. (Manager Magazin)
  • Has been replacing under-utilised supercharger stations with slower-charging units. (Inside EVs)

Toyota (history)

  • Recalling around 74,000 vehicles in North America to correct seating and stability control issues. (Toyota)
  • Announced an electric motor magnet design that Toyota says reduces rare earth material content by 50%. (Toyota)
  • Uber’s CEO posted photos of a meeting with Toyota’s leadership, saying that the two companies were discussing a partnership for autonomous vehicles. (Deal Street Asia)

VW Group (history)

  • Announced financial results for 2017. Revenue of €231 billion was up 6.2% versus 2016; operating profit increased to €17 billion, leading the company to propose doubling the dividend. (VW)
  • Porsche said that it has already ceased production of diesel versions of the Macan and that sales of diesel Panamera would soon stop — customers are opting for hybrids in large numbers. Although it production of diesel engines for the current model Cayenne has stopped, it seems the successor vehicle will have diesel. (UN Climate Action Plan)
  • Concluded pay negotiations with German unions, agreeing to a 4.3% rise and a new bonus scheme that can be taken as cash or additional leave. The agreement lasts until April 2020. (VW)
  • Škoda unions are said to be demanding a 15% pay rise over 27 months, threatening “unlimited” strikes until agreement is reached. (Handelsblatt)
  • Will invest €80 million in a cabriolet version of the T-Roc SUV. Sales will start in 2020 and the company aims to sell 20,000 units each year. Good luck. (VW)
  • Porsche said that it is working on blockchain technology for application in vehicles. Alongside the expected talk of new business models, Porsche mentioned some additional benefits — a distributed ledger can speed up verification of commands, in Porsche’s case reducing the time it takes for a door opening command to activate. (Porsche)

Other

  • A team of students in the Netherlands, working with 3D printing company Oceanz have produced a car, dubbed Noah, they claim is fully recyclable and suitable for production via 3D printing. (3d print)
  • Mahindra & Mahindra said it would invest an additional 500 crores INR (about $77 million) in electric vehicles and components for EVs. (Mahindra)
  • Mitsuoka launched the new Himiko, a Morgan-esque two seat sports car. (Mitsuoka)

News about other companies and trends

 

Economic / Political News

  • UK government ministers said they are aiming for vehicle regulations to continue to be aligned between the UK and the EU post Brexit. (Economic Times of India)

Suppliers

  • Bosch said it was creating a new mobility division and announced the acquisition of US start-up SPLT. (Bosch)
  • Magna reported full year 2017 financial results. Revenue of $38.9 billion was up 7% on 2016, adjusted EBIT of $3.1 billion was also 7% higher than prior year. (Magna)
  • Valeo reported financial results for 2017, sales of €18.6 billion rose 12% from 2016 and net income of €1 billion was up 8%. (Valeo)
  • Delphi Technologies, the former powertrain division of Delphi before the separation into Delphi and Aptiv, released 2017 financial results; Revenues of $4.8 billion rose 9% on prior year, net income was $285 million. (Delphi)
  • Visteon reported full year 2017 financial results. Revenue of $3.1 billion was about inline with 2016, Net income was $176 million. (Visteon)
  • Continental will build a powertrain electronics factory in Hungary. The €100 million plant will employ 450 people and production is set to begin in Q3 2020. (Continental)
  • Mahle said that it had developed a cheaper ethanol-based fuel called MBE2. The main innovation is a way of speeding up the fermentation process. (Mahle)

Dealers

  • carlease.com, a provider of new cars delivered to customers’ doorsteps, said it raised $3.5 million. (Press Release)

Ride-Hailing, Car Sharing & Rental (history)

  • Bosch said it was creating a new mobility division and acquired US start-up SPLT / Splitting Fares (Bosch)
    • Implication: If you want your mobility company to be acquired, maybe start a weekly newsletter? Both Stratim and SPLT did just this and now they belong to someone else.
  • Sony is partnering with a group of Japanese taxi firms to create a ride hailing service. The company believes that it can offer artificial intelligence competencies that will set its efforts apart. (Reuters)
  • Citymapper said that it had finished its pilot scheme running bus services in London and decided to start trials of a fleet of smaller minibuses. The company said it would like to operate larger vehicles but that regulations were currently too great an obstacle. (Citymapper)
    • Implication: Citymapper’s experience shows that for all the clever algorithms and awesome new never-seen-before ways of running a bus service, practical problems remain. Interestingly, one point the company didn’t mention was that bus services are often lossmaking anyway — it is common for larger public transport systems to have subsidies amount to between a third and a half of income. Ticket price rarely reflects operating cost.
  • Car sharing firm MyKeego has started operations in Buenos Aires, Argentina. (Auto Rental)
  • Moovit raised an additional $50 million from various sources including BMW iVentures and Intel. (FINSMES)
  • Via won a contract to develop on-demand technology for public transport in Singapore. (Via)

Driverless / Autonomy (history)

  • Avis said it will continue to expand its operations with Waymo. (Reuters)
  • Uber’s CEO posted photos of a meeting with Toyota’s leadership, saying that the two companies were discussing a partnership for autonomous vehicles. (Deal Street Asia)
  • Uber’s CEO said autonomous cars would be in operation on Uber’s network “in less than a year”. (Bloomberg)

Electrification (history)

  • BP’s latest energy outlook forecast a peak demand for oil in the 2030s as growth in electric car sales reduces fossil fuel consumption. Under one scenario, 30% of vehicle miles in 2040 would be electric — implying a significantly higher than 30% share of new car sales at that point in time. (Reuters)
  • Delivery firm UPS said it was working with electric vehicle start-up Workhorse on a bespoke electrified delivery vehicle. The collaboration initially hopes to create a test fleet of 50 vehicles. (The Verge)
    • UPS follows DHL (who bought Streetscooter) in deciding that mainstream OEMs aren’t up to the challenge of providing the vehicles that they need. US Postal Service could follow the same path. Given all the complaints from OEMs about customers not wanting electric vehicles, it’s a shame they aren’t taking greater advantage of the opportunities arising from those that do.
  • Researchers published a paper indicating that lithium ion batteries could be charged much faster if fibre optic sensors were fitted to monitor heat within the battery, without causing large reductions in battery life. (Engadget)
  • UK electricity network monopoly, National Grid, is proposing 100 high power charging stations along key motorway routes to provide stations within a 50 mile radius to 90% of motorists. (Engadget)
  • Apple are reportedly changing their strategy on cobalt purchasing in the face of higher demand for the material created by electric vehicles. (The Verge)
  • Toyota announced an electric motor magnet design it says reduces rare earth material content by 50%. (Toyota)

