Toyota CEO Mulls Making Deals 'to Survive in the Future'

First Up 06/14/17

GOP Lawmaker Floats 5-Year Phase-In of Border Adjustment Tax 
The top House Republican tax legislator floated a five-year phase-in to his controversial “border adjustment” idea on Tuesday in a bid to blunt mounting opposition to the concept. According to The Wall Street Juornal, the phase-in offered by Rep. Kevin Brady (R., Texas) is a response to critics who worry about the disruption that border adjustment could cause for companies, supply chains and consumers. It is a sign that Mr. Brady continues to press ahead with border adjustment and refine details of that plan rather than drop the proposal as some Republicans are urging. Under the phase-in suggested by Mr. Brady, only 20 percent of import costs would be nondeductible in the first year of the new tax system, stepping up steadily each year until it reaches 100 percent in the fifth year. The tax exemption for exports would phase in on a parallel schedule. AIADA continues to oppose the border adjustment tax. For more on Rep. Brady’s proposed phase-in, click here.

Toyota CEO Mulls Making Deals 'to Survive in the Future' 
Toyota Motor Corp. may consider mergers or acquisitions to procure new automotive technologies, including self-driving technologies, the company's president said on Wednesday, adding that it had to compete more aggressively against its rivals. At an annual shareholders meeting President Akio Toyoda said the world's second-biggest automaker, which took longer to warm to self-driving cars and electric vehicles than its rivals, would be more aggressive in expanding in these areas, conceding he may have focused too much on preserving the status quo at the firm until now, reports Automotive News. "The auto industry is undergoing big changes, and issues and ideas which we may have thought were far off in the future could affect us tomorrow. That's why we need to go on the offensive while also preserving our areas of strength," he said. For more, click here.

Auto Loan Delinquencies Rise as Drivers Splurge on Pricey Cars 
Chasing that new car smell has led some car buyers to drive off with more than they bargained for, reports CNBC. Low interest rates and low unemployment, along with loosened lending standards and greater new car sales incentives, have contributed to a boom in car leasing and auto financing. Americans are now spending more on their cars, but less out of pocket, and taking on more debt than they can afford. That, along with increased subprime lending — which is more profitable because lenders can charge much higher interest rates — has led to a recent increase in the number of drivers falling behind on their car loans, according to the Federal Reserve Bank of New York. Auto loan delinquencies rose more than any other category in last year's fourth quarter, according to the most recent data from the American Bankers Association. For more, click here.

Senators Crafting 'Bipartisan Principles' for Robo-Cars 
The day before a Senate panel is to discuss federal regulations for self-driving cars, three senators released “principles” to guide that legislation, reports The Detroit News. U.S. Sens. John Thune, Gary Peters, and Bill Nelson, all members of the Senate Commerce, Science, and Transportation Committee, on Tuesday released “bipartisan principles” to guide legislation on self-driving cars. The panel will hold a hearing Wednesday about the “hurdles for testing and deployment” of robotic cars. The lawmakers said the guidelines would ensure the safety of the cars and reduce regulatory conflicts about autonomous vehicles that most major carmakers are testing. The senators said the principles call for prioritizing safety, promoting innovation, reinforcing separate federal and state roles, strengthening cybersecurity, and educating the public. For more on rules for robo-cars, click here.

Top-Selling Cars and SUVs Remain Affordable, But Truck Costs Are Skyrocketing 
Automotive analysts have been warning about a looming affordability crisis coming to wreak havoc with the new-car business, citing rapidly rising lease rates and loan periods being extended to seven, and even eight years to help cash-strapped consumers offset escalating sticker prices. While the MSRPs on most cars and trucks generally rise by at least a token amount every year, Forbes reports that a study of inflation-adjusted prices for the 10 best-selling vehicles over the last two decades conducted by the website paint distinctively different pictures with regard to affordability. Arguably fueled by changes in market demand in recent years, pickup truck prices have indeed gone through the proverbial roof, especially when inflation is factored into the equation. Expressed as a calculation of average household income,’s data indicates it now takes an average 46 percent of a family’s take-home cash to cover the payments on a new full-size pickup truck, versus 39 percent in 1997. For more on rising vehicle costs, click here.

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