Why Luxury Car Prices Are About to Get Brutal
Maserati is serious about making its next flagship a manual transmission GT car with a high-powered version of its Nettuno V6, exceeding 621 horses.
Is the 2025 Toyota Corolla FX more show than go? We got behind the wheel, and this is our honest review of the dark-trimmed compact sedan.
Will This Break The Ice For Bigger Brands?
Porsche and Aston Martin have begun raising prices in the United States as hopes of automotive-specific carveouts in trade deals fade, Reuters reports. The price hikes come shortly after a trade deal between the U.S. and the European Union that includes a 15%-tariff on EU-made cars beginning in August—lower than Trump threatened, but much higher than the 2.5% tariff from before President Donald Trump launched his global trade war.
On Wednesday, Porsche said it had raised U.S. prices by 2.3% to 3.6% in July, Reuters reported, but said it had no plans to move production to the U.S. Bringing more manufacturing to the U.S. by making imports more expensive has been a primary aim of Trump's tariff policy. Aston Martin said it had begun 'incremental' price increases in June, while issuing a profit warning based on U.S. tariffs and low demand in Asia.
No Relief In Sight
Source: Kyle Edward
'This is not a storm that will pass,' Porsche CEO Oliver Blume said after the automaker cut its full-year profit target and reported a $462 million hit from tariffs in the first half of 2025. 'We continue to face significant challenges around the world.'
Porsche isn't alone. Hyundai, Mercedes-Benz, and Porsche's parent brand Volkswagen all reported losses, issued profit warnings, or discussed raising prices in response to Trump's tariffs, Reuters noted. Even Ford, which claims around 80% of its vehicles are assembled domestically, reported an $800 million tariff penalty in its second-quarter results.
European Automakers' Hope Of Relief Fades
Source: Mercedes-Benz
European automakers had been hoping for tariff reductions specific to the auto industry, but the recent deal has eroded optimism, according to Reuters. Mercedes CEO Ola Källenius told analysts Wednesday that the automaker was assuming tariffs would remain at 15% for the time being.
'For all intents and purposes, that global deal for now is it,' Källenius said, adding that any side deals were 'very uncertain.' The Volkswagen Group last week, however, said it was hoping to negotiate lower U.S. tariffs based on investment commitments.
About the Author
Stephen Edelstein View Profile
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times
an hour ago
- Times
Supreme Court puts brakes on car finance payouts but it's not end of road
All it took was a statement from the Financial Conduct Authority in January last year announcing it would 'undertake work' on car loans to set off more than 18 months of turmoil in one of Britain's biggest consumer finance markets. Now, with a landmark ruling on Friday from the country's highest court, consumers, motor finance lenders and car dealers finally have some clarity on the potential scale of any consumer compensation the industry might have to pay. It is good news for the lenders who are on the hook for any redress. This is because the Supreme Court overturned the main arguments put forward by the consumers who brought the cases that might have resulted in a compensation crisis for motor finance providers akin to the £50 billion payment protection insurance (PPI) redress saga. • Consumers denied car finance payouts by Supreme Court While lenders may still end up paying billions in compensation, the worst-case scenario for the industry, which one City analyst had pegged at £44 billion, appears to have been avoided. It is the latest twist in a scandal that had caused consternation at the very top of the government over fears of the size of the hit lenders may face. While motor finance has been around since early in the 20th century, it has exploded in popularity in the UK in recent decades. Between 80 per cent and 90 per cent of new cars are bought using finance. The market is huge, with £18.4 billion in finance provided for 646,080 new cars and £21.3 billion for 1.4 million used vehicles in the 12 months to May, according to the Finance & Leasing Association, which represents the industry. The issue at the heart of the furore is the commissions that lenders pay to car dealers acting as brokers in the sale of motor finance. • Discretionary car finance commission was a disaster waiting to happen They have been in the crosshairs of the FCA, the City regulator, for almost a decade. In 2017, the authority announced a review of the car loans industry over concerns 'there may be a lack of transparency, potential conflicts of interest and irresponsible lending'. This culminated in the FCA's decision to ban so-called discretionary commissions. Under this payment model, the commission paid to the dealer was linked to the interest rate paid by the borrower, which the dealer was allowed to set. This created an obvious conflict because dealers earned more commission if they charged higher interest rates. The authority's ban came into force in January 2021. The regulator estimated that it would save consumers £165 million a year. Yet controversy over commission did not go away. Customer complaints to motor finance firms about pre-ban deals surged. Borrowers argued that commissions had not been disclosed, car dealers had failed to give impartial advice and that they therefore had not received the best deal. There was also a rise in county court claims. Most grievances were rejected by firms and went up to the Financial Ombudsman Service, an