After a Roller-Coaster 2025, VW Dealers Look for Wins in 2026
2025 was notable for the vehicles Volkswagen’s U.S. dealers received as well as the products that remained out of reach. The German mass-market brand’s bestseller, the Tiguan compact crossover, underwent a significant redesign for the 2025 model year and deliveries began in May, reports Automotive News. VW quickly bolstered the Tiguan lineup in the fall with a new range-topping trim with a more powerful engine. A gasoline-electric hybrid version of the Tiguan, or any VW product in the U.S. market, remains years away at best, meaning dealers are without a powertrain that has become increasingly popular with shoppers. 2025 also marked the first full year of ID Buzz sales. But the van was marred by a slow ramp-up, limited range, high pricing and a pair of embarrassing recalls that placed the model under stop-sale orders.VW says the ID Buzz will skip the 2026 model year and the company will focus on selling down 2025 vehicles before launching a 2027 version.VW’s U.S. sales totaled 329,813 in 2025, a decline of 13 percent. It marked the first yearly decline since 2022. Click here for the full story.
Auto Industry Expands Open-Source Pact to Boost Development, Cut Costs
More than 30 companies across the automotive supply chain have agreed to collaborate on open-source software to develop next-generation cars and cut costs, the German industry lobby behind the initiative said on Wednesday. Germany’s VDA announced the expansion of the initiative at the CES trade show in Las Vegas, where carmakers and suppliers are betting on AI and software to revive an industry struggling with slow progress and high costs, reports Reuters. European auto group Stellantis and truck maker Traton have signed the memorandum of understanding, along with German supplier Schaeffler and chipmakers Infineon and Qualcomm the VDA said. They join German carmakers Volkswagen, BMW, and Mercedes-Benz, among others, lifting the number of participating firms from 11 when the group was announced last year to 32. The initiative aims to reduce development and maintenance efforts by up to 40 percent and speed time to market by up to 30 percent, the VDA said. “The growing participation in this collaboration reflects a clear global shift toward open innovation in the automotive industry,” said Mike Milinkovich, executive director of the Eclipse Foundation, a co-organizer of the initiative. Click here for the full story.
IRS Auto Loan Interest Tax Break Rules Explain What Vehicles Are New, American-Made and ‘Personal’ Enough to Qualify
The Internal Revenue Service released proposed rules for the auto loan interest deduction, offering dealerships a playbook for determining if in-use vehicles, such as demo models, were sufficiently “new” for their buyers to claim the tax break available for the first time this year. It also gives vehicle shoppers ways to identify which vehicles will be eligible and whether their driving plans would disqualify the models from a deduction, reports Automotive News.H.R. 1, also known as the “One Big Beautiful Bill Act,” signed into law in July 2025, lets borrowers deduct up to $10,000 annually in interest on new vehicles for “personal” use if the model’s “final assembly” happened in America. The amount deductible decreases if the borrower makes more than $100,000 (or $200,000 for a joint filing). Even borrowers who take the standard deduction rather than itemizing deductions can claim the tax break, which will be available for the 2025 to 2028 tax years.The National Independent Automobile Dealers Association urged lawmakers to extend the bill to used models but were unsuccessful. The enacted bill only applies to new vehicles where “the original use of which commences with the taxpayer.” Click here for the full story.
US Plans Fresh China Semiconductor Tariffs for 2027
The United States plans to install new tariffs on semiconductors from China starting June 23, 2027, according to a Federal Register filing, adding another wrinkle to existing trade tensions between the superpowers. Per the Dec. 23 filing, the U.S. will set an initial tariff of 0 percent immediately, which will be raised after 18 months to a rate to be announced at least 30 days before the implementation date, reports WardsAuto. The new duty would stack upon the existing 50 percent tariff on semiconductors from China already in place following a Section 301 probe into forced technology transfer, the filing says. The new tariff plan resulted from a Section 301 investigation by the Office of the U.S. Trade Representative into China’s policies and practices related to semiconductor production and trade. The probe was initiated last December by the Biden administration. A Section 301 investigation is one of several powers available to impose tariffs. Such probes evaluate whether countries are engaged in unfair trade practices and can lead to the USTR imposing tariffs or other import restrictions; making changes to trade agreements; or providing other relief, a Congressional Research Service report notes. Click here for the full story.
Here Are Trump’s Options If the Supreme Court Says His Tariffs Are Illegal
U.S. President Donald Trump could find out as soon as Jan. 9 whether the Supreme Court will strike down a key portion of his tariffs campaign. The court is considering whether Trump can use an emergency law that had previously never been wielded to impose import taxes, and its decision could be included in an upcoming opinions release on unspecified cases, reports Bloomberg. Lower courts have already ruled that Trump exceeded his authority by invoking the 1977 International Emergency Economic Powers Act to justify his sweeping “reciprocal” duties targeting America’s trading partners, as well as separate levies aimed at China, Canada and Mexico. The IEEPA tariffs have remained in effect as the legal proceedings continue. If the Supreme Court concurs that these duties are unlawful, large swathes of the levies Trump has imposed so far in his second term could come undone and leave the government on the hook for tens of billions of dollars in refunds. Still, there are other means by which his tariffs policy could continue. While the Constitution gives Congress the power to levy taxes and duties, lawmakers have delegated some of their authority to the executive branch through a number of statutes. Click here for the full story.
Federated Insurance’s Claim of the Month – Driving in Icy Conditions
A dealership’s parts delivery driver was driving too fast for icy road conditions and rear-ended a vehicle on the interstate. The impact caused the rear-ended vehicle to lose control, strike another vehicle, and crash into the median. The collision resulted in property damage, multiple injuries, and one fatality.
CLAIM AMOUNT: $5 million
Risk Management Advice to Consider:
• Enforce Mandatory Winter Driving Training: Train drivers on safe driving techniques for icy roads such as gentle acceleration, increased following distance, and skid recovery. Discuss and enforce company policies on speeding and cell phone use regularly with driving staff.
• Adjust Routes for Safety: Plan routes that avoid high-risk areas, such as interstates, steep grades, and areas prone to ice accumulation during ice or snow events. Train drivers to recognize and avoid unsafe driving conditions.
• Equip and Inspect Vehicles for Winter Driving: Ensure vehicles have proper tire tread depth and wellmaintained brakes. Inspect windshield wipers, defrosters, and lights to ensure they are in working order before departure.
• React and Adjust to Changing Weather: Managers and drivers should monitor local weather conditions and forecasts during inclement weather. Provide drivers with additional time to complete trips. Depending on the length and severity of the weather event, consider postponing deliveries until conditions improve. CONTACT US
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