TIME car age

Here’s Why Lots Of Cars On The Road Probably Still Have Tape Decks

Toyota Opens Hybrid Engine Factory
Bloomberg—Bloomberg via Getty Images

The average U.S. vehicle age has hit a record

You know that slot in the middle of your center-console that you sometimes use as an iPhone holder? Well, that’s actually a tape deck—an ancient artifact once used to play cassette tapes. But what’s it doing in your car?

According to IHS Automotive, a consulting firm that provides insight into the automotive industry, the average age of vehicles in the U.S. has reached an all-time high of 11.5 years. Cars have become much more reliable throughout the years, so they can endure the road for a significantly longer period of time. With new smartphones and other devices being released every couple of years, cars far outlive the technology that comes with them; thus, tape decks.

IHS has been tracking this data since 2002. The average car age has gradually increased each year, with an even more dramatic boost during the recession due to a 40% drop in new car sales from 2008 to 2009. The climb has since slowed, and it has started to plateau. IHS predicts that the number will reach 11.6 in 2016 and remain stagnant until 2018, when the company thinks it will hit 11.7.

In case you’re wondering, the last new car to be factory-equipped with a cassette deck in the dashboard was a 2010 Lexus, according to the New York Times.

And here’s one caveat about owning and older car: make sure it has electronic stability control, and side curtain airbags — two key safety features introduced a little over a decade ago.

MONEY Autos

Volkswagen Pulls Ahead to Become Top Automaker

Volkswagen is on pace to surpass Toyota in auto sales for 2015, but analysts question whether it can maintain its lead.

MONEY Autos

This Company Just Overtook Toyota to Become the World’s Top Automaker

2015 Volkswagen Jetta
courtesy Volkswagen 2015 Volkswagen Jetta

The world really likes German engineering.

During the first six months of 2015, Toyota sold 5.02 million cars. That represents a decline of 1.5% compared to the first half of 2014. More importantly in terms of bragging rights for automakers, Toyota’s total was slightly less than German rival Volkswagen, which sold 5.04 million vehicles from January through June of 2015.

Toyota has traditionally held the top spot in terms of global auto sales, though there have been flukey years like 2011, when natural disasters in Asia pushed the automaker to third place worldwide. Volkswagen, which sold just 6.2 million cars for all of 2007, has established a goal of selling 10+ million vehicles per year by 2018, if not sooner. The automaker came close in 2013, selling 9.73 million passenger cars and superseding General Motors as the world’s #2 automaker in the process.

Volkswagen just barely crossed the 10 million sales mark in 2014, and it is on pace to do so again in 2015, perhaps while taking the overall global sales crown as well. To do so, Volkswagen, which owns Audi and Porsche in addition to its flagship mid-market brand, must continue to post big sales in China—which won’t be an easy task.

“VW is snatching the sales crown in difficult times with major car markets in decline,” Stefan Bratzel, head of Germany’s Center of Automotive Management, said to the BBC. “They will need to withstand the slowdown in China if they want to keep the top spot.”

Toyota has struggled in China and wants to improve sales there. But overall, the Japanese automaker has stressed for quite some time that it’s not particularly worried about holding the global top spot for sales. “Their focus is not No. 1,” Peggy Furusaka, a Tokyo- based auto-credit analyst at Moody’s Investors Service, observed in January. “Toyota is more concerned about keeping profitability than chasing numbers. So for coming years, I wouldn’t be surprised to see Toyota selling fewer cars than Volkswagen.”

TIME Automakers

Fiat Chrysler Fined Record $105 Million Over Recalls

The company will also be forced to buy back recalled Jeeps

Fiat Chrysler could be required to lay out hundreds of millions of dollars to get potentially defective Ram pickups and older Jeeps off the road under a deal with safety regulators to settle claims that the automaker mishandled nearly two dozen recalls.

The National Highway Traffic Safety Administration is requiring the company to offer to buy back certain Ram pickup trucks and Dodge and Chrysler SUVs with defective steering parts that can cause drivers to lose control. More than 579,000 vehicles were initially recalled in 2013, but the company would only be required to buy back a third of those because many of the pickups have already been repaired.

The Italian-American automaker must also allow owners of more than a million older Jeeps with vulnerable rear-mounted gas tanks to trade them in at above market value or give them $100 as an incentive to get a repair.

