Episode 227 – U.S. Puts Tariff On Chinese Tires, Russia May Get Opel Aid, VW Unveils 150 MPG Car

September 14th, 2009 at 12:00pm

Runtime 7:18

The Obama Administration places import tariffs on Chinese tires. About 600 million euros of aid that the German government is providing to Opel will actually get spent in Russia. Volkswagen is set to unveil a one-liter car, one that gets over 150 miles per gallon. All that and more, plus Audi’s big plans to celebrate its centennial at the Frankfurt show.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. A trade war could be brewing over Chinese tires. German bailout money for Opel could end up in Russia. And VW unveils a one-liter car, one that gets over 150 miles per gallon.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Monday, September 14, 2009. And now, the news.

Could the global economy be facing a trade war? Last week we reported that the Obama Administration was looking at putting import tariffs on Chinese tires, and over the weekend it announced it will do just that. China says this could cost the jobs of 100,000 tire workers in China, Gasgoo reports. So now the Chinese government is saying it will retaliate by raising taxes on chicken and car parts imported from the U.S. But it’s not just the U.S. facing problems with Chinese tires. Last week we reported that Brazil is also imposing import tariffs on Chinese tires.

Reuters reports that about 600 million euros of aid that the German government is providing to Opel will actually get spent in Russia. As part of Magna’s plan to take over Opel with its Russian investment partner Sberbank, hundreds of millions of euros will be spent to modernize the manufacturing operations of Russian automaker GAZ. The Opel story is heavily entwined in German politics with a major election just around the corner, and this latest revelation is sure to be a bombshell.

Toyota is not going to put lithium-ion batteries in its hybrids any time soon, Bloomberg reports. While Toyota is going to put lithium batteries in a plug-in version of the Prius, that is for demonstration purposes, not for large-scale retail sale. Toyota says there’s nothing wrong with lithium batteries except for their huge cost, and it will stick with nickel-metal hydride batteries in its hybrids.

The price of steel is falling again (subscription required). The Wall Street Journal says government stimulus plans convinced steelmakers to boost production and prices. There was a temporary rise in demand but it’s since cooled off and now steel prices are back on the decline. In turn, prices for raw materials to make steel are beginning to fall as well.

China’s auto industry is starting to show signs of overcapacity. According to gasgoo.com, all of China’s largest automakers have planned production increases over the next few years. The increase in capacity is mainly being driven by the development of alternative-powered vehicles. China’s automakers have set targets that exceed the country’s goals for producing hybrids and electric vehicles over the next few years. China’s capacity is predicted to be at 16 million units by 2012.

More news coming up after the break.  We’ll take a look at the massive effort that went into Audi’s display at the Frankfurt show, and we’ll give you a peek at a new Volkswagen that gets over 150 miles to the gallon.

In 2007 BMW announced it would reduce spending by 6 billion euros annually by 2012.  Now, according to Bloomberg, the company will beat that target. The company is also on track to save 500 million euros this year from previous job cuts. BMW also expects sales to gradually improve next year and by 2011 to be through the financial crisis.

Have you noticed how happy everyone is at GM right now? As part of its bankruptcy plan all salaried workers at GM took a pay cut. But on Friday GM restored that pay for its white-collar work force. The Detroit Free Press says that since the reductions went into effect last May, the company has saved around $50 million, but now it’s worried about losing talented workers as the economy starts to recover.

It’s not every day you turn 100, so Audi is marking its centennial in a grand way (subscription required) at this year’s Frankfurt Motor Show. According to Ward’s, the company is constructing a 6,000 square-meter, or 65,000 square-foot display stand to showcase 34 different vehicles including five world premiers. It’s taking 254 tons of steel, 6,000 square feet of glass and 42 miles of electrical cable to construct the booth. Working around the clock it will take 300 laborers 25 days to complete. Talk about over the top!

Autoblog reports that Volkswagen is set to unveil another “one-liter concept” at Frankfurt. One liter refers to the car’s fuel consumption, meaning it takes one-liter of fuel to travel 100 kilometers. The company unveiled a similar concept way back in 2002, but it was a pricey one-off. This version is allegedly made out of more conventional materials. It features a 36-horsepower, two-cylinder diesel engine and a seven-speed dual-clutch transmission. It seats two, one behind the other, and weighs around 1,100 pounds. Apparently it’ll take about 1.5 liters of fuel to travel 100 kilometers equating to about 158 miles per gallon, so technically I guess it’s not a true one-liter vehicle.

