By Ramon Castro
The possibility of buying a new car without spending a fortune is beginning to fade in the United States. What until recently was an option for many drivers today seems like a rarity, and not because of a lack of demand, but because of an increasingly complex environment for brands.
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The industry is going through a delicate moment. The trade decisions promoted by President Donald Trump have put pressure on the entire production chain, especially due to the tariffs applied to products from key countries such as Canada and Mexico.
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This is not a minor detail if you take into account that a good part of the cars sold in the United States depend on parts manufactured outside the country.
The hit of tariffs
The 25% increase in tariffs has set off alarm bells. These are not only imported cars, but also those that are assembled in USA but they use foreign components. In a globalized market, almost no manufacturer can escape this dependence.
Nearly forty-five percent of vehicles sold in the United States come from abroad. Even models considered “local” integrate pieces that cross borders several times before reaching the final customer. If costs continue to rise, many of these cars will no longer be profitable for brands.
Fewer and fewer economic options
The result is already considered in the dealerships. Today there are only a few new models under $25,000. And the most worrying thing is that some of them are on the tightrope.
Well-known names within the accessible segment could disappear in the short term. The pressure on margins and the increase in production costs make manufacturing cheap cars increasingly less attractive for companies.
Behind this situation there is a trend that has been brewing for years. More demanding regulations, rising material costs and the transition towards electrification have been pushing prices up, leaving out the most basic models.
A problem that goes beyond the market
The disappearance of the economical car is not just a matter of numbers. It has a direct impact on millions of people who depend on a vehicle to work or get around, especially in areas where public transportation is not a viable alternative.
Without affordable new options, many buyers are forced to look to the secondhand market. There is no relief there either, with prices that have risen and an offer that does not always guarantee good mechanical conditions.
Manufacturers and suppliers have not sat idly by. In recent months they have intensified pressure to maintain favorable trading conditions in North America. The review of the agreement between United States, Mexico and Canada It will be decisive for the future of the sector.
The context doesn’t help. Inflation, the cost of raw materials and trade tensions paint an uncertain picture. All this pushes the market towards a scenario where cheap cars could become an exception rather than the norm.
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