774,000 Mercedes cars contain unauthorized software: German ministry

BERLIN -- Germany's Transport Ministry said on Monday that 774,000 Mercedes-Benz vehicles in Europe had been found to contain unauthorized software defeat devices and ordered Daimler to recall more than 200,000 cars in Germany.

Mercedes-Benz C-Class and Vito models with diesel engines and a sports utility variant of the sedan, known as the GLC, were the main cars found to be at fault, the ministry said.

"The government will order 238,000 Daimler vehicles to be immediately recalled Germany-wide because of unauthorized defeat devices," the ministry said in a statement.

Germany can only order the recall of vehicles within its own borders, or of those vehicles issued with a pan-European road-worthiness certification via German authorities.

Daimler has pledged to work on removing the software and to cooperate with authorities, the ministry said.

Daimler Chief Executive Dieter Zetsche said on Monday that the carmaker had found a technical solution for updating the software on its vehicles, and he therefore expected the company would avoid a fine.

In a separate statement, Daimler confirmed the recall and said the question over the legality of the software would still need to be clarified.

Evercore ISI analyst Arndt Ellinghorst predicted the costs for the required software update for Daimler would be less than 100 million euros ($118 million).

"We don't see any evidence that Daimler was designing software to deliberately cheat on emission testing," he said. "Overall, this outcome should de-risk the stock."

source: news.abs-cbn.com

Mercedes-Benz overtakes BMW, becomes largest luxury carmaker

STUTTGART - Mercedes-Benz sales overtook BMW last year for the first time in more than a decade, a feat achieved, ironically, only after parent company Daimler stopped chasing market share and focused on making stylish high-tech cars.

On Monday, Bavaria-based BMW said it sold 2,003,359 cars in 2016, less than the 2,083,888 by Stuttgart-based Mercedes. BMW had outsold Mercedes every year since 2005.

The achievement is a coup for Daimler Chief Executive Dieter Zetsche, who struggled to revive the company following a messy divorce from mass-market brand Chrysler in 2007. Less than four years ago, Zetsche faced restive shareholders, worried Daimler was lagging BMW and Volkswagen's Audi brand.

"We had some deficits, cost and quality problems. Design was not top-notch. And with Chrysler we were no longer a pure premium carmaker," Zetsche told Reuters in an interview late in 2016 in his office at Daimler's headquarters.

Zetsche has presided over a renaissance in the design and technology of Mercedes vehicles, refocused the company on technological excellence and autonomous driving instead of short-term sales goals, and adapted the entrepreneurial mindset of Silicon Valley to the traditionally risk averse culture of Stuttgart.

Daimler is also preparing for a new era when the auto industry's business model moves beyond manufacturing and selling cars to luring customers interested in pay-per-minute transport solutions provided by self-driving cars.

At the company's 125th anniversary in 2011 - a year when Audi sales overtook those of Mercedes, pushing it into third place - Zetsche forecast his improvements would make Mercedes the best-selling luxury car-maker by 2020.

"Since then we worked hard and today we are leading or among the leaders when it comes to innovation, quality, design and security," Zetsche said.

Daimler traditionalists were shocked by the volume forecast, fearing that selling too many vehicles could dilute the exclusivity of their cars and reduce the appeal of the Mercedes brand in the long run.

But consumer electronics companies such as Apple had already proven the pull of their brands did not suffer with increased sales volumes.

Daniel Binns a managing director at branding agency Interbrand, said advances in technology have made a product's scarcity less of a selling point.

"I've got it and you haven't, is what used to make premium. Now it is much more about having a better quality experience. So much of what defines an experience to the current generation is about what the technology delivers. The autonomous vehicle is the pinnacle of that," he said.

The overhaul of Mercedes began in earnest in May 2013 with the launch of a new flagship S-class. To burnish its credentials as a technology leader, Mercedes developed a prototype version which drove around 100 kilometers (62 miles) autonomously the same year.

