The Truth About Cars » Infrastructure http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 23 Apr 2014 13:30:05 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Infrastructure http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/infrastructure/ Musk: Tesla Will Build Cars In China Within Next Few Years http://www.thetruthaboutcars.com/2014/04/musk-tesla-will-build-cars-in-china-within-next-few-years/ http://www.thetruthaboutcars.com/2014/04/musk-tesla-will-build-cars-in-china-within-next-few-years/#comments Tue, 22 Apr 2014 13:00:56 +0000 http://www.thetruthaboutcars.com/?p=807330 Model S - Tesla Motors China

Though Tesla is now just delivering new vehicles to China, CEO Elon Musk predicts his company will build luxury electric vehicles in the burgeoning market within the next three to four years.

Bloomberg reports the move to localized production would allow the automaker to sell their wares while also avoiding China’s 25 percent import tariff. Right now, a new Model S retails for $118,000 in Beijing due to VAT, shipping and import duties, compared to $71,000 in Los Angeles. Musk hopes to qualify the Model S for local subsidies to help offset costs in much the same way the luxury EV sedan receives federal tax credits back in the United States.

In addition, Tesla is expanding its Supercharger network to China, with Beijing and Shanghai among the first cities to join. No word yet as to how much the automaker is investing in the expansion.

A number of challenges lay ahead for Tesla’s move into the market, including slow adoption of electric vehicles among Chinese consumers and lack of a robust infrastructure, as well the loss of China general manager of operations Kingston Chang prior to the automaker’s entry. That said, Tesla plans to increase overall global sales 56 percent this year, moving 35,000 EVs out of the showroom in so doing.

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GM Sales Unaffected By Recall, Reveals China Expansion Plans http://www.thetruthaboutcars.com/2014/04/gm-sales-unaffected-by-recall-reveals-china-expansion-plans/ http://www.thetruthaboutcars.com/2014/04/gm-sales-unaffected-by-recall-reveals-china-expansion-plans/#comments Mon, 21 Apr 2014 14:00:22 +0000 http://www.thetruthaboutcars.com/?p=806330 File photo of General Motors logo outside its headquarters at the Renaissance Center in Detroit

Reuters reports a lawsuit related to the 2014 General Motors recall crisis filed in federal court in California has placed airbag supplier Continental Automotive Systems U.S. at-fault for its role in the recall. Attorney Adam Levitt of Grant & Eisenhoffer proclaimed the supplier knew about the out-of-spec ignition switch at the heart of the recall as early as 2005, yet “did nothing to redesign its airbags” to deploy even when electrical power was cut, “nor did it warn NHTSA or the public.” Continental joins Delphi Automotive as the second supplier to face a lawsuit linked to the ongoing recall crisis.

Between the National Highway Traffic Safety Administration and GM, Automotive News says the former found itself pushing the latter on a number of occasions to do more than issue service bulletins, regional recalls, warranty extensions and customer-satisfaction campaigns regarding problems ranging from corroded fuel filler pipes in full-size vans and risks of fire from door modules in fullsize SUVs, to malfunctioning airbags in Camaros and Malibus and the aforementioned ignition switch affected over 2.26 million 2003 – 2011 vehicles to date. In a 2013 email released to the public by the ongoing Congressional investigation into the recall, NHTSA Office of Defects Investigation director Frank Borris expressed his frustration with the automaker to GM executive Carmen Benavides over GM’s slow approach to communication and action, as well as needing more provoking to do more than the least amount of effort to resolve an issue.

In more NHTSA/GM news, The Detroit News reports the agency has closed the book on its four-year investigation of 334,000 2004 – 2007 Saturn Ions regarding steering problems after the automaker announced they would recall the cars. Four service bulletins linked to power-steering repairs will be issued by GM, affecting the Ion and Chevrolet Cobalt, as well as the Saturn Aura, Pontiac G6 and Chevrolet Malibu. A total of 10 crashes linked to power-steering failure — with two resulting in injury — 4,787 complaints and 30,560 warranty claims were discovered by the NHTSA during the investigation.

As for bringing the affected vehicles in for service, Automotive News reports GM-affiliated and non-GM dealerships are having a rough time with the recalls, citing a lack of parts, growing backlog of recall-related repairs, and lost sales and dealer-related financing. However, GM President Dan Ammann says the main recall hasn’t had a “measurable impact” on overall sales, citing a 4 percent truck-led U.S. sales gain in March and a “decent start” to April’s sales. That said, Ammann has not ruled out a future impact from the recall news.

In the meantime, GM will invest $12 billion into China by 2017, with plans to boost production capacity 65 percent by 2020 based on expectations of the local market to reach 33 million to 35 million new vehicles made per year by the start of the new decade, which Ammann claims will be double that of total projected U.S. demand at the same time. The expansion would total capacity to 8 million units per year, fueled by 60 all-new or refreshed products introduced to China between now and 2018, including 11 new utility vehicles — such as the Chevrolet Trax — and a new Cadillac model every year through 2016.

Finally, The Detroit News reporter Henry Payne took to heart GM CEO Mary Barra’s statement before Congress about allowing her son to drive an affected Cobalt so long as the key was by itself in the ignition switch, turning up at a local dealership to drive an affected 2006 Cobalt to see for himself what would happen. In short: Nothing involuntary, as Payne had to put the switch into the “accessory” position himself to recreate what may have happened in the reported accidents and fatalities linked to the switch.

