BMW iX3 Will Be Built In China

BMW announced this week that it would start building more of its SUVs in China due to the recently enacted 40% import tax on cars sent there from the U.S. This massive increase was done in reaction to the Trump administration imposing import tariffs on Chinese products. Currently BMW is the largest exporter of cars in the U.S. and it makes the X3, X4, X5 and X6 SUVs at its Spartanburg plant. Employing 10,000 workers, BMW says that production numbers won’t be affected but with the recent announcement that the upcoming iX3 will also be built in China.

What The Heck Is Going On With BMW And Mercedes Brakes In China?

Both companies have had SUVs stopped at the port.

Trade tensions with China have been heating up in the past several months, causing issues for imported cars entering China. We have already seen Ford experience holdups at the Chinese port and now both BMW and Mercedes have experienced issues, according to Automotive News. All of the SUVs that were held at port were built in the US either at Mercedes' plant in Tuscaloosa, Alabama or BMW's plant in Spartanburg, South Carolina, which may partially explain the holdup.

Reports indicate that Mercedes GLS and GLE models built in the US between May 4 and June 12, 2018, may have a "safety risk," according to a Chinese customs document. Authorities in Shanghai claimed that the rear brakes on the cars were "insufficient." BMW similarly had to hold cars at the Chinese port, though this issue was in regards to a recall of approximately 19,000 X3 and X4 vehicles. The recall affects vehicles built between mid-April to the end of June and was triggered by faulty brakes from a supplier.

Both BMW and Mercedes are working to rectify the respective issues so the SUVs can be sold in China. These may be minor issues, but with the current trade tension between the US and China, little issues like these may be more highly scrutinized when the cars in question were built in the US.

BMW iX3 Will Be Built In China

BMW announced this week that it would start building more of its SUVs in China due to the recently enacted 40% import tax on cars sent there from the U.S. This massive increase was done in reaction to the Trump administration imposing import tariffs on Chinese products. Currently BMW is the largest exporter of cars in the U.S. and it makes the X3, X4, X5 and X6 SUVs at its Spartanburg plant. Employing 10,000 workers, BMW says that production numbers won’t be affected but with the recent announcement that the upcoming iX3 will also be built in China.

What The Heck Is Going On With BMW And Mercedes Brakes In China?

Both companies have had SUVs stopped at the port.

Trade tensions with China have been heating up in the past several months, causing issues for imported cars entering China. We have already seen Ford experience holdups at the Chinese port and now both BMW and Mercedes have experienced issues, according to Automotive News. All of the SUVs that were held at port were built in the US either at Mercedes' plant in Tuscaloosa, Alabama or BMW's plant in Spartanburg, South Carolina, which may partially explain the holdup.

Reports indicate that Mercedes GLS and GLE models built in the US between May 4 and June 12, 2018, may have a "safety risk," according to a Chinese customs document. Authorities in Shanghai claimed that the rear brakes on the cars were "insufficient." BMW similarly had to hold cars at the Chinese port, though this issue was in regards to a recall of approximately 19,000 X3 and X4 vehicles. The recall affects vehicles built between mid-April to the end of June and was triggered by faulty brakes from a supplier.

Both BMW and Mercedes are working to rectify the respective issues so the SUVs can be sold in China. These may be minor issues, but with the current trade tension between the US and China, little issues like these may be more highly scrutinized when the cars in question were built in the US.

BMW iX3 Will Be Built In China

BMW announced this week that it would start building more of its SUVs in China due to the recently enacted 40% import tax on cars sent there from the U.S. This massive increase was done in reaction to the Trump administration imposing import tariffs on Chinese products. Currently BMW is the largest exporter of cars in the U.S. and it makes the X3, X4, X5 and X6 SUVs at its Spartanburg plant. Employing 10,000 workers, BMW says that production numbers won’t be affected but with the recent announcement that the upcoming iX3 will also be built in China.

Did Trump And China Make A Deal On Car Tariffs?

Trump wrote a late-night tweet. China remains silent.

By now everyone is aware of the ongoing trade war between the US and China. President Trump made the first strike months ago when he imposed tariffs on imported Chinese goods. China responded in kind, and its response hurt. It tacked on tariffs for US-made cars imported to China and American automakers were not happy, to say the least. However, it appears a deal of some sort has been made.

Trump wrote on Twitter that “China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.”

