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Trumps Tax Scares the Car Industry on Vehicle Imports

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Last Sunday, US President Trump received a study on car imports from Commerce Department. After that an Independent research group gave a fair warning that if Trump imposes taxes on cars and car parts imported to the country, it will affect thousands of jobs of America and the price of domestic new cars will be increased some thousand dollars.

Trump had ordered a Sunday deadline to give the classified report as part of a Section 232 investigation of auto imports in May last year. Section 232 efforts to conclude whether national security will be at risk due to specific imports.

Though the content of the investigation was not come out, car industry groups panicked about the probable impact. They think that Trump may impose taxes on imported cars and the car parts could have on the cutback.

Last November, after the declaration of General Motors that it was going to close its plants of car assembly parts in Ohio, Michigan and Maryland and to put 25% of taxes on imported cars in revenge, Trump was angered

He tweeted at that time that “the reason that the small truck business in the U.S. is such a go to favorite is that, for many years, Tariffs of 25% have been put on small trucks coming into our country. It is called the ‘chicken tax’ If we did that with cars coming in, many more cars would be built here…..”

Knowing the president’s anger, it is expected that the commerce department report will suggest for taxes and Trump will put his stamp on them within 90 days of the report’s findings.

According to a non-profit and independent organisation, the Center for Automotive Research, the impact of the taxes could be significant on the US auto industry. It told it as a worst situation and it believed it as the substitute for the North American Free Trade Agreement and other tariffs go on. Implementation of Section 232 tariffs on imported cars will lead to loss of 366,900 US jobs and there will also be increase in prices of US “light duty” vehicles by $2,750 on average, and as a result, many consumers will try to buy the used cars.

The US Census Bureau that maintains trade figures said that the US imported $158.6 billion worth of cars in the first 11 months of 2018 (the full year’s report was delayed by the government shutdown).

A lot of imported cars come from factories in Mexico and these assemble vehicles from parts manufactured in Mexico, the US or Canada.

Sen. Charles Grassley, an Iowa Republican who is chairman of the Senate Finance Committee said that as he granted that the US needs trade agreement which will bring benefits to America, “but I do not agree that we should alienate our allies or jeopardize the health of our own economy to achieve good outcomes.”

Trump signed the agreement with Canada and Mexico on a new trade deal to change NAFTA in October. Rebranded the US-Mexico-Canada Agreement, or USMCA, the deal removes Section 232 taxes on cars brought from Mexico and Canada, up to a maximum 2.6 million vehicles. But Democrats in Congress are demanding to modify the deal before its adoption.

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Top Automotive developments of 2019

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There was anticipation last year that global vehicle sales would be challenged and it was also happened with global passenger vehicle sales staggering to a minor increase of just more 400,000 units in 2018. It has been seen that the chips on the persistent rise of mobility services and, at the end of the year, the top 5 ride-sleeting companies—Uber, Lyft, DiDi, Grab and Go-Jek—were likely to be worth over $230 billion. We had also forecasted that value-added services will transform automotive retail tremendously. So, when software technology companies entered into the automotive industry through services like usage-based insurance, new finance and leasing services, and connected car services, different automotive companies kept their customers busy and pleased through prolonged and improved following sales services and solutions.

A Year of achievements and problems

In 2019, there will be a combination of achievements and problems. Though automotive technologies will be new, exciting and modern, there will also difficulties will come across because of uncertainties caused by Brexit, the United States-Mexico-Canada Agreement (USMCA) and China’s evasion from this space. Everyone will probably see the fall of an automotive giant, the loss of a car segment which has long defined the popular vision of the automotive industry, a bonus for the titans of new mobility, and too much technology-driven interruption.

Internet Of Things (IoT) And AI help revolution: IoT and AI technologies have helped transform the automotive sector, driving extraordinary renovation across the vehicle and device connectivity, autonomous driving, electric power trains, and shared mobility and this trend will continue in coming future.

China Takes A fall:  In 2018, the Chinese automotive sector has a drop down with the failing of the passenger vehicle market. This year, there will be probably a planned economy, the rising uptake of shared mobility means, the constant popularity of public transportation, and a more and more saturated SUV market.

Advanced audio to optimise the voice-enabled car: Chris Ludwig, vice president, EPIC Experience Team, said that the dominance and sophistication of in-car voice control systems has developed appreciably currently. When AI and autonomous features have advanced a lot, the safety and productivity benefits of voice technology have not been obtained. The reason behind it is that if commands can’t be heard or understood on both ends. Expect, there will be a greater spotlight on flawless optimisation on the sonic ambiance of the vehicle cabin to facilitate better in-car communication. Thus the dream of a smart audio system in the vehicle can be achieved and how the passengers can gain better experience.

Ride-dropping IPOs become bigger-size: Look forward for some mega bigger success in ride-hailing IPOs in 2019. Uber, Lyft and DiDi may be the winners in the public market by beating the business of entrenched car companies who have been manufacturing cars for over 75 years.

The demand for electric vehicles will be more: Around 280 go-getting start-ups are trying to renew their electric vehicle (EV) industry. Stricter emissions regulations will go with an outbreak of new model launches. Let’s get ready for riding electric vehicles and by that you will become more pervasive in ride-sharing and micro-mobility solutions. Global xEV sales are likely to grow 38% over 2018 and these may reach 6.67 million units.

In spite of growth in EV and hybrid vehicles, don’t count out petrol powertrains just yet. Modernization in petrol engine technology will more influence already struggling diesel powertrains. As a result, use of alternative fuels will come out.

At last, charging technologies will help catch up with developments in EV technologies.

