Trump Tariffs Mean a New Car Could Cost Thousands More
Car buyers in the U.S. could face substantial increases in the cost of not only Mexican-made vehicles, but those assembled in the U.S., as a result of new tariffs President Donald Trump said he will begin levying on imports from Mexico starting June 10, reports NBC News. Should the tariffs reach the full 25 percent by Oct. 1, as Trump proposes, some Mexican-made vehicles could see a sticker price increase of more than $10,000, and even vehicles built in the U.S. using Mexican-made could see price hikes in the hundreds, even thousands, of dollars, according to industry experts. “Imposing new tariffs on Mexico really means imposing a new tax on American consumers, raising prices on everything from produce to pick-up trucks,” said Cody Lusk, president of the American International Automobile Dealers Association. “Tariffs on Mexican imports will result in self-inflicted damage that the U.S. auto industry, which supports 7.25 million American jobs, is not prepared to absorb.” New car prices are now at record levels, according to LMC Automotive, which estimates the average total for a new vehicle will be $33,457 in May, up 4 percent from a year ago. Read more here.
How the U.S. and Mexican Economies Are Intertwined: By the Numbers
In brandishing U.S. tariffs on Mexican imports, a surprise move that sent global financial markets into a tizzy Friday, President Donald Trump is taking aim at an ally and key trading partner. The two nation’s economies have been mutually supportive for more than two decades, helped by the North American Free Trade Agreement in 1994, according to a March report from the Congressional Research Service, an analytical arm of the U.S. legislature. The result is an intertwining of interests through trade in goods and supply chains, especially in the auto industry. Bloomberg is featuring a snapshot of the nations’ increasing interdependence over the last quarter-century, and what’s at stake in a trade war across the border. U.S. exports to Mexico rose to $265 billion last year, from $41.6 billion in 1993. Broken down by product, shipments heading south look like this: petroleum and coal products (11%), auto parts (8%), computer equipment (7%), semiconductors and other electronic components (5%), and basic chemicals (4%). Since Nafta, U.S. imports from Mexico rose even more, to $346.5 billion last year from $39.9 billion in 1993. Here are the main imports: motor vehicles (19%), motor-vehicle parts (14%), computer equipment (8%), oil and gas (4%), and electrical equipment (3%). Read more here.
At Toyota, 'It's Not That Easy' Being a Toyoda
Akio Toyoda famously downplayed and even tried to hide his lineage while rising through the ranks at the automaker that was founded by his grandfather and later run by his father. For perhaps the first time in Toyota Motor Corp.'s history, the top man is breaking the gray-suited mold of his predecessors and putting a flashy, more personalized stamp on things, reports Automotive News. Toyoda's style unabashedly commingles his journey with that of Japan's biggest automaker. Now that Toyoda's son has joined the family's namesake business, he is advising the next generation not to hide its heritage, either. To Toyoda, the family is a source of strength and pride. "I told my son, 'You don't have to hide the family because it's part of yourself, part of who you are,' " Toyoda said during an interview in which he reflected on the burden of his ancestry and his first decade leading one of the world's most admired companies. Read more of his interview with Automotive News here.
VW Sees Opening in Detroit-Dominated Pickup Market
The U.S. pickup truck market has big profits, big segments — and a big hurdle for foreign makes to clear, given Detroit Three loyalty and steep import tariffs. But Volkswagen thinks there might be an opening, according to The Detroit News. The German manufacturer has introduced two pickup concepts to the U.S. market in the last year, and it is particularly bullish on its most recent entry, the Tarok mini-pickup concept shown at this year's New York Auto Show. “As (midsize) pickups get bigger – to the stage where they are as big as full-size pickups were not so long ago – and more expensive and less fuel-efficient, we are trying to see if there is space for a vehicle with a smaller footprint that potentially is more affordable and gets better gas mileage,” says VW Senior Vice President for Product Marketing Hein Schafer. Import tariffs are a concern for VW even as it enters into a global truck alliance with Ford. VW plans to make a truck-based midsize pickup called the Amarok. The problem? It's made in Argentina for international markets and would be subject to the 25% tax, which is a dealbreaker. Read more here.
Take a Look at the Most Expensive SUV in the World
If you’re looking to spend $1.9 million on a new vehicle, an Italian armored car based on a Ford F-550 chassis is probably not on your radar. Karlmann is trying to change that, reports CNBC. The company operates from Los Angeles, has a factory in Italy and is largely financed by Beijing-based International Automotive Technologies. Its first product, the Karlmann King, is a massive rolling lounge complete with recliners, a coffee maker, champagne flutes, a massive TV, and a price tag that makes it the world’s most expensive SUV. On top of the stratospheric starting price, buyers can customize the King to their liking. Alligator-skin seats, real gold trim and specialty upholstery are all available for a price. Michael Nothdurft, Karlman’s sales director, says a client in Africa ordered a Karlman King with a $3.5 million price tag. One big part of that additional cost: bulletproofing. Most King buyers opt for the bullet-resistant option, which adds at least $300,000 to the price depending on the level of protection clients want. Check out the most expensive SUV in the world by clicking here.
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Inside Roger Penske's Secret Car Collection [The Detroit News]
