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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.

Waymo self-driving taxis in Arizona are now carrying paying passengers

CHANDLER, Ariz. — Alphabet's Waymo on Wednesday launched a significant development in its costly, decade-long quest for autonomous transportation: Its self-driving taxis are now actually generating fares. With little fanfare, the company has begun charging passengers to use its driverless vehicles in a roughly 100-mile (160 km) zone in four Phoenix suburbs — Chandler, Tempe, Mesa and Gilbert — where it has been testing its technology since 2016. Producing revenue is a strategic milestone, putting Waymo ahead of U.S. rivals, primarily General Motors' Cruise Automation and Uber Technologies, which have yet to launch their own paid self-driving services. All are racing to win customers and recoup billions spent developing the technology. To use Waymo's service, dubbed Waymo One, riders must download an app and provide a credit card number, similar to ride-sharing services Uber and Lyft. A human driver will be behind the wheel, but only to intervene in case of emergency. Major challenges remain, starting with technical hurdles. A Waymo One taxi tested by Reuters last week proved slow and jerky at times. Whether customers will continue using the service once the novelty wears off remains to be seen. Regulations governing the industry across the country are an incoherent patchwork, a significant hurdle to fast expansion. Waymo would not say exactly how many of its cars would be on the road in Arizona. It said its around-the-clock service initially would be limited to "hundreds" of people invited to sign up last year. For now, pricing is roughly in line with that of Uber and Lyft. A 15-minute, 3-mile (4.8 km) drive taken by Reuters last week cost $7.59, just above the $7.22 offered by Lyft. "Over time, we hope to make Waymo One available to even more members of the public," Chief Executive John Krafcik wrote in a blog on Wednesday. "Self-driving technology is new to many, so we're proceeding carefully." 10 million miles, $1 billion The company has been testing its driverless cars for a decade. Its fleet, now numbering 600 vehicles, has logged more than 10 million miles on public roads in and around 25 U.S. cities. Alphabet does not disclose its total investment, but industry experts put that sum at well over $1 billion. Monetizing driverless technology has been slow going.

Taking a truly driverless ride in Waymo's Chrysler Pacifica

Today was a first for me: I drove in a fully autonomous vehicle on roads without anyone behind the wheel. They weren't public roads, but they did have intersections, other vehicles, pedestrian traffic, cyclists and more, and the car managed a fairly long route without any human intervention — and without any cause for concern on my part. I've done a lot of self-driving vehicle demos, including in Waymo's own previous-generation Lexus test vehicles, so I wasn't apprehensive about being ferried around in Waymo's Chrysler Pacifica minivan to begin with. But the experience still took me by surprise, in terms of just how freeing it was once it became apparent that the car was handling things all on its own, and would continue to do so safely regardless of what else was going on around it. Waymo's test track at Castle (more on that facility here) included multiple intersections with traffic lights, a roundabout, cars stopped on the shoulder, crossing foot band cycle traffic and more. Even if these were staged, they'd be hard to replicate in exact detail every time, so despite the fact that Waymo clearly had more control here than they would out in the real world, the driving experience was still impressive. In particular, one event stuck with me: A squirrel (or other small rodent, I'm no expert on the fauna of Northern California) darted out quickly in front of the car, before turning back off the road – but the vehicle perceptibly slowed in case it needed to avoid it. Barring an incredibly lifelike animatronic, this isn't something Waymo could've planned for. Regarding how it actually works, once in the vehicle and buckled up, a rider taps a button to start the ride, and then displays mounted on the backs of the front seats show a visualization of what the car's sensors see, but selectively simplified and redesigned to draw focus to things that riders find important, and to reassure them about the system's competence and ability to spot all the key variables on the road. This is essentially the same car driving riders around Chandler, in Phoenix, where the current Waymo pilot is operating. It's still essentially a stock Pacifica van, with a premium trim upgrade, but included features in that vehicle, including the many USB ports for charging located throughout, the dual screens mentioned above on the seat backs, and the rear cabin AC and climate controls all make it particularly well suited to the task of putting the rider first.