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General Motors Plans to Shift Truck Production to U.S. to Combat Tariff Impact

Daniel Kim Views  

Photo courtesy of GM
Photo courtesy of GM

General Motors is considering shifting the production of its “Mexican-made” trucks to the United States. This strategic move aims to minimize the financial burden of the ongoing tariff dispute between the U.S. and Mexico.

Similarly, affected by the tariffs, Kia is considering leveraging its U.S. factories to mitigate the impact. However, Kia faces complications due to conflicts with its existing export strategy and the operations of its parts suppliers, which have also expanded into Mexico.

According to GM Authority, a GM-focused news outlet, the automaker is developing plans to shift production of its full-size trucks, including the Chevrolet Silverado and GMC Sierra, from its Silao plant in Mexico to Fort Wayne, Indiana.

This move is a preemptive measure against the Trump administration’s tariff threats. General Motors Mexico, the largest automotive manufacturer in Latin America, exports about 80% of its local production to the United States, making it particularly vulnerable to tariff increases. In 2023, GM’s Mexican plant produced 362,929 trucks, most of which were shipped to the U.S. market and the remainder exported to the Middle East and South America.

GM plans to finalize its response strategy before March, when the tariffs are expected to be confirmed. While there’s speculation about a long-term agreement between the U.S. and Mexico, the company is taking precautionary steps. GM CEO Mary Barra stated, “We build trucks in Mexico, Canada, and the U.S. So we have the capacity in the U.S. to ship some of that production.”

Kia is closely monitoring GM’s actions, as it is in the same tariff-affected category. Kia’s Monterrey plant began operations in 2016 and has an annual production capacity of 250,000 vehicles, with approximately 150,000 units exported to the U.S. Implementing tariffs would significantly impact Kia’s export-focused strategy.

One proposed solution is relocating production from the Monterrey plant to Kia’s facility in Georgia. The Georgia plant, Kia’s third global production base after China and Europe, is crucial for the company’s U.S. market strategy. It spans 2.612 million square meters and features a comprehensive production system, including press, body, paint, and assembly operations. It has an annual capacity of 340,000 vehicles.

However, relocating production is not a straightforward solution. Hyundai Group’s parts affiliates, including Hyundai Mobis, Hyundai Wia, and Hyundai Transys, have already established operations in Monterrey.

An industry insider noted: “The Georgia plant follows a dual-track strategy, producing internal combustion engine models like the Telluride and Sorento, and electric vehicles in response to the Inflation Reduction Act (IRA). Moving production from Mexico would be a challenging transition.”

Daniel Kim
content@viewusglobal.com

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