Sunday, 22 April 2018

Global automakers gain edge in North America production


Daimler’s U.S. plant in Alabama builds the Mercedes GLE, the GLE Coupe, the GLS and the C-class sedan. The automaker said last year it plans to build full-electric SUVs and their battery packs there.

It’s the latest milestone in the steady rise of the so-called transplant automakers at the expense of the Detroit 3.

After opening several large plants in recent years — and with more under construction in the U.S. and Mexico — the transplants are expected to account for more than half of North American auto production for the first time in 2018.

In 2017, domestic manufacturers represented 50.7 percent of production, to 49.3 percent for foreign automakers. A decade ago, Detroit led handily, 63-37.

And the trend is showing no signs of letting up. BMW and Toyota Motor Corp. are building plants in central Mexico, while Volvo Cars plans to open its first U.S. plant, this summer in South Carolina. Toyota and Mazda Motor Corp. last week chose Alabama for a plant they intend to open in 2021.

The building boom, supported largely by rising exports from North America, is expected to push production higher in the coming years, even as U.S. auto sales decline. Exports to other continents rose to 1.4 million vehicles in 2017 from 1.3 million in 2016, according to IHS Markit, which projects that figure to eventually top 2 million.

“Until 2016, the high seas were raising everything. That’s not the case anymore,” said Joe Langley, IHS’ associate director of North American forecasting. “This highlights how North America is much more globally engaged now. It used to be that a lot of what we did here just stayed here.”

Product launches also are pushing output higher. IHS expects 24 North American-built vehicle introductions in 2018, with nine of those being built here for the first time. Those nine vehicles are expected to generate about 150,000 units of incremental production.

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Overall, IHS predicts production will rise 1.4 percent in 2018, to roughly 17.4 million vehicles, from 17.17 million last year.

End of the growth streak































































First declines since 2009
  N.A. production change from 2016 U.S. sales change from 2016
Subaru 25% 5.30%
Tesla 21% 35%
Volkswagen 18% 5.80%
Hyundai-Kia 6.70% –10%
Mercedes –1.1% –1.4%
Ford –2.1% –0.9%
Industry avg. –4.2% –1.8%
Mazda –5% –2.8%
Nissan –5.1% 1.90%
GM –5.9% –1.3%
Honda –5.3% 0.20%
Toyota –6.5% -0.60%
BMW –9.7% –3.4%
FCA –12% –8.1%
Production includes estimates for some manufacturers not normally estimated.
Source: Automotive News Data Center
     
U.S. production
  2017 production* Change from 2016
BMW 371,284 –9.7%
Mercedes* 344,950 –1.1%
FCA* 1,150,595 –27%
Ford 2,474,992 –1.3%
GM* 2,239,951 –7.4%
Honda* 1,211,292 –6.1%
Hyundai-Kia* 695,429 –7.5%
Nissan 930,586 –7.6%
Subaru* 371,740 25%
Tesla* 101,327 21%
Toyota* 1,263,508 –8.6%
VW 140,417 50%
Total 11,296,071 –6.7%
*Includes estimates for select models
Source: Automotive News Data Center
     
Canada production
  2017 production* Change from 2016
FCA 446,347 –12.7%
Ford 237,269 –6.1%
GM 330,438 –26.7%
Honda 395,716 2.70%
Toyota 536,260 –4.6%
Total 1,946,030 –10%
*Through November
Source: Automotive News Data Center
     
Mexico production
  2017 production* Change from 2016
FCA 592,994 39%
Ford 294,266 –18%
GM 748,703 12%
Honda 200,904 –17%
Hyundai-Kia 207,100 120%
Mazda 132,732 –4.5%
Nissan 786,682 –0.1%
Toyota 139,857 7.40%
VW 440,172 13%
Total 3,543,410 9.50%
*Through November
Source: Automotive News Data Center

North American production fell 4.2 percent in 2017, according to the Automotive News Data Center. That’s the first decline since 2009.

And it’s more than double the 1.8 percent slide in 2017 U.S. light-vehicle sales, suggesting that automakers are getting ahead of the market’s decline rather than waiting for inventories to pile up before slowing assembly lines.

Fiat Chrysler Automobiles and BMW Group made the biggest production cuts in 2017. Both companies’ U.S. sales declined more than the industry average.

In contrast, Subaru and Volkswagen Group of America boosted production by double digits. Tesla also had a double-digit increase, though from a much lower base as it began making the Model 3.

The only other major automaker to build more vehicles last year was Hyundai-Kia, even though its sales plunged 10 percent. Kia more than doubled output in Mexico in the first full year of its new plant there.

Mexico’s rise

Auto production in Mexico rose about 10 percent last year, while U.S. output declined for the first time since 2009.

In the U.S., Ford Motor Co. was again the largest manufacturer of cars and trucks in 2017. Ford has a larger U.S. factory work force than General Motors, which is the biggest producer in Mexico. GM production in Mexico rose 12 percent last year, while its U.S. output dropped 7.4 percent.

FCA shifted a significant amount of its production south of the border last year, building 27 percent fewer vehicles in the U.S. and 13 percent fewer in Canada but 39 percent more in Mexico.

VW built 13 percent more vehicles in Mexico last year and 50 percent more in the U.S., making it the only company to increase production in both countries.

Honda was the only automaker that boosted output in Canada last year.

Mexico’s role in the auto industry has surged in recent years, buoyed by cheap labor and free-trade agreements that encourage manufacturers to use the country as a global export hub. Data released by Mexico’s auto industry last week revealed that a record 2.33 million vehicles were sent from that country to U.S. dealerships last year, 9.4 percent more than in 2016.

