The US president-elect said on Monday that on his first day in office he would impose a 25% tariff on all goods imported from Mexico and Canada.
Volkswagen Group, Stellantis, Toyota and Hyundai Motors could be the carmakers most affected by threats from President-elect Donald Trump's team to impose 25% tariffs on "all" imports from Mexico and Canada from "day one" of his second presidency that begins on January 20, 2025.
"On January 20th, as one of my many first executive orders, I will sign all necessary documents to charge Mexico and Canada a 25% tariff on all products entering the United States, and their ridiculous open borders," the Republican assured a few hours ago in a message on his social network Truth Social in which he has attacked "illegal aliens" and the "crime and drugs" that, according to him, cross the border.
This decision, which has caused stock market losses of between 2.3% and 5% for most companies in the automotive sector, puts the operations of many manufacturers in North America at risk.
The Volkswagen Group's eponymous brand could be one of the hardest hit, in part due to its manufacturing operations at the Puebla plant, the largest in the country and one of the German plant's largest in the world.
In 2023, according to data consulted by Europa Press , Volkswagen manufactured almost 350,000 vehicles there, including the Jetta, Tiguan and Taos models, all destined for sale in the United States.
Audi, a brand integrated into the German company, is thus closely monitoring future moves by the Republican administration for the effect they may have on the San José Chiapas plant where it manufactures the Q5 and employs just over 5,000 workers.
In 2023, 176,000 vehicles were produced in the area and according to data from the Mexican Association of Automobile Manufacturers, during the first six months of 2024, almost 40,000 vehicles were exported to the United States.
BMW has its production plant in San Luis Potosí for the 3 Series, 2 Series Coupé and M2 models, almost all of which are produced in the United States. From 2027, it will also produce the new electric models of the 'Neue Klasse' at this plant.
The Stellantis Group, for its part, has two assembly plants in Mexico: one in Saltillo, where Ram pickup trucks are produced, and the other in Toluca, where it manufactures the Jeep Compass. It also has two more facilities in Ontario (Canada): one in Windsor, from which Chrysler models are produced, and Brampton, which will host the production of new Jeep models throughout 2025 once the platform is adapted.
Japan's Toyota also uses Mexico as a gateway to the US automotive market. It has two plants in the country where it manufactures the Tacoma pickup truck, of which it sold some 230,000 units in the United States in 2023, or 10% of total sales in the market.
Kia has a plant in Mexico where it manufactures its own models, although it also offers part of its capacity for the production of the Hyundai Santa Fe pickup truck, which is exported in its entirety to the northern country. And Nissan assembles the Sentra, Versa and Kicks models in Mexico, producing almost 505,000 units up to September, although it has not yet revealed what part of all of these were destined for export.
Mazda is where they do give figures. The Asian company exported some 120,000 vehicles from Mexico to the United States in the last year, according to its own results. At the same time, Honda allocates 80% of its Mexican production to the neighbouring country, which has led the group's top brass to consider in recent weeks - they confirmed this during the presentation of results - whether they will have to move part of the manufacturing to the United States in the event that tariffs end up becoming a reality.
At the same time, the American company Tesla, which had planned to move part of its production to Mexico from 2025, has recently reversed its plans and decided to increase the capacity of its plant in Texas. Ford, for its part, has three plants in its southern neighbor and General Motors has seven facilities in which it manufactures not only vehicles but also propulsion systems and parts for its vehicles.
Other parts manufacturers with plants in Mexico that serve the automobile industry in Mexico are the French company Michelin and the Italian companies Pirelli and Brembo.
The Mexican government is also still awaiting the decision of China's BYD, which has postponed its decision on whether or not to build its own factory in the country until after the US elections, although at the time, the group's vice president, Stella Li, had already announced that a future plant would house production for the local market and not for export.
The automotive industry in Mexico accounts for more than 35% of manufactured goods exports in terms of value and is the most important in the country. The United States is by far the main destination for vehicles manufactured in Mexico, accounting for nearly 80% of the total volume. One in four vehicles produced in North America is manufactured in Mexico.
The analysis firm Evercore recently stated in a note from its analysts consulted by Europa Press that each 10% tariff on the Mexican automotive industry represents a risk to quarterly earnings per share of up to 20% for General Motors and 10% for Ford.
In this context, General Motors shares are trading on Tuesday with a fall of more than 7.8%, while Ford's share price is slightly lower, at 2.6%. Toyota's ADRs traded in the United States, for their part, are down 1.5%. And among European car manufacturers, Stellantis closed the session on the Milan Stock Exchange with a drop of almost 5%, while Volkswagen fell by as much as 4%.
The Stoxx Europe 600 Automobiles & Parts index, which groups together European automobile manufacturers and suppliers, was one of the worst performers of the day, falling 1.84% at the close of the session.
