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December Auto Sales Soar 9% in Record Year

Automakers posted a solid 9% sales gain in December, an exclamation point that sealed 2015 as the biggest sales year ever for the industry, reported USA Today.

All told, automakers sold 17.47 million new vehicles for the year, Autodata reported, besting the previous record set in 2000 by 68,138 vehicles. Low gas prices, cheap credit, low unemployment, soaring consumer confidence and warm weather fueled a rush into showrooms in December.

“The U.S. economy continues to expand, and the most important factors that drive demand for new vehicles are in place, so we expect to see a second consecutive year of record industry sales in 2016,” said Mustafa Mohatarem, GM’s chief economist, in a statement.

Still, sales success for individual automakers presented a mixed bag. Detroit’s Big 3 fared well for December and the year. General Motors had a 5.7% sales increase in December, Ford Motor saw an 8.3% boost and Fiat Chrysler sales rose 12.6%, according to Autodata. Tesla Motors doubled sales during the month and sold 23,650 of its luxury electric cars in the U.S. for the year, but came in at the low end of its delivery guidance on worldwide deliveries.

Among Asian makers, Toyota saw a 10.3% increase for the month, Honda was at 9.9% and Nissan at 8.7%. But for the full year, they came in lower, with Toyota posting a 5.3% increase compared to the industry average of 5.7%

One laggard was German automaker Volkswagen Group, which still cannot sell diesel vehicles amid an emissions scandal, down 3.4% overall. The automaker’s Volkswagen brand sales fell 9.1% in December and 4.8% for the year. The company’s Audi luxury brand, which has felt a smaller impact from the scandal, achieved a 6% gain in December and 11.1% for the year. Another loser for the month was Hyundai, saddled with a car-heavy lineup during the SUV surge, down 1.5%.

Consumers continued their exodus from less-lucrative cars into crossovers, sport-utility vehicles and pickups amid low gasoline prices.

At 13.9% market share, the small SUV segment is now the largest category of vehicles in the U.S., trailed by small cars and midsize cars at 13.7% apiece, according to Kelley Blue Book.

“There’s no end in sight to those trends,” AutoTrader.com analyst Michelle Krebs said. “You’re going to hear the same broken record next year.”

Crossovers like the Toyota RAV4, the Nissan Rogue and the Jeep Renegade delivered a robust showing in December.

“The segment is in demand with Baby Boomers and Millennials both looking for increased utility. We think this is a long-term trend,” Ford sales analyst Erich Merkle said on a conference call.

Unlike 2000, when automakers were piling on discounts to sell vehicles despite a strong economy, the industry is financially fit and has spurned steep incentives. Average incentives rose 3.9% in December, compared with a year earlier, to $3,063 per vehicle, according to TrueCar.

Toyota division general manager Bill Fay told reporters it was a “standout year,” though he projects sales to “start to level off a bit” in 2016.

Even as crossovers gain, the industry’s stalwart full-size pickup trucks have also flourished, in addition to new midsize pickups.

The Ford F-Series pickup, the most popular vehicle in the U.S., rose 14.6% to 85,211 units in December. Sales were up 3.5% for the year to 780,354.

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GM, Ford to jointly develop 10-speed transmissions

Via USA Today

The latest auto race isn’t on a track. It’s under the car, unseen, in the transmission.

Ford Motor and General Motors, the two biggest of the Detroit 3, said today they will jointly develop nine- and 10-speed automatic transmissions, which could save fuel and improve performance, particularly with smaller engines. Developing a new transmission is a complex and expensive project — joint development could save each company hundreds of millions of dollars.

The automakers say their engineers already are at work, but don’t say when to expect the gearboxes, which will share parts.

Companies legally can develop hardware together as long as they part ways to manufacture and tune it, as GM and Ford say they will. Unaffiliated companies even have shared engines. Chrysler, Hyundai and Mitsubishi jointly developed engines that they all used from 2005 to 2009.

The gear-speed battles seem a bit like the race to field the most cup holders or the most LED lights. But packing as many ratios as possible into a vehicle’s transmission case is about much more than bragging points.

