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Category: Automotive

Retail News Asia is committed to providing both local and global retailers with the latest Auto and Car news throughout the Asian market. This on a daily base.

  • Audi Installs Used Lithium-Ion Batteries In Factory Vehicles

    Audi Installs Used Lithium-Ion Batteries In Factory Vehicles

    Audi is testing factory vehicles powered by used lithium-ion batteries at its main plant in Ingolstadt. Audi is obliged by law to take back energy carriers after they have been used in cars because they still have a large proportion of their original charging capacity. An interdisciplinary project team is now investigating how batteries from the Audi e-tron test vehicles, for example, or from hybrid models such as the Audi A3 e-tron and Audi Q7 e-tron, can continue to be used sensibly. A number of other advantages have already become apparent during the test phase.

    Factory vehicles in Audi’s production plants such as fork-lift trucks and tow tractors have so far been powered by lead-acid batteries. When the batteries are empty, employees remove the battery packs weighing up to two tons from the vehicles and connect them to a charging station for several hours. However, lithium-ion batteries can be charged directly where the vehicles are parked during normal downtimes, in breaks between shifts for example. This saves space and also eliminates the high manual effort required to replace the batteries. Audi would save millions if it converted its entire fleet of factory vehicles to lithium-ion batteries at its 16 production sites worldwide.

    The battery of an Audi e-tron consists of 36 individual battery modules and is located under the car’s passenger cell between the axles in the form of a flat, wide block. After the batteries are taken back, the project team checks each individual module for its continued usability. They then install 24 modules in each new battery tray. This has the same dimensions and weight as the previous lead-acid batteries of the factory vehicles, so the company can continue to use all of those vehicles without any major investments. In the future, specialised employees could take over the assembly of the second-use batteries in the company’s own battery centre.

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  • VinFast rolls out its first made-in-Vietnam car

    VinFast rolls out its first made-in-Vietnam car

    Vietnam’s first full-fledged carmaker has started trial runs in its Hai Phong factory, preparing to deliver preordered vehicles later this year. The Lux SA 2.0 SUV, which has a 228 horsepower engine and an 8-gear automatic transmission, started its first run Wednesday at VinFast’s factory in the northern port city of Hai Phong.

    Commercial versions of both the SUV and a sedan will be delivered in the second and third quarter this year to customers who have pre-ordered.

    VinFast, a unit of Vietnam’s largest private conglomerate Vingroup, claims to be the first auto manufacturer in Vietnam with a closed, synchronous and complete cycle of production.

    The first cars will be tested in several countries including Australia, Austria and South Korea to make them European standards. They will also be tested in Vietnam for endurance in various climates and conditions.

    VinFast showed off prototypes of its first two car models at the Paris Motor Show in France last October, just a year after the company’s incorporation.

    A limited edition of its Lux SA 2.0, called the Lux V8 with a 455 horsepower V8 engine, is being displayed at the Geneva Motor Show 2019 this week.

  • Porsche to hike Taycan output

    Porsche to hike Taycan output

    Porsche AG will increase production of the Taycan after more than 20,000 potential buyers registered to purchase the brand’s first electric car, matching the entire annual output initially earmarked for the four-door sedan.

    “The overwhelming interest in the Taycan shows us that our customers and fans are just as excited about the first Porsche electric athlete as we are,” Porsche sales chief Detlev von Platen said Friday in a statement. “We’ve therefore increased our production capacities.”

    The Taycan will be unveiled in September with a price range between the 74,800-euro ($83,866) Cayenne SUV and the 97,800-euro Panamera coupe to compete with Tesla Inc.’s Model S. The car is part of a wave of new models from Jaguar, Mercedes-Benz and Audi that’ll challenge Tesla’s electric-car leadership.

    Porsche is parent Volkswagen AG’s most profitable brand and its success is vital for the group to pull off the industry’s most aggressive push into electric vehicles. VW has allocated some 40 billion euros for electric and connected cars and targets 50 battery-powered models by 2025. To help drive uptake, Porsche is installing fast chargers at its dealerships in the U.S. and Europe that’ll get the Taycan’s battery up to 100 kilometers (62 miles) in four minutes. The car’s overall range on a single charge stands at 500 kilometers.

    The model’s planned production of 20,000 vehicles per year is based on a two-shift system at Porsche’s main site in Stuttgart, Germany, and can be expanded if needed, production chief Albrecht Reimold told reporters last year. Porsche also confirmed recently it will offer a fully-electric version of its best-selling Macan SUV.

    Interested Taycan buyers are required to make a down payment of 2,500 euros in Europe to register.

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  • Karma queues up 3 vehicles for Shanghai auto show

    Karma queues up 3 vehicles for Shanghai auto show

    Karma Automotive is prepping three vehicles — a concept car developed with Italian design house Pininfarina, the next-generation Revero electric car and the Karma Vision concept – that it hopes will propel the brand in a new direction.

    They will debut next month at the Shanghai auto show.

    “Taken together, Karma’s Shanghai Big Three represents our transformation from an old-value car manufacturer to a company building long-term value in part by becoming an open-platform luxury high-tech automotive incubator,” Karma CEO Lance Zhou said in a statement.

    Karma Automotive, headquartered in Irvine, Calif., was founded after the demise of Fisker Automotive, created by noted designer Henrik Fisker. The company’s sole product was the gasoline-electric Fisker Karma luxury car. Chinese supplier Wanxiang Group bought Fisker Automotive in a bankruptcy auction and put a revised version of the Karma back into production as the Revero in 2016.

    Karma plans to introduce a revised version of the Revero this year. The car is sold through a network of 19 stores in the U.S., Canada and Chile.

    The company released little information about the three vehicles scheduled for the Shanghai auto show, which opens April 16.

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  • Volvo will limit top speed of its cars to reach safety target

    Volvo will limit top speed of its cars to reach safety target

    Volvo said on Monday it will limit the top speed on all its new cars to 180 kph (112 mph) starting in 2020, which is the same year the Swedish automaker wants there to be zero people killed or seriously injured in any of its new models. The change will be implemented globally starting in the second quarter of next year on vehicles planned for the 2021 model year.

    Volvo is taking the bold step because its researchers have identified speed as a prominent gap it needs to close to reach its safety target.

    “We need to talk about this problem,” Volvo CEO Hakan Samuelsson told, referring to the areas that remain to be solved to end serious injuries and fatalities in its vehicles. Although speed limits exist in most countries he said that people are still exceeding those limits by a wide margin. Volvo believes that controlling the speed in its models is worth it even if it can save just one life.

    Excluding specially tuned cars such as the Polestar Engineered variant of the S60 sedan, no Volvo vehicles currently offer a top speed that exceeds 250 kph.

    Samuelsson said that he expects pushback from the move, but Volvo received similar criticism that it was taking away a driver’s freedom when it added seat belts to its cars 60 years ago.

    “If someone is going to show leadership in safety it needs to be Volvo,” he said.

    Samuelsson added that he believes that the move will not turn away Volvo’s core customers because he says the brand already “attracts more responsible drivers” who are typically favor safety over extreme performance and horsepower.

    Traffic accident data from NHTSA shows that 25 percent of all traffic fatalities in the U.S. in 2017 were caused by speeding. Volvo safety experts say that many people do not recognize the danger of speeding or realize that once the car reaches certain speeds its in-car safety technology will not prevent severe injuries and fatalities in the event of a crash.

    “As humans, we all understand the dangers with snakes, spiders and heights. With speeds, not so much,” Volvo senior safety specialist Jan Ivarsson said in a release. “People often drive too fast in a given traffic situation and have poor speed adaption in relation to that traffic situation and their own capabilities as a driver. We need to support better behavior and help people realize and understand that speeding is dangerous.”

    It will not be possible to turn off the limited speed, a company spokeswomen said.

    Taking things a step further, Volvo is also investigating how a combination of speed control and geofencing technology could automatically limit speeds around schools and hospitals in future. The aim is to reduce speeding while also addressing the two other safety gaps after speeding – intoxication and driver distraction.

    Said Samuelsson: “We need to talk about how far we as carmarkers can go to help save lives.” He wants those discussions to determine whether automakers have an obligation to install technology in cars that changes their driver’s behavior. He said Volvo does not have a firm answer to this question.

    With that in mind, Volvo will present ideas to tackle the problem areas of intoxication and driver distraction at a special safety event in Gothenburg, Sweden, on March 20.

