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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.

New Audi R8 Spyder V10 Plus is a topless brute

If the "normal" 540-horsepower R8 Spyder isn't doing it for you, the wait is over. Audi has upped its convertible, mid-engined Huracan sibling to Plus spec, which means the FSI V10 gets a whopping 70-horsepower bump, all the way up to 610. Plus, like its lowlier sibling, you get a power folding soft top that goes up or down at up to 31 mph. But wait, there's more! The normal R8 Spyder can hit 60 miles per hour in just 3.5 seconds, according to the manufacturer, while the new one will hit 62 mph in 3.3 seconds. (Since the first specs we have are for the European version, we get 0-100 km times rather than 0-60 mph times. It's clear the V10 Plus is notably quicker.) No matter where you buy one, each V10 Plus will rev out to 8,700 rpm. Top speed increases slightly, to 203.8 mph – much faster than you'd want to go with the top down, surely. The rest of the powertrain is standard R8. There's a seven-speed S-tronic dual-clutch gearbox, the only transmission available, and Quattro all-wheel drive standard. Like the standard R8, it can send up to 100 percent of its power to either axle in extreme situations, and there's a rear differential locker for added traction. While a variable-assist steering rack is an option, the standard steering box is an electromechanical unit. Inside and out, there's a lot of exotic stuff. Optional Audi laser headlights and standard Audi virtual cockpit tick the box for Euro technophiles, while diehard Audi Sport enthusiasts will appreciate the carbon fiber diffuser that adds up to 220 pounds of downforce to the package. Speaking of pounds, that top weighs 97 pounds, but the total package weighs 55 less than the regular R8 Spyder. That weight savings is due to lightweight bucket seats, carbon ceramic brakes (15 inches up front, 14 in the back), and lighter alloy wheels. The cars will be delivered in Europe in late summer. We'll know more about US-market cars soon, surely.

Is Audi getting complacent and suffering from brain drain?

The argument is made in a Reuters article: Audi is falling behind other luxury brands, such as Mercedes-Benz and BMW, due to a lack of research-and-development spending and "brain drain," or the migration of top executives and R&D chiefs to other parts of the Volkswagen Group. Reuters notes that Audi's current R&D chief is the third in 16 months.
Audi, which contributed to 40 percent of VW Group's $11.6 billion in profit the first nine months of the year, is delivering cars at a record pace: 1.31 million were delivered from January to October 2013 versus BMW's 1.35 million. Yet Audi, Reuters reports, doesn't have a halo car akin to BMW's new electrified i3 and i8 or an answer to Mercedes' plug-in-hybrid S-Class, and the R&D spending at Audi is less than BMW and Mercedes by a fair margin. It's noted in the article, however, that Audi benefits from other R&D spending within VW Group.
Reuters mentions that BMW "trumpets its new 'i' series" and the new Mercedes CLA and GLA ranges are winning "rave reviews" as part of its argument that Audi's recent lack of technological innovation could hurt future sales. Those cars do pack tons of new technology, some of which are firsts for mainstream production cars. But last time we checked, the i3 could be causing BMW's stock to slide, the CLA isn't receiving the rave reviews that Reuters would have you believe and the GLA hasn't been reviewed yet.