According to Reuters, the German government is considering setting up a new body to test for vehicle emissions. There has been something of a loss of faith in the existing system, and replacing the old body will help to restore consumer confidence, the government hopes.
Friday 30 June 2017
US: Congress argues about legislation on autonomous cars
Members of Congress have differed over legislation on autonomous cars - but, this being the US, the arguments go beyond the rules themselves: it's a matter of who should be doing the legislating, states or the Federal authorities. Democrats argue that it's NHTSA that should be making the rules, while Republicans have a different take. The prospect of cars that stop working at state borders is not one that will help the prospects for the industry.
Read more, if you want to, from Reuters here.
Read more, if you want to, from Reuters here.
US: New dealer protection law in Florida
Automotive News reports the enactment of a new law in Florida to give dealers (enhanced, presumably) protection in two important areas - the frequency with which manufacturers can require them to upgrade their premises, and the application of sales-effectiveness criteria, both matters of great importance to dealers against which they would be hard-pressed to find any protection in UK law.
US: Dealers take action against second Tesla store in Virginia
According to Automotive News the Virginia Automobile Dealers Association has received consent from a judge to proceed with an appeal in its attempt to block Tesla from opening a second store in the state. The appeal is against Virginia DMV Commissioner Richard D. Holcomb's decision to allow Tesla to open the second outlet, and the judge (Judge Gregory Rupe) decided that the VADA has standing to bring the appeal.
Three Bosch managers targeted as German diesel probe expands
Automotive News reports (from Bloomberg) that a German investigation in Stuttgart has focussed on three employees of Robert Bosch who are considered to have been involved in the development of cheat software for VW group. All are managers in the company. Bosch is also being investigated by the U.S. Department of Justice. German authorities in Braunschweig are also carrying out investigations into that the car manufacturer has done.
'via Blog this'
'via Blog this'
McLaren CEO says post-Brexit UK must try to influence EU car rules
Automotive News Europe reports remarks from McLaren Automotive's Mike Flewitt about the importance of retaining the benefits of having uniform technical legislation for vehicles after the UK leaves the European Union. Failure to do so might lead to having to comply with two sets of rules - exactly the sort of problem that we solved by joining the European Community, especially with the completion of the single market in 1992.
Special rules on emissions for low-volume manufacturers, of which the UK has more than other EU countries (perhaps more than all of them put together), are seen as a particular issue. Will the "rump" EU be as keen to give McLaren and similar companies a good deal after we have gone? That's a rhetorical question.
He also elaborated on steps that the company is taking to mitigate the effects of immigration controls, boosting its graduate recruitment scheme.
'via Blog this'
Special rules on emissions for low-volume manufacturers, of which the UK has more than other EU countries (perhaps more than all of them put together), are seen as a particular issue. Will the "rump" EU be as keen to give McLaren and similar companies a good deal after we have gone? That's a rhetorical question.
He also elaborated on steps that the company is taking to mitigate the effects of immigration controls, boosting its graduate recruitment scheme.
'via Blog this'
Wednesday 28 June 2017
Bank of England on risks of car finance crash
The Bank of England publishes its Financial Stability Report every six months. The June 2017 edition has just come out, and in it there is a very interesting and somewhat worrying analysis of the car finance market (starting on the page numbered 18 in the linked document, which is the relevant chapter of a prohibitively extensive publication).
What sounds worrying is that there is so much PCP finance around these days. Back in the days when dealership car finance was all about standard hire-purchase agreements, things would have looked better, but Personal Credit Purchase schemes - although they are a form of hire purchase - are different. The cost to the consumer is kept down by fixing a value for the car at the end of the loan period (the car being the subject of the loan, not money). When the term finishes, of course, the consumer can choose to make a balloon payment and take ownership of the car, or hand it back: and if the used car market is weak at that point, then first of all the consumer will prefer not to make the payment because it will be on the high side compared with what the car is worth, and secondly the dealer won't be delighted to get the car back in satisfaction of the credit agreement because it won't be worth enough to wash its face.
