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  • Kia Soul Receives 2017 Consumer Guide Automotive Best Buy Award

    Kia Soul Receives 2017 Consumer Guide Automotive Best Buy Award

    Consumer Guide Automotive has awarded the Kia Soul one of its coveted Best Buy Awards for 2017 in the Subcompact Car segment, marking the third year in a row the fun-loving box car has received the award. Once again, the Soul’s funky personality resonated with the editors, along with its roomy interior, premium-looking cabin and long list of desirable features.

    “People gravitate toward the Soul because of its head-turning style, extensive feature content, and excellent value. Its practicality makes it a perfect fit for just about every type of lifestyle,” said Orth Hedrick, vice president product planning Kia Motors America. “Being recognized by Consumer Guide Automotive for a third consecutive year proves the Soul continues to be a crowd favorite, and with the new turbocharged version offered for 2017, we anticipate its popularity will surge to new heights.”

    For 2017, the Soul gains a 201-hp 1.6-liter turbocharged engine for more fun than ever. Though the 1.6-liter turbo engine adds 40 horsepower, fuel economy is 28 miles-per-gallon, city and highway combined1 —slightly better than the combined mileage of the 2.0-liter normally-aspirated 161-hp engine in the Soul Plus and in the Soul Base 1.6-liter, which produces 130 horsepower. Performance in the turbocharged Exclaim is further enhanced by the addition of a new 7-speed Dual Clutch Transmission (DCT), which contributes to a more engaging driving experience. Other new options for the 2017 model year are convenience systems such as Rear Cross Traffic Alert and Blind Spot Detection. The 2017 Exclaim also gets standard UVO32 with e-Services with integrated Android Auto and Apple CarPlay.

    Each year Consumer Guide Automotive editors select the best vehicles from 20 segments to receive Best Buy Awards, with vehicle price and value being major factors in their selection process. By prioritizing these key consideration points in the car-buying process, the Consumer Guide Automotive Best Buy Awards serve a practical purpose to everyday car shoppers. Celebrating its 50th Anniversary in 2017, Consumer Guide Automotive is one of the most trusted names in the automobile industry.

     

  • eHi Car Services Announces Third Quarter 2016 Results

    eHi Car Services Announces Third Quarter 2016 Results

    eHi Car Services Limited rentals and car services provider in China, today announced its unaudited financial results for the third quarter ended September 30, 2016.

    Third Quarter 2016 Highlights

    • Net revenues increased by 47.8% year-over-year to RMB582.1 million (US$87.3 million[1]) for the third quarter of 2016, from RMB393.8 million for the third quarter of 2015.

    Three months ended September 30,

    Year-Over-Year

    (RMB ‘000)

    2015

    2016

    Comparison

    Car rentals

    300,700

    464,271

    54.4%

    Car services

    93,080

    117,783

    26.5%

    Total Net

    Revenues

    393,780

    582,054

    47.8%

    Gross profit[2] increased by 83.9% year-over-year to RMB165.7 million (US$24.8 million) for the third quarter of 2016, from RMB90.1 million for the third quarter of 2015. Gross profit margin[2] increased to 28.5% for the third quarter of 2016, from 22.9% for the third quarter of 2015.

    • Net income increased by 269.5% year-over-year to RMB22.3 million (US$3.3 million) for the third quarter of 2016, from RMB6.0 million for the third quarter of 2015. Net income margin increased to 3.8% for the third quarter of 2016, from 1.5% for the third quarter of 2015.
    • Non-GAAP adjusted EBIT[3] increased by 97.4% year-over-year to RMB80.6 million (US$12.1 million) for the third quarter of 2016, from RMB40.8 million for the third quarter of 2015. Non-GAAP adjusted EBIT margin[3]increased to 13.8% for the third quarter of 2016, from 10.4% for the third quarter of 2015.
    • Non-GAAP adjusted EBITDA[4] increased by 60.0% year-over-year to RMB264.5 million (US$39.7 million) for the third quarter of 2016, from RMB165.3 million for the third quarter of 2015. Non-GAAP adjusted EBITDA margin[4]increased to 45.4% for the third quarter of 2016, from 42.0% for the third quarter of 2015.
    • Total average available fleet size[5] increased by 46.5% year-over-year to 41,742 vehicles for the third quarter of 2016, from 28,499 vehicles for the third quarter of 2015. Total fleet RevPAC[6] increased to RMB152 for the third quarter of 2016, from RMB150 for the third quarter of 2015.

    [1] The Company’s business is conducted in China and substantially all of its revenues are denominated in Renminbi (RMB). However, this earnings announcement contains translations of RMB amounts into U.S. dollars (US$) at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.6685 to US$1.00, the effective noon buying rate as of September 30, 2016 in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York.

    [2] Gross profit is defined as net revenues less cost of net revenues (vehicle operating expenses).  Gross profit margin is defined as the percentage representing gross profit divided by net revenues.

    [3] Non-GAAP adjusted EBIT is defined as net income before share-based compensation, interest expenses, interest income, provision for income taxes, gains from waiver of warrants and gains from sale of cost method investment. For more information, refer to “About Non-GAAP Financial Measures” and “Reconciliation of GAAP and Non-GAAP Results” at the end of this press release. Non-GAAP adjusted EBIT margin is defined as the percentage representing Non-GAAP adjusted EBIT divided by net revenues.

