Category: Automotive News (Page 5 of 7)

Volkswagen to Buy 20% of Chinese battery maker Guoxuan

January 16, 2020 / WIL BALDWIN

Volkswagen logo is seen on a Teramont X SUV displayed at the second media day for the Shanghai auto show in Shanghai

HONG KONG/BEIJING (Reuters) – Volkswagen AG <VWAGY> is set to take a 20% stake in Chinese electric vehicle battery maker Guoxuan High-tech Co Ltd, two sources told Reuters, as the German firm accelerates its electric push into the world’s largest auto market.

The deal would mark Volkswagen’s first direct ownership in a Chinese battery maker and comes as the Wolfsburg-based automaker strives to meet a goal of selling 1.5 million new energy vehicles (NEVs) a year in China by 2025, including plug-in hybrid cars.

The top foreign automaker in China plans to acquire the stake in Shenzhen-listed Guoxuan via a discounted private share placement in the coming weeks, the two sources with knowledge of the matter said. Based on Guoxuan’s market capitalization of $2.8 billion, a 20% stake in the company at present is worth about $560 million.

The deal’s details have been mostly finalized and the two firms are waiting for new Chinese regulatory rules on private share placements that will provide a more flexible pricing mechanism and shorter lock-up periods for majority shareholders, said one of the people, speaking on condition of anonymity.

After the stake purchase, Volkswagen will become the battery maker’s second-largest shareholder with a 20% stake, behind Zhuhai Guoxuan Trading Ltd, a firm controlled by Guoxuan’s founder Li Zhen, which currently holds 25%.

Guoxuan is among a swathe of mid-tier Chinese battery makers behind CATL and BYD. It is based in China’s eastern city of Hefei, where Volkswagen is also building electric vehicles with JAC Motor, one of a number of its Chinese joint venture partners.

A third source, who declined to be named due to the sensitivity of the matter, said Volkswagen has long wanted to control a battery maker to better manage its supply chain.

Volkswagen declined to comment. Guoxuan and the China Securities Regulatory Commission did not immediately respond to requests for comment.

To achieve its NEV sales goal in China, Volkswagen has built a new $2.5 billion electric vehicle plant with partner SAIC Motor that will have annual output capacity of 300,000 cars and is also revamping manufacturing facilities in China’s southeastern city of Foshan to build electric cars with partner FAW Group.

Volkswagen has also identified CATL as a strategic supplier and Volkswagen board member Stefan Sommer told Reuters in July last year that it could even build its own battery cell manufacturing plants in China.

“By holding a stake in the top Chinese battery makers, carmakers can gain more bargaining power on battery prices,” said Yale Zhang, managing director of Shanghai-based consultancy AutoForesight. “Foreign carmakers are now catching up with their Chinese counterparts on securing battery supplies in China.”

Volkswagen’s rivals in China include Tesla, which earlier this month began delivering cars from its $2 billion factory in China. The U.S. electric car maker eventually plans to manufacture 250,000 vehicles a year in the plant’s first phase.

China has been a keen supporter of NEV – pure battery electric, hybrid and plug-in hybrids – and has started implementing NEV sales quota requirements for automakers.

However, cuts to subsidies have dealt the market a blow, with NEV sales contracting for the first time last year. Sales this year are likely to be flat or rise only slightly, according to China’s top auto industry association.

(Reporting by Julie Zhu in Hong Kong and Yilei Sun in Beijing; Additional reporting by Zhang Yan and Zhang Xiaochong in Beijing; Editing by Brenda Goh and Richard Pullin)

Ford’s Vehicle Sales in China Tumble for Third Consecutive Year

January 12, 2020 / WIL BALDWIN

SHANGHAI (Reuters) – Ford Motor Co’s <F> China vehicle sales fell for a third consecutive year, by 26.1%, as it battles a prolonged overall sales decline in its second-biggest market that has hit demand for its mass-market Ford brand and sports utility vehicles.

