2015 LISTS OF 10
December 27, 2015 – 12:01 am ET
Oh, the good life.
U.S. light-vehicle sales climbed for the sixth straight year in 2015, a run of success unmatched in the American car business since that giddy stretch from 1921-26. We all remember those days, right?
Once again we’re living high on the hog.
Stiiiiill, the automotive landscape was blighted this year by another “you-gotta-be-kidding-me” scandal. So even though sales will exceed 17 million in 2015 — and may set a record — Automotive News staffers couldn’t get beyond Volkswagen’s diesel test-rigging humiliation when voting on the most important stories of the year.
In an eventful year, the VW screw-up was a clear No. 1.
But there were lots of other headline-grabbing stories in 2015: Sergio Marchionne tried to prod General Motors into merger talks with Fiat Chrysler; Mark Rosekind arrived as a hard-nosed enforcer at the National Highway Traffic Safety Administration and the industry is waking up to the reality of autonomous vehicles.
Here’s our list of the 10 biggest stories of the year.
1. VW’s ‘clean diesels’ were dirty, and the cleanup will be messy Volkswagen and Audi’s “clean diesel” vehicles provided a sweet niche in the U.S. for the two Volkswagen AG brands, combining driveability and clean emissions – or so it seemed. Then the news broke that VW had cheated on emissions tests with a defeat device, software that turned on emissions controls during testing and turned them off afterward. VW faces the continuing wrath of government regulators as it tries to cope with the problem. It cost CEO Martin Winterkorn his job, as well as those of Audi r&d chief Ulrich Hackenberg and others. Settlement costs are expected to be in the tens of billions of dollars. VW Chairman Hans Dieter Poetsch has admitted that engineers devised the “defeat” software because they couldn’t meet strict U.S. diesel limits otherwise. That dent in VW’s reputation for technical prowess hints at what likely will be the company’s biggest long-term problem – a tarnished image in the minds of its customers.
2. Sergio Marchionne’s ‘Confessions’ pushes for mergers Sergio Marchionne makes waves. But even by Marchionne’s standards, he set off a tsunami in 2015. The Fiat Chrysler CEO issued a manifesto titled “Confessions of a Capital Junkie” in April critiquing the industry’s low return on invested capital. Marchionne’s solution was joint production of some components, such as four-cylinder engines, and, more controversially, a wave of full-scale automaker mergers. Marchionne began campaigning for a merger between FCA and General Motors, but GM rebuffed Marchionne’s overtures. Although it seemed possible that Marchionne might attempt a takeover, in early December he said, “At the moment, we have no intention to do anything hostile.” That seemed to settle things – at least “at the moment.”
3. Sales soar – how high is the ceiling? If sales is a numbers game, 2015 has been pretty darned good. Overall the U.S. auto industry appears poised to exceed 17 million light-vehicle sales, and possibly eclipse the 2000 record of 17.4 million. That would be a sixth straight year of rising sales – a feat last accomplished in the 1920s. What’s more, analysts and industry leaders say fundamentals such as the age of the vehicle fleet and U.S. employment point toward two more years of 17 million sales. Three consecutive years of 17 million U.S. light-vehicle sales would be unprecedented.
NHTSA chief Mark Rosekind is making automakers toe the line on safety.
4. ‘New sheriff’ Rosekind gets tough with automakers Joan Claybrook, former head of the National Highway Traffic Safety Administration, reflected on Mark Rosekind’s leadership of the agency thus: “I think we have a new sheriff in town.” Rosekind took an aggressive stance: extending safety supervision of General Motors, pushing Takata Corp. to acknowledge faulty airbags and upbraiding Fiat Chrysler for a “pattern” of slow movement on recalls. He reinforced the latter point in early December by levying a $ 70 million fine against FCA for what NHTSA termed “failure to report legally required safety data.”
5. No strike, but UAW talks were nail-biters UAW workers didn’t strike during the contract negotiations with the Detroit 3 this year. But the talks got pretty tense. Underlying resentment about the lack of raises for Tier 1 workers and, more importantly, the classification of newer hires into lower-paid Tier 2 slots burst out when Chrysler workers rejected the initial deal offered them. Crucially, the first tentative agreement failed to offer a pathway for Tier 2 workers to gain pay equal to their more senior union brothers and sisters. That changed with the second deal, which the union passed. In the end, the Detroit 3 gave ground on Tier 2, but got permission to bring in more nonrepresented contract workers.
6. Takata struggles to fix its defective airbags As the Takata airbag crisis went through another year, it became — if anything — more complex. Takata’s airbag propellant can burst its casing and hit vehicle occupants with shrapnel. Eight U.S. deaths have been attributed to the flaw. Technically, the fix is relatively inexpensive, but replacements have to be customized for different vehicles. That, plus the scale of the recall, means that some vehicles may not be fixed for several years. To compound matters, several automakers vowed to stop using Takata airbags. That move could put Takata out of business – further complicating the recall.
7. Maybe cars really are ‘smartphones on wheels’ For years, automakers have been fond of saying that their vehicles are becoming “smartphones on wheels.” Smartphone makers seem to agree. But they also seem to believe that they themselves might as well be making smartphone-mobiles. This year word leaked out from Cupertino, Calif., that Apple had a team of hundreds at work on an electric vehicle code-named Project Titan. Google, meanwhile, hired former Hyundai Motor America CEO John Krafcik to steer its self-driving car program.
8. The move to autonomous vehicles gains momentum — and a date with reality Two factors are driving Japan’s Big 3 automakers to introduce self-driving vehicles by 2020: concern about tech companies grabbing the initiative, and the global stage that that year’s Summer Olympics in Tokyo will offer. Honda, Nissan and Toyota used this fall’s Tokyo Motor Show to say that they will sell autonomous cars by 2020. Nissan Motor Co. CEO Carlos Ghosn said that if Nissan doesn’t push forward, the industry will be invaded by challengers such as Apple, Google and Uber. But also, the 2020 Olympics will provide an opportunity to show off Japanese technology to a worldwide audience.
9. Insurance group revises tests after Ford F-150 disparities There was little question that the four protective steel bars that Ford installed on the F-150 SuperCrew were effective in protecting the passenger compartment in a small overlap crash. The question was why Ford hadn’t put the tubular bars on other F-150 models. The bars – installed in front wheel wells – helped the SuperCrew win the coveted Top Safety Pick rating in the Insurance Institute for Highway Safety’s influential tests. The other models weren’t tested. When the IIHS noticed the discrepancy, it did a highly unusual follow-up crash test and gave an extended cab SuperCab the second-lowest rating of “marginal.” The IIHS will expand its testing.
10. AutoNation breaks with TrueCar, starts online sales site AutoNation embarked on an initiative to reverse its dependency on third-party car shopping sites this year. As of November, its $ 200 million technology and branding bet looked to be paying off. Its self-developed AutoNation Express online tools now drive more than 20 percent of AutoNation sales. AutoNation also severed ties with lead generators TrueCar and Costco. There was another major change for AutoNation this year. COO Mike Maroone, who with CEO Mike Jackson led AutoNation’s retail strategies since Jackson arrived in 1999, retired April 1. Bloomberg contributed to this report.
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