XC40 strongly resembles Volvo family members

PHOTO GALLERY: Volvo XC40 spy photos








PHOTO GALLERY >>

Volvo’s XC40 baby crossover won’t be all that different from its larger siblings.

Despite heavy camouflage, key elements of Volvo’s latest design language — an enlarged, upright grille, headlights featuring Thor’s hammer and tall taillights — are evident in an XC40 mule spotted by spy photographers in Europe.

The XC40 is expected to round out the automaker’s crossover lineup.

The spy photos of the XC40 look similar to those taken of the next-generation XC60 crossover in December. Those photos show the midsize XC60 taking cues from the flagship XC90.

The XC40 is expected to debut this fall and compete in the fast-growing compact crossover segment.

It is the first of three compact entry Volvo models being developed jointly with Volvo’s Chinese owner, Geely, on a front-wheel-drive platform called the Compact Modular Architecture, or CMA.

In May, Volvo showed two CMA concepts, the 40.1 and 40.2. The spy photos indicate the XC40 will share some slight similarities with the 40.1.

Mercedes may join U.S. midsize-pickup party

Fall and rise
U.S. midsize pickup sales

2000: 1,061,148

2005: 688,703

2010: 265,278

2013: 244,834*

2016: 448,398

*Modern-day low

Source: Automotive News Data Center

Nothing in the auto industry drives product planning like somebody else’s success.

The latest example: midsize pickups. The segment, whose U.S. sales between 2000 and 2013 had withered 77 percent, is now undergoing a resurgence in sales and an accompanying product blitz with old and new nameplates.

Just last week, the head of the vans division at Daimler AG told reporters in Germany that the automaker is considering its newly developed Mercedes-Benz X-class midsize pickup for the U.S. market.

“In the past year, the midsized truck market has come back a bit. General Motors is launching a midsized truck. We are watching developments very closely, and we will take a decision at the appropriate time,” Mercedes-Benz Vans boss Volker Mornhinweg said. The X class is built for Mercedes-Benz by Nissan Motor Co. in Spain. It is based on the Nissan NP300 Navara and Renault Alaskan. Mornhinweg said a U.S. production site for the pickup was also under consideration.

If the X class is green-lighted for the U.S., by the time it finds its way to U.S. dealerships it is likely to find the competition much stiffer than today.

Sales in the midsize pickup segment have grown 83 percent since its recent nadir in 2013 of 244,834 units, with much of the rebound coming from GM’s redesigned Chevrolet Colorado/GMC Canyon. Last year, the GM twins accounted for about a third of the segment’s 448,398 sales, but continued to trail the long-running Toyota Tacoma, which has held the segment crown since 2005. The Tacoma took half of the segment’s sales in 2015, and 43 percent in 2014.

The Nissan Frontier racked up about 87,000 U.S. sales in 2016, and is expected to be redesigned this year for the 2018 model year. In January, the only other current player, the recently redesigned Honda Ridgeline, was named North American Truck of the Year.

In late 2018, Jeep will enter the segment with a long-awaited pickup based on the Wrangler. And in 2019, Ford will field a competitor in the segment for the first time since 2011 when it brings the Ranger back to the U.S.

Midsize pickups largely fell out of favor with consumers and especially automakers in large part because their prices had come to rival full-size pickups.

But as full-size pickups have continued to grow in size and price, the smaller midsize pickups are getting another look from consumers, says Stephanie Brinley, senior automotive analyst with IHS Markit.

The reason for the product resurgence in the midsize market is “because people are paying for it, and because there’s a bit of space for something smaller than a full-size pickup,” Brinley explained. “I think there’s a limit to the level of growth, though. I do think we’ll see a resurgence, but I don’t think the segment is going to get back all the way to where it was before.”

Reuters contributed to this report.

Fall and rise
U.S. midsize pickup sales

2000: 1,061,148

2005: 688,703

2010: 265,278

2013: 244,834*

2016: 448,398

*Modern-day low

Source: Automotive News Data Center

The millennials are coming

During the past decade, the rise in car-sharing services, urban living and college debt payments led to doubts about millennials’ desire to ever own a vehicle.

Not anymore. Millennials make up the fastest growing segment among vehicle buyers and likely will represent about 40 percent of the U.S. new-vehicle market by 2020.

Last year, millennials — also known as Generation Y — purchased 4.1 million vehicles in the United States, accounting for 29 percent of the market, according to data from J.D Power and Associates’ Power Information Network. They now drive changes in automotive marketing and product features and are likely to influence future automotive developments more than any generation before them, experts say.

Because of the Great Recession, millennials entered the market later than prior generations. As the U.S. economy hit the depths in 2008-09, millennials were having a difficult time finding jobs, and the cost of insurance was rising rapidly, said Mustafa Mohatarem, chief economist for General Motors.

But as the economy improved, millennials started buying cars, Mohatarem said: “What we see is the share of new vehicles being bought [by millennials] is increasing significantly.”

Jeff Schuster, senior vice president of forecasting with LMC Automotive in Troy, Mich., says millennials have shaken off the effects of the recession.

“The millennial was the buyer that was first pushed out of the market with the recession,” Schuster said. “They were late coming back, but they have come back. We are past that issue.”