Connectivity

  • Denso invested in cybersecurity start-up Dellfer which specialises in finding so called “zero day” weaknesses in security systems. (Denso)
  • Panasonic agreed a partnership with Trend Micro to develop cyber security for connected cars. (Telematics News)
  • Japanese telecoms company NTT Docomo invested in car data marketplace Otonomo. (Telematics News)

Other

  • Airbus’s flying taxi, Vahana, took to the skies in test flights. The company revealed that a one minute flight used about 8% of the battery capacity. (Geekwire)
    • Implication: Either flying taxi companies are betting on massive improvements in weight and cost (probably) or are planning on woefully short ranges (probably not). The most likely way to keep these vehicles in the air continuously is (whisper it) battery swapping.
  • Hong Kong-based dockless bike sharing scheme GoBee said it was shutting its operations in France, blaming vandalism and a weak business model. (TechCrunch)

 

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Auto Industry Briefing — week ending 18th February 2018

The Renault-Nissan alliance, public perception of internal combustion engines and electrifying sports cars … What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 12th February to 18th February 2018. A PDF version can be found here.

Favourite stories of the past week…?

  • Irreplaceable The Renault Board have told CEO Carlos Ghosn to make the alliance with Nissan irreversible. On the earnings call, Ghosn implied that he didn’t know what this meant (somewhat disingenuous as he is the Board’s Chairman). It looks as though he’ll have to play diplomat to competing French and Japanese concerns whilst creating some sort of Airbus-without-the-Hassle entity. I hope he has plenty of Ferrero Rocher…
  • Never Gonna Give You UpMazda were oddly gleeful in releasing a report saying nearly 60% of European consumers expect further innovation from internal combustion engines. They seem unperturbed by the 40% that don’t, even though most of them have never experienced an electric car (just my assumption based on the mathematical fact of low sales mix for EVs). Mazda should be drawing the opposite conclusion to their headline: electric vehicles are coming because loads of customers want them.
  • Good Thing Porsche wrote a press release in praise of electric sports cars. The company reckons that good designs will wow with their acceleration and dynamics. Porsche’s conversion is significant because it suggests baby steps towards the justification for a pricing methodology for electric vehicles versus diesel and petrol. Thus far, the accepted wisdom has been that electric cars need to reach price parity (ignoring the fact that there is no price parity between petrol and diesel, or different power levels). Charging for extra acceleration probably won’t close the cost gap yet, but why not get something for your efforts?

 

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News about the major automakers

 

 

Daimler (history)

  • Will not attend the 2019 Detroit show because it believes the CES has become more important. (Bloomberg)
  • Will show the new C-Class and AMG GT at the Geneva show. (Daimler)
  • Rumours US investigators had found emissions test defeating software were denied by Daimler. (Manager Magazin)

FCA (history)

  • Recalling around 230,00 trucks in North America (180,000 in the US) due to problems with the parking brake. (FCA)
  • Reportedly updated the uConnect system with a version containing a bug that causes the system to reset every minute or so — infotainment, heating and camera functions are affected. (Autonomes Fahren)

Ford (history)

  • Investing a further $25 million in its Kentucky plant to increase Navigator and Expedition production, saying that the plant is already working a continuous three shift pattern and over the weekend. (Ford)
  • Recalling a small number of Escape and MKC vehicles to correct brake problems. (Ford)
  • Wants to reduce the number of expatriate employees in its Chinese business by 30%. (Ford)
  • Extended a do not drive warning on vehicles with Takata airbags that have not yet been repaired. (Reuters)

Geely (includes Volvo)

  • Proton published an open letter making a series of concessions to help Malaysian dealers improve their profits. (Malay Mail Online)

General Motors (history)

  • Is closing the Gunsan, South Korea, plant. The company said that in the last three years plant utilisation has been around 20%. Shutting down operations will cost $375 million in employee payouts, with another $475 million of asset write-offs. The company said performance in South Korea needed to improve with a concrete plan by the end of February — suggesting it close other factories if necessary. (GM)
  • South Korean officials were apparently taken by surprise by GM’s announcement with insiders saying that trust with the company had collapsed. (Reuters)

Hyundai / Kia

  • Hyundai’s head of autonomous vehicles said that sales will be driven by ride sharing fleets rather than individual customers. (Bloomberg)

Mazda

  • 58% of drivers Mazda surveyed said that they expect more innovation from internal combustion engines trumpeting the results as confirmation that “consumers don’t necessarily share the view of many organisations that the internal combustion engine has no role to play in the future of cars”. (Mazda)
    • Implication: Mazda is missing the point. By its results, 42% of customers think ICEs are finished — and this is at a time when the sales rate of electric vehicles is in the low single digit percentages. Whether or not the technology is finished — and there is good reason to believe ICEs can offer quite substantial further efficiencies — electric vehicles are going to take increasingly large shares of the market and it’s a big call to have a portfolio that lacks depth in the technology.

