Confidential

School run fun

James Ruppert — Fri, 03 Feb 2012 18:43:26 GMT

I’m counting the days – well, it is just over a year – until I don’t have to do the school run anymore. Inevitably it will be replaced by the sixth-form college run, but I’m hoping that there will be a bus involved at some point. For the moment, though, there is no bus, either school or public, to get my nipper to a place of learning.

The added complication to my school run isn’t the rush hour hell in the morning or evening which many experience, it’s the fact that there is a hospital opposite.

Quite rightly there are designated parking spaces for the unwell visitors and healthcare professionals. Some school runners don’t care and park in them as well in as the bright yellow boxes reserved for ambulances. No really. So on some nights it’s gridlock as a fairly narrow road becomes blocked with motoring Mexican stand-offs aplenty.

As the least confrontational person on the planet who usually shrugs shoulders and turns the opposite lock, I have been forced out of the Land Rover (the only real one on the school run, of course) to tell drivers to move along.

How times have changed. I never went to school in a car. Ever. I walked and biked and bussed. So how come we got so soft? And so stupid about parking?

So any comments about school run fun anyone? Should we send ‘em all to boarding school or just make the little blighters walk?

New BMW M6: this much we already know

Steve Sutcliffe — Wed, 25 Jan 2012 10:25:34 GMT

When I spoke with Carsten Priest, aka Mr M, on the launch of the new BMW M5 last year, he told me a fair bit about the forthcoming M6.

And I got the impression at the time that, if anything, he was even more proud of the work his team had performed on the coupe (than the saloon) because they’d had a bit more freedom to let rip.

'Because it’s a coupe, it will naturally appeal to a more sporting audience, which is why we’ve gone maybe 10-15 per cent further with the tuning of the dynamic performance,' said Herr Priest of the M6 last October.

Yet the one thing his team won’t have been able to do much about is the fundamental weight of the car. And for the average M-car engineer, weight is the ultimate dilemma nowadays, especially when it comes to the current 5/6-series platform (beneath the skin they are the same car) which is almost 150kg heavier than before.

So although M Division’s engineers did ‘everything we could to reduce the car’s weight during the engineering process’ they knew they had one hand tied behind their back on this occasion.

The result will be a hugely more refined M6, no doubt, and a gigantically rapid one, too, if the latest M5 is anything to go by. But whether it’ll contain the agility and slightly crazed response of the previous model – which I ran for six months way back when and, irritating gearbox aside, fell for in a very big way – is another question.

I suspect that, one day, maybe in 10 years, the V10 M cars might just end up being remembered with more affection than those that replaced them – even if they were a little bit on the mad side to drive, had rubbish touring ranges and were virtually impossible to park.

Then again, I’m sure the new M6 will be a cleaner, more ecologically sound and, of course, a much better everyday car than the one it replaces; Herr Priest admitted such intentions to me late last year. So who knows how history will regard it come the year 2022?

Boxster fights off roadster rivals

Matt Prior — Wed, 18 Jan 2012 14:37:27 GMT

Porsche’s CEO, Matthias Mueller, has never seemed convinced by making a variant of the VW BlueSport roadster – whose future is now in doubt – to sit beneath the company’s Boxster.

At the Paris motor show in 2010 Mueller told me there was no point making the BlueSport just for the sake of increasing Porsche’s production volumes; regardless of how much Volkswagen’s advisory board wanted him to do precisely that, from 100,000 to 150,000 cars per year.

Mueller argued that, if the new car stole sales from the more expensive (and more profitable) Boxster, Porsche could find itself in the unenviable position of making more cars but less money. Chase profit, not volumes, he said.

All reasonable enough. After all, how cheap could a sub-Boxster Porsche BlueSport be? Maybe £25,000? More likely £30,000. Close enough, in price and practicality, that even if it reached a new generation of Porsche buyers, it would tempt more still existing ones at the expense of its profitability.

