What happened in the automotive industry last week? Please enjoy the round-up for the week commencing 24^th July 2017. Stories are arranged by company and topic, there are duplicates in case are only interested in some sections. A PDF version can be found here. If you’re happy with just the text version then please read on…

Favourite story this week…? Two things indicate that we might be nearing the point that OEMs start to show their hand on mobility more clearly… which in turn could hopefully lead to much improved capital discipline. Firstly, Daimler has started giving more and more information about the success of its various mobility services (without much financial detail) and secondly, GM’s Corporate line seems to be growing inexorably — it’s hard to see how much longer investors will agree to see hundreds of millions of dollars per quarter being spent without any substantive explanation. Innovation in the electric vehicle space appears to be hotting up too… Fisker are promising industry-leading battery capacity (and since the units are coming from LG Chem I doubt they’ll be alone for long) and Toyota and Hyundai seem to be gaining confidence in solid state batteries — although none of it could be out of a desire to detract from the Tesla Model 3 launch could it?

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Company-by-company rundown

BMW

• Confirmed that it would produce the electric version of the Mini in Oxford. The powertrain will come from plants in Germany. BMW said that it received no assurances from the UK Government about the impact of Brexit before making the decision. (BMW)

Daimler

• Reported Q2 2017 financial results. Group EBIT of €3.7 billion was up 15% on a year-over-year basis, with revenues up 7% and unit sales up 8%. (Daimler)
• Said its Finance arm would have a record second half after reported half-year earnings of more than €1 billion. Daimler said that its mobility services were now being used by 14.5 million customers and had grown 116% on a year-over-year basis (not all of it organic). (Daimler)
• Participated in the Series B round of funding ($46 million) for Chinese self-driving start-up Momenta. (TechCrunch)
• Said that it was reviewing its legal structure with a view to providing clearer distinction between its different divisions. The management team said that this was not in preparation for any spin-offs. (Reuters)
• News emerged suggesting that Daimler reported the alleged cartel first, ahead of VW. (Handelsblatt)
  • Implication: With past precedents suggesting huge fines for cartel participants, but immunity or only light penalties for whistle-blowers, whoever reported the cartel first would expect to fare much better than any other members in any successful prosecution.
• Will reportedly cease production of the China-only R-Class in September, with deliveries continuing into 2018. Memo: the vehicle was withdrawn from other markets in 2012/13 and its produced by 3^rd party AM General in Indiana, USA. (CCFA)

FCA

• Received approval for the sale of 2017MY Ram and Jeep Grand Cherokees powered by diesels in US. FCA has revised software calibrations as part of the approval process. (FCA)
  • Implication: This action shows that FCA may have a path to settle the action brought against it by US authorities for diesel manipulation. It also demonstrates that diesel vehicles can be saleable in the USA.
• Reported 2^nd quarter financial results. Adjusted EBIT of €1,867 was 15% up on a year-over-year basis. Revenue was about flat, despite reduced vehicle sales. FCA attributed most of the profit improvement to Maserati. (FCA)
• Said that half the model range would be electrified by 2022, with Maserati offering all-electric versions of its vehicles. (Automotive News)
• Said that it will unveil a strategy for the period 2018 – 2022 at an investor day next year. Although not clear on any specifics, CEO Marchionne said more asset sales were a possibility. (Reuters)
• Reached an agreement with unions at its JV plant in Serbia (where 500L) is made to end industrial action in return for a 9.5% pay increase. (Automotive News)

Ford

• Reported 2^nd quarter financial results. Pre-tax profits of $2.5 billion were down $(0.5) billion on a year-over-year basis. Cash flow was down $(2.9) billion YoY. Ford also announced a change to the way that it provided earnings forecasts by switching to an adjusted EPS rather than profit measure. (Ford)
  • Implication: Analysts thought they smelled a rat on the forecast methodology change, saying that on a like-for-like basis, Ford’s forecast for 2017 year-end had deteriorated by around 10%. (More…)
• Will recall about 117,000 vehicles in North America to fix problems with seat belts. (Ford)
• Said that it will stop production (and therefore all sales) of its B-MAX vehicle in September 2017. Instead, Ford will begin production of the EcoSport SUV (currently imported from India), reportedly hiring 1,700 additional employees. (Romania Insider)
• The Australian consumer watchdog said it was taking Ford to court for its conduct in dealing with customer complaints about transmission problems. (Reuters)
• Saw US safety body NHTSA increase an investigation into exhaust fumes entering the passenger cabin. An additional 400,000 vehicles have been added, bringing the tally of potentially suspect vehicles to 1.3 million. (Detroit News). Many of the vehicles were Police units and Ford drew attention to the possibility of aftermarket modifications causing odour and fume leaks. It also offered to repair affected vehicles, regardless of age or reason. (Ford.)
• Said that shuttle service Chariot will expand to New York. (TechCrunch)
• Saw media speculation about plans to end production and sales of Fiesta (in 2018 or 2019), Taurus (in late 2018) and C-MAX (in early 2019) in North America. (Detroit News)

General Motors (includes Opel / Vauxhall)

• Reported Q2 2017 financial results. Adjusted EBIT of $3.68 billion was down from $3.85 billion in the prior year. Part of the explanation was increased spending on “Corporate” activities which include the company’s mobility efforts. Opel/Vauxhall were reported as discontinued operations so are not in the headline figures. (GM)
• Researchers uncovered GM patents for self-cleaning autonomous vehicles. The ideas appear to include vehicles with integrated vacuum cleaners and steam cleaning as well as sensors to tell if the car is dirty. (Auto Guide)

Hyundai / Kia

• Hyundai Motor reported financial results for Q2 2017. Operating profit of 1.34 trillion won was up 7.5% on a year-over-year basis whilst revenues were up 4%. Net profit of 913 billion won was down 35% YoY. Hyundai attributed much of the profit drop to lower sales in China and said it was delivering 6 electric vehicles by 2020 to regain momentum in the market. (Hyundai)
• A senior Hyundai executive said that the company believes the viability of solid state batteries as a power source for EVs will be proven in the 2020 to 2025 timeframe and that if the technology succeeds, EV market share could be 90% by 2025. (Inside EVs)

Mazda

• Reported production and sales results for June. Global production of 132,661 units was up 6.5% year-over-year. (Mazda)

Nissan (includes Mitsubishi)

• Reported Quarterly financial results (Nissan reports this as Q1 of its 2017 financial year). Operating profit of 153.3 billion yen was down (12.8)% year-over-year whilst revenues were up 4%. Nissan explained the profit reduction as primarily due to raw materials, exchange and the removal of Calsonic Kansei from reported figures. (Nissan)
• Reported production and sales figures for June. Global sales of 502,878 vehicles was up 6.7% on a year-over-year basis. Sales in Japan were up 46.1% YoY and rest of the world was up 3.5%. (Nissan)
• Said that it had started a second shift at its Resende, Brazil, plant due to high demand for the Nissan Kicks in the region. (Nissan)
• Said that combined sales of Renault, Nissan and Mitsubishi vehicles meant that on a year to date basis the alliance was the largest seller of vehicles at 5,268,079 units. (Renault)

PSA (excludes Opel/Vauxhall)

• Announced first half 2017 financial results. Automotive operating income of €1.44 billion was up 10.7% on a year-over-year basis and gave an operating margin of 7.3%. Automotive revenue was up 3.6% YoY. (PSA)

Renault

• Reported first half 2017 financial results. Although operating profit of €1.8 billion was up slightly versus the prior year, the result was lower than expectations. (Renault)
• Said that combined sales of Renault, Nissan and Mitsubishi vehicles meant that on a year to date basis the alliance was the largest seller of vehicles at 5,268,079 units. (Renault)
• Said that Karhoo was on track to be relaunched in late 2017 with a new strategy. (Auto Finance News)

Tesla

• Held the launch event for the Model 3 where the first 30 cars were handed over. A few new details were confirmed, including: range of 220 miles (expanded to 310 miles for $9k); self-driving autopilot will be an $8k option (same as on Model S/X). During his video presentation, Elon Musk compared Model 3 crash test performance with the Volvo S60, calling the S60 “safe, by Volvo’s standards”. Musk also expressed concern over the “production hell” of the ramp-up. (Mercury News)
• Security researchers at Tencent demonstrated that they could remotely take control of a Model X and activate systems such as brakes and doors. Both the hackers and Tesla were keen to stress that they regarded the Model X as no less secure than other vehicles. (International Business Times)
• Consumer Reports announced that it had restored the top safety rating for the Model S following revisions to the automated safety systems in the vehicle. (Futurism)
• Media reports speculated that Tesla was looking into the application of a larger cylindrical battery in its vehicles despite having only recently unveiled a new battery type for the Model 3. (Inside EVs)

Toyota

• Reported June sales and production figures. June production of 912,387 vehicles was (1.2)% down on a year-over-year basis, with a (3.1)% drop in the Toyota and Lexus brands. On a year to date basis, sales of 5.13 million vehicles was down (2.7)% YoY. (Toyota)
• Is reportedly working on an electric car that will go into production in 2022 and be powered with sold-state batteries. (Reuters)

VW Group

• Reported second quarter financial results, Operating profit including special items was €4.549 billion, an increase of 3.7% on a year-over-year basis. Cash flow was substantially reduced: operating activities contributed €1.2 billion in Q2 2017 versus €7.3 billion in the same period last year. (VW)
• Said in response to cartel allegations that it was “quite common for car manufacturers all over the world to engage in an exchange on technical issues”. (VW)
• Porsche recalled about 21,500 Cayenne vehicles after discovering “irregularities” in the engine control software (and because it was ordered to by the authorities). Porsche’s press release repeatedly referred to the extent of (German regulator) the KBA’s involvement. (Porsche)
• VW Group CEO Müller said that the head of Porsche’s Works Council was being unhelpful after the latter blamed Audi’s management for emissions problems in Porsche vehicles and called for executives to be replaced. (Handelsblatt)
• Porsche announced that it would join the Formula E racing series for open-wheeled electric cars from 2019, alongside existing OEM entrants Renault, BMW, Mahindra, PSA (DS brand), Jaguar, Audi and Mercedes (as of 2019) as well as start-ups Faraday Future and NextEV. (Golem)
  • Implication: expect Formula E to become the go-to marketing tool for OEMs to try and boost their electrification credentials whilst they lack a real product portfolio.
• VW Group CEO Müller said that the company would add an additional 1.5 million vehicles (to bring the total to 4 million) to its diesel recall and upgrade program in Europe following discussions with Germany’s environment minister. (RP Online)

Other

• Subaru reported production results for June. Global production of 98,600 units was up 12.3% on a year-over-year basis, with demand for Impreza and XV cited as key drivers. (Subaru)
• Suzuki reported production data for June. Global production of 245,285 was up 18% on a year-over-year basis, with both Japanese and overseas sales responsible for the increase. (Suzuki)
• Gordon Murray Designs said that it was preparing to test its Ox vehicle in Africa, with a crowdfunding effort nearing sufficient funds to undertake the test program. (Autocar)

And now for the other news…

Economic / Political News

• Following France’s intention to ban new sales if petrol and diesel-powered cars (not yet law), the UK Government announced that it would bring forward its earlier timing of 2050 for the same sales ban to 2040. (The Guardian)
• European industry for commercial vehicles was up 2.5% in June with light commercial vehicles (under 3.5 tonnes) seeing June sales of 193,444 units, an increase of 3.2% on a year-over-year basis. (ACEA)
• UK trade body the SMMT called on the UK government to provide more clarity around Brexit as it switched from attributing falls in production output to consumer reluctance rather than fewer sales days. (Sky News)
• US Department of Transportation is reviewing fuel efficiency requirements. It is contemplating bringing forward a new fuel economy regime (to 2021 from 2022) but then adopting lower limits through to 2025, rather than requiring improvements each year. (Reuters)
  • Implication: whilst they will continue to be cautious with their language to avoid accusations of an anti-environmental stance, OEMs are likely to be pleased with any moves that relax pressure on them to implement additional technologies that reduce vehicle profitability.

Suppliers

• Media reports suggested that Bosch has been implicated in the same cartel as Daimler, BMW and VW. Bosch denies participating in any illegal activity. (Europa Press)

Ride-Hailing, Car Sharing & Rental

• Softbank reportedly has expressed an interest in making an investment of several billion dollars in Uber. It isn’t clear whether this interest is in purchase of existing shares, newly created equity or both. (TechCrunch)
• Ford said that shuttle service Chariot will expand to New York. (TechCrunch)
• Renault said that Karhoo was on track to be relaunched in late 2017 with a new strategy. (Auto Finance News)
• Uber reportedly hopes to have a new CEO in place by September but one of the rumoured candidates, Meg Whitman, has already ruled herself out. (Bloomberg)
• Capital One said that it was changing the way it structured lending for taxi licences as commercial pressures from ride hailing companies have reduced their value. (Auto Finance News)

Driverless / Autonomy

• Daimler participated in the Series B round of funding ($46 million) for Chinese self-driving start-up Momenta. (TechCrunch)
• Researchers uncovered GM patents for self-cleaning autonomous vehicles. The ideas appear to include vehicles with integrated vacuum cleaners and steam cleaning as well as sensors to tell if the car is dirty. (Auto Guide)
• The Indian minister of road transport said that he did not support the use of autonomous cars in India as “each car gives a job to a driver. Driverless cars will take away those jobs, I am certain on this issue”. His comments were not supported by other government sources, who said that the Government’s position was undecided. (International Business Times)
  • Implication: As discussed in our research paper into the growth prospects for autonomous cars, some countries will be hostile towards development, with saving jobs (and ignoring wider benefits of reducing the cost of transportation) likely to be a regular reason.
• US unions raised concerns around the light touch regulations that lawmakers are considering with one union leader saying autonomous vehicles “are likely to cause massive job dislocation and impact worker safety”. (Bloomberg)

Electrification

• German consumer body ADAC recommended that drivers assume the battery capacity of their cars was one third lower than reported figures. This was based in part on long term tests of a Nissan Leaf, which lost 11% of its capacity over a five year test period. The measured degradation is actually better than guaranteed by Nissan in the vehicle warranty. (Golem)
• A senior Hyundai executive said that the company believes the viability of solid state batteries as a power source for EVs will be proven in the 2020 to 2025 timeframe and that if the technology succeeds, EV market share could be 90% by 2025. (Inside EVs)
• Toyota is reportedly working on an electric car that will go into production in 2022 and be powered with sold-state batteries. (Reuters)
• Fisker CEO Henrik Fisker said in an interview that the EMotion vehicle his company plans to launch will have a 145 kWh battery pack that is rated at 800 volts. This is larger than other battery packs announced so far and will be able to benefit from higher charging rates. (Detroit Bureau)
  • Implication: Since Fisker’s supplier is LG Chem, it is unlikely that this technology is exclusive to the EMotion. Memo: Porsche Mission E is also planning on an 800V system. We may start to see lots of Duracell Bunny style adverts featuring Teslas running out of range whilst their competitors carry on over the horizon.

Other

• Mobike began trial services in Florence and Milan. (China Money Network)

What happened in the automotive industry last week? Please enjoy the round-up for the week commencing 17^th July 2017. Stories are arranged by company and topic, there are duplicates in case are only interested in some sections. A PDF version can be found here.

Favourite story this week…? After some internal soul-searching about whether I was being too mainstream, it has to be the German cartel allegations. It isn’t only the potential fines and reputational damage; the cohesiveness of the industrial-media-government alliance appears to be fragmenting, with German media groups leading both the scoops and the criticism. Schaeffler’s capital market day pack is also worth a peek. Alongside Faurecia, they are now publicly showing forecasts for electrification that go beyond many industry planning assumptions and their split by region for 2030, whilst probably wrong at a detailed level, shows that they are trying to think through the different growth scenarios. There is also some good electrification cost information in there, relevant whether you’re studying OEMs, suppliers, start-ups or all three!

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SIGN UP FOR THE WEEKLY UPDATED TO BE EMAILED TO YOU HERE

Company-by-company rundown

BMW

• Was allegedly part of a cartel of German car makers under investigation by the EU for possible collusion on technical regulations and component sourcing for items such as retractable roofs and emission control systems. The other participants were Daimler and VW Group (Audi, Porsche and VW). According to media reports, Daimler and VW may have partial immunity or relief from fines after coming forward as whistle-blowers. BMW appears more exposed. (More…). After the allegations first emerged, BMW rejected wrongdoing and said that the talks between the car companies had been to support infrastructure rather than to act anti-competitively. (..)
  • Implication: Fines for anti-competitive activity can be huge, up to 10% of group revenues, although fines have typically been lower even where clear financial harm to the consumer can be demonstrated. From media reports so far, it isn’t clear whether the alleged activities were to commoditise areas that were not differentiating (not okay, but with an impact limited to theoretical returns of suppliers) or can be linked to consumer effects, such as higher exhaust emissions (which discussions over the size of urea tanks could have led to). The clear impacts here are a further loss of reputation and a sense that the German media has turned against their national champions.
• BMW took part in a $38 million funding round for online used car sales company Shift. (More…)
• Took part in the $159 million series C financing of autonomous vehicle technology company Nauto, alongside GM and Toyota. BMW was already an investor. (More…)
• Saw media speculation that BMW would prefer to build the electric Mini in its Oxford, UK plant but are seeking government assurances around tariff levels and relief treatment before committing. (More…)
• Announced that the head of sales (Ian Robertson) would be retiring with Pieter Nota taking on his responsibilities. (More…)
  • Implication: Pieter Nota is being hired from Philips where he is chief marketing officer. It isn’t a knee-jerk action since the move is effective 1^st January 2018, some way into the future. BMW highlighted Nota’s experience in innovation and transformation and the growing importance of connected mobility in its press release.

Daimler

• Was allegedly part of a cartel of German car makers under investigation by the EU for possible collusion on technical regulations and component sourcing for items such as retractable roofs and emission control systems. The other participants were BMW and VW Group (Audi, Porsche and VW). According to media reports, Daimler may have partial immunity or relief from fines after coming forward as whistle-blowers. (More…)
  • Implication: See BMW comments on the same topic.
• Offered a voluntary recall of 3 million vehicles, expanding an existing campaign covering about 300,000 cars. In Daimler’s words, nearly all EU5 and EU6 vehicles will have updated software to reduce NOx emissions. The cost will be around €220 million. Daimler said that there would be a significant contribution to reducing NOx emissions from diesel vehicles in cities. (More…)
• Saw CEO Zetsche heavily criticised in the press after the recall was announced with comments he previously made around VW’s conduct being used as a suggestion of hypocrisy. (More…)
  • Implication: At the same time, German publications, in particular Handelsblatt, have been championing Ola Källenius as ready to become CEO (seemingly aligned to the company’s succession planning). If the diesel crisis creates too much pressure, a leadership change could take place more quickly than expected.

FCA

• Saw US media focus on the quality of its leasing program amid allegations of a subprime lending boom. (More…)

Ford

• Was reportedly approached by Lucid Motors to explore whether Ford was interested in buying the electric car start-up. Ford was said to be consumed by a 100-day review of its activities. (More…)
• Ford announced its first dealer in Kuwait. (More…)
  • Implication: Given Ford’s earlier announcements about market withdrawals from Japan and Indonesia on the basis of efficient capital deployment, the rationale for opening dealerships in Kuwait is unclear. Albeit at little cost, this could be a worrying indicator of a lack of discipline in allocating capital.
• Ford showed off the road-going GT, boasting that it contained more lines of software programming than an F-35 fighter jet (10 million to 8 million). (More…)
  • Implication: although this sounds cool at the surface, it raises questions about the programming expertise of OEMs. Controlling a fighter aircraft like the F-35, along with a series of systems to track targets and launch expensive weapons simply cannot be a less difficult prospect than driving a high performance sports car. Ford treating its inefficient programming is a worry, especially given that rogue code is often a source of weakness exploited by hackers.