PSA (includes Opel/Vauxhall) (history)

  • Confirmed an all-electric Corsa will be produced from 2020 onwards. There will be four electrified vehicles in the Opel range by 2020. (PSA)
  • Opel’s captive finance unit aims to increase its share of Opel sales to 1/3 of vehicles by 2020. It will launch new services, including financing for fleet sales. (PSA)
  • Faurecia reported 2017 financial results. Revenue of €17 billion was up 10.6% versus prior year, operating income of €1.17 billion rose 20.6%. (Faurecia)

Renault (history)

  • Reported 2017 financial results. Revenue of €58.8 billion was 14.7% higher than 2016. Operating profit rose to €3.9 billion. (Renault)
  • CEO Carlos Ghosn said he believes that Renault and Nissan are “well advanced” in understanding how to make money from electric cars and that rising raw material costs are not a threat since battery design is improving. (CNBC)
  • As expected, the Renault board recommended that CEO Carlos Ghosn have his contract extended until 2022, calling on him to make the Renault-Nissan-Mitsubishi alliance “irreversible”. (Renault)
  • CEO Ghosn said that European customers are “running out of diesel” and that retail customer demand for gasoline was much higher than the current sales rate. He cited the Dacia Sandero as a vehicle where Renault was seeing a particularly large swing in demand. (Seeking Alpha)

Toyota (history)

  • Recalling around 22,000 vehicles in North America to correct problems with the fuel system. (Toyota)
  • Executives said Toyota is looking at scenarios where individuals have mainly given up their own cars in favour of autonomous services, but those that remain are more like “pure race cars”. (Economic Times of India)
    • Implication: These comments mirror Ad Punctum’s future state hypothesis: privately owned cars will not be eliminated (although numbers will reduce significantly), but they will have to become more compelling and emotional to justify their purchase — yet still affordable.

VW Group (history)

  • Porsche issued a press release championing EVs; the brand drew attention to the acceleration and cornering dynamics that come with good execution. (Porsche)
    • Implication: Ad Punctum’s belief is that electric cars offer performance that is revenue-worthy in its own right and although this may not be sufficient to close the near-term cost gap to an ICE product, its better to make the most of it than leave it on the table. Porsche’s article indicates that acceleration and handling will make up a big part of the Mission E sales pitch to customers.
  • SEAT acquired Madrid car sharing company Respiro and its fleet of 200 cars. (SEAT)
  • There could be strikes at Škoda after unions rejected the company’s offer of a pay rise in line with inflation. (Reuters)
  • VW said that it is producing powertrain units for electric cars (e-up!, e-Golf and Passat GTE) at a rate of around 200 per day. (VW)
    • Implication: Although almost negligible in the overall scheme of things, this suggests an annual run-rate of almost 50,000 units per year — enough to move VW into the middle of the EV pack.

Other

  • Vietnamese company VinFast will develop two new cars (a sedan and an SUV) designed by Pininfarina selected after feedback from an internet contest. VinFast are aiming for annual sales of 100,000 to 200,000 units by 2025, with the first vehicle launching in 2019. (Mahindra)
  • Ineos Automotive has contracted a team of 200 engineers from MBTech to develop the Grenadier SUV. The company says prototypes will be running in 2018, with production vehicles in 2020. (Autocar)
  • Dyson are reportedly planning a 10,000 unit run for their first car, with two subsequent vehicles realising higher volumes. (Autocar).
  • US start-up Hackrod is aiming to raise $1 million for development of a 3D printed sports car. (3D printing industry)
  • Morgan posted 2017 profits of £2 million on revenues of £36 million (up 19% versus 2016). (Morgan)

News about other companies and trends

 

Economic / Political News

  • European car sales grew by 7.1% on a year-over-year basis, to 1,253,877 vehicles. (ACEA)
  • German politicians are reportedly at odds over whether any taxpayer money should be used to pay for retrofitting diesel vehicles to meet more stringent emissions criteria. (Manager Magazin)

Suppliers

  • Faurecia reported 2017 financial results. Revenue of €17 billion was up 10.6% versus prior year, operating income of €1.17 billion rose 20.6%. (Faurecia)
  • Cummins has acquired the automotive battery business of Johnson Matthey. (Autocar)
  • Michelin’s 2017 net revenue was €22 billion and operating income was €2.74 billion. (Michelin) The company also said that it was buying a 20% stake in German automotive servicing company ATU. (Michelin).
  • Plastic Omnium had 2017 revenue of €8 billion, up 15% on 2016, net profit was €425 million. (Plastic Omnium)
  • American Axle reported 2017 sales of $6.3 billion and net income of $337 million. (American Axle)
  • Bridgestone reported 2017 revenue of 3.6 trillion yen, up 9% on 2016; operating income of 419 billion yen was (7)% lower than prior year. (Bridgestone)
  • Borg Warner reported its financial results for 2017. Sales of $9.8 billion rose 8% versus 2016, operating income was $1.1 billion. (Borg Warner)
  • Dana reported 2017 financial results, sales of $7.2 billion increased 24% versus 2016, profit was $111 million. (Dana)
  • Gestamp has purchased a stampings plant in Brazil to supply Toyota’s operations there. (Gestamp)
  • Honeywell announced that its COO would become the next CEO and Chairman. (Honeywell)

Ride-Hailing, Car Sharing & Rental (history)

  • Mahindra purchased a 16% stake in car sharing firm Zoomcar. The two are already partnering in a scheme to create more electric car sharing. (Mahindra)
  • Uber is reportedly in talks to sell its ASEAN business to Grab in exchange for a part stake in the company. (CNBC)
  • Uber’s CEO is “pretty darn confident” that the company could be profitable in the near future, if it chose to reduce spending on growth and innovation. He is hoping Uber will have a “path” to profitability in 2019 when it plants to start talking in detail about an IPO. (Business Insider)
  • Uber lost $(1.1) billion in Q4 2017 on bookings of $11.06 billion and net revenue of $2.26 billion. (Business Insider)
  • Uber published a white paper about its vision for work in Europe, arguing that it provided a useful opportunity for freelance work that could help people earn, and championing the gig economy in general. (Uber)
  • South Korean ride hailing company Kakao Mobility has acquired car pooling start-up Luxi. (Deal Street Asia)
  • Lyft is trialling a new partnership in Baltimore where users can book a bike rental and be dropped off at the bike sharing station. (Lyft)
  • SEAT acquired Madrid car sharing company Respiro and its fleet of 200 cars. (SEAT)

