Honda Decides to Close U.K. and Turkey Plant by 2021

In response to the recent movement in trade relations and the desire to move toward electrification, Honda has decided to stop production in the U.K. and Turkey by 2021.

Honda is one of several companies that have decided to leave or make cuts in the U.K. Along with Honda, Nissan and Toyota have removed themselves from the country. In regards to making cuts, Ford Motor has already declared they are going to get rid of thousands of job and Jaguar said they were going to eliminate 4,500 positions by this January.

This recent pullback from multiple auto companies is recently due to Brexit; causing political and economic instability. Consequently, this has created another strain on the U.K. auto industry, which has already had to deal with Brexit-related issues, possible tariffs and supply bottlenecks prior to the exit from the EU on March 29.

Despite this decision coinciding with Britain removing itself from the European Union, Honda’s CEO Takahiro Hachigo said it was not a factor in their decision. Honda, instead, planned the cease of their production to correlate with the end of their Honda Civic’s life.

Honda’s removal from the U.K. and Turkey is one part of their plan, their goal to become more efficient, and more attuned to local markets. With this upcoming change, Honda will be able to shorten its global production capacity from 5.4 million to 5.1 million vehicles and increase its utilization rate over time from about 97 percent to over 100 percent.

The plant Honda will be closing in the U.K. is in Swindon. This plant, established in 1985, focuses on producing the Civic five-door hatchback. Over the years, the plant has employed 3,500 people and delivered 150,000 vehicles annually.  When this plant is shut down, and the new line of Civics come out, Honda says other regions will pick up the output left by the Swindon plant; including North American plants.

The plant Honda will be closing in Turkey focuses on producing the Civic sedan, delivering 38,000 vehicles annually. While the Turkey plant in Turkey will be shut down, Honda plans to carry on with sales and marketing operations.

Possible Increase on Automotive Tariffs

A report given to President Trump by the U.S. Commerce Department could lead to increased tariffs. These tariffs could directly effect imported cars and auto parts, creating a massive loss for the auto industry.

The report is just one of the many recent hits the auto industry has had to deal with after obstacles of low sales, China’s tariffs on auto parts and Trump’s tariffs on steel and aluminum.

The report is the conclusion of an investigation that began in May 2018. This investigation, also known as the Section 232 investigation, was done at the request of the President to understand national security and how imports impacted it. The Commerce Department implied that the investigation was also to concentrate on vehicle technology. However, the overarching goal was more likely to help with President Trump and his aspirations in the trade industry. Administration officials say the potential tariffs could be a way to win concessions in Japan and the EU. The president states that tariffs protect the industry and also help win trade agreements.

While details of the report are unknown, President Trump has 90 days to decide on the incorporated recommendations. Auto industry officials suspect these recommendations to involve tariffs on manufactured vehicles or technology or areas related to electric, automated, connected and shared vehicles.

Automakers and part suppliers believe these recommendations to involve wide-ranging tariffs of 20 to 25 percent on cars and parts, or more restrictive tariffs concerning areas related to electric, automated, connected and shared vehicles.

Since its submission, the auto industry has worked hard to combat the report in a full-fledged campaign.  In this campaign, the industry stresses just how much damage such tariffs could do to the industry; including a steep increase of thousands of dollars in vehicle costs and possibly hundreds of thousands rise in job losses if the tariff is at 25 percent. The Motor and Equipment Manufacturers Association adds to the industry’s sentiment as they warn about the tariffs affecting the amount of investment in the United States; encouraging more offshore production.

The Center for Automotive Research puts the fears of the auto industry into light when they detail a worst-case scenario in which a tariff of 25 percent would end in a loss of 366, 900 jobs. Think Tank does something similar when they say, U.S. light duty vehicle prices would increase by $2,750 on average, including U.S.-built vehicles, reducing annual U.S. sales by 1.3 million units and forcing many consumers to the used car market.

According to a New Cox Automotive Analysis, Ford and Mercedes are at the Top of the Class for Dealers

Ford and Mercedes-Benz scored the maximum grade in their class in a Cox Automotive analysis of the benefits brought to dealers by their brands.

