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Weekly Recap: Diesel scandal continues to fuel VW's woes

Volkswagen's woes continued this week when it was delisted from the Dow Jones Sustainability Index and stripped of awards. Senators are also lining up to advocate for criminal and civil action against the automaker, and its consumer reputation is in tatters. Put simply, it's been another rough period for VW. Despite this, the company eked out a sales gain of less than one percent in September, though that was well behind the overall market's performance. Sister brand Audi, which sells a diesel A3, was less affected, posting a 16-percent gain in September. Revelations that Volkswagen rigged millions of diesel-powered cars around the world didn't surface until September 18, so the full sales impact of the ongoing scandal won't likely be felt until October. Meanwhile, VW's image continues to take a beating, and an AutoPacific survey found only one in 14 vehicle owners have a positive opinion of the company. Before the scandal broke, three-quarters of respondents had a positive view of VW. The survey also found 64 percent don't trust Volkswagen, though the same number believe other companies are or may also be using cheating devices to pass emissions tests. "The reputation of diesels has been severely damaged, at least for the short term," Ed Kim, AutoPacific's vice president of industry analysis, said in a statement. Despite the lingering malaise, experts believe VW will recover, just as Toyota and General Motors eventually emerged from their own high-profile controversies. "Consumers have proven through numerous recalls that they are resilient and quickly return to their buying habits," Kim said. OTHER NEWS & NOTES Mazda to reveal sports car concept in Tokyo Mazda will bring a curvy sports car concept to the Tokyo Motor Show in October. The automaker is being especially coy with the details, only releasing the dark teaser shot that you see to the right and a cryptic statement that suggests the concept "condense[s] Mazda's entire history of sports-car development into a single model." Immediately, speculation abounded this is an RX-7 and RX-8 successor, though Mazda didn't specify what engine the concept will have. Reportedly, the company is still working on rotary engines. Mazda will have a Cosmo Sport 110S on its stand in Tokyo, which pioneered rotary technology in 1967. Read into that what you will. The Rock pitches Ford service Dwayne Johnson, also known as The Rock, is the new frontman for Ford service.

FCA to skip summer shutdowns as automakers rev up U.S. assembly lines

DETROIT — Several of FCA's facilities will skip their usual summer shutdowns to get a jump on rebuilding inventory, the company confirmed early Wednesday.  The plants that will remain open include three in the United States (Jefferson North in Detroit, Toledo Assembly in Ohio, and Sterling Heights Assembly in suburban Detroit), one in Canada (Brampton Assembly in Ontario) and two in Mexico (Saltillo Truck Assembly and Saltillo Van Assembly).  This will allow dealers to address depleted inventory of popular trucks and muscle cars, Automotive News reports. Other facilities not named will observe their normal one- and two-week breaks.  Automakers are speeding up U.S. assembly lines to meet recovering demand, increasingly confident coronavirus safety protocols are working to prevent outbreaks in their plants but wary of the challenges workers face outside. Screening workers for COVID-19 using temperature scans and questionnaires, the automakers have detected some people who reported for work despite being sick. Some plants have been briefly shut down for disinfection, but so far, there has not been a major outbreak within a U.S. auto plant since most reopened May 18, company and United Auto Workers union officials said. The risk of an infection picked up outside a plant spreading along assembly lines remains a prime concern, however. An outbreak could shut down a factory costing a manufacturer millions of dollars a day. The disruption caused by the pandemic is creating other challenges as well. At Ford Motor Co's F-series pickup truck plant in Louisville, Kentucky, the company has given more than 1,000 workers leave related to COVID-19 concerns. It hired temporary workers to fill their jobs as the plant accelerates production of trucks critical to Ford's financial recovery. Demand for pickup trucks helped boost U.S. auto sales in May, and contributed to stronger than expected overall U.S. retail sales for the month. Officials of UAW Local 862, which represents workers at the Louisville plant, said a lack of child care was a significant issue for members. It had led many to stay away from the plant and collect increased unemployment benefits provided under the federal CARES coronavirus relief act. Ford has now begun arranging subsidized child care for UAW workers, Gary Johnson, the automaker's head of manufacturing told Reuters.

United States drivers buying fewer Mexican-made cars

Crossovers and pickup trucks are not only growing in market share, they're also more profitable than cars. A crossover on the same platform as a sedan retails for thousands more, despite similar components. It's one of the reasons we've seen automakers rapidly shifting production of their sedans and hatchbacks to Mexico, where cheap labor preserves the thin profit margins on these inexpensive vehicles. But as the market continues to shift in the United States, Mexico is getting burned by its lack of product diversity. The country's auto exports, which are heavy on cars, suffered a 16-percent drop last month, Automotive News reports. In total, year-over-year exports fell from 233,515 to 197,020 last month, while year-to-date exports are down by 7.4 percent, from 922,029 to 854,118. The number one culprit? America – which usually accounts for 75 percent of Mexico's exports – and its appetite for crossovers and pickup trucks bolstered by cheap gas prices. While Mexico does build some light truck models – AN specifically calls out the Ram 2500, Honda HR-V, GMC Sierra, and Toyota Tacoma as export leaders – the vast majority of vehicles rolling out of its factories are sedans and hatchbacks. In fact, the three biggest drops in Mexican exports came from companies whose south of the border factories only build cars – Ford (Fusion/Lincoln MKZ and Fiesta), Mazda (Mazda3), and Volkswagen (Golf and Jetta). Mexican Automotive Industry Association President Eduardo Solis told AN the export shortfall will likely be sorted out sooner rather than later, thanks to a pair of new factories – a Kia car factory and an Audi SUV plant – that are coming online by year's end. The two facilities will add around 100,000 vehicles to the country's export totals, which Solis said should leave the industry on the verge of breaking another export record in 2016. But how sustainable will these record-breaking years be? Slapping an "Hecho en Mexico" sticker on a new German SUV won't be enough to change the fact that Mexico's product mix is tilted too heavily towards body styles that are not growing in volume. Mexico's record-breaking export years probably aren't at an end, but we'd argue they're certainly under threat. News Source: Automotive News - sub. req.Image Credit: Omar Torres / AFP / Getty Images Plants/Manufacturing Ford GMC Honda Mazda RAM Volkswagen Truck Crossover SUV Mexico