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U.S. tariff threat hits European automakers' stocks

FRANKFURT, Germany — A U.S. warning that it may introduce tariffs on foreign auto imports hit shares in German carmakers BMW, Daimler and Volkswagen on Thursday, which together have a more than 90 percent share of North America's premium car market. Washington said on Wednesday it had launched an investigation into whether car and truck imports are a national security issue due to signs they had damaged the U.S. auto industry. That could lead to new U.S. tariffs — up to 25 percent — similar to those imposed on imported steel and aluminum in March. BMW and Daimler shares fell as much as 3.1 percent in early Thursday trading, while Volkswagen's dropped as much as 2.5 percent. "(U.S. President) Donald Trump is obviously not thinking about how to prevent a trade war. Import duties on cars would be a nightmare for the German auto industry and would lead to a massive sales impact," said Thomas Altmann at Frankfurt-based asset manager QC Partners. BMW on Thursday condemned the move to consider tariffs. "The BMW Group is committed to free trade worldwide. Barrier-free access to markets is therefore a key factor not only for our business model, but also for growth welfare and employment throughout the global economy," it said. Daimler, which makes Mercedes-Benz cars, and Volkswagen, which makes upmarket Audis and Porsches, were not immediately available for comment. German carmakers produced 804,000 cars at local factories in the United States and exported 657,000 German-made cars into North America last year, according to German auto industry association VDA. China took pains on Thursday to welcome German firms and investments, with Premier Li Keqiang talking up relations after a meeting with German Chancellor Angela Merkel. BMW and Mercedes have expanded production capacity in the United States, but BMW, Audi, Volkswagen and Daimler have also invested billions to build new factories in Mexico in the hope of selling locally produced cars into the United States. German carmakers hiked vehicle production in Mexico by 46 percent to 620,000 cars last year, while production levels inside the United States fell by 6 percent to 804,000 cars because of a shift to Mexico, according to the VDA. BMW has its biggest factory worldwide in Spartanburg, South Carolina, and is the largest vehicle exporter among all the carmakers in the United States measured by value of goods exported. More than 70 percent of BMW's U.S.-made cars are exported.

Audi A8 could spawn Mercedes-Maybach S600 rival

Five years ago, there was no middle ground for big luxury sedans. You either bought a $100,000 Mercedes-Benz S-Class, Audi A8, or BMW 7 Series, or you spent $225K on a twelve-cylinder Bentley Continental Flying Spur. But today, the market is changing. Bentley sells a V8-powered Flying Spur for around $200,000 and Mercedes is successfully selling a longer, twelve-cylinder, ultra-lux S-Class for $190,000. The middle ground is growing, and Audi wants in on the action. Audi is looking closely at the Mercedes-Maybach S600, according to Dr. Stefan Knirsch, the company's new technical leader. The company recently introduced a one-off A8 limo, shown above, although we'd imagine an S600 rival would be a more manageable size. "We are thinking about it," Knirsch told AutoExpress at the launch of the new SQ7. "The success of the extra-long version of the S-Class has got us wondering about whether there could be a business case for that in the future." Knirsch's comments raise a number of questions about a potential ultra-lux A8. Would it be longer than the A8L? The extra backseat space is a key part of the Maybach S600's appeal. What about the badge? Audi doesn't have a nameplate to rival Maybach to distinguish such an exclusive A8 from its more affordable siblings. Will the Audi offer more or fewer shades of black/silver than the S600? But the biggest question is what a bigger, more luxurious A8 could mean for the rest of the A8 range. As AE explains, Mercedes has done a remarkable job of fleshing out the S-Class range, with the normal sedan, Maybach, Coupe, Cabriolet, and their accompanying AMG variants. The Maybach S600 started that process – could an extra-large competitor kickstart Audi's full-size luxury expansion? The A8 has long been subject to gossip that it'd spawn an A9 Coupe (2014's Prologue Concept only fed that particular rumor mill), after all. Beyond hinting at a more luxurious A8, Knirsch expounded on another piece of exciting news: the next A8 will get Level 3 automation. That would mean full driverless ability "with the expectation that the human driver will respond appropriately to a request to intervene," according to the SAE's official definition. While Audi confirmed last year that the A8 could drive itself at speeds up to 37 miles per hour, Knirsch's more specific comments make it sound like the system could be even more advanced than originally thought. Related Video:

Audi CEO says brand's EVs are almost as profitable as its other cars

After, oh, a hundred years or so of building vehicles primarily powered by internal combustion engines, automakers around the world have been and still are pumping billions of dollars into the development of electric vehicle technology. Everything from platforms and batteries to motors and the software to control it all requires untold hours of development, and that takes time and money. Fortunately, it's not going to take long for that massive investment to start paying off, at least according to Audi CEO Markus Duesmann, who told Reuters in an interview that "The point where we earn as much money with electric cars as with combustion engine cars is now, or ... next year, 2023. They are very even now, the prices." As a brand, Audi contributed more than a quarter of overall profit for the massive Volkswagen Group, which has such powerhouse brands as Volkswagen and Porsche among others. Under the Audi umbrella are Lamborghini, Bentley and Ducati, and it seems those high-end branches aren't going anywhere, at least for now. "These brands ... are very valuable very profitable brands, where we can even expand the synergy level in the future," Duesmann said in the interview. "There are no plans whatsoever to get rid of them." Despite the overall profitability of the brand, the ongoing global chip crisis is causing headaches. "We had a very strong first half in 2021. We do expect a much weaker second half," said Duesmann, who added, "We really have trouble." In fact, so serious is the trouble that the brand is forced into "a day-to-day troubleshooting process" to limit the chip-shortage damage. The good news for the automaker is that Audi has been able to boost its profit margin from 8% prior to the pandemic in 2019 to 10.7% in the first half of 2021. The bad news is that various chip shortages aren't expected to get a whole lot better over the rest of the year. Related video: