DETROIT (Reuters) – German oppulance automaker BMW (BMWG.DE) pronounced on Friday that it will be incompetent to “completely absorb” a new Chinese 25 percent tariff on alien U.S.-made models and will have to lift prices on a vehicles it creates in Spartanburg, South Carolina.
BMW pronounced it is “currently calculating associated required pricing increases” for U.S.-made models alien into China and will announce them “at a after stage.”
BMW exports high-margin X4, X5 and X6 SUV and crossover models to China. Last year, a automaker shipped some-more than 100,000 vehicles from a United States to China.
China, that only days ago cut tariffs on all alien automobiles, slapped an additional 25 percent levy on 545 American products, including U.S.-made cars, commencement on Friday.
The pierce came in response to a Trump’s administration tariffs on $34 billion of Chinese imports.
This poses a tough choice for automakers: catch a cost of tariffs and take a strike to profits, or travel prices and presumably remove sales.
“The doubt for automakers is, are we means to sell your products to consumers during a aloft price?” pronounced Johan Gott, a principal during government consulting organisation A.T. Kearney. “And if we can’t, what are we going to take that (profit) domain out of?”
Gott pronounced automakers are already traffic with steel and aluminium tariffs in a United States. They also face a probability that Trump might levy tariffs of adult to 25 percent on vehicles alien from a European Union and a U.S. boss has threatened to lift out of a North American Free Trade Agreement.
“If we are an automaker, right now we face a intensity for a good understanding of disruption,” Gott said.
Ford Motor Co (F.N) pronounced on Thursday for now it will not travel prices of alien Ford and higher-margin oppulance Lincoln models in China.
German automaker Daimler AG (DAIGn.DE) pronounced final month a 2018 pre-tax boost would tumble as tariffs on cars exported from a United States to China would harm sales of high-margin Mercedes-Benz SUVs.
A mouthpiece for Daimler pronounced a automaker is monitoring a tariff situation, though would not criticism on a pricing strategy.
On a other end, General Motors Co (GM.N) imports a Chinese-made Buick Envision SUV into a United States, that is now theme to a tariff. Last year, GM alien 41,000 of them.
A GM mouthpiece pronounced no preference has nonetheless been done on a probable cost boost for a Envision in a U.S. market.
Reporting by Nick Carey; modifying by Chizu Nomiyama and Nick Zieminski