Senate Tax Plan Differs From House on Individual Rates, Timing of Corporate Rate Cut

First Up 11/10/17

Senate Tax Plan Differs From House on Individual Rates, Timing of Corporate Rate Cut
Senate Republicans’ proposal to rewrite the tax code breaks significantly with the one crafted by the House GOP, reports The Wall Street Journal. The Senate plan, released late Thursday, would delay until 2019 a cut in the corporate tax rate to 20 percent. It also would double the estate-tax exemption to a maximum of about $11 million per person, but it would leave the 40 percent tax itself in place for estates above that level. The Senate bill also sets a 38.5 percent top tax rate for individuals and preserves a seven-bracket structure. The House bill, by contrast, would cut the corporate tax rate immediately and repeal the estate tax starting in 2025. The House plan proposes a 39.6 percent top rate for individuals and a four-bracket structure. House Republicans made late changes in their bill Thursday, keeping the adoption tax credit, increasing a one-time tax on foreign profits, adding lower rates for small businesses, bumping up taxes on multinational corporations and exempting car dealers from a limit on interest deductions. Read more about the competing tax bills, including their impact on car dealers, by clicking here

Hyundai Mulls More Crossover, Pickup Output at U.S. Plant, According to Report
Hyundai Motor Co. is considering building the Tucson and Kona crossovers and a planned pickup truck at its sole U.S. factory to help reverse a sales slump. According to Automotive News, Hyundai aims to produce the Tucson and the pickup at its U.S. plant in Alabama in 2021, the report said, citing anonymous industry officials. The plant currently builds the Sonata and Elantra sedans and the Santa Fe crossover. Hyundai told Reuters it had made no decision about future production in the United States. "We are always considering the possibilities of all products in individual markets," it said in a statement. To boost crossover output, Hyundai would increase the production capacity of the U.S. factory to 450,000 vehicles a year, from the current 380,000 vehicles, the report said. Read more here

Jaguar Propels Tata to Biggest Profit Gain in 6 Quarters
Jaguar Land Rover's Indian parent reported its biggest profit jump in six quarters after the luxury car brand began selling new models. Tata Motor's profit almost tripled on the back of a better product mix, reports Automotive News. Net income was 24.8 billion rupees ($382 million) in the September quarter, up from 8.3 billion rupees a year earlier, according to a filing. Jaguar Land Rover's deliveries in China, its top market, expanded 27 percent, reflecting the buoyancy seen by its peers. Automakers have been offering bigger discounts and rolling out new models to entice customers, after the government's increase of a sales tax at the start of the year deterred buyers in the world's largest auto market. Jaguar plans to launch the less expensive Jaguar E-Pace SUV in markets including China next year. Read more here

Can Gas Engines Be Greener Than Electric Vehicles? 
If you want a gasoline engine that is greener than a fully electric vehicle, you'll have to buy a car that's a lot more fuel efficient than the one you're probably driving now, reports The Detroit Free Press. A new study by the University of Michigan Transportation Research Institute finds that gas-powered vehicles need to average 55.4 mpg in the United States or 51.5 mpg worldwide in order to produce fewer greenhouse gas emissions than a battery-electric vehicle. In Canada and France, the numbers would be even higher, 169.5 mpg and 524.6 mpg respectively. The disparity depends on what is used to make the electricity that charges a battery. In countries where coal (or oil) is king, generating electricity for a full charge creates more carbon dioxide emissions than in places where hydroelectric power, for example, is the main source. Read more here

Fiat Chrysler Expects to Fix Emissions Issues Next Year 
Fiat Chrysler Automobiles is hoping to receive government approval as soon as March for emissions fixes to diesel-powered vehicles that allegedly pollute far beyond U.S. legal limits, a development that could move the company closer to settling widespread litigation and avoid costly buybacks of affected automobiles. The Wall Street Journal reports that the Italian-U.S. automaker held discussions Wednesday morning with federal officials and plaintiffs’ lawyers on a plan to test software that would recalibrate roughly 104,000 2014-2016 model-year Ram pickup trucks and Jeep Grand Cherokee SUVs at the center of the alleged emissions violations. The discussions were overseen by Kenneth Feinberg, a court-appointed settlement master for litigation consolidated in a San Francisco federal court. Read more here

Is a Financial Partnership in Your Future? 
In auto retail today, selling less than 100% of the business and joining forces with outside capital for the purposes of accelerated growth and dealership acquisitions is becoming more common. This is a new development, given the historical industry norm of an outright sale.  In 2016, Kerrigan Advisors estimates there were over 40 dealerships in which the seller sold less than 100% of the business.  Thus far in 2017, that figure is up 17.5%.  As dealers consider their own growth plans for their business, a strategic capital partner may be a compelling option. However, it is important to assess whether you are a good candidate for this approach. Click here to read Kerrigan Advisors’ full article outlining important considerations for dealers in growth mode.

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