Feb 18 - By Nick Carey, European Autos Correspondent
Greetings from London!
Under the new Trump administration, the tariff threats just keep on multiplying.
Within the last five days alone, U.S. President Donald Trump has threatened auto tariffs will come in April and has directed his economic team to plan reciprocal tariffs on every country that taxes U.S. imports – a move that would affect European auto exports to the United States. All this follows a theoretical March 12 start date for 25% tariffs on all U.S. imports of steel and aluminum.
The EU's competition chief tells Reuters that Trump has upended the "trustful relationship" between the United States and Europe. But on a broader level, automakers are now faced with a confusing mélange of tariff threats that will likely chill investment across much of the sector.
Automakers like certainty for major investment decisions. Unfortunately, right now the only certainty is chaos.
Which brings us to today’s Auto File…
Honda and Nissan call it quits
BYD gets some customer pushback
VinFast struggles outside Vietnam
Honda and Nissan fail to seal a deal
Honda and Nissan made major headlines in December when they announced merger talks that could lead to the creation of the world’s fourth-largest automaker.
But those talks to create a $60 billion car company collapsed in the last week, bringing even more uncertainty for Nissan in particular.
My Reuters colleagues Maki Shiraki, Daniel Leussink and Norihiko Shirouzu report that Nissan's pride and insufficient alarm about its predicament, as well as Honda's abrupt decision to propose Nissan become a subsidiary, caused the merger talks to unravel. You can read their report here.
Honda, however, may be willing to restart talks if Nissan CEO Makoto Uchida steps down.
Nissan is in many ways the poorest performer among the major traditional automakers, suffering from years of crisis and management turmoil sparked by the 2018 arrest and ouster of former chairman Carlos Ghosn.
Foxconn, which had been seen as a potential suitor for Nissan, says it would rather cooperate with the automaker than buy it.
Nissan’s main problem now is that there are not many buyers out there looking to buy a struggling automaker. Or as one analyst put it to Reuters: “They don’t have a dance partner right now.”
Recommended reading:
BYD’s Brazilian lithium bonanza
Bridgewater adds Tesla to portfolio
Scania buys Northvolt’s industrial battery business
BYD’s smart move backfires
BYD made headlines last week by suddenly offering advanced autonomous driving features on most models including ones priced as low as $9,555, giving it an apparent advantage in China’s grueling EV price war.
But BYD owners who bought their cars before the announcement flooded a prominent Chinese auto quality platform complaining this meant they had overpaid for their cars.
Over 4,700 complaints were filed against BYD cars between February 11-17 on 12365auto.com, a third-party auto consumer complaints platform, compared with about 150 the week before and roughly 500 for January.
One customer complained that before buying their car they had repeatedly asked the salesperson if a newer model would be launched this year, only to discover a couple of weeks later that BYD had issued multiple upgrades of the vehicle at the same price.
As Tesla discovered two years ago when its price cuts saw hundreds of owners assemble at the company's Chinese showrooms and distribution centres seeking rebates and credits, upping the ante in a price war is not popular with everyone.
VinFast’s foreign buyer problem
Vietnamese EV maker VinFast sold nearly three times as many cars last year as in 2023, but the problem for an automaker bent on aggressive foreign expansion is that almost all those sales were in its home market. My Reuters colleague Phuong Nyugen writes about it here.
The startup is pursuing an aggressive but costly expansion strategy in Vietnam, where sales were also boosted by a much cheaper, smaller model.
The company said it planned to at least double global sales this year.
VinFast wants to expand abroad, but has so far struggled to attract foreign buyers.
The problem is the EV maker lost nearly $2 billion in the first three quarters of last year, after posting $2.4 billion in losses in 2023.
That is already putting pressure on its parent company, Vietnamese conglomerate Vingroup, so VinFast needs to boost sales quickly to keep the money flowing.
GM to close China plant
General Motors’ painful restructuring in China continues. The U.S. automaker will close a plant this month in the northeastern Chinese city of Shenyang, a company source told my Reuters colleague Kalea Hall. You can read about it here.
The plant makes Buick GL8 minivans and the Chevrolet Tracker SUV for the China market.
GM has been forced to restructure its business in China, where domestic manufacturers have taken over the market.
In the fourth quarter, the Detroit automaker reported $4 billion in restructuring charges in China, which included plant closures.
Fast Laps
Tesla is looking to hire senior staff in India, signalling progress in the EV maker's plans to enter the world's third-biggest auto market, less than a week after CEO Elon Musk met Indian Prime Minister Narendra Modi in Washington.
Renault and China's Geely have reached an agreement to produce and sell zero- and low-emission vehicles in Brazil.
Stellantis will make dual-clutch transmissions for hybrid vehicles at its Termoli plant in Southern Italy, which its joint venture ACC has earmarked for the creation of an electric vehicle battery-making hub.
Volkswagen has issued internal targets to boost the profit margin for sales from its VW car business to 6.5%, up from about 2% previously reported, news website Business Insider said.
U.S. Senate Republicans have proposed a pair of bills to kill the country's $7,500 electric vehicle tax credit and impose a new $1,000 tax on EVs to pay for road repairs.
A federal judge has rejected a challenge by a group representing automakers to a Massachusetts voter-approved measure that expanded access to vehicle data and allowed independent shops to repair increasingly sophisticated automotive technology.
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(Editing by Alexandra Hudson)
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