TOKYO/MILAN, May 31 (Reuters) - Shares of global automakers and suppliers tumbled on Friday after U.S. President Donald Trump threatened to impose tariffs on imports from Mexico, potentially upending a global manufacturing business model established decades ago. From Mazda Motor Corp in Japan to Volkswagen AG in Germany to General Motors Co in the United States, carmaker stocks took a hit as a new front opened in the global trade war. Automakers and suppliers could try to pass along tariff costs to consumers. Swedish industrial seals and bearings maker SKF, which supplies carmakers in the United States from Mexico, said it would pass on any tariff impact to customers.. Janet Lewis, an analyst at Macquarie Securities. However, other analysts said tough competition and slowing demand for vehicles would likely force manufacturers to eat much of the added cost. That in turn could force more cost-cutting by auto sector manufacturers. Major trade groups that represent the Detroit Three automakers and global automakers with U.S. David Schwietert, interim head of the Alliance of Automobile Manufacturers said in a statement that called tariffs a tax on consumers.
Auto trade groups also expressed concern that a tariff war with Mexico would undermine efforts to win congressional approval for a new U.S., Canada and Mexico trade agreement negotiated by the Trump administration. Automakers shipped 2.52 million vehicles to the United States from Mexico in 2018, accounting for about 14.6% of total U.S. IHS Markit, a consulting and market research firm. Railing against a surge of illegal immigrants across the U.S. Trump said he would target all goods coming from Mexico with a 5% tariff from June 10, increasing monthly to 25% by Oct. 1, unless Mexico took immediate action. Trump wrote in a tweet on Friday. Auto industry executives have said it would cost billions to abandon factories in Mexico and build replacements in the United States. For years carmakers and auto parts makers have built vehicles and parts in Mexico, taking advantage of its cheap labor, trade deals and proximity to the United States, the world's second largest auto market after China.
Mexico now dominates production of certain key automotive components, such as wiring harnesses - the networks of cables that connect on-board computers, brakes, headlights and other electrical systems. Mexico produces 97% of the wiring harnesses used in North American made vehicles, said Peter Nagle, senior automotive economist at IHS Markit. Trump's threat to impose tariffs rattled a number of global companies and industries. In addition to the auto sector, aerospace suppliers, industrial component makers and electronics firms are vulnerable. Jon Harrison, a senior macro strategist at TS Lombard. 32.5 billion in auto parts flowed to the U.S. Mexican factories, according to U.S. Some of the most popular vehicles sold in the United States are made in Mexico, including versions of GM's Chevrolet Silverado pickup, the Chevrolet Blazer SUV, Volkswagen's Jetta sedan and Toyota Motor Corp's Tacoma pickup. Trump's tweet ignited a global sell-off in shares of major auto industry players. In Europe, potential merger candidates Fiat Chrysler Automobiles NV and Renault SA led the carmakers lower, each falling 5%, while automotive supplier Faurecia SE was down 4% in late afternoon trading. In Friday afternoon U.S. GM, Ford and big auto parts makers Delphi Technologies PLC, Aptiv PLC and seat maker Adient PLC all tumbled.
That said, the redesigned Jetta does look somewhat plain without pretentious sport-styling cues, swoopy creases, or the like. It does not call excess attention to itself, but a closer look reveals lines that are purposeful and tastefully done. Inside the Jetta Hybrid, it is form-follows function - to a point. Instruments and gauges are logically placed. Steering wheel controls lend hands-free operation to several key functions. That this is a hybrid is soon obvious as there are a total of three possible ways to monitor what the gas-electric powertrain is doing. Power Meter on left instead of a tachometer. On the left of the main instrument cluster, in place of an analog tachometer, is a Power Meter. It looks sort of like a tach, but has a green colored zone to indicate regenerative battery charging, such as when off the gas, or on the brakes. As the needle sweeps in a clockwise direction, above the green is a numbered blue Eco zone indicating back-and-forth gas-electric-charge operation. And beyond that, number six to number 10 on the face indicates engine power alone is being used. Beyond that is Boost which indicates gas-plus-electric are being used.
