Jump to content
  • William Maley
    William Maley

    Diamler and Volvo Begin Bracing For A Possible Trade War

      One Predicts a Hit on Profits, While the Other Says it will threaten jobs

    The project of a trade war between the U.S. and China (along with the European Union) has many automakers on edge. Some are beginning to speak out about the possible dangers it may bring.

    Mercedes-Benz's parent company, Diamler AG announced yesterday that its full-year earnings will be slightly lower than last year. Their reasoning comes down to consumers in China buying fewer SUVs that are imported from the U.S. Most of Mercedes-Benz SUVs are built in Alabama.

    “Remember, for those following from a Trump/global free trade perspective, this is now a German car maker, warning on the profits coming from their Alabama-made SUVs, which are then sold/exported into China –- a complicated situation indeed!!” wrote Evercore ISI analyst Arndt Ellinghorst.

    According to Bloomberg, shares in Diamler dropped 4.4 percent on this announcement.

    Meanwhile, Volvo Cars CEO Hakan Samuelsson said the trade war could affect plans in the U.S. Speaking at the opening of the Swedish automaker's new assembly plant in South Carolina, Samuelsson told Bloomberg that Volvo would have to limit the number of models it sells due to threat of a 25 percent tariff on imported vehicles.

    “I would have less models to choose from and they would cost more -- that would be the consequence. Shorter menu and higher prices -- not a very good restaurant,” said Samuelsson.

    The factory in South Carolina will provide a small relief for Volvo if tariffs do go into place. Small is the key word as LMC Automotive estimates 87 percent of the vehicles Volvo sells in the U.S. next year will come from other places - Sweden and China.

    Samuelsson also warned that the trade dispute could mess up plans to create up to 4,000 new jobs at the new plant.

    "If you have trade barriers and restrictions, we cannot create as many jobs as we are planning to," explained Samuelsson.

    "We want to export and if suddenly China and Europe have very high barriers, it would be impossible. Then you have to build the cars there. And then all cars will be more expensive, you have to invest more tooling and have every model in every country. That's against all the logic of modern economies that trade with each other."

    Source: Bloomberg, (2), Reuters



    User Feedback

    Recommended Comments

    Totally agree that the trade war is going to mess up existing plans. In some regards things will get better for all, in others, things are going to hit home like a bomb going off.

    Interesting times we live in, very interesting! 🤔

    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites

    It is rather sad that our President is pursuing a policy that benefits few and hurts a lot of people here and abroad.  And all of this is for what exactly?  Since when is protectionism good policy? Since when is autarky good?  I would say NEVER under any circumstances.  Trade wars tend to beget shooting wars, so tread carefully and buy your next car sooner than later.

    Of course, the Chinese warned any who would listen: May you live in interesting times.

    • Upvote 3

    Share this comment


    Link to comment
    Share on other sites

    I believe the goal is just a level playing field as we pay waaaay more in tariffs that others pay to sell their stuff here. 

    Share this comment


    Link to comment
    Share on other sites
    1 hour ago, ccap41 said:

    I believe the goal is just a level playing field as we pay waaaay more in tariffs that others pay to sell their stuff here. 

    We don't pay tariffs to other countries for items exported from the US. The customers in those countries pay the tariff.

    We pay very few tariffs in this country and the ones we do pay are quite low unless you're trying to buy a truck from Germany...

    • Thanks 1
    • Haha 1

    Share this comment


    Link to comment
    Share on other sites
    21 minutes ago, Drew Dowdell said:

    We don't pay tariffs to other countries for items exported from the US. The customers in those countries pay the tariff.

    Correct. Consumers absorb the price increase. 

    Share this comment


    Link to comment
    Share on other sites

    Hmmm. Well good bye to S90. 25% tariff on A8, S-Class, and 7 Series.

     

    the way I see it these luxury products will take a super large hit. Good.

    I wonder now. Cadillac will have to stop-sale of the plug-in CT6.

     

    And Buick Envision toodle-loooo. What else?

     

    oh yes, Mexican made Audis, go to hell pls clearly a profit grab nothing else. Damn all these luxury makes that use cheap labour are really gonna take a hit. I think that’s a good thing. Luxury car should mean expensive overpaid labour all the time. 

    Share this comment


    Link to comment
    Share on other sites
    4 hours ago, Suaviloquent said:

    Hmmm. Well good bye to S90. 25% tariff on A8, S-Class, and 7 Series.

     

    the way I see it these luxury products will take a super large hit. Good.

    I wonder now. Cadillac will have to stop-sale of the plug-in CT6.

     

    And Buick Envision toodle-loooo. What else?

     

    oh yes, Mexican made Audis, go to hell pls clearly a profit grab nothing else. Damn all these luxury makes that use cheap labour are really gonna take a hit. I think that’s a good thing. Luxury car should mean expensive overpaid labour all the time. 

    Chevy Silverado quad cab, 25% tariff, Dodge Ram 25% tariff, Buick Encore, Chevy Traxx, Chevy Sonic, Chevy Spark 25% tariff.  Ford Fusion, Lincoln MKZ, Chrysler 300/Dodge Charger/Dodge Challenger 25% tariff.  None of those are made in the USA.  

    I bet adding $10,000 to the price of the Silverado and Ram will be good for sales.  Dealership sells less, they lay off workers.

    Mercedes C-class, BMW X5, Mercedes GLE: 0% tariff.   Honda Accord/Pilot/Ridgeline, Acura TLX, Toyota Camry/Highlander/Sienna no tariff.  All those are made in the USA.  

    This tariff garbage only screws the consumer, and will drop auto sales which in turns screws all auto companies.  This isn't like 1960 when Americans made cars in America, Japanese made cars in Japan, etc.  And if you export tax those BMW and Mercedes going to China, and China taxes them coming in because of a trade war and they sell less in China, then BMW and Mercedes lay off workers in South Carolina and Alabama.  Lets kill some more jobs.

    • Thanks 2

    Share this comment


    Link to comment
    Share on other sites

    All of the GMs and the RAM could move production to the US. The cheap ones will probably just get cancelled.

    The ct6 plug in could be built here, they just sell most of them in China.

    • Like 1

    Share this comment


    Link to comment
    Share on other sites

    General Motors has 4 facilities in Mexico and 40 in the U.S..

    Fort Wayne & Flint are online to build the next Silverado/Sierra, and fully 80% of GM pickups sold in the U.S. are built in the U.S..

    Edited by balthazar
    • Like 1
    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites

    I dunno about increased costs. For one it simplifies the hell out of product planning.

    Yeah you have short turn spike in all the sunk costs associated with developing cars for markets where the crippling tariffs now make them unmarketable.

     

    Consumers NEED value but they WANT choice. 

     

    I’d say something like this might single handedly force automakers to invest even more in America as it’s the large market. Mexico isn’t large. The cars made there are almost always for export! And Canada, heck I’m Canadian - and we really have gotten a great deal, too good of a deal!

    • Like 1

    Share this comment


    Link to comment
    Share on other sites
    On 6/21/2018 at 5:53 PM, Suaviloquent said:

    Hmmm. Well good bye to S90. 25% tariff on A8, S-Class, and 7 Series.

     

    the way I see it these luxury products will take a super large hit. Good.

    I wonder now. Cadillac will have to stop-sale of the plug-in CT6.

     

    And Buick Envision toodle-loooo. What else?

     

    oh yes, Mexican made Audis, go to hell pls clearly a profit grab nothing else. Damn all these luxury makes that use cheap labour are really gonna take a hit. I think that’s a good thing. Luxury car should mean expensive overpaid labour all the time. 

    Not sure if you are being sarcastic but I rather like Audi products. All things considered I probably would buy an Audi over a Cadillac or Lincoln...do not appreciate the administration restricting my choices.

     

    On 6/22/2018 at 12:21 AM, balthazar said:

    General Motors has 4 facilities in Mexico and 40 in the U.S..

