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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.

  • Mazda announces breakthrough in long-coveted engine technology

    Mazda announces breakthrough in long-coveted engine technology

    Mazda said it would become the world’s first automaker to commercialize a much more efficient petrol engine using technology that deep-pocketed rivals have been trying to engineer for decades, a twist in an industry increasingly going electric.

    The new compression ignition engine is 20 percent to 30 percent more fuel efficient than the Japanese automaker’s current engines and uses a technology that has eluded the likes of Daimler AG and General Motors Co.

    Mazda, with a research and development (R&D) budget a fraction of those of major peers, said it plans to sell cars with the new engine from 2019.

    “It’s a major breakthrough,” said Ryoji Miyashita, chairman of automotive engineering company AEMSS Inc.

    The announcement places traditional engines at the center of Mazda’s strategy and comes just days after Mazda said it will work with Toyota Motor Corp to develop electric vehicles and build a $1.6 billion U.S. assembly plant.

    “We think it is an imperative and fundamental job for us to pursue the ideal internal combustion engine,” Mazda R&D head Kiyoshi Fujiwara told reporters. “Electrification is necessary but… the internal combustion engine should come first.”

    A homogeneous charge compression ignition (HCCI) engine ignites petrol through compression, eliminating spark plugs. Its fuel economy potentially matches that of a diesel engine without high emissions of nitrogen oxides or sooty particulates.

    Mazda’s engine employs spark plugs under certain conditions, such as at low temperatures, to overcome technical hurdles that have hampered commercialization of the technology.

    Executive Vice President Akira Marumoto called Mazda’s engine technology the automaker’s “heart”.

    The engine is called SKYACTIV-X and Mazda had no plans to supply the engine to other carmakers, Marumoto said.

    AEMSS’ Miyashita said a key issue would be how smooth and responsive the engine is.

    “Is it jerky? If so, that would pose a big question when it comes to commercializing this technology.” he said. “Hopefully Mazda has an answer to that question.”

    Mazda also said it would introduce electric vehicles and electric technology in its cars from 2019, focusing on markets that restrict the sale of certain vehicles to limit air pollution or that provide clean sources of electricity.

    In addition, it said it aimed to make autonomous-driving technology standard in all of its models by 2025.

    Mazda’s announced its petrol-engine technology breakthrough on the same day that shares in Japan’s GS Yuasa Corp surged after a newspaper reported that it would start producing a lithium battery that would double the range of electric cars as early as 2020.

    Mazda’s share price closed down 1.3 percent. That compared with a 0.3 percent fall in the benchmark Nikkei 225 index.

  • Intel set to roll out 100 self-driving cars

    Intel set to roll out 100 self-driving cars

    Silicon Valley giant Intel on Wednesday (Aug 9) announced plans for a fleet of self-driving cars following its completion of the purchase of Israeli autonomous technology firm Mobileye.

    A day after closing the US$15 billion deal to buy Mobileye, which specialises in driver-assistance systems, Intel said it will begin rolling out fully autonomous vehicles later this year for testing in Europe, Israel, and the US.

    The fleet will eventually have more than 100 vehicles, according to Intel.

    The testing in real-world conditions “provides immediate feedback and will accelerate delivery of technologies and solutions for highly and fully autonomous vehicles,” said Mobileye co-founder Amnon Shashua, who is to run the unit for Intel.

    “Our goal is to develop autonomous vehicle technology that can be deployed anywhere.”

    The Intel test fleet with include various types and makes of vehicles, and capitalize on Mobileye expertise in computer vision, mapping and sensing.

    Intel, which has been expanding beyond its core of computer chipmaking, is keen for its technology to be an engine powering self-driving systems across the spectrum of vehicle manufacturers.

    “We want to enable automakers to deliver driverless cars faster while reducing costs,” Shashua said.

    Intel said the vehicles would offer “level 4” autonomy, which under industry standards represents a “high” level of autonomy just below the fully automated level 5.

    Most major automakers and several other technology firms have been stepping up efforts on autonomous driving in recent years, contending these systems will eliminate the vast majority of road accidents. Apple has a testing permit in California.

    German luxury carmaker Daimler and auto parts supplier Bosch have announced plans to work together to create completely driverless cars in the next few years.

    US-based Tesla boasts that all its models are built with the hardware for self-driving in event regulators five the technology a green light.

    US car rental giant Avis Budget earlier this year announced it will team up with Waymo on the self-driving cars being tested on Arizona roads.

  • Nissan to sell its electric battery business to GSR Capital

    Nissan to sell its electric battery business to GSR Capital

    Nissan Motor Co said on Tuesday it has agreed to sell its electric battery business to Chinese investment firm GSR Capital for an undisclosed sum.

    The business to be sold to GSR includes battery plants in Tennessee, England and Japan, the Japanese automaker said in a statement.

    Nissan will first take full control of the business – Automotive Energy Supply Corp – by buying the combined 49 percent minority stake held by NEC Corp and its subsidiary NEC Energy Devices. NEC Corp said it has approved the sale of its stake.

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  • Volvo Cars to share engine technology and more with parent Geely

    Volvo Cars to share engine technology and more with parent Geely

    Sweden’s Volvo Cars, a unit of Zhejiang Geely Holding Group, has agreed to make some engines available for Geely-branded vehicles, sources said, deepening ties between the carmakers who already share technology through third brand Lynk & Co.

    Three people close to Geely and Volvo said the first Volvo-powered Geely model was expected to hit the market as early as late next year as a 2019 model year car.

    The car will be equipped with a new 1.5-liter turbo charged gasoline engine which Volvo has been developing for smaller cars, the knowledgeable individuals said.

    Volvo is expected to share a 2.0-liter turbo-charged engine at a later date and will also allow Geely-branded cars to use a common vehicle platform the two automakers developed jointly for Volvo and Lynk & Co.

    “The terms of the recently announced joint venture between Volvo Cars and Geely Group mean that existing and future technologies can be shared by Volvo, Geely Auto and Lynk & Co, under license agreements,” a Volvo spokesman said.

    Analysts questioned Geely’s ability to absorb the best of Volvo when it acquired the automaker from Ford Motor Co almost seven years ago. Yet Geely has been working progressively to improve its technology with Volvo know-how.

    Better designed cars following its 2010 purchase of Volvo – such as its GC9 sedan and Boyue sport-utility vehicle – have helped lift Geely’s fortunes. Its China sales grew 50 percent last year to 766,000 vehicles and it expects sales to climb well above the 1 million mark this year.

    Ultimately, it aspires to sell more outside China.

    Earlier this year, Geely bought 49.9 percent of struggling Malaysian carmaker Proton from conglomerate DRB-HICOM Bhd. Geely officials have told Reuters the Hangzhou automaker is planning to improve Proton cars by sharing Geely and Volvo technologies.

    Analysts have said one big risk for Volvo, as it combines more with its parent, is the dilution of Volvo’s brand image by sharing its technology and know-how with a Chinese auto upstart.

    Volvo Chief Executive Hakan Samuelsson said the key was to differentiate the brand sufficiently – even if the two groups share more technology. For Volvo, that is about more and better safety equipment, among other aspects.

    “The progress Geely has been able to make in improving products and brand image over the past several years makes me feel more confident they can execute this process successfully,” Yale Zhang, head of Shanghai-based consultancy Automotive Foresight, said.

    Last month Geely and Volvo said they plan to go beyond Lynk & Co and create a joint venture to share technology, such as vehicle architecture and engines via cross licensing arrangements managed by that joint venture.

    Samuelsson told Reuters last month the deal would provide Volvo with greater development resources and efficiency in purchasing parts. It also should help Volvo speed up introduction of new technology in areas such as components for electric vehicles, he said.

  • Toyota takes stake in Mazda, links up for $1.6 billion U.S. plant

    Toyota takes stake in Mazda, links up for $1.6 billion U.S. plant

    Toyota  said on Friday it planned to take a 5 percent share of smaller Japanese rival Mazda Motor Corp, as part of an alliance that will see the two build a $1.6 billion U.S. assembly plant and work together on electric vehicles.

