Trump Administration Withholds Report Justifying 'Shock' Auto Tariffs
Politico reports that a confidential government report has provided President Donald Trump with a legal rationale to impose heavy new tariffs on foreign cars as soon as this spring, a prospect fiercely opposed by White House officials and congressional Republicans alarmed by its enormous economic and political stakes. The Commerce Department submitted the report to the White House in mid-February, triggering a 90-day period for Trump to decide whether to impose tariffs, which could reach as high as 25 percent, on imported autos. It concluded that Trump could justify the tariffs on national security grounds and offered a range of options in response — putting the decision in the president’s hands, four people familiar with its conclusions told POLITICO. Although the existence of the report was previously known, the administration has kept its findings hidden — including from a powerful Republican senator who has demanded to see it — and its conclusion had not been previously reported. Trump has not yet made a decision, but he has long complained that the U.S is exploited economically by its allies and has repeatedly told aides he wants to impose a “ring tax” around U.S. borders to protect the country from foreign imports. Read more here.
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Toyota, Suzuki Deepen Ties to Produce EVs, Compacts
Toyota Motor Corp. and Suzuki Motor Corp. on Wednesday said they planned to produce electric vehicles and compact cars for each other to better compete with fast-changing technologies in the global auto industry, reports Automotive News. The agreement follows an initial r&d tie-up announced by Japan's No. 1 and No. 4 automakers in 2017, and will see more vehicles produced by Suzuki for Toyota. The two automakers have been pooling their strengths. Toyota is a leader in hybrid technology and is investing heavily in automated driving, while Suzuki specializes in affordable compact cars. Under the latest agreement, Suzuki will source gasoline hybrid systems for cars it sells worldwide from Toyota, which pioneered hybrid vehicles with the Prius more than 20 years ago, the companies said in a joint statement. In return, Suzuki will produce two compact models for Toyota in India based on its Ciaz and Ertiga models. Read more here.
Trial of Former Nissan Boss Ghosn Expected to Start in Sept.
The trial of former Nissan Motor Co boss Carlos Ghosn on charges of under-reporting his salary is expected to start in Tokyo in September, reports Reuters. Ghosn’s first court appearance may be on May 23 as part of the preparations for the trial, NHK said, citing sources familiar with discussions between the prosecution and the defense. Ghosn was released on $9 million (6.8 million pounds) bail this month after spending more than 100 days in a Tokyo detention center. He faces charges of under-reporting his salary at Nissan by about $82 million over nearly a decade. Ghosn has said the charges are “meritless”. He was stripped of the role of Nissan chairman but remains a board member. Read more here.
BMW Warns Profits Will Fall, Plans $13.6 Billion in Cost-Cutting
BMW said Wednesday that profits in 2019 will be "well below" last year's, and it will cut 12 billion euros ($13.6 billion) in costs by the end of 2022 to offset spending on new technology. Autoblog reports that the company said profits would be eroded by higher raw materials prices, the costs of compliance with tougher emissions requirements, and unfavorable shifts in currency exchange rates. The Munich-based automaker also faces increased uncertainty due to international trade conflicts that could lead to higher tariffs. "Depending on how conditions develop, our guidance may be subject to additional risks; in particular, the risk of a no-deal Brexit and ongoing developments in international trade policy," said Chief Financial Officer Nicolas Peter. The company forecast a profit margin of 6 to 8 percent for its automotive business, short of the long-term strategic target of 8 to 10 percent, which it said still "remains the ambition" for the company if given "a stable business environment." Read more here.
The Cheapest and Most Expensive Cars to Insure for 2019
You can maintain a flawless driving record, keep your deductibles high, take every discount to which you’re entitled, and could still wind up paying inflated car insurance rates. It’s not your fault. All else being equal, some vehicles are inherently more expensive to cover than others. Importantly, vehicles that fare the best in terms of their claims histories, including the cost of physical damage the car both incurs and inflicts upon other vehicles in a crash and the severity of personal injuries involved, enjoy the lowest rates. By that actuarial recipe, the 2019 vehicle with the cheapest auto insurance premiums is the Honda Odyssey minivan at an average $1,298 per year. The average cost among all 2019 models is $1,812, which is up from $1,645 a year ago. That’s according to the annual survey of car insurance rates conducted by the website Insure.com. Forbes is featuring the 10 cheapest 2019 models to insure – of which nine are SUVs – in the accompanying slideshow. Read more here.
The Blue Sky Report® by Kerrigan Advisors – 2018 Full Year
The 2018 auto retail buy/sell market recorded another record year of transactions, the fifth consecutive year of over 200 buy/sells, according to the recently released Kerrigan Advisors 2018 Full Year Blue Sky Report®.
Although blue sky multiples decreased slightly, dealership valuations still remain at peak levels due to strong real estate valuations. Other key factors driving the robust buy/sell market include the continued interest of professional capital in auto retail, growth in fixed operations, and the proven success of the dealership business model in adapting rapidly to reduce expenses and create new profit opportunities. The report also includes Kerrigan Advisors’ blue sky multiples and franchise overviews. The Blue Sky Report® is the leading industry publication analyzing the auto retail buy/sell market and current franchise values. Read the report here.
Around the Web
Porsche is Restarting 911 GT2 RS Production to Replace Cars Lost at Sea [Road and Track]
2021 Land Rover Defender Spy Shots [MotorAuthority]
Automakers Steer Tesla's Direction on Wireless Updates [WSJ]
Vietnam-Tied Hackers Said to Target Auto Industry [Automotive News]
