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Runtime: 9:13
0:00 Tariffs Could Hit Stellantis’ Profits Hard
1:03 U.S. Tariffs Will Vary By Region
1:56 Hyundai Reveals New Software Platform & SDV
4:55 GMC Expands Sierra EV Lineup
5:57 GM’s Durant Guild Opens 1st Experience Center
6:38 March China Sales Expected to Grow
7:23 Daimler Partners for Autonomous Military Vehicles
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TARIFFS COULD HIT STELLANTIS’ PROFITS HARD
About 40% of the vehicles that Stellantis sells in the U.S. are imported from other countries and according to the investment bank Jefferies, that will have a huge impact on Stellantis’ bottom line if the Trump Administration’s tariffs go into full effect. It says 305,000 of the 1.3 million vehicles that the automaker sold in the U.S. last year would have been subject to the tariffs and when you add in the tariff on non-U.S. parts, it would have cost Stellantis $7.1 billion. So, that’s why Jefferies is forecasting that the company’s earnings could be cut by as much as 75% this year. The investment bank also says BMW, Mercedes and Volkswagen would be hit particularly hard, with estimated tariff bills between $4.3 and $5.4 billion.
U.S. TARIFFS WILL VARY BY REGION
But it looks like some countries and regions of the world will face different tariff rates. The Premier of Ontario says he spoke with the U.S. Secretary of Commerce who said that Canadian-made vehicles with 50 per cent or more U.S. parts will not face the tariffs. Ontario is home to five automakers with eight vehicle assembly plants as well as sites that make engines and transmissions. And the Premier claims “a lot” of the vehicles made there have 50%, 60% U.S. parts. So, automakers like Ford, GM, Stellantis and Toyota that make a good amount of vehicles in Canada, won’t be hit as hard by the tariffs as long as they have a good amount of U.S. content. And we wouldn’t be surprised to see Mexico get a similar deal, since it’s also part of the USMCA free trade agreement.
HYUNDAI SLOW TO LAUNCH HANDS-FREE DRIVING
The Hyundai Group revealed a new mobility software platform, called Pleos, and its Software Defined Vehicle architecture at a developer conference in South Korea yesterday. It calls it an end-to-end platform that covers everything from the chips and controllers, the operating system, the infotainment system, to cloud infrastructure and fleet management as well as mobility and logistics solutions. The operating system is newly developed in-house by the Group and features a centralized computing system with more powerful computers, which helps allow for things like autonomous driving functions. But it will be a little late to the game in this regard. The Group doesn’t expect to launch Level 2+ hands-free driving until the end of 2027. Going back to the operating system, it also speeds up the overall performance of the company’s new infotainment system, called Pleos Connect. It’s based on the Android Automotive OS, which is supposed to provide a more phone-like interface, and will make its debut in the second quarter of next year. That infotainment system could include more creative and useful apps for users on the center screen. The Group established an open platform where app developers can access automotive software to see if their apps will work in a vehicle and then offer it through an ‘App Market’ for users to download. And the last thing we’ll highlight is the company’s mobility and fleet management efforts. This includes something called the Autonomous Vehicle Foundry, which is its initiative to supply autonomous vehicles to other companies. The Foundry provides everything from development kits, fleet management, production, certification and technical support. You may remember that it’s already signed up Uber as a partner.
GMC EXPANDS SIERRA EV LINEUP
GMC is expanding the Sierra EV lineup with the introduction of the AT4 and Elevation trims. The AT4 gives the Sierra more off-road capability with 2-extra inches of ground clearance, 35-inch all-terrain tires and it comes exclusive with an off-road driving mode. The AT4 starts just over $81,000 including destination charges and it’s an extra $10,000 for the longer-range version. The Elevation trim is now the lowest priced version of the Sierra EV, with a starting price of just under $65,000 including destination charges. It features a 16.8-inch touchscreen, a power operated hood and MultiPro tailgate. For comparison, the Denali version of the Sierra EV, which was already available, starts at about $71,800 and the top-trim version Denali costs more than $100,000. The new versions of the Sierra EV go on sale this summer.
GM’S DURANT GUILD OPENS 1ST EXPERIENCE CENTER
And in other General Motors news but shifting over to China, the automaker is celebrating the grand opening of its first Durant Guild experience center. And It also kicked off deliveries of the Chevy Tahoe and GMC Yukon to customers. The experience centers feature lounges and VIP areas, vehicle showrooms and dedicated areas for accessories, merchandise, delivery and after sales services. Those services are meant to help support the customer throughout the lifetime of the vehicle, which it hopes enhances the ownership experience. The Durant Guild is a business that GM created for the Chinese market to import premium vehicles.
