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Manufacturers Face Increasing Scrutiny but are Intent on Innovating

‘Development’ was the key word during the second quarter of the year, with manufacturers and regulators making progress in a wide range of areas – not without controversy either!


Auto manufacturers from Asia were the biggest talking point of the quarter, with several stories casting light on unscrupulous practices. Mitsubishi was the first of three auto makers exposed – the company confirming it had lied about the fuel economy performance of its minicars for the last 25 years.

Suzuki was next to acknowledge its own wrongdoings – illegal fuel economy testing for its Japanese vehicles. And earlier this month, Nissan faced criminal charges from the South Korean government after being caught in an emissions cheating incident. However, the Asian sector was supported by merger activity, with Nissan attaining “effective control” of Mitsubishi.

Volkswagen recently settled a $20b civil claim against it in the US, however, the manufacturer is still facing numerous other proceedings across the world for its infamous ‘Dieselgate’ scandal. Meanwhile, in Australia, Ford became the subject of its own legal battle after a class action was filed against the company for “unsafe” transmissions in over 60,000 of its vehicles.

Lastly, several manufacturers hedged their bets on the future of the industry. BMW, Toyota, Volkswagen and even Apple all signed partnerships with ridesharing companies, while Fiat Chrysler formed a self-driving partnership with tech giant Google.



Safety and Environment

While the Takata airbag recall surged towards 78 million vehicles worldwide, there were fewer major safety incidents throughout the quarter. One troubling report was the discovery of 33,000 fake Toyota safety parts in a Chinese factory, destined for Australia.

Toyota recalled 3.4 million cars over airbag and fuel tank concerns, while the Australian arm of Jeep Chrysler issued a recall for 50,000 auto vehicles which could roll away when left in park setting. This however, would pale in comparison with news at the end of June from Mitsubishi and Toyota, recalling nearly 500,000 and 324,000 cars respectively.

Google meanwhile, is considering an innovative approach to combat the increasing number of pedestrian fatalities, patenting a design for vehicles with sticky bonnets that would prevent secondary impacts after a pedestrian is struck by a car.

On the environmental front, Australia was left embarrassed by research showing it ranked equal 31st for global vehicle CO2 emissions. With an absence of legislation set to address this, while other countries make progress, things are unlikely to improve soon.




With Tesla releasing its highly sought after Model 3, electric vehicles were buoyed by notable publicity. In its footsteps, Volvo is aiming for 1,000,000 electric vehicles by 2025, while Mercedes-Benz announced plans for a 500km, five minute recharge EV – potentially as part of a dedicated EV brand. Nissan unveiled plans to develop the world’s first engine powered by a solid oxide fuel cell (SOFC) as well as bio-ethanol electric power. Toyota however, reaffirmed their long-term commitment to hydrogen power.

Mazda and Volvo adopted opposing views regarding any move to rely on self-driving technology. The former proposing that such technology should only be used as support, whereas Volvo foresee autonomous cars operational in Australia by 2021. Subaru are partnering with IBM to establish a data system that would replicate autonomous driving traits and eradicate vehicle accidents.




As new sales continued to surge to record levels, Ford recorded a rebound in sales with a sixth consecutive month of sales growth – overtaking Holden for the first time since 1999. International auto makers remained the preferred brands of choice, while an increasing number of 4WDs and utes from Asia were being favoured ahead of local options.

Regulatory Issues

In response to emissions concerns, Norway proposed legislation that would ban the sale of new petrol and diesel cars from 2025, while India advocated for all cars to become electric by 2030. China looks set to allow the importation of parallel import vehicles, while in Australia, Nick Xenophon confirmed he would oppose local changes in this area. Finally, the SA government embraced self-driving vehicles by becoming the first state to permit controlled testing.

One comment

  1. Billnix says:

    The Norwegians of course can afford to ban the sale of petrol and diesel powered vehicles and mandate only electric cars after 2025. Norway is one of the countries with the highest per capita availability of hydro electric power in the world. If only Australia could say the same.

    July 20th, 2016 at 4:02 pm