The rates of 25 % of President Trump on imported vehicles, which entered into force last week, are already sending tremors through the automotive industry, pushing the companies to stop the cars sent to the United States, close the factories in Canada and Mexico and fire workers in Michigan and other states.
Jaguar Land Rover, based in Great Britain, said that he would temporarily stop exporting his luxury cars to the United States. Stellantis has minimal factories in Canada and Mexico that produce Chrysler and Jeep vehicles and have fired 900 US workers who provide those factories with engines and other parts.
Audi, the luxury division of Volkswagen, also paused car exports to the United States from Europe, telling retailers to sell everything they still had in their lots.
If other car manufacturers make similar moves, the economic impact could be serious, bringing to the highest cars and widespread layoffs. Cars rates are among the first of numerous specific withdrawals in the sector that Mr. Trump has in his sight and could offer first clues on how companies will respond to his commercial policies, including if prices increase or increase production in the United States. The president said he also wants to tax the imports of medicines and computer chips.
The application of the new import rate to imported cars could increase the cost for consumers by thousands of dollars, strongly reducing the demand for such vehicles. For some models Jaguar Land Rover or Audi, the rates may amount to over $ 20,000 for cars.
While most of the initial impact of the rates was disruptive, in at least one case the duties of Mr. Trump had the expected effect of increasing production in the United States. General Motors said at the end of last week that it would increase the production of light trucks in an Fort Wayne factory, Ind.
The long -term impact of the rates of 25 percent is not clear. Many car manufacturers are still trying to understand how to avoid increasing prices so much that consumers can no longer afford new cars. Investors are pessimistic. Ford Motor, GM and Tesla actions have decreased in the last few days of negotiation.
“Everyone in the automotive supply chain focuses on what they can do to minimize the tariff impact on their budgets and prices,” said Kevin Roberts, director of the economic and market of Cargurus, an online shopping site.
But the car manufacturers have never had to face the imposition of such high rates with so little notice. Nor did they have little information about what the president will do later, analysts and retailers said.
“The traditional playbook is not enough,” said Lenny Larocca, who guides the automotive sector team at the KPMG consultancy company.
Larocca provided that the car manufacturers would be increasingly focused on the production of larger and heavier sports utility vehicles and tampereds. Those vehicles, many of which are assembled in US factories, are usually the most profitable and offer companies more space to absorb the cost of rates rather than transmitting them to customers.
Many modern assembly lines are able to produce different models, offering flexibility companies to switch to more profitable vehicles and to abandon vehicles that do not make so much money. Mercedes-Benz has said that he will take advantage of flexible assembly lines in his factory in Alabama.
This strategy is supplied with negative sides. It could be more difficult for car buyers to find new cars at moderate prices. The average price of a new car is already almost $ 50,000.
Analysts say that this is clear: rates will not push companies to open new factories or immediately reopen closed plants. The companies will not take that expensive step until they are sure that the rates are permanent and that investing hundreds of millions – or billions – of dollars in new production capacity will repay.
“I haven’t seen great moves,” Larocca said. “It’s waiting and seeing.”
Some car manufacturers and suppliers have expanded their US operations before Trump came into office. They were often reacting to the Pandemia del Coronavirus, when he became risky to rely on distant factories for the critical parts. Others have made large investments in factories that produce EV electric vehicles or batteries to take advantage of the incentives offered by the Biden administration.
ZF, a German manufacturer, spent $ 500 million last year to expand a factory in the South Carolina that produces broadcasts for BMW and other car manufacturers. And in recent years GM has opened two new US batteries with a South Korean partner, LG Energy Solution, to create the most important component of electric vehicles.
In the short term, some foreign car manufacturers may simply stop sending vehicles to the United States, either because they can no longer make profits or because they can make more money elsewhere. This could be the case of Jaguar Land Rover. The company, known for luxury sports utility vehicles made in Great Britain, sells about a fifth of its cars in the United States.
If other companies stop selling certain models to Americans, consumers will have fewer vehicles to choose from and the remaining car manufacturers will have more room for maneuver to increase prices.
So far, however, the rates have not led to price increases widespread for new cars. Hyundai Motor declared last week that he would not have increased the suggested retail price of the car manufacturer Hyundai and Genesis until June 2nd.
Of course, car retailers can increase prices even if a car manufacturer does not commit. This happened a lot during the pandemic, when the supply of new vehicles was limited by the lack of computer chips and other parts.
Dealers and car manufacturers have reported fast sales in the last few days, as people have hurried to buy vehicles before the rates came into force. The average time that a vehicle spent in the lot dropped from 77 days to the end of January less than 50 days at the beginning of April, according to Cargurus.
The question was particularly high for Japanese brands such as Honda, Subaru and Nissan, apparently because buyers presume to be imported, said Sean Hogan, vice -president of the Sierra Auto group, who has a dozen dealers in southern California. All three Japanese companies have factories in the United States, although they import some cars.
Another tariff shock will arrive on May 3, when the Trump administration will apply the tariffs to the car parts. This means that even the cars made in the United States will be affected because practically all vehicles contain components from abroad. The repairs will become even more expensive.
“The educated audience is definitely making some moves to anticipate the rates, which I think is intelligent,” said Hogan.
But the long -term impact of Trump’s commercial policies is still impossible to predict, he said. “This administration moves quite quickly and you really don’t know what will happen later,” added Mr. Hogan. “Filla.”
Neal e. Boudette AND Melissa Eddy Contributed relationships.