Although dealership finance has gone up by some 20 per cent a year since 2012, increasing by £30 billion over that period, it still accounts for a relatively small part of banks' lending. So although 85 per cent of car sales use dealership finance, mostly PCP, the Bank estimates that even a 30 per cent shortfall in residual values would have relatively little impact on banks' capital ratios. In addition, car finance being secured on the car is inherently less risky than other types of consumer finance, so the sector should be pretty stable - and the Bank acknowledges that arrears are less of a problem in motor finance than other areas. Of course they are - the finance company takes the car back if the arrears get too high.
But it strikes me that the same might have been said of mortgage lending before 2008. And we live in times which are, to say the least, uncertain.
Postscript: today (30 June) Bloomberg highlights the growth in vehicle finance in Europe, remarking that the continent is heading down the road already taken by the US. Explaining how securitisation deals - finance companies selling off their consumer debt - are to a large extent based on residual values, the Bloomberg piece makes me wonder about the BoE's assessment that even a substantial fall in the used car market would have little effect on banks' capital ratios. Perhaps the point is that it's not the impact on capital ratios that we should be worried about.
Also, a day earlier, the Telegraph reported that the FCA had been consulting with US authorities to gain a better understanding of the emerging problems, given the fact that the Americans have more experience of the impact of this type of secured lending in the automotive sector.
What sounds worrying is that there is so much PCP finance around these days. Back in the days when dealership car finance was all about standard hire-purchase agreements, things would have looked better, but Personal Credit Purchase schemes - although they are a form of hire purchase - are different. The cost to the consumer is kept down by fixing a value for the car at the end of the loan period (the car being the subject of the loan, not money). When the term finishes, of course, the consumer can choose to make a balloon payment and take ownership of the car, or hand it back: and if the used car market is weak at that point, then first of all the consumer will prefer not to make the payment because it will be on the high side compared with what the car is worth, and secondly the dealer won't be delighted to get the car back in satisfaction of the credit agreement because it won't be worth enough to wash its face.
Although dealership finance has gone up by some 20 per cent a year since 2012, increasing by £30 billion over that period, it still accounts for a relatively small part of banks' lending. So although 85 per cent of car sales use dealership finance, mostly PCP, the Bank estimates that even a 30 per cent shortfall in residual values would have relatively little impact on banks' capital ratios. In addition, car finance being secured on the car is inherently less risky than other types of consumer finance, so the sector should be pretty stable - and the Bank acknowledges that arrears are less of a problem in motor finance than other areas. Of course they are - the finance company takes the car back if the arrears get too high.
But it strikes me that the same might have been said of mortgage lending before 2008. And we live in times which are, to say the least, uncertain.
Postscript: today (30 June) Bloomberg highlights the growth in vehicle finance in Europe, remarking that the continent is heading down the road already taken by the US. Explaining how securitisation deals - finance companies selling off their consumer debt - are to a large extent based on residual values, the Bloomberg piece makes me wonder about the BoE's assessment that even a substantial fall in the used car market would have little effect on banks' capital ratios. Perhaps the point is that it's not the impact on capital ratios that we should be worried about.
Also, a day earlier, the Telegraph reported that the FCA had been consulting with US authorities to gain a better understanding of the emerging problems, given the fact that the Americans have more experience of the impact of this type of secured lending in the automotive sector.
Wednesday 21 June 2017
Snap Queen's Speech
Following the snap election, a snap Queen's Speech - with little of direct, specific interest to the motor industry in it, but a lot about Brexit. More on that another time. Much more on that, at other times, I should say.
What there is to interest the motor industry is a proposed Civil Liability Bill, which will bring down the cost of insurance premiums by reducing the cost and quantity of whiplash claims. It will introduce a new fixed compensation tariff for whiplash injuries for up to two years, and will ban offers to settle claims without supporting of medical evidence.
There will also be an Automated and Electric Vehicles Bill, which will require the installation of charge points for electric vehicles at motorway service areas and large fuel retailers. It will also include a set of common technical and operational standards which will ensure that charging points are convenient and work seamlessly right across the UK.
Compulsory motor vehicle insurance will also be extended to cover the use of automated vehicles, to ensure compensation claims continue to be paid quickly, fairly and easily, in line with longstanding insurance practice.
What there is to interest the motor industry is a proposed Civil Liability Bill, which will bring down the cost of insurance premiums by reducing the cost and quantity of whiplash claims. It will introduce a new fixed compensation tariff for whiplash injuries for up to two years, and will ban offers to settle claims without supporting of medical evidence.
There will also be an Automated and Electric Vehicles Bill, which will require the installation of charge points for electric vehicles at motorway service areas and large fuel retailers. It will also include a set of common technical and operational standards which will ensure that charging points are convenient and work seamlessly right across the UK.
Compulsory motor vehicle insurance will also be extended to cover the use of automated vehicles, to ensure compensation claims continue to be paid quickly, fairly and easily, in line with longstanding insurance practice.
BMW win appeal in Technosport trade mark case
Almost exactly a year ago, on 17 June last year, we reported a case in the Intellectual Property enterprise Court in whcih BMW had sued a company called Technosport London for trade mark infringement and passing off. At the time, we questioned why such a case might even have got to court, but noted that the defendant won on one count of trade mark infringement although it lost on three and on passing off. Now BMW has won its appeal on the claim on which it lost first time round.
Bayerische Motoren Werke Aktiengesellschaft v Technosport London Ltd & Anor [2017] EWCA Civ 779 (21 June 2017)
Bayerische Motoren Werke Aktiengesellschaft v Technosport London Ltd & Anor [2017] EWCA Civ 779 (21 June 2017)
EU: Lighting manufacturers penalised for cartel
The European Commission has imposed a €27 million penalty on two suppliers of car lighting for operating a cartel, contrary to Article 101 of the Treaty on the Functioning of the European Union. Automotive Lighting and Hella have to pay €16.3 and €10.4 million respectively for their part in the cartel. A third cartel member, Valeo, escaped a financial penalty, which the Commission indicated woulod have been over €30.5 million, because it revealed the existence of the cartel.
Reuters says that the parties discussed quotes for tenders and negotiation strategies and exchanged information on the status of negotiations with customers regarding price increases.
The EU press release is here.
Reuters says that the parties discussed quotes for tenders and negotiation strategies and exchanged information on the status of negotiations with customers regarding price increases.
The EU press release is here.
Tuesday 20 June 2017
Amazon plan to disrupt the car market
So, as reported in Auto Retail Network and lots of other places, Amazon are planning to enter the car market using the UK as a guinea pig (or, perhaps, proof of concept). Maybe the time is ripe with the country set to distance itself from the system of competition law that allows vehicle manufacturers and importers to restrict supplies to authorised dealers. The block exemption has not been popular in the UK, initially because it enabled suppliers to charge higher prices here than on the continent (something tells me that the sort of mindset that caused car buyers to head off to Belgium or The Netherlands back in the eighties might well have led them to vote leave in 2016 - but it's no more than a feeling). Maybe Brexit will be an opportunity to shake up what is seen by many as an unjustifiably privileged sector, insulated from normal competitive pressures.
Amazon have tried in a small way to sell cars before (Fiats in Italy: how could that go wrong?). Tesco have tried online car sales for a short time, and there have been other attempts to use ecommerce to cut out the middleman. Further back in history, there was Asdadrive, which emerged in the mid-eighties and made scarcely a ripple - and has disappeared so comprehensively that there's almost nothing to be found on the Internet save for some Companies House records.
It is trite to remark that selling cars is not like selling baked beans. You don't trade in your previous beans when you buy a new can, for a start. There is no continuing servicing and repair requirement, no market for spare parts, no way of adding accessories, no opportunity to sell financial services ("products", as they are weirdly called) as well. (Or, to put it another way, these days the cars are often ancillary to the financial services). For these reasons selective distribution remains the optimal way to service a complicated market, although those complications change over time as service intervals become longer, cars become more reliable, and the chances of effecting an economic repair when a prang occurs tend towards zero. (The bumper is supposed to save the car from damage, but the sensors now mounted in it make replacement prohibitively expensive.) So Amazon might find that they have bitten off more than they can chew, though with sales and service being separated by the block exemption the landscape is different from that which faced Asdadrive. Maybe, as Brexit approaches, this will be seen as an excuse to dispense with the block exemption - a move that could be dressed up as consumer benefit, potentially a popularist aspect of leaving the EU. And another chicken that would come home to roost a few years later, I suspect.
