Ford to Hold Off on Price Increases to Assess Rivals' Actions
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Ford Motor Co. won’t increase the price of its vehicles until it sees how competing carmakers respond to higher costs imposed by President Donald Trump’s tariffs.
“You know half the industry in the U.S. is imported and they have $5,000 to $10,000” in additional costs due to tariffs, Ford CEO Jim Farley told reporters at the company’s pickup truck plant in Kentucky on April 30. “Will they just absorb those? Will they pass them on to customers? That will be a big decision because a pricing decision is a competitive decision.”
Ford had previously planned to raise prices on cars rolling off its assembly lines starting in May, absent a major change in Trump’s tariff policies. The president’s tariffs targeting the auto industry are widely expected to increase vehicle costs by thousands of dollars.
Farley said Ford will detail how much the levies will increase its costs when it reports first-quarter earnings May 5.
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Trump on April 29 signed directives to lessen the blow of the tariffs, in part by exempting goods affected by his 25% duty on imported cars and parts from facing other levies like those on steel and aluminum. He also gave automakers temporary relief from his tax on imported parts to allow them more time to move production to the U.S.
Ford builds about 80% of the cars it sells in the U.S. domestically, making it relatively more insulated from tariffs on finished vehicles than many competitors. Ford imports some of its less expensive models, such as the Maverick small pickup truck that’s made in Mexico.
“Those will be the ones we will be paying attention to. It’s a competitive environment,” Farley said.
Still, Farley said more needs to be done to address how tariffs are affecting the parts that carmakers import. He also said Ford plans to work with the Trump administration to receive credit for the vehicles it exports from the U.S.
“We have a lot more work to do on parts and on exports,” Farley said.
Farley earlier this year warned that Trump’s tariffs could “blow a hole in the U.S. industry that we have never seen.” The auto industry, including Ford, had been furiously lobbying the White House for relief on 25% tariffs on certain car parts due to take effect May 3. Automakers must still confront higher costs from the 25% tariff Trump imposed on imported cars April 3.
RELATED: Carmakers Freeze Prices, Offer Discounts
Car buyers surged into showrooms this spring to snap up models with pre-tariff pricing, but analysts expect automakers to boost sticker prices this summer. Separately, Ford extended its promotion offering employee pricing to everyone through the July Fourth holiday weekend. The promotion helped the company achieve a double-digit sales increase over the past month, the automaker said on its website.
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