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Toyota will not sell a diesel version of the new C-HR.

For years, Toyota Motor Corp. focused on pushing its hybrid models in Europe, avoiding a diesel-for-diesel competition with market leaders including Volkswagen Group. The Japanese carmaker’s strategy is finally paying off.

In the first full year since Volkswagen’s emissions scandal threw the German giant into disarray, Toyota is on track for roughly a 40 percent jump in annual sales of gasoline-electric vehicles in Europe. Hybrids are set to account for more than half of Toyota’s deliveries for the region by the end of the decade, according to Karl Schlicht, executive vice president of the carmaker’s European division.

Toyota’s Europe dilemma was a product mismatch rather than a regulatory crisis. At the beginning of the decade, when demand for its Prius was surging in other markets like the U.S., the model barely attracted buyers in Europe, where more than half of industrywide sales are diesels. After Volkswagen’s scandal undermined those powertrains, Toyota’s strategic decision to avoid pitting its models directly against diesel vehicles and force its dealers toward hybrids is now yielding results.

“When you have a strategy driven by necessity and it’s doing the right thing for the customers and the world, it’s a very powerful force,” Schlicht said in an interview. “We kind of had to do it, and that made us focus.”

Toyota is still a small player in Europe, where it had a 4.3 percent market share in the 11 months through November, well behind the leader Volkswagen’s 24.1 percent, according to the European industry association ACEA. Still, it’s in an enviable position with Volkswagen and diesel-reliant peers including BMW, Daimler and Fiat Chrysler Automobiles now needing to shift gears to electrified powertrains.

Eric Felber, a VW spokesman, declined to comment on the rise in hybrid sales at the expense of diesel cars.

Shares of Toyota have fallen 8.7 percent this year, compared with Daimler’s 8.7 percent drop and gains of 2.1 percent at Volkswagen and 2.4 percent at Fiat Chrysler.

Diesel’s demise?

UBS analysts in a report this month forecast that diesel will almost disappear by 2025 and be replaced by hybrids and battery-electric vehicles. Athens, Madrid, Mexico City and Paris have pledged to phase out diesel vehicles by 2025 in a bid to curb pollution.

“Diesel is on its way out for cars; we’ve seen the beginning of the end,” Alexander Nix, a Toyota dealer in Germany since 1980, said by phone. “Once we see further restrictions on emissions, it’s just going to be too expensive. We’ve already seen that now.”

Dealers were singing a different tune when Schlicht, the Toyota Europe sales chief, returned to an executive role in the market in 2012, after a stint managing Lexus product and marketing planning in Japan. His assessment of the carmaker’s position at that time was grim: Toyota lacked the scale, visibility and pricing power to compete.

“Our dealers at the beginning of this period were very much like, ‘You guys need more diesels,'” Schlicht said. Before auto shows in Geneva, Paris or Frankfurt, he braced for criticism. “Put your helmet on; you’re going to get beat up because we don’t have enough diesels.”

Hybrid focus

Toyota started directing its distributors and dealers to focus entirely on hybrids, even though they were accounting for just a fraction of the company’s sales mix. If a customer wanted to go for a test drive in, say, a Yaris, they had to take a spin in the hybrid before they could try the diesel.

When Toyota coupled this retail strategy with an all-hybrid marketing campaign, its auto buyers started becoming hybrid converts. Dealers had little trouble reselling used hybrids that were traded in by customers because they tend to retain more of their residual value.

“There is no strategy that the carmaker can make if the front line doesn’t buy in,” Tom Fux, the Cologne-based president of Toyota Germany, said by phone. “For us, hybrid is the key focus.”

By the time hybrids reach about 50 percent to 60 percent of Toyota Europe’s sales mix, the company will be selling about 400,000 or 500,000 units per year, Schlicht estimates. In the January-November period, hybrids accounted for about 32 percent of its sales in the region.

Shifted mindset

Corporate fleet operators and leasing companies, which play an outsize role in Europe’s auto market, have begun to feel exposed as residual values for diesels begin to shrink, and they’re starting to talk with Toyota about increasing hybrids as a portion of their business mix.

