Subaru dived into the US three row SUV pool this week. Just what the snow belt ordered

Subaru dived into the US three row SUV pool this week. Just what the snow belt ordered

The renegotiation of the NAFTA free trade deal between the US, Canada and Mexico is attracting some automaker attention and they're not too happy, it seems. The Detroit Big Three - Ford, GM and FCA - are urging the Trump administration to row back from rule-of-origin proposals for NAFTA that they claim would add thousands to car costs and disrupt supply chains. A fifth round of negotiations between the member states of the US, Canada and Mexico ended with substantial differences and disagreements unresolved. President Trump has been a strong critic of the agreement, arguing that it has enabled US companies to decamp US manufacturing operations to lower cost Mexico and supply the US from there. 

US negotiators have proposed raising the minimum percentage of parts that must be made in the US, Canada or Mexico — from 62.5% to 85% — in order for manufactured vehicles to circulate freely between NAFTA countries. They also want 50% of parts to come from the US. Mexico and Canada are opposed to the US proposals. As we reported this week, the three Detroit automakers - represented by GM CEO Mary Barra, Fiat Chrysler Automobiles CEO Sergio Marchionne and Ford global operations supremo Joe Hinrichs - met this week with US vice president Mike Pence to voice industry concerns over the proposed rule changes. This one, like Brexit talks, will go on a bit yet.

Sometimes, rules have unintended consequences. Blow-in-the-wind politicians some years ago changed emissions rules to encourage UK buyers into diesel cars. They ignored advice that there were worse diesel exhaust pollutants than diesel. Then the wind changed. Now diesel is nasty, and must be taxed into oblivion. Cue Autocar magazine, over a century old, and its claim this week automakers will find it impossible to sell cars in the UK exempt from new diesel tax rules announced in the latest budget. Chancellor [finance minister] Philip Hammond announced diesel cars which don't meet a certain standard by April next year will go up by one tax band, determining how much vehicle excise duty (VED, commonly known as 'road tax') is paid at the time of registration and in subsequent years. Autocar noted the new standard, called Real Driving Emissions Step 2, is not due to be introduced until 2020, meaning that manufacturers have only just started working on the technology required. Even if cars do meet the required emissions limits, the certification for RDE2 does not yet exist, making it impossible to prove any car is exempt.

This means that, as well as a potential extra cost of GBP500 per vehicle owner, the budget announcement has caused mass confusion in the UK's GBP77.5bn car industry with automakers unable to comment without seeking further clarity from the treasury.

"The chancellor had an opportunity this week to clarify the road ahead for diesels, both for motorists and the car industry," said Autocar editor Mark Tisshaw. "But instead, he has created enormous confusion with a ruling that makes no sense. If Hammond really was serious about tackling pollution caused by diesel cars, he would have announced incentives around getting older, more polluting vehicles off the road. He did nothing of the sort, instead focusing on the cleanest, most modern diesels and sparing them tax increases if they meet a certification standard that can't be tested for until 2020."

Why am I not surprised?

In analysis this week, we scrutinised the recent order for Volvo from Uber, touched every screen we could find in a Tesla, and looked at an electrified future for Honda.

The Los Angeles show, aside from the usual 'where is the industry going', was SUV central this year. Subaru returned to the fold with a proper SUV instead of a people carrier with 4WD, Nissan launched the Kicks and Toyota's Lexus finally gave the RX three rows of seats.

Have a nice weekend.

Graeme Roberts, Deputy Editor,

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