According to the analysis, Ford tallied four A’s and two A-minuses and collected enough bonus points to outrank Toyota at the top of the non-luxury ranking. The only imperfection for Mercedes on the luxury report card was an A-minus as it scarcely topped Lexus. Cox’s Retail Brand Scorecards Study, compiled in conjunction with Automotive News, measures a brand’s performance primarily through surveys and online participation on Cox-branded websites.

Cox used a classroom-style evaluation in six categories to give each brand an overall grade-point average. Extra points were added and subtracted for “geographic consistency” in delivering share across market areas and the probability of dealers to report difficulties in dealing with their manufacturers. As with students in classrooms, brands may outshine in some subjects but not others. Tesla, for example, got one A-plus for the quality of its customers and another for their perception of the brand. Unfortunately, the electric vehicle maker drew an F for its product range and was also penalized because of its geographical limits. Overall, Tesla ranked just above Jaguar at the bottom of the luxury chart.

Yet Mitsubishi, came up to an A-minus for the newness of its products. But it finished at the bottom of the non-luxury class thanks to F’s in traffic, loyalty and product range.

As far as brands that were able to earn extra credit, Chevrolet garnered points for its market-share balance across the U.S. This distinction is a major plus to potential buyers of a dealership, Cox says. Conversely, Chevrolet also ranked as one of the industry’s worst performers when it comes to franchised dealers citing automaker mandates and restrictions that hold back business.

Audi and GMC were considered the most likely to have such complaint-inducing issues with factories, while Honda and VW were least likely. Those figures were assimilated into the Brand Scorecards from Cox’s quarterly Dealer Sentiment Index.

All luxury brands and many of the non-luxury brands earned A-level grades for drawing the best customers — those who frequently purchase new vehicles at the same dealership and obtain financing and service repairs in-house.

“The people who scored highest on best customers, quite literally much of their sales are to the people who do all those behaviors,” Cox says.

SiriusXM Expands Availability Within Toyota Lineup

Dealerships that eventually will have 2020 Toyota models in their inventory now have another feature to propose to potential buyers. SiriusXM announced that it has reached what the company called a “landmark” agreement with Toyota that will expand the installation of SiriusXM to all Toyota models and trims sold in the continental U.S.

Officials said the development is expected to start with 2020 model year vehicles produced in the fall of this coming year. They further stated that the agreement will result in SiriusXM becoming a standard feature as Toyota’s next generation head units are rolled out to Toyota cars, trucks and SUVs.  SiriusXM also revealed that the agreement encompasses the long-term relationship between the two companies into 2028.

Toyota consumers will remain receiving a three-month introductory subscription to SiriusXM All Access, which is SiriusXM’s most expansive programming package and gives the subscriber admission to SiriusXM both on the radio and via the SiriusXM app. “This extension represents a milestone agreement between our two companies,” said Christopher Lam, senior vice president and general manager of automotive partnerships for SiriusXM.  “Our long-standing relationship with Toyota has helped grow SiriusXM to over 34 million subscribers, and we’re excited that Toyota will now offer even more customers access to all of SiriusXM’s exclusive, award-winning content,” Lam continued.

Of particular interest in the used-vehicle space, the companies emphasized customers who purchase or lease Toyota certified pre-owned vehicles will also continue to receive a three-month introductory subscription to SiriusXM All Access. “We are committed to delivering our customers the features and services they want, and because of the strong demand we see for SiriusXM, both from our customers and dealers, we’re making SiriusXM standard across our entire model lineup,” said Steve Basra, vice president of connected technologies for Toyota Motor North America. “By building SiriusXM into every model and trim level, it will enable us to deliver SiriusXM to more Toyota drivers than ever before,” Basra went on to say.

Mazda 3 Redesign Program is Focused on the Human Physique

Traditionally, major vehicle redesigns begin with a review of such hardware as cylinder heads, suspension arms and chassis legs. The remake of the compact Mazda 3 sedan and hatchback focused on those items as well as a detailed study of human arms, legs and heads as well as spines, pelvises and necks.

The 2019 Mazda 3 new engineering goal is to create a tremendously balanced car that is as natural for humans to drive as it is for them to walk.

Quite an ambitious claim and during their recent media presentation, Mazda engineers spoke of their comprehensive studies of human bodies and how the car was designed to decrease stress and drastically improve comfort. Instead of talking as much about the usual redesign metrics of stopping distances, horsepower, torque or 0-to-60.