    [4] Non-GAAP adjusted EBITDA is defined as net income before depreciation and amortization, share-based compensation, interest expenses, interest income, provision for income taxes, gains from waiver of warrants and gains from sale of cost method investment. For more information, refer to “About Non-GAAP Financial Measures” and “Reconciliation of GAAP and Non-GAAP Results” at the end of this press release. Non-GAAP adjusted EBITDA margin is defined as the percentage representing Non-GAAP adjusted EBITDA divided by net revenues.

    [5] “Average available fleet size” is calculated by dividing the aggregate number of days in which the Company’s fleet was in operation during a given period by the total number of days during the same period. In determining the size of the Company’s fleet in operation, eHi includes all vehicles in its car rentals and/or car services fleets except for vehicles that have been written off in accordance with its accounting policy and vehicles that have not been consistently made available for rent and that it may consider to dispose of when appropriate opportunities arise.

    [6] “RevPAC” refers to average daily net revenue per available car, which is calculated by dividing the net revenues during a given period by the aggregate number of days in which the Company’s fleet was in operation during the same period.

     

    Average Available

    Fleet Size

    RevPAC

    (RMB)

    2015Q3

    2016Q3

    Year-Over-Year

    Comparison

    2015Q3

    2016Q3

    Year-Over-Year

    Comparison

    Car rentals

    26,200

    39,227

    49.7%

    125

    129

    3.2%

    Car services

    2,299

    2,515

    9.4%

    440

    509

    15.7%

    Total

    28,499

    41,742

    46.5%

    150

    152

    1.3%
    • Fleet utilization rate[7] for car rentals was 71.9% for the third quarter of 2016, compared with 73.8% for the third quarter of 2015.
    • As of September 30, 2016, total period-end fleet size[8] was 48,934 vehicles.

    [7] “Fleet utilization rate” refers to the aggregate transaction days for the Company’s car rental fleet during a given period divided by the aggregate days the car rental fleet was in operation during the same period.

    [8] “Period-end fleet size” refers to the aggregate number of vehicles in the Company’s car rentals and car services fleets as of the last day of a given period which the Company holds legal title to and reflects in its balance sheet, including vehicles that are currently missing but have not been written off in accordance with its accounting policy. The period-end fleet size as of September 30, 2016 excluded 144 vehicles which the Company had written off from its balance sheet in accordance with its accounting policy.

    Mr. Ray Zhang, eHi’s Chairman and Chief Executive Officer, said, “Our business continued to thrive during the third quarter, leading to both strong top-line growth and significant improvement in profitability. As a fast-growing company, we are committed to driving ongoing operating leverage and are well-positioned to capture the growing demand from China’s rapidly rising domestic tourism and business-related travel.”

    “The recent regulations regarding online car-hailing business in China, we believe, provide us with greater potential to explore business and strategic cooperation opportunities to enhance our competitive position. Looking ahead, we remain focused on continuing to execute on our growth plan and achieving our strategic objectives,” Mr. Zhang concluded.

    Mr. Colin Sung, eHi’s Chief Financial Officer, said, “We are pleased to report strong third quarter results with net revenues increasing by 47.8% year-over-year, while recording 269.5% bottom-line growth from the prior-year period. Notably, our continued focus on operating efficiency and cost control measures contributed to broad-based margin improvement. Our gross margin and non-GAAP adjusted EBITDA margin both reached record-highs of 28.5% and 45.4%, respectively. Our financial discipline is well-established, and we remain committed to prudent expansion and a balanced approach between growth and profitability.”

    Third Quarter 2016 Financial Results

    Net revenues for the third quarter of 2016 were RMB582.1 million (US$87.3 million), up 47.8% year-over-year, attributable to increased net revenues from both car rentals and car services.

    Net revenues from car rentals for the third quarter of 2016 were RMB464.3 million (US$69.6 million), up 54.4% year-over-year, primarily driven by the growing average available fleet size for car rentals in response to customer demand.

    Net revenues from car services for the third quarter of 2016 were RMB117.8 million (US$17.7 million), up 26.5% year-over-year, primarily driven by the increased car services RevPAC as we provided services to more business clients.

    Cost of revenues (vehicle operating expenses) for the third quarter of 2016 was RMB416.4 million (US$62.4 million), up 37.1% year-over-year, primarily driven by increased depreciation and labor costs.

    In the third quarter of 2016, 486 used vehicles were disposed of, and 358 used vehicles were under sales contracts pending title transfer. The Company recognized a disposal loss of RMB0.3 million (US$0.04 million) in aggregate for these 844 vehicles. In addition, a disposal gain of RMB0.7 million (US$0.1 million), which was unrecognized in the previous quarters, was recognized in the third quarter of 2016 as a result of the completion of title transfer during such period. The disposal loss and gain were both recognized as adjustments to the vehicle-related depreciation expense as part of the cost of revenues.

    Gross profit for the third quarter of 2016 was RMB165.7 million (US$24.8 million), up 83.9% year-over-year. Gross profit margin for the third quarter of 2016 was 28.5%, compared with 22.9% for the third quarter of 2015. Gross profit margin improvement was due to certain cost controls primarily in vehicle insurance, and to a lesser extent, in vehicle repair and maintenance as well as labor costs, in connection with enhanced economies of scale and operating efficiency.