And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

20 Comments to “Episode 227 – U.S. Puts Tariff On Chinese Tires, Russia May Get Opel Aid, VW Unveils 150 MPG Car”

  1. Jim Sawyer Says:


    Remember Willy Messerschmidt’s car from the late ’50s or early ’60s? This looks remarkably similar. Any idea of the mileage of that long-ago car?

  2. dcars Says:

    It seams appropriate to ask this question now, what ever happened to Goodyear? They were once a dominant player in the racing and tire industry. Are they still independent? or are they owned by someone else like Firestone?

  3. Nick Stevens Says:

    Some external similarities. There were many other tiny cars like the BMW isetta and others back then. I doubt they would get more than 50-60 MPG. despite the fact that they needed no catalytic converters etc.

    The questions are:

    What if VW made a REAL vehicle and NOT a covereed 3-wheel scooter? How much less MPG would it get?

    and, John, 1.5 lt/100km (158 MPG) is almost as good as 1 lt. Both practically burn NOTHING. Even the tiniest 50 CC scoooter is 50% more thirsty than that, 100-110 MPG is the max the most efficient two-wheelers can get today, thanks to their lousy Aerodynamics.

    at 1,200 lbs, this is far heavier than the heaviest Harley-Davidson, I believe. if they made it into a 4-wheeled 4-seater, the weight gain would not be substantial, maybe another 400 lb? to 1,600, or about as heavy as a mercedes “DUMB” (aka “SMART”..LOL) TWO seater.

    I’d bet the 4-seater 4-wheeler would get over 100 MPG with the same engineering the VW 2-seater has.

    Remember, only a few years ago the goal was the THREE Liter car (78 MPG), and few cars on sale today can achieve that either!

  4. Warren Webb Says:

    That 1 liter VW looks like they took a 59 Messerschmidt & cloned it with the first version Honda Insight! Great idea but what about its crashworthyness? As a 3 wheeler, it gets passage here in So. Cal. for the “diamond lane” which would be a help since no matter where you live, its at least an hour or more drive to work.

  5. Nick Stevens Says:


    I lived in So Cal for 7 weeks in summer 06, found a great sublet at long beach and commuted 26 miles to Anaheim every day. It almost never took me more than 45 mins, starting at 7:30 AM and returning around 3:30 PM. And gas was $1.50-$1.60 back then. I would think that traffic is not much worse when gas went to $4 and even $3?

    PS you can buy an excellent used Prius II for less than $10k and still be able to use the diamond lane, I believe?

  6. dcars Says:

    Opps, sorry for the dumb question, it appears that Goodyear is alive and doing well.

  7. G.A.Branigan Says:

    Another high mpg concept car….yawnnn.I don’t much care for “concept” vehicles at all.The ones I really like never go into production,case in point:Jeep unvailed a new “Gladiator” diesel 4×4 pickup truck about 3 years ago.WOW,everything I always wanted and then some.Big let down.From then on,if it ain’t in the showroom or on the lot,it ain’t real to me.

    China is pissed because the US and other countries are imposing tarrifs on their junk tires.What in hell do they expect?? Remember when “made in Japan” was synonimus to JUNK? Well hey China……..stop flooding the market with crap.What passes for quality in your commie country don’t get it here Won hung Lo.

  8. paulstewart Says:

    I’m pretty sure that dcars is not the notorious thor. Because dcars said he was sorry. And the thor can’t even spell the word “sorry” Bt the way – dcars this statement is a tribute to you for being a gentleman, honest !

  9. paulstewart Says:

    sorry, I should have spelled that ( By not Bt ). I guess that means I’m not thor either.

  10. Pedro Fernandez Says:

    China has been dumping crappy products here for decades, but now we’re talking about dangerous products like tires and they simply should be banned, not taxed. And these people want us to buy their cars, you must be nuts to buy a Chinese car.

  11. Bill Clough Says:

    It is a wonderful irony that the German government, which pushed so hard for Magna as the winning bidder, is now faced with their tax dollars being used to update factories in Russia that will compete against a “German” company using “German” designs. I guess it is another case of “careful what you wish for, it might come true.”

