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Smart brand will be built in China as a Daimler-Geely joint

FRANKFURT/BEIJING — Daimler will build its next generation of Smart electric cars in China through a joint venture with Geely, as a way to increase economies of scale in a market segment that is struggling to turn a profit. China's Geely built a stake of almost 10 percent in Daimler last year, saying it wanted to forge an alliance to develop electric and self-driving cars to better compete against new challengers such as Uber and Google. Daimler said on Thursday it would build the next generation of Smart-branded city cars at a purpose-built factory in China, and planned to share its expertise in manufacturing, engineering and design with Geely. The high cost of electric car batteries has made it hard for automakers to build affordable zero-emissions vehicles, leading several of them to strike alliances with Chinese partners. Daimler's German rival BMW recently unveiled plans to build electric Minis in China, where production costs are low and demand for small electric cars is rising. Daimler and Geely did not disclose financial terms of their deal. The details of the joint venture will be finalized by the end of 2019, they said in a joint press release. Daimler currently develops and builds Smart cars with Renault at factories in France and Slovenia. The Daimler factory in Hambach, France, will be retooled to build Mercedes-Benz cars. Geely has been expanding rapidly through mergers and acquisitions since 2010, when it acquired Swedish carmaker Volvo from Ford. Last year, Daimler and Geely set up a ride-hailing joint venture in China. Daimler's Chief Executive Dieter Zetsche said last month the German carmaker was in talks to deepen its alliance with Geely after the Chinese's group's chairman Li Shufu bought a 9.69 percent stake in Daimler in 2018.

Lewis Hamilton takes pole position at German GP as Ferrari falters

HOCKENHEIM, Germany — Lewis Hamilton took pole position for the German Grand Prix on Saturday, while Sebastian Vettel's miserable form continued for Ferrari as he was unable to even set a time and will start from the back. It got even worse for Ferrari as Vettel's teammate Charles Leclerc was unable to start the last part of qualifying, known as Q3, and is set to begin from 10th place on the grid on Sunday. "I don't know really how we did it today. I'm not quite sure what happened to the Ferraris," Hamilton said. "I think if Leclerc had done a lap at the end, it would have been close between us." Ferrari is winless in 10 races this season and that terrible run looks to continue, while Hamilton is aiming for a sixth win in seven. It was a record-extending 87th pole for the five-time world champion, who is 11 wins shy of Michael Schumacher's record of 91. Hamilton starts on the front row alongside Red Bull's Max Verstappen, who knocked Hamilton's Mercedes teammate Valtteri Bottas into third place. Red Bull's Pierre Gasly goes from fourth. "A bit disappointed with qualifying and I just struggled," said Bottas, who is level with Hamilton on four poles this season. "Ferrari (were) extremely quick and we knew it would be difficult to beat them ... We've been a bit lucky." Vettel, who crashed at last year's German GP despite leading from pole, looked visibly upset as he climbed out of his car in the team garage. The incident happened during the first part of qualifying, making him one of five drivers eliminated from Q1. The issue appeared to be related to a turbo problem, even more surprising given Ferrari had topped all three practice sessions heading into qualifying. Worried faces in the Ferrari garage turned to sheer horror as mechanics then detected a problem on Leclerc's car, ruling him out of the top-10 shootout in Q3. "Mine was a fuel system problem. It is a shame but we will be trying to understand what happened and not to reproduce it. The car felt great today so it's a shame it ended like this," Leclerc said. "I feel for the whole team. I will give absolutely everything to make everyone smile again tomorrow." Television footage showed a Ferrari fan in the stands sinking his face into his hands in disbelief. Mercedes head of motorsport Toto Wolff was sympathetic when commenting on Ferrari's latest setback. "It is a shame for Ferrari and for Sebastian at his home GP," Wolff told broadcaster Sky Sports, adding.

Mercedes, Nissan and VW slammed by China's CCTV

Several automakers in China, including joint ventures with Nissan, Volkswagen and Mercedes-Benz, are in hot water because their dealers are allegedly overcharging customers for repairs. China Central Television, the country's state broadcaster, leveled the claims during its annual Consumer Day expose. CCTV runs these reports each year on March 15 and often takes aim at foreign companies operating within China. This year the focus fell on automakers, according to the Financial Times, and no domestic car companies were targeted. The network also accused dealers of overselling parts, and it took aim at Jaguar Land Rover specifically for problems surrounding transmission repairs, according to Reuters. The yearly stories are often criticized for focusing on outside businesses. "It panders to a certain type of nationalism as it tends to target foreign companies and rarely touches large state groups or monopolies," Qiao Mu, a journalism professor at Beijing Foreign Studies University, said to the Financial Times. Foreign automakers seem to face tighter scrutiny when doing business in China than their domestic counterparts, in general. The government there investigated several luxury brands, including Audi and BMW, last year for how they supplied spare parts and whether the components were overpriced. Some incurred fines, and Lexus decided to lower its prices. Volkswagen also experienced protests when owners felt the company wasn't handling a recall properly. The CCTV report also comes as many auto dealers in China are feeling a pinch due to high mandated sales targets from automakers. The situation was so dire in early 2015 several brands cut back sales targets and in some cases even paid the sellers to offset poor profits. News Source: Financial Times - sub. req., ReutersImage Credit: Andy Wong / AP Photo Government/Legal Mercedes-Benz Nissan Volkswagen Car Dealers Auto Repair Maintenance jaguar land rover