U.S. traffic deaths fell after coronavirus lockdowns but fatality rate spiked

WASHINGTON — U.S. traffic deaths fell during the coronavirus lockdowns but drivers engaged in riskier behavior as the fatality rate spiked to its highest level in 15 years, a government report set to be released Thursday will show.
NHTSA found the fatality rate jumped to 1.42 deaths per 100 million vehicle miles traveled in the three months ending June 30, the highest since 2005.
At the same time, overall traffic deaths fell by 3.3 percent to 8,870 while U.S. driving fell by about 26 percent, or 302 fewer over the same period in 2019, according to the report reviewed by Reuters.
NHTSA’s study showed “drivers who remained on the roads engaged in more risky behavior, including speeding, failing to wear seat belts, and driving under the influence of drugs or alcohol.” By contrast, the fatality rate for 2019 was just 1.10 deaths per 100 million miles, the lowest rate since 2014 as traffic deaths fell by 2 percent to 36,096.
Traffic data showed average speeds increased and extreme speeding became more common. Data from some states suggested that fewer people were wearing seat belts during the lockdown.
“In short, the stay-at-home orders may have led the population of drivers during the height of the health crisis to have been smaller but more willing to take risks,” NHTSA found.
NHTSA also noted that in the wake of the outbreak enforcement of some traffic laws was reduced. “It is possible that drivers’ perception that they may be caught breaking a law was reduced,” the report found.
NHTSA also said that since coronavirus risks are higher for older Americans, that could have minimized driving by more risk-averse drivers.

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Michigan AV startup names new CEO

Refraction AI, a Michigan startup developing autonomous delivery robots, appointed a former Ford Motor Co. and mobility-industry veteran its new CEO on Wednesday.
Luke Schneider becomes Refraction AI’s CEO at a time when the pandemic has accelerated demand for automated and contactless delivery systems. He had been CEO at wejo, an early-stage traffic-analytics company connecting cities with vehicle data.
He replaces Refraction AI co-founder Matthew Johnson-Roberson, who stays on as chief technology officer, a role in which he’ll remain focused on developing the company’s autonomous-driving system and the next generation of robots.
“As we scale up and continue to solidify the key role of delivery robots in people’s daily lives, Luke’s wealth of knowledge in the mobility space will be critical in our next phase of growth,” Johnson-Roberson said in a statement.
Founded in 2017, Refraction AI has focused on food delivery. Its REV-1 prototype vehicles weigh about 100 pounds and have three wheels and a small electric motor. They travel at 12 to 15 mph and are tailored to trundle along bike lanes. The company has tested the service in Ann Arbor.
“We’ve been building something that we can put out there on the roads and use to conceivably take over big chunks of the last-mile delivery market, and all that was pre-COVID,” Johnson-Roberson told Automotive News in May.
Schneider has experience developing new markets for mobility services. He’s helped launch Silvercar and Zipcar, which were later acquired by Audi and Avis Budget, respectively. He started his career at Ford, where he worked in product development, strategic planning and operations positions.

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DAILY DRIVE PODCAST: October 1, 2020 | U.S. energy chief: Why Calif. won't achieve fossil fuel ban 

Join Automotive News Publisher Jason Stein for a daily podcast series about the coronavirus crisis. He’ll speak with industry experts, insiders and Automotive News reporters about how the virus is impacting and reshaping the automotive industry.

U.S. Energy Secretary Dan Brouillette weighs in on California’s plan to ban the sale of new gasoline-powered vehicles in 2035, the state’s stringent emissions standards, challenges ahead for green cars and the industry’s relationship with the agency.

