It’s no secret that tariffs imposed by the Trump administration on imported automobiles and select components have upended the industry in various ways. Aside from prompting some automakers to raise prices at least somewhat to compensate, others have announced plans to move production and shift supply chains, though such moves can be costly and time consuming. As it turns out, automotive production in North America is also poised to take a bit of a tumble as the latest piece of fallout from tariff concerns.
According to Automotive News, new data from AutoForecast Solutions shows that automotive production in North America will drop by around 126,000 units in Q1 2025 compared to expected levels, taking into account production cuts and increases announced by automakers as of late. It is worth noting that this isn’t a massive figure – representing roughly one percent of the 16 million vehicles that same region produced in 2024, but it’s also another side effect of higher production costs related to tariff levies imposed on places like Canada and Mexico.
“It’s going to take three or four years before we can get a greenfield plant up and running with new production,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. “It just doesn’t happen overnight. So in the meantime, we’re going to see lower sales and lower production.”
As Ford Authority recently reported, Ford stands to be impacted less by tariffs than most of its peers, and CEO Jim Farley even admitted that they give the automaker a bit of an advantage given its strong U.S. production footprint. However, Farley also expects those tariffs to remain in place for at least three years, prompting some price increases, and that’s already true of the models that The Blue Oval builds in Mexico and subsequently imports and sells in the U.S.
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A close relative just purchased a new car recently, for just this reason. I’ve heard that many dealerships are doing a brisk business lately as many are anticipating price increases. Good for now…but it doesn’t bode well for the long term. Especially as many are anticipating Trump’s tariffs to be in place for most of his term.