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: Volk$$$wagen

Dieselgate certainly isn’t the only automaker scandal to surface in recent years, but it has proven to be the most costly so far, and by a pretty wide margin. Daniel Howes at The Detroit News puts the numbers into perspective:


The numbers do the talking. VW’s settlement of nearly $15 billion is more than 10 times what Toyota Motor Corp. paid to settle criminal charges in its sudden-acceleration case. It’s roughly 16 times General Motors Co.’s settlement for malfunctioning switches that interfered with air-bag deployments, claiming more than 120 lives.

Granted, these are not apples-to-apples comparisons. General Motors’ payout of more than $2 billion was to end a criminal investigation, while Volkswagen’s probe is just beginning—the German automaker settled with the EPA, the states and other regulators. And Toyota’s $1.2 billion settlement was because the Justice Department charged it with criminally concealing some defects.

Either way, the environment apparently trumps safety, and VW may still end up paying a lot for its criminal case; not to mention all those lawsuits.


2nd Gear: BMW’s New Partnership

And it’s not with another car company. BMW, which is quickly expanding into the tech and autonomous universe, will announce a development partnership with Intel and Mobileye on Friday, reports Automotive News.



Senior executives from each company, including BMW chief Harald Krueger, will hold an event on Friday to discuss the driverless-vehicle initiative, said the people, who asked not to be named because the details are private.

Mobileye has been an early leader in providing cameras, software and other components that allow vehicles to see the world around them and analysts estimate its systems command 70 percent of the market for collision-detection systems, a key enabler for autonomous driving.

[...] Intel is the world’s biggest chipmaker, thanks to its control of the computer-processor market. The company has moved its way onto the car dashboard by producing the components inside entertainment and information systems in vehicles. However, it still lags behind companies such as NXP Semiconductors and Infineon Technologies in providing chips to the auto industry.

Should be interesting to see what they’re all up to together.

3rd Gear: The Sales Streak Could Break In 2016


One of the big auto industry stories in the last couple of years has been record sales every month culminating in an unprecedented 17.5 million new cars sold in 2015.

But that could slow down to 17.5 million again in 2017, down from this year’s forecast of 17.8 million, according to Automotive News.

Here’s why car sales might start slowing:



Incentive spending per vehicle was up 14 percent early this year, as automakers unloaded a glut of unsold small cars.

The delinquency rate on subprime loans has spiked to 4.5 percent this year from less than 3 percent in 2011.

Leases rose to 31 percent of new-car transactions in the first quarter of this year, up from 27 percent in the first quarter of 2015. A flood of off-lease vehicles will drive down used-car prices and dampen demand for new cars.

More than 40 percent of nonluxury cars that are traded in will have negative equity this year, making it tougher for buyers to finance a new vehicle.

4th Gear: And Brexit Is Not Helping

What does the Brexit have to do with U.S. auto sales? Consumer confidence and the ripple effect that could lead to a global downturn, reports Bloomberg:


Even before last week’s decision by U.K. voters to leave the European Union, RBC Capital Markets flipped from predicting 2016 would top last year’s record 17.5 million vehicles to expecting a 1 percent drop, while Bank of America Merrill Lynch lopped its estimate by a half-million vehicles. After the vote triggered a two-day global stock market rout — the kind of event that make car buyers less confident about their finances — LMC and consultant AlixPartners said they’re also rethinking forecasts.

“Confidence and wealth effect are immediate impacts,” said Mark Wakefield, a managing director at AlixPartners, which helped guide General Motors through its 2009 bankruptcy. “It’s a downside scenario.”

5th Gear: Bring On The Self-Driving Cars!, Americans Say

Americans, having realized that being stuck in traffic tends to be awful, are apparently ready to “replace the daily commute’s drudgery”, according to a new study by AlixPartners.



Here’s the findings as reported by Bloomberg:

AlixPartners said that when the 1,517 people it surveyed were presented with the attributes of self-driving cars, 73 percent said they would want autonomous vehicles to take over all their driving needs. Mark Wakefield, head of the consulting firm’s automotive practice, said 90 percent would let a driverless car handle their commute if they could occasionally take the wheel.

The results go against several recent studies showing as many as half to three-quarters of respondents weren’t ready to give up the wheel. The University of Michigan Transportation Research Institute said last month that it found that just 16 percent of Americans would prefer to ride in an autonomous vehicle, while 46 percent wanted nothing to do with robot cars and 39 percent would accept a partially self-driving vehicle. Consumer acceptance is critical for automakers and tech giants like Alphabet Inc.’s Google that are investing billions in driverless cars they plan to put on the road by 2020.

“It’s worth remembering that commuting sucks and it has gotten worse every decade,” Wakefield said in an interview. “Autonomous driving increases the economic utility of the commuter and it makes their life better. When you describe what it can do, they like that.”

Good for those people. I’ll keep my PG-driven car and they can have their autonomobiles. Just don’t come asking for my help when they go haywire.

Reverse: Corvette!

Neutral: When Will Auto Sales Really Slow Down?



How long can automakers keep the record months going?