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New Nissan Compact Hatch To Lead Fight For Increased European Growth http://www.thetruthaboutcars.com/2014/04/paris-2014-new-nissan-compact-hatch-to-lead-fight-for-increased-european-growth/ http://www.thetruthaboutcars.com/2014/04/paris-2014-new-nissan-compact-hatch-to-lead-fight-for-increased-european-growth/#comments Mon, 21 Apr 2014 13:00:31 +0000 http://www.thetruthaboutcars.com/?p=806258 Nissan_Almera_front_0071129

Eight years after the Nissan Almera left Europe, the automaker is planning a return to the C-segment hatch market in October, with the overall goal of 5 percent overall European market share by the end of FY 2016 in mind.

Automotive News Europe reports the compact hatchback will bow at the 2014 Paris Auto Show prior to going on sale soon after, and will be built in Nissan’s Barcelona, Spain factory, where capacity has been boosted to 80,000 units annually with the aid of a $178 million investment.

As for the Qashqai, which took over for the Almera in Europe upon the latter’s departure to great success, Nissan Europe boss Trevor Mann believes the compact won’t ding sales of the second-gen compact crossover:

In any segmentation you get that cannibalization. We think Qashqai sales will stay level. That car has defied what’s normal. The original annual sales target was 130,000 units. In the first year we made 160,000 units and since then we’ve been making 300,000 units.

Currently, Nissan holds around 4 percent of overall European market share. With the compact hatch leading the way, the automaker aims to own 5 percent by the end of FY 2016 in late March 2017.

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Toyota Looking To Conquer Africa http://www.thetruthaboutcars.com/2014/04/toyota-looking-to-conquer-africa/ http://www.thetruthaboutcars.com/2014/04/toyota-looking-to-conquer-africa/#comments Tue, 15 Apr 2014 11:58:19 +0000 http://www.thetruthaboutcars.com/?p=798514 Toyota Land Cruiser 79 Bakkie

Though Toyota already has a presence in South Africa, the automaker is eyeing the last untapped market in the world: The African continent.

Automotive News reports Toyota patriarch Shochiro Toyoda gave his son, current president Akio Toyoda, a mission last year to explore markets outside of the “Asia-Europe-America” sphere, especially those where the younger Toyoda had not visited. His travels took him to a knockdown factory in Kenya, where there are 40 cars per 1,000 people according to IHS Automotive, laying the early groundwork for an all-out campaign to get as much of the final frontier as possible.

Success in the market may have to come in the long term, however; IHS predicts GDP per capita in Sub-Saharan Africa won’t reach the threshold of $3,000, as well as the ownership rate of 70 units per 1,000 people, until 2030 at the earliest. Toyota Africa CEO Johan van Zyl, who is scouting for new factory locations outside of South Africa, knows this reality well:

It’s a growing market, a market with a future. We have quite an ambitious [annual sales] target. But we must also understand, this is not going to happen overnight. We have to put the right things in place. And that is what we are busy doing, to ensure that we have the right foundation for the business in the future in Africa.

In the meantime, the automaker will launch the Quest compact in South Africa next month. The Quest — based upon the previous-gen Corolla — will help boost production towards full capacity at Toyota’s Durban plant; while max capacity is 220,000 annually, current production is 160,000 units per year. Unlike many auto makers, Toyota is not pursuing a new brand or platform for their new, low-cost car.

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Cadillac Flagship, Redesigned LaCrosse To Be Made In Detroit By 2016 http://www.thetruthaboutcars.com/2014/04/cadillac-flagship-redesigned-lacrosse-to-be-made-in-detroit-by-2016/ http://www.thetruthaboutcars.com/2014/04/cadillac-flagship-redesigned-lacrosse-to-be-made-in-detroit-by-2016/#comments Tue, 15 Apr 2014 11:30:16 +0000 http://www.thetruthaboutcars.com/?p=798938 2013 Cadillac Elmiraj Concept

In light of General Motors’ recent announcement of a $384 million investment in its Detroit-Hamtramck Assembly Plant, two vehicles from Cadillac and Buick could wind up being produced alongside the next-generation Volt.

Edmunds reports IHS Automotive senior analyst Stephanie Brinley expects Cadillac’s all-new flagship to be produced in late 2015, with the Buick LaCrosse — currently assembled in Fairfax, Kan. — joining the flagship in 2016 for the latter’s next redesign.

Though GM hasn’t said much about the flagship, industry insiders claim the vehicle will be aimed at the Audi A8, BMW 7 Series, Lexus LS and Mercedes S-Class, and may be priced as much as $100,000.

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US Energy Department Unveils Four-Year Strategy For Alternative Energy http://www.thetruthaboutcars.com/2014/04/us-energy-department-unveils-four-year-strategy-plan/ http://www.thetruthaboutcars.com/2014/04/us-energy-department-unveils-four-year-strategy-plan/#comments Tue, 15 Apr 2014 11:15:27 +0000 http://www.thetruthaboutcars.com/?p=798026 South_Point_Wind_Farm

The U.S. Department of Energy unveiled last week a four-year plan that would advance the goal of energy security by building upon as many alternative sources as possible, further reducing dependence on imported petroleum.

Autoblog Green reports the 27-page plan illustrates the proposed aims of the DOE to double the amount of energy produced by renewables, improve battery technology, usher in advances in biofuels and hydrogen fuel cells, and push further electrification of vehicles.

In addition, the DOE also has strategies ready for testing the nation’s nuclear deterrent for safety, security and overall effectiveness, as well as boosting the tools needed to bring improvements on the nation’s security infrastructure.

