DETROIT — This week’s North American Auto Show has the usual showmanship. But things are different than in past years.
Since 2009, the industry has enjoyed a surge of demand following a major recession and US government-backed bankruptcies of General Motors Co. and Chrysler. That demand has bolstered the industry, making it one of the strongest performers in manufacturing.
Now, sales have hit a plateau. Industrywide deliveries of cars and light trucks did reach a record 17.55 million last year, according to Autodata Corp. But that wasn’t much over the previous record of 17.48 millon in 2015.
Demand is forecast to remain strong but below the 2016 mark. “That means some OEMs will see sales declines and there’s zero tolerance for that amongst senior executives and stockholders,” said Rebecca Lindland, senior analyst at Kelley Blue Book. “So we could see high sales but ongoing high incentives.”
Then, there’s President-elect Donald Trump, who’s keeping an eye on the industry and letting his opinion be known through his Twitter account.
Trump criticized Ford Motor Co. (Dearborn, MI) during the 2016 presidential campaign for the company’s plans to build a $1.6 billion factory in Mexico to assemble Focus small cars. Ford last week canceled the project but said the next-generation Focus will still be built in Mexico, but at an existing factory. Still, Ford said it would spend $700 million of the money earmarked for Mexico to develop electronic and autonomous cars in the US. The company said this would add 700 jobs in Michigan.
The Republican last week attacked General Motors Co. (Detroit) for selling Mexican-produced Cruze hatchbacks in the United States. The bulk of Cruzes are assembled in Ohio. Trump also criticized Toyota Motor Corp. over plans to build a factory in Mexico.
FCA’s $1 Billion
The industry’s dance with the president-elect continued with the start of the auto show.
On Sunday, FCA US LLC said it’s spending $1 billion to upgrade factories in Ohio and Michigan, add three Jeep models (including a pickup) and add 2000 jobs. Under the plan, the company’s Warren, MI, plant will be upgraded to produce the Ram heavy-duty pickup. That model, as noted in the company statement, “is currently produced in Mexico,”
Trump commented on that Monday.
“It’s finally happening—Fiat Chrysler just announced plans to invest $1 BILLION in Michigan and Ohio plants, adding 2000 jobs,” Trump said in one tweet. “Ford said last week that it will expand in Michigan and U.S. instead of building a BILLION dollar plant in Mexico. Thank you Ford & Fiat C!,” he said in another tweet.
Ford added one more piece of the puzzle today. When the automaker canceled the Mexican project, it said “two new iconic products” would be built at its Wayne, MI, factory where the Focus currently is assembled.
The automaker said at the auto show today that a new version of Ford Ranger truck would be built at Wayne starting in 2019 and a new Ford Bronco in 2020. The company didn’t release any images of the planned models.
Toyota also stressed its US investment at factories. CEO Akio Toyota, while introducing the next-generation Camry sedan, said his company would spend another $10 billion in the US over the next five years. Jim Lentz, Toyota’s North America chief, disclosed the figure earlier in the day in an interview with Reuters.