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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

Next-gen Mazda6 reportedly getting RWD, straight-six it shares with Toyota

Last June, Japan's Best Car magazine laid out what we considered a whopper series of rumors about future Mazda developments. The mag said it had been speaking to a Toyota source on an unrelated matter, and found out that Mazda's work on a straight-six Skyactiv engine was predicated on that engine's use in Toyota Group vehicles, including Lexus models. Car and Driver has apparently consulted its own sources, and in a new report utters many of the same pronouncements as Best Car. The next-generation Mazda6, due around 2022, will molt out of its transverse engines on a front-driver platform, and be the first home for the longitudinally-mounted straight-six on the automaker's new rear-wheel drive "Large Architecture."  The gas-powered Skyactiv-X six-cylinder, a shade under 3 liters of displacement, will get help from a 48-volt hybrid system, and top output could hit 350 horsepower. A second straight-six will come in an oil-burning Skyactiv-D flavor, and PHEVs are certain to eventually factor into the equations. The sheetmetal around the bodywork will draw inspiration from the four-door Mazda Vision Coupe concept that debuted at the 2017 Tokyo Motor Show. Describing a scenario we can only cross our fingers for, C/D writes "there's a chance Mazda will mimic Lexus and put inline-six into both four- and two-door bodies," grabbing another unused concept as a design guide for the latter, the two-door RX Vision concept from the 2015 Tokyo Motor Show. C/D suspects the increasing cooperation between Mazda and Toyota will not only pay the bills for Mazda's sports sedan, but compel the Large Architecture to take a couple of side jobs in Toyota City. C/D writes, "Toyota may adopt the six-cylinder Skyactiv-X for the next-generation Lexus IS and RC." According to the recently leaked dealer report, the next-gen IS could be with us in 2021 as a 2022MY offering. Betting money seems to be on the sedan sticking with Toyota's TNGA platform and Lexus engines until a brand new model shows around 2026, though.

Japan may aid carmakers facing U.S. tariff threat

TOKYO — Japan is considering giving carmakers fiscal support including tax breaks to offset the impact from trade frictions with the United States and a sales-tax hike planned for next year, government sources told Reuters on Wednesday. Going into a second round of trade talks with the United States on Sept. 21, Japan is hoping to avert steep tariffs on its car exports and fend off U.S. demands for a bilateral free trade agreement that could put it under pressure to open politically sensitive markets, like agriculture. "If the trade talks pile pressure on Japan's car exports, we would need to consider measures to support the auto industry," a ruling party official said on condition of anonymity because of sensitivity of the matter. The auto industry accounts for about 20 percent of Japan's overall output and around 60-70 percent of the country's trade surplus with the United States, making it vulnerable to U.S. action against Japanese exports. Japan's biggest automakers and components suppliers fear they could take a significant hit if Washington follows through on proposals to hike tariffs on autos and auto parts to 25 percent. Policymakers also worry that an increase in the sales tax from 8 percent to 10 percent planned for October 2019, could cause a slump in sales of big-ticket items such as cars and home. Prime Minister Shinzo Abe has twice postponed the tax hike after the last increase from 5 percent in 2014 dealt a blow to private consumption, which accounts for about 60 percent of the economy. To prevent a pullback in demand after the tax hike, the government may consider large fiscal spending later when it draws up its budget for next year, government sources said. "One option may be to greatly reduce or abolish the automobile purchase tax," one of the government sources said. The government is also considering cuts in the automobile tax and automobile weight tax to help car buyers, the source added. Reporting by Izumi Nakagawa and Tetsushi KajimotoRelated Video: Image Credit: Getty Government/Legal Isuzu Mazda Mitsubishi Nissan Subaru Suzuki Toyota Trump Trump tariffs trade