It's all part of the plan to "spread" out tariffs hits over the entire model range.
Last week, we published a piece explaining the important of knowing where your car is built. It will soon be extremely important to know where your next car was assembled, because the US is in the midst of a massive trade war. Just because your car was built in the US, doesn't make it safe from tariffs. As Automotive News reports, automakers may be forced to spread price increases from tariffs across their entire model range.
Many people seem to be confused about how US-built cars could possibly affected by Trump's tariffs. To put it simply, automakers plan to minimize the impact of the tariffs by spreading out price increases across their lineup. In Buick's case, the Chinese-built Envision's price increase will likely be broken up and added onto other models. Volvo is another interesting case. Although the new S60 sedan will be built in the US, it may suffer from a price increase to make up for foreign-built models. Some automakers such as Jaguar, Land Rover, Porsche, Mitsubishi, Audi, and Mazda have no US-built cars to spread the tariff price increases onto.
According to analysts at Baird Equity Research, the average price increase for automakers with all foreign-built lineups will be around $6,000, which is a significant amount to spread out. Even US-built cars will have some added cost, because of their foreign parts content. Baird analysts predict that the average cost increase will be around $4,000 - $1,000 of which includes foreign parts content on US-built vehicles. No matter where a car is built, it will likely increase in price due to these tariffs. Some automakers, like GM, Ford, FCA, and Honda, are better suited to deal with the tariffs because they produce the most vehicles in the US.
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