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[Berlin] Volkswagen could relocate some production of its high-end Audi line to dodge US tariffs on automobiles ordered by US President Donald Trump, the German carmaker’s chief executive said in an interview released on Friday (Apr 18).
Europe’s largest car manufacturer, which is especially vulnerable to the increase in US tariffs, was in “constructive discussions” with the US administration on the issue, Oliver Blume told the Frankfurter Allgemeine Zeitung newspaper.
Volkswagen, which earlier in April said Trump’s slew of planned tariffs had dragged down its first-quarter operating profit, wanted to do “as much as possible to remain an investor and reliable partner for the United States”, Blume added.
“For Audi, production in the United States would be in line with our development strategy,” he said.
However, he ruled out any American manufacturing for Porsche, despite the US market being the luxury sports car brand’s largest.
At only around 70,000 vehicles a year the volumes were too small to consider the idea, he said.
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Trump last month announced a 25 per cent tariff on cars imported to the US, which is the No 1 destination for German car exports.
The Republican has claimed that imposing tariffs would make foreign companies relocate part of their production to the US.
Volkswagen – a 10-brand group which also includes Audi, Porsche, Seat and Skoda – sold just over one million vehicles in North America last year, 12 per cent of its sales by volume.
With Volkswagen sales in reverse in China in the face of stiff competition from domestic carmakers, particularly on electric vehicles, the US market has become even more important for the German manufacturer.
Despite the presence of a Volkswagen production plant in Tennessee, 65 per cent of its flagship VW brand’s American sales come from vehicles shipped into the US from Europe or Mexico.
The figure rises to 100 per cent for its high-end Audi and Porsche brands.
Blume would not comment on the tariffs’ financial impact on Volkswagen, nor on whether it would raise its prices in the US in response. AFP
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