'via Blog this'
Amazon have tried in a small way to sell cars before (Fiats in Italy: how could that go wrong?). Tesco have tried online car sales for a short time, and there have been other attempts to use ecommerce to cut out the middleman. Further back in history, there was Asdadrive, which emerged in the mid-eighties and made scarcely a ripple - and has disappeared so comprehensively that there's almost nothing to be found on the Internet save for some Companies House records.
It is trite to remark that selling cars is not like selling baked beans. You don't trade in your previous beans when you buy a new can, for a start. There is no continuing servicing and repair requirement, no market for spare parts, no way of adding accessories, no opportunity to sell financial services ("products", as they are weirdly called) as well. (Or, to put it another way, these days the cars are often ancillary to the financial services). For these reasons selective distribution remains the optimal way to service a complicated market, although those complications change over time as service intervals become longer, cars become more reliable, and the chances of effecting an economic repair when a prang occurs tend towards zero. (The bumper is supposed to save the car from damage, but the sensors now mounted in it make replacement prohibitively expensive.) So Amazon might find that they have bitten off more than they can chew, though with sales and service being separated by the block exemption the landscape is different from that which faced Asdadrive. Maybe, as Brexit approaches, this will be seen as an excuse to dispense with the block exemption - a move that could be dressed up as consumer benefit, potentially a popularist aspect of leaving the EU. And another chicken that would come home to roost a few years later, I suspect.
'via Blog this'
Monday 19 June 2017
Everything you ever wanted to know about the emissions scandal (in French)
I make no apology for saying that the emissions scandal has left me nonplussed, often not knowing quite how to react to the latest news, what to write, what to think. The sheer volume of news on the subject is daunting. I was therefore pleased to find a newspaper which has conveniently collected together all its stories on the topic. Unfortunately it's Le Monde - perhaps there is also an English one, although I trust Le Monde a bit more than most English papers. If you wish to see what Le Monde has published on the subject, here's the link.
US: EPA suspected FCA defeat device in 2015
The EPA reportedly told Fiat Chrysler that it suspected that some of its vehicles had defeat devices as long ago as November 2015, according to reports in Automotive News based on recently-disclosed emails. Does that even count as news, I wonder? The emails do.
Meanwhile, AN reports that the Department of Justice has announced that approval of FCA's software fix to deal with emissions problems may take months. It also reports that the same institution that identified the VW problem says that FCA diesel vehicles emit up to twenty times as much pollution as they should. The manufacturer faces a civil suit from the government which it is estimated could cost it as much as $1 billion - and it is not exactly flush with cash.
Last month, a lawyer for FCA told a US court that a software fix could overcome the problem.
'via Blog this'
Meanwhile, AN reports that the Department of Justice has announced that approval of FCA's software fix to deal with emissions problems may take months. It also reports that the same institution that identified the VW problem says that FCA diesel vehicles emit up to twenty times as much pollution as they should. The manufacturer faces a civil suit from the government which it is estimated could cost it as much as $1 billion - and it is not exactly flush with cash.
Last month, a lawyer for FCA told a US court that a software fix could overcome the problem.
'via Blog this'
Friday 16 June 2017
Dieselgate: extended warranty but no compensation for VW owners
The European Commission has announced that VW is offering an additional two-year warranty but nothing in the way of compensation for owners of cars affected by the Dieselgate scandal. Reports in Just Auto indicate that this has been agreed with the European Commission's consumer affairs directorate, but it seems that it is only an offer - and the Commissioner, Vera Jourová, remains intent on persuading the manufacturer that it should offer compensation, while respecting the fact that there is no legal basis on which they can be required to do so. Regulation (EC) No 2006/2004, which is the EU legislation most obviously engaged in the matter, deals with co-operation between Member States on consumer matters. (Presumably owners of VW diesels did not vote Leave.)
