(Metal tariffs) US automakers says cost of a vehicle will rise by US$300Business | 9 Mar 2018 11:55 am
U.S. automakers are among the businesses with the most at stake, given they account for 38 percent of the aluminum and 15 percent of the steel consumed in the country, according to Ward’s Automotive Reports.
There are about 1,100 pounds of steel and 400 pounds of aluminum in the average two-ton U.S. vehicle, according to the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan.
The Alliance of Automobile Manufacturers, a major industry trade group, warned the tariffs will also drive up the price of steel made in the U.S. — a cost that it predicts will be passed along to consumers through higher prices on vehicles.
If the entire cost is passed to consumers, which may not be possible, it could add about US$300 to the price of the average vehicle, said Kristen Dziczek, director of Center for Automotive Research’s Industry, Labor & Economics Group.
But automakers could absorb price increases or figure out some other way to offset the increases, Dziczek said. Plus, companies usually lock in steel and aluminum prices with long-term contracts, so it could take years for price increases to kick in, she said.
General Motors doesn’t expect the tariffs to hurt that much, partly because of its long-term contracts.
"We have shown we have the ability to adjust and adapt to a variety of market changes around the world and that will be our approach on this issue as well,” said the company that owns popular auto brands such as Chevrolet, Buick and Cadillac.-AP