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Why The Chinese Market Is Still A Great Place To Do Business

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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: Don’t Count China Out Yet

For years China was seen as this unstoppable, unkillable growth market for automakers, a bottomless well of new car sales to an eager and well-monied public. Then their economy came close to crashing this summer and sales have plummeted.


Despite automakers’ attitudes to the contrary, anyone with common sense could have told you the bubble would burst eventually. But according to analysts, the market shouldn’t be written off just yet. Via Bloomberg:

China’s car market grew 19 percent a year from 2005 to 2014. AlixPartners estimates that sales there will grow 4.1 percent a year on average until 2018 and 2.9 percent annually until 2023.

That’s still a pretty good place to do business, said Kevin Tynan, auto analyst for Bloomberg Intelligence. China will still buy more than 20 million cars this year, compared with more than 17 million in the U.S., he said.

“Even in contraction, they will still be in the ballpark of 20 million units,” Tynan said. “That’s a lot of vehicles.”


That IS a lot of vehicles!

2nd Gear: A Potentially Big Blow To The UAW

As United Auto Workers contract negotiations with automakers continue, the involved parties face something they’ve never faced before: Michigan’s right-to-work legislation passed in 2012 that will allow workers to opt out of a union if they choose. From The Detroit News:

“This is going to be a big battle in Michigan,” said Kristin Dziczek, director of the industry and labor at the Center for Automotive Research. “Last year, Michigan’s overall unionization rate fell dramatically.”

Although membership nationwide in the UAW grew 3.1 percent last year, the percentage of all Michigan workers in unions fell to 14.5 percent last year from 16.3 percent a year earlier. There are 25 right-to-work states. Among recent converts, Indiana enacted a right-to-work law in 2012; Wisconsin adopted a right-to-work law earlier this year.

Since this is the first time Big Three autoworkers have had the chance to opt out in the three states, industry and even union officials say it’s difficult to predict how many will withdraw. The UAW says in other right-to-work states, UAW membership levels have not dropped much — in some cases a percentage point or two.

Keep your eyes on this one.

3rd Gear: The Insurance Question Persists

Autonomous vehicles will dominate the conversation around cars in the coming years whether we like it or not, but there’s still one big question no one has figured out: who will be liable if these things don’t do what they’re supposed to?


As Reuters notes, the burden of liability could shift away from consumers toward car companies in the near future, especially when it comes to to security issues:

“What should be done in the case of a faulty software algorithm? Should manufacturers be required to monitor vehicles post-sale in the case of a malfunction or a hacker attack?” Savarese asked.

While established models for assigning liability - such as holding the owner responsible for what the car does - will still be relevant, the onus may shift toward manufacturers.

Greater automation may also change consumer behavior and affect insurance costs if drivers become less vigilant and less practiced in their ability to avert an accident.

“Could a manufacturer become liable if a distracted driver causes an accident while relying on autopilot? It’s too early to tell,” Savarese said, adding that increased liability would unlikely deter carmakers since customers were demanding more self-driving functions.


I saved a bunch of money on my car insurance by buying a car I don’t drive!

4th Gear: Semi-Autonomous Car Functions Go Mainstream

You know how car technology works: it starts out on fancy, expensive luxury cars, and then it trickles down to the rest of us. The same goes for semi-autonomous driving safety technologies like emergency auto braking or lane change warning systems. Volkswagen is doing it and so are others, according to the AP:

Automakers are rapidly adding radar- and camera-based systems that can keep a car in its lane, detect pedestrians and brake automatically to avoid a collision. For now, they work with a driver behind the wheel, but eventually, versions of these systems will likely power self-driving cars.

Semi-autonomous features used to be confined to luxury cars, but they’re quickly migrating to mainstream brands as technology gets cheaper. Toyota, for example, will offer automatic braking, pedestrian detection and lane departure warning for just a few hundred dollars on all of its vehicles by 2017.


We don’t have driverless cars yet, but the building blocks are there.

5th Gear: Magnum, Aztek (Seriously) Prove Popular With The Youths

Here’s an interesting look at what The Youths (aka Millennials) are buying on the used market from Automotive News:

Several discontinued vehicle models, including the Pontiac Aztek — well known for its spot atop many lists of the ugliest vehicles ever and for its role in AMC’s “Breaking Bad” TV series — are finding new life on the used-car market thanks to millennial buyers, an analysis found.

The Dodge Magnum station wagon, which Chrysler discontinued in 2008, had the highest rate of millennial car buyers of any used vehicle this year through June, an Edmunds study of Polk data released today showed. About 28 percent of Magnum buyers were between ages 18 and 34, well above the industry average of 17 percent.

Other discontinued vehicles, including the Aztek (26 percent), Chrysler Pacifica (27 percent) and Chevrolet TrailBlazer (26 percent), also had a high rate of millennial sales. In fact, six of the top 10 used-vehicle models with the highest rate of millennial sales are no longer in production, Edmunds said.


I’ll assume those Magnum sales are all you Jalopnik readers out there, in which case, good show.


Reverse: The Start Of Safety


Neutral: Who’s Liable For An Autonomous Car’s Mistake?

I’d be shocked if the insurance and auto industries allow the burden to shift entirely away from owners, or drivers, or operators, or whatever we’ll be in our future-pods.


Photo credit AP

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