Little else has since been said by the president. China hasn’t said a thing. But already shares of German automakers like BMW and Daimler have rallied following Trump’s comment. Tesla will also be very happy about this deal because it desperately needs China’s business. Although it is about to begin construction of a new plant in China, Tesla will still need to import vehicles for the foreseeable future. Just last week, China said that tariffs on US-built cars would be 15 percent if not for the ongoing trade dispute. Instead, it called for negotiations with the goal of ending the trade war.

Trump and Chinese president Xi Jinping recently met face to face at the G20 summit in Argentina and it appears that meeting was fruitful. If there’s no deal in place, then there’ll be a 15 percent to 25 percent increase of some $200 billion worth of Chinese-made products at the beginning of next year. That’s less than one month from now. Fortunately, it sure sounds like something positive is happening.

Trump also tweeted the following: “My meeting in Argentina with President Xi of China was an extraordinary one. Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!” We’ll update this space if and when an official announcement is made.

EV Sales: China New EV Models

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Toyota aims to triple China output over next decade

Toyota can produce 1.16 million cars in China annually, and sold 1.3 million there last year for a 4.5 percent market share. Photo credit: REUTERS

Toyota Motor Corp. is aiming to triple car production in China by as soon as 2030 in a renewed push to make up lost ground in the world's biggest market, according to people familiar with the plan.

Asia's largest automaker is targeting to manufacture 3.5 million vehicles annually in China around that year while boosting imports to the country to half a million vehicles, the people said, asking not to be identified as the internal goal is private for now.

Toyota can currently produce 1.16 million cars in China annually, and sold 1.3 million there last year for a 4.5 percent market share. Volkswagen AG and General Motors? delivered more than 4 million each.

The foray comes as Chinese officials warm to the hybrid technology that Toyota pioneered with the Prius, amid a realization that electric vehicles alone probably won't be able to achieve Beijing's ambitious environment targets, two of the people said. The government is aiming for a fifth of car sales by 2025 to be so-called new-energy vehicles, which include pure EVs and plug-in hybrids. Stringent quotas for NEV production go into force from next year.

Toyota is working to get back on track and accelerate growth in a market where VW, GM and local manufacturers such as Geely Automobile Holdings are strengthening their presence with lineups featuring plug-in vehicles. Geely, controlled by billionaire Li Shufu, overtook all its Japanese rivals to became China's third-biggest automaker by sales this year. By contrast, Toyota had to delay the introduction of a plug-in hybrid Corolla until next year, with an EV version of its compact crossover C-HR not due until 2020.

The China push is one way Toyota is adapting to fast changes in the car market -- a focus on self-driving vehicles is another. On Tuesday, Toyota said it is investing $500 million more in Uber Technologies Inc. and that it plans to manufacture minivans loaded with the U.S. company's software, with testing slated to begin on Uber's ride-sharing network in 2021.

Factory expansion

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The company aims to boost Chinese capacity to 2 million vehicles annually by the early 2020s on its way to the 3.5 million-vehicle-a-year production target, two of the people said.

The company plans to expand capacity in Tianjin by 120,000 units annually with local partner China FAW Group Co., according to a document posted on a local government website. The investment will total 1.76 billion yuan ($258 million), with 110,000 of the vehicles being plug-in hybrids and the remainder EVs, according to the document.

Additionally, Toyota will build a new factory in Guangzhou with its other local partner, Guangzhou Automobile Group Co., capable of producing 200,000 vehicles a year, Nikkei reported over the weekend. The joint venture is also expanding its existing facilities to make an additional 120,000 cars, bringing annual capacity to 1.7 million units by 2021, the newspaper said.

Toyota said it is studying how to reinforce its organization to accelerate its Chinese business, but declined to comment on specific moves. Toyota said it positions China as one of the most important countries within the global market.

The plans don't come without challenges. After years of rapid growth, the Chinese market is showing signs of cooling. Auto sales expanded just 3 percent in 2017, the slowest rate in recent years, with a similar pace forecast for the current year, according to the state-backed China Association of Automobile Manufacturers.

Even so, China has been improving access to its market, slashing car import duties to 15 percent from 25 percent last month, and starting to ease rules limiting foreign ownership of joint ventures. That compares with Toyota's biggest market, the U.S., where President Donald Trump's administration is said to be considering tariffs on cars of as much as 25 percent, even as that market shrinks.

Toyota sold more than 2.4 million vehicles in the U.S. last year, almost twice as many as in China.

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