January 17, 2017
Donald Trump Warns on House Republican Tax Plan
President-elect Donald Trump criticized a cornerstone of House Republicans’ corporate-tax plan, which they had pitched as an alternative to his proposed import tariffs. The measure, known as border adjustment, would tax imports and exempt exports as part of a broader plan to encourage companies to locate jobs and production in the U.S. But Mr. Trump, in his first comments on the subject, called it “too complicated.” He told The Wall Street Journal that, “Anytime I hear border adjustment, I don’t love it. Because usually it means we’re going to get adjusted into a bad deal. That’s what happens.” The border adjustment is a core piece of the House GOP tax plan released last June. It would generate about $1 trillion over a decade, significantly offsetting the cost of cutting the corporate tax rate from 35 percent to 20 percent, according to several independent analyses. Mr. Trump’s plan calls for a 15 percent corporate-tax rate. For more on President-elect Trump’s comments on a proposed border adjustment tax, click here.
German Automakers Push Back on Trump's Warning Over Mexican Plants
Bloomberg reports that German carmakers pushed back against President-elect Donald Trump’s threats of import duties on the autos they make in Mexico, pointing to extensive production expansion in the U.S. in recent years. BMW AG, which the president-elect singled out in an interview with German newspaper Bild on Sunday, sought to defuse potential tensions by stating that its largest factory is in South Carolina and that cars made at a planned, smaller factory in Mexico will be exported globally. Trump said BMW will face a 35 percent import duty on vehicles it exports to the U.S. from Mexico. Trump’s comments were the first aimed at a European carmaker after he issued similar warnings to Ford Motor Co. and Toyota Motor Corp. So far, the threats have prompted conciliatory gestures by the targeted companies. Toyota, which is set to start producing Corolla cars at a new plant in Mexico starting in 2019, has said it’ll take Trump’s decisions into account in the future. Read more about President-elect Trump’s comments regarding German automakers and their Mexican production plans here.
BMW, Mercedes Executives Plead for More Crossovers
Even as they launch competing midsize cars, luxury archrivals BMW and Mercedes-Benz face a common challenge, reports Automotive News. BMW rolled out its redesigned 5-series sedan at the auto show in Detroit last week, and Mercedes-Benz showed its E-class coupe. But both automakers want to get more crossovers into U.S. dealer showrooms, executives said in interviews. In 2016, both brands saw car unit sales fall while unit sales of trucks, including crossovers, rose. Ludwig Willisch, CEO of BMW of North America, said that he would like to see an even split between crossovers – “sport activity vehicles" in the company's jargon – and cars. "In the part of the market that we're in, obviously 50 percent would be a good place to be," Willisch told Automotive News. "Right now we are a little over 40, so that gives you a clear indication where we need to be in the future." Dietmar Exler, CEO of Mercedes-Benz USA, said the automaker's global allocation of crossovers will increase U.S. dealers' supply slightly this year. For more on BMW’s and Mercedes’ crossover plans, click here.
Hyundai, Kia Plan $3.1 Billion U.S. Investment, Consider New Plant
Hyundai Motor Co. and Kia Motors Corp. said they will spend $3.1 billion in the U.S. in the next five years, joining other vehicle manufacturers in announcing investment plans. According to Automotive News, the planned U.S. investment by South Korea’s two largest automakers is nearly 50 percent more than the $2.1 billion they spent in the previous five-year period, Hyundai Motor President Chung Jin-haeng told reporters in Seoul on Tuesday. The group is considering building a new factory in the U.S. and may produce Hyundai’s upscale Genesis vehicles and a U.S.-specific SUV in the country, said the executive, who also oversees the strategic planning for Kia. “We expect a boost in the U.S. economy and increased demand for various models as President-elect Trump follows through on his promise to create 1 million jobs in five years,” Chung said. “We will actively consider introducing new models that have increasing demand and profits.” For more on Hyundai and Kia’s U.S. plans, click here.
Americans Have Fallen in Love with Little Big Cars
Americans love little big cars, reports The Washington Post. Crossovers or cross utilities, smaller SUVs built on car platforms, have become the most popular new vehicle on the road. Led by sales of the Honda CR-V and Toyota RAV4, they outsold every other type of automobile by a substantial margin last year, making up nearly a third of all new vehicle sales in 2016, according to WardsAuto. Their tremendous growth in just the last decade propelled sales of new utility vehicles, large and small, ahead of cars for the first time in 2016. SUVs, trucks, and vans now make up a combined 60 percent of new vehicle sales in the United States, and analysts and automakers project that share will rise in the years to come. “The outflow [of buyers] from the sedans into that crossover space is big and growing,” said Robert Davis, senior vice president of Mazda’s U.S. operations. “Of everybody that bought a car three years ago or five years ago, 50 percent of them are intending to buy a crossover” next time. For more on how Americans are gravitating toward small crossovers, click here.
ADESA Benefit Auction at NADA 100
Get ready for a twist on the usual charity auction at the 2017 NADA Convention & Expo. In past years, ADESA has auctioned off a motorcycle at the convention to benefit the NADA Foundation’s Frank E. McCarthy Fund and Canine Companions for Independence. This year, ADESA is donating a 2015 Polaris RZR S900 EPS Black Pearl side-by-side sport vehicle for the charity auction. It features a 4-stroke DOHC twin cylinder engine, automatic transmission, electronic power steering, electronic fuel injection, high-performance true on-demand all-wheel drive system and FOX 2.0 Podium X shocks. The live auction kicks off at 1 p.m. (CST) on Saturday, January 28, at the ADESA exhibit (Booth No. 3137) in the New Orleans Ernest N. Morial Convention Center. Canine Companions for Independence provides wounded veterans with highly trained assistance dogs. “We’re proud to support the NADA Foundation and CCI, and we’re delighted to auction off this vehicle for their benefit,” said Steve Dudash, ADESA vice president of dealer services. “We think it will inspire enthusiastic bidding among the many dealers who will join us for this event.” The 2017 NADA Convention & Expo runs Thursday, January 26 through Sunday, January 29. Visit www.nadaconvention.org for more information.
Around the Web
2018 BMW 4-Series Preview [MotorAuthority]
All the Weird Ways You Can Shift an Automatic [Autoblog]
7 Crazy Concept Cars Already Unveiled in 2017 [Business Insider]
How to Become a Car Photographer [Forbes]