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: Game Time
The car industry is changing at probably the quickest pace it’s ever seen, and the fun part is nobody has a clue what the endgame looks like or how our electrified, autonomous mobility app-centric future will actually make money. But! Everyone is scrambling to enter the next phase of carmaking, and that means investing heavily in new technologies.
It’s not unfair to say the Japanese auto industry has lagged from its 1990s peak of tech, experimentation, growth and quality, so now we’re seeing various ways its automakers are scrambling to catch up with competitors as well as new startups. Why the hell is Toyota, a massive company with more resources than most, so very behind the curve in both EVs and autonomous driving? Blame a conservative and risk-averse business ethos, for starters; Japan is the opposite of Silicon Valley in a lot of ways.
Automotive News examines how the catch-up game is going down:
New demands for autonomous cars, electrification, artificial intelligence and new mobility are squeezing Japan’s automakers like never before. Their solutions for tackling the challenges will be on full display in Tokyo, but the country’s carmakers are in some ways just starting to respond.
Honda Motor Co. unveiled a detailed electric vehicle and autonomous driving road map only last summer after setting up an AI and robotics laboratory earlier in the year.
Longtime EV skeptic Toyota Motor Corp. established an EV division just 11 months ago. And despite huge investment, it has been slow to bring self-driving functions to the mass market. Toyota suddenly finds itself scrambling to find technology partners, no matter how small or obscure, who have the computing expertise the old-school automaker lacks.
Smaller rivals Subaru and Mitsubishi remain constrained by tight purse strings. Their best hope, for the time being, seems to be sheltering under the umbrellas of larger partners Toyota and Nissan.
Nissan Motor Co. is arguably the Japanese pioneer in EVs and autonomous driving. But even its ambitions seem diluted on the global stage by the onslaught of EVs from European rivals, self-driving technology from Silicon Valley and ride-hailing ventures from Detroit.
It puts specific emphasis on Mazda—sweet, tiny, scrappy Mazda—and how it’s working on a far smaller R&D budget to overhaul its lineup and prepare for an electrified future. Key to that is the new SkyActiv-X engine and platform, which will underpin all or most of its future vehicles, but that’s the tip of the iceberg:
The push kicks off in 2019 with a new vehicle architecture that will simplify manufacturing by underpinning nearly every vehicle in Mazda’s lineup, from the CX-9 large crossover to possibly the Mazda2 subcompact hatchback. The architecture will weigh less, cost less and deliver a quieter ride with crisper handling and better rigidity.
The platform’s floor pan was designed to accommodate batteries for electrified cars.
In that same year, Mazda will add an EV and a mild hybrid vehicle.
Also in 2019, the carmaker will launch a new generation of its Mazda Connect on-the-go infotainment system. The company isn’t providing details about it but hints at something akin to ride-hailing. Mazda is calling it a “new business model that enables car owners to support the needs of people in depopulated areas and those who have difficulty getting around.”
That story’s worth a read in full.
2nd Gear: Of Course Things Suck For Women In Cars
On the heels of the Harvey Weinstein nightmare-mess, we’re finally having some long-overdue conversations about sexual harassment and assault in the workplace. How does the auto industry fare in that regard? Over at Automotive News, an ambitious package of stories examines how it’s still got a long way to go to address sexism, bias and outright harassment, even if women in leadership roles like General Motors CEO Mary Barra do show signs of change in the right direction.
The publication says it surveyed nearly 900 women who work in the industry and in car dealerships, and while it was planned before the Weinstein case became news, it ended up being a very timely report.
It is difficult for women to strike the right balance between being seen as too pushy or too weak. They’re told they’re too aggressive (68 percent) or too quiet (50 percent). They’re too bossy (62 percent) or too emotional (61 percent).
A full 55 percent have received comments on their appearance, getting advice from bosses to wear skirts, or comments on how shirts show off their breasts.
“I was once told I should change my clothes (I was in a dress my mother bought me) before I made a presentation because the participants would be too busy thinking about what was under the dress than what I have to say,” said one respondent.
