Trade War Update

Donald Trump this week celebrated a small victory in a preamble battle to the Trade War he wants to start and insists will be easy to win. China announced that they will cut import tariffs for cars from 25% to just 15% starting on January 1. Car parts will be cut from 10% to 6%, which will help lower the cost to build new cars in the country as well. In exchange, the United States has lifted a ban on products from Chinese telecom company ZTE Corporation, which had apparently crippled the company. Set to benefit most from the relaxed tariffs are Volkswagen and luxury car makers like BMW and Mercedes-Benz, who don’t produce cars in China. Tesla also benefits, as do some premium Japanese brands, which will now be able to compete cost-wise on a more level playing field with vehicles produced in China.

This doesn’t particularly help Ford or GM, who have already established extensive production in China specifically to avoid high tariffs, and with the 15% tariff still in place, there isn’t much likelihood brands will magically decide to start producing cars in the States again and ship them over. There’s also some rich irony that the Germans seem to benefit most from the actions of the U.S. President.

Photo by Dilworth Police Department

And while China cuts their import tariffs, Trump heard only the phrase “import tariff” and decided “yeah, that’s a great idea, let’s look into that” and assigned the U.S. Secretary of Commerce some homework. Specifically, Trump wants him to initiate a Section 232 investigation into the import of automobiles, trucks and auto parts to determine their effects on America’s national security. And right now you’re thinking “oh, this is supremely stupid,” but remember, it has happened twice that Ford Fusions from a plant in Mexico were caught in the U.S. loaded down with a bunch of weed that some drug mules north of the border failed to offload, so it’s entirely possible that cars are the single greatest source of drug trafficking in the United States. Or maybe it could be that pot should be legalized and regulated and we wouldn’t have people smuggling it in and that two examples of some incompetent drug cartel don’t exactly signify a trend. In any case, the Commerce Secretary will decide.

But Trump’s call for the investigation itself has been met with widespread condemnation from, well, kind of everyone. It’s being regarded as a waste of time and resources that could end up not only harming our relationship with other countries, but harming American consumers through generating higher prices for goods, much like the tariffs on steel and aluminum have done. Moreover, most consider it a stretch to think that an import tariff has anything to do with national security, with Canadian Prime Minister Justin Trudeau going so far as to say it rests on “even flimsier logical grounds.” Automotive News has a great roundup of all the quotes lambasting the move but the best and most concise probably comes from John Bozzella, CEO of the Association of Global Automakers, who said “The U.S. auto industry is thriving and growing. To our knowledge, no one is asking for this protection. This path leads inevitably to fewer choices and higher prices for cars and trucks in America.” So who’s going to win this Trade War again?

Authored by
Devlin Riggs

Headlines & New Cars for the week of January 22nd, 2018

Arbeit Macht Schwer

In case you thought the US was the only country with labor relations issue, here comes Germany to reassure us that we're not so different. Factory workers at Audi and Porsche plants have gone on strike to support demands of a six percent raise and the right to ask for a reduction in hours from 35 to just 28 so they can do things like care for children or the elderly for a couple of years, then return to work full time. In response to the union’s demands, employers have apparently offered a two percent raise, a one-time only “bonus” of two hundred Euro, and flat out refused to consider the reduced hours point. As they say, misery loves company, so I’m happy to see the rich American tradition of overwork and underpay is starting to catch on across the world. It makes me feel slightly less guilty for not working in France or Norway.

Geld Macht Spaß

Last year we covered the launch of the Porsche Passport Pilot Program, or as nobody calls it, Quadruple P. Well, they have some early numbers to report based on the program in Atlanta and signs are good for the brand, with 78% of participants having never owned a Porsche before. The company envisions this as just one way buyers can experience Porsche ownership, and they anticipate about 30% of buyers will purchase vehicles online in the next couple of years. Mercedes-Benz is thinking similarly, estimating that 25% of their new and used sales will come from the internet by 2025. But back to Porsche Passport - they also say it’s reaching a younger demographic, though they don’t specify how young. Given the fact that most of the participants are opting for the higher-cost, $3,000 per month service, I can’t believe these people are that young. To be able to basically have $36,000 to spend on a car every single year in addition to housing costs, food and other things, it seems like you’d have to be doing pretty damn well for yourself, which generally takes a few years. Or, in some of our cases, not at all. 

