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Automotive News Digest; Week Ending December 23, 2018; Executive Producer Larry Nutson

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AUTO CENTRAL and CHICAGO - December 23, 2018: Every Sunday Larry Nutson, Senior Editor and Chicago Car Guy along with fellow senior editor Thom Cannell from The Auto Channel Michigan Bureau, give you The Auto Channel's "take" on this past week's automotive news, in easy to "catch up" with news nuggets.

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The Auto Channel Automotive News In Digest Format - Week Ending December 23, 2018;
Executive Producer Larry Nutson

* Respected forecasters at J.D. Power/LMC Automotive, Cox Automotive and Edmunds predict that 2018 auto sales will exceed 17 million units for the fourth consecutive year, exceeding expectations. Credited are: higher fleet deliveries; U.S. tax reform; and Tesla’s rapid ramp-up in production. Average transaction prices increased 2.2% and incentive spending went down. All in all - it has been a good year for the auto industry. That momentum will carry over to next year where NADA expects about 16.8 million vehicle sales. High new vehicle prices, rising interest rates and a slowing economy may temper sales a bit more.

* The Fed increased the benchmark interest rate into a range between 2.25 and 2.5 percent and marks the fifth consecutive quarter that the central bank has moved to raise borrowing costs. TrueCar’s Chief Economist, Oliver Strauss, believes that although rising interest rates can dampen car sales, current levels are still low enough that the impact on auto loans won’t be as big as consumers might think. Sales have been strong in 2018, with forecasts showing the year is likely to end with over 17 million total vehicles sold, but he predicts that should federal interest rates rise above 3%, that would have a more significant effect on car sales.

* Diplomats from nearly 200 countries, including the U.S. (this despite President Trump), reached a deal to keep the Paris climate agreement alive by adopting a detailed set of rules to implement the pact. The deal will ultimately require every country in the world to follow a uniform set of standards for measuring their planet-warming emissions and tracking their climate policies. It remains to be seen what needed changes will occur in the use of private passenger vehicles in the U.S. in order to reduce the use of fossil fuels.

* Carlos Ghosn’s bad karma deepens as he is rearrested by Japanese prosecutors on new, more serious, charges regarding alleged nefarious financial dealings in what has become a string of charges. Ghosn presided over the partnerships between Nissan, Renault and Mitsubishi and has been lauded as a star among automotive industry icons like Lee Iacocca, Sergio Marchionne and Bob Lutz. Ghosn’s attorneys have not commented as their client goes back to jail for another 10 days, at least.

* At the upcoming 2019 Detroit North American International Auto Show, the last to take place in January, 30 vehicle unveilings are expected. The Cadillac XT6 luxury SUV, Toyota Supra sport coupe, Ford Bronco SUV, Ford Mustang Shelby GT500, Volkswagen Passat, Lexus RC F Track Edition, a new Lexus all-electric SUV, as well as a concept vehicle from Infiniti are expected to break cover.

* The 2019 Chicago Auto Show, with media previews scheduled for February 6-8, 2019, will be the world debut and global introduction venue for the new 2020 Range Rover Evoque. BMW/MINI and Mercedes-Benz will not have corporate exhibits this year as those brands test other marketing strategies. The local Chicago area dealers for these brands may still have displays at the show.

* California buses are going all-electric. By 2040 the California Air and Resource Board (CARB) is requiring the state’s public bus fleet to use electric power. California the first state to sign on to such a commitment. The mandate requires the state replace more than 14,000 buses with zero-emissions models. There's a phase-in beginning now and ramping up in 2025.

* Lincoln is celebrating the 80th anniversary of its Continental nameplate in 2019 with a very limited run of 80 Continental sedans with coach doors. Hinged at the rear and opening a wide 90 degrees the often-called suicide doors make for gracious entry and exit. The wheelbase has been stretched 6 inches for more rear seat comfort. Loaded with every option, the price to be north of $100,000 according to reports. A limited number of additional Continental Coach Door Edition sedans will be available for the 2020 model year, according to Lincoln.

* We learned this week Audi will preview a technology they’ve been working on called “Audi Immersive In-Car Entertainment.” The system uses the inside of the car's windshield and side windows as screens for streaming entertainment and will be to be revealed at the upcoming Consumer Electronics Show. CES will also be the venue for Honda to show an autonomous, all-terrain work vehicle and a high-tech new Mercedes-Benz CLA-Class. CES has become a popular venue for automakers to show off new tech.

* First keys, then key fobs, then...your finger. In China the new 2019 Hyundai Santa Fe will be offered with an optional fingerprint recognition system that can lock, unlock and start the vehicle. It will even set up automatically such things as seat position and sideview mirrors depending on which user is detected. If you're wearing gloves, forget it. It's back to the key fob.

