For decades, Volkswagen Group’s North American strategy was built on a clear cost advantage: manufacturing vehicles in Mexico and exporting them to the United States. That model is now under serious pressure.

 

According to a report from Automotive News Europe, with U.S. tariffs on Mexican-built vehicles reaching as high as 27.5%, the economics that once justified cross-border production are rapidly eroding. Volkswagen exports roughly 70% of its Mexican output to the U.S., while Audi sends up to 90% of its production north or to other global markets, leaving both brands highly exposed.