    The plant was a surprise for investors at a time of cooling U.S. sales, but marked good news for U.S. President Donald Trump who came to office on the back of promises to bring back manufacturing and jobs for U.S. workers. He commented on Twitter that it was a “great investment in American manufacturing”.

    The plant, whose location is not yet public, will be able to produce 300,000 vehicles a year, with production divided between the two automakers, and employ about 4,000 people. It will start operating in 2021.

    Analysts said the plan was more than a political ploy. The alliance is also an attempt to catch up with rivals in the race for electric car technology, as tighter global emissions rules loom, along with the entry of new players into the market.

    “There will be new rivals appearing – Apple, Google – these are IT companies, we also need to compete with them, too,” Toyota President Akio Toyoda, grandson of the company’s founder, told a news conference in Tokyo.

    He was appointed last year to lead Toyota’s newly formed electric car division, flagging the group’s commitment to a technology it has been slow to embrace.

    “What’s different from the past is that there are no nautical charts for us to follow. It’s without precedent,” he said of the push into alternatives to the internal combustion engine.

    Other traditional automakers such as Daimler and BMW are also weighing how best to work on new, disruptive technology, from electric vehicles to autonomous driving, that require hefty investment and have turned firms like Google and Tesla into rivals.

    Toyota has set a goal for all of its vehicles to be zero emission by 2050. But until recently, it has said it favoured EVs for short-distance commuting, given their limited driving range and lengthy charging time.

    It has been investing heavily in hydrogen fuel-cell vehicles (FCVs), while rivals such as Nissan Motor Co, Volkswagen AG and Tesla have touted pure electric cars as the most viable zero-emission vehicles.

    As part of the agreement, as well as electric car technology, Toyota and Mazda will work together to develop in-car information technologies and automated driving functions.

    Toyota, Japan’s biggest auto company, has been forging alliances with smaller rivals for several years, effectively engineering a loose network at the heart of the Japanese auto sector. It already owns a 16.5 percent stake in sixth-ranked Subaru Corp with which it also has a development partnership.

    Toyota is also courting compact car maker Suzuki Motor Corp to cooperate on R&D and parts supply, as Toyota seeks to tap its smaller rival’s expertise in emerging Asian markets.

    As part of Friday’s plan, Toyota, the world’s second-largest automaker by vehicle sales last year, will take a 5 percent share of Mazda, and Mazda will take a 0.25 percent share of Toyota.

    Mazda said it could even expand the alliance, as long as it could stay in control of its own management. “We will study the possibility of expanding the capital alliance, but the basic premise is that autonomy is assured,” said Mazda Executive Vice President Akira Marumoto.

    A stake in Mazda may also prevent future incursions by tech companies, one analyst said.

    “For a technology company which lacks the expertise in making cars, Mazda could look like a very interesting acquisition. They’re very good, they’re not too expensive. Maybe Toyota realises this,” CLSA managing director Chris Richter said.

    “By buying a 5 percent stake, Toyota takes Mazda off the table rather than having it sit out there like a free agent which could someday be used against them.”

    Mazda, for its part, stands to gain from a deal that gives the small automaker a production foothold in the United States. At the moment, it ships all vehicles sold in the country, its biggest market, from its plants in Japan and Mexico.

    With an R&D budget of around 140 billion yen ($1.27 billion) this year, a fraction of Toyota’s 1 trillion yen, Mazda lacks the funds to develop electric cars on its own, a predicament shared by Subaru and Suzuki.

    “Mazda needs electrification technology. In the past, they’ve pooh-poohed EVs, they’ve felt they can make internal combustion engines more efficient, but the bottom line is that globally you need to have this technology,” said Janet Lewis, head of Asia transportation research at Macquarie Securities.

    The automakers plan to produce Toyota Corollas and a new Mazda SUV crossover at the new plant, and the companies said they could eventually build other cars including electric vehicles.

    Toyota initially had been planning to produce Corollas at its new $1 billion plant being built in Mexico, prompting Trump to threaten punitive tariffs.

    The company has since said it will instead produce its Tacoma truck model in Mexico.

