Among auto brands, Volkswagen and RAM face major exposure to proposed Mexican import tariff
The majority (57%) of all Volkswagen cars sold in the United States are manufactured in Mexico, meaning the world’s biggest car-maker will take an exceptionally hard hit if President Trump’s on-again, off-again 20% Mexican import tariff becomes reality.
That’s a finding from a new analysis performed by Carjojo, the technology company that tracks all new car sales in the US in real time to help consumers make the best car-buying decision. Carjojo looked at every Mexican-made vehicle sold in the U.S., and calculated the percent of each brand’s overall U.S. sales represented by those vehicles.
The study revealed that the tariff could also have a potentially far-reaching impact on pick-up trucks, the U.S.’s most popular vehicles. Chrysler manufactures over half of RAM vehicles– including many of its most popular vehicle, the Ram 1500 — in Mexico, exposing every single one of those trucks to the tariff.
“Pick-up trucks are top-selling vehicles here, and any pricing disruption brought on by the tariff could have massive ripple effects across all brands, no matter where they’re made” said Peter Levy, Carjojo founder and CEO. “RAM can’t raise the price of just the trucks that are made in Mexico – they’ll have to raise the prices on the whole line. And their competitors will then have cover to either raise prices themselves or gain market share. That’s a big deal to car-makers and to consumers.”
Lower-income American car buyers would bear the brunt of a 20% Mexican import tariff, a study released last month by Carjojo concluded. This study found some of the world’s biggest brands would face steep consequences from the tariff, too.
“The burden of any import tariff is borne first by U.S. consumers — from tariff fees tacked on to vehicle prices — and by the manufacturers who will likely absorb some of the tariff from their profits. Higher prices and lower profits mean the tariff has the potential to badly tarnish the brands exposed to it.”
The following chart shows every Mexican-made vehicle brand that sells in the U.S. The “brand exposure” is the percent of that brand’s overall U.S. sales that came from its Mexican-made models in a 90-day period ending March 7, 2017. The “Mexican-made sales” are that brand’s specific U.S.-sold models that are made in Mexico (the sale of those models make up the brand exposure percent).
|Brands*||Total US Sales||Total Mexican-made US Sales||Percentage|
Not shown in the chart above are these brands who have not sold Mexican-made vehicles in the U.S. over this period.
*For this study, the brand refers to any model that has the specific brand name in its model name. It does not refer to every model made by the parent manufacturer even if its name is the same as the brand name.