The Future Of Mobility Is Multimodal: Public-private partnerships are getting stronger by Big Data and data analytics, will power resource-proficient, flexible and on-demand multimodal mobility solutions. This will merge with new policy programmes intended at supporting modernized and sustainable urban transportation. Simultaneously, wait for more legitimate journey planning apps for B2B and travelers.

Auto-manufacturers mess up to handle outcomes Of Trade Deals

Currently, the automotive industry has to support for a rough ride in this year. It is expected that there will be somewhat drop in sells of new vehicles in rising markets like Thailand, Turkey and Slovakia this year because of rising vehicle costs, and cannibalization by public transportation and new mobility alternatives. This will be counterbalance by minor growth in new car sales in other promising markets like India, Brazil and Mexico.

Basically, Latin America will be the rescuer on wheels and it will be pushed mainly by a resurgent Brazil. Brazilian automotive industry will get a concrete stand in 2019 by strong GDP growth, solid sales, particularly in the SUV segment, and policy drives through ‘Rota 2030’, a growth and modernization strategy making the aim of the country’s automotive sector.

According to less inspiring news, Brexit, USMCA and the US-China trade war will continue to shed dark shadows on the automotive industry. New vehicle production and sales are likely to experience impediments. With facing so many problems, the automotive industry tries to cross this difficult year, want to see more alliances between automakers and provide attractive after sales gifts to lure customers.

 

 

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Government incentives for plug-in electric vehicles

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India makes a point of not handing any money to people wanting to buy the more expensive EVs, as Forbes News reports. Whether they can produce enough electricity to back up their policy is not clear. The majority of their power supply is from coal, plus some diesel generators.

To encourage the growth of the electric vehicle (EV) industry in India, the government has developed a two-pronged strategy aimed at both buyers and manufacturers: $1.4 billion in subsidies are to be offered, followed by a hike on import tariffs within the next year to spur domestic companies to build the vehicles.

The new policy, which was cleared by the cabinet late last month but the details of which were not available till now, kicks in with the new financial year in April.The scheme promises to lay out $1.4 billion in subsidies over three years for electric buses, three-wheelers, four-wheelers that are registered as commercial vehicles as well as private motorbikes and scooters.

Unlike other countries where the incentives for EVs has been focused on personal vehicles like those produced by Tesla, India, where less than four million cars are sold annually, is instead focusing on its public transport system.

Hence the primary aim of the policy on subsidies for buses and three-wheelers as well as two-wheelers, a hugely popular, and affordable, mode of transport.

While EVs are still a negligible component of the country’s current transport system, several Indian companies, including Mahindra & Mahindra, Tata Motors, Ashok Leyland among others have begun making electric cars, autorickshaws and buses (as well as two-wheelers) that run on lithium-ion batteries.

Subsidies are also available for plug-in hybrids and strong hybrid four-wheelers and will be capped at 40% for buses and 20% for all other vehicles.

Since the cost of batteries is what makes EVs prohibitively expensive for most consumers, the policy offers subsidies based on battery capacity–$140 per  per kilowatt-hour for all vehicles excluding buses. The latter will get a subsidy double that amount.

State governments, too, are expected to offer a combination of fiscal and non-fiscal incentives to further encourage the adoption of EVs. Non-fiscal incentives include a waiver or reduction in road taxes, toll tax, parking fees, registration charges, among others.As part of its push to encourage local manufacturing, the government has also laid out a phased manufacturing roadmap. “The intention is to substantially increase value addition and capacity building within the country,” according to a statement from the government.

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German Automakers Will Spend Over $60 Billion on Electric Vehicles

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Electric vehicles will take centre stage at this year’s Geneva Motor Show, as automakers scramble to bring their fleets into line with strict CO2 emissions standards set to kick in next year. Europe’s biggest annual car show, which will open its doors to the media on Tuesday and to the public two days later, has long been synonymous with new lines of powerful and prestigious racing cars and shiny petrol-guzzling SUVs. But even before the 2019 show got under way, it was clear that electric would be all the rage.

Monday afternoon, the annual European Car of the Year prize went to Jaguar’s new electric I-Pace model, marking only the second time in the 45-year history of the award that it has gone to a fully electric vehicle, after Nissan Leaf won in 2011.The show itself is set to be little more than a showcase for new electric concept cars, from small city autos by the likes of Citroen and Honda, to SUVs by Aston Martin, Audi and Mercedes, and even a new electric Volkswagen buggy.

Other carmakers will unveil brand new models, like Peugeot with an electric version of its popular 208, and Kia with a new compact crossover called e-Soul.

German automakers are about to spend big on electric cars and autonomous driving, two technologies that are expected to reshape the industry over the next few decades. Automakers will spend a combined 60 billion euros ($68 billion) over the next three years, the VDA, a German car-industry trade group, said in a statement ahead of the 2019 Geneva Motor Show.

“We will invest over 40 billion euros ($45 billion) in electric mobility during the next three years, and another 18 billion euros ($20 billion) will be invested in digitization and connected and automated driving,” VDA President Bernhard Mattes said. The number of electric car models from German automakers will also treble in that time, to around 100, Mattes added.

A ramp-up of electric car production is needed to meet stricter European Union emissions standards set to take effect in 2030, Mattes said, asking for what he called appropriate regulatory conditions across Europe. Mattes also called for expanded charging infrastructure and more purchase incentives for electric cars. Major German automakers have also discussed plans to develop self-driving cars. BMW and Daimler recently announced a joint effort to develop the technology, while Volkswagen is working with U.S. startup Aurora Innovation on autonomous cars.

The investments are considered necessary because of the presumed importance of electric powertrains and autonomous driving to the future of the car industry. These technologies also have the potential to greatly reduce emissions and improve safety, which are worthy goals. But self-driving cars are still largely unproven, and Don Walker, CEO of major automotive supplier Magna International, has questioned whether automakers can implement the new technologies profitably.

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