2015 Porsche 911 on 2040-cars

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U.S. tariff threat hits European automakers' stocks

FRANKFURT, Germany — A U.S. warning that it may introduce tariffs on foreign auto imports hit shares in German carmakers BMW, Daimler and Volkswagen on Thursday, which together have a more than 90 percent share of North America's premium car market. Washington said on Wednesday it had launched an investigation into whether car and truck imports are a national security issue due to signs they had damaged the U.S. auto industry. That could lead to new U.S. tariffs — up to 25 percent — similar to those imposed on imported steel and aluminum in March. BMW and Daimler shares fell as much as 3.1 percent in early Thursday trading, while Volkswagen's dropped as much as 2.5 percent. "(U.S. President) Donald Trump is obviously not thinking about how to prevent a trade war. Import duties on cars would be a nightmare for the German auto industry and would lead to a massive sales impact," said Thomas Altmann at Frankfurt-based asset manager QC Partners. BMW on Thursday condemned the move to consider tariffs. "The BMW Group is committed to free trade worldwide. Barrier-free access to markets is therefore a key factor not only for our business model, but also for growth welfare and employment throughout the global economy," it said. Daimler, which makes Mercedes-Benz cars, and Volkswagen, which makes upmarket Audis and Porsches, were not immediately available for comment. German carmakers produced 804,000 cars at local factories in the United States and exported 657,000 German-made cars into North America last year, according to German auto industry association VDA. China took pains on Thursday to welcome German firms and investments, with Premier Li Keqiang talking up relations after a meeting with German Chancellor Angela Merkel. BMW and Mercedes have expanded production capacity in the United States, but BMW, Audi, Volkswagen and Daimler have also invested billions to build new factories in Mexico in the hope of selling locally produced cars into the United States. German carmakers hiked vehicle production in Mexico by 46 percent to 620,000 cars last year, while production levels inside the United States fell by 6 percent to 804,000 cars because of a shift to Mexico, according to the VDA. BMW has its biggest factory worldwide in Spartanburg, South Carolina, and is the largest vehicle exporter among all the carmakers in the United States measured by value of goods exported. More than 70 percent of BMW's U.S.-made cars are exported.

Porsche 911 R is made for the purist

Who wouldn't welcome a new version of the Porsche 911 with ultra-light weight, a GT3 RS motor, a stripper interior, and a core philosophy of driving fun over outright lap times? The iconic Porsche 911 has been getting larger and more complicated with each passing generation, and that hasn't sat well with every engineer at Porsche. So there's a ready market out there for 911 R, a limited-edition show stopper of just 911 cars, due to start production in Zuffenhausen, Germany, in May. It's a car that combines a unique version of the six-speed manual gearbox, plenty of raw, naturally aspirated flat-six power, and all the feel of a cut-price version of the 911 GT3 RS pseudo racer. Yes, Porsche is bringing the beloved six-speed stick back to the sharp end of the 911, even though the brand's quickest cars are now dominated by the seven-speed dual-clutch transmission (and the less loved seven-speed manual). Porsche insists that the RS is still the 911 to have if it's stopwatch-bashing you need to do. Instead, the 911 R developers focused on trying to give it the most driving purity it could cram in. The most traditional way for motorsport operations to do that has always been to rip out weight. And Porsche Motorsport didn't diverge from the plan. The 911's rear seats have been thrown out, along with a raft of other pieces Porsche Motorsport thought it could either do without completely, redesign to be lighter or stronger, or both. View 18 Photos The R cuts 110 pounds from the next-lightest 911 variant, hitting 3,020 pounds on the scales. The pound-cutting starts at the body and bores all the way into the 911 R's chassis components, though there are some obvious nods to the marketing department that survived the dietician's axe. There is a lot of 911 GT3 in the body, with a combination of a carbon fiber (bonnet and front guards), a magnesium roof, polycarbonate front and side "glass," and aluminum everywhere else. The R cuts 110 pounds from the next-lightest 911 variant, hitting 3,020 pounds on the scales. While the 911 R has lurid (and deletable) red or green racing stripes as standard, it's not supposed to be as wild looking as the GT3. Porsche replaced the GT3's adjustable, tall-standing rear spoiler with a more-subtle pop-up version, and the R uses a rear diffuser under the bumper to offset any loss of rear downforce. The rear seats are gone, and the two remaining seats use carbon fiber shells upholstered in tartan cloth (another nod to early 911s).

Dealers mobilize to protect their margins from automaker subscription services

Six individual auto brands — Lincoln, Cadillac, Porsche, Mercedes, BMW and Volvo — have established or are trialing a vehicle subscription service in the U.S. Three third-party companies — Flexdrive, Clutch and Carma — run brand-agnostic subscription services. And three automakers — Mercedes-Benz, BMW, and General Motors — have also launched short-term rental services. Dealers, afraid of how these trends might affect their margins, are building political and lawmaking campaigns to protect their revenue streams. So far, three states are investigating automaker subscriptions, and Indiana has banned any such service until next year. It's certain that those three states are the first fronts in a long political and legal battle. Powerful dealer franchise laws mandate the existence of dealers and restrict how automakers are allowed to interact with customers to sell a vehicle. On top of that, Bob Reisner, CEO of Nassau Business Funding & Services, said, "Dealers and their associations are among the strongest political operators in many states. They as a group are difficult for state politicians to vote against." In California earlier this year, the state Assembly debated a bill with wide-ranging provisions to protect against what the California New Car Dealers Association called "inappropriate treatment of dealers by manufacturers." One of those provisions stipulated that subscription services need to go through dealers, but that item got stripped out when dealers and manufacturers agreed to discuss the matter further. In Indiana, Gov. Eric Holcomb signed a moratorium on all subscription programs by dealers or manufacturers until May 1, 2019, to give legislators more time to investigate. Dealers in New Jersey have taken their campaign to the state capitol, asking that the cars in subscription programs get a different classification for registration purposes. Automakers run the current subscription services and own the vehicles. Sign-ups and financial transactions happen online or through apps, leaving dealers to do little more than act as fulfillment centers to various degrees, with little legal recourse as to compensation amounts when they're called on to deliver or service a car. That's a bad base to build on for business owners who've sunk millions of dollars into their operations.