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GM to increase focus on EVs

General Motors has said it will combine operations outside of China and North America into a new organization based in Detroit, in an attempt to further scale back its operations that are losing money, and increase their presence in the EV market.

Automotive News reports that GM said it will combine the leadership of its Southeast Asia, India and Oceania operations, with its South American operations, effective January 1 next year. The new company will be led by Barry Engle, currently GM executive vice president and president of GM South America.

GM CEO Mary Barra.

On Monday GM outlined plans to add 20 new battery electric and fuel cell vehicles to its global lineup by 2023, financed by robust profits from sales of gasoline-fueled trucks and sport utility vehicles in the United States and China.

GM’s Latin American and Asia/Pacific operations both lost money in 2016, excluding profits from GM’s operations in China.

“Our strategy (is) to refocus our traditional business operations to free up the resources and financial power needed to really step into the next chapter of the automotive industry,” Stefan Jacoby, executive vice president of GM’s International Operations told Reuters.

GM has shrunk its international operations over the past five years, ceasing manufacturing in Australia and Indonesia entirely, while restructuring its Thai operations. The car maker is also reducing its presence in India.

GM has also sold its European unit Opel, to French automaker Peugeot SA.

 

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EU investigates possible auto cartel

Volkswagen will hold a supervisory board meeting labelled “extraordinary” by Reuters on Wednesday following allegations that major German car makers operated a cartel.

German magazine Der Spiegel first reported on Friday that Volkswagen, Daimler and BMW may have colluded to fix prices on components, including diesel emissions systems.

The European Commission announced on Saturday that antitrust regulators were investigating a possible cartel in the auto industry in Germany following a tip-off from a source.

The Commission will investigate whether Volkswagen, Audi, Porsche, Mercedes and BMW used auto industry committees to discuss pricing of components and technologies, and if these discussions could be defined as anti-competitive behaviour.

A Volkswagen spokesperson confirmed the planned board meeting on Wednesday to Reuters, but declined to provide further information.

The industry has been hit with fines totalling billions of dollars in both Europe and America in the past for parts-related cartels.

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Europe to go electric by 2035

ING Bank has predicted that all new vehicle sales in Europe will be electric as soon as 2035.

The Dutch bank said that pure electric cars would “become the rational choice for motorists in Europe” between 2017 and 2024, due to falling prices, an increase in vehicles on offer, and growing charging infrastructure.

The report follows a pledge made earlier this month from France’s ecology minister, Nicolas Hulot, that the sale of petrol and diesel cars would be banned in France by 2040. It also follows Volvo’s announcement that all cars manufactured from 2019 onwards would contain an electric motor.

Analysts forecasted that in Germany, the cost of owning an EV would be on par with a conventional petrol vehicle by 2024, and ‘range anxiety’ will dissipate as more EVs are able to travel beyond 500km on a single charge.

However, ING warned that European car makers could lose their market share to manufacturers in the US and Asia who are aggressively developing and releasing EVs and plug-in hybrid vehicles.

“Europe’s competitive advantage in internal combustion engine powertrains disappears with the shift to battery electric vehicles,” the report said.

The report matches research undertaken by Tony Seba at Stanford University and reported by The Guardia. Seba claimed that, worldwide, “essentially all vehicle miles travelled will be electric by 2040.”  

“The car industry faces an imminent technology disruption by AEVs in the early 2020s. Even without autonomous technology, the internal combustion engine car industry will have been long decimated by 2040,” Seba added.

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UK auto industry at record high

The UK automotive industry posted a record turnover of $136.6 billion, marking its seventh consecutive year of growth, according to figures released by the Society of Motor Manufacturers and Traders (SMMT)

Productivity, production output and vehicle sales increased. Light vehicle output grew 8.3 per cent to 2.54 million vehicles, and the report noted a rise in premium and luxury vehicles.

Exports also rose, with 78 per cent of vehicles produced were bound for foreign markets.

Car production in 2016 was at its highest level since 1999, but the SMMT warned in the report the industry shouldn’t get too comfortable with the status quo, and said “it is expected that the industry will change more in the next five years than in the past 50.”

New car registrations rose 2.3 per cent in 2016. Diesel registrations grew 0.6 per cent, and petrol increased 2.7 per cent. Alternatively fuelled vehicles had the largest growth, up 22.2 per cent to 88,919 vehicles registered, representing 3.3 per cent of the total market.  

Employment has grown 11.9 per cent to 109,890 employees, and the number of jobs dependent on the automotive sector in the UK remained stable at 814,000 people. Direct employment in automotive manufacturing jobs also remained stable at 169,000.

“Today’s results demonstrate how UK Automotive is delivering growth across the UK, boosting productivity and improving environmental performance. This has been driven by massive investment, in new models, plants, innovation and one of the world’s most skilled workforces,” said SMMT chief executive Mike Hawes.

“However, for UK auto manufacturing to continue to thrive, we need clarity on the future, post Brexit, to encourage ongoing investment and growth.”

The report follows fresh uncertainty about the future of the UK auto industry. As talks begin to withdraw Britain from the EU, where it trades freely with 27 other member states, auto industry figures have warned that without an interim deal, this export market, which accounts for 43 per cent of the UK’s vehicle production in 2016, could collapse.

