Article Type: News

Making the battery market more sustainable

The European Commission wants to enforce mandatory requirements on all batteries entering the EU market, which includes applications within the automotive sector, alongside industrial and portable-uses cases.

This could include using responsibly-sourced materials with constrained use of hazardous substances, including a minimum amount of recycled materials, as well as carbon footprint, performance and durability. The Commission argues this would help develop a more sustainable and competitive battery industry across Europe and the wider world.

These requirements come as part of plans that will modernise EU legislation on batteries, focusing on greater sustainability throughout their lifecycle. They also address social, economic, and environmental issues tied to all types of batteries.

The changes complement the Circular Economy Action Plan, a core building block of the European Green Deal. The Commission argues these roadmaps promote competitive sustainability while enabling green transport, clean energy and the attainment of climate neutrality by 2050.

Sustainable and safe

The proposals set out the need for batteries placed on the EU market to become sustainable, high-performing and safe throughout their whole lifecycle. This singles out batteries produced with the lowest level of environmental impact, using materials sourced in full respect of human rights, following social and ecological standards. Under these proposals, at the end of their life cycle, these units should be repurposed, remanufactured or recycled, allowing valuable materials to re-enter the economy.

In addition, providing legal certainty would help unlock large-scale investment and boost the production capacity for innovation and sustainability, to help Europe respond to a fast-growing battery market. ‘Better and more performant batteries will make a key contribution to the electrification of road transport, which will significantly reduce its emissions, increase the uptake of electric vehicles and facilitate a higher share of renewable sources in the EU energy mix,’ the Commission argues.

‘Clean energy is the key to European Green Deal, but our increasing reliance on batteries in, for example, transport should not harm the environment,’ said Frans Timmermans, executive vice-president for the European Green Deal. ‘The new batteries regulation will help reduce the environmental and social impact of all batteries throughout their life cycle. Today’s proposal allows the EU to scale up the use and production of batteries in a safe, circular and healthy way.’

Collection and recycling

With its proposal, the Commission also aims to boost the circular economy of batteries, promoting the more efficient use of resources, and aiming to reduce the environmental impact. From July 2024, only electrically-chargeable vehicles (EV) with a carbon footprint declaration can enter the market.

To improve the collection and recycling of portable batteries, the 45% collection rate should increase to 65% in 2025, and 70% in 2030. Units from the automotive sector meanwhile have to be collected in full. This enables the recovery of valuable materials like cobalt, lithium, nickel and lead.

The use of new technology, like the battery passport and interlinked-data space, will help enable safe data sharing, increase market transparency, and make large batteries traceable throughout their life cycle.

‘This future-oriented legislative toolbox will upgrade the sustainability of batteries in each phase of their lifecycle,’ said commissioner for environment, oceans and fisheries Virginijus Sinkevičius. ‘Batteries are full of valuable materials and we want to ensure that no battery is lost to waste. The sustainability of batteries has to grow hand in hand with their increasing numbers on the EU market.’

Honda’s UK production pause a sign of things to come?

On Wednesday (9 December), Honda confirmed its Swindon factory in the UK, where it makes the Civic, would pause production due to transport-related parts delays. The carmaker has since confirmed it will not be re-opening the plant until the beginning of next week. Honda confirmed with to Autovista Group Daily Brief that: ‘the situation is currently being monitored with a view to re-start production on Monday 14 December.’

With manufacturers dependent on ‘just-in-time’ supply chains, mounting disruption and delays at UK ports are taking a serious toll. In the wake of COVID-19, these processes had already taken a beating, as parts suppliers and carmakers alike struggled to deal with reduced production capacity and lockdown-induced shutdowns. But with Brexit just weeks away, this could only be the start of a long logistical nightmare for UK-based factories.

Broken supply chains

The temporary pause in production at Honda’s Swindon plant is a exemplifies how manufacturers rely upon ‘just-in-time’ deliveries. Currently, parts arrive exactly when they are needed, as opposed to being stored in a warehouse, adding additional storage costs and complexities. But signs of trouble have already been brewing at container ports in the UK, including the likes of Felixstowe, Southampton and London Gateway.

Last month, the Road Haulage Association (RHA) pointed to long-standing technical issues at the port of Felixstowe, in Suffolk. Rod McKenzie, the RHA’s managing director for policy and public affairs, commented that ‘managing Britain’s biggest and busiest container port is a massive logistical challenge at the best of times but since the implementation of nGen, Felixstowe’s own terminal-management platform back in 2018, productivity has dropped considerably. Not because it’s a bad system but because it was given insufficient time to bed in.’

The RHA explained that COVID-19, Brexit, nGen and Christmas had all come together to create a perfect storm at the port. It predicted that it would take up until the first quarter of 2021 to clear the site’s current backlog. Of course, Felixstowe is not alone, with an increasing number of consumer Christmas orders, and companies clearing lockdown-related backlogs creating congestion across the UK. Furthermore, it is also believed companies are stockpiling goods in the run-up to the end of the Brexit transition period on 31 December.

Brexit bares down

Autovista Group’s recent Brexit survey found that UK respondents still need more clarity on the specifics of changes to imports, exports and travel. They also pointed out the need for more time to adjust to any changes and clarification on what Brexit would mean for the automotive industry in particular. But as Brexit continues to bear down on the automotive industry, with talks appearing to hit nothing but brick walls, it is left trying to find short- and long-term solutions to disrupted supply chains.

Some manufacturers have taken their own steps regarding supply, Bentley has booked five Antonov cargo jets to help them fly past plugged-up ports in the event of a disorderly Brexit, Reuters reported. But while some carmakers try to find short-term logistical work-arounds, others have taken a grimmer long-term outlook.

Nissan has issued dire warnings throughout this year that no trade deal would simply make its plant in Sunderland ‘unviable’. Given that the EU would be the site’s biggest customer, any tariffs would make UK-based production difficult.

While Honda’s Swindon factory lays dormant over the next few days, its cards were already marked. Last year, the carmaker announced the factory will be closing its doors permanently in 2021. It said that the acceleration of electrification has made it ‘focus activity in regions where it expects to have high production volumes.

European Commission’s sustainable mobility strategy far from reality, says ACEA

The European Commission has drawn back the curtain on its Sustainable and Smart Mobility Strategy, with an action plan of 82 initiatives that will direct transport policy in Europe. It sets out how the EU’s transportation network can achieve its green and digital transformation, resulting in a 90% cut in emissions within the next 30 years. These new initiatives will set the standard over the next four years, with additional industry targets set for 2030, 2035 and 2050.

While the automotive sector has recognised the need to boost the uptake of zero-emission vehicles, the European Automobile Manufacturers’ Association (ACEA) has warned that some of the Commission’s ambitions could be a stretch. It explains the industry already dedicates much of its yearly €60.9 billion research and development budget to decarbonisation, as electromobility and digitisation shape a cleaner future.

Sustainable milestones

By providing clear milestones, the European Commission hopes to keep the transport system’s journey towards a smart and sustainable future on track. This includes ensuring there are at least 30 million zero-emission cars in operation by 2030, as well as the large-scale deployment of automated mobility, and climate neutrality in 100 European cities.

By 2050, the Commission wants nearly all cars, vans, busses and new heavy goods vehicles to be zero emission. It also expects there to be a fully-operational, multimodal Trans-European Transport Network (TEN-T) for sustainable and smart transport with high-speed connectivity.

‘To reach our climate targets, emissions from the transport sector must get on a clear downward trend,’ said Frans Timmermans, executive vice-president for the European Green Deal. ‘Today’s strategy will shift the way people and goods move across Europe and make it easy to combine different modes of transport in a single journey. We’ve set ambitious targets for the entire transport system to ensure a sustainable, smart, and resilient return from the COVID-19 crisis.’

82 initiatives

To achieve these goals, the Commission’s strategy outlines 82 initiatives within 10 key areas for action. So, for transport to become more sustainable, practical measures will need to be taken. This includes boosting the uptake of zero-emission vehicles, which can be targeted by installing three million public charging points and 1,000 hydrogen filling stations by 2030. The strategy also outlines the need to make urban mobility healthy and sustainable, for instance, by doubling high-speed rail traffic and developing extra cycling infrastructure over the next decade.

In terms of smart innovations, the Commission wants to see more connected and automated mobility, like allowing freight to seamlessly switch between transport modes. The strategy also plans on boosting the use of data and artificial intelligence, which could include supporting the deployment of drones and unmanned aircraft.

Reality check

Taking note of the Sustainable and Smart Mobility Strategy, ACEA acknowledged the objective of boosting the uptake of zero-emission cars. However, it warned the ambition to have 30 million of them across European roads by 2030 could be unrealistic. ‘Unfortunately, this vision is far removed from today’s reality,’ cautioned ACEA director-general, Eric-Mark Huitema.

