Facing U.S. Tariff Threat, Toyota Warns Car Costs Could Rise

First Up 08/03/18

Facing U.S. Tariff Threat, Toyota Warns Car Costs Could Rise
Toyota Motor Corp. on Friday said higher U.S. auto tariffs would ramp up the cost of vehicles produced locally along with those imported to the United States from Japan, which would have a “big impact” on its bottom line. Reuters reports that like its global rivals, Toyota is bracing for the possibility of a rise in U.S. auto import tariffs, which could cloud its outlook as it would raise the cost of selling vehicles in the world’s second-biggest vehicle market. Such uncertainty took the shine off strong quarterly results announced on Friday. Read more here. 

Toyota also reported that it logged a better than expected performance in the last quarter, reporting Friday that its quarterly profit jumped 7.2 percent to a record 657.3 billion yen ($5.9 billion), thanks to strong sales in the U.S. and other overseas markets. According to The Detroit News, the maker of the Camry sedan, Prius hybrid and Lexus luxury models said sales rose 4.5 percent, also to a record, of 7.4 trillion yen ($66 billion). Toyota’s profit in the same quarter a year earlier was 613.0 billion yen. Read more here.

Iconic Car Dealer Bud Smail Dies
Iconic Greensburg, Pa., car dealer Clarence “Bud” Smail Jr. died Wednesday. According to TribLive.com, orn in Buffalo, N.Y., Smail, 81, was CEO of Smail Auto Group in Pennsylvania. “We competed against each other, but Bud was always a gentleman. Everything was upfront with Bud,” said Bill Mohler of Sendell Motors Inc., whose grandfather started in the automotive business in the 1920s. Smail had been in the industry since 1959, after graduating from the University of Maryland. He started working for the Bud Smail Lincoln-Ford dealership that his uncle, R. Smail, founded in Jeannette in 1956. His father, C.B. Smail Sr., eventually took over. The Smail family has been in the automotive business since 1936, starting out with a Chevrolet dealership in Jeannette, according to a story in a special January 1961 Tribune-Review business edition. Smail Auto Group grew to include 10 car franchises and more than 400 employees. Smail served as past president of both the regional and state automobile dealers associations, on the board of the National Automobile Dealers Association and as a member of the American International Automobile Dealers Association. Read more here. 

Trump Proposes Car-Mileage Rollback; States Sue in Protest
Citing safety, the Trump administration on Thursday proposed rolling back car-mileage standards, backing away from years of government efforts to cut Americans’ trips to the gas station and reduce unhealthy, climate-changing tailpipe emissions. The Associated Press reports that if the proposed rule becomes final, it could roil the auto industry as it prepares for new model years and weaken one of the federal government’s chief weapons against climate change — regulating emissions from cars and other vehicles. The result, opponents say, will be dirtier air and more pollution-related illness and death. The administration also said it wants to revoke an authority granted to California under the half-century-old Clean Air Act to set its own, tougher mileage standards. California and 16 other states already have filed suit to block any change in the fuel efficiency rules. Read more here. 

U.S., Mexico Getting Close to Deal on Autos Content Rules at NAFTA
The United States and Mexico are getting close to a deal on the key issue of autos content rules at talks to renew the NAFTA trade pact, a senior Mexican official said on Wednesday. According to Automotive News, Guillermo Malpica, head of the trade and NAFTA office for the Mexican government, also said the United States had "started showing more flexibility last week" on autos content and other topics at the negotiations, which have dragged on for almost a year. Mexican officials say they are optimistic about the possibility of getting a deal to renew the North American Free Trade Agreement and are hopeful of progress when ministers from Mexico and the United States meet this week. Malpica, speaking to reporters at the CAR Management Briefing Seminars here, said "we are getting close" to an agreement on the so-called autos rules of origin, which dictate how much of a vehicle must be made in the three NAFTA nations to qualify for duty-free status. Read more here. 

Mitsubishi Prepares to Set Up 2 New U.S. Regional Offices
Amid five consecutive years of annual sales growth, Mitsubishi Motors North America (MMNA) has made plans to grow its U.S. field operations zone offices from two locations to four locations, reports Auto Remarketing. The automaker announced Monday that it will assemble new U.S. regional offices that will operate out of Cypress, Calif. and Orlando, Fla. The new offices will join MMNA’s two other zone offices located in Swedesboro, N.J., and Irving, Texas. According to MMNA, this field operations structure expansion represents the first time that the brand has enlarged its U.S. regional network in 10 years. “Being part of the world’s largest automotive alliance, Mitsubishi is poised to grow alongside our Nissan and Renault partners, and the upcoming field operations expansion is the next step in the brand’s evolution,” MMNA president and chief executive officer Fred Diaz said in a news release. Read more here. 

The Buy/Sell Market – Hot or Not?
Join Kerrigan Advisors as they explore a deeper understanding of today’s dealership buy/sell market. Potential tariffs, rising interest rates, and a slowing new car sales volume - are possible clouds on the horizon? Today’s auto retail market is dynamic – status quo is no longer a strategy. Listen in to learn how you can maximize the value of your auto retail enterprise.

This webinar will include:

  • An overview of who is buying in today’s buy/sell market, including a discussion of new investors in auto retail. 

  • Why more sellers are coming to market today and the impact of rising seller volume on today’s blue sky values and multiples. 

  • The importance of dealership real estate to most transactions and the effects of image facilities on blue sky value. 

A must for any dealer considering their growth strategy or exit plans, join us on Tuesday, August 21 at 2 p.m. EDT to find out more! Click here to register. 

Around the Web

The Official Cars of State Leaders [Forbes]

Vehicles That Owners Keep the Longest [Autoblog]

The Classic Acura NSX is a Better Investment Than the Dow [Bloomberg]

New Ferrari CEO Promises Stability as Investors Remain Edgy [Forbes]