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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

UAW papers reveal release dates for new Dodge, Jeep and Ram models

Documents published by the United Auto Workers union reveal key information about some of the products Dodge, Jeep and Ram will release during the early 2020s. All three brands will try to capitalize on the growing demand for trucks and SUVs in the United States. The agreement between the UAW and Fiat Chrysler Automobiles (FCA) outlines what the period between 2019 and 2023 will look like from an employee's vantage point. The $4.5 billion factory the automaker is building in Detroit will begin manufacturing a three-row Jeep model in 2020, and it will add the next-generation Grand Cherokee to its roster the following year, according to CarScoops. The new Grand Cherokee will also roll out of the Jefferson North facility that makes the current model scheduled to retire shortly before its successor arrives. The Dodge Durango will continue to be built there, and the UAW papers mention a mild-hybrid variant of the SUV due out before the end of 2020. Two body-on-frame Jeep models tentatively scheduled to revive the heritage-laced Wagoneer and Grand Wagoneer nameplates will break cover in 2021. They will be built alongside Ram pickups at the Warren Truck plant, and odds are the three models will share several components under the sheetmetal. Adding the two Jeep models is expected to create 1,400 jobs, FCA predicted. Speaking of Ram, the high-performance TRX model (pictured) aimed at the Ford F-150 Raptor's jugular is penciled in for a 2020 launch. The concept that previewed the model made its debut in 2016, so it's reasonable to assume it will have changed considerably by the time it reaches showrooms. It will be based on the newest variant of the 1500, not on the last-generation model still sold as the Classic. What won't change is the supercharged, 6.2-liter Hellcat V8 between its fenders. The plug-in hybrid Wrangler remains on track for a 2020 launch. The Cherokee will continue to come out of Belvedere Assembly in Illinois, but the UAW's documents mention "fresh models / features" off of its unibody platform. Whether that means new trim levels or additional body styles remains to be seen, but it sounds like something new and Cherokee-related is around the corner. The ancient Dodge Journey shares at least one thing with the beater you drove in high school: a four-speed automatic transmission. The gearbox is finally on its way out, according to the UAW, and the 2.4-liter four-cylinder engine that powers the entry-level model isn't long for this world, either.

Fiat Chrysler profit up as it closes in on retiring its debt

MILAN — Fiat Chrysler Automobiles reduced its debt by more than expected in the first quarter, putting the carmaker well on course to become cash positive later this year. Chief Executive Sergio Marchionne expects to cancel all debt during 2018 — possibly by the end of June — and generate around 4 billion euros ($5 billion) in net cash by the end of the year. Marchionne has said that forecast does not include any one-off measures, nor the impact of the planned spinoff of parts maker Magneti Marelli, which he hopes to execute by early 2019. The world's seventh-largest carmaker said on Thursday net debt had fallen to 1.3 billion euros ($1.6 billion) by the end of March, well below a consensus forecast of 2.6 billion euros in a Thomson Reuters poll of analysts. FCA said capital spending fell 900 million euros in the quarter due to "program timing," which analysts said implied higher investments for the rest of the year. The Italian-American group said first-quarter operating profit rose 5 percent to 1.61 billion euros, below a consensus forecast of 1.74 billion, as a weaker performance from its North American profit center weighed. Shipments there were higher due to the new Jeep Wrangler and Compass models. But currency moves hit revenues and earnings, and costs related to new product launches added to the pressure. FCA's shift to sell more trucks and SUVs boosted margins yet again in North America to 7.4 percent from 7.3 percent in the same quarter a year ago, although they were down from the 8 percent recorded in the preceding three months. Marchionne, preparing to hand over to an internal successor next year, is close to his goal of ending a margin gap with larger U.S. rivals General Motors and Ford. The 65-year-old has said becoming debt free and being able to compete on a par with U.S. peers would mean FCA no longer needed a partner to survive and could well succeed on its own. The CEO has previously said tying up with another carmaker would help to meet the huge costs in an industry investing in electric vehicles and automated driving. FCA shares fell immediately after the results, but recovered to trade up 3 percent at 19.71 euros by 1150 GMT, outperforming a 0.4 percent rise in Europe's blue-chip stock index. ($1 = 0.8214 euros) Reporting by Agnieszka FlakRelated Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.