Mercedes Benz Group AG is considering shifting the production of another vehicle model to the U.S. in response to Donald Trump’s 25 per cent auto tariffs.
The move may be necessary to deal with the cost of the duties, Mercedes’ production chief Jörg Burzer said Thursday, declining to comment on which model may be moved to its factory in Tuscaloosa, Alabama.
“We’re still assessing the impacts of these tariffs,” Burzer said on the sidelines of a company event in Stuttgart, Germany. “We have made some plans, but flexibility is absolutely key.”
Germany’s carmakers are among the most affected by Trump’s higher levies on auto imports. Robust demand for more profitable sport utility vehicles and US consumers’ slower shift to electric vehicles make it a lucrative market for the likes of Mercedes and Porsche AG.
Mercedes’ most popular imported model is the GLC. The German luxury-car maker sold 64,163 units of the SUV in the country last year, an increase of 58 per cent compared to the prior year.
Starting at just under $50,000, the GLC has smaller margins and faces stiffer competition than more expensive models such as the S-Class sedan and G-Wagon, meaning tariffs are more likely to weigh on its profitability.
Trump’s 25 per cent levy, which took effect Thursday, has already rattled the auto industry, with buyers rushing to lock in deals and shares slumping on fears of soaring costs. Mercedes is considering cutting sales of lower-margin imports like the GLA SUV, Bloomberg reported earlier this week, as tariffs threaten to erode their profitability.
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