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AD #2323 – Will Trump’s Tax Cut Help or Hurt Sales?, NTSB Angry at Tesla, GM Korea Struggles Continue

April 2, 2018 by John McElroy

Runtime: 6:33

0:31 Tesla Acting Like Old School Car Company
1:01 NTSB Angry at Tesla
1:24 Tesla Crash Details
2:27 Lincoln Tests Used Car Subscription Service
3:19 Car Sales Plunge in China
3:52 BMW Offering 3D Printers for Motorcycles
4:53 GM Korea Struggles Continue
5:29 Will Trump’s Tax Cut Help or Hurt Sales?

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On today’s show…Tesla is borrowing bad habits from old-school car companies…President Trump’s tax cut is going to help car sales, and hurt them too…and BMW is putting 3D printers on the back of motorcycles. All that and more coming right up on Autoline Daily.

This is Autoline Daily the show for enthusiasts of the automotive industry.

TESLA ACTING LIKE OLD SCHOOL CAR COMPANY
Tesla brags about being different than other car companies, but now it’s just like the rest of them. Last Friday it announced that one of its cars involved in a fatal crash was in Autopilot mode. That’s a favorite trick of car companies: announce bad news late Friday so that it’s too late to get on most newscasts, and then hope that it gets lost in the noise over the weekend. Even better for Tesla, it announced the news on a holiday weekend, when even more people would miss it.

NTSB ANGRY AT TESLA
And now the NTSB, or National Transportation Safety Board, is mad at Tesla for divulging information about that accident. Once the NTSB launches an investigation, it doesn’t like companies blabbing about details that could prejudice or compromise its investigations. In fact, the NTSB has specific rules and regulations about it.

TESLA CRASH DETAILS
What Tesla divulged was that the driver did not have his hands on the wheel for 6 seconds before the accident, in which his Model X drove straight into the end of a cement barrier, ripping the front-end off the car, all the way up to the A-pillars and setting the batteries on fire. Tesla says the driver received two visual and one audio warning to put his hands back on the steering wheel, but he never did. Tesla also claims its data shows that drivers are 3.7 times less likely to get killed when Autopilot is engaged, compared to cars that don’t have the system.

BMW is bringing 3D printers to a dealership near you and that’s coming up next.

LINCOLN TESTS USED CAR SUBSCRIPTION SERVICE
One of the ways Lincoln is trying to differentiate itself from other luxury brands is by focusing on customer services and now it’s going to offer a subscription service for a range of pre-owned 2017 Lincoln models. The pilot follows in the footsteps of Ford’s Canvas program and will first be offered in west LA and San Francisco. Customers will choose a package based on mileage and the monthly payment will include insurance, warranty, maintenance and roadside assistance. Lincoln has not announced pricing, but monthly payments for Canvas customers starts out at $400. It will be more for the more upscale vehicles, which will also include access to the brand’s Pickup & Delivery program, where a valet brings a loaner vehicle while the other is in for service.

CAR SALES PLUNGE IN CHINA
Automakers took it on the chin in China in February. Light vehicle sales hit 1.6 million units, which was an 11% drop. Passenger cars were down 14% and Light Trucks dropped 8.5% in February. But don’t read too much into that. The drop coincided with the Chinese New Year celebrations and car sales always fall during that. Besides, when combined with January, total sales are up 1.4%, so far this year.

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CHINA SALES FEBRUARY 2018
Light Vehicles 1,627,926 -11.1%
Passenger Cars 755,993 -13.9%
Light Trucks 871,933 -8.5%
2018 TOTAL 4,302,866 +1.4%
Source: WardsAuto

BMW OFFERING 3D PRINTERS FOR MOTORCYCLES
BMW wants to make sure motorcycle riders don’t get stranded on the road. So it’s offering a 3D printer that can fit in a rear top case or the saddle bags. After downloading the information from the BMW iCloud, customers will be able to make the handbrake, clutch or gear levers, valve caps, fork bridges and turn indicator lenses. BMW will also install larger, permanent 3D printers at 250 Motorrad sales centers worldwide that can produce more complex parts.

Coming up next, is President Trump’s tax cut going to help or hurt car sales?

GM KOREA STRUGGLES CONTINUE
GM is struggling in Korea. A little over a month ago, it announced it’s closing a plant in Korea, and last month sales plunged nearly 60% to only 6,200 units. Reuters reports GM is proposing to suspend a shift at another plant. Over the last few years, GM has pulled operations from money losing regions. So far, it’s sold off its operations in Europe, stopped manufacturing cars in Australia, Russia, Indonesia, Thailand and South Africa, and stopped selling cars in India.

WILL TRUMP’S TAX CUT HELP OR HURT SALES?
Is President Trump’s tax cut going to help car sales in the U.S. market? Well, yes and no. The tax cut primarily goes to higher income people. And that’s reflected in car sales. J.D. Power says that for the first two months of the year, sales of cars that cost more than $40,000 are up 4%, while those that cost less than $20,000 are down 19%. One factor is that as interest rates go up, car buyers with subprime credit ratings are dropping out of the new car market. But they’re likely going to buy used cars, and there is a flood of cars coming off lease that desperately need buyers.

And that brings us to the end of today’s report. Thanks for watching and please join us again tomorrow.

Thanks to our partner for embedding Autoline Daily on its website: WardsAuto.com

John McElroy

John McElroy is an influential thought leader in the automotive industry. He is a journalist, lecturer, commentator and entrepreneur. He created “Autoline Daily,” the first industry webcast of industry news and analysis.

Filed Under: Autoline Daily Tagged With: 3D printer, bmw, BMW Motorrad, car sales, China, GM Korea, Lincoln, motorcycles, National Transportation Safety Board, NTSB, pre-owned vehicle, President Trump, subscription service, tax cuts, Tesla, Tesla Autopilot, used car

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