New-vehicle purchases by millennials — the 75 million-plus group born in the United States between the early 1980s and late ’90s — are likely to grow at a faster rate than any other age group in the coming years. Since 2011, their share of U.S. retail new-vehicle sales rose nearly 9 percentage points, compared with baby boomers, whose share declined 6 percentage points during the same period, according to J.D Power.

“If you combine Gen Z and Gen Y, they are 30 percent now, a massive increase from just 20 percent in 2011,” said Thomas King, vice president of PIN operations at J.D. Power. Gen Z is the post-millennial age group.

Growing demographic

Millennials are a growing part of the U.S. light-vehicle retail market.
Share of retail sales
201120122013201420152016
Gen Z0%0%0%0%1%1%
Gen Y (millennial)20%22%24%26%28%29%
Gen X24%24%24%24%25%25%
Baby boomer42%41%39%38%37%36%
Pre-baby boomer14%13%12%11%10%9%
Retail sales (in millions)
Gen Z00000.10.2
Gen Y (millennial)22.633.544.1
Gen X2.52.83.13.33.53.5
Baby boomer4.34.85.15.25.25.1
Pre-baby boomer1.51.61.61.51.41.3
Source: J.D. Power PIN data

Need, not want

Unlike their wealthier parents — Gen X’s born in the mid-’60s to late-’70s and baby boomers born after 1946 — millennials are buying vehicles because of need rather than want, according to a study by the online shopping site Autotrader. They are graduating from college, landing jobs, buying homes, getting married, and some are starting families.

Between 2010 and 2015, the share of vehicle sales for buyers under 35 has grown about 3 percentage points for each point of growth in the market, said GM’s Mohatarem: “So when you are talking about a market of 17.5 million, that is a big number.”

The biggest buying segment is still 50- to 69-year-olds, who buy more than 35 percent of all vehicles — but they have been purchasing fewer cars in the past five years, Mohatarem said.

Millennials are largely buying entry compacts and some SUVs and crossovers. “Because the buyers are younger, typically they have lower incomes and lower credit profiles. They tend to skew towards buying compact cars — 18 percent compared to 14 percent for the industry in total,” King said.

Mohatarem said that at GM, millennial sales rose to 19 percent of the giant automaker’s sales in 2016, up from 14 percent in 2010.

Millennials purchase vehicles below the $34,000 average transaction price at GM, he said: “When you look at the vehicles in that market, our Chevy Spark is just under $15,000 to the Chevy Equinox that can stretch to $30,000 — that seems to be the sweet spot.”

But give them time. “They are shifting from cars towards SUVs,” King said. “That makes sense because the older millennials are changing their lifestyles, and they are responding and making that shift rapidly.”

AutoNation results

According to AutoNation, the country’s largest public dealership group, Toyota captured 19 percent of AutoNation’s millennial sales through last September, followed by Honda with 15 percent and Ford with 14 percent. The Toyota Corolla, Honda Civic and Honda Accord were the top-selling vehicles, according to AutoNation.

Kim McCullough, vice president of marketing at Jaguar Land Rover North America, said millennials are moving into the premium segment. They accounted for about 18 percent of U.S. premium sales last year, up from 10 percent in 2011. In the U.S., 25 percent of all sales were premium vehicles, she said.

McCullough said conquesting buyers is the “lifeblood” for both Jaguar and Land Rover, and millennials are a crucial part of JLR’s continued quest to become a top five luxury brand in the U.S.

Reaching out to millennials is important for all brands in the current sales plateau, experts say.

“Now in an environment where you don’t see as much sales growth, you have to think about every opportunity that you have and potentially be aggressive to get those consumers,” King said.

Jaguar and Land Rover are both trying to grow sales in the United States with more affordable, smaller and youthful vehicles. In the past year, Jaguar launched the compact XE sedan and its first crossover, the compact F-Pace. Land Rover’s new smaller SUV, the Discovery, goes on sale in late spring.

Half of Land Rover and Range Rover buyers are between the ages of 20 and 48, McCullough said. With the launch of the XE, the number of buyers under 35 has “doubled for the brand as a whole.”

Shopping used cars?

Used cars traditionally have been an alternative to new cars for entry buyers, but they have been scarce because of the dip in U.S. automotive sales during the recession — and, with supply short, they’re expensive.

But as more used vehicles enter the market this year, millennials may decide that perhaps a 3-year-old SUV is a good alternative to the new one they covet. Adding to the pressure is the rise in new-vehicle prices.

Rather than stretch the budget to buy a new SUV or crossover, now millennials “may find themselves in a vehicle that is a few years old with a warranty,” King said.

He dismisses the notion that millennials are more interested in ride-sharing services such as Uber and Lyft than car ownership: “It is a hot topic. I think in respect to the interest level, the need for transportation is similar to what it has been in similar generations.”

Michael Aron, senior manager of market intelligence for Nissan North America, agrees: “There is a lot of hype about millennials and interest in alternative mobility solutions and that the car market is dead because the future looks like shared car and taxi sharing like Uber and so forth.

“The main thing millennials are limited by, up to their 30s, is budget.”

