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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

Volkswagen bringing driver assistance systems to its 2016 lineup

Chevrolet isn't the only manufacturer rolling out luxury safety technologies on a 2016 mass-market lineup. Volkswagen has just announced that next year it will begin adding driver assistance systems to its lineup here in the States – stuff that was previously only available on Audi and Porsche models here, or Volkswagens in Europe. Adaptive cruise control, forward collision warning, and autonomous braking will be standard on the CC V6 4Motion, optional on certain trims of the Golf and Jetta. Blind spot monitoring will be standard on the Beetle, and top CC and Jetta trims, but optional on the Golf and lower Jetta variants. Automated parking will be available on Golf models, including the e-Golf. Blind spot assistance with rear traffic alert, lane departure warning, park distance control, and an automatic post-collision braking system also come in the technology kitty, all of which will be packaged at prices between $695 and $1,495. Infotainment options take a bit step up, too, with every VW model but the Touareg being fitted with touchscreens. The new MIB II head unit comes in four sizes, the Beetle, Jetta, and Tiguan getting the smallest, five-inch screen as standard but upgradeable to a 6.5-inch screen. Android Auto, Apple CarPlay, and MirrorLink are integrated into that larger screen. The interface is improved by a faster processor, higher resolution, and better graphics, and some will come with swiping and pinch-to-zoom functionality. The two press releases below lay it all out in detail. VOLKSWAGEN DEMOCRATIZES HIGH-END DRIVER ASSISTANCE FEATURES FOR THE 2016 MODEL YEAR Many models in the 2016 Volkswagen lineup offer new driver assistance systems that used to be the sole preserve of premium and luxury vehicles Herndon, VA Jul 29, 2015 — For the 2016 model year, Volkswagen is offering a host of driver assistance features that were only previously available on the premium Touareg SUV—and adding some new ones that truly democratize driver assistance for the compact sedan and compact hatchback classes. These available features include: Forward Collision Warning and Autonomous Emergency Braking (Front Assist); Adaptive Cruise Control (ACC); the Parking Steering Assistant (Park Assist); and an active Lane Departure Warning (Lane Assist) system. The Beetle, CC, e-Golf, Golf, Golf GTI, Golf R, Golf SportWagen, and Jetta offer these available features, depending on model and trim line.

The UK votes for Brexit and it will impact automakers

It's the first morning after the United Kingdom voted for what's become known as Brexit – that is, to leave the European Union and its tariff-free internal market. Now begins a two-year process in which the UK will have to negotiate with the rest of the EU trading bloc, which is its largest export market, about many things. One of them may be tariffs, and that could severely impact any automaker that builds cars in the UK. This doesn't just mean companies that you think of as British, like Mini and Jaguar. Both of those automakers are owned by foreign companies, incidentally. Mini and Rolls-Royce are owned by BMW, Jaguar and Land Rover by Tata Motors of India, and Bentley by the VW Group. Many other automakers produce cars in the UK for sale within that country and also export to the EU. Tariffs could damage the profits of each of these companies, and perhaps cause them to shift manufacturing out of the UK, significantly damaging the country's resurgent manufacturing industry. Autonews Europe dug up some interesting numbers on that last point. Nissan, the country's second-largest auto producer, builds 475k or so cars in the UK but the vast majority are sent abroad. Toyota built 190k cars last year in Britain, of which 75 percent went to the EU and just 10 percent were sold in the country. Investors are skittish at the news. The value of the pound sterling has plummeted by 8 percent as of this writing, at one point yesterday reaching levels not seen since 1985. Shares at Tata Motors, which counts Jaguar and Land Rover as bright jewels in its portfolio, were off by nearly 12 percent according to Autonews Europe. So what happens next? No one's terribly sure, although the feeling seems to be that the jilted EU will impost tariffs of up to 10 percent on UK exports. It's likely that the UK will reciprocate, and thus it'll be more expensive to buy a European-made car in the UK. Both situations will likely negatively affect the country, as both production of new cars and sales to UK consumers will both fall. Evercore Automotive Research figures the combined damage will be roughly $9b in lost profits to automakers, and an as-of-yet unquantified impact on auto production jobs. Perhaps the EU's leaders in Brussels will be in a better mood in two years, and the process won't devolve into a trade war. In the immediate wake of the Brexit vote, though, the mood is grim, the EU leadership is angry, and investors are spooked.