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: Womp Womp
No one has benefitted from cheap gas and America’s resulting insatiable demand for trucks and SUVs like Fiat Chrysler. And yet, despite a huge earnings jump in Q4 thanks to strong Jeep (and Ram truck) sales, The Detroit News reports investment costs and a huge plethora of recalls took their toll last year:
Fiat Chrysler Automobiles NV on Wednesday reported a profit of 377 million euros (about $410 million) for 2015, a substantial decrease from 632 million euros from the previous year due to recall and investment charges.
Special charges during the year totaled more than 2.2 billion euros ($2.4 billion), including 1.6 billion euros ($1.7 billion) in North America: 761 million euros ($850.2 million) for recalls in the third quarter and 834 million euros ($906.5 million) for costs related to its “new industrial plan” in the fourth quarter.
Despite this, things are good, as long as gas stays cheap at least:
The automaker beat many expectations to end the year thanks to strong results in North America and improving operations in Europe in the fourth-quarter. It reported adjusted operating profit from October-December was 1.6 billion euros ($1.78 billion), up from 1.2 billion euros the previous year — beatings analysts’ expectations of 1.3 billion euros.
The automaker’s operating profit was 5.3 billion euros ($5.8 billion) in 2015, up 40 percent compared to 1.5 billion euros in 2014. Adjusted net profit for the year was 2 billion euros ($2.2 billion), nearly double from 2014.
2nd Gear: Toyota Stays On Top
Fiat Chrysler may have done well last year, but the company couldn’t hold a candle to Toyota, which kept its world’s top-selling automaker title as Dieselgate-hampered Volkswagen contracted. And Toyota was still down slightly, too! Here’s Bloomberg:
Global sales for Toyota, including its Hino Motors Ltd. and Daihatsu Motor Co. units, fell 0.8 percent to 10.15 million vehicles last year, according to a company statement. Volkswagen earlier this month reported a 2 percent drop to 9.9 million, while General Motors Co.’s deliveries rose 0.2 percent to 9.8 million.
Toyota’s result caps a year in which Volkswagen led its Japanese rival through the first six months, only to relinquish the top spot amid an unprecedented crisis. Already dealing with slumping sales in China, Volkswagen’s emissions scandal has forced it to halt sales of diesels in some markets and scramble to repair 11 million vehicles. The German company also has to mend its reputation and rethink the goal of surpassing Toyota, a key objective under former Chief Executive Officer Martin Winterkorn, who resigned in the wake of revelations the company had employed defeat devices to beat exhaust tests.
3rd Gear: The Muscles In Brussels
Speaking of Dieselgate, the EU is seeking much stronger regulatory powers over the auto industry this week, reports Reuters:
Under the proposed new rules, Brussels would be able to order spot checks on vehicles, order recalls and impose penalties on carmakers of up to 30,000 euros ($32,600) per vehicle for failure to comply with environmental laws - if no fine was being imposed by the member state.
The new plans would also authorize individual EU member states to recall cars approved by any of the bloc’s other nations for violations, encouraging peer review of national authorities.
The planned legislation is the strongest EU response yet to German carmaker Volkswagen’s admission in September that it used software to cheat U.S. diesel admissions tests - a scandal which has shone a light on the EU’s lax vehicle regulations.
The new legislation has to be approved by EU member states and the European Parliament.
4th Gear: ‘We Might Have Been In On This But It’s All Your Fault,’ Says Bosch
Supplier Bosch is investigating what role, if any, it had in Dieselgate, but according to Automotive News it’s very clear on where to place the blame:
Robert Bosch is carrying out an internal probe to investigate whether any of its staff were involved in Volkswagen’s rigging of emissions tests, the supplier’s CEO, Volkmar Denner, said.
However, VW bears the responsibility for its emissions-cheating scandal and not suppliers or diesel technology, Denner said at a press briefing here at the supplier’s headquarters on Tuesday.
Bosch said in September that it supplied control components for VW engines implicated in emissions rigging. Prosecutors in the U.S. and Germany are looking into whether the partsmaker helped VW to cheat on emissions tests.
5th Gear: Cars Are The New Horses
As he seeks a Chinese manufacturing partner for Tesla Motors to avoid that country’s trade tariffs, Elon Musk had some bold predictions in Hong Kong Tuesday about the future of his company and cars in general. Via Bloomberg:
While Musk cautioned that falling oil prices could dampen interest in electric-powered vehicles, worsening pollution could prove a boon to makers of cleaner vehicles that are exempt from restrictions such as license plate quotas in Beijing. Among his predictions for the future are a Tesla truck, a manned flight to the International Space Station by his SpaceX venture before the end of 2017 and a majority of new cars to be driverless within 15 years.
Driving a car will be “like owning a horse. You do it for sentimental reasons, not transport,” Musk said.