Ford Increases Prices on Vehicles Amid Tariff Pressure

Ford Motor Company is raising prices on three of its vehicles produced in Mexico due to tariffs imposed by President Trump. Price increases of up to $2,000 affect the Mustang Mach-E, Maverick, and Bronco Sport. This decision reflects broader industry pressures as car manufacturers anticipate escalating costs and adapt to ongoing tariff-related uncertainties.

In a significant move, Ford Motor Company has announced a price increase on three models produced in Mexico. This decision comes as a response to tariffs imposed by President Donald Trump on auto imports, which are expected to ultimately affect consumer prices for vehicles arriving at dealer lots in June. The affected vehicles include the Mustang Mach-E, Maverick pickup, and Bronco Sport, with price hikes reaching as much as $2,000 on select models, as reported by Reuters.

The new pricing takes effect for cars manufactured from May 2 onwards. This adjustment places Ford among the first major automakers to alter their pricing in the wake of tariffs. The changes were not entirely unexpected, given recent industry discussions surrounding the implications of these tariffs. A spokesperson from Ford noted the vehicles with increased prices are scheduled to arrive at dealerships late next month.

Ford projects that the trade conflict could add approximately $2.5 billion in costs through 2025, though the company aims to mitigate this impact by reducing exposure by about $1 billion. Meanwhile, General Motors indicated last week that it is bracing for tariff-related costs between $4 billion and $5 billion, with plans to offset at least thirty percent of those expenses.

The auto sector has been juggling numerous uncertainties linked to these tariffs. Major car manufacturers have adjusted forecasts, modified production strategies, and even halted operations in some cases. Trump has made slight concessions regarding tariffs on foreign auto parts, suggesting credits for domestic production efforts. Yet, the steep 25-percent tariff impact on 8 million imported vehicles remains intact.

Ford has a stronger position to manage these tariffs compared to its rivals, largely due to its robust domestic manufacturing footprint. According to an analyst note from Barclays, Ford assembles 79 percent of its vehicles sold in the United States within the country. In contrast, General Motors builds only about 53 percent domestically.

Both Ford and GM still face pressures from tariffs on imports from China and South Korea. GM estimates it incurs around $2 billion in costs related to its imports from Korea. Ford, however, has not disclosed specifics regarding the costs associated with its Chinese imports.

Many automakers that depend heavily on exports to the U.S. market are experiencing pricing pressures due to these tariffs. Data from 2024 by S&P Global Mobility shows that numerous major companies, including Toyota and GM, import over 40 percent of their sales in the U.S., while brands like Volkswagen and Hyundai exceed 60 percent of imported vehicles. Before Ford’s announcement, the majority of automakers avoided price hikes but hinted at impending increases.

Brands like Porsche have indicated they would need to raise prices if tariffs persist, and Audi has suggested similar potential adjustments. Conversely, BMW anticipates a decline in U.S. car tariffs starting in July, suggesting a more optimistic approach than that of many competitors. GM’s finance chief recently expressed confidence about the current pricing environment, stating that the company does not foresee any imminent hikes.

Ford’s recent decision to increase prices on select vehicles reflects ongoing industry adjustments in response to tariffs imposed by the current administration. As other automakers prepare for potential pricing shifts due to increasing costs, Ford’s strong domestic manufacturing gives it a distinct advantage. Nonetheless, uncertainties in the auto sector remain as companies navigate these challenging economic conditions.

Original Source: www.aljazeera.com