MARCH CHINA SALES EXPECTED TO GROW
And sticking with the Chinese market, car sales are expected to increase this month. The China Passenger Car Association is forecasting 1.85 million sales, up 9% from a year ago. That’s outpacing the first two months of the year, which saw sales only increase 1.2% to 3.2 million vehicles. And electric vehicle sales this month are expected to be strong thanks to China extending a vehicle scrappage program where owners receive a subsidy to trade-in their gas-powered car for a new EV. The trade-group estimates that NEVs, which includes plug-ins, EREVs and BEVs, hit 1 million sales, accounting for 54% of the overall market.
DAIMLER PARTNERS FOR AUTONOMOUS MILITARY VEHICLES
Daimler Truck is expanding its defense business. It’s forming a partnership with ARX Robotics, which is based in Germany, to integrate its robotics and AI technologies into vehicle platforms from Daimler Truck. The truck maker develops defense vehicles through its Mercedes-Benz Special Trucks business and the military versions of the Unimog and Zetros will be the first to be integrated with the tech. The models will be capable of networking with other software-defined systems, like drones and other vehicles. They’ll also have autonomous capabilities that can find the best route in open terrain, carry out remote-controlled landmine clearance and evacuate people without putting soldiers in danger. The two companies say they are also looking into retrofitting existing vehicles with the technology.
But that brings us to the end of today’s show. Thanks for tuning in and I hope that you have a great weekend.
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Sean, Last time I checked, Ford Oakville is ‘between’ products at the moment, so zero Fords are made in Canada. Ford does have an engine plant in Windsor and plans to restart vehicle assembly at Oakville depending on how the tariff war works out.
GM needs to bring back their V6 engines to the Chevy Traverse and GMC Acadia.
Most Canadian vehicles are Hondas and Toyotas. Pacifica is Canadian, as are some GM trucks from Oshawa. Does anyone here know the percent parts sourcing by country for any of these vehicles?
BTW, the UAW loves the idea of tariffs. I wonder if they’ll feel that way when the layoffs start,
Trump pardons Trevor Milton.
He did, didn’t he? I bet senile idiot Joe Biden would never do that, Kit. He only pardoned his entire, corrupt family. I wonder why.
I fondly remember when, from these comments, I was the only one who told you Milton was charlatan and a crook, and GM Veteran defended him as just a typical businessman who ‘exaggerated’ a little. (a retired GM VP damned fool was a Milton Protector and accomplice, forget his infamous name).
Do not mourn the demise of the $250 million U of M DEI Racket, that cancer on US Universities, and its $417k a month chief (a female psych prof… talk about charlatans!) too much, Kit.
Correction, of course it was $417k a YEAR as I also mentioned in yesterday’s comments.
As for the obscenely overpaid, illiterate UAW members for whom you wish they lose their jobs. Kit, to show everybody how bad tariffs are, my heart goes out for them morbidly obese, drunken drug addicts (remember the Chrysler ones at their lunch break?)
Seriously, have you ever seen an unhealthier looking group than UAW workers? In any photo of them I ever saw, male, female, or whatever (a most popular category in the Dem party), both their morbid obesity and their unhealthy faces never fail to amaze me.
Milton apparently contributed $1.8 million (a really lousy sum, considering that Kackling Kamala spent $1,000 million (that’s a billion for the math challenged) MORE than Trump spent on their 2024 campaigns.
It happens in the best of families….. Remember Shameless Bill Clinton (for whom I did vote in 1992 and have, overall, not regretted it)? Remember his orgy of pardons before he left the WH? Remember world-class FUGITIVE FROM US JUSTICE Marc Rich? The Clintons pardoned the scumbag. Google his exploits!
Trump pardoned violent thugs who tried to overthrow an election and physically harm congress people. Yeah, Biden pardoned some innocent people who were likely to be targeted by Pam Bondi.
I worked with UAW people for 23 years, and as any other group, they varied widely in body shape, and job dedication. I didn’t like some of the work rules, requiring three skilled trades people to do a job I could do in 5 minutes, but most of the trades people worked well with salary techs and engineers like me, and most of the production people did their jobs properly.
Yes, I remember Clinton’s pardon of Marc Rich, and no, I didn’t like it.
Remember back in ‘92 when SNL and Dana Carvey turned Ross Perot into a joke so that no one would heed his warnings about the mfg devastation that NAFTA would bring? Well in hindsight that crazy little gnome was 100% correct wasn’t he? Politicians have cried about it ever since but did nothing. Obama said he would renegotiate NAFTA but did nothing. Trump actually did renegotiate but we still suffer huge trade imbalances and manufacturing did not return.
