German carmaker's shares fall amid Trump's return and concerns over US tariff hikes

German carmaker's shares fall amid Trump's return and concerns over US tariff hikes

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By: bloomberg
, updated on: 08 November 2024, 09:39 am

Stocks in BMW AG and Porsche AG declined on concerns over potential US tariff hikes, with BMW falling 6.8 percent and Porsche reaching a two-year low.

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During his campaign for the presidential elections, Trump has said that he intends to impose tariffs on foreign-made cars imported into the US in order to protect local jobs. (Reuters)

Shares of German automakers led by BMW AG and Porsche AG fell on concerns that the US might raise tariffs on imported cars after Donald Trump returns to the White House.

BMW, which earlier Wednesday reported disappointing quarterly earnings, fell as much as 6.8 percent in Frankfurt. Porsche, maker of the 911 sports cars, fell to its lowest intraday price since the stock began trading more than two years ago.

Also read: Analysts reduce EV development expectations in America after Donald Trump's return

Additional tariffs would hurt German automakers, which ship more vehicles to the U.S. than any other country. The market is becoming increasingly attractive to them due to strong demand for large sport utility vehicles and a slower shift toward EVs than in Europe, allowing them to sell more of their higher-margin combustion-engine models.

During his campaign, Trump said he planned to impose tariffs on foreign-made cars shipped to the US to protect local jobs.

Mercedes-Benz Group AG declined 4.9 percent. Volkswagen AG fell as much as 4.4 percent.

Also read: Nissan cuts 9,000 jobs, halves CEO salary, here's why

German automakers operate several factories in the US where they produce cars for both local buyers and exports – meaning any European retaliatory measures could compound the damage from the trade dispute.

The conflict with the US would create another problem for the Germans, who already face stiff price competition in China and lower demand in Europe.

“Trump is pursuing a distinctly protectionist agenda that relies on higher import tariffs and more restrictions on international trade,” Clemens Fuest, president of Germany's Ifo economic research institute, said on Wednesday.

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First publication date: 08 November 2024, 09:39 am IST

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Germany urges compromise in EU-China EV dispute

Germany urges compromise in EU-China EV dispute

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By: AFP
, updated on: 02 November 2024, 10:02 am

  • The German automotive sector condemned the recent tariffs, calling them harmful to business and employment.
Germany voted against the additional tariffs and has urged both Beijing and Brussels to find a compromise. (AFP)

The German government on Wednesday urged the EU and China to reach a compromise, a day after Brussels announced additional tariffs on Chinese-made electric cars.

“Both Brussels and Beijing are being urged to find sustainable and creative solutions through ongoing dialogue,” said Stefan Habestreit, a spokesman for Chancellor Olaf Scholz, in Europe's biggest economy, whose key auto industry is beset by problems. .

Germany voted against additional tariffs, measures which Habestreit said would “naturally draw a reaction from the Chinese side”.

Also read: Chinese EV makers see decline in EU sales as tariff dispute deepens

“These kinds of trade disputes are not something we should even aspire to,” he told a news conference.

New tariffs of up to 35 percent were announced by the European Commission on Tuesday after an EU investigation found that Chinese state subsidies were undermining European automakers.

Beijing said on Wednesday it had filed a complaint with the World Trade Organization, with China's commerce ministry vowing to “take all necessary measures to firmly protect the legitimate rights and interests of Chinese companies.”

Negotiations are ongoing between the EU and China and the tariffs could be lifted if both sides reach a satisfactory agreement.

Suggested Watch: Volkswagen Virtus crosses 50,000 sales mark in India but what made it so popular?

On Tuesday, Germany's Automotive Industry Association, which represents car giants such as Volkswagen, BMW and Mercedes, called the tariffs “a step backward for free global trade and thus a step back for prosperity, job protection and growth in Europe.” told.

Volkswagen warned on Wednesday that “painful” cuts were on the way as it announced a fall in third-quarter profits due to falling sales in China, its biggest market.

At least three German VW plants are at risk and thousands of jobs at the namesake brand could be lost, labor representatives said this week.

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First publication date: 02 November 2024, 10:02 am IST

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Trump claims Chinese automakers are building factories in Mexico, promises 200% tariffs

Trump claims Chinese automakers are building factories in Mexico, promises 200% tariffs

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By: AP
, updated on: Sep 18, 2024, 08:57 am

Trump made false claims about Chinese auto factories in Mexico, threatening to impose heavy tariffs on vehicles. He warned that a Harris win would devastate the economy

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Donald Trump is not a fan of electric vehicles, nor is he interested in subsidies for these. He is running for President of the United States again and has expressed his views on EV subsidies on several occasions. (Reuters)

Former President Donald Trump on Tuesday repeated false claims that Chinese automakers are building huge factories in Mexico. During a stop in the automobile state of Michigan, he vowed to impose a 200 percent tariff on all vehicles built in these unbuilt plants and shipped to the United States.

