President Trump enacted a 25% tariff on new cars imported into the country yesterday, and has promised a matching tariff on imported parts that will raise the prices of even domestically built cars by May 3.
Automakers have just begun responding, but their early moves have already stopped the production or import of some cars. None are in short supply at dealerships yet.
Cox Automotive Executive Analyst Erin Keating explains, “New-vehicle inventory increased modestly to 2.67 million units toward the end of March, down 2.7% against the same time in 2024. But a surge of sales pushed days’ supply lower to 71, down from 89 a month earlier. Our full, official inventory report from vAuto will be available next week, and at that point, we will likely see the full picture of strong month-end sales.”
Cox Automotive owns Kelley Blue Book.
Stellantis Idles Factories
Stellantis, parent company of Chrysler, Dodge, Jeep, Ram, and other brands, has paused production and laid off workers in parts of the U.S., Canada, and Mexico.
The company yesterday idled its Windsor Assembly Plant in Ontario, Canada, for two weeks and its Toluca Assembly Plant in Mexico for the remainder of April.
That move also temporarily closed plants that supply parts to those two factories. CNN reports, “The affected U.S. employees work at five different Midwest plants: the Warren Stamping and Sterling Stamping plants in Michigan, as well as the Indiana Transmission Plant, Kokomo Transmission Plant, and Kokomo Casting Plant, all in Kokomo, Indiana.”
The moves pause production of the Chrysler Pacifica, the Dodge Charger Daytona electric vehicle (EV), the Jeep Compass SUV, and the Jeep Wagoneer S electric vehicle.
None of the four are in short supply. Automakers traditionally aim to keep about a 60-day supply of most new cars on sales lots. Cox Automotive reports that the Pacifica, Charger Daytona, and Compass supplies are well over 60 days. The Wagoneer S is so new that supply levels are unclear. However, Jeep has only recently begun advertising the vehicle, so demand has likely not built yet.
Infiniti Pauses SUV Production
Infiniti, the luxury division of Nissan, has paused production of its QX50 and QX55 SUVs assembled in Mexico. Industry publication Automotive News reports, “In an April 3 retailer memo, Infiniti Americas Vice President Tiago Castro said QX50 and QX55 output bound for U.S. dealerships is halted ‘until further notice.’ He attributed the stoppage to the Trump administration’s decision to levy a 25% tariff on vehicles made in Mexico.”
The automaker has a healthy supply of both models in the country. However, Infiniti has already announced plans to cancel both after the 2025 model year.
Volkswagen Halts Rail Shipments
Automotive News, citing a memo sent to dealers, says that Volkswagen “has halted rail shipments of vehicles built in Mexico to the U.S.”
A Volkswagen spokesperson confirmed the news but said cars are still entering the country by other means. “Rail shipments are a small proportion of the total number of vehicles we move out of” the company’s Puebla production facility, he noted.
Volkswagen builds the Taos and Tiguan SUVs and the Jetta sedan in Mexico. Cox Automotive reports that VW had 90 days’ worth or more of both SUVs in the U.S. at the end of February and more than 60 days’ worth of Jettas.
Audi Holding Cars at Port
Automotive News also reports that Volkswagen’s Audi luxury division is holding cars at U.S. ports.
Vehicles that arrived in the U.S. before tariff fees were levied “will be processed, wholesale, and delivered to dealers.” Audi’s plan for vehicles kept in port is unclear. We will update this story if they explain.
Audi has an ample supply of most cars in the U.S. but less than 20 days’ worth of its Q6 e-tron SUV. The company does not produce any vehicles in the U.S. It has one plant in North America, located in Mexico and producing Q5 SUVs.