- Matthew DeBord/BI
The year 2016 might have been the most lively and interesting I’ve ever experienced and I’ve been covering the auto industry for over a decade.
From General Motors to Uber and Tesla to Donald Trump, the stories came fast and furious.
It was hard, at times, to keep up.
But we pulled it off. Here are the ten biggest car stories of 2016:
10. The booming US auto market.
- Business Insider
In 2015, US auto sales set a new record when 17.5 million new cars and trucks rolled off dealer lots. The industry had decisively recovered from the dark days of the financial crisis, a period when the sales pace fell at one point below 10 million, an apocalyptic situation.
The numbers aren’t in yet for 2016, but the sales pace has been as strong as it was in 2015. Still, though, there’s been much discussion and debate in the industry about whether the market has plateaued at a “historically high level,” as Ford CEO mark Fields has put it. Regardless, 2016 could see the 2015 sales record broken.
This is a boom, no doubt about it. It’s also a profitable boom, as automakers in the US sell a lot of pickup trucks and SUVs, amid relatively low gas prices.
9. Risky new trends in auto lending.
- Scott Olson / Getty Images
With a booming sales market comes booming credit: the vast majority of new vehicles are financed.
In the past, loans were structured to run five years before the car or truck was paid off. But after the financial crisis, some lenders got aggressive about capturing subprime borrowers, people with damaged credit who still needed a vehicle.
Lenders also began to stretch out loan terms in order to create an appealing monthly payment number and enabled a borrower to get into a more expensive car or truck.
However, this now means that some borrowers will be “underwater” or in a negative-equity position with their car loan. This has raised some alarms about lending practices. In 2017, the lending story is likely to get more intense, as the plateaued market compels automakers to maintain their slice of the sales pie.
8. Fiat Chrysler ends passenger-car production in the US.
- Bill Pugliano/Getty Images
Because profits are so much higher for pickups and SUVs – and because that’s what US consumer want to buy – automakers are shifting their production mix to favor those vehicles.
FCA took the plunge in 2016 to end all passenger car production in the US, moving it to Mexico to free up factory capacity to build more trucks.
FCA CEO Sergio Marchionne has been bold in his statements about this decision and the underlying market trend. He has said that a structural shift is happening and that passenger cars will never come back in the US, even if gas prices spike.
7. GM’s completes its acquisition of Cruise Automation.
- General Motors
The year 2016 was one in which Detroit started to buy in, quite literally, to Silicon Valley.
General Motors was especially active. In March, the automaker announced it was buying Cruise Automation, a startup that has an innovative self-driving technology.
GM plans to integrate Cruise’s autonomous tech with a fleet of all-electric Chevy Bolt crossovers rolling out in cities on the Lyft network.
Self-driving and ride-sharing are the two biggest new stories in transportation, taking the place of the previous Big Narrative, electric cars. And GM was right there, with a large checkbook made flush by several years of booming auto sales – and the senior leadership, especially CEO Mary Barra and President Dan Ammann, to provide the strategic vision.
6. The Chevy Bolt hits the streets.
- General Motors
Speaking of GM, the carmaker decided to bring a 200-mile-plus-range electric car to the mass market, pricing the vehicle at around $30,000 after tax breaks.
GM did that in 2016 with the Chevy Bolt. The range is 238 miles on a charge, and the price is … $29,995! That’s pointedly $5 less than the $30,000 post-tax-break price tag that industry leader Tesla will achieve for its Model 3, a car that won’t hit the streets until late 2017.
The Bolt started to roll off the assembly lines in October, went on sales in California and Oregon soon after, and won Motor Trend’s Car of the Year for 2017.
5. Trump took on the auto industry.
- Shannon Stapleton/Reuters
Trump took a number of shots at the auto industry during the contentious and ultimately shocking 2016 presidential campaign. He attacked Ford for a plan to move small-car production to Mexico and sent a shiver through a business that has spread its NAFTA supply chain across the border, and that has been building factories in Mexico since the 1960s.
But at the same time Trump was accusing the automaker of outsourcing jobs, he was giving them indications that his EPA would favor the industry by rolling back more stringent fuel-economy standards, something carmakers have been actively lobbying for.
This schizophrenic relationship will probably continue under a President Trump.
4. Ford wins Le Mans and repeats history.
- Screenshot via Ford Performance
In 1966, Ford finished 1-2-3 at the 24 Hours of Le Mans, the world’s most prestigious endurance race, and in the process created a legend. It was Ford vs. Ferrari, and Ford emerged victorious with its famous GT40 car.
In 2015, Ford revealed a new GT, as well as plans to return to Le Mans in 2016 to make a run at history on the 50th anniversary of the 1966 win.
Against all odds, Ford pulled it off, once again beating out Ferrari, who finished second. It was an epic conclusion to an amazing story.
3. VW’s Dieselgate.
In 2015, Volkswagen was caught cheating on emissions tests in the US by installing “defeat devices” – software that would fool tests of its diesel engines into thinking that the motors were emitting lower levels of pollutants than they actually were.
In 2016, the Dieselgate scandal enveloped VW, destroying US sales for months and spreading across the globe.
During the year, VW would accept a multi-billion-dollar legal settlement with the US government and agree to buy back offending vehicles from owners.
By the end of 2016, VW was just beginning to show signs of recovering from the worst crisis in its history.
2. Tesla’s fatal Autopilot crash.
- Reuters/Bobby Yip; Business Insider/Dave Smith
Tesla started 2016 with a bang, as it revealed its mass-market Model 3 in Los Angeles and swiftly booked almost 400,000 pre-orders at $1,000 a pop for a $35,000 vehicles that wouldn’t roll off the production line until 2017.
It was an astonishing triumph for Elon Musk’s company.
But by mid-year, we learned that a Tesla owner had been killed when his Model S, running Autopilot self-driving systems, crashed in Florida in May.
Tesla was immediately plunged into an identity crisis as questions arose about whether its state-of-the-art self-driving technology was safe.
On a larger scale, as numerous carmakers began to introduce autonomous tech in the marketplace, a debate developed about whether self-driving cars were really ready for prime time.
HONORABLE MENTION: There will be no Apple Car.
Speculation had been rampant in 2014 and 2015 that Apple’s next big thing would be to jump into the auto space.
For a year and a half, the mysterious “Project Titan” was pondered and scrutinized. Would there really be an Apple Car? And if there were, would it be a transportation gamechanger, as the iPhone had been for telecommunications?
As it turned out, the Apple Car was the big story that wasn’t of 2016. Project Titan had reportedly been poorly managed, and the visionless undertaking saw its ambitions dialed back before the year was out.
1. Uber’s self-driving fleet hits public roads in Pittsburgh.
- Business Insider/Corey Protin
Out of nowhere, Uber completely shifted the ground under the world of transportation.
Prior to 2016, the rise of the electric car had been the hottest story, led by Tesla, but with new entrants such as Faraday Future arriving on the scene.
But Uber and it $60-billion-plus valuation and steady march toward dominating the ride-hailing and ride-sharing business showed that although EVs were cool, there was a massive consumer desire for a better and more technologically enabled taxi services.
Meanwhile, self-driving cars were becoming a major new trend.
Uber put these two together when it rolled out a fleet of self-driving vehicles in Pittsburgh. The entire auto industry immediately took notice.
That would have been the biggest car story of 2016 on its own. But then Uber botched the rollout of self-driving vehicles in San Francisco and effectively as it has triumphed in Pittsburgh. CEO Travis Kalanick and his company found themselves ordered by the California DMV to cease using the self-driving cars until Uber acquired a $150 permit from the state.
Uber refused, and the story continues…