Driverless / Autonomy (history)

  • Hyundai’s head of autonomous vehicles said that sales will be driven by ride sharing fleets rather than individual customers. (Bloomberg)
  • Waymo has received a permit to operate commercial ride-hailing services in the state of Arizona, where it already has a test fleet. (Quartz)
  • A report by the London Assembly (regional government) said that the city would not be ready for driverless cars before 2030, and urged the adoption of car sharing instead. (Bloomberg)
  • Mining company Rio Tinto said that it would increase its 80 vehicle autonomous mining truck fleet to 140 units by 2019, citing substantial increases in productivity and cost reductions. (Rio Tinto)
  • Driverless buses are going into operation at Fukushima, reducing the number of people at the site. (Japan Times)
    • Implication: This is a high-profile example of a niche use-case area that autonomous vehicles will very soon be commercially capable — shuttle services on closed, or low volume roads. Although these applications will not create demand for millions of vehicles, they will provide valuable learning and demonstration of the value and safety record of AVs.

Electrification (history)

  • Mahindra unveiled an electric platform called MESMA that can accommodate a range of battery sizes between 21 kWh and 54 kWh (in extended wheelbase form). Initial production vehicles will be released before 2021. (Autocar)
  • Faraday Future has reportedly raised a further $1.5 billion, over $500 million of which is in the bank. The company held a special presentation to reassure suppliers and a smaller product, dubbed FF81 is now rumoured to be in development. (Business Insider)
  • China has changed its subsidy scheme for electric cars. Vehicles with a range of beyond 400km now receive a larger incentive, while the qualifying level for any amount has been raised to a range of 150km. (Bloomberg)
  • 70% of respondents to a Spanish survey believe all cars will soon become electrified. (Facon Auto)

Connectivity

  • Denso took a stake in cloud-based software development firm Creationline. (Denso)
  • PayByCar announced an agreement to use toll payment systems from E-ZPass to provide a aftermarket in-vehicle payments system. (Xconomy)

Other

  • An Australian university is developing a bodywork repair robot that uses 3D printed parts. (3D Printing Industry)
  • Ride hailing firm Careem acquired a restaurant listings firm to help it enter the food delivery market. (Reuters)

 

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Auto Industry Briefing — week ending 11th February 2018

Aston Martin’s way of working, electric vehicle supply shortages, the advent of seamless door-to-door mobility and self-driving partnerships … What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 5th February to 11th February 2018. A PDF version can be found here.

Favourite stories of the past week…?

 

 

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

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News about the major automakers

 

BMW (history)

  • Invested in Fair.com — the recent acquirers of Uber’s leasing business. At the same time, Fair purchased Skurt, a fleet management company BMW had previously invested in. (FINSMES)
  • Long-rumoured talks for Hyundai to join BMW’s self-driving alliance are reportedly in the final stages. (Handelsblatt)

Daimler (history)

  • Launched the new Sprinter, saying that the all-electric eSprinter version would go on sale in 2019. (Daimler)
  • Mercedes-Benz’s VP of strategy said putting self-driving systems in a vehicle with an internal combustion engine “doesn’t make sense” because of the negative impact on fuel economy. (Wired)
  • Came in for criticism in Europe after Mercedes used a Dalai Lama quote on its Instagram feed and then deleted it, fearing uproar in China. (Manager Magazin)
  • Executives said that a series production vehicle with a hybrid architecture based on the Formula One-derived Project One would be available in 2020/21. (Autocar)

FCA (history)

  • Unions said that the company plans to cut production at the Mirafiori plant, where the Maserait Levante is produced, by an equivalent of 60% in the first six months. There were also several down days at the end of last year. (Reuters)
  • Standard & Poors upgrades its rating for FCA to BB+ and maintained a positive outlook. (FCA)

Ford (history)

  • Reportedly applied for a banking licence in Germany to allow its Ford Credit business to operate in Europe in the event that passporting is lost due to Brexit. (Reuters)

Geely (includes Volvo)

  • Production of Polestar 1 hybrid cars might grow beyond 500 units per year if Volvo can find ways to increase capacity. (Automotive News)
  • Volvo cars reported 2017 financial results. Revenue of 210.9 billion SEK (about $26.1 billion) was up 16.6% compared with 2016, while profit of 14.1 billion SEK (about $1.75 billion) was up 27.7%. (Volvo)

General Motors (history)

  • Reported financial results for 2017; a net loss due to sale of Opel / Vauxhall and tax changes were not included in GM’s headline adjusted EBIT of $12.8 billion. (GM)
  • GM Ventures invested in Yoshi, a callout car maintenance and refuelling service. (FINSMES)

Hyundai / Kia

  • Long-rumoured talks for Hyundai to join BMW’s self-driving alliance are reportedly in the final stages. Memo: Hyundai recently announced a collaboration with Aurora on driverless cars. (Handelsblatt)
  • Announced a goal of 10,000 hydrogen filled vehicles sold by 2022. (Yonhap)

Mazda

  • Reported Q4 2017 financial results; revenue of 2.5 trillion yen was up 8.5% on a year earlier, operating income of 107 billion yen was 5.1% up. (Mazda)

Nissan (includes Mitsubishi)

  • Nissan reported financial results for Q4 2018, revenue of 2,943 billion yen was down (2.2)% on a year-over-year basis, profit of 163.5 billion yen was down (15.1)%. Nissan held its forecast FY revenue but reduced the profit outlook by (12.4)%. (Nissan)
  • Mitsubishi reported financial results for Q4 2017, revenue of 1.5 trillion yen was up 13.1% on a year-over-year basis. Operating profit of 64 billion yen was a marked improvement from a (23) billion yen loss in 2016 Q4. (Mitsubishi)
  • Announced a new investment plan for its Chinese JV. The aim is to increase volumes from 1.52 million in 2017 to 2.6 million by 2022. The DFL Triple On plan will see new models launched, including 20 electrified models (not all BEVs) — by 2022 the JV expects these models to make up 30% of sales. (Nissan)
  • Published a research report that said 37% of ASEAN customers planning to buy a car are open to an EV. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Said that there are now 600,000 Free2Move customers — the service covers 30 services in 10 countries. (PSA)
  • Acquired a controlling interest in Chinese spare parts distributor Jian Xin. (PSA)
  • Production in Poissy was disrupted by heavy snow. (France Info)

