Ford raises prices on Mexican-Made vehicles amid trade war jitters: Automotive Addicts
Automotive
Due to the escalating cost pressures within the automotive industry, Ford has increased prices on three of its Mexico-produced models, effective May 2. Ford will increase prices on certain trims of the Mustang Mach-E and Maverick. The Bronco Sport may also see a price hike up to $2,000. The decision comes as a response to a combination of routine mid-year pricing adjustments and newly implemented tariffs under former President Donald Trump’s trade policies.
This adjustment positions Ford as one of the first major automakers to revise its pricing strategy in direct response to the revived tariff agenda, which has thrown the industry into a state of uncertainty. Ford estimates that trade-related costs will reach $2.5 billion by the 2025 model, but the company expects to reduce that impact to around $1 billion with various cost-cutting methods. Despite the increases, Ford is still running discount programs through the July 4th weekend to help maintain showroom traffic.
Trump’s tariffs, aimed at boosting domestic manufacturing, have caused disruptions throughout the auto sector. Some automakers even paused operations. They were forced to reevaluate their production strategies. The White House lowered tariffs for auto parts after pressure from the industry. Credits were offered for components manufactured in the U.S., to avoid double taxing raw materials. However, a 25% tariff on the roughly 8 million vehicles imported into the U.S. annually remains in effect.
Analysts have warned that if such tariffs stay in place, U.S. auto sales could dip by more than 1 million vehicles annually. Ford is, however, in a stronger position due to its significant domestic production footprint. About 79% of the vehicles Ford sells in the U.S. are built domestically, compared to GM’s 53%, according to Barclays.
Still, Ford is not immune. Ford’s Maverick pickup is made in Mexico. It is one of the most affordable and popular models. Ford is in a tough spot as the price-sensitive sectors are the ones who will be most affected by the tariffs. Meanwhile, GM has indicated it faces $4 billion to $5 billion in new costs but aims to offset up to 30% of those through operational changes.
Imports from China and South Korea are also under scrutiny. GM faces costs of about $2 billion related to South Korean imports. Ford has not disclosed the specific financial impact of its imports from China, though the company has historically relied on that supply chain for select models and components.
The broader industry is bracing for more adjustments. Audi and Porsche have warned that if trade policy does not change, price increases will be inevitable. Ford’s pricing decision is a sign of things to come. Ford’s decision to adjust pricing is a sign of things to come.
Follow us today:
