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: The Only Sensible Way To Drive In This World Is Without Rules
Bloomberg this morning has an interesting take on a much-watched topic in the car world: accidents involving autonomous cars. So far, according to studies, none of the autonomous cars themselves have been at fault in the crashes that have occurred; it’s all human error by other motorists.
But it highlights a problem. When the cars always obey the rules, every single time, they can’t deal with human drivers who do not, and sometimes in traffic you have to break the rules a bit to stay safe or avoid a collision:
This may sound like the right way to program a robot to drive a car, but good luck trying to merge onto a chaotic, jam-packed highway with traffic flying along well above the speed limit. It tends not to work out well.
As the accidents have piled up — all minor scrape-ups for now — the arguments among programmers at places like Google Inc. and Carnegie Mellon University are heating up: Should they teach the cars how to commit infractions from time to time to stay out of trouble?
The current crop of autonomous test cars are too cautious and conservative on the road. Google says it’s working to make its cars behave a bit more like humans, which makes them more predictable to human drivers, and more aggressive—but the dilemma is how far to go with that.
That whole story is worth a read. I think this stuff is fascinating.
2nd Gear: Google Fires Back
Speaking of autonomous cars, Google (predictably) is not a fan of the proposed new rules by the California DMV that would heavily restrict autonomous car testing and wrap deployment up with more red tape. Via USA Today:
In a direct response to the DMV’s proposed regulations, which were released Wednesday, Google executive and robotic-car expert Chris Urmson wrote a blog post Thursday on Medium.com blasting the rules as a step back from progressive 2012 state regulations that allowed for the development of occupant-as-passenger vehicles without a steering wheel or pedals. The new DMV rules, which will be debated twice in 2016 before being voted on, specifically note that such vehicles must have a licensed driver in the car at all times in order to be able to take control in the case of an emergency. Google’s prototype two-person car would in finished form have neither a steering wheel or pedals, thereby not allowing an occupant to take control.
“People are telling us daily that fully self-driving cars are worth a shot,” Urmson wrote. “The status quo on our roads is simply not problem-free, it has a real cost, not only in productivity and stress, but in lives damaged and destroyed by the mistakes of human drivers. Around the world, 1.2 million people die on the roads each year. In the U.S., 94 percent of crashes are caused by human error.”
Odds are Google, Tesla, traditional automakers and Apple (?) will just start testing cars in places other than California.
3rd Gear: Nobody Wants Takata Steering Wheels
Japanese supplier Takata is besieged with recall costs over its potentially lethal exploding airbags, and now it has another problem too: nobody wants the other parts it makes, namely steering wheels. Via Bloomberg:
The Japanese auto supplier, whose air bags are behind the largest automotive-safety recall, told its lenders in recent weeks that it has seen a substantial impact on its steering business, as the two components are closely linked, said the people, who asked not to be identified discussing confidential information. The people briefed on the impact weren’t provided with specifics. Steering wheels account for almost a fifth of Takata’s sales, while air bags contribute 37 percent.
A decline in orders for Takata’s other businesses would complicate the company’s ability to withstand the costs involved with replacing air bags in more than 40 million vehicles. Safety regulators have said Takata air-bag inflators run an unacceptably high risk of rupturing when they deploy, a defect that’s killed eight and injured about 100 motorists. Takata lowered its full-year profit forecast last month, as it incurred recall losses and automakers led by Honda Motor Co. banned the inflators from future cars.
4th Gear: The Phaeton Is Dead (For Now) And What That Means
As part of the cuts related to Dieselgate, Volkswagen this week decided to axe production of the Phaeton luxury sedan. The U.S. hasn’t had that car in many years but it soldiered on in Europe, produced at an opulent glass factory even when its sales were minimal in the Old World too.
The Phaeton model is set return in a few years as an all-electric sedan. But for now, here’s Forbes on what the Phaeton’s death means:
While not important financially I believe the decision to kill the Phaeton represents a glimpse into the new world of VW. The trappings of empire are being shed, albeit slowly, in the wake of the management changes brought on by the DieselGate scandal. Volkswagen will emerge leaner, stronger and more focused on its core stakeholders under new CEO Matthias Müeller (formerly CEO of Porsche ) than it was under former CEOs Wiederkorn or Piëch. That’s a good thing for investors.
For 25 years Volkswagen Group culture was so insulated and so dominated by the cult of Dr. Piëch–whose grandfather Ferdinand Porsche was responsible for the development of “the people’s car” as well as his namesake sports car company–that no one internally ever seemed to ask the tough questions. VW was well ahead of the curve in China–a market that now represents more than a third of group sales–and that country’s growth seemed to offset the fact that VW was making some dubious product and engineering decisions.
Was there ever any financial review at VW, especially where Piech vanity projects were concerned? Possibly not. Now, more checks and balances and less ridiculousness are coming soon to VW. That makes sense, but it’s also a bit sad.
5th Gear: The ‘80s Are Back
Here’s something from The Chicago Tribune that Jalops have known for some time (often to our dream car-acquiring chagrin): the cars of the ‘80s and ‘90s are slated to be the next most coveted ones at auctions as Gen X-ers and some Millennials find themselves with money.
It’s no surprise what Gen Xers are starting to collect. The biggest increases in searches on Hagerty’s Valuation Tools Search involve the BMW M3, Acura NSX and Mercedes-Benz 560SL — icons of Gen Xers’ youth. My personal garage includes a 1989 Corvette that first tugged my heart when a buddy’s dad bought one during my freshman year of high school.
“In the last two to three years, it’s been Porsche, Mercedes, Ferrari and also great American classics,” Gould said. “All the guys who watched “Miami Vice,” with Ferrari Testarossa posters on their walls, are getting serious. They have a house, family and can now go out and get the car they dreamed about as teenagers. There’s a finite number of those cars.”
Investment values will shift. Cars that meant a lot to baby boomers — ‘57 Chevys, ‘55 T-Birds and American muscle cars — may have peaked. There will never be a substitute for their style and power, but younger generations will covet the ‘80s and ‘90s cars to which they have emotional attachments.
Reverse: Chitty Chitty Bang Bang