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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.

Porsche offering 250-hp 718 Cayman, Boxster in China

Porsche is studying a new approach in the lucrative Chinese market – less power. Automotive News Europe reports that the famed German manufacturer will sell less powerful versions of the 718 Cayman and Boxster in the People's Republic. In fact, the new cars are already on Porsche's Chinese consumer page. The hope, 718 chief Jan Roth told Automotive News Europe, is to replicate the success Porsche's sister company Audi has had with the TT. "A lot of the TTs that Audi sells in China, the smaller displacement 1.8-liter versions with rear-wheel instead of all-wheel-drive, are priced below that, Mercedes too," Roth said. We're guessing the comments about rear-wheel drive and a 1.8-liter engine are either typos or something was lost in translation, because Audi's Chinese website only lists a 2.0-liter engine, and most gearheads know the TT rides on a front-drive platform. Audi's success is largely down to price – 542,800 yuan ($81,549, at today's rates) for a base TT. Roth called 600,000 yuan "a magical threshold for customers in China." To hit that price point, Porsche is dropping the 718's 2.0-liter, turbocharged four-cylinder – offered North America and Europe with 300 horsepower in base form – to 250 ponies. The Cayman starts at 588,000 yuan ($88,340) while the Boxster is 598,000 yuan ($89,842). The 350-hp Cayman S will carry on unchanged. According to ANE, Roth said Porsche's Chinese strategy could drive 718 sales up to 4,500 units a year by 2017, nearly double the 2,500 Boxsters and Caymans sold in 2015. Could a similar lower-tiered strategy work in the US? We'll need to put on our speculation hats. In the US, the base car is about 81 percent of the price of the 350-horsepower S model. If Porsche were to offer the same discount for the hypothetical, 250-hp 718s, it could set the starting prices at $43,659 for the Cayman and $45,360 for the Boxster. That lines up neatly with the $43,500 TT Coupe, but this theoretical 250-hp Boxster would fall about $1,640 less than Audi's soft top. We shouldn't forget Porsche's expansive options catalog – we doubt there'd be a lot of sub-$50,000 718s on dealer lots. But still, slashing over $10,000 off the price of a $54,000 car is a big ask – Porsche would almost have to de-content such a lower-tier model. But – and this is a Kim K-sized but – moving the 718 downmarket would open the brand to a new range of consumers. Not only would these new cars be the cheapest sportscars from Porsche money could buy.

Audi looks at the future of transportation for Ender's Game film

The forthcoming science-fiction movie Ender's Game, starring Harrison Ford and Ben Kingsley, takes place in a high-tech world. So if movie-watchers are to be fully immersed in the story, every detail counts. That's why the computer-generated special-effects company assigned to the movie, Digital Domain, enlisted the help of Audi to design a future car that would fit seamlessly in the film's world - part of its $17.2-million investment in the movie.
Audi went all out, with Head of Audi Exterior Studio 1 Frank Rimili and designer Björn Wehrli assigned to the Audi Fleet Shuttle Quattro's design, which is so thorough and cohesive that we wouldn't be surprised to see cars like it on the road three-quarters of a century down the line. Rimili doubts that, but is "absolutely sure" Audi will still be around in 2088.
Watch the making-of video below to see all of the work that went into designing a car that will never see the light of day - in the real world, that is. If you're a fan of science fiction or the novel on which the movie is based, head on over to a theater to watch Ender's Game, which opens on Friday.