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The Renault-Nissan alliance has announced plans to build electric cars in China in a new venture with Dongfeng Motor, joining the scramble by global automakers to meet Beijing’s stringent quotas for zero-emission vehicles.

The venture, eGT New Energy Automotive Co, will develop an electric mini-SUV to go into production in 2019 by Dongfeng, the carmaking alliance said, for sale under the partners’ own brands. Dongfeng already builds conventional vehicles with Nissan and its French parent Renault.

China, the world’s biggest auto market, wants all-electric battery cars and plug-in hybrids to account for at least one-fifth of its vehicle sales by 2025, as policymakers grapple with alarming pollution levels in major cities.

Renault-Nissan so far leads the deployment of modern electric cars, thanks to the top-selling Nissan Leaf introduced in 2010 and Renault’s Zoe subcompact launched two years later. But its leadership is being challenged by Tesla as well as more mainstream carmaker rivals.

Ford Motor Co said earlier this month it was exploring a joint venture with carmaker Anhui Zotye Automobile Co to build electric vehicles under a new brand, in competition with China manufacturing plans previously announced by Tesla, Daimler and General Motors.

Renault and Nissan will each own a quarter of their venture with Dongfeng, which would hold the remaining 50 percent, the alliance said.

China’s electrification push has changed the thinking of many automakers that had hitherto resisted investing heavily in pure-electric or rechargeable hybrid vehicles.

Hybrid pioneer Toyota had dismissed battery-only vehicles until it abruptly reversed course last year, confirming electric-car investment plans that largely reflect Beijing’s demands.

Renault-Nissan’s move "confirms our common commitment to develop competitive electric vehicles for the Chinese market," alliance Chairman Carlos Ghosn said. The statement included no financial or product details.

However, Ghosn has previously discussed plans to "change the game" with a low-cost electric car priced below $8,000 after Chinese incentives – and ultimately without them.

The programme is headed by Gerard Detourbet, who developed the conventionally powered Kwid budget SUV for India and is likely to use its architecture for the Chinese battery car, an alliance engineer with knowledge of the plans told Reuters.

China’s latest quota proposals, due to take effect as soon as next year, would require 8 percent of automakers‘ sales to be battery electric or plug-in hybrids – rising to 10 percent in 2019 and 12 percent in 2020.

Beijing will present its final plans in coming days, German newspaper Frankfurter Allgemeine Zeitung reported, adding penalties for non-compliance were likely to be softened after an outcry by global automakers.

The company, which also owns Volvo, says that Lynk & Co will focus on connectivity, launching with an open API, sharing services and the first dedicated app store for cars. To preview what Lynk & Co intends to bring to market, the brand just debuted a hybrid compact SUV called the 01, which is built on the Compact Modular Architecture (CMA) platform.

Like Tesla, this new brand plans on selling directly to consumers, while having flagship stores around the world. Currently, the company plans on getting the first Lynk & Co vehicles to owners in China next year, before heading to the U.S. and European markets.

Lynk & Co also has a partnership with tech company Ericsson, and promises that its vehicles will not only offer Apple CarPlay, MirrorLink and Android Auto, but will have onboard telematics for a permanent connection with the world via the Lynk & Co cloud.

To give you an idea of what the company has in mind for its vehicles, nearly everything with a Lynk & Co car can be managed through a smartphone app. That includes providing digital keys to gives access to your friends and family. The entire user interface within the car will be customizable, such as rearranging icons and functions to fill your needs.

The vehicles will also be able to communicate with one another, sharing data like available parking spaces and the correct speed to travel in order to not hit a red light. The interior takes a cue from Tesla and Volvo by using a large, tablet-like screen to control the infotainment system. Different materials and textures are used inside, giving the interior a very Scandinavian feel.

