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  • Toyota with Daihatsu gets ready to enter small-car market

    Toyota with Daihatsu gets ready to enter small-car market

    The world’s largest carmaker, Toyota Motor, is finally getting ready to enter the Indian small-car market and challenge the dominance of Maruti Suzuki and Hyundai Motor in their bread-and-butter segment. The Japanese automaker and its unit specialising in small cars, Daihatsu Motor, are expected to drive in a new range of vehicles to India starting 2020-2021.

    A few days ago, Toyota and its fully owned Daihatsu unit announced plans to establish an internal company that will be responsible for compact vehicles for emerging markets, from product planning to production preparation. India is an integral part of this move. The structure of this new internal company is likely to be formed by January, 2017.

    The groundwork has already been done through various studies commissioned over the years, said people in the know of the plans. The Toyota-Daihatsu combine will target the A and B segments, where vehicles are typically priced below Rs 10 lakh. This segment, where Toyota currently has only a limited presence here with the Etios range, is the mainstay for Maruti and Hyundai Motor India.

    The branding for the products is yet to be defined. The new cars under the venture may be branded Toyota or Daihatsu, or it could be an all-new brand in line with how Toyota introduced a ‘Scion’ brand in North America in 2003 — the brand was discontinued this year.

    Through the proposed internal organisation, the objective is to develop and launch competitive compact vehicles in emerging markets based on Daihatsu’s approach to manufacturing affordable, high-quality products. While the small car champion will take the lead responsibility in this new initiative, in India, it will seek to gain from the parent’s understanding of the market.

    Vikram Kirloskar, vice chairman of Toyota Kirloskar, the Indian unit of Toyota, told ET that the initial target of the new company would be Asian countries and that joint decisions would be made to enable the effective use of both companies’ existing bases of operation.

    “We are happy to note that India is among the countries being considered as the responsibility of Daihatsu as the Indian market has strong need for compact vehicles in the B Segment and A Segment which is Daihatsu’s strong point. The priority would be to strengthen operations in each country by first enhancing the collective capabilities of the Toyota Group,” he said.

    More details on the initiative will be known by January of 2017, when the formal structure will be defined, Kirloskar said, while declining to comment on products or timelines.

    A person in the know of the plans said the vehicles would come around 2020 and conform to the BS-VI emission guidelines that would come into effect that year.

    It makes sense for Toyota to launch compact cars in India around 2020, by when the market would grow more than 70% from now and the buying power of the middle class would be much higher, said Gaurav Vangaal, senior analyst for forecasting at IHS Markit Automotive. “But then, countering the already strengthening Maruti and Hyundai won’t be an easy task, though the cars will be from Toyota,” he added.

    Daihatsu will be responsible for the development, procurement and production preparation for compact vehicles for emerging markets based on “DNGA”, a Daihatsu vehicle architecture now being defined, and Toyota will support these efforts by providing knowledge and resources. The business plans will be formulated jointly and, in India, the Toyota-Daihatsu combine is likely to use Toyota’s existing facility on the outskirts of Bengaluru. It factory has an annual capacity to produce 3.1 lakh vehicles and is being underutilised.

    Kirloskar said Toyota is learning about Daihatsu’s strengths, such as its work processes and approach to manufacturing at both its production and development workplaces. Daihatsu, on the other hand, is receiving various kinds of support related to the evolution of automobile manufacturing, such as information related to advanced technologies, starting with hybrids.

    “We are hopeful that by sharing and unifying strategies for the future, mutual synergies will be steadily achieved and result would be seen in India as well,” he added.

    Daihatsu has twice in the past attempted to enter the Indian market — first in late 2000 and then a few years later.

    According a person in the know of Toyota’s plans, the sourcing executives of Daihatsu have already met vendors to discuss a few projects.

    Another said future growth for the company would likely come from Asia. “The needs of these markets are different from the developed world; they can be catered only through Daihatsu’s small car,” he added.

    Daihatsu will launch a new generation Agya or Ayla — a small car sold in Indonesia — by 2019 and it is the same car which is being explored for the Indian market, said year another person. “The company has also studied the possibility of launching the B segment SUV for India.”

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  • High-end luxury car market hit hard

    High-end luxury car market hit hard

    The bottom may already be falling out of the high-end luxury car segment because of the gloomy economy, but Indonesia’s tax amnesty scheme seems to be exacerbating the situation.

    This segment groups super sports car and ultra luxury limousine brands, namely Ferrari, Lamborghini, McLaren, Aston Martin, Rolls-Royce and Bentley.