Rather than designing a limousine which appealed mainly to rear seat passengers, the new S-Class featured large digital display screens on the dashboard, a deliberate attempt to appeal to a younger, driver-focused audience.

The same youthful design approach was used for the new C-Class and E-class designs, which are now the company's big sellers.

To counter the threat from Audi, Zetsche appointed a young designer, Gorden Wagener, to head up Mercedes design. He introduced an elegant and sporty style to spruce up Stuttgart's Teutonic limousines. Mercedes cars were also equipped with state-of-the-art digital display technology, luring smartphone savvy customers.

It was a change for Mercedes where engineers always believed they were producing the best cars in the world, but measured quality mainly using technical or engineering criteria, a strategy which often led to powerful cars with expensive and complex technical innovations.

Today, Mercedes-Benz follows its motto "the best or nothing" by thinking about whether customers would notice or benefit from a new technological innovation, and by benchmarking the brand against competitors, Zetsche said.

Mercedes also revived the Maybach brand, a marque targeting the ultra-luxury sector which the company had stopped making after the prior bespoke design failed to gain traction, leading the car to sell only 200 times in its final year of production.

Since Maybach's latest revival in February 2015, Daimler has sold 15,000 cars.

"The rewards we are reaping today are the logical consequence of careful preparation," Zetsche said.

source: news.abs-cbn.com

Eyeing future sales, luxury carmakers innovate to woo millennials

NEW YORK, United States - British carmaker Jaguar has developed a tool to win over seen-it-all millennials who view a conventional test drive as passe.

Seeking to tap into younger customers' desire for a few moments of cinematic glory, Jaguar films the prospective customers behind the wheel as they navigate the vehicle through several precarious driving challenges, channeling their inner speed demon.

Moments later, they are emailed a slickly edited two-minute film, which can conveniently be uploaded to Facebook and social media sites.

"It all takes literally minutes," said Jaguar spokesman Stuart Schorr. "By the time you're done, you've taken a test drive, but you've also got an asset that's shareable and fun."

The clever tactic is part of the 94-year-old brand's effort to boost its US sales as it broadens its offerings in 2016 with the introduction of new models, including the F-PACE, Jaguar's first sports utility vehicle.

But all the automakers at this week's New York International Auto Show have the new generation in their sights.

"Generation Y will dictate who wins and who loses in the marketplace," said John Humphrey of JD Power's global automotive practice. "It is by far the biggest generation we've had in the US."

BMW, also eyeing millennials, has trained a cadre of some 1,000 showroom "geniuses" -- like the staff at an Apple Store "Genius Bar" -- to show drivers how they can customize the car's myriad gadgets and driving tools.

They are distinct from the salesforce and are not supposed to seal deals, said Ludwig Willisch, president and chief executive of BMW North America.

Millennials "don't like sales pressure," Willisch told the JD Power auto forum Tuesday, as opposed to their parents, the baby boomers, who rely more on test drives and multiple visits before making a purchase.

With millennials, he said, "You only get one shot."

"If we get this right, and we will, we have the opportunity to create lifelong BMW drivers."

Pocketbook challenge

It is a crucial point for luxury cars, which account for about half of the auto industry's profits. A long-term worry for auto companies is that with the surge of rideshare programs like Uber and optimism about self-driving cars, younger Americans will drive less than earlier generations did.

Humphrey said automakers face particular pressure because the overall US auto market is expected to cool significantly following several boom years.

"We're coming up on the end of the current cycle," said Humphrey, who warned that the industry could slip back towards overcapacity and a reliance on rebates and cheap prices to move inventory.

Those practices are less a problem for brands like Jaguar and BMW, which cater to a more select group of buyers less influenced by price, Humphrey said.

But luxury brands face other difficulties with millennials, a generation renowned for carrying hefty student loans and without the means to spend $50,000 or $60,000 on a car.

Compact and midsized cars accounted for the highest shares of the millennial market in 2015, with a combined 32.6 percent. Premium vehicles in total accounted for less than 10 percent, according to JD Power data.