Now, with the BlueSport’s future in doubt after Volkswagen North America decided it doesn’t need the car to stretch its sales volumes to 800,000 units a year, Porsche’s fears will ready another nail for what seems like an inevitable hammering shut of the mahogany lid on the baby-Boxster’s future.

While Porsche can swallow the development cost of the Cajun SUV even if it does eventually nick the odd Cayenne buyer (because the Audi Q5 has already footed the biggest part of the bill), without the VW BlueSport there’s no way Porsche will pay to develop a roadster that endangers its existing sports car. If Porsche wants to reach downwards at all, maybe a modestly equipped four-pot Boxster would be a more palatable solution.

Some of my colleagues argue, not unreasonably, that the 1997 introduction of the Boxster signalled the beginning of the end for TVR. That in the Porsche, former TVR buyers found a destination for their thirty-odd grands without feeling they were doing the development and durability work for the company they’d just paid.

Fifteen years on, for very different reasons, the Boxster is still keeping other roadsters down.

Land Rover turns its back on Detroit

Julian Rendell — Fri, 13 Jan 2012 11:27:35 GMT

I thought the days of British car-makers dragging defeat from the jaws of victory were long gone in the modern era of more professional management. But Land Rover’s absence from the Cobo Hall on the day the Evoque scooped the prestigious North American Truck of the Year must rank as one of the dumbest marketing decisions made by Brits for a long time.

Given the historical importance of the US market to JLR, and Land Rover in particular, the decision to turn its back on Detroit was a strange one in itself, regardless of whether a major gong was in the offing.

In past years, Jaguar has exported half its output to the US and in dark times, sales in America kept the company afloat. Land Rover is less reliant on the US, but the world’s biggest SUV market is still hugely significant to a company whose sales are dominated by 4x4s.

But you also have to wonder why Land Rover’s US operation was not able to feedback the significance of a possible Evoque win to HQ in Gaydon?

And then how the Gaydon management machine failed to join-the-dots and at least consider that the Evoque might be a short-listed contender for NA ToTY, therefore making an appearance at Detroit essential?

On the face of it, JLR made the judgement call to exhibit at Delhi instead of Detroit, although the company says India is so much cheaper to attend that the comparison is unfair.

I also heard execs argue that the US budget was better targetted at LA before Christmas, where new Defender concepts were unveiled.

At least JLR’s top bosses managed to divert themselves from Delhi to pick-up the Evoque award.

Anyway, the scale of the Evoque’s tremendous victory in the US can be judged by the fact that the last British car to scoop a major US award was the Mini Cooper, NA CoTY in 2003. Previous to that the Discovery was short-listed for ToTY in 1994 and the Jag XK for CoTY in 1997.

But what a missed opportunity with the world’s media watching — plus the top bosses of arch-rivals from America, Germany and Japan — not to have the brilliant Evoque proudly on its stand alongside the Truck of the Year Award.

Given the money that’s sometimes lavished on obscure PR opportunities, missing an open goal like this surely requires a degree of internal navel-gazing in the senior management at Gaydon?

Incidentally, for some reason, JLR has mixed form when it comes to Detroit. A few years ago, the US magazine that I also write for voted the C-XF concept best in show at the 2007 Detroit Show.

Editors were not best pleased when Jaguar crated up the handsome C-XF and withdrew it from the show on public days, so that paying visitors and readers of the mag couldn’t see the headline grabbing award winner. Which makes the Evoque episode an unfortunate repeat of history.

Too big not to fail?

Hilton Holloway — Thu, 12 Jan 2012 16:43:00 GMT

To see Sergio Marchionne passing through a motor show on press day - especially a North American motor show - is to see power made real. He is always at the centre of media scrum, which follows him around like a giant cloud of people.

Most the hacks involved are either Italians, fascinated by Fiat’s effective takeover of Chrysler, or Americans, wanting to know what this king from over the water is going to do to with one of their biggest car companies.

Marchionne’s audacious - and so far successful - take-over of Chrysler also means that his thoughts on the wider car industry are much in demand. Earlier this week at the Detroit show, the media were all ears when Marchionne declared Fiat-Chrysler was open to another partnership.

