Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: Contact Your Local Representatives
As President Trump makes a big stir about a possible border tax on goods (including cars) imported from Mexico, automakers are beginning to freak out over how that could impact prices, profits and yes, jobs.
One in particular, Toyota, sent word to its U.S. dealers and told them to contact their local representatives and warn them about how a high tax on imports would hurt buyers, reports Reuters. And a lot of them responded:
Some of Toyota’s 1,500 dealers heeded the call and contacted members of the House of Representatives’ tax-writing Ways and Means Committee, urging them to rethink their proposal, according to people familiar with the effort.
Imposing a 20 percent tax on imports would force consumers to pay potentially thousands of dollars more for vehicles, they warned.
The Japanese automaker’s mobilization of its army of dealers underscores the growing alarm among some of the world’s largest companies that sell imported goods in the United States. They fear a big tax on imports would hurt their sales and profits and put them at a disadvantage to rivals more reliant on U.S.-made products.
“Cost is going to go up, as a result demand is going to go down. As a result, we’re not going to able to employ as many as people as we do today. That’s my biggest fear,” Toyota’s North America CEO Jim Lentz said in an interview.
Toyota dealers employ more than 97,000 people in the United States.
We’ll see if this makes any difference.
2nd Gear: Mexico Could Take Its Business Elsewhere
Meanwhile, the tariff talk has folks on the Mexican side wondering just how much they actually need us. In particular, Mexican oil producers, writes Bloomberg. From the story:
Pemex, Mexico’s principal producer, isn’t waiting for Trump’s plan to come to reality. The state-owned company has already been reducing its reliance on the U.S. In the first 11 months of 2016, Mexico exported 48 percent of its crude to the U.S., down from 69 percent in 2014, according to Mexico’s Energy Information Agency data. Asian buyers took 26 percent while Europe accounted for 23 percent.
Trump will give attendees of the Energy Mexico 2017 conference, convening today in Mexico City, plenty to chew over. Mohammad Barkindo, OPEC’s Secretary General, is scheduled to open the event. The three-day conference, organized in large part by former Pemex Chief Executive Officer Jesus Reyes Heroles, features experts from BP Plc, ExxonMobil Corp., Citigroup Inc., and many of Mexico’s top names in the industry.
Panels will discuss North America’s energy outlook, the changing geopolitical climate, global oil outlook and deep-water production in the Gulf of Mexico.
“If the relationship goes in the wrong direction, which it seems to be doing, then all the aspects of the current cohesive relationship are at risk,” said Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars in Washington.
Meaning that the increased cost for oil could get passed along to us, American motorists.
3rd Gear: Volkswagen Has Some Ideas For The Look Of An EV
Volkswagen’s big push to get out from underneath the Dieselgate mess is to go heavy on electric vehicles. And those vehicles need to look the part, according to Automotive News. They need to look “fresh”:
Klaus Bischoff, VW brand’s head of design, said battery packs make it possible to change the fundamental shape of the vehicle. That will lead to vehicles that are taller and have short overhangs, shorter hoods, longer wheelbases, more-raked windshields and bigger passenger compartments.
These cars, starting with the Golf-like I.D. hatchback that debuted in the U.S. at CES in Las Vegas this month, will all be based on the new MEB modular architecture.
Because the need for an engine compartment disappears, the A-pillar can be moved forward substantially. This lets designers shrink the hood to essentially only what is needed to meet crash regulations and pedestrian impact guidelines. This allows the windshield to be inclined at a more level angle for better fluid dynamics, he said.
“To gain the travel distance — range is essential — we need to have outstanding drag coefficients, and this will also influence the shape of the cars quite a bit,” Bischoff said.
With virtually no front to the car, overhangs can be extremely short, maximizing the wheelbase and expanding the passenger compartment. VW designers also pushed the dashboard forward by 127mm (5 inches) to give even more legroom.
He also said that he doesn’t want a front grille anymore, either, because what’s the point? Whatever, as long as they make the electric microbus.
4th Gear: Weaker Yen Means A Not-As-Bad Loss For Mitsubishi
Is it a win if the loss isn’t as bad as you originally thought it would be? Because of the weaker yen, which resulted in lower costs, Mitsubishi said today that it expects “a smaller full-year net loss” than what was previously estimated, reports Reuters:
Japan’s sixth-largest carmaker, which is recovering from a mileage cheating scandal, posted an 8.4 billion yen ($73.85 million) operating profit for October-December, lower than a 9.36 billion yen estimate drawn from four analysts polled by Thomson Reuters I/B/E/S/.
Net profit reached 6.3 billion yen, down 18.3 percent from the same period a year earlier but improving from a first-half loss of 31.6 billion yen.
Look at that! Improvement.
5th Gear: Do The EV
Audi, which like corporate cousin Volkswagen has a bunch of EVs coming to the market soon, is trying to get dealerships more on board with selling them. That’s the big question with the slew of new EVs coming out: can car companies get people to buy them, and if so, how?
Wards Auto reports that Audi of America President Scott Keogh spoke at the J.D. Power Automotive Summit and really pushed for EVs:
“Do we want to jump in and compete? Without a doubt,” Keogh says of the new technology wave around EVs, connectivity and mobility. “We have the resources, the scale, the infrastructure, the customers (and) the dealers to compete in this new order.”
Keogh says the movement to BEVs will be unstoppable in the U.S., suggesting that driving range between charges, now topping 200 miles (322 km) in cars such as the Chevrolet Bolt, soon will reach 400 miles (644 km) and eventually 500 miles (805 km).
Coupled with a growing charging infrastructure, that quickly will make range anxiety a thing of the past, Keogh says. VW has pledged to spend $2 billion on installing public charging stations across the country over the next 10 years as part of its Dieselgate emissions-cheating settlement.
“All this fright about where am I going to get a charge is going to go away extremely fast,” Keogh says. “The technology on this front is moving at a staggering pace. You’re going to be looking at a marketplace in the next seven, eight, nine, 10 years where for 30 or 40 some brands their entire business is going to be battery-electric vehicles.”
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