Volkswagen faced significant downturns in 2022 with a 10% sales drop in China and stagnant growth in Europe, culminating in a planned reduction of 35,000 jobs. However, the company saw growth in the Americas, particularly a 15.2% increase in U.S. sales, a long-sought achievement. Compounding these challenges are newly imposed 25% tariffs on products from Mexico, where 44% of its U.S. models are produced, raising concerns about Volkswagen's pricing and competitive position in an already weak market.
Volkswagen's significant reliance on Mexican manufacturing puts it at considerable risk given the newly imposed tariffs, compounding existing challenges in key markets like China.
With 44% of Volkswagen Group vehicles in the U.S. produced in Mexico, the recent 25% tariffs pose a serious threat to their financial standing and competitive edge.
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