U.S. metal tariffs will raise Fiat Chrysler Automobiles NV's 2019 costs by $300 million to $350 million, or about $135 to $160 per vehicle, Reuters reported Jan. 14, citing a statement made by the company's CEO Mike Manley during the Detroit Auto Show.
Manley's projections were based on the automaker's 2018 U.S. sales, the report said. The company later confirmed the executive's comments to S&P Global Market Intelligence.
Fiat is not the only automaker feeling the pinch as car companies producing vehicles in the U.S. have to contend with U.S. steel and aluminum prices being driven higher by Trump administration tariffs, Reuters noted.
Toyota Motor Corp. has had to increase prices three times due to the higher tariff costs, Reuters said, citing Bob Carter, executive vice president for North American sales, who estimates that the tariffs have caused about a $600 dollar spike in industry vehicles prices.
Ford Motor Co. and General Motors Co. are also taking a beating and the auto industry has expressed its concern amid efforts by the administration to negotiate a new deal with China in hopes of avoiding new tariffs, Reuters said. Meanwhile, a new regional trade agreement with Canada and Mexico still needs the green light from Congress.
"Those are headwinds ... it's our job to run the business to offset those headwinds," General Motors President Mark Reuss told Reuters.
General Motors on Jan. 11 raised its adjusted diluted EPS and free cash flow outlook for fiscal 2019 and Chief Executive Mary Barra stuck to her plans to target five North American factories for closure and cut nearly 15,000 jobs overall, Reuters noted.
Vehicle demand is expected to slow in the U.S. and China in 2019, the report said.