According to Mazda engineers the new Mazda 3 is all about one word: balance.

The redesign started with an in-depth study of how the body maintains balance when walking, said Kota Beppu, Mazda3 program manager. Mazda engineers were particularly interested in preventing unwanted head movement. To do that, engineers redesigned the Mazda 3’s body and suspension so that when the car encounters a bump in the road, the shock absorbed by the suspension system is channeled behind the driver. Engineers also studied the human spine and developed seats that put the driver in the optimum position to maintain balance. The tilting lower seat cushion helps keep the thighs firmly planted in the seat. This keeps the pelvis in an upright position and the spine in its natural S shape, Mazda says.

While the Mazda 3 uses conventional electric rack-and-pinion steering and hydraulic four-wheel disc brakes, engineers kept a keen eye on removing jerkiness in the car’s behavior. The brakes initially feel as though they don’t have significant bite. But a little extra pressure on the pedal slows the car quickly and smoothly. Mazda calibrated the brake feel to eradicate abruptness that can force passengers to lurch forward. The power steering also has been fine-tuned to reduce coarse movements.

On a 50-mile test drive, the Mazda3 proved easy to handle, with comfortable and supportive seats, unobstructed front and rear views and simple-to-manage controls. The car was said to be quiet, took curves at speed with ease and drove smoothly in heavy stop-and-go traffic. The sedan and hatchback go on sale in March. Prices start at $21,895 for the front-wheel-drive sedan and $24,495 for the hatchback. Adding all-wheel drive and other premium features pushes prices close to $30,000 for both body styles.

Infiniti plans a shift in marketing for its Anniversary Models

Infiniti has announced that they will launch a portfolio of anniversary-edition models in 2019 to mark the brand’s 30 years in business. Infiniti Americas Vice President Mike Colleran devoted a large part of his NADA session to reassure dealers that new vehicles are on the way, said Mario Murgado, CEO of Brickell Motors in Miami and chairman of the Infiniti National Dealer Advisory Board. “We have the oldest portfolio of products in the business, and Infiniti is working hard to renew that portfolio, and to be transparent with its retailers to tell us that they are fixing it,” Murgado said. While not offering details such as when the models will appear, Colleran told dealers the anniversary plan will include multiple nameplates. He said Infiniti will reveal details in a series of start-up meetings commencing this month around the country.

In an interview, Colleran said Infiniti wanted to specify dealers with new offerings as they await the brand’s next great product modification. According to retailers who attended this meeting, that will be a remodeled QX60 crossover, due next year. Infiniti also expressed to dealers that specific electric vehicle plans are in the works, following its proclamation a year ago of an electrification strategy set to begin after 2021. In its 2018 announcement, Infiniti said every new vehicle introduced after 2021 will be a full EV or have an electrified powertrain — except for Infiniti’s full-size SUV, the QX80.

The electrification approach will begin revealing itself “very soon in automotive years,” Colleran said after the meeting. “We have changes going on and we want to make sure we have open communications with our dealers to keep them involved.” Phil O’Connor, Infiniti director of marketing communications and media, told vendors the company plans a new marketing tactic this year, aiming for likely buyers instead of relying on broad market campaigns. “It’s about reaching to a specific household that is currently in-market, as opposed to covering an entire city, including consumers who are not planning to buy a new vehicle,” O’Connor said after the meeting. “We now have the tools to know who is likely to be ready to buy a vehicle, and who is likely to buy a premium vehicle.” O’Connor told the suppliers the new tactic will not replace Infiniti’s national advertising, which traditionally becomes more visible during the college basketball season, leading up to the March Madness national college basketball tournament. He said Infiniti’s new advertising tactic came about at vendors’ request.

Nissan is adding an Outdoor Package for the 2019 Pathfinder

Nissan has decided to do some cosmetic updates to the Pathfinder to redirect their marketing towards the crossover’s outdoorsy consumers.

They are introducing the Rock Creek Edition package for the midsize crossover at the Chicago Auto Show. This package will be available in the spring for $995 and offered for the Pathfinder SV and SL variants, in both two-wheel- and all-wheel-drive configurations. “The Rock Creek Edition name was chosen to connect to Pathfinder’s family outdoor adventure-minded target customers,” Nissan North America Chief Marketing Manager Scott Shirley said in a report.

