Road Rage

Welcome back Pricing People! Buckle up as we take a drive through the automotive industry, where policymakers keep shifting gears, sending prices in all directions. From aggressive discounts to steep hikes, let’s explore how trade wars are putting the pedal to the metal on pricing strategies.

Bumper price increase

While tariffs are creating turbulence across most industries, few sectors are feeling the impact more intensely than the automotive market, resulting in some truly extreme pricing decisions.

Ford recently became one of the first manufacturers to implement price increases in the US, hiking costs on three Mexico-produced models. Meanwhile, a senior Toyota executive warned that with half their US cars imported and countless parts subject to potential tariffs, price rises seem inevitable, potentially making new cars unaffordable for many more Americans.

Charging ahead

Seizing the opportunity to capture market share outside the US, Chinese electric vehicle giant BYD is attempting to become king of the road with dramatic price cuts across 22 electric and plug-in hybrid models. As part of the company’s “fixed price” campaign, the most aggressive slash saw one plug-in hybrid discounted by a huge 34%.

Other Chinese manufacturers quickly followed suit in this pricing race to the bottom. State-backed Changan rolled out 15% discounts on SUVs, while Stellantis-backed Leapmotor slashed prices by up to 30% on select models.

For smaller rivals with weaker balance sheets, it’s a brutal choice between cutting prices and bleeding cash, or watching market share evaporate.

The automotive industry is clearly navigating challenging terrain. If you’re stuck in first gear with tariff price planning, get in touch with Flintfox today. Until next time, power to you Pricing People!