Autoblog

Goes Both Ways: Free-trade pact sees South Korean brands losing share at home

Jonathon Ramsey — Sat, 29 Dec 2012 11:00:00 EST

Filed under: Europe, Government/Legal, Hyundai, Kia, South Korea

France has been vocal, but not alone, in noting the rise of the South Korean automakers in Europe. The signing of a free-trade pact in 2011 between South Korea and the EU, along with the especially value-conscious buyers in a crisis-stricken Europe, has seen market share increases measuring in the double digits for Hyundai and Kia - analysts expect 14-percent growth for the two in 2012.

A report in Bloomberg has found that there's pain at the other end, too: The pact more than halved import tariffs on European cars headed to South Korea to 3.2 percent, and prices are now close enough to domestic offerings for more South Koreans to pay the premium for foreign luxury nameplates and the cachet they confer. Products sold by the five domestic automakers hogged 92 percent of the market last year, and sales have dropped 5.2 percent this year whereas import sales have risen by 24 percent. This will mark the first year that imports claimed ten percent of the market; compare that to 2002, when domestic market share in the world's 11th largest auto market was 99 percent.

The Germans are at the head of the arrow, counting for 65 percent of imported car sales, but every foreign maker has seen double-digit gains. Analysts think foreign makes could ultimately grab 15 percent of the market.

The US signed a free-trade agreement with South Korea last year after years of back-and-forth negotiations. The import tariff on US cars was halved to four percent, and by 2016 there won't be any tariff at all. The hope is that the deal will quickly mean the US will be able to export and sell more than a miniscule fraction of cars to the Asian nation's buyers; the US Internal Trade Commission predicts a 54-percent climb in exports to the country is possible. A side beneficiary of the deal is the Japanese makers: With no free-trade deal between their home country and South Korea, manufacturers like Toyota and Honda are now looking forward to sending more of their American-made product to the peninsula.

Goes Both Ways: Free-trade pact sees South Korean brands losing share at home originally appeared on Autoblog on Sat, 29 Dec 2012 11:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

U.S. filing trade complaint against China for auto tariffs

Zach Bowman — Thu, 05 Jul 2012 14:00:00 EST

Filed under: China, Government/Legal, Chrysler, GM, Earnings/Financials

Automotive News China reports the United States is set to file a complaint with the World Trade Organization against China for tariffs on American-built vehicles. The duties cover around 80-percent of the vehicles imported from the U.S. and are expected to cost U.S. automakers $3.3 billion. Interestingly enough, General Motors and Chrysler vehicles face higher tariffs than those of other automakers due to the government bailout those manufacturers received under presidents George W. Bush and Barack Obama.

Models like the Jeep Wrangler and Grand Cherokee face tariffs of around 15 percent, while the Buick Enclave and Cadillac CTS face duties of nearly 22 percent. For comparison, the Acura TL, which is built in Marysville, Ohio, gets away with a 4.1 percent tariff. Even so, The Detroit News reports the duties are somewhat symbolic, since vehicles assembled in the U.S. are already expensive to purchase in China.

The White House, meanwhile, said it is filing the complaint because "China must play by the rules of the global trading system."

U.S. filing trade complaint against China for auto tariffs originally appeared on Autoblog on Thu, 05 Jul 2012 14:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

China aims to slow foreign investment in auto market

Zach Bowman — Mon, 02 Jan 2012 09:31:00 EST

Filed under: China, Plants/Manufacturing

The exponential growth of China's auto market has left many automakers licking their lips at the thought of rampant profit. Recent years have seen the country's government spur foreign investment with various incentives, including reduced tariffs on imported manufacturing machinery. According to Automotive News, that's all about to stop. China has said it will cease encouraging foreign investment in a move designed to promote natural growth in the sector. The country saw automotive growth drop to one tenth of what it was in 2010.

That's not to say China is putting a stop to all aid to foreign automotive investment. The report says China will still encourage foreign automakers to develop green technologies within its borders.

Automakers from General Motors to Toyota and Volkswagen have all focused more heavily on the Chinese auto market in recent years. Honda recently began producing Fit models in China for sale in Canada as part of an effort to move more of the company's production out of Japan, as well. Similar strategies may become less cost effective as China makes it more difficult for foreign companies to invest in manufacturing.

China aims to slow foreign investment in auto market originally appeared on Autoblog on Mon, 02 Jan 2012 09:31:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

New trade agreement may mean more domestics sold in South Korea

Jeff Sabatini — Fri, 14 Oct 2011 08:58:00 EST

Filed under: Government/Legal, South Korea

In 2010, domestic automakers shipped about 7,500 vehicles to Korea, representing less than one percent of its auto market. To add insult to injury, well over half a million Korean cars were sold here. But that could all change, according to Ford CEO Alan Mulally, who told The Detroit News that a new trade agreement "will open new opportunities for Ford to reach even more Korean customers."