For that reason, luxury automakers are taking the long-term view in their marketing campaigns.

Few of the 6,000 consumers who have participated in the Jaguar events have ordered one of their cars, Schorr said. But about 60 percent have shared their personal action videos on Facebook. That creates additional exposure and buzz, enhancing the brand's prospects.

"The whole subtext is to reintroduce the Jaguar brand to a younger group of customers, and that's an investment you look to pay off over a number of years," he said.

source: www.abs-cbnnews.com

Tesla recalls all Model S cars worldwide for seatbelt fix

NEW YORK, United States - Tesla said Friday it was recalling all 90,000 of its Model S luxury electric cars sold worldwide since 2012 after discovering a security problem with seatbelts.

The front seatbelts failed to correctly fasten, but no accidents or injuries had been reported as a result, Tesla said, in a blow to its stellar reputation.

In an email to customers, Tesla said it was ordering the recall as a "proactive" step after learning of a Model S in Europe with a front seatbelt "that was not properly connected to the outboard lap pretensioner."

"This vehicle was not involved in a crash and there were no injuries. However, in the event of a crash, a seatbelt in this condition would not provide full protection," the email said.

The notice said the company had inspected 3,000 vehicles and found no issues, but "we have decided to conduct a voluntary recall as a proactive and precautionary measure to inspect all front Model S seatbelts and make absolutely sure that they are properly connected."

Tesla's cars have been in high demand, despite a price tag of $70,000 and up, and the vehicles had won much praise -- until a recent Consumer Reports review which highlighted problems with the Model S.

Some analysts see Tesla's innovations as driving a new model for the auto sector, and predict it can grow from its small base into a major producer.

Tesla plans to unveil its Model 3 electric car aimed at less affluent buyers in March 2016.

Model 3, whose price is estimated at $35,000 -- half the cost of other Teslas -- is seen as key to expansion for the carmaker, which has a loyal following among well-heeled buyers.

source: www.abs-cbnnews.com

Why rich Koreans are shunning BMWs for Maseratis

SEOUL - Flashy Maseratis and Bentleys are fast becoming the cars of choice for young, monied South Koreans, eclipsing German luxury brands now so commonplace that some in Seoul's upscale Gangnam district jokingly refer to a BMW 5-series as a Hyundai Sonata.

Driving the sales of six-figure plus cars is a growing acceptance of conspicuous consumption in the conservative home of Hyundai Motor Co, where more younger, affluent Koreans are turning their backs on their parents' frugal ways.

"While our parents saved a lot in the past, younger people nowadays spend on things they can enjoy," said chef-restauranteur Song Ji-hoon, who last year sold his Mercedes-Benz CLS to buy a Maserati Ghibli.

"The street is now flooded with German cars. My car is not something one can see often," Song, 34, told Reuters.

Last year, the Seoul dealership of Volkswagen unit Bentley Motors was the top global seller of Flying Spur sedans, which start at just under quarter of a million dollars. The outlet, in Gangnam, ranked second in overall sales behind one in Dubai.

South Korea is also the seventh-largest market for Fiat Chrysler's Maserati, which saw sales increase five-fold last year to a record 723 cars after the brand introduced its Ghibli sports sedan, which starts at around $90,000.

"Korean consumers now want to flaunt themselves," said Kevin Kang, chief operating officer of the joint dealership for British luxury brands Aston Martin and McLaren Automotive which will open in the first half of this year in Gangnam.

"There lingers antipathy towards the wealthy, but at the same time there is aspiration to be wealthy," he said.

Imported luxury vehicles were relatively scarce in South Korea before a trade deal which took effect in 2011 unleashed an influx of high-end mainstream German cars from the likes of BMW , Audi AG, and Daimler AG's Mercedes-Benz.

While South Korea is the 11th largest car market, it ranks in the top four for certain top-end models such as Audi's A8 and the Mercedes-Benz S Class line, according to the companies.

Sales of imported vehicles priced above 100 million won ($91,100) grew by a third in 2014 from a year earlier to 14,975, the Korea Automobile Importers and Distributors Association says, a figure that excludes Maserati, Lamborghini and Ferarri, which are not association members.

Sales of foreign brands priced 150 million won ($136,339) and above nearly doubled last year, as more wealthy drivers sought "ultra-premium" cars to flaunt their status, a trend mocked and celebrated in Psy's 2012 hit song "Gangnam Style".

"There is a strong me-too-ism in Korea. People follow what other people are buying," said Andy Bae, senior analyst at automotive research firm IHS, which expects South Korea's ultra-luxury car market to grow 45 percent by 2017.

South Korea's overall car market grew 8 percent last year.

The number of South Koreans with assets exceeding 1 billion won doubled to about 167,000 in 2013 from five years earlier, according to KB Research. This rising wealth, coupled with younger peoples' desire to stand out in a traditionally conformist society, is encouraging luxury automakers.

Koreans are also marrying later and often rely on parents for housing, leaving many with the means to splash out on flashy purchases.

"As consumers get younger, they are less shy about something that stands out," said Kim Eui-young, a sales manager at the Maserati dealership in Gangnam, which opened in 2007.

Some ultra-luxury cars owners, however, prefer discretion.

A businessman in his 40s, who did not want to be identified, said he bought a blue Ferrari 355 Spider to enjoy on weekends. He also owns a Porsche and a Maserati, but drives a Hyundai SUV to work every day. "People are looking at my cars," he said. "But my employees do not know."

source: www.abs-cbnnews.com

Detroit auto show roars to life

DETROIT -- Luxury and performance vehicles look set to steal the headlines at the first major international auto show of the year in Detroit, further proof the industry is back to its boisterous best after near-collapse.

The world's top vehicle manufacturers were Sunday putting their finishing touches to their extravagant display stands and there was no mistaking the prevailing sense of optimism and anticipation.

The US auto industry last year clocked up its best year in sales in nearly a decade and, with the low cost of gas and low interest rates, has created what analysts are calling a near-perfect storm.

With host Detroit now on the long road to recovery after the largest municipal bankruptcy in US history, experts are expecting the North American International Auto Show to let its hair down.

More than 40 new car and truck models are forecast to go on display from Monday, when the show opens its doors to the media.

All the talk points to the luxury sector as being the one to watch this year.

"I’m convinced the US economy and auto market are on the same upward trajectory as the city of Detroit," Mercedes-Benz chief Dieter Zetsche said Sunday, presenting the new GLE Coupe -- a hefty combination of power and luxe -- at an upscale downtown hotel.

Much of the pre-show buzz has surrounded a new incarnation of Honda's legendary Acura NSX supercar and Ford was expected to roll out one of its own in the shape of an eagerly awaited new GT.

"The NSX is going to be beautiful. This is what you go into journalism for," said Scott Burgess, Detroit editor at Motor Trend. "You could almost have a motor show just for the NSX."

Ford's refusal to give any information away has served only to whet appetites and increase speculation.

"Ford has been the quietest in not telling us what they have," he said.

Not to be outdone, Cadillac will show off its most powerful product in the brand's 112-year history, the new 640 horsepower CTS-V. And then there will be Lexus with it GS F performance sedan.

'Good and bad'

"It's a very exciting time to be a luxury brand in the US. Luxury cars are making inroads into the mass market," said Ravi Shanker, executive director and lead auto analyst at Morgan Stanley.

Brian Bolain, corporate marketing manager, Lexus division, told the same Society of Automotive Analysts conference Sunday: "Luxury is about the brand, always has been, and will continue to be so."

But while the overall mood in Detroit is overwhelmingly more positive than in recent memory, it is not all good news.

The European market "continues to bomb," said Shanker, while emerging markets in Brazil and Russia "are struggling a bit."

And while the low price of gasoline is drawing buyers back to gas-guzzling performance vehicles, there is a downside to that too, said Shanker.