    From January to August this year, a total of 91 of these cars were registered here, according to the Land Transport Authority. This is down 27 per cent or about a quarter from the 125 units registered in the same period last year.

    This is in stark contrast to the total year-to-date registrations for the overall car market, which soared 71 per cent from 33,673 to 57,468.

    According to some dealers, the high-end luxury car segment has been particularly quiet in the past couple of months since the start of the Hungry Ghost Festival, a period when prospective buyers traditionally refrain from making big-ticket purchases.

    Pang Cheong Yan, managing director of Wearnes Automotive, said: “Generally, people are becoming more cautious as they are not sure how long this current economic climate will continue.”

    Mr Pang, who is in charge of the Aston Martin and Bentley brands, added that it did not mean that this group of buyers is “less rich”.

    “They are just not willing to spend on discretionary items.”

    Melvin Goh, chief executive officer of EuroSports Global, said that the wealthy are being “more careful with their spending”. EuroSports distributes Lamborghini and Zonda, among other brands.

    Mr Goh said: “Business sentiment is weak and this has affected the Lamborghini business. Fortunately though, we have the LP580-2 Coupe and Spider priced below S$1 million and these are still selling.”

    Mr Goh explained that the S$1 million mark is a psychological barrier for many people, so anything just below it becomes a “magic number”.

    Besides the economy, however, some dealers said that Indonesia’s tax amnesty scheme is also hurting their business.

    The director of a high-end luxury brand, who declined to be named, said that as many as 30 per cent of his customers are wealthy Indonesians and “this group is gone”.

    He said that many are “scrambling for cash” to pay the taxman after having declared their assets to the authorities.

    “As for the rest who still have spare cash, they won’t spend until they are in the clear.”

    The head of another high-end luxury dealership agreed. He said that while the large majority of his customers – up to 90 per cent – are Singaporeans, some of the remaining 10 per cent are also feeling the heat from the tax amnesty issue.

    “For now, they are not going to be seen spending any of their money on expensive cars.”

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  • Henrik Fisker launches new electric car company

    Henrik Fisker launches new electric car company

    Henrik Fisker, whose previous automotive venture collapsed in 2013 owing U.S. taxpayers $139 million, said on Tuesday he plans to launch a new electric car company next year to compete with Tesla.

    Fisker declined to say who is funding his new California-based venture, called Fisker Inc, and a new battery subsidiary, Fisker Nanotech.

    The Danish automotive designer’s previous venture, Fisker Automotive, once was a rival to Tesla Motors Inc (TSLA.O) in the nascent market for electric luxury cars. Founded in 2007, Fisker Automotive built fewer than 2,000 cars through 2012 while burning through $1.4 billion in private investments and taxpayer-funded loans from the U.S. Department of Energy. Fisker left the company in March 2013, before it filed for bankruptcy protection.

    In 2014, Fisker was purchased out of bankruptcy by Chinese auto parts maker Wanxiang Group Corp (000559.SZ), and renamed Karma Automotive. Wanxiang also acquired bankrupt U.S. battery maker A123. It relaunched the Fisker Karma gasoline-electric hybrid sports car in August as the Karma Revero.

    In an interview, Fisker said his new company plans a battery-powered model aimed at the Tesla Model S, which is priced at about $65,000. He did not specify when production would begin.

    A second smaller Fisker electric car will follow, Fisker said, and will target the upcoming Tesla Model 3, which is expected to start at about $35,000.

    Fisker said his new electric cars will be powered by a long-range battery that uses graphene to extend its range and life and reduce charging time. The company is targeting a 400-mile driving range between charges, Fisker said.

    Fisker said his new venture is not connected with Wanxiang.

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  • Toyota, Daihatsu to set up joint emerging markets company

    Toyota, Daihatsu to set up joint emerging markets company

    Toyota Motor Corp on Tuesday said it will set up a joint internal company with subsidiary Daihatsu to develop and market compact vehicles in emerging markets, as Toyota aims to expand market share in other Asian markets.

    The Japanese automaker plans to establish the new unit in January, it said in a statement, adding that its operations would be led by compact carmaker Daihatsu, a Toyota group company which was absorbed by the automaker earlier this year.

    Daihatsu will be responsible for development, procurement and production preparations for compact cars while the two companies will use existing production sites to manufacture the compact vehicles.

    Toyota said the companies were considering possible markets including Vietnam, India and Pakistan.

    “With the establishment of the internal company, Toyota intends to learn the very fundamentals of Daihatsu’s competitiveness and change the way we work,” Toyota Executive Vice President Shigeki Terashi said in a statement.

    The companies intend to develop Daihatsu into a global brand as they focus on growing markets for entry-level compact cars, which are becoming smaller and energy efficient due to environmental and traffic concerns.

    Daihatsu holds around a 16 percent market share of the passenger car market in Indonesia, where it manufactures the Ayla and other vehicles in a joint venture with Astra International. In Malaysia, it operates a joint venture which has a market share of around 32.5 percent.

  • Tesla posts 70 percent rise in quarterly deliveries, backs 2016 target

    Tesla posts 70 percent rise in quarterly deliveries, backs 2016 target

    Tesla Motors Inc said on Sunday its third-quarter deliveries rose 70 percent to 24,500 cars, following production improvements, cheaper lease deals and reports of discounts on some vehicles.

    Deliveries are a key metric of performance for the luxury electric vehicle manufacturer, which had missed these targets in the previous two quarters.

    The improved deliveries for the third quarter bring Tesla closer to meeting its second-half 2016 target of 50,000 vehicles, which it reiterated on Sunday. It said in a statement that fourth-quarter deliveries would be “at or slightly above” the third quarter’s.

    However, the third-quarter figures included 5,150 vehicles in transit at the end of the second quarter, as Tesla reported in July. Another 5,500 cars in transit would be counted in the fourth quarter, it said.

    Meeting the third-quarter target was a priority for the money-losing Silicon Valley carmaker, which is hoping to raise funds from the equity market later this year for multiple efforts, including building out its factory for the Model 3 mass-market sedan due in late 2017 and the planned acquisition of SolarCity Corp (SCTY.O).

    Tesla experienced production problems earlier this year and began to resolve them in June. It said in July that production would improve from 2,000 cars a week to 2,200 in the third quarter and 2,400 in the fourth.

    Production rose in the third quarter to 25,185 vehicles, implying just shy of 2,000 vehicles per week.

    The company will release third-quarter financial results in early November.

    Chief Financial Officer Jason Wheeler said in August that if second-half production and delivery targets are met, the company had a “great chance of being non-GAAP profitable,” without specifying a time period.

    In September, Tesla began advertising its inventory cars, for showrooms or test drives, “at favorable prices and ready for expedited delivery.”

    Some analysts expressed concern that discounts, reported extensively on online Tesla forums, would undermine margins.

    Last week, Chief Executive Officer Elon Musk published a memo telling employees to follow the company’s policy of not offering discounts on new cars.

    Musk was responding to a research note published on Tuesday by Pacific Crest Securities analyst Brad Erickson criticizing Tesla for offering discounts on Model S inventory cars, not those built-to-order for specific customers, to boost third-quarter sales.

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  • Audi says August sales up 2.9 percent on Chinese demand for compact cars

    Audi says August sales up 2.9 percent on Chinese demand for compact cars

    Audi increased global sales 2.9 percent in August on strong demand in its key Chinese market for luxury compact cars including the A3 and Q3 models.

    The Volkswagen-owned division on Tuesday said deliveries rose to 132,350 autos last month from 128,647 a year earlier, with eight-month sales up 4.9 percent at 1.23 million.

    Sales in China were up 8.8 percent at 49,154 cars, expanding year-to-date registrations in Audi’s largest market 6.8 percent to 361,315.

    German luxury rival BMW earlier on Tuesday reported a 5 percent increase in brand sales to 142,554 cars, with eight-month sales up 5.5 percent at 1.28 million.

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  • VW’s Audi steps up collaboration with Chinese tech groups

    VW’s Audi steps up collaboration with Chinese tech groups

    Volkswagen’s luxury car unit Audi has agreed to deepen collaboration with Chinese internet technology groups to offer more digital services in the world’s largest car market.

    Audi and FAW-Volkswagen, VW’s joint venture with FAW Car Co Ltd (000800.SZ), have signed letters of intent with Alibaba (BABA.N), Baidu (BIDU.O) and Tencent (0700.HK), Audi said on Sunday. Financial terms were not disclosed.

    Parent Volkswagen has been hobbled by a scandal over the rigging of emissions tests, distracting it in a race with global carmakers to develop computer-aided services for drivers.

    VW’s CEO told a newspaper on Sunday that it has to remain in control of its relationship with car users, which is why it stopped talks with U.S. ride-hailing service Uber and technology giants Google (GOOGL.O) and Apple (AAPL.O).