Mexico accounted for 22 percent of North American auto production in 2017, up from 13 percent a decade earlier, with the number of vehicles built there nearly doubling over that period.

Meanwhile, the U.S. went from representing 70 percent of North American production in 2007 to 67 percent last year, even though it built more vehicles. Mexico’s rise has been felt more in Canada, which fell from 17 percent a decade ago to 11 percent in 2017.

A decade ago















  2017 2007 Change
BMW 371,284 154,999 139%
Daimler 332,964 174,356 91%
FCA 2,270,975 2,485,500 –8.7%
Ford 3,040,939 2,798,451 8.70%
GM 2,392,131 4,254,006 –20%
Honda 1,853,175 1,432,731 29%
Hyundai-Kia 916,929 250,519 266%
Mazda 185,907 84,513 120%
Nissan 1,775,132 1,190,779 49%
Subaru 371,740 109,177 240%
Toyota 1,985,897 1,671,009 19%
VW 601,665 411,129 46%
Source: Automotive News Data Center

 

Transplants vs. domestic

Total North American production rose 18 percent from 2007 — the year the industry plunged into the Great Recession — to 2016, when automakers built a record 17.9 million vehicles, before declining last year.

Four automakers have at least doubled North American production over the past decade: BMW, Mazda, Subaru and Hyundai-Kia. Subaru’s growth stems from its nine straight annual U.S. sales records. BMW sales, in contrast, have been relatively flat over the period, but its South Carolina plant exports a rapidly expanding lineup of crossovers. The BMW brand now produces more vehicles in North America than it sells here.

On the other end of the spectrum, two automakers — GM and FCA — built fewer vehicles in North America last year than in 2007. Both have had their U.S. market share shrink over the period. Ford production grew 8.7 percent.

Outside of the Detroit 3, the smallest production increases since 2007 were 19 percent for Toyota and 29 percent for Honda Motor as the transplant automakers sourced more vehicles popular among their U.S. customers locally rather than importing them from Europe and Asia.

CR-V vs. Impala

It’s no surprise that crossovers and midsize pickups were among the top segments responsible for the industry’s production increase since 2007, while minivans and many car segments declined. Honda makes nearly eight times more CR-Vs now, while GM built 17 times more Chevrolet Impalas a decade ago than last year.

But a few cars are made in higher volumes now, with automakers compensating for lower North American demand by supplying other markets. Nissan’s compact Sentra is among the top vehicles exported to other continents from Mexico, for example.

Inventories stay healthy

GM and Ford entered 2018 with less U.S. inventory than a year earlier, despite posting lower sales, too. Keeping inventories at healthy levels in a declining market reduces the chances automakers will have to roll out big discounts, cutting deeper into profits.

“We’re really well positioned from an inventory standpoint heading into 2018,” Mark LaNeve, Ford’s head of U.S. marketing, sales and service, said Jan. 3. Ford said it had a 68-day supply to start the year.

GM, after letting inventory top 100 days as recently as August in preparation for plant downtime related to model changeovers, cut that to just 63 days going into January.

A decade of change


































































SUVs
  2017 production 2007 production Change
Jeep Grand Cherokee 272,989 127,518 114%
Jeep Wrangler 264,829 156,716 69%
Chevrolet Suburban 70,518 46,594 51%
Cadillac Escalade 50,937 61,857 –18%
Lincoln Navigator 11,927 26,161 -54%
       
Full-size pickups
Ram pickup 635,930 410,725 55%
Ford F-150 699,814 509,510 37%
Ford Super Duty 352,844 323,713 9%
GM Sierra 280,832 269,288 4.30%
Nissan Titan 65,959 69,850 –5.6%
Chevrolet Silverado 635,258 747,628 –15%
Toyota Tundra 136,036 240,101 -43%
       
Midsize pickups
GMC Canyon 42,254 23,210 82%
Chevrolet Colorado 129,343 85,400 51%
Nissan Frontier 89.065 63,123 41%
Toyota Tacoma 233,393 192,425 21%
       
Crossovers
Honda CR-V 463,248 59,772 675%
Chevrolet Equinox 345,593 105,260 228%
Jeep Compass 182,698 67,603 170%
Ford Explorer 316,012 162,575 94%
Ford Escape 367,270 209,774 75%
GMC Acadia 158,611 103,059 54%
Hyundai Santa Fe/Sport 162,078 116,985 39%
       
Premium crossovers
Lexus RX 114,257 78,074 46%
Mercedes-Benz GL 54,464 41,827 30%
Acura MDX 112,963 94,025 20%
BMW X5 155,324 129,440 20%
       
Compact cars
Nissan Sentra 283,494 125,175 126%
Toyota Corolla 374,362 359,491 4.10%
Ford Focus 179,110 191,115 –6.3%
Honda Civic 357,111 402,406 –11%
Chevrolet Cruze/Cobalt 180,457 226,314 –20%
       
Midsize/large cars
Chevrolet Malibu 222,201 130,598 70%
Nissan Maxima 69,963 46,042 52%
Hyundai Sonata 138,166 133,534 3.50%
Honda Accord 322,551 382,654 –16%
Nissan Altima 261,872 338,609 –23%
Toyota Camry 341,032 447,934 –24%
Cadillac CTS 19,559 55,934 –65%
Chevrolet Impala 18,148 315,114 –94%
       
Sports cars
Ford Mustang 120,780 144,459 –16%
Chevrolet Corvette 22,973 36,597 –37%
       
Minivans
Toyota Sienna 126,976 159,453 –20%
FCA minivans 246,625 351,089 –30%
Honda Odyssey 120,755 196,043 –38%
Figures are January through November of each year
Source: Automotive News Data Center

 



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