May 28, 2019
Adjudicator Says Any Security Defense of U.S. Auto Tariffs at WTO 'Very Difficult'
The United States will find it “very difficult” to defend President’s Donald Trump’s proposed car tariff against any challenge at the World Trade Organization, a veteran trade adjudicator who has ruled on a related case told Reuters. Trump said this month that some imported vehicles and parts pose a “national security” threat, justifying tariffs under Section 232 of the Trade Expansion Act of 1962, the basis for tariffs put on steel and aluminum last year. Read AIADA’s response here. Until 2016, using the national security clause was taboo because trade experts feared it could become a common way to get around the rules and erect the kind of trade barriers the WTO was designed to remove. Georges Abi-Saab, a former chairman of the WTO’s Appellate Body, said he doubted the national security argument for cars would withstand a legal challenge. “Frankly I think, if I were a lawyer (working on the case) I wouldn’t accept to take such a case – not only on moral aspects, but I think it would be very difficult to make it prevail,” he said. For the full story, click here.
Nissan Could End Scorned Stair-Steps
Nissan is considering pulling the plug on the contentious stair-step incentive program it has used to drive its dealers to higher monthly sales. Automotive News reports that Nissan could halt the program as early as this summer, though a decision might be delayed until year end, according to a dealer familiar with the plans. The shift would be a sea change for the brand, which has earned scorn for what some dealers claim has been hard-driving sales pressure on its franchisees. The internal discussion was revealed last week in a letter to Nissan's dealers obtained by Automotive News, which said Nissan North America is studying an end to the program. One Florida Nissan dealer said the pressure for volume has given Nissan the image of a "discount brand" in the U.S. "We are forced to put current customers into new vehicles much faster than normal," the dealer said. "We lose $2,000 or $3,000 per vehicle to do it, but we need to hit our objectives to get our $100,000 bonus." For more on the future of stair-steps, click here.
Fiat Chrysler Proposes Merger with Renault
Fiat Chrysler proposed on Monday to merge with France's Renault to create the world's third-biggest automaker and save billions of dollars needed to invest in the race to make new electric and autonomous vehicles. According to the AP, the merged company would reshape the global industry: it would make some 8.7 million vehicles a year, leapfrogging General Motors and trailing only Volkswagen and Toyota. Shares of both companies jumped over 10 percent on the news of the offer, which would see each side's shareholders split ownership in the new manufacturer. Renault welcomed the idea. The company's board met Monday at its headquarters outside Paris to discuss the proposal and said afterward that Renault will study it "with interest." A merger would save 5 billion euros ($5.6 billion) for the two companies each year by sharing research, purchasing costs and other activities, Fiat Chrysler said in a statement. The companies are somewhat complementary: Fiat Chrysler is stronger in the U.S. and SUV markets, while Renault is stronger in Europe and on electric vehicle developments. Click here for more details.
Honda Has a Reason to Fight for Sedans
Drivers who worry the shift to SUVs will leave them without any cars to choose from should keep their eyes on American Honda boss Henio Arcangeli who will make the case for cars on Friday before the Automotive Press Association in Detroit. Maker of two of America’s most popular cars — the midsize Accord and compact Civic — Honda has a huge stake in fighting the narrative that cars are yesterday’s news and SUVs are the road forward. According to the Detroit Free Press, cars’ share of the new-vehicle market has fallen from over 50 percent to around 30 percent, and may decline further, but, “25 percent of U.S. sales is still a lot,” notes Autotrader executive analyst Michelle Krebs. (That amounts to more than 4 million vehicles last year, and will be again in 2019.) “Midsize and compact cars are still two of the five best-selling classes of vehicle, and cars are favored by fast-growing demographic groups like Hispanics and Asians,” Krebs said. For more on Honda’s position, click here.
BMW Reveals X5, X7 M-Performance SUVs
BMW has revealed new M-Performance versions of its X5 and X7 models ahead of their planned introduction to the North American market during the final quarter of 2019 at respective prices of $82,150 and $99,600. Click here to see them. Set to crown the existing X5 and X7 lineups until the arrival of the even more powerful X5 M and X7 M in 2020, the two new M50i-badged SUVs receive an updated version of BMW’s twin-turbocharged 4.4L gasoline V-8 delivering 523 hp and 553 lb.-ft. of torque – an increase of 67 hp and 74 lb.-ft. over the existing X5 xDrive50i and X7 xDrive50i. Wards reports that the updated engine, known under the internal codename N63, adopts a revised aluminum block for greater stiffness. Further changes include new pistons coated in a graphite-impregnated resin as well as a damper incorporated on the crankshaft – measures BMW says enhance refinement over the earlier V-8. The new M50i performance models will be produced alongside the standard X5 and X7 at BMW’s Spartanburg, SC, factory starting in September. For details, click here.
Around the Web
Vegas Tourism Board Backs $49M Elon Musk Transit System [The Detroit News]
A Tesla Engineer's Jeep Ended Up Under 10 Feet of Snow for Months and It's Still There [Jalopnik]
Ferrari Officially Teases Hybrid V8 Before Official Reveal [Auto Blog]
The Audi A8 May Go Electric and Ultra-Luxurious with a New High-End Model [Car & Driver]
