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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.

  • Tesla to recall 53,000 cars over parking brake issue

    Tesla to recall 53,000 cars over parking brake issue

    Tesla Inc said on Thursday it would recall 53,000 of its Model S and Model X cars globally to fix a parking brake issue.

    Shares of the U.S. luxury electric car maker were down nearly 1 percent at $302.77 in afternoon trading, following its biggest ever recall. (bit.ly/2ovjTzb)

    Tesla’s total production for 2016 was 83,922 vehicles and included both Model S and Model X.

    “The electric parking brakes installed on Model S and Model X vehicles built between February and October 2016 may contain a small gear that could have been manufactured improperly by our third-party supplier,” Tesla said in a statement on its website.

    The car maker said there had been no accidents or injuries due to the issue.

    Tesla said less than 5 percent of the vehicles being recalled may be affected and it would take less than 45 minutes to replace the brakes.

    The company also said it would send an official recall notice to its customers.

    Tesla, led by entrepreneur Elon Musk, had said last year it would recall 2,700 Model X sport utility vehicles in the United States due to a faulty locking hinge in third-row seats.

    The company said on Thursday it was working with Italian supplier Freni Brembo to get the replacement parts.

    Brembo did not immediately respond to a request for comment.

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  • Honda to invest $124 mn to advance vehicle innovation

    Honda to invest $124 mn to advance vehicle innovation

    Japanese automobile manufacturer Honda is going to invest $124 million (approx Rs 802 crore) to establish a multifunctional aeroacoustic wind tunnel facility to advance vehicle innovation and enhance the world-class testing facilities at the Transportation Research Center (TRC), in East Liberty, Ohio.

    The groundbreaking is slated for the late summer of 2017, informed the automaker in a statement.

    “This new facility will further enhance our ability to efficiently create products of the highest quality for our customers,” said Frank Paluch, president of Honda R&D Americas.

    “It will be integral to our aerodynamic and aeroacoustic R&D activity, which spans from advanced research and computer simulation, through scale-model and full vehicle development, to production vehicle performance assurance. And all of this is being done right here in the US.”

    “This innovative and industry leading asset provides us with another distinct reason for our customers to take advantage of the world-class testing facilities we have in Ohio at TRC,” said Mark-Tami Hotta, president and CEO of the Transportation Research Center.

    The aeroacoustic wind tunnel facility will have space for four secure and confidential customer bays, providing the opportunity for use by customers other than Honda.

    The advanced acoustic design will drive the next generation of wind noise reduction by utilising a strategic system of microphones and cameras set up to measure and identify potential noise issues on both the exterior and interior of a vehicle during the development stage, added the company.

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  • Honda to launch all-electric battery car in China next year

    Honda to launch all-electric battery car in China next year

    Japan’s Honda Motor will launch an all-electric battery car in China next year as demand for plug-in electric vehicles (EVs) expands in the world’s largest automobile market, a senior company executive said.

    Yasuhide Mizuno, Honda’s China chief, told reporters on the sidelines of the Shanghai auto show on Wednesday the automaker was “expediting” the development of the EV. He said he expects the car to arrive in showrooms before the end of next year.

    Mizuno added that plug-in hybrid models would likely follow, but did not say when that car might hit the market in China.

    Carmakers in China are scrambling to develop and sell so-called new energy vehicles (NEVs) in anticipation of tougher new rules expected to be implemented as early as next year.

    Those rules will likely require companies to generate as much as eight percent of their China sales with plug-in cars, either fully-electric or plug-in hybrid vehicles.

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  • Daimler says yet to choose semiconductor partner for autonomous cars

    Daimler says yet to choose semiconductor partner for autonomous cars

    German automaker Daimler has yet to select a semiconductor provider for its autonomous cars’ development partnership with supplier Robert Bosch, Mercedes-Benz research and development chief Ola Kaellenius said on Wednesday.

    Earlier this month, Daimler and Bosch announced a strategic partnership to develop self-driving cars.