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  • Honda motorcycle sales boost quarterly net profit

    Honda motorcycle sales boost quarterly net profit

    Motorcycle sales volume grew in India and Vietnam. Japanese vehicle maker Honda on Tuesday said net profit for the second quarter rose by double digits boosted by strong motorcycle sales, revising up its full-year forecast.

    The Tokyo-based company said “solid sales of two-wheel vehicles in Asia and cost reduction efforts” contributed to increased profits.

    Motorcycle sales volume grew in India and Vietnam, Honda said, while four-wheel vehicle sales volume increased in Japan and China but declined in North America.

    Japan’s number-three automaker booked net profit of 207.3 billion yen ($1.88 billion) in the April-June period, up 18.7 percent from the previous year.

    Sales grew 7.0 percent to 3.71 trillion yen, while operating profit rose 0.9 percent to 269.2 billion yen.

    Honda boosted its net profit forecast to 545 billion yen from an earlier figure of 530 billion yen for the fiscal year ending March 2018.

    It also lifted its fiscal year operating profit and revenue outlooks.

    “Honda’s profit pales compared to figures last year when it booked a one-time gain in a pension accounting change,” Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting institute, said ahead of the earnings release.

    “But it displayed a good performance in China and Indonesia while showing steady sales in North America,” he said.

    While North American vehicle sales declined in the quarter year on year to 481,000 from 510,000, revenue rose slightly to 2.13 trillion yen from 2.06 trillion yen.

    Takada added that the foreign exchange situation is “a key factor” for automakers.

    “Current levels are relatively positive for the Japanese auto industry,” he said.

    Although the yen has strengthened slightly in past days, it remains weak against the dollar over recent years.

    A stronger Japanese yen can hurt carmakers by eroding the value of overseas profits when repatriated.

    On Thursday, Nissan reported a drop in quarterly net profit, hit by higher costs and weak sales in key markets, although it left its annual forecasts unchanged.

    Toyota will release earnings on Friday.

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  • BMW’s 5-series launch helps drive forecast-beating second quarter profit

    BMW’s 5-series launch helps drive forecast-beating second quarter profit

    German luxury carmaker BMW posted a forecast-beating 7.5 percent rise in second-quarter profits as sales of its new 5-series helped to offset slowing demand for luxury cars in the United States.

    Earnings before interest and tax (EBIT) rose to 2.92 billion euros ($3.46 billion), compared with an average forecast for 2.82 billion in a Reuters poll of banks and brokerages.

    BMW affirmed its guidance for a slight increase in full-year group pretax profit and an operating margin of 8 to 10 percent at its automotive business, which posted a second-quarter margin of 9.7 percent, up from 9.5 percent a year earlier.

    BMW said it now forecasts a solid increase in automotive segment revenues for the full year.

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  • Japan’s Subaru posts higher profit as car sales jump

    Japan’s Subaru posts higher profit as car sales jump

    Subaru on Thursday posted a better-than-expected rise in its quarterly operating profit, buoyed by higher sales in the United States, its biggest market, where other Japanese automakers are struggling with slower demand.

    Operating profit at Japan’s No.6 automaker came in at 119.3 billion yen ($1.08 billion) in the first quarter ended June, up 17.5 percent from a year ago and exceeding the average forecast for 114.8 billion yen from seven analysts polled by Thomson Reuters I/B/E/S.

    Most Japanese automakers have been hit by both an overall slowdown in the U.S. market and a growing preference for bigger car models, versus the sedan.

    Subaru has, however, managed to buck this trend, reporting a 12.3 percent jump in sales in the world’s No.2 auto market after China, with models such a revamped version of its Impreza sedan, along with the Forester SUV and Outback SUV crossover.

    Subaru raised production capacity last year at its plant in Indiana and was able to deliver more units over the quarter in the United States, which accounts for around 60 percent of its global sales volume.

    The automaker’s U.S. marketing strategy has focused mainly on affluent and liberal-minded consumers, with advertisements featuring slogans such as love and inclusion.

    It has won over consumers living largely on the west and east coasts – a concentration that has allowed it to leverage its production capabilities, which are a fraction of those of Toyota Motor and other bigger rivals like Nissan Motor Co.

    Toyota is expected to announce a 16 percent drop in its quarterly operating profit, according to analysts surveyed by Thomson Reuters I/B/E/S, while Nissan last week posted an almost 13 percent slide in profit, dragged by rising incentives to sell its cars in the United States.

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  • Tesla begins to deliver model for the masses

    Tesla begins to deliver model for the masses

    Analysts have predicted that Tesla may be reshaping the future of the auto industry, like Apple did with the iPhone. Tesla began delivering on a dream to make an electric car for the masses, rolling out the first of its keenly-awaited “Model 3” cars, aiming to disrupt a world accustomed to automobiles powered by pollution-spewing fossil fuel.

    An initial batch of the ‘Model 3’ cars that rolled out of the Tesla plant in Fremont, California late Friday were given to customers, most of whom were employees of the company.

    Tesla founder and chief Elon Musk proclaimed it a great day for the company, saying the goal was to make a terrific electric car “that everyone can buy.” Musk starred in a ceremony at the plant delivering the first batch to their owners.

    “It’s the best car for its cost, either electric or gasoline,” he said.

    Production of the electric car aimed at the broader market — with a starting price of $35,000 — will ramp up quickly, according to Musk, with 100 in August and 1,500 or more in September.

    Tesla aims to produce 5,000 units of the Model 3 a week this year, and 10,000 units a week in 2018.

    Tesla already sells “S” and “X” model electric cars, but with a starting price of $80,000 they have been seen as wheels for the wealthy.

    The Model 3 silhouette resembles that of the Model S, but the new electric ride is smaller with a simpler design.

    The vehicle’s battery was designed to keep it going for “at least 215 miles” (345 kilometers) before needing to be recharged, according to Tesla. A battery with a longer range is available for more money.

    Musk has mentioned in Tesla earnings calls that while early models were packed with innovative engineering, they caused vexation on the assembly line.

    The Model 3, he said, was designed from the outset with mass production in mind to push down cost and crank cars out quickly.

    ‘Crucial step’

    More than a half-million customers have placed deposits to get on the waiting list for the Model 3, and anyone wanting one will have to wait at least until 2018.

    “Demand is not a challenge there,” Musk said, noting that most of the orders have been in the US.

    A big question for Tesla is whether it can ramp up production to meet demand and whether rivals will cut into the electric vehicle market.

    Like its predecessors, the Model 3 is fully electric and on-board computers can handle some driving tasks.

    Tesla referred to the arrival of the Model 3 as a “crucial step” in the company’s mission to speed the transition to renewable energy.

    Not long after Tesla was founded in 2003, Musk said the plan was to use money from high-end electric vehicles to create more affordable offerings to make the technology the new automotive norm.

    Cars powered by green energy are consistent with a concern for the environment seen in Musk’s other enterprises.

    Musk runs solar energy firm SolarCity, and is building rechargeable batteries to power homes as well as cars.

    His Boring Company is part of a vision for near-supersonic rail travel through low-pressure tubes that he laid out in a Hyperloop white paper he made open to other entrepreneurs.

    Combined sales of Model S and Model X vehicles in the first half of this year were estimated to tally from 47,000 to 50,000.

    With the Model 3, Tesla hopes to start cranking out hundreds of thousands of cars annually.

    The iPhone of cars?

    Success of the Model 3 could put in the rear-view mirror concerns about Tesla’s prospects for growth.

    So far, Musk’s strategy has paid off. Even though most major car makers sell electric vehicles, Tesla practically defines the category.

    The rush of pre-orders allowed Tesla to recently become the biggest US car company in terms of market capitalization, despite the fact that General Motors (GM) and Ford produce millions of cars per year and Tesla has yet to make a profit.

    While Tesla is scrambling to meet Model 3 demand, GM has temporarily halted production of its ‘Bolt’ electric car to eas ease inventories.

    Some analysts say that with the launch, Tesla may be reshaping the future of the auto industry. Gene Munster, analyst with the research firm Loup Ventures, argues that Tesla may do for the auto sector what Apple did for smartphones and electronics.

