Photo credit Mike Roselli

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: Perhaps The Rich People Have Acquired All The Cars They Need

During this past weekend’s four-day marathon of auctions at the Pebble Beach Concours d’Elegance, $344.9 million worth sold of cars, trucks, and motorcycles were sold to collectors and lucky normal folks on a budget. That’s about $25 million less than anticipated, and much less than last year’s $396.8 million or 2014's $400 million.


Bloomberg says it’s a sign that the classic car auction market has already peaked and is starting to slide.

In general, bidding in Monterey was sluggish, with sell-through percentages the lowest they’ve been since 2000. According to Hagerty data, the sales rate for cars priced at more than $100,000 dropped 15 points, from 72 percent sold last year to 57 percent this year. And even cars priced for less than $50,000 saw a three-point drop in their sell rate.

“It seems that buyers are more in tune with the new market-adjusted prices than sellers at the moment,” Hagerty said. “They are not allowing themselves to pay for future gains now.”

The age of the cars moved this time, however, is interesting:

What’s more, cars made in the years from 1950 to 1979 seemed to hold their place in the collecting echelon. They saw a 58-percent sell-through rate, which was more than both the prewar and modern-classic groups. In general, cars from the 1950s through the 1970s also sold for much larger percentages above their estimated values, Hagerty reported.

2nd Gear: Daimler Loosens Up


How do established players in the auto market keep up with fast moving newcomers from Silicon Valley? In the case of Daimler, the oldest, stodgiest, most old-school of the German automakers, one answer is to loosen up and solicit ideas from everyone, reports Reuters.

Daimler is trying Valley-style management techniques to make quicker decisions and empower innovation:



CEO Dieter Zetsche is sweeping away layers of bureaucracy and encouraging a more experimental approach to new products. He has also asked 144 employees — many of them from the rank and file — to generate new leadership ideas, according to sources at the German luxury automaker.

These are big changes for a company known for strict hierarchies and meticulous planning, and follow a trip by around 100 top managers to Silicon Valley last summer when they met executives from companies including Apple, Google and Uber.

[...] Alexander Hilliger von Thile, a senior graphics and rendering manager at Mercedes-Benz research and development in North America, said Daimler was now encouraging ideas from all team members and not just the bereichsleiter or department chiefs, as well as greater collaboration.

“We do not want to have experts who know everything, who sit somewhere and don’t talk to anybody,” he told Reuters.

Let’s just hope they don’t get weird.

3rd Gear: VW Paid Up To End That Supplier Dispute


Because Golfs are important, Volkswagen couldn’t let its six-day supplier standoff last too long. It turns out VW asked Bosnian supplier Prevent to slash an order amid Dieselgate money woes, but in the end VW relented on compensation to the tune of about $15 million, reports Bloomberg:

The amount is well below Prevent Group’s initial demands seeking about 58 million euros ($66 million) to cover factory alterations made in preparation for a 500 million-euro order that VW canceled, said the people, who asked not to be identified because the two sides agreed not to talk publicly about the deal reached on Tuesday.

Sueddeutsche Zeitung reported that the agreed-upon figure is 13 million euros ($14.7 million).

As part of the settlement, VW will continue purchasing parts from Prevent units for at least six years in the future, the people said.

The two sides agreed not to seek further damages from one another over the current feud, while VW reserved the right to pursue claims in the future if parts from the Bosnian supplier don’t meet the automaker’s quality standards, they said.

4th Gear: What Do Consumers Want?

Technology! Specifically, safety technology. Here’s the results from a new survey by Automotive News:



The 2016 Nielsen AutoTECHCAST report, released today, found that U.S. consumers are most interested in technology aimed toward safety, followed by connectivity, comfort and convenience, driver assistance and fuel efficiency.

Safety tech features drawing the most interest in the survey were rear camera mirrors, low-speed collision avoidance systems and blind-spot detection and prevention systems, respectively.

Blind-spot detection and prevention systems are viewed by consumers as being the most differentiating technology during the vehicle-buying process. In fact, 73 percent of responders said they were “very/extremely likely” to purchase a vehicle with blind-spot detection/prevention than one without, the survey found.

At the same time, it’s the millennials who are most interested in that stuff, most had never heard of connected cars, and “the base familiarity of the 44 auto-related technologies included in the survey was 25 percent.” Encouraging!

5th Gear: Do It Yourself Or Buy From Someone Else?


The Detroit News points out the two approaches to autonomous car development: create the systems yourself as an automaker, or buy it from an outside supplier like Mobileye:

Some, like General Motors Co. and Ford Motor Co., have enough cash reserves that they are developing their own proprietary autonomous systems in close partnership with technology companies. Others are waiting to buy off-the-shelf systems like the fully autonomous one announced by Delphi Automotive PLC and Mobileye NV, which they said Tuesday will be ready for any automaker to purchase by 2019.

Both approaches have advantages and disadvantages: Automakers who create their own systems can potentially be first to market and have the authority to adapt and change the technology to suit their specific needs. Automakers who wait for a turnkey approach, however, avoid some of the risk of failure and potentially save hundreds of millions in research and development.

Is there a right path?

“There’s no right path,” said Jeremy Carlson, senior analyst of automotive technology at forecasting firm IHS Markit. “The decision needs to be made for each individual company for what they need to do. It comes down to what you’re able to do with the resources you have.”

Reverse: Forza Maria

Neutral: Why Do You Think The Classic Car Market Is Tapering Off?



I have to assume at least some of it is demographics, i.e. the blue blood Delahaye-buying crowd dying off to make room for Millennials who are either rich and only want Teslas and new Lambos, or are so loaded down with student loan debt that they can only eat out once a week. There seems to be no middle ground.