Mahindra Eyes Former GM Plant in Mich. if it Wins U.S. Contract
India vehicle manufacturing giant Mahindra & Mahindra Ltd. said it plans to revitalize the former General Motors Buick City complex in Flint, Mich., in a deal that could lead to 2,000 jobs if it wins a major U.S. government contract. Automotive News reports that Mahindra North America Inc. signed a letter of intent with RACER Trust to build a plant on the 364-acre site, which was once the home to the majority of Buick's operations before operations ceased in 2010 following the GM bankruptcy. Mahindra is out of capacity at its plant in Auburn Hills, Mich. – where it manufactures an off-road vehicle called the Roxor – and requires more production space, the company said Thursday in a statement. But Mahindra's expansion is highly contingent on its ability to secure a $6 billion contract to build next-generation delivery vehicles for the U.S. Read more here.
Tesla Stands by Safety Claims Despite U.S. Probes, Subpoenas Over Crashes
Reuters reports that electric carmaker Tesla Inc stood by its Model 3 safety claims on Wednesday in the face of regulatory scrutiny, while documents showed the top U.S. automotive safety watchdog issued at least five subpoenas since last year seeking information about crashes involving the company’s vehicles. Tesla, led by billionaire Elon Musk, has said the Model 3 “was engineered to be the safest car ever built” with the lowest probability of injury of all vehicles ever tested by the National Highway Traffic Safety Administration (NHTSA). Regulators challenged that view last year, according to documents seen by Reuters. The NHTSA sent a cease-and-desist letter to Tesla on Oct. 17, for making “misleading statements” over safety ratings of the Model 3. Read more here.
Auto Lenders Likely to End Interest Rate Cuts
In July, new vehicle sales in the U.S. ticked up slightly as buyers finally decided to take advantage of the good deals afforded them by three consecutive months of interest rate cuts by auto lenders; however, interest rates are likely as low as they’re going to get, reports The Detroit Bureau. According to the analysts at Edmunds, the annual percentage rate on new financed vehicles averaged 5.8% in July, compared to 6% in June. While the positive results in July and the latest fed rate cut may have some potential buyers thinking there might be another cut by lenders, that appears unlikely. Edmunds believes last month’s cut down to 5.8% came in advance of the fed’s move on July 31. Read more here.
Honda's New Tactic for Attracting First-Time Car Buyers: Esports
Honda Motor Co. is pumping more marketing dollars into competitive video gaming to protect its status as the dominant carmaker among young, first-time buyers, reports Bloomberg. The Japanese auto giant is becoming the official automaker of Riot Games Inc.’s League of Legends Championship Series, one of North America’s biggest esports leagues. The news comes eight months after Honda signed a partnership with Team Liquid, a three-time league champion. Honda’s goal is to meet young consumers on their own terms. The global esports audience is more than 450 million people, according to analysis firm Newzoo, and North America represents the largest market. That group is largely young, tech-savvy consumers who don’t interact with marketing in the same way as their older peers. Read more here.
Trade War Escalation Nudges U.S. Closer to Recession: Reuters Poll
The recent escalation in the U.S.-China trade war has brought forward the next U.S. recession, according to a majority of economists polled by Reuters who now expect the Federal Reserve to cut rates again in September and once more next year. Despite expectations for further easing, the Aug 6-8 poll gave a median 45% probability of the U.S. economy slipping into a recession in the next two years, up from 35% in the previous poll and the highest since that question was first asked in May 2018. A closely-watched bond market gauge of U.S. recession risk flashed its biggest warning since March 2007 on Monday, underscoring concerns the spillover from the battle between the world’s two biggest economies over trade will accelerate a global downturn. Read more here.
Webinar: Tax Reform Status Update for DealersJoin AutoTalk on Tuesday, August 20th at 2:00pm ET as Amy Stillwell and Dan Cheyney of Moss Adams' Automotive and Dealer Services Group update dealers on:
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Additional tax plan clarification on dealer operations
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What we know now
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How tax reform effects dealers
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What you can do to minimize your taxes
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