What the Tariff Battle Means for Auto Plants in South Carolina

First Up 07/10/18

Action Alert: 25% Auto Tax
Representative Jackie Walorski (R-Ind.), Mike Kelly (R-Pa.), Ron Kind (D-Wis.), Terri Sewell (D-Ala.), and a growing bipartisan group of lawmakers, are planning to send a letter to Commerce Secretary Wilbur Ross. The letter affirms that cars are not a threat to national security and that the Section 232 investigation is not a productive use of taxpayer dollars. It is important that the letter gain as many signatories as possible and all dealers should urge their Members of Congress to sign the letter. Take action now by asking Congress to sign a bipartisan letter affirming that cars are not a security threat. 

What the Tariff Battle Means for Auto Plants in South Carolina
President Donald Trump’s trade battle with China is threatening the U.S.’s growing role as an auto exporter. In recent years, BMW AG, Daimler AG, and China’s Zhejiang Geely Holding’s Volvo Cars have invested billions to expand U.S. factory production with the goal of exporting a significant number of vehicles to China and other markets world-wide. But, reports The Wall Street Journal, the tit-for-tat tariffs on U.S.-China trade could prompt the manufacturers to rethink that strategy. On Friday, China raised to 40 percent its tariff on auto imports from the U.S. as part of a broader retaliation against the Trump administration’s move to impose duties on $34 billion in Chinese-made goods. BMW and Daimler are among the foreign auto makers that stand to suffer the most from the move. Both German auto makers have massive factories in the U.S. South that employ thousands of workers and build luxury sport-utility vehicles for sale in the U.S. and export to China and Europe. The tariff will force the companies to either charge customers in China more or absorb the added costs. Read more here.

Detroit Auto Show Aims for June in 2020
Detroit auto show organizers are finalizing a plan to move the annual show to June in 2020, ranking industry sources close to the situation tell The Detroit News, establishing the cornerstone of an outdoor automotive celebration around Cobo Center and other downtown landmarks. And at least one hometown automaker is urging the Detroit Auto Dealers Association to adapt elements for a reimagined auto show from the Goodwood Festival of Speed happening this weekend in the United Kingdom. The push by automakers and the DADA to re-energize the annual spectacle comes as organizers of the North American International Auto Show face growing defections from the show. They include all but one German automaker operating in the United States, namely Volkswagen, as well as competitors from Britain, Sweden, and Japan. Read more here. 

New Subaru Chief Aims to Shore Up Profits, Sales
Newly appointed Subaru President Tomomi Nakamura has unveiled a fresh five-year business plan that aims to boost U.S. market share, stoke an 18 percent increase in global sales, shore up flagging profitability and invest more in next-generation technologies. And crucially, reports Automotive News, the new roadmap calls for restoring trust in the brand at home. Nakamura, 59, took the helm from departing chief Yasuyuki Yoshinaga in June, following a vehicle inspection scandal in Japan that hurt the brand's image at home. The backlash was contained in the Japanese carmaker’s backyard because the lapses didn’t affect cars for export. But in unveiling the new plan July 10, Nakamura pledged to prioritize cultivating a company that "does the right thing in the right way." He dubbed the blueprint STEP, with the T standing for trust. The other letters come from speed, engagement and peace of mind. The plan runs through the fiscal year ending March 31, 2026, and Nakamura said it will keep small but expanding Subaru competitive in the rapidly changing international landscape. Read more here. 

U.S. Appeals Court Upholds VW's $10 Billion Diesel Settlement
A federal appeals court on Monday upheld Volkswagen's $10.03 billion settlement with the owners of nearly 500,000 polluting diesel vehicles announced in 2016, reports Automotive News. The three-judge panel of the U.S. 9th Circuit Court of Appeals said, in dismissing a number of objections to the settlement, that it "delivered tangible, substantial benefits to class members, seemingly the equivalent of – or superior to –those obtainable after successful litigation, and was arrived at after a momentous effort." In total, Volkswagen AG has agreed to pay more than $25 billion in the United States for claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting U.S. vehicles. The buybacks will continue through the end of 2019. The decision on Monday pertained to the settlement covering the owners and former owners of 475,000 polluting 2.0-liter vehicles. VW agreed to offer owners of the 2.0-liter vehicles between $5,100 and $10,000 in compensation, in addition to the estimated value of the vehicle. Read more here. 

Nissan Admits to Falsifying Emissions Tests
This week in Tokyo, Nissan joined the increasing list of automakers who have admitted to falsifying emissions and/or fuel economy figures. According to Forbes, the company said it had uncovered falsified data from car exhaust emissions tests at most of its plants based in Japan. An internal review at Nissan’s production facilities in Japan revealed that company inspectors had used “altered measurement values” on emissions reports. The tests also “deviated from the prescribed testing environment,” it said. Nissan explained that around 1 percent of vehicles produced are taken offline for emissions and fuel economy testing, which according to the company, equates to 2,187 vehicles over the last few years. A spokesman said that the firm "identified 1,171 cases in which test results were non-compliant in one form or another." Nissan also confirmed that this issue does not affect vehicles made outside of Japan. Read more here. 

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