Within weeks of taking office, the Trump administration has moved to shake up the global trade status quo by imposing significant tariffs on goods entering the United States from overseas. As of Tuesday, 4th February, the US has imposed tariffs of 10% on Chinese goods – sparking immediate retaliation from Beijing – with further tariffs expected on some of the country’s closest trade partners, including Canada and Mexico.
In 2024, sales of new light vehicles in the US totalled 16.1 million units, 61% of which were manufactured locally. “While the situation is constantly evolving, the imposition of tariffs on the United States’ closest trade partners will have a major impact on the automotive industry in North America, affecting the millions of cars that enter the country from markets such as Canada, China and Mexico every year,” said Felipe Munoz, Global Analyst at JATO Dynamics. According to JATO Dynamics data, these three countries accounted for 18% of total sales of new vehicles in the US in 2024.
Mexico is the second largest country of origin for new vehicles sold in the US and an important production and export hub for many carmakers. According to JATO Dynamics data, sales of Mexican-made new light vehicles in the US totalled 2.19 million units in 2024, or 14% of the total market. Sales volumes increased by 13% year on year, in contrast to the 1.7% growth posted by US-made vehicles, reflecting the importance of the country to the wider region’s automotive industry.
The Latin American nation is also the largest country of origin for cars sold by Volkswagen Group in the US, accounting for almost half (44%) of its total sales in the country in 2024. Similarly, Mexico was the second largest country of origin for vehicles sold in the US by Stellantis, Nissan, Mazda, Honda and Ford.
“With four of its top five best-selling models in the US last year manufactured in Mexican factories, Volkswagen Group is the automaker most exposed to the imposition of tariffs on Mexican goods,” Munoz commented.
The importance of Mexico to car manufacturers operating in the US comes in stark contrast to the waning influence of Canada, which was the fifth largest country of origin for cars sold in the US in 2024. “Last year, more cars sold in the US came from the European Union than from Canada. It’s the country of origin for a limited range of models, all of which are sold in the US,” Munoz highlighted.
Canadian-made cars accounted for 18% of Toyota’s total sales in the US last year, followed by Stellantis at 14%. Only 5% of Ford vehicles sold in the US last year came from a Canadian plant.
Last year, sales of light passenger vehicles in the US from plants in the European Union (EU) totalled more than 820,000 units, more than the total sales of Canadian-made cars in the country. Three German carmakers – Volkswagen Group, Mercedes-Benz and BMW Group – accounted for 73% of this total. While Mexico was the largest country of origin for Volkswagen Group’s vehicles, the EU is the largest country of origin for Mercedes-Benz vehicles sold in the US. Meanwhile, Geely – owner of Volvo – sold 135,300 new vehicles in the US last year, of which 110,000 came from the EU.
Separately, 56,800 vehicles made in China were sold in the US in 2024, giving the country a market share of 0.35%. “The US is imposing severe restrictions on Chinese-made vehicles, despite the marginal role the country plays in America’s auto industry,” Munoz highlighted.
“While difficult to predict what the Trump administration will do next from a trade perspective, the measures taken so far in the administration’s first month in office are a sign of things to come. Importing cars into the US will become more difficult across the board, and the European Union should be prepared for future restrictions on trade”, Munoz concluded.
Contact:
Jack Sice, +44 7874 830 170, jatoteam@firstlightgroup.io
Felipe Munoz, +57 314 680 9848, felipe.munoz@jato.com