Automakers Respond to 25% US Import Tariff

While the cost of importing vehicles has just gone up, this does not impact all automakers equally and over time we are likely to see multiple pricing strategies emerge. In the early days, providing stability and reassurance to consumers was the motivation for several automakers.

Ford and Stellantis quickly stepped in to launch employee price incentives. Both enable customers to purchase vehicles at the employee pricing, which is often below a dealer invoice price.

Ford excluded a limited number of high-demand vehicles including Raptor models and 2025 model-year Expedition, Lincoln Navigator and Super Duty trucks. Ford’s employee pricing program is set to be available through June 2, 2025.

The Stellantis offer runs through April 30, 2025. Stellantis is also allowing consumers to choose between the employee discount or cash incentives, as some cash incentives already in play may have a larger impact on consumer pricing. The Stellantis discounts exclude the Ram 1500 RHO and Jeep Wrangler Rubicon 392.

Some automakers vowed to hold pricing steady for the very immediate term. These included Hyundai and Genesis, who will hold pricing through June 2, 2025. Mercedes-Benz has said it will hold pricing on its 2025 model year products, without a specific timeline.

Volkswagen and Audi will reportedly add a line to their pricing detail to reflect an import fee, similar to the destination fees automakers are required to disclose. However, Audi has also decided to hold all vehicles from US delivery as of April 2, 2025, at least initially.

For Audi, 100 percent of its US sales comprise vehicles imported from Mexico or Europe. Audi is holding any vehicles delivered to US ports after April 2. Vehicles which have already been imported will display a US$0 option code on the invoice for “No added import fee.”  Audi also indicated its incentive level in April will remain similar to the level in March.

It is not, at this time, clear if VW and Audi will develop a single fee or if the fee will be model- specific . This approach can provide transparency to customers about how the tariffs are affecting the costs but also could leave them exposed to consumer backlash if this approach is different from others or if consumers feel the fee is too high.

In March, BMW said it would absorb the cost of the tariff on vehicles which it imports to the US from Mexico, though as activity on the tariff front has increased, the company has not provided a further update.

As the situation evolves and automakers determine their best reactions, an impact to manufacturing is expected.

So far, announced and reported activity on this front has been relatively muted.

However, reports indicate that General Motors is increasing production of the GMC Sierra and Chevrolet Silverado at its Fort Wayne, Indiana, plant. The production gain is expected through increasing overtime days on the plant schedule, though it will require downtime for part of a week in April to make plant adjustments.

While GM is preparing to increase production at the Fort Wayne plant, so far there does not appear to be a commensurate reduction in output at any other truck plant.

Jaguar Land Rover was quick to announce it will stop shipping vehicles to the US at this time. However, the Jaguar brand is essentially on hold ahead of new products next year, so the move affects the Land Rover brand more significantly. It is not clear when exports will resume.

Nissan has reportedly canceled a previous plan to reduce US production of the Rogue crossover utility vehicle (CUV) to one shift. Nissan has been struggling with weaker sales and overcapacity.

It is possible that the Rogue benefits from avoiding a 25% import tariff, making the vehicle more affordable than some competitors produced in Canada and Mexico. The day before the 25% auto import tariff came into effect, Nissan announced a price reduction for the Rogue and Pathfinder for the 2025 model year, as sales have struggled. Both models are produced in the US.

Infiniti has paused production of the QX50 and QX55 for the US market, a model produced in Mexico. Infiniti had planned to end production of the two models at the end of 2025; production of the models for the US market may not resume.

Stellantis was among the first automakers to adjust production. In Canada, Stellantis paused production at its Windsor, Ontario, facility. The plant currently produces the Chrysler Pacfica and Voyager minivans, as well as the Dodge Charger Daytona. The production halt is temporary and is expected to last two weeks.

Stellantis is also idling its Toluca, Mexico, plant from April 7 through the rest of the month. The Toluca plant builds the Jeep Wagoneer S and Compass. Those production actions, however, caused layoffs at Stellantis stamping and transmissions and metal casting plants in the US, which provided parts to the impacted Canadian and Mexico production plants.

Additionally, Stellantis is taking its Warren Truck Assembly Plant offline from April 14 through early May. That action is, however, not related to tariffs. Instead, the decision to idle production of the Jeep Wagoneer and Grand Wagoneer was taken so that the engine production can be dedicated to the Ram 1500 full-size pickup truck.