2012 Volkswagen Jetta on 2040-cars

Auto blog

The UK votes for Brexit and it will impact automakers

It's the first morning after the United Kingdom voted for what's become known as Brexit – that is, to leave the European Union and its tariff-free internal market. Now begins a two-year process in which the UK will have to negotiate with the rest of the EU trading bloc, which is its largest export market, about many things. One of them may be tariffs, and that could severely impact any automaker that builds cars in the UK. This doesn't just mean companies that you think of as British, like Mini and Jaguar. Both of those automakers are owned by foreign companies, incidentally. Mini and Rolls-Royce are owned by BMW, Jaguar and Land Rover by Tata Motors of India, and Bentley by the VW Group. Many other automakers produce cars in the UK for sale within that country and also export to the EU. Tariffs could damage the profits of each of these companies, and perhaps cause them to shift manufacturing out of the UK, significantly damaging the country's resurgent manufacturing industry. Autonews Europe dug up some interesting numbers on that last point. Nissan, the country's second-largest auto producer, builds 475k or so cars in the UK but the vast majority are sent abroad. Toyota built 190k cars last year in Britain, of which 75 percent went to the EU and just 10 percent were sold in the country. Investors are skittish at the news. The value of the pound sterling has plummeted by 8 percent as of this writing, at one point yesterday reaching levels not seen since 1985. Shares at Tata Motors, which counts Jaguar and Land Rover as bright jewels in its portfolio, were off by nearly 12 percent according to Autonews Europe. So what happens next? No one's terribly sure, although the feeling seems to be that the jilted EU will impost tariffs of up to 10 percent on UK exports. It's likely that the UK will reciprocate, and thus it'll be more expensive to buy a European-made car in the UK. Both situations will likely negatively affect the country, as both production of new cars and sales to UK consumers will both fall. Evercore Automotive Research figures the combined damage will be roughly $9b in lost profits to automakers, and an as-of-yet unquantified impact on auto production jobs. Perhaps the EU's leaders in Brussels will be in a better mood in two years, and the process won't devolve into a trade war. In the immediate wake of the Brexit vote, though, the mood is grim, the EU leadership is angry, and investors are spooked.

VW makes $9.2B offer for rest of truckmaker Scania

Volkswagen owns or has controlling interests in three commercial truck operations: besides its own, VW began buying shares in Sweden's Scania in 2000 and now controls 89.2 percent of its shares and 62.6 percent of its capital, then bought into Germany's Man in 2006 - in order to prevent Man from trying to take over Scania - and now owns 75 percent of it. The car company has managed to work out 200 million euros in savings, but believes it can unlock a total of 650 million euros in savings if it takes outright control of Scania and can spread more common parts among the three divisions.
It has proposed a 6.7-billion-euro ($9.2 billion) buyout, but according to a Bloomberg report, Scania's minority investors don't appear inclined to the deal. Although effectively controlled by VW, Scania is an independently-listed Swedish company, and a profitable one at that: in the January-September 2013 period its operating profit was 9.4 percent compared to Man's 0.4 percent. Some of the other shareholders believe that Scania is better off on its own and will not approve the deal, some have asked an auditor to look into the potential conflict of interest between VW and Man, while some are willing to examine the deal and "make an evaluation based on what a long-term owner finds is good," which might not be just "the stock market price plus a few percent." The buyout will only be official assuming VW can reach the 90-percent share threshold that Swedish law mandates for a squeeze-out.
Many of the arguments against boil down to investors believing that Scania's Swedishness and unique offerings are what keep it profitable, and ownership by the German car company will kill that. (Have we heard that somewhere before?) If Volkswagen can buy that additional 0.8-percent share in Scania, perhaps its buyout wrangling with Man will give it an idea of what it's in for: "dozens" of minority investors in the German truckmaker have filed cases against VW, seeking higher prices for their shares. It is likely only to delay the inevitable, though. If VW is really going to compete with Daimler and Volvo in the truck market, it has to get the size, clout and savings to do so.

VW apprentices prep Golf GTI Dark Shine, Variant Biturbo for Worthersee

Volkswagen not only cooks up some pretty tempting concepts of its own for the GTI-Treffen at Worthersee every year (and encourages its sister brands to do the same), but also gives its apprentices the opportunity to do it. And here's what they came up with this year. Called the GTI Dark Shine edition, the show car features an upgraded 2.0-liter turbo four, pumping out 389 horsepower and 359 pound-feet of torque through its dual-clutch transmission. But that's not all. As you can see, it also has a striking two-tone livery of metallic gray and yellow pearl, along with a stainless steel exhaust, carbon air box, an upgraded aero kit, a 3,500-watt audio system with eight speakers and a thoroughly reworked interior done up to match the bodywork in black Alcantara and carbon leather with yellow trim. The team of 13 apprentices built the show car from a body-in-white over the course of nine months. It follows in a long line of GTI concepts done each year by VW apprentices that stretches back to 2008. This year, however, another team of 14 interns at the plant in Zwickau, Germany, worked up a blue Golf Variant wagon called the Biturbo Edition with the twin-turbo diesel from the Passat good for 236 hp and 368 lb-ft. Another team in the Czech Republic was responsible for the Fabia FUNstar pickup concept. And of course the automakers themselves showcased the radical Golf GTE Sport, GTI Clubsport, Skoda Fabia Combi R5 and Audi TT Clubsport. The lake is calling ... world premiere: Volkswagen apprentices present their Golf GTI Dark Shine at Worthersee event - Other show car premieres: Golf Variant Biturbo Edition (Zwickau) and SKODA FUNstar (Mlada Boleslav) They have followed the call of the lake: 13 Wolfsburg apprentices from Volkswagen and group company Sitech Sitztechnik have traveled to the 34th Worthersee GTI meeting today to present their 395 PS (290 kW) Golf GTI Dark Shine to the public for the first time. Their sporty two-door Golf features a two-tone color scheme. The front is painted in dark Daytona Grey Metallic and the rear in unique R-yellow pearl effect – giving rise to the name "Dark Shine". The Golf GTI Dark Shine is impressive confirmation of the high-quality practically oriented training provided by Volkswagen.