Good Morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: More Doom And Gloom On Monday
The effects of the United Kingdom’s vote to exit the European Union won’t be fully felt or understood for years, but analysts who watch the auto industry and automakers themselves are anticipating a big downturn.
Automotive News has a bigger analysis on how this will affect one of the world’s most important auto sales and export markets:
LMC Automotive predicted that the vote to leave would wipe out 120,000 sales in the U.K. this year and about 400,000 in each of the next two years, reducing its forecast over that period by 10 percent. “Uncertainty will likely hold back investment and hiring decisions, as businesses consider their options and wait for greater clarity, something which is unlikely to come quickly,” LMC said in a report Friday.
Analyst firm Evercore ISI cut its U.K. sales forecast through 2017 by 14 percent and said the vote for British exit, known colloquially as Brexit, could impact automaker earnings by more than 8 billion euros ($8.9 billion) in the next two years.
[...] In a letter sent to employees ahead of the referendum, Toyota Motor Corp. warned that a U.K. withdrawal from the EU could result in levies of 10 percent imposed on the cars it builds in Britain, Bloomberg reported. Toyota Europe CEO Johan van Zyl told the Automotive News Europe Congress in June that the company could rethink investments in the U.K. if Britain voted to leave.
That whole story is worth a read in full.
2nd Gear: Auto Stocks Down Too
The effects on the market, however, were immediately felt. Via The Detroit News:
Shares of Fiat Chrysler Automobiles NV, which runs many operations out of Italy, plunged 12.2 percent. Ford Motor Co. fell 6.6 percent and General Motors Co. closed down 4.9 percent. In comparison, the S&P 500 lost 3.6 percent, the Dow lost 3.4 percent and the Nasdaq lost 4.1 percent.
[...] Other companies in the auto industry took costly hits Friday: Delphi Automotive, which is headquartered in England but has a large presence in Troy, suffered a 12.2 percent drop. Southfield-based Lear Corp. fell 9.6 percent and Bloomfield Hills-based Penske Automotive was down 10.35 percent. Auburn Hills-based BorgWarner Inc. fell 9.5 percent and Detroit-based American Axle & Manufacturing Holdings Inc. was off 6.3 percent.
3rd Gear: The Cadillac ATS Tries Again
The Cadillac ATS is one of the best cars that no one is buying. Despite impressive engines and probably the best handling dynamics of any car in that segment, it’s struggled to attract buyers for a litany of reasons.
For the 2017 model year, Cadillac is making a number of adjustments, including adding more features and dumping the base 2.5-liter four.
Here’s part of why it hasn’t gotten traction the way General Motors wanted, via Automotive News:
A big part of the problem: Resale values have fallen steadily too, making it harder and more expensive for Cadillac to offer a competitive lease, crucial to success in the luxury market.
Even with bigger incentives that run higher than the segment average, the price of the ATS remains higher than the point “where consumers feel comfortable taking a chance on a Cadillac as opposed to the well-established luxury competitors,” says Patrick Min, a senior industry analyst at ALG, a research company that monitors and projects vehicle values.
[...] The ATS’ sales woes in part reflect a four-year hangover from a poor launch strategy. Analysts and dealers say Cadillac priced the cars too high and overproduced them in the first two years. Cadillac President Johan de Nysschen and his team have been struggling to right the ATS ever since, including dramatically reducing inventories and cutting back on incentives.
4th Gear: Maybe Shifters Are Getting Too Complicated
One more from Automotive News: a good look at automatic gearboxes from brands like Chrysler, Jeep, BMW, Land Rover, Lincoln, Mercedes and more, all trying to re-invent the wheel (or the shifter, in this case) in ways that may be too confusing for customers.
Familiarity hasn’t always been a challenge in shifting an automobile into drive or park. But style, electronics and the battle for space on the dash and center console have changed the shifter’s shape and the way it is operated.
One consequence of replacing the old-style mechanical linkage from the shifter to the transmission with smaller, faster and more precise electronic systems is that drivers no longer shift intuitively. Nor can they seamlessly transition between brands of cars as they once did.
Authorities are examining what role, if any, the unusual and now recalled Jeep shifter played in the death of actor Anton Yelchin.
5th Gear: Europeans Demand VW Pay Too
That payout American diesel Volkswagen owners are likely to get? Europe wants the same deal, reports Reuters:
Volkswagen AG (VOWG_p.DE) should offer European drivers similar compensation to what the German carmaker is expected to pay U.S. customers, Europe’s Industry Commissioner Elzbieta Bienkowska told a newspaper on Sunday.
“Volkswagen should voluntarily pay European car owners compensation that is comparable with that which they will pay U.S. consumers,” Bienkowska told the Welt am Sonntag newspaper.
Considering how many more diesel VWs are on European roads than ours, good luck with that.
Reverse: Route 66 No More
Neutral: How Does Cadillac Move The ATS?
It is a solid offering for sure, and the ATS-V is a staff favorite around here, but it could use some improvements. How does Cadillac learn from that?