    Selling and marketing expenses for the third quarter of 2016 were RMB28.5 million (US$4.3 million), up 81.8% year-over-year, primarily due to increased channel marketing and promotion fees as the Company expanded branding and channel promotion activities during such period.

    General and administrative expenses for the third quarter of 2016 were RMB63.1 million (US$9.5 million), up 38.6% year-over-year, primarily due to increased employee-related costs including salaries and welfare expenses as a result of increased headcount, as well as a foreign exchange loss in the third quarter of 2016 compared with a foreign exchange gain in the third quarter of 2015.

    Profit from operations for the third quarter of 2016 was RMB77.0 million (US$11.5 million), up 124.2% year-over-year.

    Interest expense for the third quarter of 2016 was RMB55.7 million (US$8.3 million), up 79.5% year-over-year, primarily attributable to the interest expense associated with the Company’s senior unsecured notes of US$200 million due 2018.

    Net income for the third quarter of 2016 was RMB22.3 million (US$3.3 million), up 269.5% from RMB6.0 millionfor the third quarter of 2015. Net income margin for the third quarter of 2016 was 3.8%, compared with 1.5% for the third quarter of 2015.

    Basic and diluted earnings per ADS for the third quarter of 2016 were RMB0.32 (US$0.05) each, compared with basic and diluted earnings per ADS of RMB0.09 (US$0.01) each for the third quarter of 2015.

    Non-GAAP adjusted EBIT for the third quarter of 2016 was RMB80.6 million (US$12.1 million), up 97.4% year-over-year. Non-GAAP adjusted EBIT margin for the third quarter of 2016 was 13.8%, compared with 10.4% for the third quarter of 2015.

    Non-GAAP adjusted EBITDA for the third quarter of 2016 was RMB264.5 million (US$39.7 million), up 60.0% year-over-year. Non-GAAP adjusted EBITDA margin for the third quarter of 2016 was 45.4%, compared with 42.0% for the third quarter of 2015.

    As of September 30, 2016, the Company’s cash, cash equivalents and restricted cash balance was RMB1.5 billion (US$223.7 million).

    Recent Development

    On August 30, 2016, the Company entered into a US$150 million syndicated loan facility agreement. This loan facility agreement includes an initial facility of US$110 million and a greenshoe facility of US$40 million. The loan facilities have a three-year term and will be repaid in installments. The interest margin is priced at 350 basis points per annum over LIBOR. Deutsche Bank AG, Singapore Branch is acting as the original mandated lead arranger of the loan facilities. The Company had fully drawn down the US$150 million facility as of September 27, 2016, and used part of the proceeds for repaying certain existing indebtedness with high interest rates. The remaining proceeds will be used for funding capital expenditures and other general corporate purposes of the Company.

    Outlook

    The Company estimates that net revenues for the full year of 2016 will range from RMB2.1 billion to RMB2.2 billion, and total period-end fleet size will reach approximately 57,000 vehicles as of December 31, 2016. This outlook reflects the Company’s current and preliminary view, which is subject to change.

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  • Volkswagen aims to sell 400,000 new energy vehicles a year in China by 2020

    Volkswagen aims to sell 400,000 new energy vehicles a year in China by 2020

    Volkswagen aims to boost new energy vehicle sales in China to 400,000 units a year by 2020, the automaker’s China chief Jochem Heizmann said, as Beijing pushes automakers to sell low-emissions cars via incentives and friendly regulations.

    It aims to eventually sell 1.5 million new energy vehicles (NEVs) annually by 2025, Heizmann told reporters ahead of the Guangzhou auto show, which opens on Friday.

    “We have to do more in the NEV area. The government is pushing, the general environment in China is pushing that,” Heizmann said.

    Overall sales of NEVs in China more than quadrupled last year with rapid growth continuing in 2016.

    Volkswagen will deliver its first locally produced NEVs, as battery electric and plug-in hybrid cars are referred to in China, under its Audi brand this year.

    Audi AG manufactures the vehicles in a joint venture with China FAW Group.

    Volkswagen also has a JV with SAIC Motor (600104.SS), and the two companies have plans to sell plug-in hybrid cars in China in the future.

    Global auto brands are only allowed to manufacture cars domestically in China through ventures with local partners, with automakers typically limited to two JV partners.

    Volkswagen said in September that it had signed a preliminary deal to explore making electric vehicles in a new joint venture with China’s Anhui Jianghuai Automobile.

    The deal is not final and is subject to approvals.

    “We are making good progress in our feasibility study with JAC,” Heizmann said.

    He said he was hopeful the government would allow what would be Volkswagen’s third JV in China, with the government pushing for less-polluting vehicles.

    “Normally the legal framework is you are only allowed to have two joint ventures. There is a special chance to have this additional joint venture just on pure battery cars,” Heizmann said.

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  • Mazda Unveils the All-New CX-5

    Mazda Unveils the All-New CX-5

    Mazda Motor Corporation today unveiled the all-new Mazda CX-5 crossover SUV. The fully redesigned model, which refines every element of Mazda’s design and technology to offer new dimensions of driving pleasure, will be launched in Japan in February before being rolled out to global markets.

