Welcome to the Daily 5 report for Wednesday, March 12.
It was once the pet project of two automotive industry titans — former Mercedes CEO Dieter Zetsche and then-Nissan CEO Carlos Ghosn — but 15 years later faces an uncertain future clouded by U.S. tariff threats, global economic concerns and Nissan's festering business outlook.
The COMPAS joint venture plant in Aguascalientes, Mexico, once offered enormous potential for the production in a low-cost country of luxury SUVs for sale in the U.S.
As Urvaksh Karkaria reports today, the partnership could be unwinding in the not-too-distant future. Discussions about who buys out whom in terms of ownership stakes in the $1.4 billion factory have been ongoing for more than a year, our story says.
"It's just slow and painful," a person familiar with the matter told Automotive News. "Each side is playing chicken to see who blinks first."
The future of the JV has short- and long-term implications for both automakers. Our story lists reasons Nissan and Mercedes would want to keep the partnership. Notably, Nissan would not want to open the door for a Chinese automaker to acquire the asset and thus become a competitor.
Meanwhile, in the latest from the world of tariff chaos, Canada today offered its latest response to U.S. steel and aluminum tariffs after Tuesday's dustup where President Donald Trump threatened to double the 25 percent tariff — then later reconsidered when Ontario backed off a plan to tax electricity exports to three U.S. states.
And industry experts in this story reinforced the notion that global automotive suppliers don't plan to relocate factories to the U.S. from Mexico, despite steep import tariffs scheduled to take effect in early April.
The Trump administration's planned 25 percent tariff on imported goods "has not led to an ongoing dialogue about bringing business back from Mexico," Ann Marie Uetz, a Detroit partner at law firm Foley & Lardner, which counts more than 200 suppliers as clients, said in our story.
The auto industry's troubles in Europe continue to worsen with thousands of new job cuts. Porsche today said it is shrinking its workforce by 3,900 jobs and plans further cuts in a major restructuring to boost flagging profitability amid collapsing sales in China and the threat of tariffs on its exports to the U.S., Reuters reported.
Trade tensions and intensifying competition in China will weigh on 2025 earnings, even before accounting for possible higher tariffs on its cars exported to the U.S. from Europe, Porsche said in the Reuters report.
Finally, in some good news for Toyota customers, the automaker plans to resume production of its popular RAV4 crossover, the company's bestselling single model worldwide, after output in Japan was knocked offline by a rare explosion at a supplier that killed a worker and derailed domestic parts deliveries, Hans Greimel reports from Tokyo.
Toyota said it plans to put the RAV4 back into production from the second shift Thursday at two assembly plants in Japan after securing parts.
Looking ahead to tomorrow, we'll report the results of the annual J.D. Power U.S. Customer Service Index Study.
That's it for now. Have a great rest of your day.
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— Philip Nussel, online editor
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