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: As The Crossover Rises
We’ve covered this trend in the past, but 2015 seems to be the year that will put the biggest nail yet in the coffin of the midsize sedan yet. This story from Automotive News illustrates just how much the crossover is threatening what used to be the most important segment in all of cars:
The evidence of what’s going on is striking: Through the first half of the year, in a U.S. market up 4.4 percent, the historically biggest segment — midsize cars — is down 3.4 percent. It begs a question: Why now?
The answer, according to experts, is that consumers no longer must choose between the fuel economy and comfortable ride of a sedan and the versatility and increased visibility of a crossover or SUV.
“If you go back in time and [bought] an SUV, you would be compromised to some extent of the way that vehicle performed on-road,” said Mike Manley, the global head of the brand that has most capitalized on the shift, Jeep. “Now I can get everything I want to get, and I don’t have to give up all those things that I might have had to give up five or six years ago,” he said.
Can you blame buyers? All of this is true. You get the higher ride, which some people like, plus more practicality and no real fuel economy penalty in a crossover. The three-box sedan is inherently a compromised design that’s getting rapidly outmoded by these faux-SUVs.
Even the Honda Accord and Toyota Camry — two cars that traditionally have the same level of inevitability as taxes, death and trouble — are down in sales by thousands of units compared to the same months of 2014. The Accord’s sales are down a whole 16 percent.
2nd Gear: Nissan Can’t Make The Rogue Fast Enough
Speaking of crossovers, in another sign of how the small crossover segment is blowing up, Nissan is ramping up production of the Rogue to meet strong demand. Currently the car is made in Tennessee and South Korea, now it will be built in Japan as well. From Reuters:
A weak yen versus the dollar allows Nissan to take more profit per Rogue built in Japan and sold in the United States, but Nissan spokesman David Reuter said the move is due to demand, not because of currency advantages.
“We are maxed out of production capacity” for Rogue at the Tennessee and South Korean plants, Reuter said.
The Rogue. So hot right now.
3rd Gear: Another Big Recall For General Motors
Unlike in 2014, GM has mostly gone through this year without an enormous recall — until now. The General is recalling 780,000 crossover SUVs, primarily in North America, because their power liftgates could fall on people and hit them. And apparently do, as 56 injuries have been reported. One more from Reuters:
The recall covers the Buick Enclave from model years 2008-2012, the Chevrolet Traverse from 2009-2012, the GMC Acadia from 2007-2012 and Saturn Outlook from 2007-2010, GM said in documents filed with U.S. safety regulators.
Dirt can get into the gas struts that hold up the gate, causing them to wear and fail, the company said.
4th Gear: Where’s Acura?
Honda’s new CEO Takahiro Hachigo wants the troubled automaker to get their mojo back, and at a recent news conference in Tokyo, he outlined his plan for doing so. As Automotive News points out here, it’s not unlike the plan Toyota’s Akio Toyoda came up with in 2010 post-unintended acceleration crisis.
Except for one key area:
In one important way, Hachigo does not seem to be following Toyota’s playbook, noted Chris Richter, an auto analyst at CLSA Asia-Pacific Markets in Tokyo.
Toyota effectively stepped up its positioning of its high-margin Lexus luxury brand as a global profit engine. In contrast, Hachigo uttered the word “Acura” only as a brief aside in his hourlong press conference, entirely glossing over any plans for his company’s struggling America-centric luxury brand.
Hachigo, despite touting “Honda-unique” technologies, even failed to use the opportunity to trumpet the unique three-motor hybrid system it will deploy in the upcoming Acura NSX halo car. “It was just mentioned vanishingly,” Richter said of the Acura business. “It isn’t a priority, and it needs to be.”
It does seem like every other manufacturer wants to step up their luxury game, knowing how strong the margins can be if you do it right. Look at what Cadillac is trying to do, for example. So why isn’t Honda following suit? Acura’s been kind of an afterthought at Honda for much of its history. That doesn’t seem poised to change soon.
5th Gear: Everything You Need To Know About UAW Negotiations
In the coming days the Big 2.5 American automakers will begin contract negotiations with the United Auto Workers union, and it will affect the work environment of some 135,000 hourly employees at those companies for the next four years. Put simply, it’s a big deal in the biz.
The Detroit News has a good summary of the most important issues at stake in the negotiations. You should read it. Here’s one:
■Pay increases for veteran tier-one employees: Veteran hourly workers have not had a wage increase in as long as a decade and securing a base wage increase is among key goals for the union. Automakers, if they agree to it, may try to keep the raise low enough that hourly wages remain less than $30 an hour.
The current union contract expires Sept. 14.
Reverse: Then He Went To Chrysler And Showed Them
Neutral: Does The Sedan Matter Anymore?
How long before the midsize sedan doesn’t matter much at all anymore? I’ve been testing a 2015 Subaru Legacy lately, and I’m hard pressed to figure out why anyone would want one over an Outback or a Forester.
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