Fiat Chrysler also faces a record civil penalty of up to $105 million. That beats the old record of $70 million assessed against Honda Motor Co. for lapses in reporting deaths and injuries to safety regulators. FCA’s fine includes $70 million in penalties, at least $20 million to meet performance requirements and $15 million if an independent recall monitor finds any further violations.

Fiat Chrysler shares traded in the New York Stock Exchange dropped nearly 5 percent to close at $14.41 Monday following the weekend announcement of the deal.

The settlement is the latest sign that auto safety regulators are taking a more aggressive approach toward companies that fail to disclose defects or don’t properly conduct a recall.

“Merely identifying defects is not enough,” U.S. Transportation Secretary Anthony Foxx said Monday during a conference call with media. “Manufacturers that fail in their duty to fix these defects will pay a price.”

Nearly 1.3 million Rams, Chrysler Aspen and Dodge Durango SUVs and Dodge Dakota pickups from as far back as the 2003 model year were recalled for the steering problem in 2013. The government excluded around 700,000 of the oldest models from the buyback program because most have already been repaired or are no longer on the road.

But it ordered the buyback for up to 579,000 vehicles from the 2008 through 2012 model years. Of those, around 193,000 have not gotten the recall repairs and are eligible for either a repair or a buyback, according to recall reports submitted to the government by Fiat Chrysler.

In each case, Fiat Chrysler would be required to pay the original purchase price plus 10 percent, minus a certain amount for depreciation.

The ultimate cost of the settlement depends on how many pickup and SUV owners join in. According to Kelly Blue Book, a 2010 Dodge Ram 1500 — one of the smaller, less-expensive trucks involved in the recalls — could fetch $20,000 in a dealer trade-in, assuming the truck has 60,000 miles on it and is in “good” condition. At that rate, FCA could spend $956 million to buy back one-quarter of the vehicles at issue. The company is allowed to repair and resell the trucks it buys back.

The government knows of at least one death attributed to the steering defect.

The older Jeeps have fuel tanks located behind the rear axle, with little to shield them in a rear crash. They can rupture and spill gasoline, causing a fire. At least 75 people have died in crash-related fires, although Fiat Chrysler maintains they are as safe as comparable vehicles from the same era.

FCA must offer $100 to Jeep owners as an incentive to get a repair or a trade-in incentive of $1,000 toward the purchase of another Fiat Chrysler vehicle. The repair consists of adding a trailer hitch to the Jeeps. FCA has already repaired around 441,000 of the 1.5 million Jeeps recalled.

The Jeep trade-ins could add to the tab, but they also could generate more new vehicle sales by getting customers into showrooms. Still, the total could strain the parent company, Fiat Chrysler Automobiles NV. The company posted a first-quarter net profit of $101 million and had more than $20 billion in cash and securities on March 31.

FCA said the amount it pays to repurchase vehicles will be applied as a credit to the $20 million it agreed to spend on outreach efforts as part of its $105 million fine.

“FCA U.S. does not expect that the net cost of providing these additional alternatives will be material to its financial position, liquidity or results of operations,” the company said Monday.

Both the Jeep and Ram measures are part of a larger settlement between the government and the automaker over allegations of misconduct in 23 recalls covering more than 11 million vehicles. Besides the civil penalty, Fiat Chrysler agreed to an independent recall monitor and strict federal oversight.

TIME Ferrari

Ferrari Just Filed to Go Public in the U.S.

Luxury Car Sales On The Rise As Buyers Shed Recession Caution
Joe Raedle—Getty Images

The market debut is planned for early 2016

Fiat Chrysler has officially filed plans to sell up to a 10% stake in luxury auto maker Ferrari in an initial public offering that is expected to be completed early next year.

While the amount of shares being offered and the price range for the IPO haven’t been disclosed, Ferrari did say it plans to list the stock on the New York Stock Exchange, according to a filing with the Securities and Exchange Commission on Thursday. Fiat Chrysler had previously estimated the Ferrari division is valued at about $11 billion, Bloomberg reported, and the stock sale is part of the Italian automaker’s move to cut debt.

The IPO was initially due to occur in June of this year, and was pushed back a few times to deeper in the 2015 calendar. It now appears very likely that it will occur in early 2016.