New research by the association points out that of the 243 million passenger cars on the road in Europe last year, less than 615,000 fell into the zero-emission category, making up less than 0.25% of the whole car fleet. ‘To meet the Commission’s objective, we would need to see an almost 50-fold increase in zero-emission cars in circulation on our roads in just 10 years,’ Huitema explained.

He went on to say that despite industry investment and a growing market share, not all the right conditions were in place yet to take such a massive leap, such as the availability of charging points. ‘The European Commission should match its level of ambition for rolling out infrastructure across the EU with its ambition for reducing CO2 emissions from vehicles. It is quite simple: the higher the climate targets become, the higher targets for charging points and refuelling stations should be. Unfortunately, we still see a mismatch between these two elements at EU level,’ he warned.

A recent report by ACEA identifies the need for the deployment of 15 times more infrastructure over the next 11 years to meet the Commission’s target of three million public charging points, up from 200,000 last year. The association is therefore calling again for an urgent review of the Alternative Fuels Infrastructure Directive, to push national governments to invest.

‘Experience has shown us that a voluntary approach to these infrastructure targets does not work,’ stated Huitema. ‘While some EU countries have been very active, others have done little or nothing. The AFID review really must include binding infrastructure targets for member states.’

Apart from infrastructure, ACEA also identified other necessary measures to encourage consumers to make the switch to zero-emission mobility. This included the need for more aggressive carbon pricing, the continuation of fleet renewal schemes, as well as the re-training of sector workers.

Toyota continues hydrogen push

Toyota is highlighting its commitment to a hydrogen future by announcing a series of measures designed to improve infrastructure and supply chains, as the automotive industry continues to increase its interest in the zero-carbon propulsion technology.

The carmaker’s European arm has established a Fuel Cell Business Group to oversee hydrogen activities across the region. Based in Brussels, it will strengthen the business case for hydrogen and support its introduction into mobility and other fields, making it accessible to new commercial partners.

To accelerate hydrogen’s widespread take-up, Toyota will focus on hydrogen ‘clusters’ or eco-systems in European centres where local infrastructure is supporting transport fleets and mobility services. It believes activity like this will drive demand for hydrogen, bringing down costs and strengthening the viability of the supply infrastructure, which in turn will attract more customers.

Through the new Fuel Cell Business Group, Toyota will work closely with industry partners, national and regional governments, and organisations to stimulate the development of hydrogen eco-systems in more locations and progress towards the goal of a hydrogen society.

Speaking at Toyota’s Kenshiki forum last week, Thiebault Paquet, director of the Fuel Cell Business Group, said: ‘The benefits of hydrogen are clear. That is why we expect our global sales of fuel-cell systems to increase by a factor of 10 in the short term, and why we have dramatically increased our production capacity.’

Wider field

In addition to its movements in Europe, Toyota is also joining the Japan Hydrogen Association (JH2A), a new entity aiming to promote the global collaboration and formation of a hydrogen supply chain.

The new organisation aims to maintain Japan’s lead in the development of hydrogen systems for various markets, including automotive. Both Toyota and Honda were leaders in hydrogen research for mobility, although the latter dropped out of the market before bringing its Clarity concept model to sale.

‘As part of our various efforts to contribute to the mitigation of global warming through the reduction of CO2 emissions, Toyota will actively make efforts together with our JH2A colleagues to realise the JH2A’s purpose of establishing a hydrogen society at an early point,’ the carmaker said.

Model launch

These involvements in hydrogen society come as Toyota launches its second-generation Mirai. The first-generation model was one of the first hydrogen-powered cars to come to market.

A priority of the new model has been to improve its driving range compared to the first-generation version. Increased power and hydrogen fuel capacity, improved efficiency and better aerodynamics all contribute to extending the driving range by 30% to around 400 miles.

Improvements have also been made to the fuel-cell stack, allowing it to sit on the new GA-L platform and use space more efficiently. A smaller but more efficient lithium-ion battery has also been included.

Increasing awareness

Toyota’s moves follow an announcement last month that Hyundai and market newcomer Ineos had signed a memorandum of understanding to explore new opportunities and accelerate the global hydrogen economy. The agreement also includes the evaluation of Hyundai’s proprietary fuel-cell system for the recently announced Ineos Grenadier.

BMW is also exploring hydrogen deployment, while in Germany, some states are looking at creating a hydrogen economy to take advantage of the zero-carbon emissions. There is also a move to explore hydrogen for heavy-goods vehicles, with Daimler looking to lead the way in this regard. However, the German vehicle manufacturer has ruled out the technology making its way into its passenger cars.

As most carmakers push to launch battery-electric vehicles (BEVs) to comply with strict EU emissions targets, the move from development to market means there is now more time for them to research other low- and zero-carbon technologies. Hydrogen has been around for some time, with Toyota starting its studies in fuel cells in 1992. The technology provides short refuelling times and long ranges, making it similar to internal combustion engine (ICE) technologies. However, the only emission is water, therefore making it a viable alternative to CO2 and NOx emitting petrol and diesel engines.

UK registrations stall in November as second lockdown takes effect

UK new-car registrations fell by 27.4% year-on-year in November, as a second lockdown came into effect, closing dealerships and hampering sales. New data from the Society of Motor Manufacturers and Traders (SMMT) reveals that 42,840 fewer cars joined British roads, resulting in a £1.3 billion (€1.4 billion) revenue hit for the market.

In total, the UK saw 113,781 new-car registrations last month, taking trade back to levels not seen since the 2008 recession. Private demand fell by 32.2%, while registrations by large fleets dropped by 22.1%. While this most recent decline demonstrates the continued impact of COVID-19, the drop was less severe than the one in the UK’s first lockdown which began in March, where registrations fell by 97.3% in April alone.

Fuel type divergence

Positive trends did continue for alternative-fuel cars, with battery-electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) increasing their number of registrations, up 122.4% and 76.9% respectively. BEVs enjoyed their third-highest ever monthly market share at 9.1%, with PHEVs also building their share up to 6.8%.

Nearly 37% of the market was held by low-emission fuel types in November, resulting in a year-on-year change of 74.1%. This resulted in a combined total of 18,000 new zero-emission capable cars joining the UK’s roads during the month. Meanwhile, petrol continued to hold on to its market majority at 49.1%, with a year-on-year registrations drop of 41.9%, from 96,166 in November 2019 to 55,855 in the same period this year. Diesel sales fell by 56.2% to 15,925 in November 2020 from 36,329 units in the same period last year, holding on to 14% of the market.

SMMT Graphic


Source: SMMT

Protective measures in place

November’s partial triumph is the result of manufacturers being better prepared to deal with the pandemic, having already put in place protective measures during the first wave of COVID-19 and the resulting lockdowns, such as click and collect ordering systems with little to no human contact.

‘Given the huge contribution that COVID-19-secure showrooms make to the economy and a national recovery, reopening dealerships across most of the UK will help protect jobs in retail and manufacturing and should help stimulate spending,’ the SMMT said.

So far, the automotive sector has been stripped of 663,761 units this year, down 30.7%. This means that some 31,000 cars would need to be registered every working day in December if the market was to climb back to the level expected at the beginning of 2020.


UK new-car registrations, January 2018 to December 2020 (forecast from December 2020)

UK new-car registrations, January 2018 to December 2020 graph

Source: SMMT and Autovista Group

‘Compared with the spring lockdown, manufacturers, dealers and consumers were all better prepared to adjust to constrained trading conditions,’ said Mike Hawes, SMMT chief executive. ‘But with £1.3 billion worth of new car revenue lost in November alone, the importance of showroom trading to the UK economy is evident and we must ensure they remain open in any future COVID-19 restrictions. More positively, with a vaccine now approved, the business and consumer confidence on which this sector depends can only improve, giving the industry more optimism for the turn of the year.’

Now with less than a month to go until the UK leaves the EU, talks over a trade deal look to be reaching a pinnacle moment. In the event of no free-trade agreement between the UK and EU tariffs of 10% could be added to imports and exports. Carmakers have already cautioned their inability to absorb this additional cost, meaning they could tag it onto the price of new cars imported into the country, which will only come to hurt the sector further.

Tesla self-driving update teased as suspension probe begins

Tesla CEO Elon Musk has revealed wider ‘Full Self-Driving’ Beta software could be released within roughly two weeks. Targeted testing of the package began in October, with early users able to make autonomous turns on city streets, all linked through the car’s navigation and autopilot features.

However, this announcement was made as the US National Highway Traffic Safety Administration (NHTSA) opened up a new probe into roughly 115,000 Tesla vehicles. The investigation will focus on a safety issue with the front suspension of the Model S (2015-2017) and the Model X (2016-2017).

Self-driving software

Taking to Twitter at the end of last week (27 November), Musk confirmed the expansion of new self-driving features for Tesla vehicles within a fortnight. ‘Probably going to a wider beta in two weeks,’ he told a user enquiring as to whether the latest software would be available in Minnesota.

In October, the so-called ‘Full Self-Driving’ Beta software was initially offered to a select number of ‘expert, careful’ drivers. Delivering an almost feature-complete self-driving package, users are required to constantly monitor the system as is made apparent in the release notes.

‘Full Self-Driving is in early limited-access Beta and must be used with additional caution. It may do the wrong thing at the worst time, so you must always keep your hands on the wheel and pay extra attention to the road. Do not become complacent.’

Tesla outlined that when enabled, the new software would allow the user’s vehicle to ‘make lane changes off highway, select forks to follow your navigation route, navigate around other vehicles and objects, and make left and right turns.’

Musk had previously said the latest upgrade wold be widely released by the end of 2020. The system looks to become more robust and capable as it gathers additional data to feed its neural networks, improving with each new user. With the majority of this testing appearing to focus on the US market, and given the current legislative quagmire surrounding autonomous capabilities in Europe, uncertainty remains around when Tesla owners elsewhere in the world might experience this new system.

Suspension investigation

This announcement also fell under the shadow of a new probe opened up by the NHTSA, affecting an estimated 114,761 vehicles. The agency began the preliminary investigation after receiving 43 complaints alleging failure of the left or right front-suspension links. In a NHTSA document, the issue was linked to malfunction of the knuckle ball-joint ring in the Model S (2015-2017) and Model X (2016-2017), which could result in contact between the tyre and wheel liner.

Of the 43 complaints received by the agency, 32 involved failures occurring during low-speed parking manoeuvres (below 16kph), and 11 while driving (above 16kph), including four at highway speeds. ‘The complaints appear to indicate an increasing trend, with 34 complaints received in the last two years and three of the incidents at highway speeds reported within the last three months,’ the document detailed.

Tesla was approached for a statement, but did not respond to the request prior to the publication of this article. As this investigation continues in the US, Tesla owners in Europe will again have to wait and see how they are impacted.

Motorcycle Press Release November 2020

Data published by the motorcycle industry association (MCIA) shows registrations in October grew significantly, up 23.9% versus last year. Six out of nine bike categories recorded growth with mopeds once again enjoying the greatest increase with adventure sports recording the second strongest growth, followed by scooters.

Glass’s Leisure Vehicles Editor Paul McDonald said, “After more modest growth in September, it was great to see a significant increase in registrations again in October. It’s going to be interesting to see how the market performs during the final month of 2020. However, with England in Lockdown-2 and enhanced restrictions elsewhere in the UK, registrations in November are stalling.”  

Engine band highest registered models – October 2020

Engine band highest registered models table October 2020

New motorcycle market

Sales and demand are slowing as is expected at this time of year with little sign of a substantial decline. New stock supply from factories is still an issue for some dealers. However, consumers appear to be prepared to wait for the stock to arrive with some lead times stretching towards the end of quarter one next year. Scooters and 125cc machines remain a popular choice for commuters in the wake of COVID-19, but demand is generally strong across the board.

What can the industry expect moving forward?

At the time of writing, England is in Lockdown-2, although the industry is hopeful that restrictions will ease in December with the market looking forward to the 2021 season. Sales and demand could be affected in the run-up to Christmas, however November and December are typically a quieter time for dealers. Therefore, Lockdown-2 is unlikely to have as big an impact on registrations compared to Lockdown-1 which coincided with the peak demand season. With uncertainty surrounding COVID-19 continuing, consumer confidence continues to be at risk which is a concern for the industry.

Used motorcycle market

Mirroring demand in the new market, dealer feedback suggests that used motorcycle sales activity is also slowing with a specific demand for certain machines. Following the pattern from recent months, scooters and 125cc machines remain popular, particularly among commuters. With additional demand from takeaways offering delivery as smaller engine machines are a popular choice for this activity. In other sectors, demand continues to be evenly spread, with hobbyist riders swelling demand with a new pastime not hindered by social distancing.

Stock

Opinions regarding stock continue to be mixed with some dealers finding quality stock a challenge and are travelling far and wide, whilst other dealers are satisfied with supply and do not want to be overstocked going into the winter months. There is some speculation that if the pound weakens, the country could see more European buyers snap up quality used stock following the precedent set during the 2009-2011 recession which would further hinder stock supply.

Sales Activity

Despite sales and demand declining, there was little sign of a significant reduction, which is positive. However, taking into account the time of year and increased uncertainty, after careful consideration, many values have been eased back for the December guide, except where trade feedback and evidence from the market place has suggested further adjustments. Exceptions to this are mopeds, scooters, commuters, smaller engine machines and off-roaders where values have been held.

Fiat Chrysler expands EV offering with new joint venture

Fiat Chrysler Automobiles (FCA) has entered a joint venture with energy-storage company Engie to create a new e-mobility business, offering a suite of solutions including charging infrastructure and green energy packages.

The new entity will be an Italian e-mobility technology company, with the carmaker saying it will have access to a portfolio of ‘more than a hundred patents, a strong team of electrical and system engineers, and an established automotive industrial footprint.’

The venture will rely on FCA’s financial resources together with its industrial footprint, while Engie will provide technical expertise and its intellectual property portfolio. The two companies are looking to create sustainable mobility, which will make access to electric automotive technology easier and more convenient for drivers and mobility users. It will offer products for electrically-chargeable vehicles (EVs) such as residential, business and public charging infrastructures as well as green energy packages, enabling customers to charge at home or at any public charging point across Europe with a simple subscription at a fixed monthly rate.

Future thinking

The joint venture represents another example of vehicle manufacturers looking beyond the sale of a vehicle, especially when it comes to EVs.

Profit margins are likely to be lower for EVs due to the high cost of components involved in their production. Volvo believes that margins will only start to improve in 2025 as it increases its range. Therefore, as carmakers look to an electric future, they need to explore new avenues of profit to recoup losses they may make as sales of petrol and diesel engines make way for battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs).

Hyundai recently announced it was becoming a partner in the manufacturer-backed charging provider Ionity. In the UK, Audi has teamed up with energy supplier Octopus to offer 5,000 ‘free electric miles’ (over 8,000km). Volkswagen (VW) is rolling out wallboxes and a recharge service with the release of the ID. family in Europe. Meanwhile, Ford has set up partnerships with infrastructure-installation service providers to deliver charging at home.

Therefore, FCA’s move to join forces with Engie and provide e-mobility services will give the Italian carmaker another option to make profits as it looks to increase its EV offering.

‘The signing of this Memorandum of Understanding originates from a fruitful three-year cooperation between the two companies. This allowed the implementation of truly disruptive projects, such as the introduction of the exclusive FCA easy Wallbox, an easy-to-use plug-and-play charging unit, the recently launched V2G Pilot Project and the innovative customer-oriented energy packages,’ said Mike Manley, CEO of Fiat Chrysler Automobiles. ‘The envisioned joint venture would allow an even higher commitment from both parties to expand the scope of the existing cooperation and further develop innovative products and services to enable and support a smooth shift to electric mobility in Europe’.

Commercial operations

Engie has also partnered with Scania, providing transport providers in 13 countries with made-to-measure e-mobility solutions.

This partnership will be for trucks and buses and will provide Scania’s clients with solutions to meet their e-mobility needs. It will include made-to-measure solutions to meet a fleet and depot’s actual management requirements, as well as those of electric heavy goods vehicles (HGVs). It will also cover smart charging infrastructure, service and maintenance, the provision of green energy, and financing.

‘A complete charging solution encompasses energy supply, charging hardware and software, as well as installation, maintenance and other associated services tailored to meet each client’s specific requirements,’ commented Alexander Vlaskamp, Scania’s head of sales and marketing. ‘This strong partnership with Engie and EVBox Group will simplify our clients’ transition over to an increasingly electrified fleet on the path towards a more sustainable transport sector.’

New Car Market Update October 2020

Following September, new car registrations in October had a relatively low bar to clear to eclipse last year’s total, due to the WLTP emissions testing challenges faced in 2019.  However, once again registrations failed to match last year’s figure coming in 1.6% lower at 140,945, according to the latest figures published by the Society of Motor Manufacturers and Traders (SMMT). This was the lowest October total for nine years and over 10% lower than the average October total over the last decade.

There was potential for an uptick in October, but with the Welsh lockdown towards the end of the month hitting registrations in the region by up to 25%, any momentum fizzled out. On a positive note, October was the least-worse month-on-month comparison versus 2019 (see chart below). The year to date registration total is now down 31%.

