International Fleet World February 2013

FEBRUARY 2013

internationalfleetworld.com

INTERNATIONAL

FLEETW RLD Essential Business Information for International Fleet Decision Makers

Driven

Technology

SEAT Leon Opel Mokka Volvo V40

The future of the connected car

GOING GLOBAL

Audi’s assault on the premium sector continues

The

Insignia BiTurbo

Tame your ight foot. r The best car we’ve ever built.

With a powerful and frugal BiTurbo diesel engine.

400 Nm. 230 km/h. With 4.9 l consumption.

www.opel.com/insignia Official fuel consumption urban 8.6–6.1 l/100 km, extra-urban 5.4–4.2 l/100 km, combined 6.6–4.9 l/100 km; CO2 emissions combined 174–129 g/km (according to R (EC) No. 715/2007). Efficiency class C–A

FEBRUARY 2013

internationalfleetworld.com

INTERNATIONAL

FLEETW RLD Essential Business Information for International Fleet Decision Makers

Driven

Technology

SEAT Leon Volvo V40 DAF XF

The future of the connected car

INTERNATIONAL

FLEETW RLD internationalfleetworld.com

GOING GLOBAL

Audi’s assault on the premium sector continues

Publisher Ross Durkin ross@fleetworldgroup.co.uk Editor John Kendall john@fleetworldgroup.co.uk Deputy Editor Natalie Middleton natalie@fleetworldgroup.co.uk Motoring Editor Alex Grant alex@fleetworldgroup.co.uk Editorial Assistant Katie Beck katie@fleetworldgroup.co.uk Sales Director Anne Dopson anne@fleetworldgroup.co.uk Sales Executive Darren Brett darren@fleetworldgroup.co.uk Circulation Manager Tracy Howell tracy@fleetworldgroup.co.uk Production Manager Luke Wikner luke@fleetworldgroup.co.uk Designers Tina Ries tina@fleetworldgroup.co.uk Samantha Hargreaves sam@fleetworldgroup.co.uk Internet Editor Luke Durkin durks@fleetworldgroup.co.uk

Published by Stag Publications Ltd, 18 Alban Park, Hatfield Road, St Albans, Herts, AL4 0JJ tel +44 (0)1727 739160 fax +44 (0)1727 739169 email ifw@fleetworldgroup.co.uk web fleetworld.co.uk

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VIEWPOINT

CONTENTS

It’s that time of year when forecasters and pundits analyse sales data and try to work out what will happen in the coming year. Website focus2move.com has an interesting perspective on the European sales figures. It was no surprise that they were down, it has been clear for most of the year that that would be the trend. Focus2move.com has looked at when 28 European countries recorded their highest car sales volumes, when that was, how that compares with 2012 and how much less than the record volume 2012 has been.

It is difficult to escape the conclusion that for some markets, car sales have not just declined, but the likelihood that they will ever return to peak volumes is low.

Take Lithuania as an example. The market peaked in 2003 at 358,432 registrations. In 2012 that figure had fallen 96.6% to 12,170.

It’s a similar picture for the other markets near the bottom such as Estonia and Bulgaria. Both peaked in 2003 and sales have fallen by 91.7% and 87% respectively from that peak.

Ireland is beset with economic problems and its sales peaked in 2000 at 230,972 but in 2012 had fallen 65.5% from that figure to 79,632. It seems unlikely that sales will approach that peak figure in the next few years.

It’s hardly surprising that manufacturers are looking east for better prospects. But has the market reached a point where consumers are turning their back on car ownership? That would be understandable for city dwellers where public transport systems are fairly effective. Or have the costs of ownership now reached a point where buyers are thinking twice? If so, the time could be right for some smart rental and leasing schemes.

04 News Analysis 10 EV news analysis 12 LA MOTOR SHOW The main highlights for fleets from Los Angeles.

16 Technology How the internet is rapidly becoming a feature of modern connected cars.

22 Strategy European residual value confidence.

23 New Models A dozen for ‘13: The 12 key models coming onto fleets this year.

30 Management The effect of leasing on fleets’ low-emission vehicle take-up.

32 FOCUS ON CHINA.

36 Remarketing The growing 4x4 exodus into Russia.

38 FLEET PROFILE Audi

44 2013 fleet calendar 45 Launch Report SEAT Leon / Volvo V40 / Opel Mokka / DAF XF.

50 Fleet in figures Analysing the latest ACEA sales charts.

12 16 32 48

John Kendall Editor

IFW February 2013

03

news analysis

04

Land Rover moves on

Volvo’s global ambitions

The international roll out of the new Range Rover is almost complete and brand director, John Edwards, and his team are handing over to the local markets. His verdict, ”It has all gone better than we dared believe.”

He added: ”the reaction to the car has been phenomenal. It really demonstrates how we have rediscovered our self-belief. Three years ago Land Rover was selling around 150,000 vehicles a year and now we are up to 300,000 and there is potential for more.”

The brand's factories in the UK are bursting at the seams and already operating on three shifts a day. A new factory is on the horizon in China which will build Jaguars and Land Rovers, but that is still some way in the future.

The introduction of the V6 Diesel engine for the first time in the new Range Rover is one growth opportunity, making the car more accessible to a wider range of customers.

Edwards said: ”It will help us particularly in Europe with sub-200 g/km emissions although we have no immediate plans to introduce diesels in the US. The market for diesels here is growing but it is not on our radar yet”.

A hybrid Range Rover is scheduled for late next year and that will drive emissions down further, but again there are no immediate plans for an introduction in the US, as it will be a diesel hybrid.

Order banks for the new Range Rover, he added, are as long as for the Evoque, which has become the fastest-selling Land Rover in the company's history. Next up is the launch of the 2013 model year Land Rover Freelander that sees the introduction of a 2-litre petrol engine to replace the 3.2-litre straight 6. This improves efficiency by 17% while adding power and torque. There is also an interior upgrade.

Edwards said: ”Freelander is doing really well for us. There was concern that Evoque would come in and steal sales away from it and while there has been a small amount of that the buyers for these two cars are very different.”

Having launched the latest version of one icon, another one looms with an all-new Defender, which is due around the middle of the decade.

Edwards added: ”We are still working hard to see what the new Defender will look like. We have had some good feedback from the concepts we have shown and we are still very much in the development stage.”

Volvo is paying the price for the lack of investment in the last days of Ford ownership after the 2008 banking collapse, says sales and marketing chief, Doug Speck.

Global sales of 422,000 last year were 6% down on 2011, with falls in Europe (minus 1.3%) and China (minus 11%) more than offsetting gains in the US, Russia, Japan and south-east Asia. ”It was also a fairly weak product year for us,” said Speck. "Our only new product was the V60. But I saw the trend reversing in the second half of the year and confidence was measurably better, so I would expect 2013 to be comparable for us, year-on-year. ”I believe the market will grow 8 to 9% in China and we will retain our share there. The US will probably grow 5 to 6% and we will protect our share there. The wild card is Europe. Our projection is that it will be down 3 to 4%, but no-one can be certain.”

Volvo will have updates to the whole 60 series range starting at the Geneva show in March and begin introducing its new four-cylinder powertrains at the end of the year, but it will be late 2014 before the first all-new product comes along – a replacement for the XC90. ”The XC90 has aged beautifully, but it has still aged, and it is a very strategically important car for us,” said Speck. ”The introduction of a new XC90 will be a very important event for us.”

Volvo also needs a new compact car to replace the C30 which goes out of production this year, says Speck. ”In Europe we have the V40, but we need something for the rest of the world and we don't yet know what it will be,” he added. ”Most likely it will be a partnership with someone, and we are already talking to several people.

Russia, China and the US want sedans, but from a global point of view the most important car for that segment would be a XC40.”

internationalfleetworld.com

Volvo released the V60 Plug-in-hybrid in 2012

for the latest news, visit internationalfleetworld.com

Opel fleet embarks on growth strategy for commercial vehicles Opel/Vauxhall has set out plans for a substantial increase in sales of light commercial vehicles in Europe.

The move is a part of the company’s plan to capitalise on its strong presence in the fleet sector.

Internal restructuring at Opel’s European headquarters near Frankfurt has brought the responsibility for commercial vehicles into Opel’s international fleet team.

Ian Hucker, Opel’s director of European fleet and commercial vehicles, told International Fleet World that the new structure would allow for better integration of sales activity as most major LCV buyers also had substantial car fleets. ”It makes sense to have both fleet and LCV sales under one roof,” said Mr Hucker. ”On the passenger car side, Opel has been moving steadily up the European sales charts in recent years and we can see a tremendous opportunity to grow our LCV sales in the same way. ”There have been a few gaps in our van product portfolio in the past, but we have plugged these with recent developments such as new Combo, new derivatives of Movano and the expansion of our conversions programme. We are now very well placed to match in the LCV sector what we have already done in passenger cars.

LCVs are a big growth opportunity for us.

European car registrations down Even by the standards of December car registrations in Europe, December 2012 was weak, with registrations down 16.2% on average across the 27 EU member states, compared with December 2011, according to data from the European automobile manufacturers’ association, ACEA. The monthly total of 799,407 represented the steepest fall in registrations for December since 2008.

The annual figure of 12,053,904, was the lowest since 1995 and was 8.2% lower than 2011.

The groups recording the highest registrations were VW with 2,977,416 (-1.6%), PSA with 1,431,063 (-12.9%)and Renault with 1,030,321 (-19.1%), the largest percentage fall of any group in 2012.

The best selling brand was VW with 1,541,643 registrations (-4.6%), while Audi saw registrations rise 3.1% to 673,647. Both Hyundai and Kia continued to grow their European volumes with Hyundai up 9.4% to 414,827 and Kia up 14.1% to 327,995. Renault took a large hit with registrations down 22.5% to 795,972.

Among the large markets, the UK was the only one to see registrations rise in 2012, up 5.3% to 2,044,609. The UK wasn’t alone with Bulgaria, the Czech Republic, Denmark, Estonia, Hungary and Slovakia all posting small increases during the year. Greece posted the largest percentage fall, down 40.1% to 58,482.

Tesla removing the barriers to EV ownership American electric car company Tesla says it wants to ”take away every hurdle” to electric car ownership - and is setting up a chain of free fast-charge stations so that owners will be able to drive exactly as they could in a car with an internal combustion engine.

Tesla established eight of these so-called superchargers at the end of last year, mainly in California. They are said to be capable of giving the mid-sized Model S saloon a 150mile range in 30 minutes.

The plan is to cover the entire east and west coasts of America initially, and then the whole of the USA. And the supercharger idea will be rolled out in other countries where Tesla sells. ”It is our aim that you will be able to take a trip just as you would in an internal combustion-engined car," said head of sales and ownership, George Blankenship. "In the time it takes for you to stop and have lunch you can put another 150 miles of range into the car. ”Ultimately it's our goal to do this with solar energy.

We have said that we will make electricity free forever on sunlight.”

Tesla expects to sell 20,000 cars globally in 2013 and to increase its total of worldwide stores from 33 to 58. Half of the additions will be outside America, including its first store in China.

Tesla's next production car will be a small model costing around €22,600 ($30,000) in the US. It is expected to be on sale in 3 to 4 years.

IFW February 2013

05

news analysis

VW – 100 plants and growing

Feu Vert gives Epyx green light

The Volkswagen Group opened its 100th plant worldwide in January. The new plant, at Silao, in the central Mexican state of Guanajuato represents an investment of €414.25 million ($US 550 million) and will supply Volkswagen’s North American vehicle plants in Puebla, Mexico and Chattanooga, USA with TSI petrol engines.

Speaking at the opening ceremony, Martin Winterkorn, Chairman of the Board of Management of Volkswagen, said, ”Over the next three years the Volkswagen Group will be investing more than USD five billion (€3.7bn) in North America alone.” The VW Group plans to be selling one million vehicles in the USA alone from 2018. The figure will include the Jetta, Beetle and US Passat.

The VW Group already produces VW and MAN CV models in Mexico and is expected to open an Audi plant in San José Chiapa, which is scheduled to begin production in 2016. The VW Group delivered 165,900 vehicles in Mexico (excluding MAN and Scania trucks) in 2012, an increase of 8.2% on 2011.

French car maintenance network Feu Vert has signed a deal with Epyx France to use Epyx’s 1link Service Network e-commerce platform. The company, which has 300 sites in France, will use Epyx to manage transactions and provide central invoicing for company cars and vans.

It is claimed that the deal will also give Feu Vert access to several major leasing companies.

According to Alain Moury, director of fleet business at Feu Vert Enterprises, ”When a fleet driver arrives at a Feu Vert Enterprises centre, an in-house interface allows a simple click to replace telephone calls to leasing company customers. A transaction number is then automatically recorded on our job sheet and this serves as a basis for completion of the job and invoicing. The time taken to obtain work authorisation is reduced to a few seconds. Also, prior validation and checking of tyrerelated work to be carried out on corporate fleets allows costs to be more easily controlled.”

Geneva launch for Renault Captur UK closes licence loophole The British Government has closed a legal loophole which was permitting drivers from outside the EU to exchange their driving licenses for British licences, valid in all EU States, when the standard of the driving test they had passed could not be verified.

The UK has arrangements with 15 countries outside the EU which allows drivers to exchange their licences for a UK licence without taking a British driving test, because the driving test they have taken meets the required standard to obtain a UK driving licence.

An inconsistency in the law, uncovered by the BBC had enabled some foreign drivers to exchange their licence with overseas countries within the UK’s exchange agreement, then subsequently exchange this for a UK licence despite some not meeting the required standard.

Drivers will now have to prove they have met the required standard in a designated country before becoming eligible for a UK licence. Foreign licence holders (except those from EU states and the designated countries) are allowed to drive in the UK for up to a year before taking a driving test.

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Renault will launch its first urban crossover, the Captur, based on the Renault Clio platform at the Geneva Show in March. The Captur will draw on the Captur concept shown at the 2011 Geneva Show. Renault claims it will have the styling and driving position of an MPV, cabin space of an MPV and driving characteristics of a compact hatchback. Expect hands-free entry, hill start assist, rear parking sensors and options including R-Link Tablet, Bluetooth connectivity and audio-streaming.

for the latest news, visit internationalfleetworld.com

Volvo trucks opens Truck Center in Montenegro Volvo has opened a new Volvo Truck Center in Montenegro in the Western Balkans. ”This new Volvo Truck Center in Bandi in Montenegro represents another important step towards increasing our presence in the Western Balkans,” said Johan Björnör, managing director Adriatic Hub at Volvo Trucks, Region Central East Europe.

The 800m2 building incorporates a large workshop with 2 inspection pits, a parts shop and offices.

VW Group sets new record The VW Group delivered over 9m cars worldwide for the first time in 2012. Total deliveries reached 9.07m, up 11.2% on 2011. Europe remained VW’s largest market with 3.67m deliveries (-0.3%), while deliveries in China rose by 24.5% to 2.81m. VW delivered a total of 5.74m vehicles (+ 12.7%), Audi 1.46m (+11.7%), Skoda 939,200 (+6.8%) and SEAT 321,000 (8.3%).

EV penetration likely to remain weak, says ACEA A number of factors are holding back the acceptance of EVs and plug-in hybrids, according to ACEA. The organisation points to slow progress on common charging standards, an uncoordinated approach from EU member states to market incentives, a lack of dedicated support for research and development and no clear and unified vision on infrastructure. The organisation also believes that declining EV sales, partly due to the current weak European economy are also a factor. ”E-mobility can be part of a long-term solution to our mobility challenges. However, we need to have the right framework conditions if it is to really take off,” says Ivan Hodac, ACEA secretary general. ”It will only be possible to book real progress if there is full cooperation between utility providers, infrastructure companies, the energy sector, standardisation bodies and the automotive industry - with the full support of national governments and the European institutions.”

ACEA points out the need for a single harmonised plug system for both vehicles and infrastructure and that the industry had already agreed a joint proposal for an EU wide charging system last year. The organisation expressed its concern over the lack of progress in creating a framework to meet these goals.

ACEA now forecasts the future market penetration of ECVs to be in the range of 2 to 8% for the next decade, with significant differences among manufacturers depending on their individual strategies.

in brief...

Fleet Logistics plans to double fleet Fleet Logistics has appointed four chief regional officers for Europe as part of its plan to double its panEuropean fleet from 100,000 to 200,000 vehicles over the next three years. The company was acquired by the German certification agency, TÜV SÜD, last September.

Cadillac ATS wins Top US award The 2013 Cadillac ATS was named as the North American Car of the Year at the Detroit Motor Show. The saloon car is available with four and six cylinder petrol engines and rear or allwheel drive. The decision was made by a jury of 49 automotive journalists.

New TomTom mileage app TomTom has launched a new app designed to help drivers keep an accurate log of their trips via their smartphone. The Webfleet Logbook App is available for iPhone and Android phones and works with the in-vehicle Link tracking device. Drivers simply identify whether the journey is for business, private or commuting and the system automatically logs the trip.

Athlon to adopt miles Netherlands-based Athlon Car Lease has introduced Sofico’s Miles leasing and fleet management software to help manage its operations in Italy and Spain, where it operates 6-7,000 vehicles and manages around 45 employees in each country. The company will then roll out the system to Germany by the end of this year and then to the rest of its European operation after that. The company manages over 234,000 vehicles across Europe.

IFW February 2013

07

* CO²OL

*The new A-Class with CO₂ emissions as low as 98 g/km.

A Daimler Brand

The pulse of a new generation. Thanks to state-of-the-art technical features such as the ECO start/stop function fitted as standard, the new A 180 CDI BlueEFFICIENCY is one of the most efficient diesel vehicles in the compact car segment – with CO₂ emissions from just 98 g per kilometre. And because road safety is not a matter of price at Mercedes-Benz, the radarsupported COLLISION PREVENTION ASSIST system also comes as standard. Find out more at www.mercedes-benz.com/fleet

Fuel consumption urban/extra-urban/combined: 8.4–4.5/5.1–3.3/6.4–3.8 l/100 km; combined CO₂ emissions: 148–98 g/km.

Figures do not relate to the specific emissions or fuel consumption of any individual vehicle, do not form part of any offer and are intended solely to aid comparison between Provider: Daimler AG, Mercedesstraße 137, 70327 Stuttgart

different types of vehicle.

EV news analysis

Tesla releases European pricing for Model S electric luxury car Californian carmaker Tesla Motors has released pricing for left hand drive European versions of the Model S electric executive saloon, with an entry price of under €60,000 depending on the market.

The Model S will launch in left hand drive markets during the first half of 2013, and Tesla’s European arm, based in the UK, is appointing a team of fleet experts to establish the car in the corporate sector. Right hand drive models will follow later in the year, and prices will be announced four to five months beforehand, Tesla said.

Sold with three different battery packs, the Model S offers up to a 500km range and with the Performance pack has an output of 416hp. It’s based on a skateboard-shaped platform with the battery under the cabin and motor between the rear wheels, offering a low centre of gravity, 50/50 weight distribution and creating space for 50% more boot capacity than of its rivals.

At launch, the car will be available with two of these battery units. The 60kWh unit is expected to be the most popular this offers a range of 375km on a single charge and costs around €72,600, while the 500km, 85kWh version is priced from €83,150 depending on the market.

The top-level Signature trim starts at €101,400, only available with the larger battery, while the 416hp Performance ver-

sions are priced at €97,550 or €110,950 depending on trim.

Shortly afterwards, the range will be completed by the entrylevel 260km, 40kWh unit set to be priced under €60,000.

While the car is more expensive than executive-class rivals, its low tax liability could make it a viable option for fleets. The range-topping Signature Performance version offers on-paper acceleration figures to match the BMW M5, Jaguar XFR and Mercedes-Benz E63 AMG, all of which emit 230g/km or more.

Stakeholders meet in Brussels to discuss EV component standardisation Standards institutes in North America and Europe have held a round table meeting to discuss ways of standardising electric vehicle components and infrastructure between the two markets, facilitating quicker global take-up of the technology.

Held in Brussels, the meeting pulled together technical experts from the automotive industry, government and stakeholders in the electromobility market. Discussions centred on setting priorities for which systems should be standardised first to avoid conflicts between both sides of the Atlantic.

Participants discussed having an international standard for electrical couplers, possibly based on the SAE’S new combo coupler, but agreed that these would have to vary based on electrical grid requirements. Wireless charging, which is still in its infancy, is already being developed co-operatively between companies on both side of the Atlantic.

Systems which allow vehicles to communicate with the electrical grid should also be standardised, attendees said, a process which would require carmakers, utility providers and charging network suppliers to work together. Vehicle and bat-

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tery safety structures, as well as the way batteries should be transported and stored, could also be subject to TransAtlantic co-operative development.

for the latest news, visit evfleetworld.com

Low carbon vehicle centre announced for North East England A college in North East England is to open a multi-million Euro development centre for low carbon vehicles, adjacent to the Nissan factory in Sunderland where the European-market LEAF will be produced from April.

The 2,000m2 facility, formerly a Nissan design centre, will be focused on developing new and existing vehicles and components, infrastructure, battery technology and management systems, and is managed by Zero Carbon Futures, a subsidiary of Gateshead College.

Its location places it close to numerous Tier 1 automotive suppliers, a new business park and the college’s Skills Academy for Sustainable Manufacturing and Innovation (SASMI), which opened last year. Partnership work between Gateshead College, sustainability experts Tadea, transport consultancy firm TRL and Zero Carbon Futures will be undertaken on-site, including a new training centre.

Chargemaster to acquire Elektromotive for €10.4m Two of the UK’s largest charging point manufacturers have joined to create one of Europe’s largest networks, after Chargemaster reached an agreement to acquire Elektromotive for £8.5m (€10.4m) in cash from its Singapore-based holding company.

The deal gives Chargemaster widespread coverage of Europe, with Elektromotive’s strong sales bases in Belgium and Ireland complementing Chargemaster’s coverage in France, the Netherlands, Germany, Austria and Switzerland.

Elektromotive has 15 global distribution partners, including a presence in Asia, while Chargemaster has supplier contracts with Nissan, Renault in the UK and France, Vauxhall and Toyota as well as British Gas and Scottish and Southern Energy (SSE). Both also already have growing public charge point networks in the UK. The enlarged group formed by the two companies is aimed at competing with large rivals such as Schneider in France and Siemens and RWE in Germany. Globally, the charging point market is expected to grow exponentially as new models are introduced, expanding 20-fold over the next eight years to be worth €1.5bn.

Nissan opens largest EV battery plant in United States Nissan has taken a step further towards localised production of the LEAF electric vehicle, opening the United States’ largest lithium-ion automotive battery plant in Smyrna, Tennessee.

Positioned adjacent to the carmaker’s existing factory, which has just been retooled to manufacture North American market Nissan LEAFs, the plant is aimed at meeting the demands of a scheduled ramp-up in production for the electric vehicle next year. At full capacity, it will be able to build 200,000 batteries per year, catering for the production of other electric models in future.

To date, all Nissan LEAFs have been built in Japan. As part of a mid-life upgrade in 2013, production will be localised to the markets where the vehicle is sold, including building Europeanmarket cars at the plant in Sunderland, UK from March.

in brief...

Hertz adds Nissan LEAF to Milan rental fleet The Hertz Corporation has extended its ElectriCity initiative to Milan, allowing members to rent the Nissan LEAF from the city’s central railway station. Available to rent by the hour or day, online or in person, the vehicles are eligible for free access to the city’s central congestion zone and use of specially marked parking spaces.

Further cities are being considered.

Global Lexus hybrid sales pass half a million mark Lexus has sold more than 506,000 vehicles equipped with its Lexus Hybrid Drive system since the first RX 400h went on sale in 2005, accounting for 25% of the company’s global sales IN 2012. Around a quarter of the worldwide total, 126,000, have sold in Europe.

In Western Europe hybrids command a larger share, accounting for more than 85% of the Lexus models sold.

Holden Volt helps Telstra improve its fleet efficiency Australian telecommunications company Telstra has added the Holden Volt to its fleet, with the first models deployed as pool cars to assess how electric drivetrains perform. This will be the first time Telstra has used plug-in vehicles in its fleet, and all are wrapped in environmentally friendly decals made with latex inks and vinyl.

IBM takes steps to create Europe-wide charging network IBM has developed a common IT platform for electric vehicle charging data, allowing stakeholders to share services across Europe and in turn offering international roaming for drivers billed similarly to mobile phones. The initiative is part of the Green eMotion project, which aims to create a Europe-wide electric vehicle charging infrastructure by 2015 allowing drivers to cover long distances without multiple membership cards.

IFW February 2013

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motor show review LA MOTOR SHOW

US market gaining its stars and stripes Industry executives at the Los Angeles Show in December believe the US market will return to its 16 million high within the next three years and be up by 1.3 million in 2013 compared with 14.5 million last year.

The average age of cars on US roads has risen to an all-time high of 11 years and people are now looking for a change, we are told. Finance is cheaper than it has been for some time and younger people are richer than before.

Diesel sales are also on the increase with the German premium brands Audi, BMW and Mercedes leading the way, making even the US companies sit up and take notice.

Diesel fuel for cars and SUVs is now available at pretty much every gas station and not stuck away in a dark corner for use only by truckers.

At the show Audi showed four new diesels, while Mazda introduced its SKYACTIV-D 2.2-litre diesel.

Volkswagen is also weighing in with the recent addition of the Passat TDI diesel and Beetle TDI while Porsche has a diesel variant of its Cayenne SUV. Jaguar Land Rover did its best to steal the show with what it called its ”British Invasion” – US debuts for the Ranger Rover and Jag F-Type and a global debut for the XFR-S.

> Volkswagen

> Chevrolet

The convertible bug is back! Volkswagen unveiled the new version of its open top Beetle at the LA Show.

The latest convertible comes more than 60 years after the original was first seen in 1949 and which ran until 1980.

Over 330,000 were made in that time.

The new Beetle Cabriolet came out in 2002 selling 230,000 in eight years. The new model comes with an automatically folding hood and the European engine range will feature three petrol units ranging from 1.2 to 2-litre and a pair of diesels, 1.6 and 2.0-litre.

The fully electric 2014 Chevrolet Spark EV, unveiled at the LA Show, is rumoured to Chevrolet have a range of over 80 Spark EV miles (129km), with the SAE Combo DC fast-charging capability for charging to 80% of capacity in 20 minutes. It will be powered by an advanced US-built 130hp/110kW motor and drive unit, delivering claimed bestin-class acceleration. The capacity of the lithium-ion battery is claimed to be over 20kWh. It carries an eight-year/100,000 mile (160,934km) warranty and weighs 254kg.

Sales are due to begin in California and Oregon in the US, with other markets to include Canada and South Korea.

Chevrolet says that US prices will start from under $US 25,000 with tax incentives.

Two re-configurable seven-inch colour LCD screens inside the car provide information for the driver. The MyLink radio will be standard equipment and like the Opel/Vauxhall ADAM, will provide connectivity with a smart phone, which will drive the system with a range of apps, including navigation and radio.

rio Volkswagen Beetle Cab

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> 2025 Highway Patrol Vehicles The LA Auto Show was the place to come for car designers as it hosted a creative competition – to create the ultimate 2025 highway patrol vehicle.

Design studios from BMW Group, General Motors, Honda, Mercedes-Benz and Subaru took on the challenge.

The criteria for a futuristic patrol car included the future needs for advanced technology; speed and agility on future freeway systems while meeting a specific region’s emission standards and environmental sensibility – including maintenance and recyclability.

Laurenz Schaffer, president of BMW’s DesignworksUSA, said: “We wanted to present a visionary impulse to the theme of highway patrol. The competition gives us the opportunity to do something a little different so our concept has no links to BMW’s future design strategy.

“We took the liberty to think out of the box. Our design is independent from BMW design elements and known visual cues, but looks at new product typologies and fresh ideas on shapes.”

The result is the ePatrol and the DesignworksUSA team began the challenge by selecting Los Angeles as the region to create a 2025 scenario.

Schaffer added: “Being aware that there will be more traffic, faster vehicles, and vehicles with alternative drive trains the design team explored how a patrol team functioned today and in the future and determined that teamwork and accessibility were the two key elements to a successful patrol effort.”

General Motors’ Advanced Design California created a new electric vehicle, the Volt Squad, a three vehicle fleet, designed around the concept of observe, pursue and engage.

Each vehicle has a clearly defined role and, as the name implies, uses the Chevrolet Volt as a base.

Honda’s advanced design studio in California created the CHP Drone Squad, a two-vehicle system. The Auto-Drone operates as a manned or un-manned mission control vehicle, which deploys Moto-Drones and can do so on the move. MotoDrones are un-manned motorcycles capable of being rigged for multiple response or rescue missions.

The company’s Tokyo-based designers came up with the 2025 Traffic Crawler designed to operate at a time when we may see more automated driving and traffic control.

However, they think the Californian car nuts will still want

to tear around the highways, hence a need for strict traffic enforcement. Honda’s cop car offers sporty mobility with the toughness to respond in severe traffic situations.

Mercedes-Benz designers believe officers will need to adapt to even more crowded roads with electronically monitored and controlled traffic, a much larger population, and changes in human behaviour – whatever that may mean.

The Ener-G-Force they reckon will help police around the world and is based on the G-Class off-roader.

Subaru showed off the SHARC (Subaru Highway Automated Response Concept), which the company said is innovative, affordable, and environmentally conscious, reflecting a trend for reduced highway patrol budgets worldwide.

The zero-emission SHARC vehicles are powered by renewable energy and operate autonomously, eliminating the need for a large, full-time police presence.

Mercedes-Benz Ener-G-Force

Genral Motors Volt Squad

> BMW The i3 Concept Coupe builds on the i3 Concept shown around the world since the Frankfurt show in 2011. This latest i variant has two less doors than its conceptual predecessor, but shares the 170hp electric motor powering the rear wheels and a range of between 80–100 miles (129–161km) on a full charge, which takes six hours. The i3 is due on sale in 2013.

¡

BMW i3 Concept

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motor show review LA MOTOR SHOW

¡

> Fiat Fiat has struggled to get a foothold in the US market with the Fiat 500L tiny 500 that it launched at the Los Angeles show two years ago, but things are definitely looking up according to global marketing chief, Olivier Francois.

A slow start, which saw just 20,000 sales in its first year, was attributed to an under developed dealer network but things have shaken out.

Francois said: “In the first six months of this year we passed the 20,000 figure and we are already past 30,000 for 2012. We wondered when we launched whether the US was ready for such a small car and we are now discovering that America is more than ready.

“Our sales are running 130% ahead of last year and we have created new monthly records in six separate months.”

Sales have been boosted by the introduction of Abarth models and at this year’s show Francois introduced the Abarth Cabrio, the electric 500e and the longer wheelbase 500L. There have also been other sales boosters, he added.

Beefing up the sound system in the cars being one and a series of highly imaginative and amusing television ads.

Francois added: “When we introduced Abarth earlier this year it sold out within a couple of months and the ad we did for the car went viral. I am sure the new models, and the new ads will be equally appealing.

