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September was best auto sales month of the year

Keith Laing, Detroit News Washington Bureau
Published 6:14 a.m. ET Oct. 3, 2017

September was the best month of the year so far for U.S. auto sales as car manufacturers reversed a year-long downward trend and rebounded from hurricanes that put a damper on sales in multiple major markets.

GM, Ford, Toyota, Nissan, Honda and Volkswagen posted strong sales numbers that were part of an industry-wide total of more than 1.5 million vehicles that were sold in September, thanks to a strong economy and a boost in demand in areas where vehicles were damaged by storms.

The result was 6.1 percent higher than last September’s sales figure, and it came after automakers experienced a nearly 2 percent decrease in August that was attributed partially to hurricanes Harvey and Irma, which slammed populous parts of Texas and Florida last month. September was the first month of the year in which auto sales were higher than they were during the corresponding month last year.

General Motors Co. led the pack with 279,176 cars and trucks sold in the U.S. in September, which was a nearly 12 percent increase over the same month last year. Ford Motor Co. sold 221,643 vehicles, a nearly 9 percent increase. Fiat Chrysler Automobiles sold 174,266 vehicles, which was down almost 10 percent.

“September was the month the U.S. auto industry had been hoping for,” said Michelle Krebs, executive analyst for Autotrader. “Vehicle sales surpassed forecasts, thanks to a strengthening economy, August sales disrupted by and replacement demand created by hurricanes Harvey and Irma, and attractive model-year-end deals.”

Alec Gutierrez, senior analyst for Kelley Blue Book, said, “The sales numbers for just about every manufacturer have come in well above expectations. As you look at the segment mix, there was strength across the board. … Regardless of segment, vehicle sales were very strong.”

GM’s uptick was driven by a 17.2 percent increase at Chevrolet and a 9.4 percent increase at GMC.

“Our new crossovers from Chevrolet, Buick, GMC and Cadillac have been very well-received, and Chevrolet had an outstanding month with the Silverado and Colorado,” Kurt McNeil, U.S. vice president of sales operations, said in a statement.

GM said 2017 was its best September for Chevrolet since 2004. Sales of Chevrolet’s newest crossovers, the Equinox and Traverse, were up 80 percent and nearly 51 percent respectively over the same month last year. GM also reported the GMC Terrain was up 61.2 percent for its best September ever, while the Cadillac XT5 was up 58.5 percent.

Ford said sales of its F-Series pickups rose by 21.4 percent, with 82,302 trucks sold. The company said demand remains robust for its Super Duty, with the premium Lariat, King Ranch and Platinum trim levels making up 52 percent of retail sales. Ford added that sales of its Explorer, Sport and SportTrac SUVs totaled 21,207, which was a 10.8 percent increase over last year and also its best September retail sales performance in 13 years.

“Ford sales gains came from trucks and SUVs, with truck sales gains of 19.9 percent and SUV sales gains for the month up 1.8 percent,” Mark LaNeve, Ford vice president, U.S. marketing, sales and service, said in a conference calls with analysts and reporters. “Our business was strong nationwide, with retail increases in 12 of our 21 sales regions, with particular strength in Houston.”

LaNeve added: “The only notable year-over-year decline was in Florida. As you know they were closed for a big chunk of the month mainly to power outages and some debris damage, and even Florida was coming on strong at the end of the month.”

Fiat Chrysler said its fleet sales, which represented 16 percent of its September 2017 total, were down 41 percent from last year. It said the reduction was part of a strategy to “reduce sales to the daily rental segment.”

The automaker said five of its U.S. vehicles — the Jeep Renegade, Chrysler Pacifica, Ram ProMaster and Ram ProMaster City — posted record sales figures in September. Sales of FCA’s Jeep Compass were up 75.2 percent, which the company said was enough to account for the compact SUV’s best sales month ever. FCA also reported that sales of the Dodge Durango increased by 45.2 percent, which was best September sales for the SUV since 2005.

Kelley Blue Book had projected that new overall vehicle sales would rise by 1 percent in September 2017 in a year-over-year comparison with September 2016, going from 1.43 million last year to 1.44 million last month.

