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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.

The 570-hp AC Schnitzer ACL2 Concept tries to one-up the M2

AC Schnitzer's new ACL2 concept aims to outdo the BMW M2 at the Geneva Motor Show. To out-muscle the latest M car, the German tuner starts with an M235i and installs the M4's 3.0-liter inline-six. The company also turns up the power to 570 horsepower – a healthy upgrade over 365 hp from the M2's 3.0-liter. The power bump lets the ACL2 reach 62 miles per hour in 3.9 seconds and hit a top speed of 205 miles per hour, AC Schnitzer claims. Those figures make the coupe a few tenths quicker than the M2's 4.2-second to 60 mph sprint, but BMW limits its creation to 155 mph. AC Schnitzer's long list of upgrades makes the impressive performance possible. To get the most out of the engine, the company installs a carbon fiber intake. It also replaces the most of the exhaust, including the downpipe, catalytic converter and tailpipes. Carbon-ceramic brake discs make sure a driver can control so much power, and the company fits a fully adjustable suspension to aid handling. The ACL2's body is too loud for our tastes even through the subdued dark green paint, but the extensive use of carbon fiber parts should keep weight down. AC Schnitzer adds a road-scraping front splitter with canards at each corner. The rear has a similarly aggressive diffuser and huge wing. The wider fenders also add 5.5 inches to the coupe's width, and 20-inch wheels sit underneath them. The ACL2 doesn't get to challenge the M2 on the Autobahn yet because AC Schnitzer says it's just a concept. The coupe exists simply for the company's product development. However, if you want to put all of these bits together, the final cost would be 149,000 euros ($161,500 at current exchange rates), the tuner claims. Related Video:

BMW 4 Series spied with its future competition

BMW showed off its new 4 Series coupe in concept form at the 2013 Detroit Auto Show earlier this year, but it won't be long before we see the production model, evidenced by this modestly camouflaged prototype spotted testing. In case you forgot, the 4 Series serves as the replacement for the two-door versions of the BMW 3 Series, just as the upcoming 2 Series will effectively be the new version of the 1 Series coupe and convertible sold in our market.
This isn't our first glimpse of the 4 Series out testing, and we've even spied its droptop, Gran Coupe and too-hot M4 kin. We don't expect the final design to stray too much from the concept car seen in Detroit, albeit without the normal conceptual goodies like oversized wheels and with the overstyled front fascia toned down a bit. Our spy photographers even caught the 4 Series coupe hanging out with an Audi A5, giving us a good glimpse at how the two cars will stack up in terms of size and design.
It's still unknown exactly what engines will power the car when it comes to production, but since this thing is a derivative of the 3 Series, we expect the usual range of turbocharged four- and six-cylinder engines to be available, likely in 428i ad 435i guise (though, to be fair, the larger 640i coupe uses a 3.0-liter turbo engine, so there's even the potential for 440i nomenclature to work its way into the mix). We'll have to wait until the car officially bows later this year to know for sure.