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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.

Infiniti's new VC-T changes the rules of small turbocharged engines

The upcoming Infiniti QX50 crossover does not get our pulse racing, no matter how shapely the QX Sport Inspiration concept that previews it may be. No midsize SUV does, to be fair. But it has something special under the hood – the world's first production variable-compression-ratio engine. That means the QX50's 2.0-liter turbo four, which makes 268 horsepower and 288 pound-feet of torque, will have up to 27 percent better fuel economy. Here's how it works. The trend of moving to smaller, turbocharged engines carries with it one big falsehood. Under low load when the turbo isn't needed, these engines are less efficient than an equivalent engine without a turbo because of the low compression ratio the turbo requires. That is, if you never need the extra power, you're wasting fuel. Turbocharged (and supercharged) engines use a lower compression ratio to prevent detonation. When you force extra air in a cylinder and mix it with fuel, it's more likely to prematurely go boom. Lowering the compression ratio prevents this problem, but it's less efficient. Infiniti's VC-T promises the best of both worlds, with a compression ratio that ranges from 8.0:1 for high-power turbo needs to a 14.0:1 ratio for fuel-sipping efficiency. At its heart the VC-T engine is a simple idea, but it's complicated to explain. Consider yourself warned. The photo below from Infiniti serves as a good visual overview. For the truly nerdy, this patent application covers the mechanical concept. Instead of having the pistons connected to the crankshaft, Infiniti's engine has a pivot arm with a connection on each end. One end connects to the piston, the other connects to a second lower shaft, which is controlled by an actuator arm. At any given time the engine's pistons move up and down according to the lobes on the crankshaft. But the actuator arm can change the angle of the pivot arm up and down. That is, the pistons still move in the same motion with the same stroke, but phase the entire stroke up or down. Move the pivot up and there's less room at the top, which means a higher compression ratio. Move the pivot down and the compression ratio goes down, too. As an added bonus, the lower shaft eliminates the need for counter-rotating balance shafts. Infiniti says this system works constantly and can vary the compression ratio to any number between 8:1 and 14:1. It also uses electronic variable valve timing on the intake valves to switch into Atkinson-cycle combustion for greater efficiency.

Infiniti brand will finally make its debut in Japan, but not the name

Nissan left the automotive media scratching its collective head when it announced that its Infiniti luxury brand would be renaming all of its vehicles, with cars wearing the Q designation and CUVs/SUVs wearing the QX badge. So the G Sedan became the Q50, and the G Coupe became the Q60. The QX56, meanwhile, became the QX80, and the FX crossover became the QX70. It is still thoroughly confusing nearly a year later.
Not content to confuse its US customers alone, Nissan will be fiddling with the name of one of its most revered Japanese-market models - the Skyline. Rebadged for the US as the Q50, and before that as the G Sedan/Coupe, the new Skyline will wear an Infiniti badge. What makes this truly confusing, though, is that the car won't be called the Infiniti Skyline, despite its badging. It won't even be called the Nissan Skyline, anymore. It's now just the Skyline. Apparently, Nissan thinks it can capitalize on the Skyline's link to the Japanese royal family (the Skyline was originally a product of Prince Motors, which provided vehicles for the Emperor and his family), by ditching any brand names and referring to it as its own model, according to Automotive News.
Now, confusion aside, there are things about Infiniti badging in Japan that make sense. Badging all the Nissans that eventually become Infinitis as Infinitis in the first place goes a long way to make the brand seem separate and distinct from its parent company. Speaking to AN, Infiniti's executive vice president of global product planning, Andy Palmer, puts it this way, "We have to treat Infiniti, if you will, in the same [way] that Volkswagen treats Audi. It's not a Nissan-plus. Infiniti has to stand head-to-head with any of those German competitors."