Audi officially suspended all vehicle shipments to the United States in response to President Donald Trump’s 25% auto import tariff proclamation last week, according to multiple sources. Originally reported by Germany’s Zeit and Automobilwoche, the Ingolstadt-based automaker halted all U.S.-bound car deliveries as the company seeks to assess the situation and adjust its product strategy accordingly.
Last week, Trump rolled out his massive and hugely controversial 25% automotive import tax on all foreign vehicles and related parts, aged 25 years or younger, on April 2, or his so-called “Liberation Day.” The tariffs rippled across the industry, sending everyone in a disruptive frenzy, with many trying to interpret what it all truly means. Just a few days ago, Jaguar-Land Rover became the first major automaker to suspend vehicle shipments to the U.S., signifying the massive effects of the tariffs. Audi is now officially the second.
Audi’s Particularly Affected As All U.S. Models Are Made Abroad
A spokesperson for Audi originally told Zeit that all vehicle units imported into the U.S. after April 2 will be held at their respective ports, instead of being delivered to dealers. Now, all shipments are on hold for the time being.
In another supposed piece of correspondence to American-based Audi franchise stores, the German automaker instructed its dealers to concentrate on selling its preexisting inventory until the mothership can fully adapt to the situation. In the same correspondence, U.S. dealers are said to have about two months of inventory left before the situation becomes critical, or around 37,000 units in total.
Audi’s particularly affected by the tariffs as all of its U.S.-market cars are made in Germany, Hungary, or Slovakia, and imported. It does not have any production facilities here in the States. But the company does have assembly lines in Mexico, where the top-selling Q5 is made.
With automakers releasing their first quarterly sales reports, Audi’s U.S. sales reportedly fell 3.4 percent, signifying the company’s fifth consecutive quarterly sales decline as of recent. Part of this decline may be attributed to the stagnation of Audi’s lineup, which the carmaker’s currently in the process of addressing with a lineup overhaul. A new Q5 is anticipated to arrive sometime this summer with other models, such as a new A6 sedan, also on the horizon.
The Ingolstadt-based company is also in the midst of reworking its product strategy as it backtracked on its all-electric lineup initiatives. The reason for the product strategy shift boils down to slow EV demand and a recent rollback in regulatory policies regarding EV mandates and U.S.-based emissions and fuel economy compliance.
Just last week, a memo from Volkswagen of America leaked out to AutomotiveNews informing American Audi dealers that shipments would cease beginning on April 2. However, the date was seemingly pushed back by about five days, taking into effect today. Additionally, just last week, the Wall Street Journal reported dealers could face additional costs from the tariffs.
“We are laser-focused on supporting the Audi dealer network to minimize impact to their business and customers,” an Audi spokesperson told AN at the time of its original report on April 3.
This story is developing, and we’ve reached out to Audi for a response and will update this post accordingly.
TopSpeed’s Take
Audi became the second major automaker to suspend vehicle shipments to the U.S. due to Trump’s tariffs. Although temporary, it proves the implications of the massive tariffs placed on foreign auto imports and how gravely they’re disrupting the industry and all related sectors. Other automakers are also scrambling to reel in from all the effects of these tariffs and, with us only being a week into the import tax hike, we imagine this is only just the beginning of the potentially far-reaching effects of Trump’s latest diplomatic policies on international trade with the United States.
Source: Zeit, Reuters
Read the full article here
