Bloomberg Daybreak: Asia Edition The Impact of Tariffs on the Global Auto Industry
Apr 17, 2025
Stephen Dyer, Head of the Asia Automotive Practice at AlixPartners, and Shams Afzal, Managing Director at Carnegie Investment Counsel, dive into the seismic effects of U.S. tariffs on the global auto industry. They discuss Ford's potential price hikes if tariff relief isn’t granted and how Chinese EV maker Xpeng is expanding despite trade tensions. The duo also addresses how tariffs could influence Federal Reserve policies and market stability, creating volatility in Wall Street as investors react to the changing landscape.
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Tariffs Reshape Auto Industry
- Rapidly changing US tariff policies deeply disrupt the automotive industry and supply chains.
- Companies must now reevaluate both short-term and long-term strategies amid these trade shifts.
Supply Chain Changes Take Time
- Changing a single auto part supplier takes 6 to 18 months due to safety validations.
- Relocating an entire assembly operation can require 12 to 24 months to establish.
Chinese EVs Adapt to Trade Barriers
- Chinese EV makers face 100% US tariffs and new EU tariffs, closing off direct exports but encouraging local assembly in Europe.
- Localizing production in key markets helps Chinese automakers maintain global competitiveness.