Geely (includes Volvo)

• Volvo announced first half 2017 financial results. Operating profit of about $800 million was up 21% on a year-over-year basis whilst revenue of about $12 billion was up 17% YoY. (More…)
• Geely, Volvo and Lynk & Co (all parts of Geely) agreed to collaborate on vehicle architecture and engine technologies. Although billed as a way of bringing electrified vehicles to market, the sharing seems far broader in scope. It was also announced that Volvo will become a shareholder in Lynk & Co. (More…)

General Motors (includes Opel / Vauxhall)

• Announced shutdowns at plants including Orion Assembly where the Bolt BEV and Sonic C car are built. The move was already expected as GM had said they would reduce inventories in Q3. Comments by workers on social media indicated that part of the downtime would be spent increasing Bolt production. (More…) Media reporting disagreed on whether or not this was correct with some indicating Bolt was suffering over-supply. (More…)
  • Implication: if Bolt production is being increased then this points to two interesting conclusions. Firstly, demand is pleasingly robust — given that Bolt from a technical and cost point of view (slightly awkward styling notwithstanding) seems a competitive prospect. The second is that Bolt is either more profitable than expected or GM has a higher appetite for absorbing losses on this product.
• Took part in the $159 million series C financing of autonomous vehicle technology company Nauto, alongside BMW and Toyota. GM was already an investor. (More…)
• Is reviewing its line-up in North America to reflect changes in powertrain and model mix. The UAW said that it was in talks with the company on how to address under-utilised plants and media reports speculated that six passenger cars could be dropped, including the Chevrolet Volt PHEV (which might stay as a nameplate but become an SUV) and Sonic (build alongside Bolt BEV). (More…)

Honda

• Will recall about 1.2 million vehicles to repair battery sensor problems that can lead to fires. (should have been reported last week). (More…)

Hyundai / Kia

• Said that it will bring forward its timeline for a Level 2 self-driving system. The HDA2 (highway driving assist) feature had been targeted for roll-out between 2019 and 2022 but will now begin to appear in 2018. Hyundai suggested that this feature set provided a pathway to fully autonomous vehicles by 2022. (More…)
• Reportedly in the final stages of design for an 8 speed dual clutch transmission to be used in passenger cars from 2018 onwards. (More…)

Nissan (includes Mitsubishi)

• Will face a vote for union recognition at its Mississippi plant in early August with the UAW accusing the company of intimidation tactics. (More…)
• Said that the new Leaf will have an e-pedal — a device that will allow almost complete control of braking and acceleration with a single pedal. (More…)
  • Implication: This move by Nissan shows that companies with significant electrification experience (R-N and Tesla) may have insights into consumer operation that allows them to better tailor electric cars to fully present the best customer experience, and thus gain an advantage over companies still in their first generation of mass-market offerings. Execution will be key though — if customers find the operation too difficult, they may be put off.

PSA (excludes Opel/Vauxhall)

• Expanded its European online offering so that consumers can now purchase new PSA vehicles in France entirely online (final delivery will still be via a dealer). (More…)
• Faurecia reported first half results and raised full year 2017 guidance. (More…)
• Faurecia said that it was taking a majority stake in Chinese supplier Jiangxi Coagent Electronics by investing €193 million and together they would develop “the cockpit of the future”. (More…)

Renault

• Renault published sales figures for the first half. The 1.88 million units sold represented a 10.4% increase on a year-over-year basis, with sales in emerging markets growing particularly strongly. (More…)

Tata (includes JLR)

• Announced the opening of JLR’s first non-UK engine plant in China, part of a JV with Chery. This is not quite as historic as it might seem as JLR have only been manufacturing their own engines for a couple of years (pre-Ford days notwithstanding). The press release was careful to mention the “exactly 28 robots” working in the plant. (More…)

Tesla

• Said that the Model 3 will not contain a solar roof to augment charging, saying that there was not enough surface area for current technologies to generate significant charge. (More…)
  • Implication: with several other start-ups working on vehicles that place solar charging at the heart of the concept, either this may cause them to have a re-think or (if they are right) could be an area where Tesla are later shown to have lacked vision — given the acquisition of Solar City, Tesla will argue that they know plenty about solar panel technology.
• Said that the second of the Rive brothers (cousins of Elon Musk and co-founders of Solar City) had left the company. (More…)
• Has appointed two new independent directors, fulfilling an earlier promise to shareholders. Both have multi-national and media experience but appear new to technology and capital-intensive manufacturing. (More…)

Toyota

• Took part in the $159 million series C financing of autonomous vehicle technology company Nauto, alongside GM and BMW. Toyota was already an investor. (More…)
• Reportedly plans to begin large-scale BEV production in China in 2019, with a crossover as the launch vehicle. (More…)

VW Group

• Was allegedly part of a cartel of German car makers under investigation by the EU for possible collusion on technical regulations and component sourcing for items such as retractable roofs and emission control systems. The other participants were BMW and Daimler. According to media reports, VW may have partial immunity or relief from fines after coming forward as whistle-blowers. (More…)
  • Implication: See BMW comments on the same topic.
• Porsche said that it would decide on whether or not to create a new diesel architecture by the end of the decade. (More…)
• Audi will recall 850,000 EU5 and EU6 diesel vehicles worldwide (mainly in Europe) to offer updated emissions software. Audi said that this would improve emissions beyond legal requirements. (More…)
• According to media reports, Volkswagen is thinking of selling MAN’s stake in heavy truck transmission supplier Renk. Works Council representatives are strongly opposed. (More…)
  • Implication: similar to Volvo’s sale of a stake in an engine manufacturer, truck companies may be wise to divests whilst the business appears healthy to avoid a political maelstrom further down the road when traditional powertrain business drops.
• Announced group sales for the first half of 5.2 million units, this represents an increase of 0.8% on a year-over-year basis. Sales are down for the Audi brand and China market. (More…)
• German media outlets speculated that several members of Audi’s board will have to leave in relation to their involvement with the diesel scandal. The HR chief, head of production, CFO and head of sales were all mentioned as being at risk. (More…)
• News about the sale of Ducati continued to leak, with the Benetton family emerging as possible suitors and a price tag of $1.4 billion being mentioned. (More…)

Other

• A study commissioned by the German automakers’ association reported that 600,000 jobs could be lost from combustion engine decline. The figure is an assessment of people working in both engine and transmission development and manufacture. (More…)
  • Implication: Although positioned as a reason that city bans should be avoided, the study really highlights the cost of the inevitable changeover from ICE to pure electric vehicles. Even if a significant share for ICEs remains, hundreds of thousands of jobs will be at risk in Germany and other countries. Overall, batteries and electric motors require fewer production hours. OEMs will be under increasing pressure to spell out how they intend to handle this transition (Daimler’s trouble of the last few weeks on steroids).
• The German government will convene a summit, scheduled for August 2^nd between OEMs (BMW, Daimler, VW Group, Opel and Ford), national and local government in a bid to create an aligned plan to improve emissions in a credible manner without having to resort to city bans. (More…)
• The UAW is reportedly planning a “Buy American” campaign to be run around the Labor Day holiday (4^th September) that will try to inform consumers about where different vehicles are built. (More…)

And now for the other news…

Economic / Political News

• UK government minister Michael Gove said that the cabinet was united in wanting a transition period for full implementation of Brexit measures after the end of March 2019. Reporting on the length of the transition varied with about two years being the most common estimate. This will be a measure of relief to automotive groups as it would (if agreed) push the impacts of Brexit further into the business cycle. (More…)

Suppliers

• Continental unveiled its own driverless pod called CUbE which it will use as a demonstration and test vehicle. Memo: Continental is already a member of a number of non-exclusive driverless projects including BMW/Intel and Baidu’s Project Apollo. (More…)
• Continental is reportedly in talks to take an 8% to 10% stake in mapping company HERE. (More…)
• Valeo reported Q2 financial results. Operating margin and net income were up but the company maintained its full year guidance as it expects raw material and exchange headwinds in the remainder of the year. (More…)
• Schaeffler held a capital markets day where they announced a new E-Mobility division and an Industry 4.0 unit. As part of the moves, Schaeffler will also open an electrification centre in China. By 2020 the company intends average sales growth of 4% to 6% and EBIT margin of 12% to 13%. (More…).
• Within the detailed Schaeffler presentation material itself, the company forecast a 15% worldwide share for BEV in 2025 and 30% by 2030 (with EMEA and China above this and other regions lagging). They also presented cost (to OEM) forecasts for componentry. (More…)
• Amtek (a UK aluminium casting business) has been bought out of administration by Liberty House, who have been acquiring a number of UK metal-working businesses over the past few years. (More…)
• Faurecia reported first half results and raised full year 2017 guidance. (More…)
• Faurecia said that it was taking a majority stake in Chinese supplier Jiangxi Coagent Electronics by investing €193 million and together they would develop “the cockpit of the future”. (More…)

Ride-Hailing, Car Sharing & Rental

• Lyft said that it had partnered with Deem to include its service in the latter’s multi-modal travel for business applications. (More…)
  • Implications: hot on the heels of Lyft’s tie up with a number of business receipt processing companies, this represents part of a concerted push by Lyft to be appealing and easy to use for business travel.
• Lyft has created its own autonomous vehicle lab called “Level 5” (a reference to the SAE designation of full autonomy). Saying that it wants to be “active” in the development of self-driving vehicles. Given Lyft’s existing relationships with a range of self-driving providers including Waymo, nuTonomy and GM/Cruise, the rationale for and scope of the exercise isn’t clear. (More…)
• Careem has bought a stake in Egyptian start-up Swyvl an operator of a multi-modal service that directs users to the most appropriate private bus service for their trip. (More…)

Driverless / Autonomy

• German vehicle testing firm Dekra has purchased a racing circuit at Lausitz in preparation for a surge in testing miles for autonomous vehicles. (More…)
• Self-driving truck start-up Embark announced that it had raised $15 million and was working on adaptations of Peterbilt The company is planning a Level 3/4 system that will navigate highways autonomously whilst using a driver for city routes. (More…)
• Several media outlets wrote profiles about Lvl5 a mapping start-up that uses camera and GPS data to build high definition maps. It is paying drivers (many of whom are Uber and Lyft drivers) to send it data from their trips in order to build its database of features. (More…)

Electrification

• Fisker confirmed that they will be using battery cells from LG Chem. CEO Henrik Fisker said that the cells would be “highest energy density” but didn’t provide any details about what this means. (More…)
• The South Korean government has changed the terms of its incentive program for cars, removing a restriction that prevented owners of vehicles with large batteries receiving grants. (More…)
• Lucid Motors denied that it had offered to sell itself to Ford and said that its latest funding round was going well. (More…)

Other

• Connected car start-up Cubic Telecom has reportedly raised a further $40 million, valuing the company at $200 million. Audi is amongst Cubic’s investors. (..)
• Artificial intelligence company Brain Corp raised $114 million from investors including Qualcomm. Brain Corp makes software that helps robots learn their environment. Although aimed at internal spaces at the moment the technology could have applications in vehicles. (More…)
• Calsonic and Quarkslab announced that they had created a joint venture called White Motion to work on automotive cybersecurity. (More…)

What happened in the automotive industry last week? Please enjoy the round-up for the week commencing 10^th July 2017. Stories are arranged by company and topic, there are duplicates in case are only interested in some sections.

