Detroit Three’s to lose dominance of North American auto output in 2017: IHS


DETROIT (Reuters) – North American vehicle production by the unionized Detroit Three automakers will fall behind the combined North American output of Tesla Inc and automakers from Europe and Asia for the first time this year, IHS Markit forecast on Wednesday.

In 2017, the Detroit Three could build 8.6 million vehicles in North America, while Tesla and foreign automakers build 8.7 million, IHS Markit analyst Joe Langley said on Wednesday.

By 2024, the gap will widen, with Asian and European automakers and Tesla combining to build about 9.8 million vehicles in North America. General Motors Co, Ford Motor Co and the North American operations of Fiat Chrysler Automobiles NV will combine to build 8.1 million vehicles, down 6 percent from this year.

Mexico is on track to increase its share of North American vehicle production, Langley said, moving to 4.5 million vehicles a year by 2024 from about 4 million vehicles currently.

General Motors world headquarters are seen before GM CEO Mary Barra addresses the media ahead of the start of GM’s annual shareholders meeting at the Renaissance Center in Detroit, Michigan, U.S., June 6, 2017. REUTERS/Rebecca Cook

The milestone for the growth of Tesla and foreign automakers in North America comes as the Trump administration is pushing to limit imports of vehicles from Mexico in negotiations to overhaul the North American Free Trade Agreement.

The declining share of North American vehicle production for the Detroit automakers also challenges U.S. and Canadian unions that represent their workers.

Canadian workers are on strike at a GM factory in Ontario to protest the automaker’s decision to cut jobs and move to Mexico some production of sport utility models built there.

Foreign automakers over the past year have announced plans for a wave of new or expanded plants in North America, while Tesla is ramping up to build as many as 500,000 cars a year at its plant in Fremont, Calif. Often referred to as “transplants,” the foreign-owned factories are poised to become the mainstream of the North American auto industry.

Automakers are increasingly using factories in China or Mexico to build vehicles that used to be assembled solely in the United States, Langley said. He cited as an example Ford’s decision to shift production of the Focus small car for North America to a Chinese assembly plant.

Reporting By Joseph White; Editing by Cynthia Osterman

Our Standards:The Thomson Reuters Trust Principles.



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