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: The Jeep Hack And Its Fallout

Yesterday the big story in the car world was how two white-hat hackers managed to seize control of a Jeep Cherokee driven by a Wired author — in another city. Up to now “car hacking” has usually meant physical tampering with vehicles, but this was done wirelessly via the Uconnect system’s IP address.

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As Jason wrote yesterday, it’s not a reason to start panicking since the exploit is so hard to find and Chrysler made a patch to close the hole, but it’s definitely a big deal. It’s the most high-profile example of car hacking yet and people are paying attention. The Detroit News reports that the hack serves as a “red flag” for automakers and safety regulators:

NHTSA Administrator Mark Rosekind said Tuesday in Ypsilanti that the agency doesn’t want to hinder new technologies, but emphasized the importance of security and privacy.

“We must reassure vehicle owners that their data is secure, that their vehicle is secure and that we are looking out for threats from hackers, thieves and anyone else that might seek to tamper with safety critical technology,” he said in a speech at Automated Vehicles Symposium 2015. “Cybersecurity and privacy must be high-priority items for the industry and for NHTSA.”

NHTSA on Tuesday also released a document outlining the agency’s privacy and cybersecurity efforts. “We’re not just aware of these threats, we’re working to defeat them,” Rosekind said. “We want Americans to know that we’re on it.”

NHTSA’s on the case!

2nd Gear: More Power To NHTSA Kinda Maybe

Speaking of our friends at NHTSA, a highway funding bill under consideration by the U.S. Senate could expand some of their regulatory powers, reports Automotive News:

Under the bill, as reported out of the Senate Commerce Committee last week, funding for the National Highway Traffic Safety Administration’s defect investigation operations would grow, but only after the agency completes a series of reforms sought by the U.S. Transportation Department’s inspector general. The maximum penalty that NHTSA can impose would double to $70 million, provided the reforms are completed.

The proposed budget increase is in line with the Obama administration’s Grow America Act transportation funding proposal. It would nearly triple NHTSA’s defect investigation budget to $31.3 million. The additional funding would more than double the office’s headcount to 108 employees, including some 22 engineers, plus additional investigators, statisticians and other workers to bolster the department’s ability to detect and analyze safety defects.

Sounds good, right? But some of the more critical Senate Democrats wanted it to go much, much further, including criminal penalties for executives involved in coverups:

The trio sought to make it a crime for auto executives to knowingly conceal defects or corporate decisions that could injure or kill consumers, punishable by fines and up to five years in prison. Their proposal also would have eliminated the cap on fines that can be imposed by NHTSA, let the agency ground vehicles with dangerous defects and prohibited dealers from selling used cars with unrepaired recalls.

Better than nothing, I guess?

3rd Gear: Kia To Enter The Small Crossover Game

Small crossovers! They’re the best! Everybody wants them! Kia and Hyundai, their spouse who sleeps in a different bedroom, are hoping to get in on the game too. Here’s Automotive News again:

Kia Motors is gearing up for a run at the subcompact crossover market, one of the fastest-growing product segments in the U.S. Spy photographers recently caught a fleet of the vehicles during some hot-weather testing.

The new crossover’s major competitors will be the Honda HR-V, Chevrolet Trax, Nissan Juke and Fiat 500X. Kia’s sister brand, Hyundai, also is preparing to launch a subcompact crossover in the U.S.

I guess Hyundai’s crossover will be smaller than the 2016 Tucson we tested recently, which is already aimed at the HR-V and its like. I’m sure there’s room for both.

4th Gear: Audi’s China Chief Out

The automakers hit hardest by the Chinese market meltdown have been General Motors and the Volkswagen Group. For the latter, that specifically means Audi, whose sales have been hammered lately. So the guy who led its Chinese operations is out, reports Reuters:

Dietmar Voggenreiter, who has led Audi’s business in the world’s largest auto market since 2009, will leave his post at the end of the year and be replaced by Joachim Wedler, who currently oversees Audi’s strategy on model lines, Audi said in the July edition of in-house newspaper “Audi Mobil.”

VW’s flagship division is reviewing a 2015 target of delivering 600,000 cars in China after its sales slowed markedly in the first six months, culminating in a 5.8 percent drop in June.

The recent stuff is nobody’s fault, but Audi’s Chinese sales appeared to be slipping well before that.

5th Gear: Toyota Is All Like “Uhhhh...” When It Comes To Lexus In China

Speaking of China! Toyota was gearing up for an aggressive expansion into China that meant building ES sedans and RX crossovers in country. But now, with the Chinese market slowing down significantly, they’re likely to push that decision back at least a few years. Once more with feeling from Reuters:

Toyota Motor Corp (7203.T) will likely delay building its premium Lexus brand in China for at least a few years, as growth in China’s auto market slows to a crawl and a weak yen makes it cheaper to keep making cars in Japan.

Toyota wants to focus on strengthening the Lexus brand in China and increasing sales in the country to well above 100,000 vehicles a year before investing what could be hundreds of millions of dollars if it was to build a new assembly line, two company executives told Reuters.

Meanwhile Infiniti, Jaguar Land Rover and Cadillac are moving ahead with their plans to build cars in China. It’s a gamble for sure.

Click here to view this kinja-labs.com embed.

Reverse: CA Passes Greenhouse Gas Law Today In 2002

California–which represents 10 percent of the nation’s automobile market and is known for its struggles with air pollution–took the lead early in setting stricter fuel emissions standards than the federal government’s. Assembly Bill (AB) 1493, which Davis signed into law in July 2002, was the first law in the nation to address the greenhouse gases emitted in automobile exhaust. The law required the California Air Resources Board (CARB) to regulate greenhouse gases under the state’s motor vehicle program and gave automakers until the 2009 model year to produce cars and light trucks that would collectively emit 22 percent fewer greenhouse gases by 2012 and 30 percent fewer by 2016.

Neutral: Does NHTSA Empowerment Go Far Enough?

I suppose it’s a moot point now as the proposal has failed, but should the part about criminal penalties for auto execs have made it into the bill? Or is NHTSA not to be trusted at all given that scathing audit?


Contact the author at patrick@jalopnik.com.