Automakers Expect White House to Delay Decision on Auto Tariffs
Automakers expect U.S. President Donald Trump to delay a decision due next week on whether to impose steep tariffs on imported cars and auto parts on national security grounds for up to six months as talks continue with the European Union and Japan, reports Reuters. In February, the Commerce Department submitted its “Section 232” national security report. Trump has until May 18 to act, but four auto executives who have spoken to administration officials say he is likely to extend that deadline by another 180 days. He may also announce a specific date to impose new duties if no deal is reached. Administration officials say Trump could still opt to impose the tariffs by May 18, but believe that after a series of investment announcements by automakers – including one by General Motors Co on Wednesday of $700 million in three Ohio plants – he will likely delay the tariffs amid a trade battle with China. Read more here.
Sewell Leads Bipartisan Push to Protect Auto Industry from Tariffs
U.S. Rep. Terri Sewell (D-Ala.) led a bipartisan group of lawmakers to urge Director of the National Economic Council Larry Kudlow and President Donald Trump against imposing new tariffs that could harm the auto industry. Sewell is a member of the Ways and Means Subcommittee on Trade, reports the Alabama Political Reporter. “We are convinced that the products hard-working Americans in the auto sector design, build, sell and service are not a threat to our national security,” wrote Sewell and the group of lawmakers in a letter to Kudlow. “We strongly urge you to advise the president against imposing trade restrictions that could harm the auto sector and the American economy.” The letter also said tariffs on autos will raise prices for American consumers and lower demand, ultimately leading to decreased domestic production, investment and employment. “We urge you to do everything you can to avoid trade restrictions that would negatively impact the U.S. auto sector and undermine our economic security,” the letter concluded. Read more here.
Mazda's Profits Tumble 43% on Foreign Exchange, Lower Sales, Dealer Outlays
Mazda said operating profit slumped 43 percent in the latest fiscal year, with results broadsided by falling global sales, increased marketing expenses, foreign exchange losses and spiraling costs for increased investment in its U.S. retail network reforms. Automotive News reports that Mazda operating profit dropped to 83.01 billion yen ($748.9 million) in the full fiscal year ended March 31, the automaker said on Thursday in its earnings report. Net income also slid 43 percent, to 63.48 billion yen ($573.0 million) in the 12 months. Revenue increased 3 percent to 3.56 trillion yen ($32.12 billion), as worldwide retail sales declined 4 percent to 1.56 million units, losing ground in North America and China. Operating profit margin deteriorated to 2.3 percent from 4.2 percent the year before. In announcing the results, CEO Akira Marumoto outlined a new mid-term business plan that targets lifting operating profit margin to a sustainable 5 percent by the fiscal year ending March 31, 2025. The company also downgraded its long-term sales goal in line with tougher realities. Read more here.
Mitsubishi Earnings Climb on Rising Sales, Cost Controls
Mitsubishi Motors Corp. reported a 14 percent increase in operating profit in the latest fiscal year as rising sales and cost controls offset foreign currency exchange losses, reports Automotive News. Mitsubishi’s operating profit climbed to 111.82 billion yen ($1.01 billion) in the full fiscal year ended March 31, the Japanese automaker said Thursday in its annual earnings report. Net income grew 24 percent, to 132.87 billion yen ($1.20 billion) in the 12 months. Revenue increased 15 percent to 2.51 trillion yen ($22.65 billion), as worldwide retail sales increased 13 percent to 1.24 million units, gaining ground in all major markets. North American regional operating profit more than tripled to 3.5 billion yen ($31.6 million) in the 12 months to March 31, on a 12 percent increase in sales to 173,000 million units. Mitsubishi forecasted that operating profit will decline 19 percent in the current fiscal year ending March 31, 2020, while net income will drop 51 percent. Read more here.
Lawsuit: Ford Hid Focus, Fiesta Transmission Problems, Then Blamed Customers
More than 1.9 million unhappy customers who purchased or leased a Ford Focus or Fiesta say the company lied to unload cars with faulty transmissions on unsuspecting buyers and then blamed the drivers for problems they experienced, reports USA Today. As a result, Ford Motor Co. faces a potential $4 billion liability, lawyer Ryan Wu said last month during a U.S. Court of Appeals hearing during heated discussion with judges. He was trying to convince a panel of appellate judges in Pasadena, California, on April 8 to leave in place a $35 million settlement his law firm negotiated to resolve a class-action lawsuit against Ford. Ford customers claim in legal filings their 2012-16 Focus and 2011-16 Fiesta sedans were built with dual-clutch transmissions prone to “shuddering, slipping, bucking, jerking, hesitation while changing gears, premature internal wear, delays in downshifting and, in some cases, sudden or delayed acceleration.” Read more here.
Webinar: Let Go and Let Google
Join Google's Senior Automotive Retail Strategist, Kelly McNearney, on Tuesday, May 21st at 2:00pm EDT as she demonstrates how to drive more dealership visits using Google machine learning. Kelly will discuss how dealers need to "let go" of traditional marketing and "let Google" use advanced algorithms, machine learning and data to bring their business into the digital age. To register, click here
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