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: Volkswagen May Punish Its Skoda Brand For Being Too Good
A new report from Reuters cites sources at Volkswagen as saying the VW brand is worried about competition from Skoda (which, you’ll recall, is part of the VW family). The article says that, in the wake of Dieselgate, VW is on a quest to reduce its spending, and that Skoda’s “superior car reviews and profitability” has “intensified the brands’ rivalry within the Volkswagen empire.” The article goes on, describing VW’s plans to fix this, saying:
Volkswagen managers and unions are seeking to curb competition from lower-cost stablemate Skoda, move some of its production to Germany and make the Czech brand pay more for shared technology, company sources told Reuters.
According to Reuters’ sources, VW wants to put some checks on Skoda’s “unfair advantages,” namely the fact that the brand can combine German tech with cheap labor from the Czech Republic. According to the news site, labor costs in the country average 10.10 euro an hour, compared to 38.70 in Germany.
The goal of VW’s move to transfer Skoda manufacturing to “underused German plants” and to make Skoda pay more royalties for vehicle platforms, according to the source, is to “reaffirm the top-selling brand’s primacy ahead of a wave of new electric car launches.”
One manager speaking about the drama told Reuters: “Instead of devoting our efforts to beating Tesla, we may just be setting up a futile internal conflict.”
2nd Gear: Australia’s “Carmageddon” Is Here
Yesterday, Toyota—Australia’s biggest car manufacturer over the last 10 years—closed its final assembly plant in the country, marking another step towards Australia’s “carmageddon,” The Associated Press reports.
Australia was the first place outside of Japan that Toyota manufactured cars, and the company has been doing so for 54 years. But now Toyota is gone, following Ford’s withdrawal in 2016 after over 90 years, and GM’s announcement that it will shut down its legendary Holden brand later this year. AP describes just how big of a loss this is for Australia, saying:
When the final Camry sedan rolled off the Melbourne production line, 2,700 Toyota workers became unemployed...The closure of the Holden plant will eliminate another 3,000 jobs...
...Analysts forecast the loss of thousands more jobs in auto-related industries. University of Adelaide research has predicted a worst-case scenario of 200,000 lost jobs nationwide due to the auto industry’s collapse, which would take $AUD29 billion ($22.6 billion) out of Australia’s GDP annually.
According to report, Toyota “reluctantly” pulled out of Australia after GM and Ford’s departure made access to local car parts too difficult. Toyota’s reasons for leaving—AP reports—include an “‘unfavorable Australian dollar,’ high manufacturing costs and meager economies of scale in Australia, a country of only 23 million people.”
Australia is losing its entire auto industry, and that’s just sad.
3rd Gear: GM Merges International And South American Operations
At the start of next year, GM International and GM South America will become one. Stefan Jacoby, who’s been at the helm of international operations for over four years, will retire at the end of the year, and Barry Engle—president of GM South America—will become the head of the new “GM International” team.
His job will be to look after all of GM’s operations except for those in North America and China. GM says in its press release that Engle—who will be based out of Detroit—will have a “mandate to deliver profitable growth in each market in which the company competes.”
The purpose of the move is not surprising in the wake of General Motors’ recent retreats from Europe, South Africa and India: GM is trying to save money by streamlining. As Marry Barra puts it in the press release: “Combining the leadership of the two regions supports our efforts to gain efficiencies in global markets.”
Looks like GM’s quest to save every last penny on international ventures continues.
4th Gear: Safety Watchdogs Are Wary Of New Autonomobile Legislation
In its first effort to help expedite autonomous vehicle development, congress is considering a bill that would let automakers sell up to 100,000 self-driving vehicles, provided those automakers could “demonstrate [those cars] are as safe as current vehicles,” Reuters reports.
According to the news site, the bill—which the Senate Commerce Committee will vote on this Wednesday—could let automakers “win exemptions from safety standards for self-driving cars without human controls and bar states from imposing performance requirements.” Its this bit about exemptions and lack of performance requirements that has a number of safety watchdogs up in arms, with Reuters reporting:
“The public will be the crash-test dummy for this dangerous experiment,” former National Highway Traffic Safety Administration chief Joan Claybrook told a conference call with reporters on Tuesday, arguing the auto industry “is essentially trying to deregulate auto safety.”
Jason Levine, who heads the Center for Auto Safety, said on the call there was an “absence of corporate caution in the rush to be first to get self-driving cars on the road.”
Current law prohibits vehicles without human controls.
It’s worth noting that states could still make their own rules regarding things like “registration, licensing, liability, insurance and safety inspections,” but performance standards would be out of their hands.
It’s another example of some of the tough decisions lawmakers will face as the industry tries to push out autonomous vehicle technology as quickly as possible, while safety watchdogs (and the general public in general) remains wary.
5th Gear: Looks Like The Chevy Bolt Is Actually Selling Reasonably Well
U.S. September sales results are in, and they’re actually looking fairly positive across the entire industry, with auto sales up more than 6 percent over September of last year. (You can check out the full sales breakdown for various automakers here).
Green Car Reports broke those sales figures down, looking only at fully electric and plug-in hybrid vehicles. Their main takeaway: the Chevy Bolt actually had a hell of a month.
After first going on sale in January, and having a fairly slow roll-out to all 50 states, Chevy has sold 2,632 Bolts in September—that’s a 25 percent increase over August’s 2,107 deliveries. The news site compares these figures to that of the more established Volt:
That brings the year-to-date total to 14,302 Bolt EVs, and the car only went on sale in all 50 states during July...The plug-in hybrid Volt, also from Chevrolet, logged 1,453 sales, roughly the level it’s maintained this year... Its year-to-date total of 15,348 could well be surpassed by the Bolt EV in October or November if each car maintains its current sales rate.
So even though initial Bolt sales were a bit concerning, on the year, it could outsell the mighty Volt. Not to mention, The First 200 Mile EV Under $40,000 made some of the competition look like amateurs in September, with Nissan’s Leaf EV (which, admittedly is on its way out for a new generation) only managed 1,055 sales, and VW’s eGolf and Audi’s Audi A3 e-tron only selling a couple of hundred cars each. (Tesla, meanwhile, sold 26,150 in the third quarter).
Not bad, Chevy Bolt.
Reverse: Italy’s Highway System Gets Its Backbone
Via Newsgo (translated from Italian):
It was October 4, 1964, when dell’autostrada del Sole, the A1 Milano-Napoli, was inaugurated, which is the longest in Italian territory (initially 755 km). Its construction, costing 272 billion lire, was wanted by governments in the 1950s, who through this work were thinking of relaunching the post-war national economy, and was part of the Anas project of adapting the roads...
...There were no controversies about this, but the benefits of the Sunway were obvious: commercial vehicles took two days to travel from Naples to Milan and with this fast-paced route the times would be greatly reduced and consequently they would also be reduced the consumer prices of the goods transported. It also aimed at creating social cohesion and reaffirming the primacy of politeness.
Neutral: Do you find the Chevy Bolt appealing? Its sales figures have been going up each month; how far do you think this will continue?