Automotive Companies Impacted by Expanded Section 301 Tariffs Given Possibility of Product-Specific Exclusions

steel

Introduction

The latest announcement of new Section 301 tariffs on imports from China contained an unwelcome surprise for the U.S. automotive sector.  In addition to the announcement of a potential Section 232 tariffs or other trade measures on imported automobiles and automotive parts (an investigation that is still ongoing), the Trump Administration now has announced a list of $200 billion in special Section 301 tariffs on over 6000 types of products imported from China. And to add further to the import-related misery, the Trump Administration then upped the ante by increasing the potential duties on the $200 billion of new annual trade from 10 to 25 percent, thereby proposing a new tax on imports in the range of $50 billion per year.

Continue reading this entry

Forecasting the North American Sales and Production Footprint in Uncertain Times

sales

The Center for Automotive Research (CAR)’s annual Management Briefing Seminars are being held this week in Traverse City, Michigan.  Tuesday’s sessions included an annual highlight of the conference: a detailed update and outlook on “Forecasting the North American Sales and Production Footprint in Uncertain Times,” presented by a panel of leading automotive forecasters, analysts and economists.  Unlike the more rosy tone from last year when I reported that “The Sky Is Not Falling,” this year’s themes could be summed up as:  “Risk, Disruption and Declining Peak.”  Most of the forecasts included only a modest decline (by historical standards) from sales of 17.2 million units in 2017 to somewhere in the mid-high 16 million units by 2020, but when combined with current trade and regulatory uncertainties the overall tone of the panel was more cautious this year. The other glaring theme from the panel, not only in North America but in many other world markets, was the continuing route of SUVs and CUVs over sedans, with a market share that is only expected to increase.

Continue reading this entry

Is my Advisor a “Finder” or a “Broker”? Avoiding the Pitfalls of Raising Capital Using Unlicensed Broker-Dealers

advisor

Companies seeking to expand operations often face numerous challenges.  One such challenge is raising the capital necessary to make such an expansion possible.  When a company sees an expansion opportunity but does not have the financial resources on hand or readily available (cash, available bank debt, etc.) to make it happen, other avenues of financing must often be considered, including potentially taking on additional investors.  This can be particularly challenging where a company is not in the habit of actively seeking outside investment and, as a result, lacks the institutional knowledge and contacts to identify and court external investors.

Continue reading this entry

Recharging Electric Vehicle Incentive Limits

manufacturing

Recently, Representative Peter Welch of Vermont introduced legislation restructuring the planned phase out for the current electric vehicle $7500 federal tax credit.  As has been discussed in great detail in this blog, the current electric vehicle incentives begin to phase out individually for each manufacturer when that manufacturer delivers its 200,000th electric vehicle.  As a policy mechanism, the federal electric vehicle tax incentives positively influence both consumer and automotive manufacturer market behavior.  When implemented correctly, consumers will shift toward purchasing eco-friendly electric vehicles and manufacturers will ramp up electric vehicle research and development, ultimately leading to higher production volumes.  By combining the benefits to both consumers and manufacturers, these incentives can build a trend toward a growing and ultimately sustainable electric vehicle market devoid of any external incentives.

Continue reading this entry

Happy 4th of July

The Manufacturing Industry Advisor team hopes you had a safe and happy 4th of July.

Check back with us next week as we return to our regular posting schedule.

Thank you for your continued support of the Manufacturing Industry Advisor blog!