  12. Salvador G. Says:

    JohnMc, I got nothing againts buying stuff from China (unless it kills me) and if anyone has ever shopped at Wallmart or any company owned by Walmart, that person its probably buying a Chinist product, however; Tariff are a good thing, hopefully Pres.Obama will have the sense of getting rid off every free trade agreement there is and that cost this country to lose so many jobs.

    -Also, Why Pres. Obama didn’t simple asked (in secret) the States to raise taxes on China’s tires, that way he could have safe face with the country americans are in debt to, they woudn’t be raising taxes on U.S. products because it would have NOT been the U.S. goverment doing.
    -Well, that’s my theory-

    Nice show JohnMc
    Oh- and when Audi builts its stand I hope WE get full pictures…



  13. Wayne Says:

    John, you left out some details in the story on Friday about the former Ontario Solicitor General and the hit and run incident with the cyclist in Toronto. While I don’t condone the driver’s actions after the cyclist was hurt, it should be mentioned that the deceased had an earlier encounter with Toronto’s finest during a domestic dispute and he had been drinking heavily. He was a bicycle messenger and was actually well known to Toronto police. Some wonder why he was allowed to leave that incident when he was known to be impaired but there is no law in Ontario against impaired cycling.
    The former politician was driving a convertible with the top down at the time of the incident and there have been reports that an argument of some sort led to the deceased trying to climb into the vehicle while they were both moving and this led to him being thrown. The investigation is still on-going and much has been speculated on as to why the driver fled. Hopefully the police investigation gets to the facts and the driver’s actions can either explained as criminal or justifiable under the circumstances.

  14. Don MacConnel Says:

    One of the best videos on one of John’s shows was the European crash test of a Chinese SUV.

    The car hit the block, the air bag deployed and the steering column came through the air bag and nailed the test dummy. Hilarious!

  15. Wayne Says:

    With today’s show, the issue with the tires from China should send up red flags everywhere. Let’s not forget the tainted dairy products, lead painted toys and other lax safety issues with Chinese products.
    There is also the concern with North American retailers putting pressure on Chinese suppliers to lower even their cut-rate prices. We certainly don’t want a repeat of the exploding Firestones or even worse.
    Hopefully the Canadian government gets its act together and follows suit with our neighbours to the south.

  16. dcars Says:

    I agree pedro, my mechanic friends tell me that the chinese tires are dangerous and are refusing to install them. Buyer beware. Thanks for the nice comment paulstewart.

  17. John Says:

    What does it take for the pinhead, moron, globalist sock-pupet, outsourcing managers to wake up to the fact that the people who buy products in the U.S. market, do not want dangerous, faulty, substandard, toxic, communist crap from China.

    Anybody out there have a comment?


  18. Kit Gerhart Says:

    That VW concept would be much safer than a motorcycle, and get 2.5 times the fuel economy of any of the several motorcycles I’ve had, albiet on diesel. I suspect that with a lot of well-implemented air bags, it could be as safe as some of today’s small cars. It looks long enough to have a reasonable amount of crush space.

  19. Kit Gerhart Says:

    John says:
    “What does it take for the pinhead, moron, globalist sock-pupet, outsourcing managers to wake up to the fact that the people who buy products in the U.S. market, do not want dangerous, faulty, substandard, toxic, communist crap from China.”

    If Americans were unwilling to buy stuff from China, WalMart certainly wouldn’t be the largest retailer in the world. It’s hard to buy anything at WalMart NOT from China, except maybe beer. OK, I’m exagerating a little, but not much. Basically all the small manufactured items we buy are from China.

    That said, I don’t want to buy tires from China, even if they are cheap, and I’m all for the tariff on Chinese tires. If I had the choice, I’d be willing to pay a little extra for, say, a dust pan made in the U.S. if it would create jobs for some people. It wouldn’t hurt me much, because the dust pan would last the rest of my life. Unfortunately, we don’t even have the option of buying things like dust pans or any other simple manufactured products from anywhere but China.

  20. Pedro Fernandez Says:

    For years , we have been accustomed to cheap,disposable imports from China without having to worry about quality, but now you have things like tires and perhaps electric cars coming soon which could, if they fail, cause injury or even death, the problem is we have been depending on their imports for so long, and they own so much of our debt, that they got us by the gonads.