By on February 13, 2013

The United States and the European Union will begin talks on a free-trade agreement, which may take as long as two years to complete. The deal is expected to be worth some $613 billion annually, and could have some interesting implications for the auto sector.

The first and most obvious possibility is the end of import duties for passenger cars and light trucks; 2.5 percent for cars and 25 percent for trucks. Such a deal would amount to an end for the “chicken tax” for European made light trucks.

This may have an impact on the manufacturing profile for the world’s automakers as well. Mexico is currently in vogue due to low labor costs and the ability to export Mexican made cars to the United States and Europe. But with a US-EU free trade deal, there may be an extra incentive to bring some production to Europe, particularly if there’s unused capacity burning a hole in their pocket.

Also worth keeping an eye on is vehicle safety standard harmonization. The FMVSS standards vary from the UN/ECE standards used by pretty much everyone else, and this deal may bring about some kind of agreement on harmonization between the two. The FMVSS is frequently cited as a non-tariff barrier to trade by many observers. Not many would be sad to see it go.

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90 Comments on “EU-US Free Trade Deal Begins, Completion Expected In 2015...”


  • avatar
    Tomifobia

    So does this mean domestic-brand cars will lose energy-absorbing bumpers, but gain awkwardly-tall beltlines?

    • 0 avatar
      Athos Nobile

      Not only the bumpers, off the window go the bigger US-spec airbags, side marker lamps, yellow parking lamps and other. And that is to mention just the crumbles.

      I guess they will also want to dump the EPA driving cycle for fuel economy test. I have seen the EU and US charts and to me the gringo one is more indicative.

      I’ve been in a place were both standards live side by side, and believe it or not, the marker lamps helps vehicle visibility during the night. US cars could use rear fog lamps and European manufacturers could finally have the decency of fitting 2 reverse lamps in every car (the cheapest ones usually do with one, the other side is a fog lamp).

      If there’s standards harmonization happening it has to flow in both ways. Can’t be that the US surrender theirs to adopt the UN/ECE stds when both systems clearly have their advantages and disadvantages.

      • 0 avatar
        th009a

        There is no need to harmonize fuel economy calculations — US and Canada use different numbers, too.

        As for tall beltlines and slit windows, there are plenty of those on the US market already, such as the Chrysler 300 or Chevrolet Camaro.

      • 0 avatar
        Tomifobia

        But I like those crumbles.

      • 0 avatar
        th009

        There is no need to change local fuel economy measurement standards in order to have free trade. UK measures in mpg within EU, Canada measure in L/100 km within NAFTA. Measurement methods don’t prevent trade.

        As for awkwardly-tall beltlines and slit windows, there are plenty of those in domestic cars already, such as the Chrysler 300 and the Chevrolet Camaro …

  • avatar
    kvndoom

    Kill the chicken tax! Finally!!! Maybe the compact pickup market can come back.

    • 0 avatar
      Pch101

      You can buy compact pickups today that have zero percent tariff. They should be stacked up at your local dealership.

      But you probably don’t want one. Don’t worry, not many other people do, either.

      • 0 avatar
        Big Al from Oz

        @Pch101
        Have you ever had the chance to do a comparison between a global mid sizer and a US full size pickup?

        I doubt it.

        The new generation of mid sizer ie T6 Ranger/BT50, VW Amarok, Colorado/Dmax are a generation in front of the Toyota Hilux. And the Hilux is a generation in front of the Taco.

        I do think if these new mid sizers are available in the US you would see a significant drop in full size sales.

        Release these trucks as are, with up to 3 000lbs payload and their current tow ratings. Have them manufactured overseas to create real competition in the US. You will soon see an improvement in vehicle build quality and safety.

        There is a huge market in the US for these trucks. They pollute less, are much more economical, and are built better than your current full size trucks.

        Google the name of these new mid sizers an read the reviews.

        I great to be proud and patriotic of a country you live in, but be realistic.

      • 0 avatar
        DenverMike

        @Big Al From Oz – The “up to 3,000 lbs” drops significantly for the double cab 4X4s and that’s a truck sold without a bed! Sorry, beds are forced in the US and you have to deduct for them.

        Global trucks would make a tiny dent in full-size truck sales, but most of those would a loss of fleet dept regular cab full-size trucks (or loss leaders). Global trucks could take a bigger dent out of Corolla, Jetta, Sentra (and the like) US sales. So Global OEMs could be cannibalizing their own profitable car lines for a whole lot of loss leader fleet and retail pickups?

        As far as quality goes, and even if your anecdotal truck reviews are real world, the difference would be minuscule and irrelevant. Never mind that we’re talking trucks, but If utmost quality was every buyers #1 main concern, INCLUDING those super sophisticated Australians, Toyota and Honda would be much bigger and VW, Audi, Porsche, Jaguar, Land Rover, Mercedes, and BMW would be much, much smaller.

      • 0 avatar
        racer-esq.

        *If* there is a compact pickup market in this US it is for the kind of FWD car based compact pickups that are sold in Mexico and Brazil. A modern body-on-frame compact/midsize pickup costs so much that a US buyer might as well buy a full size pickup.

        However, I think that the Ford Transit Connect, Nissan NV200 and whatever the Ram version of the Fiat Doblo is called will fill that niche. They offer the same size and efficiency as the car based Latin American pickups while also giving the cargo protection from theft and the elements.

      • 0 avatar
        George B

        @Big Al from Oz
        The Corporate Average Fuel Economy rules, CAFE, are not emissions standards. They are a way to make a manufacturers develop and offer fuel-saving features like 6 or 8 speed automatic transmissions with less fear that another manufacturer will undercut them on price. Only a minority of voters experience the sticker shock from mandated features when they buy a new car while the overwhelming majority of voters would be made immediately angry by higher taxes on fuel.

        I’d welcome the chance to try some of the global mid-size pickup trucks, but the current domestic brand full size pickup trucks already compare well against good quality competition from Toyota and Nissan.

      • 0 avatar
        Pch101

        “Have you ever had the chance to do a comparison between a global mid sizer and a US full size pickup? I doubt it.”

