UK car prices could rise as Volkswagen warns of | Tech News
Some motoring specialists have feared that President Trump’s tariffs could see price hikes within the UK (Image: Getty)
A growing quantity of motoring specialists have raised considerations that the 25 p.c imported car tariff launched by the Trump Administration could end in larger prices in UK dealerships.
According to a research by the automotive consultancy firm Anderson Economic Group, the blanket tariffs could see prices of new vehicles in America rise by an average of $12,000 (£9,270), with producers primarily based in international locations together with Mexico, Japan and Germany set to be the worst affected.
Edmund King OBE, President of the AA, famous that the tariffs will even have a important impression on the various UK-based firms that sell fashions in America, however was hopeful that price hikes in different markets is not going to be crucial.
He defined: “Car producers depending on a high proportion of gross sales within the United States shall be hardest hit and can lose gross sales.
“Whether their loss of gross sales within the USA will increase the prices of autos within the UK might properly rely on the competitors for gross sales within the specific car section market within the UK. The UK car market is already fairly aggressive on price, so large hikes in prices could be counterproductive.”
America is the UK’s second-largest car export market, with over 600,000 models exported there (Image: Getty)
During 2024, 16,9 percent of the 603,595 cars produced in the UK were sent to the USA, making it the second-largest export market, after the European Union.
As a result, it is likely that the UK car industry could see a significant reduction in profits if vehicle manufacturers are forced to increase the retail prices of their cars in the America.
If the tariffs do result in a reduction in sales, some have raised concerns that the cost of new models sold in other markets, including the UK, could increase in an effort to maintain the company’s profit margins.
Volkswagen and JLR have both temporarily paused US imports to assess the impact of the tariff (Image: Getty)
The speculation comes as a growing number of vehicle manufacturers temporarily freeze exports to the USA in order to assess the impact that tariffs may have on profit margins and the amount customers will need to pay.
JLR were the first to announce an import freeze, highlighting that the company needs to develop a long-term plan over vehicle sales in the country.
Volkswagen Group quickly followed, pausing USA-bound deliveries until further notice. Whilst the company produces a number of models in Tennessee, around two-thirds of the vehicles sold in the country come from Mexico and Germany.
Volkswagen Group highlighted that they have no plans to increase prices in the UK due to the tariff (Image: Getty)
Whilst Volkswagen Group reassured customers that they have no plans to raise prices in the UK, a spokesperson for the company highlighted that the tariffs could significantly stunt economic growth in the USA and other markets.
They stated: “The US is an important market for the Volkswagen Group. We have invested more than $14 billion (£11 billion) into the market just lately, assist hundreds of well-paid jobs, and contribute to prosperity and growth.
“We share the assessment of most experts that US tariffs and any counter-tariffs will have negative consequences for growth and prosperity in the US and other economic areas. The entire automotive industry, global supply chains and companies as well as customers will have to bear the negative consequences.”
Some have steered that the tariffs could see US-bound fashions despatched to different markets (Image: Getty)
However, along with the price of new vehicles doubtlessly rising, some have predicted that motorists exterior the USA could additionally expertise a shift in provide of fashionable fashions.
In a bid to increase gross sales elsewhere, vehicle producers might reshuffle the place vehicles are despatched to, with electric fashions being exported to markets the place demand is stronger, such as Norway.
Whilst that is unlikely to be a sudden change that impacts UK drivers, with all American-bound vehicles that includes left-hand drive and totally different specs, there may be a chance that much less fashionable fashions bought within the UK could face shortages or be axed from the vary altogether as different markets are prioritised.
As nations, together with China, hit back at America with counter-tariffs, a spokesperson for BMW Group, homeowners of MINI, referred to as for negotiations in a bid to improve the tariff between America and the EU with a view to keep the company’s growth.
They defined: “Free trade and international cooperation are of immense importance worldwide and are important drivers of growth and progress. They have always been a guiding principle of the BMW Group.
“The EU and the US are the world’s largest trading companions – which brings with it a great accountability. The present negotiations needs to be used to take away long-standing commerce boundaries and thus strengthen each financial areas.
“Both sides should quickly find a transatlantic deal that will generate growth. Consumers on both sides of the Atlantic would also benefit from this.”
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