Unlike some automakers like Ford, Subaru and Toyota, Hyundai and Audi are still holding off on tariff-related vehicle price hikes. Read more in this week's Tariff Talk:
Hyundai hasn't raised priced due to tariffs
- Leave it to Hyundai! Hyundai has not made any tariff-related pricing changes despite reports that said price hikes could be on the horizon. That’s according to Hyundai Motor North America CEO Randy Parker, who said on a call with media July 1 that keeping product affordable is key to navigating a “challenging” second half. In May, Bloomberg reported that the South Korean automaker was looking at an imminent increase of 1 percent to the suggested U.S. retail price on every model in its lineup. That followed an April announcement from Hyundai committing to maintain pricing until at least June 2. But Parker said the automaker has taken no action and, conversely, has incentive programs plotted out through the end of the year as part of a “robust plan” that will keep vehicles competitive.
No prices hikes so far from Audi, either
- Audi is holding off on price increases in the U.S. despite a sharp 19% drop in Q2 vehicle sales, marking its sixth consecutive quarterly decline. The company attributed the downturn to a tough economic environment and ongoing model changeovers. Compounding the issue, tariffs introduced by President Donald Trump have increased costs for German automakers that import vehicles to the U.S. without domestic production. The Q5 SUV, Audi’s top-selling U.S. model imported from Mexico, saw a steep 29% drop in sales. Amid these challenges, Audi is considering launching U.S.-based manufacturing and may make a decision on a plant location later this year.
White House latest
- President Donald Trump said Monday the U.S. would impose a 25 percent tariff on imports from Japan and South Korea beginning Aug. 1 as he unveiled the first two of an expected 12 letters to trading partners outlining the new levies they face. “If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25 percent that we charge,” Trump said in letters to the leaders of the two Asian countries, which he posted on his Truth Social platform. Later, Trump also announced the U.S. will impose 25 percent tariffs on Malaysia and Kazakhstan. It truly looked like Japan’s low-key, nonconfrontational approach to trade talks with the White House would work, but a report from Reuters suggests it has failed after President Donald Trump said Japan faces 25 percent tariffs on U.S. exports starting Aug. 1. Will Japan’s efforts really fail? After all, Japan and the Trump administration successfully negotiated for Nippon Steel’s massive acquisition of the iconic U.S. Steel Corp and Trump gave Japan three-plus more weeks to cut a deal, along with time to absorb its parliamentary election results July 20.
Volvo cuts some of U.S. commercial workforce
- Volvo Cars has cut about 15 percent of its commercial workforce in the U.S. as the Swedish automaker braces for market headwinds. According to a person briefed on the matter, Volvo eliminated about 60 jobs, mostly at its Mahwah, N.J., headquarters. Some of the cuts were made through attrition. Most of the affected workers were hired during the pandemic, said the person, who asked not to be identified because the job cuts had not been announced publicly. Volvo’s U.S. field staff is not affected.
Japanese automakers sharply reduced prices of exports to U.S. in June
- Japanese automakers sharply reduced the prices of vehicles exported to the United States last month, reflecting efforts to remain competitive as President Donald Trump’s 25% auto tariffs take effect. According to the Bank of Japan’s corporate goods price report released yesterday, the export price index for vehicles shipped to North America fell 19.4% year-over-year on a contract currency basis, the steepest decline recorded since 2016. The price cuts underscore the pressure Japanese automakers face to avoid passing tariff costs to U.S. consumers, even as the tariffs raise concerns about profitability and the potential impact on wage growth, a key factor in Japan’s inflation targets. While some manufacturers, such as Subaru, have announced selective price increases, overall data indicate that Japan’s strategy focuses on limiting price hikes.
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