Renault-Nissan teams up with Daimler

Renault-Nissan enters into a strategic partnership with Daimler. All the three automakers will have around 3% stake in one another through equity exchange. The near-future aim of this alliance is to collaborate on the next generation Smart Fortwo and the Renault Twingo, including electric versions of the cars.

The overall objective of this alliance is to share and develop engines and powertrains for future passenger cars and light commercial vehicles for all three automakers.

In a nutshell, Daimler will get to use Renault-Nissan's latest generation small 3/4-cylinder small petrol and diesel engines for new Smart vehicles and also use these engines to introduce entry-level vehicles in the future. Daimler also gets to use Renault-Nissan diesel powertrains for it van, the Vito. Moreover, Mercedes-Benz Vans will get to include Renault-Nissan entry level models in its Light Commercial Vehicle portfolio from 2012 onwards.

In return, Daimler commits to lend its 4/6-cylinder petrol and diesel engines to Nissan's luxury car brand, Infiniti.

The deal clearly states that the brand and product identities of the three car-makers will remain intact.

There is also talks about Daimler and Renault-Nissan using one another's plants in the US to manufacture vehicles.

This looks like an interesting alliance provided Daimler keeps its end of the promise and not provide dated engines and powertain to Nissan like it did to Chrysler.

Whichever way the alliance swings, but one thing is for sure, the new age of automotive industry has arrived and many more consolidations are in the cards.

Recalling the Toyota recalls

During my stint with erstwhile Chrysler, I learnt one important thing about the average American car drivers - they are a quirky and very paranoid bunch of people when it comes to the quality and the safety of the vehicles. No wonder they have the safest and the most technologically advanced vehicles; but at the same time over-dependence on technology has diluted the driver's intuition in the average American.


The recent Toyota recall story is not new. It is a deja vu of the Audi 5000 recalls in the mid-1980's. Anyway, we all know the story of unintended acceleration of certain Toyota and Lexus models and the number of recalls made, etc. In my opinion, Toyota did a commendable job in managing the negative publicity, but just a couple of months after the hue and cry is over, everybody seems to forget to find out what really happened. Were the Prius' really faulty, as alleged? What about the outcome of the investigation?


I stumbled upon Drew Winter's commentary in Wards Auto and I think it is a must-read. Drew gives very nice details on what really happened as the initial Federal investigation results showed up and further investigations are made. To read Drew's article click here.


Addendum - The NHTSA slammed a fine of USD 16.4 mn on Toyota stating that Toyota was aware of the faulty electronic throttle, but chose to remain silent. Food for thought - Toyota being fined means the Big 3 sales increase, two of which are owned by the US government.

Is BYD, China, buying the Maybach marquee from Daimler?

The latest speculation in the automotive world is BYD approaching Daimler AG to buy the Maybach brand. BYD is one of the smaller Chinese automotive companies that focus in battery-operated electric vehicles. BYD already had teamed up with Daimler to develop electric vehicles for the Chinese market.

Interesting facts about BYD are that, Warrren Buffet has a 10% stake in the company and it was originally a Li-ion battery manufacturer for Nokia and Motorola.

Spokespeople from both the companies have clearly denied the rumors and have passed it off as market speculation.

The truth remains to be seen. But with a poor sale of around 200 Maybachs last year and Daimler working vehemently to lose its extra fat, such a rumor might not stay a rumor for long.

Geely buys Volvo

The announcement of Chinese car manufacturer Geely buying Volvo Cars from Ford Motor Company is a big news. A landmark event or not, remains to be seen. I make this comment because if we consider the popular school of thought, according to which, consolidations in the future would leave about 5 major global automotive companies owning over 30 brands, Geely's acquisition seems like a small ripple in the grander scheme of things; but nevertheless an important milestone, especially for the Chinese automotive industry.

Estimated at USD 1.8 bn, the Geely-Volvo deal marks China's biggest overseas auto purchase and a global shift in manufacturing from North America / Western Europe to China.

According to Geely, its present and near-future aim is not to tap the western market but bring volumes to the the Chinese market and boost manufacturing. This objective is not so simple as it sounds. Volvo Cars sold around 50,000 units in China in 2009, while the market leader in the premium segment in China, Audi, sold almost 130,000 cars in 2009. But the acquisition is a step forward in the right direction for Geely. Already, a big player within its compatriots, Geely now has the famed Volvo safety design and vehicle engineering technologies at its disposal. This will take Geely a few steps ahead of the other Chinese automakers.

The deal took almost 2 years in the making since Geely went to Ford Motor Company with a speculative bid to buy Volvo Cars. But the buy-over did not happen earlier mainly due to two reasons -

1) Fears of loss of Intellectual Property. The Chinese manufacturers do not have a very good reputation of protecting the interest of foreign JV partners. Remember Chery shamelessly copying the design of Daewoo Matiz? (I heard Chery did such a fine imitation that the QQ headlamps would fit like a glove in a Matiz!)

2) Geely is essentially a private firm without government stakes in the company. This does not bode too well for a foreign investor because according to the Government Procurement Law of the People's Republic of China, "...purchasing activities conducted with fiscal funds by government departments, institutions and public organizations at all levels, where the goods, construction and services concerned are in the centralized procurement catalogue complied in accordance with law or the value of the goods, construction or services exceeds the respective prescribed procurement thresholds", basically, fiscal funds can be used only when the government gives a go-ahead.

But what is interesting is that Geely only paid USD 800 mn of the total USD 1.8 bn amount to Ford. The rest of the money comes from "regional investments", which basically means local governments.

