Thursday, April 13, 2017

Trump's auto industry plan hits the skids

Donald Trump is removing regulations, easing emissions rules, and promising to boost US car jobs and production. 

But falling sales for US manufacturers suggest his ideas may not be easy to achieve. 

Automated production lines, falling demand, and a declining market for US-made sedans could all combine to throw off the President's plan to restore the age of industry for America's automakers. 

Nick Harper reports from the New York Auto Show. 

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The US car industry is heading downhill. After seven straight years of increasing car sales, there are now signs the recovery is running out of gas. 
Which is terrible timing for a President who wants America to be the "car capital of the world". 

TAKE SOUNDBITE - Donald Trump, US President 
"The assault on the American auto industry believe me is over."

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He's cancelled a regulation aimed at cutting carbon emissions. 
And he's trying to get more car plants and more jobs in the US. 
But Jennifer Vuong from Automotive News says that's easier said than done. 

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Jennifer Vuong, Automotive News
"A lot of the jobs that Trump wants to keep in the US are being automated now, so it's a little tough to find those jobs if machines can do them. So it's going to be tough to find all these jobs for all these employees and that might not fall in line with what Trump wants."

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Researcher LMC Automotive predicts no more record beating sales figures for at least the next four years. 
So if the market is potentially peaking now is hardly a good time to open US factories that cost around $1 billion dollars. 
Senior Analyst, IHS Automotive, Stephanie Brinley says that's especially true as the demand isn't really there. 

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Stephanie Brinley, Senior Analyst, IHS Automotive
"One of the challenges with the US manufacturing base is it's pretty robust, and we're building all the cars that we need. So, it's a little challenging to figure out how to build more cars for a market if we don't really need them."

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Overheads and labour costs mean making vehicles in America is more expensive. 
Yet President Trump's proposed tax for foreign-made cars that are sold in the US could increase prices by as much as 20 percent. 
Either way, cars could get costlier for consumers. 
Here's Autoweek Magazine's Jake Lingeman. 

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Jake Lingeman, Autoweek Magazine
"I don't know if a big shake up is what they need. If these cars all get produced locally they might be more expensive. And if people are willing to pay that, we'll have to see if people are willing to pay that."

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And with last month's US figures showing sales of Ford and Chevrolet's best known sedans were down around 36%, Donald Trump might find it harder than he thought to jump start the auto industry.
Those campaign promises coming up against the reality of manufacturing in America is now at a point where the rubber meets the road. 
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