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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.

Buy a V8 Mercedes-Maybach, or splurge for a V12? Oh to have such problems

There's a certain air that surrounds the Maybach badge, and it's not just the scent being pumped out by the ionizer in the car's glovebox. It's the cream of the crop when it comes to German luxury. These cars are filled with an acre's worth of wood and a herd's worth of cows, ensuring your fingers rarely touch materials as pedestrian as plastic. It's as quiet, as smooth, and as imposing as you think it would be. Though the latest model from Mercedes-Maybach, the S550, might have swapped in a V8 and all-wheel drive in place of the V12 at the heart of the S600, no other amenities have been lost in translation. The car's size gives it a certain presence. Staring at the profile shows a wheelbase that spans two counties, necessitating a microphone and speaker setup simply so that the driver can converse with the passenger – and a Maybach will almost always have a passenger. No one buys a Maybach to drive. You buy a Maybach to be driven. No means of transport short of business-class airline seating offers this much space. Sit back, recline the seat, roll up the shades and enjoy your $167,125 cocoon. But you know all of that already. What you really want to know is if $25,000 - the V12-powered S600 starts at $192,225 - is worth it to gain an extra four cylinders, 74 horsepower, and 96 lb-ft of torque. On paper, no, it's not. The two cars have identical performance numbers, and the S550 benefits from Mercedes' 4Matic all-wheel-drive system. Even with all-wheel drive, the S550 weighs less than the nose-heavy S600. Fuel economy is, as expected, superior in the S550. It's rated at 16 city, 24 highway and 19 combined as opposed to 13 city, 21 highway, and 16 combined. Visually, the two cars are identical save for a few badges. The V12 badge on the S600 is replaced with a 4Matic badge on the S550, and that's where things start to get murky. When you're spending six figures on a car, decisions become more emotional than practical. $25,000 is a lot of money, but there's a bigger difference between $25,000 and $50,000 than there is between $167,000 and $192,000. As stated, you don't buy these cars to drive. Performance needs to be merely adequate. A smooth, torquey V12 is likely preferable to a hairy-chested V8, refined as it may be. These cars will never touch redline, lest the passengers spill their champagne. Plus, that V12 badge is worth its weight in country club memberships. Driving an S550 is fine until an owner shows up at an event behind an S600.

European automakers overstate fuel economy by 40% on NEDC cycle

Volkswagen is apparently not alone among European automakers when it comes to giving out funny emissions or fuel economy numbers. It turns out that pretty much everyone across the Pond is doing it. So much, in fact, that, on average, the difference between European vehicles' fuel-economy and emissions figures and real-world driving results is about 40 percent, Bloomberg says, citing a report from Brussels-based Transport & Environment. Yes, 40 percent. Mercedes-Benz was the worst offender, as the Daimler division on average overstated its vehicles' fuel economy by 48 percent, said the study, which used data from International Council on Clean Transportation (ICCT). That automaker isn't exactly a world-beater for fuel economy in the US. In fact, two of its models, the Mercedes-Benz G 63 AMG and the G550 (pictured), showed up on the American Council for an Energy-Efficient Economy's (ACEEE) annual list of cars that are "meanest" to the environment. "The information provided by manufacturers on fuel consumption is based on the NEDC test cycle, which is prescribed by law and conducted in a laboratory. Since real driving conditions generally deviate from conditions in the laboratory, the consumption figures can also deviate from the standardized figures. Since T&E has unfortunately not published the test conditions used in its study, it is not possible to provide a useful analysis of the test results," Mercedes-Benz wrote in an e-mailed statement to Autoblog. "The data pool used also does not allow a thorough scientific assessment. Mercedes-Benz emphatically supports the introduction of the WLTP (Worldwide Harmonized Light Vehicles Test Procedure). This is supposed to replace the NEDC with the aim of bringing the rated fuel consumption and the actual consumption closer together. We also actively support the dialog between industry (ACEA) and the authorities, and are in regular contact with the EPA and the ARB in the US." The ICCT is the group that helped spur the investigation that led to the Volkswagen diesel-emissions scandal we're all still talking about, so it shouldn't expect Christmas cards from the largest German automakers this year. This new study came from data taken from about 600,000 cars. That's a lot of funky air floating over Rome. The overstatements were pretty widespread, too. The fuel-economy of the BMW 5 Series was overstated by almost 50 percent, as was the Peugeot 308's.