Nissan Motor Co. has announced that it will stop accepting new orders in the U.S. for its Mexican-built Infiniti QX50 and QX55 SUVs in response to the 25% global car and truck tariffs imposed by President Donald Trump. This decision marks a significant reduction in operations at the COMPAS manufacturing facility in Mexico, which Nissan operates jointly with Mercedes-Benz. While production of these models will continue for other international markets, such as Canada, the Middle East, and Panama, the U.S. market will no longer be served due to the high tariff costs.
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Impact on Operations and Market Strategy
The tariffs have hit Nissan particularly hard, as it exports more vehicles from Mexico to the U.S. than any other Japanese automaker. The Infiniti QX50 and QX55 models were primarily exported to the U.S., making them vulnerable to the newly imposed tariffs. This move comes amid broader challenges for Nissan in the U.S., including an aging vehicle lineup and a lack of hybrid models, which have contributed to declining sales and profitability.
In addition to halting Infiniti SUV orders, Nissan announced that it would maintain two production shifts for its Rogue SUV at its Smyrna, Tennessee plant—a reversal of its earlier plan to reduce shifts this month. This decision reflects Nissan’s strategy to focus on localized production in the U.S., which is exempt from the new tariffs, while scaling back reliance on imports from Mexico.
CEO’s Vision for Recovery
Nissan’s new CEO, Ivan Espinosa, a Mexican national who previously oversaw product planning, has pledged to overhaul the company’s vehicle development process to address these challenges. Espinosa aims to accelerate the time it takes to bring new models to market while navigating the complexities of global trade policies.
Broader Industry Implications
The Trump administration’s tariffs have sent shockwaves through the automotive industry, forcing companies like Nissan, Ford, and Stellantis to reevaluate their production strategies and supply chains. Analysts estimate that these tariffs could cost automakers billions in additional input costs and significantly impact earnings across the sector.
As Nissan adjusts its operations to mitigate tariff-related losses, this decision underscores the growing pressure on automakers to adapt to shifting trade policies while maintaining competitiveness in key markets like the U.S.