The landscape for German luxury carmakers in the United States is shifting rapidly in the wake of a sudden and sweeping auto tariff announcement. On April 2, U.S. President Donald Trump declared a 25% tariff on imported cars, sending ripples across the global auto industry. While BMW has managed, so far, to navigate these challenges with a combination of strategic price adjustments and temporary protection for certain Mexico-based production, Audi finds itself in an entirely different position—one that has led to a dramatic decision to suspend U.S. vehicle deliveries indefinitely. A U.S. spokesperson has allegedly confirmed this to Automotive News.
Audi Hits Pause
Ingolstadt-based Audi, which imports its entire U.S. vehicle lineup, has been dealt a particularly tough hand. Unlike BMW and Mercedes-Benz, Audi does not have a U.S. manufacturing presence. While some of its most popular models, like the Q5, are built in Mexico, the majority of its vehicles come from Europe—Germany, Hungary, and Slovakia. The introduction of the 25% tariff, on top of the existing 2.5%, has rendered these imports significantly more expensive, leaving Audi unable to remain competitive in price-sensitive luxury segments.
In response, Audi has halted all shipments of vehicles that arrived in the U.S. after April 2. A company memo sent to dealers, later confirmed by Audi officials, instructed dealerships to focus on selling existing stock—about 37,000 vehicles—while the company reevaluates its strategy. This inventory, expected to last about two months, will be the brand’s lifeline for the near term. Beyond that, without a resolution to the tariff dispute, Audi’s future in the U.S. market is highly uncertain.
BMW’s Balancing Act
By contrast, BMW has managed to keep its cars rolling into showrooms, though not without some adjustments. BMW has long relied on its production facilities in Spartanburg, South Carolina, the largest BMW plant in the world, to bolster its U.S. presence. Spartanburg-produced SUVs—such as the X3, X4, X5, X6, X7 and XM—make up a substantial portion of BMW’s U.S. sales and are protected (for now) from the brunt of the new tariffs. This gives BMW a critical advantage: these American-made vehicles are not subject to the same import fees as those from Europe or Mexico. As a result, BMW can maintain relatively stable pricing on these popular models, helping to keep dealers and customers satisfied.
However, not all of BMW’s lineup comes from Spartanburg. All the sedans and coupes, including the 2 Series, 3 Series, 4 Series, 5 Series, and 7 Series, are still imported, including the electric variants. So far, BMW only announced a price increase for the 2 Series Coupe and M2 Coupe, around 4 percent. The details on the full scope of price increases remain under wraps. BMW’s approach appears to be a strategic balancing act: absorbing some of the cost to maintain competitive pricing on core models, while passing on a portion of the tariff burden to customers for others.
The auto tariff turmoil doesn’t just pit Audi against its German rivals; it’s a challenge for the entire luxury car market in the U.S. Mercedes-Benz, another German giant with U.S.-based production, is similarly leveraging its American-built SUVs to weather the storm. Yet, even for these manufacturers, the broader implications remain daunting. Automakers now face higher prices for imported parts and vehicles, a complication that could drive down overall sales volumes, erode profit margins, and potentially reshape how these brands approach the U.S. market in the long term.
When it comes to BMW, we expect to learn more in the next few weeks about the next steps for the company’s strategy in the United States. High-level discussions took place last week in Woodcliff Lake, but the result of these talks is currently unknown.
[Source: Reuters]
