Overview
- Nissan announced Wednesday that it will reduce production costs for vehicles built in Mexico to blunt the effect of a U.S. 25% tariff on those imports.
- The company says the tariff raises costs by roughly $2,500 to $3,000 per unit, which has made some Mexico-built models harder to sell in the price-sensitive U.S. market.
- Over the past year Nissan has shifted some output to the United States, raising the share of U.S.-built vehicles for the U.S. market from about 45% to near 60%.
- Nissan will keep entry-level models such as the Sentra and Kicks in Mexican plants to retain lower labor costs rather than moving all production to the U.S.
- Management says it is also monitoring T-MEC negotiations and may extend its long-running partnership with China’s Dongfeng as it balances competitiveness, costs, and potential effects on U.S. prices and market share.