Talk of trade war shadows auto show
Euro execs face threat after Trump singles out industry as battleground
The Geneva International Motor Show is known as a staging ground for the glitzy luxury models that swaddle the wealthy and deliver them in style.
This year’s no exception, with a new version of the Bentley Bentayga SUV, Bugatti’s $2.6-million (U.S.) Chiron and the Ferrari special-edition 488 Pista among the cars that will jostle for photographers’ attention.
But a separate plot line is emerging this year. European auto executives face the threat of a trade war after U.S. President Donald Trump singled out the car industry as the next battleground after steel and aluminum tariffs. Europe’s largest annual automotive gathering started Monday (the alternating Paris and Frankfurt shows draw more visitors but each runs every two years), with two days of news conferences before it opens to the public.
Here are some things to look for: Electric buzz While the show will have its usual displays of top-end cars — this time largely without the skimpily clad female models that have been a staple in the past — manufacturers will continue unveiling technology that may eventually come to rule the industry. Tata Motors Ltd.’s luxury Jaguar brand gave a sneak online preview last week of its fully battery-powered I-PACE sport-utility vehicle ahead of its official premiere in Geneva. Among newcomers offering battery cars will be Chinese producer LVCHI, presenting the Venere sedan, and Italian design company Icona, debuting the self-driving, steeringwheel-less Nucleus concept. Questions on diesel ... Industry executives at the show will be asked whether they’re holding tight to a strategy of developing cleaner diesel technology to meet ever-tighter regulations on fleet emissions of carbon dioxide, a greenhouse gas. They’ve come under scrutiny on two fronts. Authorities are questioning whether current model lines already violate rules, particularly after Volkswagen’s disclosure in 2015 that it rigged diesel engines to cheat on emissions tests. Separately, a top court ruling in Germany last week put into question whether the fuel is permissible in city centres, given that the motors also produce nitrogen oxide, a key component of health-threatening smog. Car buyers are already responding: diesel cars’ market share in Germany has dropped to 32.5 per cent as of February from about half before VW’s scandal erupted. ... and on U.S. trade Trump’s announcement last week of impending tariffs on U.S. steel and aluminum imports means raw-material supply costs are likely to rise at the American plants that German carmakers set up years ago — partly to reduce the effects of any trade barriers. It’s an indirect but potentially important hit at an industry that the U.S. leader has already targeted with blame for a widening German trade surplus. And it may be only a start. Trump is now threatening to tax car imports directly if Europe retaliates against the steel and aluminum tariffs. And then there’s NAFTA, which presents carmakers with another wild card, and Brexit, which is chilling sales in the U.K.