The implementation of Donald Trump’s new tariff regime came into effect yesterday. As expected, automobiles was one of the most highlighted industries and it instantly created a ripple effect. Post the new tariff announcement, Ford was one of the first OEMs to take some counter measures.
The Michigan-based legacy automaker has reportedly decided to offer attractive discounts across its model range, starting Thursday. According to Reuters, Ford is leaning on a healthy inventory which encourages the company to write off thousands of bucks from the listed price as opposed to rivals who have hiked prices to absorb added costs from tariffs.
Employee pricing for regular customers
Ford will offer its employee pricing, a discounted rate available to Ford employees, to all customers. The program will reportedly be called the “From America for America” plan. While Ford is yet to officially announce this new program, Ford may benefit from the “Make in America” ideology promoted by the President of USA.
The American carmaker builds 80 per cent of its sold vehicles domestically in the USA itself, giving it a greater buffer from Trump’s tariffs than some of its competitors. However, it still faces the prospect of steep levies on imported vehicle parts. Trump last week announced 25% duties on all auto imports, which sent shockwaves through the global industry.
Research firm GlobalData reported that the United States is the largest car importer globally, with nearly half of all vehicles sold domestically last year coming from abroad. On Wednesday, President Trump expanded tariffs to impose a baseline rate of 10% on all imports, with even higher rates targeting certain countries. Following the announcement, shares of Ford, General Motors, and Tesla all declined.
Other U.S. automakers such as General Motors and Stellantis, the parent company of Chrysler, manufacture about half of the vehicles they sell domestically within the United States. In recent weeks, buyers have flocked to dealerships to purchase cars ahead of anticipated price hikes, driving a surge in auto sales for March. According to Cox Automotive, Ford’s dealership lots are better stocked than the industry average.
As of February, Ford had over four months’ worth of inventory on hand, surpassing the industry average of nearly three months. Cox also reported that Ford’s incentive offers were slightly below the industry norm, accounting for 6.7 per cent of the average transaction price compared to the industry average of 7.1 per cent, or approximately $3,392 (around Rs 2.88 lakh).
With inputs from Reuters