We Really Did Forget Dieselgate

After a disastrous 2015 and '16 where they were found to be using defeat devices to circumvent global emissions laws in their diesel cars, Volkswagen spent most of 2017 trying their absolute hardest to help buyers forget about dieselgate. A lot of this included generous discounts, goodwill campaigns and reinvestment in popular vehicles, not to mention the rebirth of the Microbus as the I.D. Buzz. Turns out, all that work paid off and buyers around the world pretty much did forget and stepped right back in line to snatch up new Volkswagens. What makes it more incredible is that, while the industry as a whole was down last year from 2016, Volkswagen recorded record sales, increasing 4.2% verses the year prior. And while the rest of the industry braces for more stagnating sales, VW sales chief Juergen Stackmann is optimistic, expecting sales to continue to rise in 2018. Based on the popularity of the gigantic Atlas, the compact Tiguan twins and the attractive Arteon, as well as the deal I was able to strike on a leftover 2017, it looks like their aggressive measures may be pretty effective!

Infiniti’s Shocking Moves

Meanwhile in Japan, Infiniti also had a great year, increasing sales eleven percent over 2016, but they’re still very much playing catch up to the German, English and Swedish luxury brands. Their plans to overtake their competition hinges primarily on electrification, as Nissan CEO Hiroto Saikawa explained this week. All new Infinitis launched after 2021 will be all-electric or will be range-extended hybrids, but not in the conventional sense. The company’s technology called ePower uses a gasoline motor to recharge the battery in its range extended hybrids, but that gas motor doesn’t drive the wheels at all. And there’s no plug-in feature. So the propulsion is entirely electric and the power generation entirely gas. It’s a weird setup, and especially considering Infiniti’s recently-announced variable compression engine, a strange change of approach to try to lure buyers. Then again, it could be a great solution for buyers without a garage or access to plug-in locations. 

Acura Wants to be Exciting Again

In addition to announcing the new 2019 RDX, Acura dropped a bombshell on the Detroit Auto Show, announcing the return of Type-S and A-Spec brands. For the uninitiated, Type-S is a high trim level applied to Acura models that are especially fast and good handling, and it was last used ten years ago on the TL sedan, but was famously applied to the RSX and Integra coupes, which were a ton of fun to drive. A-Spec is another trim level more focused on comfort, style and refinement than outright speed, so it’s somewhat less exciting, but no less important to buyers. The bombshell, however, was kind of a dud because they didn’t announce which models would get which trim levels or if they’d be bringing back an actually affordable fun car. It’s like Honda has this caged lunatic who wants fun cars and they let it out just a little bit at a time because if they let it off the leash completely, we’d end up with cars enthusiasts like and that’s just too much for them.

France Wants to be Less Exciting

People keep dying on French roads, with increases over the past three years after steady decreases going back as far as 1972. In response, France is lowering the speed limit on most of their highways by ten kilometers per hour, so the fastest you will be able to legally drive in France is just 56 miles per hour, rendering the fairly standard 0-60 calculations pretty useless. To their credit, the French don’t attribute all the deaths just to speed alone and have tightened regulations on cell phone use and drunk driving. This comes as road deaths are up also in Britain and the United States, illustrating a disturbing trend that I think must be attributed to cell phone usage. When I was hit a couple of weeks ago, I was lucky to come away uninjured and the other driver offered no excuse for why he ran a red light that had been red for at least seven seconds. Based on the Uber and Lyft stickers in his window though, I guessed that he was trying to find a fare. I wouldn’t go so far as to say those ride sharing companies are complicit in the wreck that has cost me days worth of time fighting with insurance companies and trying to find a new car, but the sooner we can integrate smart features into a car so drivers need look at their phones less, the better. 

