German automaker Audi, is sending out a new warning about expensive changes that its consumers might feel at the dealership.
According to a report by Reuters, the four rings warned during the brand’s presentation of its full-year results on March 18 that it is weighing whether to pass on the costs of U.S. import tariffs by increasing new car prices.
Audi’s finance chief, Juergen Rittersberger, said the company is looking for a “sweet spot” between increasing prices and adjusting the amount of cars it produces. He noted that Audi is exploring “the extent to which we will have to pass on at least some of the tariffs to our customers in the form of price increases.”
2025 Audi Q5. Audi is in a precarious position, as its lone North American factory is in San Jose Chiapa, Mexico, where it builds the Q5.
Audi
Audi weighs U.S. production investment
Further, Audi CEO Gernot Doellner said that U.S. was Audi’s “main growth market” and that it will work around deterrents to expand its stateside presence.
Imported cars are a target of President Trump’s proposed 25% tariffs that is set to go into effect on April 2. Currently, automakers have been granted a one-month tariff carveout for USMCA-compliant vehicles, which require 75% of its parts to be made in North America.
“This is what we are pursuing. And we are pursuing this regardless of the changes in the political landscape in the USA,” Doellner said, adding that existing Volkswagen factories or a new facility could take in some Audi production.
The brand added that it was expecting a decision on whether or not to bring more production to North America. Audi’s lone North American factory is in San Jose Chiapa, Mexico, where they build the Q5 and employ over 5,000 people.
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Audi’s bombshell follows a Feburary 2025 report by the German business publication Handelsblatt that said that the Volkswagen Group is considering shifting some production of U.S.-bound Porsche and Audi cars to the U.S.
The publication noted that some production could shift to the South Carolina plant for the Scout Motors EV brand, as well as VW’s Chattanooga, Tennesee factory.
Audi carries some risk in its current production situation, as many of its bestsellers carry some tariff risk.
Its best-selling car, the Q5 crossover, is built in Audi’s lone North American factory in San Jose Chiapa, Mexico. In 2024, 56,799 Q5’s were sold in the states, making up more than a quarter of the four rings’ sales in the region.
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Luxury rivals are also feeling the heat
Audi is far from the only luxury automaker sounding the alarm, as its German motoring compatriots have been outspoken about the tariff issue at hand.
On February 20, Mercedes-Benz CFO Harald Wilhelm warned that increased tariffs in the U.S. could lead to a loss of one percentage point of margin, which can equal a loss of a billion euros or about $1.05 billion from its EBIT.
To avoid possible tariffs and work around the “dynamic geopolitical environment,” Mercedes said it will beef up its “local-for-local” production in markets like China and the United States, where models sold in said markets are actually made within their respective countries.
Mercedes aims to increase localized production from 60% to 70% by 2027, and aims for a “core” Mercedes car to be made at its factory in Tuscaloosa, Alabama.
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