PDF version can be found here. If you’re happy with just the text version then please read on…

If you want a history lesson, our archive can be found here.

Favourite story this week…? Maybe I’ve been watching the Tour de France too much but I think that there are two breakaway companies that need to either win the stage or be re-absorbed into the peloton: Tesla and Uber. It feels like on both counts we are coming to a point of reckoning. Uber has now retreated from two major markets and faces extra competition in South East Asia where Grab has raised a $2 billion war chest. Soon we are going to find out whether the monopolistic assumption underpinning Uber’s valuation is real or flawed — it will either have to choose somewhere to make a stand or write off the winner takes all aspiration. Then we can move on to the question of how well Tesla Model 3 demand has held up compared to the pre-order figures and whether the vehicle is profitable. Unfortunately, many in the industry are mesmerised by these two companies and until the issue of whether they are game-changing or merely trail-blazing is put to bed, we’ll see too much cautious-me-too strategy and too little innovation from the major players.

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Company-by-company rundown

BMW

• Announced June sales figures. The 232,620 vehicles sold by the group represented a 2.1% year-over-year increase. (More…)
• BMW i Ventures has made an investment in Caroobi, an online platform that uses independent repair garages to offer servicing in a variety of locations across Germany, Switzerland and Austria with haggle-free pricing. (More…)
• Announced that it will become an official manufacturer in the Formula E racing series (open wheel, electric power only), partnered with the Andretti team. (More…)
  • Whilst unclear whether or not Formula E has captured the public imagination, BMW joins a list of competitors including Audi, JLR and Renault and volume-hopefuls (such as NextEV) in trying to use the series to position their brand as an electrification leader.
• Reached agreement on pensions for UK staff, ending a series of strikes. Staff agreed (with 81.5% in favour) to the closure of the company’s defined benefits scheme for existing contributors (new hires are already in a defined contribution scheme). The union has extracted higher transition payments (£22,000 over a series of years) than the company originally offered. The DC scheme has an employer contribution of 16%. (More…)
  • Implication: Many other UK carmakers have moved to a DC scheme for new hires whilst keeping DB schemes open for existing members. BMW appear to have set a precedent for the terms required to end DB schemes entirely, HR teams will be watching closely…

Daimler

• Announced that it will build electric powertrain components, including batteries and axles, at its Untertürkheim plant. Employees have been carrying out work-to-rule industrial action due to their future employment concerns and the press release was careful to mention the 250 jobs to be created and say that it offered employees “good prospects in the coming era of electric mobility”. In return, unions agreed to more flexible operating arrangements for the existing factories. (..)
  • Implication: Daimler has explicitly acknowledged that electric powertrain production will cause disruption to traditional factories and require fewer jobs. Unions may want to cement lead plant status now, in return for flexibility concessions, rather than face confirmed oblivion later.
• Came under fresh scrutiny in Germany amid reports that 1 million vehicles had excessively high emissions (More…)
• Reached agreement with Chery over their clashing EQ / eQ brands. Daimler owned international rights whereas Chery held trademarks in China. The two companies have now agreed that they will market their products with these similar brands, although no product cooperation is implied. (More…)
• Announced an investment in and cooperation with CleverShuttle, a company that creates software which lets public transport operators optimise routes depending on point in time passenger demand. (More…)
• Said that it will make an electric version of the Sprinter van at its Düsseldorf factory. (More…)

FCA

• Resumed the production of diesel-engined Ram pick-up trucks even though the EPA has not given approval to their sale, indicating that FCA are confident that the matter will soon be resolved. (More…)
• Saw Serbia’s prime minister attempt to intervene to end a strike at Fiat’s factory in the country. The government owns a 33% share in the facility which makes 500L vehicles. (More…)
• Announced June European sales of 106,700 vehicles, an increase of 7.9% on a year-over-year basis. (More…)
• Announced a recall of 1.3 million vehicles due to two separate problems, one with the wiring harness and one for problems with the alternator. (More…)

Ford

• Announced June European sales of 128,400 vehicles, a decline of (1)% on a year-over-year basis. Ford was keen to stress the performance of CVs and SUVs and that sales were up in EU20 markets. On a vehicle line level, Fiesta (on run out ahead of the next generation model) more than accounted for the drop. (More…)
• Issued a recall notice for around 6,000 2017 model year vehicles in the US to fix problems with the transmission. (More…)

Geely (includes Volvo)

• London Taxi Company re-launched itself as London Electric Vehicle Company (LEVC) and displayed its initial product. As with (Geely owned) Volvo, the company has chosen to make much play on the use of electrified branding in its powertrain although the vehicles are PHEVs rather than pure BEVs. It remains to be seen whether or not this blurring of technology and perception will be sustainable in the long term. The car will cost about £50,000 — an uplift of some £8,000 on the outgoing diesel model. This is more of an increase in price than is found on many PHEVs compared to diesel powered siblings. (More…)

General Motors (includes Opel / Vauxhall)

• Vauxhall has launched fixed price urea top ups for SCR equipped diesel vehicles. (..)
  • Implication: OEMs have already recognised urea refills as a major source of consumer frustration. GM’s actions are an attempt to make the experience mundane and predictable and, crucially, disconnect refills from service intervals (something others may have to follow if their calibrations are found wanting by regulators).

Hyundai / Kia

• Hyundai workers in South Korea have voted to go on strike, demanding a 7.13% pay rise. (More…)

Nissan (includes Mitsubishi)

• Said that it expects 20% of European sales to be fully electric by 2020 “where the market conditions are right”. (More…)
• Announced a second shift at its St Petersburg, Russia plant. 450 employees will be recruited as a consequence. (More…)

PSA (excludes Opel/Vauxhall)

• Announced June and first half sales figures. The group sold 1,580,000 units in the first half, an increase of 2.3% on a year-on-year basis. Sales fell in Europe but performance of 3008 was particularly strong, with PSA reporting an order backlog of almost 100,000 units (memo: PSA keeps announcing production increases for this vehicle). (More…)
• PSA’s union leaders reflected on the year that has passed since new employment conditions were agreed. They praised the tele-working arrangements for salaried staff but criticised the impact of volatile production planning on assembly workers. (More…)
• Launched a website named cardayz.fr that is a platform for used vehicle sales. The complete offering will include physical sites and will also enable people to sell their used cars to PSA in a no-haggle transaction. (More…)
  • Implication: having taken a broader interpretation of mobility than most of its competitors, PSA is trying to encourage online transactions in a way that could lead to changes in new vehicle sales. It isn’t clear whether PSA sees its efforts as a way of helping dealers deal with transition or it is actively trying to supplant them.
• Reportedly struggling to recruit enough temporary staff to increase production of 3008 in Sochaux to meet demand. Apparently only 600 people have so far been hired for a 1,500 member weekend shift. (More…)
• Said it was working with VINCI on communications between vehicles and infrastructure. The project appears similar to, but smaller than, the SCOOP initiative that Renault is involved in. (More…)

Renault

• Said that it is on course to spend more on French digital media advertising than television in 2017, the first year that this will be the case. (More…)
• Gave an overview of its work on driverless technologies. Renault said that by 2020 it will have single lane control in production vehicles (later than some other OEMs, including Nissan). Amongst other things, Renault highlighted the importance of autonomy and said that its current sensor set included 3 LIDAR devices (2 front, 1 rear) — a departure from the device at each corner approach of many competitors. Timing was given as “after 2020”. Memo: Renault are also involved in partnerships such as Vedecom. This blog post covered only their in-house efforts. (More…)
  • Implication: OEMs are feeling under more pressure to trumpet their research into driverless technologies and revealing divides in sensor approach, market and timing. Renault’s application appears targeted at highway driving rather than robo-taxi fleets.
• Announced it will contribute a 1,000 vehicle test fleet for a project to test vehicle-to-vehicle and vehicle-to-infrastructure communication (e.g. with toll booths). The Scoop V2V project will include other partners and should not to be confused with start-up of the same name that BMW invested in. (More…). The wider cooperation includes Sanef / Abertis (More….)

Tata (includes JLR)

• Said that it would build the E-Pace in two factories — neither of which are JLR owned. For international markets, Magna will produce the E-Pace in Graz, Austria. For China only, Chery will make the vehicle at its Changshu factory. (More…)
  • Implication: E-Pace is the second vehicle (after I-Pace) that JLR has announced will not be produced in the UK. With the model line-up for its new Slovakia plant still unconfirmed, the company is positioning itself to be less reliant on the UK, and possibly sending a message to the workforce and government.
• Reported Tata Motors Group sales, including JLR, of 90,966 units in June 2017, a drop of (2)% on a year-over-year basis, mainly due to declines in commercial vehicle sales. (More…)
• Managing Director of Tata’s truck making business said that performance of the CV business was “worrisome” and that the company’s focus must change from “transformation journey to a turnaround” in a memo to employees. (More…)

Tesla

• Said that it would expand its servicing infrastructure. Tesla will open 100 new physical servicing sites and add 350 mobile servicing vans. Tesla believes that the two measures will increase servicing capacity threefold. In total, 1,400 technicians will be hired. (More…)
  • Implication: With Tesla’s total vehicle production to date hovering around the 250,000 unit mark, this implies a network capable of servicing an additional 500,000 vehicles, a single year of Model 3 production (Tesla hopes). Several more expansions will be required to satisfy Tesla’s target ownership levels.

