Nissan US chief says tariffs will hammer lower-income car shoppers

DETROIT: The chairman of Nissan Americas, Christian Meunier, said on Wednesday (Apr 16) he is concerned that tariffs may drive already eye-popping vehicle prices even higher.

“Cars are becoming completely unaffordable,” Meunier told Reuters. "It's not fair for the middle class or the lower class, the people that can't afford a car, to force them to buy a used car ... I think it's the responsibility of the government as well to keep it possible for people to buy a new car."

US President Donald Trump's 25 per cent tariffs on imported vehicles have rocked automakers in and outside of the US, most of which have become reliant on imports from Mexico and Canada.

The average transaction price of a vehicle in the US "is north of US$48,000," according to an analysis from Cox Automotive. The firm expects tariffs will add 10 per cent to 15 per cent to prices of affected models, and an overall 5 per cent jump in prices of vehicles not subject to the levies.

Among the models most affected by tariffs are those priced under $30,000, almost all of which are produced outside the United States. Nissan's Versa, which Cox said has an average transaction price of about $20,000, is made in Mexico.

“With the tariff coming through, it's going to be super difficult," Meunier said. "The risk is that these (affordable) segments are going to disappear.”

While it could be possible for Nissan to build less costly vehicles in the US instead of Mexico, Meunier said it "would be a challenge if we're not allowed to bring some parts from Mexico."

Automakers are also facing tariffs on a variety of important auto parts starting May 3, including engines, transmissions, lithium-ion batteries and other major components.

The Nissan executive said the Japanese automaker has the space to expand production in the US The carmaker has 800,000-unit capacity at its two US auto assembly plants, and produced about 525,000 vehicles in the 2024 calendar year.

Still, he said Nissan is not reducing production capacity in Mexico.

"We will accept to pay tariffs for a period of time and see how we can manoeuvre. We'll have potentially to adjust along the way, but we'll be very careful, because ultimately, it's very important that we keep sales momentum."