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Auto imports from Mexico climb amid talk of new NAFTA deal

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A truck transports new Volkswagen AG cars at the Port of Veracruz, Mexico.

Susana Gonzalez | Bloomberg | Getty Images

A truck transports new Volkswagen AG cars at the Port of Veracruz, Mexico.

With indications growing that the United States, Mexico and Canada are close to agreeing on a framework for altering the North American Free Trade Agreement, the Mexican auto industry is exporting vehicles to the U.S. at a record pace.

New data from the Mexico Automotive Association shows vehicle exports to the U.S. in the first quarter climbed 5.3 percent, despite a slight decline in exports in March. In 2018, automakers have shipped almost 600,000 vehicles to the U.S., with those models making up almost 15 percent of U.S. auto sales in first quarter, according to Ward’s Automotive.

The increase this year is driven in part by strong demand for pickups and SUVs, which make up a sizable percentage of the vehicles exported from Mexico. Both General Motors and Fiat Chrysler build pickups in Mexico, while Audi imports its best-selling SUV, the Q5, from that country.

President Donald Trump has been pushing to alter the North American Free Trade Agreement as part of his plan to drive more auto production and hiring among automakers in the United States. In a television interview, Mexico’s economy minister indicated there is an 80 percent chance of a new NAFTA agreement by the first week of May.

How that deal is structured and whether it would prompt automakers to scale back production in Mexico remains unclear.

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Facebook will ban ads that seek to delegitimize US election

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Facebook co-founder, Chairman and CEO Mark Zuckerberg testifies before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill April 11, 2018 in Washington, DC.

Yasin Ozturk | Anadolu Agency | Getty Images

Facebook on Wednesday announced that it will not allow any ads on its service that seek to delegitimize the outcome of an election, including the upcoming U.S. election on Nov. 3.

“Last week we said we’d prohibit ads that make premature declarations of victory. We also won’t allow ads with content that seeks to delegitimize the outcome of an election,” tweeted Rob Leathern, Facebook director of product management. 

This policy will prohibit any ads that call specific methods of voting, such as voting by mail, as being inherently fraudulent or corrupt, Leathern said. It will also prohibit the use of isolated incidents of voter fraud to delegitimize the result of an election, he added. 

Facebook’s policy change comes as President Donald Trump has used social media to make false claims that voting by mail leads to election fraud. Trump has refused to commit to a peaceful transfer of power should he lose. 

The new policy will apply to ads on Facebook and Instagram effective immediately, Leathern said. 



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Some Chinese automakers show off concept sportscars, amid auto market slump

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GAC unveiled its electric sports car prototype on Sept. 26, 2020, at the Beijing auto show.

Evelyn Cheng | CNBC

BEIJING — Some of the flashiest items Chinese companies had on display at the first major auto show since the coronavirus pandemic were concept sports cars.

While vehicle sales for state-owned Guangzhou Automobile Group (GAC) fell 9.87% from a year ago in the first eight months of 2020, following a decline of nearly 4% last year, the company has been developing an electric sports car called “Enpulse.”

The company revealed the glimmering metallic vehicle to media on Saturday at the Beijing auto show, which was delayed by five months due to the outbreak of Covid-19. 

The convertible electric sports vehicle features a yellow interior with striped pink sections, evoking a rainbow. The car was developed by GAC’s global design team, particularly designers from the company’s Los Angeles office, according to GAC.

“Before the advent of cars, traveling afar was ambitious,” Zhang Fan, vice president of design, GAC R&D, said at Saturday’s launch event, according to an official translation of his Mandarin-language remarks.

“Before the advent of electric vehicles, making sports cars accessible to everyone was also ambitious,” he said, adding, “We hope that the Enpulse will chart the course for the realization of our ambition and make the classic sports car romance accessible to everyone.”

GAC’s vehicle sales climbed double-digits in July and August from a year ago. The company still hopes to achieve its goal of 3% growth this year.

Also attracting a bit of a crowd at the Beijing auto show was state-owned Hongqi’s S9 sports car. The hybrid turquoise vehicle was first unveiled at the Frankfurt auto show in September 2019, according to state media, and claims a maximum speed of 400 kilometers-an-hour. 

Chinese state-owned brand Hongqi showed off its prototype for its S9 sportscar at the 2020 Beijing auto show.