“The millennial was the buyer that was first pushed out of the market with the recession. They were late coming back, but they have come back. We are past that issue.”
Jeff Schuster

LMC Automotive

‘Generational thing’

JLR’s McCullough said some millennials even put off getting a driver’s license. But she attributes that to a “generational thing.” A baby boomer herself, McCullough recalled rushing off to get her driving permit “as soon I could” because it was “freedom, woo-hoo!”

“There were so many people saying millennials wouldn’t be interested in buying cars — the difference is they aren’t interested in doing it right away,” she said.

But they are different from the baby boomers, experts say.

“What is important to them is different because it is such a large generation and spanning quite a difference in age and life stage. There are a lot of subgroupings in that generation as well,” said LMC’s Schuster.

“It is important that the industry addresses all of those.”

Price is probably the most important factor for millennials. Schuster said that, unlike their baby boomer parents, millennials measure vehicle affordability by the monthly payment rather than the total purchase price.

“The millennial is not worried about “If I spread it across 84 months, it could cost me a lot more interest,'” Schuster said.

GM also finds that more millennials buy rather than lease cars. “I think it is more that they make good cost calculations on what is a better option for them,” Mohatarem said.

Subsegments differ

Subaru sees two distinct groups of millennials: younger buyers who are looking for their first new car and an older group that’s starting a family and/or buying a home. Indeed, Subaru’s marketing for the redesigned Impreza compact is to a group it calls “young matures, folks that are still early in life,” said Dave Sullivan, the brand’s marketing manager. “They are a bit more pragmatic than you might expect someone of that age to be.”

Subaru forecasts half of the buyers of the new-generation Impreza that went on sale in December will be under 45 and a third will be millennials.

“One of the things that struck us talking to younger customers is they are looking for long-lasting cars, and in the family formation, they are focused on safety,” Sullivan said.

Nissan’s Aron said capturing millennials means more than just bringing in more sales. “Our equity lies in being a more bold and provocative brand.”

“Most people, and the younger generation in general, are stressed out by driving, increasing commute times, increasing traffic situations,” he said.

The digital generation

Marketing to millennials also is changing. TV is of less importance. Social media, with new sites and apps popping up at a rapid pace, is far more relevant, automakers said.

Autotrader found that millennial vehicle buyers do 61 percent of their research and shopping online and just 12 percent visiting dealerships. “Millennials feel the Internet is four times more helpful during the shopping process than TV or newspapers.”

And millennials like communicating through images more than older groups, Autotrader said.

JLR tried to capitalize on the millennial taste for photos and videos during last year’s multicity Art of Performance Tour and allowed participants to test drive cars. Using in-car video technology and special effects, videos were created for participants to post on social media.

“What we did is the best encapsulation to reach this new audience, tapping into … millennials’ desire for virtual content and making those videos that are shareable,” McCullough said.

And 37 percent of the tour participants were 25- to 32-year-olds, she said.

“You have to take chances, and you have to learn. It is changing so fast with things like Snapchat that weren’t on the radar six months ago,” McCullough said. “You have to dedicate some of your budget to do that and learn.”

Luring more millennials will indeed take time. As Nissan’s Aron puts it, it will be a five- to 10-year “assault on millennials.”

“You can’t boil the ocean all at once, so we are trying to leverage our brand image with our investment in connective services and leadership with electric vehicles like the Nissan Leaf.”

Lease vs. buy

According to a new Edmunds study, about 32 percent of millennials who bought a vehicle last year opted to lease, up from 21 percent in 2011.

Millennials were the biggest group of lessees with a household income under $50,000, Edmunds said.

“Leasing hits a sweet spot for millennials — they can enjoy the benefits of owning a new vehicle at a low price point with the latest features they crave,” Jessica Caldwell, an Edmunds analyst, said in a release. “If automakers make a positive first impression with this influential group, they have a great opportunity to build lasting relationships as brand loyalty rates are much higher among shoppers who lease vs. buy.”

Lessees save an average of $120 per month leasing rather than financing, and the terms average 36 months, Edmunds said. Last year, the average period for financing was 69 months.

When millennials do finance, it’s for a longer term, generally 64 months — which AutoNation says is the average length of most of its buyers’ contracts.

But if interest rates rise and residuals are under more pressure, leasing may become less attractive to millennials.

“If credit were to tighten, it could put pressure on millennials, which affects the market,” Schuster said.

Nevertheless, J.D. Power forecasts that millennials’ leasing rates will rise “as they get a little older and a little bit wealthier,” said King.

The segment will grow in both purchasing and leasing, he adds: “They are big enough that they cover all bases.”

Can Toyota stave off CarPlay, Android Auto?

DALLAS — With the launch of the 2018 Camry this summer, Toyota is rolling out an upgraded infotainment system with features such as dynamic traffic information and high-speed wireless Internet connections. But what really makes the system stand out from the rest of the industry is that it still doesn’t accommodate Apple CarPlay and Android Auto.

Toyota remains the only major global automaker with no plans to incorporate the smartphone integration interfaces from Apple and Google into its infotainment systems.

Toyota says its recently upgraded Entune 3.0 infotainment and app suite is a better alternative for the brand and replicates many of the features and applications in the Apple and Google products, but with better integration. Its Lexus marque uses a version called Enform.

“It’s our job as an auto manufacturer to have an engaging user experience, whether it’s how the car feels when you’re behind the wheel or how to use the center stack and engage with smartphone applications,” said Sandy Lobenstein, vice president of connected strategy for Toyota Motor North America.

“Yes, there’s risk,” Lobenstein conceded.

It’s not entirely unusual for Toyota to march to the beat of a different drummer, as it has done with hybrids and hydrogen fuel cells. But some analysts say Toyota may be marching in the opposite direction of consumers by turning its back on CarPlay and Android Auto, which transmit apps and imagery from a driver’s smartphone onto a vehicle’s touchscreen.

High stakes

The stakes are high for Toyota, which has long enjoyed a sterling reputation for quality and fierce loyalty among its customers but risks losing favor if its infotainment offerings can’t keep up with what consumers expect. Fussy infotainment units have dragged down quality scores for some auto brands, and CarPlay and Android Auto are emerging as popular solutions for bringing the smartphone’s up-to-date entertainment, messaging and navigation apps more seamlessly into the car.

“Toyota is definitely the odd man out,” said Roger Lanctot, an associate director at Strategy Analytics, a technology consulting and market research firm.

Lanctot said he respects Toyota for trying to develop a platform that integrates its own hardware and software with third-party apps, but he doesn’t think it’s going to be able to hold off Apple and Google for long.

“The problem is that the auto industry is ruled in many ways by marketing and demographics, so it’s going to be difficult for Toyota to stand their ground on this,” he said. For example, Lanctot’s son recently bought a Chevrolet Cruze in part because of its Android Auto integration.

Stephen Baker, a vice president and analyst at the market research firm NPD Group, said keeping up with the pace of smartphone technology requires much greater scale than even Toyota has. “While I suspect that Toyota will be able to hang on for a while, sooner than later they will face challenges in getting developers to build for their platform and fall behind in the smart-car race.”

Over 200 car models from nearly every major brand offer CarPlay and Android Auto, according to Apple and Google. Mazda is another holdout along with Toyota.

For years, carmakers were reluctant to cede infotainment real estate in their vehicles to the two tech giants, for fear that it would dilute their brand identity and limit potential revenue from such things as in-car purchases and data gathering.

Toyota’s Lobenstein said those considerations are still valid today.

“We spend billions of dollars developing brand identities, and those brand identities are pervasive in the exterior designs of our vehicles, on the interior designs of our vehicles,” he said in an interview.

“The center stack, where the radio is, you can see that from the two front seats and the three back seats and sometimes if you’re in an SUV, from the third row,” Lobenstein added. “That’s prime real estate for OEMs to communicate their brand image.”

Privacy concern

Another concern is data privacy and security, he said. Toyota can control that through a proprietary system and app suite “where we control the environment, we control the pipelines, we develop the applications.”

Entune 3.0 uses an open-source platform called Smart Device Link for third-party applications such as Pandora radio, Slacker, Facebook and Yelp. SDL was introduced by Ford and opened up to other automakers to develop alternatives to the CarPlay/Android standards. But the SDL alliance has attracted few other partners, and Ford has since decided to make its Sync 3 infotainment compatible with CarPlay and Android Auto for all 2017 model vehicles.

Colin Bird, a senior auto tech analyst at IHS Markit, said he doesn’t think Toyota’s approach is a deal breaker yet, given its reputation for quality and reliability. “I think those are things that matter more” among auto buyers, he said.

And he thinks the SDL platform has potential to be better integrated with a vehicle’s existing controls and offer a greater range of “car-centric” applications, such as multiple navigation choices rather than just one with Apple and Google.

At the end of the day, he said, consumer acceptance will depend on how the software and the hardware come together.

“What really matters also is how carmakers are designing these infotainment systems,” Bird said. “If people just get totally fed up — they think the voice recognition doesn’t work well and all this stuff is bad — they’re probably just going to move into the Apple or the Android environment.”

That, he said, could be as simple as doing what a lot of car owners already do: use a third-party cradle to attach their smartphone to the dash.

Ferrari beast, Porsche wagon to star in Geneva

Geneva debuts
PRODUCTION VEHICLES

  • Ferrari 812 Superfast
  • Ford Fiesta
  • Honda Civic Type R
  • Italdesign supercar
  • Range Rover Velar
  • Lexus LS 500h
  • McLaresupercar
  • Mercedes-Benz E-class cabriolet
  • Mitsubishi Eclipse Cross
  • Porsche Panamera wagon
  • Subaru Crosstrek
  • Techrules supercar
  • Volkswagen Arteon
  • Volvo XC60

CONCEPT VEHICLES

  • Hyundai Tucsofuel cell concept
  • Mercedes-Benz X-class pickup
  • Pininfarina/Hybrid Kinetic H600
  • Pininfarina/Fittipaldi EF7 VisioGran Turismo

This year’s Geneva auto show will highlight a mix of supercars, everyday models and unexpected vehicles such as a Porsche station wagon and a Mercedes-Benz pickup.

Supercar highlights will include Ferrari’s most powerful series production car to date and a Chinese-backed potential rival to Tesla’s Model S.

Among everyday cars, Volkswagen brand will highlight its new flagship, the sleek Arteon. The latest Fiesta, Ford Motor’s European best-seller, gets its first show outing.

