Waymo Retires Iconic “Firefly” Vehicles

Google’s self-driving car company Waymo is retiring its iconic “Firefly” self-driving vehicles from testing fleets after three years in service. The Firefly, which were widely known as “the koala cars,” are being replaced by Waymo’s expanding fleet of Chrysler Pacifica plug-in hybrid autonomous minivans. This transition comes as Waymo moves toward commercial availability, including an “early rider program” in Phoenix, Arizona.

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Where’s The Outrage Over GM & Chrysler?

Closer than you think...

Closer than you think…

In my latest post at BloombergView, I look at Donald Trump and Hillary Clinton’s attempts to tap into the populist anger over the auto industry and am left wondering why neither is willing to attack the automakers who actually received bailout money. Trump has taken on Ford’s decision to double production capacity in Mexico and Clinton has attacked the supplier Johnson Controls for relocating to the UK in an “inversion” deal with Tyco, yet neither of these alleged automotive evildoers come close to matching the perfidy of the two bailed-out automakers. To wit:

General Motors, which received a $50 billion bailout, has received a net federal tax advantage of $52 million over the last three years in spite of billion-dollar profits, thanks to a controversial government decision allowing it to carry tens of billions of dollars in operating-loss credits through bankruptcy. GM is also leading the way on importing vehicles from China, and has focused its global export and R&D strategies around that huge potential market in the years since taxpayers bailed it out. Just like Ford, GM is doubling its Mexican production capacity, spending $5 billion on new assembly jobs south of the border.

Meanwhile, FCA isn’t even based in the U.S., having fled to a U.K. tax domicile after receiving more than $10 billion in bailout funds. Putting Fiat’s Italian plants in front of the line for new production, FCA anticipates that its North American production will remain flat through 2018 while imports from outside North America will expand to more than 10 times 2013 levels

This is at the heart of populist anger over the auto industry: Even if the bailout was necessary as an emergency measure, it’s failed to change the behavior of the firms who benefited from it or to deliver any reversal in the fortune for U.S. workers. Fiat-Chrysler survived to become a foreign firm by every possible metric, and GM became a tax-dodging Trojan horse for Chinese cars. And yet no American politician — Democrat or Republican, establishment or renegade — seems able to even identify these real culprits.

Not convinced that the automakers we bailed out are bad corporate citizens of the US? Read on…

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FCA Feels The Crunch

Stuck in neutral... (courtesy: Bernstein Research)

Stuck in neutral… (courtesy: Bernstein Research)

Ever since Sergio Marchionne offered the auto bailout team a home for a bailed-out Chrysler, his Italo-American hodgepodge has been held together with bootpolish, high hopes and strong demand for trucks and SUVs. Had the Jeep and Ram brands been spun off to any other automaker, the Fiat, Chrysler and Dodge brands would almost have certainly ended up in a bankruptcy sale. Instead the House of Chrysler’s two perennial profit centers have found themselves stuck propping up failing mass market brands, just as they were under Cerberus and Daimler-Chrysler management. In the meantime, Chrysler’s cross-town rivals have improved their cars enough to push their truck-powered profit margins towards the 10% level in North America.  But despite strong growth in sales growth, volume and mix, FCA’s North American margins are “bizarrely low” according to research by Bernstein. And their research shows that the bootpolish is really starting to wear thin…

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Chrysler Is Still Waiting For Its Quality Turnaround

Who's laughing now?

Who’s laughing now?

In 2009, when Sergio Marchionne’s team presented the first five-year plan for what would become Fiat Chrysler Automobiles (FCA), his VP for Quality Doug Betts told attendees that Chrysler’s quality problems would soon be a thing of the past. Thanks to Fiat’s superior fit-and-finish standards and “World Class Manufacturing” system, Chrysler hoped to match the best mass-market competitors on quality by 2012 according to Betts. Three years after that initial goal had passed unaccomplished, Betts is gone but FCA’s US-market brands are still occupying the bottom tier of Consumer Reports’ most recent automotive quality survey. With quality problems plaguing even its “halo” Hellcat and Ecodiesel engines as recently as last week, it’s clear that Marchionne hasn’t been able to bring the long-term quality backmarker up to pace.