BMW to Charge for Not Their Service

BMW, though, has a different idea of how to integrate phones into cars and that involves squeezing its drivers for every penny they can get, like little Bavarian weasels, hiding away all their nuts. But the truth is, the nuts aren’t even theirs! Or maybe the tree isn’t. This is a bad metaphor. BMW wants to charge a subscription fee for Apple’s CarPlay software, which they currently have as a $300 option when you buy a new car. By charging $80 per year after the first year, which is free, they argue that you pay less if you only keep the car a few years, which I guess most BMW owners do because they want to be seen driving a new BMW. The issue here is that more than 400 models of car come with Android Auto and almost as many come with Apple’s CarPlay, but it’s included in the price and not an option you have to add in later. Hell, you can buy a Toyota Corolla or VW Jetta and get these features for free, but you don’t with BMW. It’s like how fancy hotels make you pay for WiFi when you get it for free at Best Western. Why? Because the fancy hotels know you have the money to pay for it. Okay, that was a better metaphor.

Taking Crashes to New Heights

In Santa Ana, California this week, a driver managed to launch his Nissan Altima into the second story of a dental office, using a raised center media as a sweet ramp for the epic Dukes of Hazzard-style flying act. The driver, who was apparently high as a kite, was able to exit the car and hang by the door until police came and literally caught him. He and his two passengers were injured and taken to the hospital where they had some serious coming down to do. 

Photo by Southern Counties News

Tackling Terrible Truckers

From bad drivers to bad truckers, we’re headed back to England, where the Driver and Vehicle Standards Agency, or DVSA, announced the findings of a 4,000 vehicle roadside test. They found that one in 13 trucks on British roads were fitted with an emissions cheat device that give false emissions readings, allowing the truck better performance while drastically increasing pollution. If this sounds familiar, it should because it seems like there’s this type of story every week, it just usually involves auto manufacturers getting caught doing it, not truck drivers who are looking to skirt the law. A representative of the DVSA, Gareth Llewellyn said, “we’re committed to taking dangerous lorries off Britain’s roads. We won’t hesitate to take action against these drivers, operators and vehicles.” Unfortunately for Gareth, when trucks were found with defeat devices, drivers were given ten days to fix the problem or pay a £300 fine, which sounds an awful lot like they’re hesitating to take action to me.

Have a Seat

Back here in America, our love for three row SUVs has apparently created quite a criminal enterprise, because there have been a rash of robberies - of just the third row seats from SUVs. Apparently, on most General Motors SUVs, like the Chevy Suburban, Tahoe and GMC and Cadillac Siblings, if you’re able to pop open the rear glass on the lift gate, the alarm on the car doesn’t go off. Once inside, the third row can simply be unhooked and then passed out the open hatch. And who is buying all these third rows to make stealing them such a popular endeavor? If you guessed “people who have had their third rows stolen,” you’d be right. It’s tempting to victim blame here and say “just park in a garage or back in so the back glass isn’t so accessible,” but what’s the point of a car alarm if it’s not going to alarm you when someone is stealing something from it? Come on, GM, this is on you.

AI Coming Along Swimmingly

While Google and Amazon work to integrate their digital assistants into more and more new cars, Nissan is going a sort of different direction with their own artificial intelligence. Instead of a female voice, Nissan’s Xmotion Concept features a koi fish as a virtual assistant that swims across the myriad interior screens to provide drivers assistance with, well, driving, as well as entertainment and navigation. It’ll also connect with the driver’s smartphone to share information between it and the car. And in case you’re thinking this is some sort of anthropomorphized Admiral Ackbar-looking fish, no, it’s just a normal koi fish, and I think it’s neat and more companies should think outside the pond when coming up with virtual assistants.

