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According to Carscoops, it’s not just Chinese automakers that will be negatively impacted by the impending import tariffs that President Donald Trump plans to impose during his new term. German car manufacturers are also likely to feel the effects of this “storm.”
In the coming months, Porsche, Audi, and Volkswagen may have to fork out an additional 10% of their profits to cover the impending rise in fees and tariffs. Data from Marklines reveals that German automakers, regardless of whether they have manufacturing plants in the US or not, currently export approximately 583,000 cars per year from Europe and 343,000 per year from Mexico to the US.
All Porsche vehicles sold in the US, for instance, are imported from Europe, while the Audi Q5 is manufactured in Mexico. Similar to Audi, some models from Toyota, GM, Ford, BMW, and Volkswagen are also produced in plants just across the border from the US.
Although President Trump has not confirmed which tariffs will be increased for German cars, he has indicated his disapproval of automakers who choose not to manufacture in the US and instead import from Europe or Mexico. If the tariffs are raised from 2.5% to 12.5%, these vehicles will cost the German automakers a significant amount of money.
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Audi Q5 Sportback. Image: Audi. |
Analysts from Stifel Europe predict that Porsche, Audi, and Mercedes-Benz could face an 11-15% drop in profits if they continue to import cars into the US. In response to this news, BMW remains optimistic. They believe they can offset the impact of the tariffs by increasing their production in the US, as they already have multiple plants in the country.
However, this optimism may not be shared by Audi and Porsche, who do not currently have any manufacturing plants in the US and have no immediate plans to build any. The decision to build plants in the US is a complex one, and it will take time for German automakers to weigh their options. In the meantime, if they continue to import, Porsche, Audi, and Volkswagen will either have to sacrifice a portion of their profits or raise their prices, potentially losing market share to domestic automakers like Tesla, Lotus, or Chevrolet.
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