Unfortunately, very few powertrain details for the SUV were released, but is said that the new brand will try to enter the U.S market in 2018.

source credit: www.autoguide.com

The Government of China views its automotive industry, including the auto parts sector, as one of the country’s pillar industries.  China continues to be the world’s largest vehicle market with sales of over 28 million units in 2016, a year-on-year growth of 9% from 2015.  The Chinese Central Government expects that China’s automobile output will reach 30 million units by 2020 and 35 million by 2025.

Made in China 2025 is an initiative to upgrade the country’s industry from low cost mass production to higher value-added advanced manufacturing.  It prioritizes 10 sectors, including the auto sector (and NEVs). The initiative’s objectives are to sell one million units of domestically produced pure electric and plug-in hybrid cars in China by 2020, which should account for a minimum of 70% of the country’s market share. Moreover, it aims to sell three million domestic brand units by 2025, and account for a minimum of 80% of the country’s market share. The NEV market in China is dominated by domestic brands. A draft measure has been released for public comment that aims to set NEV production targets for both domestic and foreign automakers operating in the Chinese market.  Automakers that do not meet this target would need to purchase NEV credits from other automakers that exceeded it. China’s “Automobile Mid and Long Term Development Plan”, which was released in April 2017, aims to make China a “strong” auto power within ten years.  It sees the development NEVs and connected cars  as providing an opportunity for China to capture the market pre-emptively and leapfrog in auto development. A number of ambitious targets are also set, relating to the creation of national champions in auto parts and auto brands, connected car technology, driver assistance, and partial/conditional automatic systems driverless vehicles.  Additional guidelines further focus on the sub-sectors of NEV engines, plug-in hybrid engines, fuel cell systems and key components, charging pillars, battery manufacturing facilities, and testing equipment.

Subsidies, from both the central and provincial/municipal governments, have played a significant role in spurring domestic NEV sales and are provided directly to the consumers at time of purchase. Though these subsidies’ stated aim is to support the development of the domestic NEV industry, it also has the effect of preventing cost competitive market entry for foreign producers.  The Ministry of Industry and Information Technology (MIIT) releases “white lists” of qualified vehicles that are eligible for subsidies, nearly all of which are produced by domestic manufacturers. MIIT announced in December 2016 that it would cut the maximum subsidies by 20 percent for 2017 and eventually phase out all subsidies by 2020.

The “Plan of Promoting Vehicle Power Battery Industry Development”, which was jointly released by a number of ministries in March 2017, encourages the development and industrialization of the lithium-ion battery industry, the establishment of R&D centers, and additional support to develop the entire supply chain. It also encourages foreign enterprises to establish R&D centers in China.  Relevant authorities also maintain a list of approved domestically produced NEV battery suppliers. Though not explicitly instructed to do so, Chinese NEV producers only source their batteries from companies on this list; this effectively locks foreign producers out of the Chinese NEV battery market. Effective December 1, 2016, all imported passenger cars and medium and small size of commercial vehicles valued 1.3 million RMB excluding VAT (approximately $188,000 USD) and above are required to pay an additional 10% “Luxury Car Consumption Tax”.