The U.S. automaker delivered 146,473 vehicles in China in the fourth quarter, down 14.7% year-on-year, Ford said in a statement. In total, it sold 567,854 vehicles over 2019.

Ford has been trying to revive sales in China after its business began slumping in late 2017. Sales sank 37% in 2018, after a 6% decline in 2017.

Anning Chen, president and chief executive of Ford Greater China, said that while 2019 was a “challenging” year for the automaker, it saw its market share in the high-to-premium segment stabilize and its sales decline in the value segment start to narrow in the second-half of the year.

“The pressure from the external environment and downward trend of the industry volume will continue in 2020, and we will put more efforts into strengthening our product lineup with more customer-centric products and customer experiences to mitigate the external pressure and improve dealers’ profitability.”

The automaker plans to launch more than 30 new models in China over the next three years of which over a third will be electric vehicles. It has also said it would localize management teams by hiring more Chinese staff and aimed to improve relationships with joint venture partners.

New models it launched in the fourth quarter include a new Ford Escape version – for which the automaker said orders received so far have been much higher than expected – and the Lincoln Corsair, the first localized Lincoln model in China.

In China, Ford makes cars through a joint venture with Chongqing Changan Automobile Co Ltd and Jiangling Motors Corp Ltd (JMC). It has also said it would partner Zotye Automobile Co Ltd to sell lower priced cars.

Its larger U.S. rival General Motors Co <GM> last week said its sales in China fell 15% from a year earlier to 3.09 million vehicles in 2019, its second year of decline.

China’s auto market is set to contract by 2% in 2020 for the third year of decline, the China Association of Automobile Manufacturers (CAAM) forecast, due to a weaker economy and trade dispute with the United States.

Over 28 million vehicles were sold in 2018, down 3% from the prior year, while 2019 sales are likely to have declined 8% from the prior year, CAAM said.

(Reporting by Brenda Goh and Yilei Sun; Editing by Christian Schmollinger and Christopher Cushing)

A Ford model is seen during the China International Import Expo (CIIE), at the National Exhibition and Convention Center in Shanghai

GM to Revive Hummer Name with Electric Pickups, SUV’s

January 10, 2020 / WIL BALDWIN

Workers leave the General Motors CAMI car assembly plant where the GMC Terrain and Chevrolet Equinox are built in Ingersoll

WASHINGTON (Reuters) – General Motors Co <GM> will revive the Hummer name to sell a new family of electric pickup trucks and sport utility vehicles and will tout the return with a Super Bowl ad featuring NBA star LeBron James, two people briefed on the matter said on Friday.

The vehicles will be sold under the GMC nameplate. Reuters reported in October that GM planned to build a new family of premium electric pickup trucks at its Detroit-Hamtramck plant beginning in late 2021 and was considering reviving the Hummer name, citing several people familiar with the plans.

The Wall Street Journal reported GM’s decision to move forward earlier on Friday. GM declined to comment.

The electric truck and SUV program is the centerpiece of a planned $3 billion investment in the Detroit-Hamtramck plant to make electric trucks and vans, and part of a broader $7.7 billion (5.9 billion pounds) investment in GM’s U.S. plants over the next four years that was part of a new contract signed with the United Auto Workers union last year.

The investment moves the automaker into a part of the EV market that is largely untested and where GM has a higher likelihood of turning a profit, analysts said.

Reuters reported GM plans to first build EV pickups in late 2021 and then an electric SUV in 2023.

Tesla <TSLA> CEO Elon Musk in November unveiled an electric pickup called “Cybertruck” it plans to build starting in late 2021.

Rivian, a start-up electric company backed by Amazon.com <AMZN>, will begin building 100,000 electric delivery vans for Amazon starting in 2021.

Hummers were rugged civilian utility vehicles with low gas mileage that were inspired by military vehicles and were popular with such celebrities as actor Arnold Schwarzenegger but derided by environmentalists as gas-guzzlers. GM shut down its Hummer brand after a deal to sell the SUV-line to an obscure Chinese machinery maker was blocked by Chinese regulators in 2010.

