Tariffs Could Raise Price of America's Favorite Car by $5,000

Cars and Drivers

Published: August 7, 2018 6:25 am

Last Updated: January 11, 2020 7:48 pm

Tariffs on cars and car parts could raise the price of the Ford F-150 by as much as $5,000. The increase would be a huge blow to the already beleaguered Ford Motor Co. (NYSE: F). Several other car companies could have similar problems.

A survey by credit firm Experian breaks down where the most popular cars in America are made, along with where their parts come from. The Ford F-Series, for example, is made in the United States, and 65% of its parts are made “locally.” Tariffs on foreign parts would raise the price of the vehicle by between $2,572 and $5,746.

The two other most popular vehicles sold in the United States face similar issues. General Motors Co. (NYSE: GM) sells the second most popular vehicle in America, the Chevy Silverado. The price of the pickup will rise between $3,993 and $7,650 according to the research. The third most popular vehicle, which is the Fiat Chrysler Automobiles N.V. (NYSE: FCAU) Ram 1500, would suffer a price increase of between $3,063 and $6,298. Among the three pickups, the Ram is the only one that makes some of its vehicles overseas — in Mexico

Ford faces the largest blow because sales of the F-Series were 552,087 in January through July, up 4.6% year over year. Ford’s total sales for the period were 1,471,171, or down 2.0%. The F-Series will become even more important to Ford’s U.S. efforts as the company phases out several of its cars, which have suffered large sales losses because of the popularity of pickups, crossovers and sport utility vehicles.

Ford is already struggling in America. To make matters worse, its sales in China, the world’s largest car market, have plunged. In the first half of the year, its sales there fell 26% to 400,443.

Ford management also has been accused of being flat-footed in its efforts to enter the electric and autonomous vehicle industries, which it says are the wave of the future.

Ford cannot afford a slowdown to the primary pillar of its sales, but that is likely to happen soon.