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    • What will the Trump effect be on the American auto industry? President threatens BMW with 35% tariff

      To be fair, BMW has a large plant in Spartanburg, South Carolina. This plant churns out BMW SUV's which are eaten up by the US market. The SUV segment is the only one which did not take a huge nosedive for BMW in 2016 in the United States.


      Trump's tariff rhetoric on cars built outside the country already had an effect on US manufacturers including Ford. As stated, BMW builds plenty of cars in the USA and employs close to 70,000 Americans but BMW also plans to open a new factory in Mexico in 2019.


      This article was originally published in forum thread: Trump Threatens German Car Makers with 35% Import Tariff started by bigdnno98 View original post
      Comments 79 Comments
      1. blackshan's Avatar
        blackshan -
        When's the last time Trump bought a GM vehicle?
      1. bigdnno98's Avatar
        bigdnno98 -
        Well, I'm not privy to his car purchasing history, but I'd venture to say, never? LOL
      1. bigdnno98's Avatar
        bigdnno98 -
        His Limos are probably made by Ford though.
      1. ///MPOSTER's Avatar
        ///MPOSTER -
        You never know...maybe the tariff will cause BMW to stop watering down their name with endless models and focus on selling to real lovers of BMW and not the " I can make a $350/mo payment" which one can I buy" type of person. And with Harim Kabob (head of design) leaving BMW, we can only assume the models of cars will stop looking like a cut and paste between series.

        They could also expand SC to do 3 series which would account for most of US sales (between X-type SUVs & 3 series).
      1. DavidV's Avatar
        DavidV -
        BMW employes 70.000 people in the USA.
        The factory in Mexico is meant to build 3-series for the world, not only for the USA.
        Maybe Trump just does not realize this...
        He wants the 3-series for America First.
      1. bigdnno98's Avatar
        bigdnno98 -
        Click here to enlarge Originally Posted by ///MPOSTER Click here to enlarge
        You never know...maybe the tariff will cause BMW to stop watering down their name with endless models and focus on selling to real lovers of BMW and not the " I can make a $350/mo payment" which one can I buy" type of person. And with Harim Kabob (head of design) leaving BMW, we can only assume the models of cars will stop looking like a cut and paste between series.

        They could also expand SC to do 3 series which would account for most of US sales (between X-type SUVs & 3 series).
        In 2015, the U.S. was only 18.1% of BMW sales market. While that is the second largest number to China, in the grand scheme it's still only 18.1%. I don't have the breakdown by country for 2016, but with global sales figures falling, while SUV sales rising, maybe it was a little higher for 2016 for U.S. sales.

        Regardless, I don't think placing tariffs on imported German cars is going to help American car sales. Nor is it going to keep BMWs and Mercedes vehicles off of Fifth Avenue. Those people won't care when the prices go up due to tariffs. It'll be people like us that it will affect.
      1. bigdnno98's Avatar
        bigdnno98 -
        Click here to enlarge Originally Posted by DavidV Click here to enlarge
        BMW employes 70.000 people in the USA.
        The factory in Mexico is meant to build 3-series for the world, not only for the USA.
        Maybe Trump just does not realize this...
        He wants the 3-series for America First.
        LOL, what it sounds like he wants is a 3 series Chevy. Well, Chevy hasn't built a decent sedan in decades. The SS is ok, but overpriced and can't compete with it's German counterparts. I like the direction Cadillac has gone, but that's the Germans' only competition when it comes to U.S. made luxury cars.
      1. ///MPOSTER's Avatar
        ///MPOSTER -
        This is what I meant. For US sales, the 3 series and X series represent the large percentage ( about 50% US sales). If they were to be taxed 35% it would kill sales. So to stop that from happening they would have to try to mitigate the issue now by creating jobs / expanding SC plant. What better way than to cover the MOST purchased vehicles in the US?