Reuters also have the story.
Reuters also have the story.
Thursday 15 June 2017
EU set to scrap tariffs on Japanese car parts
The European Union is ready to propose immediately scrapping import tariffs on most Japanese car parts in trade negotiations now under way, according to the Nikkei daily quoted by Reuters on 15 June. In return the EU will press Japan to reduce or abolish tariffs on agricultural products - a step which would face considerable opposition in Japan, demonstrating rather nicely the sort of thing that goes on in international trade negotiations. A tempting offer, with a difficult quid pro quo in return - there's going to be a lot of this going in as Brexit talks get under way, starting on Monday 19th.
The Nikkei goes on to say that Japanese and European negotiators are continuing talks, which began in 2013, in Tokyo to reach a broad deal on signing an economic partnership agreement in early July. Such a deal is one of the key goals of premier Shinzo Abe's "Abenomics" stimulus programs and growth strategy to revive the country's stagnant economy. The EU accounts for about a tenth of Japan's foreign trade, and at present the EU imposes a tariff around 3 to 4 per cent on parts and 10 per cent on cars imported from Japan.
The Nikkei goes on to say that Japanese and European negotiators are continuing talks, which began in 2013, in Tokyo to reach a broad deal on signing an economic partnership agreement in early July. Such a deal is one of the key goals of premier Shinzo Abe's "Abenomics" stimulus programs and growth strategy to revive the country's stagnant economy. The EU accounts for about a tenth of Japan's foreign trade, and at present the EU imposes a tariff around 3 to 4 per cent on parts and 10 per cent on cars imported from Japan.
Wednesday 14 June 2017
Consumers from UK and NL get together to claim over Dieselgate
Automotive News reports that consumers from the UK and Netherlands are combining in what it suggests could become a Europe-wide action to claim compensation from VW over the emissions scandal. The report says that 220,000 owners are involved. The day before, the same source had reported that 160,000 Dutch claimants were about to sue.
Monday 12 June 2017
Germany: Porsche emissions under scrutiny
The German transport ministry has ordered the KBA to examine emissions of VW unit and sports car maker Porsche, a ministry spokesman told a news agency following a critical media report.
Just Auto
Just Auto
Friday 9 June 2017
India: GM dealers may sue manufacturer in US
GM dealers in India, facing the cataclysmic event of the manufacturer's retreat from the market, are contemplating a class action in the US courts. They are aggrieved - of course! - that they are not being adequately compensated for the point of sale investments they made before GM decided to pull out.
Just Auto
Just Auto
Thursday 8 June 2017
Tesla direct sales banned in Louisiana
Louisiana is the latest state to ban Tesla's direct sales to consumers, according to Automotive News, while in Michigan the manufacturer has issued subpoenas in a legal action to challenge the state law which has the same effect.
Wednesday 7 June 2017
US: Dieselgate monitor to take on more staff
Automotive News reports that the court-appointed monitor "may" be tripling the number of experts supervising the manufacturer. Perhaps this is the last area in which experts are still regarded as a good thing.
Friday 2 June 2017
US: Toyota goes open-source for infotainment system
Automotive News reports that the Japanese manufacturer is using Linux-based open-source software for the infotainment system in its latest Camry model. The "flavour" of Linux involved has been developed by a consortium called Automotive Grade Linux (AGL) which aims to develop a software platform for connected cars.
US: Dieselgate class action against Daimler given green light
Not aggrieved owners this time: a class action brought by investors against Daimler and several senior executives can proceed following a decision by a Federal judge, according to Automotive News. And Bloomberg reports that Daimler has been looking for criminal defence lawyers to act for key executives in connection with the same matter.
Germany: Audi faces cheating accusations
According to Automotive News, Audi faces accusations of emissions cheating for the first time in its home country. The government says that the manufacturer cheated emissions tests with top-of-the-range models. Bild, the tabloid newspaper, has said that the government has detected illicit software and demanded the recall of diesel A8 and (apparently) A7 Sportback models to remove it. Following the accusations, prosecutors in Munich have widened their investigation of Audi to examine sales in Germany and elsewhere in Europe
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