        I’ve probably seen more of Australia than you have (and in a Falcon that I owned, no less.) But thanks for asking.

        “I do think if these new mid sizers are available in the US you would see a significant drop in full size sales.”

        I’m sure that you think so. But you’ve already established that you don’t really know anything about the US car market, or US auto regulations, or for that matter, much else. Your opinions mean very little, while reality is rather different from how you imagine it.

      • 0 avatar

        @PCH101:

        TTAC has a commenting policy that disallows rude behavior.
        “No personal attacks on other commenters or TTAC authors. Disagreement is no attack, name calling is. You may make a robust argument, but you may not insult the other person … The decision of what is an attack rests with TTAC moderators, and their decision is final.”

        Comments along the lines that an opponent does “not know much else” and that his “opinions mean very little, while reality is rather different from how you imagine it” are clearly insulting.

        You had been warned before: http://www.thetruthaboutcars.com/2013/02/canadian-government-investigating-price-discrepancies-for-new-cars/#comment-2003478

        As warnings do not appear to effect a change in this aggressive behavior, I see no other alternative than to issue a ban.

        To all:

        It’s not what someone says that can result in a ban. Only how it is said. TTAC is known for the quality of its comments. Rude, aggressive comments diminish the quality and destroy TTAC. They will not be allowed.

    • 0 avatar
      RobertRyan

      @kvndoom,
      Yes it will open up many new possibilities. Definitively a shot in the arm for the European makers. Getting rid of a ridiculous 25% tariff is a good thing before you start.

    • 0 avatar
      L'avventura

      The ‘Chicken Tax’ will likely stick around.

      Let’s take KORUS(S.Korea-US) FTA that was recently ratified as an example. The ‘Chicken Tax’ will remain until 2019 when it’ll be reduced to a still high 6.1%. For light-trucks, ‘special auto provisions’, aka a regulatory barriers, are allowed to exist until 2032(!). Nearly two decades away.

      Being that the light-truck market in Europe is near non-existent, I don’t see the ‘chicken tax’ being a major focus for negotiations. Nor European production economically favourable or worth the EU fighting over.

      If this FTA passes it’ll be a watered-down version with lots of exceptions.

      For instance, I don’t see Americans recognizing PDOs (protected designation of origin)of foods. Unless, Americans want to stop generically using names like mozzarella, cheddar or feta cheese, parmesan, champagne, etc. There are going to be so many pit-falls and caveats to any US-EU FTA that things like the ‘chicken tax’ will just glide under the radar.

      • 0 avatar
        DenverMike

        More likely, the Chicken Tax has done more harm than good to US OEMs. Without a FTA, where can you sell US trucks? Without politial S storm? “Yes, we charge everyone (including you) a 25% tariff, but, but…”

      • 0 avatar
        RobertRyan

        @Denvermike
        “More likely, the Chicken Tax has done more harm than good to US OEMs. Without a FTA, where can you sell US trucks? Without politial S storm? “Yes, we charge everyone (including you) a 25% tariff, but, but…”
        I have to agree with you there. It sure has. I think this proposed Free trade agreement with EU is one way of repairing the damage.

      • 0 avatar
        th009a

        Champagne is indeed protected, but none of mozzarella, cheddar or parmesan are (Parmegiano Reggiano is, though).

        The restrictions are really not that onerous, though that doesn’t mean the US would accept them. I do expect that they will be a significant issue for the EU negotiators.

      • 0 avatar
        Pch101

        “Being that the light-truck market in Europe is near non-existent, I don’t see the ‘chicken tax’ being a major focus for negotiations.”

        There are several FTAs that include a waiver of the 2.5% auto tariff and the chicken tax. I suspect that an EU FTA would be similar to those, but the impact of a waiver on the truck market will be minimal for the reasons that you state.

    • 0 avatar
      spw

      no pickups are produced in EU at all… so if anything, we could see US made trucks in Europe, not vice versa.

      So this could only help Toyota which has pickup production in the US and not big 3. It could also mean cheaper export for Prius, if it starts producing in the US as well, as EU-Japan has customs on Japanese cars being imported to Europe.

      On the other hand, Ford could export some other cars that sell good in US to Europe… as well as GM/Opel and Chrysler.

      • 0 avatar
        RobertRyan

        @spw
        “So this could only help Toyota which has pickup production in the US and not big 3. It could also mean cheaper export for Prius, if it starts producing in the US as well, as EU-Japan has customs on Japanese cars being imported to Europe.”

        Not going to make much of a difference as Pickups in general are not common in Europe, in fact they are pretty are in most countries.

      • 0 avatar
        th009

        Japan-EU FTA will most likely be done long before a US-EU FTA.

  • avatar

    I’ve been pretty optimistic about an EU FTA’s impact on the auto industry, but it’s pretty clear that auto trade will continue to be pretty heavily regulated. Per the Globe and Mail:

    “Brussels and Ottawa remain divided over Canada’s insistence on duty-free or low-tariff access for vehicles shipped from assembly plants in Canada. The amount of Canadian content in these vehicles is on average less than 30 per cent because significant portions are made by U.S. auto makers.

    Canadian officials expect Brussels, which is worried about U.S. autos slipping into Europe through such an arrangement, will set a quota for this trade.”

    Given the long-term demand picture in Europe, it’s hard to imagine US manufacturers flooding the EU with exports, but I guess the concern is still there…

  • avatar
    bumpy ii

    One would think the OEMs would be pushing for harmonization, as the different standards now in place make their job a lot harder than necessary. I suppose one short-term solution would be reciprocal acceptance.

    • 0 avatar
      Pch101

      The US and Canada use a “voluntary compliance” system for safety standards. First, a set of regulations is created, with input (read: haggling and lobbying) by the automakers; then, the automakers can build what they want in compliance with the rules, with the assumption that they are in compliance unless proven otherwise.

      Elsewhere, they use a “type approval” system. Not only do they have regulations, but each vehicle design has to approved before it can be sold.

      Type approval flies in the face with how we do business and our approach to free enterprise, which doesn’t assume the worst about business and that allows the market to sort out what it likes or doesn’t like. Type approval is too heavy handed, since approvals have to be front loaded and blessings have to be granted before vehicles can be brought to market. We’ll never go for that, and frankly, there’s no reason that we should.