The U.S. - South Korea Trade Agreement was approved by Congress on October 12, while President Obama welcomed President Lee Myung-bak of the Republic of Korea to the White House yesterday.

The United Auto Workers also praised the move, which reduces both Korean and U.S. tariffs. South Korea will immediately cut its tax on U.S. cars from eight percent to four percent, and fully eliminate the tariff in the fifth year of the agreement. The U.S. will continue to tax Korean cars at 2.5 percent until the fifth year, when the tariff will be eliminated. Korea will also eliminate its 10-percent tariff on trucks immediately, while the 25-percent U.S. tariff on trucks will be phased out during the eighth to tenth years of the agreement.

Perhaps more importantly, the agreement also includes a provision to address differing safety and environmental standards. Domestic automakers will now be able to sell vehicles in Korea without certifying them to Korean regulations, under certain limitations. U.S. companies that sell fewer than 25,000 vehicles in Korea will be required to only meet U.S. safety regulations. And as long as American cars are within 19 percent of South Korean standards for fuel economy and emissions they will be considered legal for sale.

New trade agreement may mean more domestics sold in South Korea originally appeared on Autoblog on Fri, 14 Oct 2011 08:58:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

REPORT: Detroit Three call Japan's cash-for-clunkers program unfair

Chris Shunk — Fri, 11 Dec 2009 10:32:00 EST

Filed under: Car Buying, Government/Legal, Japan

The U.S. Car Allowance Rebate System (a.k.a. 'cash-for-clunkers') program was a short-term boon for automakers participating in our market. Sales went up, inventory went down and nearly 700,000 vehicles that would likely have otherwise ended up on used car lots were destroyed. And since the U.S. is essentially a free market where automakers around the globe are allowed to participate, Japanese and European automakers benefited from the program as well. In fact, Japanese automakers fared even better than their U.S. competitors, as Toyota, Honda and Nissan are said to have surpassed their market share with the program. A reported 319,000 of the 677,000 vehicles sold via cash-for-clunkers were from Japanese companies. But while the U.S. C4C program took place in a free market where everybody is able to participate, critics are complaining that the new Japanese program is anything but equal opportunity.

Japan is considered by many to be the world's most insular auto market, and its $3.7 billion government clunker program makes U.S. autos ineligible for government assistance. According to The Detroit News, the program, which the Japanese government is using to spur sales (which are down 17 percent versus 2008 levels), provides cash rebates of up to $2,830 for customers who turn in vehicles 13 years or older. Car buyers who don't turn in a vehicle can still get over $1,100 toward the purchase of a new vehicle. An estimated 87 percent of all Japanese vehicles are eligible for the program, while zero vehicles from General Motors, Ford and Chrysler will be eligible.

The DetNews is reporting that Motown automakers have written a letter to the Deputy U.S. Trade Representative calling for action on a matter that was called "another example of Japan continuing efforts to discriminate against imported vehicles." Carol Guthry of the U.S. Trade Representative told the newspaper that the government is working to resolve the issue, adding "our position remains that changes are necessary to give U.S. vehicles greater opportunity to qualify under Japan's program."

While we're not exactly import/export experts and we don't have any experience with foreign relations, we're thinking it's about time Japan treated foreign automakers in the Land of the Rising Sun with the same level of equality that its automakers receive elsewhere in the world. What do you think? Have your say in 'Comments.'

[Source: The Detroit News | Image: Yoshikazu Tsuno/AFP/Getty]

REPORT: Detroit Three call Japan's cash-for-clunkers program unfair originally appeared on Autoblog on Fri, 11 Dec 2009 10:32:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Obama administration slaps hefty import tariffs on Chinese-made tires

Jonathon Ramsey — Mon, 14 Sep 2009 13:58:00 EST

Filed under: China, Government/Legal

The aggrieved parties are: the United Steelworkers and the U.S. government on one side, Chinese tire companies and the Chinese government on the other. The issues are, as always, jobs and money. The Steelworkers brought a case against Chinese tire companies for dumping tires on the U.S. market over the past few years and in the process putting more than 5,000 people out of work and closing seven domestic tire factories. The case was ruled on by the U.S. International Trade Commission, which found in favor of the Steelworkers. In response, the current administration plastered a 35% tax on Chinese passenger car and light truck tires.