    “We have not selected the computing supplier, and there are several capable options in the market,” Kaellenius told reporters at a roundtable discussion at the Shanghai Motor Show.

    “We are working with several partners in pre-development. What we see being available in the coming years looks very promising,” he said.

    Semiconductor manufacturers including Intel , Nvidia, and Qualcomm have started expanding their automotive product offerings in recent months as self-driving cars drive an “arms race” among suppliers.

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  • Vietnam’s car imports jump 34 pct y/y in Q1 on tax cuts

    Vietnam’s car imports jump 34 pct y/y in Q1 on tax cuts

    Vietnam’s car imports have risen a staggering 34.4 percent from a year ago to 26,500 units, with more than half of them coming from low-tariff markets in Southeast Asia, customs figures show.

    The car import value in the first quarter edged up just 1 percent from the same period last year to $488 million, data from the General Customs Department showed.

    Cars from Southeast Asian countries totaled 14,460 units, accounting for 55 percent of the quarterly import volume and which jumped 67.6 percent from a year ago, the data show. The import from Indonesia increased five-fold.

    The strong purchase was fueled by large tariff cuts from major markets like Indonesia and Thailand, citing several importers. The import tariffs on cars from ASEAN countries have been cut to 30 percent as of January 2017, from 40 percent last year, before being fully removed in 2018.

    The tax cuts have helped reduce the retail price in Vietnam by 6-7 percent, the businesses said.

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  • Osram eyes acquisitions of up to $530 million

    Osram eyes acquisitions of up to $530 million

    German lighting company Osram is on the lookout for acquisitions worth up to 500 million euros ($530 million), although there are no specific plans for a deal as yet, its finance chief told Retail News.

    Osram wants to strengthen the areas of electronics and software within its automotive lighting unit and is looking for acquisition targets or partners, Ingo Bank told Boersen-Zeitung in an interview published on Saturday.

    Acquisitions for its Opto semiconductors unit would also be attractive if they opened up access to markets, he said.

    Osram has funds available after the sale of lamps division LEDvance, which brought in gross proceeds of about 500 million euros, and thanks to its strong balance sheet, Bank said.

    “We have a lot of firepower and the ability to act. However, we will not be making the error of buying for the sake of it,” the paper quoted him as saying.

  • Tianjin FAW Xiali Auto expects Q1 net loss to widen

    Tianjin FAW Xiali Auto expects Q1 net loss to widen

    Tianjin Faw Xiali Automobile Says it expects Q1 net loss to widen to 240-290 million yuan from 166.9 million yuan ($24.24 million) year ago.

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  • Apple receives permit in California to test self-driving cars

    Apple receives permit in California to test self-driving cars

    Apple Inc has secured a permit to test autonomous vehicles in California, fuelling speculation that it is working on self-driving car technology in a crowded arena of companies hoping to offer those cars to the masses.

    The permit allows it to conduct test drives in three vehicles with six drivers, the state Department of Motor Vehicles said on Friday. The vehicles are all 2015 Lexus RX450h, according to the DMV.

    Although it has never openly acknowledged it is looking into building an electric car, Apple has recruited dozens of auto experts in recent years, and the permit pulls the curtain back a bit on any possible plan.

    “This does confirm what’s long been rumored: that Apple is at least toying with the idea of getting into the autonomous game in some capacity,” said Chris Theodore, president of consultancy Theodore & Associates, and a former vice president at Ford Motor and Chrysler.

    The permit does not mean Apple is definitely building a car. “This is not necessarily automobiles as initially rumored, but software or possibly hardware associated with autonomous technology,” Theodore said.

    An Apple spokesman declined to comment directly on the filing, pointing back to a statement the company made in November when it wrote to the U.S. National Highway Traffic Safety Administration (NHTSA) on the subject of regulating self-driving vehicles.

