According to Automotive News, Nissan has informed U.S. dealers that it has increased production in Mexico to prepare for a potential 25% tariff on Mexican-made vehicles imposed by the U.S. government.
After two delays, U.S. President Donald Trump announced that tariffs on Mexican products will take effect on April 2. The report states that this tariff will impact three budget-friendly Nissan models produced in Mexico, which account for nearly one-third of the brand's U.S. sales. This could significantly disrupt the Japanese automaker's U.S. operations.
According to a source familiar with the matter, Nissan informed retailers in a March 18 conference call that the company is ramping up production of Sentra, Versa, and Kicks for the U.S. market to mitigate the impact of tariffs, which could ultimately range from 10% to 25%. The anonymous source also stated that Nissan currently has a 90-day inventory of Mexican-made vehicles in the U.S. and plans to ship March-produced cars before the April 2 deadline.
The source further mentioned that Nissan might prioritize higher-margin models in Mexican production to help offset the tariffs. Another source revealed that Nissan has no plans to shift its manufacturing operations from Mexico to the U.S. at this time.
If Trump maintains the tariffs long-term, Nissan may have to pass some of the added costs to consumers. One source suggested that the company could spread the increased expenses across its entire lineup to avoid steep price hikes on Mexican-made models. Traditionally, automakers raise prices on higher-end models to absorb such costs.
Sam Fiorani, Vice President of AutoForecast Solutions, commented, "While the Sentra, Versa, and Kicks are crucial for Nissan to attract younger buyers, overly high prices could quickly deter customers. Nissan hopes the tariffs will be short-lived, allowing these models to remain among the most affordable options in the industry."
The Sentra sedan, Nissan's second best-selling model in the U.S., is set for a redesign in the third quarter. The Kicks, redesigned last year, serves as Nissan's entry-level crossover. The Versa hatchback, currently Nissan's cheapest model in the U.S., is scheduled to be discontinued next year.