Evelyn Cheng | CNBC

Hongqi, which means “red flag” in Mandarin, is a subsidiary of state-owned auto group FAW.

The brand announced in April it will set up a joint venture with New York-based SILK EV to manufacture the Hongqi S luxury sports car series, according to state media. The article also said Hongqi sold more than 25,000 cars in the first quarter of the year, or an 88% gain over the same period in 2019.  

Auto sales in the world’s largest car market are down 9.7% for the first eight months of the year from the same period in 2019, according to the Ministry of Industry and Information Technology.

But the market has recovered in recent weeks. Auto sales rose 11.6% in August from a year ago, with sales of pure electric vehicles growing more quickly with a gain of 25.6%, according to the ministry.

Automakers often develop high-performance cars to test and exhibit innovative technology. At last year’s auto show in Shanghai, BMW displayed its first electric race car, the iFE.18, shortly after it had completed a race. 

At the 2020 Beijing auto show, Chinese electric vehicle start-up Nio also displayed its sports car prominently at the front of its display area. The EP9 was launched in 2016 and the following year set a record for the fastest self-driving electric car, a feat the company claimed took only four months of technology and software development.

Chinese electric vehicle start-up Nio welcomed visitors to its exhibit at the 2020 Beijing auto show with a display of the Nio EP9 sportscar.

Evelyn Cheng | CNBC

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These cities are at risk of a housing bubble as home prices inflate worldwide

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A Canadian flag flies amid the Toronto skyline

Roberto Machado Noa | Getty Images

Despite a global recession brought on by the coronavirus pandemic, home values in major markets around the world continue to rise, with some at risk of overheating.

Of 25 major cities analyzed, more than half are either at risk of a housing bubble or are overvalued, according to UBS’ Global Real Estate Bubble Index 2020. The index looked at typical signs of a bubble, which include a decoupling of prices from local incomes and rents, and imbalances in the real economy, such as excessive lending and construction activity.

Toronto is the only major North American city in the study that was found to be at risk of a housing bubble. Vancouver, British Columbia, Los Angeles, San Francisco, and New York are considered overvalued, but not at risk of a bubble. Boston is at fair value, and Chicago is the only North American city considered to be undervalued.

Europe appears to have the greatest risk of housing heat, along with Hong Kong. Munich and Frankfurt in Germany and Warsaw, Poland, top the list, with home prices rising more than 5% in the last four quarters. Paris, Amsterdam and Zurich are also in bubble risk territory.

Cities not at risk of a bubble, but considered overvalued, include Vancouver, London, Tokyo, Los Angeles, Stockholm, Geneva, San Francisco, Tel Aviv, Israel, Sydney, Moscow and New York.

Home values have been supported throughout the pandemic by government stimulus, mortgage bailouts and low interest rates. UBS noted that it considers price gains under these circumstances unsustainable.

“It is uncertain to what extent higher unemployment and the gloomy outlook for household incomes will affect home prices. However, it’s clear that the acceleration over the past four quarters is not sustainable in the short run,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a release. “Rents have been falling already in most cities, indicating that a correction phase will likely emerge when subsidies fade out and pressure on incomes increase.”

An aerial drone view of the city centre of Zurich, Limmat River, Lake Zurich, and the Grossmuenster Church stand during the coronavirus pandemic on July 12, 2020 in Zurich, Switzerland.

Christian Ender | Getty Images

Home values fell in just four of the 25 cities analyzed: Madrid, San Francisco, Dubai, United Arab Emirates, and Hong Kong. The last time there were fewer cities with negative price growth was in 2006.

The pandemic has increased demand for larger homes with more outdoor space, and in some cities that has caused a flight to the suburbs. Both New York and San Francisco have seen large outflows of the population either to smaller cities or suburban areas. That makes the future health of urban housing markets uncertain both in the short and long term, especially since no one knows how long the pandemic will drag on.

“The rise of the home office calls into question the need to live close to city centers. Pressure on household incomes cause many people to move to more affordable suburban areas,” said Claudio Saputelli, head of real estate at UBS Global Wealth Management’s chief investment office. “Already debt-ridden or economically weaker cities will have to respond to this economic crisis with tax increases or public spending cuts, neither of which bode well for property prices.”

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