Total new car registrations monthly graph November 2020

Data courtesy of SMMT

Pure petrol cars saw a 21.3% reduction while diesel fell a significant 38.4% and accounted for just 14.9% of the new car market in October. However, large increases in mild-hybrid (MHEV) models mitigate these figures as they jumped significantly compared to last October, with petrol MHEV up 545.8% and Diesel MHEV up 56.6%. This shift has played out all year as shown in the year-to-date chart below, as car manufacturers continue to reduce CO2 outputs using mild-hybrid technologies.

New car market fuel type ytd % change graph November 2020

Data courtesy of SMMT

Despite the year’s very low total registration figure, the bright spot continues to be alternative fuel vehicles, especially Battery Electric Vehicles (BEVs). With the registration total of BEVs almost trebling in October compared to last year. The adoption of BEVs is higher in the fleet market, with 43,146 cars registered year-to-date compared to the private market at 26,682. Benefit in kind (BIK) taxation benefits and product confidence make the BEV proposition more compelling to company car users. For private retail customers, the lack of taxation savings, higher list prices (versus internal combustion engine vehicles), lack of knowledge of both longer driving ranges and the potential for the total cost of ownership savings, makes the BEV purchase proposition more difficult for private consumers with the increased upfront financial burden.

Car Market Overview November 2020

To adhere to the latest government imposed COVID-19 lockdown, on November 5 car dealers in England temporarily closed their physical sales operations for the second time in a year. Lockdown-2 follows similarly enhanced social restrictions seen in other parts of the UK. Despite this economic setback, many dealers continue to offer cars for sale through ‘click and collect’. However, even with these strategies in place, Glass’s still expects a significant impact on UK dealer’s profits.

To support businesses throughout this period the Government has extended the Furlough scheme, which will be welcome news. However, this extension does not only cover the four-week lockdown, it will last until the end of March 2021. This has raised anxiety amongst business leaders that extended restrictions may affect businesses via full lockdowns or changes to the local tiered alert system.

The tier system was in place in October, affecting different regions in England in a variety of ways, although not affecting car dealers and other ‘non-essential’ retail outlets. In other parts of the UK, restrictions required dealers to close. This impacted new car sales during this period. According to the Society of Motor Manufacturers and Traders (SMMT), the new car market fell by 1.6% in October, to just under 141,000 registrations, marking a nine-year low. The year to date registration total now sits almost 621,000 below last year, a drop of 31%.

The wholesale auction market continued with strength in the early days of October, but conversion rates began falling as the month went on. It seems that many dealers felt they had the correct level of stock and began ‘cherry-picking’ as a result. As is common when dealers become more selective, vehicle condition becomes more important, with cars with higher auction condition grades falling out of favour, either receiving no bids or disproportionately low offers. Glass’s understands that sold volume increased slightly in October compared to last year but first-time conversion rates fell by five percentage points, to 80%.

Although there is a high level of uncertainty in the current new and used car markets, dealers should take some comfort from how trading bounced back following the end of Lockdown-1. However, with the latest lockdown due to end in December, which is typically a slower retail month due to the pressures of Christmas, Glass’s does not expect retail activity to be as strong. That said, we expect wholesale trading to remain reasonably positive, as dealers build stock for the important post-Christmas and early new year period.

Volvo recalls 120,000 cars globally after airbag defect

Volvo Cars is undertaking a global recall of its S60 and S80 models built between 2001 and 2003 due to an airbag defect, Autovista Group has learned.

‘The recall is global and in total around 120,000 cars will be recalled from markets with hot and humid conditions,’ the carmaker confirmed to Autovista Group’s Daily Brief. ‘All affected owners will be contacted directly by Volvo.’

The move looks to tackle an airbag defect which has already been linked to one fatality in the US. Documents published by the country’s National Highway Traffic Safety Administration (NHTSA), describe the potential for the driver side airbag inflator to rupture, causing fragments to be expelled on deployment.

This process has already begun, with the manufacturer reaching out to owners of the S60 and S80 models. According to NHTSA documents, Volvo plans to replace the faulty unit with modern propellant and inflator.

‘After being notified by Volvo in August 2019 of a field incident where it appeared that a specific type of airbag inflator ruptured upon deployment, ZF promptly informed the NHTSA and, together with Volvo, began investigating the incident,’ the airbag provider told the Daily Brief. ‘As a company committed to safety, ZF will continue to work closely with NHTSA and Volvo on this issue.’

Hot and humid conditions

The report lays out that when the faulty airbag’s propellant tablets are subjected to increased moisture levels and frequent high-inflator temperatures, the tablets can start to decay and form dust particles. Also, when exposed to increased temperatures, moisture leaves the tablet and when cooled down is absorbed and accumulated on its surface.

This localisation of moisture leads to ‘volumetric changes of the tablet’s surface,’ creating dust. This dust increases burn surface area and burn rate. This can result in higher combustion chamber pressure and the risk of inflator rupture.

‘In the event of a crash were the driver airbag is activated, fragments of the inflator inside the airbag may, in certain cases, project out and in worst case strike you, potentially resulting in serious injury or death,’ the US recall notice states.

The carmaker and the NHTSA have had meetings about the airbag fault since August 2019.

The agency confirmed that one person in the US died when a ZF/TRW FG2 twin driver airbag inflator containing the propellant 5AT-148N exploded. The government body said this was the only known fatality for this type of inflator globally.

Takata troubles

The development is reminiscent of the ongoing global recall due to an airbag issue by Takata. According to the NHTSA, it affected tens of millions of vehicles, from 19 different automakers. These airbags were recalled because they could explode when deployed, causing serious injury or even death.

Ford and Volvo to pool emissions as recalls wreak havoc

Ford will enter a pool with Volvo Cars to meet its 2020 European CO2 emissions target. The recall of the Kuga plug-in hybrid (PHEV) reduced the number of low-emissions models the carmaker could sell this year, impacting its fleet-average CO2 level.

But while Volvo Cars announced it was set to overachieve on this year’s targets, its subsidiary Polestar confirmed it is also initiating a recall. As safety concerns continue to plague electric vehicles (EVs) and shake consumer confidence, manufacturers will need to act decisively if they want to meet their respective emissions targets.

Ford’s recall

In August, Ford recalled and suspended sales of Kuga PHEVs built up until 26 June, after four vehicles reportedly caught fire. The problem was traced back to the potential for water to cause an electrical short, which could then lead to overheated battery cells. It was estimated that over 20,000 models could be affected. With the Mustang Mach-E not yet in showrooms, Ford lacks a mass-market EV, leaving it heavily reliant on PHEVs to meet its emissions obligations.

‘Ford always has, and will continue to meet, the EU’s emissions targets. Based on our product roadmap and production schedule for this year, we expected to comply with the new regulations, and this was still our intent with the COVID-related disruption to manufacturing,’ the carmaker said in a statement sent to Autovista Group. ‘However, given the current supplier battery issue with the Kuga PHEV, Ford now will enter a pool to meet the EU’s 2020 emissions regulations without penalty for passenger vehicles, just as many other OEMs have done in Europe.’

‘We recently declared our intent to join an open pool with other OEMs and can confirm we are doing so with Volvo Car Corporation,’ Ford added. ‘Conversely, as we anticipate over achieving our CO2 targets on light commercial vehicles, we have filed separately our intent to form an open pool so other OEMs can benefit from the positive CO2 performance of our light commercial fleet.’

Pooling with Volo

At the end of October, Volvo Cars and its EV affiliate Polestar confirmed they would be able to reduce fleet emissions beyond their joint CO2 target. This left them with enough surplus to enter a pool with Ford, with the resulting revenue from the deal to be reinvested in new green-technology projects.

‘For Volvo Car Group, the future is electric and we are transforming our company through concrete action,’ said Håkan Samuelsson, chief executive of Volvo Car Group. ‘I am pleased to see that we are exceeding our CO2 reduction targets. It proves our strategy is the right one for our business and for the planet.’

PHEVs made up more than a quarter of Volvo Cars’ sales in Europe during the first three quarters of 2020. By 2025, the carmaker aims for its global sales volume to consist of 50% BEVs, with the rest made up from hybrids. Meanwhile, Volvo’s EV brand began deliveries of the Polestar 2 in July. But as Ford joins Volvo’s emissions pool, the Polestar 2 has climbed into the same boat as the Kuga PHEV, as it too hits stormy waters.

Polestar recalls

In a statement issued at the end of October, the BEV-maker confirmed it is initiating a recall as well as a service campaign of the Polestar 2. The recall will involve the replacement of faulty inverters on most delivered customer vehicles. This unit transforms stored energy in the battery into the power required by the electric motors. Polestar confirmed the total number of affected vehicles delivered to customers is 4,586.

Meanwhile, the service campaign relates to the high-voltage coolant heater, which is responsible for both cabin and high-voltage battery heating. The carmaker confirmed that faulty parts fitted to early production cars need to be replaced. The total number of affected vehicles delivered to customers is 3,150.

So, in the wake of the Kuga PHEV recall, Ford found emissions regulations relief in Volvo Cars, whose affiliate is now coming face to face with EV issues itself. As recalls ravage new EV models, carmakers must act quickly to ensure consumer confidence does not take too much of a nosedive. If public opinion takes a dramatic turn against PHEVs and BEVs, the potential for manufacturers to achieve their emissions targets will plunge.

Mini model range to expand and electrify

BMW has outlined new plans for its Mini brand, including the electrification of the entire model range, in cooperation with Chinese manufacturer Great Wall, and the addition of two new crossover models.

Mini started on the road to electrification in 2008, with the low-volume production of the Mini E. With the plug-in hybrid (PHEV) variant of the Mini Countryman alone, electric vehicles (EVs) accounted for 5% of the brand’s total sales in 2019, according to a BMW Group release. Following the launch of the Mini Electric earlier this year, the EV share has doubled to 10% of all new registrations for the brand.

Looking forward, Mini ‘will enable customers all over the world to have emission-free driving with a completely electrified model family.’ However, the brand will continue to offer internal combustion engines (ICEs) as they remain an ‘ideal solution for target groups and regions whose mobility needs are not yet met by all-electric vehicles.’

‘With the two pillars of our drivetrain strategy, we are pursuing the Power of Choice approach to meet the needs of our customers around the world,’ Bernd Körber, head of Mini, said in the statement. ‘This will create the conditions for further growth and actively shape the transformation of mobility.’

Speaking to the German publication WirtschaftsWoche, Körber commented that ‘we will electrify the whole Mini portfolio by 2024.’ He added that there will be Mini cars with ICE until 2030 but the brand will be ‘completely electric earlier than most other brands.’ Körber predicts that beyond 2025, more than half of all Minis sold will be purely electric, and Mini could be an electric brand in 2030. ‘Already at the end of 2020, the share of pure-electric and plug-in hybrid Minis sold will be about 10% to 15%. In 2021, it should then be about 15-20%.’

Crossing over

The future Mini range of all-electric vehicles will include the three-door hatchback, a new crossover model in the small-car segment and a compact crossover model. The Mini Countryman compact crossover will therefore be joined by a new crossover model in the small-car segment, which will be supplied exclusively with an all-electric drive. The next-generation Countryman will be available with both ICE and electrified powertrains.

However, this does leave a question mark over the future of the Mini Clubman compact hatchback model, which is produced at Mini’s plant in Oxford, UK. The Clubman spearheaded Mini’s move into the premium compact segment before being joined by the Countryman. Around 40% of the brand’s vehicle sales are in this segment.

Building with Great Wall of China

The Chinese vehicle market continues to grow and will become even more important for Mini in the future. Currently, around 10% of all new vehicles produced for the brand are delivered to customers in China. It comes as little surprise, therefore, that Mini will move from being an import brand to producing cars locally.

Based on a new vehicle architecture, developed from the ground up for pure e-mobility, battery-electric vehicles will be produced in China from 2023, in cooperation with local manufacturer; Great Wall Motor.

‘This venture will enable Mini to meet the rising demand for emission-free driving both in China and in the other global markets. Cooperation with the Chinese partner will be based on a clearly defined principle: production follows the market. With locally manufactured vehicles, Mini will serve the growing Chinese automotive market whilst maintaining stable production at other locations,’ BMW Group said in its statement.

Automotive industry worries as Brexit no-deal seems likely

With a deadlock in Brexit trade-deal negotiations following the passing of a UK-imposed deadline, both the British and European automotive industries are nervous about the looming threat of a no-deal scenario.

Last week, the UK government signalled that ‘the talks are over’ in regards to a free-trade agreement with the European Union (EU). Prime Minister Boris Johnson added that the country has to ‘get ready’ to trade in 2021 without an agreement, although stopping short of confirming that discussions would not resume. Government television messages are running in the UK warning businesses to get ready for change from 1 January 2021.

While the EU is keen to continue talking, the UK government is now giving businesses in the country warning that the likelihood of any deal is diminishing rapidly, and they should prepare for tariffs and customs checks. For the automotive industry, which relies on competitive pricing and ‘just-in-time’ deliveries, this is a hammer blow – particularly for those companies based in Britain.

Government response

The UK is looking for a ‘Canada-style’ deal. The EU’s agreement with Canada is called the Comprehensive Economic and Trade Agreement (CETA), which removes most tariffs, but not all, while increasing quotas, meaning more goods can be shipped before tariffs are applied. Instead, it looks likely that an Australian-style deal will be adopted. This means tariffs on imports and exports to and from the EU, together with stricter customs checks at borders.

‘We were totally clear that we wanted nothing more complicated than a Canada-style relationship, based on friendship and free trade,’ Johnson said last week. ‘To judge by the latest EU summit in Brussels, that won’t work for our EU partners. They want the continued ability to control our legislative freedom, our fisheries, in a way that is obviously unacceptable to an independent country.

‘Given that they have refused to negotiate seriously for much of the last few months, and given that this summit appears explicitly to rule out a Canada-style deal, I have concluded that we should get ready for 1 January with arrangements that are more like Australia’s, based on simple principles of global free trade.’

The Chancellor of the Duchy of Lancaster Michael Gove, added: ‘At the end of this year we [the UK] are leaving the EU Single Market and Customs Union and this means there are both new challenges and new opportunities for businesses. Make no mistake, changes are coming in just 75 days and time is running out for businesses to act.

‘It is on all of us to put in the work now so that we can embrace the new opportunities available to an independent trading nation with control of its own borders, territorial waters and laws.’

Automotive outcry

Numerous carmakers and suppliers have stated over pat months that should a no-deal occur, they would seriously consider their manufacturing positions in the UK. In contrast, others have highlighted the problems that such a scenario would pose on importing items into the country.

The Society of Motor Manufacturers and Traders (SMMT) has stated that with tariffs added, the cost of a UK-built car could rise by as much as £2,700 (€3,000). Recently, it was reported that Toyota and Nissan would look for compensation from the UK government should such costs be added, as to export their vehicles for sale in the EU with tariffs added would make them less competitive than those from European-based marques.

Volkswagen has warned that it would be unable to absorb any tariffs placed on vehicle imports. The carmaker has no manufacturing presence in the UK. As the country’s second-largest brand by market share (according to SMMT figures), it is possible the company will look to stockpile vehicles in the country before the end of the transition period.

Responding to the Prime Minister’s statement, Mike Hawes, chief executive of the SMMT, said: ‘Make no mistake, the automotive industry will not prosper from ‘no deal’. It would have a devastating impact on the sector, on the economy, and on jobs in every region of Britain.

‘Businesses have been battling coronavirus at the same time as investing heavily in decarbonisation, all while preparing as best they can for a seismic change in trading conditions come year-end. But to avoid permanent damage, we urge both sides to keep talking, to remain calm but work with renewed vigour on a deal that supports automotive, a sector that is Britain’s biggest exporter of goods and one of the UK and Europe’s most valuable economic assets.’

According to Reuters, when asked about Brexit trade talks at a recent speaking event, Daimler chairman Ola Källenius– said: ‘I am hoping for last-minute common sense,’ before confirming that the company ‘would have to live with tariffs’ and has no plans to open any manufacturing plants in the UK to avoid them.

Bentley chief executive Adrian Hallmark told Reuters that a Brexit no-deal would be ‘extremely damaging’ for the Volkswagen Group-owned luxury carmaker.

‘If you took the duties on components, 45% of the bits we buy in, and the 10% tariff on cars, worst-case scenario, it would take out a significant percentage of our profits,’ he said. ‘(It) would probably ACEA appeals to EU

Furthermore, the European Automobile Manufacturers Association (ACEA) has written to Brussels urging the EU parliament to ‘reconsider its position’ on a trade deal with the UK, according to the Financial Times

The body’s demands include the EU lowering the percentage of components in a car that must be either European or British for the vehicle to qualify for the benefits of any EU-UK trade deal, a process known as ‘cumulation’. ACEA is also seeking a ‘phase-in period’ of these new rules to help the industry adapt to the changed business environment.

The EU looks unlikely to sanction parts from Japan and Turkey that could count towards ‘local-parts’ figures. Manufacturers with plants based in the UK will need to prove that exported goods are actually British-made, with a specified threshold of British parts. Should the threshold not be met, tariffs will be included on exports, even if a trade deal is in place.

Brussels has proposed that non-UK/non-EU content be limited to 45% of the car, a figure ACEA wants pushed up to 50% ‘in line with the UK’s position.’

Autovista Group is keen to hear your views on Brexit and the effect it will have on both the UK and Europe. Look out for our in-depth Brexit survey launching tomorrow (22 October) and make sure you have your say.

New Car Market Update September 2020

The latest figures released by the Society of Motor Manufacturers and Traders (SMMT) showed that registrations in August declined by 5.8%, suggesting another very disappointing month for the industry. However, delving a little deeper into the data suggests that August 2020 is not quite as bad as first impressions show.

The decrease was only 5,347 units compared to 2019, as August is traditionally the lowest volume month of the year. This equates to less than half a per cent of 2019’s total annual sales. Additionally, August’s total of 87,226 units is, in fact, the fifth-highest August since the start of the revised registration frequency back in 2001.

New car market august registrations by year graph 2020

Data courtesy of SMMT

The August sales reductions in the major European markets of France, Germany and Spain were considerably worse, down 19.8%, 20% and 10.1% respectively, despite government-backed incentives in place to stimulate demand, which customers in the UK currently do not enjoy.

Through the sales channels, once again private retail sales performed better than fleet/business with only a 1.7% decline (699 units) on last year, which shows some stability in consumer confidence which is vital for the economy as a whole moving forward. Fleet activity was down 5.5% and Business sales channel dropped 57.9% albeit on a very small total.

Analysing the fuel types shows a similar story, with zero and low emission registrations increasing and gaining market share from petrol and especially diesel. Battery electric cars increased by over 77%, achieving 6.4% of the total sales in August and now stand at almost 5% market share year to date, while pure diesel has declined almost 60% this year.

New car market Fuel split YTD graph September 2020

Data courtesy of SMMT

The top ten best sellers list for the month is back to normality with the Fiesta, Focus, Golf and Corsa all in the top five. However, there is additional good news for Ford as the new Ford Puma small crossover came in fourth place.

Fleet was once again a laggard this month compared to private sales. For the industry to get fully back on track it needs businesses to feel confident with a sustained period of economic improvement after the tumultuous first half of the year. At this point, more businesses will feel confident enough to invest in new car lease contracts.

There are some headwinds including uncertainty over Brexit negotiations on the withdrawal and any new trade deal with the EU. Additionally, the impact from Coronavirus flare-ups this autumn and winter may well force yet more delay on large expenditure commitments by businesses. As noted before, September is a critical month for the car industry and will set the tone for the rest of the year.

Used-car transactions grow across Europe in July

The latest data from the respective associations in the major continental European markets reveal that the volume of used-car transactions grew in July 2020 compared to the same month last year. Autovista Group senior data journalist Neil King considers this return to growth across Europe’s used-car markets as the sector tentatively recovers from the coronavirus (COVID-19) crisis.

Used-car sales increased by 13% year-on-year in both France and Germany in July, and were up 9% in Italy and 6% in Spain. Through to July, Germany is the only major European used-car market that has not suffered a double-digit decline, with a comparatively modest contraction of 8%.

Used-car data is not yet available for the UK for July but is expected to follow the growth trend, especially given the 11% surge in new-car registrations in the country’s first full month of trading since February. This is even without increased buying incentives, which have been introduced in France, Germany, Italy and Spain.

Used-car transactions, year-on-year percentage change, July and year-to-date 2020

Used-car transactions, y-o-y percentage change graph, July and year-to-date 2020
Sources: CCFA, KBA, ANFIA, GANVAM/IEA

Outperforming new-car registrations

Prior to the positive results last month, the volume of used-car transactions declined in the first half of 2020 compared to H1 2019 in all five major European markets. However, the downturns in the first half of 2020 were not as dramatic as the contractions in new-car registrations.

Used-car transactions and new-car registrations, year-on-year percentage change, H1 2020

Used-car transactions and new-car registrations, y-o-y percentage change graph, H1 2020
Sources: CCFA, KBA, ANFIA, ANFAC, GANVAM/IEA, SMMT

In the UK, the used-car market contracted by 28.7% in the first half of 2020, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT) on 11 August. Following a comparatively modest decline of 8.3% in the first quarter of 2020 as the COVID-19 lockdown from March negated growth in January and February, there were only 1,039,303 changes of ownership in the second quarter, equating to a 48.9% slump in the second quarter. However, ‘the pace of decline eased as the quarter progressed, from a peak year-on-year loss of 74.2% in April to 17.5% in June, as private sellers and buyers got back on the move and transactions began to restart,’ the SMMT stated.

‘As devastating as these figures are, with full lockdown measures in place for the whole of April and May, they are not surprising. As the UK starts to get back on the move again and dealerships continue to re-open, we expect to see more activity return to the market, particularly as many people see cars as a safe and reliable way to travel during the pandemic. However, if we’re to re-energise sales and the fleet renewal needed to drive environmental gains, support will be needed for the broader economy in order to bolster business and consumer confidence,’ commented Mike Hawes, SMMT chief executive.

Continental transactions

There were similar contractions of the used-car market in Spain and Italy. Spain suffered the most, with 31.7% fewer changes of ownership in the first half of 2020 than a year earlier, but new-car registrations declined by more than 50%. There was a phased approach to relaxing the lockdown measures in Spain, which largely explains why both the new- and used-car markets were still weak, even in June. However, dealers can now fully reopen, and the introduction of the MOVES II incentive scheme for new battery-electric vehicles (BEVs) and plug-in electric hybrids (PHEVs) and the RENOVE scrappage scheme have stimulated the Spanish market since their introduction in early July.

Used-car demand fell 31.6% year-on-year in Italy in the first half of 2020, compared to a 46.1% contraction of the new-car market. However, many buyers of both new and used cars decided to hold off until government incentives came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). This new scheme comes on top of the Ecobonus scheme, which incentivises cars producing less than 20g of CO2/km.

Electric and hybrid cars can now benefit from up to €10,000 in subsidies when scrapping an older vehicle. €3,500 is now provided for scrapping vehicles that are at least 10 years old when buying a new Euro 6 vehicle with CO2 emissions up to 110g/km, and a price of up to €40,000. Dealers will put forward €2,000 towards the incentive, while the state provides €1,500. Without trading in an older model, the funds drop to €1,750.

In France, the 17.4% decline in used-car sales in the first half of 2020 was a significantly better performance than the 38.6% fall in new-car registrations. Whereas the incentives introduced on 1 June for new BEVs and PHEVs remain, the additional bonus for trading in older cars for cleaner new and used cars was exhausted before the end of July. The scrappage scheme reached its 200,000-vehicle cap after just two months, but the Ministry of Ecological Transition announced it would be replacing the recovery scheme with a conversion bonus, applicable from 3 August.

Germany has weathered the COVID-19 storm better than the other major European markets, with only 11.4% fewer changes of ownership in the first half of 2020 compared to the same period last year. New-car registrations have also suffered less than in the other major markets, but were still down 34.5% in the first half, and have therefore been outperformed by used-car demand here too.

Residual-value resilience

As used-car markets have proven more resilient than new-car markets, the impact on residual values (RVs) has been rather marginal in European markets so far this year. Nevertheless, a ‘three-speed’ development of residual values (RVs) is emerging. The UK and France are benefitting from pent-up demand and some markets have had a rapid reaction to the impact of COVID-19, but most are ‘late starters’ with limited value movements thus far.

Residual value inteligence coronavirus tracker July 2020
Source: Autovista Group – Residual Value Intelligence Coronavirus Tracker

As COVID-19 lockdowns are left behind, thoughts turn to economic recovery. However, as the latest update to the Autovista Group whitepaper ‘How will COVID-19 shape used car markets’ explains, in the last month, the situation has taken a gloomier turn. Download your copy here.

BMW promotes hydrogen technology with new model in 2022

BMW has confirmed that its i Hydrogen Next technology will go on sale in 2022, with a new model, based on the current X5, becoming the first to feature the powertrain.

The carmaker announced plans to develop a hydrogen drive system for sale last year. However, since then Daimler has pulled out of developing the technology for passenger vehicles, while pressure has increased on all carmakers to create electrified drivetrains to lower average emissions. But the German manufacturer remains committed to hydrogen, seeing the long-term benefits of the zero-emission technology.

The carmaker has been working with Toyota, a leader in the development of hydrogen powertrains, to develop the technology for its vehicles. Since summer 2015, the BMW Group has been testing development vehicles, based on the BMW 5-Series GT, that are equipped with a jointly developed fuel-cell system. 

The fuel-cell stack that will power the new BMW i Hydrogen NEXT model is an original development of the BMW Group, according to the company. The individual cells of the fuel cell come from Toyota. An automated research facility for the production of fuel-cell stacks is used in the manufacture of the X5 pilot fleet.

The testing of innovative production technologies is an important step in the preparation of scalable, time, cost and quality optimised production of hydrogen fuel-cell drives.

https://www.youtube.com/watch?v=PmSXAbkvoE8&feature=emb_logo

‘In the future, the hydrogen fuel-cell drive can be an attractive alternative to battery-electric vehicles (BEVs), especially for customers who do not have access to their own charging infrastructure and who often drive long distances,’ the company said. ‘With a sufficient refuelling infrastructure, hydrogen vehicles offer great flexibility, since the full range is available again after a short refuelling process of around four minutes – regardless of temperature conditions.’

Beneficial technology

Hydrogen has the potential to sit alongside BEV technology and create a two-fuel system once various countries ban the internal combustion engine. It offers drivers a longer range than some BEVs. At the same time, refuelling times are comparable to petrol and diesel, meaning those covering longer journeys would be able to do so with ease in a vehicle that only emits H2O from the exhaust.

Toyota has led the way with hydrogen development and was the first to bring a production car to market, albeit in small numbers. Hyundai is also developing the technology, while Daimler, which pulled out of researching and producing fuel-cell passenger cars, will instead focus on the use of hydrogen in larger commercial vehicles.

‘What we see today is a rapid shift into battery, because to produce fuel-cell power, you need to have an electric powertrain first,’ Toyota’s manager of alternative fuels, Jon Hunt, said at a summit earlier this year. ‘So that’s where the development is occurring, before moving to fuel-cell electric vehicles (FCEV).’

‘Notwithstanding that, there are many manufacturers who have huge issues of achieving their emission reductions to avoid fines. That means that they have to have a certain proportion of zero-emission cars. That is distorting the market.’

Coronavirus impact

However, the current situation the market finds itself in following the coronavirus (COVID-19) pandemic and associated lockdowns may change the timeline of hydrogen development.

Carmakers are facing large fines if they fail to bring down their average fleet emissions by the end of 2021, and with the diesel market collapsing, the only way to do this is by manufacturing a technology that is already further along the development path – and that is battery-electric. With COVID-19 and the resulting economic turmoil, development budgets will likely be cut, and therefore hydrogen technology will suffer.

Yet with Toyota, Hyundai and now BMW actively pursuing hydrogen as an alternative fuel of choice, their development may aid others in the research of the technology. Toyota has already announced it will allow access to its patents around hydrogen.

Committed choice

BMW sees hydrogen as giving its customers another choice when it comes to vehicle powertrains.

‘Politicians have recognised the importance of green hydrogen for the energy system of the future,’ said BMW CEO Oliver Zipse, referring to the support of the German Government with the National Hydrogen Strategy. ‘We expressly welcome the various initiatives. For road traffic, an expansion of the infrastructure is now required, which takes into account the needs of both commercial vehicles and cars. Depending on how the general conditions develop, hydrogen fuel-cell technology has the potential to become another pillar in the BMW Group’s drive portfolio.’

Zipse added to his feelings about hydrogen technology at BMW’s annual general meeting (AGM), saying: ‘We continue to invest consciously in various technologies. This includes hydrogen fuel-cell technology. Ultimately, this is the most intelligent and fastest way to effective climate protection.’

Outside influence

The BMW Group also has experience with the use of hydrogen outside of drive development. The company has always followed the path of resource-saving and sustainable production of vehicles and is continuing this path with the use of hydrogen.

The carmaker’s Leipzig plant has been operating hydrogen-powered industrial trucks since 2013. The use of innovative hydrogen technology offers the site the long-term opportunity to further promote decarbonisation. 

‘With the National Hydrogen Strategy and the billions promised to be implemented in the economic stimulus package, the Federal Government has sent a clear signal,’ said Peter Altmaier, Federal Minister for Economic Affairs and Energy, while visiting the Leipzig plant recently. ‘We will shape the framework and actively support the economy in the development and use of hydrogen technology. However, the marketable implementation of hydrogen technologies lies with the companies. And I am therefore very happy that there are many companies like BMW in Germany that have the vision, the courage and the innovative strength to make this technology a market success.’

Vehicle details

The system performance of the BMW i Hydrogen NEXT comes to a total of 275kW (374hp) according to the carmaker.

‘With the drive system of the BMW i Hydrogen NEXT, the fuel-cell system generates up to 125 kW (170hp) of electrical energy, which is obtained from the chemical reaction of hydrogen and oxygen from the air,’ says Jürgen Guldner, head of BMW Group Hydrogen Fuel Cell Technology and vehicle projects. ‘This means that the vehicle only emits water vapour.’

The electrical converter, which is located below the fuel cell, adjusts its voltage level to that of the electrical drive and the power buffer battery. This is fed by both the kinetic energy from braking and the energy of the fuel cell. 

The vehicle itself houses two 700 bar tanks, which together hold six kilograms of hydrogen. ‘This guarantees long ranges in all weather conditions,’ Guldner adds. ‘The refuelling process only takes three to four minutes.’

The Convertible Market

At a time when more and more SUVs are launched, a car without a roof was once the norm, as all cars were built without any roof or sides. This was quite often to reduce weight and ensure horseless carriages could maintain forward momentum due to a lack of power. As available engine power increased, roofs and sides were added to cars.

Production of convertibles increased again after the World War II as a result of American soldiers in France and the UK experiencing small roadster cars not available in the United States. These roadsters included the MG Midget and Triumph Roadster. To compete through the 1950s and 1960s, and service the demand of returning GIs, car manufacturers in the United States manufactured a broad range of convertible models during the 1950s and 1960s.

During the 1970s, the popularity of convertibles was severely reduced by the increased speeds on roads and new crash safety standards, However, this did not stop manufactures producing new convertibles for global markets including the Triumph Stagg, TR6 and TR7, Lotus Elan and Seven S4, Alfa Romeo Spider, Chevrolet Corvette C3, MGB, Porsche 914, Fiat 124 Spider, Morgan 4/4 and Volkswagen Beetle convertible.

Reinvigorating the segment

In 1989, Mazda launched the Mazda MX-5. Over the years this has become the best-selling convertible with over 1 million units sold and creating something of a gold rush in the development of new convertibles. From humble Ford Escorts to luxurious Rolls Royce Dawns, the majority of manufacturers have marketed a convertible during their history.

The contraction

Today, demand in the new market for convertibles is waning once more. The SMMT’s registration data shows registrations falling consistently. As a percentage of the total market, convertibles stood at 4.4% in 2007 and by 2019 had fallen to just 1.6%. 

Convertible percentage of market yearly graph

The debate today, is whether we have fallen out of love with the convertible with too many products no longer evoking dreams of open top sports cars unabated by traffic congestion and variable speed limits.

During the early 2000s, manufacturers developed folding solid roof structures as the answer to the many negatives of the soft-top design, especially road and wind noise together with safety and security. Unfortunately potential buyers were not impressed in the long run by these new seemingly practical introductions. Although solving some issues, they created particularly impractical vehicles when the roof was down due to the roof occupying the majority of the boot.

The future of convertibles

Convertibles in the UK are becoming niche. Over the last 14 years SMMT data shows the convertible segment is no longer a high volume selling segment. Volumes are falling significantly, from over 104,000 registrations in 2007 to under 36,193 in 2019. The 2020 year to date figure is significantly affected by the Covid-19 Lockdown.

Convertible registrations yearly graph 2006-2020

Residual values

Over the last 7 years, the overall trend for convertible residual values (RV) has been rising. From 2013 to 2020, RVs have risen by 7.2 percentage points for models up to two years old. The up to five years old models are up by 4.6 percentage points and a notable 5.3 percentage points increase for models eight years and older. Clearly as volumes in the used market decline, residual values are becoming stronger. Moreover, the last 12 months shows a greater level of increase than would normally be expected in this short period suggesting, at least in the used market, there is still demand for convertibles. 

Convertible RVs (standard mileage) yearly graph 2006-2020

In the past year, models up to two years old have increased 1.8 percentage points, up to five years old declined 0.1 percentage points whilst models over eight years increased 2.5 percentage points. These are exceptionally strong increases, especially considering when the data was drilled down to see that nearly all the increases have been in the last three months.

Coming out of lockdown, logic might suggest the last thing on people’s minds would be buying a convertible. However, lockdown has created a pent up demand for all things fun and enjoyable, with the need to enjoy the remainder of the summer sun now more desirable than ever. Lockdown has, for some, created a greater feeling of living for today. However a significant improvement in new convertible registrations is not likely in the short term.

The Van’s Headlights: Mercedes-Benz Vito

Whilst some manufacturers suggest their vehicles are the backbone of Britain, others mention fitting everything and some always work with you, Light Commercial Vehicles really have delivered during the pandemic. In this month’s edition of The Van’s Headlights, we consider the merits of the Mercedes-Benz Vito 114CDI Long 2.1-litre 136bhp Euro 6 RWD van (2015 – 2019).

