BMW USA Shields Mexico-Built Models From Tariffs Until May—What Happens Next?

In response to a newly imposed 25% tariff on vehicles imported from Mexico, BMW North America has announced their dealers that there is a price protection planned for Mexico-produced models. According to a dealer bulletin, vehicles such as the BMW M2, 2 Series, and 3 Series with a scheduled production date before May 1, 2025, will be price-protected, shielding dealers and customers from immediate price hikes.

However, starting May 1, 2025, any Mexico-produced BMW models arriving in the U.S. could face a new total import duty of 27.5%, up from the previous 2.5% tariff, since the Mexico tariffs started on March 4th. But for now, BMW is not committing to a plan post May 1st. Clearly, this development stems from an aggressive trade policy move by the U.S. government, aiming to reduce reliance on foreign manufacturing and bring more production back to domestic facilities.

We reached out to BMW of North America and received the following statement: “What this means by “price protection” is that we’re not increasing prices for March or April. Nothing will change for March or April,” a BMW spokesperson told us. “However, if the tariff situation remains as it currently is, we may need to reassess after that time.”

BMW Faces Challenges With M2 and 2 Series Production

For BMW, the new tariffs pose a significant challenge, particularly for the M2 (G87) and 2 Series Coupe (G42). These models are exclusively manufactured at BMW’s San Luis Potosí plant in Mexico, meaning BMW has no alternative production plants for these cars. With no immediate solution available, U.S. customers could see price increases on these enthusiast-focused models unless BMW absorbs the costs—an unlikely long-term solution.

The 3 Series Offers Some Flexibility

The BMW 3 Series (G20 LCI), while also produced in Mexico, has a second production site at BMW’s Munich plant in Germany. This gives BMW a potential workaround, but this is pure speculation since BMW won’t officially comment on these plans. 

• The company could shift more U.S.-bound 3 Series production to Munich to avoid the new tariffs.
• Alternatively, BMW could redirect Mexico-built 3 Series to Europe while allocating German-built 3 Series for the U.S. market.

This strategy, however, depends on Munich’s production capacity and whether BMW is willing to adjust its global logistics to counteract the tariff impact.

Potential Industry-Wide Impact

BMW is not the only automaker affected by these tariffs. Brands with significant Mexican manufacturing footprints, including Volkswagen, Honda, and Toyota, are now facing rising costs and supply chain disruptions. Many automakers will be forced to decide whether to pass on the added costs to consumers, shift production, or negotiate exemptions.

While BMW NA’s price protection plan offers a temporary buffer for dealers and buyers, the long-term strategy remains uncertain. Will BMW find a way to shift production, or will enthusiasts be forced to pay significantly more for models like the M2 and 2 Series? The coming months will be critical as BMW evaluates its options in response to this dramatic policy shift. A policy that also seems to change by the week.

First published by https://www.bmwblog.com

Source: BMW BLOG