Another significant factor will be the newly introduced C-HR, a latecomer to the fast-growing compact sport utility vehicle segment. Toyota will build the model at a plant in Turkey, and about 75 percent of initial orders have been for the hybrid version, Schlicht said. The model won’t offer a diesel engine option.

“We’re not anti-diesel, but the mindset has shifted,” Schlicht said of Toyota Europe’s dealers and distributors. “It’s moved on, and now they’re really into selling hybrids.”

Read more: http://europe.autonews.com/article/20161229/ANE/161229890/toyotas-hybrid-bet-in-europe-finally-pays-off

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New models such as the Jaguar XE are boosting the premium midsize segment.

Sales of luxury midsize cars in Europe are on track to top sales of mass-market rivals this year for the first time as buyers looking to move upscale increasingly choose Mercedes, Audi or BMW cars over mass-market brands.

European sales of premium midsize models jumped by 8 percent to 652,000 through November while sales of mainstream midsize cars rose by just 1 percent to 582,000, according to JATO Dynamics market researchers.

The trend is likely to continue in December, giving premium brand the greater share of European midsize new-car sales.

“Aspirational” buyers seeking upscale models are helping premium midsize sales to grow faster than their mainstream counterparts, said JATO Dynamics global analyst Felipe Munoz.

Sales of mass-market midsize cars such as the Volkswagen Passat or Ford Mondeo are also being hit by the increasing popularity of SUV/crossovers, Munoz said.

German premium brands have also been expanded their midsize lineups beyond traditional sedans and station wagons with cars such as the BMW 3 series GT fastback and the Audi A5 range. For BMW, renaming its 3-series coupe as the the BMW 4 series coupe has been a success.

Premium automakers are also now selling cheaper entry-level models and new luxury midsize cars such as the Jaguar XE and Alfa Romeo Giulia also have boosted sales.

“There are fewer and fewer reasons to buy a large mainstream sedan or station wagon,@ Munoz said.

Among mass-market brands, automakers such as Fiat, Honda and Nissan have exited the midsize segment in Europe.

Read more: http://europe.autonews.com/article/20161227/ANE/161229969/premium-brands-on-track-to-win-battle-for-midsize-segment

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The Q8 concept has a wide single frame grille.

Audi will debut a near-production concept for its Q8 SUV flagship at the Detroit auto show next month.

The concept has the “typical spaciousness of an SUV with elegance of a coupe,” Audi said in a statement today.

“With the Audi Q8 concept, we have created a new spearhead within our Q model line. Its design strongly evokes sportiness and prestige,” Audi’s design chief, Marc Lichte, said in the statement.

The concept has a spacious interior with seating for four despite its flat roof line, Audi said.

The car’s octagonal single frame grille is considerably wider than the grille on Audi’s current production models. Many design elements are reminiscent of the 1980s Ur-quattro, Audi said, including the extremely flat but very wide C pillar and the prominent, flared shoulders above the wheels.

The Q8 concept has a flat roof line,wide C pillar and flared shoulders above the wheels.

Audi CEO Rupert Stadler announced the brand’s plans for the Q8 last year, saying the SUV would be aimed at markets such as the U.S., China and the Middle East, where large coupe-styled SUVs are in high demand.

The production Q8 will be built on Volkswagen Group’s newest MLB platform also used by the Q7 and Bentley Bentayga. The Q8 is expected to launch in 2018.

Read more: http://www.autonews.com/article/20161222/COPY01/312229910/1657

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Given the significant amount of junk cars, scrap metal and other materials strewn throughout the large salvage yard at the time of the purchase, property owner Agustin Ramirez was given until July 1, 2015, to have all of that material off of the property so that the city could begin preparations for construction of the new retention area in time to avoid losing the EPA grant funding.

