Here’s what’s happening in the automotive industry this week as automotive tariffs continue to shape the landscape.
BMW Plans to Expand Spartanburg Plant, Increase Production by 80,000
BMW is considering increasing shifts at its Spartanburg, SC plant to boost production by up to 80,000 units. This move aims to mitigate potential impacts of U.S. trade policies, as the facility is set within a free-trade zone exempting parts imported for exports from tariffs. Executives have assured analysts that prices for most U.S. models will remain stable through the end of May while evaluating their strategies to maintain competitive pricing.
Source: Reuters
Canada Hits Back With 25% Tariffs on U.S. Vehicles
Canada announced a 25% tariff on U.S.-built vehicles in retaliation to American tariffs targeting the Canadian auto industry. These measures exclude vehicles compliant with the USMCA and those with Mexican parts, safeguarding collaborations with Mexico. The tariffs are designed to pressure the U.S. government, with Canadian officials emphasizing the need to protect domestic jobs and production capabilities during heightened trade tensions.
“Canada continues to respond forcefully to all unwarranted and unreasonable tariffs imposed by the U.S. on Canadian products,” Finance Minister François-Philippe Champagne said in a public statement. “The government is firmly committed to getting theses U.S. tariffs removed as soon as possible.”
Source: CBT News
Stellantis First-Quarter Shipments Decline Nine Percent
Stellantis, the world’s fourth-largest automaker, reported a nine percent drop in global shipments in Q1 2025, with North American output down 20 percent due to extended holiday shutdowns and model transitions. However, South American shipments grew by 19 percent, compensating for some losses. New models like the Ram 2500 and Fiat Grande Panda are expected to bolster inventory stability and drive better order volumes in the coming months.
Source: Reuters
Audi Faces Potentially Unsellable Model in the U.S.
The Trump administration’s new tariff policies have struck a blow to Audi, whose top-selling SUV, the Audi Q5, may become unsellable in the United States. The Q5 is built in Mexico and could potentially be hit by tariffs three different times before reaching the market. This would add duties totaling at least 52.5% to the vehicle which is already priced at $45,400. Luxury car brands, which often source parts and manufacturing across multiple nations, are particularly vulnerable to these new costs.
Source: Bloomberg
Volvo to Drop Chinese-Made S90 Sedan
Volvo has reportedly decided to halt U.S. sales of its S90 sedan according to a person familiar with the matter. The S90, which is manufactured in China, would be affected by steep American tariffs on Chinese imports. Instead, Volvo plans to focus on expanding production of its high-demand XC90 SUVs and electric EX90 models at its South Carolina plant. Volvo also aims to reduce incentives on their existing inventory while reallocating resources toward mitigating future tariff-related costs.
“Adding production of the XC90 to the assembly lines of Charleston would make the most sense as it shares components with the outgoing S60,” said Sam Fiorani, vice president at AutoForecast Solutions. “This is a move they probably should have taken when the plant originally opened.”
Source: Automotive News
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