Renault (history)

  • One of the two top executives believed to be in contention to succeed CEO Carlos Ghosn resigned; it is now likely that the chief competitive officer will be named COO and become CEO in time. (Reuters)
  • Said it was holding back on bringing an EV portfolio to India until it knows the government’s infrastructure plan. (Economic Times of India)
  • Production in Flins was disrupted by heavy snow. (France Info)

Suzuki

  • Reported Q4 2017 financial results, revenue and profits continued to grow strongly but the company maintained its full year guidance (now looking conservative), citing concerns over exchange rate volatility. (Suzuki)

Tata (includes JLR)

  • Tata Motors announced Q4 2018 financial results, revenue of 74,157 Rs Cr (about $11.1 billion) was up 16.1% year-over-year, mostly thanks to growth from Tata branded vehicles. PBT ws 2,029 Rs Cr (about $300 million). (Tata)
  • JLR reported Q4 2018 financial results (included in the Tata figures above). Revenue of £6.3 billion rose 4.3% year-over-year and the business reported profits of £192 million. (JLR)
  • Tata intends to double its dealer footprint in India to 1,500 sites by 2020 — covering around 90% of the market (from 70% today). (Economic Times of India)

Tesla (history)

  • Reported financial results for full year 2017, losing almost $(2) billion on automotive revenues of $8.5 billion. Tesla said that Model S and X were now constrained by supply of the 18650 form factor cell that they use — a new excuse and slightly odd given Tesla’s past projections of 150,000+ deliveries for the two models combined. Production problems don’t seem to be putting customers off though — deposits shot up 24% to $854 million, but that could all be reservations for Founders Series Roadster (worth $250 million if they were all taken, which they aren’t yet). (Tesla)
  • Said that it a high profile coast-to-coast autonomous vehicle demonstration is delayed because it is waiting to use coding that could be used in many locations rather; than “game it” with specialised software. (TechCrunch)
  • Elon Musk wouldn’t give firm answers on current Model 3 status, preferring to lay a big portion of the blame on 3rd parties suppliers of manufacturing facilities. Keen Tesla watchers will remember that Tesla cut out some parts of the normal prototype build phase to save time, that wasn’t mentioned as a potential cause. (Seeking Alpha)
  • The head of sales and service is leaving the company (to go to Lyft) and will not be replaced; his responsibilities will be absorbed by the CEO. (Seeking Alpha)
  • Elon Musk said annual production of 100,000 trucks is a “reasonable” target and reiterated that he believes camera, lidar and ultrasonic sensors will be a sufficient sensor set for autonomous driving. He was particularly critical of 400nm to 700nm lidar — slightly odd because it is not the area of focus for many suppliers who are instead working between 900nm – 1500nm. (Seeking Alpha)
    • Implication: Our analysis indicates that Mr Musk is missing the point — radar is the only sensor set Tesla will be fitting with a range beyond 100m, simply for purposes of redundancy we think additional sensor types will be required, regardless of how intelligent the neural net Tesla develops becomes (and it needs to be very clever indeed to do object recognition from contemporary radar sensors).

Toyota (history)

  • Reported Q4 2018 financial results, revenue and profits continued to grow strongly, in part due to a weakened yen. The company revised its financial forecasts up, whilst keeping sales outlook flat, as a result. (Toyota)
  • Toyota will make an investment in cab company JapanTaxi and the two will work together on development of mobility services. (Toyota)

VW Group (history)

  • German prosecutors investigating manipulation of diesel emissions carried out new raids on Audi. (Handelsblatt)
  • Porsche said it would invest €6 billion in electrified vehicles by 2022, an increase of €3 billion from the prior plan. €500 million of this will be for additional variants of the MissionE (2-3 new top hats by our maths); €700 million is to be spent on non-vehicle projects such as infrastructure. (Porsche)
    • Implication: if Porsche needs to spend €6 billion / $7.3 billion on electrification by 2022, maybe Ford ($11 billion by 2022) needs to take a second look at its plans.
  • Porsche and Audi executives said that the two firms would save around 30% investment by sharing an EV platform, in development for launch around 2025. (Engadget)
  • Scania and Chinese truckmaker Haylion agreed a collaboration to work on autonomous trucks. (Scania)

Other

  • Subaru reported Q4 2017 financial results; revenue of 2.6 trillion yen was up 5.6% year-over-year but operating income slipped slightly to 306 billion yen. (Subaru)
  • Aston Martin’s CEO said the company will “never make more than 7,000 sports cars a year”; SUVs are incremental to this — the company hopes for sales of between 5,000 – 7,000 per year from its forthcoming model. (Automobile)
  • McLaren’s CEO said that all future models, starting with the Sports Series replacement in 2019, will only be offered with hybrid engines (except possibly for some trackday specials). (Autocar)
  • UK hydrogen powered vehicle start-up RiverSimple launched a new crowdfunding round; aiming to create a test fleet driven by members of the public. (Riversimple)

News about other companies and trends

 

Economic / Political News

  • There were 269,429 passenger car registrations in Germany during January, an 11.6% year-over-year increase. (KBA)
  • UK passenger car registrations for January of 163,315 fell (6.3)% on a year earlier. The biggest declines were seen in business purchases, which fell (1.8)%. (SMMT)

Suppliers

  • Continental and Nvidia agreed a partnership for self-driving car technology, intending to integrate Continental’s sensor technology with Nvidia’s chips. The partners hope to be able to offer a Level 3 product in 2021. (Continental)
    • Implication: a near-term timeline for offering a level 3 system somewhat undermines the insistence of multiple companies around developing their own bespoke solution. The partnership also highlights the increasing complexity of relationships: Continental is one of the integration partners for BMW / Intel and Nvidia is the chosen component supplier for VW.

