Automotive News Europe — 2025-01-21
Automotive Industry
Volkswagen Group warned against the “harmful economic impact” of tariffs that US. President Donald Trump is proposing on imports from Mexico, where the carmaker operates a major factory.
The comments by the German automaker, already grappling with high costs and cheap Chinese competition at home, reflect major uncertainty following Trump’s threat to possibly impose duties of 25% on goods from Mexico.
While a firm decision has not been made, Trump said such tariffs could become effective from 1 February 2025.
“The Volkswagen Group is concerned about the harmful economic impact that proposed tariffs by the US administration will have on American consumers and the international automotive industry,” a VW spokesperson said in an emailed statement to Reuters.
“We value collaboration and open dialogue. The Volkswagen Group looks forward to continuing its longstanding and constructive partnership with the US administration,” the spokesperson added.
VW’s Puebla auto factory is Mexico’s largest and one of the biggest in the group, making nearly 350,000 cars in 2023, including the Jetta, Tiguan and Taos — all for US export.
Stifel analysts have reckoned that around 65% of the cars that VW sells in the US would no longer be competitive if duties were added to Mexican imports.
In an effort to showcase its commitment to US sites, VW said it was making total investments of more than $10 bn in the country, roughly split between its Chattanooga plant and a joint venture with Rivian.
VW has been in close contact with the Trump administration over tariffs, according to two people familiar with the matter.
BMW faces tariff uncertainty in US
Last week, BMW CEO Oliver Zipse was in South Carolina, where the automaker has a plant, and received an award from the state’s Republican governor for its contribution to the economy.
“BMW assembles more vehicles in the US than we sell in the US and exports more vehicles from the US than we import into the US,” the automaker said, adding in 2023 it sold more than 396,000 vehicles there.
Stellantis said it is well positioned to adapt to policy changes announced by Trump.
The Chrysler and Jeep parent, which manufactures some cars for the US market in Mexican and Canadian plants, sees Trump’s focus on policies aiming to support US manufacturing base as “hugely positive,” it said.