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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.

Renault's planned luxury sub-brand gets reconsidered

Renault believes there's enough Alpine love to restart that brand with its own model almost immediately. The launch of the Initiale Paris luxury brand it's been mulling, on the other hand, will be more restrained: a report in Autocar says that instead of launching with a first model based on the Mercedes E-Class architecture, Renault is going to introduce an Initiale Paris trim line on the new Clio and Espace. More accurately, that should be 're-introduce and aggressively market,' since Renault has used an Initiale Paris trim over the years since it introduced the concept car (pictured) in 1995, even as recently as the current-generation Laguna Coupe.
Other models will be added after the Clio and Espace, and when Renault can assess what kind of future the trim has, it will decide on the launch of a subsidiary brand. Company CEO Carlos Tavares said we shouldn't hang around waiting for a decision, though, declaring that establishing such a brand - if it even comes to that - "will be a job for at least my successor to worry about, not me."

DC fast charging not as damaging to EV batteries as expected

As convenient as DC fast charging is, there have been lots of warnings that repeated dumping of so many electrons into an electric vehicle's battery pack in such a short time would reduce the battery's life. While everyone agrees that DC fast charging does have some effect on battery life, it may not be as bad as previously expected. Over on SimanaitisSays, Dennis Simanaitis, writes about a recent presentation by Matt Shirk of the Idaho National Laboratory (INL) called DC Fast, Wireless, And Conductive Charging Evaluation Projects (PDF) that describes an ongoing test of four 2012 Nissan Leaf EVs that are being charged in two pairs of two. One pair only recharges from 50-kW DC fast chargers, which the other two sip from 3.3-kW Level 2 chargers exclusively. Otherwise, the cars are operated pretty much the same: climate is automatically set to 72 degrees, are driven on public roads around Phoenix, AZ and have the same set of dedicated drivers is rotated through the four cars. "Degradation depends more on the miles traveled than on the nature of recharging." What's most interesting are the charts on page seven of Shirk's presentation (click the image above to enlarge), which show the energy capacity of each of the four vehicles. When they were new, the four batteries were each tested to measure their energy capacity and given a 0 capacity loss baseline. They were then tested at 10,000, 20,000, 30,000 and 40,000 miles, and at each point, the DC-only EVs had roughly the same amount of battery loss as the Level 2 test subjects. The DC cars did lose a bit more at each test, but only around a 25-percent overall loss after 40k, compared to 23 percent for the Level 2 cars. Simanaitis' takeaway is that, "INL data suggest that the amount of degradation depends more on the miles traveled than on the nature of recharging." The tests are part of the INLs' Advanced Vehicle Testing Activity work and a final report is forthcoming. These initial numbers from IPL do mesh with other research into DC fast charging, though. Mitsubishi said daily fast charging wouldn't really hurt the battery in the i-MiEV and MIT tests of a Fisker Karma battery showed just 10-percent loss over 1,500 rapid charge-discharge cycles.