“We are well on the way to establishing Fiat in the US market.”

Ford Transit Connect MPV

> Ford

A people carrier designed to shed the ‘soccer mom’ image of such vehicles was showcased

by Ford at the LA Show.

It's based on the Transit Connect small van, features sliding doors and will be built in Spain at Ford’s Valencia factory.

The company said that the design is aimed at under 30s who traditionally do not buy MPVs in the US because of what it describes as the ‘soccer mom stigma’.

Ford’s head of global engineering, Hau Thai-Tang said: “Many youngsters grew up in the back of a minivan and historically they tend to reject what they're familiar with.”

Ford has been selling the Transit Connect in the US as a commercial vehicle and the people-mover version will go on sale by the end of next year.

So-called minivan sales in the US have halved from a peak in 2000 at around 1.3m.

Analysts say this is due to a social view that it signals the driver has lost his or her individuality after becoming a parent, known among the younger generation here as the Millennial.

Ford expects the Transit Connect wagon will get 30mpg on the highway. It has more than 2,832 litres of cargo space and will be offered in five and seven-person configurations with the option of a rear lift-gate or side-hinged cargo doors.

> Volkswagen Also on the VW stand making a debut appearance was the Jetta Hybrid.

This model is powered by a 1.4-litre, 150hp turbocharged petrol engine and a 20kW electric motor together with a seven-speed DSG gearbox.

Like the Touareg, the Jetta is a parallel hybrid which uses a decoupling clutch that can disengage the petrol engine for pure electric drive, or disengage the electric unit for higher speeds – or when the charge runs low. It also combines the two for maximum power.

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Volkswagen Jetta Hybrid

> Jaguar Land Rover Jaguar Land Rover launched a British Invasion at the Los Angeles Motor Show with two North American and one global debut.

With 550hp on tap and a 0-60 acceleration time of 4.4 seconds, the XFR-S is the fastest, most powerful Jaguar saloon ever and it goes on sale in late spring or early summer.

Brand director, Adrian Hallmark, said: “California is the largest sports car market in the world and the F-Type and XFR-S put Jaguar back where it belongs at the heart of the sports car market. Jaguar without a sports car isn't Jaguar.”

Hallmark also revealed that Jaguar has just hit its highest ever position in Jaguar XFR-S the US J D Power customer satisfaction ratings in second place behind Lexus.

He added: “We are already top of the ranking in the UK and this is further evidence of how we have moved in terms of the quality of our cars.”

Andy Goss, president of JLR in the US, said: “Our British Invasion is aimed at giving us an enormous impact in the US which is still our largest target market. We have a great story to tell with excellent products, strong financial performance and global growth up 35%.”

> Acura

Toyota RAV4

Acura RLX replaces RL in 2014, with a 310hp 3.5-litre V6 engine and a ‘Sport Hybrid’ to come, featuring Acura’s Super Handling All-Wheel Drive system (SH-AWD). This uses an electric motor to drive the rear axle and fourwheel steering that enhances lane-changing stability and vehicle rotation while cornering.

> Toyota You don’t have to be big to be beautiful on the roads of California, or anywhere else in North America come to that.

Toyota chose the Los Angeles Auto Show to unveil its allsaw RAV4, the fourth generation of the model which debuted in 1996 as what that Japanese carmaker describes as the world's first crossover.

Toyota Group vice president, Bill Fay, said that the company has sold 1.7m RAV4s in the US since launch and is built at the carmaker’s factory in Canada.

He added: “We have a really loyal following for this car in North America. Many of those 1.7m cars are still on the road.”

The new model goes on sale in the US in January and comes to the UK in February. It has a much more dynamic look and a more aggressive stance. Gone is the rear mounted spare wheel, which moves underneath the car to make access to the rear easier and also allows an electronically controlled tailgate.

It will be available in two and four-wheel-drive and in the US comes with a 2.5-litre petrol engine.

There will be different engines for Europe, but no hybrid version although insiders say there are plans for a hybrid model off the RAV4 platform.

Acura RLX

> Kia Arriving in the US in early 2013, the Kia Forte actually made its world debut at the 2012 Santiago Motor Show as the Cerato. New styling brings it in line with the Optima.

Kia Forte

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technology

The connected car

The internet has already transformed modern society, but now it’s rapidly becoming a key feature of new cars. Alex Grant looks at how growing connectivity will shape the way fleets operate, and the potential risks it poses.

Internet connectivity may be in its infancy, but a large percentage of fleet vehicles already contain stored data.

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I

t’s not so long ago that drivers would only be storing basic information in a car – data which extended as far as radio presets for most, perhaps seat and steering wheel settings for a few, and at the very most a few albums stored on a built-in hard drive.

But cars are changing, and fast. Bluetooth is already commonplace, internet-connected navigation isn’t far behind and a few of the most recent models offer social media apps built into the dashboard. Devices connected to the internet already outnumber the human population of Earth, and cars are becoming the next frontier.

So, as the car becomes an ever-more detailed storage space for dates, numbers, addresses and e-mails, what’s next for driving, and how can fleets prepare for the next generation of motoring?

SO WHERE ARE WE NOW ?

RENAULT R-LINK Renault’s R-Link infotainment system debuts on the futuristic ZOE electric supermini, but it is technology bound for the rest of the range, and will be offered as an option on the fourth-generation Clio.

Designed to look and operate like a tablet computer, key functions are grouped into individual icons for easy access and Renault will launch an online R-Link Store similar to the Apple, Android, Nokia and Blackberry alternatives, through which users can download apps to the car. From launch, though, the system will include four pre-installed apps – e-mail, Twitter, weather and Renault Assistance.

BMW CONNECTED DRIVE Telephone connectivity is a small part of BMW’s Connected Drive package, but the features are comprehensive. Cars with a navigation screen can read and display not only contact books and multimedia wirelessly, but also text messages, e-mails, calendar entries with a text-to-speech function.

An on-board data connection boosts this further. Real-time traffic information is displayed as a simple red, amber and green overlay, drivers can display the end destination using Google Street View, and news, weather and sports can be accessed on screen. Connecting to a phone with the relevant app installed also allows Twitter and Facebook updates to be posted from the car’s infotainment system.

TOYOTA TOUCH AND GO PLUS Launched on the Avensis and rolled out to the facelifted Prius and seven-seat Prius+, Toyota’s top of the range infotainment system adds internetconnected navigation which can download 3D city modelling and traffic information over the air.

The system features full calendar and e-mail integration, with the latter able to be sent and received through the car’s dashboard. Touch and Go Plus will also read text aloud so drivers can stay in touch while they’re on the move, and future upgrades will add Google Street View and for text and e-mail messages to be dictated into the system.

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THE FUTURE OF CONNECTED CARS ¡ SECURITY RISKS While connected cars offer a more convenient onroad life for drivers, the data stored in the memory of most built-in infotainment systems has never offered such a detailed view of the owner’s life. Internet connectivity may be in its infancy, but a large percentage of fleet vehicles already contain Bluetooth-transferred phonebooks and, via the sat nav, details of where it’s been driven.

David Tomes of fraud investigation company, Auto Intelligence, says: “In the main, cases I have seen relate to accessing data after the vehicle has been passed on, not particularly the case of access without the driver knowledge, because ultimately the driver gets to know about it. There are also cases where data has been stolen and used for nefarious purpose.”

Not only is this a potential headache for drivers – cases have been reported where new owners have traced cars back to their previous keeper using the sat nav – but it’s an issue for fleet managers too, potentially leaving them open to legal action if data isn’t cleared properly.

Andrew Wright of Fleet Influence explains: ‘Failing to cleanse data between vehicles users is a gaping hole in procedures which leaves the company and directors exposed to legal action should a bright lawyer get hold of it. At a minimum, fleets should implement a cleansing regime at every vehicle turnround but discussions on this topic go even further.

“The suggestion is that, when taking a car from a driver, he or she should be asked to sign to say that personal data has been removed, or to confirm that they have seen the company representative remove data from the car’s devices.”

It’s an issue the remarketing industry is also investigating. The Vehicle Remarketing Association (VRA) recently published a best practice guide, advising its members to ensure that vehicles go through a factory reset procedure when they are de-fleeted to avoid personal information being sold on.

This is a potential problem which can only grow as the technology becomes more commonplace.

Tomes points to recent rearch by American agency ABI, which showed 5.7 million vehicles globally are already internet connected. By 2017, this will have grown more than tenfold, to 60 million, with around 80% of new cars sold in Europe connected to the web.

As the amounts of data stored on board continue to grow, the potential for a legal precedent to be set is becoming more likely, and protecting drivers’ data is an issue no fleets will be able to ignore.

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MORE COMPREHENSIVE PHONE INTEGRATION Manufacturers have tended to mimic smartphone usability through the car’s touch screen. As the technology progresses, phones will begin to stream apps through to the screen, allowing the car to use built-in functionality such as GPS, data connections and even accelerometer data. The MINI Connected app already combines smartphone accelerometer and ECU data to give live driving style information.

GAINING FUNCTIONALITY OVERNIGHT Touch screens allow new functions to be added through software updates, as opposed to requiring extra switches and buttons to be fitted into the dashboard. Tesla’s electric Model S executive car replaces almost all of the traditional switchgear with a 430mm display, and as the software develops Tesla will be able to give drivers new features via an over-the-air update.

Just like putting new software on a smartphone.

WIFI BECOMES MAINSTREAM To date, wireless internet access is only found in luxury models, but expect this to grow. When SYNC launches in the Ford Focus next year, it will gain on-board WiFi allowing tablets, laptops and smartphones to be connected wirelessly. The problem at the moment is relatively slow data, and sometimes patchy coverage.

New ultra-fast 4G connections should take care of both, and the technology is already being rolled out in the Europe’s largest cities.

FACTORY-FITTED TELEMATICS Likely to be a big growth area, advanced telematics such as live vehicle information and remote climate control settings are already found in several electric vehicles.

Volvo’s latest Sensus also allows remote opening via a smartphone and for expense reports to be downloaded as a spreadsheet from the car’s memory. Integrated with a mobile phone data connection, GPS and accelerometer, cars could be able to transmit driver behaviour data and journey information back to base.

ROAD TRAINS Working with Volvo, the SARTRE project is developing technology which will allow a ‘platoon’ of vehicles to follow each other automatically for long stretches of road while the occupants relax and let the car drive itself. The leading vehicle will have a professional driver behind the wheel and sets the speed for the rest of the platoon, with following vehicles using radar, camera and wireless communication to stay in convoy.

THE ULTIMATE MOBILE OFFICES BENTLEY MULSANNE EXECUTIVE CONCEPT

The one-off Mulsanne concept car is designed to show a mobile workplace which can be hidden away when the passengers want to relax. On-board WiFi provides internet access for two iPads, built into electrically-retracting picnic tables and with wireless keyboards. The rear centre console houses a phone, Bentley-branded Tibaldi fountain pen and fridge, while a Mac Mini in the boot is connected to the roof-mounted monitor in the cabin.

Rear-seat functions are controlled via an iPod Touch.

BRABUS iBUSINESS 2.0 Brabus may be known for performance and styling, but the company also carries out bespoke interior conversions to turn the S-Class into a mobile office. The iBusiness system is based on a Mac Mini in the boot and pair of iPads which dock on picnic tables in the rear, offering video conferencing and internet access through a WiFi connection. The iPads also control the entire COMAND infotainment system wirelessly via an app. It’s compatible with any S-Class, but makes the 800hp BRABUS 800 the fastest office on wheels, with a top speed of 219mph.

JAGUAR XJ ULTIMATE Rear-seat occupants in the £121,980 Jaguar XJ Ultimate each get their own third-generation iPad with a wireless keyboard, installed in leather-trimmed docks on the back of the front seats. The iPads can be used without being removed, have their own power supply and are hidden behind leather-trimmed roller doors when not in use. A champagne cooler, with glass flutes, is built into the space between the rear seats.

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CASE STUDY

VOLKSWAGEN MULTIVAN

Could this €83,000 executive transporter be the first steps towards an office-free remote working environment for the future fleet? Alex Grant investigates.

Priced in line with a luxury saloon, the Caravelle Business joined Volkswagen’s commercial vehicle range last summer designed to transport executives who don’t have time to stop working. The technology on board is niche at the moment, but as it becomes more common, could the office of the future be made of metal and rubber, rather than bricks and mortar?

DATA ON THE MOVE A must-have for the mobile office, the Caravelle features onboard WiFi using a small router hidden in the glovebox. This allows several devices to be connected at once, enough for a meeting in the back, but the speeds available depend entirely on the available coverage. The router connects using a SIM card, and with strong 3G coverage can offer speeds equivalent to a home broadband connection.

Volkswagen has also fitted a 12V socket in front of the rear seats. With an inverter, this can keep a laptop battery poweredup without relying on the battery.

SPACE FOR FOUR Trimmed in supple two-tone Nappa leather, the back of the Caravelle offers comfort most boardrooms can’t match. Four occupants can sit behind the front seats, and the middle row rotates to face the back row for a conference setup around a folding, rotating and sliding central table.

At the back, the traditional three-seat bench is replaced with a two-seat unit which could almost have been lifted from the luxurious Phaeton. Passengers here get heated and fully adjustable seating, operated on a wood burr console on each side, with a small but powerful fridge between them and a pair of glass tumblers stowed in a drawer close to the floor.

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COMFORT Cars, unlike offices, don’t usually have central heating. The Multivan fills in for colder weather with a built-in space heater operated off the key fob or a panel above the driver (pictured right). This allows scheduled pre-warming of the cabin, and can run with the engine and air conditioning switched off.

Storage space is more of a challenge, though. The boot is tiny with the rear bench reclined, but there are cubby holes throughout the cabin including A4-sized pockets either side of the table base and a hook behind the rear seats for hanging clothes. Tinted windows with privacy blinds mean it’s quite difficult to see what’s inside, and all that’s really lacking is a toilet.

KEEPING IN TOUCH Volkswagen’s familiar touch screen can be found in the front of the cabin, and it’s fitted with a 60GB hard drive for additional music storage – enough for almost a 40-day soundtrack without hearing the same track twice. Bluetooth connectivity and a wired iPhone connection are included as standard, so keeping in touch while on the move is no problem.

BEHIND THE WHEEL Caravelle and Transporter are renowned for driving more like a car than a van, and the Nappa leather front seats are as comfortable for long distances as you’d expect in a Passat. New models feature a choice of petrol and diesel engines, including the same 2.0-litre twin-turbo diesel from the Amarok, with 180hp, and the familiar 140hp 2.0 TDI which has the range’s lowest CO2 emissions, at 7.7l/100km and 203g/km. Adding a seven-speed DSG transmission costs €2,315, while 4MOTION four-wheel drive is €3,291. Both are available on all engines.

THE NEW SEAT LEON Technology to enjoy.

For further details, please visit www.euroncap.com

ENJOYNEERING THE MOST BEAUTIFUL WAY OF DRIVING A FUNCTIONAL CAR. Sleek and eye-catching, the new SEAT Leon is beautiful and practical. The Leon is designed for maximum performance with low consumption and great safety, making it a powerful choice for fleet. The latest technology is part and parcel of the Leon. Enjoy maintenance-free SEAT Full LED headlamps that light your way as well as advanced safety features like our Automatic Post-Collision Braking System and the Tiredness Recognition System, for which the Leon received the maximum 5-star Euro NCAP rating. The user-friendly EASYCONNECT system allows you to operate the Leon’s large array of infotainment and navigation options through a single touchscreen. Form and function live together comfortably in the new SEAT Leon.

Test drive it and enjoy the future of driving. / SEAT Full LED lights / EASYCONNECT operating system

/ Best residual value among its competitor basket / Fuel-efficient TDI engines from 99 g CO2/km

/ Driving Assistance (including Front and Rear Parking System, High Beam Assist, Lane Assist and much more)

SE AT.COM

SEAT FOR BUSINESS Average consumption: 3.8-6.0 l/100 km. Average CO2 mvissions: 99-139 g/km.

fleet strategy

Budgets and forecasts realigned in uncertain European leasing sector Some major shifts in forecasted residual values and servicing, maintenance and repair budgets have taken place across Europe, reports Experteye.

In the last three months UK leasing companies have realigned their forecasted residual values (RV) by -4.8%, with Portugal altering its outlook on the future used vehicle market by -4.6%.

Portuguese leasing companies have also pushed their servicing, maintenance and repair (SMR) budgets up by +8.2%; a significant shift at a time when Spain has dropped its SMR rates by -6.5%.

The igures from the Experteye European Leasing index show some dramatic shifts during the last quarter and over the course of 2012. During the year, Portugal has moved its forecasted RVs by -8.4% and upped its SMR budgets by +8%. Spain has seen RVs fall by -4% with SMR also dropping by -8.5%. Italy reports a -3.4% reduction in forecasted RVs and +5.2% increase in SMR rates. The UK has seen a -1.7% downturn in its RV predictions with a +3% rise in SMR. Whilst the results are less dramatic in other countries surveyed, French fleet operators have seen a -5.5% reduction in their lease rentals during the last twelve months with only Portuguese customers suffering a marginal increase of +0.8%.

The Experteye survey tracks forecasted residual values (RV), servicing, maintenance and repair (SMR) costs and rental rates in six European countries using data supplied by major leasing companies.

With forecasts and budgets fluctuating it shows uncertainty in the market amidst severe competition to secure fleet business.

with a -0.1% fall in forecasted RVs, a -1.2% drop in SMR budgets and a -1.4% fall in lease rentals. During the most recent quarter German leet operators have seen their rentals climb slightly with a +0.1% rise, however there is continued stability with forecasted RVs shifting by only -0.2% and SMR budgets the same (-0.2%).

ITALY: Italy is the only country in the Experteye survey to have improved its RV forecasts in the last quarter with a +0.1% rise. This follows a year when con idence in the future used vehicle market had declined with a -3.4% fall. Italian leet customers may, however, be concerned to see SMR budgets rising with a signi icant +5.2% hike during 2012, albeit not the largest increase across Europe. Yet irrespective of this SMR rise, rental rates for the year have fallen by -1.4% but have risen marginally in the last quarter by +0.1%.

PORTUGAL: Portugal continues to report the most sizeable shifts in its forecasts and budgets with RV predictions falling by -8.4% for the year and -4.6% for the quarter. SMR budgets have shot up by +8% during 2012 and by +8.2% since October. However, this has balanced out to provide a negligible change in lease rentals for the year (+0.8%) and a -0.8% fall during the last quarter.

SPAIN: Spain has seen the largest fall in SMR budgets of all nations surveyed. In 2012 they dropped by -8.5% and in the latest quarter by -6.5%. Con idence in the future used vehicle market fell during the year with a -4% reduction in forecasted residual values, and a -1% downturn over the last three months. Spanish leet operators, however, have seen little impact on their lease rates with a -1% drop in rentals during 2012 and a +0.2% rise in the last quarter.

UK: Con idence in the future used vehicle market has been down in the UK, with a -1.7% fall in forecasted RVs during the last twelve months and a -4.8% drop in the last quarter; the largest reduction over three months of all nations surveyed. SMR budgets have risen by +3% in 2012 with a +0.1% rise since October. And whilst rental rates have fallen by -1.2% during the course of the year there has been no movement at all in the latest quarter.

Market summaries – 3 and 12 months to December 2012 FRANCE: French fleet operators have enjoyed the largest reduction in their average lease rates across all nations surveyed, with a -5.5% fall during 2012. The latest quarter sees a -2.4% reduction in rates, with residual value forecasts moving by -0.1% and SMR budgets increasing by +0.9%. During the last twelve months confidence in the future used vehicle market has remained relatively static with a small +1.1% shift in forecasted RVs. SMR budgets have come down by -1.7%.

GERMANY: Germany has remained relatively stable during 2012

CHANGES IN RV FORECASTS, SMR COST FORECASTS AND LEASE RENTALS Forecast Residual Values

Forecast Service, Maintenance and Repair Costs

Current Rental Rates

3-month change 12-month change 3-month change 12-month change 3-month change 12-month change France Germany Italy Portugal Spain UK

-0.1% -0.2% +0.1% -4.6% -1.0% -4.8%

+1.1% -0.1% -3.4% -8.4% -4.0% -1.7%

Notes: • The comparisons are for vehicles with a contract duration of 36 months/90,000km.

• Twelve-month comparisons show change since January 2012.

• Three-month comparisons show change since October 2012.

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+0.9% -0.2% -0.7% +8.2% -6.5% +0.1%

-1.7% -1.2% +5.2% +8.0% -8.5% +3.0%

-2.4% +0.1% +0.1% -0.8% +0.2% +0.0%

-5.5% -1.4% -1.4% +0.8% -1.0% -1.2%

• Rental rate changes compare the rates in effect at the time of the survey with those in effect three or twelve months ago.

• RV and SMR changes show the change in participating leasing companies’ forecasts of residual values and maintenance costs over the period.

new models

A DOZEN FOR ‘13

• CITROEN DS3 CABRIO • PEUGEOT 2008 • RENAULT ZOE • HONDA CR-V I-DTEC • VW GOLF BLUEMOTION • MAZDA6 • NISSAN LEAF • TOYOTA AURIS WAGON SPORTS • MERCEDES-BENZ E-CLASS • SKODA OCTAVIA • KIA CARENS • VAUXHALL CASCADA ¡

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A DOZEN FOR ‘13

¡ THE 12 KEY MODELS TO LOOK OUT FOR THIS YEAR, AND WHEN TO EXPECT THEM ON YOUR FLEET. BY ALEX GRANT.

CITROEN DS3 CABRIO Citroën has sold more than 200,000 DS3s globally since the supermini launched three years ago. It’s been an important part of reinventing the brand’s image, and popular with fleets thanks to its lowcarbon engines and aesthetic appeal. A refreshed version is coming soon, but most of its styling updates will get a first outing on the DS3 Cabrio, which launches in early 2013 with the MINI Convertible and Fiat 500C in its crosshair.

The Cabrio retains five seats and most of the DS3’s side profile and boot space, adding a pearlescent fabric centre section to the roof and a menial 25kg to the weight. This can be optioned in three colours and retracts to the bottom of the rear window line in 16 seconds at up to 75mph.

It’s also the first DS3 to get the new LED rear lights and PureTech downsized petrol engines destined for the rest of the range. Conquest sales beckon. WHEN? Early 2013

PEUGEOT 2008 Looking almost identical to the concept car shown at last year’s Paris Motor Show, save for the lack of a luminous yellow paint job, the 2008 is Peugeot’s entry into the growing B-segment crossover class. It’s a sector where most mainstream manufacturers will be launching products in the near future, and could help retain user-chooser customers the ageing 308 can’t tempt. Production begins alongside the 208 this summer, and the first cars will be delivered in the second half of the year.

The 2008 is roughly the same size as a Nissan Juke, and features the same floating trapezoidal grille and claw-shaped rear lights as the 208. Engines include e-HDI diesels and Peugeot’s first use of the new 1.2-litre turbocharged petrol, with CO2 emissions starting at 99g/km. The manufacturer has also hinted at a connected multimedia system, and buyers will be able to order the car with snow and mud tyres similar to the 3008.

WHEN? Autumn 2013

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RENAULT ZOE The supermini sector is ideal for electric vehicles, as it tends to be one defined by short commutes and low average mileage where battery range isn’t much of an issue. Unfortunately high pricing tends to be a deal-breaker, which is a problem Renault hopes to solve with the ZOE. Thanks to the carmaker’s battery leasing scheme and government grants in several EU States, ZOE is available at a competitive price. For example in France the Government provides a grant of €7,000, bringing the starting price down to €13,700 including VAT. It’s also home to technology as advanced as the styling suggests. The ZOE features new EV-specific tyres, an energy-saving cabin heater pump and regenerative braking system aimed at boosting its range to a best-in-class 130 miles on the official combined cycle. It can be recharged at multiple speeds through a single charging port, and is fitted with Renault’s R-Link tablet-style multimedia system. This combines conventional navigation, telephony and audio functions with a high-speed data connection and additional functions for electric motoring. It could be ideal for low-mileage public sector fleets. WHEN? Early 2013

HONDA CR-V 1.6 i-DTEC Honda is readying a line-up of efficient new engines under its Earth Dreams Technology banner, aiming to create a green sub-brand similar to BMW’s EfficientDynamics line. The 1.6 i-DTEC debuted recently in the Civic and is earmarked for the CR-V crossover from Q3 onwards.

To date, the CR-V has only been offered with the 2.2 i-DTEC, which in turn has no two-wheel drive option and emits a minimum of 149g/km CO2. With the 1.6 i-DTEC, Honda will have its first two-wheel drive diesel crossover and is targeting best in class emissions, which would mean undercutting the smaller 119g/km Mazda CX-5 and Nissan Qashqai.

The CR-V is a popular model with buyers who use its off-roading ability, so the 1.6 i-DTEC won’t take over from the 2.2 as it has in the Civic. But this is expected to be the most popular choice for fleets, and in a growing segment it should open new doors for Honda. WHEN? Late 2013 IFW February 2013

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new models

¡ VOLKSWAGEN GOLF BLUEMOTION Volkswagen will be able to claim the C-segment’s lowest CO2 emissions when it launches its third Golf BlueMotion next summer. Predicted to offer 3.2l/100km and 85g/km, it’s more efficient than current class-leaders the Renault Megane and the revised Toyota Auris Hybrid, as well as undercutting the Polo Bluemotion. It also hints that the next Passat BlueMotion should emit less than 100g/km CO2.

Based on the 1.6 TDI, the engine has been retuned to offer an extra 5bhp, while the bodywork is lighter and 10% more aerodynamic than the rest of the Golf range. Longer gear ratios, lower rolling resistance tyres and reduced drivetrain weight all contribute to the lower fuel consumption. Similar to previous versions, the BlueMotion upgrades will add to the up-front price, but this should be balanced by reduced fuel consumption and tax concessions for the reduced CO2 emissions where applicable. WHEN? Summer 2013

TOYOTA AURIS WAGON SPORTS Debuted at the Paris Motor Show in September, the Auris Wagon Sports is the first time Toyota has had a C-segment estate since 2006. It’s a vital model, too. Estates make up a quarter of the segment’s sales Europe-wide, and this could help retain space-conscious buyers who may otherwise move into a low-CO2 crossover, which the carmaker doesn’t have.

The Auris Wagon Sports shares its wheelbase with the hatchback, growing 285mm at the back end to improve the load space. It’s also confirmed for the hybrid drivetrain, which gives Toyota a unique model in this sector. The hybrid battery moved from under the boot to under the rear bench as part of the recent refresh, which means all Auris models have the same load space.

Pricing and running costs haven’t been released yet, but the hybrid has the potential to be the segment’s most efficient estate, undercutting the 90g/km Megane dCI 110.

WHEN? Summer 2013

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MAZDA6

With the striking new Mondeo delayed until 2014, Mazda has a real opportunity to increase its Dsector foothold with the new Mazda6. This is the second model to feature Mazda’s SKYACTIV Technology improvements, which means efficient and responsive new powertrains, lighter and stiffer bodyshells and revised chassis components. So not only is this car larger and more fun to drive than its predecessor, but it’s better looking and considerably more efficient too.

The range comprises two diesel and two petrol engines, six trim levels and estate or saloon body styles, with the 2.2-litre SKYACTIV-D diesel engine in the lower of its two power outputs predicted to be the fleet favourite. This combines 148bhp with some of the sector’s best efficiency figures - 4.5l/100km fuel economy and CO2 emissions of 108g/km – better than low-carbon Ford, Opel or Volkswagen rivals. Improved residuals and a petrol with the lowest BiK in the range will really up Mazda’s appeal. WHEN? January 2013

NISSAN LEAF Localised production of a Europe-only LEAF will begin at Nissan’s Sunderland plant this April. While there are no official details at the time of writing, the Japanese market LEAF has recently been updated too, which could offers some clues about what’s coming to Europe.

Most of the upgrades are to the drivetrain. This now features a smaller, lighter high voltage unit which is relocated to the front of the car and a new motor with fewer rare earth metals used in its manufacture. These upgrades shed 80kg, improve the range by 14% and include a low-price entry-level trim costing around €30,700. If European pricing is similar, this could bring the LEAF entry price, after government grants, where available, much closer to conventionally powered C-segment rivals.

Details of the Sunderland-built LEAF will be announced at the Geneva Motor Show in March. WHEN? April 2013

MERCEDES-BENZ E-CLASS The executive segment has become sportier and more youthful recently, and the refreshed E-Class brings Mercedes-Benz in line with fresher-looking competition. This substantial facelift introduces single-piece headlamps either side of a more prominent grille badge, in-keeping with the latest models, while the outgoing car’s muscular rear arches have been softened and the interior subtly revised.

Mercedes-Benz has chosen the E-Class to debut 11 new driver assistance systems, including accident avoidance technology and a simulated birds-eye view parking camera, before they are fitted to the next S-Class. All diesel engines have had small improvements in economy, including the hybrid which now emits 107g/km CO2 in the saloon. Also interesting for fleets, though, is a pair of new efficient 2.0-litre petrol engines. The E200 and E250 both return 5.8l/100km and emit 135g/km in the saloon, with power outputs of 184 and 211bhp respectively. These could be a viable tax-efficient choice for low-mileage user-choosers. WHEN? Early 2013

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new models

¡ KIA CARENS

SKODA OCTAVIA Skoda begins 2013 launching all-new Octavia, featuring the same upmarket styling as the Rapid and based on an extended version of the new Golf modular platform. It’s the longest wheelbase yet derived from the platform, offering improved rear occupant space and a marginal increase in boot capacity, while, at 102kg lighter than its predecessor, it’s also the most efficient Octavia yet.

From launch, the Octavia will use four petrol and four diesel engines, and all except the entry-level models will feature idle stop and energy recuperation as standard. The CO2 leader is the 89g/km Octavia GreenLine, based on the 1.6 TDI, which is the first time Skoda has offered a C-Segment car at under 100g/km. Luxury class features such as fatigue detection, automatic parking and high beams and the accident avoidance system from the Citigo all help make this a sophisticated, costconscious choice. WHEN? Q1 2013

Kia’s large MPV is the last model in the range to receive the stylistic influence of design chief Peter Schreyer, and it can’t come soon enough. The result makes Carens one of the best looking MPVs on sale. Styled a lot like the new cee’d, it’s smaller than its predecessor but offers additional interior space while retaining its seven-seat capacity.

The new Carens will feature two versions of the 1.7-litre diesel engine with 133 and 134bhp, the former offering CO2 emissions as low as 118g/km, and two petrols with 133 and 174bhp. All cars get six-speed gearboxes and a front passenger seat which folds flat to extend the load area, and the new car is expected to achieve five Euro NCAP stars when it is tested next year, beating the four achieved by its predecessor. This should increase its company car appeal while retaining its Motability popularity. WHEN? Spring 2013

The Cascada takes Opel into its fourth new segment within 12 months when it arrives in showrooms this year, continuing a design-led move upmarket kickstarted by the ADAM city car. Based on the current Astra platform and sharing the GTC’s front suspension setup, this is a four-seat convertible of 4.7 metres in length, a similar size to the new Astra saloon and longer than the Audi A5 Cabriolet.