Toyota

• Announced that it has formed an in-house VC operation called Toyota AI Ventures with $100 million of funding. This builds on the earlier creation of the Toyota Research Institute (TRI), based in Silicon Valley. The three investments discussed in the press release have already been made and previously announced by TRI. (More…)
  • Implication: Toyota’s specific concentration on areas where it believes it needs help, AI and mapping, belies those areas it feels confident in (the development of the self-driving vehicle itself). It also shows a separation between investment types (this VC fund does not hold Toyota’s small stake in Uber and is instead technology focused) where other OEMs make no distinction.
• Received assurances from the UK government around Brexit ahead of a March 2017 announcement that a future product would be built at its UK plant. As in the case of prior discussions with Nissan, the UK government confirmed that a letter had been sent to Toyota but refused to divulge its contents. The government did indicate that the same assurances would be available to other companies. (More…)

VW Group

• Audi unveiled the feature-packed next generation A8. The vehicle will include a traffic jam pilot that will control the vehicle at speeds up to 60 km/h on suitable highways. Audi indicate that the vehicle is capable of driving itself without human attention but stress that local laws may forbid this. Audi’s system users a single LIDAR unit positioned below the front number plate (see image). The overall sensor set contains a mix of cameras, radar, ultrasonic and LIDAR (see image). (More…)
  • Implication: As the first commercially available Level 3 system, Audi has guaranteed it will boost sales figures and yet preserve residual values as desperate competitors buy vehicles for teardown. The operating performance of the system and the reaction of consumers and lawmakers will be closely watched. No doubt we will soon have hacked vehicles aiming to demonstrate how far above the 60 km/h operating window the self-driving software and hardware can be pushed.
• Saw media reports misattribute VW executives with having claimed that 40 factories the size of Tesla’s Gigafactory battery making facility will be required by 2025. The 40 figure was derived by journalists taking VW’s own capacity estimate and multiplying it out by VW’s market share. VW have made a far higher assumption on 2025 industry mix than most other OEMs. (More…)
• The head of the Audi works council criticised the company’s product plan and production guarantees around electric products in an internal meeting. (More…)
• VW has made an investment in AutoGravity, a product that allows online comparison of financing products — Daimler already involved in the company. (More…)
• Saw 41,000 people join a class action lawsuit in the UK over reduced performance experienced in VW vehicles that have undergone the company’s emissions fix. The lawsuit says that whilst NOx performance has been improved, the vehicle driving experience, and running costs, have deteriorated. VW said that there was no systemic problem with the fix that they had applied. (More…)
• Porsche installed its first 350 kW charging stations ahead of the Mission E launch The units are developed by Porsche themselves. (More…)
  • Implication: the performance of these chargers and the vehicles will be closely monitored. 350 kW is more than double the output of Tesla superchargers (135 kW) and promises a sub 10 minute charge time for more than 200km of range.

And now for the other news…

Economic / Political News

• European Union passenger car sales were announced. At around 1.5 million units, sales were up 2.1% on a year-over-year basis. (More…)
• European Union sales figures for 2016 (EU15) showed that diesel share fell to 49.9%, from 52.1% in the prior year. Most of the share loss was to petrol powered vehicles. (More…)
  • Implication: although the rate isn’t clear, the long term direction of travel for diesel appears to be firmly downwards, with some EU markets experiencing drops of 10% on a year-over-year basis so far in 2017. It remains to be seen how this feeds into residual values.
• China passenger car sales as reported by CAAM were 2,172,000 units in June. This is a 4.5% increase on a year-over-year basis. (More…). Commercial vehicle sales of 340,000 units was up 18.4% on a year-over-year basis. (More…)
• German June sales figures were reported for passenger cars. The 327,693 cars registered represented a (3.5)% decline on a year-over-year basis. Diesel share has declined almost 10% so far this year. (More…)

Suppliers

• Continental unveiled a 48 volt system aimed at electrically assisted bicycles. (More…)
  • Implication: whereas for cars, a 48V system can only provide assistance, in smaller applications, such as bicycles, it can be sufficient to provide more substantive range. Now that automotive systems have brought cost down, Continental are exploring new markets that previously would have had cost or reliability problems that can now be fixed.
• Valeo announced that it was exploring a sale of its passive hydraulics business to Raicam in order to gain approval from the European Commission for Valeo’s acquisition of FTE. (More…)
• Linamar is reportedly interested in a take over of troubled French supplier Aveyron Sam Technologies. (More…)

Dealers

• BMW i Ventures has made an investment in Caroobi, an online platform that uses independent repair garages to offer servicing in a variety of locations across Germany, Switzerland and Austria with haggle-free pricing. (More…)
• PSA launched a website named cardayz.fr that is a platform for used vehicle sales. The complete offering will include physical sites and will also enable people to sell their used cars to PSA in a no-haggle transaction. (More…)

 Ride-Hailing, Car Sharing & Rental

• Grab is in talks to raise $2 billion from a range of investors including SoftBank and Didi. (More…)
• Uber announced that it would merge its business in Russia, Azerbaijan, Belarus and Kazakhstan with Russian ride-hailing company Yandex, giving Uber a 36.6% stake. The new company will also cover Armenia and George (where Uber currently has no presence). Uber will put $225 million into the new venture, in addition to the $170 million it says it has already invested in the region. The combined business will be about the same size as Lyft on a rides per day basis. (More…)
  • Implication: It isn’t clear whether this move, which is similar to the Didi deal in China, is a sign of strength or weakness from Uber. In both territories it has traded its local operations for a minority stake in a larger venture, somewhat at odds with its winner takes all approach in other markets. Perhaps the real strategy is to try to create local monopolies once a market has been fought to duopolistic stalemate? If so, keep an eye on India…
• Uber has bought Swipe Labs, seemingly on the basis of the engineering talent rather than the product. The new team is expected to add user interface expertise to Uber’s existing capabilities. (More…)
• Lyft announced that it had integrated several expense management platforms into its app for business customers. This change allows business users to automatically add the receipts for trips to their company’s system. (More…)
  • Implication: Lyft is recognising the value of business-friendly features — airlines and hotels have shown that preferred supplier status is not simply a factor of price and market share.
• Daimler announced an investment in and cooperation with CleverShuttle, a company that creates software which lets public transport operators optimise routes depending on point in time passenger demand. (More…)
• Freight-matching start-up Transfix has raised an additional $42 million (More…)

Driverless / Autonomy

• A report by AlixPartners said that 50 creditable companies are trying to develop an autonomous vehicle system, as well as a “plethora” of smaller players. The survey including consumer research that finds traditional OEMs such as Ford and GM are viewed as less attractive than Tesla and Google in terms of autonomous vehicles. Note: prior research implies that this is debateable with other studies both for and against traditional OEMs versus technology companies in terms of reputation. (More…)
  • Implication: As indicated in previous news reviews, there are a huge number of start-ups and adjacent companies proffering driverless technology. Less well publicised than the demonstration vehicles themselves is that several white-label autonomous image-processing and controls companies now exist. If someone wants help in launching a new vapourware self-driving start-up with a plausible-looking demonstration quickly and on the cheap, please give me a call — I know how to do it!
• As if to illustrate the point above, Indian software services giant Infosys showed off an autonomous vehicle produced by its engineering team. (More…)
• The CEO of nuTonomy gave an interview around some of the practicalities of autonomous vehicle development. Highlights include: he currently sees autonomous driving software as having to be developed on a region by region basis and isn’t sure how that will change; and he sees multiple competitors across regions rather than a winner takes all market. (More…)
• Continental gave greater details on its Cruising Chauffeur system, confirming its Level 3 to Level 4 credentials. The press release describes a system where the vehicle can drive itself on highways (regulations permitting) and will execute an emergency stop (including pulling over to the side of the road) if the driver fails to take over. The company also highlighted its work on redundancy: it has two separate decision-making systems, one for normal operation and one for emergencies. Continental say that the system will be available in 2020. (More…)

Electrification

• Faraday Future said that it is abandoning its plan for a $1 billion Las Vegas car factory and will instead choose a new (as yet unnamed) site. The company still appears to be planning an early 2018 release. (More…)
• Daimler said that it will make an electric version of the Sprinter van at its Düsseldorf factory. (More…)
• Saw media reports misattribute VW executives with having claimed that 40 factories the size of Tesla’s Gigafactory battery making facility will be required by 2025. The 40 figure was derived by journalists taking VW’s own capacity estimate and multiplying it out by VW’s market share. VW have made a far higher assumption on 2025 industry mix than most other OEMs. (More…)
• German start-up Sonomotors is promising to launch an electric vehicle by 2019. The design includes integrated solar panels that allow top-up charging for around an additional 30km per day of range. (More…)
• Nissan said that it expects 20% of European sales to be fully electric by 2020 “where the market conditions are right”. (More…)
• eMotorWerks announced a scheme that lets private owners of charging points rent time (and electricity) to others via a smartphone app that uses blockchain technology to complete the transaction. (More…)
  • Implication: if schemes like this catch on then they could be a part solution to the electrification infrastructure conundrum. The chance of rental could persuade people to buy high-powered chargers and the cost of renting the space could prevent people hogging chargers for longer than needed

Other

• LexisNexis and Modus announced an alliance to provide insurance companies with off-the-shelf hardware and data processing that will enable them to sell user-based insurance. (More…)
• Octo Telematics launched a new insurance data platform that it claims can take data from any type of sensor and perform usage analysis to derive insights useful for creating insurance policies. (More…)

We’ve just released our latest weekly review of automotive industry news and trends. You can find it here as a downloadable document.

Our favourite story this week…? We are going to keep things very simple and recommend that you take a look at VW’s mobility technology day press release. It details a number of areas that the company is working on, ranging from powertrain to automated infrastructure. Here’s the kicker: this is now all price of entry. Next time you see a company talking airily about its contribution to future mobility, compare it to this. If it looks similar, then they may be far less disruptive than they claim.

For all this and more, take a look at the pdf, or just read on…

If you want a history lesson, our archive can be found here.

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Company-by-company rundown

BMW

• Has set itself a target of saving €1 billion in indirect production costs by 2019. BMW’s current indirect purchasing bill is around €20 billion. (More…)
• Said that the stoppage a few weeks ago caused by a Bosch supplier had affected delivery of around 8,000 vehicles. (More…)
• Will use Inrix as a provider of parking space information in 5 series vehicles. (More…)
  • Implication: BMW has invested in Parkmobile and Inrix is part-owned by rival VW, BMW’s choice indicates that they feel even with close partnerships, they will exploit better alternatives where they see fit.
• Will supply i3 powertrain components to electric boat propulsion company Torqueedo. (More…)

Daimler

• Released further details of the (previously announced) JV it has formed with BAIC to produce and sell electric vehicles in China. The two partners will invest €655 million. One of the clear targets is to locally produce Mercedes-Benz badged vehicles that use Chinese battery cells. (More…)
• Reported June sales figures for cars. 221,874 vehicles were sold in June, an increase of 10.1% on a year-over-year basis. Improved sales at Mercedes-Benz more than offset losses at Smart. (More…)
• Has started a legal case against bearing supplier SKF because of the company’s participation in a cartel. SKF is already being sued by BMW but says its actions had no effect on its customers. (More…)

Ford

• Announced June sales figures for US and China. In the US, sales were down (5.1)% on a year-over-year basis, with increases for trucks and SUVs failing to offset a fall in fleet sales and passenger cars. (More…). Ford’s Chinese JVs reported sales up 15% YoY. (More…)

Geely (includes Volvo)

