Trump Faces Tough Sell to Dealers Bracing for Auto Tariffs

First Up 02/12/19

Feb. 12, 2019

10 Least Satisfying Cars

Buying a car can be exciting. In most cases, a new or new-to-you car means significant upgrades in comfort and convenience features, and the potential to move up to a bigger, more sophisticated ride. Given the cost and extensive time spent behind the wheel, MSN says that it's not surprising that car buyers are disappointed when a vehicle doesn't live up to its promise. To measure the current state of owner satisfaction, Consumer Reports collected data on more than half a million vehicles. The owner satisfaction score, based on whether owners say they would definitely buy the same car again if given the choice, measures whether a car has lived up to its expectations Respondents also rated their cars in six categories: driving experience, comfort, value, styling, audio, and climate systems. Based on that analysis, click here to see the models Consumer Reports’ survey respondents ranked as the least satisfying.

Trump Faces Tough Sell to Dealers Bracing for Auto Tariffs

Car dealer Jim Smail in Greensburg, Pa., voted for Donald Trump in 2016 because he wanted a businessman in the White House. The U.S. president's trade wars have changed his mind, reports Automotive News. The next chapter in Trump's effort to rewrite American trade policy may be delivered later this week, and it could be the most disruptive. Commerce Secretary Wilbur Ross is set to conclude by Feb. 17 an investigation examining the national security risk of auto imports. He'll formally submit the report to the president and offer recommendations on what actions to take. Trump will have 90 days to decide what to do next. He could also further delay his decision to give countries more time to negotiate with the U.S. It's hard to say how the potential tariffs would impact Smail’s business because there are no details yet, he says. What is certain: A trade war with cars in the crossfire would hurt his sales and cause layoffs. "I look at tariffs as a cost to the consumer," Smail says. Read more here. 

German Carmakers Could Face Huge Profit Hit If Trump Imposes 25% Tariff

If President Trump imposes a 25 percent tariff on auto imports, European carmakers like BMW, Mercedes and Volkswagen’s Audi and Porsche would lose about 90 percent of their high-profit-margin sales of imported luxury vehicles, according to a report from investment bank UBS. The tariffs, which would also hit products from South Korea and Japan as well as the European Union, would cut overall U.S. car sales by about 11 percent. Forbes reports that the U.S. Commerce Department is expected to report by February 17 on whether automotive imports constitute a threat to U.S. national security. Click here for more. UBS said in 2017, 1.2 million vehicles were imported to the U.S. from Europe, of which 630,000 were luxury and 610,000 mass market vehicles. “We estimate a total of about 650,000 of these sales would be lost, with the luxury segment losing 90% of imported sales. The German manufacturers would be the most disadvantaged,” the report said. Don’t like the sound of that? Take action today by registering for AIADA’s D.C. Fly-In and join the dealer-led movement against tariffs.

Subaru Strains Under Production Pressure

A rash of production hitches in Japan has slammed Subaru's reputation in the home market, torpedoed its Japanese sales and triggered corporate upheaval. According to Automotive News, the problems are now creeping into the United States in the form of recalls and lost shipments. The simmering problems are now beginning to worry some U.S. Subaru retailers and company managers. Some of their unease focuses specifically on whether the pressures might affect this summer's planned production launch of the next-generation Outback crossover, an important cash cow for the brand. "We continue to be concerned that [Subaru] is not making the necessary investments and changes fast enough to ensure that vehicles are being produced with the quality the brand and its customers deserve," the marque's U.S. National Retail Advisory Board wrote in a Sept. 18 resolution to top Subaru management in the U.S. and Japan after last year's rollout of the U.S.-built Ascent crossover was marred by a recall. For how Subaru has responded, and plan to tackle the challenges of 2019, click here.

Toyota Bets $3.9 Billion to Win Autonomous Race

In the race to be the first company in the world to get a fully functioning autonomous car into showrooms and on to public roads, it looks like global giant Toyota might just beat the high-tech Germans, and sci-fi loving Tesla, with the company pledging to offer a self-driving, road-registrable car within the next year. According to Cars Guide, Toyota knows how big a task this is, indeed it’s being described as the company’s “moonshot”, a reference to the US space program aiming for the impossible back in the 1960s, but believes it can be done by creating the “most powerful supercomputer on wheels." James Kuffner, CEO of Toyota Research Institute Advanced Development Inc, or TRI-AD, is the man faced with the task of finding and hiring people with the necessary skills and then getting them not only to develop the software and hardware necessary, but finding ways to vastly reduce the amount such technologies cost. The goal being to produce a car people not only want, but can afford. To read more about his mission, and funding, click here.

Federated Insurance’s Claim of the Month — Could it happen to you?

A dealership allowed a young driver to test drive a vehicle. The driver was 15 years old and did not have a learner’s permit. The driver failed to stop at a stop sign, causing a multi-vehicle accident with serious injuries. The dealership was sued for negligent entrustment. CLAIM AMOUNT: $750,000. Do you have a clear set of policies and procedures for test drives? Federated recommends several best practices to help protect your business. For example:

  • Make a copy of the driver’s license and proof of insurance.

  • Ensure a customer is comfortable with the vehicle before the test drive begins. This step should include reviewing the operations of the vehicle.

  • Create and document policies for test drives. Make sure they are easily accessible by employees.

  • Remind employees of the policies and procedures regularly at trainings and staff meetings.

These are just a few loss-control recommendations you can use to help protect your dealership. To learn more, contact your local Federated Insurance® representative and request a copy of our risk management folder, “Keys to Success.”

Around the Web

Game-Changer: A Look Back at 30 Years of the Acura NSX [Automobile Mag]

Gotta Be Quicker Than That – 30th Anniversary Miata Sells Out in Four Hours [TTAC]

2020 Land Rover Range Rover Evoque Makes North American Debut []

Watch These Semi Trucks Get Absolutely Shredded by the Viper Barricade [Auto Blog]