    The slogan for development of the all-new CX-5 was “an SUV all customers will enjoy,” and Mazda aimed to add a new dimension by offering driving pleasure that everyone on board can enjoy—not just the driver. The model is engineered in line with human sensibilities to deliver responsive performance that conforms to the driver’s expectations. It also prioritizes passenger comfort, with a quiet cabin and pleasant ride feel, and adopts G-Vectoring Control, the first of the SKYACTIV-VEHICLE DYNAMICS vehicle motion control technologies. Designed under the KODO—Soul of Motion design theme, the exterior is both bold and sensual, and the interior has been crafted to give occupants a pleasant feeling. The body color lineup includes the newly developed Soul Red Crystal, which highlights the beauty and quality of Mazda’s KODO designs.

    The powertrain lineup comprises the SKYACTIV-G 2.0 and 2.5 gasoline, and SKYACTIV-D 2.2 diesel engines. All three options offer powerful, linear driving performance and outstanding environmental performance.

    The all-new CX-5 will be on display at the Los Angeles Auto Show, open to the public Nov. 18-27.

    Launched in 2012, the CX-5 was the first new-generation model featuring SKYACTIV technology2 and KODO design. It has since grown into a core model that is sold in over 120 countries and accounts for approximately one quarter of Mazda’s global sales volume.3 It has won around 90 awards worldwide, including 2012-2013 Japan Car of the Year.4

    By providing driving pleasure to everybody who drives or rides in one of its vehicles, Mazda aims to enrich people’s lives and become a brand with which customers feel an emotional connection.

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  • Chinese Ride-Hailing Company Ucar Partners with BitTiger

    Chinese Ride-Hailing Company Ucar Partners with BitTiger

    Ucar, a major player in the Chinese ride-hailing and car rental market, has joined the global race to develop a road ready self-driving car. To compete for the best international talent, Ucar has opened a research outpost in Silicon Valley and partnered with online education platform BitTiger to host a deep-learning coding class and competition that offers winners cash prizes and a chance to interview with the company.

    Ucar (神州专车) booked approximately 15%1 of car chauffeur services in China in 2015, and are backed by Alibaba. They are based in Beijing, China and began aggressively expanding their research center in Silicon Valley last year by hiring experienced engineers from major Bay Area tech companies. The research center is part of a larger trend among Chinese companies, including tech giant Baidu, that are creating research outposts in Silicon Valley to gain a competitive talent advantage over domestic rivals.

    Ucar is responding to the huge market opportunity for self-driving cars in China where crippling traffic jams can keep city streets gridlocked for days2. Principal engineer of the Ucar Silicon Valley based research center, Zhong Hua, explains that Ucar’s self-driving car technology aims to “minimize traffic related deaths, reduce commute times, and make better use of cars left idly parked most of the day,” all goals that would have a big impact in China’s mega-cities.

    BitTiger is a US-based online learning platform for Chinese engineers that gained experience at elite tech companies to share their knowledge with Mandarin-speaking students around the world. These students are eager to gain access to a top education taught by industry experts not otherwise available to those outside of the best university programs.

    The course being launched by Ucar and BitTiger will provide candidates with fundamental knowledge of image recognition and deep learning techniques. Upon completion of the course, students will be challenged to accurately identify pedestrians, cars, and bicycles among images collected by Ucar’s test vehicles. The top three teams that most accurately and consistently identify these target objects will receive cash prizes and an opportunity to interview for a position at the Ucar Silicon Valley research center.

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  • Jaguar Electrifies With I-PACE Concept Car

    Jaguar Electrifies With I-PACE Concept Car

    Jaguar’s engineering and design teams have torn up the rule book to create a bespoke electric architecture, matched with dramatic design. The result is no-compromise smart, five seat sports car and a performance SUV in one.

    Ian Callum, Director of Design, said: “The I-PACE Concept represents the next generation of electric vehicle design. It’s a dramatic, future-facing cab-forward design with a beautiful interior – the product of authentic Jaguar DNA, electric technology and contemporary craftsmanship.

    “Our virtual reality reveal today has pushed technology boundaries as well, and captures the hi-tech essence of the concept car. We only have one concept car and it is in LA for the reveal. For the first time, VR has allowed us to share it across the globe in the most immersive way possible.”

    This unique and world-first ‘social VR’ reveal is believed to be the largest live and connected VR event of its type to date. Throughout the day more than 300 guests were transported into a specially created life-like virtual space, into which, two of the car’s creators, Ian Callum and Ian Hoban were projected.

    From VR hubs in Los Angeles and London, groups of 66 guests including A-list stars Michelle Rodriguez, Miranda Kerr, James Corden and David Gandy, used HTC Vive Business Edition headsets, powered by Dell Precision workstations, to put themselves inside the concept car and interact live with other participants. Guests ‘sat’ on the concept’s virtual seats, had a 360[0] view of Venice Beach as the concept was built piece by piece around them, and saw the I-PACE Concept race towards them across a virtual desert.

    Dr Wolfgang Ziebart, Jaguar Land Rover, said: “This is an uncompromised electric vehicle designed from a clean sheet of paper: we’ve developed a new architecture and selected only the best technology available.”

    The I-PACE Concept transforms the electric driving experience and offers the driver-focused performance and response Jaguar is renowned for. To help deliver this, the I-PACE has electric motors on the front and rear axles. Their combined output is 400PS and 700Nm of torque – the same torque rating as the F-TYPE SVR, accelerating from 0-60mph in around four seconds. For rapid charging, using a typical public 50 KW DC charging network, a full charge will take just over 2 hours – enough to deliver more than 220 miles range.

