What will the Trump effect be on the American auto industry? President threatens BMW with 35% tariff
To be fair, BMW has a large plant in Spartanburg, South Carolina. This plant churns out BMW SUV's which are eaten up by the US market. The SUV segment is the only one which did not take a huge nosedive for BMW in 2016
in the United States.
Trump's tariff rhetoric on cars built outside the country already had an effect on US manufacturers including Ford
. As stated, BMW builds plenty of cars in the USA and employs close to 70,000 Americans but BMW also plans to open a new factory in Mexico in 2019.
BMW's head of sales and marketing Ian Robertson stated the following:
Originally Posted by Ian Robertson
BMW makes more cars in Spartanburg than at any other BMW plant. It is true, their commitment to the US is strong. However, BMW intends to increase their volume significantly with cheap Mini variants
. That is where the Mexican plant comes into the picture.
Trump's response to BMW?
Originally Posted by Trump
BMW does not plan to make any changes at this time to its Mexican plant and other German manufacturers are continuing on with business as usual.
It is important to note that the US is the largest car market for the Germans. BMW, Porsche, Audi, Mercedes, and others will not achieve their stated sales goals without it.
We will have to see who gives in first.