Three engines will be available from launch, comprising the familiar 1.4-litre turbocharged petrol and 165bhp 2.0 CDTi as well as the first use of a new 168bhp 1.6 turbocharged petrol. Cascada won’t record massive fleet volumes, especially if Opel restricts sales as it has with the ADAM, but it could be a helpful model for changing perceptions. WHEN? Q1 2013

OPEL CASCADA

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management

Can leasing speed up LEV uptake?

Tighter emissions means higher vehicle cost and it’s the same story for alternative fuels. What role can finance leasing play in bringing these technologies to market? John Kendall finds out. t’s probably true to say that the motor industry has never been faced with as much change as it has been for the past few years, at least, not since its beginnings in the late 19th Century. Whether or not we like the idea of vehicles powered by alternative fuels, there is no doubt that we will have to get used to it.

Our conventional fossil fuel reserves are being depleted, but may still be fuelling vehicles for a signi icant proportion of this century. We may be able to use alternative fossil sources, such as shale gas, but like oil, these resources will be inite. Applying Hubbert’s Peak theory suggests that as supplies dwindle, price will become less stable, like we have seen in recent years.

This will certainly be one incentive for manufacturers to seek out alternatives.

With these comes additional cost. Battery electric vehicles are currently dependent on rare and expensive metals for battery manufacture, which adds signi icantly to the price of a vehicle. Hybrids inevitably bring additional cost as they incorporate an internal combustion engine and electric motor, with a battery pack similar to that in an electric vehicle, but smaller, depending on the hybrid technology used.

Hydrogen fuel cell vehicles will carry a cost penalty to cover the cost of developing the technology and possibly equipping vehicles with batteries similar to those in an electric or hybrid vehicle.

There are other examples we could use, but we must also consider conventionally fuelled petrol and diesel vehicles. In Europe, Euro 6 compliant vehicles will become a reality in 2014.

New heavy commercial vehicles are already affected, although it will be January 2014 before all vehicles must comply.

The sizeable reductions in emissions of oxides of Nitrogen (NOx) for diesel

I

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vehicles means that selective catalytic reduction (SCR) exhaust aftertreatment, similar to that used for heavy trucks already, will probably have to be applied to light diesel engines too. This would involve itting a system for injecting a urea solution into the exhaust stream to react with the gases and reduce the NOx to nitrogen and water, in addition to a particulate ilter. Alternative systems are being researched, but whatever system is used will add cost to the vehicle.

This is particularly relevant for Euro 6 compliant trucks and buses, where two aftertreatment systems will be needed, where one has been enough before. The on-cost quoted by a number of manufacturers is in the region of €8,000 – €12,000 per vehicle. US EPA ‘10 regulations have already introduced similar aftertreatment technology on US trucks.

So motor vehicles of all types will continue to become more expensive as more technologies are added to control emissions, or alternative powertrains are introduced. For leets that would mean the prospect of more capital expenditure, if they buy vehicles outright. It is also a potential opportunity for leasing and inance companies, which could help leets to reduce capital expenditure. Is an operating lease the best option? Do inance providers need to consider new ways of funding? Are there incidental bene its with these funding opportunities?

A new truck and trailer could cost upwards of €120,000, depending on the truck and the complexity of the trailer.

Given the high capital costs, commercial vehicle operators have been more ready to use leasing options than those operating car leets, as KPMG’s 2011 truck study, Competing in the Global Truck Industry –

Emerging Markets Spotlight, has identi ied. Research for the report suggested that some 45% of new trucks are leased in Germany, compared with 21% of cars.

Given that around 33% of a transport company’s costs are fuel, releasing capital by leasing vehicles could help with cash low, while also ensuring that the operator has new, more fuel-ef icient vehicles in the leet, which in turn could help to reduce those fuel costs. It could also help with budgeting if the operator also has a clearer idea of monthly ixed costs.

Over 20 years of emissions reduction policy has helped to reduce truck emissions. But the reductions could be greater.

Leaseurope’s report, The Road to 2050: Truck leasing and rental – An integral part of a sustainable European transport system, highlights the age of many truck leets across Europe. While newer trucks offer sizeable reductions in toxic and CO2 emissions, there are still many older trucks on the road. If these were replaced with newer vehicles, it would speed up improvements in air quality. This is the rationale behind the emergence of city low emission zones (LEZ).

Leaseurope’s report compares the average age of leased trucks on leets across a number of European States with the age of the entire leet. In Germany, the average is 2.5 years for leased vehicles and 6.8 years for the entire leet, in the UK 2.8 years for leased vehicles and 6.6 for the entire leet and in Spain, 2.5 years for the leased leet and 8.5 years across the entire leet. Leasing could play a signi icant role in helping to ‘clean up’ and renew truck leets.

The KPMG report – Global Automotive Finance and Leasing: The role of product diversi ication and emerging markets in future growth, also points to the many additional services that truck OEMs offer

customers besides leasing and inance.

These include service products (i.e. maintenance/repair and fuel/service cards), leet management and mobility solutions.

Cost is clearly an issue for car leets, particularly when considering battery and hybrid vehicles. It seems that sales of electric vehicles have slumped in a number of markets, despite a reasonable choice of good products that are easy to drive. Cost is not the only issue – concerns surrounding range are also a large factor, but electric vehicles can offer a viable solution for many drivers who tend to cover shorter distances in urban areas or delivery leets operating in similar conditions and returning to the same base each day, where the batteries can be recharged.

Where cost is concerned, buyers who choose EVs are taking on a risk that is dif icult to quantify. The KPMG report Global Automotive Finance and Leasing identi ies the high cost of batteries and how different battery chemistries offer different life expectancies, making it dif icult to determine residual value. This in turn makes it dif icult to determine leasing rates.

Separating vehicle and battery cost and making the batteries available on a leaseonly basis could be one way to make the leasing model work, as Renault has chosen to do. This reduces the cost of the vehicle to that of a comparable model with a conventional engine, then offers the batteries on a separate lease using a fairly standard distance basis for calculating the cost.

Recently new methods of inancing mobility have become available or are in the development stage. Peugeot, for instance has introduced its Mu scheme in many city dealers across Europe. A driver can sign up to the Mu rental scheme, by setting up an account, which can be done online, then buy credits which can be used to rent a range of vehicles, or a bike, a scooter or even an accessory such as a roof box. The Mu account is then debited accordingly.

The scheme allows the account holder to rent any Peugeot vehicle according to their needs and as consumers look for new and more lexible mobility solutions, variations of such a scheme for more permanent users could provide an alternative.

Separating vehicle and battery cost and making the batteries available on a lease-only basis could be one way to make the leasing model work, as Renault has chosen to do IFW February 2013

31

fleet focus CHINA

SMALL MARKET, HUGE POTENTIAL China offers huge potential for motor manufacturers, but access to finance and corruption are among the current barriers to growth, reports John Kendall.

MADE IN CHINA The Buick Excelle was China’s best selling saloon in 2012.

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“Disappointing” is not the word that European automotive manufacturers would use for sales growth of 4.3% in their home markets at the moment. But that’s how 4.3% growth in vehicle sales in China has been described for 2012. Compared with 46% growth in 2009 and 32% in 2010, it is clearly a different story, but as European economies are learning, growth does not continue forever. In total 19.3m vehicles were sold in China in 2012, of which 15.5m were passenger cars.

Passenger car sales growth reached 7.1% for the year, down on the 8% predicted by the China Association of Auto Manufacturers (CAAM). The biggest growth was in SUV sales, which rose 25.5% during 2012 to 2,000,400. Just the same, saloon cars still accounted for the majority of sales, rising 6.15% to 10,744,700. MPV sales fell by 0.87% to 493,300, while microvan sales, included in passenger car data, experienced a marginal reduction of 0.07% to 2,256,700.

The table (below) shows domestic sales. Chinese manufacturers also had a record year for exports with sales of 1,056,100, an increase of 29.7% compared with 2011. It was the first time that exports had grown above 1m. The top five exporters were Chery, Geely, Great Wall, SAIC, and Lifan. According to the Financial Times, the top export markets for Chinese manufacturers in 2012 included Algeria, Chile, Iran, Iraq and Russia.

By contrast, commercial vehicle (CV) sales fell by 5.49% overall to 3,811,200, with buses showing the only growth in the CV sector in 2012, up 5.51% to 425,600. Truck sales fell by 1.8% during TOP 10 CHINESE PASSENGER CAR MANUFACTURER SALES 2012

Skodas are produced in China under a JV with SAIC

the year to 2,653,400.

But the trend is upward. Total vehicle sales growth in 2011 was 2.5% and sales growth increased towards the end of 2012, encouraging analysts to believe that 2013 will see further expansion. CAAM is predicting average growth of 7% in the total Chinese vehicle market in 2013, with car sales growing by 8.5% and commercial vehicles by 1%.

Factors said to have affected growth in 2012 have included slowing economic growth, the ending of incentives for domestic manufacturers, restrictions on sales in some large Chinese cities, in an attempt to control congestion and the dispute over the Senkaku islands between China and Japan, which has limited sales of Japanese vehicle brands in China. Air quality is also a major concern in many TOP 10 CHINESE COMMERCIAL VEHICLE MANUFACTURER SALES 2012

Manufacturer

Sales (000s)

Manufacturer

Sales (000s)

Shanghai GM

1,363.5

Beiqi Foton

613.1

FAW VW

1,328.9

Dongfeng

538.7

SGMW

1,322.6

JAC

274.7

Shanghai VW

1,280

Jinbei

263

Beijing Hyundai

859.6

FAW

227.7

Dongfeng Nissan

733

Jiangling

187.7

Chongqing Changan

604.2

Sinotruck

137.8

Chery

550.2

Great Wall

137.2

FAW Toyota

495.5

SGMW

135.6

Changan Ford

493.6

Nanjing Auto

132

Source: China Auto Web

Source: China Auto Web

Chinese cities. At the time of writing, Beijing was gripped by smog with PM 2.5 (fine particles measuring less than 2.5 microns in diameter) levels at official and unofficial monitoring stations having climbed way above the World Health Organisation (WHO) danger level of 300 microgrammes per cubic metre.

Since China outpaced the US car market in 2009, making it the largest car market in the world, a comparison with the 2012 US car market makes interesting reading.

The US passenger car market grew 13% to 14.5m in 2012. Comparing the populations of the two countries shows the US with a population of approximately 315m, while the population of China is estimated at 1,347m. Applying the 2012 US car sales data to the Chinese population would provide a potential market for 62m new car sales in China last year.

Obviously this a very crude analysis that does not take economic factors in China into account. Just the same it makes it easier to understand why there is so much optimism applied to the Chinese vehicle market and why the Japanese, Korean, European and North American manufacturers have been so keen to do business in the market with the largest population in the world, particularly when prospects for growth elsewhere are not encouraging. Of course there are many reasons why it will take some time yet before the vehicle market in China could reach that level.

Foreign motor manufacturers cannot enter the Chinese market without a 50/50 stake in a joint venture with a Chinese partner or partners. This has resulted in a number of joint ventures between a single Chinese manufacturer and a number of rival foreign manufacturers. For

IFW February 2013

33

¡

fleet focus CHINA

Small market, huge potential... ¡

TOP 10 SALOON/HATCHBACK MODELS IN CHINA 2012 Model

Manufacturer

Sales

Buick Excelle

Shanghai GM

277,071

Chevrolet Sail (saloon)

Shanghai GM

262,071

VW Lavida

Shanghai VW

246,687

VW Jetta

FAW VW

246,687

VW Passat

Shanghai VW

233,321

Chevrolet Cruze

Shanghai GM

232,592

VW Bora

FAW VW

222,735

Hyundai Elantra Yuedong

Beijing Hyundai

213,974

Hyundai Verna

Beijing Hyundai

201,746

VW Sagitar

FAW VW

173,667

Source: China Auto Web

TOP 10 SUV MODELS IN CHINA 2012 Model

Manufacturer

Sales

VW Tiguan

Shanghai VW

173,062

Honda CR-V

Dongfeng Honda

169,037

Great Wall Haval H6

Great Wall

112,262

Hyundai ix35

Beijing Hyundai

108,241

Chery Tiggo

Chery

105,553

Nissan Qashqai

Dongfeng Nissan

105,143

Toyota RAV4

FAW Toyota

98,179

Audi Q5

FAW VW

90,157

BYD S6

BYD

86,851

Kia Sportage R

Dongfeng Yueda Kia

75,969

WHAT OF THE OPPORTUNITIES FOR FLEET BUSINESS IN SUCH A LARGE AND GROWING MARKET?

Source: China Auto Web

TOP 10 MPV MODELS IN CHINA 2012 Model

Manufacturer

Sales

Dongfeng Fengxing Lingzhi

Dongfeng

74,451

Buick GL8

Shanghai GM

64,001

Dongfeng Fengxing Joyear

Dongfeng

62,187

JAC Refine

JAC

54,093

FAW Xenia (Senya)

FAW Jilin Daihatsu

41,270

JAC J6

JAC

37,304

VW Touran

Shanghai VW

36,044

Dongfeng Succe

Dongfeng Nissan

25,157

Honda Odyssey

GAC Honda

20,900

Haima Freema

FAW Haima

20,653

Source: China Auto Web

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instance Dongfeng has joint ventures with Nissan, PSA Peugeot Citroën, Honda and Kia (in partnership with Jiangsu Yueda).

Similarly, some foreign manufacturers have formed joint ventures with more than one Chinese partner. The Volkswagen Group is an example, having formed partnerships with First Auto Works (FAW) and SAIC (Shanghai Automotive Industry Corporation).

Under the JV with FAW, both Audi and VW models are produced, including the Audi A4L, A6L and Q5. VW models include the Bora, Passat CC, Golf, Jetta, Magotan (Chinese Passat variant, launched in 2011) and Sagitar (based on the 2010 VW Jetta, launched in China in 2011.) The JV with SAIC produces the VW Lavida (a saloon developed for the Chinese market, based on a lengthened Golf Platform, launched in 2008), New Passat, Passat-Lingyu (a lengthened Passat for the Chinese market, launched in 2005), Polo, Santana and Tiguan. For Skoda the JV manufactures the Fabia, Octavia and Superb.

Other examples of manufacturers building vehicles with more than one Chinese partner include GM and Toyota.

The models produced for China are not necessarily the same as those produced by the original manufacturer elsewhere.

Many business managers prefer to be driven. For this reason it is fairly common for long wheelbase variants to be produced specifically for the Chinese market, such as the Audi A4L, A6L and Chinese VW variants mentioned above.

As the best seller tables show, Chinese manufacturers are not necessarily preferred by Chinese buyers. For saloons and hatchbacks, there were only three Chinese models in the top 20, the Geely Emgrand EC7, FAW Xiali and Chery QQ, taking the 14th, 16th and 18th places respectively in 2012.

Chinese manufacturers performed better in the growing SUV sector, although as already discussed, the passenger car sector is far larger.

The story is different in the MPV sector where Chinese producers performed better.

Despite the requirements for JV operations where motor manufacturers are concerned, the Chinese authorities take a different view when it comes to providing finance. As The White Clarke Group points out in its recent report, China Asset and Auto Finance Survey, the market was opened up by the Ministry of Commerce (MOFCOM) in 2005, when foreign owned leasing operations were permitted to operate in China and this included overseas car manufacturers’ finance operations.

The report points to around 17 auto finance operators in the country. These include a mix of foreign funded, JV and wholly Chinese funded operations. Volvo Financial Services was the first to gain a licence.

