Automakers Say Trump's Threatened Mexico Tariffs Would Cost Billions

First Up 06/05/19

Automakers Say Trump's Threatened Mexico Tariffs Would Cost Billions 
According to Reuters, Toyota Motor Corp said on Tuesday that U.S. President Donald Trump’s proposal to slap tariffs on Mexican-made goods could cost its major suppliers $1 billion, highlighting growing concern in the U.S. auto sector about the potential damage of a new front in the Trump administration’s trade wars. Trump has said he will apply tariffs of 5% on Mexican goods on June 10 if Mexico does not halt the flow of illegal immigration, largely from Central America, across the U.S.-Mexican border. Those tariffs would gradually rise to 25% by Oct. 1 if Mexico does not satisfy Trump’s demands. Faced with this threat, major automakers are also planning to delay some vehicle shipments from Mexico, people briefed on the plans told Reuters on Tuesday. The shipment delays would affect vehicles with high inventory levels on U.S. dealer lots if the tariffs take effect as threatened. Automakers are trying to speed some critical parts shipments this week ahead of the Monday deadline. Read more here. 

Republicans Threaten Revolt, May Block Trump's Mexico Tariffs
Republicans are warning that President Donald Trump could face a shocking rebellion against him on the Senate floor if the president slaps Mexico with wide-ranging tariffs, reports Politico. At a closed-door lunch Tuesday, two Trump administration officials laid out the president’s view: There is a crisis at the border and Mexico needs to stem the surge of migrants to avoid the new levies. But White House deputy counsel Pat Philbin and Assistant Attorney General Steve Engel faced brutal push-back from the GOP, according to multiple senators, with some threatening that Trump could actually face a veto-proof majority to overturn the tariffs. Senate Majority Leader Mitch McConnell (R-Ky.) told reporters the party spent “almost our entire lunch” going back and forth with the administration and warned afterward “there is not much support in my conference for tariffs, that's for sure.” Read more here.

Car Safety Takes a Back Seat for Passengers in the Rear
Cars are safer than they've ever been, but with improvements focused largely on front-seat passengers, safety groups in Washington say those in the backseat are being left behind, reports The Detroit News. Air bags and devices like seat belts that automatically tighten in crashes have reduced the likelihood of serious injury or death. But the Arlington, Va.-based Insurance Institute for Highway Safety, which represents the insurance industry, says automakers need to add more of the life-saving technology to rear seats. Complicating matters further, the use of ride-hailing services like Uber and Lyft in major cities like Detroit is on the rise, and studies show back-seat passengers are less likely to buckle up in hired vehicles than they are in privately owned cars. Hoping to raise awareness about the problem, the Insurance Institute is developing new crash-testing to demonstrate safety concerns raised after analyzing data from 117 crashes in which belted rear-seat occupants age 6 or older were killed or seriously injured in front-end crashes. Read more here. 

BMW, Jaguar, and Land Rover Will Jointly Develop EV Parts
BMW Group said it will develop its next-generation electric motors, transmission, and power electronics with Jaguar Land Rover, unveiling yet another industry alliance designed to lower the costs of developing electric cars, reports Automotive News. "Together, we have the opportunity to cater more effectively for customer needs by shortening development time and bringing vehicles and state-of-the-art technologies more rapidly to market," BMW r&d boss Klaus Froehlich said in a statement. BMW aims to have 12 full-electric models by 2025. Currently the BMW brand's sole battery-powered model is the i3 hatchback. Jaguar Land Rover's first EV is the Jaguar I-Pace. BMW and Jaguar Land Rover said they will save costs through shared development, production planning, and joint purchasing. A joint team of BMW and Jaguar Land Rover experts in Munich will be tasked with further developing BMW's fifth -generation eDrive technology that will debut this year on the iX3 battery-powered crossover. The X3 variant will be built in China and exported to the U.S. and Europe. Read more here. 

Asbury and Group 1 Keep Close Tabs on Used Inventories
For both Asbury Automotive Group and Group 1 Automotive, keeping a close watch on their used-vehicle inventories is an ongoing effort and one that influenced their first-quarter performance, reports Auto Remarketing. At Group 1 Automotive, its stores retailed 29,317 used vehicles during the first quarter. That figure represented a 7.3% lift year-over-year. Daryl Kenningham, Group 1’s president of U.S. operations, pointed out that the company’s Q1 performance marked the first time  it sold more used vehicles than new models within its U.S. business. During Group 1’s quarterly conference call with the investment community, Kenningham also highlighted the successes of the most affordable segment of its used-vehicle department. The company reported its Val-U-Line sales grew 29% and represented 11% of its quarterly used volume. Read more here. 

Beware of Auto Dealership Fraud Schemes
Laramie Sandquist of Federated Insurance joins AutoTalk on Tuesday, June 18th at 2:00pm EST to discuss how dealers are getting schemed on both cars and money, including some of the latest trends. He will offer some practical advice on how to prevent dealers from being a victim of fraud. To register, click here.

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