Though a well-established luxury brand, Ferrari is a relatively small player in the global automobile industry. It reported 2014 sales of 2.76 billion euros ($3 billion), up 18% from the prior year. Net profit also increased last year.

Ferrari’s small volume – it only shipped 7,255 cars last year – is purposeful. The automaker has said it pursues a “low volume production strategy” to maintain a reputation of exclusivity and scarcity among purchases of the company’s cars. Nearly half of the company’s sales are from Europe, the Middle East, and Africa, with another third coming from the Americas. In recent years, Ferrari has shipped more to the Middle East and Greater China and, to a lesser extend, the Americas. Conversely, a lower proportion has shipped to Europe.

MONEY Autos

Honda’s Adorable Little SUV Is This Summer’s Hottest New Car

150616_EM_HondaHRV
Honda—Wieck 2016 Honda HR-V

Subcompact HR-V is selling like hotcakes

Honda’s brand new HR-V, a subcompact SUV that’s taller than the Honda Fit compact and smaller than big sister crossover CR-V, has only been available for purchase for a few weeks. But during the last two weeks of May—the model’s first two weeks on the market—an impressive 6,381 HR-Vs were sold.

That’s triple the amount that any other automaker has achieved with a new model in the tiny SUV category, Bloomberg reported, and Honda hit this sales mark without even launching an advertising campaign for the vehicle. Honda sees the HR-V, which starts under $20,000 and gets 35 mpg on the highway, as the perfect vehicle for a broad swath of consumers, no matter if gas prices rise, fall, or stay flat.

“This is a small crossover that people will look at as the ultimate hedge against everything,” John Mendel, executive vice president of Honda’s U.S. sales unit, told Bloomberg. “I think, personally, the car is going to be a home run, but we’ll bear that out over some time.”

Before the HR-V arrived at Honda dealers, some analysts expressed concern that the new model would simply tempt customers away from purchasing the larger, pricier CR-V, which has a sticker price starting roughly $4,000 higher. According to Honda, however, one-third of HR-V buyers haven’t been Honda customers in the past, and CR-V sales have remained strong even with its smaller, cheaper sibling on the market.

“[We’ve been asked]: Was this going to cannibalize it? Well, we sold exactly what we did with CR-V last year, which was well over 30,000 units, so no cannibalization there,” Honda’s Mendel explained to Wards Auto.

MONEY Autos

This Is the World’s Most Valuable Auto Brand

2015 Toyota Camry
David Dewhurst Photography 2015 Toyota Camry

Despite a strong year for industry sales overall, the top automaker saw its value drop.

Toyota is worth 2% less than it was a year ago, according to the just-released BrandZ Top 100 Most Valuable Global Brands study from market research firm Millward Brown. Nonetheless, Toyota, estimated to be worth $28.9 billion, is still the world’s most valuable automotive brand. The Japanese automaker has held the title in eight of the last ten years.

Automotive News noted that Toyota, as well as Honda, saw its valuation drop over the past year partly due to massive recalls that plagued the entire industry and hit these two automakers especially hard. Honda’s worth, according to the BrandZ study, dropped 5%, landing the automaker in fourth place with a value of $13.3 billion.

BMW and Mercedes-Benz hold positions #2 and #3, while inching up slightly in value over the past year. Ford, the only American automaker in the top 10 (#5), boosted its value by 11%, while Audi (#7) and Volkswagen (#8) increased their values an impressive 43% and 10%, respectively.

Overall, the total value of the top 10 automakers rose 3%, which is nothing compared with the growth in industries such as tech and retail—both up 24% year over year. The insurance and telecom categories showed substantial increases as well, with their overall values up 21% and 17%, respectively.

Why isn’t the auto sector growing faster? The study’s researchers point to the overlapping trifecta of mobile devices, millennials, and non-ownership trends that include car sharing and services like Uber. “Factors such as urbanization and the influence of millennials are changing the very idea of mobility in fundamental ways,” the report explains. “Young people, in contrast to their parents, don’t rely on cars for freedom or for defining and projecting a self-image. They have mobile devices.”

MONEY Autos

For Electric Cars, High Gas Prices Can’t Come Back Quickly Enough

2015 NIssan LEAF
Nissan—Wieck 2015 NIssan LEAF

Gas prices have rebounded a bit, but they remain low enough to kill the cost-saving argument for buying a plug-in electric car like the Nissan Leaf or Chevy Volt.

