Shares of Ford Motor Company (NYSE: F) plunged 5.02% on Thursday as President Donald Trump's 25% tariffs on imported cars and auto parts took effect, raising concerns about the automaker's profitability and future sales. The steep decline came as the company announced aggressive discounts to maintain customer interest in the face of potential price hikes.
The newly implemented tariffs are expected to significantly impact the auto industry, with analysts predicting increased costs for manufacturers and higher prices for consumers. In response to these challenges, Ford announced it would offer employee pricing to all U.S. buyers starting Thursday, potentially saving customers up to $4,000 per vehicle. This move, while aimed at preserving sales volume, has raised questions about the company's profit margins in an already competitive market.
Adding to investor concerns, the National Highway Traffic Safety Administration (NHTSA) announced a recall of over 105,000 Ford SUVs due to seat belt issues. The recall affects Ford Expedition and Lincoln Navigator vehicles from model years 2018 to 2020, further pressuring the company's reputation and potentially incurring additional costs.
Industry analysts warn that the tariffs could lead to reduced auto demand as vehicle prices increase. A report from consultancy firm Anderson Economic Group suggests that the new tariffs may cost U.S. consumers more than $30 billion in higher vehicle prices and reduced car sales in the first full year of implementation. This outlook has dampened investor sentiment across the auto sector, with Ford's stock decline reflecting broader market fears about the industry's near-term prospects.
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