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  • VW recycling project targets spent batteries

    VW recycling project targets spent batteries

    The auto industry’s big push into electric vehicles will lead to a big problem down the road: What to do with all those lithium ion batteries once they’ve lost their oomph? It’s the central question behind a pilot recycling project that Volkswagen Group plans to launch at a factory in Salzgitter, Germany, about 30 miles from its global headquarters in Wolfsburg. Beginning in 2020, the plant will accept about 1,200 tons of used automotive lithium ion battery packs a year — the equivalent of what’s in about 3,000 EVs today.

    The battery packs will be analyzed and sorted; those with some life left will be given a second use, such as mobile vehicle charging stations similar to the way a power pack can be used to recharge a cellphone. Batteries that are spent will be shredded and ground to a fine powder, Volkswagen says, so their valuable and rare raw materials — including lithium, cobalt, manganese and nickel — can be extracted and sorted for use in new battery packs.

    Volkswagen believes that, within 10 years, it will be able to recycle up to 97 percent of all the raw materials used in the battery packs driving its upcoming EVs. It expects the pilot project to help it reach 72 percent, up from 53 percent today.

    Thomas Tiedje, Volkswagen’s head of technical planning, said the automaker has spent 10 years researching how best to recapture the valuable minerals used to make modern batteries.

    “We already have sustainable battery expertise in the Group and are developing this further,” Tiedje said in a statement.

    While the pilot plant is ramping up in Germany, the company has not determined plans for battery recycling in North America after it begins selling EVs here this year with the Audi e-tron and in 2020 with the Volkswagen I.D. Crozz. “We are in regular contact with our colleagues in [North America] about recycling,” a spokesman said.

    Today’s lithium ion battery packs have an estimated useful first life of about 150,000 miles, or roughly 10 years, given average driving cycles. In Europe and in China, automakers are required to pursue end-of-life strategies for their products, especially those containing materials that are hazardous to the environment. In the U.S., however, similar recycling research efforts are in their infancy, though the nation’s largest EV maker, Tesla, last year said it is working toward a closed-loop battery recycling process at its Gigafactory battery-production locations.

    Playing catch-up

    Just in February, the U.S. Department of Energy launched a three-year, $15 million effort to industrialize the recycling of lithium ion EV batteries. The ReCell Center, at Argonne National Laboratory in suburban Chicago, will coordinate research with automakers, material and battery suppliers, and several universities with the aim of using recycled materials to drive down the cost of EV batteries by 10 to 30 percent, to a goal of $80 per kilowatt-hour.

    One more spin: Volkswagen’s pilot EV battery recycling plant in Germany will test whether cells are still useful or should be recycled.

    “We’re trailing the other countries,” Jeffrey Spangenberger, the center’s director, told Automotive News. “There aren’t many lithium ion battery recyclers in the U.S., so work needs to be done to catch up.”

    Spangenberger said ReCell’s efforts will be focused on “trying to increase the value of the materials coming out of the battery recycling stream. A lot of the processes that are used currently recover low-value materials. We’re trying to find ways to get the materials back that can make more money,” including cobalt, nickel and lithium.

    Reusing the good stuff: Once a battery is no longer useful, it is shredded and dried, with most of the expensive minerals recovered so that they can be reused to make future cells.

    In addition to guiding battery recycling efforts, the research will focus on three areas:

    1. Direct cathode recycling to develop processes that generate products to go back into new batteries without the need for reprocessing.

    2. Recovery and recycling of other battery materials that can be resold for a second use, providing an additional source of revenue.

    3. Design for future batteries to optimize the recapture and recycling of raw materials.

    A big problem fast

    The scope of global automotive lithium ion battery recycling is expected to grow fairly quickly into a huge issue. The International Energy Agency predicts that the number of EVs on the world’s roads could grow from about 2 million today to as many as 140 million by 2030. Volkswagen believes it will sell as many as 15 million battery-electric vehicles globally by 2025.

    In addition to all those extra EVs, higher-powered fast-charging increases the battery degradation rate by as much as 400 percent, Asad Farid, an analyst at Berenberg Thematics, told the Advanced Automotive Battery Conference in Strasbourg, France, in January. That means all those quick-charging EVs will need new battery packs sooner than 10 years. Berenberg estimates that by just 2022, as many as 262,000 metric tons of automotive lithium ion batteries will need to be recycled.

    “The car manufacturers have an upcoming problem, and one that we are already starting to see — this massive volume of batteries,” Johan Stjernberg, CEO of Box of Energy, a Swedish company working with Porsche and Volvo Cars, told Bloomberg last year.

    “The market will be enormous for second-life applications with storage.”

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  • Hyundai Korea’s employees to be more casual at office

    Hyundai Korea’s employees to be more casual at office

    Jeans and T-shirts will be allowed at Hyundai Motor offices from March 4 as the auto group’s heir apparent Chung Eui-sun looks for new ways to give the automaker a younger, trendier feel. On Monday morning, Hyundai Motor employees at its headquarters in southern Seoul were told that they are free to dress however they want from next month. Unlike a no-tie day, Hyundai’s new dress code didn’t include any special rules or guidelines.

    The free dress code applies to all Hyundai office workers, according to the company spokesperson, but not for workers at production facilities due to safety issues.

    While some time will be needed for Hyundai employees, who are much more familiar with formal suits, to get used to their new fashion freedom, industry sources say the move is likely to spread to Hyundai affiliates soon.

    Hyundai has long been considered one of most conservative Korean companies, as with most other companies in the traditional manufacturing sector like shipbuilding and steel. However, the automaker has been trying to rebrand itself as a mobility technology company given the growing importance of digital technology in the auto industry.

    Hyundai Motor Group Executive Vice Chairman Chung Eui-sun stressed in his New Year’s message that he will ramp up investment in the sharing economy, artificial intelligence and smart mobility to keep up with the radical paradigm shift.

    LG also started to shift its dress culture earlier last year. LG Electronics and LG Corp. adopted free dress codes from September.

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  • Hyundai Motor raided as defect cover-up investigated

    Hyundai Motor raided as defect cover-up investigated

    Prosecutors raided the main office of Hyundai Motor and its smaller affiliate Kia Motors on Wednesday as part of a probe into allegations that the company tried to conceal defects in some of its vehicle lineups. The Seoul Central District Prosecutors’ Office sent its investigators to search the quality division at the headquarters of the automaker to collect evidence.

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  • Rolls-Royce agrees to follow Korea’s lemon law

    Rolls-Royce agrees to follow Korea’s lemon law

    Rolls-Royce announced Wednesday it will follow Korea’s voluntary lemon law for automakers, making it the first foreign luxury brand to accept the newly introduced regulation. Korea’s revised automobile management law, enacted last month, forces complying automakers to replace or refund recently purchased vehicles that repeatedly exhibit problems, similar to lemon laws in the United States.

    While most local automakers have adopted the rule, Volvo has been the only overseas brand to do so.

    The U.K.-based automaker said it will abide by the country’s revised auto guidelines to strengthen its quality commitment to Korean customers.

    “Rolls-Royce will be the first luxury brand to accept the amended automobile management act,” said Rolls-Royce Motor Cars CEO Torsten Muller-Otvos at a launch event on Wednesday for the automaker’s showroom in Cheongdam-dong, southern Seoul.

    “It is our responsibility … to reassure our Korean customers that we will stand by our promise of ultimate quality,” added Muller-Otvos.

    Foreign automakers’ reputations took a blow in Korea last year. BMW Korea conducted two series of recalls after its vehicles began bursting into flames due to component defects.

    The Korean unit of Mercedes-Benz was fined 2.8 billion won ($2.5 million) in December for violating environmental and customs law regarding emissions certifications.

    BMW was fined for similar reasons at the start of this year.

    The quality push from Rolls-Royce comes as the luxury automaker achieved record sales figures last year in the Korean market as foreign imported vehicles continue to grow in popularity.

    According to the Korea Automobile Importers & Distributors Association, Rolls-Royce sales in the domestic market grew 43 percent to 123 units last year from 86 in 2017. Foreign auto imports increased by 11.8 percent.

    The luxury automaker’s performance in the Korean market last year outpaced its 22 percent growth in global sales.

    According to Rolls-Royce, the brand’s sales grew at a rapid pace in Korea last year thanks to an expanded lineup, including the Phantom.

    The CEO said he expects the company’s performance in the country to continue to improve.

    “Korea is a very important cornerstone in our Asia strategy,” said Muller-Otvos. “We might even see at a certain moment Korea overtaking the Japanese business in terms of size.”

