Latest Automotive News: Tariff adjustments, worldwide predictions, and European used car market trends
The global automotive industry is currently navigating turbulent waters, particularly in the US and European markets, due to the implementation of tariffs on imported cars and auto parts.
In April 2025, President Donald Trump's administration imposed a 25% tariff on all imported vehicles and parts, which was initially intended to protect national security and boost domestic production. This move has increased costs for imports from Canada, Mexico, the EU, Japan, and other regions, potentially leading to consumer price hikes of several thousand dollars per vehicle.
The tariff's impact on the US market is significant. Domestic cars currently account for about 50% of the market, while imports make up the other half. The tariffs have disrupted supply chains, with domestic car manufacturers struggling to meet demand due to the increased costs.
In response to these tariffs, a recent trade deal between the US and the European Union reduced EU auto tariffs from 25% to 15%. While this provides some relief for European automakers like Volkswagen, Porsche, and BMW, the 15% rate remains much higher than the 2.5% rate before Trump's policies. This ongoing tariff burden continues to strain European car manufacturers, with companies like Stellantis reporting a $1.7 billion earnings hit in 2025 due to tariffs, particularly because many of their vehicles are made in Canada and Mexico and sold in the US market.
Regarding the European used-car market trends, while specific details are not provided, the external pressures from tariffs and disrupted supply chains tend to influence pricing and availability. Higher tariffs on new car imports can increase demand for used cars, potentially driving up used-car prices in Europe as consumers seek more affordable options amid rising new car costs.
Elsewhere, the UK used-car market remained relatively stable in April, with plug-in hybrids experiencing a small decline of only 1 percentage point (pp). Battery-electric vehicles and full hybrids posted modest gains of 1.3pp and 0.7pp respectively in used-car residual values (RVs) in Europe during the same period.
In other news, Heycar, launched in 2017 with backing from Volkswagen Financial Services (VWFS), Daimler Mobility, and Volkswagen (VW), has announced its closure. VWFS has absorbed the platform's technology and expertise into a newly formed subsidiary. Heycar, which entered the UK market in 2019, positioned itself as a competitor to established players.
In 2023, Heycar underwent significant restructuring in the pursuit of profitability. Volkswagen decided to sell its shares in Heycar in an unspecified year. Global forecasts for light-vehicle sales growth have dimmed, with EV Volumes cutting its 2025 projection to 1.2%.
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Key points:
- US Tariffs on Auto Imports: 25% tariff since April 2025 on all imported autos and parts, raising costs and incentivizing domestic production.
- Tariff impact on US market: Domestic cars dominate ~50%, imports ~50%; tariffs raise prices and disrupt supply chains, consumer prices up.
- US-EU Trade Deal: Tariffs on EU cars reduced from 25% to 15% in July 2025, easing but not resolving cost burdens.
- European automaker impact: Stellantis projects $1.7 billion revenue loss due to tariffs, highlighting ongoing damage to European firms.
- European used-car market trend: Likely rising demand and prices due to tariff-driven new car cost increases (not explicitly detailed in results).
- Heycar's closure: Expected to be wrapped up before the end of the summer, as reported by AM Online.
- Global forecasts for light-vehicle sales growth: Dimmed, with EV Volumes cutting its 2025 projection to 1.2%.
- Northern America's light-vehicle sales outlook has dropped to 17.67 million units.
- Rising vehicle prices in the US are expected to climb 5% this year, which may weaken demand.
- In April 2025, used-car residual values (RVs) in Italy declined 4.6 percentage points (pp) year-on-year compared to April 2024.
- Plug-in hybrids struggled across Europe in April, but the UK remained relatively stable, with RVs falling only 1pp.
- Battery-electric vehicles and full hybrids posted modest gains of 1.3pp and 0.7pp respectively in used-car residual values (RVs) in Europe in April.
- Tariffs on automotive imports into the US have caused industry turbulence in 2025.
- Three-year-old used cars in Europe, at 60,000km, had a smaller percentage of their list price in April compared to March across Austria, France, Germany, Italy, Spain, Switzerland, and the UK.
- Daimler decided to sell its shares in Heycar in an unspecified year.
- Volkswagen Financial Services (VWFS) has announced the closure of Heycar.
- Heycar, launched in 2017, had backing from VWFS, Daimler Mobility, and Volkswagen (VW), with the latter investing around €300 million in the division since its launch.
- In the global finance sector, the ongoing tariffs on automotive imports into the US have caused significant turbulence in the industry, driving up consumer prices for vehicles and potentially leading to further adjustments in domestic production.
- The implementation of a 25% tariff on imported vehicles and parts in the US market by President Donald Trump's administration in April 2025 has also affected the transportation sector, particularly the European used-car market, where tariff-driven new car cost increases may lead to increased demand for and prices of used cars amid weakening demand for new vehicles.