      • 0 avatar
        wmba

        Thanks for that information – hadn’t realized that was what the EU was up to.

        In Canada, type approval is required for electricity meters, gas meters and all trade related measurement devices, the areas I’m most knowledgeable about. It is a Federal approval that must be met before use anywhere in the country, and subsequent checks and QA tests are run by the feds. In the US this weights and measures thing is state-run.

        The EU vehicle approvals mean that if a vehicle is type-approved in one member country, automatic approval extends to the whole EU. Which at least means you can’t get petty politicians in a country refusing vehicle sales from another country they don’t care for just because they feel like it.

        On the other hand, in the US, you get California in particular dictating standards that are different than Federal ones. That messes up your system, and there seems to be no recourse for the Feds to follow.

        CARB certification is much more like the EU model. It’s a pre-approval process. So, in negotiating with the EU, it would seem that California should be brought to heel first.

        What say you?

      • 0 avatar
        Manic

        Pch101, do you feel that EU type approval is somehow difficult to achieve? Chrysler sells its US cars as Lancias, Chinese have tried to sell their one star (ENCAP crash test result) death traps etc. Approval’s not real problem if your non-european car has brakes and lights.
        If private person wants to import really rare recent car which doesn’t have type approval this approval can be done for that one single car, costs couple of thousands Euros. Brake dyno etc. tests and that’s it. maybe if you have really crappy home-brew car it can be refused but that’s not an problem for US Big3.

      • 0 avatar
        Pch101

        “CARB certification is much more like the EU model. It’s a pre-approval process. So, in negotiating with the EU, it would seem that California should be brought to heel first.

        “What say you?”

        I seriously doubt that safety and emissions standards will be on the negotiation table at all.

        The European approach tends to focus on carbon emissions, while the US focus is on air quality. The Europeans try to reduce the amount of carbon from being burned with fuel taxes and, increasingly, registration fees based upon carbon output. We continue to use ad valorem assessments for registration fees, while CARB and EPA are obviously focused on smog, which means lower maximum NOx levels and the like, but less effort to control fuel consumption.

        I don’t see this changing. It’s a rather substantial philosophical difference, and neither side is going to change for the sake of the other.

      • 0 avatar
        Pch101

        “do you feel that EU type approval is somehow difficult to achieve?”

        If you believe the EU and the ACEA, Japanese type approval is used as a non-tariff barrier that has the effect of increasing European car prices in Japan.

        I suspect that the issue with having a type approval system in the US would be a philosophical one. It requires more government involvement in the car business for no particularly good reason. This need for more bureaucrats who cost us all money while creating no value would send the Republicans (and probably the Democrats who are part of the Auto Caucus) into a tizzy.

        And this is one of those rare cases when I’d be cheering on the Republicans. The US system presently does a good job of allowing automakers to bring decent product to market. The success of the US approach proves that shuttling a team of regulators to approve production facilities and vehicle designs is not worth the cost. This is one situation in which the Europeans should be copying us, not the other way around.

      • 0 avatar
        th009

        The US system is in no way “voluntary”. Rather, it is self-certification.

        There is no reason why US couldn’t continue with self-certification and EU with type approval, just with a common set of rules. The rules are independent of the enforcement mechanism.

  • avatar
    tced2

    Why does it take 2 years to negotiate a “free trade” agreement? Can’t it be done in an afternoon?
    Perhaps it’s actually a “freer trade” agreement with lots of fine print. 2000 pages would be nice.

    • 0 avatar
      th009

      The EU-Canada free trade negotiations have been ongoing for 3 1/2 years already, and are not yet concluded.

      Given that the president needs ri secure fast track authority from the congress first, then the negotiations, and finally congressional approval (both house and senate), I cannot imagine ratification of a US-EU free trade treaty in anything less than five years. And there will be one presidential and two congressional elections during that time.

    • 0 avatar
      Brian P

      One problem is the differing technical regulations (as already seen in some of the posts in this thread). The “not invented here” syndrome is very much in effect: the EU does not want to accept US standards and the US does not want to accept EU standards. The safety standards are only one thing; the emission standards are quite another. It takes considerable time to work through the differences.

      While “type approval” implies a level of government intervention, in reality it is a matter of the vehicle manufacturer preparing a stack of documentation and then submitting that to an organization such as TuV, who then grant the type approval which is then valid everywhere that accepts the UNECE motor vehicle standards (e.g. throughout the EU and elsewhere). Performing (and paying for) the testing is still up to the vehicle manufacturer – this is the same as it is in the USA. But accepting one set of standards (whether US or UNECE) means the testing only has to be done once, instead of using two slightly different test regimens that are just different enough that you can’t do it once and use the results to satisfy both sets of regulations.

      The challenge, and the reason it takes time, is to convince the EU that the US standards are “good enough” or “equivalent” or vice-versa, convincing NHTSA and EPA that the UNECE standards are “good enough” or “equivalent”.

      The US wants taillamps to have reflectors, and the turn signal and brake indications can be combined and/or can both be red. UNECE doesn’t care about reflectors, but insists on the turn signal being orange and the brake lamp being red, and it has to have rear-facing high-intensity fog lamps. Who’s right?

      On the instrument panel, if the brake fluid is low on a US-market vehicle, the English word “BRAKE” must be illuminated in red. That doesn’t fly in the rest of the world, most of which speaks some language other than English. In the rest of the world, it needs to have the ISO symbol for braking system warning, and words (implying a specific language) are not to be used. You try telling each one that the other is right! It easily takes years to resolve these issues, and thousands more.

      Personally, I would rather have the US accept the UNECE standards rather than the other way around. But … I don’t live in the US!

      • 0 avatar
        Athos Nobile

        “The US wants taillamps to have reflectors, and the turn signal and brake indications can be combined and/or can both be red. UNECE doesn’t care about reflectors, but insists on the turn signal being orange and the brake lamp being red, and it has to have rear-facing high-intensity fog lamps. Who’s right?”

        Both. Turn signals should have their own color. The car should have reflectors in the back to provide car presence in case of a blown bulb.