Naturally, the Chinese are miffed, to say the least. They feel the tariff is contrary to World Trade Organization rules and President Obama's rhetoric on current tariff levels, as well as being a tactic of undue protectionism. When China entered the WTO, the U.S. specifically negotiated the right to protect itself against a sudden wave of Chinese goods, and the ITC feels that China's share of the tire market having grown 14% in four years, with 31 million more tires entering, is just such an occasion.

Politics could be the decider in this one, however. China can complain to the WTO, attempt to impose its own countermeasures, or at the upcoming G-20 meeting it can simply whisper in Obama's ear, "You know that $1.56-trillion-and-counting deficit you guys need floated..." Nobody wins in the case of escalation, but we have a feeling the fight isn't yet finished.

[Source: Wall Street Journal | Photo: Mark Ralston/AFP/Getty Images]

Obama administration slaps hefty import tariffs on Chinese-made tires originally appeared on Autoblog on Mon, 14 Sep 2009 13:58:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Hyundai said to be considering pickup

Damon Lavrinc — Tue, 03 Apr 2007 19:07:00 EST

Filed under: Truck, Hyundai

Yup. You read that right. According to the folks at Edmunds, Hyundai made a statement yesterday that a pickup truck might be in the cards, but it won't be available for a long time.

The announcement by the Korean automaker comes the same day as a trade pact between the U.S. and Hyundai was announced. The pact, which we covered earlier, will lift tariffs on certain models, depending on engine displacement, over the course of the next few months and years.

Reuters quoted a Hyundai spokesperson as saying that, "We will conduct a feasibility study [on a pickup truck] as a long-term project." Again, such a project will be dependent on the elimination of financial restrictions, and considering that a tariff on models sporting three-liter or larger engines won't go away for another 10 years, you can expect to wait at least that long until you see one at your local Home Depot.

[Source: Edmunds]

Hyundai said to be considering pickup originally appeared on Autoblog on Tue, 03 Apr 2007 19:07:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

More good news for Hyundai/Kia: new U.S. trade pact favorable

Chris Shunk — Tue, 03 Apr 2007 08:05:00 EST

Filed under: Government/Legal, Hyundai, Kia

South Korean automakers received a pretty big shot in the arm as a trade agreement was reached with the United States. The trade pact, which lasts for 15 years, took nine months to negotiate. With the new agreement, tariffs will be immediately lifted on cars with engine displacements of 3-liters or less. Cars with displacements greater than 3.0L will have to wait three years, and trucks will have to wait 10 years before the tariff is lifted. As expected, Hyundai stock shot up 3.3% on the news, and Kia saw an increase of 5.5%.

For their part, in three years the South Korean government is levying a flat tax of five-percent on all vehicles, domestic or imported. Automotive News cites experts who believe the trade agreement won't help US automakers much, since demand for their products isn't as high as that of luxury automakers like Lexus or Audi.

Within the past few years, Hyundai and Kia have gone from makers of cheap, unattractive junkers with great warranties, to companies with good quality, improved designs, and great warranties. Losing the import tariffs will help Korean automakers deliver good products at an even better value. With new products on the horizon like the RWD, V8-powered Hyundai Genesis concept, we think the domestics and Japan had better take notice of the South Korean automakers, or risk getting left in the dust.

[Source: Automotive News (Sub. Req.)]

More good news for Hyundai/Kia: new U.S. trade pact favorable originally appeared on Autoblog on Tue, 03 Apr 2007 08:05:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Score one for the free market: US dumps most of its steel tariffs

Damon Lavrinc — Fri, 15 Dec 2006 11:32:00 EST

Filed under: Government/Legal

Yesterday the U.S. International Trade Commission lifted tariffs on imported steel from Australia, Canada, France and Japan, and there was much rejoicing in the boardrooms of many automakers that build cars and trucks in the U.S. The tariffs were originally put in place on cheap steel imported into the U.S. from a total of six countries that threatened to collapse the U.S. steel industry back in 1993. Some 13 years later, the U.S. steel industry is healthy, and the tariffs that once were helpful, are now creating artificially high steel prices in the U.S.

Six automakers including General Motors, Ford, DaimlerChrysler, Honda, Nissan and Toyota lobbied hard for this outcome and were extremely pleased yesterday, despite not getting tariffs lifted against steel imported from Germany and Korea, tariffs on both of which will remain in place until reviewed again in 2011.

The rising cost of raw materials, steel in particular, has been a constant thorn in the side of our own domestic auto industry, the members of which are busy trying to orchestrate complex turnarounds at the moment. Hopefully market prices for steel will begin to drop as competition to sell this all-important ingredient in modern day cars heats up again.

[Source: Just-Auto]

Score one for the free market: US dumps most of its steel tariffs originally appeared on Autoblog on Fri, 15 Dec 2006 11:32:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments