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MARCH 6, 2017
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OPEL OPT OUT? General Motors, after 17 years of losses in Europe, is expected to announce a sale of its Opel division to PSA Group of France today, March 6. See autonews.com for updates.
MOBILITY REPORT The new daily Mobility Report launches online today at autonews.com/MobilityReport
Industry’s record run still has legs Economy eases concerns Nick Bunkley
[email protected]
Big discounts and high inventories, a toxic combination for the auto industry in the past, pose less danger today because a healthy economy is keeping U.S. sales at a near-record pace, analysts say. February was a virtual repeat of January for the industry, as increasing consumer confidence and a long stretch of gains in the stock markets helped the annualized selling rate stay at 17.57 million for a second consecutive month. There are signs of headwinds approaching, including rising loan delinquencies, interest rates and gasoline prices. Inventories for many brands are at their highest point since the dark days of 2009. But in the near term, automakers and dealers have plenty of reasons to remain bullish. “When you look at overall sentiment from a macro perspective, the numbers certainly support strong performance related to sales,” said Alec Gutierrez, Kelley Blue Book’s senior market analyst of automotive insights. Some forecasters, including LMC Automotive,
AUTOMOTIVE NEWS ILLUSTRATION
Posts and ads are appearing on Facebook with fake or altered images of vehicles, including a white coupe as the “new” Dodge Charger and a nonexistent Cadillac wagon promoting features of the Escalade. Michael Wayland
[email protected]
s news organizations and the Trump administration battle over “fake news,” some automakers face a new challenge on social media: “fake ads.” Sponsored posts and ads on Facebook have surfaced touting “new” vehicles such as the Dodge Charger and Cadillac Escalade with altered or misleading images. Some posts feature a concept vehicle or more futuristic design of a current model, while others show fake vehicles.
A
FAKE OUT Doctored vehicle images on Facebook provide click-bait for dealer advertisements Social media users share, comment on and “like” the posts based on the fictitious cars and trucks — potentially giving consumers unrealistic expectations when buying a new vehicle. It’s a thorny issue for auto brands that like the exposure and targeting ca-
pabilities of social media but zealously control how their brands and vehicles are portrayed. A post from a group called Auto Elite featured an image of what appears to see FAKE, Page 34
see SALES, Page 37
Self-driving programs go beyond ‘pedigree’ for talent Shiraz Ahmed
[email protected]
A NEWSPAPER
Fifteen-year-old Mikel Bober-Irizar opts to study autonomous driving over hanging out with friends.
t age 15, British computer whiz Mikel Bober-Irizar cuts an odd profile as a student leader in an online self-driving car engineering course. In the semianonymous world of e-learning, he codes alongside Ph.D.s and veteran developers from around the world for hours on end — even if it means frustrating his friends by choosing to do lessons over hanging out with them.
Industry scrambles to find qualified engineers “My dad is very much into computer science. He got me my first laptop when I was 5 years old,” said Bober-Irizar. “I’ve learned to teach myself things, figure out how to do them by just doing it.” Not bad for a kid who can’t even drive. Bober-Irizar’s interest in autonomous vehicle technology doesn’t come from a childhood of playing with Hot Wheels, but from a deep interest in computer science honed through competitive online challenges.
