The election of Donald Trump as the next U.S. president will have a dramatic impact on the auto industry.
It is impossible to predict exactly what the new president will do, but it's possible to anticipate some of the changes.
We will likely see a major relaxation of regulations, such as the existing rules on corporate average fuel economy. The administration could lower the CAFE target or lengthen the time required to meet it. Either way, it would be helpful.
Most executives should be pleased with the prospect of lower corporate income taxes, which may finally give Wall Street some interest in the automotive sector.
There would probably be a pause in any plans global auto manufacturers have to build plants outside the U.S. for production of vehicles sold in the U.S. But I would be surprised if manufacturers already building outside the country and selling in the U.S. were punished.
Some other actions from the executive branch will affect the automotive industry. We will see an increase in energy production, making it less costly to operate a vehicle and perhaps giving the gasoline engine a new lease on life.
We will certainly see fewer federal regulations affecting dealerships, which will make owning one far more palatable and less troublesome than today. It could even raise the value of dealerships.
Trade will be the sticking point. As time goes on, we'll get a better idea of how the new administration will treat automotive trade.
The election of Trump is going to change the entire attitude of the government toward the automobile industry.
Indeed, it would not surprise me to see the government become an ally rather than an adversary. That would be a seismic change from the past 70 years.
Nothing is certain. Perhaps this is all wishful thinking, but it will be interesting to watch it unfold.