Range Rover, Volvo and Subaru will present new crossovers to boost their presence in a hot sector.

Ferrari

Ferrari’s 812 Superfast mid-front-engine sports car will be the brand’s most powerful series production car to date. It is an updated version of the F12 Berlinetta fitted with a larger version of that car’s naturally aspirated V-12 engine. The upgraded 6.5-liter engine makes 798 hp and pushes the car to a top speed of 211 mph, with acceleration from 0 to 62 mph in 2.9 seconds.

Ford

The Fiesta that will be shown previews the U.S. version due this year. The car is Ford’s top-seller in Europe and the automaker has added advanced safety features such as adaptive cruise control and lane-keeping alert that are not yet common in subcompacts. The upscale equipment will help the Fiesta meet demand for advanced technology from customers downsizing from larger models. The Fiesta gets new variants to cater to a wider range of customers, including an upscale Vignale version, a high-performance ST-Line and an Active sporty trim line.

Honda

Honda will debut the Civic Type R, a high-performance version of its Civic hatchback, which will be sold in the U.S. for the first time. The car will be powered by Honda’s latest 2.0-liter VTEC turbocharged engine with its performance upgraded from the current Civic Type R’s 306 hp, although Honda is not releasing horsepower details ahead of the car’s show debut. Production will start in the summer at Honda’s U.K. factory. The production Civic Type R will closely resemble the concept unveiled last year at the Paris auto show.

Hyundai

Hyundai is expected to unveil a Tucson fuel cell concept that’s more advanced than the current Tucson fuel cell model. The concept will also showcase design cues for the next Tucson conventionally powered model.

Italdesign

Italdesign, Audi’s design and engineering subsidiary, will unveil a supercar priced at $1.6 million, plus taxes. The company’s new bespoke division, Italdesign Automobili, plans to build five examples of the two-seat carbon-fiber car. It has a 5.2-liter V-10 engine also used in top-end versions of the Audi R8 and can accelerate from 0 to 62 mph in 3.2 seconds. Italdesign Automobili plans to produce more one-off and limited-edition cars for collectors as the Italian design house, which Audi bought from Italian design legend Giorgetto Giugiaro and his son Fabrizio, seeks to increase business from outside Audi parent Volkswagen Group.

Land Rover

Land Rover will expand its Range Rover lineup with the Velar, a sporty crossover that will be a rival to the Porsche Macan. The Velar will slot between the entry-level Range Rover Evoque and the more expensive Range Rover Sport. The Velar is the first Land Rover to use Jaguar Land Rover’s D7A all-/rear-wheel-drive platform that underpins the XE compact sedan and F-Pace compact crossover sold by sibling brand Jaguar, according to reports.

Lexus

Lexus will show the LS 500h, the hybrid sedan version of its LS 500 flagship unveiled in January at the Detroit auto show. The LS 500h has the brand’s Multi Stage Hybrid System that can propel the car under electric power alone at speeds of up to 87 mph.

McLaren

McLaren Automotive will replace the 650S supercar that launched the British company’s on-road challenge to Ferrari nearly six years ago with a new, more powerful model to be revealed in Geneva. The two-seat coupe will form the heart of McLaren’s next Super Series car range, one up from the entry Sports Series but a long way from the million-dollar heights of the Ultimate Series.

Mercedes-Benz

Mercedes-Benz will complete the rollout of its redesigned E-class family with the E-class cabriolet, a four-seat convertible. Four Mercedes-AMG models will have their world premieres in Geneva: the E63 S wagon, AMG GT C Roadster Edition 50, C63 S Cabriolet Ocean Blue Edition and AMG Performance Studio Package-equipped C43 Coupe, known in Europe as the Night Edition.

Mercedes also will show two notable vehicles not planned for sale in the U.S.: the ultraluxury Mercedes-Maybach G650 Landaulet SUV, which will cost at least 500,000 euros (about $529,000 at current exchange rates) and be limited to 99 units, and the concept X-class midsize pickup, based on the Nissan Frontier.

Mitsubishi

Mitsubishi Motors is reviving the Eclipse name for a new entry in the compact crossover segment as it seeks to turn around its fortunes under Nissan, which bought a 34 percent controlling stake in its Japanese rival in October. The new vehicle will be called the Eclipse Cross in a nod to the Eclipse coupe that was sold in the U.S. until 2011.

Pininfarina

The Italian design house has two concepts lined up for Geneva: the Hybrid Kinetic H600 and Fittipaldi EF7 Vision Gran Turismo. The Fittipaldi EF7 is due to become the first production model for a new sports-car company fronted by Brazilian racing driver Emerson Fittipaldi. His company, Fittipaldi Motors, plans a limited run of the two-seat, carbon-fiber supercar, which is powered by a 600-hp, V-8 normally aspirated engine.

The H600 concept previews a potential rival to the Tesla Model S. The design house developed the H600 for Chinese-backed startup Hybrid Kinetic. Pininfarina described the car as an “eco-sustainable luxury sedan” but gave no details of its drivetrain before its show debut. Hybrid Kinetic is headed by billionaire Yung Benjamin Yeung, who founded China’s Brilliance China Automotive. His plan to build a car factory in Alabama by 2013 never materialized.

Porsche

The Panamera Sport Turismo, Porsche’s first wagon, is meant to appeal to customers looking for luxury, a sporty drive and practicality.

Porsche sees Europe is the main market for the wagon, based on the Panamera four-door, but it will also sell the wagon in the U.S. and China where wagons are less popular.

Subaru

Subaru’s new Crosstrek crossover will be based on the automaker’s new global platform that underpins the redesigned Impreza. The Crosstrek will incorporate some design elements from the XV Concept shown last year in Geneva, including similar taillights and a sporty, flowing side profile.

Techrules

Chinese startup Techrules will debut a supercar styled by the Giugiaros. The car has an aircraft-inspired three-seat cockpit design. It’s the production version of the 1,030-hp GT96 concept unveiled in Geneva last year. The car will be powered by a hybrid powertrain that uses a microturbine to generate electricity to charge a battery pack. The battery powers the motors that drive the wheels. The car can run on various fossil or gas fuels.

Volkswagen

Volkswagen brand’s new flagship, the Arteon, will replace the Passat-based CC. The Arteon will be roomier than the CC because of its longer wheelbase. VW brand chief Herbert Diess said in January at the Detroit show that the Arteon will launch in the U.S. next year. VW is also expected to show the production version of its T-Roc concept of a small crossover.

Volvo

Volvo continues its product offensive under Chinese owner Zhejiang Geely Holding Group with the new XC60. The midsize crossover is expected to take styling cues from the larger XC90, but is based on a more compact version of Volvo’s Scalable Product Architecture used on the 90 series vehicles. The XC60 is also likely to have a plug-in hybrid powertrain. It will go on sale this year.

Douglas A. Bolduc, Luca Ciferri, Nick Gibbs, Hans Greimel, Amy Wilson and Jack Walsworth contributed to this report.

Geneva debuts
PRODUCTION VEHICLES

  • Ferrari 812 Superfast
  • Ford Fiesta
  • Honda Civic Type R
  • Italdesign supercar
  • Range Rover Velar
  • Lexus LS 500h
  • McLaresupercar
  • Mercedes-Benz E-class cabriolet
  • Mitsubishi Eclipse Cross
  • Porsche Panamera wagon
  • Subaru Crosstrek
  • Techrules supercar
  • Volkswagen Arteon
  • Volvo XC60

CONCEPT VEHICLES

  • Hyundai Tucsofuel cell concept
  • Mercedes-Benz X-class pickup
  • Pininfarina/Hybrid Kinetic H600
  • Pininfarina/Fittipaldi EF7 VisioGran Turismo

MOBILITY REPORT: How to sell mobility services

Automakers are going all in on mobility, but it will take more than big investments to get new services off the ground: Companies and government agencies need to work together to ensure services work together and make sense, rather than just being a hodgepodge of shiny new things.

Automakers have been investing in start-ups and technologies outside of vehicle manufacturing in the hopes of growing their customer base. But experts warn these efforts could go to waste if consumers are faced with too many options that don’t work seamlessly with each other and with their lives.

In order for alternative transportation services to work, they have “to be better than owning a car,” said.

Sampo Hietanen, CEO of MaaS Global, a Finland-based company that helps customers find and connect the best short-distance transportation options.

Hietanen, speaking at the University of Michigan’s Mobility as a Service conference this month, said mobility services haven’t caught on yet because current offerings aren’t attractive enough to get people to ditch the idea of owning their “dream car.”

To make mobility services a viable business division, he said, automakers need to seamlessly combine the variety of transportation options available and provide them to consumers in a simple package.

Broader definition

In general, mobility refers to services that facilitate movement, from public transit to ride hailing to bike sharing. Companies have also used the term to define new automotive technologies, such as self-driving cars and cloud connectivity.

With the range of services that fall under mobility, streamlining offerings may not be so easy.

“A couple years ago, we began a journey to expand our business model to include a broader definition of mobility,” said John Kwant, Ford Smart Mobility’s vice president of city solutions, at the University of Michigan conference. “It’s going to be a wide range of transportation solutions from a wide variety of providers.”

Ford Motor Co. started the Ford Smart Mobility subsidiary in March 2016 to commercialize alternative transportation technologies. Since it launched, Ford Smart Mobility acquired the shuttle service Chariot, partnered with bike-sharing company Motivate and, earlier this month, invested $1 billion in artificial intelligence company Argo AI.

General Motors has been making similar efforts, investing $500 million in ride-hailing company Lyft in January 2016 and acquiring self-driving startup Cruise Automation for more than $1 billion in March 2016. The automaker also launched its own car-sharing service, Maven, and in January, introduced the Cadillac Book subscription service, which gives customers access to Cadillac vehicles for a monthly fee of $1,500.

Making money

All of these investments seem like they have potential to work. But the problem with merely offering lots of different pieces of the mobility puzzle is that automakers run the risk of merely acting as a trip planner. That holds no value to customers who have unlimited access to the Internet and mobile devices, Hietanen said. Instead, companies need to create an infrastructure that provides the fastest and most dependable way to get from point A to point B.

But they won’t be able to manage that level of efficiency on their own or expect to dominate the market.

