Asian carmakers are taking hits to their profits from having to spend more to move metal in America. Nissan Motor Co. and Hyundai Motor Co. both cited higher incentive spending in the U.S. as reasons behind a slump in quarterly profit, with a political backlash in China adding to a cloudy outlook for Hyundai, South Korea’s largest automaker. More evidence of the industry’s pain is likely to come next week, with Toyota Motor Corp. and Honda Motor Co. scheduled to report earnings.
Fiat Chrysler Automobiles NV said its net profit nearly tripled from a year ago to a record 1.2 million euros ($1.4 billion) on strong results in its international regions as well as from Maserati and its components business. The gains came on flat revenue. “It was a strong quarter,” Chief Financial Officer Richard Palmer said in a call with analysts and investors. “With the progress we’ve made in the first half of the year, we are confirming our full-year guidance.”
Ford Motor Co. will continue cleaning up harmful chemicals discovered in the groundwater and soil around the Livonia Transmission Plant and will submit plans to prevent future contamination, according to a settlement filed with the state. Ford has been investigating and abating the contamination since it was discovered in 2014, according to the lawsuit filed in U.S. District Court. Ford said in early 2016 that samples with potentially cancer-causing chemicals were found seven feet or more underground, but those chemicals pose no health risk to residents.
Germany’s high-end carmakers face a potentially destructive new scandal after European antitrust authorities said that they were looking into allegations that Volkswagen, Daimler and BMW colluded illegally to hold down the prices of crucial technology, including emissions equipment. If proven, the allegations threaten to further damage the country’s reputation for engineering excellence. That reputation has already been badly tarnished by Volkswagen’s admission that it illegally installed software in its diesel-powered cars to evade standards for reducing smog.
Over seven years, California has spent $430 million on low-emission vehicle subsidies to help lower the cost for car buyers. Now the state Legislature is looking to extend that by another seven years, but with a price tag of $3 billion. Assembly Bill 1184 is being slammed for leaving basic questions unanswered, including the biggest one: Where would the money come from?
General Motors has put six of its cars under review and is evaluating whether to cancel them in the coming years. The news comes as sales of cars continue to plummet in the U.S. and as consumers increasingly turn to SUVs and pickups. The company is considering plans to eliminate the Chevrolet Volt hybrid, the Buick LaCrosse, Cadillac CT6, Cadillac XTS, Chevrolet Impala and Chevrolet Sonic.
Ford is fighting the latest expansion of the Takata air bag inflator recall. Earlier this month, Takata filed documents with the U.S. government adding 2.7 million vehicles to the recall from Ford, Nissan and Mazda. All have inflators with a drying agent that previously were thought to be safe.
Lyft said that it is setting up its own unit to develop autonomous vehicle technology, but its approach will be different from other companies and partnerships working on self-driving cars. The San Francisco-based ride-hailing service says it will open its network, inviting automakers and tech companies to use it to haul passengers and gather data. It may even share computer software and sensor technology.
While a proposed border adjustment tax on goods including cars and trucks appears to have been pulled off the political stove by House Republicans, the North American Free Trade Agreement is still on a burner. A new study commissioned by the Motor & Equipment Manufacturers Association and conducted by Boston Consulting Group suggests that the U.S. leaving NAFTA would drive up prices of vehicles sold in the U.S. through suggested tariffs on autos and auto parts coming into the U.S. from Canada and Mexico. A renegotiation of NAFTA, however, could benefit the auto industry, said Ann Wilson, senior vice president for government affairs for the association.
United Auto Workers President Dennis Williams said he is “confident” the union can win a vote at Nissan’s Canton, Mississippi, plant early next month, which would mark a major victory for the union in its attempts to organize in the South. Williams, who met with members of the media at the union’s headquarters in Detroit, said he feels at the moment that the vote will pass, but cautioned that “any campaign you do is an ongoing evaluation.” He said the UAW has received reports of Nissan employees intimidating plant workers that the Canton factory could close, or other things would change if the plant was unionized.
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