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Team to crowdfund Volkswagen rebuild

Standard Superior in 1933

A duo from Europe have launched a crowdfunding campaign in the hopes of restoring the original Volkswagen as designed by engineer Josef Ganz and presented to Adolf Hitler at the 1933 Berlin Motor Show.

Paul Schilperoord, from the Netherlands, and Swiss-born Lorenz Schmid are heading the project, which launched today on website Indiegogo. The project aims to raise $69,000 in two months to fund the reconstruction.

The pair have procured the only surviving rolling chassis of Josef Ganz’ Standard Superior Type I, of which 250 were built between April and September in 1933.

At its unveiling in Berlin, the Standard Superior, which cost just 1,590 Reichsmark, was the only four-wheeled rear-engined car in production, and the German press called it “the future” and “the most advanced despite its small proportions.”

“Whatever may be the future development of this type of car in Germany, without doubt, the Hitler government will be responsible for its popularisation,” the Detroit News prophetically wrote in 1933.

Schilperoord and Schmid plan to work with professional restorers to recreate the original wooden beetle-shaped bodywork for the car, which will be used at events and exhibitions to promote Ganz, who was Jewish and fled Germany in 1934, and largely vanished from automotive history.

The modified Superior awaiting restoration

The chassis, running gear, wheels and wings are fully original, but the bodywork has been modified with spare parts from a Trabant P50.

German company Stellmacherie Tiede will reconstruct the wooden body using archive photographs, as all engineering diagrams have since been lost.

The team plan to local various original parts, such as lights, steering wheel, door handles, and the radio, from German classic car events.

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London, Paris to launch new emissions system

Paris Mayor Anne Hidalgo and London Mayor Sadiq Khan jointly announced yesterday that they are working together to creating a vehicle rating system which would score new cars based on real-world emissions and their impact on air quality.

Current schemes, such as the EU standards, only regulate some noxious emissions and require vehicles to meet laboratory condition standards, despite the fact that actual on-road emissions have been proven to exceed this limit by up to 15 times.

Recent scandals have destroyed public confidence in the current emissions legislation, and a study conducted by the German transport ministry in 2016 showed that some diesel cars that meet the highest EU environmental standards, rated Euro 6, actually release more nitrogen oxide and nitrogen dioxide than a modern heavy-duty truck.

The new scheme allocates each model of car with a score based on the air pollutants they release during real-world, on-road conditions, which will be available to the public through dedicated websites.

Paris and London have committed to launch this online data by the end of 2017.

 “For too long, some vehicle manufacturers have been able to hide behind inconsistent regulation and consumer uncertainty about the damage their cars are causing,” said Hidalgo at the meeting.

“This announcement is a wake-up call to car companies that they need to act now.”

 “My scheme will put an end to the smoke and mirrors that have been employed in official emissions tests. It will provide Londoners with an honest, accurate and independent evaluation of the emissions of most new cars and vans on our roads and on the showroom forecourt,” said Khan.

“By having ‘on the road’ testing, I believe we will help Londoners make an informed choice and incentivise manufacturers to build cleaner vehicles sooner.”

“The toxicity of the air in London and many other big cities is an outrage, and schemes of the type we are introducing in London and Paris have the potential to make a massive difference to the quality of the air we all breathe.”

Several other cities, including Seoul, Madrid, Mexico City, Milan, Moscow, Oslo and Tokyo have all committed to work to develop a relevant local scoring system and make it available to the public.

“Tackling vehicle emissions is a priority if you are to tackle air pollution in your city,” said Seoul mayor Wonsoon Park. “As cities made significant contributions toward the adoption of the Paris Agreement, the concerted effort shown by cities today to tackle air pollution will make air cleaner for our citizens to breathe.”

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FCA merger snubbed by GM, VW

Fiat Chrysler CEO Sergio Marchionne’s attempts to discuss a merger with larger car makers have been rebuffed by both VW and GM in the wake of PSA’s acquisition of Opel.

On Tuesday, Marchionne said the sale would create pressure on VW, which could prompt the German car maker to sit down with Fiat Chrysler.

VW CEO Matthias Mueller dismissed the claim at the Geneva Auto Show, telling Reuters that the company was too busy with the fallout of the emissions scandal. “We’re not ready for talks about anything,” Mueller said. “We have other problems.”

The German inquiry into the VW emissions scandal is in its final days, with German chancellor Angela Merkel set to testify amid controversy over her close relationship with former CEO Martin Winterkorn and ongoing friction with US environmental authorities.

Marchionne has been a long-term advocate for mergers between car makers, which would share the costs of research and development in the effort to produce cleaner, more technologically advanced vehicles.

“You need to achieve scale or we will end up delivering an incredibly poor return and margins on this business. We need to fix this,” he said.

Mueller’s rejection of a merger follows a similar dismissal from GM, after Marchionne said the American car maker was his preferred choice.

“We weren’t interested before, and we’re even less interested now,” GM President Dan Ammann told reporters in Geneva.

Fiat Chrysler lags behind other car makers in Europe, with a market share of seven per cent and an operating margin of 2.5, below most of its rivals.

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Opel sold for $3.3 billion

An agreement on the sale of GM’s Opel/Vauxhall divisions to French car maker PSA, which includes brands Peugeot and Citroen, was met after several weeks of negotiations. The deal was announced at a joint press conference in Paris last night.

“We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” said Carlos Tavares, chairman of the Managing Board of PSA, in a statement.

“We intend to manage PSA and Opel/Vauxhall, capitalising on their respective brand identities.” He added. “We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees.”

The Opel/Vauxhall division was valued at just under $2 billion, and GM’s European financial operations were valued at $1.36 billion. The company generated $26.8 billion of revenue in 2016. The acquisition of GM’s European holdings gives PSA a 17 per cent market share of the auto industry in Europe, making them second behind the Volkswagen group on 24 per cent.

The transaction includes all of Opel/Vauxhall’s automotive operations, with the Opel and Vauxhall brands, six assembly plants, five component-manufacturing facilities, one engineering centre in Germany and approximately 40,000 employees. The pension fund shortfall, which hampered discussion last week, has also been met, with GM promising to pay a $4.5 billion settlement.

 “We are very pleased that together, GM, our valued colleagues at Opel/Vauxhall and PSA have created a new opportunity to enhance the long-term performance of our respective companies building on the success of our prior alliance”, said GM CEO Mary Barra.

“We believe this new chapter puts Opel and Vauxhall in an even stronger position for the long term and we look forward to our participation in the future success and strong value-creation potential of PSA.”

The acquisition of Opel/Vauxhall means lower costs in research and development and manufacturing due to a significant increase in economies of scale. PSA expects Opel/Vauxhall to reach a 2 per cent operating margin in 2020 and will generate operational free cash flow.

The Holden brand was not part of the sale, which only included GM’s European operations, and the joint statement confirmed that existing supply agreements for Holden will continue.

In their own press release, Holden said, “Holden and Opel have had close ties for many years and delivered fantastic vehicles to Australian customers, including the current all-new Astra and the next generation Commodore due in 2018. The good news is these product programs are not affected at all.”

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PSA and GM to confirm sale of Opel

General Motors and France’s PSA group is set to hold a joint press conference in Paris tonight, where it is expected the sale of Opel to PSA will be confirmed.

Reuters reported the deal had won PSA board approval, which includes the French government, the Peugeot family, and Chinese car maker Dongfeng, on Saturday.

Negotiations had been hampered over a $14.2 billion pension deficit in the Opel company, and demands by GM that a PSA-owned Opel be barred from competing against GM’s own Chevrolet line-up in certain markets.

However, sources told Reuters on Thursday the non-compete issues and pension deficit had been resolved, with GM agreeing to boost its funding injection into the pension plan.

The acquisition of Opel will make PSA, which currently manufactures Peugeot, Citroen and DS cars, the second-largest car maker in Europe after Volkswagen.

Both PSA and GM confirmed talks were underway last month over the sale of Opel and the British Vauxhall brand, which sparked discussion and concern over possible job cuts and factory closures. Opel and Vauxhall currently employ 38,000 people in the UK and Germany. PSA said it would honour existing manufacturing contracts that run through to 2020.

The acquisition of Opel comes after GM reported a 16th consecutive loss for its European manufacturing arm.

According to Reuters, PSA CEO Carlos Tavares also told his board that PSA would redevelop the Opel line-up with its own technologies to achieve rapid savings for the brand. PSA avoided bankruptcy in 2014 by selling 14 per cent stakes of the company to the French government and Dongfeng.

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Nissan trials self-drive LEAF

Nissan will conduct its first European real-world trials of self-driving cars in London.

The company has chosen England as the country, to trial its self-driving vehicles, despite concerns over Brexit.

A modified version of Nissan’s LEAF electric vehicle (EV), with autonomous driving technology will be tested in London next month.

“With future models secured and cutting-edge innovation being developed right here in the UK, we’re looking forward to a strong future of designing, engineering and manufacturing in the country for customers right across the world,” said Nissan Europe Chairman Paul Willcox.

These will be the first demonstrations of Nissan’s autonomous drive technology on public roads in Europe, representing the next step in Nissan’s Intelligent Mobility blueprint for transforming how cars are driven, powered, and integrated into wider society.

It follows recent announcements that both the refreshed Qashqai and the new LEAF, both coming soon, will be equipped with autonomous drive technology to enable single lane autonomous driving on motorways.

The announcement was made following a visit to the Nissan Technical Centre Europe (NTCE) in Cranfield, Bedfordshire, by the Rt Hon Greg Clark, the UK Secretary of State for Business, Energy and Industrial Strategy.

NTCE, the European R&D hub for Nissan, is developing autonomous drive technologies as well as new advanced fuel, energy and efficiency technologies, in collaboration with the Nissan Technical Centre and Advanced Technical Centre in Japan.

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Paris EV taxi fleet

Auto manufacturer, Hyundai will provide 60 ix35 fuel cell-powered SUVs to an electric taxi startup in Paris, France.

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