independent body that adjudicates on unresolved complaints. It published its first two decisions on representative cases in January last year. One of the disputes related to Black Horse, the car loans division of Lloyds Banking Group that is the UK's biggest motor finance provider, and the other related to a unit of Barclays. In both instances the ombudsman found against the lenders, deciding that they had acted unfairly because the discretionary commissions had not been disclosed to the borrowers, and that they should pay compensation. This immediately prompted the FCA to begin another review of the market, examining discretionary commissions as far back as April 2007, blindsiding the industry with its wide-ranging, retrospective nature. This fuelled City speculation that car loan providers, which include the lending arms of car manufacturers as well as banks, would ultimately be forced to pay consumer compensation totalling billions of pounds and, inevitably, a whole industry of claims management companies and law firms seeking to cash in on redress claims quickly sprang up. • 23m people expecting compensation for car finance scandal Industry data compiled by the authority covering most of the car loans market suggests there were about 25.9 million motor finance deals arranged between 2007 and the end of 2020. Some 14.6 million of these included discretionary commissions of about £8.1 billion. It was just weeks after the authority started its review that the fallout on lenders began to materialise. The first casualty was Close Brothers, a London-listed merchant bank that has large exposure to motor finance relative to the size of its wider loan book. Its shares had slumped following the regulator's announcement after investors identified the 147-year-old lender as being at risk from the inquiry. Their fears were confirmed in February last year when Close revealed it was scrapping its dividend to bolster its balance sheet to prepare for possible compensation payouts. It has since taken a series of emergency actions to boost its capital position by more than £400 million. A week after Close Brothers axed its dividend, Lloyds announced it was setting aside £450 million to cover its potential customer redress bill. This was increased by Lloyds to £1.15 billion this February following a seismic ruling last autumn by the Court of Appeal, which found against lenders MotoNovo and Close in three cases brought by consumers. It was this judgment, which stunned the industry because of its far-reaching implications, that was referred to the Supreme Court after the lenders involved appealed. While the FCA's continuing review relates to discretionary commissions, the Court of Appeal ruled that any commission was unlawful if it was not properly disclosed to, and consented to, by consumers, and that dealers, in their capacity as brokers, had to act in the best interests of their customers because they owed them a fiduciary duty. It also ruled that lenders were liable to compensate consumers for the commissions. By going much further than what had been required under regulation, it immediately caused chaos in the motor finance market, as lenders halted operations to check that they complied with the ruling, and prompted several banks to follow Lloyds by making compensation provisions. They included Santander UK, which set aside £295 million, Close, which has earmarked £165 million, and a £90 million provision by Barclays. The UK motor finance arm of BMW set aside more than £70 million, although this provision pre-dated the Court of Appeal ruling. All of this significantly increased estimates for the overall bill faced by the industry. Some lawyers warned the ruling could have implications for commissions in other areas involving brokers, such as asset finance and energy. • Car finance revival as memories of the mis-selling scandal fade The prospect of another PPI-style scandal unnerved the Treasury, not least because Rachel Reeves, the chancellor, has placed fostering the financial services at the heart of her efforts to boost Britain's faltering economy. This risked being undermined, not just by a big compensation crisis for lenders, but also by the frenzy of activity by claim-chasing companies and law firms that have been seeking to feast on the scandal. Yet the Treasury can breathe a sigh of relief. The Supreme Court on Friday rejected the idea that dealers owed a fiduciary duty to their customers and also dismissed the argument, which had been upheld by the Court of Appeal, that the commissions amounted to a bribe. The industry is not completely out of the woods, however. While the Supreme Court upheld two of the appeals made by the lenders, it backed consumers in the third case. • Common sense has triumphed over compensation culture The FCA also still has to make a decision about discretionary commissions. It previously signalled that it was likely to impose a redress scheme on the industry over these arrangements. It said on Friday night that it would confirm whether it will consult on a compensation scheme before markets open on Monday. Even so, the Finance & Leasing Association hailed the judgment as 'an excellent outcome'. The Treasury, which had been considering bringing in legislation to supersede the court ruling if it threatened a huge compensation blow to lenders, signalled that it would not intervene, with a spokesman saying it respected the judgment. Kate Scott, a partner at the law firm Clifford Chance, called it 'an eminently sensible, commercial decision from the Supreme Court. As any man on the street will confirm: car dealers act in their own interest'.
