New Donald Trump's U-turn. The American president has, in fact, hinted that he could temporarily suspend the 25% tariffs taxes on imports of cars and components. The goal, the president explained, is to offer “a little time” to automakers to reorganize their supply chains and move production “from Canada, Mexico and other countries to the United States.”
“I am evaluating a solution that can help some automakers in that regard,” Trump said, speaking from the White House. “They have need some time because they will produce their products here, but they need some time". Words that mark a further step backwards compared to what only a few weeks ago had been defined as a “permanent” measure. But then again, coherence has never been the strong point of the Trump doctrine, which this time has surpassed itself: "I don't change my mind, but I am flexible".
Possible tariff truce gives automotive stocks a boost
The announcement had immediate effects on the markets, where investors seem to have welcomed the presidential “flexibility” as a breath of fresh air. At Piazza Affari, the auto sector is among the best: the Ftse Italia All Share Auto earn the1,44%while its Euro Stoxx 600 Auto grows by 2,42%. What shines above all is Stellantis, on the rise 4,16%. Positive also Pirelli and Iveco Group, more timid Ferrari, considered less exposed to the risk of duties. In Paris they are in the spotlight Michelin e Renault, while in Frankfurt Shelf advances of the 2,95%, BMW of the 3,58% e Volkswagen of the 3,62%. Sentiment is also positive on Wall Street: after Trump's words Ford closed up 4,07% e General Motors of the 3,46%.
Meanwhile, the groups' strategies are being quickly adapting: Nissan, for example, announced a Rogue SUV production cut in Japan for the May-July period, equal to more than a fifth of the volumes destined for the United States in the first quarter.
The Japanese group, which sells more than a quarter of its vehicles on the American market, explained that the decision is linked to theuncertainty about tariffs. “We are reviewing our manufacturing and supply chain operations to ensure efficiency and sustainability. Our approach will be thoughtful and deliberate as we address both the immediate and long-term impacts,” Nissan said.
The costs of the trade war
According to an estimate of Boston Consulting Group, the potential impact of Trump's tariff policy on the global auto industry could reach 140 billion dollars, nearly a quarter of the total value of vehicle sales in the United States. The estimated increases are not marginal: a engine It could cost between + 27,5 % and + 72,5 % more depending on the country of origin; a door between the + 7,5 % and + 52,5 %; an audio system between the + 14,9 % and+ 83,9 %. Under these conditions, even optional extras remain optional.
“The uncertainty is total,” he explains. Davide Di Domenico, senior partner at BCG. “All the car manufacturers have activated 'war rooms' to study scenarios and countermeasures, but before moving they are waiting to understand whether the duties will actually be modified or just postponed”. Translated: nobody trusts.
Domestic production? Yes, but with whom?
La regulatory volatility It certainly does not encourage investment. On the contrary, freezes them. The car manufacturers, BCG explains, are not even able to plan a production expansion in the USA: not so much for lack of will, but for lack of manpower. American unemployment is at an all-time low, and in-demand skills are not readily available.
The risk? A further increase in car prices and an estimated contraction of one million units sold each year. The ones who will pay the price are mainly European and Asian groups, forced to absorb higher costs or pass them on to consumers. Compressed margins, falling sales: the classic lose-lose scenario.
Cars: The (Partial) Advantage of American Homes
Ford, GM e Stellantis - the “three sisters” of Detroit – are in a slightly more favorable position: their level of production on the ground North American is already high (80% for Ford, 58% for GM, 43% for Stellantis). But that's not enough. 30-45% of their components still comes from Canada and Mexico. And those flows, if taxed, risk jam the chains too “domestic”.
Matt Blunt, president of the American Automotive Policy Council, confirmed the sensitivity of the moment: “There is a growing recognition that extended tariffs on parts could undermine our shared goal of building a thriving and growing American auto industry, and that many of these supply chain transitions will take time.”
Towards a fragmented industry
- effects of the trade war but they go far beyond the US borders. According to Joseph Collino, managing director of Bcg, the US-China conflict will also spill over into the European market: "Chinese car manufacturers will try to penetrate Europe with ultra-competitive prices. They have low costs and excess production capacity: even with EU duties, they can afford to push."
The real risk, analysts point out, is a lasting fragmentation of the global supply chain, with the formation of distinct regional blocks: one US-driven, one European and one Asian. A broken industrial geography that would make the production strategies of large groups more rigid – and expensive.
In this context, Trump's much-vaunted "flexibility" looks more like aa patch that has a solution. The announcement of a suspension of duties may have calmed the markets in the short term, but it is not enough to reactivate investments, hiring and industrial plans. Uncertainty remains the real price to pay.
Stellantis Assembly: Elkann Raises Alarm on Duties and Regulations “Auto Industry at Risk”
TheStellantis shareholders meeting. President John Elkann took the opportunity to focus on the tensions weighing on the industry, between “unrealistic” European regulations and “painful” American duties. A mix that risks putting both Europe and the United States in serious difficulty: “with the current path of tariffs and regulations that are too rigid, theAmerican and European auto industry at risk“, Elkann declared; “it would be a tragedy, because we are talking about a sector that creates employment, innovation and social cohesion. But it is not too late to change course”. According to the president, a orderly transition is still possible, provided that both sides of the Atlantic act promptly. And in this sense, he welcomed Donald Trump's overtures on a possible easing of duties.
They were not lacking sore notes on the internal front of Stellantis: “2024 was not a good year for the group” admitted John Elkann; “some of the causes were under our control, and this is what makes the result even more disappointing”. After the CEO’s exit Carlos Tavares, which took place last December, the group is still looking for a successor, whose appointment, according to Elkann, is expected by the first half of 2025.
The shareholders' meeting approved the resolution with over 99% of the votes budget 2024 and, with 66,92% of the votes (and 33,08% against), also the new remuneration policy. The expected dividend is 0,68 euros per share, a sharp decline compared to the 1,55 euros distributed last year. The Remuneration Report 2024 also includes the compensation and severance pay for former CEO Tavares: will receive a total of 23,1 million euros for 2024, down 37% from 36,5 million the previous year, and a severance package of 12 million, which will be paid out in 2025. Some investors, including Allianz Global Investors, and advisors such as Proxinvest, have criticized the size of the package in a year marked by falling profits and sales.
News on the board too: enter Claudia Parzani, president of Borsa Italiana, while key members such as Fiona Clare Cicconi e Nicholas Dufourcq. The assembly also gave the green light to theAuthorization for the purchase of own shares and the issuance of new securities.
Last update 16,17am
