Fearing no-deal Brexit, UK carmakers slam brakes on investment

LONDON - Britain's carmakers, fearful of a chaotic no-deal Brexit and global economic turmoil, are slamming the brakes on investment, the nation's automotive industry warned on Wednesday.

New investment in the sector crashed 70 percent to £90 million ($109 million, 98 million euros) in the six months to June, the Society of Motor Manufacturers and Traders said in a statement.

That contrasted sharply with an annual average of £2.7 billion over the previous seven years.

"Today's figures are the result of global instability compounded by ongoing fear of no-deal," said Mike Hawes, chief executive of the SMMT industry organization. 

"This fear is causing investment to stall, as hundreds of millions of pounds are diverted to Brexit cliff-edge mitigation -- money that would be better spent tackling technological and environmental challenges."

The SMMT also revealed that total production tumbled by a fifth to 1.7 million vehicles in the first half of 2019 from a year earlier.

In another worrying Brexit signpost, British-based carmakers meanwhile suffered their 13th successive monthly output drop in June.

The industry organization has long argued that a no-deal Brexit would ramp up costs and hurt supply chains, while tariffs would undermine competitiveness and bite into profits.

Newly-installed British Prime Minister Boris Johnson has vowed to leave the European Union on October 31 come what may -- with or without a trade deal with Brussels.

Britain's biggest trade union Unite however called Wednesday on Johnson's Conservative administration to stem the loss of valuable investment and protect jobs.

"Prime Minister Johnson and his government cannot bat this aside," said Unite's assistant general secretary for manufacturing Steve Turner.

"There is a £330 million hole in investment into the UK auto sector because money must now be diverted into no deal preparations, draining the life out of the industry.

"That is money that ought to be creating new jobs and investing in new models and a future dedicated to the UK."

source: news.abs-cbn.com

Luxury in focus as Geneva car show opens

PARIS - Europe's biggest annual car show kicks off in Geneva on Tuesday with luxury and crossover vehicles in the limelight, but with the emissions scandal still hanging over the industry.

Automakers are celebrating the end of the sector's crisis as European sales have returned to levels last seen in 2008 before a global financial meltdown inflicted deep dents on their business.

It is a far cry from last year's show where the industry was under a cloud after Volkswagen admitted in 2015 to having installed software in 11 million diesel engines worldwide to circumvent emissions tests, a scandal that will cost it billions in fines and compensation to car owners.

While Volkswagen has survived the crisis, the scandal has focused attention on emissions and the challenges automakers will have in building cars that can meet ever tougher pollution rules.

Carmakers are now having to steer toward engines that emit no more than 95 grams of CO2 per kilometre by 2021 to meet European requirements, compared to 130 grams in 2015.

But as diesel cars have been getting a bad rap because of emissions scandals, that target looks harder to meet.

"Diesel cars emit 15 percent less CO2 per kilometer" than gasoline-fueled models, said Christophe Aufrere, a technology strategist at car parts maker Faurecia.

With electric vehicles still only accounting for a sliver of European car sales, that means gasoline-powered cars have to take up the slack, requiring the industry to squeeze more efficiency out of engines and to reduce vehicles' weight.

Research and development costs "have practically doubled in the past decade" said Remi Cornubert at AT Kearney, a consulting firm, and if carmakers fail to succeed, the bill will be high.

Automakers failing to meet the CO2 targets -- capping petrol consumption to 4.1 liters per 100 kilometres and diesel to 3.6 litres -- will have to pay 95 euros ($100) for every extra CO2 gram emitted by each car -- potentially adding up to tens of millions of euros of fines.

NEW MODELS

Jostling among carmakers for market position is also likely to dominate discussions after French carmaker PSA announced Monday the acquisition of General Motors' European subsidiary, which includes the Opel and Vauxhall brands, for 1.3 billion euros ($1.38 billion), catapulting it into second place in Europe.

And there was more good news for PSA in Geneva on Monday after its Peugeot brand won European car of the year for its 3008 urban 4x4, as the show opened to the press.

Volkswagen, meanwhile, unveiled its first prototype autonomous car Monday evening, the electric Sedric.

The German giant, whose brands include Audi and Porsche, said it planned to join a string of other automakers in investing billions of dollars in developing the vehicle over the coming years.

Despite the greater emphasis on fuel economy, the Geneva car show is unlikely to disappoint in terms of its usual glitz and glamour.

