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Weekly Recap: Lamborghini to build SUV

Finally, Lamborghini will build a sport utility vehicle. The Italian supercar maker confirmed this week that it will launch a luxury SUV in 2018. It will be built at Lamborghini's soon-to-expand factory in Sant'Agata Bolognese in Italy, and will double the company's current sales volume. Lamborghini did not announce a name for the vehicle or other details, but noted a concept version, the Urus, was displayed at the Beijing motor show in 2012. It will be sold around the world, but it's expected to be a critical offering in the United States, China, and the Middle East. The automaker projects the SUV will sell about 3,000 units per year, and it will be the third product in Lamborghini's portfolio. It currently sells the Huracan and Aventador supercars. "The introduction of a third model line endorses the stable and sustainable growth of the company and signifies for us the beginning of a new era," Lamborghini chief executive Stephan Winkelmann said in a statement. The project is also a boon for Italy, which will get 500 new jobs in the Emilia Romagna region as Lamborghini's factory will nearly double in size. Ian Fletcher, principal analyst for IHS Automotive, said the SUV will position Lamborghini for future growth. "It could well also bring new customers to the brand [who] may find the dramatic styling of Lamborghini products appealing, but find its typical sports cars restrictive," he said. "If it is a success, the SUV could be a catalyst to Lamborghini broadening its portfolio further." OTHER NEWS & NOTES GM invests in Chevy Camaro factory General Motors is investing $175 million to upgrade its factory in Lansing, MI, to build the 2016 Chevy Camaro. The investment will pay for new tooling and equipment. The improvements include three new paint systems and two new robotic framers. GM will add a second shift at the factory to build the Camaro, resulting in 500 jobs. The automaker had dropped the plant to one shift last year amid slow sales for its products, the Cadillac ATS and CTS. GM is spending $5.4 billion over the next three years to upgrade its US facilities. Last week, GM announced plans to spend $439 million to build a new paint shop for the Chevy Corvette. While the Camaro and Corvette plant improvements are intriguing to enthusiasts, GM also confirmed this week that it is investing $1.2 billion in its Fort Wayne (IN) factory that builds trucks.

Google-FCA deal is a coup for both sides

FCA made a savvy play this week to team with internet giant Google. It's not as sexy as partnering with Apple, but it's almost as good. This move positions FCA to expand its capabilities in the autonomous driving field, and connecting with Google could boost the automaker's image. FCA will provide Google with about 100 Chrysler Pacifica hybrid minivans specially developed for autonomous testing. Google will integrate its sensors and computers into the vehicles. They'll work together at a site in Southeast Michigan and test the prototypes on Google's private test track in California. It's looks like an equitable deal and a win for both sides. "This marks a watershed event for the auto industry on two major levels: contract manufacturing for high tech firms and allowing such firms a clear pathway into the brain of the car," Morgan Stanley researchers said in a note. Don't underestimate how big this is for Google. The deal more than doubles the size of the tech firm's fleet, and does so with the Pacifica, a potentially segment-defining entry. Currently, it's using Lexus vehicles and other modified prototypes as testers. Though FCA is the smallest of Detroit's carmakers, it's also viewed as nimble and willing to embrace change. The Jeep and Ram divisions are as strong as any brand in the industry, and the Hellcats and Viper reinforce FCA's enthusiast cred. Google doesn't need those things, but they're pretty cool associations, nonetheless. If Ferrari can try to position itself as a leather goods maker, Google can have a little octane in its system. While experts expect Google to eventually partner with other automakers or to license its technology (FCA chief Sergio Marchionne reportedly said the deal isn't exclusive), FCA is positioned to get a head start. IHS Automotive predicts there will be 10.5 million self-driving or driverless cars used around the world by 2030. General Motors, Mercedes, Tesla, Volvo, Ford, and others have launched or are planning to roll out their own versions of autonomous driving technology. For now, FCA goes from having no apparent autonomous plans to potentially being among the leaders, and Google secures a legitimate automotive partner. Like we said, it looks like a win-win. NEWS & ANALYSIS News: Sergio Marchionne is taking over the CEO job at Ferrari. Analysis: This is a consolidation of Marchionne's power over the famous Italian sports-car maker and racing team.

Fiat Chrysler and Renault pursue $35-billion merger to combat car industry upheaval

MILAN/PARIS — Fiat Chrysler pitched a finely balanced merger of equals to Renault on Monday to tackle the costs of far-reaching technological and regulatory changes by creating the world's third-biggest automaker. If it goes ahead, the $35 billion-plus tie-up would alter the landscape for rivals including General Motors and Peugeot maker PSA Group, which recently held inconclusive talks with Fiat Chrysler (FCA), and could spur more deals. Renault said it was studying the proposal from Italian-American FCA with interest, and considered it friendly. Shares in both companies jumped more than 10 percent as investors welcomed the prospect of an enlarged business capable of producing more than 8.7 million vehicles a year and aiming for 5 billion euros ($5.6 billion) in annual savings. It would rank third in the global auto industry behind Japan's Toyota and Germany's Volkswagen. But analysts also warned of big complications, including Renault's existing alliance with Nissan, the French state's role as Renault's largest shareholder and potential opposition from politicians and workers to any cutbacks. "The market will be careful with these synergy numbers as much has been promised before and there isn't a single merger of equals that has ever succeeded in autos," Evercore ISI analyst Arndt Ellinghorst said. With these sensitivities in mind, FCA proposed an all-share merger under a listed Dutch holding company. After a 2.5 billion euro dividend for existing FCA shareholders - giving a big upfront boost to the Agnelli family that controls 29% of FCA - investors in each firm would hold half of the new entity. The merged group would be chaired by Agnelli family scion John Elkann, sources familiar with the talks told Reuters, while Renault chairman Jean-Dominique Senard would likely become CEO. Italian Deputy Prime Minister Matteo Salvini said the proposed merger could be good news for Italy if it helped FCA to grow, but it was crucial to preserve jobs. He did not comment on the French government's 15% stake in Renault, but an influential lawmaker from the ruling League party said Rome may seek a stake in the combined group to balance France's holding. A deal could also have profound repercussions for Renault's 20-year-old alliance with Nissan, already weakened by the crisis surrounding the arrest and ouster of former chairman Carlos Ghosn late last year. The Japanese carmaker has yet to comment on FCA's proposal.