BBC News
2 hours ago
- BBC News
Trump says he will fire head of BLS as stocks shudder
US President Donald Trump said he would fire the head of the agency charged with publishing some of America's most closely watched economic data, after a weaker-than-expected jobs report stoked further alarm about his tariff policies. His decision to move forward with plans to sharply raise tariffs on goods from countries around the world had already sent financial markets in the US shuddering. In the US, the three major indexes dropped, with the S&P falling 1.9% by mid-afternoon. That followed earlier sell-offs in Europe and Asia, as investors dumped shares of firms such as South Korean steel manufacturers and German truck-maker Daimler. Trump's plans leave most goods coming into the US facing new taxes of 10% to 50%, depending on their origin, and will lift tariff rates in the US to the highest levels in nearly a says the measures will rebalance global trade and boost US analysts say they will raise prices for businesses and consumers in the US and weigh on the US and global economies, as sales, hiring and investment slow. This week has revived fears about economic damage, as companies update investors on their costs and new data points to slowdown in the US. Employers in the US added just 73,000 jobs in July, according the monthly Labor Department report published on also dramatically revised estimates of job growth in May and June, with far fewer gains than previously thought."The economic data since the Liberation Day announcements did not reflect that sharp deterioration in economic activity, or at least not in obvious ways. This was the week that changed," analysts at Wells Fargo wrote on Friday. The revisions appeared to spur Trump to fire the commissioner of labor statistics, Erika McEntarfer, in a post on social media."We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY," he wrote on social media, referring to the large revisions to the May and June jobs numbers. Trump also lashed out at Federal Reserve chairman Jerome Powell, whom he has angrily criticised in recent in the US opened lower in the morning, with losses accelerating over the course of the afternoon. France's CAC 40 closed down 2.9%, while German's DAX fell 2.6%. In the UK, the FTSE fell 0.7%.Earlier the leading index in South Korea fell 3.8%, the Hang Seng index in Hong Kong dropped 1% and Japan's Nikkei fell 0.6%. When Trump first put forward his plans in April, shares in the US tumbled more than 10% in a week, the concerns spreading to the dollar and bond stock market recovered after he suspended some of the most drastic measures, leaving in place a less punishing, more expected 10% levy. In recent weeks, indexes in the US have been trading around all-time highs. "The reality is Trump got emboldened by the fact that markets came right back," Michael Gayed, portfolio manager for The Free Markets ETF told the BBC's Opening Bell. "Now he's going to try his luck again." The latest measures are less extreme than what Trump first put forward in April, when goods from key players in southeast Asia, such as Vietnam, were facing tariff rates of more than 40% and a tit-for-tat exchange with China drove US tariffs on its exports surge to at least 145%.But the tariffs still make for a radical change for the US, for decades a champion of free plans include a minimum 10% tax on most goods entering the US, with major trade partners, including the European Union, Japan, South Korea, Vietnam face tariffs in the range of 15% to 20%.Goods from China are set to facing new 30% levies, while exports from some other countries, including Switzerland and Laos face even higher changes, which are set to go into effect on 7 August, will lift the average tariff rate to roughly 18%, up from less than 2.5% as recently as had been taking the impact of tariffs in stride, sending shares in the US and elsewhere to new highs in recent weeks. Mr Gayed said markets had become less sensitive to Trump's rapidly changing trade policies, but he saw risks ahead. "The more he just whips around policy, the more the markets will not care, but as the old saying goes, nothing matters 'til it matters and then it's the only thing that matters," he said.
The Independent
2 hours ago
- The Independent
Drivers should be ‘very pessimistic' over car finance claims, say lawyers
Drivers should be 'very pessimistic' about getting any compensation for taking out a car loan after a landmark ruling by the Supreme Court, experts have warned. Industry analysts also said on Friday that banks will 'breathe a sigh of relief' after the Supreme Court ruled they are not liable for hidden commission payments in car finance schemes. Nevertheless, the financial watchdog has said it is still considering whether to launch a redress scheme for consumers who potentially receive compensation. Lawyers have also indicated that some consumers should still consider pursuing their claims over 'unfair' treatment. Two lenders, FirstRand Bank and Close Brothers, went to the UK's highest court to challenge a Court of Appeal ruling which found 'secret' commission payments paid by buyers to car dealers in agreements before 2021 without the motorist's fully informed consent were unlawful. The ruling last year found three motorists, who all bought their cars before 2021, should receive compensation. But in a decision on Friday, justices at the UK's highest court overturned the Court of Appeal, though some customers could still receive payouts by bringing claims under the Consumer Credit Act (CCA). Lawyers for the lenders told the Supreme Court at a three-day hearing in April the decision was an 'egregious error', while the Financial Conduct Authority intervened in the case and claimed the ruling 'goes too far'. However, the judges upheld a claim brought by one driver under the CCA that his relationship with the finance company had been 'unfair', awarding him the commission amount of £1,650.95 plus interest. Lizzy Comley, chief operating officer of consumer law firm Slater and Gordon, said the ruling still reinforces the right of many consumers to pursue claims. She said: 'This landmark ruling is positive news for the millions of people who have lost money due to the car finance mis-selling. 'The court confirmed that for years, consumers have potentially been unfairly overcharged on car finance agreements, and this ruling reinforces their right to pursue justice and recover the compensation they deserve.' However, others have said that the ruling will make it harder for most claims. Nicola Pangbourne, partner at Kennedys law firm, said: 'If I was a driver, I would be very pessimistic about getting compensation. There's now quite a few hurdles they've got to get through.' Industry experts have suggested the ruling will be broadly seen as a success for lenders, who had been preparing for significant compensation payments. Caroline Wayman, global head of financial Services at PA Consulting, said: 'Lenders will breathe a sigh of relief at the ruling, but it should still be a wake-up call for firms to scrutinise any large, undisclosed commissions in their business. 'Firms should ask themselves whether it still feels justifiable or could be considered unfair, particularly if they haven't disclosed commercial ties to the broker and it won't be enough to expect customers to have read and understood the fine print.' On Friday, a spokesperson for the Financial Conduct Authority said after the ruling that it would confirm whether it will consult on any such scheme by 8am on Monday. They said: 'We want to bring greater certainty for consumers, firms and investors as quickly as possible.'