    The luxury automaker’s chief also emphasized the automaker’s commitment to the luxury sector as the auto industry braces for major changes.

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  • VinFast to test its first car for safety in Europe next month

    VinFast to test its first car for safety in Europe next month

    VinFast, Vietnam’s first indigenous car manufacturer, plans to test its first vehicle for safety parameters in Europe on March 6. According to company executives, the vehicle will be tested for international standards to ensure its highest safety. This announcement came after VinFast’s Hai Phong factory successfully manufactured the first body shell of the Lux A2.0, a sedan, Wednesday.

    Shaun William Calvert, deputy general director in charge of production, said the first body shell meets the highest quality requirements.

    VinFast, the car manufacturing unit of Vietnam’s largest private conglomerate Vingroup, showed off its first two car models, a sedan and an SUV, at the Paris Motor Show in France last October just a year after the company’s incorporation, grabbing the attention of the local and international media.

    VinFast’s first cars are expected to hit the road in August 2019.

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  • Hyundai to focus on customization

    Hyundai to focus on customization

    The chief of Hyundai Motor’s financial affiliates outlined the units’ digital strategy and future vision at IBM’s largest annual conference that ran through Friday in San Francisco. Chung Tae-yong, who heads Hyundai Card, Hyundai Capital and Hyundai Commercial, said that finely-tuning customization will take center stage in Hyundai’s approach to serving financial services’ clients.

    “The existing concept of market customization is irrelevant to the current business environment,” said the CEO, whose English name is Ted Chung, during a session with Ginni Rometty, CEO of IBM.

    “Customization should not be based on widely-held assumptions, like young people might love zombie movies or older people won’t listen to hip-hop music,” Chung said, “If one likes candy, that is just it.”

    He went on to note that Hyundai Card holds a wide range of information that points to clients’ daily lives, preferences and hobbies and that the new services under development will be tailored using that data.

    Chung also cited Buddy, an AI-based chatbot for customer service using machine learning technology from IBM’s Watson.

    “It’s almost impossible to fully understand or memorize the benefits, limits, or conditions of a finance product,” he said.

    “So we introduced IBM Watson and it became a very powerful tool to help our employees and helped us to lower our employee turnover rate to less than 10 percent.”

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  • 2018 sales of EV doubled in Korea

    2018 sales of EV doubled in Korea

    Hyundai Motor Executive Vice Chairman Chung Eui-sun laid out a plan to develop 44 electric vehicle models (EVs) and sell 1.67 million of the cars by 2025 during his New Year’s message held at the beginning of this year. The goal was a dramatic increase on the 38 models he planned to have by 2025 at the start of 2018. The revised goal is rooted in the fact that EVs are growing at an unprecedented pace in the global auto industry.

    According to U.S. market research firm S&P Global Platts, the number of electric cars sold worldwide exceeded 2 million in 2018 including plug-in hybrids, double the 1 million sold in 2017.

    This achievement came seven years after Tesla rolled out its Model S, opening the era of EVs, and more than two decades since Toyota released the world’s first hybrid, the Prius.

    Among the total number of EV cars sold, battery-electric vehicles sold 1.45 million units last year, followed by plug-in hybrids at 550,000 units.

    The most popular model was Tesla’s Model 3, which started mass production last year. Unlike the Model S and X, which cost over 100 million won ($88,850), the Model 3 was released as a more affordable model with a price tag around 50 to 60 million won. It sold 146,846 units, taking the top spot.

    Four Chinese companies ranked high in the top 10. The EC Series from Beijing Automotive Group ranked second. BYD’s eco-friendly plug-in hybrid, the e5, and JAC Motor’s iEV E/S were also on the list. Among Japanese cars, Nissan’s Leaf placed third while Toyota’s Prius Prime was ninth and Mitsubishi Outlander plug-in hybrid placed 10th.

    Hyundai and Kia both made it to the top 10 list of automakers for the first time. Combined, the two sold 90,860 units last year, taking the eighth spot.

    Tesla sold the most cars, at 245,240, followed by China’s BYD at 229,338. German brands, traditionally strong players in the vehicle market, had BMW at fifth and Volkswagen at ninth.

    Industry analysts project the market for electric cars will expand at an even faster speed. Deloitte, a global consulting firm, expects 4 million EVs to be sold in 2020 and 14 million in 2025. By 2030 it expects EV sales to hit 21 million.