• Volvo announced that it will cease production and sale of vehicles powered only by internal combustion engines in 2019. Although the news was billed as Volvo converting to electrification, the company’s near-term ambitions are more modest and the announcement is about 100% penetration of 48V mild hybrid systems / PHEV and BEV on all new products that launch after 2019. In practice, vehicles will continue to be produced with ICE-only powertrain into the 2020s until they are replaced. In separate comments, Volvo also said that a 48V gasoline engine will be around equivalent cost to a (Stage 6.2) diesel engine. (More…)
  • Implication: although the substance of the announcement was not the wholesale switch to electrification that many of the headline writers seized, this move will add to existing calls for other OEMs to show that they are taking the transition to electrification seriously. In many ways, Volvo’s press release shows the goodwill that can be generated from simply being the first to state what will be a commonplace transition plan.
• Geely announced that it was buying flying car start-up Terrafugia. (More…)
• Reported Volvo sales figures for the first half of the year. Sales of 277,641 vehicles was an 8.2% increase on a year-over-year basis. Increases in China more than offset share losses in the Americas. (More…)

General Motors (includes Opel / Vauxhall)

• Reported June sales figures for the USA. Total sales of 243,155 vehicles was down about (5)% on a year-over-year basis. GM tried to draw attention to areas where it was out-performing rivals: lower incentive spending and fewer sales to rental companies (memo: inventory at GM is currently far higher than domestic rivals). (More…)
• Three workers were injured in an explosion at the Hamtramck assembly plant (all are expected to recover). Production was unaffected by the incident. (More…)

Honda

• Announced that has formed a joint venture with Hitachi (49% Honda/51% Hitachi) to develop and manufacture electric vehicle motors. This follows months of detailed discussions after agreeing an MoU earlier this year. (..)
• Reported US sales results for June. Total sales of 139,793 vehicles represented an increase of 0.8% on a year-over-year basis. Improvements at the Acura brand more than offset a slight decline in sales of Honda branded vehicles. (More…)

Hyundai / Kia

• Hyundai reported June sales results. 376,109 units were sold, a (15.5)% reduction on a year-over-year basis. The main cause of the reduction was weaker South Korea and Chinese sales. (More…)
• Kia reported June sales results. 232,370 vehicles were sold, representing a (13.3)% decline on a year-over-year basis. Kia primarily blamed declines in the South Korean market and losses in China (memo: both Hyundai and Kia had previously said tension over US missile interceptor sites in South Korea were harming Chinese sales). (More…)

Nissan (includes Mitsubishi)

• Reported sales results for US and Europe. US sales of 143,328 were up 2% on a year-over-year basis. European sales of 70,757 units were up 4.4% YoY. (..)
• Said that in 2016, the Renault-Nissan alliance had delivered €5 billion in annual synergies, a 16% increase over the figure for the previous year. With the addition of Mitsubishi and further application of CMF-based vehicles, R-N expect this saving to reach at least €5.5 billion by 2018. (More…)

PSA (excludes Opel/Vauxhall)

• The European Union announced that it had approved the sale of Opel and Vauxhall to PSA. The EU statement noted that in Estonia and Portugal the combined entity would have a 40% market share in small commercial vehicles but took no action. (More…)
• Faurecia announced that it will create a joint venture with (PSA’s part-owner) Dongfeng to provide clean mobility technologies to Dongfeng-affiliated OEMs. (More…). It also announced a new JV with Wuling to produce seating. (More…)
• Is in conflict with one of the smaller unions at the Vigo plant. The union is complaining about the line rate increases PSA has imposed and is threatening strike action. PSA has refused to negotiate saying that the union represents less than 20% of workers at the plant. (More…)
• Created a research partnership with Moroccan and US universities called OpenLab to look at sustainable mobility in Africa. (More…)
  • Implication: PSA is recognising the precedent set by development of the mobile phone industry in Africa (examples include M-Pesa) and is looking for Africa-centric solutions
• PSA’s site at Sept-Fons was blockaded by the workers of GM&S, unhappy at the progress being made to avoid a liquidation of the company. PSA had to take emergency measures including the use of helicopters to retrieve parts and the blockade was lifted after a few days. (More…)
• France’s finance minister announced that the government would put €10 billion towards innovation, with the money coming from the sale of various company stakes owned by the government. He declined to name the potential sales — PSA was an inevitable target of speculation. (More…)
  • Implication: a sale by the French state could change the balance of power within PSA since the current ownership stake is designed to be inline with the shareholdings of the Peugeot family and Dongfeng.

Renault

• Announced a new joint venture in China with Brilliance Automotive (in addition to its JV with Dongfeng). Renault will have 49% of the JV which will be for commercial vehicles. The JV was formed through the re-capitalisation of Brilliance Automotive’s existing subsidiary Shenyang Brilliance Jinbei. (More…)
  • Implication: although relatively late to China, Renault now has two JVs (which seems the de rigeur number for most companies) and is very experienced in the kind of battery electric vehicles that the Chinese government is encouraging.
• Has invested in a joint venture with driving simulation company Oktal. Renault has taken a 35% stake in the new entity, to be called Autonomous Vehicle Simulation (AVS), which will include Renault’s in-house simulation software SCANeR.
• Said that in 2016, the Renault-Nissan alliance had delivered €5 billion in annual synergies, a 16% increase over the figure for the previous year. With the addition of Mitsubishi and further application of CMF-based vehicles, R-N expect this saving to reach at least €5.5 billion by 2018. (More…)
• France’s finance minister announced that the government would put €10 billion towards innovation, with the money coming from the sale of various company stakes owned by the government. He declined to name the potential sales — Renault was an inevitable target of speculation. (More…)
  • Implication: a sale by the French state could change the balance of power within Renault and possibly even changes in the capital structure of the Renault-Nissan alliance.

Tata (includes JLR)

• Reported June sales figures for Jaguar Land Rover. Sales of 51,591 vehicles were up 11% on a year-over-year basis. For April to June 2017, sales of 137,463 units was an increase of 3.5% but within this figure Land Rover sales were down (4.7)% — attributed by JLR to weakness in emerging markets other than China. (..)

Tesla

• Reported Q2 production and delivery figures. 22,000 vehicles were delivered, of which around 12,000 were Model S. Although up on a year-over-year basis, the figure was short of market expectations. Tesla reported that a production shortfall of 100 kWh battery packs had constrained supply of vehicles to around 60% of demand during April and May. Tesla issued a follow-up following negative feedback that it had an additional 3,500 vehicles in transit that were not declared as deliveries, but it was unclear whether this number had been in any way inflated by the production hold-up. (More…)
• Saw concern from investors and media following the Model S failing to achieve the top safety rating in every test set by the IIHS (a US insurance industry testing initiative). The Model S recorded the top rating in all but one test, in which it recorded the 2^nd highest rating. Tesla called the test “subjective”. (..)
  • Implication: The pressure on Tesla to execute in every area in a better way than other automakers seems to be increasing. This is an expectation that the company will find it difficult to fully satisfy.
• Said that the first production-standard Model 3 had left the factory (More…)
• Announced that lower-end Model S and Model X vehicles will receive upgrades to improve their acceleration times. (More…)
• Saw concerns arise over drops in registrations in California and Hong Kong. The local registration reporting lags Tesla’s own sales figures. (More…)
• Elon Musk showed that Donald Trump isn’t the only one who can do massive deals via Twitter. Tesla has agreed to deliver 100 MW of battery capacity to an Australian utility. If Tesla doesn’t deliver within 100 days, the batteries will be free, showing Tesla is prepared to learn from the takeaway pizza industry. The offer was originally made via a tweet in April (More…)

VW Group

• Said that the recall of vehicles to fix problems with the brakes had risen from 385,000 last week to 766,000 cars. (More…)
• Reported to be the front-runner for the contract to be official sponsor of the German national team. The sponsorship is said to cost €25 to €30 million per year. Mercedes are the current sponsor. (More…)
• Seats’s president said that the Spanish government should do more to encourage sales of electric vehicles in order to attract production of electric cars, noting that currently only electric commercial vehicles are produced in the country. He also noted that he was expecting a new generation of batteries to arrive in 2025 that would give a significant cost advantage. (More…)
• Said that it will return to Iran with the VW brand. The company will partner with privately-held Mummut Khodro. At present, all vehicles will be imported. (More…)
• Claims emerged in the German press that VW’s management had been informed of the likely costs of the diesel scandal over a month before any public announcements were made, calling into question whether the executive team acted in a suitably timely manner. (More…)
• Will work with Third Space Auto on applications for artificial intelligence within the vehicle such as voice recognition and smartphone integration. (should have been in last week’s review). (More…)
• VW Group held a mobility technology day where it outlined many of the projects it is working on around electrification and mobility. As well as the usual work on better drivetrain and sensors, VW highlighted work on infrastructure such as charging stations that automatically plug in to the car. (More…)
• VW will partner with robotics supplier Kuka on applications that can help electric and autonomous vehicles, particularly around supporting services and infrastructure. (More…)
  • Implication: The advent of the robo-taxi will see costs of driving reduced but needs infrastructure innovations such as automated cleaning and re-charging to provide a low overall cost. VW’s partnership with Kuka will enable it to explore what it takes to deliver these type of services.
• Porsche is said to be working on autonomous vehicle software designed for on-track application. The company has apparently retained the services of ex-Formula 1 driver Mark Webber to help them record circuit data that can then be downloaded to other cars and teach the owners how to drive faster. (More…)
  • Implication: as autonomous driving threatens to change the car ownership model, it holds some possibilities for brands to provide a more tailored experience than can be economically offered today.