China is ranked 29th out of 144 countries in the World Economic Forum Global Competitiveness Index 2012-13, which is a good score. As the White Clarke Group indicates, the 2011-12 Global Competitive Report highlights several problem areas for doing business. Most problematic is access to financing. In

Many business managers prefer to be driven. For this reason it is fairly common for long wheelbase variants to be produced specifically for the Chinese market.

order, the top five problems are listed as inflation, policy instability, inefficient government bureaucracy and corruption. The international organisation Transparency International has produced a Corruption Perceptions index, indicating how corrupt a country’s public sector is perceived to be for many years and the 2012 index, published in December 2012, rates China as joint 80th out of 176 countries. The report also gives a corruption score and China scores 39 out of 100. Scores below 50 indicate a high level of corruption.

China appears to have work to do to improve this perception.

ALD Automotive is active in China, based in Shanghai. We spoke to the company’s general manager in China, Frédéric Hamain, and Guillaume Bourst, business development manager. Mr Hamain started by underlining the relatively small size of the market, “despite everybody mentioning that this is the largest market in the world, we are speaking about a stock of cars which is very, very low – between 80 and 90 million. This market is very big potentially, but very small today, if you compare it with the population. Only 7% of people have cars. The expectation is that in 20 years, the rate will be only 25%, compared with the US and Europe, where it is 80% and 60%.”

Guillaume Bourst highlights some of the difficulties in assessing the size of the business car market, “It is very difficult to find reliable figures on this market because it is not very well structured and we don’t have any official numbers.”

“There is an estimate that at the end of 2012, there would be 11m business cars – essential cars used by companies and government”, says Mr Hamain, “Around 15% of the total market. If you compare again with Europe, the business market is closer to 25%. So there is still a gap. The experts believe that this gap will increase, because the population will get more and more new cars but the rate of growth for business will not be the same. So probably it will drop from 15% to 13%.

“Most of the business cars today are actually management cars and a lot of them are government cars used by officials or people in state-owned enterprises”, continues Mr Bourst, “These are mainly luxury cars.”

Audi tends to be the preferred brand here and Mr Bourst points out that the image of BMW is too luxurious for the company car market. “They believe Audi is the right fit because it is a good mix of a Western brand, a good image, a long, black car, most of the time with tinted windows. At the same time, the image is not too high like Mercedes or BMW would be. Despite all the

efforts of the Chinese Government to promote the local Chinese brands, it’s still dominated by the foreign brands.”

Who has a business car in China? “Of all the requests we receive, most are for managers or heads of departments. There are almost no corporate fleets, as you would find in other countries for the sales and technical guys, that’s also why the figures are pretty low”, says Mr Hamain.

“What we have seen recently is an increase in car allowances for people to buy their own cars. In China there is still very much a desire to own”, says Mr Bourst, “This is changing for several reasons. First is the rotation rate. It’s very common for Chinese people to change jobs after 1 or 2 years and companies are looking for retention tools.” The moves to limit cars in cities is another reason.

Business and private cars pay similar taxes, says Mr Hamain. At purchase this includes VAT and a purchase tax of around 10% of the price. Local authorities also levy an annual tax. “In 2012, VAT was introduced but only leasing companies have the capacity to deduct the VAT because it is considered a working tool. So if I am a company and I lease the car, because the leasing company can deduct VAT, I can save around 15% on the cost. So we anticipate that this will definitely boost the leasing market.”

Managers prefer to be driven – Audi produces a stretched A6, the A6L, specifically for the Chinese market

IFW February 2013

35

remarketing

PETER GRØFTEHAUGE, AUTOROLA’S CHIEF EXECUTIVE, LOOKS AT THE GROWING EXODUS OF LARGE 4x4s FROM WESTERN EUROPE INTO RUSSIA VIA POLAND.

A

s winter hits areas of Europe harder than others, a migration of large used high emission 4x4s from Western Europe to Russia has begun, according to Autorola.

This cross border trend not only shows that Europe is becoming one large market from an online remarketing perspective, irrespective of VAT and tax, but the continent’s vendors and buyers are proving that there should be no such thing as a used car that can’t find a home. A recent good example is Lithuanian and Latvian buyers who are currently sourcing 4x4s from Autorola Poland from vendors across Europe to satisfy the growing demand in Russia.

At a time when the large used 4x4 market is virtually coming to a standstill in western Europe due to the increased penalties being dished out to high CO2 cars, Russians are seeking these cars in high numbers for very practical reasons. There are many roads in Russia that are in very poor condition with pot holes capable of swallowing small children and large parts of the country suffer from very low temperatures where snow and ice are permanent fixtures for months on end.

The large 4x4, irrespective of brand, is able to cope with these extreme conditions which is why they have found favour with Russian businesses and businessmen, which in turn is feeding this cross border demand.

In countries such as Holland, Belgium and Germany 4x4s, particularly the older ones and those with large petrol engines, have fallen out of favour with buyers because of high running costs including fuel and tax. The environmental lobby has also forced many western European Governments to introduce CO2 based tax structures that tax large 4x4s very heavily due to their high emissions.

On this basis alone western European countries are only too happy to offer these vehicles for sale on the Autorola online trading platform. Who they get purchased by and where they end up isn’t a consideration for asset owners, all they know is that they have been purchased through a secure online platform they can trust and been paid within a few days of them being collected by the new owner. ”We saw how cross border trading via our online platform helped the likes of Portugal and Spain dispose of tens of thousands of unwanted used cars because of the poor economic conditions in these countries,” said Peter Grøftehauge, Autorola’s chief executive. ”Buyers bought these vehicles to feed the growing demand from eastern Europe for used vehicles of all ages, thus helping prevent used cars sitting around in storage yards for months at a time becoming a huge drain on the country’s cash flow. ”Demand for 4x4s in Russia is high because they don’t currently penalise higher emission vehicles and instead focus more on practicality and suitability for the country’s road and weather conditions.

We believe this trend will continue from west to east all year round rather than just experiencing a peak of demand in the winter months,” he added.

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Audi aims for global premium leadership Germany’s third premium brand continues to develop both its model range and global footprint.

Is there no stopping it?

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AUDI WORLDWIDE MARKET PERFORMANCE IN 2012 Audi has gradually risen to a strong position within the global luxury car market, largely through an extensive model expansion programme. In the 1990s, Audi offered a handful of conventional saloon and estate models, but between 2001 and 2012 it has expanded its range of distinct models from 17 models to 41, adding sports cars, SUVs, cabriolets and high-performance derivatives, as well as moving into the small car segment with the A1.

Audi’s model proliferation has proved successful, with the company achieving consistent growth over recent years and setting new sales records in 2012, despite tough economic conditions in two of its main markets, Europe and North America.

In 2012 Audi sold around 1,455,100 cars worldwide, 11.7% more than the previous record set in 2011, according to provisional data released by the company. This figure surpassed the 2012 target, announced in the summer, of 1.4 million cars, largely thanks to strong growth in North America and Asia.

Deliveries exceeded the 2011 igure by more than 152,000, making it the secondhighest jump in sales in the history of the company. That record was set in 2011, when Audi sales grew by 210,000 over 2010’s level. With around 110,400 deliveries (+0.8%) in December 2012, Audi reached again the strong sales total of the excellent inal month of 2011.

“In 2012, Audi achieved new record totals in every region worldwide, including in Europe,” said Luca de Meo, Audi management board member responsible for sales and marketing. “We managed to buck the negative market trend and continued to grow there, extending our lead as the strongest premium brand.” In Europe, Audi sold a total of around 739,000 cars in the past year, growth of 1.8% against a difficult market.

BATTLE FOR PRESTIGE BRAND LEADERSHIP Audi has in recent years signi icantly closed the gap with its two main German prestige rivals, BMW and Mercedes-Benz. BMW is still ahead – brand sales rose 11.6% in 2012 to reach a total of 1,540,085 vehicles, simi-

lar growth to Audi and also the best sales level in the history of the brand. But Audi has now overtaken Mercedes-Benz, which also achieved a new sales record in 2012 of 1,320,097 Mercedes-Benz brand vehicles.

De Meo said new models had helped the sales expansion: “Worldwide, our new models in particular gave us an extra lift over the past year, most notably the Audi Q3: It has helped the entire Audi SUV family become a mainstay of our success, now accounting for one-quarter of all deliveries for the irst time.”

Global sales of the Q3 began in October 2011, so 2012 was its irst full year in the market. In Europe alone, Audi sold around 78,700 units of its compact SUV in 2012. The larger Q5 also performed well. The SUV was the leader in its segment in 2012 with around 206,000 units delivered worldwide.

De Meo also singled out the A6 Avant, another model launched in autumn 2011, as providing strong sales in Europe. Around 60% of A6 customers in Europe choose the station wagon version over the saloon: A6 Avant sales in the region rose by 38.9% to 63,100 in 2012.

EUROPEAN SALES: DIFFERING FORTUNES In major European countries, Audi experienced differing fortunes. In Germany Audi outperformed the overall market, increasing sales by 3.6% to a new high of 263,163 to give the company a market share of 8.6%, the highest in its history.

In France, in a contracting overall 2012 market, Audi France was able to repeat the previous year’s record sales. With 62,202 deliveries, up 0.3%, Audi maintained its leading position in the premium segment in France. However, the signi icantly worse economic situation in Southern Europe led to declining sales in Italy (down 17.0% to 50,085) and Spain (a drop of 11.7% to 36,139) in 2012. In both countries, however, the registration igures for Audi managed to hold their ground much better than the market as a whole.

The strongest performance came from the UK, where Audi has almost doubled its annual sales over the past ten years. Business in 2012 contributed to this performance with growth of 7.2% to 123,640 cars, again an all-time high. By comparison, Audi sold 65,552 cars in the United Kingdom in 2002.

NORTH AMERICA – RECORD SALES In the US, Audi established a new sales record in every single month of 2012 and further accelerated growth from 2011. By the end of 2012, 139,310 Audi cars had been shipped to the US, 18.5% more than in the previous year. Within the space of ive years, Audi of America has increased its customer base by almost 50% (2007 deliveries: 93,506 cars).

Large car sales were particularly strong Stateside in 2012. Combined sales of the A6, A7 Sportback, Q7 and the lagship A8 model were up 39%. Sales of the A6 Sedan alone, the new generation of which was available at US dealers for its irst full year in 2012, climbed to 18,998 units, a rise of 73.7% on the prior-year total.

Audi’s sales performance in the two other countries of the North American free trade region was similarly impressive in the past year: In Canada sales were up 18.6% at 20,000 units, and in Mexico up 17.7% to 9,482.

STRONG GROWTH IN EMERGING MARKETS Audi experienced dynamic sales growth in Russia in 2012, with 33,512 cars delivered, representing an increase of 44.1% on the previous year. Russia is now among Audi’s top 10 sales markets worldwide, and was the fastest growing of the top 10. By comparison, Audi sales total for 2009 in Russia was 15,009 cars, less than half its current igure.

Worldwide, our new models in particular gave us an extra lift over the past year Luca de Meo, Audi AG board member for marketing and sales

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In China Audi remained the clear premiumsegment leader at the close of 2012. With 405,838 deliveries in 2012, it broke through the barrier of 400,000 cars for the irst time ever – having crossed the threshold of 300,000 units only one year earlier.

Main drivers behind the 29.6% growth rate were the Changchun-built models: Despite a model changeover in March, for the irst time ever Audi sold over 130,000 of the long-wheelbase version of the A6 Sedan in China within the space of a year (132,872 deliveries). The A6L remains the top-seller in Audi’s Chinese model range and the most popular premium car in China. Q5, also built locally, was also a strong performer. In total, Audi sold 93,030 Q5s in China last year, a signi icant increase of 63.8% on 2011.

A number of other emerging markets also became increasingly important for Audi in 2012 thanks to their high growth rates. These include South Korea (up 46.0% to 15,100 cars); South Africa (up 15.5% to 16,771 cars) and India, where Audi brand sales rose 63.4% to 9,003 units. Sales in Turkey also put on a spurt of 17.7% to 14,487 units, making it one of more than 50 markets where Audi established a new sales record last year.

INVESTMENT TO CONTINUE Audi has announced plans to invest €13 billion over the next four years as it continues to seek growth in the face of a tough global economy. The investment will be both in the development of new vehicles and technologies as well as the completion of three new manufacturing plants.

Nearly €8bn will be invested into Audi’s two main German manufacturing plants at Ingolstadt and Neckarsulm as Audi modernises and expands its line-up and intensi ies its efforts in the areas of electric mobility and lightweight design and construction.

Audi’s expansion plans should see the completion of the manufacturing site in Gyor, Hungary, later this year, followed by assembly lines in Foshan, China, in early 2014 and San Jose Chiapa, Mexico by 2016.

TARGET FOR 2020: 2 MILLION AUDIS Audi AG chief inancial of icer, Axel Strotbek, said investment in international production facilities was fundamental to the brand’s goal of becoming the world’s top-selling premium vehicle brand and boosting its sales to more than 2 million per year by

AUDI CAR SALES IN KEY MARKETS, 2011-12 2012

2011

% Change

Germany UK France Italy Spain Russia

263,163 123,640 62,202 50,085 36,139 33,512

254,011 115,345 62,009 60,353 40,905 23,250

+3.6 +7.2 +0.3 -17.0 -11.7 +44.1

TOTAL EUROPE

739,000

726,318

+1.8

USA Mexico Asia-Pacific China India

139,310 9,482 478,900 405,838 9,003

117,561 8,058 373,724 313,036 5,511

+18.5 +17.7 +28.1 +29.6 +63.4

1,455,100

1,302,659

+11.7

WORLD TOTAL Source: Audi AG

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2020. “We will keep investing large sums to pursue our growth strategy,” Strotbek said.

Wolfgang Durheimer, Audi board member for technical development, added that the goal was to make Audi the “number one premium brand in the world by 2018-2020”, adding: “We are about level with Mercedes-Benz and our next target is BMW.” Model proliferation will continue, as will work on new, cleaner alternative powertrains: “For Audi, one of the innovative and futuristic ideas we have is to bring a 1-litre/100kms (283 mpg) car to the market, that delivers everything an Audi should in terms of seats, space, comfort and connectivity,” added Durheimer.

However, some projects look destined to remain unbuilt. It appears there will be no new A2, which was designed to revive the original 1990s A2 compact concept, while using electric and hybrid powertrains. And the R8 e-tron electric supercar has also been shelved. A number of hybrid models, using the e-tron nameplate, will be launched, including versions of A3 and A6.

An A8 hybrid has already been released.

GLOBAL FLEET STRUCTURE Fleet sales will continue to centre on mainstream models – A3, A4, A5, A6 and A7, with A1, Q5 and Q3 gaining in popularity. Europe remains the main leet market – Audi claims nearly 50% of western European sales are to corporate buyers, with the UK being the leading market ahead of Germany.

Fleet sales tend to be structured nationally, but Audi does have frame agreements with some multinational customers, generally under the umbrella of the Volkswagen Group Fleet International (VGFI) business.

This highly successful business coordinates international key account sales of Volkswagen, Audi, SEAT and Skoda vehicles, and VW Group claims VGFI is market leader in the ive largest individual EU markets Germany, UK, France, Spain and Italy - in terms of key account business.

According to analysts Dataforce, a total of 155,433 VW Group vehicles were registered in the leet market in the “big 5” markets in the irst quarter of 2012. This included an increase in Audi sales of 2.9% against the same period in 2011 to 48,409 vehicles, making it number one key account premium segment sales in these markets.