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It’s (Not Even) About Ethics In Automotive Journalism

Advertisement or just plain old "car content"? Or is there a difference?

Advertisement or just plain old “car content”? Or is there a difference?

The first time I ever watched “The World’s Fastest Car Show,” I was on an airplane. I can’t remember the airline, but when I took my seat on the flight, an episode showing a shootout to crown “The World’s Fastest Sedan” was playing on the seatback screen in every row. At the time I didn’t think twice about it, assuming it was simply an advertisement for the winning Dodge Charger Hellcat. I’d previously seen a similarly-produced segment featuring the Lincoln MKS “competing” for the affection of a bunch of actors portraying luxury car buyers, and that was unmistakably advertising. After all, everything that runs on those seatback screens pre-flight are clearly paid-for advertisements.

So imagine my surprise this morning, when Jalopnik’s Editor-in-Chief Matt Hardigree tweeted a link to a Kinja Post from “The World’s Fastest Car Show” which stated that the segment I had seen on that airplane was “banned” from Motor Trend’s YouTube channel.

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Black Friday Deals Behind The Chrysler 200’s Hot Sales

On closer inspection...

On closer inspection…

After years of having to put a brave face on what everyone knew was just an updated Sebring, Chrysler’s 2015 200 was supposed to be the brand’s bold return to the midsized segment. Reviewers gave mixed-to-positive reviews, all concluding that the new 200 is a definite step up from the old model. Sales were up over 150% Year-Over-Year in November… so has Fiat’s CUSW platform made Chrysler competitive in the hotly-contested midsized sedan segment?

As the numbers above indicate, probably not. According to national sales data from TrueCar’s website, only the cheapest model of the new 200 (LX FWD) is selling close to MSRP ($68 above, actually). Every other trim of the new 200 is selling at deep discounts, despite having launched just this year. In fact, consumers spent less on average for the second level (Limited FWD) than the base trim, and average discounts for the top trim reach nearly $4,000. Though it’s impossible to know what the average of these averages is without knowing the sales mix, the fact that the typically loss-leading lowest trim is the only one maintaining any pricing discipline, its clear that this brand-new car is buying market share in hopes of appearing successful. Given that Edmunds says the Chrysler brand as a whole averaged a 20% discount in October, it’s clear that FCA’s attempt to transform Chrysler into a mass-market offering is not going to be a gimme.

That hurts: Chinese government punishes Audi and Chrysler for price fixing. More fines to come

Winterkorn in Beijing - Picture courtesy Bertel Schmitt

Foreign brands own more than 70 percent of the world’s largest car market China, and they are taking home outsized profits. China’s government is putting an end to this. China’s antitrust regulator, the National Development and Reform Commission (NDRC), found Audi and Chrysler guilty of monopoly practices. “They will be punished accordingly in the near future,” NDRC spokesman Li Pumin told Reuters. The still unannounced fines can be up to 10 percent of the automaker’s domestic annual sales revenue. [Continue Reading]

Chrysler’s Canadian Breakdown

 

Southbound and Down? (Courtesy: canadianmetalworking.com)

Brampton: Southbound and Down? (Courtesy: canadianmetalworking.com)

When Chrysler Group LLC announced that it was withdrawing requests for Canadian Government aid earlier this week, my immediate reaction was to think: “there goes another piece of Canada’s auto industry.” Having just months ago watched GM close its Australian operations when it became clear the government there wouldn’t continue to subsidize the industry, it seemed clear that Chrysler would move at least one of its Canadian products to the waiting Toluca, Mexico plant. I was not alone in guessing that Windsor’s minivan plant would be on the block, but in its carefully-worded statement Chrysler indicated it would move ahead with the tool-up for a new generation of minivans there. Chrysler even committed to investing in “substantial product interventions” for Brampton’s Lx platform vehicles (300, Charger, Challenger), which are supposed to hit markets later this year.

So did FCA’s CEO Sergio Marchionne break the political math tying government support to new product investments? Not exactly. He still has plenty of room to maneuver, and lots of possible asks. And the likelihood that a Canada plant will end up losing a Chrysler plant to Mexico remains very high.

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