“Nobody is leading it, not even the government can do it alone,” Hietanen said. “The only way of making this ecosystem work is if every part of this system is competitive.”

Companies will also have to agree on standard sources of transit, like ride sharing, carpooling and bike sharing, to avoid overloading streets and bike lanes with services that can’t coordinate with existing traffic, he said.

This uniformity will make mobility services easier to scale and reach more customers, similar to cellular service providers, Hietanen said. It also allows for companies to charge for mobility like a cellphone plan, structuring monthly packages for consumers with varying needs.

“I would say mobility as a service is much more scalable,” he said. “The pieces that cost a lot, they exist everywhere. As long as we get to plug in, we’re good to go.”

Honda settles for an 80-mile EV

Limited range
Honda’s Clarity Electric arrives on the market this year with one competitive disadvantage.

2017 Chevy Bolt: 119 mpg-e fuel economy*, 238-mile range

2017 VW e-Golf: 119 mpg-e, 125-mile range

2017 Hyundai Ioniq Electric: 136 mpg-e, 124-mile range

2017 Nissan Leaf: 112 mpg-e, 107-mile range

Honda Clarity Electric: N/A, 80-mile range

*Combined city/highway rating, based on energy equivalent of 1 gallon of gasoline

Source: EPA

LOS ANGELES — In a surprise twist that will challenge Honda’s carefully cultivated reputation as a leader in green vehicles, the Clarity all-electric model debuting this spring will have only about 80 miles of range on a single charge, Automotive News has learned.

That figure puts the Honda well behind the Chevrolet Bolt’s 238-mile range and nearly every other battery-electric vehicle on the market. And it leaves Honda to tackle a tough problem: how to build a cutting-edge brand image around its Clarity line of electrified vehicles with a battery EV whose range barely tops that of a Nissan Leaf circa 2010.

The shortfall is not a failure of its engineering, Honda says, but the unavoidable result of its choices.

The automaker defined two parameters that were nonnegotiable: the physical size of the Clarity platform — which the EV shares with the Clarity plug-in hybrid and hydrogen fuel cell models — and the cost of the battery-electric version, which is expected to start around $35,000 before any tax credits or incentives (pricing hasn’t been announced).

With those hard points, Honda didn’t leave itself any leeway to fit a longer-range battery, which would have been heavier and costlier.

“A pillar of the Honda brand is affordability, and if Honda came out with some obscenely priced long-range electric car, what does that do for the brand?” Steve Center, vice president of environmental business development at American Honda Motor, told Automotive News. “Most of our customers would not be able to acquire it.”

Just how big a handicap the modest range figure will be remains to be seen. Thanks to regulatory pressures in California and other states, the number of electric and electrified vehicles on the market is expanding rapidly. While consumers haven’t gravitated to these vehicles in large numbers, those who do will soon be able to choose among many similarly priced options that offer varying combinations of size, range and brand cachet.

“To some degree, it’s all white space,” said Stephanie Brinley, senior analyst for IHS Markit, “and the market is going to spend the next several years figuring it out and where people want to buy in the spectrum of size and range. You just need to get it out there and see how people react.”

Honda sees itself as well-positioned. The automaker says its three-model approach with the Clarity series lets customers choose their path to electrification.

That assumes that they choose a Honda at all, and aren’t turned off by the 80-mile figure. But Honda argues that with any of the EVs on the market, buyers are forced to make tradeoffs involving size, range or price.

Chevy’s Bolt is affordable and long-range, but small. Tesla’s Model S and X are large and long-range, but costly. The Tesla Model 3 will be less costly and long-range, but, again, small and possibly not even attainable until next year. The second-generation Nissan Leaf is expected to be small and inexpensive, but still modest in range. And Hyundai’s forthcoming Ioniq EV will work the middle of the road in range, price and size.

That leaves an open path for Honda to market a large, well-equipped but affordable car for people who aren’t prone to range anxiety. Honda is basing much of its confidence on its experience with the Fit EV. That car also got roughly the same range, yet the main complaint Honda says it heard from the roughly 1,100 U.S. customers was about its diminutive size.

Honda didn’t disclose volume expectations for the Clarity BEV, but Center expects to beat the Fit EV “by a whole lot,” he said. Many of them will be current Fit EV owners.

“These people want a battery car and they know what they do and where they go,” Center said. “They’re very rational and they don’t need to lug around or charge up a 300-mile-range battery because that costs them electricity.”

Limited range
Honda’s Clarity Electric arrives on the market this year with one competitive disadvantage.

2017 Chevy Bolt: 119 mpg-e fuel economy*, 238-mile range

2017 VW e-Golf: 119 mpg-e, 125-mile range

2017 Hyundai Ioniq Electric: 136 mpg-e, 124-mile range

2017 Nissan Leaf: 112 mpg-e, 107-mile range

Honda Clarity Electric: N/A, 80-mile range

*Combined city/highway rating, based on energy equivalent of 1 gallon of gasoline

Source: EPA

Errant email lands Uber in court

On Dec. 13, a group email with a curious name popped into the inbox of a Waymo employee. It was titled “OTTO FILES,” and had been sent by one of Waymo’s lidar suppliers, inadvertently including Waymo in on the discussion.