Some years ago, he had famously stated that a mainstream carmaker needed to sell 5-6 million vehicles per year to be able to prosper over the longer term. At Detroit he upped that estimate to as many as 8 million vehicles per year, partly due to overcapacity in the European car industry. (Marchionne added that the financial crisis in the Euro zone will hamper Fiat-Chrysler’s attempts to hit 5.7million sales in 2014).

The logical conclusion, which Marchionne admitted the following day, was that Fiat-Chrysler needs another partner, one which would help propel such a super-alliance to combined sales well north of 8 million per year.

The inevitable speculation over a suitable bride led first to struggling Vauxhall/Opel, then Volvo and then to Peugeot-Citroen, which is suffering particularly as the European new car market contracts. Frédéric Saint-Geours, the PSA brand boss, told the Financial Times that PSA is open to an alliance but that ‘the time was not yet right’.

Of course, PSA would make sense on paper because it would provide such a super-alliance with a decent foothold in China, which Fiat and Chrysler lack, while PSA is undersized in Europe and nowhere to be seen in North America. But the chances of pulling this off are, surely, minimal.

As previous collapsed mergers (Daimler-Chrysler and BMW-Rover) have shown, trying to get different companies, in different places, with different ideas to co-operate enough to use the same parts bin is probably impossible.

I can’t quite imagine the product bosses of Fiat, Chrysler, Peugeot and Citroen all being marched into a Milan meeting and being given a platform and components set and being told, VW Group-style, not to deviate from the pre-engineered parts bin when creating their next model.

And deviating from any shared component sets - think of Saab’s struggle to do its own thing under GM - would greatly undermine the point of a super-alliance. Even the new Dodge Dart is wider than the donor Alfa Romeo Giulietta, which might mean both cars cannot be built on the same US production line.

And Marchionne’s super-alliance could be dealing with three governments and three sets of unions. Imagine the uproar from the French government if Marchionne wanted to reduce capacity by closing a factory?

It’s understandable that mass-market manufacturers, who are desperately chasing the globally economies of scale enjoyed by VW and Toyota, want to try to weld together disparate, historically independent, carmakers into a single-minded whole.

But I just can’t see such a plan flying.

COTY 2012 does its job – so far

Steve Cropley — Mon, 09 Jan 2012 11:43:40 GMT

The seven-car shortlist for Car of the Year, revealed this morning, seems to show that the world's oldest and most thorough 'best car' competition, now in it's sixth decade, is in full health again.

In recent years there has been a tendency for jurors to choose simple, high-value cars at the expense – excuse the pun – of more premium, more technical advanced models. This year's group, which includes the Vauxhall Ampera and Land Rover Evoque, puts those days in the past.

The full list – Citroën DS5, Fiat Panda, VW Up, Range Rover Evoque, Ford Focus, Toyota Yaris and Vauxhall Ampera – sets up a fascinating competition from which just one car will be chosen on the opening day of the Geneva motor show at the beginning of March.

Personally, I'm delighted that Opel/Vauxhall's range extender made it to the shortlist, despite the recent storm-in-teacup business about one or two batteries catching fire when the cars were in storage, days or weeks after being involved in a big accident.

GM now has a fix for the problem, anyway. It's also great (and unexpected) that JLR's fine design work has been recognised. The shortlist also sets up the expected, fascinating A-segment battle, Fiat Panda-versus-VW Up. And Ford must be relieved that Focus has made it, given the rumbles that the latest car isn't quite as inspirational as its peers.

Me? I chose five of the seven. I'd have liked to see the Kia Rio make it, because it seems such an excellent all-rounder. And I also chose the Peugeot 3008 HYbrid4, because it's packed with new technology and drives pretty well, if not perfectly.

The jury body chose the Citroën DS5, a decent decision, and the relatively ordinary but well-packaged Toyota Yaris instead. The last of them, I suspect, not even Toyota was expecting. But then, there's always one…

Leyland rises from the ashes (sort of)

Hilton Holloway — Thu, 05 Jan 2012 10:44:56 GMT

Just before the Xmas break you might recall news reports of a huge fire in Lancashire, which broke out close to the London-Glasgow main rail line. You might also have heard that it was caused by warehouse full of loo roll combusting.

You might not have twigged that the fire was at the old Leyland bus and truck facility in the small Lancashire town of the same name. The Farington facility dates back to before WW2 and was part of the massive facility that dominated the town.

Indeed, in its heyday, it is said that Leyland Motors, as it was known locally, was the biggest exporter of the commercial vehicles in the free world. (That latter qualification takes into account the Soviet Union’s notorious ‘tractor factories’ that churned out vehicles regardless of demand).

The ruggedness of Leyland vehicles was appreciated in the developing world, but they were rather out of step with trans-continental European use. Only when it was used to create British Leyland did the well-documented trouble begin.

I should say, though, that a greatly shrunken Leyland Trucks still does modestly well under US ownership, making Peterbilt, Kenworth and DAF trucks down the road at the modern factory built in the 1970s for the stylish T45 Roadtrain series.

Anyway, I was in Leyland for Christmas – I grew up in the Farington area – and popped down Centurion Way to look at the damage to the original site. It was – as these snaps show – pretty bad. Local gossip suggested that the buildings dated back to WW2 and were originally used for tank production (hence, Centurion Way).

It’s all pretty depressing. Leyland Motors has been crumbling away since it was forced to absorb Austin-Morris-Jaguar 40 years ago. For a large chunk of the old factory – admittedly now used for warehousing – to be destroyed by a loo roll fire shows that old company’s terrible luck shows no sign of letting up.

And here’s the weird thing: a few days after the Leyland factory fire, news filtered through that the infamous BL ‘plughole’ logo is set to fly again in the UK. It seems struggling bus builder Optare is set to be taken over by a Indian company called… Ashok Leyland.

Yes, that is the same Leyland – the company’s one-time Indian operation, now prospering under the ownership of the Hinduja Group. And it still uses the old BL logo. It gets weirder: Optare was born out the decision – in 1984 – by BL to close its Roe coachworks in Leeds. A management buy-out re-launched Roe as Optare.

So we have the old Indian Leyland operation coming in to rescue the old Leyland Leeds operation. It was 30 years ago that the massive, global, BL operation started to disintegrate and explode into tiny pieces. Now, some of the those pieces are being joined back together. And, in the next few days, Leyland’s old Rover operation and BMC’s old Jaguar operation (joined together by British Leyland, separated by privatisation and put back together by India’s Tata…) will announce record sales and record profits.

Obviously, British Leyland is not coming back from the dead, but bits of it are showing remarkable signs of life.

Fast-forward into the future

Hilton Holloway — Wed, 04 Jan 2012 08:54:34 GMT

With hundreds of millions in investment at risk, you might expect the car industry to be knee deep in facts and figures. But its also has to chase demographic and behavioural change, both of which have recently switched into fast-forward mode.

Twenty years ago, tastes were very slow to shift. Today, we’re seeing violent shifts in social trends across just a few years. For example, the UK market for city cars has leapt from 90,000 in 2005 to over 200,000 units last year, which means other market niches are seeing commensurate shrinkage.

But car makers have to drill down much further than these top-line figures to reveal deeper trends. Some of them are counter-intuitive: one Skoda boss told me that apart from MPVs, city cars are the most likely type of vehicle to have children travelling in the rear seats.

Such a revelation helped steer the styling of the Skoda Citigo, because potential purchasers want such a car to look as solidly-built as possible. It probably also drove the decision to make access the rear in three-door easy for children, although the result is a huge door. (In fact, the B-pillar is placed so far rearwards, the side- and head-bags are mounted in the Citigo’s seat).

Equally, Europe’s collapsing birthrate – the average family size is now under two children – has resulted in sales of seven-seat MPVs falling five years on the trot.

So, imagine you were trying to project the future shape of the UK entry-level car market. You’d have to consider that 40 per cent of the population will be saddled with big tuition fee debts, that over sixty perc ent of graduates will be female and families will get even smaller.