    The virtual reality experience also allowed participants to sit in the front and rear of the Jaguar I-PACE Concept and explore the beautiful interior, discovering hidden details and features.

    Ian Callum said: “The interior of the I-PACE Concept is finished with beautiful, premium materials and an unwavering attention to detail. From the expansive panoramic glass roof to the sporting, beautifully finished seats, every feature bears the hallmark of British craftsmanship.”

    Renowned VR Director, Alexander Horton, led the creative direction. Participants experienced the car being built around them, speeding towards them and appearing to fall to Earth from another planet – clearly signalling the future-forward nature of the revolutionary Jaguar.

    The new and exciting VR platform pushed the boundaries further than ever before, with the inclusion of social interaction and a live presenter broadcast into a single VR world, so groups in both LA and London were able to communicate and interact with one another.

    The VR content from the reveal will now be available on Vive Port through a dedicated Jaguar app allowing consumers to experience the I-PACE Concept at home.

    Jaguar joined forces with VR leaders HTC, Computer experts Dell and Creative agencies ReWind and Imagination to create the world’s largest, global, connected VR experience.

    Hervé Fontaine, Vice President Virtual Reality B2B and Business Development at HTC said: “Jaguar Land Rover is renowned for its innovative spirit, and with Vive Business Edition we’re thrilled to be the virtual reality partner to help bring to life their latest launch. With the blend of cinematics and Vive’s room-scale VR technology, the I-PACE Concept VR experience offers an incredible level of immersion, and showcases an exciting reimagining of the traditional car launch as we know it.”

    Rahul Tikoo, Vice President and General Manager for Dell Precision, said: “Dell has long been involved in VR, and we’ve been evolving our business model to introduce solutions that are optimized for the future of VR. The Jaguar I-PACE Concept, designed and introduced with VR, reinforces the incredible innovation that’s possible with VR technologies and the potential to ultimately transform industries.”

    Ross Wheeler, Head of Automotive at Imagination, said: “For the first time in history, a global automotive brand has used fully immersive VR to launch their latest car. This launch takes the individual far beyond any new car experience they would have witnessed before, allowing people across the globe to connect in real time, be fully immersed within the vehicle and share live together their experience of Jaguar’s first ever electric vehicle.”

    “Jaguar, by embracing cutting-edge technology in this way, has created an experience rich and rewarding for its consumers. It has undoubtedly redefined the future of how automotive brands introduce their new vehicles to customers.”

    The Concept will make its first public physical appearance at the 2016 Los Angeles Auto Show on Wednesday 16 November.

  • Fiat Chrysler, Cummins reject diesel cheating suit

    Fiat Chrysler, Cummins reject diesel cheating suit

    Fiat Chrysler Automobiles NV and Cummins Inc said on Monday they will fight a class-action lawsuit filed against the companies accusing them of cheating on diesel emissions tests.

    On Monday, lawyers representing owners of older 2500 and 3500 Dodge Ram trucks filed a class-action lawsuit in U.S. District Court in Detroit, asserting the companies “conspired to knowingly deceive consumers and regulators of illegally high levels of diesel emissions in their vehicles.”

    The suit accuses the automakers of fraud, violating the Racketeer Influenced and Corrupt Organizations Act and consumer-protection laws by intentionally misleading the public, concealing emissions levels and illegally selling noncompliant polluting vehicles.

    The suit filed by Seattle lawyer Steve Berman said the emissions catalysts are not durable and do not meet emission standards, and that at times emissions are nearly 10 times legal limits.

    The class action suit comes as Fiat Chrysler and Cummins are fighting over the costs of an emissions recall involving a different, newer population of trucks.

    Fiat Chrysler said in a statement it “does not believe that the claims brought against it are meritorious” and the company “will contest this lawsuit vigorously.”

    Cummins spokesman Jon Mills said the lawsuit “has no merit. We are obviously disappointed in the effort to tarnish our image and we plan to vigorously defend ourselves.”

    The suit covers owners of 2007–2012 Dodge Ram 2500 and 2007–2012 Dodge Ram 3500 pickup trucks.

    Reuters reported on Oct. 10 that Fiat Chrysler and Cummins Inc have been fighting over the $200 million estimated cost for a recall of 130,000 newer 2500 Ram pickup trucks equipped with Cummins diesel engines that could exceed U.S. pollution limits.

    The U.S. Environmental Protection Agency and California Air Resources Board have demanded a recall of 2013-2015 model year Ram 2500 pickup trucks with 6.7L Cummins diesel engines because moisture can lead to the deactivation of the selective catalyst reduction system, causing excess nitrogen oxide emissions, Cummins said.

    Fiat Chrysler has sued Cummins to recover the $60 million it has spent to date repairing 42,000 trucks at its own expense, a company lawyer said in court documents. Settlement talks are ongoing.

    Cummins counter-sued, saying Fiat Chrysler would not cooperate in the recall “for one reason – money” and said the automaker was “holding both Cummins and its own customers hostage.”

    When the emissions system fails, the warning light goes on and if the vehicle isn’t fixed soon the vehicles go into “limp mode” that allow them to only be driven very slowly.

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  • BMW eyes 100,000 electric car sales in 2017

    BMW eyes 100,000 electric car sales in 2017

    BMW wants to boost sales of electric cars by two-thirds next year to 100,000 vehicles as the luxury automaker is offering more battery-powered models, citing Chief Executive Officer Harald Krueger.