The legendary Ferrari, Lamborghini, Pagani, McLaren and Bentley have all picked Lake Geneva's shores to present new models. Renault will showcase the final version of its Alpine A110 sports car.

"Geneva has always been the show of beautiful automobiles and prestigious racing cars," said Ferdinand Dudenhoeffer at the CAR institute.

But the greatest buzz may come from so-called "crossover" vehicles (CUVs), which combine features taken from sports utility vehicles (SUVs) with those of passenger cars.

The segment, including fashionable urban four-wheel drive vehicles, now makes up nearly 30 percent of the European car market and features the Volvo XC60, the Citroen C-Aircross, the DS7 Crossback and the Land Rover Velar.

Some 180 companies will be present at the 10-day show which opens to the public on March 9 after two press days during which most major corporate announcements are expected. Last year's show attracted 687,000 visitors.

source: news.abs-cbn.com

As recalls mount, Takata, Japan automakers stuck in uneasy reliance

TOKYO - Air bag manufacturer Takata Corp and Japanese carmakers including Honda Motor Co are locked in the commercial equivalent of a bad marriage; not entirely happy in each other's company but unable to break apart and wary of potentially costly court battles.

Honda on Friday unveiled a new model with an unusual sales pitch - fuel efficient, lots of cargo space and, by the way, no air bag inflators made by Takata, the Japanese supplier at the centre of a global safety crisis that has rocked both companies.

Over the past five years, recalls have ballooned to include 36 million vehicles fitted with potentially lethal Takata air bags, triggering a criminal investigation and lawsuits in the United States, and testing ties between Takata and its main customers, bankers and auto executives say.

Automakers don't normally discuss supply arrangements for components like air bags in their new models.

But in a departure that underscores an increasingly strained relationship, Sho Minekawa, Honda senior managing director, said the new Shuttle wagon sold only in Japan would use inflators from Takata's rival, Daicel Corp.

"We use very little from Takata for our domestic models and that's been the trend in recent years," Minekawa said in response to a question at the launch of the new car. "There was a time when we used a lot."

The uneasy dynamic explains why Japan's automakers have not been agitating for a shake-up or even restructuring at Takata even as they give new contracts to other suppliers.

The automakers need Takata to supply replacement parts for urgent repairs and cannot demand compensation that would endanger its ability to do so in an industry where no rival could readily take up the slack.

A court battle could risk embarrassing disclosures about the responsibility of automakers in reviewing Takata's designs or in pushing for cost cutting, a banker who has been in contact with Takata said.

"The most important thing from the perspective of the automakers is that they can ensure replacement parts are being supplied in a stable fashion," said Masaki Higurashi, deputy director of the automobile division at Japan's trade ministry who is involved in coordinating the government's monitoring of the recall crisis.

Any discussion of restructuring would have to wait until after that, he said. "After all the replacement parts are supplied, the automakers have to decide whether to let Takata stay on as it is," he said. "I think the automakers are starting to think about that."

Honda, still Takata's largest customer, recalled almost 5 million more cars last week after concluding the Takata air bags they contained were at risk of exploding in accidents. Toyota Motor Corp added another 5 million vehicles to the tally and Nissan Motor 1.5 million.

Six deaths, all in Honda vehicles, have been linked to shrapnel from defective Takata air bags. Problems with Takata air bags have also been linked to more than 100 reported injuries.

'NO CHOICE BUT TO STAY TOGETHER'

The Japanese automakers and Takata failed to agree on whether the most recent recalls were necessary based on data provided by Takata.

As a result, there is no agreement between Takata and the automakers on how to split the costs, representatives of both sides said. That will have to wait until after they have determined why Takata air bag inflators are breaking down.

Takata will not be able to go it alone. The new costs could be as much as $1 billion if all vehicles covered by the new recall were repaired and the $100-per-car estimate favored by analysts applied. By comparison, Takata's market value is a little over $1 billion.

Takata has allocated $520 million to cover recall costs. At a meeting with analysts on Thursday, CFO Yoichiro Nomura said Takata had asked automakers to allow it to pay its share of recall costs in installments, a concession that would allow it to avoid a potentially destabilizing charge, according to analysts who attended the closed-door briefing.

Takata CEO Shigehisa Takada, whose family controls some 57 percent of the auto parts maker, did not attend the meeting. Nomura told attendees the CEO was busy with quality issues.

Honda is using a Takata competitor, Toyoda Gosei, for driver's-side air bags for its new Accord sedan in North America, two people with knowledge of that move have said. Toyota is no longer among Takata's top five customers.