Oh, and the number of under-25s with a driving licence is dropping and the current average age of a Mini and Smart buyer is around 43.

Out of that mix, what would you extrapolate? If you concluded that, by 2030, the car industry is doomed and that it was time to build scooters and bicycles, I might be tempted to agree.

At the wheel of the 313mpg mega-car, on sale 2013

Hilton Holloway — Sat, 31 Dec 2011 21:33:00 GMT

Time off over Christmas is – if you’ll forgive the pun – a Godsend. It also means there’s plenty of time for reading, so I’d thought I’d try and sum up my motoring year month by month over the holiday period. It’s a year which has taken me around the from the Middle East, to California and to Japan and back and easily the most interesting and engaging year I’ve seen so far as an automotive hack.

January 2011 kicked off, as it usually does, with a trip to a freezing Detroit, which blended straight into a flight to the Mexican border, to try the new Mercedes CLS 63 AMG. January ended with a trip to Dubai to drive Volkswagen’s radical XL1 which claims 313mpg and 24g/km of Co2. It was a neat experience: just about the two extremes of motoring possibilities.

The AMG is a beautifully re-engineered (with bespoke steering and suspension systems) high-quality road car of extraordinary competence. Indeed, the driving experience on the roads around the Mexican border in the AMG would have been unimaginable a decade ago. It felt like it had been mostly machined from solid billet and delivered the kind of feedback through the driver’s contact points that wouldn’t have shamed an expensive bicycle.

In many ways, the CLS 63 AMG was just about the ultimate expression of the internal-combustion driven automobile, or at least one that tries to balance practicality with the need for speed.

Driving VW’s far more extraordinary XL1 was a shock because it made such a serious stab at the shape of driving in 20 year’s time. The carbon fibre-reinforced tub and bullet-shaped body played host to a remarkable drivetrain. A two-cylinder turbo diesel and electric motor are the key (along with an all-up weight of just 795kg) to the remarkable fuel economy.

The biggest surprise behind the wheel of the XL1 was the amount of time the engine was idle. Only when I pressed the accelerator did the motor spin into life and deliver another burst of forward motion. The slippery body and low rolling resistance meant the XL1 could cover a surprising distance on momentum and the odd push from the electric motor.

If this car is a fair representation of the future – and I think it is, even if we are looking at 2030 – we’ll be spending an enormous amount of time coasting around. Every downgrade will be an opportunity to take advantage of gravity and get us that bit nearer our destination without using the on-board energy storage.

Ultimately, though, both the CLS and XL1 are reasons to admire today’s car industry. It is simultaneously still polishing the proposition established by the 1886 Benz Patent-Motorwagen, while looking far into the future.

Can Britain’s components industry rise from the dead?

Hilton Holloway — Sat, 31 Dec 2011 20:23:00 GMT

Before he stood down as GM Europe boss, Nick Reilly told the BBC that the big problem for car manufacturing in the UK was the lack of a local supply chain. Importing the majority of components for assembly in the UK is not the ideal route to being competitive in a cut throat market.

The UK supply chain has shrunk dramatically over the years and some claim that the number of UK supplier jobs have collapsed by a further 25 percent since the global recession. At first glance, the situation looks dire - after all, if the UK supplier base gets any smaller, the chances of more car production being shifted overseas become ever greater.

Earlier this year, a report from the University of Manchester pointed out that in 1979, 96 per cent of a JCB digger was made in the UK. Today, however, just 36 per cent of a typical JCB is sourced domestically.

That’s why the UK’s Automotive Council (a forum hosted by the government and the industry) is current trying to identify the automotive technologies of the future and try and ensure they are rooted in the UK. Even if those technologies turn out to be smart phone ‘intelligent mobility’ apps.

Meanwhile, the tide is also turning a little against overseas component suppliers. There been a steep rise in shipping costs and wages are also now rising steeply in China after a decade of super-low costs.