Trump also claimed during an event in Flint that if Democratic Vice President Kamala Harris is elected in November, there will be no auto industry in the US because electric vehicle manufacturing will move to China.

The statement comes at a time when employment in the automobile sector has grown since President Joe Biden took office in January 2021, after declining during Trump's first term.

Also read: Stellantis will no longer receive EU funding for Gigafactory in Italy

“If I don't win, within two to three years you're going to have no auto industry,” Trump said, calling any growth under Biden and Harris temporary. “You're going to have no manufacturing plants. China is going to take them all over because of the electric car.”

He told the crowd that he would force foreign automakers to build factories in the U.S. by imposing tariffs on imported vehicles, saying it would be “like taking candy away from a baby.”

Foreign automakers already have several factories in the US, mostly in the southern states.

Auto jobs fell 0.8 percent during Trump’s tenure to a little over 949,000 in January 2021, when he left office, according to the Bureau of Labor Statistics. Since Biden took office that month, auto and parts jobs rose 13.6 percent in August to 1.07 million, so there’s no evidence the industry is disappearing. Auto sales rose 2.4 percent in the first half of this year.

Also read: JSW MG Motor to launch four premium models – Here’s our expectations

Trump said his tariffs would prevent Chinese vehicles made in Mexico from being sold in the United States, forcing automakers in China and elsewhere to set up factories in the United States.

“They're being owned and built by China in Mexico, and there are several being built there right now,” Trump said of the Chinese factories.

See: BMW Retail.Next: The way we buy cars is changing

Although some Chinese automakers aspire to sell in the U.S., industry analysts say no major Chinese-owned auto factories are under construction in Mexico, and only one small Chinese auto assembly factory is in operation there, run by a company called JAC that builds inexpensive vehicles from kits for sale in that country.

Trump also promised to impose tariffs on vehicles made in the U.S. if other countries impose taxes on vehicles made in the U.S. But tariffs often end up being levied on consumers in the country that assesses them.

The Harris campaign released a statement from Michigan Senator Gary Peters saying a second Trump term would kill auto jobs, “handing Michigan's global auto manufacturing leadership over to the Chinese government.” He said Harris has a plan to bring good-paying manufacturing jobs home “and ensure Michigan workers continue to lead the world in auto manufacturing.”

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First Publication Date: Sep 18, 2024, 08:57 AM IST

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Lotus slashes delivery targets due to tariffs on Chinese electric vehicles

Lotus slashes delivery targets due to tariffs on Chinese electric vehicles

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By: Bloomberg
, updated on: 01 September 2024, 08:17 am

Electric carmaker Lotus Technology Inc, owned by China's Geely, has slashed its annual delivery target by more than half because of the tariffs.

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Lotus Technology, the EV arm of the British sports car maker, has cut its annual delivery target by more than half amid increased tariffs on Chinese electric vehicles and weak demand. (Lotus)

Electric carmaker Lotus Technology Inc., majority-owned by China's Geely, has slashed its annual delivery target by more than half amid tariffs on Chinese-made electric vehicles and weak demand.

The company, which listed in February after being spun off as the EV arm of the British sports car maker, said on Wednesday it now expects to deliver 12,000 vehicles this year, down from a previous target of 26,000.

Shares in Lotus Technology fell 4.3 percent in early trade in New York, having lost nearly half of their value since listing.

Also read: Chinese EV makers suffer setback in Europe as tariffs begin

The lower target comes after the U.S. and the European Union planned to impose tariffs on EVs imported from China, where Lotus Technology is based and makes some models. The EU, which has accused China of unfairly subsidizing carmakers, has raised the prospect of imposing tariffs as manufacturers such as BYD Co. have begun to enter Europe more aggressively with cheaper EVs.

The outlook cut is a blow to investors who backed the company when it listed in February. At the time, Lotus said its range of luxury EV models and an alliance with luxury goods giant LVMH would help it avoid the same struggles as rivals.

Zhejiang Geely Holding Group, the automotive empire of billionaire Li Shufu, rescued Lotus in 2017 after the carmaker suffered as consumers turned to SUVs. The company is building electric models priced between $80,000 and $150,000, including more SUVs.

Also Read: Mahindra Thar Rocks – Here’s What It Misses

The British sports car division is separate from the listed entity and is wholly owned by Geely.

Geely has faced similar problems with other brands it supports amid a broader slowdown in EV demand. Polestar has lost about 90 percent of its value since it was spun off from Volvo Car AB two years ago.

Geely also has stakes in Mercedes-Benz Group AG and Aston Martin Lagonda Global Holdings PLC.

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First Publication Date: 01 Sep 2024, 08:17 AM IST

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