"It's good because there are more dollars in consumers' pockets," he said. "But then it's bad because lots of the US economy depends on the gas and oil industry."

And then there is the sensitive issue of recalls -- a record 60 million vehicles in the US last year, with GM in particular in the spotlight over an ignition problem linked to dozens of deaths.

But amid all the gleam and muscle on display, no one was talking about recalls as the show poised to open.

source: www.abs-cbnnews.com

LOOK: Carmakers unveil new SUV, luxury models in NY

NEW YORK - Japanese carmakers revealed their new and redesigned sedan and sports utility vehicles at the annual New York International Auto Show, which opened on Wednesday.

Toyota Motor Corp. debuted the 2015 Camry with a revamped exterior, a quieter passenger cabin and three engine choices, including a hybrid option. The slightly longer car has almost 2,000 new parts and a retuned suspension.

"Our customers expect more and we will give them more," Toyota group vice president Bill Fay said at the unveiling event Wednesday about why the carmaker redesigned their best-selling vehicle. "Put it all together and you have a car that will continue to set the pace for the industry."

Honda Motor Co. will reveal a new compact SUV on Thursday that is expected to be based on its subcompact car Fit.

Honda's luxury brand unveiled the production model of the 2015 TLX sedan after showing a concept version at January's North American International Auto Show in Detroit. The new TLX will have three models with different engine options and will be up to 230 pounds (104 kilograms) lighter than some versions of the outgoing TL.

"This new TLX lineup will serve as the backbone of Acura's sedan lineup, delivering new levels of refining comfort, technological innovation and dynamic performance," American Honda vice president Mike Accavitti said at the unveiling.

The automaker expects the new sedan to add "volume" to the luxury brand and forecasts sales to be about 50,000 units annually, the American Honda executive vice president told a group of Japanese media earlier on Wednesday.

 

Nissan Motor Co. debuted the 2015 Murano SUV Wednesday based on its Resonance crossover concept that the automaker showed in Detroit last year. Nissan said the crossover's styling, such as the V-shaped front end, is a glimpse at how the automaker is revamping the brand's design.

"The 2015 Murano debuts our new Nissan design direction," Nissan Executive Vice President Andy Palmer said at Manhattan auto show. "It sets the stage for Nissan's crossovers and sedans."

Mazda Motor Corp. revealed a special edition of its iconic MX-5 Miata roadster to commemorate the 25th anniversary of the car's launch. Only 100 models will be available in the U.S.

Among U.S. automakers, Ford Motor Co. announced a special edition of the 2015 Mustang to celebrate the 50th anniversary of the sports car. Ford will only make 1,964 models, which will be available in either "Wimbledon White" or "Kona Blue."

 

Meanwhile, Chrysler Group LLC and General Motors Co. used the show to unveil small SUVs--Chrysler's 2015 Jeep Renegade and GM's 2015 Trax.

About one million people are expected to visit the New York show, which will open to the public from April 18 to April 27.

source: www.abs-cbnnews.com

Why luxury cars may soon be ordinary in China's roads

GUANGZHOU, China - Luxury car dealers are resorting to offering customers massages, mini-golf and other gimmicks, hoping this will give them an edge in a ferociously competitive Chinese market where brand loyalty is less common than in the West.

Premium car sales slowed in China last year as the economy eased off the throttle and new Communist Party leadership was installed, but momentum is returning, and China is set to overtake the United States as the world's top luxury car market by 2020 with annual sales of close to 3 million cars.

A victim of its own recent success, the Chinese market has become a hyper-competitive battleground. Five years ago, there were fewer than a dozen luxury car models sold under five premium brands. Today, that has exploded to more than 90 models offered by 25 brands, says market research firm TNS.

China last year displaced the United States as BMW's leading market, and the German premium brand sold 317,822 vehicles in January-October of this year, a fifth more than a year earlier. Porsche increased its Greater China sales last year by 28 percent to 31,205 vehicles, closing in on its sales in its biggest market, the United States.