* Motor Trend revealed the lists of the quickest and slowest cars tested in 2018. Since they instrument-test over 200 cars, trucks and SUV/CUVs a year, their numbers are good. Fastest (0-to-60 time): Mustang GT, 3.9 seconds; Dodge Challenger Hellcat, 3.9 seconds; Porsche Macan Turbo, 3.8 seconds; Porsche 911 Carrera T, 3.8 seconds; and Alfa Romeo Giulia Quadrifoglio, 3.8 seconds. Slowest: Subaru Crosstrek, 9 seconds; Hyundai Elantra, 9, seconds; Hyundai Santa Fe, 9.6 seconds; Mitsubishi Eclipse Cross, 9.6 seconds; and Subaru Forrester, 9.6 seconds.

* The Insurance Institute for Highway Safety announced this week its annual “Top Safety Pick” and “Top Safety Pick +" awards for 2018. The “+” designation is a bit more stringent this year. Thirty vehicles earned the “+” designation, all were Asian and German brands. The only U.S. brand to earn the non-“+” honor was the Chrysler Pacifica. Brands failing to qualify for either award were Buick, Cadillac, Chevrolet, Dodge, Ford, GMC, Jeep, Lincoln, Ram, Tesla and Volvo.

* Tesla has been having a lot of growing pains but recently posted a record quarterly profit with investors reacting positively. With the introduction and increased production and sale of the Model 3 Tesla flipped from negative cash flow to positive. Using the backing of high-end leases on its Model X and Model S that usually sell for around $100,000 Tesla sold $837 million in bonds. Selling auto-lease bonds is a common tool for auto makers to finance their leasing business.

* In other Tesla news, Elon Musk unveiled his underground transportation tunnel in LA allowing guests and news reporters to take their first ride. A Tesla Model X modified with wheels to follow a track drove about a mile at speeds up to 40 mph through the mile long tunnel in about three minutes. That's a long way from the promised 150 mph but it is a start.

* In Arizona, you can now get groceries delivered in by autonomous vehicle. Kroger and Nuro, an autonomous vehicle company, will deliver groceries using the R1 autonomous vehicle for a distance of up to one mile following only residential streets. For a fee of $5.95 your order is delivered to your home and you will be notified via text message telling you to go outside and get them from the vehicle. The R1 is half the width of a Toyota Corolla, travels at speeds up to 25 mph and is unmanned. A chase car follows it with an engineer able to remotely take control if needed.

* A German engineering company, IAV GmbH (IAV), based in Berlin, has agreed to pay a $35-million fine, serve probation and be monitored for two years for its role in Volkswagen's massive fraud involving U.S. diesel vehicle emissions tests. IAV agreed to plead guilty to one criminal felony count after an investigation showed it conspired with VW to dupe U.S. consumers. IAV designed the software used for the VW diesel defeat device.

* Toyota is recalling nearly 143,000 SUVs and pickups worldwide to fix air bag and brake problems. One recall covers about 96,000 Toyota Land Cruisers and Lexus LX570 SUVs from 2008 through 2019 to fix a seat belt tension sensor that can malfunction. The second recall affects about 47,000 Tacoma pickups from 2018 and 2019 to fix a brake master cylinder seal.

* Porsche is recalling 74,585 Panamera sedans worldwide over a software problem that could cause the electric power steering system to be unavailable for short periods. The affected cars were assembled between March 21, 2016 and December 6, 2018.

* Ford announced this week a recall of 874,000 pickups in North America because of an engine block heater fire risk. About half the affected vehicles - some 2015 to 2019 F-150s and some 2017 to 2019 Super Duty pickups - are in the U.S. and the other half in Canada. The company said there have been three instances of the fires caused by corrosion in an electrical connector, but no injuries are known.

* At the 2019 Dakar Rally, the Geely Auto Shell Lubricant Cooper Tire team and Asia’s “Off-road King” Han Wei will compete with a 100% methanol fuel powered rally vehicle for the first time in the races history. On January 6, 2019 the 41st Dakar Rally will be begin in Lima, Peru and will undertake a 5,000 km journey. In October 2018 at Rallye du Maroc, the Geely Auto Shell Lubricant Cooper Tire team tested Geely Auto’s methanol powered rally vehicle. Rallye du Maroc held in the Sahara desert has become a classic precursor to Dakar.

* Old style, short track racing may be making a return. A deal has been reached between track operator Formosa Productions that could lead to the return of NASCAR to the Fairgrounds Speedway Nashville. The .596-mile track, located at the fairgrounds about four miles from downtown Nashville, last hosted a Cup race in 1984 and Xfinity and Truck Series races in 2000.

* From all of us at The Auto Channel we wish you a Merry Christmas and a safe year-end holiday.