Ford Raises Prices on Mexican-Made Cars Amid Tariff Impacts

Ford Motor Company is increasing prices on three models manufactured in Mexico due to President Trump’s tariffs on imported vehicles. The Mustang Mach-E, Maverick pickup, and Bronco Sport will see price hikes of up to $2,000. Ford estimates up to $2.5 billion in increased costs related to tariffs by 2025 but expects to offset some expenses. This move reflects growing uncertainty in the automotive sector due to trade policies.

In a move that reflects the ongoing impact of tariffs on the automotive industry, Ford Motor Company is raising prices on three of its models produced in Mexico. This price hike comes in response to tariffs imposed by President Trump that began affecting imports, and it marks one of the first significant adjustments in pricing from a major automaker since these tariffs were enacted. The adjustment is set to affect vehicles that were manufactured from May 2 onward, with the new prices going into effect before these models reach dealership lots in late June.

The affected models include the Mustang Mach-E, a popular electric SUV, the Maverick pickup—widely recognized for its affordability—and the Bronco Sport. Reports indicate that the price increase could reach up to $2,000 for some variants of these vehicles, according to notices sent to dealerships reviewed by Reuters.

Ford anticipates that the ongoing trade war will impose substantial costs, estimating an increase of approximately $2.5 billion by 2025. The automaker, however, expects to mitigate some of that impact by about $1 billion. Comparatively, General Motors noted that tariffs might cost them between $4 billion and $5 billion, but they also believe they could offset about 30 percent of those expenditures.

The uncertainty introduced by these tariffs has resulted in significant shifts across the auto sector. Manufacturers have revised their forecasts, altered production schedules, and in some cases, even temporarily idled plants due to escalating costs and unpredictability. In response to industry pressures, President Trump adjusted tariffs on foreign auto parts in a bid to provide some relief and prevent compounded tariffs on materials sourced domestically.

Despite these challenges, Ford’s strong manufacturing base in the United States positions it relatively well in contrast to some of its competitors. Data from Barclays indicates that Ford assembles 79 percent of the vehicles it sells within the U.S., while its main competitor, GM, assembles only 53 percent domestically.

Additionally, both Ford and GM are contending with significant tariffs imposed on imported vehicles from China and South Korea. GM has estimated that these costs amount to around $2 billion for the imports it sources from Korea, though Ford has not disclosed specific numbers related to expenses from China.

Moreover, other automakers that rely heavily on U.S. exports face mounting pricing pressures due to tariffs. According to 2024 data from S&P Global Mobility, several leading manufacturers—such as Toyota, GM, Volkswagen, and Hyundai Motor—import over 40 percent of their vehicles sold in the U.S.

While Ford is the first major automaker to take the step of raising prices, many others have hinted that increases may be imminent if tariffs remain in place. Porsche has indicated a potential need to raise selling prices, while Audi has similarly suggested possible hikes but has not provided specific details. On a different note, BMW is anticipating a downward shift in tariffs starting in July, signaling a more optimistic outlook amid a generally uncertain environment. GM’s finance chief, Paul Jacobson, suggested that the company is currently not seeing an immediate need for price increases and is confident about the pricing environment for now.

In conclusion, Ford’s price increase on select models is an early response to ongoing tariffs affecting the auto industry, particularly those implemented under the Trump administration. The automaker, while facing rising costs, is managing to maintain a stronger domestic manufacturing presence compared to competitors. The broad impact of tariffs on the automotive sector suggests a complex landscape ahead for pricing and production as companies adapt to new economic realities.

Original Source: www.aljazeera.com