The impact of U.S. President Donald Trump's tariff policy on imported cars is leading to an increase in investments by global automotive manufacturers in the U.S. Major automotive brands are adjusting their local sales strategies in the short term to respond to tariffs and are planning to expand production in the U.S. in the medium to long term, including factory transfers.
The Korea Automobile Mobility Industry Association (KAMA) noted on the 15th in a report titled 'Current Status of Responses by Global Automotive Industry to U.S. Tariff Measures' that major automotive corporations are taking initial measures to counter tariffs by ▲absorbing tariff expenses through reduced margins and incentives ▲reducing production costs by adjusting North American production volumes and parts sourcing.
In the medium to long term, there are plans to increase investments in the U.S., including restructuring supply chains and transferring final assembly plants. The report explains that this aligns with President Trump's intention to revive the U.S. automotive industry.
Recently, both U.S. and non-U.S. brands have begun to revise sales strategies without raising prices due to the impact of U.S. tariffs. Ford and Stellantis have applied employee discounts on some models to defend prices, while European and Asian brands are maintaining prices through inventory by reducing exports to the U.S.
The Volkswagen Group temporarily suspended shipments of Audi and Porsche to the U.S. since last April. Mercedes-Benz reviewed halting sales of entry-level models, such as the GLA, in the U.S. The Volkswagen Group has frozen local prices until this month, and Benz also announced a freeze on the prices of 2025 models.
Hyundai Motor Group is maintaining the prices of Hyundai, Kia, and Genesis, and has extended special cash discounts for some models until the 7th of next month. While Toyota and Honda forecast a decrease in operating profits of 21% and 59%, respectively, compared to the previous year, they remain cautious about price adjustments.
Corporations are increasing investments in the U.S., such as transferring factories, while downsizing overseas production facilities. General Motors (GM) announced early this month that it will invest $4 billion (5.4712 trillion won) over two years in three assembly plants in the U.S., following the expansion of production at its assembly plant in Indiana and investing $900 million (1.231 trillion won) in its Tonawanda engine plant in New York.
In contrast, the Canadian electric commercial vehicle assembly plant announced plans to halt operations and cut jobs. The Oshawa plant in Canada will cut 700 jobs and operate at reduced capacity, while two models of Chevrolet Blazer sports utility vehicles (SUVs), which were produced in Mexico, are set to be manufactured entirely in the U.S. after two years.
Stellantis is considering temporarily suspending operations at its assembly plants in Canada and Mexico and transferring some pickup truck model production from Mexico to the U.S. Volkswagen is reviewing the expansion of its Chattanooga plant for electric pickups and vans, and Audi has pinpointed three potential sites for local production in the U.S.
Benz plans to deploy key new models at its Alabama plant in the U.S. starting in 2027 and to produce the GLC for North America. BMW also aims to increase the annual production capacity of its Spartanburg plant in the U.S. to 480,000 units beginning next year and will produce the next-generation electric SUV. Hyundai Motor Group plans to make local investments amounting to $21 billion (28.7238 trillion won) by 2028 to achieve a local production rate of 70%.