Jan. 18, 2019
Federal Shutdown Threatens to Delay Vehicle Launches
Vehicle certification is among the functions halted by the nearly four-week partial shutdown of the federal government, meaning automakers could face delays in launching new and updated models if the impasse in Washington drags on. Under the Clean Air Act, new vehicles and engines can't be sold legally in the U.S. without approval from the EPA. Jim Farley, Ford Motor Co.'s president of global markets, noted this week that the automaker has a number of important products headed to dealerships this year, including the redesigned Explorer and Escape, as well as the new Lincoln Aviator. "We're all waiting in lines," Farley said at the Automotive News World Congress in Detroit. "Every new vehicle has to get certified through the government. If that gets backed up, so do the launches." The Alliance of Automobile Manufacturers, whose members represent 70 percent of U.S. light-vehicle sales, said in a statement, "Automakers are still monitoring the performance of their products during this time and we hope the government shutdown is resolved expeditiously so EPA staff can carry on their work." For more on what delays could mean to dealers, click here.
10 Must-Sees at the Detroit Auto Show
The Detroit Auto Show may be a bit quieter this year, but, according to the Detroit News, there are still plenty of U.S. and foreign automakers who have brought their A-games. There are the usual mighty muscle cars and trucks we expect at a Motown show. But there is also an extraordinary breadth of vehicles from electric to autonomous to V-8s appealing to the richest auto consumer market on the planet. Click here to see the most important vehicles in show. They include, of course, the Toyota Supra. Motorheads have thirsted for the next Supra since Toyota teased the stunning FT-1 Concept in 2014. The production car holds nicely to the concept's design with its low, racer-like hood and roller-coaster hips. Also worth seeing is the 2020 Kia Telluride. The exterior is bold and upright like a Range Rover. The interior is luxurious. To see it, and the rest of the ten best vehicles at the Detroit Show, click here.
Trump Tariffs Force Tough Choices at U.S. Auto Suppliers
Bob Roth makes no bones about his feelings towards U.S. manufacturing. The co-owner and chief executive of RoMan Manufacturing Inc., which makes transformers and glass-molding equipment for automakers and other industries, asks callers on his voicemail: “What have you done today to support U.S. manufacturing?” His procurement team has been under long-standing orders to source all parts and materials as near as possible to his western Michigan factory, even with President Donald Trump’s tariffs on steel and aluminum. But with those tariffs dragging into a new year and steel comprising a quarter of RoMan’s fixed costs, Roth tells Reuters his company has now begun the lengthy process of switching from its U.S. suppliers to an Israeli company for a key component for its products. It is a strategic decision that RoMan and other auto suppliers have put off since the tariffs kicked in last spring. The choice is stark for most suppliers: absorb the extra cost, pass them on to customers or find ways to slash material costs. For the full story, click here.
Subaru Sees 3% Growth in U.S.
Subaru President Tomomi Nakamura is bullish about sales growth in the brand's key U.S. market, forecasting an 11th straight year of record U.S. volume in 2019. In its home market, however, Automotive News reports that Subaru is still reeling from a string of final inspection problems that have plagued the company since October 2017. Nakamura says he is committed to putting the scandals to rest. Subaru plans to manufacture record overseas output of 380,000 units in 2019, up 6 percent from 2018, the company said Wednesday. The increase is mainly attributed to strong U.S. sales growth. Subaru expects U.S. sales to increase 3 percent to some 700,000 vehicles. Nakamura said Subaru's overall inventory turnover rate stood at 33 days at U.S. dealerships in December, with stockpiles of the Ascent, Crosstrek, and Forester being particularly low. "Our U.S. dealers said they could sell more. So, I see there is an opportunity (for further growth) in the U.S. market," he said. But when it comes to ramping up output, Subaru is going to take a wait-and-see approach at least for now. "We will be cautious about production," Nakamura said. For the rest of his remarks, click here.
Hyundai, Kia Recall 168,000 Vehicles at Risk for Fires
Despite a government shutdown, Hyundai and Kia are moving ahead with a recall of about 168,000 vehicles to fix a fuel pipe problem that can cause engine fires. The problem stems from improper repairs during previous recalls for engine failures. According to CBS, the affiliated Korean automakers have been dogged by fire and engine failure complaints from across the nation. They're both under investigation by the U.S. National Highway Traffic Safety Administration, which has been trying to figure out whether initial recalls covered enough vehicles. But the agency is mostly closed due to the shutdown. In addition to the recall, each automaker said it will do a "product improvement campaign" covering a total of 3.7 million vehicles to install software that will alert drivers of possible engine failures and send the cars into a reduced-speed "limp" mode if problems are detected. "Making our customers comfortable is vastly more important than making sure we're following additional government processes right now," he said. For the rest of the story, click here.
AIADA Affinity Partner Happenings at 2019 NADA Convention
AIADA's Member Benefits Program is one of the most valuable services AIADA provides to its members. AIADA partners with best-in-class companies to provide members with exclusive values on the goods and services they need to succeed in a competitive business environment. While you're in San Francisco, make sure to check out AIADA's Affinity Partners. Click here for a quick reference guide on where to find them at NADA 2019!
Around the Web
The 2020 Toyota Highlander Looks Redesigned beneath Some Weird Camouflage [Car&Driver]
Faraday Future Funder Writes Its Own Saab Story [Green Car Reports]
What We Found When We Crawled Under the 2020 Toyota Supra [Jalopnik]
Concept Car Corral: 6 Coolest Concepts at the 2019 Detroit Auto Show [Kicking Tires]