Thanks to the dramatic decline in prices at the pump, the average American household is expected to spend $750 less on gas in 2015 than it did last year. We’ve already seen how some of this “saved” money is being spent, what with restaurants, casinos, hotels, and recreational activities all seeing a bump in business lately. Cheap gas seems to have affected big-ticket purchase decisions as well, exhibited most obviously by the spike in SUV and luxury car sales.

It’s an entirely different story, however, when it comes to the impact of cheap gas on electric cars such as the Nissan Leaf. Nissan just released its February numbers, and sales for the brand were up 1.1% compared with last year. Sales of the all-electric Leaf, however, were down 16%. That follows on the heels of a 15% decrease in January, the first such sales decline for the Leaf in two years. Overall Leaf sales dropped from 2,677 for the first two months of 2014 to 2,268 this year.

The recent sales performance of the Chevrolet Volt, the gas-electric pioneer that has been vying with the Leaf for the title of most popular plug-in among buyers, has been even worse. January was the worst month for the Volt since August 2011, with only 592 units sold, a decrease of 41% compared with January 2014. According to General Motors data, 693 Volts sold in February 2015, a drop of 43% compared with 1,210 the year before.

Surely, the prospect of new Chevy plug-in models has hurt Volt sales lately. The all-electric Chevy Bolt, expected to cost $30,000 and get 200 miles on a single charge, is planned to hit the market in 2017, while the 2016 Volt should be available for purchase during the second half of 2015. Many would-be Volt buyers are simply waiting for the newer model, which can be driven 50 miles on electric power, up from 38 miles for the current one.

That explains some—but not all—of the decline in Volt sales. Certainly, cheap gas prices have done damage to sales of the Volt as well as the Leaf, other plug-in vehicles, and even hybrids like the Toyota Prius to boot. After all, one of the big reasons to buy an electrified vehicle is that powering it is cheaper than filling up at the pump. Consequently, when the price of gas plummets, like it did month after month for nearly half a year recently, a prime argument for going the plug-in route is weakened.

It isn’t just new plug-in models that have taken a beating thanks to a combination of cheaper gas prices and emerging new tech that makes older models seem outdated in a hurry. According to the Wall Street Journal, the resale value of used electric cars has absolutely tanked:

In December and January, for instance, the average selling price of a 2012 Nissan Leaf at auction was about $10,000, nearly a quarter of the car’s original list price and down $4,700 from a year earlier, according to NADA’s guide. Three-year-old Volts, a plug-in car with a backup gasoline motor, were selling for an average $13,000 at auction in January, down from about $40,000 excluding the federal tax credit.

Nissan is coming off of the best-ever year for any plug-in, with Leaf sales in the U.S. topping 30,000 in 2014. The way things have started in 2015, it will be difficult for the automaker to beat last year, though Nissan has blamed bad weather for the Leaf’s recent struggles, and it expects a strong rebound in the spring. Meanwhile, at the start of 2014, Nissan CEO Carlos Ghosn said he anticipated selling an average of 3,000 Leafs monthly that year, and 4,000 Leaf purchases monthly sometime in the near future.

Recent sales notwithstanding, Nissan isn’t giving up on electric cars anytime soon. Neither are many other automakers. At the auto show in Geneva this week, BMW, Volkswagen, and Fiat Chrysler were among the car companies showing off high-tech battery-powered vehicles that demonstrate their commitment to electrified cars.

At some point, rising gas prices will likely steer more interest back to alternative-fuel cars too. But that hasn’t happened yet. “Gas prices inched back up this month, but it didn’t appear to have much impact on shoppers’ choices,” Edmunds.com senior analyst Jessica Caldwell said in a report focused on February sales. “We’re still seeing a strong market for trucks and SUVs—especially compact crossover SUVs, which continue to ride an impressive wave of popularity.”

At least if the Leaf and Volt are struggling, Nissan and GM can take solace in the fact that some of their larger, less fuel-efficient and less environmentally friendly siblings are faring quite well during this winter of cheap gas, cold temperatures, and lots of snow. Two Nissan SUVs, the Pathfinder and Rogue, had record sales months in February, while GM pickup sales were up 37% for the month.

