Audi, a brand under Volkswagen, is facing challenges due to the recent announcement by President Trump of a 25% tariff on auto imports. As a result, Audi has decided to hold its cars that arrived after April 2 in US ports. This decision was made in order to assess the impact of the tariffs and determine the best course of action.
The Volkswagen brand has approximately 37,000 vehicles in its US inventory, which is enough to cover about two months of sales. The most affected model by the tariffs is the Audi Q5, which is produced in Mexico. With the remaining models coming from Europe or other regions, Audi is directly in the firing line of Trump’s tariffs.
A memo was sent to dealers informing them that shipments would be frozen from April 2 until further notice. This move gives Audi time to strategize and navigate the implications of the tariffs. On average, carmakers in the US have around three months’ worth of inventory, providing some buffer to adjust to the new regulations.
Executives from the automotive industry recently met with EU President Ursula von der Leyen to discuss the impact of the tariffs. European shares have plummeted to a 16-month low as investors anticipate higher prices, weaker demand, and the possibility of a global recession.
Overall, Audi and other car manufacturers are facing a challenging time as they navigate the uncertainties brought about by the tariffs. It remains to be seen how the industry will adapt and respond to these new developments in the coming months.