Other

• Chery’s Qoros brand said that it would create a sub-brand of its own called Model Young that will sell cheaper vehicles using the platforms that Qoros has developed. (More…)
• Volvo AB (the truckmaker, not the car company) said that it would sell its 25% stake in Deutz, a German maker of large diesels. Deutz will remain a supplier.
• McLaren is reportedly looking to raise £525 million by issuing a bond. The proceeds will largely be used to pay for the share purchase from former CEO Ron Dennis. (More…)
• SAIC will take on GM’s former site in Gujarat, India for production of MG cars, scheduled to begin in 2019. The site reportedly has a production capacity of around 130,000 units per annum. (More…)

And now for the other news…

Economic / Political News

• The EU parliament’s environment commission recommended a target of between 68g and 78 g of CO₂ per km for passenger car fleet averages in 2025 (95g is the 2021 target) and between 105g and 120g for commercial vehicles. This recommendation does not guarantee that these will be the new regulatory levels but the opinion of the MEPs influences the process. (More…)
  • Implication: In order to meet these emission targets, lightweight technologies and near 100% usage of 48V as well as a substantial increase in PHEV and BEV would be required with implications for OEM R&D spend and future profit outlook, suppliers and raw materials purchasing.
• France’s energy minister said that the country intends to stop the sale of all non-zero emission vehicles by 2040. This aspiration is not yet backed by draft legislation. The government will also launch a scrappage scheme for older gasoline and diesel vehicles. (More…)
  • Implication: this was seized upon by mainstream media as an example of action, with calls for other countries to follow France’s lead. Lost in this was the existing commitment by a group of countries including Germany, the UK and the Netherlands to halt the sale of all non-emission vehicles by 2050. Whilst this timeline is later, most seemed to not even realise it existed. These commitments by governments also give clearer planning horizons for automakers and users.
• The European Union and Japan announced that they had reached political agreement on a free trade agreement. Final agreement may take another few years but was confirmed to include the imports of car parts and vehicles with zero tariff conditions being phased in over an unspecified amount of time (More…)
  • Implication: this agreement will increase competitive pressure in Europe and also provides an alternative for Japanese manufacturers heavily exposed to Brexit due to their manufacturing footprints (Nissan, Toyota and Honda). Given their low sales in the UK, they may in time prefer to close UK plants and import into the EU from other locations if the UK fails to agree zero tariff trade with the EU.
• US sales figures for May showed an industry SAAR for the month of 16.41 million units. (More…). The US auto dealers trade body said that it forecasts industry at 17.1 million units for full year 2017 (More…).
• German car registrations for June of 327,800 units were down (3)% on a year-over-year basis, the trade association attributed this to two fewer selling days. (More…)
• UK car registrations of 243,454 units were down (4.8)% on a year-over-year basis. Within this, diesel fell by (14.7)% and is down almost (10)% on a YTD basis. (More…) Commercial vehicle sales of 37,349 units was up 1.8% in June, although the market is still down (3.7)% on a YTD basis. (More…)
• French registrations for passenger cars and commercial vehicles in June were up 1.6% and 1.9% respectively. Adjusting for selling days, the growth was much stronger: 6.4% for cars and 6.7% for CVs. (More…)
• Spanish registrations for passenger cars and commercial vehicles in June were up 6.5% and 8.7% respectively. (More…)
• Brazilian automotive sales rose 13.5% on a year-over-year basis. Some press reporting concentrated on a month-over-month slowdown — sales dropped 0.3% on that basis). (More…)

Suppliers

• Continental said that it had taken a stake in French autonomous bus company EasyMile. (More…)
• Autoliv has entered into an agreement with Velodyne with the intent of commercialising the latter’s LIDAR technology (should have been reported last week). (More…)
• Faurecia announced that it will create a joint venture with (PSA’s part-owner) Dongfeng to provide clean mobility technologies to Dongfeng-affiliated OEMs. (More…). It also announced a new JV with Wuling to produce seating. (More…)
• The US NHTSA is reportedly looking at the safety of fuel tank components made by Continental. If the agency decided that a recall was necessary, millions of vehicles could be affected. (More…)
• Continental has acquired Singaporean company Quantum Technologies — a navigation and telematics specialist. (More…)

Dealers

• There was a flurry of UK dealer acquisitions: Super Group purchased six Ford and three Suzuki dealerships (More…). Group 1 acquired Beadles Group. (More…). Sytner bought a BMW dealership (More…) and Motorline took on a Hyundai dealership. (More…)
  • Implication: despite Brexit and sluggish industry figures, dealer acquisitions continue. It isn’t clear if this consolidation reflects a pressure to reduce overhead or is due to continuing optimism about the prospects for the UK market. As a point of note, both Super Group and Group 1 are based outside the UK and have made multiple acquisitions recently.
• Indian online car sales portal Droom announced it had raised $20 million to further expand the business. (More…)
  • Implication: Online sales is an area where developing countries have the potential to leapfrog existing automotive practices, so Droom could provide useful lessons for companies such as Amazon (memo: in the process of hiring a team to begin online sales).

Ride-Hailing, Car Sharing & Rental

• Uber said that it would partially suspend services in Finland. The UberBlack service (professional drivers) will continue but UberPop (unlicensed drivers) will be stopped until new regulations are put in place. (More…)
• Spanish car sharing start-up Amovens announced that it had raised €5 million to enter the French market. (More…)
• Russia’s Bakulin Motors Group announced that it would begin trials of driverless buses on a university campus. (More…)
• Lyft said that it was now completing 1 million rides per day (memo: Uber is currently carrying out upwards of 6 million rides per day in more markets). (More…)
• Zipcar said that it would withdraw from the Austrian market. (More…)

Driverless / Autonomy

• Baidu announced that its Project Apollo initiative, launched earlier this year, now has over 50 partner companies. These include several Chinese OEMs, Ford and Daimler. (More…)
• US Start-up Torc emerged from stealth mode saying that it was producing self-driving hardware for retro-fit to existing vehicles. It currently has 1,000 miles of autonomous driving. (More…)
• Continental said that it had taken a stake in French autonomous bus company EasyMile. (More…)
• Autoliv has entered into an agreement with Velodyne with the intent of commercialising the latter’s LIDAR technology (should have been reported last week). (More…)
• As part of the ongoing Uber–Waymo litigation, a judge ordered Waymo to turn over documents relating to its communications with Lyft. Uber seems particularly interested in the nature of M&A discussions between the two. At the same time, Waymo has dropped three of the four patent claims it made, seemingly due to the inability to get the engineer at the centre of the case to testify as he wants to avoid self-incrimination. (More…)
• ai launched its first product, called Panda. The device plugs into existing car hardware and collects information about how the vehicle drives. The intent is that later on this information can be used to create self-driving programs. (More…)
• Dutch start-up Amber is claiming that it will have self-driving cars on the streets by mid-2018. (More…)
• Swedish start-up Einride unveiled its driverless delivery vehicle concept. There is no cabin so the vehicle must either operate in autonomous mode or be driven by a remote operator. (More…)
• Porsche is said to be working on autonomous vehicle software designed for on-track application. The company has apparently retained the services of ex-Formula 1 driver Mark Webber to help them record circuit data that can then be downloaded to other cars and teach the owners how to drive faster. (More…)
  • Implication: as autonomous driving threatens to change the car ownership model, it holds some possibilities for brands to provide a more tailored experience than can be economically offered today.

Electrification

• Bloomberg New Energy Finance (BNEF) published an updated assessment of electrification growth. Their latest forecast is for cost parity by 2025 and for one third of the vehicle fleet to have a plug (doesn’t preclude PHEVs) by 2040. BNEF set the cost-parity point at $109/kWh for a battery — higher than many other forecasts (which cluster around $70/kWh). (More…)
  • Implication: if the analysis is correct then there will be a surge in demand for the type of materials that go into electric vehicle batteries (assuming no new technology emerges) and manufacturers with only one or two volume BEV models in their portfolio will be unable to transition effectively in the event of a sudden (within three years) increase in electrified mix.
• Charging provider NewMotion announced that it had become a partner on the Gireve This will allow wholesale access to other physical charging points that partner with Gireve, such as the BeLib stations in Paris. (More…)
• Seats’s president said that the Spanish government should do more to encourage sales of electric vehicles in order to attract production of electric cars, noting that currently only electric commercial vehicles are produced in the country. He also noted that he was expecting a new generation of batteries to arrive in 2025 that would give a significant cost advantage. (More…)
• UK start-up Charge Automotive said that it had signed a lease for a factory where it will assemble its range of 3.5 to 26 tonne electric trucks. (More…)
• Lohr Group unveiled its electric minibus called Cristal. The vehicle is intended to feature autonomous technologies and will have a selling price of €90,000, with battery rental on top. (More…)
• The founder of LeEco is reported to have sold his share of Lucid Motors. (More…)

Other

• Geely announced that it was buying flying car start-up Terrafugia. (More…)
• Slovakian flying car start-up Aeromobil announced it had raised further funds to support the next stage of product development. (More…)

We’ve just released our latest weekly review of automotive industry news and trends. You can find it here as a downloadable document.

Our favourite story this week…? We’d been hearing people talking informally about €100 / kWh battery cell costs before 2020 for a while now but Audi have now broken cover and quoted the number in an interview. Some companies are still talking about much more expensive cost levels so it will be interesting to see whether this changes their view (btw, Audi aren’t the only OEM saying these numbers off the record).

For all this and more, take a look at the pdf, or just read on…

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SIGN UP FOR THE WEEKLY UPDATED TO BE EMAILED TO YOU HERE

Company-by-company rundown

BMW

• BMW’s CEO visited the Spartanburg, US plant for the launch of the new X3. In a speech he stressed BMW’s contribution to the US economy and said that a further $600 million would be invested between now and 2021 to make new SUVs. (..)
• BMW’s board member for sales said that the company was yet to decide where to build a forthcoming all-electric Mini. The plants in contention are Oxford (UK), NedCar (Netherlands), Leipzig and Regensburg (both in Germany). He said that the decision will be made in September. It is probably no coincidence that these remarks were made whilst BMW is in dispute with UK unions over pension terms. (More…)
• BMW’s CFO said that one of the ways the company could afford increased R&D spending was by reducing complexity. Amongst potential measures he mentioned reducing the size of the diesel portfolio. (More…)
• BMW remained silent on rumours that it will show an electric 3 series at the Frankfurt motor show (reportedly sporting a 400 km range). (More…)
• Agreed with (German region) Bavaria’s government to improve the emissions of Stage 5 diesel cars through the use of new engine management software. This could be a template for agreement at a national level. (More…)

Daimler

• Production of E-Class was reported slowed due to the “work to rule” action by workers in Daimlers plant at Untertürkheim, who produce components for the car. (..)

FCA

• Media reports suggested that the company may be suspending deliveries of the Chrysler Pacifica Hybrid minivan (the same car used by Waymo) until the next model year arrives, due to problems with the electric system. (..)

