Tariffs drive down North American car production by 2025
Analysts predict that car production in North America could decrease by 9% in 2025. The reason is the tariffs imposed by President Donald Trump, which increase vehicle prices and influence manufacturers' decisions.
According to the S&P Global Mobility report, global production of new cars this year will be approximately 88 million. This represents a 2% decrease compared to the previous year, equating to about 1.55 million fewer units. The American market might experience a significant impact, with a forecasted 3% drop in sales.
The tariffs imposed by the Trump administration raise costs for both consumers and manufacturers. About 50% of new cars sold in the U.S. are produced abroad, and between 30% to 60% of car parts are imported. In response, some companies, such as Audi and Jaguar Land Rover, have paused exports to the United States, relying on existing stock and hoping for tariff relief in the coming months.
Other manufacturers are opting to relocate production to the U.S. Volvo has announced the start of production for a second model in the country, likely the XC60 or XC90 in hybrid versions. Honda plans local production of the Civic Hybrid model, and Mercedes-Benz intends to increase its capacity in the U.S., although this may take several years.
Meanwhile, the CEO of the VW Group, Oliver Blume, revealed that Audi is in talks with the Trump administration about opening a factory in the U.S. Although Volkswagen already has plants in the country, all Audi models sold locally are currently imported.