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New PSA Boss Tavares Prepares To Rebuild Company http://www.thetruthaboutcars.com/2014/04/new-psa-boss-tavares-prepares-to-rebuild-company/ http://www.thetruthaboutcars.com/2014/04/new-psa-boss-tavares-prepares-to-rebuild-company/#comments Mon, 14 Apr 2014 14:15:58 +0000 http://www.thetruthaboutcars.com/?p=797482 Carlos Tavares

Though PSA Peugeot Citroen secured funding in a three-way deal between itself, the French government and Dongfeng, new boss and former Renault COO Carlos Tavares has a hard road ahead of him as he rebuilds the ailing automaker.

Reuters reports Tavares will focus using the joint venture it shares with Dongfeng to go after 1.5 million sales by 2020, bring exports to Southeast Asia and establish a research center. He will also tighten up both working capital and the number of models sold in each market, as well as squeeze savings from PSA’s suppliers.

However, development woes, pricing issues on some models, and the use of heavy discounts and incentives are all roadblocks on Tavares’ “Back in the Race” plan expected to be issued in full Monday, as well as currency challenges in Latin America and Russia and lower-cost products from around Asia.

As part of the plan, Tavares is expected to halve the number of models it currently offers. On the bright side, the 308 and 2008 both delivered a combined 5.2 percent sales increase in the first two months of 2014, as well as an 8.5 percent Q1 2014 gain over PSA’s home market.

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Honda Pursues 70k Annual US Fit Sales http://www.thetruthaboutcars.com/2014/04/honda-pursues-70k-annual-us-fit-sales/ http://www.thetruthaboutcars.com/2014/04/honda-pursues-70k-annual-us-fit-sales/#comments Mon, 14 Apr 2014 13:30:26 +0000 http://www.thetruthaboutcars.com/?p=797498 2014-honda-jazz-2015-honda-fit-photo-gallery-medium_17

In 2008, Honda sold nearly 80,000 Fit subcompacts to the United States, and is preparing to move 70,000 annually from the lot to the driveways of America thanks to its new Celaya, Mexico plant.

Ward’s Auto reports the automaker had a difficult time hitting the milestone set in 2008 due to production constraints at home and fervent demand abroad. With the new plant, however, Honda will be able to make 200,000 Fits annually, as well as the Fit-based crossover set to begin production later this year.

As for who Honda expects will buy the 70,000+ Fits aimed for the U.S. market — aside from lifestyle bloggers — product planner Hiroaki Hamaya says the subcompact is already “capturing the highest household income and percentage of college grads.” Data from J.D. Power bears this out: Fit buyers hold an average income of $75,000 while 64 percent of them have graduated college. However, median age and percentage of buyers under 35 currently lag behind competitors such as the Ford Fiesta and Chevrolet Sonic.

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UAW Subpoenas Haslam, Corker To Appear At VW NLRB Appeal Hearing http://www.thetruthaboutcars.com/2014/04/uaw-subpoenas-haslam-corker-to-appear-at-vw-nlrb-appeal-hearing/ http://www.thetruthaboutcars.com/2014/04/uaw-subpoenas-haslam-corker-to-appear-at-vw-nlrb-appeal-hearing/#comments Fri, 11 Apr 2014 09:30:50 +0000 http://www.thetruthaboutcars.com/?p=793666 Governor_Bill_Haslam

Tennessee governor Bill Haslam and U.S. Sen. Bob Corker are just two of the 20 prominent Tennessee witnesses subpoenaed by the United Auto Workers to appear at the union’s hearing before the National Labor Resource Board later this month, where the UAW will appeal the results of the organizing election held at the Volkswagen plant in Chattanooga back in February of this year.

The Detroit News reports the 20 witnesses subpoenaed are ordered to bring emails and documents related to a state government incentive made to VW in the aim of bringing production of a planned midsize SUV to Tennessee. Outgoing UAW president Bob King defended his union’s decision:

The purpose of the NLRB’s investigation is to determine the truth concerning the third-party interference in the February election at Volkswagen’s Chattanooga plant. The NLRB’s rules call for the use of subpoenas as part of this truth-seeking exercise. The UAW hopes that all parties who receive subpoenas will fully comply by providing the NLRB with the requested documents and with their testimony.

The action comes on the heels of an exposé conducted by Nashville CBS affiliate WTVF-TV regarding documents linking the Haslam administration to an incentive proposal made to the German automaker on the alleged condition the plant in Chattanooga remain unorganized; the proposal was withdrawn in January ahead of the election.

Among the others subpoenaed by the UAW include Tennessee house speaker Beth Harwell, economic development commissioner Bill Hagerty, and anti-tax activist Grover Norquist.

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Future Ford Explorers, Expeditions Could Wear All-Aluminium Bodies http://www.thetruthaboutcars.com/2014/04/future-ford-explorers-expeditions-could-wear-all-aluminium-bodies/ http://www.thetruthaboutcars.com/2014/04/future-ford-explorers-expeditions-could-wear-all-aluminium-bodies/#comments Thu, 10 Apr 2014 12:36:08 +0000 http://www.thetruthaboutcars.com/?p=793281 Explorer Sport rear quarter, picture courtesy Michael Karesh

As previously reported by TTAC earlier this year, future Ford Explorers and Expeditions could one day wear aluminium bodies.

Edmunds reports the SUVs could easily go aluminium should Ford decided to do so based on the higher base prices of both vehicles being able to sustain the higher cost of the metal. The Explorer and Expedition could see improved fuel economy from the several hundreds of pounds lost as a result.

Alongside aluminium, Ford also aims to improve the engines, transmissions and aerodynamics in their lineup as the automaker seeks to reduce CO2 emissions annually by 4 percent to meet ever-stringent global standards.

The earliest an all-aluminium Explorer or Expedition could come is 2018, as the U.S. metals industry is stepping up aluminium production in anticipation of more Ford products extensively using the lightweight metal.

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GM Invests $449M Into Next-Gen Volt Production http://www.thetruthaboutcars.com/2014/04/gm-invests-449m-into-next-gen-volt-production/ http://www.thetruthaboutcars.com/2014/04/gm-invests-449m-into-next-gen-volt-production/#comments Wed, 09 Apr 2014 14:10:01 +0000 http://www.thetruthaboutcars.com/?p=791273 2013 Chevrolet Volt Exterior-001

General Motors announced Tuesday that it would invest $449 million into the two plants responsible for assembling the Chevrolet Volt in preparation for the next generation of the plug-in hybrid’s arrival in 2016.

The Detroit News reports $384 million will immediately go into the Detroit-Hamtramck assembly plant for body shop tooling, equipment and other plant upgrades, while the remaining $65 million heads for the Brownstown Township battery assembly plant for expanded production of GM’s advanced lithium-ion batteries, as well as any future technologies that come down the road. The investments are expected to last for the next two years, and would add 1,400 new jobs to both facilities.

As for what fruit the investment will bear, GM vice president of North American manufacturing Gerald Johnson announced the next generation of the Volt will roll into showrooms in 2016 as a 2016 model, with production slated to begin in the autumn of 2015. Though he didn’t go further into what the new Volt would bring to the table, a number of analysts said the PHEV would likely gain an improvement in range over the 38 miles currently provided in electric-only travel.

Further, two new vehicles will accompany the new Volt within the next couple of years, including the Buick LaCrosse — expected in mid-2016 — and an all-new large Cadillac sedan set to be the brand’s flagship that would begin production around the same time as the next-gen PHEV.

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BMW May Build Second NA Plant To Fend Off German Rivals http://www.thetruthaboutcars.com/2014/04/bmw-may-build-second-na-plant-to-fend-off-german-rivals/ http://www.thetruthaboutcars.com/2014/04/bmw-may-build-second-na-plant-to-fend-off-german-rivals/#comments Wed, 09 Apr 2014 14:04:23 +0000 http://www.thetruthaboutcars.com/?p=791289 BMW Spartanburg

In its battle against Mercedes-Benz and Audi for record sales, BMW is mulling over the possibility of a second plant in North America.

Bloomberg reports the automaker would place its second factory in Mexico, with two sites under consideration. The decision to expand will take a few months according to BMW production chief Harald Krueger, Should the move be given a green light, the Mexican plant is likely to build the 3 Series.

The second factory would add to the long-term growth strategy BMW is using to fend off its German premium market competitors in a heated battle for records global sales, fueled by growing demand in the United States and China. Mercedes will add the C-Class to its Alabama facility in June with a new plant in North America due near the end of this decade, while Audi is in the middle of setting up shop in Mexico with a $1.3 billion plant set to produce crossovers beginning in 2016.

Previously, BMW announced it would invest $1 billion to expand its South Carolina plant by 50 percent in 2016, as well as add the X7 large SUV to the X Series lineup currently produced in the plant.

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NHTSA Asked To Investigate Impala Airbags, GM May Compensate Recall Victims http://www.thetruthaboutcars.com/2014/04/nhtsa-asked-to-investigate-impala-airbags-gm-may-compensate-recall-victims/ http://www.thetruthaboutcars.com/2014/04/nhtsa-asked-to-investigate-impala-airbags-gm-may-compensate-recall-victims/#comments Tue, 08 Apr 2014 11:59:32 +0000 http://www.thetruthaboutcars.com/?p=790113 '06-'09_Chevrolet_Impala_Taxicab

Bloomberg reports the Center for Auto Safety, citing a government petition from former General Motors researcher Donald Friedman, is asking the National Highway Traffic Safety Administration to open a defect investigation into 2003 – 2010 Chevrolet Impalas over a glitch in the car’s software that could “misread a passenger’s weight,” preventing frontal airbags from deploying. The agency has 143 records of fatalities linked to failed airbags in the Impala, 98 of which noted the occupants were wearing seat belts at time of death.

The request reflects growing concern over the algorithms used in advanced airbags, designed to meet strengthened U.S. regulations in 2003 after previous airbags were found in 300 cases to prove fatal to small adults and children due to excessive force upon deployment, and where improvements could be made.

Going in-depth regarding the April 2006 sign-off of the improved version of the out-of-spec ignition switch linked to the ongoing 2014 GM recall crisis, Automotive News found that while midlevel engineer Ray DeGiorgio put his signature upon what turned out to be the validation sign-off presented before the Senate hearing last week, former engineers have noted that said document was merely placing “a bow” on a package built upon by several engineers before presentation to GM. The resulting paper trail could shed more light on how the decision came to be made, as the anonymous engineers told the publication said decision to change the part would need to go through several checks and balances before signing-off on the upgraded part.

As for out-of-spec parts in general, Automotive Industry Action Group senior program manager for quality Scott Gray says that while a part may be “out of tolerance,” it may not be “the root cause of a failure” unless said part “affects a component’s fit, form or function.”

