Trump prices could quickly reduce North American automobile production

DETROIT – About a third of vehicle production in North America could be reduced next week due to the 25% prices of President Donald Trump on Mexico and Canada, while car manufacturers are trying to reduce increased costs and buyers do not hold on the purchase of new cars and trucks.

This lost production would be equivalent to around 20,000 units per day, according to a new analysis of S&P Global Mobility, the important and forecast data company.

The impact of production as well as the possibility of layoffs would continue to grow if the prices, which Trump implemented Tuesday, did not change or did not raise.

“We have a new dawn, to a certain extent. This is an important decision,” said Stephanie Brinley, associate director in autoinDelligence at S&P Global Mobility, during a webinar at the Automobile Press Association.

S&P Global Mobility reports that 25 car manufacturers produce an average of 63,900 light passenger vehicles in North America per day. The majority of these, around 65%, are assembled in the United States, followed by 27% in Mexico and 8% in Canada.

The affected production will vary depending on the location of the automaker, the vehicle and the factory. This could mean that a plant is completely idling or that it produces fewer vehicles that are based on parts that cross the borders several times in different forms before being installed in a vehicle.

“I think we will see plants falling.” It will not necessarily be consistent through [automakers]. It will be much to be what they need and how much they need it. “”

The actions of automotive actions have dropped more than the wider market Tuesday following prices.

A price is a tax on imports or foreign goods brought to the United States. Companies that import goods pay prices, and some experts fear that companies simply have additional costs to consumers – increase the cost of vehicles and potentially reduce demand.

Several car manufacturers this week refused to comment directly on the prices of 25%, based on previous comments or professional associations to speak on their behalf.

The American Automotive Policy Council, which represents Ford engine,, General Motors And Stelllantis – which are all strongly affected by prices- maintains that vehicles and parts that meet the strict requirements of domestic and regional content of the American-mexico-Canada agreement, or USMCA, should be exempt from the tariff increase.

“Our American car manufacturers, who have invested billions in the United States to meet these requirements, should not have their competitiveness compromised by prices that will increase the cost of building vehicle construction in the United States and Style investment in American workforce, while our competitors outside of North America benefit from easy access to our family market”.

The Alliance for Automotive Innovation, a commercial group representing the vast majority of car manufacturers selling vehicles in the United States, warned that no automotive manufacturer will be released unscathed, resulting in an increase in consumer costs.

“”It is not hypothetical, “said the CEO of the commercial group, John Bozzella, in a press release.” All car manufacturers will be affected by these prices on Canada and Mexico. Most predict that the price of certain vehicle models will increase – by 25% – and the negative impact on the price of the vehicle and the availability of vehicles will be felt almost immediately. “”

Nissan engine Late Monday late Monday, “the prices supported by this magnitude will have a negative impact for car manufacturers, and we assess how we will take measures accordingly. We hope that the sides will be able to reach an agreement for a productive path to follow.”

Several car leaders and Wall Street analysts described prices as inserting unnecessary chaos into the automotive industry.

“President Trump has talked a lot about strengthening our American automotive industry, bringing more production here, more innovation in the United States, and if its administration can achieve it, it would be one of the most signature achievements,” said Ford Jim Farley CEO in February at the Wolfe research investor conference. “So far, what we see is a lot of costs and a lot of chaos.”

Prices supporters argued that they are a way to help level the commercial disparities with the countries, while serving as a lever to renegotiate the USMCA, which Trump initially negotiated during his first mandate as president.

The car manufacturers were relatively silent on the financial impacts they expect from these prices, but the CEO of GM, Mary Barra, said that the car manufacturer thought that he could reduce the short -term impacts between 30% and 50% of additional costs “without deploying capital”.

It is difficult to calculate the total impact that these prices will have on the production of North American vehicles.

“This is one of the most fluid situations that the automotive industry has never really seen … In addition to a few years of unexpected coasting situations, supply situations,” said Brinley. “The industry itself has developed to be a little more agile than perhaps seven or eight years ago … But a large part is still very uncertain.”

The automotive industry is a complex global system that thrives on certainty. S&P Global Mobility reports that there are an average of 20,000 rooms in a vehicle when it is destroyed to its nuts and bolts. Parts can come from 50 to 120 countries.

For example, the Ford F-150 is exclusively assembled in the United States, but has around 2,700 main bailiffs, which exclude many small parts, according to Caresoft, a comparative engineering and advice analysis company.

These parts come from at least 24 different countries, according to Caresoft.