Leading sub-sectors Specialty auto parts  China’s specialty auto parts market was valued 150 billion RMB in 2016 with 30% growth every year. The car modification business remains popular in some developed cities despite the fact that China’s “Road Safety Law” essentially prohibits modifications.  Nonetheless, foreign tuning companies have seen the market potential.  The ITA is working to inform Chinese industry and government representatives how the U.S. regulates its aftermarket, including specialty equipment. The Specialty Equipment Market Association (SEMA) has a Market Development Cooperator Program (MDCP) award with ITA to help U.S. specialty parts companies increase their exports to China. Each fall, SEMA organizes an event in China where U.S. specialty parts companies can explore the market and meet potential buyers. Department of Commerce 2016 Top Markets Report on Automotive Parts for China may be found on their website. Recreational Vehicles  China’s RV market has undergone significant changes over the past several years, including a national focus on the development of tourism, campgrounds and the RV industry. With a growing demand for RVs and a shift in consumers’ travel preferences, tourism experts in China anticipate a surge of RV-related businesses in the coming years. According to the “2016 China Campground Industry Report”, there are total of 958 campgrounds in China, of which 489 are under construction. There were about 25,000 RVs in China by 2016. 33% of the campgrounds are located along the eastern part of China, for instance Shandong, Jiangsu, Shanghai, Zhejiang, Fujian and Guangdong), while another 22% are in western China, for instance Inner Mongolia, Gansu, Sichuan and Yunnan. There are currently around 80 RV manufacturers in China, of which 56 are active. It is predicted that the campground industry will hit a trillion RMB market ($145 billion USD) by 2020, which will also stimulate the RV industry’s development. China has made a push in recent years to develop domestic tourism, including campgrounds and the RV industry. Campground development has received great support from the central government.  The China National Tourism Administration, together with 10 other ministries, released “Several Opinions on Promoting the Development of Self-Driving Tourism” on November 9, 2016. This set a target of building 2,000 campgrounds by 2020, and allows vehicles to tow trailers which are less than 2.5 tons. However, the RV industry faces issues such as lack of standards and regulations, as well as the luxury car consumption tax challenge. China Customs does not have an HS code for RVs, so RVs are treated as automobiles upon import.  This means imported RVs have to pay the same high tariffs and duties as imported cars.

Source credit: www.export.gov

German consulting firm Roland Berger.

In terms of the sales target of electric vehicles, China sets a target of having electric vehicles account for 15 percent to 20 percent of the total car sales in 2025 and 40 percent to 50 percent of those sold in 2030, Roland Berger said in its report.

The consulting firm said the top five electric models and plug-in hybrid electric models in China are all produced by Chinese manufacturers and more new models will come to the China market in the next few years.

China aims to further strengthen its position as the global leader in battery cell production. Locally made lithium-ion cells are used in more than 90 percent of the vehicles produced by Chinese manufacturers, the report said.

The production of battery cells will see their market share continue to increase in China. The largest battery producers in China include BYD Co Ltd, Contemporary Amperex Technology Ltd, Tianjin Lishen Battery Joint-Stock Co Ltd and Wanxiang Group, the report said.

Sales of new-energy vehicles reached about 507,000 units last year, up 53 percent year-on-year. The double-digit sales growth of new-energy vehicles expected to continue this year due to key drivers include government subsidies and simpler licensing procedures, the report said.

Credit source: Shanghai Daily

At NADA convention held in Las Vegas, we learned about the four major trends that were emerging and that would have an impact for years to come:

Social networks are allies for dealerships, not just a branding tool.

Customer retention should be pursued by every department.

Customers want purchase processes like those offered by Amazon and Apple.

Data safety is crucial.

Now it’s one year later, and we ask ourselves:

What new difficulties will arise this year?What strategies should I adopt and which trends will stand out?

Here are our suggestions for automobile, equipment, motorcycle and truck dealers, on issues that they should continue to focus on.

Digital Marketing: A wider front door for prospects

Technology changes allow customers to do just about anything from their smartphones, so more and more phones are used to make quick decisions without middlemen. Some interesting stats:

87% of millennials carry their mobile phones with them all the time.71% of buyers of any product search for information from their smartphones.62% of buyers say their mobile search was useful to make a decision.

In 2017, dealers need to intensify their participation in social networks (or quickly start if they are not already on them), enter the world of mobile apps which is trending worldwide, and speed up their sales processes so as to be up to date with new customers.

Customer retention is still key to new sales

This was a main topic in 2016 and will continue to be so in 2017. Dealersmust continue to achieving the full potential of parts and service sales for the entire lifecycle of each vehicle that they sell. In order to achieve this goal, they must adopt Service Marketing strategies.

Service Marketing includes a series of automated tasks that help dealers retain customers, such as:

Send reminders for upcoming maintenance servicesSend suggestions for preventive servicesSend special service promotionsRecommend seasonal servicesRecommend tire rotation and similar jobs

Autologica DMS is a pioneer in Service Marketing and includes many features to help dealers capture the services needed by the cars, motorcycles, trucks or machinery they sell, throughout the entire lifecycle of the vehicle.