    “The company is investing heavily in the study of machine learning and automation, and is excited about the potential of automated systems in many areas, including transportation,” Apple’s director of product integrity, Steve Kenner, wrote in that five-page letter.

    Apple executives have been coy about their interest in cars. Chief Executive Tim Cook has suggested that Apple wants to move beyond integration of Apple smartphones into vehicle infotainment systems.

    Apple joins a growing list of traditional carmakers, technology companies, and small start ups to test drive cars in California – all vying to be the first to have commercially viable vehicles on the roads.

    Companies that have been issued permits also include Alphabet Google unit, Ford Motor, Volkswagen AG, Daimler AG, Tesla Motors and General Motors.

    Many companies have said the first cars will launch in 2020 but some experts believe it may take much longer due to regulatory challenges.

  • Volkswagen to build new SUV

    Volkswagen to build new SUV

    Volkswagen AG plans to build another new sport utility vehicle at its Chattanooga, Tennessee, plant as demand surges for larger vehicles, the German company’s top U.S. executive said on Wednesday.

    VW Group of America Chief Executive Officer Hinrich Woebcken told reporters at the New York auto show that the automaker planned to build a five-seat SUV in Tennessee, but he declined to say when production would begin. The news follows VW’s 2014 announcement that the company would spent $900 million to build a new SUV in Tennessee.

    VW, the largest automaker worldwide by sales, will start selling its new seven-seat VW Atlas SUV next month.

    Woebcken said VW was shifting focus in the United States from a mainly car brand to a “family friendly” automaker offering larger, U.S.-built SUVs.

    At the show, major automakers said they expected the popularity of SUVs to increase in the United States. SUVs’ share of U.S. vehicle sales rose to nearly 40 percent in 2016 from 32.6 percent in 2014.

    Woebcken would not say whether VW would add additional workers in Tennessee to build the new SUV.

    VW will sell four separate SUVs in the United States later this year, a figure that does not include the new one.

    The company said on Tuesday that it would continue selling the current Tiguan as the “Tiguan Limited” for several years even as it plans to offer a completely new, larger version later this year. The company also announced it was offering an industry-leading six-year, 72,000 mile warranty on its new SUVs.

    As part of its diesel emissions settlement, Volkswagen has agreed to add at least three additional electric vehicles, including an SUV, in California by 2020 and must sell an average of 5,000 electric vehicles annually there through 2025.

    Woebcken said he hopes that decision will help boost the company’s image in the United States. VW has agreed to spend up to $25 billion to buy back vehicles and resolve claims from U.S. regulators, dealers, owners and states.

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  • Tesla becomes most valuable US car maker, edges out GM

    Tesla becomes most valuable US car maker, edges out GM

    For the first time in the era of the modern automobile, the most valuable U.S. car maker is not based in Detroit. Silicon Valley’s Tesla Inc overtook General Motors on Monday to become the U.S. car maker with the largest market capitalization as the century-old automobile industry increases its reliance on software and cutting-edge energy technology.

    That milestone is likely to be on the minds of Tesla Chief Executive Elon Musk and GM Chief Executive Mary Barra as they and other CEOs visit the White House on Tuesday to discuss tax reform and infrastructure with President Donald Trump.

    Helped by an analyst’s recommendation, Tesla rose 3.26 percent to a record high of $312.39 on Monday. Its market value of $50.887 billion exceeded GM’s by about $1 million.

    Over the past month, the luxury electric car maker has surged 35 percent as investors bet that Musk will revolutionize the automobile and energy industries.

    That compares to a declining share performance by GM in recent years that recently led billionaire investor David Einhorn to propose splitting the stock into two classes to help boost its price.

    Tesla’s market capitalization is now equivalent to $102,000 for every car it plans to make in 2018, or $667,000 per car sold last year. By comparison, GM’s market capitalization is equivalent to $5,000 per car it sold in 2016.

