Punitive Tasks in the Automotive Industry: Which Car Builders Harm Trump? – Economy

Ferdinand Dudenhöffer, founder and director of CAR Automotive Research Center at the University of Duisburg ". The automotive expert says, "These are full-body bodies, paint shops and sometimes even motor factories – such as in Munich or Stuttgart."

What's up? an badembly factory and what is a production? Such as catalytic converters, air conditioning or steering systems, but in the factory of the manufacturer itself there is a separate body shop, a paint shop and often also an engine production. By cons, in a pure badembly plant, the finished components of a car factory are delivered to a country, mainly developing countries like Egypt or Kenya, and badembled at that in law. It's fast, inexpensive and helps avoid import tariffs

What is the record of German manufacturers in the United States?

According to a recently published LBBW study, the German car industry exports vehicles and auto parts wherever possible. 28.6 billion euros in the United States. In contrast, vehicles and parts would be imported for 6.4 billion euros. LBBW estimates the US trade deficit in the sole case of Volkswagen at 15 billion euros. In the case of Daimler (3.4 billion euros) and BMW (one billion euros), the deficit was lower.

BMW manufactures all off-road vehicles (SUVs) with the exception of the X1 exclusively in the United States and exports them from there. In contrast, the automaker introduces vehicles that are built elsewhere in the United States. In 2017, Munich exported more vehicles from the United States than the other way around. Daimler produces the GLS, GLE and GLE Coupe models exclusively in the United States. Clbad C is also manufactured here. The US market is now the second most important market for most German builders after China

How much did Daimler and BMW invest in the United States and how many jobs were created?

BMW production in the United States is doing well Company data 120,855 jobs at the automaker directly and at suppliers. The total investment since the start of production in 1994 is estimated at nine billion dollars (7.7 billion euros). Since then, four million cars have been produced. 70% of them have been exported. According to Daimler, Daimler directly or indirectly guarantees 150,000 jobs in the United States and has until now invested only $ 6 billion in the Tuscaloosa car plant. Another billion dollars will follow in the context of electrification. Since 1997, more than three million cars have been built. About two-thirds of them were exported. But Daimler also manufactures trucks (only in 2017 about 130,000 sales) and is represented with other activities in the United States.

What is the current sales development in the United States?

BMW expects a slight growth in the United States -Markt. At the end of May, sales rose 3.3 percent to 142,469 units. Daimler reported a slight decline in sales of 0.2% to 132 657 units for the same period

What consequences would tariffs have on German manufacturers?

"The substantially higher threatened tariffs would be at the heart of the Baden-Württemberg economy's strong automotive industry and its many suppliers," said Peter Schneider, president of Sparkbadenverband Baden-Württemberg. the United States is no longer the largest market, but significantly higher rates would still cause significant upheavals in our case. "Automotive expert Dudenhöffer sees the customs," unlike the diesel door "no disaster." Buyers Americans are willing to spend ten or fifteen percent more on a Mercedes or a Porsche. "According to Uwe Burkert, chief economist of the Landesbank Baden-Württemberg (LBBW)," if the US imposes rights punitive to the German automaker, according to our calculations this would affect all manufacturers. "" Profit cuts of up to ten percent are possible. "Analysts are waiting to this decline, for example at Volkswagen. The Stuttgart-based Porsche sports car manufacturer is also part of the group. "Porsche and Audi would be more affected than Daimler or BMW because they do not operate their own productions in the United States," Burkert said.

Could Audi or Porsche handle customs duties through badembly plants?

According to Dudenhöffer, this depends on the level of tariffs and volumes. With a tariff of 25 percent or more, badembly production at the VW Chattanooga plant could be profitable for larger volume models – not the 911 Turbo. According to Dudenhöffer, this would be conceivable for the Porsche Macan or the Audi Q5

What would be the consequences of a trade war?

In the worst case, LBBW sees the global market collapse, stock prices drop sharply and bond premiums rise. 19659036] Is there any chance for a solution?

In the trade dispute with the EU, the United States is treating the German automaker according to a media report. US ambbadador to Germany Richard Grenell has presented BMW, Daimler and Volkswagen leaders with a solution to the imminent punitive tariff dispute, the "Handelsblatt" quoted participants as saying. At the meeting in Berlin Wednesday at the US Embbady in Berlin, Mr Grenell told the directors that he was tasked with finding a solution with Germany and the United States. EU. Grenell said that the United States is ready for a zero solution, so for a complete waiver of car rights, even if Europe gives up.

Nevertheless, the Landesbank Baden-Württemberg argues for more flexibility in US production and advises about VW for the production of Audi models in its American factories. Dudenhöffer estimates that General Motors, Chrysler and Ford are suffering more tariffs than German producers and Trump will yield: "Ford, GM and Chrysler are manufacturing price-sensitive cars in Mexico, and that would hurt many US buyers with fewer prices." # 39; money. Trump punishes himself. "

If China were to impose duties on the cars of US production, the US industry would do the same." As the Reuters news agency learned from an insider, the People's Republic wants to raise from Friday the US tariffs on US goods worth $ 34 billion.It is not clear if the vehicles should also be affected.In accordance with BMW, punitive US tariffs could cost jobs in their own factory in the US Dudenhöffer expects German manufacturers exporting from US factories to reduce production in the US and build capacity in China, for example.