Stockholm/Detroit — Volvo Automobiles CEO Håkan Samuelsson mentioned on Friday that its clients must pay a big a part of tariff-related price will increase, and that it might grow to be unimaginable to import one in every of its most reasonably priced automobiles to the US if levies enhance.
US President Donald Trump on Friday mentioned he was recommending a straight 50% tariff on items from the EU ranging from June 1, saying that the EU has been onerous to cope with on commerce.
Samuelsson instructed Reuters {that a} 50% tariff would restrict the power of Volvo Automobiles to promote its Belgium-made EX30 electrical automobile within the US.
“That might after all be nearly unimaginable,” he mentioned, including that given the fluid nature of the tariff risk he wouldn’t speculate additional.
Trump’s tariffs on automotive imports and automobile elements have prompted turmoil within the world auto business, with some firms altering manufacturing plans to ease prices associated to the duties, whereas others wait to see if the insurance policies change.
The EX30, which Samuelsson mentioned was “very severely hit,” by tariffs as a result of it was initially produced in China, has been Volvo’s try at offering its clients with an reasonably priced electrical automobile.
With a deliberate beginning worth of $35,000, hefty tariffs imposed on automobiles made in China led Volvo to delay promoting the automobile within the US market till manufacturing began in Ghent, Belgium, which occurred in April of this yr. The automobile’s beginning worth is now at $46,195.
Uncertainty
Autos from different carmakers with lower cost tags, together with Ford Motor, Common Motors and Toyota Motor, are imported to the US from Mexico, South Korea or Japan, placing their worth factors in danger within the face of tariff uncertainty.
Samuelsson mentioned he was hopeful that Europe and the US would quickly come to an settlement regardless of the specter of rising tariffs.
“I imagine there shall be a deal quickly. It couldn’t be within the curiosity of Europe or the US to close down commerce between them.”
Most of Volvo Automobiles’ automobiles for the US market, which final yr accounted for 16% of group gross sales, are imported from Europe.
The corporate goals to extend manufacturing at its Charleston, South Carolina manufacturing facility within the close to time period by including a brand new mannequin, which Samuelsson has beforehand mentioned may very well be a mid-sized plug-in hybrid.
Reuters