    Munich-based BMW expects to increase its deliveries of fully electric and hybrid vehicles to around 60,000 units this year, Krueger said. Sales of battery-powered BMW models have totaled about 100,000 cars since 2013, he noted.

    “Electric mobility will come, but demand is not going through the roof at the moment,” the newspaper quoted Krueger as saying.

    To help improve sales, BMW is also increasing the battery range of its i3 city vehicle by 50 percent this year. The i3, BMW’s only fully battery-powered car, sold only 25,000 units last year.

    The company, which has dropped behind Daimler’s Mercedes-Benz in global luxury-car sales rankings, wants to expand the share of electric cars and hybrid models to between 15 percent and 25 percent of sales by 2025, the newspaper reported.

  • Volkswagen’s Audi in talks with China’s SAIC Motor on tie-up

    Volkswagen’s Audi in talks with China’s SAIC Motor on tie-up

    Volkswagen’s Audi premium brand is in talks with China’s largest automaker, SAIC Motor, on a potential long-term collaboration, Audi said in a statement on Monday.

    Reuters reported on Saturday, citing a source familiar with the matter, that the two had signed an agreement that could pave the way for Volkswagen’s joint venture with SAIC to make Audi brand cars.

    An early entrant to China, the world’s largest car market, Audi is the best-selling premium car brand although it is rapidly losing ground to newer car models from Daimler’s Mercedes-Benz and non-German automakers like Toyota’s Lexus and General Motor’s Cadillac.

    Audi cars are now only made in China through a joint venture with China FAW Group, providing a lifeline to a state-owned company whose own brand cars have struggled with falling sales.

    Audi reaffirmed its commitment to FAW in the release announcing the talks with SAIC, saying it had outlined growth plans with FAW for the next 10 years that include making green energy SUVs and sedans in every major segment.

    Audi will also form a new joint venture company with FAW to be based in Beijing and focus on mobility and digital services, according to the statement.

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  • Volvo recalls vehicles in US, Canada for seat belt problem

    Volvo recalls vehicles in US, Canada for seat belt problem

    Volvo is recalling about 79,000 cars and SUVs in the US and Canada because the front passenger seat belt may not hold people in a crash.

    The recall covers certain S60, S90, V60, XC60 and XC90 vehicles from the 2016 and 2017 model years.

    Volvo says in government documents that a buckle stud can come loose, allowing the buckle to separate from a bracket. If that happens, the belt may not hold the front passenger in a crash. The company said Wednesday it has no reports of injuries. It does not expect to find any loose studs but says it’s recalling the vehicles as a precaution.

    Dealers will replace the buckle if needed at no cost to owners starting December 12.

    Volvo began investigating the problem after getting reports of buckle failures starting in August. It traced the trouble to cars made from February 16, 2015, to August 22, 2016

  • Honda plans North American production shifts to make more SUVs

    Honda plans North American production shifts to make more SUVs

    Honda Motor Co is shifting around its North American vehicle production mix and may raise imports from Japan to squeeze out more SUVs as it struggles to keep up with strong U.S. demand for larger models, a factor which has prompted the automaker to trim its annual sales forecast.

    From early next year, Honda will dedicate production at its Alabama plant to its Pilot SUV, Ridgeline pick-up truck and Odyssey minivan, shifting production of its luxury Acura MDX SUV to its plant in Ohio as part of efforts to align its overall production of popular models to better reflect market demand.

    Demand for multi-tasking vehicles from cost-conscious consumers and historically low gasoline prices have ramped up demand for SUVs and other larger models over that of passenger cars.

    So far this year, roughly 59 percent of all new vehicles sold in the world’s No.2 auto market have been light trucks, versus 41 percent passenger vehicles, compared with 55 percent and 45 percent, respectively, a year earlier.

    In comments scheduled for release on Thursday, American Honda Motor Co CEO Toshiaki Mikoshiba told reporters that by also shifting more production of its popular CR-V model to its Indiana plant from Mexico, and producing more of its HR-V models in Mexico, the company planned to lift its production weighting between light trucks and passenger cars more in favor of light trucks, from an even balance currently.

    “While maintaining our current overall capacity (in North America), we’d like to also consider our production options in Japan … to produce more light trucks to respond to strong demand,” Mikoshiba said.

    “So long as we don’t see a sudden reversal in gasoline prices, we believe this would be the right move for the market.”

    Japan’s third-largest automaker by vehicle sales also said that it was considering producing the CR-V and the Civic sedan in Japan to be exported to North America to fill any gaps in local production.

    Honda is planning to market the recently revamped Civic in Japan, which a company spokeswoman said would add to production capacity, while it is also considering marketing the latest CR-V at home.

    Last month, Honda lowered its annual North American vehicle sales forecast to 1.985 million, from its previous expectation for 1.990 million, due in part to the skew in market demand.

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  • Tesla buys Grohmann Engineering to help ramp up electric car production

    Tesla buys Grohmann Engineering to help ramp up electric car production

    Electric carmaker Tesla Motors Inc has agreed to buy Germany’s Grohmann Engineering GmbH, which develops automated manufacturing systems for batteries and fuel cells, as the California-based company seeks to expand its production more than sixfold by 2018.

