Good Morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place at 9:00 AM every weekday morning. Here are the important stories you need to know.
1st Gear: Haha Oh man.
Remember how the auto industry was going to go out away because millennials just don’t love cars the way they love a good video game or telephone?
Yeah, that’s a bunch of crapola. Millennials are actually buying cars. In fact, according to Bloomberg, 27 percent of cars purchased in the US last year were bought by millennials, making them the second largest group of car buyers, right after boomers. In fact, now it’s the Gen Xers who hate cars, apparently.
This all goes back to the crux of why millennials weren’t buying cars: Money. Specifically, the lack of it. See, if you don’t have money, you can’t use it to acquire goods and services. But now millennials are getting jobs, they’re making money, and they’re moving out to suburbs where they’ll need cars to get around.
That’s how life works.
Now let’s hear about how children born in 2010 aren’t buying enough cars and just don’t care about them, but that their behavior predicts a huge future for companies that make finger paints.
2nd Gear: That’s A Lot Of Money
Shanghai GM is the Chinese division of General Motors, a joint venture between GM and SAIC Motor Corp. And in the next five years, the division will to invest $16 billion, that’s a little more than $3 billion a year, to develop new vehicles.
That’s a pretty big commitment.
They’re using it to produce 10 new or upgraded models. Oh, wait, no, I got that wrong. They’re using it to produce 10 new or upgraded models... every single year until it has about 40 model lines.
Yeah, 40 model lines. They want at least 10 of those to be eco-focused models like plug-in hybrids. They also have 13 new engines and nine new transmissions on the way. This is a lot of development. It nearly sounds like what Dany Bahar promised would happen to Lotus. Only time will tell if they can succeed.
3rd Gear: Is The US To Blame For The Issues At Volkswagen?
Last week we heard about the ongoing saga at VW, where Chairman Ferdinand Piech wanted to oust CEO Martin Winterkorn, but had the tables turned on him, didn’t get what he wanted, and now seems to have lost influence.
Well, apparently the strife was partly caused by VW’s lack of growth in the US in in the eight years since Winterkorn took over. VW has made heavy investments into the US in order to spur sales, and so far those investments haven’t been met with an equal increase in presence. In fact, market share is now around two percent, which is where it was in 2009. That’s not ideal.
Winterkorn’s focus was the US when he came on board, so this is a major issue that has arisen during his tenure. He says that the initial success of the newest Passat in the US caused VW to rest on its laurels. They are making a number of changes to the US operations now, but this probably isn’t the end of the issues at VW.
4th Gear: GM Wants A Tax Break
GM might spend as much as $420 million expanding its Warren Tech Center which would then create 2,600 jobs. This is a good thing, and now GM wants some sort of tax break for doing said good thing.
GM is seeking a 12 year tax abatement after the six years of construction. Right now, GM has not approved the project, and have said that the tax break would go a long way to making the project a reality.
The Warren City Council is meeting on Tuesday to discuss the matter further.
5th Gear: Peugeot Partnership
Peugeot is partnering with Dongfeng and spending $216 million to develop a new platform for small cars across both brands. China has been one of the lone areas for Peugeot that has been seen as an opportunity for growth.
Peugeot and Dongfeng expect to have the new small car platform on the road under a bunch of cars by 2019.
What will be the next prediction made by analysts that will just be flat out wrong?
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