Ford (F.US) increases the price of Mexican models and the pressure on tariffs is transmitted to consumers

The Zhitong Finance App learned that the US car manufacturer Ford (F.US) has begun to raise prices for some models, indicating that the effects of tariffs are gradually being transmitted to American consumers. According to a dealer memorandum disclosed by foreign media on Wednesday, the price of some popular models such as the Mustang Mach-E, Maverick pickup, and Bronco Sport will rise by as much as $2,000. The current starting price of these models is between $28,000 and $36,000.

Ford did not disclose the details of the memorandum, but confirmed the news of the price adjustment and indicated that the company's current promotional price will continue until the July 4 Independence Day holiday. It is worth noting that the above three models are all produced in Mexico, which means that Ford's price increase this time is mainly focused on imported models. It is currently unclear whether Ford will make similar adjustments to models produced in the US.

In fact, although Ford has begun to increase prices, most dealers' existing inventory in the market was still produced and purchased before the tariffs came into effect, so the price of new cars fluctuates limited in the short term. However, as inventories are gradually digested, tariff costs are bound to further push up terminal prices in the market.

Investors are currently paying close attention to how major car companies are coping with the new round of tariff challenges. Will manufacturers spread the price increase to all models, or will they only increase prices on products that are most affected by tariffs? There is currently no uniform answer. Price increases for only some models may trigger a reshuffle of market share. For example, the Tesla Model Y produced in the US may become more attractive in price compared to the Mach-E after the price increase.

The bigger question is, how much impact will the price increase have on demand for new cars? The uncertainty and rising costs brought about by tariffs have begun to dampen market sentiment.

Since the November 5, 2024 election, Ford's stock price has fallen by about 3%. General Motors (GM.US) and Stellantis (STLA.US) stock prices declined more significantly, reaching 15% and 32%, respectively. Currently, about 20% of the cars sold by Ford in the US market are imported models, while the import ratio of GM and Stellantis is close to 45%.

Faced with tariff pressure, Ford expects profits to be reduced by 1.5 billion US dollars as a result; GM expects losses of about 3.5 billion US dollars; while Stellantis directly suspended financial guidance for 2025, reflecting greater uncertainty.

Despite many challenges, Ford's stock price was up 0.68% to $10.35 at press time, while the S&P 500 index and the Dow Jones Industrial Average were up 0.46% and 0.48%, respectively.