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Former Toyota manufacturing executive named to Piston Group board

DETROIT — Piston Group, the Detroit auto supplier controlled by former NBA star Vinnie Johnson, said Wednesday it appointed the former president of Toyota’s manufacturing complex in Kentucky to the company’s board of directors.
The appointment of Wilbert James Jr., 64, was effective Thursday, spokesman Shaun Wilson said.
As president of Toyota Motor Manufacturing Kentucky, James was responsible for more than 10,000 employees. He was with Toyota for over 30 years and was most proud of leading the operation to its Platinum J.D. Power Award, according to a press release from Piston Group.
He was recognized as one of Savoy’s Top 100 Most Influential Blacks in Corporate America six times, most recently in 2017. James also serves on the boards of Atkore International, Cornerstone Building Brands and Columbia Forest Products.
Piston Group supplies chassis, electronics assemblies, electric batteries, cooling modules and other parts. James’ role on the board has not yet been defined, Wilson said.
Piston Group, of Southfield, Mich., ranks No. 72 on the Automotive News list of top 100 global suppliers, with worldwide sales to automakers of $2.85 billion in 2019.

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Tesla cuts price on China-made Model 3 with CATL battery, report says

Tesla Inc. launched its first Model 3 sedan that people with knowledge of the matter said is equipped with cheaper, Chinese-made batteries, allowing it to cut the cost of cars in the world’s largest electric-vehicle market.
The mass-market Model 3s will sell for 249,900 yuan ($36,800) after government subsidies, bringing the starting price of Tesla’s basic model down by about 8 percent. The car will have a range of 291 miles on one charge.
The cheapest current models are 271,550 yuan ($40,000) after subsidies. A Model 3 car with a longer range of 415 miles will start from 309,900 yuan ($45,600), Tesla said on its website on Thursday.
Tesla’s new powertrains are expected to include a cobalt-free lithium iron phosphate battery made by  Contemporary Amperex Technology Co. the people familiar said, asking not to be identified because those details are private.
Reuters, citing people familiar with the matter, reported that the cobalt-free batteries will be in the standard-range Model 3 sedans.
The battery has a cheaper mix of raw materials and could help Tesla compete with domestic and international rivals that are flooding the Chinese market with new models.
A representative for Tesla in China declined to comment specifically on the battery. But after the prices were changed on its website, Tesla released a statement saying the new Model 3 benefits “from advanced software technology and efficiency improvement.”
The vehicles produced at Tesla’s Shanghai plant have thus far used nickel-cobalt batteries made by Panasonic Corp. of Japan and South Korea’s LG Chem. Cobalt is expensive because about half of the world’s supply comes from the Democratic Republic of Congo, where longstanding corruption and governance issues are compounded by the use of child labor in mining and high taxes on the metal.
Tesla also is partnering with CATL, according to a February filing by the Chinese company. CATL supplies different types of batteries to various other automakers including Daimler, Hyundai Motor Co., Toyota Motor Corp. and Volkswagen Group.
LFP batteries cost about 20 percent less to make than nickel-cobalt battery cells, according to BloombergNEF.
Iron batteries will “still be good” for Tesla’s mid-range products, CEO Elon Musk said at his company’s Battery Day technology showcase earlier this month. He added Tesla doesn’t want to be constrained by limited production capacity for nickel-cobalt batteries.
Cumulative registrations this year of Chinese-made Model 3s, which debuted in January, reached almost 70,000 vehicles as of the end of August, according to state-backed China Automotive Information Net.
Reuters contributed to this report.

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Ford’s Farley shuffles executives on first day as CEO

