As 2025 approached, American auto executives from GM, Ford, and Stellantis grappled with sluggish electric vehicle demand and competition from Chinese manufacturers. The emergence of tariffs under the Trump administration posed an additional threat, potentially raising new car prices dramatically, while the economic downturn weakened consumer sentiment. This combination of factors shifted consumer preferences towards more affordable vehicles. However, U.S. automakers had focused on larger SUVs and pickups, resulting in a lack of small, affordable models, rendering them particularly vulnerable in this shifting landscape.
The term "car bloat" illustrates how American automakers have prioritized larger vehicles over smaller, more affordable options, leaving them vulnerable to economic pressures.
The threatened tariffs from the Trump administration could raise new car costs in the U.S. by up to $12,000, challenging the auto industry's profitability and pricing strategies.
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