    “We believe we will eventually look back at the launch of the Model 3 and compare it to the iPhone, which proved to be the catalyst for the shift to mobile computing,” Munster said in a recent research note.

    Munster says Tesla will play a central role in “paradigm shifts” to electric and autonomous vehicles that could transform the sector.

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  • VW sale of Ducati, Renk units lacks board support

    VW sale of Ducati, Renk units lacks board support

    Volkswagen’s planned sale of motorcycle brand Ducati and transmissions maker Renk has currently no majority backing on the carmaker’s supervisory board, with opponents to asset sales feeling invigorated by the group’s strong results.

    Europe’s largest automaker has tasked banks to evaluate options for Ducati and Renk including divesting the two divisions as it aims to streamline operations to help fund a post-dieselgate strategic overhaul.

    Volkswagen has been reviewing its portfolio of assets and brands since announcing in June 2016 a multi-billion-euro shift to electric cars and new mobility services as part of its so-called Strategy 2025.

    Five bidders have been shortlisted to buy Ducati, including Italy’s Benetton family, with offers received valuing the brand at 1.3 billion-1.5 billion euros ($1.76 billion), a source said on Saturday.

    But VW’s labour leaders, occupying half the seats on the 20-member supervisory board which decides on asset sales, resist a sale of Ducati and Renk without compelling financial reasons.

    “The employee representatives on Volkswagen’s supervisory board will neither approve a sale of Ducati, nor one of Renk or MAN Diesel & Turbo,” a spokesman for VW group’s works council told Reuters late on Saturday.

    “Everyone who can read the VW half-year results should know: We don’t need money and our subsidiaries are not up for grabs by bargain hunters.”

    Six-month operating profit at VW group jumped 19 percent to 8.9 billion euros, the carmaker said on Thursday, as cost cuts and R&D improvements at the core namesake brand earned VW a respite from the billions of euros in costs for fines, vehicle refits and compensation related to its dieselgate scandal.

    One source at VW said that given strong union opposition, VW is now reviewing the plan to sell Ducati as it doesn’t want to risk working with labour on implementing a hard-fought turnaround plan for the VW brand, seen as crucial by investors.

    Though Ducati is owned by VW’s luxury brand Audi, the VW group’s supervisory board has to approve a possible sale. Audi declined comment.

    The billionaire Porsche and Piech families, controlling 52 percent of voting shares in VW and holding four supervisory board seats, do not support selling Ducati or Renk, two other sources at VW group said.

    A spokesman for Porsche SE, the family’s holding company, declined comment.

    With 20 percent of voting rights in VW, Lower Saxony, where the carmaker employs more than 100,000 staff at six plants, can veto decisions such as factory closures.

    Holding two board seats, Lower Saxony traditionally teams up with VW’s worker representatives for the sake of protecting jobs and projects. A spokeswoman declined comment when asked whether the state government would back a sale of Ducati or other assets.

    “The management board has not even asked the supervisory board of Volkswagen, where such sales have to be ratified, for its approval,” the works council spokesman said. “Therefore we advise all supposedly interested parties: Save your time to check any books. A sale will not happen.”

    The five bidders shortlisted to buy Ducati will be given access to the company’s books after the summer, the first source said.

    With most of Audi’s executives away for a three-week summer break, a decision on whether management will stick to the planned sale will not be taken until September or October, a source close to Audi said. Audi declined comment.

    VW finance chief Frank Witter, speaking on Thursday’s earnings call, declined any comment on “speculation” surrounding VW’s asset sales plans.

  • Audi targets 10 billion euros in cost cuts to fund electric-car push

    Audi targets 10 billion euros in cost cuts to fund electric-car push

    Audi aims to cut costs by 10 billion euros by 2022 to help fund a shift to electric cars as it seeks to move on after the emissions scandal, sources close to the carmaker said.

    Audi, Volkswagen’s main profit driver, plans to bring five new all-electric models to market in coming years, starting with the e-tron sport-utility vehicle (SUV) to be assembled from 2018 in Brussels.

    Despite run-up costs for its electric-car programme, the luxury automaker wants to keep its operating profit margin at 8 percent a year at least, two sources close to Audi said. Its profit margin in the first half of this year was 8.9 percent.

