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: That Is One Extremely Good Way To Do It
While every other sports- and supercar maker these days looks to be going downmarket, bringing in entry-level exotics in an effort to increase volume and profits, Ferrari is going in another direction, according to Bloomberg:
Ferrari NV plans to increase profit by at least 8 percent this year with more special edition supercars such as the $2.1 million LaFerrari Aperta, which helped revenue and earnings reach records in 2016. The shares rose to their highest ever.
More customs, one-offs, and super-rare specials? We are very okay with this.
Maybe this strategy will even spread to other carmakers too. I mean, who doesn’t want an eight percent jump in profits? Toyota, are you listening? Where the hell is our custom Corolla????
2nd Gear: Americans Bought 1.9 Percent Fewer Cars
Americans bought 1.9 percent fewer cars in January, which is typically the weakest car buying month anyway, Automotive News reports:
U.S. light-vehicle sales dipped 1.9 percent in January with consumers and automakers taking a break after a robust December fueled by heavy promotions and more generous deals.
In what is typically the weakest month of the year, Nissan Motor Co. and Honda Motor Co., behind fatter deals and strong truck demand, posted gains while volume fell at the Detroit 3, Toyota and Hyundai-Kia.
Have they tried the whole custom thing? We hear it works.
3rd Gear: Canada’s Buying Cars Like Hotcakes
I was always under the impression that Canada in January was some sort of vast, frozen hellscape, fit for neither human nor beast. Only those willing to bind knives to their feet and helmets to their head would brave the ice, and even then, they may lose a few teeth in the process.
But boy howdy was I wrong (again from AN):
Canadian car and light-truck sales rose 2.2 percent in January over last year to an all-time record for the month, DesRosiers Automotive Consultants said on Wednesday, as the Detroit 3 posted gains that contrasted with U.S. declines.
What the hell is going on up there?
4th Gear: FCA Sales Drop 11 Percent
While most of the automotive industry sales figures at this point could almost be dismissed as statistical noise (up one percent here, down half a percent there), Fiat Chrysler Automobiles saw sales plunge 11 percent, the Detroit Free Press says:
However, sales dropped 39% for Chrysler, 17% for Dodge, 9% for Fiat and 7% for Jeep.
Fiat Chrysler’s January sales were hurt by the discontinuation late last year of the Dodge Dart and Chrysler 200 sedans and because the company has been aggressively cutting its fleet sales, which were at 42,868 units.
The company said it cut its fleet sales 31% in January as it continued a strategy it put in place last fall to reduce sales to daily rental car companies. Generally, a high volume of sales to rental car companies is viewed as unhealthy for automakers because those sales have lower profit margins and also lead to lower residual values for consumers.
The issue here is more complex, however, than just “sales are down.” A heavy reliance on fleet sales isn’t exactly good for any automaker, so it looks like FCA is trying to wean itself off that. Also, the cancellation of the Dodge Dart and the Chrysler 200 couldn’t have helped, and we know what huge volume-sellers those were.
That was a joke.
5th Gear: Japan’s Prime Minister To Meet With Toyota Before Trump Summit
As President Donald Trump starts playing protectionism with the automotive industry, so will the rest of the world respond. This time, Reuters reports that it’s Japan’s turn:
Japanese Prime Minister Shinzo Abe said he would meet the head of Toyota Motor Corp (7203.T) on Friday, as Tokyo compiles a plan to ward off U.S. criticism of Japanese trade policy before a summit with President Donald Trump next week.
Trump, who has pledged to put America first when it comes to trade, has rattled Japan by criticizing the low number of U.S. cars sold in Japan and by demanding that more cars sold in the United States be made locally.
Abe, speaking in parliament on Thursday, said the meeting was arranged months ago, but this will do little to quell speculation that he will pass on some instructions to Japan’s top auto maker about how to avoid Trump’s protectionist ire.
A full 75 percent of Japan’s trade surplus is made up of automotive exports to the United States, so any tariffs on goods coming from Japan could wreak havoc on the Japanese economy.
Just as well, Toyota actually already has several factories in the United States. There are Toyota factories in Kentucky, Mississippi, Alabama, Indiana, Texas, and West Virginia. Not bad for a “foreign” automaker.
The 24 Hours of Daytona endurance auto race begins on February 2, 1991; when it ends the following day, driver Hurley Haywood will collect his fifth win, the most victories of any driver in the event’s history.
Neutral: Did You Know I Am Now The Proud Owner Of A Yugo?
I am now the proud owner of a Yugo. Does anyone know where to get parts for a Yugo? Please help. Also tell me what we should do to this thing.