Nissan Americas Chairman Christian Meunier has voiced concerns that the U.S. government’s 25% tariffs on imported vehicles could further escalate the already high cost of cars, making them unaffordable for a significant portion of the population.
“Cars are becoming completely unaffordable,” Meunier told Reuters. “It’s not fair for the middle class or the lower class, the people that can’t afford a car, to force them to buy a used car… I think it’s the responsibility of the government as well to keep it possible for people to buy a new car.”
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The tariffs, imposed by former President Donald Trump, have raised the stakes for automakers relying on imports from Mexico and Canada. According to Cox Automotive, the average transaction price of a vehicle in the U.S. is now above $48,000, and the firm forecasts that the tariffs could increase the price of affected models by 10% to 15%.
Even vehicles not directly impacted by the levies could see a 5% price increase. The impact is particularly noticeable on models priced under $30,000, with many of them produced outside the U.S. Nissan’s Versa, with an average transaction price of about $20,000, is one of the most affected models, as it is made in Mexico.
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“With the tariff coming through, it’s going to be super difficult,” Meunier said. “The risk is that these (affordable) segments are going to disappear.” Meunier also acknowledged that while Nissan could shift some vehicle production to the U.S., it would be difficult to do so without access to parts from Mexico. The tariffs, which will also apply to a range of key auto parts starting May 3, including engines, transmissions, and lithium-ion batteries, present an additional challenge for manufacturers.
Despite the difficulties, Meunier confirmed that Nissan is not reducing its production capacity in Mexico, where it maintains the ability to produce up to 800,000 vehicles annually at two plants. In 2024, the automaker produced approximately 525,000 vehicles in the U.S. “We will accept to pay tariffs for a period of time and see how we can maneuver. We’ll have potentially to adjust along the way, but we’ll be very careful, because ultimately, it’s very important that we keep sales momentum,” Meunier added.