        The US must also require 2 reverse lamps, I haven’t seen a modern US car without. The EU can get away with one. You should have 2, + points to the US

        Side repeater lamps, win for the EU. Side marker lamps, win for the US

        I rather have the yellow and separated parking lamp of the US cars than the white one in EU cars.

      • 0 avatar
        bumpy ii

        The upsized Scion xB had a single backup lamp in the bumper for a few years. Went to the usual pair in the tail lights after a refresh.

    • 0 avatar
      PaulieWalnut

      The Doha round of WTO negotiations have been going on since 2001 with no end in sight. Two years is pretty fast.

  • avatar
    Big Al from Oz

    @Pch101
    What you have stated is incorrect.

    There is no haggling and lobbying. For example, how much haggling was there for the Colorado, an actual GM product. The vehicle has a successful design and is actually being manufactured on the global market with a 5 Star ENCAP/ANCAP.

    2 years to redesign this vehicle for the US market seems to counter your argument. So what you are saying is GM is wanting to produce a vehcile with less safety for the US market than for a developing country? Get real.

    Regulations are designed so manufacturers to conform and comply. It’s called engineering. Maths and physics isn’t “free” enterprise.

    The original differences started in the early 50s with differing vehicle design regulations in the US. This was to protect the US from cheap post war European imports.

    Your CAFE emission standards hopefully are the next to go, it makes more sense to regulate on weight not vehicle size. Your CAFE standards are counter to common sense. The bigger vehicles are given more leeway.

    Look at your aviation industry, standards for the auto industry is similar.

    Free Market, I can’t even take my Mazda BT50 and drive it on US roads, but I can bring any US manufactured vehicle and drive it on an Australian road.

    Free?? Who are you kidding. The US vehicle market is one of the most protected markets in the world.

    • 0 avatar
      DenverMike

      @Big Al from OZ – What Chicken Tax? It’s clearly a joke and nobody pays it. The millions of imported trucks during the mini-truck craze laughed at it. The real tax is a Knock Down Kit (assembly), but remember, imported cars pay 2.5%. I doubt KDKs adds more than 2 or 3% to a truck, but even at 5%, it’s what Australian imports are hit with (outside of the FTA zone).

      Foreign OEMs are excusing themselves from the US market because of the way we buy and use compact or mid-size trucks. Ask Mitsu, Isuzi, Mazda and others why they ran screaming from the US market after the 80′s. For a clue ask Nissan where their base regular cabs are? Now compare Frontier sales (2,624) to Tacomas (11,622) last month. Do you still wonder which Tacos sell the most? Do you know what a ‘loss leader’ is? Build regular cabs or don’t, you lose either way.

      Aside from fleet buyers that have a base 2wd regular cab appetite, so do cheapskate commuters just looking to get from AtoB and want an alternative from Corollas, Sentra and such. Tell me you’d take a base Corolla over a base BT50?

      You simple cannot compare the juicy full-size market to compact or mid-size, at least not in the US. Full-size trucks further kill the deal and these global truck will never be a fashion statement. Do you think anyone wants a King Ranch, Limited or Longhorn Laramie equivalent BT50? Hold the nav and bluetooth, just 4 cyl 2wd regular cab with roll-up windows and vinyl everywhere Amarok please!!!

      • 0 avatar
        Big Al from Oz

        @DenverMike
        You are making a fool of yourself with statements like you have posted above. I can’t believe some of the BS you try and serve up on this site. You left PUTC after some of your comments didn’t quite gel, now you are going to annoy people here.

        Have you started with your Ford propaganda yet on TTAC?

        If the Chicken Tax isn’t effective, why is it still there? I would like you to respond to that with a LOGICAL response, with facts to support your claim.

        The US has a FTA with Thailand, why isn’t Ford importing the Global Ranger to replace the now defunct NA Ranger? But don’t give me the Ford response.

        Also I hadn’t mentioned the Chicken Tax but seeing since you brought it up you might as well respond.

        I was talking about CAFE.

        There are publications for 3 graders to improve your comprehension.

        To the person who mentioned about CAFE not being an emissions target, my mistake. EPA sets those targets.

        Even the US EPA works as a trade barrier.

        When the US has to compete globally with vehicles the US consumers will benefit the most.

      • 0 avatar
        DenverMike

        @Big Al from Oz
        No, I’m making a fool of your nonsense. A truck sold without a bed??? Come on, of course the payload is going to look awesome… Until you mount a bed! Ha, good one!

        Once yourself and your twin start with the insults, instead of logic it Game Over! Get back to PUTC and go at it with the Ram Spam posse. And when did I leave PUTC??? That’s news to me!

        And when have I brought up Ford out thin air? You bring up Ford and I bring you back to reality. I haven’t even mentioned Ford today, except for the King Ranch, but I mentioned the Longhorn Laramie in same sentence.

        Notice you brought up the Ford Ranger. Now Ford has found the same thing as Global OEMs. There is little to zero profit in mid-size trucks (at least in the US), regardless of FTAs or Chicken Tax.

        Profits have been absent for decades in the segment, the evidence is everywhere and Mitsu, Isuzu, Mazda (and others) were way ahead of the game by jumping ship when they did. Or are you calling them stupid for doing so??? They didn’t have to start from scratch, they were already here. The Chicken Tax never stopped them. Nor Mahindra.. The Chicken Tax was a joke to them then, and still is.. Stop being so daft!

  • avatar

    It will take the USA two years or more, as Canada is just in the final part of the Free Trade Aggreemeant with the European Union and it has taken more than two years at this junction, and yes you can’t conclude this type of Trade plan in a afternoon!

    • 0 avatar

      I agree. The Canada-EU discussions began in May 2009 and are now just coming up to the really hard stuff and have involved all the Canadian provinces in negotiations. It is a Comprehensive Economic and Trade Agreement which not only covers tariffs but also things like provincial/municipal procurement and recognition of professional qualifications to allow labour movement. To think a similar agreement between the US and EU could be done in two years is a Technicolor fantasy.

      • 0 avatar
        th009

        Five years, given that first Obama has to secure fast track negotiating authority.