    Unlisted Grohmann Engineering, based in Pruem, Germany, helped Tesla rivals Daimler and BMW build production facilities for electric car batteries.

    Tesla is seeking to raise its global manufacturing capacity to 500,000 vehicles in 2018 from an expected production rate of about 80,000 this year. Its main production facility is in Fremont, California.

    “To date, we have increased the production rate at our Fremont Factory by 400 percent in four years, and we expect this acquisition to accelerate that growth rate,” Tesla said in a blogpost.

    Following the acquisition, which still needs to be approved by the cartel authorities in Germany, several elements of Tesla’s automated manufacturing systems will be designed and produced in Pruem, close to Germany’s border with the Netherlands and Luxembourg.

    The deal, whose financial terms were not disclosed, is expected to add over 1,000 engineering and skilled technician jobs in Germany over the next two years Tesla said in its blog. Grohmann currently has around 700 employees.

    Tesla agreed on Sunday to buy a 74.9 percent stake from company founder and majority owner Klaus Grohmann, and a further 25.1 percent stake belonging to private equity firm Deutsche Beteiligungs AG (DBAG), DBAG said in a statement on Tuesday.

    DBAG said it expected to earn in the mid single-digit million euro range by selling its stake in Grohmann and that Grohmann had revenues of 123 million euros ($136 million) in 2015.

    DBAG said Grohmann had developed production lines for battery cells and batteries for “numerous” German and international automobile manufacturers. Grohmann was also specialized in the industrial production of fuel cells, DBAG said, and was active in the electronic and semiconductor industries as well as the biotechnology and medical technology sectors.

    Grohmann Engineering will be renamed Tesla Grohmann Automation after the deal and will serve as the initial base for Tesla Advanced Automation Germany with other locations to follow, Tesla said.

    The deal is expected to close next year.

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  • Nissan expects sales growth to slow in China, U.S. in near term

    Nissan expects sales growth to slow in China, U.S. in near term

    Nissan Motor Co Ltd on Monday said its sales growth in the world’s two biggest auto markets is likely slow in the near term as consumer tax breaks end in China while U.S. tastes move away from the automaker’s main area of focus.

    Japan’s second-biggest automaker by sales, which earlier blamed a strong yen for a 19 percent drop in second-quarter profit, made the comments after growth in Chinese and North American retail vehicle sales outperformed many markets in April-September.

    Sales in China in the six-month period grew 3.8 percent from a year prior, and Nissan’s head of operations in the country, Jun Seki, expects double-digit sales growth for calendar 2016, aided by economic incentives aimed at stimulating demand.

    “But as the government’s small-car subsidies wind down at the end of the year, we’re expecting to see a slowdown in sales early next year, and see single digit growth for the year,” Seki told reporters at Nissan’s Yokohama headquarters via telephone.

    Nissan also said recent growth in China’s auto market was due mainly to rising demand for local brands. In response, the automaker said it would further promote its China-only Venucia brand.

    The automaker sells almost a quarter of its output in China, and around 40 percent in North America.

    Its North American retail vehicle sales rose 5.4 percent in April-September. But it said demand growth was peaking and that any additional growth had been limited by its dependence on sales of sedans, at a time when low fuel prices had boosted demand for petrol-guzzling sport utility vehicles.

    Aggressive buying incentives for its sedans had also crimped profit margins, Nissan said.

    The automaker on Monday nevertheless kept its operating profit forecast at 710.0 billion yen ($6.80 billion) for the year through March, down 10.5 percent from a year prior, and said it continues to expect sales of 5.6 million vehicles.

    It also said it still expects the domestic currency to average 105 yen to the U.S. dollar and 120 yen to the euro.

    Earlier, Nissan said yen strength was responsible for July-September operating profit falling 19 percent to 163.9 billion yen – a result that still beat the 154.5 billion yen average of 10 estimates from analysts surveyed by Thomson Reuters I/B/E/S/. For April-September, profit fell 14 percent.

    Nissan raised its exposure to the strong yen at the start of the business year in April as it has been exporting its Rogue SUV crossover model from Japan to North America to meet demand.

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  • Singulato is China’s latest e-car newcomer to rev up with big fundraising

    Singulato is China’s latest e-car newcomer to rev up with big fundraising

    Little-known Chinese electric car start-up Singulato Motors is expected to say this week it raised around $600 million in a second fundraising – the latest such move illustrating China’s headlong ‘gold rush’ into all-electric battery cars.

    The apparent ease with which Chinese electric car start-ups can raise new funds is largely down to government subsidies and favorable policies. Subsidies can total around 110,000 yuan ($16,285) a car, or around a third of the sticker price of a model such as the BYD e6.

    While China today is reminiscent of Detroit in the early 20th century, with a host of new car makers arriving on the scene, Beijing is expected to phase out subsidies from 2020 – potentially crushing the start-ups’ survival rate.

    China has made a priority of making smart, connected electric cars. Entry barriers are relatively low, and Beijing sees the sector as a way for its auto industry to challenge, and even overtake, established global automakers, several of which have instead focused more on cleaner hydrogen fuel cell propulsion technology.

    Shen Haiyin, Beijing-based Singulato’s 42-year-old co-founder and CEO, says his company has raised about $700 million in total, much of it from an investment fund run by the municipal government of Tongling City in Anhui province as part of a “strategic partnership”.

