Although Mexico avoided additional auto tariffs when U.S. President Donald Trump announced his reciprocal tariffs plan on Wednesday, the car manufacturer Stellantis has now announced a partial suspension of its Mexico operations.
Stellantis — one of the “Big Three” U.S. automakers — on Thursday announced it was pausing production at two of its plants in Mexico and one of its factories in Canada in response to previously announced tariffs. Stellantis has seven manufacturing operations in Mexico.
In a letter sent to employees, Stellantis said it is “continuing to assess the medium- and long-term effects of these tariffs on our operations, but also have decided to take some immediate actions.”
While imports from Mexico and Canada that comply with the U.S.-Mexico-Canada trade agreement (USMCA) are largely exempt from tariffs under Trump’s most recent order, auto exports as well as steel and aluminum face import duties under separate tariff policies.
Mexican President Claudia Sheinbaum on Friday said her administration continues working with the U.S. government to address the duties on cars, steel and aluminum, while also talking with automakers about how to maximize the number of USMCA-compliant products.
She also said the pause in operations announced by Stellantis is just temporary, and suggested that the vehicles the company makes in Toluca are simply not selling in Mexico.
Stellantis ranked third in total vehicle production in Mexico in 2024, after General Motors and Nissan. However, it was seventh in light-vehicle sales in the domestic market last year.
“[Stellantis has] a small market for their cars independent of the tariffs,” she said Friday. “So, they are reviewing whether or not to continue producing … electric vehicles.
Stellantis started production of electric vehicles at its Toluca factory in August 2024, after spending US $1.6 billion to adapt the plant for EV production. The company also produces its Jeep Compass and Jeep Wagoneer S in Toluca, 65 kilometers west of Mexico City.
“The company has assured [Economy] Minister [Marcelo] Ebrard that they have no plans to eliminate jobs,” Sheinbaum said “Instead, this is a temporary stoppage while they evaluate the market conditions.”
Reuters reported that the work stoppage would continue for the entire month of April. Stellantis said that while production would indeed be paused, all employees would stay on to carry out maintenance tasks and receive training.
On the other hand, Sheinbaum said, Swedish automaker Volvo announced Thursday that it is increasing production of one of the vehicles it produces at its plant in the state of Nuevo León.
Sheinbaum also said that Nissan — the top-selling brand in Mexico — appears to be ratcheting up production of one of its models. “So far, it seems that the impact is not as bad as it might have been,” she said, “and we are expecting conditions to improve.”
In December, Stellantis announced plans to increase its investments in Mexico in 2025 in expectation of double-digit growth in the Mexican market. The company even suggested it could launch up to 15 new vehicle models this year.
Stellantis counts only two models among the 10 most exported vehicles produced in Mexico — the RAM 2500 pickup truck (built in Ramos Arzipe, Coahuila) and the Jeep Compass (assembled in Toluca).
As for the domestic market, the RAM 2500 is quite popular here. Of the 6,915 Stellantis vehicles sold in Mexico in March, 3,118 were RAM 2500s.
In other tariff-related auto news …
German carmakers Mercedes-Benz, Volkswagen, Audi and BMW are seeking shelter from the Trump tariffs via the USMCA, according to President Sheinbaum. The president said Thursday that company executives have been in touch with Economy Minister Marcelo Ebrard, adding that the carmakers would have to increase the North American content in their vehicles to earn a measure of protection from the tariffs.
Japanese automaker Nissan announced on Thursday that it would halt production of two “luxury” models it makes in Mexico for the U.S. market. The two vehicles — the Infiniti QX50 and the QX55 — are assembled in the Cooperation Manufacturing Plant Aguascalientes (COMPAS) which is a joint venture manufacturing plant between the Mercedes-Benz Group and Nissan, located in the city of Aguascalientes.
With reports from El Financiero, Reuters and Infobae
