Stellantis, a leading automotive company, is contemplating a potential shift in its manufacturing expansion into Mexico in response to proposed tariffs by President-elect Donald Trump. The company’s Ram brand head, Chris Feuell, has acknowledged the need to revise factory and supplier networks to mitigate disruptions from new trade policies.
In an interview at the Los Angeles Auto Show, Feuell mentioned that they are actively engaged in scenario planning to address the potential impact of these tariffs. While no decisions have been finalized yet, Stellantis is considering various options to navigate the evolving trade landscape.
The automotive sector faces significant risks from the proposed tariffs, which could impose substantial levies on imports from countries like China. Stellantis is currently expanding its pickup truck plant in Saltillo, Mexico, to produce Ram 1500 trucks next year, in addition to heavy-duty Ram trucks and commercial vans.
However, this move has faced criticism from the United Auto Workers Union due to concerns about job cuts in the US. President-elect Trump has been vocal about penalizing automakers that import cars from Mexico into the US, prompting companies like Stellantis to reassess their manufacturing strategies.
This potential revision in the manufacturing strategy aligns with Stellantis’ broader objective of shifting more production outside the US to countries with lower costs. The company’s profit decline in the first half of 2024 has already led to layoffs and production adjustments, including 1,100 job cuts at its Warren plant in Michigan.
Moreover, there are additional challenges on the horizon, such as the potential removal of a $7,500 consumer tax credit for EV purchases by the incoming administration. This could impact the adoption of Stellantis’s EVs, prompting the company to evaluate its product mix and strategy moving forward.
Feuell emphasized the importance of staying true to their strategic goals while remaining adaptable to changing market conditions. As Stellantis navigates these challenges, the company remains focused on innovation and sustainable growth in the automotive industry.