At that point, the part would go through two industry-standard protocols: Failure Mode Effects Analysis, and Production Part Approval Process. The first is a constantly updated document that gives engineers the tools needed to evaluate the out-of-spec part and related components in determining where problems could arise prior to approving a design. The second, used by suppliers, determines whether or not the part can be built, with automakers paying for tooling only upon successful completion. Further, if even a single tiny change occurs with the part, the entire part must undergo the protocol again.

CNN Money reports GM is debating on whether or not to compensate affected customers whose relatives were either injured or killed in recall-related accidents prior to the automaker’s emergence from Chapter 11 bankruptcy in 2009. Should GM do so, the liability shield established in the bankruptcy would fall, opening itself to 2,500 lawsuits left behind with “Old GM” in so doing.

Finally, Autoblog Green reports Chevrolet will make an announcement today regarding the next-gen Volt involving a boost of 1,400 jobs and $450 million spent in preparing both the Detroit-Hamtramck Assembly and Brownstown Township battery plant for the updated EV. Speculation of what will be announced include a new platform for the 2016 Volt to an all-new unnamed EV, as well as Opel receiving a vehicle priced lower than the Ampera.

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CARB ZEV Credit Restructuring Leaves Tesla With Fewer Credits http://www.thetruthaboutcars.com/2014/04/carb-zev-credit-restructuring-leaves-tesla-with-fewer-credits/ http://www.thetruthaboutcars.com/2014/04/carb-zev-credit-restructuring-leaves-tesla-with-fewer-credits/#comments Mon, 07 Apr 2014 13:01:11 +0000 http://www.thetruthaboutcars.com/?p=788698 tesla-model-s-logo

A change to the California Air Resources Board’s Zero-Emission Vehicle credit program will leave Tesla with four credits per car cold for the foreseeable future, down from seven credits for every Model S through 2013.

Bloomberg reports the change will award zero-emission vehicles with long-driving ranges and refueling times no greater than 15 minutes — such as the outgoing Honda FCX Clarity, with its hydrogen fuel cell technology — the maximum of nine credits, while Tesla — which had, until now, earned the maximum of seven — will receive four credits going forward due to failing the rapid-refueling requirement.

Tesla, the top seller of CARB ZEV credits to other automakers, has plans to introduce battery-swap stations that would allow drivers to exchange depleted packs for new ones in around one minute. However, until enough of the stations are in place, the 2014 Model S will be rebranded a Type III ZEV going forward.

The new standards — originally meant to be in place by October 2013 — were designed by CARB to emphasize actual use of ZEVs over theoretical capabilities.

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Ford Cuts 950 Jobs In Russia Due To Weakening Ruble, Demand http://www.thetruthaboutcars.com/2014/04/ford-cuts-950-jobs-in-russia-due-to-weakening-ruble-demand/ http://www.thetruthaboutcars.com/2014/04/ford-cuts-950-jobs-in-russia-due-to-weakening-ruble-demand/#comments Thu, 03 Apr 2014 13:21:10 +0000 http://www.thetruthaboutcars.com/?p=786689 Ford-Sollers-Vsevolozhsk-plant

Two plants in Ford’s joint venture with Russian manufacturer OAO Sollers will experience job cuts as a result of a weakening ruble and decreasing demand by customers in the local market.

Bloomberg says 700 positions in St. Petersburg and 250 temporary positions in the Tartarstan region will be let go by June, while production in the former will lose one shift. The cuts were caused by “the rapid and significant depreciation of the ruble, falling industry sales and a consumer shift away” from small cars toward large SUVs according to Ford, who also reassured that the joint venture would continue to remain committed to the Russian market.

As for the current state of things, sales fell 4 percent in the first two months of 2014, following a 5.5 percent decline in 2013 to 2.78 million vehicles, while the ruble lost 13 percent of its value against the dollar within the last 12 months.

The St. Petersberg plant will also shut down for over four weeks before single-shift production and painting begin June 9. The plant currently builds the Mondeo and Focus.

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Leaked Documents Link Anti-Union VW Incentive Offer To TN Governor’s Office http://www.thetruthaboutcars.com/2014/04/leaked-documents-link-anti-union-vw-incentive-offer-to-tn-governors-office/ http://www.thetruthaboutcars.com/2014/04/leaked-documents-link-anti-union-vw-incentive-offer-to-tn-governors-office/#comments Wed, 02 Apr 2014 14:15:09 +0000 http://www.thetruthaboutcars.com/?p=786417 092112_WEB_a_VW_Sign_t618

Leaked documents linked to the United Auto Workers battle for the Volkswagen plant in Chattanooga, Tenn. point to a connection between Governor Bill Haslam and the German automaker regarding a $300 million incentive in exchange for over 1,300 jobs at a proposed SUV plant within the state.

WTVF-TV reports the incentives were contingent “to works council discussions between the State of Tennessee and VW being concluded to the satisfaction of the State of Tennessee.” By the time Volkswagen entered into election talks with the UAW in January, however, the Haslam administration formally notified the automaker that it was withdrawing the offer, citing that it had kept the offer on the table past the 90-day window normally reserved for incentives when the incentive in question had no such expiration date.

Though Haslam has denied any such connection to the incentive — dubbed “Project Trinity” — U.S. Senator Bob Corker claimed as early as February of this year that the offering would be made should the workers at the Chattanooga plant vote against representation by the union.

As for the UAW, organizer Gary Casteel stated the following in response to whether the now-public documents were a game-changer in the union’s appeal to the National Labor Relations Board over the election results:

To me, it puts pressure on the state to do what they should have done in the first place — and that’s give the incentives with no strings attached, just like they would any other company, union or non-union.

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Mitsubishi Buys Laguna Ford Assembly Plant http://www.thetruthaboutcars.com/2014/04/mitsubishi-buys-laguna-ford-assembly-plant/ http://www.thetruthaboutcars.com/2014/04/mitsubishi-buys-laguna-ford-assembly-plant/#comments Tue, 01 Apr 2014 17:06:25 +0000 http://www.thetruthaboutcars.com/?p=785649 Mitsubishi_L300_front_20081009

In a push to expand Southeast Asia sales, Mitsubishi has purchased a Ford assembly plant in Laguna, Philippines for an undisclosed amount.

Automotive News reports the plant, which last saw production in 2012, will start back up in 2015 with an initial capacity of 50,000 units per year, expanding to 100,000 annually. The plant will produce both the Adventure and L300 vans.

The second plant in the automaker’s Philippine portfolio, Laguna is key to underpinning Mitsubishi’s strength in the Southeast Asia market, especially in the emerging local auto market where the automaker is second to Toyota in annual sales.

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Gov. Perry Pushing For Direct Sales In Texas To Attract Gigafactory http://www.thetruthaboutcars.com/2014/03/gov-perry-pushing-for-direct-sales-in-texas-to-attract-gigafactory/ http://www.thetruthaboutcars.com/2014/03/gov-perry-pushing-for-direct-sales-in-texas-to-attract-gigafactory/#comments Thu, 27 Mar 2014 13:09:14 +0000 http://www.thetruthaboutcars.com/?p=782065 Texas Governor Rick Perry circa January 2014

With the possibility of bringing Tesla’s Gigafactory — and its 6,500 jobs — to Texas, Governor Rick Perry is actively pushing for legislation which would do away with the direct-sales ban currently preventing the EV automaker from doing more than presenting their wares to local customers.

The Dallas Morning News reports Perry took his stance on the issue to FOX Business’ “Opening Bell” earlier this week, explaining that it was in the state’s “best interest” to revisit what he says some people would view as “antiquated protections” for Texas’ franchise dealership network:

The people of Texas will say, ‘We don’t need to be protected. We like to be able to negotiate straight away.’ I think it’s time for Texans to have an open conversation about this, the pros and the cons. I’m gonna think the pros of allowing this to happen outweigh the cons.

Currently, Tesla has two showrooms in Houston and Austin, with a third soon to arrive in Dallas. As of this writing, however, none of the trio can do more than provide visitors with information about Tesla’s lineup, prompting interested parties to complete their purchase online or in a state more favorable to direct sales.

The move to allow direct sales would add another incentive for Tesla to build their Gigafactory in Texas, which Perry proclaims would give his state a much-desired cachet. Dallas-Fort Worth Metropolitan New Car Dealers Association president Lee Chapman, however, disagrees with the kind of incentive Perry wishes to use in luring Tesla:

The system we have was put into effect by the state to protect consumers and dealers. [Dealers are] always open to discussion, [but] at this point, we have not been given anything to discuss other than the right to sell cars here in exchange for a plant.

 

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Tesla Reader’s Digest Vol. 1: The Politics Of Dancing http://www.thetruthaboutcars.com/2014/03/tesla-readers-digest-vol-1-the-politics-of-dancing/ http://www.thetruthaboutcars.com/2014/03/tesla-readers-digest-vol-1-the-politics-of-dancing/#comments Mon, 24 Mar 2014 12:19:42 +0000 http://www.thetruthaboutcars.com/?p=779249 Tesla Roadster and Model S

In the first edition of the Tesla Reader’s Digest, Washington state makes nice with Tesla’s business model as Arizona ponders doing the same — while fighting three other states for the right to host Tesla’s Gigafactory, no less. Meanwhile, General Motors pens a letter to Ohio asking the state to force the EV automaker to play by the same rules as they already do, pricing of the Model S falls in Europe, and Edward Niedemeyer offers his view on how Tesla can topple the auto dealer monopoly.

The Detroit News ran our former EIC (originally published at Bloomberg View) a few inches to explain the situation Tesla faces with its revolutionary-for-the-United States model of doing business from the rent-seeking opposition found in the entrenched dealer franchise system. Though the automaker has already been locked out of Texas and New Jersey due to such opposition thus far, Niedermeyer offers that CEO Elon Musk has a few potential allies — including Fiat Chrysler Automobiles, eBay, Costco and TrueCar — who could help him and the U.S auto industry as a whole bring about a future where all automakers can sell directly to customers.

Reuters and CNN Money report the states of Washington and Arizona are or soon will be signing legislation allowing Tesla to market directly to consumers; previously, the automaker’s sole Washington direct-sales efforts were in Seattle, whereas Arizona only allowed showrooms, pushing sales across the border to California.

The Washington legislation came as a result of campaigning from that state’s Tesla-owning constituents with help from a lobbyist, which will allow the automaker to expand into more cities while forcing every other automaker — upcoming or long-established — to sell through franchise dealerships, a situation advocates claim will need to be remedied when legislatures return to Olympia next January.

Arizona, however, is coming around to help improve the state’s chances in becoming the home of Musk’s grand energy project, the Tesla Gigafactory. Autoblog Green also reports Tucson has not only a suitable site for the 1,000-acre, 10 million-square-foot battery factory, but the tax incentives to lure 6,500 jobs away from Nevada, Texas and New Mexico.

As for the other three states, New Mexico is working on an economic package, while Nevada remains silent on their moves, and Texas has incentives galore in spite of banning direct-sales, the latter of which could hurt the state’s chances.

