World Stock Watch

Tariff Threat Looms Over Global Companies

Automakers Face Uncertainty

US President Trump’s recent announcement to impose 25% tariffs on Canada and Mexico from February 1 has sent shockwaves through the global automotive industry. Several Asian automakers and battery firms have seen their shares plummet in response to the news.

Nissan Motor: A Significant Player in Mexico

Nissan Motor operates two plants in Mexico, producing the Sentra, Versa, and Kicks models for the US market. In the first nine months of 2024, the company produced nearly 505,000 vehicles in Mexico, although it did not disclose how many were exported to the US.

Stellantis: A Multinational Presence

Stellantis, the Franco-Italian group, operates two assembly plants in Mexico: Saltillo, which produces Ram pick-ups and vans, and Toluca, which manufactures the Jeep Compass mid-sized SUV. The company also owns two assembly plants in Ontario, Canada: Windsor, which produces Chrysler models, and Brampton, which is currently being retooled and is scheduled to resume production in 2025 with a new Jeep model.

Toyota Motor: Shifting Production

Toyota Motor builds its Tacoma pick-up truck at two plants in Mexico, selling over 230,000 units in the US in 2023. This represents about 10% of its total sales in the US market. The company used to produce the Tacoma in the US but now ships all of them from Mexico, which accounts for most of the production at the plants.

Volkswagen: A Major Player in Mexico

Volkswagen’s factory in Puebla is the largest auto plant in Mexico and one of the largest in the VW Group. In 2023, the plant produced nearly 350,000 cars, including the Jetta, Tiguan, and Taos, all for export to the US.

Audi: Expanding in Mexico

Audi’s plant in San Jose Chiapa, Mexico, produces the Q5, employing over 5,000 people. In 2023, the plant produced nearly 176,000 cars, with nearly 40,000 exported to the US in the first half of 2024.

BMW: Investing in Mexico

BMW’s plant in San Luis Potosi, Mexico, produces the 3 Series, 2 Series Coupe, and M2, with nearly all of the output going to the US and other markets worldwide. From 2027, the plant will produce the all-electric “Neue Klasse” model line.

Beyond Automakers: Other Companies Affected

The tariff threat also affects other companies outside the US, including:

• BYD: The Chinese EV maker has been scouting for locations to build a plant in Mexico, but has stated that the factory will serve the domestic market and not produce cars for the US.
• Honda Motor: The company sends 80% of its Mexican output to the US market and has warned that it would have to think about shifting production if the US were to impose permanent tariffs on vehicles imported from Mexico.
• JAC Motors: The Chinese company has a joint venture in Mexico with Giant Motors to assemble JAC brand vehicles.
• Kia Corp: The South Korean company has a factory in Mexico that makes its own vehicles and a small number of Tucson SUVs for its affiliate Hyundai Motor for US exports.
• Mazda: The company produced around 209,000 vehicles in Mexico in 2024 and exported about 60% of those to the US.
• Foxconn: The Taiwanese company is building a giant artificial intelligence server factory in collaboration with Nvidia in Mexico.
• Lenovo: The Chinese computer maker produces servers and other data centre products at a massive site in Monterrey, Mexico, which it expanded in 2021.
• LG Electronics: The South Korean company makes TVs, home appliances, and EV parts at its Mexican sites.
• Samsung Electronics: The company makes TVs and home appliances in Mexico and exports them to the US.
• Campari: The Italian spirits group has three production sites in Mexico and one in Canada, producing tequila and Canadian whisky, respectively.
• Procter & Gamble and Unilever: These big packaged goods companies are exposed to tariffs on imports from Mexico, with around 10% of P&G’s shipments and 2% of Unilever’s sea imports coming from Mexico.
• Autoliv: The Swedish company employs around 15,000 staff in Mexico and is the world’s largest maker of airbags and seat belts.
• Michelin: The French tyre maker has two plants in Mexico and three in Canada.
• Yanfeng: The Chinese seat maker has been producing in Mexico for years to supply automakers including General Motors and Toyota.
• Other parts makers: Italian tyremaker Pirelli, Italian premium brake maker Brembo, and Italy’s Eurogroup Laminations are among other parts makers with plants in Mexico serving automotive production for the US market.