You are here
Home > Vehicles > Volkswagen, Ram could get hit hard by Trump’s border tax

Volkswagen, Ram could get hit hard by Trump’s border tax

With all the recent headlines about healthcare, Russian hackers, and missing handshakes, the Trump administration has been a bit quieter about its proposed border tax (or possibly, border tariff) than it was a few weeks ago.

That’s cause for relief among many automakers, especially those who import significant numbers of vehicles from other countries, as many foreign companies do. But if and when those discussions restart, which brands are likely to suffer the biggest headaches?

Without knowing the specifics of a Trump tariff/tax plan, that’s a tough question to answer. But since much of the administration’s ire was focused on Mexican manufacturing, it’s likely that companies with plants south of the border would face some particularly stiff fines.

And which companies are those? It’s probably not the ones you think.

Southern risk exposure

As you can see in this handy chart, most of America’s major players rely on Mexico for some of their production. However, as a percentage of total sales volume, Mexican-made vehicles weigh much heavier on Volkswagen, Ram, and Fiat than on brands like Ford–a company that, ironically, has been on the receiving end of many anti-Mexico tweets. 

To gather data for the chart, Carjojo looked at 90 days worth of auto sales stats, then calculated the portion of a brand’s sales that came from vehicles made in Mexico. (It’s worth noting that several brands don’t appear on the list at all because none of the models sold during the 90-day period were made in Mexico.)

The numbers reveal that Volkswagen would fare the worst under a tariff/tax plan targeting Mexican-made cars, because those vehicles account for 57 percent of Volkswagen’s already-slim U.S. sales.

Ram isn’t far behind: more than half of the trucks that the Fiat Chrysler Automobiles unit sold between December and March–53 percent, to be precise–were manufactured in Mexico. 

And another FCA brand, Fiat itself, relied on Mexican plants for 42 percent of vehicles sold.

Dodge, Lincoln, and Nissan depended on Mexico for roughly a quarter of their sales inventory during the period covered by the study.

What’s it mean?

Again, with no formally proposed legislation to debate, it’s impossible to know exactly how a border tariff/tax would affect any of the brands on the chart. However, it’s clear that if Mexican-made goods bear the brunt of any financial penalties, Volkswagen and Ram would be the most exposed to risk. 

That’s bad news for them, but potentially good news for competitors, who might avoid the heaviest tariffs/taxes. It could be particularly good for others in the narrower truck segment–others like Ford and Chevrolet, who could pick up some sales if Ram pickups become too expensive.

Stay tuned for updates–and changes in vehicle production strategies–as the months wear on.

Similar Articles

Top