And there are other glimmers of hope that the UK might be able to rebuild its supply base. Jaguar Land Rover’ planned production expansion could help, as will the planned new JLR engine factory.

But after the recent natural disasters in Japan and the massive floods in Thailand hammered manufacturing, auto industry expert Professor Garel Rhys has suggested the UK should be alert to the possibility that the Japanese may now build back-up component plants in Europe’s rather more benign conditions.

And geo-political stability is an increasing issue. Land Rover bosses had to keep a keen eye on the recent unrest in Arab nations, because the wiring loom on the Discovery and Range Rover Sport is, remarkably, made in Egypt.

Vauxhall could be headed for disaster

Hilton Holloway — Sat, 31 Dec 2011 15:53:00 GMT

Last year, a slide of densely-packed figures was flashed up for just long enough for me to see that, in the UK, Vauxhall sells over almost 80 per cent of its vehicles to fleets and company purchasers, the highest proportion of all the car makers.

Business to business sales bring notoriously slim margins, if any. For any brand to be reduced to commodity status, with little emotional appeal to private car buyers, is a disaster. To put it in perspective, one industry paper claimed that GM Europe had lost £8.8bn since 1999. On the continent, Opel’s models are officially priced at a discount of nearly 10 per cent against the mighty VW. When it comes to a real punter negotiating a deal, that discount could end up being even higher.

Caught between high ex-factory costs and low showroom prices, Opel is desperately trying to drive up average transaction prices. According to a Bloomberg report, Opel is embarking on a scheme that will try to get buyers to spend money on high-tech extras such as sophisticated speed-sensitive headlights. Getting the typical customer to tick the options box for fancy headlights and, say, adaptive dampers could add £1800 to the transaction price and put Opel back on firm financial footing.

For me, it looks like a long shot. Perhaps even worse news for Vauxhall/Opel is the arrival of Chevy as a serious brand in Europe. 2011’s first half results for Chevrolet showed the brand seems to have become a global phenomenon while most of us were looking the other way. Chevy sold 2.35m vehicles worldwide which, not surprisingly, was the brand’s best performance in its 100 year history. To put that in perspective, the whole General Motors empire is expected to shift 8.56m vehicles across the world in 2011. If Chevy is consistent, it will account for a whisker over 50 per cent of all GM sales this year. If Chevy was a stand-alone company, it would probably end 2011 as the sixth or seventh largest carmaker in the world.

Much of Chevy’s engineering is carried out in South Korea by the impressive GM-DAT operation, which is currently putting the finishing touches to GM’s new global Corsa-size platform. Chevrolet’s success is underpinned by the fact that it is a truly global brand and that it is has been making significant gains in places as diverse as Argentina, Denmark and South Africa. Sales in China were up 15 per cent and up 54 per cent in Russia.

The Chevy Cruze, the company’s value Focus-segment model, shifted 330,000 globally in the first half of 2011, which means that a full 12 months should see this single model move a huge, Golf-rivalling, 660,000 units. With the launch of the Cruze hatchback and Orlando MPV boosting European sales to profitable private buyers, Chevy’s advance seems unstoppable, here and elsewhere. Simply, either Vauxhall must match VW pricing and make self-sustaining profits or it will be forced to compete with its Chevy sister brand - and end up deep in the red. I’m not sure Vauxhall/Opel has a realistic way out of this bind.

Volvo's long road ahead

Hilton Holloway — Thu, 29 Dec 2011 10:27:15 GMT

Just before Christmas, I was walking down Teddington High Street, near Autocar’s Middlesex base. I heard the once-familiar warble of a Volvo five-cylinder engine and looked around to see an R-plate V70.

When I joined Autocar in 2004, Teddington’s affluent streets were dominated by Volvos. The town even had its own main dealer. Today, the dealer’s gone and Volvo’s road-side presence is greatly diminished. So, whatever happened to Volvo?

It’s 20 years since the launch of the front-drive 850-series, a range designed to break with the company’s past. Models such as the dramatic T-5R should have been enough to change perceptions of Volvo.Ultimately, they weren’t.

