Fiat Works to Be in Compliance with EPA

Fiat Chrysler Automobiles (FCA) has begun a phased campaign to become compliant with the United States Environmental Protection Agency(EPA). To become compliant with emissions standards, FCA has recalled almost 900,000 vehicles; making it similar to some of the recent high profile recall campaigns. Some that come to mind are the Takata airbag inflators recall or Volkswagen diesel car recall.

This recall began after the FCA found and alerted the EPA to an issue discovered during customary in-use testing on aging vehicles as mandatorily set by federal regulations. The tests exposed the washcoat inside the catalytic converters were being affected by the sulfur in the gasoline; causing them to fail.

According to the FCA, every vehicle recalled has a four-cylinder engine and a catalytic converter. The purpose of the campaign the FCA is performing is to replace all these catalytic converters and perform engine calibration on the recalled vehicles.

While the FCA will not disclose how much this recall will be it can be deduced this process will become inherently expensive due to two reasons. One, the total number of replacements that will have to take place. Two, the replacement of the catalytic converters; involving valuable metals and costly, labor-intensive work. Based on estimations of the usual 40 percent retail margin on repair parts, the FCA will have to pay about 370 dollars for each converter.

To offset this no doubt expensive process, the FCA can recycle the used catalytic converters obtained from the recalled vehicles. Fairly common for the FCA to do, it can recycle the following materials from the catalytic converters: platinum, palladium, and rhodium.

As for the labor involved with catalytic converters, there is no clear way to cut costs. Since every vehicle is different, some of them may require multiple parts to be removed before there is clear access to the converter. Additionally, every vehicle has a different amount of exposure or damage. So damaging factors such as road salt, rust, or brittle bolts could not only make it difficult to reach the converter but add time to each repair.

Beside expenses, another concern the FCA has to face is customer engagement. While emissions issue is important, it is not held in as high regard as something such as a safety issue would to customers. Consequently, getting owners to bring in their vehicle, may be difficult.

The FCA plans to face the obstacle of customer engagement with their “recall playbook”. The FCA sent news of the recall by mail, which started last month. If this form of communication does not work, the FCA is prepared to go a step further and change course; going as far as to notifying consumers through social media.

2019 is a Transition Year: Audi Has a Plan to Get Back on Top in the Automotive Market

Audi announced that by May it will have plan to get itself back on track in the automotive market. This announcement comes after a series of consistent slumps that have impeded Audi, causing it to fall behind its competition: Mercedes-Benz and BMW.

Over time, Audi’s profitability has declined. Its return on sales went from 7.8 percent to 6 percent, its European sales fell by 14 percent and its global deliveries dropped by 3.5 percent. This decline is due to the current climate of the automotive industry; including the Worldwide Harmonized Light Vehicle Test Procedure, escalated ramp-up costs and escalated advance expenditure for electric vehicles. The increased spending on electric cars and the new emissions test in Europe that have already begun to affect the organization. Take, for instance, the incident that took place last year: multiple Audi deliveries to Europe failed and costed dearly when Audi did not have enough time to make its vehicles WLTP compliant.

To counter these obstacles and recent decline, Audi has decided to head into 2019 as a transition year. While Audi knows a transition year will most likely cause financial strain, it is confident that the results will make it worth it.

Before Audi releases its new plan, it will continue its present turnaround plan of conserving costs and ramping up production. By May 23, at its annual meeting, Audi says the final plan that they propose will help in improving plant capacity, employing the bundle of platforms and producing new vehicle construction. Besides the plan, Audi wants to also focus on two things: high-end cars, electric vehicle effort.

Audi wants to produce more high-end cars; reconstructing the entire lineup of vehicles they offer at the moment. It will pay particular attention to the upper premium, upper mid-range and full-size segments. Audi’s goal is to have increased its number of models to 15 by 2025.

Lastly, Audi wants to expand its presence in the electric, green vehicle movement. In 24 months, it plans to produce 5 full-electric and 7 plug-in hybrid models. Past that, by 2025, Audi wants to have 30 electrified cars in its lineup.

Infiniti Decides to Leave Western Europe

Infiniti, Nissan’s premium vehicle line, announced it will leave Western Europe by early next year. According to Infiniti, this move from Western Europe is so more focus can be put on their global operations; including sales marketed toward China and the United States.

To smoothly transition out of Western Europe, Infiniti plans to slowly withdraw from the Nissan Plant in Sutherland, England. The Q30 and QX30 models will be immediately discontinued before all production stopping by mid-2019.

This move may be beneficial to Infiniti, but it will bring a level of hardships to the citizens of the U.K. With a total of 55 retail stores and the plant in Sutherland, a number of workers will be laid off. However, with this realization in mind, Infiniti has promised to help these employees find alternative jobs.

The decision to move was brought on by several factors, one of the biggest being the condition of the market in Western Europe. While luxury brand vehicles are in, Western Europeans seem to prefer luxury brand vehicles local to the area; including brands like Audi, BMW, and Mercedes Benz. As a result, Infiniti has been struggling to keep sales up; evident in their lackluster sale of only 5,800 vehicles last year. Not to mention, the vehicle standards in Western Europe have become quite high; causing Infiniti to not always be able to meet regulatory and Euro 6 emission requirements.

Another big factor that swayed Infiniti was the political climate. The U.K. not too long ago made the choice to leave the European Union; making themselves no longer apart of Europe and their own separate country. This choice caused an amount of economic instability Infiniti and Nissan are unwilling to deal with. A telltale sign not only being this recent announcement by Infiniti but Nissan’s decision to build its new X-Trail SUV in Japan instead of Britain.

With this move from Western Europe, Infiniti sees a bright future. According to Infiniti, it gives them to chance to work more on making their 2021 vehicles electric and halting the production of diesel options. In addition to this, Infiniti wants to begin marketing their sales more to the U.S. and China. This marketing initiative will be led by turning its attention to the crossover/SUV line in the U.S and in five years, five new vehicles for China. This is all done with the hope that over the years there will be an increase in sales, residual value and synergies.

Leasing May Be Safer Option for Car Buyers

In today’s economy, it is not odd for you, a family member or a friend to want to buy a used car. For the price, it may seem like the perfect choice. Beware, however, because pushy salespeople are not the only thing you’ll have to deal with. More factors must be considered, according to a few experts, if the used car you purchase is ever going to be a benefit.

The first piece of advice is to be careful. Ira Rheingold, executive director of the National Association of Consumer Advocates, explains that in today’s used car industry there a lot of people that will try and take advantage of you. Rheingold’s exact words were, “It is a particularly predatory industry.” If you are not careful, one to three things could happen. One, the car salesperson could get you to sign to an overrated, overinflated price for the vehicle. Two, the car salesperson could get you a car that is not in the best condition or has hidden issues. Or, three, you end up having to deal with the wrong deal and the poorly conditioned vehicle together.

The second piece of advice is to treat it as if you were buying a house. This means, that the purchase and the finance of your car should be completely separate. It is important to keep these two things separate because when combined it gives the seller an easier chance to rip you off. The better option would be to go to a source other than the seller, like a bank or a credit union, and secure a loan prior to buying the car. By doing this, you have the security of having the money needed for the entire payment.

The third piece of advice is when in doubt, get a professional opinion. If you can get a mechanic or someone to look at the car, that is not bias toward the seller you can get an honest opinion as to the condition of the car. Rheingold and Andy Wolf, a consumer protection attorney, agree that this is a very smart thing to do.

The final and fourth piece of advice is to know your rights as a consumer and to seek legal help if needed. No seller should ever bind you into a contract you find unjust. If you think you’ve been taken advantage of, the legal system is there to help.

When you go to buy a used car, the last thing you want to worry about is being taken advantage of by the seller. With these four tips, you can feel more confident in yourself; finding the perfect used vehicle for you.  Lease swapping websites line give customers searching for a vehicle a safer option, as opposed to using a private seller.

The White House and Auto Industry at Odds When it Comes to the Fuel Economy

Carmakers and the White House are at a current impasse with issues regarding fuel economy. The White House stands firm in its demand: Support the plan to roll back fuel economy criteria or don’t and deal with President Trump backing California’s emissions requisites. This demand was given at the end of February by the president’s administration officials to auto executives in a conference call.

It came after the administration officials shutdown federal regulators, and California officials discussions on unified emission standards; tanking automakers attempt to get the two parties to agree to avoid a legal battle that could lead to court decided emission rules. The reason for this shutdown according to a Feb. 21 statement by the White House: “Despite the administration’s best efforts to reach a common-sense solution, it is time to acknowledge that CARB has failed to put forward a productive alternative.”

The White House or administrations’ involvement in trying to change the fuel economy and the auto industry is nothing new. Back in August, the administration began trying to reverse rules made by the Obama administration on the tailpipe carbon emissions standards and fuel economy requirements. Instead of allowing the tailpipe carbon emissions standards and fuel economy requirements to rise to 47 mpg by the end of 2020, they want to try to stop it at 37 mpg. This was part of a proposal by the EPA and the traffic safety administration wanting to try to rid of California’s ability to dictate its own greenhouse standards for vehicles.

Most carmakers in the auto industry have wanted a change with the fuel economy and tailpipe greenhouse gas emissions standards, yet they are still hesitant to be as drastic as the administration has wanted them to be. They have tried to get the two sides, the administration and the California Air Resources Board, to instead come to an agreement. By coming to an agreement, the auto industry could avoid dealing with legal battles that could leave the industry in a state of unpredictability. The motive behind this neutral standing ties into the looming threat of Trump’s 25 percent tariffs and how the industry is currently holding up.