While women make up 47 percent of the total U.S. labor force, they account for just 24 percent of the automotive work force, according to a 2015 study by Deloitte and Automotive News. In some cases, managers hold women back on purpose, according to the Project XX Survey.
Read it! It’s depressing and men who work in automotive need to be better!
3rd Gear: This Mobility Shit Might Work
As longtime TMS readers know, GM (and Ford) have had a hard time convincing Wall Street investors and analysts that it’s prepared for another economic downturn and ready for the future of cars—whatever that looks like. GM’s been investing heavily in mobility lately and, at least on Wall Street, it seems to be paying off. Via Bloomberg:
The more than century-old automaker’s shares have soared 17 percent in the past month after hovering near their 2010 initial offering price for years, following a parade of analyst reports lauding its technology chops. Investors are betting that GM’s test fleet of self-driving electric cars can be converted into a lucrative robotaxi operation worth billions.
“Investors and the startups in Silicon Valley assume that GM and the other car companies are dinosaurs and it’s just not true,” said Morningstar Inc. analyst David Whiston, who’s had a buy rating on the stock since January. “It’s not like they just started working on autonomous cars because of Tesla.”
Until recently, Wall Street viewed GM as a likely victim of a revolution brought about by self-driving vehicles that will render ride-hailing and car-sharing supreme over auto ownership. Companies with tech prowess like Tesla Inc., Uber Technologies Inc. or Alphabet Inc.’s Waymo would lead the autonomous road race. These views are changing, said Barclays analyst Brian Johnson.
4th Gear: Dealers Are Screwed With OTA
Everyone knows that car dealers mostly make their money on repairs and service, and not as much on actual car sales. Speaking of tech and mobility, Tesla has pioneered the ability to update car software and add new features wirelessly. When used right it’s a remarkable way to keep cars up to date without selling new ones, but when used the wrong way you’re effectively selling incomplete beta hardware.
But as this model catches on, it stands to really screw the dealers, reports Bloomberg:
The over-the-air software updates Musk pioneered to add features or fix flaws in his electric vehicles are being embraced by more automakers, a potentially grim development for dealers who typically rely on parts and service for as much as half of gross profit.
General Motors Co. will have new electronic architecture and infotainment systems that enable over-the-air, or OTA, updates before 2020, Chief Executive Officer Mary Barra said in July. Delphi Automotive Plc executives have called Tesla’s technology a “brilliant” disruption and are embedding OTA capabilities in the products the company supplies to carmakers in an “attack” on software-related warranty costs.
“Right now, the industry has a very antiquated way of dealing with software fixes: It goes to a dealer, it gets re-flashed, the dealer gets money,” Delphi Chief Financial Officer Joe Massaro said during an investor day in September. In the future when carmakers want to push through a software fix, “We’ll turn it on and fix it over the air. And if they don’t want us to do that for whatever reason, then we’re not paying for it.”
They can’t even embrace online car sales, so how are they supposed to cope with this?
5th Gear: French Investigating FCA
I have a feeling we’ll be hearing more about this in the coming weeks and months, but Fiat Chrysler is now also facing a probe in France about whether or not it misled customers or cheated emissions tests a la Volkswagen. Via Reuters:
The letter, dated Oct. 17 and sent by the magistrate leading the investigation to people involved in the probe, also says that French investigators suspect that attempts were made to hinder the work of one of the investigators, an official whose job is to note breaches of France’s consumer laws.
[...] In the letter, the head of the investigation says the suspected emissions cheating dated back to as early as September 2009 and involved brands including Fiat, Alfa Romeo and Jeep but did not say over which period.
The letter says investigators also suspect “obstruction of the work of an official tasked with registering breaches of the consumer code”.
There is an ongoing probe into FCA’s diesels here in America too. Keep an eye on it.
Neutral: How Does Japan Play Catch-Up?
It does feel like the Japanese are lagging behind the Americans and Europeans these days, to say nothing of newcomers like Tesla. How do they establish a leadership position again?