Decline in Volkswagen Deliveries in the U.S. due to Impact of Trump Tariffs
## Impact of Trump's Tariffs on Car Imports on German Car Manufacturers
In the first half of 2025, the auto industry has experienced significant disruptions due to the implementation of a 25% tariff on imported cars not largely made in North America. This tariff, initially scheduled for April, has been paused until August 1.
### Volkswagen
The impact on Volkswagen has been substantial. North American deliveries fell nearly 7% in the first half of 2025, with a 16.2% plunge in the three months to June. The tariffs have been identified as the main cause of this decline.
### Mercedes-Benz
Mercedes-Benz also felt the effects of the tariffs, with overall first-half sales falling by 14%. The company delayed some US deliveries in anticipation of the tariffs and saw a negative impact from China, which contributed to the decline in sales.
### Porsche
Porsche reported a 10% increase in North American first-half sales, citing strong regional inventory and tariff “protection” for cars already in the US. However, global sales were down due to a sharp 28% drop in China.
### European Carmakers Struggling in China
European carmakers are facing challenges in China, where they are struggling against the electric models of local competitors such as BYD.
### Summary Table: Impact on German Carmakers
| Manufacturer | North America Deliveries (1st Half) | Main Cause of Change | Notes | |------------------|-------------------------------------|----------------------|-------| | Volkswagen | -7.0% overall, -16.2% in Q2 | Tariffs | Global deliveries up 1.3%[1] | | Mercedes-Benz | Decline (no explicit %), delays | Tariffs, China sales | Delayed some US deliveries[1] | | Porsche | +10% | Inventory, tariff “protection” | China sales -28%[1] |
### Key Points
- In 2025, the actual tariffs (25% on cars not mostly made in North America) have significantly reduced imports and disrupted deliveries, especially for Volkswagen. - Porsche managed to increase sales by leveraging existing inventory, while Mercedes-Benz delayed shipments and saw overall sales declines mainly due to weak China performance. - The decline in sales for both Mercedes-Benz and Porsche was attributed to a negative impact from China. - Overall vehicle deliveries worldwide notched a rise of 1.3% in the first half of the year. - Marco Schubert, board member for sales at the firm, stated that the declines were "expected".
[1] Data source: [Reuters](https://www.reuters.com/business/autos-transportation/trumps-tariffs-hit-german-car-makers-us-sales-2025-07-06/)
- The auto industry in Malaysia, particularly manufacturers exporting to the United States, may potentially face disruptions similar to those experienced by German car manufacturers, given the 25% tariff on imported cars not largely made in North America.
- Companies in the Malaysian finance sector, particularly those involved in foreign exchange and investment, could observe shifts in FX rates and investment patterns due to changes in the global auto industry as a result of the tariffs, potentially impacting their business operations.
- Political discussions regarding tariffs on imported cars could influence the general news in Malaysia, especially since the country has a significant auto industry presence, with various Malaysian automakers reliant on export markets like the United States.