    Fort Wayne & Flint are online to build the next Silverado/Sierra, and fully 80% of GM pickups sold in the U.S. are built in the U.S..

    There is something subjective I really like about the current crop of GM pickups. Hopefully the continue to do well in the sales department!

     

    Share this comment


    Link to comment
    Share on other sites
    On 6/21/2018 at 10:59 PM, Drew Dowdell said:

    All of the GMs and the RAM could move production to the US. The cheap ones will probably just get cancelled.

    The ct6 plug in could be built here, they just sell most of them in China.

    They could move Silverado production to the USA, but that is 250,000 trucks, they would have to retool a factory which costs a lot, and then kill off whatever was being made in that factory.   Look at how it takes 4-5 years of development just to bring a new version of an existing model to market, getting one of these cars companies to build a whole new factory and relocate is like a decade endeavor.

    Share this comment


    Link to comment
    Share on other sites
    On 6/22/2018 at 12:37 AM, Suaviloquent said:

    I dunno about increased costs. For one it simplifies the hell out of product planning.

    Yeah you have short turn spike in all the sunk costs associated with developing cars for markets where the crippling tariffs now make them unmarketable.

     

    Consumers NEED value but they WANT choice. 

     

    I’d say something like this might single handedly force automakers to invest even more in America as it’s the large market. Mexico isn’t large. The cars made there are almost always for export! And Canada, heck I’m Canadian - and we really have gotten a great deal, too good of a deal!

    The American market is the biggest in North America, but in the world it isn't.  China and the EU are larger car markets than the United States.  Audi sales 2 million cars a year, only 200,000 of those are in the USA.   Even GM sells about 4 million cars a year in China and 3 million in the USA.  So if you start these global trade wars, every car maker gets hurt, prices rise everywhere, and the consumer gets stuck with the higher prices.

    Share this comment


    Link to comment
    Share on other sites

    It’s like everyone forgot that lots of auto plants closed here and even if auto makers make investments in America it’s just to keep the current plants relevant for the continued production of the next model, not to actually increase capacity for new models.

     

    i find it compelelty stupid for example how the Equinox is built in Canada but the XT5 and now Blazer will be built in Mexico, where the value added is much higher for those lower volume products this profit margin per unit much higher.

    It’s just dumb that America in the NAFTA market is far and away the biggest buyer and yet proportionally in terms of employment far lower. 

     

    Share this comment


    Link to comment
    Share on other sites
    3 minutes ago, smk4565 said:

    The American market is the biggest in North America, but in the world it isn't.  China and the EU are larger car markets than the United States.  Audi sales 2 million cars a year, only 200,000 of those are in the USA.   Even GM sells about 4 million cars a year in China and 3 million in the USA.  So if you start these global trade wars, every car maker gets hurt, prices rise everywhere, and the consumer gets stuck with the higher prices.

    When talking about Mexico about 80% of the output of every plant there is for U.S. 

     

    that’s the problem. I don’t like Mexican VINs nothing to do with the quality of the auto or the people who built it - it’s just that the carmakers pretend it’s the same value added but really they get away with paying lower wages. 

     

    If their argument of lower prices for consumers is not credible, it doesn’t matter where the car is built payment periods are becoming dangerously long

    In no way am I preaching for UAW either...

    Share this comment


    Link to comment
    Share on other sites
    26 minutes ago, Suaviloquent said:

    It’s like everyone forgot that lots of auto plants closed here

    Yup! There's a MASSIVE Diamler plant about 45 minutes away from me that's been empty for around a decade now. 

    Share this comment


    Link to comment
    Share on other sites

    You know what’s really f@#king funny though?

    Take for example all these trade war fears...Boeing is going to take HUGE hit in China.

    that’s not a trade war issue actually, the mercantilist protecitnist Chinese government basically forced the hand of all major Chinese airlines to buy into their massively delayed, over promised  Comac C919. And that plane could only have been built with the help of American and European firms.

