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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.

BMW already considering four cylinders for next M3

The cylinder count in BMW's M3 has fluctuated over the years. The original M3 debuted in 1985 packing a 2.3-liter inline-four, but subsequent models went with sixes until the outgoing generation upped the cylinder count to eight. With its latest model, BMW has dropped back to six cylinders with a pair of turbos taking the place of the extra pistons. But the next M3 sedan and M4 coupe could go back to the model line's roots with a four-cylinder engine.
Speaking with BMW M product manager Carsten Pries at the launch of the latest M3 and M4 in Portugal, our Aussie compatriots at Motoring.com.au report that "you could see a future [M3] powered by a four-cylinder engine." Offsetting the reduction in cylinders, the lighter engine would benefit the vehicle's weight and balance, thus enhancing performance.
We wouldn't expect the next M3 and M4 to lose any power in the process, though: Output in the M3 has only risen over the generations, from 192 horsepower in the four-pot original to 282 hp in the six-cylinder E36, 338 hp in the six-cylinder E46, 414 hp in the V8 E90 and 425 ponies in the new turbocharged six-cylinder F80 model. With that latter model having just debuted, it'll likely be a good six or seven years before the next version comes along, giving BMW plenty of time to settle on an engine - however many cylinders and turbochargers it has. In the meantime, you'll have to forgive us for taking a romp down M3 memory lane in the fresh gallery of images above.

Are you a BMW M4 GTS track car in disguise?

BMW is always happy to extract a little bit more gumption out of its M cars, just look at the latest 30th anniversary M5 or even the earlier CSL variants of the M3 for proof. Now, It looks like we might be getting the first glimpse of an even hotter M4, and it's wearing very interesting livery.
Our spies recently shot this M4 that could preview a future GTS version. It's all done up in MotoGP decals, but that might just be a ruse. This car sports a camouflaged lower air dam and rear wing, but those parts don't appear to be from an actual series safety car. The chin spoiler seems larger, and the rear wing is completely different. You can also spot an obvious Recaro logo on the driver's seat in one of the photos. Plus, the BMW emblem is removed at the back.
The disguised changes and odd choice of decals make this prototype incredibly weird. A BMW exec said at the beginning of the year that there were "no plans whatsoever to make a lighter, harder version just yet," of the M3 or M4, despite earlier rumors to the contrary. Check out the gallery to see what you think this is.