 

TIME Recalls

What You Should Do About the Massive Airbag Recall

Car Dealerships Ahead Of Total Vehicle Sales Figures
Bloomberg—Bloomberg via Getty Images Honda Motor Co. vehicles are displayed for sale at the Paragon Honda dealership in the Queens borough of New York, U.S., on Monday, Sept. 1, 2014.

Millions of cars from ten automakers are subject to an airbag recall. Here's what you need to know

Takata produces about 300,000 airbag replacement kits per month, possibly increasing to 450,000 or so. At that rate, it will take from 2 to 3 years to recall and replace the defective airbags in the 16-million to potentially 30-million affected vehicles in the U.S.

So what do concerned vehicle owners do in the meantime?

Takata is the only airbag manufacturer to use ammonium nitrate as a propellant for its inflators. Ammonium nitrate is affected by heat-and-cold cycling over time, plus humidity, that can cause it to become too forcefully explosive when ignited in a crash.

To fix this potentially lethal default the company says it has (1) changed the compression density force with new press machines; (2) rejected products that are not meeting quality standards; and (3) changed humidity control during production and assembly. Takata also says it also improved the hermetically-sealed package to minimize effects of moisture that would deteriorate the chemicals and make them less stable. Perhaps NHTSA should consider outlawing the use of ammonium nitrate in the first place, or at least use a safer chemical in the recall campaign.

But there are safer alternatives. It should be feasible to re-program the software in the vehicles’ airbag control modules (ACM). By changing the software, including the thresholds of activation and the control algorithms, the system could be made safer— as a temporary solution. The threshold to trigger the airbags could be raised so that it would take a crash at 30 mph, rather than 18 mph. In these low-speed collisions, the driver and passenger would still be protected by wearing their seat belts.

Since the driver and passenger airbags are dual-stage designs, they could be re-programmed to inflate only at the lower-pressure level to help ensure that the explosive force does not exceed levels that cause the metal canister to become lethal shrapnel. Because of the inherent instability of ammonium nitrate, such lower pressures in the canister cannot be absolutely guaranteed, but the risk would be reduced. (On the other hand, passenger risks would rise in a high-speed crash.)

To re-program your car’s Takata airbags, you’d drive over to your local dealership and download new software into your car’s ACM computer. It would likely take less than an hour, and then you’d drive away with a less-risky airbag system that could still offer protection in a crash. If the automakers and Takata cooperated, such software could be developed and tested and available probably within a month…. or maybe even a week.

I believe it should also be a requirement that each affected vehicle have a label attached permanently on the instrument panel, advising that the vehicle has been recalled and that a replacement airbag system has been installed. The date of such recall and replacement action should also be noted on the label.

Finally, I believe that all Takata airbag systems should have a “failsafe” pressure-relief mechanism to prevent any over-pressurization of the airbag. In the late-1970’s I became aware that too many pressurized beer kegs were exploding and propelling lethal shrapnel that injured or killed college students. I showed there was a solution, a simple device that would vent out any over-pressurization before it could cause the metal keg to explode. Lives have been saved by adopting such an inexpensive, simple device for beer kegs. Why not a use a similar device to prevent excessive forces from rupturing the metal canister that holds the airbag’s propellant? And yes, the canisters should be made stronger, too.

Byron Bloch has over 30 years of experience as an independent consultant and court-qualified expert in Auto Safety Design and Vehicle Crashworthiness. Over the years, he has inspected accident vehicles to evaluate how and why the occupants were severely injured, and exemplar vehicles to evaluate their structural details. He has qualified and testified as an expert in auto safety defect cases in Federal and State Courts coast-to-coast. He also lectures, writes, and appears on TV reports on auto safety design and vehicle crashworthiness.

TIME Autos

Ford Recalls 65,000 Fusion Vehicles

There are no known accidents caused by the issue

Ford has recalled 65,000 Fusion cars for noncompliance with a regulation on “theft protection and rollaway prevention.

The automaker announced Tuesday said that it is not aware of any accidents or injuries caused by the issue, but said that it would voluntarily fix the more than 56,000 affected vehicles in the United States, as well as 6,000 in Canada and 2,300 in Mexico.

The 65,000 vehicles recalled Tuesday is small in comparison to General Motors’ notorious recall this year, when more than 1 million vehicles worldwide were pulled over a faulty ignition switch that caused the deaths of at least 30 people.

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