Many world car manufacturers provide for the expensive impact of the trade war, and some say they expect to see profits drop by billions of dollars by the end of the year, mainly citing Prices on the automotive industry Imposed by US President Donald Trump.
Companies like Ford, General Motors, Volkswagen, Stellantis and many others expect the prices to lead to higher costs to make vehicles, and if consumers end up with a higher price accordingly, there could be a ripple effect. In some cases, this has already caused job losses.
Although certain changes have been made to give the automotive industry a room for maneuver, companies are still expecting to take a financial hit.
“There is no economist in the world who does not know that input costs are increasing. And automotive activity is a big and small margin company, “explains Andrew Macphee, the concessionaire manager in an adding interview:” There is no choice but to have a price increase in all manufacturers. “
What do companies say?
Ford Motors Inc. is under the spotlight after the company announced to the surprise of the shareholders that it suspended its advice in advance for the year. In other words, the financial future of the company is uncertain and they do not want to give shareholders a false hope.
What Ford said is that they expect to see the profits drop by $ 2.5 billion this year, citing the trade war as a main factor. The company added that $ 1 billion in the loss could be offset by cost reduction and have suggested that losses are “related to the rate”, and often these cost reduction measures include job cuts.
Other car manufacturers make similar predictions on impact rates on results, including luxury brands like Ferrari, as well as Audi and Porsche (both under the banner of the Volkswagen group).
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Ferrari announced in March The fact that the American orders were placed before April 2 would see no change in prices, but those made after could have seen increases up to ten percent, citing “import prices on EU cars in the United States”.
Addressing analysts after announcing the news, Ferrari maintained his confidence in the trade war, CEO Benedetto Vinitant highlighting the faithful customers of the company, “we distinguish ourselves thanks to the confidence of customers who are with us.”
Although reporting a profitable quarter overall in the first three months of the year, Ferrari declared in his report on gains that it expects the same import rates to have an impact on the profitability of the company for the year overall.
In recent weeks, similar conservative prospects have been announced by Volkswagen group,, StelllantisAnd General Motors Among other things, by providing for less income and profits as we did not think of it previously, the signaling of the tariff landscape should have an impact on profits.
In the case of the Stellantis report, the parent company of Chrysler, Dodge and Jeep among others, the impact of the prices was directly cited saying: “The company suspends its financial advice in 2025 due to the uncertainties linked to the prices”, while adding the company “.
For the moment, there is a price of 25% on all imports in the United States, Including for vehicles and parts that do not comply with the current Canada-United (CUSMA). In response, the Canadian government has imposed counter-tale aimed at compensating for some of the costs for Canadian companies.
In addition, there is a distinct rate of 25% on steel and aluminum products imported from Canada, and many vehicle components require these materials in the manufacturing process.
Although there are no immediate plans to do so, Trump recently said The prices “could go up” at one point.
Speaking on Tuesday at the White House before individual discussions with Trump, Canadian Prime Minister Mark Carney told journalists: “We have a huge automotive sector between the two of us … 50% of a car from Canada is American. It’s like nowhere else in the world. “
For the moment, the Trump administration has provided a certain relief of prices to car manufacturers in the United States which aims to limit foreign manufacturing while allowing companies to continue operations within the country’s borders.
US Secretary of Commerce Howard Lutnick appeared in the Washington Oval Office on Tuesday, alongside Trump and Carney. When he was asked to clarify rescue measures for the automotive sector, Lutnick told journalists: “We have made arrangements with automotive companies that 15% of their USMCA parts are included, then 15% of foreign parts in the suggested retail price suggested manufactured are not tariff to help national manufacturing.”
These prices have only been in place for a few weeks, and it is a somewhat fluid landscape because the changes are frequently made to Commercial and tariff policy, provoking extreme volatility for companies and financial markets. This has become particularly obvious in recent weeks, because the major car manufacturers have published a benefit of the first quarter to shareholders, as well as updated prospects for the next quarter and the full year.
Prices in the automotive sector will have a more than simple profits
A Study by the Michigan Automobile Research Center have noted that prices will increase costs for all car manufacturers in the United States by almost a combined total of $ 108 billion this year.
With Product manufacturing costs, including cars, have ceased to increase Following prices, Automobile dealers are preparing to increase the prices of stickers that consumers will have to pay.
These higher prices could result in less sales and this drop in income should lead companies to reduce costs to maintain profitability. Sometimes these cost reduction measures include Losses and plant closings, as was the case for Stellantis And General Motors Last week.
The most recent report on the Labor Market for Statistics Canada highlighted a loss of 33,000 jobs and upward unemployment. This included temporary layoffs and plant closings in Canada, notably Stellantis in Windsor, have.
The next employment report for April comes out on Friday.
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