Ram Production May Move to Mexico After All Because FCA Wants More Trucks

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FCA might not abandon Ram production in Mexico after all, China considers an EV sales tax cut, and NHTSA’s thinking about headlights—all of this and more in The Morning Shift for Monday, Oct. 29, 2018.

1st Gear: FCA’s Tired of Being No. 3

Back in 2017, former Fiat Chrysler head Sergio Marchionne floated the idea of moving the company’s Ram production out of Mexico, thanks to the mess that was the negotiations for a new North American Free Trade Agreement.


FCA later said in January that Ram production would move entirely to Michigan, but now Reuters reports that Marchionne’s replacement is thinking twice about the idea. The automaker, explains Reuters, is just so very tired of its no. 3 ranking in truck sales.

Production will still move ahead in Michigan, but now CEO Mike Manley thinks keeping some production in Mexico could be great.


Per Reuters:

“We need to get ourselves into second” place, Manley told Reuters exclusively in his first interview since taking over the No. 7 global automaker after Sergio Marchionne died suddenly. “Frankly, I don’t care which of the two I take share from.”

When U.S. President Donald Trump was threatening action that would have imposed a 25 percent tariff on Mexican-made pickup trucks earlier this year, Fiat Chrysler said Saltillo would be “repurposed to produce future commercial vehicles.”


Now that the U.S., Mexico and Canada have sketched out a tentative trade proposal, Manley thinks staying in Mexico will make it happen.

“With a combination of Warren and Mexico building what we call the classic truck, we have enough production to increase output next year if it’s required,” Manley said.


Hopefully by then, someone at FCA has coached him out of saying something as groan-worthy and canned as “what we call the classic truck.”

2nd Gear: New Headlights?

Automakers have long begged the U.S. National Highway Traffic Safety Administration to switch up regulations overseeing car headlights, and now, they might get their wish, according to Automotive News.

After years of pleading from global automakers, led by Toyota, NHTSA announced this month that it is considering a dramatic change to the long-standing rules that govern automobile headlights. If approved, the change — currently in a comment period before official review — would allow automakers to install and enable adaptive driving beam headlights on new cars sold in the U.S.


The change to adaptive driving beam headlights would, as Automotive News gently puts it, “make it possible to drive with high beams on without having to worry about blinding other motorists.”

The technology’s already being used elsewhere across the globe, but the change over here has been held back because of a Federal Motor Vehicle Safety Standard that dates to 1967, Automotive News says. Maybe now that’ll change.


3rd Gear: China Wants to Make EVs Cheaper

Car sales in China have nosedived in response to Trump’s multi-pronged trade war with the world, and so the country is looking to breathe some life into the market. One approach being considered, reports Bloomberg, is a tax cut of sorts.

An incentive would help shore up the world’s largest automotive market, which is facing its first decline in more than two decades as a trade war with the U.S. hits at consumer spending power. A torrid few months of escalating countermeasures have led Volkswagen, Ford and Renault SA to all cut their outlooks, as sales in the country slid for four straight months. Tensions with the U.S. have started to ripple more broadly through China’s economy and its stock market, showing a more direct impact than on the U.S.

To counteract the slowdown, China’s top economic planning body is proposing to halve the tax on car purchases to 5 percent. The measure would apply to cars with engines no bigger than 1.6 liters, said the people, declining to be named because the information isn’t public. China’s National Development and Reform Commission, also the top regulator, has submitted a plan but no decision has been, they said.


Surely, just the mere thought of this is good news to automakers. Bloomberg points out that carmaker stock shares jumped immediately, including VW, which sold roughly 40 percent of its total vehicles in China alone last year.


4th Gear: Whoops

Recalls are crucial, we all know, the feds are looking into whether Mercedes-Benz slow-walked the legal process of mailing safety recall notices to owners for over 1.4 million vehicles, according to the Associated Press.

The National Highway Traffic Safety Administration said a review found that Mercedes’ U.S. unit exceeded time limits for mailing letters to owners. In documents posted on its website, the agency also said it has questions about the company’s process and cadence for making recall decisions and notifying the government about them.

After an annual audit of recall files, the agency said it sent a letter to Mercedes outlining a list of problems with 2017 recalls.


Mercedes, for whatever reason, left out information pertaining to the source of the recall in notices that did go out. Important stuff, like when the recall would start. A Mercedes spokesperson told the AP that it makes “every effort to ensure our recall campaigns and customer notifications are executed in a timely manner.”

The automaker said it’ll work with NHTSA to address any concerns, and the AP reports it has three weeks to respond to the agency’s query, or else it could face a maximum $105 million fine.


5th Gear: Daimler Into the Idea of Working With Tesla

Long before Tesla CEO Elon Musk’s tweets landed the company in legal trouble from regulators, investors and criminal investigators, a sizable stake of the all-electric car company belonged to Daimler. The German-based company sold its 4 percent stake back in 2014, and has since rolled out a fleet of electric cars to compete with Tesla, but according to Reuters, it wouldn’t rule out working with Tesla again in the future, if the idea ever came about.


Per Reuters:

Dieter Zetsche told the daily Rzeczpospolita that after selling the Tesla shares he “never regretted it. This does not exclude a cooperation in a future.”

Daimler says Zetsche’s remarks were made in response to a hypothetical question during a roundtable discussion at the Paris Motor Show and that there was no plan currently to explore opportunities to cooperate with Tesla.


It’s an offhand remark, sure, but Musk has been candid in the past about having a willingness to partner with the industry on electric vehicles—like, for example, opening up its massive Supercharger network. He reiterated as much last week on a call with financial analysts, so it’s notable to see Zetsche even considering the possibility. Could be a good thing for the still-fledgling EV industry.

Reverse: RIP

Duane Allman, a slide guitarist and the leader of the Allman Brothers Band, is killed on this day in 1971 when he loses control of his motorcycle and drives into the side of a flatbed truck in Macon, Georgia. He was 24 years old. After Allman’s death, his band continued to tour and record and it is still together today. In 2004, Rolling Stonedeclared that the Allman Brothers were the 52nd-greatest rock band of all time.


Neutral: Headlights

Do you think it’s time automakers were allowed to install and enable adaptive driving beam headlights on new cars?