SUV Free and Happy to Be

While Ferrari and Lamborghini rush to catch up with Bentley and Porsche on the super-expensive SUV craze, McLaren is pretty content just where they are, thank you very much. The company’s chief designer, Dan Parry-WIlliams, told Top Gear magazine this week that “I’m not the first person to point out that an SUV is neither particularly sporty or utilitarian. It’s not ‘everything for a reason’ unless the reason is to clutter up the streets.” He’s referring there to McLaren’s design motto, “everything for a reason,” and it’s refreshing to see a company stick to its credo. Meanwhile, at fellow British sports car company Lotus, whose mantra, handed down from founder Colin Chapman was “Simplify and add lightness,” they’ll soon be launching their own SUV that will neither be simple nor light, though that may be said of their buyers. 

The (Frozen) Vaporware Car

Photo by Simon Laprise

In Montreal this week, someone had a good time at the expense of some local police, who attempted to ticket a snow-covered vintage Toyota Celica Supra that was parked in a snow removal lane, blocking in other parked cars. Upon lifting the very real windshield wiper to place the ticket, the police officer discovered that the wiper arm wasn’t attached to anything because the entire car was simply a pile of snow molded into the shape of a Supra. The whole thing was the brainchild of a French Canadian artist named Simon Laprise, who found the windshield wiper on the street and placed it on the car for maximum confusion. As for the ticket issued? The citation read “You made our night, hahahahaha” or whatever the French word for laughter is.

New Cars

Jeep Grand Commander

Detroit might make a great place to launch a new Jeep, but that’s just what Jeep hasn't done this week, when images of a new three-row SUV leaked to the media. It seems every company is scrambling to get an SUV with three rows out there for all the families who insist that contorting yourself to wedge in between a door sill and the second row only to sit cross-legged on a tiny, barely-padded foldable bench seat is more dignified than just swallowing your pride and buying the mini-van you should be getting. And with regards to Jeep, they don’t currently have a third-row-capable SUV in their stable and haven’t since the mercy killing of the Commander in 2010. If you forgot the Jeep Commander existed, you’re not alone and you’re totally forgiven because it was horrible and ugly. But now we have had a look at the new Grand Commander, a seven seat SUV that is apparently a China-only vehicle. At least according to what we know about it right now. The new model borrows heavily from Jeep’s other products for styling, which is now a good thing and it looks pretty decent, so it’d be hard to believe Fiat Chrysler wouldn’t wise up and bring it over stateside at some point. Plus, starting at around $38,000, it’d fit right in with most of its contemporary competitors. Until we know if it’s coming here or not, I guess you’ll just have to buy the Honda Odyssey you should be getting anyway.

GM’s Autonomous Bolt

One of the biggest stories to come out of Detroit this week was General Motors’ launch of the all-autonomous Chevy Bolt. This is a big deal because GM is calling it the first pre-production car to be shown without a steering wheel or pedals, which I guess is accurate since we’ve definitely seen concepts without them before. While it’s ostensibly a major step forward in terms of the future of autonomous vehicles, indicating GM’s confidence that they have a car ready to go completely without human controls, it really doesn’t feel all that special. Just looking at the photos of the interior, which doesn’t have to cater to a driver anymore, it really just looks like they took the passenger’s side, went into Photoshop, copied, pasted and flipped it so the former driver’s side looks the same. That’s it. I mean, in a fully driverless car, you don’t even need a dashboard. Your displays can be anywhere, or everywhere! The seats could swivel or not even face forward, and yet here we are, with a Chevy Bolt where they just Control X’d the steering column and pedals. Congratulations GM on making the future of motoring so unappealing.
 
But thank god, Chevy wasn’t the only company exhibiting at this year’s North American International Auto Show. In fact, there were a ton of new vehicles. If you want to learn more, check out to my Auto Show Rap-Up from last week's podcast. 

Authored by
Devlin Riggs