GM’s new Chevy Silverado bids for more US pickup profits

US consumers are shifting away from smaller cars in favor of larger SUVs, such as the Chevy Silverado, providing a major boost to Detroit automakers. (Reuters)
Updated 13 January 2018
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GM’s new Chevy Silverado bids for more US pickup profits

DETROIT: General Motors Co. on Saturday will fire a new round in the battle for profits from one of the US auto industry’s most lucrative segments when it shows a new generation of its Chevrolet Silverado pickup truck at Detroit’s auto show.
The new Silverado, a highlight of the show, is the successor to GM’s best-selling vehicle in North America. Sales of the current Silverado rose nearly 2 percent to 585,000 vehicles in 2017.
Analysts and company executives say the Silverado and the similar GMC Sierra are among the highest-profit models for the company, generating a significant share of its $9 billion in North American pretax earnings for the first nine months of 2017.
By adding luxury features to their pickups, automakers have pushed prices in the segment to an average $46,984 a vehicle, according to Cox Automotive. That is well above the industry’s average 2017 transaction price of $31,600 cited by GM.
Competition in the North American large pickup market will heat up as GM and rival Fiat Chrysler Automobiles NV begin selling their redesigned trucks later this year and Ford Motor Co. invests in its best-selling F-series.
Fiat Chrysler plans to unveil a new generation of its Ram pickup truck at Detroit’s auto show on Monday.
At a sneak preview in December, GM said it would offer eight versions of the new Silverado and more engine and transmission combinations than the current lineup.
Executives said the new Silverado would have a high-strength steel bed floor and use “mixed materials” to cut weight and improve fuel economy.
The F-series, which has an aluminum body, has been the best-selling model line in the United States for 41 years, with 2017 sales of nearly 900,000 vehicles.
Last year GM sold a total of 947,972 of its four Chevrolet and GMC pickup models, two of which were mid-sized.
US consumers are shifting away from smaller cars in favor of larger SUVs, crossovers and pickup trucks, a major boon for the Detroit automakers.
Light trucks accounted for 63.2 percent of US new vehicle sales in 2017, up from 59.5 percent in 2016.
However, US new vehicle sales fell 2 percent in 2017 after hitting a record high in 2016 and are expected to drop further in 2018 as interest rates rise and more late-model used cars come back to dealer lots to compete with new ones.


EU to respond to any US auto tariff move: report

Updated 23 June 2018
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EU to respond to any US auto tariff move: report

  • Trump threatened to impose 20 percent tariff
  • Shares in carmakers slip on trade war fears

PARIS: The European Union will respond to any US move to raise tariffs on cars made in the bloc, a senior European Commission official said, the latest comments in an escalating trade row.
US President Donald Trump on Friday threatened to impose a 20 percent tariff on all imports of EU-assembled cars, a month after his administration launched an investigation into whether auto imports posed a national security threat.
“If they decide to raise their import tariffs, we’ll have no choice, again, but to react,” EU Commission Vice President Jyrki Katainen told French newspaper Le Monde.
“We don’t want to fight (over trade) in public via Twitter. We should end the escalation,” he said in the comments published on Saturday.
The European Autos Stocks Index fell on Friday after Trump’s tariff threat. Shares US carmakers Ford Motor Co. and General Motors Co. also dropped.
“If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the US Build them here!” Trump tweeted.
The US Commerce Department has a deadline of February 2019 to investigate whether imports of automobiles and auto parts pose a risk to US national security.
US Commerce Secretary Wilbur Ross said on Thursday the department aimed to wrap up the probe by late July or August. The Commerce Department plans to hold two days of public comments in July on its investigation of auto imports.
Trump has repeatedly singled out German auto imports to the United States for criticism.
Trump told carmakers at a meeting in the White House on May 11 that he was planning to impose tariffs of 20 or 25 percent on some imported vehicles and sharply criticized Germany’s automotive trade surplus with the United States.
The United States currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported US cars.
The tariff proposal has drawn sharp condemnation from Republican lawmakers and business groups. A group representing major US and foreign automakers has said it is “confident that vehicle imports do not pose a national security risk.”
The US Chamber of Commerce said US auto production had doubled over the past decade, and said tariffs “would deal a staggering blow to the very industry it purports to protect and would threaten to ignite a global trade war.”
German automakers Volkswagen AG, Daimler AG and BMW AG build vehicles at plants in the United States. BMW is one of South Carolina’s largest employers, with more than 9,000 workers in the state.
The United States in 2017 accounted for about 15 percent of worldwide Mercedes-Benz and BMW brand sales. It accounts for 5 percent of Volkswagen’s VW brand sales and 12 percent of its Audi brand sales.