    The bulk of the 10 billion cost savings would come from cutting research and development costs, the sources said.

    A spokesman at Audi’s headquarters in Ingolstadt, Germany, declined comment. German business daily Handelsblatt reported the cost-savings target and profitability plans earlier on Sunday.

    Audi also aims to free up funds for investments in zero-emission technology by developing a new production platform with Porsche, allowing both VW premium brands to save money by sharing components and modules.

    Audi is grappling with car recalls, prosecutor investigations and persistent criticism from unions and managers over the diesel emissions scandal and its strategy post-dieselgate.

    Sources told Reuters on Friday that four of the brand’s seven top executives are earmarked for dismissal in the near future. On Sunday, sources said the dismissals were discussed by supervisory board members last Thursday but a formal decision has yet to be taken.

  • Germany recalls Porsche Cayenne models over emissions software

    Germany recalls Porsche Cayenne models over emissions software

    German Transport Minister Alexander Dobrindt on Thursday announced a recall of Porsche Cayenne models equipped with 3-litre diesel engines after finding potentially illegal emissions controlling software in the vehicles.

    Dobrindt told he was withdrawing certification for the vehicles, which will need to undergo a software update.

    Sports car maker Porsche AG is owned by Volkswagen, which in 2015 admitted to systematic manipulation of engine management software to cheat emissions tests.

    Porsche on Thursday said it had discovered “irregular” engine management software during an internal probe into emissions. Porsche also said it had agreed to recall the vehicles to fix the problem.

    “The producer will of course bear 100 percent of the costs,” Dobrindt said. “There is no explanation why this software was in this vehicle,” Dobrindt said.

    The minister said: “We have examined Porsche Cayenne vehicles of the 3 liter TDI Euro 6 Mark – during tests these vehicles deploy a so-called defense strategy, which isn’t activated in real traffic.”

    “In our view that is a kind of test recognition, which we regard as an impermissible deactivation strategy.”

    “Even if there is a modern exhaust gas cleaning system in these vehicles, if this software is nonetheless there it is illegal, does not meet the legal requirements and needs to be removed,” Dobrindt said.

    He also said that Porsche would quickly be in a position to bring the software into conformity with the law.

    Dobrindt also said there were some 7,500 vehicles of this type certified in Germany and some 22,000 certified in Europe. “We don’t know how many are with dealers. These are the cars that fall under the certification ban.”

    The Porsche Cayenne model shares components with a sister model, the Volkswagen Touareg.

    Asked about Volkswagen’s Touareg model, Dobrindt said: “On the technical question, it is assumed that this vehicle has a similar parameter set but identical construction does not mean that the same software was used in it but it is assumed that the same software was used.”

    He said the Transport Ministry was, however, checking that and a hearing with Volkswagen would show whether that was the case or not, adding: “The probability is high.”

    Volkswagen CFO Frank Witter had no immediate comment about the Porsche recall on a VW earnings call also held on Thursday.

    Stuttgart prosecutors have been investigating Porsche AG after some models were fitted with 3 liter diesel engines supplied by Audi.

    Audi, another premium brand owned by Volkswagen is also being probed by prosecutors in Munich who are separately investigating Audi about its role in designing the 3 liter diesel engine.

  • Tesla climbs as Musk prepares to hand over first Model 3 cars

    Tesla climbs as Musk prepares to hand over first Model 3 cars

    Shares of Tesla rose nearly 1 percent on Friday ahead of a handover to customers of its first Model 3 sedans, the electric cars that Chief Executive Officer Elon Musk is betting will propel his company into the mass market.

    Tesla is counting on the Model 3 to help turn the cash-losing company into a profitable one, and its event later on Friday at its factory in Fremont, California comes as the car maker’s stock trades down 12 percent from a record high set in June.

    Fueled by expectations that Tesla will become a carbon-free energy and transportation heavyweight, Tesla’s stock remains up 58 percent year to date, but it is also a favorite among short sellers.

    Shorts sellers have about $8.5 billion bet against Tesla, equivalent to about 20 percent of the company’s float, according to Astec Analytics.