DETROIT — Tim Stone, Ford Motor Co.’s CFO, is stepping down after only a year and a half in the position to take a new role at an artificial intelligence company, one of a handful of executive changes announced Thursday as Jim Farley takes over as CEO.
John Lawler, the head of Ford’s autonomous vehicle company, will become Ford’s CFO effective immediately. Lawler, 54, has held a number of roles during his 30-year career, including president of Ford China and CFO of Global Markets.
Stone, 53, is leaving to become COO and CFO of  ASAPP Inc. and will be the second Detroit 3 CFO to leave this year for a technology company. He will remain with Ford through Oct. 15.
“John knows our company inside-out, has a clear view and great ambition for what Ford can be, and articulates what’s needed to get there,” Farley said in a statement. “As CFO, he will help assure we have the means to fund those ambitions.”
Farley worked closely with Lawler in recent years when Farley was head of new businesses, technology and strategy. Both men spent considerable time in Silicon Valley picking the brains of tech leaders to help shape Ford’s future.
In addition, Ford said  that Joy Falotico, its chief marketing officer and president of Lincoln, will step down as CMO to focus on her role leading Ford’s luxury brand. Falotico, 53, has held the dual role since 2018.
“This change will allow Joy to focus on accelerating Lincoln’s global growth through great vehicles and services and a truly differentiated customer experience,” Kumar Galhotra, Ford’s president of the Americas and Internatioal Markets, said. “Lincoln’s completely refreshed lineup is resonating with customers in the U.S. as well as in China, where we are now producing the Lincoln Aviator and Corsair locally, for Chinese customers – and that’s just the beginning.”
Ford said it would name a new CMO “shortly.”
Ford also announced a pair of retirements: Jeff Lemmer, its chief information officer, will retire January 1. Dale Wishnousky, its vice president of manufacturing for Ford Europe, will also retire at the end of the year.
Kieran Cahill, 53, previously Ford of Europe’s director, manufacturing and strategic projects, will succeed Wishnousky, effective immediately. Ford said it would name a new CIO soon.

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Adient completes $175 million sale of fabrics business

DETROIT — Seating supplier Adient plc said Thursday that it has closed its sale of the company’s automotive fabrics manufacturing business, including its lamination business, to Sage Automotive Interiors.
The deal, first announced in March, closed Wednesday, Adient said in a statement.
Cash proceeds received from the sale to the automotive textile supplier totaled about $175 million, Adient said. Proceeds are expected to be used to pre-pay a portion of the company’s debt and for general corporate purposes.
Adient continues its strategy of focusing on its core, high-volume seating business in a move to restore profitability.
In January, it sold its premium brand, Recaro Automotive Seating. In March, as it faced losses associated with plant shutdowns during the coronavirus pandemic, it cut the salaries of U.S. non-plant employees by 20 percent. The next month, Adient said it planned to raise $500 million in a private offering, using its assets as collateral via a secured note.
Adient, based in Plymouth, Mich., ranks No. 12 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $16.5 billion in 2019.

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VW drawing up plans to carve out Lamborghini, report says

FRANKFURT — Volkswagen Group is drawing up plans to set up Lamborghini as a more independent unit, and is discussing long-term supply deals that could make it easier to list it on the stock exchange, two people familiar with the matter told Reuters.
“Volkswagen is in the process of carving out Lamborghini, and to organize future supply and technology transfer deals,” one of the sources familiar with the matter told Reuters.
The Italian sportscar brand, which is currently a division of Audi, could be partially listed, with Volkswagen retaining a controlling stake, the first person familiar with the talks said.
There is no formal decision to divest Lamborghini, a second person said, adding that the timetable of any deal remained unclear.
“This is a first step which gives VW the option to list the unit further down the line,” the second person told Reuters.
A third person familiar with the discussions said the future of Bugatti, Lamborghini and Ducati was discussed during a supervisory board meeting last Friday.
The possibilities for how to electrify the Lamborghini and Bugatti brands through partnerships and investors was discussed, the third person said.
Bankers and potential cornerstone investors in an IPO have been approached by the automaker, the sources said.
Volkswagen declined to comment.
Volkswagen Group CEO Herbert Diess said Wednesday that the automaker will announce “important steps” about the company’s future before the close of the year.
Volkswagen is reviewing what role its high-performance brands Lamborghini, Bugatti and Ducati will play within the multi-brand carmaker as part of broader quest for more economies of scale, senior executives told Reuters.
A global clampdown on combustion-engined vehicles has forced automakers to accelerate development of low-emission technology for mainstream models, leaving Volkswagen managers struggling to find resources to electrify low-volume sportscar models.