        60,668 +64,515 = 125,183 of 223,348 sales

        August 2016 August 2015 % YTD August 2016 YTD August 2015 %
        i3 1,013 792 27.9% 5,372 6,183 -13.1%
        i8 145 210 -30.9% 931 1160 -19.7%
        2 Series 728 1,024 -28.9% 11,493 7,394 55.4%
        3 Series 5,885 10,163 -42.1% 45,660 60,688 -24.7%
        4 Series 2,285 2,940 -22.3% 23,747 31,023 -23.5%
        5 Series 2,606 4,012 -35.0% 26,184 29,779 -12.1%
        6 Series 297 258 15.1% 2,695 5,653 -52.3%
        7 Series 1,230 90 1266.7% 8,038 6,229 29.0%
        Z4 101 123 -17.9% 776 1,313 -40.9%
        X1 1,440 2,317 -37.9% 15,709 9,411 66.9%
        BMW passenger cars 15,730 21,929 -28.3% 140,605 158,833 -11.5%
        X3 4,668 2,127 119.5% 27,174 17,750 53.1%
        X4 432 453 -4.6% 3,376 4,006 -15.7%
        X5 4,121 2,803 47.0% 29,069 37,965 -23.4%
        X6 580 443 30.9% 4,520 4,794 -5.7%
        BMW light trucks 9,801 5,826 68.2% 64,139 64,515 -0.6%
        BMW brand 25,531 27,755 -8.0% 204,744 223,348 -8.3%
      1. Sticky's Avatar
        Sticky -
        To be fair, BMW has a large plant in Spartanburg, South Carolina. This plant churns out BMW SUV's which are eaten up by the US market. The SUV segment is the only one which did not take a huge nosedive for BMW in 2016 in the United States.

        Click here to enlarge

        Trump's tariff rhetoric on cars built outside the country already had an effect on US manufacturers including Ford. As stated, BMW builds plenty of cars in the USA and employs close to 70,000 Americans but BMW also plans to open a new factory in Mexico in 2019.

      1. Sticky's Avatar
        Sticky -
        Click here to enlarge Originally Posted by blackshan Click here to enlarge
        When's the last time Trump bought a GM vehicle?
        Well, the presidential limo is a Cadillac.
      1. Sticky's Avatar
        Sticky -
        Click here to enlarge Originally Posted by bigdnno98 Click here to enlarge
        Regardless, I don't think placing tariffs on imported German cars is going to help American car sales.
        The Americans have already improved to such a degree I don't think they need tariffs to help them. They need to continue doing what they are doing which is offering better cars for the money.
      1. BlackJetE90OC's Avatar
        BlackJetE90OC -
        Current tariff on imported cars to the US is 2.5%, EU has a 10% tariff on imported cars. China has a 25% import tariff, among numerous other taxes. Trump has basically scared all US car manufacturers from moving plants to Mexico now and in the future. Now he is giving warning shots to other manufacturers. Trump's point is we are getting screwed on so many trade deals. BMW is getting huge tax breaks by the Mexican government for building the plant, no state or local taxes. If they want to sell cars in US built in that plant, they should think about passing on those tax savings to US market.

        Do current BMW owners even want their next gen 3-series built in Mexico? No more euro deliveries?
      1. bigdnno98's Avatar
        bigdnno98 -
        Well I would prefer to have mine made in the US and take delivery in SC Click here to enlarge
      1. nbrigdan's Avatar
        nbrigdan -
        Asked what Trump could do to make sure German customers bought more American cars, Gabriel said: “Build better cars.”
      1. Sticky's Avatar
        Sticky -
        If you talk to Germans you know they think their stuff is the best. They don't even entertain buying anything other than German unless it's some exotic or something.

        They have a bit of a superiority complex.
      1. ken2521's Avatar
        ken2521 -
        How many states offer free money to companies to build in their state. Is trump going to go after that next. Mexico just following our lead.
      1. Sticky's Avatar
        Sticky -
        Click here to enlarge Originally Posted by ken2521 Click here to enlarge
        How many states offer free money to companies to build in their state. Is trump going to go after that next. Mexico just following our lead.
        True but we're talking states vs. nations. If building in Mexico he is saying there will be a tax to come to the US.

        Building in a state means you are already IN the US.
      1. ken2521's Avatar
        ken2521 -
        Yea but it's sore spot still. I just think it's finding a good balance between responsibility to shareholders and communities. When and if the jobs come back the debate will probably shift to something else probably laws against robotics.
      1. marcvtec's Avatar
        marcvtec -
        Don't worry too much,
        once he gets settled in and all the advisors tell him the "real way"
        He will just slide along. Big barking for now, we will see the bite, if any !
      1. DavidV's Avatar
        DavidV -
        Click here to enlarge Originally Posted by Sticky Click here to enlarge
        They have a bit of a superiority complex.
        This is a funny statement coming from an American.
        Actually made me LOL. You mean more of a complex than Americans? Funny $#@!.

        BMW is not building a factory for 4 years. They are in this for the long run.
        They will coninu to use this long after Trump has dissapeared into the history books.
        Maybe they'll just take a loss for a few years. Or gamble Trump won't make 4 years in office and the USA will return to global politics instead of this isolationalism course Trump is taking.
        Isolationalism is going to make everything that is not made in USA a lot more expensive. Not only cars.