Similarly, forecast a year-over-year increase in sales of 0.4 percent with a projection that 1.435 million new cars and trucks were sold last month. The final tally for the month was 1.52 million.

Among foreign-owned automakers, Toyota Motor North America’s U.S. sales were up 14.9 percent for the month. Nissan Motor Co.’s sales were up 9.5 percent.

Volkswagen of America experienced a nearly 23 percent sales increase as it tries to move beyond its diesel-emissions cheating scandal.

American Honda Motor Co. reported best-ever September sales totals for Honda and Acura, up 6.8 percent.


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Trump vows NAFTA ‘tweak’ after Trudeau meeting

Keith Laing, Detroit News Washington Bureau
5:05 p.m. ET Feb. 13, 2017

Washington — President Donald Trump said Monday he wants to “tweak” the United States’ trade relationship with Canada as he presses for changes to the North American Free Trade Agreement.

Trump said in a joint press conference with Canadian Prime Minister Justin Trudeau that there will be changes to the trade relationship with Canada under his proposed changes to NAFTA, although most of the debate has focused on Mexico so far. He offered no specifics.

“We have a very outstanding trade relationship with Canada,” Trump said after meeting with Trudeau at the White House. “We’ll be tweaking it. We’ll be doing certain things that are going to benefit both of our countries.”

Trump added: “It’s a much less severe situation that what’s taking place on the southern border. On the southern border, for many, many years the transaction was not fair to the United States. It was an extremely unfair transaction.

“We’re going to work with Mexico,” the president said. “We’re going to make it a fair deal for both parties. I think we’re going to get along very well with Mexico. They understand and we understand.”

Trudeau, meanwhile, painted a picture of a Canadian economy that is intertwined with the U.S.

“Canadians are rightly aware of the fact that much of our economy depends on good working relations with the United States, a good integration with the American economy,” he said. “The fact is that millions of good jobs on both sides of the border depend on the smooth and easy flow of goods and services and people back and forth across our border.

In a joint statement issued Monday, the two referenced the bridge planned between Detroit and Windsor: “Given our shared focus on infrastructure investments, we will encourage opportunities for companies in both countries to create jobs through those investments. In particular, we look forward to the expeditious completion of the Gordie Howe International Bridge, which will serve as a vital economic link between our two countries.”

The Canadian Prime Minister, 25 years junior to the U.S. president and far to his left politically, sought to draw parallels between Trump’s election and his own liberal party’s electoral victory in Canada in 2015.

“Both President Trump and I got elected on commitments to support the middle class, to work hard for people who need a real shot at success,” he said. “We know that by working together, by ensuring the continued effective integration of our two economies, we are going to be creating greater opportunities for middle-class Canadians and Americans now and in the future.”

NAFTA was enacted in 1994 to create a free trade zone between the U.S., Mexico and Canada that eliminated tariffs on most goods produced in North America.

Canada is Michigan’s biggest trading partner, with the state exporting $23.5 billion in goods there in 2015, according to the U.S. Department of Commerce. Shipments to Canada accounted for nearly 44 percent of Michigan’s exports. Mexico, meanwhile, was the state’s second-largest trading partner with $11.7 billion in exports in 2015, which accounted for about 22 percent of the state’s exports.

Ford Motor Co. has said it sold 304,618 cars in Canada in 2016, which it says is its best year of sales in the country since 1989. General Motors Co. says it sold 267,341 vehicles in Canada in 2016, which was an increase of 1.5 per cent over 2015. Fiat Chrysler Automobiles reported sales of 278,729 cars in Canada in 2016, which the company said was down 4 percent compared to 2015. All three automakers have manufacturing facilities in Canada.

Trump showered praise on U.S. automakers on Monday for making new domestic investments since he took office as he pledged to press forward with changes to the NAFTA trade agreement.

“You probably have noticed that Ford is making billions of dollars of new investments in this country,” he said. “General Motors likewise is expanding plants and going to build new plants. Fiat Chrysler was at a meeting where they are doing the same.”

Trudeau pointed out that Canada is the biggest trading partner for many states like Michigan.

“As we know, 35 U.S. states list Canada as their largest export market, and our economies benefit from the over $2 billion in two-way trade that takes place every single day,’ he said. “Millions of good middle-class jobs on both sides of the border depend on this crucial partnership.”

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VW pleads guilty in emissions case; 6 execs indicted

Keith Laing, Detroit News Washington Bureau
Published 1:47 p.m. ET Jan. 11, 2017

The U.S. government is indicting six present and former Volkswagen AG executives and charging the company with three criminal felony counts for what regulators called a “10-year conspiracy” to rig hundreds of thousands of diesel cars to cheat U.S. emission standards. Volkswagen is also being forced to pay $2.8 billion in criminal fines and $1.5 billion in civil penalties related to the fraud.

The U.S. Department of Justice said Wednesday that Heinz-Jakob Neusser, 56; Jens Hadler, 50; Richard Dorenkamp, 68; Bernd Gottweis, 69; Oliver Schmidt, 48; and Jürgen Peter, 59, all of Germany, have been indicted and charged with one count of conspiracy to defraud the United States by a federal grand jury in the Eastern District of Michigan. James Robert Liang, leader of diesel competence for VW from 2008 through June, pleaded guilty to a criminal charge in September for his role in the automaker’s diesel emissions scandal.

Volkswagen’s plea agreement is pending approval by U.S. District Judge Sean Cox, who has been assigned to the case in the Detroit court.

Under the agreement, Volkswagen is pleading guilty to charges of participating in a conspiracy to defraud the United States and violating the Clean Air Act. The company is being charged with obstruction of justice for destroying documents related to the emission scheme and with using false statements to import cars into the U.S. that failed to comply with federal emission limits.

U.S. officials said the criminal charges and large fines that are being levied against Volkswagen are fitting because knowledge of the emission cheating and the attempt to cover it up went to the highest levels of the German automaker.

“These individuals all held positions of significant responsibility at Volkswagen including overseeing the company’s engine development division and serving on the company’s management board,” U.S. Attorney General Loretta Lynch said during a news conference in Washington. “Over the course of a conspiracy that lasted nearly a decade, they seriously abused those positions. And today they are being charged with a range of crimes including conspiracy to defraud the United States, violations of the Clean Air Act and wire fraud.”

Volkswagen Chief Executive Matthias Müller said Wednesday that his company “deeply regrets the behavior that gave rise to the diesel crisis.

“Since all of this came to light, we have worked tirelessly to make things right for our affected customers and have already achieved some progress on this path,” he said in a statement. “The agreements that we have reached with the U.S. government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear. They are an important step forward for our company and all our employees.”

Five of the six former Volkswagen executives who have been indicted are still in Germany. The sixth, Oliver Schmidt, former general manager of the Engineering and Environmental Office for VW of America, was arrested in Miami on Monday and charged with one count of conspiracy to defraud the U.S. to commit wire fraud and violate the Clean Air Act.

Lynch said Wednesday that it is too early to predict whether German officials would cooperate with an extradition request from the U.S. for the remaining VW officials who are now under indictment.

“I will say that we have always worked very well with our German colleagues on various law enforcement matters,” she said. “It’s too early to predict right now how matters will be resolved there. We have had a number of cases in other matters where we have been able to reach resolution with individuals, and so I won’t speculate on that right now because it’s too early in that part.”

Volkswagen has been under fire in the United States since it was accused by the U.S. Environmental Protection Agency in September 2015 of selling diesels for years with software that activated required air pollution equipment only during emissions tests. They had been marketed as “clean diesels” for the company’s Volkswagen, Audi and Porsche brands between 2008 and 2015.

The automaker has admitted to programming its diesel cars to trick emissions testers into believing the engines released far less pollution into the air than they actually do, in violation of the federal Clean Air Act. Regulators have said that in normal driving they emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.

Volkswagen has stopped selling diesel cars in the U.S. since it admitted to the scheme.

The $4.3 billion fine comes in addition to a $14.7 billion settlement the company reached earlier this year with the EPA that calls for Volkswagen to spend $10 billion to either buy back or repair about 475,000 2-liter diesel vehicles that were sold between 2009 and 2015 and were built with devices to trick emissions testers; the company must contribute $4.7 billion to federal efforts to reduce pollution.

Volkswagen’s criminal and civil fines dwarf recent criminal penalties paid by General Motors Co. and Toyota Motor Corp. for safety violations. GM was forced to pay $900 million fine over its handling of vehicles with a dangerous ignition switch defect that was ultimately linked to 124 deaths and hundreds of injuries. And it is far more than the $1.2 billion that Toyota Motor Corp. was penalized for issuing misleading statements about cars that experienced unintended acceleration in 2014.

The federal government has authority to levy heavier fines for environmental violations under the Clean Air Act than the National Highway Traffic Safety Administration does for safety infractions. Congress has capped the transportation department’s ability to fine automakers is capped at $105 million. The limit was increased from $35 million in a 2015 transportation funding bill.

Federal officials said Wednesday that the penalties that are being imposed now on Volkswagen are fitting given the German company’s transgressions against U.S. laws.

“This is a case that illustrates a company that at very high levels knew of this problem and deliberately chose to continue with the fraudulent behavior,” Lynch said.

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Trump picks Elaine Chao as DOT chief

Keith Laing, Detroit News Washington Bureau
11:53 a.m. EST November 29, 2016

Washington — President-elect Donald Trump has picked former U.S. Labor Secretary Elaine Chao to lead the Department of Transportation in his incoming administration.

If confirmed by the U.S. Senate, Chao, 63, would become U.S. Secretary of Transportation at a time when federal regulators are scrambling to craft new rules for self-driving cars as automakers and tech companies race to develop the new technology.

The transportation department will also be involved in a review of federally mandated fuel economy standards that is scheduled to take place in 2018. Automakers have been pushing the Trump administration to roll back a mandate from outgoing President Barack Obama’s administration that requires them to achieve a fleetwide average of 54.5 miles per gallon by 2025.

Trump said Chao’s “extensive record of strong leadership and her expertise are invaluable assets in our mission to rebuild our infrastructure in a fiscally responsible manner.”

“She has an amazing life story and has helped countless Americans in her public service career,” the president-elect said in a statement released by his transition team.

Chao, who is married to Senate Majority Leader Mitch McConnell, R-Ky., led the Labor Department for the full eight years President George W. Bush was in office. She formerly was Deputy U.S. Secretary of Transportation and chairwoman of the Federal Maritime Commission.

She said in a statement, “The president-elect has outlined a clear vision to transform our country’s infrastructure, accelerate economic growth and productivity, and create good-paying jobs across the country.”

McConnell told reporters at the Capitol on Tuesday that he will not recuse himself from a potential vote on Chao’s nomination, despite his close ties. “I think it was an outstanding choice,” he said.

Chao has also been chief executive officer of United Way of America and director of the Peace Corps. She worked as vice president of syndications at BankAmerica Capital Markets Group and as a banker with Citicorp in New York.

Incoming Senate Minority Leader Chuck Schumer, D-N.Y., expressed a willingness to work with Trump’s administration on transportation issues.

“Senate Democrats have said that if President-elect Trump is serious about a major infrastructure bill, backed by real dollars and not just tax credits and without cutting other programs like health care and education, that we are ready to work with his administration,” Schumer said in a statement. “I hope Secretary Chao shares that ambitious goal and is willing to work with Democrats to rebuild our crumbling infrastructure and create millions of good paying jobs along the way.”

A group that lobbies for car manufacturers in Washington praised Trump’s selection. Mitch Bainwol, president and CEO of the Washington, D.C.-based Alliance of Automobile Manufacturers, said “the combination of (Chao’s) prior cabinet experience, her specific knowledge of DOT and her extensive policy background makes her a uniquely qualified nominee who can literally hit the ground running.”

The auto alliance group represents Fiat Chrysler Automobiles, Ford Motor Co., General Motors Co., BMW Group, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen Group of America and Volvo Car USA.

The Association of Global Automakers Statement added: “Elaine Chao will become transportation secretary during an unprecedented wave of automotive innovation that is redefining how we think about transportation. We congratulate her and look forward to working together to support technologies that will save lives, time and fuel on our roadways.”

The global automakers group includes Aston Martin, Ferrari, Honda, Hyundai, Isuzu, Kia, Maserati, McLaren, Nissan, Subaru, Suzuki and Toyota.

Safety advocates questioned whether Chao would try to roll back consumer protections put in place under the Obama administration, citing her work as a fellow at the conservative Heritage Foundation.

“My biggest concern is that she probably comes from the point of view that all regulations ought to be undone,” said John Simpson, privacy project director at the Santa Monica, Calif.-based Consumer Watchdog group.

Chao would be the second woman picked for Trump’s Cabinet, joining Michigan GOP mega-donor and philanthropist Betsy DeVos, tapped by the president-elect to be his education secretary. Trump also selected South Carolina Gov. Nikki Haley to be his U.N. Ambassador, but that post is not a Cabinet-level position.

Chao, who was born in Taiwan, will also give Trump’s Cabinet another boost of diversity. Critics pointed out that many of Trump’s initial high-level picks prior to Haley and DeVos were white men.

Trump has said he is considering appointing Detroit native Dr. Ben Carson, who is African-American, to lead the Department of Housing and Urban Development.

Chao would be the 18th transportation secretary in U.S. history, and the third woman. She would follow Elizabeth Dole, who served under President Ronald Reagan, and Mary Peters, who served under George W. Bush.

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Carmakers eye favorable regulations under Trump

Keith Laing, Detroit News Washington Bureau
3:37 p.m. EST November 10, 2016

Washington — Stock prices for U.S. automakers rose sharply Thursday amid signs that fuel economy standards could be weakened under the administration of President Donald Trump.

A noted climate-change skeptic is seen as a likely choice to lead the Environmental Protection Agency under Trump. And an industry group on Thursday already was urging the president-elect to roll back mandates that automakers achieve a fleet-wide average of 54.5 miles-per-gallon for cars and light-duty trucks by 2025. Those requirement were put in place by President Barack Obama’s administration.

On the day of Trump’s first visit to Washington, D.C., as president-elect, General Motors Co. stock rose 5.7 percent to $32.73 per share. Ford stock closed up 3.1 percent to $11.94. And shares of Fiat Chrysler Automobiles NV — which has the largest proportion of pickups and SUVs, and the fewest resources to invest in fuel-saving technology — rocketed up 9.7 percent to close at $7.69.

The Alliance of Automobile Manufacturers, which lobbies for U.S. automakers in Washington, said in a Thursday memo to Trump’s transition team that Trump should move quickly to “harmonize and adjust” the stringent gas mileage rules because they “pose a substantial challenge to the auto sector due to the steeper compliance requirements for model years 2017-2025.”

The group said Trump should roll back mileage rules, which are beginning to take effect with model-year 2017 vehicles that are already in showrooms, because reports on the emission standards that have been released by federal regulators “over-projects technology efficiencies and inadequately accounts for consumer acceptance and marketplace realities.”

The auto alliance wrote, “The combination of low gas prices and the existing fuel-efficiency gains from the early years of the program is undercutting consumer willingness to buy the vehicles with more expensive alternative powertrains that are necessary for the sector to comply with the more stringent standards in out-years.”

The group represents Fiat Chrysler, Ford, GM, BMW Group, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen Group of America and Volvo Car USA.

Trump is likely to appoint an EPA administrator who is a lot more skeptical of the need to fight climate change than the Obama administration has been. Myron Ebell, director of the Center for Energy and Environment at the conservative think tank Competitive Enterprise Institute, leads Trump’s EPA transition team. Ebell is now seen as a likely choice to lead the EPA.

Jack Nerad, executive market analyst for Kelley Blue Book, said automakers are probably right to expect more favorable regulations than they have received from the outgoing Obama administration.

“One can expect that the Trump administration and the Republican-controlled Congress will take a new look at regulations that affect the auto industry and industry in general,” he said. “One obvious candidate are the current CAFE (Corporate Average Fuel Economy) regulations. In light of lower fuel prices and increased supplies of domestically produced fuel, we are likely to see a relaxation of the CAFE regulations.”

The gas-mileage rules that were put in place by the Obama administration are beginning to take effect with the 2017 model year. The rules, which are locked in for the model years between 2017 and 2021, call for ramping up from the current fleet-wide average of about 34 mpg for cars and trucks that were required in 2016, to the eventual goal of more than 50 mpg by 2025. Automakers have a chance to argue for reductions for the model years between 2022 and 2025 during a review that is set to take place April 2018.

Auto companies that do not meet the higher emission standards will be fined $5.50 for each one-tenth of a mile-per-gallon their average fuel economy falls short of the standard for a model year, multiplied by the total volume of vehicles that are in the fleet that fail to meet the new requirements. They will be allowed to purchase credits from other auto companies that have come in under the mileage requirements.

The push to get Trump to roll back the mpg rules follows a projection from federal regulators, which stated automakers may only be able to achieve a fleet-wide average of between 50 and 52.6 mpg by the deadline. Auto companies have seized upon the projection to argue that federal regulators should consider scaling back the stringent mileage rules when they come up for a mid-term review in 2018.

UAW President Dennis Williams told reporters Thursday in Detroit that while he had not reviewed the alliance’s letter, the union has raised concerns with the EPA and others about how fast the mileage standards come.

“Corporations have got to be very careful in the auto industry. There is a public out there that purchases and that public is very conscious of the environment and they’re very focused, especially millennials and others, they’re very focused on what the future of this country’s environment is,” Williams said. “I’d be very careful if I was them about not investing in futures. We’ve seen what happened when GM, Ford and Chrysler didn’t do that before. I would caution auto companies from repeating sins of the past.”

Andrew Linhardt, the Sierra Club’s associate director for federal advocacy, said it is not surprising that automakers are trying to convince Trump to ease the gas mileage rules.

“This is nothing new. They’ve been pushing this for the last year,” he said, although he acknowledged carmakers will likely have a more friendly ear in Trump.

“Trump pretty much ran on tearing down President Obama’s climate legacy, and this is a pretty big part of it.”

Staff writer Melissa Burden contributed.

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Tesla crash sparks worries about self-driving cars

Keith Laing, Detroit News Washington Bureau
11 p.m. EDT July 8, 2016

Washington — Self-driving car advocates are scrambling to contain the fallout of the fatal crash of 2015 Tesla Model S that was operating with its automated driving system activated.

The news of the fatality — believed to be the first death in a car engaged in a semi-autonomous driving feature — came as federal regulators prepare to unveil regulations for testing of fully automated cars this summer. Their preparations are being closely watched by supporters and critics of the self-driving technology.

David Strickland is a former National Highway Transportation Safety Administration chief who is lobbying for self-driving cars on behalf of Ford, Volvo, Google, Uber and Lyft. He said Tesla’s Autopilot system “is not a self-driving system.”

“It’s an enhanced driver-assist,” Strickland said, noting that the lobby group he represents — Self-Driving Coalition for Safer Streets — is pushing for fully autonomous cars. “For us, the notion is full self-driving where you have no expectation of the driver being pulled back in to driving,” he said.

Federal regulators say preliminary reports show the Tesla crash happened when a semi-trailer rig turned left in front of the car that was in Autopilot mode at a highway intersection. Florida police said the roof of the car struck the underside of the trailer and the car passed beneath. The driver was dead at the scene.

“Neither Autopilot nor the driver noticed the white side of the tractor-trailer against a brightly lit sky, so the brake was not applied,” Tesla said in a blog posting June 30.

Strickland said self-driving technology holds too much promise to discard because of the fatal accident. “Every company in our coalition is still working very hard to test and test safely because we’re operating toward a goal of full self-driving.”

Michael Harley, senior analyst for Kelley Blue Book, said the fatal crash probably will set back development of self-driving cars.

“Unfortunately the biggest issue we have right now is public perception,” he said. “The public is pretty used to seeing a couple of thousand people every day die on roads, but you get one report of automated vehicle fatality and it’s headlines everywhere.”

Still, Harley said “long-term, autonomous vehicles are the way to go.”

“It’s probably going to drop the death rate on U.S. highways by 80 to 90 percent alone, just taking away the humans [from driving],” he said. “Humans are the ones making the errors.”

Harley said Tesla’s cars are not self-driving, even though it has heavily promoted its Autopilot feature. “Right now on the scale of autonomous vehicles, we’re at a one or two,” he said. “We’re at the driver-assistance level.”

Ron Montoya, consumer advice editor for, believes the Tesla crash will cause regulators to become more cautious.

“One of the things people might want to lean toward is something like California, where the driver has to be in the car at all times,” he said, referring to proposed regulations in California that would require a licensed driver — and a steering wheel — to be in the car at all times.

Montoya said requiring licensed drivers to be at the wheel “kind of goes against the point of self-driving.” But he said “there is probably going to be a greater emphasis on holding the driver responsible for paying attention.

“There is concern that when we reduce the task of driving, we find other things to do,” he said. “The challenge is how do we re-engage the driver? If the vehicle is capable of doing most of the task of driving, what do with that downtime and how do we adjust when the system asks us to take control?”

Tesla has said it disables Autopilot by default and requires explicit acknowledgment that the system is new technology and still in a public beta phase before it can be enabled.

“When drivers activate Autopilot, the acknowledgment box explains, among other things, that Autopilot ‘is an assist feature that requires you to keep your hands on the steering wheel at all times,’ and that ‘you need to maintain control and responsibility for your vehicle’ while using it,” the company wrote in a blog post when news of the fatal accident was released June 30.

“As more real-world miles accumulate and the software logic accounts for increasingly rare events, the probability of injury will keep decreasing,” the company continued. “Autopilot is getting better all the time, but it is not perfect and still requires the driver to remain alert.”

Critics have charged that Tesla is responsible for giving drivers the idea that its Autopilot is more advanced than it really is.

“We really felt that Tesla is rushing out there putting something out that’s not safe,” John Simpson, privacy project director at the Santa Monica, California-based Consumer Watchdog group, said in a telephone interview. “If you can’t tell the difference between a white truck and the white sky, that’s not very safe.”

Simpson said the Tesla crash should “give everybody pause about the actual state of the technology” behind self-driving cars.

“Tesla’s fundamental problem is that they’re out there in beta mode,” he said. “They’re testing something and they’re relying on their customers to be their guinea pigs. They’re in that kind of Silicon Valley mindset where you put it out there and get all the feedback, but that doesn’t work here.

Simpson said driver-assist features that are not fully autonomous can be used to improve safety, as long as drivers aren’t led to believe they do not have to oversee a car’s operation.

“There are clearly elements of self-driving technology that aren’t totally autonomous that if installed in vehicles can work to augment safety. But people have to understand them,” he said.

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Big 3 not benefiting from troubles at foreign brands

Keith Laing, Detroit News Washington Bureau
11:01 p.m. EDT May 29, 2016

Washington — Recalls and emissions problems at foreign-owned auto brands such as Volkswagen and Mitsubishi have roiled the nation’s auto industry, but analysts say there is little evidence buyers are turning toward cars made by Detroit carmakers.

Cross-searches between Volkswagen and brands such as Ford and Chevrolet on the car-shopping website changed little between August 2015 — the month before the German auto manufacturer admitted it had rigged its diesel cars to cheat on government emissions testing — and April, according to researchers at the company.

Twenty-six percent of the site’s visitors who searched for information about Volkswagen cars also looked up information about Ford brands in August, compared to nearly 25 percent in April.

Similarly, about 15 percent of visitors who searched for Volkswagens also looked up Chevrolet vehicles in August, while the website found that 17 percent made similar searches in April. “There wasn’t much difference in cross-shopped brands before and after the scandal hit in September,” said Aaron Lewis, senior communication manager for

The auto industry has been rocked in recent months by revelations that Volkswagen cheated federal pollution standards by rigging cars to activate pollution-reducing software only during testing, and Mitsubishi falsified data on gas mileage test results.

Additionally, a massive recall of defective air bag inflators that were made by Japanese supplier Takata has recently been doubled to include approximately 35 million to 40 million more of the faulty parts, which has impacted about 17 brands. Honda, Fiat Chrysler and Toyota have had the most air bags recalled.

Volkswagen’s market share has dropped since the scandal hit. In the first four months of 2015, VW captured 3.1 percent of U.S. market, according to Autodata Corp. That had dropped to 2.8 percent in the same period of 2016. Mitsubishi’s share of the market stayed steady at 0.6 percent.

Ford and Fiat Chrysler picked up market share in the first four months of 2016: Ford had 15.6 percent of the market, compared to 15 percent during the same period a year ago. And Fiat Chrysler increased its share to 13.4 percent from 12.8 percent. GM’s share fell to 16.9 percent from 17.6 percent.

Analysts said the numbers paint a picture of relatively stable sales in the U.S. auto industry, despite the rash of recalls and emissions problems that have cropped up among multiple brands. And Brenna Robinson, a spokeswoman for car-shopping website Kelley Blue Book, said Volkswagen’s market share was declining even before its diesel scandal, in part because it lineup skews heavily toward cars at a time when the market is demanding SUVs and crossovers.’s Lewis said the impact of the Takata scandal is still being sorted out since it was expanded so recently. In fact, Toyota appears to be gaining customer interest. “The only brand that sort of stands out to us is Toyota, which closed in on Ford as the No. 2 cross-shopped brand,” he said.

Researchers at Kelley Blue Book said they have mostly seen lateral moves between similar automakers like Mitsubishi and Nissan, based on their analysis of brand searches on their website.

Joanna Pinkham of Kelley Blue Book said the website has seen a jump in cross-shopping from Volkswagen toward Subaru (increased 17 percent from September 2015 through April) and Nissan (increased 15 percent from September through April). Those looking at Mitsubishis increasingly cross-shopped Nissan (up 14 percent from September through April).

“Looking at cross-shopping, we don’t see any significant jump toward domestic brands by Volkswagen or Mitsubishi shoppers,” Pinkham said. “Ford continues to be in the top five most cross-shopped brands, and Chevrolet remains in the top 10,” Pinkham said.

“This is not surprising, as these two OEMs (Nissan and Subaru) have not been associated with Takata recalls like Toyota and Honda have,” she concluded. “So for Volkswagen and Mitsubishi owners who are trading in, again, no significant jump toward the domestics.”

Jim Gillette, an independent auto analyst based in Grand Rapids, said it would take persistent delays in repairs for Takata air bags for a pronounced change in the buying habits of U.S. drivers to take shape. “The buying public, for the most part, identifies more with particular brands than with foreign vs. American,” he said.

“I don’t believe the issue is one of purchasing ‘foreign’ vs. ‘Detroit Three’ brands. After all, Chrysler is now owned by Fiat, the Italian maker.”

Gillette added, “Takata’s air bag issue is different only in its magnitude. Certainly the General Motors ignition switch fiasco killed far more people than exploding air bag canisters and we have not seen any evidence that any consumers moved to other brands specifically for that reason, although quality problems over a period of decades took their toll on GM’s brand loyalty.”

Automakers who are marketing imports to U.S. customers have denied that the Takata air bag issue will reflect poorly on them.

“The premise that Takata air bag inflator recalls affecting nearly every brand in the industry would uniquely affect the reputation of any particular brand is simply not true,” Honda U.S. spokesman Chris Martin said in an email.

“With over 22 automotive brands’ vehicles included in Takata air bag inflator recalls, including each of the ‘Big 3’ U.S. domestic automakers along with Asian and European nameplates, we believe that consumers understand that it is an industry issue rather than a ‘foreign autos’ issue.”

U.S. automakers, meanwhile, are also wary of taking a victory lap because of the air bag and emissions problems that have plagued their competitors based in other countries.

‘Smart products’ credited

“The growth at GM/Chevrolet stretches back to last April,” said Jim Cain, a business spokesman for Chevrolet. “It has more to do with smart products we’ve made in the hottest segments like trucks and SUVs.”

Cain said the Chevrolet Malibu sedan has gained “pretty significant market share” in recent months in markets along the East and West coasts. But “any impact of distressed competitors is probably at the margins,” he said.

U.S. automakers have also had problems with regulatory violations in recent months. GM reported to the Environmental Protection Agency earlier this month that it discovered about 170,000 model-year 2016 SUVs were shipped with window stickers that overstated estimated fuel economy by 1 to 2 miles per gallon. The company will compensate 130,000 retail customers.


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