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GM, Toyota, FCA, Hyundai Q3 sales slip

General Motors, FCA US, Toyota Motor Corp. and Hyundai posted lower third-quarter sales, with GM, Toyota and Hyundai racking up gains in September to finish the quarter on a high note, in more signs the market is steadily rebounding from the coronavirus.
Deliveries dropped 9.9 percent last quarter at GM, with sales improving “sequentially” each month, the company said Thursday. Volume declined 11 percent at Chevrolet, 5.7 percent at GMC, 2.9 percent at Buick and 18 percent at Cadillac.
GM said the seasonally adjusted sales rate for the third-quarter is expected to tally 15.9 million, including medium and heavy duty trucks, in another sign the market gained momentum as the quarter wrapped up.  
“Industry and GM sales rebounded significantly in September, finishing the month with year-over-year sales increases,” the nation’s No. 1 seller, which no longer reports monthly results, said in a statement.
FCA US said third-quarter volume dropped 10 percent, with strong retail sales offsetting “ongoing softness in fleet purchases.”
Volume dropped 9 percent at Jeep, 2 percent at Ram, 31 percent at Dodge and 53 percent at Fiat last quarter. Only the Chrysler brand, up 8 percent, and Alfa Romeo, with an increase of 17 percent, posted gains during the period, FCA said.
U.S. retail sales of the Ram pickup truck rose 15 percent last quarter.
“Jeep and Ram are hot and we continue to prioritize deliveries to our dealers who are asking us to ship as many vehicles as we can build,” said Jeff Kommor, head of U.S. sales for FCA US.
Third-quarter volume dropped 11 percent at Toyota Motor, with sales off 13 percent at the Toyota division but up 2 percent at Lexus. The automaker’s September sales rose 16 percent, with deliveries up 14 percent at Toyota, fueled by strong Highlander and RAV4 demand, and 31 percent at Lexus. 
Hyundai reported third-quarter U.S. sales of 170,828, a 1 percent decline from a year ago.
In September, volume rose 5 percent to 54,790 cars and light trucks, behind a 21-percent gain in retail deliveries.Third-quarter retail volume tallied 161,254, a 7 increase over 2019, the company said.
Hyundai has countered lower fleet business with stronger retail sales driven by an expanded crossover lineup, even as it spends less on incentives. (See chart below.) The company said fleet sales dropped 67 percent in September and represented 5 percent of overall volume.
Most other automakers will report third quarter and September U.S. auto sales later Thursday. Ford Motor Co. will release third-quarter results on Friday. Daimler and Jaguar Land Rover are expected to release results later in the month.
September sales are projected to get a boost from Labor Day holiday volume and two extra selling days, providing a final boost to third-quarter volume.
U.S. light-vehicle deliveries fell 22 percent to nearly 9 million through August, Cox Automotive and J.D. Power say.
The market continues to rebound from the coronavirus pandemic, though low inventories, tighter credit standards for some consumers and high unemployment continue to be a drag.
Cox Automotive estimates industrywide inventories currently stand at just 57-58 days, below the industry’s longtime 60-day benchmark.
SAAR
The seasonally adjusted, annualized rate of sales for September is forecast to come in at 14.8 million to 15.7 million, based on forecasts from TrueCar/ALG, Cox Automotive and LMC Automotive. The SAAR tallied 15.2 million in August and 17.3 million in Sept. 2019 and has inched up every month since bottoming out at 8.74 million in April, according to Motor Intelligence.
Incentives
Reflecting lean stockpiles, September incentive spending is expected to fall $250 to $3,964 per vehicle — the lowest level since July 2019 and the first time this year it has dropped below $4,000 — J.D. Power said. ALG estimates incentives averaged $4,001 last month, a 5.3 percent increase over Sept. 2019. (See chart below.)
Headwinds
In addition to lean inventories, the industry faces other headwinds heading into the fourth quarter. The prospect of another wave of COVID-19 infections, coupled with the start of flu season, could undermine the rebound.
And the outcome of talks in Washington on another round of economic stimulus, as well as uncertainty surrounding the presidential election, could also weigh on household spending.
Fleet factor
While retail demand has rebounded, fleet shipments — an industry bright spot for several years — remain depressed as rental agencies continue to curtail or cancel orders.
Fleet volume is not expected to fully recover until mid to late 2021, when business and leisure travel resume, pending the broad rollout of a vaccine, some analysts argue.
“The last piece of the puzzle for the industry’s recovery is fleet sales,” said Edmunds analyst Jessica Caldwell. “Daily rental companies have understandably reduced or delayed orders as Americans continue to stay at home rather than embark upon business or air travel. It will likely take a bit longer for this side of the business to make as dramatic a comeback as its retail counterparts.”  
Nuts, bolts

There were 25 selling days last month vs. 23 in Sept. 2019.
Lease penetration in September is expected to be 26.5 percent, a decline of 2.8 percentage points from September 2019 and the lowest September level since 2014, J.D. Power said.
2021 models represent just 3 percent of available inventory, Cox Automotive said this week, compared to 25 percent of dealer stockpiles that were 2020 models in Sept. 2019. Plant shutdowns have delayed many products and limited availability of others.
Average transaction prices are projected to rise 3.5 percent, or $1,223, to $36,541 in September from a year ago, and up 0.4 percent, or $156, compared to August 2020, ALG estimates.  
Fleet sales are expected to total 130,300 last month, a decline of 52 percent from September 2019, J.D. Power said. Fleet volume is expected to account for 10 percent of total light-vehicle sales last month, down from 20 percent a year ago.

Quotable
“Large truck sales continue to spike as many consumers gravitate toward home improvement projects to enrich their home environment where they are also working and spending more of their leisure time.”         — Eric Lyman, chief industry analyst at ALG
“Third-quarter sales make at least two things apparent: Most of the doomsday scenarios forecasted at the beginning of the pandemic fortunately did not hold true, and the American consumer stepped up to become one of the many heroes in this chapter of resilience for the automotive industry. Consistently lower interest rates encouraged new-car buyers — who were less likely to be financially hindered by the economic fallout of the pandemic — to pull the trigger on a purchase.”         — Jessica Caldwell, Edmunds’ executive director of insights
“Despite some uncertainties that could affect performance in Q4, one notable tailwind could be the return of customers to the market that took advantage of lease extension offers due to disruption from COVID-19. These customers that have traditionally replaced their vehicle at the end of their lease have been waiting on the sideline, getting ready for their next purchase,”         — Thomas King, president of the data and analytics division at J.D. Power

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Toyota, FCA, Hyundai Q3 sales slip

Toyota Motor Corp. and Hyundai posted lower third-quarter sales, but racked up gains in September to finish the quarter on a high note, in more signs the market is steadily rebounding from the coronavirus.
FCA US said third-quarter volume dropped 10 percent, with strong retail sales offsetting “ongoing softness in fleet purchases.”
Volume dropped 9 percent at Jeep, 2 percent at Ram, 31 percent at Dodge and 53 percent at Fiat last quarter. Only the Chrysler brand, up 8 percent, and Alfa Romeo, with an increase of 17 percent, posted gains during the period, FCA said.
U.S. retail sales of the Ram pickup truck rose 15 percent last quarter. “Jeep and Ram are hot and we continue to prioritize deliveries to our dealers who are asking us to ship as many vehicles as we can build,” said Jeff Kommor, head of U.S. sales for FCA US.
Third-quarter volume dropped 11 percent at Toyota Motor, with sales off 13 percent at the Toyota division but up 2 percent at Lexus. The automaker’s September sales rose 16 percent, with deliveries up 14 percent at Toyota, fueled by strong Highlander and RAV4 demand, and 31 percent at Lexus. 
Hyundai reported third-quarter U.S. sales of 170,828, a 1 percent decline from a year ago.
In September, volume rose 5 percent to 54,790 cars and light trucks, behind a 21-percent gain in retail deliveries.Third-quarter retail volume tallied 161,254, a 7 increase over 2019, the company said.
Hyundai has countered lower fleet business with stronger retail sales driven by an expanded crossover lineup, even as it spends less on incentives. (See chart below.) The company said fleet sales dropped 67 percent in September and represented 5 percent of overall volume.
Most other automakers will report third quarter and September U.S. auto sales later Thursday. Ford Motor Co. will release third-quarter results on Friday. Daimler and Jaguar Land Rover are expected to release results later in the month.
September sales are projected to get a boost from Labor Day holiday volume and two extra selling days, providing a final boost to third-quarter volume.
U.S. light-vehicle deliveries fell 22 percent to nearly 9 million through August, Cox Automotive and J.D. Power say.
The market continues to rebound from the coronavirus pandemic, though low inventories, tighter credit standards for some consumers and high unemployment continue to be a drag.
Cox Automotive estimates industrywide inventories currently stand at just 57-58 days, below the industry’s longtime 60-day benchmark.
SAAR
The seasonally adjusted, annualized rate of sales for September is forecast to come in at 14.8 million to 15.7 million, based on forecasts from TrueCar/ALG, Cox Automotive and LMC Automotive. The SAAR tallied 15.2 million in August and 17.3 million in Sept. 2019 and has inched up every month since bottoming out at 8.74 million in April, according to Motor Intelligence.
Incentives
Reflecting lean stockpiles, September incentive spending is expected to fall $250 to $3,964 per vehicle — the lowest level since July 2019 and the first time this year it has dropped below $4,000 — J.D. Power said. ALG estimates incentives averaged $4,001 last month, a 5.3 percent increase over Sept. 2019. (See chart below.)
Headwinds
In addition to lean inventories, the industry faces other headwinds heading into the fourth quarter. The prospect of another wave of COVID-19 infections, coupled with the start of flu season, could undermine the rebound.
And the outcome of talks in Washington on another round of economic stimulus, as well as uncertainty surrounding the presidential election, could also weigh on household spending.
Fleet factor
While retail demand has rebounded, fleet shipments — an industry bright spot for several years — remain depressed as rental agencies continue to curtail or cancel orders.
Fleet volume is not expected to fully recover until mid to late 2021, when business and leisure travel resume, pending the broad rollout of a vaccine, some analysts argue.
“The last piece of the puzzle for the industry’s recovery is fleet sales,” said Edmunds analyst Jessica Caldwell. “Daily rental companies have understandably reduced or delayed orders as Americans continue to stay at home rather than embark upon business or air travel. It will likely take a bit longer for this side of the business to make as dramatic a comeback as its retail counterparts.”  
Nuts, bolts

There were 25 selling days last month vs. 23 in Sept. 2019.
Lease penetration in September is expected to be 26.5 percent, a decline of 2.8 percentage points from September 2019 and the lowest September level since 2014, J.D. Power said.
2021 models represent just 3 percent of available inventory, Cox Automotive said this week, compared to 25 percent of dealer stockpiles that were 2020 models in Sept. 2019. Plant shutdowns have delayed many products and limited availability of others.
Average transaction prices are projected to rise 3.5 percent, or $1,223, to $36,541 in September from a year ago, and up 0.4 percent, or $156, compared to August 2020, ALG estimates.  
Fleet sales are expected to total 130,300 last month, a decline of 52 percent from September 2019, J.D. Power said. Fleet volume is expected to account for 10 percent of total light-vehicle sales last month, down from 20 percent a year ago.

Quotable
“Large truck sales continue to spike as many consumers gravitate toward home improvement projects to enrich their home environment where they are also working and spending more of their leisure time.”         — Eric Lyman, chief industry analyst at ALG
“Third-quarter sales make at least two things apparent: Most of the doomsday scenarios forecasted at the beginning of the pandemic fortunately did not hold true, and the American consumer stepped up to become one of the many heroes in this chapter of resilience for the automotive industry. Consistently lower interest rates encouraged new-car buyers — who were less likely to be financially hindered by the economic fallout of the pandemic — to pull the trigger on a purchase.”         — Jessica Caldwell, Edmunds’ executive director of insights
“Despite some uncertainties that could affect performance in Q4, one notable tailwind could be the return of customers to the market that took advantage of lease extension offers due to disruption from COVID-19. These customers that have traditionally replaced their vehicle at the end of their lease have been waiting on the sideline, getting ready for their next purchase,”         — Thomas King, president of the data and analytics division at J.D. Power

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