Done correctly, a transmission with more speeds improves mileage, performance or both by allowing the engine to work more efficiently. How well a transmission works, however, depends not just on the number of gears but on the software programming that controls it.

Chrysler Group is putting the first mainstream nine-speed automatics into the Dodge Dart and coming 2014 Jeep Cherokee this year. And while seven- and eight-speed transmissions are common among luxury brands, Chrysler is a pioneer at the moment for using eight-speed boxes in its mainstream big cars and, this year, Ram pickups.

It wasn’t long ago that six-speed automatics were the new thing. In fact, Ford and GM collaborated on shared six-speeds last decade. While both GM and Ford are trumpeting that as an example of their joint success, those six-speeds got off to a rocky start.

GM used them in its big crossover SUVs, such as the Chevrolet Traverse and GMC Acadia. But it had to have dealers reprogram the gearbox control software several times the first year because of complaints about poor shifting.

Ford used its version in the Edge crossover SUV, among other models, but then-partner Mazda declined to accept the box for its adaptation of the Edge, called CX-9.

To boost fuel economy, a many-speed gearbox can have several “overdrive” gears, which let the engine run very slowly even though the car is speeding down the highway. For maximum performance, a gearbox with more gears can be set up to try to always keep the engine revolutions at or near the spot where it makes the most power. The art is to get the best of both approaches and to do so without annoying pauses or jerks, whether shifting up or down.

Some car companies, such as Honda, Nissan and Subaru, are going a different route with automatics called CVTs (continuously variable-ratio automatic transmissions). They have a belt-drive configuration that uses variable-diameter pulleys to constantly adjust the ratio for what their designers believe is the correct setting for the situation.

Some drivers don’t care for CVTs’ gearless driving feel, however, so automakers program in modes that either mimic the feel of conventional multispeed automatics or let drivers manually pick from six or seven ratios.

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Fisker Employees Suing for Abrupt Layoffs

Via USA Today

Fisker Automotive is being sued for laying off most of its workers without what the suit says is enough notice.

The suit was filed Friday, the same day Fisker laid off 160 of its 213 employees. The Fisker suit was brought in California by Outten & Golden, a New York firm that successfully sued failed solar-panel maker Solyndra for abruptly laying off most workers in August 2011.

The suit is on behalf of former Fisker worker Sven Etzelsberger and seeks class-action status to represent all those let go suddenly.

Because Fisker’s action amounts to mass layoffs, according to the lawsuit, the workers should have been “provided 60 days advance written notice” of the layoffs, under the federal Worker Adjustment and Retraining Notification Act and a similar California labor law.

The Fisker lawsuit seeks 60-days’ worth of wages and benefits for the ex-Fisker workers. “It’s a knowable number, but we don’t know it” because Fisker has the records, he said.

Calls to Fisker’s Anaheim, Calif., headquarters were answered by a recording. Voice mail messages seeking comment on the lawsuit and Fisker’s status were not returned.

A large-scale layoff “often is a prelude to bankruptcy” filing, according to Jack Raisner, one of the Outten & Golden lawyers involved in the suit. He also was involved in the 2011 action against Solyndra that eventually won $3.5 million for those laid-off workers.

“It happens when a company is circling the drain,” he said, while insisting he had “no insight or knowledge” about whether Fisker plans to file for bankruptcy reorganization, or liquidation, or to continue as-is.

Fisker hasn’t made any cars since the middle of last year, after its battery supplier, A123 Systems, went out of business. A123 had a $249 million grant of taxpayer money from the Department of Energy, but nonetheless went though bankruptcy reorganization and now is owned by China’s largest auto components supplier, Wanxiang Group. the reconstituted A123 notified its customers in February that it was resuming some operations..

Fisker and Solyndra both received taxpayers’ money via federal loans, not outright grants, that were meant to promote alternative energy and propulsion.

Fisker got approval for $529 million from the Advanced Vehicle Technology Loan program, but borrowed only $193 million of it before the government froze the loan. The Energy Department said Fisker failed to meet agreed-upon milestones, but has refused to specify what those were.

Fisker’s first repayment is due this month.

Solyndra got a taxpayer loan of $535 million and will repay a small fraction of that under its bankruptcy restructuring.

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