While Volvo’s re-invention was well-timed (BMW, Mercedes and Audi all hit the revolution button in the early 1990s) it just didn’t carry through the huge growth in sales that the Germans managed. In recent times, Volvo sales peaked in 2004, at 456,224 units, thanks to the XC90 and the first S60 and 458,323 in 2007.

The crunch and an ageing and off-pace model range saw output slump to just 334,808 in 2009. In 2010, the year Ford sold Volvo to Chinese manufacturer Geeley, sales climbed to 387,802, but still very disappointing for a premium brand, recognised globally. This year, it should be back to near 450,000 units, but it is still way behind its German rivals.

The Chinese bosses are expecting sales to hit 800,000 by 2020.I n the UK, perhaps the biggest hurdle is the unyielding brand image. In 2010, political bloggers exposed ‘Project Volvo’, which was the plan to get Gordon Brown, then Chancellor, into No10 Downing Street as Prime Minister.

The biggest hurdle, according to the research which was carried out before the credit crunch hit, was the public viewing Brown as a human ‘Volvo’: safe and reliable but very dull. But Volvo has a number of bigger problems.

Building cars in Sweden and Belgium and selling them in the US is often unprofitable. It also makes 10 different model lines, in relatively small numbers. In 2010, the biggest seller was the XC60 (83,670 in 2010), the V70 hit 70,945 units, but the S40 and V50 managed just 82,968 units. Hopeless, when the premium C-segment is booming thanks to downsizing.

Even so, the new S60 has done much to boost sales in 2011 well north of 400k. Aside from pushing sales in China (just 30,522 units in 2010), and whispers the XC sub-brand could be the key to a bigger future, Volvo’s Golf-rivalling hatch - due to be unveiled at the Geneva show in March - is a really crucial model.

And this year’s revelation that the company’s new platform (which will stretch from S40 to XC90) will only be available with four cylinder engines is impressively bold.

But, for new boss Stefan Jacoby, getting to 800,000 sales by 2020 remains a ‘Project Volvo’ of awesome proportions. Re-casting your image is a remarkably hard job. Just ask Gordon Brown.

Compression is the key for a fossil-fuel future

Hilton Holloway — Wed, 28 Dec 2011 12:09:01 GMT

Writing about the demise of Saab reminded me of the sheer cleverness of the company’s engineers. Much of what the engineers did in Trollhattan never saw the light of day and a lot of what did was production work for GM. One of the most original ideas the company had was unveiled to journalists. Back in 2000 I sampled Saab’s Variable Compression ratio engine. It was a 1.6-litre, five-cylinder, supercharged unit which, roughly speaking, hinged in the middle.

This meant the upper part of the engine could be tilted by up to four degrees in relation the lower half, allowing the engine’s compression to be varied between 8:1 and 14:1 depending on the engine load.

A variable compression ratio is, perhaps, the holy grail for creating ever-more frugal engines, because a fixed ratio is compromise between all types of driving conditions. The Saab engine, though relatively crude, delivered 150bhp and 140lb ft per litre of cubic capacity, but the fuel economy of a conventional naturally-aspirated 1.6-litre petrol engine.

Saab’s engine never got any further under General Motor’s ownership and, in truth, it’s unlikely that the tilting mechanism could ever have been put into production. Achieving a variable compression ratio in a long-life production engine is very difficult, but it is the key to one of the Holy Grails of engine design. It will allow an engine to run - in certain conditions - like a frugal diesel, with the fuel/air mix igniting without needing a spark. This, in turn, will allow an engine to be much smaller for a given output and remarkably frugal.

Mercedes have been working on the idea for years. BMW’s most senior engine designer told me in 2010 that the they had the engine ‘running well’ on the test bed, but that the leap to production reality was a large one.

However, an independent French company, MCE-5 Development, partly backed by the French Government and the EU, has come up with a brilliant solution to creating a variable compression ratio engine by, in rough terms, pivoting the middle of the conrod and then moving the pivot point. Thanks to some brilliantly original engineering, it can continuously alter the compression ratio of each cylinder, in fine increments, almost instantaneously.

MCE-5’s 1.5-litre, two-stage turbo, prototype petrol engine is good for 215bhp, 332lb ft of torque and 122g/km, with more to come. I’d love to see it in a car, but will any mass-maker be brave enough to ignore ‘not-invented-here’ syndrome and buy-in this technology? Maybe this is the kind of home-grown technical leap forward that would help Renault leave its current malaise behind.

Is the car industry running out of planet?

Hilton Holloway — Tue, 27 Dec 2011 10:59:55 GMT

During a visit to the Shanghai motor show in 2010, a senior car industry executive posed me a very interesting question: ‘What do you think Audi will do in 10 year’s time?’

He didn’t have to explain much further, because his point was pretty obvious. Audi is seemingly committed to building every possible variation of car: everything from the A1 to the A10 will be in your local Audi showroom. Surely, by 2020, Audi - as well as BMW and Mercedes - will start to run up against the limits of the expansion of their portfolios?

The end of the decade will also see the massive growth in China petering out, if it hasn’t already been halted rather earlier. And while Western mass-producers might be facing competition from budget Chinese own-brand cars on their home territories, premium European brands are unlikely to face Chinese competition.

But what then? Where next for a big brand such as Audi? Is there, as many anti-capitalists have been insisting for decades, a limit to growth? It is, of course, incumbent on public company to keep searching for growth and expansion. If nothing else, it is a fine way of keeping a company and its employees on their collective toes.

But surely, after the opening up of China we’re simply running out of potential new consumerist territories? Where next on the planet for expansive carmakers?

Well, the post 2020-destination has already been identified and named. The ‘N-11’ or ‘Next 11’, identified by Goldman Sachs, are Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam. After the BRIC (Brazil, Russia, India, China) expansion, the aspirational middle classes of the N-11 will be the next target of the European premium brands.

Then, perhaps, once those markets have become familiar with them we really will have run out of planet.

Death of the middle market

Hilton Holloway — Mon, 26 Dec 2011 13:20:47 GMT

Renault's recent decision to axe UK sales of the Laguna and Espace (and the fact the company still hasn't decided how to replace these models), reminded me of something that Richard Parry Jones, Ford's retired engineering guru said at Autocar's 5000th issue bash earlier in 2011.

Parry-Jones said that a car manufacturer either builds budget cars in huge volumes or it heads upmarket. There's no middle way. For mainstream car makers, 'upmarket' might not amount to a huge sum. A decade ago, the then-boss of Renault told me that his biggest headache was the fact that Volkswagen managed to get a showroom price of around £1500 more for a Golf than he could achieve with a Megane.

That might not sound much, but over annual sales of, say, 400,000 vehicles, that's an extra £600m in the Wolfsburg bank account each year. Car makers are loathe to reveal the margins made on individual models, but I found out that a certain compact premium German saloon car returns an average profit of £5000 per sale, which is regarded as impressive in the industry.

For those makers that are in the mainstream, fighting for every sale can mean never getting anywhere the near the quoted brochure price. Other industry commentators say that Europe's car industry is also suffering from 'over-capacity' - the ability to turn out far more cars than the market can comfortably absorb, forcing everybody who isn't a premium maker to discount heavily. Supermini profits can be as little as £600 per unit, which shows you just how much the car maker would like buyers to tick a few options boxes.

Cold industrial logic would suggest that more mergers are needed among European manufacturers, creating super-makers all using the same basic platforms. Fiat Auto certainly lacks critical mass as does GM Europe, which is still losing money on an operating basis.

Even Ford's European arm has been losing money, showing just how hard it is to make profits with even the best mainstream cars. And I don't think you could accuse most car-makers of being badly run.

Truth is, I can't see how this situation can continue (outside of VW which can both leverage huge volumes and demand premium prices). Either we all stump up more for our non-premium motors or the makers will start stripping out content, learn to love hard plastics and beam axles again and price the result to sell. Renault's introduction of the budget Dacia brand to the UK will be very interesting.