Even so, one purchasing manager at a Japanese automaker involved in the recalls, who asked not to be named, said the companies were forced to rely on Takata given its 20 percent plus global market share.

"We have no choice but to stay together," he said.

source: www.abs-cbnnews.com

BMW, Toyota agree on joint sportscar platform

FRANKFURT- Carmakers BMW and Toyota have agreed to develop a joint platform for sportscars, BMW's development chief Herbert Diess told a German newspaper.

"We have agreed on a joint architecture for a sports car. What is important is that there will be two different vehicles that are authentic to the two brands," Frankfurter Allgemeine Zeitung on Monday quoted Diess as saying.

BMW and Toyota had in January signed an agreement to cooperate on various areas including lithium-air batteries and lightweight technology.

They also said at the time they would study the potential for a joint platform for a mid-sized sports vehicle in a feasibility study to be completed by the end of 2013.

Frankfurter Allgemeine said that Diess declined to provide details on the models that would result from the cooperation.

source: www.abs-cbnnews.com

Are foreign carmakers charging Chinese customers more?

SHANGHAI - China's state television accused foreign carmakers of charging domestic customers more for repair costs than in other markets, singling out Audi, Subaru and Jaguar Land Rover Ltd in the latest of a series of program targeting foreign firms.

The investigative report by China Central Television (CCTV), aired on Wednesday evening, also said that many of the foreign auto makers' dealers were reluctant to repair parts, often insisting on more expensive replacements.

The programme said it was based on interviews with customers and workers at service workshops designated by foreign automakers.

It cited a tail door for a Land Rover model as being sold at around 24,100 yuan ($4,000) at an official service shop, compared with 8,500 yuan in the black market. It did not give a comparative price in other countries or specify what it meant by the black market.

"By setting ridiculously high prices, China has become the 'treasure bowl' for global carmakers," the report said, adding foreign auto makers were abusing their monopoly of sales channels.

It noted, however, that import and other duties were partly responsible for pushing up prices.

Responding to the CCTV report, Jaguar Land Rover, owned by India's Tata Motors Ltd, said its pricing was in line with Chinese regulations.

"As to the component maintenance cost with imported vehicles, JLR China has been strictly abiding by relevant laws and regulations in China, and has determined pricing with consideration of market conditions," Jaguar Land Rover (JLR) China said in a statement emailed to Reuters.

A spokesman at Subaru in Tokyo, the automaker unit of Fuji Heavy Industries Ltd, declined to comment about the CCTV report. Officials at Audi, owned by German automaker Volkswagen AG, said they were looking at issuing a statement later in the day.

The report coincides with a crackdown by Chinese authorities on what they perceive to be inflated prices and monopolistic behaviour by companies.

The China Automobile Dealers Association told Reuters in August that its officials were collecting data on the price of all foreign cars sold in the country for the National Development and Reform Commission, one of China's price regulators.

CCTV often airs programmes targeting well-known global companies. Earlier this year, it accused Apple Inc and Samsung Electronics Co Ltd of unfair service practices, and Starbucks Corp for over charging.

The accuracy of some of the broadcaster's recent reports has, however, been called into question.

Last week, China's state tax bureau said a legal misunderstanding was behind the tussle between property developers and CCTV after the state broadcaster reported that the firms owe massive sums in unpaid land taxes.

The State Administration of Taxation did not directly name CCTV but said "estimates" of huge amounts of unpaid land appreciation taxes were not accurate.

Many bloggers on Sina Weibo, China's version of Twitter, said the foreign carmakers were justified in charging higher prices and the issue of higher taxes could not be ignored.

"Even though they charge so much, they sell so well," wrote a blogger who goes by the name 'First Sunlight'.

"If they charge reasonable prices, our domestic companies will go bankrupt. They have the ability to charge high prices."

source: www.abs-cbnnews.com

Italy mourns Ferrari design genius Pininfarina

ROME/MILAN - The Italian godfather of car design, Sergio Pininfarina, renowned for crafting sleek Ferrari race cars and revolutionizing the common auto, died in Italy's motoring capital Turin on Tuesday aged 85.

Born in 1926 near Turin in the industrial north of the country, Pininfarina worked with top carmakers during his long career, designing the 1984 Ferrari Testarossa, the 1986 Fiat 124 Spider, the 2002 Ferrari Enzo, the 2003 Maserati Quattroporte, the 2004 Ferrari Scaglietti, Fiat Dino and Maserati GranTurismo, among others.

His death was mourned by many in the car and design industries.

"His genius brightened the history of the car," Fiat said on Twitter, while the head of Maserati, Harald Wester, said "Italy has lost one of its most prestigious world ambassadors, and Maserati has lost a great friend."

Pininfarina joined the family car design company after graduating with a degree in mechanical engineering from Turin's Polytechnic University, and quickly became involved in all aspects of the business, from designing the cars to engineering and manufacturing.

Determined to change the common perception of cars as merely functional, Sergio rose to stardom with beautifully sculptured and blood red Ferraris, from the 410 SA to the Dino Berlinetta Speciale, Ferrari F40 and Enzo Ferrari.

He also applied his talents to less exotic Peugeots, Volvos and Mitsubishis.

Pininfarina "led the Company with steady hand... following the tradition of elegance and style constantly renewed with the highest standards of innovation and harmonious beauty," his company said in a statement.

He had a passion for forward-looking technology, becoming an early supporter of reducing car emissions and increasing fuel economy. In 1972, he opened the first wind tunnel in Italy, one of the few in the world at the time.

Pininfarina was awarded dozens of honors throughout his illustrious career, including four university degrees in fine arts and industrial design.

In his half-a-century reign at the company, its automobile production rose from 524 units per year to more than 50,000.

He inherited his love of car design from his father, Gian Battista Farina, a onetime Turin carriage maker who founded the company in 1930 and built his reputation by sculpting eye-catching designs for many of the best known post-war sports cars.

The ground-breaking 1947 Cisalfa coupe, which his father designed after World War Two, now sits in New York's Museum of Modern Art. It was one of Sergio's favorite models.

Farina senior, who was the tenth of 11 children, named the company after his nickname "Pinin" -- which means "little one" in Piedmontese dialect.

The family's prestige in Italy was such that it was allowed to change its name to Pininfarina from the original Farina with a presidential decree in 1961.

He was famed for having met Henry Ford on a trip to the United States in 1920, where he turned down a job with the Ford Motor Company to return to Italy and create the Pininfarina empire.

He also initiated the Ferrari connection in 1952, but Sergio ended up managing most of their common projects and turned the business from craftsman level into a world renowned name.

In 1960, Farina senior appointed his son to the post of general manager. In 1961, Sergio became chief executive and in 1966 he took over chairmanship of the company after his father died.

Forty years later, Sergio in turn handed over management of the company to his son, Andrea, who died two years later when he was hit by a car.

By then, the company had already risen to prominence through a knack for making the latest aerodynamic design trends attractive to a broader public.

Besides the historic partnership with Ferrari, Alfa Romeo and Maserati (all owned by Fiat), Pininfarina also designed cars for Rolls-Royce and other non-Italian brands.

The 1963 Chevrolet Corvette Rondine, 1986 Cadillac Allante, the 1995 Bentley Azure and the 1996 Peugeot 406 Coupe (designed by Sergio) all wore the Pininfarina badge.

Pininfarina was listed on the Italian Stock Exchange in 1986.

Sergio Pininfarina stepped down to become honorary chairman in 2006, shortly before the financial crisis, which hit the car industry heavily.

Many small builders, like Germany's Karmann and France's Heuliez, did not survive. Other design firms downsized, while Italdesign - another leading Italian stylist - was acquired by Volkswagen AG.

Pininfarina was forced to raise capital in 2009, re-negotiate its debt and shrink its business.

It had to close its manufacturing operations and reinvent itself as a smaller niche design player, with the family's 77 percent stake in the company used as collateral for loans with creditors it needs to pay back by 2018.

In 2011, the company announced it was stopping car production because it had seen its revenue plunge in a sector reeling from the financial crisis, but has continued to design and engineer, with a particular focus on electric cars.

Pininfarina was head of Italy's business association Confindustria from 1988 to 1992 and was named senator for life in 2005. He is survived by his wife Giorgio and two children Lorenza and Paolo.

"He was one of the greats of Italian industry, an example of 'Made in Italy' known around the world. This is a great loss," said Giorgio Squinzi, the current head of Confindustria.

The Cisl trade union also paid tribute to a man they said had been "a constructive and attentive interlocutor both as a businessman and as a head of Confindustria in difficult years in our history."

In May, Pininfarina said it expected to post its first profit this year since 2004.

source: interaksyon.com