    Once that is finished the State-owned Comac will reverse engineer everything and what does America get for short term revenue?

    China has a threat to tariffs back the only American exports?! They ARE already looking to screw over Boeing.

    and any competitor to Boeing is also competition for Airbus. I can’t believe the WSJ and others would say this is great for Airbus as it’s complete nonsense. 

    Share this comment


    Link to comment
    Share on other sites


    Join the conversation

    You can post now and register later. If you have an account, sign in now to post with your account.
    Note: Your post will require moderator approval before it will be visible.

    Guest
    Add a comment...

    ×   Pasted as rich text.   Paste as plain text instead

      Only 75 emoji are allowed.

    ×   Your link has been automatically embedded.   Display as a link instead

    ×   Your previous content has been restored.   Clear editor

    ×   You cannot paste images directly. Upload or insert images from URL.




  • Similar Content

    • By Drew Dowdell
      ROCKLEIGH, N.J. (July 2, 2019) - Volvo Car USA LLC, (VCUSA) reported U.S. sales of 9,934 vehicles for the month of June, an increase of 0.7 percent from the same period last year. Year-to-date VCUSA has sold 50,120 vehicles, an increase of 5.2 percent from the previous year.
       
      “The first half of 2019 was Volvo’s best U.S. performance in 12 years. June was a great month, topping a monthly record set back in June 2006.” said Anders Gustafsson, President and CEO, Volvo Car USA & Senior Vice President Americas.
       
      The XC90 was popular in June, posting the best sales month of 2019 at 3,475 cars sold, a 7.6 percent increase versus June 2018. The S60 and V60 saw the largest year-over-year gains, with S60 growing 184 percent and V60 growing 113 percent.
       
      The America’s region, which includes the United States, Canada and Latin America, also showed growth in June. Sales for the entire region were up 1.9 percent for the month; posting a 6.3 percent year-over-year gain.
       
      “The first half of 2019 showed great momentum for sales and fantastic progress on new services for customers.” Added Gustafsson. “Tow for Life and Accident Advisor joined our Volvo Lifetime Replacement Parts & Labor Warranty earlier this year. These services are designed to make life less complicated for our customers and have shown strong early success.”
    • By Drew Dowdell
      If you're a diplomat, politician, or evil genius in need of protection when you are out and about, a new option just arrived on your shopping list.  Volvo has just released the XC90 Armored, an SUV that looks normal, but isn't. 
      Volvo worked on the XC90 Armored for about two years, aiming for a protection rating of VPAM VR8, the second highest rating possible.  Decoding that rating, the VR8 means that the XC90 has 360 degree ballistic resistance.  However, it also provides explosive resistance too.  
      Starting off as a standard Volvo XC90 T6 AWD Inscription, the SUV heads to Bremen, Germany to complete the process of armoring.  High-strength steel and glass are added. The additional armoring brings the total weight of the vehicle plus 5 occupants to 9,899 pounds.  With all that weight, Volvo upgrades the brakes and suspension to compensate. 
      Volvo tried to make the XC90 Armored look as close to a standard issue Volvo as possible so as not to draw any attention from the outside. 
      If this odjuret (beast) is too much for you, Volvo also makes a lightly armored version of the XC60.


      View full article
    • By Drew Dowdell
      If you're a diplomat, politician, or evil genius in need of protection when you are out and about, a new option just arrived on your shopping list.  Volvo has just released the XC90 Armored, an SUV that looks normal, but isn't. 
      Volvo worked on the XC90 Armored for about two years, aiming for a protection rating of VPAM VR8, the second highest rating possible.  Decoding that rating, the VR8 means that the XC90 has 360 degree ballistic resistance.  However, it also provides explosive resistance too.  
      Starting off as a standard Volvo XC90 T6 AWD Inscription, the SUV heads to Bremen, Germany to complete the process of armoring.  High-strength steel and glass are added. The additional armoring brings the total weight of the vehicle plus 5 occupants to 9,899 pounds.  With all that weight, Volvo upgrades the brakes and suspension to compensate. 
      Volvo tried to make the XC90 Armored look as close to a standard issue Volvo as possible so as not to draw any attention from the outside. 
      If this odjuret (beast) is too much for you, Volvo also makes a lightly armored version of the XC60.