    Considering that 98 million cars are sold worldwide annually, within 20 years one of every five cars purchased will be an EV.

    Experts say that while the United States and China have led the growth of the EV market, that is likely to change in the future.

    Deloitte forecast that cost reductions from technology development will pull down the price of EVs to be on a par with diesel cars by 2022. This means the product sector will gain price competitiveness, no longer relying on government subsidies.

    The market will also get more competitive. Toyota and Volkswagen are both planning to release new electric cars in the near future, with Volkswagen aiming to make 25 percent of the cars it produces EVs by 2025. Its investment in electric cars is already worth 20 billion euros ($2.25 billion).

    According to consulting firm AlixPartners, Volkswagen Group is planning to release 55 EV models by 2022. This accounts for half of all EV models slated for release by then.

    “Government subsidies played a big role in enabling Chinese firms to sell large numbers of EVs, but its finances have hit the limit,” said Kwon Yong-ju, a professor from Kookmin University’s department of automotive & transportation design.

    “With European companies having accumulated technology and capital while waiting for the commercialization of EVs, the future could be quite different from now.”

    “Major countries, like the United States and Europe, have tightened regulations toward environmental pollution more than before,” said Koh Tae-bong, head of research center at Hi Investment & Securities. “For car companies, it is inevitable that they will expand the amount of electric cars they make.”

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  • U.S. agency submits auto tariff probe report to White House

    U.S. agency submits auto tariff probe report to White House

    The U.S. Commerce Department sent a report on Sunday to U.S. President Donald Trump that could unleash steep tariffs on imported cars and auto parts, provoking a sharp backlash from the industry even before it is unveiled, the agency confirmed. Late on Sunday, a department spokeswoman said it would not disclose any details of the “Section 232” national security report submitted to Trump by Commerce Secretary Wilbur Ross. The disclosure of the submission came less than two hours before the end of a 270-day deadline.

    Trump has 90 days to decide whether to act upon the recommendations, which auto industry officials expect to include at least some tariffs on fully assembled vehicles or on technologies and components related to electric, automated, connected and shared vehicles.

    As the White House received the report, the industry unleashed what is expected to be a massive lobbying campaign against it.

    The industry has warned that feared tariffs of up to 25 percent on millions of imported cars and parts would add thousands of dollars to vehicle costs and potentially lead to hundreds of thousands of job losses throughout the U.S. economy.

    The Motor and Equipment Manufacturers Association, which represents auto parts suppliers, warned that tariffs will shrink investment in the United States at a time when the auto industry is already reeling from declining sales, Trump’s tariffs on steel and aluminum, and tariffs on auto parts from China.

    “These tariffs, if applied, could move the development and implementation of new automotive technologies offshore, leaving America behind,” it said in a statement. “Not a single company in the domestic auto industry requested this investigation.”

    The Commerce Department started its investigation in May 2018 at Trump’s request. Known as a Section 232 investigation, its purpose was to determine the effects of imports on national security and it had to be completed by Sunday.

    Automakers and parts suppliers are anticipating its recommendation options will include broad tariffs of up to 20 percent to 25 percent on assembled cars and parts, or narrower tariffs targeting components and technologies related to new energy cars, autonomous, internet-connected and shared vehicles.

    The Commerce Department alluded to a focus on emerging vehicle technologies when it opened the investigation.

    Administration officials have said tariff threats on autos are a way to win concessions from Japan and the EU. Last year, Trump agreed not to impose tariffs as long as talks with the two trading partners were proceeding in a productive manner.

    Trump said on Friday that tariffs protect industry and also help win trade agreements.

    “I love tariffs, but I also love them to negotiate,” he said.

    A report from the Center for Automotive Research in Ann Arbor, Michigan, published on Friday showed its worst-case scenario of a tariff of 25 percent would cost 366,900 U.S. jobs in the auto and related industries.

    U.S. light duty vehicle prices would increase by $2,750 on average, including U.S.-built vehicles, reducing annual U.S. sales by 1.3 million units and forcing many consumers to the used car market, the think tank’s report said.

    Major automaker groups said last year the cumulative effect for the United States would be an $83 billion annual price increase and argued there was no evidence auto imports posed a national security risk.