The original plan was to bid the project in February 2016 and award the contract at the Redevelopment Commission’s March 8 meeting, with construction to begin immediately after. However, issues with relocating the huge amount of salvage on the property coupled with problems locating a suitable new site to relocate the scrap resulted in that deadline coming and going with only minor movement at the site.

Faced with the loss of its EPA funding, the city applied for and received a one-year grant extension, effectively pushing the grant expiration date back to July 31, 2017.

“We had to make a strong argument that although nothing had happened up to that point, the planning was in place, we’d acquired the property that was necessary, and we’d made all the plans to make it work,” Hershberger said of the grant extension.

No longer faced with an imminent loss of grant funding, the city would continue to work with Ramirez over the next few months to get the property cleared, and in October of this year a $26,050 contract with R&R Excavating Inc. was approved for the demolition and initial cleanup of the site.

“We have done the demolition and cleanup in two phases,” Hershberger said, speaking from her office early Monday afternoon. “Phase 1 was simply the demolition and removal of all the scrap and debris that were left behind, and that has been completed. We got rid of all the concrete pads that were out there, and we just basically prepped the site. So all the debris is gone. There is still a pile of old gas tanks, however, but those will be cleaned up with our grant money, because it’s more of a cleanup process than just throwing them in a dumpster, because a lot of them are still full of material.”

With the initial cleanup of the site now complete, Hershberger said the next step in the process it to begin the environmental remediation portion of the project.

“Design plans are done, and we are actually bidding out Phase 2 right now, which is the cleanup portion, the remediation,” Hershberger said. “So the plan is to award that contract in January with all work to be completed by June. The grant expires at the end of July, but because we have done so much of the demolition and prep work ahead of time, digging a retention pond can be done even in the winter months, as can the soil work. So we’re pretty confident that we’ll be able to get all this accomplished in the allotted time frame.”

Speaking to the scope of the remediation project, Hershberger said a significant portion of the site’s surface soil will need to be removed and transported to the landfill due to prior contamination from the salvage yard.

“It’s basically taking away the surface material and making sure anything left is acceptable and it’s not going to contaminate a retention basin,” she said. “We have discovered an underground storage tank, so it will include removal of that, making sure no impacts exist because of that, and making sure there’s a clean cap over anything that remains at the end of the day. So the grant funding, the Brownfield funding from the EPA, will cover a large portion of the project.”

As for the actual retention basin project, Hershberger said the plan is to conduct the project in three phases, the first of which will be to construct a retention basin that will collect all the water that’s eventually directed to the site. Phase 2 of the project will involve reconstructing Lincoln Avenue with curb and gutter for about 500 feet past the intersection of Steury Avenue in each direction, and putting in new stormwater infrastructure, while Phase 3 will involve going up Steury Avenue and adding the same infrastructure below grade and directing the stormwater to the site.

“So at the end of the day we’re going to capture everything within that area, but we’re doing it in phases because it’s pretty substantial,” Hershberger said. “While the retention pond is going to encompass most of the site, we are also going to develop land at the northwest edge of the property that could eventually be commercial or industrial, but most likely commercial, offices or something of that nature along Lincoln Avenue.”

Given the significant amount of cleanup that has occurred at the site up to this point, Hershberger said she’s already hearing great things from the surrounding community about the project and is excited to finally see the city’s vision for the site becoming a reality.

“We’ve talked with some of the business owners out there already, and people are glad to see it cleaned up even to the point that it is now,” she said. “So for people to see it when it’s all said and done, it’s going to make such a significant impact to that neighborhood, to have it be green and clean and landscaped. So I’m excited for the community to see what we’ve envisioned since the beginning.”

Along those lines, Hershberger said the current plan is to host a public meeting sometime in early January to update the neighborhood on the status of the project and how things are progressing.

“We had met with them about two years ago,” she said, “but timing has been delayed so substantially that we just want to give them the reassurance that it’s going to happen.”

Read more: http://www.goshennews.com/news/local_news/eastside-salvage-yard-cleanup-nears-completion/article_0d014bc3-615b-5469-acbf-ca40870296e0.html

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