So now he’s actually taking action to bring auto factories back; bring other manufacturing back. He’s already had huge success with Hyundai, with that Taiwan chip maker, Mercedes is moving some here. Democrats have promised their base and the UAW this kind of action for years. “Fight for the middle class.” Instead they got years of empty promises and union membership decline. Now they’re seeing action. Why wouldn’t they be excited and give their support? But for the media and Democrat party it’s outrageous because Orange Man Bad!!!
Today Trump said that loan interest will be tax deductible if the auto is built here. That’s a huge incentive and common sense. EV or ICE, doesn’t matter, just buy Built in the USA and you get the preferred tax treatment. I’m sure Democrats will find some reason to be breathing fire over that too.
It’s not the responsibility of the US to destroy our manufacturing economy to raise the standard of living of the rest of the world. And Covid revealed the big problems that arise when not even basic necessities are made domestically.
Trump had little to do with Hyundai expanding at their existing facilities in Georgia. That decision was in the works long before Trump took power again.
“Today Trump said that loan interest will be tax deductible if the auto is built here.” How will that work? Will it apply if the the vehicle was built in the US with 90% of the parts from China? The bottom line is that the standard of living in the US is much better with a mix of products from all over the world, than if the US was totally covered with factories, and manufactured items cost twice as much. As far as car loan interest, what percentage of people with car loans have enough interest to itemize? I suspect it is small. It would only apply to those who have both car loans and mortgages.
Congress will have to write the requirements of the loan deduction. Millions of middle class households have mortgages, and with auto loan terms now having crept to the 84 and even 96 month range, with an average rate of 12%, that’s years of front-loaded, pure interest that could be deducted. It’s a good policy and squarely benefits the middle class.
Daily Driver: I only saw your last post just before this one, but from what you say, I find it amazing that interest rates are 12% for autos, and, even more amazing, that people actually take them and get in debt, instead of
Living within their means, or, like I always done, and it served me very well,
Living well BELOW their means.
They do not need a new car, I know multimillionaires who only buy certified used and gain 1/3-1/2 of the depreciation, and buy six figure luxury cars and suvs.
If they do not do a lot of miles with each of their cars, as I do, they do not even need certified used, and they can still get a flagship luxury car, maybe 7-9 years old and with 70-100k miles, for peanuts, when they can pay CASH and enjoy an almost fully depreciated auto. I have done this repeatedly and I strongly recommend it.
If they are obsessed with that “new car smell” of cheap plastic and insist on a new car, they can buy something they can afford without a 12% loan. Everybody should have some savings, they can use them to buy it.
I have seen too many people who really have no excuse, they are paid well for their jobs and still they are heavily in debt, because, just like corrupt Congress and Washington DC, they do not live within their means.
Worse, the average American’s 401k is laughably small. TOo many believe they can live with the $5k a month (in my case, and this must be a really high case) they get from Social Security. If they are frugal (which they never were), OK, but even then, what if they have a catastrophic event that requires a lot of $, health or other?
Toyotas are cheaper if you finance, at least in Florida. The dealers apparently get kickbacks if people finance. You can pay most of the principal right away, but need to wait 6 months to pay it off to avoid a penalty.
Wow, if auto loans are now at 12%, the rate has already gone up almost 30% since the new regime arrived. The loan I got in order to get a $2K discount on my car was at 9.37% APR.
Regulus —
You don’t think most people want to live within the there means?! I’m glad that you are at a point in your life where, having made the right choices and put yourself in the right situations, you have a comfortable life for yourself. Yet, not every one has the freedom to make those choices! Many find themselves thrust into situations through no fault of their own and are left scrambling to figure out what to do next. They are working jobs, supporting their families, paying for child care, when they or an aged parent get sick and they and other family members have to work together to support them. Then, so one who does know you, the work you do and how what you do impact others, comes in and demands you should worth, comply that you are lazy, claim that your job is wasteful and a misappropriation of taxpayer money and fires you! Or, the to the bad choice of the CEO that makes 7 figures and loose the company money, decides to make up for that by laying off or fire employees. Because the stock rises as a result of “right sizing the company”, that same CEO makes money as a result of stock bonuses, when the companies hardships were as a result their poor planning and short sighted efforts. Don’t get me wrong, running a company is hard work, but the employees that are impacted. For the most part, the employees had no say in the choices made are most times hurt the most. Some of them may feel blindsided by, but even if they could see it coming, with the challenges that many are already facing, any savings could be wiped away in an instant! Fortunately, it seems, you will NEVER find yourself in that situation!