AD #4098 – GM Profit Plummets on Tariffs; VW Offers Screaming EV Lease Deal; Russian Auto Industry Goes From Bad to Worse

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

GM PROFIT PLUMMETS ON TRUMP TARIFFS
General Motors reported its second quarter earnings this morning, and now we have concrete data of the impact of tariffs in the U.S. GM sold 974,000 vehicles in the last three months, down by 69,000 vehicles from last year. Revenue came in at just over $47 billion, down almost 2%. While it posted an EBIT profit of $3 billion, that was down nearly 32% and its net profit dropped more than 35% to about $1.9 billion. GM’s CFO Paul Jacobson had warned Wall Street that the second quarter would be bad, and that subsequent quarters should be better as GM figured out how to overcome the cost of the tariffs. But keep in mind that these latest financial numbers no longer include GM Cruise, which was losing a billion dollars a quarter. GM shut Cruise down to save money, and yet instead of profits rising by a billion, they dropped by a billion and that shows you how the tariffs are hurting the industry.

NISSAN TO CLOSE PLANT IN MEXICO
Nissan is planning to close another factory that has historical significance for the company. Last week, it announced it’s closing its Oppama plant in Japan, which is Nissan’s oldest. And now Automotive News reports that it will close its first international plant, which was opened in Mexico in 1966. The Civac plant, which builds the Navara and Frontier pickups for Latin America, will end production by early 2027. Last year, it produced 80,000 trucks, which is less than a third of its capacity. But those models are not going far. Nissan is moving the trucks to another factory in Mexico. However, Nissan is also ending a joint-venture it has with Mercedes in Mexico at a different plant. It builds two Infiniti crossovers that will go out of production at the end of the year, while Mercedes will end production of the GLB in the first quarter of next year. In order to cut costs, Nissan is closing seven plants worldwide to reduce capacity by 30% to 2.5 million vehicles by 2027. So, it’s got at least four more to go.

STELLA: CO2 REGS WILL CLOSE EU PLANTS
And Nissan isn’t alone. The head of Stellantis’ European operations, Jean-Philippe Imparato, says it may have to close plants in Europe in order to avoid fines for missing CO2 targets. Even though the EU eased emission targets for 2025 and is now giving automakers three-years to reach them, Imparato says they still aren’t achievable. BEVs need to account for 25% of total sales in order to meet the targets but in the first quarter BEVs only accounted for 15% of overall sales in Europe. Imparato says that it will need to cut production of ICE vehicles in order to meet targets, which means it will likely have to close factories.

FORMER UAW LEADERS & LOCAL TURN AGAINST SHAWN FAIN
There’s trouble brewin’ in UAW headquarters. The previous president of the union, Ray Curry, is attacking the current president, Shawn Fain, saying his management style is one of “fear, intimidation and retaliation.” In March, a court-appointed union watchdog criticized Fain’s management style, too. While Shawn Fain made national headlines with the lucrative labor contract he negotiated with GM, Ford and Stellantis, the union’s leadership has been marked with bickering and political infighting. Ray Curry also accuses Fain of bringing outsiders in to run the union who never worked on the factory line. And it’s not just former UAW leaders who don’t like Fain. UAW Local 140 in Warren, which represents Stellantis’s Warren truck plant in Michigan, just voted to start the process to get rid of Fain. Other UAW locals are also reportedly getting ready to vote on the same thing.

   

BMW, MB, AUDI STILL DOMINATE CHINA LUX SEGMENT
We have concerns about the overall health of the Chinese auto industry, but sales are up a decent amount in the first half of the year. Automakers sold 10.9 million vehicles, representing a nearly 11% increase compared to last year, while NEV sales were up over 33% and accounted for just over half of the overall market. If you look at the top sellers by price, we’re not surprised to see Chinese automakers dominate the low end of the market, but it is a bit of a shock to see Audi, Mercedes and BMW each have two models in the top 10 of the luxury category. These brands have been getting hammered in the Chinese market by surging local automakers, but I think this shows, with the right updates, there’s still desire for foreign luxury brands in China. However they need to watch out for those surging automakers, like Aito and Denza, and we’re not just talking about the Chinese market. [Image source: CarNewsChina]

YANGWANG LUXURY BRAND HEADED TO EU
Denza, which is a premium brand owned by BYD, had already been confirmed for the European market early next year. And now the VP at BYD says that its luxury Yangwang brand will follow later in 2026. They didn’t say what models Yangwang would offer, but in China it currently sells a PHEV and electric SUV and sedan and an all-electric supercar. Sales of that SUV in its home market have dropped off considerably, only 64 units were sold in June, so it’s not a real surprise that BYD would want to expand the Yangwang brand into Europe.

RUSSIAN AUTO INDUSTRY GOES FROM BAD TO WORSE
The Russian auto industry is going from bad to worse. After Russia invaded Ukraine, almost every foreign automaker pulled out of the country, except for the Chinese. And the Chinese are running rampant. They’ve captured almost 50% of the market. Moreover, with heavy government spending on the war, interest rates have soared to try and contain inflation. The interest rate on a new car loan ranges anywhere from 19-24%. Autovaz, Russia’s largest car maker, has seen sales drop 25% this year to only 155,000 cars. And so it’s going to a 4-day work week to cut production. But Autovaz employs 30,000 workers, which is an awful lot of people for such low production. So it’s safe to say the company will have to take much more drastic action to have any hope of avoiding a total catastrophe.

VW OFFERS DESPERATE $129/MONTH LEASE FOR ID.4
If you think the Hyundai IONIQ 5 is a good EV lease deal at $179 a month or the Tesla Model Y at $199 a month, well Volkswagen has got them both beat. In the U.S. the company is offering the ID.4 for as low as $129 a month through lease, while some dealers have shaved that down even further to $99 a month. The ID.4 is reportedly going through a major redesign for the 2026 model year with one executive saying that it fits in with the company’s new design language, probably closer to the ID.2. So, this screaming lease deal will probably help clear the way for the new version.

NEXT-GEN MACH-E NOT UNTIL 2030
In one other quick bit of EV news, the Mustang Mach-E is going to stay around in its current form for the next 4 to 5 years. Autoforecast Solutions reports that the next-gen Mach-E won’t go into production until April of 2030 and it will still be made at Ford’s plant in Mexico.

GERMAN CHANCELLOR BLASTS EV FLEET MANDATE
The European Union is proposing to force car rental companies and large corporations to only buy electric vehicles for their fleets by 2030. But it looks like it will face an uphill battle. Germany’s Chancellor blasted the proposal saying it “completely ignores the needs we have in Europe right now.” He says Europe should “remain technologically open” and not limit companies to only electric vehicles. If the proposal goes into effect, it would impact 60% of the new car business, according to one EU lawmaker.

TOYOTA TUNDRA, SEQUOIA UPDATES
The Toyota Tundra and Sequoia are getting a few updates for the 2026 model year. The only ones that grabbed our eye are a bold new blue paint color called Wave Maker and that the Tundra TRD Pro will be getting its own version of Toyota’s ISO Dynamic seats that first debuted in the Tacoma. Those are those sweet off-road seats that have built-in shock absorbers, so your body doesn’t get thrown around and beat up as much out on the trail. Both the Tundra and Sequoia are made at Toyota’s manufacturing plant in Texas.

And that brings us to the end of today’s show. Thanks for making Autoline a part of your day.