The Glass’s Commercial Vehicle Editorial Team continue to scour the market in search of models offering the highest levels of versatility and durability whilst adding their experience to spot the best value for money available.

The Mercedes-Benz Vito

The first generation Mercedes-Benz Vito launched in 1996. Built in Spain, it heralded an initial foray into medium sized vans for the German manufacturer. Available in a single body length, power came from a choice of 140PS petrol or 120PS diesel front wheel drive (FWD) powertrains.

The second generation Vito was available between 2003 and 2014. With three lengths – Compact, Long and Extra-Long – power for the range came from a rear wheel drive (RWD) 2.1-litre engine for the 109CDI 95bhp, 111CDI 109bhp and 115CDI 150bhp models and a 3.0-litre V6 diesel engine for the 120CDI 221bhp model. As well as the panel van, a Dualiner crew van and a Traveliner 9-seater was also available. This range featured improvements to design, safety, performance and comfort and was the first van range to adopt Adaptive ESP® as standard for a smoother ride in all conditions.

The Vito received a facelift in 2010 changing the model naming to 110CDI, 113CDI and 116CDI. Improvements included restyled front and rear lights, front bumpers and grille and also enhancements to the suspension. Internally, there was improved instrumentation, steering wheel, and cabin materials. Improving fuel consumption and emissions, BlueEFFICIENCY diesel engines adapted from the Sprinter range were also introduced at this point. New drivetrain options included 4MATIC four wheel drive and a 5-speed automatic. The Vito E-Cell 36kW all-electric van was also revealed in 2010.

Introduced in 2015, the third generation Vito launched in North America for the first time as the Metris. Offered with new standard features including tyre pressure monitoring, Crosswind Assist, Active Park Assist and a 6-speed manual gearbox. New price listed options included the 7G-Tronic seven-speed automatic gearbox, LED indicators, LED daytime running lights, LED low beam headlamps and main beam cornering lights. At this point the Traveliner was also renamed the Tourer.

The renamed 109CDI and 111CDI manual transmission models were available as FWD only and powered by the 1.6-litre Renault derived diesel engine fitted to Renault’s Trafic range. The 114CDI, 116CDI and 119CDI models were RWD only and powered by Mercedes-Benz own 2.1-litre BLUETEC diesel unit, available with either manual or automatic transmissions. Euro 6 compliant engines were launched in 2016.

Further updates took place in 2019. Dedicated ‘Pure’, ‘Progressive’ and ‘Premium’ trim levels launched across the range, whilst a halo ‘Sport’ model was introduced on the 116CDI and 119CDI only. The production 41kW eVito electric van was also launched.

In early 2020, Mercedes-Benz launched a facelift for Vito, limited visually to a new radiator grille and interior detail changes. Under the bonnet, the 2020 Vito included new fuel efficient WLTP compliant 6-speed 1.7-litre engines for the FWD models. The RWD models are powered by an all-new 9G-Tronic 2.0-litre unit. Beyond this there are additional safety technologies including a digital rear-view mirror, autonomous emergency braking, ‘Distronic’ active cruise control and a new air suspension system.

A practical evolution

Andy Picton, Glass’s Chief Commercial Vehicle Editor recommends the Mercedes-Benz Vito as “a practical van with a varied number of configurations and payloads.”

Andy added, “Over its near 25-year life, the Mercedes-Benz Vito has continued to evolve, always a leader when it comes to safety and technological improvements. The Vito has a wide choice of models and is currently the only manufacturer to sell their medium sized van range in front, rear and all-wheel drive”.

Mercedes-Benz Vito 114CDI Long 2.1-litre 136bhp Euro 6 RWD van (2015 – 2019)

The Mercedes-Benz Vitorange

  • Three van body lengths, Compact, Long and Extra-Long
  • One roof height
  • Two wheelbases
  • Front, rear and all-wheel drive
  • Five power ratings
  • Manual and 7G-Tronic automatic gearbox
  • Three gross vehicle weights
  • Diesel and electric power
  • One trim level
  • Bodies include
    • Panel van
    • Crew Van
    • Tourer 9-seater
  • Euro 6 engine line up

Standard specification on the Euro 6 Vito included cruise control with Speedtronic variable Speed Limiter, multifunction steering wheel with trip computer, and high-resolution 5.8-inch TFT display Audio 15. This version of the vehicle also has Bluetooth®, USB and aux-in port, iPod® interface, and SD memory card slot.

Safety features included Adaptive ESP®, Adaptive Brake Lights, Attention Assist, Crosswind Assist, driver and passenger airbags, Hill-Start Assist, reflection-style headlights with daytime running lights, Rescue Assist QR codes, and a Tyre Pressure Monitoring System.

The recommended 2018 Vito benefitted from Mercedes-Benz smooth 2.1-litre BlueTEC engine fitted to all rear wheel drive models of this version.

Mercedes Benz vito dimensions table

The SEAT Ibiza: 36 years young

Introduced at the Paris Motor Show in 1984, the SEAT Ibiza reached UK shores a year later. Initially it met with a lukewarm reception, and was viewed as being at the budget end of the market competing with Hyundai’s Pony, Lada’s Riva, Skoda’s Estelle and FSO’s Polonez. Over time, the perception of the Ibiza has changed. SEAT continues to update and renew the Ibiza range with around six million units sold worldwide so far.

History of the SEAT Ibiza

The Ibiza was the first fully independent model offered by SEAT after a long collaboration with Fiat, making the SEAT Panda, later being renamed the SEAT Marbella essentially a Fiat Panda.

Named after the Balearic Island, the Ibiza launched with excellent levels of specification including; power locking doors, electric windows and sunroof. These items were highly regarded at the time for a small car. The styling was by Giorgetto Giugiaro’s Italdesign, and prepared for production by the German manufacturer Karmann. The powertrain was developed in collaboration with Porsche and despite Porsche’s direct involvement, SEAT had to pay royalties to put the ‘System Porsche’ inscription on the engine blocks and down the flanks of the car.

The Mk1 base model’s UK list price of around £4,995, was very competitive even in the mid-eighties. The competitive pricing, design and engines proved to be a winning formula allowing SEAT to sell 1,342,001 units of the first generation over 10 years of production. In a final swansong in 1992, the Mk1 Ibiza was the official car of the Barcelona Olympics.

In 1986 Volkswagen became the majority shareholder in SEAT, introducing enhanced parts and production processes to the Spanish brand. In 1993, the Mk2 Ibiza launched, styled again by Giorgetto Giugiaro at Italdesign, whilst also benefitting from Volkswagen’s modified MK3 Golf platform. Engines included the 2.0 litre 150PS unit from the Golf GTi making its debut in the Cupra version. This gave SEAT an advantage over its stablemate, the Volkswagen Polo, which could not accommodate this engine. Additionally, diesel TDi units from Volkswagen made for some very fast and frugal versions. Mk2 production ended in 2002.

Designed in house by Walter de’Silva, the Mk3 launched in 2002 was a more overt evolution. Growing in size, it was now capable of comfortably accommodating five adults whilst also gaining more boot space. Only produced for six years, this generation featured the biggest step change in design, dynamics and features. The Cupra was a notable addition to the range including a 1.9 TDi 160PS / 330 Nm diesel variant, with excellent driving dynamics.  What Car? Supermini winner for three years running showed that the Ibiza Mk3 was a serious contender in the Supermini sector.

In September 2005, Luc Donckerwolke was appointed SEAT Design Director. Previously he was responsible for the 2001 Lamborghini Diablo VT 6.0, 2002 Lamborghini Murciélago and 2004 Lamborghini Gallardo. Bringing strong design credentials to the brand, the 2008 Mk4 Ibiza launched with sharper styling and a new estate model named ST in 2010. This was a notable volume benefit for the range, especially as small estate cars continue to be a rather uncommon offering in UK model line-ups. The Mk4 ran successfully until 2017.

The Mk5 launched in 2017. It was a gentle but effective update with all dimensions changed, yet it kept much of the styling cues from the previous generation. The specification levels and dynamics are among the highest in the Supermini sector.

Residual values

The Ibiza has represented excellent value for money since its launch 36 years ago. This value for money also extends to the used market. Expressing average residual values as a percentage of the original cost new price it is possible to compare the Ibiza with the Supermini segment as a whole. The Ibiza sits just below the average, which considering the segment includes some of the UK’s most popular cars such as the Ford Fiesta and the Volkswagen Polo, we should conclude that the Ibiza’s residual value performance is very good, whilst from a consumer’s point of view, it offers excellent value for money.

Seat Ibiza 3 year old average RV percentage graph