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United States drivers buying fewer Mexican-made cars

Crossovers and pickup trucks are not only growing in market share, they're also more profitable than cars. A crossover on the same platform as a sedan retails for thousands more, despite similar components. It's one of the reasons we've seen automakers rapidly shifting production of their sedans and hatchbacks to Mexico, where cheap labor preserves the thin profit margins on these inexpensive vehicles. But as the market continues to shift in the United States, Mexico is getting burned by its lack of product diversity. The country's auto exports, which are heavy on cars, suffered a 16-percent drop last month, Automotive News reports. In total, year-over-year exports fell from 233,515 to 197,020 last month, while year-to-date exports are down by 7.4 percent, from 922,029 to 854,118. The number one culprit? America – which usually accounts for 75 percent of Mexico's exports – and its appetite for crossovers and pickup trucks bolstered by cheap gas prices. While Mexico does build some light truck models – AN specifically calls out the Ram 2500, Honda HR-V, GMC Sierra, and Toyota Tacoma as export leaders – the vast majority of vehicles rolling out of its factories are sedans and hatchbacks. In fact, the three biggest drops in Mexican exports came from companies whose south of the border factories only build cars – Ford (Fusion/Lincoln MKZ and Fiesta), Mazda (Mazda3), and Volkswagen (Golf and Jetta). Mexican Automotive Industry Association President Eduardo Solis told AN the export shortfall will likely be sorted out sooner rather than later, thanks to a pair of new factories – a Kia car factory and an Audi SUV plant – that are coming online by year's end. The two facilities will add around 100,000 vehicles to the country's export totals, which Solis said should leave the industry on the verge of breaking another export record in 2016. But how sustainable will these record-breaking years be? Slapping an "Hecho en Mexico" sticker on a new German SUV won't be enough to change the fact that Mexico's product mix is tilted too heavily towards body styles that are not growing in volume. Mexico's record-breaking export years probably aren't at an end, but we'd argue they're certainly under threat. News Source: Automotive News - sub. req.Image Credit: Omar Torres / AFP / Getty Images Plants/Manufacturing Ford GMC Honda Mazda RAM Volkswagen Truck Crossover SUV Mexico

Porsche CEO Matthias Mueller throws hat back in ring for VW CEO job

Toward the end of February it got leaked that Porsche CEO Matthias Muller was being promoted to Volkswagen's supervisory board. Muller's credentials and his success over 36 years at the VW Group have, for observers, put his name in the pool of potential candidates to succeed current group CEO Martin Winterkorn when Winterkorn retires in two years. But the 61-year-old Muller told German newspaper Frankfurter Allgemeine Zeitung earlier in February, "It's no solution to put a 63-year-old at the head of Volkswagen," and the statement was taken to mean he wasn't considering the job. Muller now says the quote was misunderstood. In a report in Automotive News, the newly minted board member says he was commenting on what it would mean for the supervisory board and the Group if they nominated a 63-year-old to replace a 69-year-old - that it wouldn't result in a "generation change." However, if that's what they choose to do, Muller feels great: "I stand ready to take over any assignment," he said. Muller's name re-enters the candidacy pool, but we still have no idea who leads the running for the role and Winterkorn isn't saying a word. It could be three years before we know: Winterkorn's contract concludes at the end of next year but there is speculation he'll re-up for two years to see out the end of the Strategy 2018 initiative.

VW fix would have cost $335 per vehicle

Since the Volkswagen diesel kerfuffle began, Bosch, the world's largest auto supplier, has been hooked up to a bullhorn trying to make sure everyone knows its side of the story. Bosch supplied VW with the engine management testing software, including delivery and metering modules, that VW then used to skirt emissions laws in the US. Bosch told VW in 2007 that it was illegal to use the software in cars it planned to sell yet VW did it anyway, according to reports coming out in German newspapers Bild am Sonntag and Frankfurter Allgemeine Zeitung. That first warning came two years after VW started developing the small-displacement diesel, around the time that the two men pushing its development, then-brand chief Wolfgang Bernhard and engineer Rudolf Krebs, were telling their superiors that the engine needed AdBlue urea injection to pass US emissions. VW cost controllers wouldn't approve the AdBlue solution because it would add 300 euros ($335 US) to the cost of the vehicle. Bernhard and Krebs left the same year that Bosch advised VW about the software, two years before the engine went into production. That's when things get cloudy. A report in Automotive News says that when Martin Winterkorn took over in 2007 as head of the VW Group and brand, he asked Ulrich Hackenberg and Wolfgang Hatz to keep working on the engine, and "[the] engine then ended up in VW Group diesels" with that problematic software still intact. No one has yet pointed any fingers at this latter chain of command, but like a game of Clue, right now they're the professors in the library holding the candlesticks. Warnings didn't only come from the supplier: Frankfurter says VW's initial investigation has found that an engineer issued the same caution to the company in 2011. Neither Bosch nor VW would comment on the reports.