Dealers

  • US vehicle auctions technology provider KAR acquired fleet management start-up Stratim, saying that the two firms shared many of the same customers. (Auto Rental)

Ride-Hailing, Car Sharing & Rental (history)

  • Didi announced a deal with 12 carmakers — including the Renault-Nissan-Mitsubishi alliance; KIA and a series of Chinese manufacturers — to work on a future electric car sharing network. (Deal Street Asia)
  • Europcar said it would start offering integrated taxi rides to and from the rental location into leasing offers; using the Brunel ride hailing service it acquired last year. (Auto Rental International)
  • com — the recent acquirers of Uber’s leasing business — completed a new round of fund raising. At the same time, Fair purchased Skurt, a fleet management company BMW had previously invested in. (FINSMES)
  • Business expense company Certify said that 68% of US travel spending on its systems in 2017 was on ride hailing services, against 7% for taxi rides. (Auto Rental)
  • Communauto subsidiary Vrtucar acquired longstanding Canadian operator Community CarShare. (Auto Rental)
  • Zoomcar said that its revenue had grown 40% on a year-over-year basis and that it was launching a bike sharing scheme called PEDL (Auto Rental)

Driverless / Autonomy (history)

  • Byton announced a partnership with Aurora to develop level 4 and 5 self-driving vehicles. (Byton)
  • Uber and Waymo settled their ongoing case over stolen IP after a few days in court. The $245 million settlement will be paid in Uber stock at a $72 billion valuation. Google emails released during the trial confirmed that the company had tried to agree a tie-up with Ford (long rumoured but previously denied by both companies). (Futurism)
  • Continental and Nvidia agreed a partnership for self-driving car technology, intending to integrate Continental’s sensor technology with Nvidia’s chips. The partners hope to be able to offer a Level 3 product in 2021. (Continental)
  • Autonomous truck company Embark said it had completed a 2,400 mile journey from California to Florida to test its systems (with safety drivers). There were numerous disengagements but the company was encouraged that often the intervals were several hours at a time (not unexpected from highway driving if the system is competent). (Engadget)
  • Uber’s CEO said that because some routes are “tricky” for autonomous vehicles, Uber expects to see “a mix of human-driven vehicles along self-driving ones for years to come”. The company also thinks that self-driving cars “must” be shared, rather than individually owned. (Uber)
  • Scania and Chinese truckmaker Haylion agreed a collaboration to work on autonomous trucks. (Scania)
  • Long-rumoured talks for Hyundai to join BMW’s self-driving alliance are reportedly in the final stages. Memo: Hyundai recently announced a collaboration with Aurora on driverless cars. (Handelsblatt)
  • Mercedes-Benz’s VP of strategy said putting self-driving systems in a vehicle with an internal combustion engine “doesn’t make sense” because of the negative impact on fuel economy. (Wired)

Electrification (history)

  • Lithium-ion battery maker Farasis Energy raised almost $800 million. (Deal Street Asia)
  • Chinese electric car designer SKIO Matrix has reportedly raised $159 million in funding (China Money Network)
  • Solid state battery developer Ionic materials received $65 million in investment from Alliance Ventures (Renault-Nissan-Mitsubishi) amongst others. (Deal Street Asia)
  • The Ionity charging network, backed by a group of OEMs, released a (not very detailed) map of its intended charging network in Europe. (Electrek)
  • Several European carmakers are reportedly seeing growing waiting lists for their all-electric products. (Golem)
  • Porsche and Audi executives said that the two firms would save around 30% investment by sharing an EV platform, in development for launch around 2025. (Engadget)

Other

  • ComfortDelGro expanded its footprint in the UK (buying a bus company) and China (buying a taxi company)
  • Passenger carrying drone start-up Ehang released footage of what it says are some of the hundreds of test flights it has conducted with human beings in the cockpit. (The Verge)
  • Bicycle sharing company Spin has added electric scooters to its line-up. Inner children can be released at speeds of up to 15mph. (TechCrunch)

 

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Auto Industry Briefing — week ending 4th February 2018

Autonomous vehicles in court, the next step for internal combustion engines and carmakers crying foul of CO2 targets… What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 29th January to 4th February 2018. A PDF version can be found here.

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News about the major automakers

 

BMW (history)

  • Acquired full control of car sharing brand DriveNow, buying out Sixt. (BMW)
  • Reportedly suspending production of M550i in Europe because BMW hasn’t managed to make technical changes to the vehicle necessary to comply with WLTP-based emissions measuring. (BMW Blog)

Daimler (history)

  • Reported 2017 full year financial results. Revenue of €164.3 billion was up 7% versus 2016. EBIT of €14.7 billion was up 14%. Daimler expects sales and revenue to increase in 2018 but profits to remain flat. (Daimler)
  • Launched the new A-Class. The new compact car uses petrol engines developed with Renault and owners can authorise family members to access and drive the car for limited periods using their smartphones — avoiding having to hand the key over every time. (Daimler)

FCA (history)

  • FCA and Waymo agreed a deal for “thousands” of Chrysler Pacifica minvans for delivery from late 2018 onwards. The number of vehicles wasn’t specified but note that thus far Waymo has purchased 700 vehicles, supporting several test fleets and a single town of service provision. (FCA).
  • The US department of justice has told FCA that it wants the company to pay “very substantial” fines to settle charges over diesel emissions cheating. (Reuters)

Ferrari

  • Reported 2017 financial results. Revenue of €3.4 billion was up 10% on 2016, with deliveries up 4.8% to 8,398 units. Adjusted EBIT was €775 million. In 2019 the company aims to sell over 9,000 vehicles. (Ferrari)

Ford (history)