    Tongling city mayor Ni Duping said the decision to invest in Singulato is part of a strategy to promote the new energy automotive industry. “We believe this effort will definitely allow Tongling to accelerate the city’s industry transformation,” he said in a statement.

    The company plans to invest in technology and build what Shen says will be a state-of-the-art electric vehicle (EV) production plant in Tongling capable of making 200,000 cars a year, by around 2020.

    The two-year-old start-up, with 140 employees, plans to roll out its first product, a crossover sport utility vehicle, by late next year or early 2018. Production will be outsourced, at least initially, to an existing automaker with excess manufacturing capacity, Shen said.

    “We’re targeting our EVs at young city dwellers in Beijing, Shanghai, Shenzhen and other large cities where buying a gasoline car is becoming more difficult because of purchase restrictions imposed by the government,” Shen told Reuters in his modest office.

    “If they buy an EV, they could buy a car immediately as EVs are exempt from purchase restrictions. Tech-savvy young people are naturally going to gravitate toward EVs.”

    Battling road congestion and air pollution, more Chinese cities are restricting new vehicle purchases – holding auctions and lotteries to sell a limited number of license plates. In Beijing, drivers of gasoline cars are barred from driving on one weekday per week. All-electric battery cars and heavily electrified plug-in hybrids are usually exempt.

    EASY MONEY

    Singulato’s fundraising follows an around $1 billion financing deal for another Chinese EV start-up WM Motor, again largely involving a municipal government.

    Other well-funded Chinese electric car start-ups include Future Mobility, LeEco’s LeSee, Next EV, Ch-Auto’s Qiantu Motor, and Changjiang Auto, as well as U.S.-based Chinese-funded start-ups Atieva and Faraday Future.

    LeSee, which aims to launch an all-electric luxury car, for example, raised more than $1 billion in a latest financing, mostly from Chinese investors including state-owned enterprises and a local municipality.

    Some 289,000 ‘new energy’ vehicles, including all-electric battery and plug-in electric vehicles, were sold in China in January-September. Full-year sales are likely to fall well short of a 700,000 target, according to a top official at the China Association of Automobile Manufacturers.

    MOVING IN-HOUSE

    Singulato’s Shen, who made his money as a tech entrepreneur in Tokyo, plans to aim straight for the electric car mass market rather than follow Tesla Motors’ model of first making a high-profile electric battery super sports car to stir up buzz around a new brand.

    Shen declined to elaborate on his pricing strategy beyond saying his cars would compete on price with Tesla’s $35,000 Model 3.

    For its first model, Singulato has developed in-house the electric propulsion and smart, connected systems, while doors, seats, panels and other basic parts were outsourced to Beijing-based IAT Automobile Technology Co.

    For future models, Singulato plans to design, develop and manufacture more on its own, and has been scouting global automakers for talent.

    “Compared to gasoline cars, EVs don’t have complex mechanical systems like the engine and transmission. They’re much easier to engineer and manufacture,” Shen said.

    “We think an even bigger differentiator will be how connected and intelligent the car is going to be, and we’re focusing on that more than the car itself.”

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  • Scania Strengthens Position in Indonesia

    Scania Strengthens Position in Indonesia

    Scania continues to reinforce its position in the Indonesian bus market. Transjakarta has now placed an order for 150 low-entry city buses in addition to the previously ordered 110 3-axle Scania buses that will be delivered later this year. The public transport operator in the Indonesian capital already has 108 articulated Euro 6 Scania gas buses in its network.

    The Transjakarta Bus Rapid Transport system is considered to be the world’s longest busway, serving more than 10 million passengers monthly. The forthcoming delivery of low-entry buses will replace the existing, highly polluting, old buses that operate outside the busway corridors. The new Scania buses, delivered by United Tractors and bodybuilt by Laksana, will feature wheelchair ramps.

    On announcing the order, Jakarta Governor Basuki “Ahok” Tjahaja Purnama particularly highlighted the greater accessibility and said, “this is the world-class bus we expect to have. Jakarta has never before had low-entry buses.”

    Scania, through its Indonesian partner United Tractors, has established the bus depot workshop facilities and parts supply systems in Jakarta needed to uphold an uptime of over 90 percent.

    United Tractors is the leading and the largest distributor of heavy equipment in Indonesia, providing products from world-renowned brands, including Scania. The partnership between United Tractors and Scania was established in 2004, initially focusing on heavy-duty trucks for the Indonesian mining industry.

    Scania is major supplier of buses for BRT systems throughout the world. “We are convinced that bus systems offer the quickest and most cost-effective solution for cities to increase urban mobility and alleviate traffic congestion,” says Karin Rådström, Head of Buses and Coaches. “The Jakarta BRT system serves as a model for many growing cities.”

    Scania is a part of Volkswagen Truck & Bus GmbH and one of the world’s leading manufacturers of trucks and buses for heavy transport applications. Scania is also leading provider of industrial and marine engines. Service-related products account for a growing proportion of the company’s operations, assuring Scania customers of cost-effective transport solutions and maximum uptime. Scania also offers financial services. Employing some 44,000 people, the company operates in about 100 countries. Research and development activities are concentrated in Sweden, while production takes place in Europe and South America, with facilities for global interchange of both components and complete vehicles. In 2015, net sales totalled SEK 95 billion and net income amounted to SEK 6.8 billion.