These special editions help bring much needed attention to models late in their life cycles. Proposing a package such as the Rock Creek Edition permits Nissan to put together anticipated features at a lower cost rather than having them as standalone options, said Sam Fiorani, vice president at Auto Forecast Solutions. “Tying the Pathfinder to an outfitter, such as Rock Creek, has the additional benefit of generating interest to the core buyer’s desire to get back to nature,” Fiorani said.

Enhancements

The Rock Creek Edition package comes with a variety of features such as dark 18-inch wheels, black roof rails, black door handles, black mesh grille, and outside rearview mirrors, black front and rear fascia accents and black molded over fenders. The interior features include high contrast stitching on seats, door, console lid, two-tone seating surfaces and badging, and steering wheel and premium metallic interior trim. They also have two additional options are available with the Rock Creek Edition.

As far as pricing goes, the $980 SV Rock Creek Edition Technology Package includes the Nissan Connect smartphone-based infotainment system, heated cloth front seats, heated steering wheel and heated outside rearview mirrors. The SL Rock Creek Edition Premium Package, which is a little pricier costs about $2,110. However, this package also adds a Bose 13-speaker audio system and a panorama moon roof.

Compared to its previous models, the 2019 Pathfinder is powered by a 3.5-liter direct-injection V-6 gasoline engine that delivers 284 hp and reels out 259 pound-feet of torque. The Pathfinder, with three rows of seats, contests directly with the Hyundai Santa Fe, Honda Pilot and other midsize crossovers but also the slightly larger Toyota Highlander, Ford Explorer and Chevrolet Traverse. As minivans have fallen out of favor in recent years, the three-row utilities have become today’s sleeker family wagons. While U.S. sales of the Pathfinder fell 17 percent to 67,550 last year, they still account for a significant portion of Nissan’s volume and an even higher percentage of the automaker’s profit. The Pathfinder received a major makeover in 2016, and a revamp is expected in 2020 or 2021.

Detroit’s saving grace: All-American muscle car

The amount of passenger cars sent to the scrap heap keeps getting
larger. The Dodge Dart and Chrysler 200 are over, Ford models including the
Fusion and Fiesta are done and last month General Motors Co. announced plans to
cull the Buick LaCrosse, Chevrolet Impala and others. But as Detroit kills off
slow-selling sedans, there’s one niche that’s hung on: retro-styled reincarnations
of muscle cars introduced in the 1960s and 1970s. “What’s dying is the commoditized, four-door nothing burger, no-personality cars,” said Tim Kuniskis, who ran the Dodge brand at Fiat Chrysler Automobiles NV from 2013 to early 2018. Muscle cars “have a really well-defined personality and positioning while enticing respectable revenue.” For example, Fiat Chrysler commands an average transaction price of around $36,000 for its muscular Dodge Challenger. It might not be enough to match the fat margins on the trucks and SUVs that have become the focus for Detroit, but these powerful throwbacks can be still be moneymakers. And that can help big automakers finance their shift to a more electric future, especially since the initial investment on developing a Challenger or a Dodge Charger has long since been paid off.

Looking for growth in muscle cars still might be a bit of a stretch. Fiat Chrysler expects to sell roughly 65,000 Challengers this year, about the same as last year and just below the record 66,000 reached in 2015. Sales of the four-door Charger dropped 11 percent this year through November. Still, compared with the death spiral that’s consumed sedans, the Dodge muscle cars are doing alright. Retail sales of large passenger cars, a segment that includes the Nissan Maxima and Chevy Impala, is down 21 percent in 2018, according to J.D. Power. The Ford Mustang, the top-selling muscle car in America, was down a modest 3.6 percent through last month.

Manufacturers of more mass-market sedans are trying some of the same tricks to a lesser degree as a way to revive flagging sales. Even Fiat Chrysler is to stanch the bleeding from Americans’ disinterest in compacts by packing more power into their engines. Every Fiat model starting in 2019 will be turbocharged, said Steve Beahm, head of Fiat Chrysler’s passenger brands. However, considering that drag racers in Challengers, Camaros and Mustangs are already being bested by Tesla drivers on the track, a omen of the electric future awaiting the muscle-car world. Kuniskis said he expects performance cars to become more electrified over time, with plug-in hybrid versions taking off in the future. However, they declined to go into detail on Fiat Chrysler’s product plans, and the automaker hasn’t invested heavily thus far to bring in electric vehicles to market. But their cult following, muscle cars are always going to be a niche segment, leading some analysts to still question how much longer they’ll hang around. The Dodge, Fiat, and Chrysler brands were all left out of the automaker’s five-year strategic plan the company presented in June, and Schuster of LMC thinks it may be hard to sustain enough volume to keep the Charger and Challenger alive beyond the next three or four years. Fiat Chrysler’s Beahm insisted the Challenger isn’t going anywhere because it sets the tone for the whole Dodge brand. “I’m not going to tell you it’s going to grow,” Beahm said. “But it’s going to dramatically buck the trend regarding where passenger cars have gone lately and where they’re going to go in the next couple of years.”

BMW’s Electric Future for 2019

BMW’s i sub-brand launched the i3, a full-electric city car with an ultra-lightweight carbon fiber frame, in 2013. BMW showed that it will continue to push the sub brand to new levels when it previewed the iNext, in September 2018. Robert Irlinger, the head of the sub brand was recently interviewed about BMW’s electrification strategy. He disclosed that they announced four BMW electric models and one Mini. Which entails that there are seven battery-electric models still to come. He hopes to increase the distribution of their volumes across the brands while also covering the segments according to customer demands as much as possible. With the new iX3, they will expand into the compact SUV segment, the i4 is a compact sedan with a coupe like look and the iNext will roughly has the dimensions of an X5. These are all volume segments BMW is entering since the demand for electric vehicles is growing, governments will support them and the infrastructure is expanding. They changed strategy because they felt the customers want them to bring electrification across a broad range of our models. Irlinger also discusses the i3 letdown by stating that they were going through the learning process. He expresses how they started with a range of 80-99 miles in everyday conditions and thought that was enough since they originally positioned the car for urban mobility. However, the customer had a mindset that more range would be better, so they decided it was necessary to bring a second battery update relatively quickly. The first update brought 50 percent more range with the 94-amp-hour cells, and the 120-amp-hour cells now add another 30 percent on top. Car buyers continue to ask for more range at present. Although, there could come a time when they say, for example, 600 km under WLTP rules is sufficient. Then maybe the sub brand won’t need to come with an update at all. However, if customers want 500 mph and our competitors respond, then they would have to adapt appropriately.

Dealers’ most-liked brand remains Lexus

According to the most recent NADA’s Dealer Attitude Survey, Lexus remains the most-liked brand by dealers. Toyota held the second spot, followed by Subaru repeating at third, Honda remaining in the No. 4 position and Porsche moving up one spot from the winter survey to finish fifth. The rest of the rankings for the latest survey included Audi, Mercedes-Benz, Volvo, Jeep and Ram. Kia and Ford fell out of the top 10 this round, while Volvo and Ram entered in. NADA confidentially surveys franchised dealers twice a year about their relationships with their automaker partners. They are questioned on satisfaction with brand franchise policies, the automaker’s field staff and franchise value, and those opinions are measured. NADA declined to offer a complete list, including brands that finished at the bottom. The summer survey was conducted over a one-month period from July to August and NADA shared survey results privately with automakers in a series of meetings in late November.

The rankings are simply a measure to help automakers engage with dealers to improve business practices. Rankings also are shared with NADA’s industry relations committee and brand-level dealer council members in meetings. This survey also measures the consideration of dealer input on product, quality concerns and advertising programs. In that ranking, Lexus also finished atop the list, followed by Toyota, Subaru, Audi, Honda, Mercedes-Benz, Ford, Volvo, Porsche and Lincoln. The top four in that list remained the same from the winter survey. NADA also tracked dealer response to the survey and found BMW dealers had the highest rate of response, at 88 percent. Toyota followed, at 81 percent, Kia at 76 percent, Porsche at 72 percent, Volvo at 70 percent, Mercedes-Benz at 70 percent, Hyundai at 67 percent, Mini at 67 percent, Acura at 66 percent and Audi at 65 percent. During the last survey, Mercedes-Benz dealers had the highest rate of response but BMW was able to take first this round.