        And even then, there is the question of whether the next president and congress will even approve it (since all three will have to do so).

  • avatar
    mkirk

    Wonder if this will open up some of the smaller displacement European motorcycles to our market?

  • avatar
    Beerboy12

    All 3 of the big three stand to benefit from a more relaxed trade agreement. All 3 have models in Europe they would love to just sell in the US as is so this agreement will benefit both sides of the Atlantic equally.
    Also… Perhaps Renault will come back.

  • avatar
    racer-esq.

    “The FMVSS standards vary from the UN/ECE standards used by pretty much everyone else, and this deal may bring about some kind of agreement on harmonization between the two. The FMVSS is frequently cited as a non-tariff barrier to trade by many observers. Not many would be sad to see it go.”

    I would be sad to see them go. I like that whatever cheap car I buy has to have front and side airbags, ABS, traction control and an very strong structure standard. Non-joint-venture horribly built Chinese cars are able to meet the ECE standards.

    • 0 avatar
      Brian P

      Air bags are across-the-board in Europe, too. US standards don’t require ABS, but the new requirement for stability control is a de-facto requirement for ABS. UNECE standards address all sorts of these issues, too – just not identically.

      Horribly-built Chinese cars are capable of (barely) meeting the US standards, too … see Coda. Most mass-market cars in both US and Europe considerably over-comply with the collision requirements, due to market pressures (e.g. wanting to get 5-star ratings from IIHS or NCAP … which are not government requirements!) A comparable situation exists in Europe – only that the testing body is different and the details of the tests are slightly different. It has happened that a North American designed vehicle that aces the IIHS tests (because it was designed to do so) did not do well on Euro NCAP because the bodyshell was not designed with those (slightly different) test procedures in mind, so it goes both ways.

      If you look at mass market vehicles, it can’t really be said that a UNECE compliant vehicle is overall more or less “safe” than a comparable North American market vehicle … it’s just different in silly details that prevent each one from being directly imported and registered in the other market. You cannot buy a VW Golf in Sweden and import it to Canada and register it here, even though a VW Golf in a Canadian dealership is (almost) the same car … but the paperwork won’t allow it …

      • 0 avatar
        racer-esq.

        I’m not an expert on the Euro rules, but I do not believe they require side airbags, or, effectively, ABS through an ESC requirement. These things are a big deal to me because I am a cheap bastard that likes to buy stripper cars with no options, but that wants that stuff. Before the side airbag and ABS/ESC rules kicked in (2010 or 2011 I think) those would be pricey stand alone options, and dealers would rarely carry cars with just those options.

      • 0 avatar
        Brian P

        Getting a good Euro NCAP rating demands including those features regardless of legal requirements, just as getting a good IIHS rating in USA demands including those same features regardless of legal requirements. The cheapest VW up! includes ABS and airbags, including a side/thorax airbag system. So does the Opel/Vauxhall Adam.

    • 0 avatar
      Extra Credit

      I’d be very surprised to see the FMVSS disappear. Regulations like these enable countries to engage in “controllable” free trade.

      In the Canada-E.U. free trade talks, the NAFTA and AutoPact continue to regulate vehicle trade. Meaning that once an agreement is signed, Canada will only accept E.U. vehicles that satisfy CMVSS. Once a vehicle legally enters Canada, that vehicle may also flow “freely” into the U.S.A. and Mexico, and Canada will continue to be obligated to ensure these vehicles satisfy CMVSS. I expect that the U.S.A. will also rely on NAFTA and AutoPact to protect their vehicle trade control via FMVSS.

      • 0 avatar
        th009

        No. Just because a vehicle legally entered Canada, it cannot be automatically imported to the US, it has to have been originally certified to Canadian standards (CVMSS). Smilarly, you can only import cars from US to Canada that were originally built to US standards.

        NAFTA does not (and cannot) regulate trade with any other countries. So Canada could choose to accept vehicles originally built to UN/ECE standards. That wouldn’t make them eligible to enter US or Mexico, though.

  • avatar
    Speed3

    Skeptical at best. As the economist Tyler Cowen said, “We cannot deregulate our own country, and yet we think we can deregulate a hydra-headed, 27-nation negotiating sclerotic behemoth?”

    http://marginalrevolution.com/marginalrevolution/2013/02/an-eu-u-s-trade-pact.html

  • avatar
    RobertRyan

    @Athos Nobile said
    “The US wants taillamps to have reflectors, and the turn signal and brake indications can be combined and/or can both be red. UNECE doesn’t care about reflectors, but insists on the turn signal being orange and the brake lamp being red, and it has to have rear-facing high-intensity fog lamps. Who’s right?”

    This is not a major stumbling block for free trade. The US/Canada and Mexico have differing regulations for Heavy Trucks although they all are part of NAFTA. States within the US require different legislation. California has unique emission regulations compared to the rest of the US.

    • 0 avatar
      Athos Nobile

      You didn’t quote what I wrote. My point was that both systems have strengths and weaknesses. The scenario in which the US throws its standards to adopt the EU ones won’t happen and viceversa. There should be a “mix”, a middle point or a coexistence accepted.

      Back when I worked with trucks, almost 10 years ago, I remember reading a US specialty magazine stating the issues the transport industry was going to face because of the different regulations regarding trucks between the US and Mexico. Also the consequences the difference in maintenance and, to use a local term, roadworthiness was going to cause. I don’t remember them to be too worried about the Canadians.

      Those differences in regulations have to be either harmonized or an agreement reached at a medium point to make the FTA work.

      • 0 avatar
        RobertRyan

        That is what I was getting at. Still you can get a “mix” like you do now in the US with various states and California’s unique legislation.
        See what happens, we cannot really be that sure how people are going to approach this.

  • avatar
    RobertRyan

    @racer-esqe said:
    “However, I think that the Ford Transit Connect, Nissan NV200 and whatever the Ram version of the Fiat Doblo is called will fill that niche.”
    Agreed and additional similar vehicles will fill out the segment.

  • avatar
    RobertRyan

    @George B said
    “’d welcome the chance to try some of the global mid-size pickup trucks, but the current domestic brand full size pickup trucks already compare well against good quality competition from Toyota and Nissan.”