Michael Harley, executive editor for Kelley Blue Book, noted “the original Hummer was ostracized out of showrooms for being heavy and ponderous with an insatiable appetite for gasoline. An all-electric powertrain essentially exonerates the truck on all charges.”

Electric pickups and SUVs – the heart of the U.S. market – could help Ford Motor Co <F> and GM generate significant sales of EVs needed to meet tougher California emission standards and electric vehicle mandates.

The Trump administration is moving to roll back those standards – and eliminate extra credits that automakers receive from EV sales but electric trucks are a hedge if California prevails.

(Reporting by David Shepardson; Editing by Sandra Maler and Alistair Bell)

Toyota to Build Prototype City of the Future in Japan

January 6, 2020 / WIL BALDWIN

Akio Toyoda, president of Toyota Motor Corporation, speaks at a news conference, where he announced Toyota’s plans to build a prototype city of the future on a 175-acre site at the base of Mt. Fuji in Japan, during the 2020 CES in Las Vegas

LAS VEGAS (Reuters) – Toyota Motor Corp <TM> said on Monday it plans to build a prototype “city of the future” at the base of Japan’s Mt. Fuji, powered by hydrogen fuel cells and functioning as a laboratory for autonomous cars, “smart homes,” artificial intelligence and other technologies.

Toyota unveiled the plan at CES, the big technology industry show. The development, to be built at the site of a factory that is planned to be closed, will be called “Woven City” – a reference to Toyota’s start as a loom manufacturing company – and will serve as a home to full-time residents and researchers.

Toyota did not disclose costs for the project.

Executives at many major automakers have talked about how cities of the future could be designed to cut climate-changing emissions from vehicles and buildings, reduce congestion and apply internet technology to everyday life. But Toyota’s plan to build a futuristic community on 175 acres (71 hectares)near Mt. Fuji is a big step beyond what rivals have proposed.

The proposal highlights not only Toyota Chief Executive Akio Toyoda’s ambition, but also the financial and political resources Toyota can bring to bear, especially in its home country.

Toyota expects 2,000 people will live at the city initially, with construction slated to start next year. Toyoda called the project “my personal ‘field of dreams.’

“You know if you build it, they will come.”

Toyota said it has commissioned Danish architect Bjarke Ingels to design the community. Ingels’ firm designed the 2 World Trade Center building in New York and Google’s offices in Silicon Valley and London.

Toyota said it is open to partnerships with other companies that want to use the project as a testing ground for technology.

(Reporting by Jane Lanhee Lee and David Shepardson; Writing by Joe White; Editing by Dan Grebler)

Watch the 30 second Woven City YouTube video by clicking HERE!

Aston Martin Reveals Airbus ACH130 Aston Martin Edition Helicopter

January 6, 2020 / WIL BALDWIN

Aston Martin (ARGGY) just can’t help but outdo itself. From its entry in Le Mans, to building James Bond cars that actually work, to Aston Martin-themed motorcycles, and even embracing the manual gearbox after everyone else abandoned it—it seems that the British luxury marque is always looking to do the unexpected.

For its next trick, Aston Martin announced a team-up with airplane and helicopter maker Airbus to unveil the ACH130 Aston Martin Edition, a stylish helicopter embellished with four different interior and exterior designs provided by Aston Martin.

Exterior options include Stirling Green, Xenon Grey, Ultramarine Black, and a color simply dubbed Arizona. For the cabin, buyers get to choose between Oxford Tan, Cormorant, Ivory, and Pure Black. Matching leather and Pure Black ultra-suede makes up the rest of the interior. Aston Martin badging is embossed on the leather headrests to further distinguish this special edition for the standard ACH130.

Click the link for the full story and more pics!

Daimler, Volvo Mull Combustion Engine Cooperation

January 5, 2020 / WIL BALDWIN

BERLIN (Reuters) – Luxury German carmaker Daimler <DDAIF> and Volvo Cars, owned by China’s Geely, are considering cooperating to cut the costs of developing combustion engines, a magazine reported on Sunday, citing unnamed company sources.