EVER-POPULAR Fleet sales will continue to centre on mainstream models

EUROPEAN PRODUCTION NETWORK Audi Group is headquartered at its main manufacturing centre in Ingolstadt, Bavaria, southern Germany, which is also home to the company’s main technical development, sales and administration functions.

The Ingolstadt plant (pictured left) builds Audi A3 and A3 Sportback, A4 saloon and Avant, A5 Sportback and the A5 Coupé, RS5 Coupé and Q5 models. In addition, the Ingolstadt factory also makes bodies for the A3 Cabriolet, the RS3 Sportback and the TT coupe and roadster.

The site covers an area of more than 2.6m m3 and employs around 34,000 workers. It accounts for around half of Audi’s total manufacturing capacity, having built 583,824 cars in 2011.

The other main German plant is the former NSU factory at Neckarsulm, where A4 Sedan and A5 Cabriolet, A6, A7 Sportback and A8 luxury saloon are manufactured. The manufacturing facilities at the Neckarsulm site comprise a new press shop,

one aluminium-and-steel and two pure aluminium body shops, a paint shop and multiple assembly lines. In 2011, vehicle production at Neckarsulm totalled 265,622 vehicles, and around 15,000 people were employed at the factory.

Audi’s massive model expansion has resulted in the need for extra capacity. Some of this, speci ically the Audi TT Coupé, the Audi TT Roadster, the Audi A3 Cabriolet and the Audi RS3 Sportback, are assembled at Audi Hungaria Motor Kft, in Gyor, Hungary.

Vehicle manufacturing started at Gyor with the Audi TT in 1998, using painted body shells supplied from Ingolstadt. Vehicle assembly takes place in a 35,000m2 hall.

Assembly of the Audi A3 Cabriolet was added in November 2007, while series production of the Audi RS3 Sportback began in 2011. Audi Hungaria had built 553,354 cars at Gyor up until the end of 2011.

Gyor is currently being expanded – construction on new assembly facilities started in 2011 and will open later in 2013,

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giving the plant the capacity to build 125,000 complete cars per year.

The main function of Gyor is the development and manufacturing of engines for Audi and other Volkswagen Group brands. Almost the entire Audi engine range is now built at Gyor, with production starting in 1993. Fourcylinder petrol and diesel engines are manufactured there, along with ive, six, ten and twelve-cylinder units. It is one of Hungary’s major exporters and highest-revenue businesses. In 2011, Audi Hungaria produced a total of 1,883,757 engines and 39,518 cars.

Body components are shipped from Ingolstadt and Neckarsulm, while the engines come from Gyor.

The Q3 small SUV is also outsourced – this is built in the SEAT plant in Martorell, Spain.

Production started in the irst half of 2011, and a new body shop and assembly line were erected for the Audi Q3, with 450 latest-generation robots. Around 1,500 workers are dedicated to the Audi Q3 manufacturing project, and 2011 production was 19,654 cars – though the Martorell plant can build more than 100,000 of the cars per year.

EUROPEAN CAPACITY EXPANSION

CHINESE MANUFACTURE Audi has had a manufacturing joint venture in China with First Automobile Works (FAW), China’s oldest automaker, since 1996. It currently builds the Audi A4L and Audi A6L – special long-wheelbase derivatives of the A4 and A6 that are speci ically adapted to the Chinese market, as well as the Q5 SUV. The irst Audi A6L appeared on the Chinese market in mid-2005, followed by the A4L in 2009 and the Q5, from CKD kits, in 2010.

China became Audi’s largest individual market for the irst time in 2011, when more than 310,000 vehicles were delivered, an increase of 37% on 2010. Audi has more than 230 dealers in more than 100 major cities and regions throughout the country.

Audi will begin production at a second FAW-VW site in the southern Chinese city of Foshan in the southern province of Guangdong, in 2013. This plant will eventually push Audi’s total Chinese capacity above 700,000 vehicles a year.

The Foshan plant will have a capacity to build about 150,000 to 200,000 cars from 2013, while Changchun’s capacity will be raised to 550,000 cars. Foshan will employ about 4,000 workers and produce a “new member” of the A3 compact line.

In 2007 Audi acquired a further European production site, when it took control of the former Volkswagen factory in Brussels, Belgium, now renamed Audi Brussels. When volume production of the Audi A1 started in May 2010, the Brussels plant assumed the lead role in building the model – the irst time the plant had done so in over 60 years of its existence. In November 2011, production of the Audi A1 Sportback was added. In 2011, Audi sold around 118,200 Brusselsbuilt Audi A1s.

Daily capacity exclusively for building Audi A1 is 520 units. The production plant, including body shop, paint shop and assembly line, covers a site of 540,000m2, and there are around 2,400 employees. There is also an automotive supplier park at the site, established in 2005, directly linking suppliers to the production halls by bridge.

Further capacity is sourced from other VW Group plants. The Audi Q7 large SUV is built at the Volkswagen Slovakia plant in Bratislava. The SUV has been assembled by a workforce of more than 2,200 in Bratislava since the end of 2005. In total, 53,707 Audi Q7s were built there in 2011.

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CKD ASSEMBLY IN INDIA Audi has been assembling cars for the local Indian market in Aurangabad, Maharashtra State, since 2007. The A4, A6 and Q5 are currently assembled at the Skoda Auto India Private Limited (SAIPL) plant, and were joined by Q7 at the end of 2012. In addition, Audi A8, A7 Sportback, RS5 and R8 are imported to India. In 2012, Audi almost

doubled its sales to more than 9,000 cars, up from 5,511 in 2011.

The Audi Q7 will be produced at a rate of 1,000 units a year in a newly constructed hall at SAIPL, with production of the Audi Q3 also planned from mid-2013. The new hall covers a loor area of 20,000m2.

Audi is steadily building up its nationwide presence in India. There were 25 dealerships throughout the country at the end of 2012. New showrooms opened in Kanpur, Goa, Navi Mumbai, Coimbatore, Delhi West, Nagpur and Bhopal over the past few months.

The small-scale production operations for the Audi R8 supercar at Neckarsulm serve as the model for the CKD production line in Aurangabad. Individual parts are transferred by rail to the sea ports Hamburg and Bremerhaven and are shipped to Mumbai – covering about 11,000km in 28 days. Finally they are trucked the 480km from Mumbai to Aurangabad.

The Audi A6 is assembled from 2,500 parts in ive working cycles each lasting 90 minutes. Production takes place in two shifts on two separate assembly lines. The painted bodies, engines and preassembled parts such as the front seats are all shipped from Germany. The parts preassembled at the Indian plant include the cockpit, front end, doors, pedals, rear axle and centre console.

“Local production of the Audi Q7 is part of our long-term growth strategy in India, one of the most promising auto markets in the world,” said Dr. Frank Dreves, Audi board member for production. “The very good infrastructure in the plant, ef icient working processes, a quali ied workforce and a well developed logistics environment, along with the surging growth of the Indian market, were the factors that motivated us to expand the Aurangabad plant.”

READY TO ROLL Q7s at Aurangabad plant

PLANNED MANUFACTURING IN THE AMERICAS Audi last year announced plans to build a €0.98bn (US$1.3bn) plant in the Mexican state of Puebla, its irst production facility in the Americas. Construction will start in 2013, and the plant, which will start operations in 2016, will produce 150,000 units annually of the next-generation Audi Q5 SUV, to be supplied worldwide. The Mexico plant will replace Ingolstadt as the global source point for Q5, freeing up capacity in Germany for other models. The Mexico plant will also supply CKD kits for the Q5 to Changchun in China.

The plant, in the city of San Jose Chiapa, is expected to create around 10,000 jobs once it starts operating. It marks “a milestone in Audi's growth strategy,” said Audi Mexico director, Walter Hanek, adding that it would be “the most modern in Audi's production network in terms of ef iciency of resources and manufacturing process”.

Audi is also said to be eyeing the Brazilian luxury car market, which is forecast to expand from 50,000 units in 2012 to up to 130,000 a year by 2016. Audi previously produced the two-generations-back A3 at the Volkswagen plant in Parana. This plant has now stopped producing the VW Fox hatchback for Europe, and this capacity could be used for Audi production, according to local sources.

The Mexico plant will replace Ingolstadt as the global source point for Q5, freeing up capacity in Germany for other models.

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2013 fleet calendar International Fleet World’s guide to what’s happening in the fleet industry in the comimg months – when, where and how to find out more info...

February 8-17 Chicago Auto Show, USA (PC) www.chicagoautoshow.com 15-24 Canadian International Auto Show, Toronto, Canada (PC) www.autoshow.ca March 1-3 Transpotec Logitec 2013, Verona, Italy (CV) www.tltiexpo.it 7-17 Geneva 83rd International Motor Show, Switzerland (PC) www.salon-auto.ch 22-31 Belgrade International Motor Show, Serbia (PC, LCV) www.belgradefair.rs 29-7 April Seoul International Motor Show, South Korea (PC, LCV, CV) www.motorshow.or.kr April 9-11 The Commercial Vehicle Show, Birmingham, UK (CV) www.cvshow.com 23-26 NAFA Institute and Expo, Atlantic City Convention Center, NJ, USA www.nafa.org/conference 24 Fleet World Fleet Show 2013, Silverstone Wing, Silverstone, Northants, UK www.thefleetshow.co.uk May 11-19 Barcelona International Motor Show, Spain (PC, LCV) www.firabcn.es 31-2 June International Kyiv Auto Salon 2013, Ukraine (PC) www.sia-motorshow.com.ua June 4-5 The Blue and Amber Light Fleet Exhibition, Telford International Centre, Telford, UK (Emergency services) www.napfmevent.org.uk 15-23 Sofia International Motor Show, Bulgaria (PC) www.svab.bg 20-30 Buenos Aires International Motor Show, Argentina (PC, LCV) www.elsalondelautomovil.com.ar September 10-14 Moscow Auto Salon COMTRANS, Russia (LCV, CV) www.oar-info.ru 10-22 Frankfurt International Motor Show, Germany (PC) www.iaa.de October 4-13 Bucharest International Motor Show, Romania (PC, LCV) www.siab.ro 18-27 Johannesburg International Motor Show, South Africa (PC, LCV, CV) www.johannesburgmotorshow.co.za November 2-10 Athens International Motor Show, Greece (PC, LCV) www.seaa.gr 14-17 COMVEX Istanbul Commercial Vehicles, Buses and Components Expo, Turkey (LCV, CV) www.osd.org.tr 22-1 December Los Angeles Auto Show, USA (PC) www.laautoshow.com 23-1 December 43rd Tokyo Motor Show, Japan (PC, LCV, CV) www.tokyo-motorshow.com 27-2 December Riyadh International Motor Show, Riyadh Exhibition Center, Murooj Area, Olaya St, Riyadh Saudi Arabia (PC), www.recexpo.com KEY: PC – passenger cars // LCV – light commercial vehicles // CV – commercial vehicles

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launch report SEAT Leon p46 Volvo V40 D3 p47 Opel Mokka p48 DAF XF p49 Solid styling and optional four-wheel drive may tempt user-choosers out of an Astra. p48

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launch report

SEAT Leon Major improvements in all areas should make the Leon a popular choice, says Steve Moody.

SECTOR Family hatchback PRICE €18,850 – €26,910 (approx) FUEL 3.8 – 6.0l/100km CO2 99 – 139g/km The SEAT Leon has perhaps had the unfortunate honour of being the car company drivers choose if they can’t afford a Golf, but it has nevertheless been a huge success story for the brand. In 2011, total Leon sales reached 77,075 and over a million have been sold since the first model was launched in 1999. With the latest model, SEAT may well have a car that steps out of the shadow of its illustrious relation.

Like the recently launched Golf, it uses the new MQB architecture, and shares half of its structural, mechanical and electrical components with the Volkswagen. The wheelbase has been elongated marginally despite the car being shorter overall.

Thanks to its advanced construction and lightweight materials, overall weight has been reduced by 90kg compared with the previous version. From a design perspective it looks like a large Ibiza from the front, but the side and rear views are much better: taut, clean surfaces, and a whiff of Alfa around the boot. The new architecture has freed up a lot of space: there’s a significant increase in room inside, especially in the rear.

Engines include petrol and diesel choices from 1.2 to 2.0-litres, all with direct injection and turbocharging. Designed for low internal friction and fast warm-up, fuel

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consumption has reduced by 22% compared to the predecessors.

The vital engine for the fleet market, 1.6 TDI, generates 103hp and in the Ecomotive version with Start/Stop system and brake energy recuperation, returns 3.8l/100km and emits 99g/km CO2. The extensively re-engineered 2.0 TDI returns 4.0l/100km in the Ecomotive version, and develops 148hp.

SEAT says it will rapidly expand the engine line-up. Two versions of the 1.2 TSI will launch in early 2013 with 85hp and 105hp, followed by a 120hp 1.4TSI and 180hp 1.8 TSI. The diesel line-up will be augmented by an 90hp 1.6 TDI and rangetopping 181hp 2.0 TDI. Depending on the engine, transmission options range from five and six-speed manual gearboxes or the renowned six and seven-speed DSG dual-clutch gearboxes.

Higher end cars with 150hp or more gain independent rear suspension, while those at the more parsimonious end of the spectrum have a torsion-beam at the back, keeping costs and weight down.

That means the 1.4 TSI and 1.6 TDI we drove both had the cheaper system, but it doesn’t really show. It reacts with a hardish stomp over sudden bumps, but across most surfaces when given more time to absorb

changes it is compliant enough, while body control is decently well-contained.

The diesel is a bit gruff at low revs and the TSI is the more characterful motor. Both are pretty sprightly though – certainly a company car driver would not feel short changed.

Inside, generally the materials are solid where it matters, and there is plenty of useful kit available: air conditioning, twin halogen headlamps with electric adjustment, an mp3 compatible six-speaker CD player, integrated hands-free phone operation with Bluetooth audio streaming, and a colour touchscreen interface.

Price wise, it is significantly cheaper than a Golf, with the 1.6 TDI up to €2,400 cheaper, and the TSI about €1,200 less, while entrylevel prices start from around €18,852. First deliveries are due in March 2013.

If the Leon gains the same acceptance on the used market as the first generation did, then SEAT will really have a trusted, admired and liked family hatchback.

verdict Roomier, more efficient, classier, better to drive and with likely low running costs, the new Leon is an excellent addition to the SEAT range, and should prove popular with fleets.

Volvo V40 D3 Volvo V40 brings fleet appeal, strong safety features, appealing engines and more, reckons John Kendall.

SECTOR Medium hatchback PRICE €35,374 (as tested) FUEL 4.3l/100km CO2 114g/km The Volvo V40, launched in Q4 2012 was the first new model to be launched since Volvo was acquired by Geely of China in 2010. It replaced the previous S40 model, launched in 2004 and based on the Ford Focus platform, but with significant modification by Volvo.

The latest model is completely new and barely had it hit the road when Volvo unveiled the V40 Cross Country at the Paris Show last September. Our test is of the V40 D3, which has all the ingredients of a successful premium diesel model in its segment. D3 denotes that under the bonnet sits the least powerful variant of Volvo’s five-cylinder 1,984cc diesel, producing 150hp at a relatively low 3,500rpm and 350Nm of torque, across a broad rev range from 1,500rpm to 2,750rpm.

Five-cylinder diesels are comparatively rare now, as manufacturers opt for the lower friction of four-cylinder engines with the potential for better fuel consumption and lower emissions. That said, the Volvo’s 4.3l/100km combined consumption figure and 114g/km of CO2 are impressive figures. So in some ways, drivers can have it all their own way, with the enticing offbeat sound of a five-cylinder

engine, plus fuel economy that would have been inconceivable from an engine of this size a few years ago.

UK specification SE models gain cruise control, keyless start and automatic folding door mirrors, while engine Stop/Start, Bluetooth connectivity and a high performance audio system are standard across the range. Inevitably, there’s a host of standard safety equipment too including a pedestrian airbag, driver’s side knee airbag, as well as side and curtain airbags.

Our test car came with no less than €6,714 worth of additional equipment.

Among the options fitted were the driver support pack, which incorporates collision warning with full automatic braking, pedestrian detection, adaptive cruise control and distance alert, lane keeping aid, automatic dipping headlamps and road sign information display, plus a blind spot information system.

The winter illumination pack – the second most expensive option fitted – included steered Xenon headlamps, heated front seats, (that used to be standard on Volvos of old) and a heated front windscreen.

Many of these items are of some value, but I found the adaptive cruise control system difficult to adapt to. Despite turn-

ing the distance sensor to its shortest setting on motorways, it would lock on to a slower car in front at some distance. It couldn’t be switched back to a standard cruise control either. But it’s an option and one that many fleets would probably not bother with. Otherwise, it’s a pleasant car with performance in reserve and the attraction of the standard safety equipment, while also being entertaining enough for enthusiastic drivers.

The only real disappointment was the level of road noise in our test car, which seemed excessive, especially for a car at this price. On the plus side, it has one of the most impressive digital speedometers and instrument packs that I have seen and generally it’s easy to navigate through the information available.

Build quality is good and while the V40 doesn’t impress in quite the same way as the latest Golf, it has enough individuality to make a viable alternative.

verdict Swedish car makers, even if Chinese owned, do things differently to the German premium manufacturers. The V40 is undoubtedly a good fleet choice, with the right specification.

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launch report

Opel Mokka Destined for retail success, but how does Opel’s new crossover fare for fleets? Alex Grant finds out.

SECTOR Crossover PRICE €18,990 – €26,820 RANGE 4.5 – 6.4l/100km CO2 120 – 149g/km Of Opel’s recent newcomers, Mokka has perhaps the most logical name. Rather like the menu board at your nearest upmarket coffee house, satisfying the modern car buyer means offering as much choice as possible and sometimes finding wants and needs even the end user didn’t know they had.

The B-segment crossover is the latest niche manufacturers are getting excited about. It’s a sector where most mainstream marques will be launching new products in the near future, and predicted to grow rapidly as it steals sales from conventional hatches, larger crossovers and small MPVs. Nissan got this sector moving with the Qashqai, which continues to sell in high volumes thanks to its low CO2 engines, high practicality and SUV driving position, and pushed the crossover set into a new niche with the Juke. Opel has sized the Mokka to fit neatly between the two.

Beneath the bodywork is a stretched version of the latest Chevrolet Aveo platform, also due to underpin the next Corsa, which is shared with the forthcoming Chevrolet Trax which is built on the same production line in South Korea. Mokka gets its own, arguably better looking, bodywork but isn’t unique to Europe. North America will get a lightly modified version badged as the Buick Encore.

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There are plentiful differences under the skin, though. Chevrolet and Opel use entirely different suspension settings, and even Vauxhall has a UK-specific chassis setup to cater for British roads and drivers.

The softer Continental European chassis, which has a stronger tendency to pull the steering to dead centre, was the only one available to test at the launch.

Opel has the better cabin, compared to the Chevrolet. Interior quality range-wide has improved dramatically over the last five years, and Mokka features the same glossy panels in the dashboard and door cards as the Ampera, which feels modern and upmarket. There’s plentiful room in the front and rear, helped by the high roofline, but the rising beltline results in a large blind spot.

For drivers, though, the dashboard is ultimately let down by its cluttered instrument panel. There are far too many buttons around the infotainment system, and it’s not always obvious what each one does. Many manufacturers are migrating to touchscreens or rotary controllers similar to BMW’s iDrive system, and as with most cars in its range Opel could benefit from following suit to keep drivers’ eyes on the road.

Engines comprise an entry-level 1.6-litre and 1.4-litre turbocharged petrol, available

with two or four wheel drive respectively, while the 1.7 CRDi diesel is offered with optional four-wheel-drive and the choice of manual or automatic transmissions. The diesel will be the biggest seller with fleets, with CO2 emissions as low as 120g/km, and it’s the better of the higher-powered units to drive. Although the 1.4 Turbo is more powerful, it can feel a bit blunt.

Mokka feels as solid and Germanic as its bulky styling suggests it might. It’s not as agile as a Corsa or Astra, but there’s little body roll for such a high-sided vehicle and refinement is almost on par with C-segment models at motorway speeds.

Ultimately this is likely to be more of a user-chooser option than a core fleet offering like the Astra or Insignia, but its downsized muscular styling should make it popular with lifestyle-focused buyers. But, much like the drink it’s named after, there will soon be plenty of choices if you’re in the market for this particular blend of coffee.

verdict Mokka enters an established market but is still early enough to beat most competitors.

Solid styling and optional four-wheel drive may tempt user-choosers out of an Astra.

DAF XF Don’t be fooled by the familiar face, DAF’s XF flagship heavy truck has a lot to offer, says John Kendall.

SECTOR Heavy truck GVW 44.0 tonnes ENGINE 12.-litre Euro-VI, 410, 460 and 510hp New trucks don’t appear that often, thanks to the high cost/low volume nature of the business compared with cars. Cabs tend to have a life of between 10 and 15 years, simply because they are they most expensive element of the vehicle. For the new XF, available in Spring 2013, DAF has carried out an intensive modification of the large cab that it has used since 1987.

Power comes from the Euro-VI version of the 12.9-litre PACCAR MX engine, originally developed by DAF’s engineering team in the Netherlands. Power outputs of 410hp, 460hp and 510hp will be offered.

The engine designers have been able to draw on the experience of parent company PACCAR in North America, whose brands Peterbilt and Kenworth have supplied over 30,000 trucks fitted with the US EPA ‘10 compliant versions of the engine.

Underneath cab and engine, DAF has developed a new chassis, re-designed to accommodate the new components required by the Euro-VI legislation. For instance the cooling module of radiator and intercooler needs a surface area 30% larger than before. To accommodate this, the cab floor had to be raised and redesigned at the front end to fit around the radiator. The cab suspension has been

redesigned and the frame, cab floor and firewall have been stiffened, helping to reduce interior cab noise by 2dBA. Safety has also been improved in the process.

H7 headlamps may be standard, but DAF claims a first for trucks in offering LED headlamps as an option. Cornering lights are also an option. Headlamp bulbs can now be changed without tilting the cab.

Aerodynamics have come in for attention too, with revised corner air deflectors concealing some of the cab access steps behind the closed cab doors. Mudguards, side skirts and side fenders have also been redesigned with aerodynamics in mind. The roof air deflector weighs some 25kg less than before and as an option, the spoiler height can be adjusted mechanically from ground level to match the trailer height.

Inside the cab DAF claims over 1,000 litres of storage space and 2,250mm of standing headroom. Seat options include a split backrest at shoulder height, with two stage ventilation and heating. DAF has redesigned the dashboard to incorporate a 5-inch TFT screen, which provides information in 32 languages about vehicle and engine functions. DAF’s Driver Performance Assistant is also incorporated. It gives feedback to drivers on how efficiently they

are driving and offers tips on improvement.

The first impression, once under way is of the very low noise levels inside the cab.

Road noise is virtually absent and engine noise very subdued, which is impressive considering it is right underneath the cab. A 12-speed manual gearbox is standard, but some markets are likely to specify the 12speed automated AS-Tronic transmission.

Where the AS-Tronic is fitted, the vehicle will also be equipped with EcoRoll. On gentle downhill gradients the system will automatically select neutral, where braking is not required. When selected, EcoRoll is signalled on the information screen in front of the driver. It is said to provide fuel consumption savings of between 0.5 and 1.0%. The AS-Tronic transmission is also equipped with a quick gear change function for the most commonly used gearshifts between 11 and 12. The shift is speeded up by keeping the clutch engaged and reducing the torque interruption.

verdict Low noise levels inside the cab make for a relaxed driving environment and the detailed changes help to keep the cab up to date. The new XF looks like a good proposition.

IFW February 2013

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fleet in figures

Can global car sales recovery continue in 2013?

With the exception of Western Europe, car sales were rising in 2012, but 2013 could see a cooling off, reports John Kendall.

Audi bucked the trend and posted a 3.2% rise in registrations in 2012.

2012 was a year of mixed fortunes where global vehicle sales and registrations were concerned. Generally, the larger western European markets saw reductions in sales, although several eastern European States appear to have performed well. The UK was the exception to the rule with new car registrations rising

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5.3% during the year to 2,044,609 – the highest percentage increase since 2001 and the highest volume since 2008.

Final data for Western Europe had yet to be published at the time of writing, but Scotiabank has forecast a closing European new car market of 11.65m for 2012.

Polk is slightly more optimistic, suggest-

ing a 2012 Western European market of 11,727,826, down 8.2% on 2011. As LMC Automotive points out, these are levels not seen in Western Europe since 1993.

German registrations took a dive in December, down 16.4% to 204,331 for the month and 3,082,504 for the full year, down 2.9% on 2011. Despite the fall, it

remains the largest car market in Western Europe, although the decline that took hold earlier in the year does not appear to be over. France ended the year with a performance similar to the rest of 2012, with December registrations down 14.4% for the month to 158,745 and down 14.1% for the year to 1,869,628, making it the third largest new car market in Western Europe. Italy ended 2012 with car registrations down 20% compared with 2011 to 1,396,044, according to Polk, and down 22.0% for the month to 86,730. Spanish registrations were similarly down 23% for the month to 155,218, but overall, car registrations in Spain were down 13.4% for 2012 to 699,589. But as LMC Automotive points out, the 2012 Spanish market was 57% down compared with 2007.

Volkswagen has had a good year in Western Europe despite the prevailing market conditions. Car sales were down 4.6% to 1,535,215 according to Polk, almost half the decline for the year across the region. Audi and Mercedes-Benz were the winners with Audi bucking the trend to post a 3.2% overall rise in registrations during the year to 686,344. Mercedes increase was more modest at 0.5% bringing full year registrations to 583,325. It will be no surprise to Western European market watchers that Renault suffered the biggest drop in registrations during 2012, down 22.5% to 755,268. But most major manufacturers suffered double digit declines during the year.

And the outlook for Western Europe in 2013? It’s not rosy. Scotiabank is predicting a flat market for 2013 while LMC has forecast a further 3% decline.

The US market by contrast had a far better time in 2012. According to the Wall Street Journal, car sales were up 18.8% for the year to 7,414,282 and light duty trucks were up 8.3% to 7,077,591, making a light vehicle total of 14,491,873, 13.4% up on 2011. US buyers supported their home brands with the “Big 3” taking the top 3 places. Third placed Chrysler marked its revival with a 20.6% sales increase overall to 1,651,787. Most Japanese manufacturers also posted healthy increases, as

they bounced back from the 2011 earthquake and Tsunami that claimed many lives and seriously disrupted component and vehicle production. Toyota boosted sales by 26.6% compared with 2011, lifting the total to 2,082,504.

Mitsubishi was the Japanese exception with sales down 26.9% to 57,790. The poor performance is blamed on a small and uninspiring model range for the US. Production of Galant, Spyder, Endeavor and Eclipse all ended during the year. The company appointed a new North American Chairman late in 2012. Gayu Uesugi has a background in product planning and has a big job on his hands to revive the company’s US fortunes.

Volkswagen of America can claim the largest percentage gain of the year with a 35.1% increase to 438,134. With an 18.5% increase for Audi of America and 20.5% boost for Porsche Cars in the US, the VW Group had a good year in the US in 2012.

Scotiabank is forecasting a total market of 15.0m in the US for 2013, which would be the highest level since 2007. The average age of the US car fleet has risen from 9 years or less to 11 years for the first time, the bank says, and many buyers will be considering renewal. Polk is more optimistic, forecasting a 6.6% rise in the US to 15.3m vehicles.

“Polk expects continued recovery in the industry in 2013 and 2014, a positive sign for the U.S. economy,” said Anthony Pratt, director of forecasting for the Americas at Polk. “The auto sector is likely to continue to be one of the key sectors that lead the US economic recovery, however, we don’t expect to realise pre-recession levels in the 17 million vehicles range for many years,” he said. “However, our baseline forecast hinges on Washington’s ability to draft a budget plan that will avoid $600 billion in spending cuts and tax increases.” Mid-size, luxury sedan and compact crossover are all segments to watch, reckons Polk.

Other NAFTA countries had a good year too with car sales in Mexico rising 9.0% to 987,747, roughly equal to the market in 2002. Underlining the country’s impor-

tance as an exporter, Mexican light vehicle exports were up 9.9% too to 2,355,564. The US and Latin America accounted for the greatest volume of exports, but 212,792 were destined for Europe, a 3.6% reduction on 2011.

Further south, Brazil has seen steady growth in the automotive sector. Scotiabank has forecast growth of 8.3% to 2,860,000 light vehicle sales in 2012, rising to 3,000,000 in 2013. The bank points to continuing investment in the Brazilian automotive sector – some €14.3bn up to 2017. Around 27% is earmarked for new plants. Add in low interest rates and low unemployment and the signs look good.

We cover China extensively on page 32-35.

Although recovery has slowed, for a number of reasons, China still has great potential because of the size of the population and the current low level of car ownership.

Elsewhere in the BRIC economies, growth in Russia has slowed in 2012.

Domestic sales grew 38% from 1.91m in 2010 to 2.65m in 2011, but Scotiabank expects growth to slow to 15% for 2012, with a total car market of 3.05m and to slow further to around 4.9% in 2013 with a forecast market of 3.20m cars. The bank attributes the cooling in the Russian car market to the ending of Government incentives to buy new cars. Volkswagen continued its run of success in Russia recording vehicle sales of 317,700, a 38.8% increase on 2011.

India has also seen passenger vehicle sales slowing recently. After 28% growth between iscal year 2009/10 and 2010/11, growth slowed to 4.7% between 2010/11 and 2011/12, with 2011/12 sales reaching 2,618,072. According to the Society of Indian Automotive Manufacturers (SIAM), passenger vehicle growth in the AprilDecember 2012 period was 8.4% compared with the same period in 2010/11. Car sales actually declined by 0.33% in the period, offset by utility vehicle and van sales. Car sales fell back by 12.5% in December 2012, compared with December 2011, while total passenger vehicle sales declined by 1.13% for the month too. Scotiabank forecasts lat growth of 4.8% for 2013.

IFW February 2013

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SIMPLY CLEVER

ŠKODA Rapid.

A great news for your fleet.

Regardless of which angle you look at the new ŠKODA Rapid, you will always discover many good reasons why to make it a member of your company fleet. Rapid is a representative as well as a practical car. Behind its elegant clean lines awaits a spacious interior and many clever details that will make traveling pleasant for the entire crew. For example, the side pockets where you can place your cell phone, an ice scraper mounted on the fuel tank lid or the multimedia holder located on the center console. While drivers will enjoy the high performance of TSI engines, fleet managers will appreciate their efficiency.

The offer also includes extremely efficient 1.6 TDI diesel engines. All TDI and TSI engines are also available in Green tec versions that are particularly environmentally friendly. With the new ŠKODA Rapid your fleet will reach a completely new level.

Contact us as soon as possible. We will gladly introduce you to other ŠKODA models from our fleet offer. www.skoda-auto.com

Combined fuel consumption and CO2 emissions for the Rapid model: 3.9–5.8 l/100 km, 104–134 g/km