    The $35,000 Model 3 is designed for easy production, with output targeted to reach 20,000 per month by December. The Silicon Valley car company aims to quickly ramp up its factory to reach a production target of 500,000 cars per year in 2018.

    Tesla’s last launch was the luxury Model X SUV in 2015, which had a number of production issues.

    Tesla reports its second-quarter results on Wednesday, and investors are keen for an update on how quickly its output is expanding after deliveries for the first half of 2017 came in at the low end of the company’s own forecast.

    “This evening’s event will keep investors focused on the Model 3 ramp, and less on the upcoming quarter,” Barclays analyst Brian Johnson wrote in a note to clients. Johnson has a an “underweight” rating on Tesla.

    Skeptics believe Tesla’s growth targets are unrealistic and that it is at risk of being overtaken by General Motors , BMW and other deep-pocketed manufacturers that are ramping up their own electric-vehicle offerings.

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  • Maruti, Hyundai rule passenger vehicle sales in June

    Maruti, Hyundai rule passenger vehicle sales in June

    Country’s top two carmakers Maruti Suzuki India and Hyundai Motor India dominated the Indian passenger vehicle sales segment last month with their models occupying all the slots in the top ten list.

    While car market leader Maruti has seven of its models in the list, rival Hyundai Motor India has three of its models in the top ten selling list of last month.

    Toyota Kirloskar Motor’s Innova and Renault Kwid which were there in the June 2016 list have failed to find place in this year’s top ten list.

    According to the latest data from Society of Indian Automobile Manufacturers (SIAM), Maruti’s Alto retained the top position in June with 14,856 units, as against 15,750 units in June last year.

    Hyundai’s compact car Grand i10 stood at second position with 12,317 units. It was at third position in June 2016, with 12,678 unit sales.

    Maruti’s compact sedan Dzire occupied the third position with sale of 12,050 units as compared with 15,560 units in June last year.

    The car market leader’s compact hatchback Wagon R stood at fourth position with sale of 10,668 units during the last month.

    Hyundai’s Elite i20 stood at fifth position last month with 10,609 units. The company had sold 8,990 units of the vehicle in the same period last year.

    Maruti’s Swift retained sixth position with 9,902 units in June. It had sold 9,033 units in the same month of the last year.

    The carmaker’s premium hatchback Baleno stood at seventh position with sale of 9,057 units last month, while compact SUV Vitara Brezza with sale of 8,293 units took eighth position in June.

    Hyundai’s Creta retained ninth position with sale of 6,436 units in June. It sold 7,700 units in the same month last year.

    Maruti’s hatchback Celerio stood at tenth place with sale of 6,375 units.

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  • Peugeot sets new profitability record on pricing gains

    Peugeot sets new profitability record on pricing gains

    PSA Group increased sales and profit in the first half, the maker of Peugeots and Citroens said, beating analyst expectations with a new profitability record at its core manufacturing division.

    Net income rose 3.6 percent to 1.26 billion euros ($1.46 billion) on a 5 percent increase in revenue to 29.17 billion, the French carmaker said on Wednesday, as stronger pricing more than made up for weaker sales volumes in Europe and China.

    The core automotive operating margin jumped from 6.8 percent to 7.3 percent, setting a “new historic high” for the carmaker, Chief Financial Officer Jean-Baptiste de Chatillon said on a conference call with reporters.

    The Paris-based carmaker rebounded from near-bankruptcy and a government-backed bailout in 2014 to a 6 percent automotive operating margin last year on the strength of cost-cutting, a pared-down lineup and determined efforts to lift prices.

    Weaker first-half vehicle sales in Europe and a sharper slowdown in China had sparked concerns about the pace of PSA’s recovery just as it prepares to acquire Opel from General Motors , in a deal closing later this year.

    But the first-half numbers squarely beat analyst expectations of 28.92 billion euros in sales, 1.3 billion in automotive profit and a 1.06 billion-euro net profit, based on the median of nine estimates polled for Reuters.

    PSA also raised its full-year European auto-market growth forecast to 3 percent from one percent and its Latin American and Russian growth forecasts to 5 percent from 2 percent and flat, respectively.