    • By Drew Dowdell
      Volvo Cars posted strong sales in May, with volumes up 12.4 per cent compared with the same period last year.
      The company sold 60,196 cars during the month, as China, Europe and the US all reported a growth in sales compared with the same period last year.
      The double digit volume growth in May was led by the continued strong demand for Volvo’s award-winning SUV range led by the XC60, and followed by the XC40 and XC90. Volvo’s latest models, the V60 estate and the US-built S60 sedan, also contributed to the strong performance.
      In the January to May period, Volvo sold a total of 278,051 cars – up 9.6 per cent, compared with the same period last year.
      China reported a strong sales growth of 17.4 per cent in May compared with the same period last year. Total sales in the region reached 12,425 cars during the month. The growth came on the back of high demand for the locally assembled XC60 and S90 models.
      European sales in May grew 16.9 per cent to 29,681 cars, led by strong demand for the XC60, followed by the XC40 and the V60 estate.
      US sales reached 9,761 cars in May, up 4.5 per cent compared with the same period last year. XC90 was the best selling car in the region followed by the XC60.
      A detailed break-up of regional sales is given below:
       
        May
          January-May
          2018
      2019
      Change
      2018
      2019
      Change
      Europe
      25,395
      29,681
      16.9%
      131,267
      144,164
      9.8%
      China
      10,582
      12,425
      17.4%
      49,792
      54,503
      9.5%
      US
      9,338
      9,761
      4.5%
      37,754
      40,186
      6.4%
      Other
      8,224
      8,329
      1.3%
      34,768
      39,198
      12.7%
      Total
      53,539
      60,196
      12.4%
      253,581
      278,051
      9.6%

      In May, the XC60 was the top selling model with sales reaching 17,510 cars (2018: 16,171), followed by the XC40, with total sales at 10,574 cars (2018: 5,413 units), and the Volvo XC90 at 8,621 cars (2018: 7,979 units).
    • By Drew Dowdell
      Volvo Car USA, LLC, (VCUSA) reported U.S. sales of 8,367 vehicles for the month of April, an increase of 0.4 percent from the same period last year. Year-to-date, VCUSA has sold 30,425 vehicles, an increase of 7 percent from the previous year.
      April 2019 was the best April sales performance since April 2007. The XC90 was the top seller for April, up 27 percent over the prior year, with 2,700 sales recorded. The new XC40 had another record-breaking month, selling 1,824 compact SUVs.  
      “Led this month by the XC90, our award-winning SUV line was up 10 percent for the month,” said Anders Gustafsson, President and CEO, Volvo Car USA. “Together, the XC90, XC60 and XC40 have led to a 14 percent increase in SUV sales year-over-year.”
      Models April 2019 April 2018 % Year To Date 2019 Year To Date 2018 % S60 1,232 575 114.3 % 5,041 2,604 93.6 % S60 CC 0 8 - - 122 - S90 258 583 -55.7 % 1,051 2,408 -56.4 % V60 27 183 -85.2 % 139 593 -76.6 % V60 CC 0 626 - 38 1,226 -96.9 % V90 40 30 33.3 % 148 82 80.5 % V90 CC 35 150 -76.7 % 361 702 -48.6 % XC40 1,824 1,404 29.9 % 5,401 2,483 117.5 % XC60 0 16 - - 204 - XC60 II 2,251 2,476 -9.1 % 8,887 8,321 6.8 % XC90 2,700 2,282 18.3 % 9,359 9,671 -3.2 % Total 8,367 8,333 0.4 % 30,425 28,416 7.1 %
  • Social Stream

  • Today's Birthdays

    1. Samurai
      Samurai
      (46 years old)
  • Who's Online (See full list)

  • My Clubs

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets

facebook

×
×
  • Create New...