Thursday, August 22

Which European car carriers fear America’s most tax increases?

If it’s in China, the two American companies are Ford and GM, and in the U.S., Jaguar, BMW, and Mercedes are considered to suffer the most damage. 

The majority of cars sold in the United States are imported from elsewhere. Jaguar Land Rover is considered to be the most vulnerable. In 5/2019 alone, the British car carrier sold about 9,358 cars in the US market, but did not produce any vehicles here. Therefore, a 25% import tax will cause particularly heavy losses.

Daimler and BMW were also among the risks, but other than the Jaguar Land Rover, the two carriers relocated their vehicles to the United States with factories in Tuscaloosa, Alabama, and in Spartanburg, South Carolina. Manufacturing operations in factories still account for only 30% to 40% of the car sold in the US-where it makes up to 15% of the global total sales of these companies.

Japanese car carriers such as Toyota, Honda and Nissan are less affected than European carriers, as they all have a large production base in the US. According to the most recent “American Car” rankings of the Cars.com page, some car models are considered the American standard of Japanese companies.

Honda and Toyota produced 9 of the top 15 models on top of the list – ranking of vehicle lines based on production, component origin and the number of American workers used by the airline. The other seven models belong to Honda and the other two are Toyota’s. Meanwhile, Korean companies such as Huyndai or Kia are less protected, when half of the vehicles sold in the US are imported vehicles.

According to Fitch, the new import tariff is set out to protect American automobile manufacturers such as General Motors (GM) and Ford, most likely will not benefit major, by the U.S. will face many risks when other countries take action responded. In addition, Washington’s tariff measures can be detriment to global economic growth due to the broad scale and impact of the automotive market.

Currently, more than half of the cars imported to America come from Mexico. Both Ford and GM have large-scale manufacturing factories here. At the beginning of May 6, U.S. President Donald Trump has threatened to impose a new tariff range, which has a score of 5% for each product imported into the United States, unless the Mexican government has an action to curb the number of immigrants to the United States. The threat caused Mexico to take action at the border and after nine days of threats, President Trump abandoned the plan. The threat of raising taxes despite causing the automobile carriers to headache, but did not make any changes to the supply and assembly lines in Mexico.

According to the U.S. Congress, in 2018, almost half of the vehicles sold in the US are imports, rising above the rate of 41% in 2010./.