Shares in German carmakers BMW, Daimler and Volkswagen have fallen after United States President-elect Donald Trump warned he will impose a border tax of 35 percent on vehicles imported from abroad to the U.S. market. Sonia Legg reports.
Ford may have scrapped its planned car plant in central Mexico. But BMW has no plans to follow suit. Last week the German carmaker vowed to continue with its $2.2 billion investment in the region. Then came another blow. Trump told a German journalist he would impose a 35 per cent border tax on vehicles imported from abroad to the U.S. market. (SOUNDBITE) (English) MIKE INGRAM, MARKET ANALYST, BGC PARTNERS, SAYING: "It's interesting that many people have taken Trump at his word in some of the things that are market positive and selectively edited out some of the items that are potentially negative. Restrictive trade, tariffs were very much part of the narrative in the Trump election campaign and he has continued with that since he won the election in November." Shares in BMW, Daimler and Volkswagen all fell as markets opened after the comments were made. All three carmakers have invested heavily in factories in Mexico, where production costs are lower than in the U.S. (SOUNDBITE) (English) MIKE INGRAM, MARKET ANALYST, BGC PARTNERS, SAYING: "To some extent in terms of public opinion he is pushing against an open door. We are still dealing with the VW emissions scandal and he has already had some measure of success, as he would say, in that he has already brought some of the jobs back." BMW already produces its 3 series in Germany and China. Production at San Luis Potosi is due to start in 2019. The 150,000 cars it will make there are intended for the world market. Both Daimler and VW's Audi division also have big plans for Mexico. But Trump doesn''t like what he calls an unfair one-way street. Noting that Germans aren't buying Chevrolets at the same rate as Americans are buying Mercedes-Benz.