    The Palo Alto, California company is rushing to launch its mass-market Model 3 sedan in the second half of 2017 and quickly ramp up its factory to reach a production target of 500,000 cars per year in 2018. Last year it sold 76,230, missing its target of at least 80,000 vehicles. By comparison, GM sold 10 million cars and Ford sold 6.7 million.

    With its stock down nearly 20 percent since 2013, GM has scaled back operations outside the United States while pushing to improve its profitability. It announced in March it would sell its European operations.

    Reflecting Wall Street’s worries, GM’s stock trades at 6 times its expected earnings, the lowest multiple among companies in the S&P 500.

    Proponents believe Tesla, which is not profitable, argue its stock price is justified based on long-term expectations for Tesla’s growth.

    They also point to opportunities from Tesla’s acquisition last year of money-losing solar panel installer SolarCity and Tesla’s Nevada battery cell plant aimed at driving down manufacturing costs.

    Analyst enthusiastic

    After driving a Tesla for seven months, Piper Jaffray analyst Alexander Potter on Monday upgraded the stock to “overweight” from “neutral”, describing Tesla’s products as “captivating”.

    “Tesla isn’t just another company. More so than any stock we’ve covered, Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate,” Potter wrote in a report.

    Skeptics believe Tesla’s growth targets are unrealistic and that the company risks being overtaken by GM, Ford and other deep-pocketed manufacturers ramping up their own electric-vehicle offerings.

    Its market capitalization remains smaller than Japan’s Toyota Motor Corp, at $173 billion.

    Tesla’s rich valuation has made it a target of short sellers, who so far in 2017 have suffered over $2 billion in paper losses as the stock rallied.

    Jeffrey Gundlach, who oversees over $105 billion in assets at Los Angeles-based DoubleLine Capital, told Reuters last week: “As a car company alone, Tesla is crazy high valuation. As a battery company – one that expands and innovates substantially – maybe the valuation can work.”

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  • BMW i3 Wins Inaugural World Urban Car

    BMW i3 Wins Inaugural World Urban Car

    At a press conference hosted by the New York International Auto Show, Bridgestone Corporation, and Autoneum, the BMW i3 (94Ah) was declared the inaugural winner of the 2017 World Urban Car award.

    “We are delighted and honored that the BMW i3 has been recognized as the World Urban Car,” said Ludwig Willisch, Head of BMW Group Region Americas. “This award highlights BMW Group’s commitment to sustainable mobility through BMW’s first all-electric vehicle made primarily of carbon fiber. The design brief for the BMW i3 was to create a Mega City Vehicle for the cities of the future. Today, the new 2017 BMW i3 (94 Ah) provides more range paired with a high-level of dynamic performance, making it the perfect urban vehicle for people around the world.”

    2017 marks the first year for the World Urban Car award. World Car vice-chairman, Mike Rutherford, commented, “It’s an award whose time has come. Everyday cars in many – perhaps most – parts of the world will have to become smaller if road and parking space is to be found for them in increasingly packed towns and cities whose populations are swelling annually. This year’s winner in our inaugural World Urban Car category proves that these small vehicles don’t have to be cheap, undesirable and unpleasant to drive. Quite the opposite. It is among the best value-for-money products on the market”.

    This year’s winner was chosen from an initial entry list of 7 cars from all over the world, then a short list of three finalists as announced in Geneva last month: the BMW i3 (94 Ah), the Citroen C3 and the Suzuki Ignis

    Vehicles in all award categories are selected and voted on by an international jury panel comprised of 75 top-level automotive journalists from 23 countries around the world. Each juror was appointed by the World Car Steering Committee on the basis of his or her expertise, experience, credibility, and influence. Each juror typically drives and evaluates new vehicles on a regular basis as part of their professional work. Through their respective outlets they collectively reach an audience of many millions world-wide. The international accounting firm KPMG tabulates the jurors’ ballots.

    The Road to World Car began in Paris on September 29, was followed by test-drives in Los Angeles in November, continued in Geneva with the Top Three in the World announcement, and finally ended today with the declaration of the winners in six categories at the New York International Auto Show.

    2017 marks the 11th anniversary of the partnership between World Car and the New York show, and the fourth consecutive year that the World Car Awards have retained their ranking as the number one automotive awards program in the world in terms of media reach.

    The Global Trends Report, co-presented annually by Prime Research and Autoneum, was also released today.The report is the culmination of research and insights across the past six months. Autoneum CEO Martin Hirzel said, “The auto industry is in the midst of an upheaval that goes far beyond anything it has experienced in the past 100 years. Emerging industry trends such as autonomous driving, electric mobility and connected cars are changing not only vehicles and their technologies but also their concepts and forms. As the market leader in acoustic and thermal management for vehicles, Autoneum today already offers a large variety of multifunctional and lightweight technologies and components to meet the requirements of modern mobility. With our recently established “Competence Center for New Mobility” in Sunnyvale, California, Autoneum is taking a committed and active role in driving vehicle advancement by developing innovative technologies and components for all forms of mobility.”

    World Car of the Year is more than just an awards program. The World Car community brings together a large cross section of experts and professionals from every segment of the automotive industry. World Car connects the global industry around the very best of today and inspires, with insights, the ideas and trends of tomorrow. Thus defining The Road Ahead platform shared with our presenting partners Bridgestone Corporation, Prime Research, Autoneum and, most recently, Brembo.

    “As the world’s largest tire and rubber company, we are proud to partner with the World Car program for the 9th consecutive year,” said Mike Martini, president, original equipment tire sales, U.S. and Canada, Bridgestone Americas Tire Operations. “This is an important forum for leaders in the automotive industry to celebrate achievements in innovation, performance and sustainability. As new mobility preferences emerge, we must continue to collaborate across our industry to deliver cutting-edge technology and world-class products that meet the needs of a changing global customer base.”

    In a rapidly changing automotive world, Brembo is also focused firmly on the future and the vehicles it will bring to market. Brembo is committing significant resources to perfecting ever more sophisticated virtual simulation methodologies that includes the study of forms, materials, technologies and surface treatments able to meet the needs of the new-generation vehicles, with a particular focus on environmental impact aspects, which drives all of Brembo’s development activities.

  • China’s Dongfeng signs JV with Nexteer for power steering systems

    China’s Dongfeng signs JV with Nexteer for power steering systems

    China’s Dongfeng Motor Group Co Ltd will form a joint venture with auto parts maker Nexteer Automotive Group Ltd to design and make electric power steering systems for Dongfeng passenger vehicles, Nexteer said on Monday.

    The venture – to be equally owned by Nexteer and a unit of Dongfeng – will set up a facility near Dongfeng’s headquarters in Wuhan, China, Nexteer said.

    Nexteer, whose customers include Fiat Chrysler, General Motors, Toyota and Volkswagen , currently provides electric power steering systems for many Dongfeng-affiliated vehicles, including the Peugeot 2008 crossover.

  • The Road to World Car journey ended today with the declaration of a double win

    The Road to World Car journey ended today with the declaration of a double win

    The JAGUAR F-PACE won the 2017 World Car Design of the Year award as well as the overall 2017 World Car of the Year. The winner was announced during a press conference hosted by the New York International Auto Show, Bridgestone Corporation and Autoneum.

    Dr Ralf Speth, CEO Jaguar Land Rover said: “The F-PACE was designed and engineered as a performance SUV with exceptional dynamics, everyday usability and bold design. Winning these two awards endorses the talent and great work of our teams that have delivered the world’s most practical sports car and Jaguar’s fastest selling vehicle.”

    The JAGUAR F-PACE was chosen from an initial entry list of 23 vehicles from all over the world, then a short list of ten, then three finalists as announced in Geneva last month: the Audi Q5, the Jaguar F-PACE and the Volkswagen Tiguan

    To be eligible for the overall World Car award, the candidates must become available for sale on at least two continents during the period beginning January 1, 2016 and ending May 31, 2017.

    This year, vehicles were selected and voted on by an international jury panel comprised of 75 top-level automotive journalists from 23 countries around the world. Each juror was appointed by the World Car Steering Committee on the basis of his or her expertise, experience, credibility, and influence. Each juror typically drives and evaluates new vehicles on a regular basis as part of their professional work. Through their respective outlets they collectively reach an audience of many millions world-wide. The international accounting firm KPMG tabulates the jurors’ ballots.

    Previous World Car of the Year winners were the Mazda MX-5 (2016), Mercedes-Benz C-Class (2015), the Audi A3 (2014), the Volkswagen Golf (2013), the Volkswagen Up! (2012), the Nissan Leaf (2011), the Volkswagen Polo (2010, the Volkswagen Golf (2009), the Mazda2 / Mazda Demio (2008), the Lexus LS460 (2007), the BMW 3-Series (2006), and the Audi A6 (2005).

    The Road to World Car began in Paris on September 29, was followed by test-drives in Los Angeles in November, continued in Geneva with the Top Three in the World announcement, and finally ended today with the declaration of the winners in six categories at the New York International Auto Show.

    2017 marks the 11th anniversary of the partnership between World Car and the New York show, and the fourth consecutive year that the World Car Awards have retained their ranking as the number one automotive awards program in the world in terms of media reach.

    The Global Trends Report, co-presented annually by Prime Research and Autoneum, was also released today.The report is the culmination of research and insights across the past six months. Autoneum CEO Martin Hirzel said, “The auto industry is in the midst of an upheaval that goes far beyond anything it has experienced in the past 100 years. Emerging industry trends such as autonomous driving, electric mobility and connected cars are changing not only vehicles and their technologies but also their concepts and forms. As the market leader in acoustic and thermal management for vehicles, Autoneum today already offers a large variety of multifunctional and lightweight technologies and components to meet the requirements of modern mobility. With our recently established “Competence Center for New Mobility” in Sunnyvale, California, Autoneum is taking a committed and active role in driving vehicle advancement by developing innovative technologies and components for all forms of mobility.”

    World Car of the Year is more than just an awards program. The World Car community brings together a large cross section of experts and professionals from every segment of the automotive industry. World Car connects the global industry around the very best of today and inspires, with insights, the ideas and trends of tomorrow. Thus defining The Road Ahead platform shared with our presenting partners Bridgestone Corporation, Prime Research, Autoneum and, most recently, Brembo.

    “As the world’s largest tire and rubber company, we are proud to partner with the World Car program for the 9th consecutive year,” said Mike Martini, president, original equipment tire sales, U.S. and Canada, Bridgestone Americas Tire Operations. “This is an important forum for leaders in the automotive industry to celebrate achievements in innovation, performance and sustainability. As new mobility preferences emerge, we must continue to collaborate across our industry to deliver cutting-edge technology and world-class products that meet the needs of a changing global customer base.”

    In a rapidly changing automotive world, Brembo is also focused firmly on the future and the vehicles it will bring to market. Brembo is committing significant resources to perfecting ever more sophisticated virtual simulation methodologies that includes the study of forms, materials, technologies and surface treatments able to meet the needs of the new-generation vehicles, with a particular focus on environmental impact aspects, which drives all of Brembo’s development activities.

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  • Toyota Invests $1.33 Billion To Upgrade Georgetown, Kentucky Plant

    Toyota Invests $1.33 Billion To Upgrade Georgetown, Kentucky Plant

    A $1.33 billion investment will make Toyota Motor Manufacturing, Kentucky, Inc. the first plant in North America to begin producing vehicles using Toyota New Global Architecture.

    Toyota’s Kentucky assembly plant located in Georgetown, 13 miles north of Lexington and 71 miles east of Louisville, is the automaker’s largest in the world employing 8,200 team members. This represents an all-time high after recently adding over 700 people to support the upcoming launch of the 2018 Camry.

    Last year, TMMK produced nearly a quarter of the total number of Toyota vehicles produced in North America, over 500,000. In total, the plant has produced more than one-third, 11 million, of all Toyota vehicles manufactured in North America since 1986.

    Today’s announcement adds to the $530 million investment the plant committed to in 2013, in part to support Lexus production, the carmaker said. This brings Toyota Kentucky’s investment in the last four years to approximately $1.86 billion.

    “This $1.33 billion investment is part of Toyota’s plan to invest $10 billion dollars in the U.S. over the next five years, on top of the nearly $22 billion Toyota has invested in the U.S. over the past 60 years,” said Jim Lentz, CEO of Toyota Motor North America.

    “Toyota New Global Architecture is about exciting, ever-better vehicles for our customers as it will improve performance of all models, including increased fuel efficiency, more responsive handling, and a more stable, comfortable feel while driving,” he added.

    “This is the largest investment in our plant’s history and it speaks directly to the quality of our people and our products, as well as the partnerships we’ve forged in the local community and across the state,” said Wil James, president, Toyota Motor Manufacturing, Kentucky, Inc. (TMMK). “This major overhaul will enable the plant to stay flexible and competitive, further cementing our presence in Kentucky.”

    “Toyota is a global icon. This $1.33 billion investment is further proof of their commitment to producing American-made cars that are among the finest quality found anywhere in the world,” said Governor Matt Bevin. “It also serves as a testament to the hard work and dedication of the plant’s current employees, and reaffirms Toyota’s confidence in the advantages of manufacturing in Kentucky. We are grateful that this significant investment further validates the fact that Kentucky is the engineering and manufacturing hub of excellence in America.”

    “This major investment further solidifies Toyota’s long-term commitment to its Kentucky plant,” said Secretary Terry Gill of the Kentucky Cabinet for Economic Development. “Its ripple effects will add to Toyota’s three decades of transformative impact on our communities and for our residents across the Commonwealth. Additionally, this strengthens Kentucky’s status as a top state for auto manufacturing.”

  • Volkswagen offers six-year warranty to win back customers

    Volkswagen offers six-year warranty to win back customers

    Volkswagen AG is trying to win back American customers after its diesel emission scandal with SUV warranties that it said will be the longest in the United States.

    Ahead of the New York auto show, the world’s largest automaker said Tuesday it will offer a six-year, 72,000 mile warranty on its new 2018 Atlas and 2018 Tiguan sport utility vehicles that go on sale later this year.

    “This warranty further addresses the needs of American buyers head-on,” said Volkswagen Group of American chief executive Hinrich Woebcken.

    VW said most other major rivals offer a 36,000 mile, three-year warranty on similar SUVs. The longest warranty is now offered by Hyundai Motor Co (005380.KS) and its Kia Motors Corp (000270.KS) affiliate. That warranty extends 60,000 miles or five years. The powertrain warranty is 100,000 miles, but it only lasts five years or 60,000 miles if transferred.

    The German automaker has been struggling to recover since it admitted in 2015 the company installed secret software that allowed vehicles to cheat emissions tests for six years.

    The new VW warranty is twice as long as the current three-year 36,000-mile warranty on the Tiguan. The Atlas is a new model.

    VW brand U.S. sales this year are up 10 percent this year, but fell 8 percent in 2016 to 323,000 vehicles after falling 5 percent in 2015. The automaker halted all U.S. diesel sales in late 2015.

    AutoNation (AN.N) Inc chief executive Mike Jackson said that an extended warranty could help win customers.

    “The American people are full of forgiveness. All you have to do is say you are sorry and give them a deal,” said Jackson, who heads the largest U.S. new car dealership chain. VW has “to give a price that reflects that you are asking for forgiveness.”

    In March Volkswagen pleaded guilty as part of a settlement over the automaker’s diesel emissions scandal.

    In total, VW has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting U.S. vehicles.

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