  • Will launch the Chariot bus service in London, the first European city. A fleet of 14 vehicles will run on four routes, all with snazzy alliterative titles (“Shooters Hill Shot” feels a bit weak; we would have gone for Sprinter, potential trademark disputes with Mercedes-Benz notwithstanding). The service is free for the first two weeks. (Ford)
  • Ford’s China CEO, an external hire, departed after five months in the role. (Detroit Free Press)
  • Launched the Freestyle, a compact sized crossover in India. (Autocar)
    • Implication: Apart from highlighting the meaninglessness of the “crossover” moniker (Ford describes the Ecosport in identical terms), the vehicle shows that Ford is taking a different path from Renault. Whereas the French brand has created value “Kaptur” vehicles that share contemporary western styling, Ford’s Figo-based product is clearly not design-led.
  • Moody’s downgraded the company’s rating outlook from stable to negative. (Detroit Free Press)

Geely (includes Volvo)

  • Autocar magazine claimed that Volvo’s first all-electric car will be a hatchback, similar to the 40.2 concept. (Autocar)
  • Lotus’s CEO plans to launch two new sports cars by 2020 and an SUV by 2022. (Car Magazine)
  • Reportedly secured sufficient shares to take the 5% stake in Daimler mentioned before Christmas. (Handelsblatt)

General Motors (history)

  • Being sued over a collision between a motorcycle and a Cruise-operated Chevrolet Bolt. GM (citing the police report) say the motorcyclist is responsible for cutting into the Bolt’s lane; he says it was driving erratically. (Engadget)
    • Implication: If the case goes to trial, it will be interesting to watch the arguments around the culpability of the vehicle programmers and safety driver, in addition to the extent of evidence submitted from the car’s own sensors and whether behaving unpredictably (if at all) is the AVs fault, or something the following motorist should monitor more carefully.

Honda (history)

  • Reported full year 2017 production of 5,236,842 vehicles, up 4.8% on 2016. (Honda)
  • Released financial results for Q4 2017 (fiscal third quarter). Revenue and operating profits both improved on a year earlier and Honda raised its full year outlook for both revenue and operating profit. (Honda)

Hyundai / Kia

  • Kia says that it will stop selling Diesel variants of Rio and Venga in the UK because of falling volumes. (Autocar)

Mazda

  • Reported full year 2017 production figures of 1,607,602 vehicles, 1.4% up on 2016. (Mazda)
  • Believes that it can achieve 56% thermal efficiency for the Skyactiv-3 gasoline engine (due sometime in the 2020s), which would reduce CO2 by a quarter from today’s engines. (Automotive News)

Nissan (includes Mitsubishi)

  • Announced a collaboration with carpooling app Hytch whereby Nissan will sponsor a system of reward payments made to both drivers and passengers who choose carpooling instead of separate journeys. (Nissan)

PSA (includes Opel/Vauxhall) (history)

  • Reached a five year labour agreement with unions at the Zaragoza, Spain plant. Wages will be frozen in 2018 and shift premiums and holiday bonuses will be slightly reduced. (PSA)
  • Free2Move will run a bicycle sharing pilot in Singapore that uses electrically assisted bikes. (PSA)
  • Opel announced new importers in Morocco, where it aims to get 5% market share by 2025, and Tunisia. (Opel)

Suzuki

  • Released its annual CSR and environmental report. (Suzuki)
  • Produced 3,302,336 vehicles globally in 2017, 12.1% up on 2016. (Suzuki)
  • Will launch EVs for the Indian market in 2020 based on technology developed in-house by Suzuki before the start of its electric vehicle agreement with Toyota. (Times of India)

Tata (includes JLR)

  • Confirmed that it had an extended Christmas shutdown at Castle Bromwich plant (which makes almost all Jaguar models) and that further downtime was scheduled in the near future. (Coventry Telegraph)

Tesla (history)

  • Teardown company Munro Associates gave the Model 3 a poor review for a number of design elements. (Inquisitr)

Toyota (history)

  • Announced full year global production of 10,466,451 vehicles, a 2.5% increase on 2016. (Toyota)
  • Agreed a series of projects with Chubu Electric Power on use of second-life vehicle batteries in stationary storage facilities and battery recycling. The companies hope to have a 10,000 battery system by 2020. (Toyota)
    • Implication: Although this is firmly at the unexciting end of the battery electric ecosystem, batteries will be unable in vehicles long before they reach the end of their life (they will probably have to be removed when at circa 80% of new capacity). Re-using them in a cost efficient manner (e.g. without extensive re-processing) and creating improved recycling processes (thus far, lithium ion recycling is much more expensive than for lead acid batteries) will help improve the battery electric business case.
  • Is recalling 49,000 hybrid vehicles to correct a problem that prevents the airbags working correctly. (Toyota)
  • Made an investment in flying taxi company Joby Aviation. (Toyota)

VW Group (history)

  • Launched Cupra as a standalone sporty sub-brand within SEAT. (SEAT)
  • Porsche executives talked about plans for the all-electric Mission E sports car, saying that although annual production was planned at 20,000 units there is “a little leeway” to produce more; that they were investigating additional derivatives and that Porsche are seeing “a trend towards shorter lifecycles” than the traditional 5-7 years. (VW)

Other

  • Subaru reported global production of 1,073, 057 vehicles in 2017. (Subaru)
  • In addition to performing emissions testing on monkeys, it turned out that researchers funded by BMW, Daimler and VW also used humans. Daimler and VW suspended senior managers as a result. (The Guardian)
  • As negotiations between German employers and unions continued, workers increased their walkouts to periods of 24 hours — Ford, Daimler and Porsche were affected. (Economic Times of India)
  • Aston Martin said it was aiming for £600 million in sales to China over the next five years. It also announced a collaboration on electric vehicles with Sinomach Automobiles (a distributor). (Aston Martin)
  • Zenvo said that it will reveal a new car at Geneva. (CAR)
  • Scuderia Cameron Glickenhaus says it will build an off-road car called the Boot. (Autoblog)

News about other companies and trends

 

