Honda Takes a Gamble on Electric

First Up 03/20/17

March 20, 2017

Critics in Canada and Mexico have already blasted the idea of a border adjustment tax. And now more voices within the country are speaking out. Auto Service World reports that earlier this month, members of the American International Automobile Dealers Association spent two days in Washington, D.C. talking to House of Representative members about the dramatic impact such a tax would have in the automotive industry and to American households. “We would like to see no border adjustment tax at all,” said AIADA President Cody Lusk. “We think there’s a better way to do tax reform that would minimize its impact on auto consumers and the auto sector. We’re paying a disproportionate amount of this tax right now as it is proposed.” Lusk went on: “Everything’s going up and we worry about making our consumers pay that much more for everyday goods and vehicles and services and everything like that. It would have a very detrimental impact on the economy.” For more on why the border adjustment tax is bad for auto consumers, click here.

Honda Takes a Gamble on Electric 

Against a tide of low consumer demand for battery-powered vehicles and loosening federal emissions rules, Honda announced last week that it will aggressively pursue vehicle electrification. With a goal of two-thirds of brand sales coming from battery or hydrogen-fuel cell vehicles by 2030, the Japanese manufacturer is bullish on alternative fuels. According to The Detroit News, the move to electrification marks a significant shift for a brand that has built its U.S. success on gauging consumer demand for efficient, gas-powered small cars and crossovers. “This is a long-term vision to make sustainable, electrified vehicles – true volume vehicles for Honda,” says Jim Burrell, assistant vice president for American Honda Environmental Business Development. For more on Honda’s electric gamble, click here.

A New Era for Nissan Design 

Two non-Japanese designers, one a veteran insider, the other just poached from a luxury-brand rival, face a difficult balancing act leading Nissan Motor Co. into an era of new technology that promises to change the look of cars in unpredictable ways. According to Automotive News, Alfonso Albaisa, 52, is the seasoned Infiniti design chief tapped to head global styling starting April 1. He must continue a brand identity cultivated over nearly 18 years by outgoing styling boss Shiro Nakamura. However, opportunity for new direction abounds thanks to electrification, connectivity, and autonomous driving. Those changes are "bringing oxygen to our working environments," Albaisa said. "Adapting to this opportunity is liberating," Albaisa said in an email to Automotive News. "As head of design, I feel a major part of my job is to facilitate this liberation." Meanwhile, Albaisa's successor at Infiniti, Karim Habib, 47, will import fresh ideas about European luxury from his time as global design chief at BMW and work at Mercedes-Benz. For more on design changes at Nissan, click here.

Auto Industry Says It Still Won't Back Off Fuel-Economy Efforts

Just because President Trump may weaken U.S. fuel economy requirements, don’t expect gas guzzlers like the giant 13 mpg Hummer H1 to make a comeback, reports The Detroit Free Press. Executives from automakers and suppliers gathered at a conference in Dearborn late last week said looser fuel economy standards might allow for sales of more trucks in areas where they’re popular. But otherwise, the pursuit of fuel-efficiency technologies will proceed unabated. Trump went to the Detroit area last week to announce that his Environmental Protection Agency will re-examine gas mileage requirements that were affirmed in the Obama administration’s last days. Executives at the Fuel Economy Detroit conference said the billions of dollars already invested in efficient vehicles makes reversing course impractical. And while the U.S. may relax rules, other countries are toughening them, leaving the industry no choice but to keep researching ways to make gas engines more efficient and develop cheaper and longer-range electric and hydrogen fuel cell vehicles. For more on industry fuel-economy plans, click here.

Offices of Volkswagen and Audi Chiefs Searched in Raid, Warrant Says 

German officials included the offices of both Volkswagen’s chief executive and the head of the Audi division when they raided company premises last week as part of an investigation into emissions fraud, according to a copy of the search warrant. The warrant, whose contents were viewed by The New York Times, was first reported on Sunday by the German newspaper Bild am Sonntag. Investigators do not yet have enough evidence to determine who is responsible for illegally manipulating diesel motor software to deceive American clean-air regulators, according to the warrant. But the warrant, signed by a judge in Munich, allowed investigators to seize documents and other items such as appointment calendars, copies of emails, mobile phones, and electronic passwords from Mr. Müller and Mr. Stadler, and numerous other current or past Volkswagen and Audi employees. For the latest on searches of VW and Audi, click here.

Tomorrow: What Could the Border Adjustment Tax Mean for Your Dealership? 

On the heels of AIADA’s Washington, D.C., Border Adjustment Tax (BAT) Fly-In this month, join AIADA tomorrow, March 21, for a special AutoTalk session with AIADA President Cody Lusk featuring an in-depth look at the issue and its importance to international nameplate dealers. The 20 percent BAT is a provision in the “Better Way” tax proposal, which is currently being discussed in the U.S. House of Representatives. Lusk will provide insight into the status of this destructive tax proposal and its potential ramifications for dealers and their businesses and take questions from participants.

Topics covered in this special AutoTalk webinar will include:

  • Just what is the BAT?

  • Who is proposing the tax, and is it part of a larger tax plan?

  • Does the tax apply to vehicles assembled in the U.S., like the Toyota Camry? Or does it only impact cars and light trucks that are imported into the country?

  • What is the projected impact on the annual vehicle sales rate?

  • How will this affect consumer affordability?

To register for the 10:00 a.m. EDT session, click here. To register for the 4:00 p.m. EDT session, click here.

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