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: Ford Goes Big In Mexico
During last year’s negotiations with the United Auto Workers union, it became apparent—but not official—that Ford’s goal was to shift small car production from Michigan to Mexico, leaving domestic production to focus on more lucrative SUVs and trucks.
Ford still hasn’t confirmed that’s the case, but the Wall Street Journal pretty much has it locked down. The paper reports this:
The No. 2 light-vehicle seller in the U.S. plans to add 500,000 units of annual Mexican capacity starting in 2018, more than double what it built in 2015, according to people briefed on the plan. The plan mirrors General Motors Co.’s $5 billion investment to double Mexican capacity by 2018.
Ford will build a new assembly complex in San Luis Potosí, and expand an existing factory near Mexico City. The moves will make room for several models, including a yet-to-be-disclosed hybrid vehicle that is described as a Toyota “Prius fighter,” and will allow Ford to focus its U.S. factories on higher-profit trucks and sport-utility vehicles.
The Focus, currently built in Michigan, is one such vehicle set to move production to Mexico, while the U.S. factory will shift to producing the new Ranger and Bronco, which are also unconfirmed but pretty much a lock at this point.
2nd Gear: Tesla Hits A New Low
Wall Street is concerned about the low cost of petroleum’s effects on demand for Tesla’s cars, and whether or not the company can sort out production issues with the new Model X. Tesla’s stock fell to a two-year low yesterday afternoon, reports Bloomberg.
The stock slid 9 percent to $147.99 at 4 p.m. in New York for its lowest closing price since January 2014. The shares had already declined 32 percent this year through Friday. Stock-market indexes were sharply negative on Monday.
The Palo Alto, California-based maker of electric cars and energy-storage devices will report fourth-quarter earnings Wednesday after the market close. Bearish sentiment has been on the rise since the release of the Model X SUV due to concerns about the company’s production ramp and ability to manufacture the complex vehicle in high volumes.
3rd Gear: Less Super Bowl Airtime For Cars This Year
While there were plenty of ads from carmakers during Sunday night’s big game, there was actually far less of that than in previous years. The least amount of car-related airtime since 2010, reports Bloomberg.
Why is that, amid booming new car sales? The news wire says it has more to do with how car companies are expanding their ad work beyond just traditional TV commercials:
But the overall trend was toward shorter, snappier ads of 30 seconds — instead of relatively long commercials of 60 or even 120 seconds — with plenty of social marketing to build off the buzz of the TV spot.
“We feel we can tell what we need to tell in the Super Bowl in 30 seconds and let the social forms really round out the conversations,” said Tom Noble, head of marketing at BMW AG’s Mini USA unit, which returned with a 30-second spot for the first time since 2011. “They work in harmony.”
Same with Honda:
Automakers are also investing in more social media and digital campaigns to supplement TV time. Honda Motor Co., promoting its redesigned Ridgeline truck, released its full ad a week before the game on YouTube, promoting it with a blitz on social media. The company also sponsored digital page “takeovers” on ESPN’s and MSN’s websites on game day and used snippets of the ad on its social content.
“We will do a heavy social media push,” said Tom Peyton, assistant vice president of marketing for Honda, said before the game. “We want to get the word out that we’re back in the truck business.”
Gotta reach those Millennials!
4th Gear: GM, UAW Donate $3 Million To Flint Kids
By now you should be aware of the ongoing contaminated water crisis in Flint, Michigan. Now GM and the UAW are stepping up to help, reports The Detroit News:
General Motors Co. and the United Auto Workers will donate $3 million to the United Way of Genesee County to help support health and education needs for the children of Flint who have been impacted by lead-contaminated water.
The company on Tuesday said the five-year commitment “will address immediate, ongoing and growing needs of Flint children affected by lead.” The donation will be broken up into $600,000 per year, according to a company spokesman.
“This crisis has impacted every Flint resident, most specifically children under the age of six who face a long road to recovery,” said United Way of Genesee County CEO Jamie Gaskin. “We’re outlining a framework that will support these children with things like at-home care, nutritional assistance and early childhood and supplemental education so they can continue to learn and grow.”
5th Gear: VW Could Sell Trucking Business
Here’s one way Volkswagen could shore up cash for Dieselgate. Via Reuters:
Volkswagen AG’s (VOWG_p.DE) trucks business may pursue acquisitions or even a public listing, the company said on Monday, only days after the parent company was forced to delay publishing earnings in the wake of a diesel emissions scandal.
“We’re keeping all options open in regards to expanding overseas, about a possible takeover as well as about a stock market listing,” a spokeswoman for Volkswagen trucks said on Monday, declining to comment on whether a full or partial separation from Volkswagen Group was a possibility.
Reverse: Maybach Music
Neutral: Does Super Bowl Car Advertising Work?
Was anything especially effective this year, given the massive costs involved?
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