Former Ford CEO: Volkswagen is one of the most tariff-exposed vehicle makers

Volkswagen's Challenges - Volkswagen faces a $15 billion tariff hit in the first half of the year, leading to a lowered full-year forecast [1] - The company is particularly exposed in the US market, importing 80% of its vehicles [2][3] - Volkswagen encounters hyper-competitive market conditions in China, traditionally one of its largest and most profitable markets [4] - Stricter European CO2 requirements are forcing increased sales of EVs, which have lower profit margins compared to internal combustion engines [5] - Profits from Audi and Porsche, Volkswagen's luxury brands, experienced a significant collapse during the quarter [5] Trade and Tariff Implications - The assumed tariff rate is 275%, but a trade deal could potentially lower this number, similar to the 15% rate for Japan [6] - A potential trade agreement with Japan is considered a win for Japan, allowing them to avoid harsher tariffs and export volume restrictions [11][12] - US automakers may face disadvantages as North American-built vehicles with significant US content could face a 25% import tariff from Mexico or Canada, higher than Japan's 15% tariff [13] Competitive Positioning - Chinese domestic brands are well-positioned due to their focus on domestic growth and lack of distraction from tariffs [7] - Toyota is also well-positioned with a strong strategy in EVs and hybrids, along with a solid brand image [8] - US automakers like Ford and GM have strong franchises in SUVs and trucks, driving profitability [9]