The tariff situation in the U.S. is, let’s just say, unpredictable at the moment. It’s unclear what the rates are, which countries and industries they apply to, and when they’ll start. And if you wait two or three days, everything will probably change again. This confusion is causing turmoil in the automotive industry, and Mitsubishi is facing some severe issues because of this.
A Huge Problem For The Brand
As reported by our friends at Automotive News, the Japanese brand has hit the brakes in a big way, and is no longer sending new vehicles to its U.S. dealerships. Instead, the triple-diamond company is holding cars at the port of entry before import tariffs can be levied.
Every model Mitsubishi sells in the U.S. is imported from Japan, which could be a huge problem in the near future if prices suddenly increase by 25 percent because of tariffs. Providing customers with a modicum of stability, though, the manufacturer will reportedly not raise prices on pre-tariff vehicles that are already in U.S. inventory.
Reportedly, Mitsubishi currently has plenty of new vehicles available for purchase, enough to meet customer demand for at least a little while. U.S. dealers, of which there are around 330, should have roughly 100 days’ worth of inventory in stock. The ideal number for new vehicle supply is usually around 60 days, so the automaker is a little ahead of that, which, in this situation, is definitely not a bad thing.
- Mitsubishi has paused vehicle deliveries at the port of entry
- The automaker has enough pre-tariff supply to meet customer needs
- The Outlander SUV is Mitsubishi’s top-selling model in the U.S.
- This vehicle is a rebranded Nissan Rogue and could be assembled in Tennessee
That available supply equates to more than 20,000 vehicles, products that were brought into the country before tariffs were put in place. Some 80 percent of that total – nearly 6,400 vehicles – are supposedly Outlander SUVs, an unexpectedly competent vehicle that is Mitsubishi’s best-selling model in the U.S.
We are holding vehicles at the port until we have additional visibility on tariffs and decisions made on next steps
“We have sufficient stock on the ground at dealers for the moment to not impact customer choice,” Mitsubishi spokesperson Jeremy Barnes told Automotive News. “We are holding vehicles at the port until we have additional visibility on tariffs and decisions made on next steps,” he added.
Tennessee Of All Places Is A Possible Solution
The good news is, if automotive tariffs remain in place, Mitsubishi could relatively easily start building the Outlander in the U.S. This SUV is essentially a rebranded Nissan Rogue, which is actually screwed together in Smyrna, Tennessee. Making this switch would require time and some not-insubstantial investments, but it’s certainly in the realm of possibility.
Still, at least in the near-term, tariffs on vehicles imported from Japan could cause massive issues for Mitsubishi’s U.S. dealers. The brand’s retail locations only have an average net profit as a percentage of sales of 0.92 percent, a significant drop from 2023 when it was 2.2 percent. Reducing available inventory, or tariffs increasing the price of new vehicles by 25 percent – or maybe even more – will not help dealerships keep their heads above water.
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