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China's tariff of 25% on cars imported from the U.S. is a  poor target says this report in WSJ, as most of the cars China imports from the U.S. are made by BMW, Mercedes and Tesla. China already has a 25% tariff on U.S. made cars.

The German cars are made at the Spartanburg plant and other plants of BMW and Mercedes in the southern U.S.

Tesla cars would also be hurt yet Tesla has supported the Trump administration tariffs as the existing 25% tariff makes it harder for Tesla to compete in the Chinese market. U.S. and European carmakers cannot hold more than 50% foreign ownership under China's rules in its auto market. As a result U.S. carmakers already have joint ventures in China and make most of the cars they sell inside China.

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What if car buyers have to pay all cash absent the ability for people with good credit to get loans, a scary development for the auto companies. Analysts say tight credit was a crucial factor in the 27% drop in September sales. About 31% of all nonluxury sales in the last week of September were all cash deals, says Libby chief market analyst JD Powers. And down payments are much higher than before. Abd lease deals are dropping from 16% till late July 2008 to 9% in the last week of September 2008. Whats unprecedented is that buyers with credit scores in the upper 700's are being turned down and that is sure to trigger even more declines in the next few months. And dealerships are closing 600 of 20,770 already losed this year.

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Small airports that are popular- Wichita, Hagerstown, Orlando, Charlotteville, Albany. It is easier to get to these airports and hire a rental car, get your bags, and not have to fight traffic.

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The expansion plans of VW will add more competition into the US market which is declining. Martin Winterkorn ran VW's Audi business. He became VW's new CEO this year and brings a new leadership perspective to his job. He has several new strategies. In the area of pricing he wants to reduce unneeded features such as external mirrors that fold inward for narrow European streets, and bring down the price of VW Jetta and Passat models to be competitive with Toyota's Corolla and Camry models. Currently a Jetta is $17,000, a Corolla is $ 15,200 and a Passat is $23900 compared to a Camry at $20,000. VW's plans are to set a sales target of 1 million cars by 2018, tripling sales in ten years from the current 330,000 vehicles. In the next 3 years to 2010 sales world wide are expected to increase by 12 to 15%, VW wants to capture a bigger share by seeing its sales increase by 30% from the six million units today to 8 million units by 2010. Winterkorn sees this as possible given that VW has a more centralized management structure now which makes for quicker decisions. VW is also working on a new family of small fuel efficient cars on a common platform to be sold in China, India and other markets where a small car will be popular. Winterkorn referred to its new concept car as an example of the direction this would take. As importing cars from Europe is becoming costlier with the strong euro and the Japanese in contrast have the advantage of a weaker yen, the expansion plans will require lower pricing. VW looks to build a plant in the USA. Another strategy is to add 12 new models to its global product line and to launch more new vehicles in new product segments. This is what Winterkorn thinks has given Toyota its increased sales. A new compact SUV caled the Tiguan will be introduced. What all this means is that VW is seeking to move buyers of Japanese and American cars to try German cars, make German cars cost less and make a strong showing in the American and global markets. ...

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The new price of the Leaf is $35,200 for the 2012 model year as more features were made standard by Nissan. The Leaf will now cost $27,700 after a $7,500 federal tax credit in the U.S. The higher price also reflects the stronger yen as the Leaf is made in Japan. Every Leaf is sold from a waiting list, with sales in only some states- including Arizona, California, Hawaii, Oregon, Tennessee, Texas and Washington. Nissan's marketing chief, Brian Carolin, says about 1000 vehicles a month will be sold for the remainder of 2011. The average customer of the Leaf drives the car with an all electric range of 75 miles, for 30 miles each day and charges it for 3 hours a day. Average household income is $140,000. The 2012 standard model comes with a cold weather package, heated seats, battery warmer and steering wheel, and a fast charging arrangement that gets it recharged in 30 minutes, instead of the 8 hours.

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Most people are not aware that EU had 10% tariff on US car imports into the European Union over many decades. US tariff was only 2.5%. The US tariff of 15% on EU car imports into the US in 2025 comes after EU recalcitrance for decades in lowering its tariffs on US car imports.  German carmakers have prepared for the higher tariff and EU car stocks were up as this is a lower tariff than the initial tariff of 25%. German car makers export luxury cars with higher margins which offers some offset as well as increasing efficiency in car making so that only a small part of this will be passed on to the US car buyer. An offset to the US car buyer is in the One Big Beautiful Act of 2025 which lets car buyers deduct the interest costs of leasing a car. The result is that US car industry will have the advantage it has long been deprived of and American car buyers will not be affected in the way the media has presented, or not at all. Over time German car industry will also do well with its access to the growing American market. Germany will lower its tariff on US car imports to 2.5% from 10% which makes it profitable for BMW and Mercedes to make SUV's in the US to export to Germany and EU, making this a win-win for US and EU. ...

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The auto industry has only itself to blame for shaping and sustaining the retrograde world it finds itself in, says Politico magazine. GM supported the Trump administration's efforts to push back the fuel efficiency rules setup earlier. With Chrysler and Ford it went a step further in getting out of cars altogether and having a line of SUV's and other vehicles. This step is seen as retrograde and a result of several possible lines of thought among the car executives in Detroit. One is that the SUV higher profits would provide a cushion as this cycle in the industry's revival comes to a close. Another is that in a situation where GM's shares are depressed while Tesla with no profits is seeing a higher valuation, this could increase its share price. This has not happened and President Trump is as critical of the layoffs of 15% and closure of plants in GM's announcement, as Democratic senator Bernie Sanders is. Still another is that GM needs to prepare for all the tech changes happening in driverless cars, new tech advances, that a move like this would better prepare itself for the new world of transportation. This remains nebulous however and GM has failed to take account of the fact that only a short time ago about half of all car buyers were still not buying SUV's. Gas prices are volatile and will continue to be so that strategy cannot be based on cheap gas prices and SUV profits.    ...

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As remittances fall and in some places disappear from workers in developed countries to their families in developing countries, Kristof says about 46 million people there will fall into poverty. Something Zoellick of the World Bank has been warning for some time. Everything from food, school lunches, tution for children to go to school, housing, will be affected.

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Teh Reva Electric Car Company in Bangalore, India. GM's electric version of the Chevy Spark will use Reva's technology. THis electric version will go on sale in India by the end of 2010.

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How in the last days before bankruptcy Chrysler executives pushed dealers to take therir allottment of cars even though they had unsold inventory sitting in their showrooms as sales plunged over 50% for Chrysler, the worst hit among all the carmakers. Dealers say this was aveiled threat to take the cars or face being terminated. For Jim Press and Chrysler this was about "You can help us, or burn all of us down," as Chrysler sturggled to show its viability to the government. See link to where White House economic adviser Summers argued against Obama adviser Austan Goolsbee's advice to let Chrysler go out of business, as there was too much capacity in the car business.

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Mercedes is seeing signifcant sales growth in China. It is Mercedes's third biggest market with sales of 100,000 cars compared to 67,000 in 2009. Daimler CEO Dieter Zetsche says that given no downturn in the world economy Mercedes-Benz cars should reach its target for return on sales of 10% by the second half of 2012. He predicted EBIT of 2.5-3 billion euros for 2010, and plans to boost expenditures for R&D in fuel efficient technology and capital investments in new vehicle models in the second half of 2010. Analyst Warburton at Sanford and Bernstein, writes that Mercedes is likely to pass 7% margins in the first half of 2010, and will get a boost from a weaker euro plus strong sales in China. The only question is, as Dieter Zetsche noted, prospects depend on no downturn in the global economy. China's economy is growing too fast to be sustainable growth and a property bubble is developing, and its not certain how long strong sales in China will last. There are other signs of a slowdown in the global economy. See global economy....

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The new J.D. Powers Quality Survey put out in Feb 2013 showed the Lexus, Toyota, Mercedes, Buick, Chevrolet, Lincoln and Dodge Ram brands performing at the top level in number of problems reported by owners of 3 year old vehicles. Land Rover, Jeep and VW brands did poorly. Most of the Chrysler Dodge cars performed poorly. The redesign of vehicles initiated by Fiat Chrysler CEO Marchionne does not show up in this study. The redesigned Jeep and other vehicles will show in next years study. The study also showed buyers of economy vehicles were likely to switch easily when buying another car. New models are showing fewer problems and are more dependable compared to previous years, with the average number of problems declining from 170 per 100 vehicles in 2009, to 132 in 2011, and 126 in 2012.

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This Perspectives piece in the DW.com says the German government has little option but to support the federal Leipzig court ruling in favor of banning diesel cars in cities with high pollution levels. It says the best days of diesel engine cars are over in Germany and in Europe. The downward trend after the VW diesel emissions scandal affected public confidence, the pressure from the European Union with the strict Euro 66 standards and the failure of many German cities to meet the EU nitrogen oxide standards, and this ruling by the courts, all mean says DW.com that the best days of diesel are over.