    Under the agreement with online search company Baidu, Audi aims to improve the use of smartphone apps in its cars.

    Its projects with social network and online gaming group Tencent include helping drivers to make better use of the WeChat communication app.

    The alliance with Alibaba aims to develop more real-time traffic news services and 3D maps.

    VW in May took a $300 million stake in smaller ride-sharing company Gett.

  • In China’s electric car boom, global automakers select different gear

    In China’s electric car boom, global automakers select different gear

    By 2020, Beijing says automakers must meet tough new green standards to cut epic pollution in China’s cities. As domestic firms bet heavily on electric cars to meet that goal, foreign peers are set to stay in a different, petrol-driven gear.

    In the latest sign of caution from global automakers in China, Germany’s Audi last week unveiled a new factory for high-efficiency transmissions in Tianjin, to be used in petrol-powered cars. While Chinese firms go electric in the world’s biggest auto market, Audi is intent on petrol engines that can run farther, cleaner, in tandem with hybrid technology.

    As China’s electrified vehicle production booms, some international industry officials warn in private that the ambitious electric goals of domestic firms could prove too costly, too risky, too far from what consumers actually want – and not a good fit with their operations elsewhere. Still, China doled out $4.5 billion last year alone in green car subsidies.

    “In 2020, most cars we will sell will be combustion engines, so to fulfill (fuel consumption targets) you have to improve the consumption of each and every car of the Audi model range,” Audi China chief Joachim Wedler said at the opening of the new plant. Wedler didn’t comment on Chinese peers’ electric car plans.

    Automakers globally have struggled to agree on what a greener future will hold for the industry. In China, Beijing and state-linked automakers have thrown their weight behind electric vehicles – despite the fact that the electricity they need may be generated from burning coal.

    Under Beijing’s 2020 requirements, on average cars must consume less than 5 liters of petrol per 100 kilometers – nearly 30 percent below current standard levels.

    Beijing has rolled out a raft of incentives to push domestic automakers – foreign brands generally aren’t eligible – to build more electric and plug-in hybrid vehicles, spurring a quadrupling in sales of these so-called “new energy vehicles” (NEVs) in 2015. Even with that surge, just 1.4 percent of cars sold in the first seven months of 2016 were NEVs, as concerns linger over driving range and home charging.

    HYBRID COMPROMISE

    A powertrain manager at a major foreign automaker’s China joint venture said domestic companies’ smaller scale made them nimbler. Many are also state-linked, therefore obliged to support government policy, the manager said, declining to be named as he was not authorized to speak to the media.

    For example, Geely – controlled by Li Shufu, a member of the government’s political consultative body – wants 90 percent of all sales to be NEVs by 2020. Meanwhile, state-backed GAC Motor plans to be able to produce up to 400,000 green energy cars annually by the end of this year.

    Foreign automakers, who must form joint ventures with local partners to produce cars in China, have to consider a different dynamic – how manufacturing strategies on the mainland correlate with their traditional businesses and customers elsewhere.

    The powertrain manager said his company, like Audi, is focusing on a more gradual strategy, developing more efficient engines as well as plug-in petrol-electric hybrids: an interim solution that will please a government intent on cutting harmful emissions.

    Of course, foreign automakers aren’t avoiding NEVs entirely.

    General Motors’ China venture last year pledged to spend $4 billion on electrification, developing 10 new energy models by 2020.

    In Tianjin, Audi China chief Wedler said the German firm and partner China FAW Group plan to launch their first locally produced plug-in hybrid vehicle this year, with a new imported car based on the same principle on the way next year.

    But Wedler acknowledged that as China’s massive auto market evolves, automakers alone won’t determine future directions.

    “The whole picture is driven by legislation,” Wedler said.

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  • Audi recalls A8 models in South Korea due to stalling problem

    Audi recalls A8 models in South Korea due to stalling problem

    Audi is recalling 1,534 A8 cars in South Korea due to a stalling problem, the transport ministry said on Wednesday, adding it was the first country where the German carmaker was recalling the model for such a defect.

    The Volkswagen (VOWG_p.DE) division will expand the recall to the United States and other countries, South Korea said, in what would be a further blow to the German company reeling from its emissions-test cheating scandal.

    An Audi Volkswagen Korea spokeswoman confirmed it was the first recall for such a defect but said she was not aware of any plans to expand the recall to other countries.

    South Korea, a major market for the A8, has sought to punish Volkswagen aggressively following the scandal, suspending sales of some Volkswagen, Audi and Bentley cars for allegedly forging documents on emissions or noise-level tests.