Liu Zheng, a 54-year-old history professor in Shanghai and owner of a BMW 5-Series sedan, sums up the problem facing premium carmakers such as BMW, Mercedes-Benz and Volvo.

"On Chinese roads, there are too many BMWs, too many Mercedes, too many Audis," said Liu as he looked around a downtown Shanghai store for a new China premium brand called Red Flag, made by state-owned FAW Car Co Ltd. "There are very few Red Flag cars. If you own one, people would feel you're unique."

As Western premium brands have become almost commonplace on Chinese city streets, monied locals have scaled further up to Aston Martin, Porsche, Jaguar and even McLaren, Ferrari and Lamborghini to stand out from the crowd. Ford is launching its storied Lincoln brand in China next year, adding to a competitive field that also includes the likes of Infiniti and Tesla.

Audi will open its Innovation Exhibition at the Guangzhou auto show on Thursday, showcasing its technologies and concept cars such as the Crosslane Coupé, as well as the new generation Audi 3, including the plug-in hybrid A3 Sportback e-tron.

"China is the market with the highest competition. There's no other market that offers more brands," said Boris Weletzky, a Beijing-based BMW sales-and-marketing executive tasked with leading the German firm's charm offensive to give its brand more cachet, and stop drivers like Professor Liu, from defecting.

LITTLE LOYALTY

A majority of car buyers in China, including those splurging on top-of-the-range premium models, are first-time buyers and have little loyalty to any global brand.

In an attempt to sway Chinese hearts and minds, Mercedes-Benz plans to build a brand museum in Beijing, a move that Volvo is also considering. Ford recently sponsored a classic car exhibition on Shanghai's Bund with its historic Lincoln models, while General Motors plans to allow some potential buyers inside its Cadillac plant in Shanghai to see their cars being assembled, according to Bob Socia, president of GM China.

Dealers at BMW and Mercedes-Benz outlets offer select buyers pomp and ceremony at the clinching of a deal - including ribbon-cutting, hand-shaking, photo-taking and a banquet. Some Land Rover Jaguar showrooms provide massage services and video rooms, and its newly-opened Shanghai store comes complete with a mini-golf site.

BMW this year opened a store on the former Expo grounds in Shanghai that doesn't aim to sell a single car.

The German firm's Future Retail Brand Experience Center rather 'sells' the BMW story, through historic model displays, photos and film. The aim is to hype the brand's heritage in a modern, art-gallery type environment.

"BMW was an admirable brand, but now people (in China) see BMW, Mercedes and Audi as mass luxury brands," said John Shen, senior partner at consultancy Roland Burger. "BMW and others are trying to revitalize their brands, to create more emotional values, more unique experiences at the retail level."

BMW's levers for differentiation, being tapped as part of the Future Retail initiative launched in 2011 in Britain, the Netherlands, France and China, are two-fold: Driving the brand-enhancing effort, as in the Shanghai experience centre, and a new, non-pressure sales environment it is creating throughout its 200 retail outlets across China.

The company will deploy a so-called Product Genius - who is not a salesperson and isn't there to quote prices or push deals - at each BMW dealer in China. Interested customers are encouraged to drop in and browse - much as they might at a Prada or Gucci boutique - and they are given the kind of attentive service a visitor might expect from Four Seasons and Ritz Carlton hotels, Weletzky said.

Potential buyers will be able to configure their virtual dream BMW car on an iPad with a Genius, and then watch the result projected on a giant screen through 3D glasses.

At the 2-storey, glass-panelled BMW brand experience centre in Shanghai earlier this month, Li Fuxi, an Audi-driving businessman from a small town in the eastern province of Anhui, sipped a cappuccino at the centre's mini-coffee bar.

After an hour spent with the Product Genius, hearing tales of BMW and its history, Li was warming to the brand.

"This place makes me feel good," he said. "I might even buy an i3," he added, referring to a BMW electric car due to hit Chinese showrooms next year.

source: www.abs-cbnnews.com