The Tariff Conundrum
In an unprecedented move, Volvo Car USA has decided to discontinue the importation of the S90 sedan, citing the escalating trade tensions between the US and China. According to Automotive News, this decision is a direct result of the crippling tariffs imposed by the Trump administration on Chinese goods, including vehicles. With a 125-percent tariff imposed as of April 9, Volvo’s S90 becomes an unaffordable luxury for American consumers.
- The S90 was already a slow seller in the US, with only 1,364 examples sold last year.
- Volvo built the S90 at its Daqing, China assembly plant, making it a foreign-made vehicle for the American market.
- With the tariffs in place, the S90 becomes a “low-volume car for the US,” making it an impractical choice for Volvo to continue importing.
“It’s a low-volume car for the US,” an unnamed insider familiar with the matter told Automotive News. “Rather than deal with [the tariffs], they are just going to cut it out.”
The Impact on Volvo’s US Sales
The discontinuation of the S90 has significant implications for Volvo’s US sales. As of April 9, the Trump administration imposed a 125-percent tariff on Chinese goods, including vehicles. This is five times higher than the 25-percent tariff charged to vehicles imported from anywhere else in the world.
| Tariff Implications | Consequences for Volvo’s S90 Sales |
|---|---|
| A 125-percent tariff on Chinese goods, including vehicles. | The S90 becomes an unaffordable luxury for American consumers, making it a slow seller. |
| Five times higher than the 25-percent tariff charged to vehicles imported from anywhere else in the world. | Volvo’s S90 sales plummet, making it a low-volume car for the US market. |
Shift in Focus to Crossovers
In response to the tariffs, Volvo has decided to shift its focus to its biggest sellers: crossovers like the XC90, the XC60, and the XC40. This strategic move aims to bolster funding for future tariff expenses and ensure the company’s financial stability.
- Volvo will continue to import and sell its crossover models in the US market.
- The company will also cut incentives on current offerings to help alleviate the financial burden of tariff expenses.
The Significance of the S90’s Demise
The discontinuation of the S90 sedan has far-reaching implications for the foreign car market in the US. Other major brands, such as Lotus, JLR, VW, and Audi, have already paused shipments to the US to assess the tariff impacts.
- The S90’s demise is just one of many disruptions to the foreign car market.
- Other brands are also reevaluating their US sales strategies in response to the tariffs.
A Complex and Uncertain Future
As the trade tensions between the US and China continue to escalate, the automotive industry is facing unprecedented challenges. The S90’s discontinuation is just the beginning of a new era of uncertainty, and it will be crucial for companies like Volvo to adapt and respond to these changing circumstances. Key Takeaways:
- Volvo Car USA has discontinued the importation of the S90 sedan due to the 125-percent tariff imposed on Chinese goods.
- The S90 was a slow seller in the US market, with only 1,364 examples sold last year.
- Volvo will shift its focus to its biggest sellers: crossovers like the XC90, the XC60, and the XC40.
Highlights:
* Volvo Car USA has discontinued the importation of the S90 sedan due to the 125-percent tariff imposed on Chinese goods. * The S90 was a slow seller in the US market, with only 1,364 examples sold last year. * Volvo will shift its focus to its biggest sellers: crossovers like the XC90, the XC60, and the XC40. * The discontinuation of the S90 has significant implications for the foreign car market in the US, with other major brands reevaluating their US sales strategies.