European Automakers Fearful Of Trump Presidency

BMW South Carolina plant (Credit: BMW)

Right after it became apparent Donald Trump had won the election, European automakers expressed concern. VDA, an organization with members like BMW, Daimler and Volkswagen, said it was afraid the US would start behaving like China, making international trade more difficult.

Just as concerning to VW, BMW and others is the threat to slap a big tariff on all vehicles made in Mexico. Those companies have made big investments in factories south of our border. Even worse, Renault has opened facilities in Iran, at a time when the French brand has been weighing breaking into the American market.

These changes are coming as we’re seeing a drop in car sales for this market. According to an Automotive News report, some auto industry experts are fearing big stock drops and even more depressed sales for certain brands. In other words, this could trigger another round of automakers dropping like flies, similar to the Great Recession.

Ironically, Daimler just reported some big sales numbers for October, thanks in large part to strong Chinese demand. The company already punched past the total number of sales in China from last year, with two months left in this year. If protectionist Chinese policies are hurting foreign automakers there, it seems Daimler has found a path to success anyway.

Quite a few European automakers have factories in the United States, with more set to open in the next few years. Daimler alone has 22,000 US employees. That move might be a saving grace.