He’s one of countless engineers and hobbyists who lack what one recruiter calls “pedigree experience” but offer a potential source of new talent for companies desperate to staff rapidly expanding autonomous vehicle programs. Today, automakers and suppliers are stymied because the academic institutions and programs needed to train autonomous vehisee RECRUITS, Page 24
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UBER Mercedes-Benz E-class Cabriolet
Leadership help urged for quick fix continued from Page 3
GEMS IN GENEVA
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ercedes-Benz will contribute to the glitz and glamour at the Geneva auto show this week, while Italdesign, Audi’s design and engineering subsidiary, will present a vehicle that takes shared individual mobility to new heights. 䡲 Mercedes-AMG is hinting at plans for an all-new, four-door GT based on a concept set to debut in Geneva. A teaser photo indicates the Mercedes-AMG GT Concept Showcar will feature aggressive wheels, centered exhaust and a rear that is similar to the AMG GT coupe and roadster. 䡲 The final member to join Mercedes’ redesigned E-class family is the cabriolet. Two variations will be available: the E400 Cabriolet and the E400 4MATIC Cabriolet, which brings all-wheel drive to an E-class convertible for the first time. 䡲 Italdesign and Airbus are working on a car with an upper body that can be airlifted by a large drone and flown above traffic congestion. Italdesign, which will debut a concept for the vehicle, first developed a car with an upper body and chassis that could separate with the Capsula concept at the 1982 Turin auto show. c
FAKE Ads with altered images ‘a total loss’ for dealers continued from Page 1
be an Escalade morphed into a large wagon and the headline “Cadillac Escalade Features.” Following inquiries by Automotive News, Cadillac spokesman Andrew Lipman said the brand is “working with Facebook to identify these fake ads and have them removed.” The post appeared to have been removed as of last week, and the group has changed its name to Auto Review Hub. Automakers can file a complaint with Facebook to investigate the ads or posts if they believe they infringe intellectual property or other rights. But using misleading or manipulated images doesn’t violate Facebook’s policies, as long as they link to information about the real vehicles or related websites, including dealership websites. “I would like to see a stop to them,” said Matt Wertz, a retired General Motors assembly worker of 30 years who has criticized the ads and posts. “I follow reputable sources, and when I see those posts on Facebook, and I see the comments of how many people are discussing it, it’s frustrating.” Facebook, which has launched efforts to remove fake news from the social media platform, declined to comment on whether it plans to change its advertising policies to ban the use of altered images. Using a misleading or provocative image or headline to lure online users is common-
Mercedes-AMG GT Concept Showcar
The Italdesign Capsula from 1982, pictured here, was a forerunner to the firm’s modern concept of a pod that can be airlifted by a large drone.
place for websites and companies that get paid by advertisers by the number of clicks, or views, their websites and affiliates attract. It’s called click-bait. “We’ve got fake news, fake products and now fake ads that are really misleading,” said Hairong Li, an advertising professor at Michigan State University who is part of a team researching the effects of fake news and products on consumers. “There is a call in the industry to try and eliminate such fake sites.” Dealers and even news organizations partner with or enlist companies such as Media.net or Taboola, an industry leader for “sponsored links” or “content discovery,” as a way to advertise or increase digital metrics. Ads on sites operated by or affiliated with such companies can differ every time someone goes to them, as many are tailored to individual users based on their search history, location or Internet cookies. Li argues that the clicks generated by such sites provide little long-term benefit — particularly if a customer goes to a dealership seeking a vehicle that doesn’t exist. “On the dealer side, it’s a total loss,” he said. “It’s fake traffic. I don’t think they really benefit.”
‘Contrary to our values’ At least three Detroit-area dealerships owned by Ken Garff Automotive Group of Salt Lake City are indirectly sponsoring ads or posts found by Automotive News to show fake or misleading vehicle images. Once users click on the social media posts, they’re taken to a website where links to the dealership websites are featured as “sponsored ads.” For example, users who click on