If you wish to learn more about Service Marketing, here are some articles and recorded courses.

Data safety is center stage

During the past year we detected an alarming number of cases of total data loss in dealerships around the world.

This data loss was mainly caused by two types of problems:

Database hackingHardware issues

These problems will persist and we believe will even increase, so it is essential that dealers implement all possible safety strategies in order to minimize their risk of data loss. 

Source credit: Blog Autoblogica

FRANKFURT — Daimler and its Chinese joint-venture partner BAIC Motor Corp. have agreed to jointly invest 5 billion yuan ($735 million) in electric-vehicle production in China by 2020 and to provide the infrastructure needed.

Of that investment, a three-digit million-euro sum is to be invested in a new battery factory to be built in China by the joint venture, Beijing Benz Automotive Co., Daimler said in a statement on Wednesday.

"By 2025, the Chinese market will have a substantial share in global sales of Mercedes-Benz electric vehicles," Daimler’s China boss, Hubertus Troska, said in a separate statement.

Daimler and BAIC signed a framework agreement last month to upgrade production facilities at BBAC to make New Energy Vehicles, a label for so-called low-emission vehicles which include plug-in hybrid and pure battery electric cars.

Daimler’s Mercedes unit aims to launch more than 10 new electric cars by 2022. The first, an SUV based on the Generation EQ concept, is due in 2019.

Credit source: autonews.com

Dongfeng Renault opens first plant in China, Wuhan plant opening Dongfeng Renault Automotive Company (DRAC)

On February 1, 2016, Carlos Ghosn, Chairman and Chief Executive Officer of Groupe Renault, and Zhu Yanfeng, Chairman of Dongfeng Group, opened the Dongfeng Renault Automotive Company (DRAC) plant in Wuhan, Hubei Province.

Just two years after the joint venture was formed, the first DRAC plant in China will start producing the Renault Kadjar, Renault’s latest SUV.

The Renault brand is taking on a new dimension in China with a plant which complies with the highest quality standards for vehicle production and a sales and marketing offensive in the fastest-growing segment.

Dongfeng Group (DFG) and Nissan.

The plant achieved ISO 9001 certification for quality in November 2015 and local content with its suppliers exceeds 80 percent.

The facility includes a vehicle assembly plant, a powertrain plant and an R&D Centre to adapt our products to our customers’ requirements. It will have an initial production capacity of 150,000 vehicles per year which has the potential to be doubled to 300,000 vehicles.

Carlos Ghosn commented during the opening ceremony: “Thanks to a talented, multicultural team, the Wuhan plant was built in record time to our highest quality standards. This is a milestone in our long-term partnership with Dongfeng Group, as well as for Renault’s growth. China is a core part of Renault’s strategic plan.”

The Dongfeng Renault Automotive Company (DRAC) joint venture was formed on December 16, 2013, and work started on the plant in January 2014. One year later, the joint venture had around 1,000 employees. At end-2015, the workforce totalled 2,000 – a challenge in terms of recruitment and multicultural management.

The Kadjar To Go On Sale In March The first vehicle to be manufactured at the plant is the Renault Kadjar, an SUV with racing genes. The car’s dynamic design and high-tech features meet the expectations of our customers in China. The car has been fitted with some different equipment compared to the Kadjar released in Europe in 2015, including a panoramic sunroof, 4Control and independent rear suspension for added comfort.

The SUV segment accounts for 30% of the Chinese market and is the fastest-growing segment, increasing by 53% in 2015.

The Renault Kadjar was unveiled at the 13th Guangzhou Motor Show on November 20, 2015. It will go on sale in China in March 2016.

JD Power in 2015, Renault was ranked second among mass-market brands in China.

Credit source: Groupe Renault International Press