Volkswagen AG is planning so as to add the brand new import charges to the sticker costs of its automobiles shipped into the US.
A Volkswagen brand is pictured at Volkswagen’s headquarters in Wolfsburg, Germany.(Reuters)
This comes after US President Donald Trump introduced 25% tariffs on car imports into the US, which Volkswagen’s vehicles now come beneath, in accordance with a Bloomberg report.
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The German automaker has despatched its US sellers a memo informing them of the charges. It has additionally quickly halted rail shipments of automobiles from Mexico and is holding vehicles shipped from Europe at port, in accordance with the report.
Volkswagen has a manufacturing unit in Tennessee the place it makes the electrical ID.4 and bigger Atlas SUVs. Nonetheless, different fashions such because the ID. Buzz van and Golf are imported from Europe, whereas the Tiguan and Taos SUVs and Jetta are introduced in from Mexico.
German carmakers are among the many ones most impacted by Trump’s auto tariffs. Trump’s tariffs are a “fundamental turning point in trade policy,” the report quoted Hildegard Müller, head of Germany’s auto foyer VDA as saying.
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The transfer will solely produce losers, together with within the US, with customers hit by “rising inflation and a reduced choice of products,” she added.
On high of this, German automotive firms’ shares slumped on Thursday, with Volkswagen and Mercedes falling greater than 3% throughout early intraday buying and selling, in accordance with the report which added that BMW was an exception, buying and selling up as a lot as 1.6%, and reversing earlier declines.
This additionally comes at a time when customers’ preferences are extra inclined in the direction of worthwhile sport utility automobiles, which is profitable for the likes of Mercedes-Benz Group AG and Porsche AG.
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Consequently, Mercedes is trying to withdrawing lower-margin imported fashions such because the GLA small SUV within the US, in accordance with the report.