BMW partners Jaguar Land Rover to develop electric engine

A BMW I3 electric car charges its battery outside the BMW factory in Leipzig, Germany. (Getty Images)
Updated 05 June 2019

BMW partners Jaguar Land Rover to develop electric engine

  • A joint team will be based in Munich and tasked with developing the next generation electric drive units which BMW will launch together with JLR
  • Like many other traditional carmakers, both BMW and JLR are racing to catch up with US tech giant Tesla which has a head-start in making the cleaner, smarter vehicles of the future

BERLIN: German high-end car giant BMW and British group Jaguar Land Rover announced Wednesday they are teaming up to develop a new generation of electric motors.
A joint team will be based in Munich and tasked with developing the “next generation electric drive units” which BMW will launch together with JLR.
“Cooperation between car manufacturers to share know-how and resources is important” as the automotive industry tackles “the significant technological challenges” posed by the electric cars of the future, said BMW in a statement.
The partnership is for research and development and the engines will be produced “by each partner in their own manufacturing facilities,” BMW said in a statement.
Both groups hope the partnership will reduce development costs at a time when the transition to electric vehicles weighs heavily on manufacturers’ balance sheets.
Like many other traditional carmakers, both BMW and JLR are racing to catch up with US tech giant Tesla which has a head-start in making the cleaner, smarter vehicles of the future.
Pressure is also coming from the EU for the European automotive industry to shift gears to electric engines, as new tougher CO2 emissions limits come into force from 2020.
To meet the high costs shifting away from internal combustion engines, other carmakers have also struck up partnerships.
Mercedes-Benz maker Daimler and Chinese auto giant Geely in March announced plans to develop the next generation of electric Smart cars to be made in China in a joint venture.
JLR last year unveiled an electric Jaguar SUV and is currently carrying out major restructuring in a bid to save £2.5 billion ($3.2 billion, 2.8 billion euros) so as to be able to invest more in electric cars.


Easy credit poses tough challenge for Russian economy minister

Updated 18 August 2019

Easy credit poses tough challenge for Russian economy minister

  • Measures being prepared to help indebted citizens; situation might blow up in 2021

MOSCOW: New machines popping up in Russian shopping centers seem innocuous enough — users insert their passport and receive a small loan in a matter of minutes.

But the devices, which dispense credit in Saint Petersburg malls at a sky-high annual rate of 365 percent, are another sign of a credit boom that has authorities worried.

Russians, who have seen their purchasing power decline in recent years, are borrowing more and more to buy goods or simply to make ends meet.

The level of loans has grown so much in the last 18 months that the economy minister warned it could contribute to another recession.

But it’s a sensitive topic. Limiting credit would deprive households of financing that is sometimes vital, and could hobble already stagnant growth.

The Russian economy was badly hit in 2014 by falling oil prices and Western sanctions over Moscow’s role in Ukraine, and it has yet to fully recover.

“Tightening lending conditions could immediately damage growth,” Natalia Orlova, chief economist at Alfa Bank, told AFP.

“Continuing retail loan growth is currently the main supporting factor,” she noted.

But “the situation could blow up in 2021,” Economy Minister Maxim Oreshkin warned in a recent interview with the Ekho Moskvy radio station.

He said measures were being prepared to help indebted Russians.

According to Oreshkin, consumer credit’s share of household debt increased by 25 percent last year and now represents 1.8 trillion rubles, around $27.5 billion.

For a third of indebted households, he said, credit reimbursement eats up 60 percent of their monthly income, pushing many to take out new loans to repay old ones.

Orlova said other countries in the region, for example in Eastern Europe, had even higher levels of overall consumer debt as a percentage of national output or GDP.

But Russian debt is “not spread equally, it is mainly held by lower income classes,” which are less likely to repay, she said.

The situation has led to friction between the government and the central bank, with ministers like Oreshkin criticizing it for not doing enough to restrict loans.

Meanwhile, economic growth slowed sharply early this year following recoveries in 2017 and 2018, with an increase of just 0.7 percent in the first half of 2019 from the same period a year earlier.

That was far from the 4.0 percent annual target set by President Vladimir Putin — a difficult objective while the country is subject to Western sanctions.

With 19 million people living below the poverty line, Russia is in dire need of development.

“The problem is that people don’t have money,” Andrei Kolesnikov of the Carnegie Center in Moscow wrote recently.

“This is why we can physically feel the trepidation of the financial and economic authorities,” he added. Kolesnikov described the government’s economic policy as something that “essentially boils down to collecting additional cash from the population and spending it on goals indicated by the state.”

At the beginning of his fourth presidential term in 2018, Putin unveiled ambitious “national projects.”

The cost of those projects — which fall into 12 categories that range from health to infrastructure — is estimated at $400 billion by 2024, of which $115 billion is to come from private investment.