    The Global Pickups are as similar as a F150 is to a F350, as regards current US Midsizers.

  • avatar
    RobertRyan

    @racer-esq. said
    “I would be sad to see them go. I like that whatever cheap car I buy has to have front and side airbags, ABS, traction control and an very strong structure standard. Non-joint-venture horribly built Chinese cars are able to meet the ECE standards”

    I know the Japanese/ Koreans comply to varying safety regulations elsewhere. European cars coming to the US and Vice Versa would follow a similar path.

  • avatar
    RobertRyan

    @Denvermike,
    “There is little to zero profit in mid-size trucks (at least in the US), regardless of FTAs or Chicken Tax.”

    Lecturing the OEM’s how to make vehicles are we? GM will have the Colorado and Chrysler has just introduced a 3 LITRE DIESEL RAM 1500

    • 0 avatar
      DenverMike

      “Lecturing the OEM’s how to make vehicles are we? GM will have the Colorado and Chrysler has just introduced a 3 LITRE DIESEL RAM 1500″

      Bring a car to market and turning a profit are not mutually exclusive. This is not news and profitability is obviously not always the point. Just ask the former GM and Chrysler.

      Having the ‘only one’ on the market or the segment to itself has a value of its own including bringing extra foot traffic to the show room and grabbing free headlines. When a vehicle is the only one in its class, (out of US OEMs), while the others show absolutely zero interest in that particular segment, that says it all.

      Still, you have no answer to why Mitsu, Mazda and Isuzu (and other OEMs)ran away from the US pickup market like it was on fire. And Ford is of course stupid (as is everyone else) for leaving the US mid-size pickup market with absolutely no intention of ever coming back. Try using logic. Using GM and Chrysler as examples of how to run a company really says it all.

  • avatar
    RobertRyan

    @Brian P. said
    “Getting a good Euro NCAP rating demands including those features regardless of legal requirements, just as getting a good IIHS rating in USA demands including those same features regardless of legal requirements.”

    Same thing with Australian ANCAP ratings. Slightly different to the US and European ratings.

  • avatar
    RobertRyan

    @Pach101
    “Ive probably seen more of Australia than you have (and in a Falcon that I owned, no less.) But thanks for asking.”

    So the answer to Big Al’s question is NO you have not been in a Global Pickup. Yes I have been a in a Falcon(amongst others) and seen a lot more of Australia than you. Only Problem is Falcons only can so far off road.

  • avatar
    RobertRyan

    @Pch101 said:
    “The success of the US approach proves that shuttling a team of regulators to approve production facilities and vehicle designs is not worth the cost. This is one situation in which the Europeans should be copying us, not the other way around.”

    You certainly do not have much on idea do you?. It requires one ,lot of approvals unlike the time wasting an expensive US approach of serial approvals.

  • avatar
    RobertRyan

    @Pch101 said
    “There are several FTAs that include a waiver of the 2.5% auto tariff and the chicken tax. I suspect that an EU FTA would be similar to those, but the impact of a waiver on the truck market will be minimal for the reasons that you state.”

    The “Chicken Tax” affects more than the European market. More FTA’s are required with Asian suppliers.

  • avatar
    RobertRyan

    @Denvermike said
    “Bring a car to market and turning a profit are not mutually exclusive. This is not news and profitability is obviously not always the point. Just ask the former GM and Chrysler”

    Well several OEM’s are gluttons for punishment then?. GM, Chrysler/Fiat and possibly Nissan are introducing diesel pickups, not counting diesel Vans for Ford and Chrysler.

    “Having the ‘only one’ on the market or the segment to itself has a value of its own including bringing extra foot traffic to the show room and grabbing free headlines. When a vehicle is the only one in its class, (out of US OEMs), ”

    You said there would never be a Diesel 1/2 ton, the “US Public would never buy one” Guess you were well and truly way off tne mark there.

    “Still, you have no answer to why Mitsu, Mazda and Isuzu (and other OEMs)ran away from the US pickup ”

    Thats easy. The US Public only buys local makes. Mitsbishi and Isuzu(, probably being the biggest Globally in sheer numbers) make a lot more money with heavier trucks, Mitsubishi makes money with cars and SUV’s as well. Mazda makes money on cars and Vans. Seeing the VERY PALTRY NUMBERS SOLD in the midsize sector, it does not make sense to persevere in the US.Toyota is the biggest by far the biggest midsize players and they are only selling 180,000 vehicles, pitiful. Mitsubishi and Isuzu they sell vastly more vehicles outside NA. The Global market is much more important profit wise than the North American market.

    • 0 avatar
      DenverMike

      @RobertRyan said
      “Well several OEM’s are gluttons for punishment then?. GM, Chrysler/Fiat and possibly Nissan are introducing diesel pickups, not counting diesel Vans for Ford and Chrysler.”
      “You said there would never be a Diesel 1/2 ton, the “US Public would never buy one” Guess you were well and truly way off tne mark there.”

      Bring something to market doesn’t guarantee success (financial or otherwise), far from it. I’ll admit I was wrong, but someone, somewhere, once said GM would never dare putting (converted from gas???) diesel 5.7 (350) small blocks into FWD Eldorados, Fleetwoods and Delta 88s and of course, half tons. Now it’s Ram’s turn and it’s no Cummins BTW. GM shocked everybody, but not in a good way, it turned out. It sounded like a good idea at the time though…

      Prices are yet to be announced and said to be several thousand dollars over the premium Hemi.

      “Thats easy. The US Public only buys local makes. Mitsbishi and Isuzu(, probably being the biggest Globally in sheer numbers) make a lot more money with heavier trucks…”

      I guess you never heard of the import, yes import mini-truck craze of the ’80s???
      With full-size you may have a point, but that’s a different topic.

      “…Mitsubishi makes money with cars and SUV’s as well. Mazda makes money on cars and Vans. Seeing the VERY PALTRY NUMBERS SOLD in the midsize sector, it does not make sense to persevere.”

      You’re talking a lot, but you’re not saying anything… Besides proving my point. You give good reasons for them leaving, but what’s changed and why should the come back to beat the same dead horse?

      “They sell and make vastly more vehicles outside NA. The Global market is much more important profit wise than the North American market.”

      Again, stop proving my point for me… What’s in it for them to come to a America if the market is so unimportant? And why act like it’s some mythical chicken???

  • avatar
    Big Al from Oz

    @Pch101
    Like I pointed out, why then is it taking GM 2 years to redevelop an existing platform for the US market.

    Why is it that your CAFE/EPA and design regs inhibit imports (and to the US readers imports isn’t just a foreign name on a vehicle).

    Why is the Chicken tax still in place?

    Why is it I can’t drive my Mazda in the US even though it is safer than any other pickup in your market? (and pollutes less).

    Why is it I can drive a US vehicle in Australia?

    Like I stated the US has evolved a system on barriers against imports (vehicle manufactured overseas). It has barriers impeding the development of diesel.

    Pch101, I do think you need to realise how the US vehicle market works and is sustained. Why did Detroit go broke? By not being competitive.

    This uncompetitive environment was created by the above mentioned trade barriers. The US can’t yet compete with Euro/Asian vehicles.

    Why does the US now import most of its vehicle technology if it has such a competitive market?

    The difference between the Euro and US system is the Euro system is changing the culture of vehicles and the US is trying to regulate change.

    The Euro system is based on expanding existing technologies and the US is trying to create new technologies.

    Try and look at what is going on a slightly deeper level. Start to interpret all of the data objectively. Also have a look at how free the US economy is compared to the rest of the world.

    Pch101, I think you should read a bit more, and interpret the information better.

    Trust me I very much doubt you have driven what I have driven in Australia and the types of driving I do.

    @DenverMike
    Remember last year you quoted that diesels will not even be looked at by the US manufacturers? I told you they will be arriving soon.

    You stated a 1/2 ton with a diesel would cost $8 000. Really DenverMike you are proven wrong again.

    Small 3 litre class diesel are coming.

    When your CAFE regulations finally force the US vehicle to manufacture 1/2 ton trucks the size of HDs the market will shrink.

    The 1/2 truck market is force to use technology that will increase the price of vehicles, they will become uncompetitive against mid sizers.

    As for the weight of a twin cab? My dual cab BT50GT has a payload of 1 100kg, and that’s a 4×4.

    Also you have stated you own a trucking company. Why would a cab chassis not be an option? Really again your logic is minimal.

    Why buy a bed if it isn’t required. A 6×8 flat bed is very useful, especially when you can put up to 3 000lbs on them.

    • 0 avatar
      DenverMike

      @Big Al from Oz – No, I estimated, 5 to $8,000, but prices haven’t been released. Yes there are lots of diesel fans online, but it remains to be seen if that will translate into actual sales once fans get past the romance. Clearly, it can take decades to see a ROI.

      They do want to regulate our 1/2 tons out of their current footprint, but it’ll just amount to an emblems swapping game. Pure nonsense.

      No, in North America a bed is required. That takes a chunk out of the “up to 3,000 lbs” gross payload of global cab/chassis pickups. Deduct a lot more for double cab 4X4s.

      A cab/chassis is an incomplete vehicle and while I do buy them, the bed is already installed.

      • 0 avatar
        RobertRyan

        “They do want to regulate our 1/2 tons out of their current footprint, but it’ll just amount to an emblems swapping game.”

        The OEM’s want to bring the US Pickups in line with future Global models saves money and increases te opportunity for exports for the US OEM’s.

  • avatar
    Athos Nobile

    “Like I pointed out, why then is it taking GM 2 years to redevelop an existing platform for the US market.”

    I would venture to say they want to fit 1 or 2 more powertrain options, petrol 4cyl and V6 and that requires a LOT of testing. The lightning system of the thing will have to be modified so throw some degree of wiring redesign there. It may need other changes, but the core platform must have most of the features to be sold in the US market already built in.

    Add a plant that will be tooled to produce it, that quite possibly the priority during the launch was the rest of the world… and since everything in this industry takes its time, 2 years doesn’t sounds crazy to me.

    I don’t think for a second that the US truck would be less safe than the one sold here for example.

    “Why is it I can drive a US vehicle in Australia?”

    That’s not as easy as taking the car from the ship pay your rego and away it goes. The car would need to be converted to RHD, complianced and in some cases has to belong to a list of pre-approved cars. That’s why among other things, a Silverado goes here for $150K instead of the dirt cheap price you would pay in the US.

    “Why is it I can’t drive my Mazda in the US even though it is safer than any other pickup in your market? (and pollutes less).”

    I don’t know if your BT50 is the newer one (developed here BTW) or the older one. To be honest, I don’t see where that safety gap that you mention sits.

    Also, have a look at the guts of the “midsizers”, which really look more 70′s or 80′s American full size, and a modern American pickup. On pickups from the same brand, one US full size, the other a global Hilux pretender I found independent front suspension with struts on both 4×2 and 4×4 and rear leaf springs. So there’s a tie there.

    When I compared F350 with its European equivalent, the flimsiness of the European chassis was more than evident. That truck was also severely underpowered compared to its American counterpart. The Euro truck was a POS after 5 years in the field, the US one still looked serviceable, and cheaper to buy and run too. It is not a surprise that people preferred the US option.

    I’ve also sat in the 3 ovals brand global truck, of different generations. Peppy engine (petrol 4 banger), unbreakable in 2WD form (serious 4WD use is another matter) but the interior of those things is depressing. As depressingly cheap looking.

    “Small 3 litre class diesel are coming.”

    I didn’t see foreign trucks eating GM or Ford’s cake when they competed together. If fuel cost is taken out of the equation, the Americans win hands down. Period. I’ve seen that live and in technicolor. And without going too far, Silverado/F-Series/RAM easily outsell Tacoma and Frontier in the US, the latter 2 built there and without paying chicken tax.

    The things are more powerful, have equivalent (if not more) torque, stronger mechanical components and the cabs and cargo boxes are bigger. You can say they’re cheaply built, but so are the others.

    Where the Americans failed in that market was in not offering a 4 door cab, and when they did it was mastodontic. I haven’t seen yet how that story ended.