The Automobilwoche weekly cited a Volvo manager as saying there were initial talks with Daimler, but no concrete plans, while a company spokesman said it was too early to talk about firm projects, although it was not excluding anybody.

A Daimler spokesman said the company’s cooperation with Geely, which owns a 10% stake in the German carmaker, was developing in a positive way, but declined to comment further.

Global tariffs, accelerated by a trade war between China and the United States, as well as higher investment requirements for electric and autonomous vehicles, are forcing carmakers to seek new ways to cut and share costs.

In October, Volvo said it would merge its engine development and manufacturing assets with those of Geely, creating a division to supply in-house brands and also potentially others with next-generation combustion and hybrid engines.

The Automobilwoche said this new division would start operating by the end of March, which could be a possible starting point for cooperation with Daimler, while a further step could be a partnership to develop electric power trains.

Geely and Daimler have said they plan to build the next generation of Smart electric cars in China through a joint venture and the two companies are also cooperating on a premium ride-hailing service in China.

Geely bought Volvo Cars in 2010 from Ford Motor Co <F.N>, allowing the Swedish brand to operate on an arms-length basis. But in recent years, it has deepened cooperation between the two brands.

Volvo already supplies engines to some Geely-branded vehicles, sharing technology through Geely’s Lynk brand. Both companies share and develop common vehicle platforms.

(Reporting by Emma Thomasson and Georg Merziger; editing by Jason Neely)

After Tesla’s Record Year in Norway, Rivals Gear Up for 2020

January 3, 2020 / WIL BALDWIN

FILE PHOTO: A 2018 Tesla Model 3 electric vehicle is shown in Cardiff, California

OSLO (Reuters) – The sale of new electric cars in Norway rose by 30.9% last year amid soaring demand for Tesla Inc’s <TSLA> vehicles, but the pioneering U.S. firm faces rising competition from rival auto makers in 2020.

Fully electric cars made up 42.4% of sales in the Nordic nation last year, a global record, rising from a 31.2% market share in 2018 and just 5.5% in 2013, the Norwegian Road Federation said on Friday.

Seeking to become the first country to end the sale of fossil-fueled cars by 2025, Norway exempts battery-powered vehicles from the taxes imposed on petrol and diesel engines.

This year, as many as six in 10 of all new cars sold in the country could be fully electric, said Volkswagen <VWAPY> distributor Harald A. Moeller AS, which is preparing to launch several models in 2020.

“The electrification of the car market is accelerating … we forecast electric vehicles to hold a 100% market share in 2025,” the importer said of the outlook for Norway.

The country’s best-selling car in 2019 was Tesla’s mid-sized Model 3 sedan, which retails from 384,900 Norwegian crowns ($43,721.74), racking up an 11% market share in the California-based firm’s first attempt at addressing the mass market.

(Reporting by Victoria Klesty and Lefteris Karagiannopoulos, writing by Terje Solsvik, editing by Gwladys Fouche)

GM Loans $40 Million to Firm to Acquire, Retool Shuttered Lordstown, Ohio, Factory

December 9, 2019 / WIL BALDWIN

FILE PHOTO: The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing.

WASHINGTON (Reuters) – General Motors Co <GM> confirmed on Monday it agreed to loan $40 million to an electric vehicle start-up to facilitate the acquisition of its shuttered Lordstown Assembly plant in Ohio.

Lordstown Motors Corp, which is 10% owned by Workhorse Group Inc <WKHS>, bought the plant and equipment for $20 million in November as part of its ambitious plan to begin building electric pickup trucks by the end of 2020.

The loan agreement, which was reported earlier Monday by the Business Journal in Youngstown, was filed in Trumbull County last week.

Lordstown Motors has been working on the engineering of the new truck, “Endurance”, and hired Rich Schmidt, a former director of manufacturing at Tesla Inc, as chief production officer.

“We structured the sales agreement to help support Lordstown Motors’ launch plans for the Endurance pickup,” GM spokesman Jim Cain said, who added it “allows them to take possession of the plant and to cover some operating expenses while they undertake their capital raise.”

GM is not investing in the venture, but Cain said GM financing could rise to $50 million.

The fate of the sprawling northeastern Ohio plant became a political lightning rod after GM announced its planned closure in November 2018, drawing condemnation from U.S. President Donald Trump and many U.S. lawmakers.

Lordstown CEO Steve Burns told Reuters last month he hopes to have pre-production prototypes coming off the assembly line by April and to start production by November 2020 with an initial workforce of 400 hourly workers.

Burns said last month the company hopes to raise more than $300 million, the Business Journal reported. Burns told Reuters it retained Ohio investment bank Brown Gibbons Lang & Co in its capital fundraising effort.

GM and South Korea’s LG Chem <051910.KS> said Thursday they will invest $2.3 billion to build an electric vehicle battery cell joint venture plant in Ohio which will be one of the world’s largest battery facilities.

The plant, to be built near the Lordstown complex, will employ more than 1,100 people, the companies said.

As part of the Lordstown sale, GM has the option to lease land near the assembly plant that it could use for the battery plant.

(Reporting by David Shepardson; Editing by Sonya Hepinstall)

Italy Tax Authorities Say Fiat Underestimated Value of Chrysler by $5.6 Billion

December 4, 2019 / WIL BALDWIN

MILAN (Reuters) – Italian tax authorities believe that Fiat Chrysler Automobiles <FCAU> underestimated the value of its U.S. business by 5.1 billion euros following Fiat’s phased acquisition of Chrysler, according to a company filing and a source close to the matter.

The audit, which concerns transactions dating back to 2014, could result in FCA having to pay back taxes for $1.5 billion, the source added, confirming a report by Bloomberg.

FCA said in its third-quarter report that the tax authorities had issued to the company a final audit report in October this year “which, if confirmed in the final audit assessment, could result in a material proposed tax adjustment related to the October 12, 2014 merger of Fiat SpA into FCA NV.”

It said the issuance of a final audit report starts a 60-day negotiation period, which ends with the issuance of a final audit assessment expected to be received by the end of December 2019.

“The company believes that its tax position with respect to the merger is fully supported by both the facts and applicable tax law and will vigorously defend its position,” it said in the third-quarter report.

A spokesman for Italy’s tax agency declined to comment.

“At this time, we cannot predict whether any settlement may be reached or if no settlement is reached, the outcome of any litigation. As such, we are unable to reliably evaluate the likelihood that a loss will be incurred or estimate a range of possible loss,” Fiat said.

News of the tax probe comes at a delicate time for Fiat Chrysler, which is finalizing talks with PSA, the maker of Peugeot and Citroen, over a planned $50 billion merger to create the world’s fourth-largest automaker.

(Reporting by Silvia Aloisi in Milan; Editing by Anil D’Silva)

Logo of car manufacturer Fiat is seen in Zurich

Tesla Move will Draw Further Companies into Germany

December 1, 2019 / WIL BALDWIN

FRANKFURT (Reuters) – Tesla’s announcement earlier this month that it will build its first European factory near Berlin will draw further companies from the electric mobility and energy storage sectors into Germany, a state premier told newspaper Die Welt.

“They are already on their way. I’m hearing there are further inquiries with the communities and the regional business development programme. Tesla will cause other companies to follow,” said Dietmar Woidke, premier of the eastern German state of Brandenburg that surrounds Berlin.

He said Brandenburg was already in talks with other companies, declining to identify them due to confidentiality agreements. “I expect that we can announce it before Christmas,” Woidke said.

Tesla’s move is a big boost for Germany as a centre for manufacturing after BMW and Daimler in recent years chose to build new factories in Hungary, and after its auto industry was hit hard by Volkswagen’s admission in 2015 that it cheated U.S. diesel emissions tests.

(Reporting by Christoph Steitz; Editing by Mark Heinrich)

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