New Tariffs Couldn't Come at a Worse Time for the Auto Industry

First Up 03/07/18

Trump's New Tariffs Couldn't Come at a Worse Time for the Auto Industry 
President Trump's new tariffs on imported steel and aluminum couldn't come at a worse time for the U.S. automotive industry. Auto sales in the US have already reached an inflection point after seven years of rocketing growth, and rising costs resulting from tariffs, higher interest rates, and any disruptions to global trade could all exacerbate any slowdown in the industry, reports Business Insider. "If all this was happening in 2015 it wouldn't be as concerning because the market was growing like crazy" Karl Brauer, publisher of Kelly's Blue Book said in an interview. "But now we're in sort of a whipsaw effect at the end of a 7 year growth spurt." In February, U.S. new vehicle sales declined 2.4% from the previous month. That's less than the expected 4% drop, but continues a trend that began in 2017 when sales peaked after a strong run. The U.S. auto market has grown from 10 million units sold in 2009 to over 17 million in 2016. Read more here

And, for more from AIADA President and CEO Cody Lusk on why new tariffs would spell bad news for auto retailers, check out his interview on CNBC’s Squawk Alley earlier this week by clicking here.

GOP's Rep. Brady Predicts the U.S. Will Stay in NAFTA Because 'Stakes Are So High'
House Ways and Means Committee Chairman Kevin Brady, just back from NAFTA talks in Mexico, said Tuesday he believes the United States will not scrap the trade agreement, reports CNBC. President Donald Trump has repeatedly threatened to pull out of the North American Free Trade Agreement if negotiators from the U.S., Canada and Mexico can't figure out how to overhaul the 1994 pact. "The stakes are so high here," said Brady, who has been involved in a dozen free trade negotiations "in one way or another." He led a bipartisan delegation to Mexico to meet with NAFTA negotiators during the past two days. In an interview on CNBC's "Squawk Box," the Texas Republican said negotiators are making "good progress" and they're "close on some major economic wins." He added that he didn't see anything while visiting the U.S. negotiating team to make him believe the U.S. would abandon NAFTA. Read more here

Hyundai Will List All CPO Vehicles on Carfax 
Hyundai Motor America will start posting all of its dealerships' certified pre-owned vehicles for sale on Carfax's used-vehicle listings, joining a number of other brands that do so, reports Automotive News. Individual Hyundai dealers have been able to list used vehicles on, but a new agreement between Carfax and the U.S. arm of the Korean automaker allows prospective buyers to set up their online searches to list only Hyundai CPO models. "Our certified program has grown significantly since its inception," Jose Froehlich, Hyundai senior manager for certified pre-owned, said in a statement. "This is an excellent opportunity to expand our relationship with Carfax and place Hyundai CPO vehicles in front of ready-to-buy shoppers." Carfax allows users to search for used vehicles by Carfax vehicle history attributes such as accident-free, one owner or service history and get a free Carfax Vehicle History Report for any vehicle they purchase. Read more here

VW Stays With Diesel Engines; Toyota is Done
Toyota Motor Corp. announced plans to drop diesel models from its European portfolio this year even as Volkswagen AG, which sparked the fury over the technology, predicts a rebound. According to The Detroit News, the diverging views of the world’s two largest automakers reflect the uncertainty over the future of diesel, which has faced a steady drumbeat of bad news since Volkswagen’s cheating scandal erupted in September 2015. The German auto giant is expecting consumers to forgive and forget soon, as cleaner diesels hit the streets. “Diesel will see a renaissance in the not-too-distant future because people who drove diesels will realize that it was a very comfortable drive concept,” Chief Executive Officer Matthias Mueller said at the Geneva auto show. “Once the knowledge that diesels are eco-friendly firms up in people’s minds, then for me there’s no reason not to buy one.” The comments are bold considering Volkswagen put aside about $30 billion in provisions to cover fines, retrofits and legal costs stemming from rigging diesel-emissions systems to dupe government pollution tests. Read more here

Luxury Shoppers Increasingly Cross-Shop Full Size Pickup Trucks 
February shopper interest data recently released by Jumpstart Automotive Media suggests that a number of luxury-oriented consumers have been increasingly cross-shopping full-size pickup trucks, reports Auto Remarketing. In addition to the full-size pickup truck segment now representing the third most-shopped, January luxury shoppers who were also cross-shopping trucks increased 22 percent from the previous month, while non-luxury shoppers only showed an increase of 11 percent. “Luxury shoppers are willing to pay higher prices to get the latest technology and advanced features, and most trucks offer this in some of their higher packages,” Jumpstart senior director of insights and analytics Aline Hilsabeck explained in a news release. Last month, the full-size pickup truck segment climbed four spots from last year — the highest it’s ever been. In January, three of the top-five most-shopped models came from the full-size pickup truck segment. And shopper interest in the Chevrolet Silverado 1500 climbed 31 percent. Read more here

See You in Las Vegas 
AIADA's 48th Annual Meeting and Luncheon, held March 25 in Las Vegas, is your chance to gather with likeminded leaders to consider what the future looks like for your businesses. During the meeting, we'll introduce AIADA's 2018 Chairman, Volkswagen dealer Brad Strong of Utah, and recognize the winners of both of our annual awards – the David F. Mungenast Lifetime Achievement Award and the Fritz Hitchcock Grassroots Award. Finally, we'll hear from Volkswagen of America President and CEO Hinrich J. Woebcken on the state of our industry and the challenges he sees in the coming years.    

If you plan to attend NADA's convention this March in Las Vegas, please add AIADA's 48th Annual Meeting and Luncheon, held Sunday, March 25, to your schedule. You can register for the meeting by clicking here or by calling 1-800-GO-AIADA

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