Good morning! It’s Tuesday, March 12, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: 13 Out Of 14 Driver Assist Systems Are Awful
The vast majority of automated driving systems received either marginal or poor scores in a new Insurance Institute for Highway Safety rating system that is designed to figure out just how safe these systems are and how much they distract drivers.
Lexus’s system, called Teammate with Advanced Driver, was the only system out of the fourteen tested to get an “acceptable” rating. This makes sense. I’ve used this system, and it is very good. The test evaluated driver monitoring, involvement and encouragement of safety feature usage. From Automotive News:
The goal of the test is to encourage automakers to develop systems that ensure the driver is engaged and that promote the use of safety features, such as seat belts, said IIHS President David Harkey.
“We’re trying to do two things here. One is to help provide more guidance for the auto industry in terms of safe implementation of these systems,” Harkey told Automotive News. “And two is to provide consumers with information on how these systems actually work and how they differ among the various manufacturers and vehicle models.”
Ratings were awarded through a series of tests, many conducted on a private track, the IIHS said.
Tested systems from General Motors, Nissan, Ford, BMW, Genesis, Mercedes Benz, Tesla, Volvo and a second system from Lexus all received ratings of “poor” or “marginal.”
Not all is lost for these systems, though. Several of them got “good” ratings in one of the IIHS’ categories. One example of this is the Genesis Smart Cruise Control/Lane Following Assist. It received “good” ratings in the driver involvement category, but it was ranked “poor” overall.
“No single system did well across the board, but in each category at least one system performed well,” Harkey said in a statement. “That means the fixes are readily available.”
Listen, I use various driver assist programs fairly often given the nature of this job. From what I’ve found, for the most part, they are not ready for primetime just yet. We’re still a looooooooooong way away from anything that resembles self-driving.
2nd Gear: Ford To Pay $365 Million Over Transit Connect Tariff Evasion
Ford is going to have to fork over $365 million to resolve allegations from the U.S. government that it violated a federal tariff law by misclassifying and understanding the value of hundreds of thousands of Transit Connect vans. Good job, guys.
The settlement has worked out to be one of the largest customs penalty payments in recent history. From Reuters:
The Justice Department said the settlement resolves allegations that Ford devised a scheme to avoid higher duties by misclassifying cargo vans imported from Turkey from April 2009 to March 2013.
[...]
“Ford strongly disagrees with many of the characterizations in the DOJ’s statement and admits no liability in this matter,” a Ford spokesperson said. “But in the interest of moving on from this complex, decade-old dispute, we have agreed to settle the matter once and for all.”
Customs and Border Protection ruled in 2013 that Transit Connects imported as passenger wagons and later converted into cargo vans were subject to the 25% duty applicable to cargo vehicles, rather than the 2.5% passenger vehicle duty.
The Justice Department said Ford imported the vehicles “with sham rear seats and other temporary features to make the vans appear to be passenger vehicles. These temporary rear seats were never intended to be, and never were, used to carry passengers.”
Ford included these seats and features to avoid paying the 25% duty rate, the government said.
After Customs clearance, the Transit Connect vehicles were immediately stripped of rear seats and returned to its original identity as a two-seat cargo van.
“The government will not permit companies to evade duties by adding sham features to their products and then misclassifying them,” said Brian Boynton, head of the DOJ Civil Division.
Ford said in 2021 it could face up to $1.3 billion in penalties in a long-running dispute over import duties paid on Ford Transit Connect vehicles after the Supreme Court declined to hear its appeal in 2020 that it paid increased duties for some prior imports.
The 25% tariff stems from a 1960s trade war involving frozen chicken, and the larger tariff on cargo vehicles is known as the “chicken tax.”
Who knew this dumbass law that is nearly 60 years old would still be fucking people up in 2024?
The big lesson here is not to try to cheat import taxes, because the government will not like that.
3rd Gear: It’ll Take Time To Get German Gigafactory Going Again
It’s going to take some time for production at Tesla’s Gigafactory near Berlin, Germany to fully resume after a far-left militant ground set a power station on fire a few weeks back, Andre Thierig, the plant’s boss, said. From Reuters:
“It will certainly take some time until we have fully resumed production, but the most important step has been taken,” Thierig said.
On Monday the power firm in charge of fixing a week-long outage said the factory had been reconnected to the electricity grid.
Tesla CEO Elon Musk called the action, done by the “Volcano Group,” “extremely dumb” in a post on his social media site X.
Back in 2019, authorities in Berlin said the Volcano Group was a left-wing extremist organization that had targeted cable ducts on railway lines and in some cases radio masts, data lines or company vehicles.
The Austin, Texas-based automaker is now expected to deliver about 421,000 vehicles in the first quarter of 2024, rather than the 489,000 it originally estimated to move in that time period.
4th Gear: Don’t Expect A Banner Financial Year From Porsche
Porsche says profit margins will be a bit narrower in 2024 since the German automaker is spending a whole lot of money launching four new models that it hopes will push it through a “challenging phase for European carmakers.” From Reuters:
The group, majority-owned by Europe’s top carmaker Volkswagen is targeting an operating return on sales in the range of 15-17% in 2024, below the 17.4% average analyst forecast in an LSEG poll and down from 18% in 2023.
Shares in the group, which was carved out and separately listed in a mega-IPO in 2022, were up 0.5% at 0911 GMT, with traders pointing to fourth-quarter results that were slightly ahead of estimates.
However, Citi analysts said the 2024 outlook was disappointing.
“Porsche will focus on brand and pricing in future, but to do this, the product range needed to be renewed. This is now happening – but the full impact on pricing and profitability will take time, and now come from a lower base,” they said.
The muted outlook chimes with parent Volkswagen, which earlier this month said sales growth would slow in 2024 due to headwinds including from weaker economic growth, stiffer competition and higher costs.
Porsche maintained its medium-term margin outlook of 17%-19%. In the long-term, it continues to expect more than 20%.
The company’s shares are down nearly 1% year-to-date, underperforming a 10% increase in the STOXX Europe 600 Automobiles & Parts index, with analysts pointing to fierce competition in China and expected ramp-up costs for the new model launches.
Porsche is launching new models in its Panamera, Macan, Taycan and 911 model lineups in 2024. That represents four out of the six different vehicles it currently makes. The automaker said it is planning the biggest year of product launches in the company’s history.