The email and its attachments were the final piece of evidence Waymo, the self-driving car company spun off from Google late last year, felt it needed to file a lawsuit against Otto, an autonomous driving company for trucks, and its parent company Uber.

Otto was founded on Jan. 15, 2016, by then-Google employee Anthony Levandowski. Levandowski had been with Google since April 2007, and had been working on the self-driving car project since the beginning. Waymo said it has evidence Levandowski began methodically downloading 14,000 confidential files a month before leaving the company.

If Waymo’s claims prove true, Uber could be facing hundreds of millions of dollars in fines and civil damages. Theft of trade secrets can also carry a criminal charge, as a violation of the Lanham Act, which can carry a penalty of up to 10 years in jail and fines.

Waymo claims the email files it saw contained a lidar circuit board diagram that “bears a striking resemblance” to the lidar designs Waymo has developed in-house. The company also says it has evidence that employees who left Waymo to join Levandowski at Otto also downloaded confidential files.

“We believe these actions were part of a concerted plan to steal Waymo’s trade secrets and intellectual property,” the company wrote in a blog post.

Eric Meyhofer, director of hardware engineering for Uber, said the company is preparing a public statement on the lawsuit. “I’m super confident that the truth will come out,” he said.

Uber sees the lawsuit as a distraction away from building autonomous technology, Meyhofer said, arguing the lawsuit was a tactic Waymo is using to distract Uber off its mission. “That’s the big danger of these allegations: It forces us to focus on these things, which means we’re not focusing on building our product,” he told Automotive News.

Waymo’s lidar system has been a point of pride for the company, which announced in January at the Detroit auto show that it had developed its technology in-house, reducing costs by more than 90 percent.

In the lawsuit, Waymo laid out several unique ways it designs its lidar systems. Regular lidar, which uses laser beams to determine how far away things are and how fast they are moving, needs two lenses to transmit the laser beams. Waymo came up with a system that uses just one lens, it said. It also simplified the design for laser diode firing, and found a way to compress the light beams, increasing the resolution of the images produced by lasers.

The company said it also developed a lot of technology or processes that could never be used commercially, but those “dead-end designs” help inform Waymo’s current research and development.

The lawsuit is not the first claim of corporate espionage among self-driving technology companies. In January, Tesla Inc. sued its former head of Autopilot, Sterling Anderson, and ex-Google employee Chris Urmson, alleging they stole company information to start their own self-driving company.

Wayland joins Automotive News

DETROIT — Automotive News has hired Michael Wayland as a staff reporter.

Wayland, 30, comes from The Detroit News, where he worked for two and a half years covering Fiat Chrysler Automobiles and the UAW, among other topics. He spent five years with Booth Newspapers and MLive Media Group, where he covered business and the Detroit automakers.

He is president of the Detroit chapter of the Society of Professional Journalists and is a board member of the Automotive Press Association.

Wayland graduated from Central Michigan University in 2009 with a degree in English and journalism.

Takata’s guilty plea to be considered Monday by U.S. judge

DETROIT — A federal judge on Monday will consider Takata Corp.’s proposed $1 billion settlement over deadly automotive airbags that have claimed at least 17 lives around the world.

The Tokyo-based company is scheduled to enter a guilty plea in Detroit before U.S. District Judge George Caram Steeh to one count of wire fraud for falsifying data and reports provided to automakers. Takata agreed last month to pay a $25 million criminal fine and establish a $125 million fund to pay victims and a separate $850 million fund to reimburse automakers for recalls.

Takata and the U.S. Justice Department nominated lawyer Kenneth Feinberg to run the compensation fund as part of the proposed settlement in January, and Feinberg’s role will be among the items the judge weighs on Monday, two people familiar with the situation said.

“I’ll be in the court tomorrow at the request of the U.S. district judge,” Feinberg said Sunday in an interview. “What happens there is up to the judge.” He declined further comment.

The appointment of 71-year-old Feinberg would bring to the case a lawyer experienced in administering some of the nation’s highest-profile settlements. He handled General Motors’ ignition-switch fund, as well as compensation for victims of the Sept. 11, 2001, terrorist attacks and BP Plc’s 2010 Gulf of Mexico spill.

Takata spokesman Jared Levy declined to comment, as did a spokesman for the Justice Department.

Settlement agreement

Takata’s agreement last month to settle the criminal probe removed a hurdle to the airbag maker’s sale, which the company needs to continue operations and complete the biggest product recall in automotive history. The payment includes $25 million to the U.S. and $975 million to compensate carmakers and people who were injured, according to court papers. U.S. prosecutors charged three former Takata executives for their alleged roles.

Takata faces a recall that is expected to cover more than 100 million airbags. Potential buyers include Autoliv Inc. and Key Safety Systems Inc.

Key Safety has emerged as the leading contender, a source with knowledge of the bidding told Crain’s Detroit Business last week. Crain’s is an affiliate of Automotive News.

The eventual acquirer would have to ensure a stable supply of replacement parts even as uncertainties surround its exposure to future liabilities, including the costs for replacing the airbags.

When the U.S. announced the guilty plea last month, Takata said it would establish a $125 million restitution fund for “individuals who suffered or will suffer personal injury caused by the malfunction of a Takata airbag inflator, and who have not already resolved their claims.”