European automakers are increasing prices and planning to transfer vehicle production to the United States in response to the new rates imposed by President Donald Trump.
Volkswagen said it will add import rates to the prices of vehicles sent to the US, reflecting the immediate impact of. Volvo and the Mercedes-Benz group are studying expanding their local production to avoid charges.
German manufacturers are among the most affected by new tariffs, which should significantly increase costs and disorganize supply chains. The strong demand for higher profit -margin SUVs and the slower adoption of electric vehicles by US consumers make the US market especially attractive for brands such as Mercedes, BMW and Porsche.
“Inflection Point”
According to Hildegard Müller, president of the German Automotive Industry Association (VDA), tariffs represent a “fundamental inflection point in commercial policy” and will bring harm even to US consumers, who will face “increasing inflation and lower variety of products”.
VW has reported to US dealers on new fees and temporary suspension of Mexico train shipments, as well as the retention of vehicles imported from Europe in the ports, according to Automotive News. The company confirmed the memorandum, but did not comment on its content.
The market reacted immediately: Actions of German automakers fell on Thursday, with VW and Mercedes registering falling over 3% and BMW retreating up to 4.3% .3
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Strategy Change
Jörg Burzer, Production Head of Mercedes, said the company can transfer the manufacture of a specific model to its plant in Alabama, although it has not specified which one. The GLC SUV, imported from Germany, is the brand’s best -selling model in the country, with more than 64,000 units sold in 2024 – up 58% compared to the previous year.
Mercedes also evaluates to remove its smaller and more affordable models in the US. VW, in turn, already produces the electrical models ID.4 and Atlas on Tennessee, but still matters vehicles like the ID. Buzz, golf, tiguan, taos and jetta from Europe and Mexico.
BMW, which manufactures about 400,000 cars a year in Spartanburg (South Carolina), still depends on key pieces imported from Europe, such as engines.
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Volvo, from Sweden, will also expand production in the US. The automaker already manufactures the EX90 and Polestar 3 electric in Charleston, and should transfer the production of another model there, according to CEO Håkan Samuelson.
In Italy, Ferrari has announced up to 10% in the prices of some models in the US – readjustment that can represent tens of thousands of dollars.
In the United Kingdom, which exports about 80% of its automotive production, entities in the sector warned that US consumers will face higher prices on brands such as Range Rover, Mini, Bentley and Aston Martin. “These costs cannot be absorbed by automakers, and US consumers will have to pay more or give up iconic British brands,” said Mike Hawes, CEO of the Society of Motor Manufacturers and Traders.
