On Wednesday, Christian Meunier, the chairman of Nissan Americas, expressed his concerns regarding the potential impact of tariffs on vehicle prices, which are already at notably high levels. In an interview with Reuters, Meunier highlighted the issue of vehicle affordability, stating that the rising costs could make new cars inaccessible for middle and lower-income consumers, potentially forcing them to resort to purchasing used vehicles. He emphasized the importance of government intervention to ensure that new cars remain affordable.
The implementation of a 25% tariff on imported vehicles by U.S. President Donald Trump has significantly affected both domestic and international automakers, many of whom rely heavily on imports from Mexico and Canada. According to an analysis by Cox Automotive, the average transaction price of a vehicle in the United States has surpassed $48,000. The company anticipates that tariffs will increase the prices of affected models by 10% to 15% and will result in an overall 5% rise in prices for vehicles not directly subject to the tariffs.
Vehicles priced under $30,000, primarily manufactured outside the United States, are expected to be the most affected by the tariff measures. For instance, the Nissan Versa, typically priced around $20,000 according to Cox, is produced in Mexico. Meunier conveyed that, with the impact of tariffs, maintaining the production of affordable vehicles could become significantly challenging, risking the elimination of these segments. Although he acknowledged the possibility of producing more affordable vehicles within the United States, he noted the difficulties posed by potential restrictions on sourcing parts from Mexico. Starting May 3, automakers also face tariffs on essential auto components, including engines, transmissions, lithium-ion batteries, and other major parts.
Meunier indicated that Nissan has the capacity to expand U.S. production, as the company’s two American assembly plants have a combined capacity of 800,000 units, with about 525,000 vehicles produced in the 2024 calendar year. Nonetheless, he stated that Nissan does not intend to reduce its production capacity in Mexico. Instead, the company plans to absorb tariffs temporarily while assessing strategies to adapt, with the aim of maintaining sales momentum in the market.