Economic / Political News

  • German coalition talks indicated that diesel vehicles with high emissions should be retrofitted rather than scrapped. Carmakers anxiously await further details since an SCR system could cost upwards of $1,500 per vehicle. (Reuters)
  • California’s governor signed an executive order mandating 5 million BEVs and FCEVs by 2030. To do its part, the state will spend $2.5 billion on charging infrastructure by 2025. (Climate Action)
  • US light vehicle sales in January of 1.15 million units, represented a SAAR of 17.07 million, down 2.5% on a year-over-year basis. (Wards)
  • The French passenger car market grew 2.5% on a year over year basis in January, to 156,851 units. (CCFA)
  • The Italian passenger car market grew in January by 3.4% on a year-over-year basis to 177,822 units. (UNRAE)
  • The Spanish passenger car market grew by 20.3% in January on a year-over-year basis, to 101,661 units. (ANFAC)
  • European trade body ACEA said that it believes the EU’s long-term CO2 targets are not “technology netural” and “impose a technology choice… effectively pushing for pure battery electric vehicles”. (ACEA)

Suppliers

  • Denso announced financial results for Q4 2017 (Q3 of its fiscal year). Full year revenue and profit forecasts were revised up, to $44.5 billion and $3.5 billion respectively. (Denso) The company said it will open a new office in Tokyo dedicated to research on self-driving cars. (Denso)
  • Bosch reported 2017 financial results. Overall revenue of €78 billion was up 6.7% versus 2016. Sales of the mobility solutions business were up 7.8% to €47.4 billion. EBIT was €5.3 billion (Bosch)
  • Adient fiscal first quarter revenue increased 4% to $4.2 billionbut EBIT fell. (Adient)
  • Autoliv reported financial results for 2017. Revenues of $10.4 billion were up 3.1% versus 2016, adjusted operating income of $892 million was slightly up. (Autoliv) The company also said that it would name the spin off electronics unit “Veoneer” and trading in the new company will begin in Q3 2018. (Autoliv)
  • Schaeffler reported 2017 financial results. Revenue increased 5.9% to €14 billion but profits fell. (Schaeffler)
  • Honeywell reported financial results for 2017. Revenue of $40.5 billion was up 3% year-over-year. (Honeywell)
  • Mahle appointed a new CEO. The previous incumbent was recruited by ZF. (Mahle)
  • US payouts from the Takata compensation fund were approved by a court. GM, Ford and FCA will receive $189 million in total. The largest payout goes to Honda ($126 million). (Detroit News)

Dealers

  • Honda expects its Spanish dealers to make 1.5% profit on turnover in 2018, slightly above 2017. (Europa Press)
  • Mazda’s UK dealer average profits rose to 1.4% of sales in 2017, the top quartile hit 3.3%. (Automotive Manager)

Ride-Hailing, Car Sharing & Rental (history)

  • Uber said it will team up with bicycle sharing company Jump to run a scheme in San Francisco where users can choose to rent a bike, rather than hail a car, from Uber’s app. (The Verge)
  • Grab and Samsung will partner on initiatives around “digital inclusion”, such as improving ride hailing services and mobile payments. (Samsung)
  • BMW acquired full control of car sharing brand DriveNow, buying out Sixt. (BMW)
  • Ford will launch the Chariot bus service in London, the first European city. A fleet of 14 vehicles will run on four routes, all with snazzy alliterative titles. (Ford)

Driverless / Autonomy (history)

  • California’s DMV released reports from companies authorised to test autonomous vehicles in the state (newcomers are exempt). The reports cover the period to November 2016. Notably, Faraday Future failed to submit a report on time. Analysts quickly crowned Waymo as the champion of the self-driving space, with Cruise getting an honourable mention for the level of improvement in the last 12 months. Drawing deep conclusions from the data is becoming increasingly dangerous. Many OEMs with testing licences run very small fleets in California, rarely putting their vehicles on the road (Tesla is one). Even Waymo’s fleet is shrinking (but miles per car are going up). (Ars Technica)
  • Lyft is opening a European office, but it isn’t aimed at running ride sharing yet. Instead, it is creating an autonomous vehicle centre in Munich, Germany. (Bloomberg)
  • Autonomous delivery van company Nuro raised $92 million. Its concept vehicle has slots for different customer grocery orders, enabling it to drive to your door (carrying them in is your job). (Reuters)
  • Udelv announced the start of public trials with its autonomous delivery vehicle. (Golem)

Electrification (history)

  • Electric vehicle start-up Xiaopeng (XPENG) has investors for a $350 million series B round; Foxconn is joining existing investor Alibaba (said to own 10% of the company). Xpeng has raised $800 million in total. (XPENG)
  • BP invested $5 million in electric charging company FreeWire and plans to use the company’s charging equipment at petrol stations in Europe. (Reuters)
  • European EV charging operators Allego and Fortnum will create interoperability between their sites. (Charged EVs)
  • Faraday Future filed a lawsuit against Evelozcity, founded by Faraday’s ex-CFO, accusing it of stealing trade secrets by recruiting Faraday employees. Evelozcity called the allegations “recklessly inaccurate”. (China Money Network)
  • Autocar magazine claimed that Volvo’s first all-electric car will be a hatchback, similar to the 40.2 concept. (Autocar)
  • Toyota agreed a series of projects with Chubu Electric Power on use of second-life vehicle batteries in stationary storage facilities and battery recycling. The companies hope to have a 10,000 battery system by 2020. (Toyota)

Connectivity

  • LG and Honeywell signed an MoU to develop automotive cybersecurity solutions. (LG)

Other

  • Airbus said that the Varhana flying taxi had made its first flight. (The Verge)

Toyota made an investment in flying taxi company Joby Aviation. (Toyota)

 

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Auto Industry Briefing — week ending 28th 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 22nd January to 28th January 2018. A PDF version can be found here.

Favourite stories of the past week…?

 

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

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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 1st 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)

 

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Automotive trends, Auto industry trends, Automotive market research, Automotive market analysis, auto industry news

Auto Industry Briefing — week ending 21st January 2018

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 15th January to 21st January 2018. A PDF version can be found here.

Favourite stories of the past week…?

 

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

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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)

 

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