Ford

• Announced that the Ford-branded GoBike scheme (run by a 3^rd party called Motivate) had launched in San Francisco. The scheme will ultimately have 7,000 bicycles available. (..)
• Will hire 160 people and renew 240 temporary positions at its plant in Valencia, Spain due to a line rate increase to satisfy demand for Kuga. Following the hiring, line rate will rise from 1,810 cars per day to 1,920. (More…)
• Announced that 400,000 Transits will be recalled in the US to fix problems with the driveshaft flexible coupling. A very small number of Police Interceptor and Escape vehicles will be recalled to fix specific issues. (More…)

Geely (includes Volvo)

• Announced that the recently formed partnership with Autoliv (called Zenuity) to develop autonomous cars will work with Nvidia, targeting a Level 4 autonomous car by 2021. (More…)

General Motors (includes Opel / Vauxhall)

• Held a conference call to give an update on its financial forecast for the Opel / Vauxhall sale and US industry. The Opel / Vauxhall sale will incur $5.5 billion of special charges (up from $4.5 billion) and that from Q2 onwards the business will be reported as “discontinued operations”. GM also gave details of the way that profits and revenues will be impacted by the sale. US industry is now expected by GM to be in the “low 17 [millions]” as opposed to “min 17 [millions]” previously — the main trends are a weakness in passenger car sales and lower residual values. GM plans considerable inventory reductions for passengers cars by year end versus its current position. (More…)
• Indicated that it was looking at ways to involve its dealers in the servicing and fleet management of autonomous vehicles. (More…)

Honda

• JV Honda Dongfeng will recruit an additional 2,200 people in China to increase production. (..)

Mazda

• Recalling almost 228,000 vehicles in the US because of problems with the parking brake. (..)

Nissan (includes Mitsubishi)

• Announced May 2017 production and sales results. Global sales of 460,554 units were up 6.7% on a year-over-year basis, led by sales of passenger cars in Japan. (More…)
• Early model (2011) and high mileage Nissan Leaf owners are reporting range degradation of over 50%. They are also discovering that Nissan’s earlier statements about battery replacement cost are not being honoured by dealers. (More…)

PSA (excludes Opel/Vauxhall)

• After discussions with the French government, PSA committed itself to €12 million of annual orders from troubled supplier GM&S and to make a shared investment (with Renault) of €10 million in the site from 2018. This appears to pave the way for a takeover of GM&S by GMD. (..)
• PSA discussed their plans for electric drivetrain manufacture, including locations for motor and pack assembly. The company appeared not to rule out developing its own battery cells but said it is not the preferred approach and that PSA believes there is proprietary knowledge in the software that controls charging and discharging. (More…)
• Has launched a store in France that uses virtual reality instead of display models to sell cars and plans to have 30 such sites in operation across Europe by 2030. (More…)
• Said that it will supply 55,000 3 cylinder engines from its Chinese JV plants to meet demand in Europe rather than increase capacity in European plants. (More…)

Renault

• After discussions with the French government, Renault committed itself to €10 million of annual orders from troubled supplier GM&S and to make a shared investment (with PSA) of €10 million in the site from 2018. This appears to pave the way for a takeover of GM&S by GMD. (..)

Suzuki

• Announced May 2017 production and sales results. Global production of 273,316 units was up 10.6% on a year-over-year basis. (More…)
• Maruti-Suzuki announced June 2017 sales of 106,394 units, up 7.6% on a year-over-year basis. (More…)

Tesla

• Elon Musk revealed that the Model 3 has passed its regulatory tests and handover to the first (very small) batch of customers will take place in late July. He believes that production could reach 20,000 cars per month by December. (..)

Toyota

• Said that its Chinese JV FAW-Toyota would install a new assembly line for small SUVs with production capacity of 100,000 units starting in June 2018 and rising to 200,000 units. (..)
• Invested in Israeli vehicle to vehicle communication hardware provider Autotalks. (More…)
• Will recall 1,760 Lexus ES models to fix issues with the steering. (More…)
• Announced May 2017 production and sales results. Global production of 734,574 units was down 1.4% on a year-over-year basis. (More…)

VW Group

• Audi’s chief technical officer said in an interview that the company would be paying about €100 per kWh for batteries when it launches its new all-electric products later this decade. (More…)
• Audi and MAN agreed with (German region) Bavaria’s government to improve the emissions of Stage 5 diesel cars through the use of new engine management software. This could be a template for agreement at a national level. (More…)
• Saw ratings agency Fitch keep VW’s rating at BBB+ and revise the outlook upwards, to stable from negative. (More…)
• Faced allegations that VW’s French arm had mis-reported sales and delivery figures for several years. The accusations would have affected the reporting of the timing of the sale. (More…)
• Announced the creation of a deep learning data lab with Nvidia with a particular focus on mobility services. Memo: Audi announced their own deep learning activity a couple of weeks ago. (More…)
• Will recall 385,000 cars in Germany to fix problems with anti-lock brakes. (More…)

Other

• Aston Martin announced that it will produce an all-electric model for the first time. The RapidE will be a limited production run of 155 vehicles and will be based on the Rapide 4 door. Power and range figures were not revealed. The company previously was developing electric powertrains with Chinese group (and Faraday Future owner) LeEco but said it would be developing RapidE “by ourselves”. (.)
• In a series of press releases, McLaren announced that (McLaren Chairman) Ron Dennis had sold his 25% stake to other investors and would leave the company. (More…). Following this move, McLaren will re-unify the racing team and automotive company that have been separate entities for the past few years. (More…).
• McLaren announced that in 2016 it sold 3,286 cars and made an operating profit of £65.8 million on revenue of £649.8 million. (More…)
• Avtovaz said it hopes to increase sales in Russia by 10% in 2017 on a year-over-year basis. (More…)
• German automobile club ADAC said that it was advising consumers not to buy new diesel cars until the autumn, when it expected Euro 6D / Stage 6.2 models to become available. (More…)
• Mahindra & Mahindra reported that June 2017 sales of 35,716 units were down 5% year-over-year. (More…)
• Subaru announced May 2017 production and sales results. Global production of 86,285 units was up 17.6% on a year-over-year basis. (More…)

And now for the other news…

Economic / Political News

• Audi, BMW and MANAgreed with (German region) Bavaria’s government to improve the emissions of Stage 5 diesel cars through the use of new engine management software. This could be a template for agreement at a national level. (More…)
• French car registrations were up just over 1.5% in June on a year-over-year basis. Sales are up almost 3% YTD. (More…)
• UK passenger car production data for May 2017 showed a drop of 9.7% year-over-year, which (trade body) SMMT blamed on preparation for new model introductions (More…). Commercial vehicle production declined 11.3% YoY. (More…) Local engine production rose 5.5% YoY. (More…)
• Spanish production data for May 2017 showed an increase of 6.3% on a year-over-year basis. It is down 1.75% YTD. (More…)
• The German government will reportedly create a new emissions testing body that makes up for perceived shortfalls highlighted by the VW diesel scandal. (More…)

Suppliers

• Schaeffler reduced its profit guidance, blaming in part raw materials and higher development costs for electric powertrains. (More…)
• Volvo announced that the recently formed partnership with Autoliv (called Zenuity) to develop autonomous cars will work with Nvidia, targeting a Level 4 autonomous car by 2021. (More…)
• Autoliv announced it would “[complement] its innovation strategy] by investing $15 million in the Autotech Ventures VC fund. (More…)
• Faurecia held an investor day where they presented several long range forecasts around battery electric vehicles and fuel cells. Faurecia see the fuel cell stack and hydrogen tank (an approximate alternative to a long range battery) as costing €4,500 in 2030. (More…)
• ZF and Hella announced that they will include Nvidia in their recently formed JV to work on self-driving vehicles. (More…)
• VW and Nvidia announced the creation of a deep learning data lab that will focus on mobility services. (More…)
• GKN saw employees vote to strike at a plant in Spain after a breakdown in negotiation. (More…)

Ride-Hailing, Car Sharing & Rental

• Uber said that it had now completed 5 billion trips. The milestone was passed on May 20^th but only reported now. Since it reported hitting the 2 billion trips milestone (June 2016), it has averaged just under 9 million trips per day. During the first six months of 2016 the average was about 5.6 million per day. (More…)
• Alphabet’s (Google) Waymo driverless car division announced an agreement with Avis to run its self-driving test fleet in Phoenix. The exact terms of the agreement (length of time, geography and exclusivity) were unclear. (..)
• Hot on the heels of the Waymo / Avis tie-up, Bloomberg analysis showed that Apple were renting cars from Hertz’s contract hire subsidiary. Without any indication that Hertz are actually involved in the day-to-day running of the fleet (unlike Avis / Waymo), this seemed to be far more mundane than many media reports indicated. (More…)
• South Korean firm Kakao Mobility (ride sharing, on-demand chauffeurs and navigation services) has raised $437 million for “aggressive expansion”. (More…)

Driverless / Autonomy

• Alphabet’s (Google) Waymo driverless car division announced an agreement with Avis to run its self-driving test fleet in Phoenix. The exact terms of the agreement (length of time, geography and exclusivity) were unclear. (..)
• Volvo announced that the recently formed partnership with Autoliv (called Zenuity) to develop autonomous cars will work with Nvidia, targeting a Level 4 autonomous car by 2021. (More…)
• ai said that it had raised $50 million in order to help develop self-driving technology, including devices that could be retro-fitted to existing vehicles. (More…)
• GM indicated that it was looking at ways to involve its dealers in the servicing and fleet management of autonomous vehicles. (More…)
• HERE announced a joint venture with Mapillary to use the latter’s crowd-sourcing images to built better 3D maps. (More…)
• Self-driving vehicle researchers were aghast after Volvo reported that it was having particular problems detecting kangaroos with its sensor set up because of the way that they jump around. Fortunately, it turned out to be mis-reporting and concern the fine-tuning of Volvo’s current safety systems, meaning travellers to the outback can still dare to dream of a driverless future. (More…)

Electrification

• A tweet from Henrik Fisker with the Apple HQ in the background led to rumours that the tech giant might be interested in a tie-up. (More…).
• The website for Fisker reservations said that each $2,000 deposit is fully refundable. There is a cap on the number of reservations which appears to be under review. It is currently two per household, having been three per person when the site launched. (More…)
• Audi’s chief technical officer said in an interview that the company would be paying about €100 per kWh for batteries when it launches its new all-electric products later this decade. (More…)
• Chargepoint (backed by Daimler and BMW) announced that it had secured $125 million in its Series G funding round and that it would take on GE’s charging assets in the US. (More…)
• Faurecia held an investor day where they presented several long range forecasts around battery electric vehicles and fuel cells. Faurecia see the fuel cell stack and hydrogen tank (an approximate alternative to a long range battery) as costing €4,500 in 2030. (More…)
• Dutch start-up Lightyear have announced their plan to bring a solar-powered electric car to market in 2019. It will have a range of 800km and reservations are now open. Pricing starts at €119,000 with the final design to be unveiled in 2018. (More…)