    The ministry said it had found a design problem in a coolant control valve, which was causing the affected models to stall. This is a “serious defect which hampers safe driving,” the ministry said in a statement.

    An Audi spokesman in Germany said a magnetic valve near the car’s gearbox needed to be replaced and that there had been no other recalls in other countries so far.

    The model in question is the A8 4.2 FSI Quattro produced between July 2010 and April 2012.

  • Ford to recall 91,000 cars worldwide to fix fuel-pump issue

    Ford to recall 91,000 cars worldwide to fix fuel-pump issue

    Ford Motors said on Wednesday it was recalling about 91,000 vehicles worldwide to replace faulty fuel-pump parts that could potentially cause a car to stall without warning.

    Ford said it would replace fuel-pump control modules in about 88,151 vehicles, including certain of its 2013-15 model year Ford Taurus sedans, Ford Flex crossover utility vehicles, Lincoln MKS sedans, Lincoln MKT SUVs and Ford Police Interceptor sedans. (ford.to/2bOOxjg)

    The company also said it would recall about 2,472 Ford Transit vans to replace fuel-injection pumps in certain models manufactured in the year 2015-16.

    The carmaker said it was additionally recalling 23,150 Ford Escape SUVs of 2017 model year to update power-window software.

    Ford said is was not aware of any accidents or injuries associated with the issues.

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  • Toyota to introduce new safety features in future vehicles

    Toyota to introduce new safety features in future vehicles

    Japanese auto major Toyota plans to introduce its new global architecture and latest safety technologies in future vehicles as it seeks to play a major role in bringing down fatalities in road accidents.

    The company, which has introduced its Toyota New Global Architecture (TNGA) in its 4th generation hybrid car Prius, plans to introduce it in its future models as well.

    Besides, it is also looking to introduce pre-collision system (PCS) in vehicles from next year in Japan, Europe and the US.

    “We have introduced the TNGA in the market with our 4th generation Prius. We will introduce it in vehicles following the Prius and eventually introduce it to all our products when there is a model change,” Toyota Motor Corporation Assistant Chief Safety Technology Officer Seigo Kuzumaki said here.

    Stating that TNGA has resulted in new collision safety body structure, he said in oblique frontal crash test, the new Prius has about 55 per cent decline in cabin deformation percentage compared to the previous 3rd generation.

    The test was conducted at a speed of 90 kmph as compared to 64 kmph done in the previous generation, he added.

    According to Toyota, TNGA incorporates wide reaching structural innovations that promises substantially improved basic performance and product appeal.

    Commenting on the PCS, Kuzumaki said: “The plan is to introduce this technology to our vehicles in Japan, Europe and the US in 2017. Later on, it will be rolled out country wise depending on suitability.”

    The PCS is a feature that helps prevent collisions using a camera and millimetre wave radar and engaging brake assistance system after warning when a driver fails to use brake.

    Although the company hasn’t specified a timeline for these technologies to be brought to India, it assumes significance as Indian roads account for registering the highest number of road fatalities in the world.

    Deaths due to road accidents in the country increased by around 5 per cent to 1,46,000 in 2015 from the previous year.

    As per WHO, fatalities due to road accidents globally were at 1.42 million people and is projected to increase to 1.85 million by 2030.

  • Toyota to Continue to Invest Big in Indonesia

    Toyota to Continue to Invest Big in Indonesia

    Toyota will continue its major investment plan in Indonesia, particularly in manufacturing, up to Rp20 trillion by 2020.

    PT Toyota Motors Manufacturing Indonesia (TMMIN) deputy president director Warih Andang Tjahjono in Tokyo, Japan, said Sunday, August 28, 2016, that Toyota has made Rp10 trillion investment of its planned investment in Indonesia, as promised by Toyota Motor Corp (TMC) president director Akio Toyota.

    “Major projects have been realized, the third plant has been completed,” he said.

    Since 2013, he went on, Toyota’s production capacity in Indonesia continues to increase, from 110,000 units to currently 25,000 units per day.

    According to Warih, the total TMC investment in the past few years have reached roughly Rp10 trillion, in which the biggest investment had been made to develop the production capacity of Kijang Innova and Fortuner at approximately Rp5 trillion, followed by the production of Sienta at around Rp2.5 trillion, and NR engine production with an investment value of roughly Rp2.3 trillion.

    “Investment will continue, although it would not be as big as the current investment,” Warih said.

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