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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.

Recharge Wrap-up: Toyota Prius airbag recall, Peugeot launches eU01s e-bike

Toyota is recalling 7,600 Prius vehicles for an airbag issue. Certain examples of the 2016 Prius could have malfunctioning inflators that could cause the passenger side airbags to deploy accidentally. There are no known injuries from the faulty airbags, but Toyota says, "This has been observed when the vehicle is parked and unoccupied for a period of time." Toyota also says this issue is unrelated to the massive recall of airbags supplied by Takata. The automaker will contact affected owners to arrange free repairs. Read more at Automotive News. Peugeot is adding another e-bike to its portfolio with the eU01s. What sets this electrically assisted bicycle apart from both regular bikes and other pedelecs is its ability to propel the bike to 28 mph under electric power. It comes with either a 400- or 500-Wh lithium-ion battery, providing 47 or 59 miles of range, respectively. It also offers an optional on-board computer with its 4.3-inch screen, through which riders can customize the electric assistance, get directions, receive sports coaching, and connect their smartphone. Earlier this year, Peugeot also launched its e-Kick scooter and folding eF01 e-bike. Read more at Green Car Congress. BYD is expanding its manufacturing facility in the US. In the second of three phases for the plant, BYD is adding onto its factory in Lancaster, California, where it currently builds electric buses. The Chinese company plans to triple the number of employees, up from the current 400, as it expands the facility by 40,000 square feet. BYD plans to build medium- and heavy-duty trucks at the plant, but declined to comment on whether it has plans to build light-duty vehicles there. Read more at Automotive News. The German states of Hesse and Baden-Wuerttemberg are suing Volkswagen over the Dieselgate scandal. The states are joining other investors seeking damages over losses incurred because of the automaker's emissions cheat device. Hesse Finance Minister Thomas Schaefer said the scandal cost the state about $4.4 million in stock losses, while Baden-Wuerttemberg likely lost closer to $450,000. Bavaria said earlier that it would sue Volkswagen on behalf of its pension fund for civil servants, which lost around $780,000. Read more from Automotive News Europe.

2015 Volkswagen GTI: Clicking, beeping, and trying to stay cool [w/video]

My first car didn't have air conditioning. Well, that's not entirely true. The car had A/C, it just didn't work. Nevertheless, I survived summer after summer of sweating behind the wheel – par for the course in a 15-year-old Mitsubishi with 235,000 miles on the odometer. But it's another thing entirely when that same experience happens in a 2015 Volkswagen GTI after just 7,000 miles of use. That's how Autoblog kicked off summer with the long-term GTI: sweating in plaid seats. The car went to Suburban Volkswagen in Troy, MI, where the technicians told me the air-con just needed a recharge (despite asking them to inspect it further). They recharged it, the air blew cold, and 48 hours later, the A/C stopped working again. (Surprise!) The problem was a leak in the compressor/condenser line, so a new one was installed, the system was charged, and now it's fixed. For real this time. Unfortunately, that second-coming happened during a road trip with editor-in-chief Mike Austin at the helm. His logbook comments are, as you'd expect, appropriately salty. "Everybody loves the GTI, right? Not quite. I drove to Toronto for a weekend. On the way home, the A/C quit working. This wasn't too much of a problem until we hit the border control line to re-enter the United States. I always pick the slow line, somehow. Thusly baked in the heat, with outside temperatures above 80, the GTI didn't cool back down for the rest of the trip. Then I learned we already fixed the A/C once." "Of course, any car on that day with a surprise A/C failure would earn my ire," Austin notes. "It just seems a little more irritating on a new car. Otherwise, yeah, this is a great car." A great car, indeed. Everyone loves spending time with the GTI. It's got plenty of power, it's quiet, it's comfortable, and it eats up highway miles. We've got just over 10,000 miles on the odometer as of this writing, and as summer carries on, many editors have requested extended periods of seat time in the GTI for weekend getaways and longer road trips. But it's still not perfect. Following the A/C fiasco, there's another, more curious problem plaguing the GTI. Every time the car starts, a weird, varied-tempo, loud clicking is heard from the dash. We think it's coming from the direction of the glovebox, and it's not the same click patten every time. Sometimes it's one or two knocks, sometimes it's several. See what I mean in the video below. Weird, right? Another trip to Suburban Volkswagen offered no help.