neering after the company learned of his history of sexual harassment at Google. To top off the month, a video of Kalanick surfaced the next day, showing him arguing with an Uber driver over lowering prices. “Some people don’t like to take responsibility,” Kalanick told the driver after he complained of losing $97,000 because of Uber. “They blame everything in their life on somebody else.” Kalanick came into March more lamb-like, publishing the Tuesday night note he sent to employees addressing the video and his need for leadership help. Uber did not respond to a request for comment on how the company has been handling the string of events. “Clearly he realizes that he was in the wrong for some of the things that have happened,” Sullivan said. “The apology wasn’t just directed to the Uber driver.” Kalanick’s apology didn’t end the chain of bad press. On Friday, The New York Times published a report on the company’s use of a tool called Greyball, which allowed it to continue operation in municipalities that had banned its ride-sharing service by identifying law enforcement officials and showing them a dummy version of the app if they tried to use it. James Fenell, 22, is a part-time Uber driver in Pittsburgh and found the video of Kalanick “appalling.” He also didn’t buy the apology that followed. “The way he reacted shines light on how he really feels about drivers,
a Facebook post by Everydaytopics.com with an image of a sleek, white coupe with Dodge’s signature crosshair grille being touted as the “New Dodge Charger” are taken to a website with information on the real, four-door car, and the dealer ads. Jeremy Nef, digital marketing director for the Ken Garff group — which ranks No. 8 on the Automotive News list of the top 150 U.S. dealership groups — said he was unaware of its dealerships being linked to the websites from the “deceptive images.” He said the company on Friday alerted AdSense, the Google advertising placement service that put the dealership’s ads on the websites, that it no longer wanted to be associated with the sites. “We absolutely do not condone anything like this,” he said. “Deceptive advertising is not something we believe in. It’s absolutely contrary to our values.” Another Facebook post, by Smartfind.com, features a customized, oldermodel Escalade with a shiny gold exterior labeled as a “new” version of the SUV. Clicking the link takes the user to a site with information on the 2017 model, accompanied by an ad for Ken Garff Automotive’s Cadillac of Novi, near Detroit. In the case of the Charger, the website linked from the fake image had accurate facts and figures comparing the real vehicle with the Chevrolet Impala and Toyota Avalon from industry research firm Edmunds. Nicole Carriere, a spokeswoman for Edmunds, confirmed the website’s parent company, Inuvo Inc., was one of Edmunds’ more than 500 affiliate partners. She said Edmunds terminated the relationship after an inquiry from Automotive News about the
the people who made him worth $6 billion,” Fenell said. Fenell said he and fellow drivers in the area have grown frustrated with Uber for cutting driver rates without warning and making communication between drivers and support staff more complicated. He added that some drivers are considering defecting to the new ride-hailing service Juno that has been planting roots in Pittsburgh and offering generous driver incentives. To avoid losing ground to opportunistic competitors, Uber needs to act fast. An immediate solution and one mentioned in Kalanick’s apology, is to bring in new leadership to assist the CEO, and help build an internal corporate structure that supports its employees and drivers. Because much of Uber’s growth can be tied to Kalanick’s efforts, Sullivan said, it’s unlikely he’ll be ousted from the head role, but bringing in an executive with a reputation of transparency and trustworthiness in a co-leadership position could help stabilize the company. Uber also needs to establish a culture of prevention rather than the reactionary strategy it has developed during its rapid growth, Joseph said. Such a policy requires dedicated teams monitoring employee concerns and established procedures to address issues rather than suppress them, Joseph said. Uber’s strategy seems to be purely reactive, rather than attempting to make sure bad things don’t happen in the first place, Joseph said. And most importantly, the company needs leadership that pays attention and cares about stopping bad behavior. “People expect you to know what’s going on and not allow a culture that permits bad things to happen,” Sullivan said. c
website’s use of its information. Edmunds, she said, is “taking measures to ensure” that all of its affiliates are “appropriately” using the company’s technology and content. Fiat Chrysler Automobiles declined to comment.
No ‘doctoring’ At least three of five Facebook ads and posts with potentially misleading images found by Automotive News, including the Charger coupe and Escalade wagon, were shared or sponsored by social media groups or websites owned by Inuvo, a publicly traded Little Rock, Ark., advertising company that reported $71.5 million in revenue in 2016. Inuvo COO Trey Barrett said in a phone interview that he was unaware of the company using any altered or fake images. He said “most” of the images used in the company’s campaigns are from stock photo providers. “We don’t do any doctoring,” he said. “Certainly, our intent would not be to bait or mislead anyone, so we would not be supportive of that activity.” In an email, Barrett confirmed the company was using the images cited by Automotive News, which also appear on some unofficial websites. He argued that the use of such images does not constitute click-bait. Barrett defined click-baiting as “a process where images or marketing content is purposefully and distinctively different than the site or content promoted by the advertisement,” whereas “the Everydaytopics.com content matches the images and the context of our advertisements.” “We provide highly relevant content for our users,” he wrote. c
