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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-Nissan promises 10 autonomous models through 2020

Renault-Nissan boss Carlos Ghosn promised back in 2013 to have autonomous technology on the road by 2020, and now the automaker has pledged to have more than 10 models ready in that time with varying levels of autonomous capabilities. The company claims it will offer these systems to customers around the world at affordable prices in major markets like the US, Europe, Japan, and China. Renault-Nissan will introduce driverless tech in multiple phases over the next four years. The first step will come later this year with the introduction of a single-lane autonomous system that will be able to go down the highway and manage stop-and-go traffic automatically. The next innovation in 2018 will offer multi-lane capability, and the ability to automatically pass other vehicles on the road. Another big jump will come in 2020 with the ability for models to navigate intersections and urban areas without a driver's control. Renault and Nissan engineers will develop all of this together, and the results will be available in both of the company's brands. Ghosn explained this roadmap towards an autonomous future last year but cautioned that Renault-Nissan didn't plan to take complete control away from owners. Instead, the company sees these systems as a way to make people even safer behind the wheel by reducing the chance for driver error. The automaker's deliberate introduction strategy is prudent because it can potentially adapt to proposed regulations that could mandate rules on how piloted vehicles operate. RENAULT-NISSAN TO LAUNCH MORE THAN 10 VEHICLES WITH AUTONOMOUS DRIVE TECHNOLOGY OVER THE NEXT FOUR YEARS World's fourth largest car group confirms autonomous drive and connectivity timeline through 2020 Fatal and serious injuries have been significantly reduced; new technologies will help make cars even safer Car group hires new executive to oversee connectivity and connected car services globally SUNNYVALE, Calif. – The Renault-Nissan Alliance will launch more than 10 vehicles with autonomous drive technology in the next four years. The global car group confirmed today that it will launch a range of vehicles with autonomous capabilities in the United States, Europe, Japan and China through 2020. The technology will be installed on mainstream, mass-market cars at affordable prices. In addition, Renault-Nissan will launch a suite of new connectivity applications that will make it easier for people to stay connected to work, entertainment and social networks.

Renault, Nissan and Hyundai face shutdowns in India over workers' COVID fears

CHENNAI, India — Automakers Renault, its alliance partner Nissan and Hyundai face temporary factory closures in India due to growing unrest among workers concerned about rising COVID-19 infections. Workers at Renault-Nissan's car plant in the southern state of Tamil Nadu will go on strike on Wednesday because their COVID-related safety demands have not been met, a union representing the workers told the company in a letter on Monday. Hyundai said it would suspend operations at its plant, also in Tamil Nadu, for five days starting Tuesday, after several workers staged a brief, sit-in protest on Monday amid rising cases in the state. "The management agreed to close the plant after workers expressed concerns over safety after two employees succumbed to COVID," E. Muthukumar, president of the Hyundai Motor India Employees Union, told Reuters. The unrest highlights the challenges companies face in India amid a huge wave of COVID-19 infections, an overwhelmed health system and a shortage of vaccines which is making employees more fearful. Tamil Nadu is one of the worst hit states with more than 30,000 cases a day last week. The state, an auto hub known as India's Detroit, has imposed a lockdown until May 31 but allowed some factories, including auto plants, to continue operating. The strike threat at the Renault-Nissan plant came ahead of a court hearing on Monday over allegations from workers that social distancing norms were being flouted and factory health policies did not sufficiently address the risk to lives. Renault-Nissan has said it is following COVID-19 safety protocols. At the hearing, a lawyer for the workers argued that while the company had reduced the number of shifts, production numbers had not been cut and the headcount remained the same leading to crowding on the factory floor. The company told the court it had reduced the workforce to around 5,000 from 8,000. It also said it had vaccinated employees over 45 and was willing to inoculate those under 45 if vaccines were made available. The two-judge bench presiding over the case said that while the health of workers is paramount, if industries go down there will be no place for them to work. They also said the company must not take advantage of the exemption granted by the state and should reduce production to meet only necessary export orders. "The production should have fallen ... You also have to assuage the feeling of the workers," said the court, which will next hear the case on May 31.