After the unsuccessful attempt by the little-known heavy machinery maker Sichuan Tengzhong Heavy Industrial Machinery to buy Hummer, the Geely-Volvo deal is a new chapter in Chinese automotive history. What remains to be seen whether this is a mere ripple in major consolidations in the automotive industry that are to happen in the future or a milestone event that could change the global automotive industry and start a new trend.

Portion of Hyundai i20 production to shift to Turkey

By June this year Hyundai will shift a part of its production of the i20 to Turkey. The main reasons for this shift are -

1) The production capacity (~600,000 units per annum) of the two plants in Chennai is almost saturated.

2) The recent spate of labor problems in the plant.

What this means for the Indian consumer is that the waiting period for the i20 will now be around 3 weeks.

This move also signifies the Indian economy losing out a portion of its revenue to an Eastern European country, which have become close competitors to India, China and other South-east Asian countries in terms of affordable labor and raw materials for automotive OEMs.

What seems curious is that, Hyundai after announcing India as its small car manufacturing hub, should have considered capacity expansion in India rather than moving to another country. But I guess this will be the trend going forward, as Turkey has the advantage of being closer to the European market besides offering the same USP as India.

The Dark Horse gets its strategy right – Ford hits India with the right product

I like American cars, especially Ford. When I saw the Ford Escort around 1998, I was, let’s say, not so enthused. The Ikon was much better and the Mondeo was true Ford DNA; but Ford never could make a mark in the Indian market. Ford was never mass-market here and the only feeble effort was the launch of the Fusion in 2004. But like I discussed in an older post (look at the post at the bottom), the Fusion could never compete with the hatchback leaders in India.

But things are going to change for Ford in India and the B+ segment market here is in for some fresh competition from the Ford Figo. Ford, for the first time, understands the importance of the Indian automotive market and actually has a strategy. It took more than a decade, but finally, I feel Ford will see its market size grow in India from a puny 1.6% (volume).

I will not talk about the specifications as they have been discussed in many places, especially the Team-bhp review, which is all comprehensive. You can read it all here. My personal opinion is that two engine variants, 1.2 L petrol and 1.4 L diesel churning out 70 bhp and 68 bhp respectively are very decent options for the Indian buyers, though other OEMs have set a higher standards for power.

What I feel will make the Figo a hot-seller in India is its neat looks (no overambitious design experimentation like the Ritz, A-Star or the Beat), ample space in the car and most importantly the price. INR 4.5 lakh for the high-end petrol version and INR 5.3 lakh for the diesel variant places the Figo bang in the middle of the hottest selling hatches in India (the Swift and the i10). The mileages are impressive too. At 15.6 kmpl (petrol) and 20.0 kmpl (diesel), the Figo numbers are among the best offered in the country.

The improvements visible in the Figo are a step in the right direction for Ford; but it only means that Ford is catching up with Maruti, Hyundai and the other hatchback makers in India. What I really feel gives Figo the edge over competition is the fact that Ford has managed to pack its essence in a B-segment car in the true sense, namely, handling and the sheer driving pleasure. A Ford has always been a driver’s car. GM needs to pull its socks up.

Mahindra Xylo

Finally the much awaited Xylo has been launched. I saw the pictures and I must say I was horrified! Ugly is an euphemism for this mutation of a Scorpio and a Sumo Grande. The headlights in particular make me pukish. I do not understand what fascination (or fetish) these Indian designers have for the upwardly curved grotesque angular head lamp assembly (and I thought A-Star was ugly)!

It could have been some what acceptable if the international automotive design trend is going in that direction; but it is not. Xylo's looks, unlike the Maruti Zen's, is NOT something you will grow in to (liking). Mahindra is keen on going the Detroit way by not learning from the "big 3"s design failures.

But like they say beauty is in the eye of the beholder. Apparently, many people are going gaga over the Xylo's looks! And why not, if we 'like' the TVS Victor, Yamaha Frazer/Gladiator looks, this is a piece of aesthetic wonder!

The interiors are pathetic. Cheap platic feel all over. I wonder what they were thinking when they decided to include purple/lavender cup-holders and under-seat storage, glove-box lining in an all black/dark grey set up.

Well, the Xylo does have some good features too. First, it is spacious and lives up to the name of an utility vehicle (or an MPV). It can easily take a family of 6 to a picnic 200 kilometers from home. Also, little considerations like lockable storage space under the seat, food tray make it very utilitarian.

A maximun power of 112 bhp @ 3,800 rpm and a maximum torque of 240 Nm @ 1,800 rpm gives the Xylo enough power for all activities an MPV is expected to do (C'mon we do not need to tow a trailer or a boat in India! We do not do such things). What I heard is that the M-Eagle engine that the Xylo uses is a toned down version of the 2.6L M-Hawk engine that the Scorpio uses.

I have a strong premonition that I will be encountering a lot of white Xylo's on my way to work three months from now. No doubt (like everyone has predicted), the Xylo will provide a stiff competition to the Toyota Innova, in terms of fleet vehicles; but I seriously doubt if the Xylo can match up to Toyota's quality and attention for details.

BASIC SPECIFICATIONS -

Engine Specifications
Displacement: 2498cc, CRDe, M-Eagle
Engine Type: Diesel
Maximum Power: 112 Bhp @ 3800 rpm
Maximum Torque: 240 Nm @ 1800 rpm

Dimension
Length: 4520 mm
Width: 1850 mm
Height: 1895 mm

General Specification
Seating Capacity: 8
Tyre Size: 215/75 R15
Suspension: Independent Coil Springs, Multi Link Coil Springs
Turning Circle: 5.40 m
Steering: Power
Brakes: Front Disk, Rear Drum
Gears: 5 Manual
Ground Clearance: 186.00 mm
Kerb Weight: 1830.00 kg
Fuel Tank: 55.00 L