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Volkswagen and BMW Respond to U.S. Tariff Policies with Long-Term Strategies

Automakers face challenges from new trade rules as Volkswagen explores backup plans and BMW opts to absorb costs temporarily.

  • Volkswagen and BMW are adjusting strategies to navigate U.S. tariffs on vehicles imported from Mexico, with Volkswagen ruling out immediate production shifts to the U.S.
  • President Trump granted a one-month exemption for USMCA-compliant vehicles, set to expire on April 4, but automakers face uncertainty about long-term trade policies.
  • Volkswagen's Puebla, Mexico plant, responsible for two-thirds of its U.S. sales, is central to its operations, but increasing U.S. production in Chattanooga will require more time.
  • BMW has decided not to pass on the cost of tariffs to U.S. customers for now, contrasting with other automakers considering price hikes to offset the financial impact.
  • Volkswagen is developing long-term contingency plans while continuing a cost-cutting initiative, including headcount reductions and factory adjustments, to improve profitability.
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