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.

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1st Gear: It’s Happening

We’ve been warned about the streak of record new car sales coming to an end for months now, but in August it finally happened. Reuters reports overall U.S. new car sales slid 4.2 percent last month, and the top sellers—General Motors, Ford and Toyota—all posted declines of at least 5 percent. (Fiat Chrysler posted some gains, but that was only because the bastards were greasing their sales last year.)

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Here’s a more detailed analysis from Automotive News:

Ford’s sales fell 8.8 percent to 213,411 with retail volume off 8 percent and fleet shipments dropping 10 percent. A 7 percent rise at Lincoln offset some of the decline at the bigger Ford division. The results marked Ford’s biggest monthly setback since August of 2010.

GM said August sales dropped 5.2 percent to 256,429 cars and light trucks. Deliveries slipped 3.9 percent at Chevrolet, 14 percent at GMC and 2.7 percent at Buick. Sales rose 3.9 percent at Cadillac.

At Toyota Motor Corp., volume dropped 5 percent to 213,125 cars and light trucks last month. Honda Motor Co. deliveries dipped 3.8 percent.

Sales fell 7.9 percent at Kia, 2.7 percent Mini, 13 percent at Mazda, 12 percent at Mitsubishi and 9.1 percent at the VW brand, where U.S. volume has slid every month beginning with November as the company struggles to move past violations of U.S. diesel emissions rules.

The Hyundai brand’s volume rose by just three units over August 2015.

Why did this happen? Well, you can only have record sales months for so long before the market doesn’t demand new cars anymore. For years the market had tremendous pent-up new car demand stemming from the recession and its aftermath. That wasn’t ever going to last forever.

2nd Gear: What Does It Mean For Automakers?

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Declining sales aren’t good, so what will car companies do to offset these trends? More incentives, more fleet sales and possibly production cuts. From that Reuters story:

Ford, whose sales tumbled 8.4 percent, said its U.S. inventory was at 81 days of supply versus 61 days a year earlier, suggesting Ford may have to cut production, increase profit-eroding incentives, or boost fleet sales.

“Now the automakers’ focus will shift from simple growth to market share and managing inventories,” said analyst Karl Brauer of Kelley Blue Book. “The use of incentives and fleet sales as a counter to plateauing retail sales will be the statistics to watch going forward.”

Ford’s LaNeve said the company will manage supply with demand, but when asked if production will be slowed or plants shut down to accomplish that goal, he declined to say.

3rd Gear: Down But Not Out

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One could look as this as a doom and gloom situation, but it could also just be the car market reaching more natural levels. Over at The Detroit News, Daniel Howes sees a silver lining in the overall stability of the Big Three automakers compared with their situations a decade ago:

Bad news? Don’t be so sure. Beneath the headlines reporting slipping sales, reflected across the industry, is encouraging news that underscores just how far Detroit’s automakers have come from the bleak days of 2008 and 2009: Average transaction prices, or ATPs, a marker of how much customers are willing to pay for their new ride, are rising.

The numbers are encouraging, especially for Detroit’s Big Two. Lincoln’s August ATPs, to invoke the industry lingo, rose $1,200 per vehicle over July. GM pegged the same metric at $1,600 per vehicle — and $5,800 above the industry average.

Translation: Detroit is not only building cars and trucks consumers want to buy. It’s building cars and trucks that buyers are willing to pay more to own or lease, a reversal of the self-inflicted predicament that contributed to the industry’s near-total collapse into bailout, bankruptcy and ridicule.

4th Gear: Everything’s Fine Here, Italy Says

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Bruised by Volkswagen’s diesel cheating scandal, the German government now points its finger at Fiat Chrysler, saying that automaker was doing similar trickery. Italy, on the other hand, says things are fine. Via Bloomberg:

Italy rebuffed German efforts to look more deeply at Fiat Chrysler Automobiles NV, arguing the automaker’s vehicles don’t breach emissions rules.

The Italian Transport Ministry’s tests showing Fiat used no unauthorized devices on its vehicles still stand, an Italian government official said. Germany this week escalated a months-old dispute between the two countries, asking the European Union to step in.

The German Transport Ministry wants the EU’s executive arm to intervene in the feud with its Italian counterpart by setting up consultations to find a resolution to disagreements over the test results, according to a letter dated Wednesday obtained by Bloomberg News. The Italian Transport Ministry hasn’t received any formal request, said the official, who asked not to be identified by name because the government isn’t officially commenting.

5th Gear: Mitsubishi Raided

Speaking of scandals, things go from bad to worse in Japan for Mitsubishi as that automaker continues to struggle with its fuel economy rating debacle. Via Reuters:

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Mitsubishi Motors Corp.’s headquarters and Nagoya plant were raided by government officials today, deepening the crisis for the Japanese automaker that is struggling to recover from a mileage manipulation scandal.

The raid comes after Mitsubishi said this week that more of its vehicle models were involved in a mileage cheating scandal than initially stated.

“We want to thoroughly investigate the circumstances that led to this situation,” Japan’s Transport Minister Keiichi Ishii told reporters.

Reverse: Falcon Punch

Neutral: What Does The Sales Decline Mean?

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Are we doomed or is this a natural leveling off? And what should automakers do about it?