Speaking of direct-sale bans, Automotive News reports General Motors penned a letter to Ohio governor John Kasich over concerns his state could open the door to Tesla. GM’s senior vice president of global communications and public policy Selim Bingol explains his employer’s viewpoint:

We understand discussions are ongoing over legislation which could provide a broad exemption for a single manufacturer, Tesla Motors Inc., to circumvent long-established legal precedent on how new motor vehicles are marketed, sold and serviced in your state.

GM is not alone, as lobbyists representing the Ohio Automobile Dealers Association warned the state legislature last week that by allowing Tesla to sell directly to consumers, it would allow all automakers to do the same, casting the franchise model to the wind.

Finally, Tesla may be fighting a different battle in Europe. Inside EVs reports pricing of the Model S has dropped in Germany and Netherlands 6,700 euro and 4,000 euro respectively to 65,300 euro and 66,200 euro. Though Tesla cites currency appreciation against the dollar, low demand and lack of a sufficient Supercharger network may be to blame.

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Fewer Than 4,000 Green Calif. HOV Stickers Remain http://www.thetruthaboutcars.com/2014/03/less-than-4000-green-calif-hov-stickers-remain/ http://www.thetruthaboutcars.com/2014/03/less-than-4000-green-calif-hov-stickers-remain/#comments Thu, 20 Mar 2014 12:56:39 +0000 http://www.thetruthaboutcars.com/?p=776521 2012-Chevrolet-Volt-HOV-052_610x407

For potential California PHEV owners, time may soon run out to obtain the Green Clean Air Vehicle Sticker issued by the California Environmental Protection Agency for HOV lane use, as only 3,770 of the 40,000 stickers remain available.

Inside EVs reports a huge spike in applications for the green stickers since the start of 2013, with 12,000 issued last year, and 8,000 more since January. This is in contrast to 2012, when around 500 stickers per month were issued in the first seven months of the year.

The stickers, meant for AT PZEVs such as the Toyota Prius and Chevrolet Volt, will likely be gone by the time BMW brings the i3 extended-range model to the United States this summer, and in spite of the automaker’s best efforts, only the pure-electric i3 will be eligible for the White Clean Air Vehicle Sticker issued to as many approved EVs, fuel-cell- and CNG-powered vehicles — like the Tesla Model S, Ram 2500 and Honda FCX Clarity — as can be registered.

Both green and white HOV stickers are set to expire New Year’s Day 2019, extended from the same date in 2015.

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Marchionne Closes Chapter On Canadian Minivan Plant http://www.thetruthaboutcars.com/2014/03/marchionne-closes-chapter-on-canadian-minivan-plant/ http://www.thetruthaboutcars.com/2014/03/marchionne-closes-chapter-on-canadian-minivan-plant/#comments Mon, 17 Mar 2014 13:01:27 +0000 http://www.thetruthaboutcars.com/?p=773825 Chrysler Windsor Assembly

While celebrating the successful turnaround for Fiat Chrysler Automobile’s Sterling Heights, Mich. plant, CEO Sergio Marchionne proclaimed the issue of upgrades made to the Windsor, Ont. plant with help from Canadian federal and provincial governments one no longer worth discussing.

Automotive News reports FCA pulled out of discussions with Canada over a $2 billion upgrade incentive package that would secure the long-term future of the plant after politicians referred to the request as “ransom” and “corporate welfare,” according to Marchionne:

Chrysler is not in the business of accepting handouts. And if provincial and federal authorities in Canada think that’s the way to attract foreign investment, I think they are in for a big shock.

It doesn’t matter. It’s gone. That chapter is closed. Fiat-Chrysler has moved on. The agenda, from my standpoint, is complete.

Regarding Sterling Heights, where the Chrysler 200 will go into production this week, the plant’s upgrade as “an apt symbol of how far Chrysler has come because of the courage and resilience of [its] people,” Marchionne explained. The plant was due to close in 2010, only to return to life through a $1 billion investment made in light of the success behind the restyled and renamed compact, and the capacity needed to fulfill demand.

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Japanese Automakers Find New Export Base, Opportunity In Mexico http://www.thetruthaboutcars.com/2014/03/japanese-automakers-find-new-export-base-opportunity-in-mexico/ http://www.thetruthaboutcars.com/2014/03/japanese-automakers-find-new-export-base-opportunity-in-mexico/#comments Tue, 11 Mar 2014 14:45:26 +0000 http://www.thetruthaboutcars.com/?p=769626 Mazda3s Loading Onto Three-Tiered Train Car

Within four months of each other, Honda, Mazda and Nissan have opened new factories in Mexico, taking advantage of the opportunities within the nation’s automotive industry to grow a new export base into the United States, Latin America and Europe while also gaining ground in the rapidly expanding local market, all in direct challenge to the Detroit Three and other automakers on both sides of the border.

Automotive News reports Mexico will become the No. 1 exporting nation to the U.S. by 2015 at the earliest in large part due to the 605,000 units per year added by the three Japanese automakers. Meanwhile, Toyota will begin production in 2015 at Mazda’s newly opened Salamanca plant prior to deciding whether or not to build a new factory of their own. Nissan’s premium brand, Infiniti, may also set-up shop in Mexico.

In turn, the Japanese will see benefits from the move, from mitigating losses from a weaker yen in exports from home and greater profit due to cheap labor, to no tariffs on exports to the U.S. due to the North American Free Trade Agreement and improved product availability resulting from shorter distances between markets.

