Automotive Industry News Update
A recent issue of Fortune magazine provided the 2016 list of most-admired companies. The top-8 automotive manufacturers are as follows: Toyota, BMW, Daimler, Hyundai, Honda, GM, VW and Nissan. The fact that VW made the list (given the revelations of diesel fraud) is remarkable, but they did fall from third in 2015 to seventh this year.
Perhaps surprisingly, Ford did not make the list. As I write, news broke that Ford plans to build a $1.6 billion auto assembly plant in Mexico, which won’t attract admirers. Small-car production will be shifted from the U.S., and 2,800 jobs will be created in Mexico. Ford did not say which models will be moving to Mexico, but the United Auto Workers said that production of the Ford Focus and C-Max gas-electric hybrid will be making the move from Detroit to south of the border. Ford indicated that they build more vehicles in the U.S. and have more hourly workers than any other automaker. Is that before or after this move?
Ford’s Cleveland engine plant will get an infusion of $145 million to support production of the all-new second-generation 3.5-liter Ecoboost® for the 2017 F150 lineup. In the process, 150 jobs were created or retained. The investment is part of Ford’s commitment to 8,500 jobs and its investment of $9 billion across the U.S. over the next four years.
Not to be outdone by Ford, General Motors is investing in its Spring Hill, Tenn., manufacturing plant to quickly add capacity for the small-block 6.2-liter V8 engine. This will be the first time this plant has built V8 engines, and more than 200 jobs will be retained in the process. Production is scheduled to begin during the fourth quarter of 2016.
Automotive electrification seems to be the current (no pun intended) industry “big thing.” Although electric and hybrid vehicles represent only 2% of the U.S. market, GM and other companies are committed to expanding their offerings. The Chevrolet Bolt is the latest all-electric model from GM. The Bolt can travel up to 200 miles on a single charge and will cost around $30,000 after government incentives. Did you know the average new car cost $33,155 in January?
Another manufacturer moving toward making electric cars more affordable is Tesla. As most of us heard, Tesla recently unveiled its Model 3 electric, which is reported to start at $35,000 and has a driving range of 215 miles between charges. Within days of their announcement, 300,000 orders were taken at a $1,000 deposit for each. That’s a large infusion of cash, but can Tesla produce that many cars when they have produced just over 100,000 vehicles in their entire history? Tesla’s founder Elon Musk says the first Model 3s will reach customers by “late 2017.” That’s a wait of 20 months or more for those making a deposit.
Electric vehicles are an area not dominated only by names that have been a part of the automotive landscape for generations. In time, names like Mullen Technologies and Faraday Future may come to mind, like Tesla, when we think of electric vehicles.
BMW is moving in this direction in a big way. In fact, they believe that hybrids will account for most of their sales within a decade. The i3 electric hatchback starts at $42,400 and travels 80 miles on a single charge. The BMW i8 sports car can go from 0 to 60 in 4.2 seconds, and it’s quite a looker.
We are hearing a lot about how robots are replacing people, especially in heavily automated production facilities such as automotive. I wanted to mention a particularly interesting and perhaps ironic twist that we first reported in a recent magEzine newsletter. Mercedes-Benz (M-B) has kicked out the robots. Why? Robots can’t keep up with the growing consumer demand for customization. Using a skilled crew of workers, M-B can shift a production line in a weekend instead of multiple weeks needed in the past to reprogram robots and adjust assembly patterns.
Well, that’s about all there’s space to print. For the last couple of years in this column, I would have said automotive was trending upward. My current perspective is flat, but we’ll keep reporting because we know many in our industry do well when the automotive industry is healthy.