    Canada and Mexico each won duty-free access to 2.6 million vehicles as part of a new North American free trade deal even if the administration moves ahead with the tariffs.

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  • Renault Korea still at odds with union

    Renault Korea still at odds with union

    Renault Samsung Motors and its labor union once again failed to reach a consensus on 2018 wages after negotiations fell through for a 14th time on Tuesday. Renault Samsung is the only domestic automaker that has still not clinched a wage deal for last year. A source from the automaker said the Tuesday talks lasted for about an hour and a half after the meeting began at 2 p.m. at Renault Samsung’s Busan factory, but ended in vain.

    The major issue of disagreement is over whether to raise the base pay.

    The labor union has been requesting a 100,667 won ($89.51) raise in base pay. The company has refused, citing bad timing, and offered incentives if the base pay is maintained instead.

    The wage deal is very important for both the company and the labor union, as it comes at a crucial time.

    While Renault Samsung’s Busan factory has been producing Nissan’s Rogue compact crossover on consignment, the contract ends in September.

    The Korean unit of Renault needs to negotiate with the French headquarters to win follow-up models to produce in Busan. As Rogue production accounts for nearly half the workload at the Busan factory, it could be seriously harmed if the deal falls through and may even end up following in the footsteps of GM Korea’s Gunsan factory in North Jeolla, which closed last year.

    The company claims raising the base pay at this time would negatively affect negotiations with the headquarters.

    The labor union, however, responded to the company with partial strikes. From October last year through last month, the labor union has gone on strike 28 times at the Busan factory. The labor union claims it deserves a base pay raise considering its wage is about 85 percent that of workers at Hyundai Motor factories and its productivity has been high.

    In response to the strikes, Jose Vicente de Los Mozos Obispo, Deputy Alliance Executive Vice President, Manufacturing & Supply Chain at Renault, sent a video message to employees at the Korean unit earlier this month, warning the Renault-Nissan-Mitsubishi Alliance cannot assign new models to the factory if the strikes continue. Renault considers labor cost, production cost and supply stability when allocating new models to factories.

    The two parties have yet to hammer out their differences in the negotiations that began in June last year.

    The company and the labor union will have another round of negotiations soon, though the exact date was not released Tuesday.

    Renault Samsung is in a hurry to finalize the deal as it is running out of time to win new models for the Busan factory before September. The factory needs several months of preparation to adjust production lines to produce a new model.

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  • Vietnamese car maker plans private share issue

    Vietnamese car maker plans private share issue

    Truong Hai Auto Corporation (THACO) is planning to issue more than 30.3 million shares to a strategic shareholder. The company is currently collecting shareholders’ opinions on a draft resolution to authorize a private placement worth an estimated total of VND3.89 trillion ($167.19 million) to Jardine Cycle & Carriage, a Singaporean diversified conglomerate that specializes in investment in car manufacturing.

    The share issue aims to raise additional capital to finance THACO’s investment and business plans this year, the company said in a circular issued to shareholders last week.

    The 30.3 million shares proposed in this placement make up 1.82 percent of THACO’s current chartered capital, and will raise the Singaporean shareholder’s stake in the car manufacturer to 26.57 percent.

    The share ownership of remaining shareholders will remain unchanged. Currently, 6.8 percent of THACO is owned by billionaire Tran Ba Duong, founder and chairman of the company, and another 60.6 percent by Tran Oanh JSC, a holding company owned by Duong and his family.

    The shares are expected to be issued soon after the State Securities Commission has confirmed the receipt of all documentation regarding the private placement.

    Dong Nai-based THACO was established as an auto and commercial vehicle maker in 1997. It has a plant in central province of Quang Nam and 89 showrooms and 53 dealerships.

    It makes trucks and buses and assembles cars for brands like Kia (South Korea), Mazda (Japan), and Peugeot (France).

    Jardine Cycle & Carriage Ltd, which is part of the Jardine Group of companies, has a diverse business portfolio. They have long term shareholdings in major manufacturers such as Jakarta based Astra International, as well as other interests in the refrigeration, cement and milk business.

    In Singapore, Jardine C&C is best known as the retailer of Mercedes Benz, Mitsubishi, Kia, Citroen, DS, and Maxus motor vehicles. The company has a current market capitalisation of S$14.55 billion (US$10.71 billion).

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