VW Says Trump's Trade War Is Forcing A Car Recession
VW is mad everyone’s messing with the economy, Tesla is making moves to expand Fremont, BMW has Brexit plans, and more, more, more. We’re getting wet and wild in The Morning Shift for Tuesday, September 10, 2019.
The trade war between the U.S. and China, a dramatically mismanaged fiasco orchestrated by President Trump that has seen escalating tariffs levied on goods and cars between the world’s two largest trading partners, has Volkswagen’s CEO not just disappointed this time, but straight-up upset.
“We come now into a situation where this trade war is really influencing the mood of the customers, and it has the chance to really disrupt the world economy,” Volkswagen CEO Herbert Diess said in an interview with Bloomberg TV. “China is basically a healthy market, but because of the trade war, the car market is basically in a recession. So that’s a new situation. That’s scary for us.”
Concerns about global trade have reached nearly 10 times the peaks seen in previous decades and could shave about 0.75 percentage points off world economic growth this year, according to data compiled by the International Monetary Fund. The auto industry is particularly exposed because of its global network of assembly plants and parts suppliers. Daimler AG, for instance, makes many of its Mercedes-Benz’s utility vehicles in Alabama and exports them to China and other markets.?
None of this ever had to happen! But it is. Keep in mind Volkswagen, and most of the major automakers of the world, are busy trying to wrap their heads around electric vehicles as the Chinese and European governments put pressure on them to curb emissions. Plus there was that whole Dieselgate thing they lost billions over. It’s hard to save face when the punches keep coming.
Carmakers need car buyers of the world to be financially secure in making the jump from gas guzzlers to mysterious battery machines, but if prices are artificially inflated over a glorified slap fight, it’s going to bum everybody out, man. I’m sure Volkswagen will be fine regardless, but it’d be really neat if we all put our efforts into stopping global economic decline instead of, like, begging for it. https://jalopnik.com/vw-says-trumps-trade-war-is-forcing-a-car-recession-1838008645