2014 Chrysler 300 Base on 2040-cars

Auto blog

The next steps automakers could take after sales drop again in April

DETROIT (Reuters) - Major automakers on Tuesday posted declines in U.S. new vehicle sales for April in a sign the long boom cycle that lifted the American auto industry to record sales last year is losing steam, sending carmaker stocks down. The drop in sales versus April 2016 came on the heels of a disappointing March, which automakers had shrugged off as just a bad month. But two straight weak months has heightened Wall Street worries the cyclical industry is on a downward swing after a nearly uninterrupted boom since the Great Recession's end in 2010. Auto sales were a drag on U.S. first-quarter gross domestic product, with the economy growing at an annual rate of just 0.7 percent according to an advance estimate published by the Commerce Department last Friday. Excluding the auto sector the GDP growth rate would have been 1.2 percent. Industry consultant Autodata put the industry's seasonally adjusted annualized rate of sales at 16.88 million units for April, below the average of 17.2 million units predicted by analysts polled by Reuters. General Motors Co shares fell 2.9 percent while Ford Motor Co slid 4.3 percent and Fiat Chrysler Automobiles NV's U.S.-traded shares tumbled 4.2 percent. The U.S. auto industry faces multiple challenges. Sales are slipping and vehicle inventory levels have risen even as carmakers have hiked discounts to lure customers. A flood of used vehicles from the boom cycle are increasingly competing with new cars. The question for automakers: How much and for how long to curtail production this summer, which will result in worker layoffs? To bring down stocks of unsold vehicles, the Detroit automakers need to cut production, and offer more discounts without creating "an incentives war," said Mark Wakefield, head of the North American automotive practice for AlixPartners in Southfield, Michigan. "We see multiple weeks (of production) being taken out on the car side," he said, "and some softness on the truck side." Rival automakers will be watching each other to see if one is cutting prices to gain market share from another, he said, instead of just clearing inventory. INVESTORS DIGEST BAD NEWS Just last week GM reported a record first-quarter profit, but that had almost zero impact on the automaker's stock. The iconic carmaker, whose own interest was once conflated with that of America's, has slipped behind luxury carmaker Tesla Inc in terms of valuation.

Minivans could be key to Google-FCA self-driving partnership

Executives from Google and Fiat Chrysler Automobiles have held discussions about creating a technical partnership, the purpose of which would be to further development of self-driving vehicles, according to multiple reports. The two companies might make ideal partners. Google has been at the forefront of developing autonomous technology, and has publicly stated it'd seek partners to build vehicles. FCA, meanwhile, has not invested in self-driving research, and its CEO has been publicly offering the company up for acquisition for the last several years. Combined, they could make both the brains and the bodies of self-driving cars. "Public transit executives could be buying autonomous minivans rather than expensive buses." – Chris Urmson "A Google-FCA tie-up could simultaneously put both companies in the lead in this critical race," said Kelley Blue Book senior analyst Karl Brauer. "... FCA's efforts to merge with another automaker have failed, but if the automaker can join forces with Google, it could immediately change the dynamic. Every car company is trying to get into the tech space right now, because they all know their future depends on it." A Google spokesperson declined comment on the reports Thursday, and FCA did not return a request for comment. But Chris Urmson, director of Google's self-driving car project, may have inadvertently hinted at the partnership Wednesday when he detailed an interest in building autonomous minivans for public-transportation use. "Public transit executives could be buying autonomous minivans rather than expensive buses," Urmson said during a public meeting on autonomous regulations held by the National Highway Traffic Safety Administration in Palo Alto, California. "Federal standards determine what kinds of vehicles cities can use for transit. This needs attention." Minivans are different than the Lexus 450h and pod-like prototypes Google has used for autonomous testing so far. If Urmson is indeed interested in self-driving minivans that provide on-demand services for public transportation users, as he elaborated upon, there may be no more perfect partner than Chrysler, which pioneered the minivan segment three decades ago and recently reasserted its presence the minivan market with the new Pacifica, a completely redesigned vehicle. Ridding the urban environment of traffic-clogging buses might be one small slice of Google's broader plan for transforming cities and the imprint cars make upon them.

FCA to pay buyers $1,700 to swap out of scandal-mired VWs

FCA is trying to gain some sales from arch-rival VW in the competitive European market by offering potential buyers in Italy up to $1,700 to swap into an FCA group car. While the promotion isn't specifically targeted at TDI owners affected by the emissions scandal, it is clearly intended to turn dissatisfaction with VW's defeat device cheat into additional sales, Bloomberg reports. The 500-1,500 euro incentive (roughly $560-1,700, depending on vehicle) stacks on top of any other rebates or deals applicable, and applies if a buyer brings in any of Volkswagen Group's cars – including Audi, Skoda, and SEAT, among (many) others. As Bloomberg notes, it's normal for automakers to offer "conquest" deals – giving a buyer cash for trading in a competitor's vehicle. Those deals aren't usually limited to one company's products, however; FCA's program looks specifically to take advantage of VW's legal and public relations nightmare. FCA isn't the only automaker trying this trick in Italy. Automotive News Europe also reported that Ford is offering approximately $840 in incentives across its entire range to owners of VW vehicles seeking to trade in for a Ford. No word of yet as to whether these incentives will spread beyond Italy or to other automakers.Related Video: