Waymo Launches Commercial Autonomous Vehicle Service

Waymo, Google’s self-driving car affiliate, said its launching its first commercial autonomous-car service in the next two months.  Waymo says the new service charges passengers for rides and businesses will pay to shuttle customers to their stores.  The service will be available to small groups in roughly a 100 square mile area in Phoenix to start, but the plan is to expand to more people in the coming months.

In it’s “early rider program,” Waymo has been operating a self-driving ride-hailing pilot for select residents in Chandler, Arizona for a number of months.  The company plans to expand the driverless vehicles to a range of 600 square miles.

Last December, Waymo was spun out for Google.  The company was forced to explore several business plans to commercialize its self-driving technology, including ride sharing, trucking and logistics, public transportation, and licensing agreements with automakers.  Waymo runs 100 Chrysler Pacificas with its self-driving technology as they have a partnership with Fiat.  They plan to also expand with 500 electric Jaguars.

Car Pillars Affecting Drivers Visibility and Safety

Cars companies are increasing their efforts every year to improve the safety of their vehicles.  Decades of safety-focused design have led to an increase in “thick A-pillars” which is the term used for pillars at the front of the car that hold up the roof.  The B-pillars support the front and rear doors, and the C-pillars support the rear window.  The purpose is to keep a car from collapsing if it should flip over.  However, consumers are complaining these thicker pillars are making it more difficult to see pedestrians in the corners.

“They do provide substantial safety benefits in a rollover,” says Zach Bolton- head of R&D at Continental. “But something must be done about visibility, he says. They’re typically several inches thick, plenty wide enough to hide a pedestrian or even a cyclist. Continental says an object 3 feet across is totally obscured when it’s 12 feet away from the car. Meanwhile, pedestrian deaths in the US are on the rise.

Several companies are now saying they may make these pieces of metal transparent.  Using cameras and high resolution screens, the pillars can be wrapped into a wide-screen.  This makes it possible for the driver to see a pedestrian crossing the street as they make a turn.

Continental has built a curving pillar with fish-eye cameras to fill the vision gap. However, it’s still being tested to see if it’s too distracting.  In 2014, Land Rover showed a similar concept that projected the view from a forward-facing camera onto the lower part of the windshield. That made the whole hood look transparent, so the driver could get a good visual on what they’re running over, or the curb they’re trying to park against without scratching their alloys.

Automakers have already expressed interest in adding the setup to their vehicles, all of them looking for the clearest vision.

Mercedes Investigation On Recalls

Auto-safety regulations in the United States launched an investigation into whether Mercedes-Benz has been too slow to disclose safety recalls and defects as well as to make repairs.  The National Highway Traffic Safety Administration sent a letter to the top executives asking them to explain delays in notifying owners about safety defects and how they’re carrying out recalls.

The letter claimed communications with regulators were missing details about repairs.  Mercedes also did not provide enough data so that consumers could check for open recalls on the NHTSA website.

“Repeated and lengthy disruptions of MBUSA’s service result in the motoring public not being able to access safety critical information about their MBUSA vehicles and/or confusion over whether a safety recall applies to their vehicle,” NHTSA’s Stephen Ridella wrote to R. Thomas Brunner, the senior manager of regulatory and government compliance at Mercedes-Benz USA.

The NHTSA’s letter says the agency notified Mercedes in May that it failed to tell vehicle owners within the required 60 day time period about recalls affecting their vehicles.

“The safety of our customers is our highest priority,” Mercedes-Benz spokesman Robert Moran said in an email responding to the claims. “We make every effort to ensure our recall campaigns and customer notifications are executed in a timely manner. We will work closely with NHTSA on this audit query to address its concerns.”

The agency is asking Mercedes to provide information about how it handled over 24 recalls in the past three years.  In 2015, NHTSA fined Fiat Chrysler over $105 million in penalties, and Honda was fined over $70 million.

Volkswagen Reports Profit Increase Despite Emissions Headwinds

Volkswagen is Europe’s largest auto maker by sales as reported in late October 2018.  Tougher emissions regulations have been enforced in Europe, yet the company still made headway in the fiscal year.  The company reaffirmed its profit and sales outlook for the year, driving company shares 5% higher in early trading.  Volkswagen said net profit rose to 2.67 billion from 990 million in the same period a year ago.