Speaking of free-trade agreements, Japanese automakers will also have access to some 44 countries and up to 40 million sales annually as a result of Mexico’s many agreements, allowing them to take on competitors in Latin America and Europe.

Finally, the Japanese have taken market share away from the Detroit Three in Mexico’s own automotive market, holding a collective 42 percent over Detroit’s 35 percent in 2013, when just four years earlier Detroit dominated with 57 percent of the market over Japan’s 23 percent.

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Ford Medium-Duty Truck Production Moving To Ohio In 2015 http://www.thetruthaboutcars.com/2014/03/ford-medium-duty-truck-production-moving-to-ohio-in-2015/ http://www.thetruthaboutcars.com/2014/03/ford-medium-duty-truck-production-moving-to-ohio-in-2015/#comments Mon, 10 Mar 2014 14:30:23 +0000 http://www.thetruthaboutcars.com/?p=768738 2015 Ford F-650

With the Econoline passing the torch to the Transit Connect at the end of this year, Ford is in the process of moving production of the F-650 and F-750 from Mexico to Ohio in time for the medium-duty trucks’ redesign for 2015.

Bloomberg reports the automaker is cutting ties with Navistar International in a joint venture based in Escobedo, Mexico to take full control of the two medium-duty trucks in their transfer to Avon Lake, Ohio, bringing the entire F-Series line — and the profits made up and down the chain — in-house as Ford’s president of the Americas Joe Hinrichs explains:

We’re doing this to bring the 650-750 production in-house so that we have complete design, manufacturing and engineering control over our F-series lineup. It’s so critical to be able to offer our commercial customers everything from an F-150 all the way to an F-750 and to know it’s built by Ford.

The relocation will preserve 1,600 jobs while honoring an agreement made between Ford and the United Auto Workers in 2011, with no added jobs or change in labor costs resulting from the move.

Hinrichs expects it will take less than the 13 weeks needed to transition the two F-150 plants from steel to aluminium-body production, with tooling from the Mexico plant already being put into place:

A lot of equipment has been going in on the fly. It’s not what we would classify as a new body shop, but the investment that’s being made largely is for equipment in the body shop and for tooling associated with building the 650 and 750.

The transition will occur in time for the F-650′s and F-750′s 2015 redesign, though the medium-duty trucks will remain steel-bodied.

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Toyota To Receive SkyActiv Engines For Upcoming Subcompact http://www.thetruthaboutcars.com/2014/03/toyota-to-receive-skyactiv-engines-for-upcoming-subcompact/ http://www.thetruthaboutcars.com/2014/03/toyota-to-receive-skyactiv-engines-for-upcoming-subcompact/#comments Fri, 07 Mar 2014 15:33:51 +0000 http://www.thetruthaboutcars.com/?p=767377 Mazda3 SKYACTIV engine, photo courtesy Michael Karesh

Toyota’s line of engine/body mashups continues, this time with their upcoming Mazda2-based subcompact powered by Mazda’s SkyActiv engine family.

Automotive News reports the subcompact, set to replace the current Yaris by 2016 at the latest, will be assembled alongside the new Mazda2 at Mazda’s newly opened Salamanca, Mexico factory. Approximately 50,000 of the factory’s total annual output of 230,000 units will be allocated to Toyota for the subcompact, with the SkyActiv transplant assembled on-site.

Though few details regarding either subcompact have been released, Mazda’s partnership with Toyota will allow the former to achieve greater economies of scale for the factory by supplying engines and possibly other SkyActiv-related components to Toyota.

Production for Toyota’s subcompact is set to begin next year, while Mazda2 production may begin as soon as the second half of 2014.

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Yamanouchi: Mazda’s Mexico Factory Key To Global Strategy http://www.thetruthaboutcars.com/2014/02/yamanouchi-mazdas-mexico-factory-key-to-global-strategy/ http://www.thetruthaboutcars.com/2014/02/yamanouchi-mazdas-mexico-factory-key-to-global-strategy/#comments Fri, 28 Feb 2014 16:15:21 +0000 http://www.thetruthaboutcars.com/?p=757201 Takashi Yamanouchi

Mazda Chairman Takashi Yamanouchi opened his company’s sole North American factory in Salamanca, Mexico, proclaiming the new factory the key to a global strategy “upon which the very future of [the] company hinges.”

Automotive News reports the strategy with the factory — Mazda’s Structural Reform Plan — follows a three-pronged approach: a hedge against currency exchange disruptions, provide Mazda with a low-cost manufacturing base, and give the automaker access to new markets. The factory’s location allows the automaker to gain more profit for the Mazda3s destined for the United States, than those exported from Japan, while also providing an export base to Europe and access to new markets in Latin America. In turn, Mazda’s new access through Mexico’s free trade pacts provides to markers worth a combined 35 million to 40 million vehicle sales annually.

Though the yen is weakening against the dollar at the moment, Yamanouchi said the factory will act as a hedge against unpredictable currency fluctuations that could bring down profits for his company at any time:

When the yen becomes stronger, we have the Mexican plant, therefore we will never again go into the lost position. But when the yen gets weaker, we will further cost reduce the Mexican plants so it will contribute to our total profitability. Our philosophy is that we will strike the balance of business so that we won’t go into the very difficult times of the past that we have experienced. Never.

The factory is expected to employ 4,600 workers once at full capacity of 230,000 units/annually. Currently, 3,000 employees assemble Mazda3s for the North American market, which will be joined by the Mazda2 and a Mazda2-based vehicle for Toyota. An engine machining plant will also set up shop in the factory by October 2014.

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