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Q1 2017 – When One Door Closes, Another Opens

We review all the major news events in the automotive industry from the first quarter of 2017.

Manufacturing

Soon to join Ford and Holden among the casualties within the local automotive scene, Toyota announced plans to close its engine casting and manufacturing facilities on October 3 this year. Australian car part manufacturers could be the beneficiaries, with local parts being touted for use in foreign diplomats cars.

On a global level, the arrival of US President Donald Trump shook things up for automakers, with some of the biggest names under scrutiny for prioritising investment outside the USA.

Despite its issues, Volkswagen claimed the mantle to become the world’s largest auto manufacturer.

 

Safety and Environment

In what is another troubling case, authorities seized over 500,000 fake and counterfeit car parts in Abu Dhabi that were destined for Australia. The issue continues to be one proving troublesome for the industry. In an announcement to combat the problem, the Federal Chamber of Automotive Industries will implement a new system designed to stop fake parts at the border.

In recent days, the AAA has played a flat bat to the Federal Government’s assertion that motorists would save fuel with the introduction of stricter emissions standards. The remarks come as 17 out of 30 vehicles tested on Australian roads exceeded fuel consumption figures by an average of 25%.

Overseas, and Norway took the radical step to temporarily ban diesel cars in Oslo to reduce pollution. The nation’s measures seem to be working though, with the proportion of EV sales to new cars upwards of 50% this year. The UK has also seen record numbers for registration of EVs.

A large spate of Australian recalls closed out the quarter, with 14 separate announcements made by the ACCC in the first fortnight of March.

 

Technology

Self-driving vehicles received a shot in the arm via an announced partnership between GM and Lyft that will include the largest autonomous test set for next year. In Australia, the South Australian Government committed support to 7 driverless programs. Intel announced a $20bn acquisition of autonomous vehicle technology firm Mobileye, indicating it may well want a piece of the automotive supplier landscape. Germany meanwhile, approved a draft law to allow the technology onto roads.

In disappointing news for technologists and environmentalists, local sales figures showed a huge slump for electric vehicles in 2016 despite the year being a record for new car sales. BMW Australia pinned this on the Federal Government, arguing a lack of incentives has failed to convince motorists to buy electric vehicles.

Meanwhile, the Federal Government has committed to invest $55m into technology designed to improve traffic flow and alleviate congestion on our roads.

Another technological highlight saw Mazda propose the removal of spark plugs in favour of a new, world-first fuel technology destined for local drivers.

 

Legal and Regulatory Issues

Formally, Volkswagen pled guilty in a US court over its Dieselgate saga, with fines exceeding US$4bn. This hasn’t closed off all cases however, with numerous other lawsuits in progress. Also looking to put a line under its own saga, Takata agreed to pay $1.2bn in a US court,

Meanwhile, with a local class action in progress, the CEO of Choice called on Volkswagen to offer compensation to local motorists, and the ACCC took exception to reports of waivers from the automaker absolving responsibility. The ACCC also commenced action against Audi for alleged misleading conduct regarding diesel emissions, but the matter has not yet progressed with any further detail.

In a separate matter, the consumer watchdog has indicated it will ban flex commissions for car salesmen.

Renault and Fiat also drew the attention of prosecutors and regulators for diesel emissions cheating concerns. A slew of other manufacturers like Toyota, Peugeot, Citroen, Ford are also rumoured to be subject to investigation, suggesting the industry issue is far from over.

Also before the courts, Tesla was cleared of responsibility in a fatal crash involving one of its autonomous vehicles last year. The decision could have thrown a spanner into the works for a multitude of companies currently betting driverless vehicles will be the way of the future. Lastly, in another autonomous vehicle dispute, one of Google’s subsidiaries and Uber remain locked in a legal battle regarding intellectual property theft.

 

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