The trade dispute between China and the United States has dampened business and consumer confidence, and brought a significant market decline in the third quarter, according to Volkswagen’s finance chief.  He stated that sales were also hit by the new emissions testing standard in Europe.

The company still managed to increase sales in China during the first 9 months of the year, partially due to a rise in auto financing and lower taxes on purchases.  Overall, Volkswagen sales for 4.1% world-wide to 7.6 million vehicles.  The Volkswagen brand, the company’s largest business by revenue and sales, increased revenue in the first nine months of the year, but pretax earnings fell 7% to 2.3 billion.

Audi, Volkswagen’s luxury brand and one of its main profit drivers, also posted a 7% decline in pretax earnings to 3.6 billion. Profit at Porsche, Volkswagen’s sports car brand, rose nearly 11% to 3.2 billion, while Bentley, the super luxury brand, continued to decrease, reporting a 137 million loss in the first nine months of the year.

Volkswagen confirmed its 2018 guidance, forecasting sales to rise as much as 5% and operating return on sales between 6.5% and 7.5%.

The Time May Be Right to Explore Contract Vehicle Assembly

With ever-changing consumer tastes and uncertain trade tariffs, and increasing vehicle assembly levels, the time might be right to establish contract assembly operations in the United States. Automotive history shows that in the 1980’s, Cars & Concepts as well as American Specialty Cars provided niche convertible conversions of mass production vehicles.  Some say this could be due to the contrast in the assembly business model. The economics and labor dynamics – at least for the convertibles – drove the production back to the main assembly plants.

Many have reacted to Volkswagen’s announcement to end the production of the VW Beetle and Ford’s announcement not to import the Focus Active from China into the United States.

In the grand scheme of a 17-million-unit sales market, some would make an argument that at a dealership- and manufacturer-level, the ability to offer a niche-volume product, in the case of the Beetle, or flexibility to import product from global assembly operations, with the Ford Focus Active, matters. Niche vehicles such as the Beetle drive brand loyalty with unique styles for first-time buyers before moving into exile. For those families having the luxury to own more than that one practical vehicle in the garage, a halo vehicle offers a fun vehicle to drive and be seen in. Both situations drive dealer showroom traffic.

Ford dealers lost an entry-level vehicle to tariffs. There will be other options on the new vehicle side with aggressive financing packages or on the used vehicle side – that will offer utility at an affordable price. However, it will be one less option for the consumer and for Ford to balance out its global manufacturing operations by exporting vehicles from one region to another.

Considering these two examples, there might be an emerging case for contract assembly in North America, as Magna Steyr – as an example – offers in Europe and Asia. Unique body styles and price points have stayed in a manufacturers’ product portfolio. Also, with the U.S. – Mexico – Canada Agreement incentivizing greater powertrain localization, there might be a case for localizing the production of a small volume nameplate in a contract assembler that would use that last incremental engine or transmission output needed to justify building a North American engine or transmission plant module.

With the U.S. market becoming more fractionalized in vehicle nameplate sales and with greater uncertainty over the ability to import and export vehicles and components between regions, the time may be right to re-test the business case for contract vehicle assembly.

Ferrari Releases 2 New Models, One with-out a Windshield

Ferrari debuted two new models at the Paris Motor Show, one of which does not have a windshield.  The models are both modern with carbon fiber skin and the fastest V-12 engine Ferrari has ever offered.  One of which is capable of hitting 125 miles an hour in under 8 seconds.  The two models are part of a new operation the Italian automakers is launching, and it will focus on bringing back the classic design concepts found in the past.

It’s part of the new strategy Ferrari has launched since the company went public in 2015, adding a variety of new models to help boost demand. The cars will be exclusive, with plans to build only 499 models.  Ferrari will only sell these to their best customers and collectors, meaning it’s by invitation only.  The two models are almost identical, while one version only holds one passenger and the other may hold two.

The super-light and ultra-strong carbon fiber bodies replace the hand-rolled and hammered aluminum that was the norm among exotic automakers in the years after World War II. That reduces weight, improves performance, and improves safety.

The models are unique in the fact that is neither have a windscreen.  Instead, the cars rely on a concept called “Virtual Wind Shield” which uses aerodynamic tricks to route air around occupants. Though modeled after classic race cars, Ferrari claims the SP1 and SP2 will be street legal. It remains uncertain if the cars, sans windshields, will be approved by U.S. regulators, however. They might require some modifications, or the use of helmets.

Speculation is that the vehicle will run between $2 million and $3 million dollars.

48,000 Mazda6 Sedans Recalled Over a Rust Problem

Mazda has announced a recall on almost 49,000 of its 2009 and 2019 Mazda6 Sedans due to a suspension component that may rust to the point that it breaks.  Broken parts results in drivers losing control of their vehicles.  Because this component is more likely to rust if it is exposed to rod salt,  the recall is limited to vehicles that were sold or registered in “salt states” where weather is typically colder.

This includes Connecticut, Delaware, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Wisconsin, and the District of Columbia.

There have been no crashes or injuries related to the issue according to the National Highway Traffic Safety Administration.  One way to tell if your vehicle is affected is to plug your car’s 17-digit vehicle identification number into the NHTSA’s website.

The Details:

Vehicles recalled: Certain Mazda6 sedans manufactured in Flat Rock, Mich., from Feb. 4, 2008 through Oct. 1, 2010.

The problem: Mazda says it didn’t apply enough paint to a part of the vehicle’s suspension, so rust may occur if the car is exposed to road salt. A rusted component could break and the driver may lose control, which could lead to a crash.

The fix: Mazda says its dealers will inspect affected vehicles and either fix or replace the faulty component.

How to contact the manufacturer: The recall is expected to begin on Nov. 12, 2018. Owners may contact Mazda customer service at (800) 222-5500.

NHTSA campaign number: 18V631. Mazda’s own number for this recall is 2818I.

Check to see whether your vehicle has an open recall: NHTSA’s website will tell you whether your vehicle has any open recalls that need to be addressed.

Chevy Drivers Have Saved 108 Million Gallons of Gas To Date

As of October 2018,  Chevy reports that Chevrolet Volt owners contributed to reducing the amount of gas consumers use.  In total, it was reported that 147,000 Chevrolet Volts in the U.S. have covered approximately 2.6 billion miles, and saved 108 gallons of gas.

The Volt is equipped with one of the largest batteries available for cars today, which gives a range of about 53 miles.  Chevy has reported that the 2019 model year will increase this even more.

GM has also reported that the sales of the Chevrolet Volt have not specifically grown in the last few years.  The company is also approaching the federal tax credit limit, which will trigger a phase out of incentives- so the Volt will likely not expand in the market.

General Motors To Offer Their Own add-on Warranty

General Motors has announced that they are giving new-vehicle buyers the option to add two years onto their factory warranty.  The program is optional, and begins October 2018.  The warranty lengthens the factory 3-year/36,000 mile limited warranty on Chevrolet and GMC vehicles.  For Buick and Cadillac, the extension lengthens the warranty to 6 years/70,000 miles.

Pricing for the warranty will be left up to dealers.  GM suggests that they charge $1000-$2000 based on the price and type of vehicle.  The cost would be added to the vehicle price and rolled into their monthly payment.

“It keeps the GM customer experience pure, inside the GM system,” said Ken Mac, director of Chevrolet-Buick-GMC and Cadillac Protection. “We really believe the more pure you keep your GM experience, the better it is for you the consumer and the GM dealer.”

Several dealers reported having mixed feelings about the program.   They say that there is a risk associated that would help the manufacturer more than the stores.  However, some feel that the warranty is innovative and will help the dealer sell more cars as well as retain more service customers.

Factories Say Tariffs Hurting Their Business

The recent administration says that tariffs on Chinese imports will shift manufacturing back to the United States, but some small to midsize factories are saying that the tariffs are hurting their business.  Many of these factories including automotive, rely on steel tubes cut in China for painting and welding.  One plant noted that they planned to hire another 40 workers, and because of the tariffs has decided to hold back.

The Trump administration says the tariffs are designed to counter what it sees as unfair trade practices that give Chinese firms the advantage over their U.S. counterparts. Some U.S. manufacturers have also reported an increase in revenues as it has forced customers to rethink supply chains.  However, other automotive companies have said that the U.S. tariffs are raising their costs and making them less competitive.

Some companies hit by tariffs aren’t only raising prices to offset the added costs, but some are delaying plans to expand within the U.S. while they search for other offshore production options.  One nonprofit that helps manufacturers make decisions about relocating production stated that “overall, manufacturing in the short-term, the U.S. is worse off because of the tariffs.”