    I don’t want to go to the “chicken tax” because that is out of my scope. However I’ll note that I’ve read your previous posts and found them very informative.

  • avatar
    Big Al from Oz

    @Athos Nobile
    I work in aviation and part of my job is designing engineering solutions. So I think it will be hard for you to convince me about engineering and design.

    Powertrains? The truck already has powertrain options and I would hazard to guess it will come with the 2.8 diesel when released in the US.

    I have a 2012 BT50GT.

    Build them in Thailand, the US has a FTA with them. You could have some now.

    Your US pickups have a lower safety rating than our new mid sizers, which are all rated at 5 Star ENCAP/ANCAP.

    Our trucks look like a 70s or 80s full size. What does that mean?

    I think you’ll find our trucks have better chassis and suspension design. The interior and appointments are the same or better, build quality is superior. They are better off road and offer all the electronic aids to assist in all driving situations. Log onto Mazda Australia and look at the feature my vehicle has. You will be more than pleasantly surprised.

    What is a F-350 European truck. Do they make one, it sound to me you are full of it. The closest thing to what you are describing would be a LDT. Which is designed to work 7 days a week. Not to be a part time SUV, which only positive is its tow ability.

    The global mid sizers actually have a stronger chassis than one of your 1/2 ton pickups. They are designed as a commercial vehicle first. They are in fact a much stronger vehicle.

    The engines we have are much better for work than any 1/2 ton pickup. Maybe if the Ram comes out with the VM V6 diesel it might come closer, but it still has a weak chassis.

    Your 1/2 ton trucks are designed as a SUV/family wagon/daily driver first.

    The US trucks will win hands down? You are another person who hasn’t had the opportunity to drive one of our new mid sizers.

    Another reason to prove global pickups offer better service is they are global, not US only. If the US half ton was a better vehicle you would be exporting them in lieu of global mid sizers.

    • 0 avatar
      Athos Nobile

      I sat today in one and wasn’t impressed. Your comments actually sparked my curiosity and there was one in the shop. Can’t see why you think they’re the second coming of J… they’re nice, have come a LONG way, but still left me cold.

      I compared the F-350 (US truck) with one of its European counterparts. And that happened while I lived in another country.

      I’ll have a look at the Mazda site. Last thing I remember about those twins was the whole trailer wiring fiasco of last year. That way I could also look at the CX5 and new 6 which is gorgeous.

      “Our trucks look like a 70s or 80s full size. What does that mean?”

      It means that what you call a midsizer is easily or roughly the same size as a F-150 or C-10 of the vintage I mentioned above.

      I am not trying to convince you of anything. I can’t export a light truck because we don’t produce them here, instead we produce a nice SUV, 3 terrific big sedans, a compact and a couple of heavy trucks. I could as well be your neighbor.

      And mate, have a good night.

      • 0 avatar
        RobertRyan

        “I sat today in one and wasn’t impressed. Your comments actually sparked my curiosity and there was one in the shop. Can’t see why you think they’re the second coming of J… they’re nice, have come a LONG way, but still left me cold.”

        I have ridden in a F250 over some rough dirt roads, now that left me cold. The ride was TERRIBLE.

  • avatar

    Some one mentioned about the UK or (England) measuring Petrol, the last time I was home in Edinburgh, I purchased Petrol in Litres! So they don’t measure in Imperial Gallons as far as I know!

  • avatar
    Acd

    Since most of the U.S. manufacturers profits come from trucks opening up the truck market could have huge implications for them. Consumers will ultimately benefit since increased competition will keep prices down but at the expense of non-competitive manufacturers. The elimination of the chicken tax may hurt the U.S. industry.

  • avatar
    Big Al from Oz

    @Athos Nobile
    It sounds like you are in Australia, then go and have a look at a Amarok, Ranger, BT50.

    As for HD pickups, I don’t know of one European HD, sorry. Or anything resembling an HD pickup from Europe.

    I saw one HD in Paris last year, yes France and it was imported from the US. It would have been a headache to drive around.

  • avatar
    RobertRyan

    @Big Al from Oz,
    Did 15 European countries in 2010. Saw Grand total of EIGHT US Pickups,most were HD Rams scattered around various cities. and one broken F150 in Greece. @HighDesertCat is right, virtually no US Pickups. Could not see ANY US cars.

    • 0 avatar
      Big Al from Oz

      @Robert Ryan
      What I saw was a relatively new F-250 Super Duty single cab. I was at my cousins about 7km from Hotel de Ville. The streets are very congested and narrow, like lanes in Australia. The Metro was the only way.

      When I stayed at my Uncle’s between Bordeaux and Toulouse farmers had a lot of Tritons by French standards, and believe it or not I saw 200 Series Cruisers and Patrols and a number of short wheelbase Prado’s.

      I can only think of Spain making any ute and that is the Navara. VW is supposed to building Amaroks in Germany soon.

  • avatar
    RobertRyan

    @Big Al from Oz
    What stood out for me, was there more Pickups in Southern Europe(especially Greece). As I said they are pretty rare in Europe as Vans and Cab Chassis versions of Vans do a lot of the “work” aspects of Pickups.
    I did see a RAM parked near a Canal in Amsterdam surrounded by what appeared to be a million bicycles,Another RAM not far from Central London and most unusual a RAM going over a bridge in Milan.

    • 0 avatar
      Big Al from Oz

      @Robert Ryan
      I read yesterday (Sydney Morning Herald) that the Chev SS will be “presented” today. They have a picture of the Commodore, apparently it will be a Commodore with a few “bolt on” pieces to make it more aggresive looking ie bonnet scoops etc, for the US market. Oh, the engine we will get is the 6 litre and the US is getting the 6.2.

  • avatar
    Big Al from Oz

    @Robert Ryan
    I was thinking the PSA link to Mitsubishi could be the reason for the number of Tritons I saw in the south of France.

  • avatar
    Big Al from Oz

    @Robert Ryan
    Here is the link to the Chev SS article. Quite interesting, especially the number of V8 Commodores that are sold and the number of EVs.

    http://smh.drive.com.au/motor-news/holden-unveils-export-model-20130215-2eh8t.html


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