Why don’t Europeans buy more American cars?

Donald Trump is threatening to introduce large tariffs on the European Union car imports, unhappy that Europeans do not buy more American vehicles. But US cars, with a remarkable exception of Tesla, are not more popular in Europe?

The ancient cities and cities of Italy, with their narrow, cobbled roads, provide a clear explanation, why, in the words of US President Donald Trump, European “does not take our cars”.

Or as the car industry analyst Hampus Engelu said: “Try to move around Italy in a large SUV. I have done it, and it’s very difficult”.

Add the cost to the question, and it becomes clear why you don’t see a lot of American pick-up trucks on European roads, the Society of Motor Manufacturer and CEO Mike Hayes, the CEO of traders, represent the industry in the UK.

“We have higher fuel prices than Americans, so we prefer small, more fuel-skilled vehicles, while they usually like large vehicles.”

Sri Angelou, who works for the Swedish Investment Bank Handlesbankan Capital Markets, has also highlighted the petrol prices in the US being cheaper. “They pay the gallon that we pay per liter,” they say. A US gallon has 3.8 liters.

Nevertheless, these differences have made European car manufacturers much less to prevent market share in the US. Again, in the words of Mr. Trump, the US has “millions of cars coming – BMW, Mercedes, Volkswagen and many more”.

In 2022, 692,334 Cars manufactured by the new European Union were exported to the US, priced at € 36BN ($ 37bn; £ 30bn). While only 116,207 new US-made cars went in the opposite direction for € 5.2BN.

This imbalance is due to inappropriate trading rules and correct needs, according to Mr. Trump.

“Sri Trump is concerned because the terms of business are not really the same,” Sri Angelou states that the European Union’s 10% tariff on imported cars from the US is more than 2.5% tariff – currently – duty on imported cars from the European Union.

These inequalities have inspired Trump to say that he wants to increase the US tariff on European motor vehicle imports. They have already announced 25% import tariffs on steel and aluminum imports, two metals are important for car manufacturers.

Trump’s move has inspired European Union officials to consider reducing their own tariffs to protect Europe’s motor vehicle industry from potential trade war.

Trump’s intervention has not affected US car manufacturer Ford’s boss Jim Farley. “What we are seeing so far is a lot of cost and a lot of chaos,” NBC News recently Informed him by saying.

In fact, a lot of attention to business is probably wrong, according to Andy Palmer, the legend of the motor vehicle industry, the Chief Operating Officer of Nissan and CEO of Eston Martin and currently an advisory. “If you can help it, you don’t want to ship cars around the world. They are big boxes of expensive air,” they say.

The automotive industry is global, connects Mr Hawes of SMMT, so car manufacturers usually “want to build on the basis of customer”.

For example, many European car manufacturers, most specially BMW, Mercedes and Audi, are making some of their largest cars in North America, and some of these vehicles are exported back to Europe.

American car manufacturers have historically pursued similar strategies in Europe. General Motors owned and built European marks such as Opel/Vaxhall and Saab, but sold the East in 2017, and closed the latter in 2009.

Meanwhile, Ford landed Aston Martin in 2007, Jaguar and Land Rover in 2008 and Volvo in 2010.

After years of losing money, Ford is currently removing its European business towards electric and commercial vehicles and from small, inexpensive cars, such as its focus model.

Ford plans to cut 800 jobs in the UK and 2,900 jobs in Germany by 2027, which represents a 14% decrease in its 28,000-confirmation European workforce.

Elon Musk’s Tesla has a factory near Berlin in Germany, where it makes its model Y car for the European market, but even there are headwinds because low -cost sugar imports see their share of Europe’s market, especially for electric cars.

According to Jose Asumandi, the head of European motor vehicle research at JP Morgan, an investment bank, Europe is a very difficult market for car manufacturers. “You need the right products, and you need to run the manufacturing plants well.”

He points to brands with competitive gains in his domestic countries, whether it is BMW, Mercedes, Volkswagen and Audi Germany, Puzo, Citroen and Renault in France, or Fiat and Alpha Romeo in Italy.

“There is a natural inclination for people to buy local champions, especially in Germany, France and Italy,” Sri Asmandi explains.

He says that while other European countries are more open to separate brands, there is a crowd in the market, Japanese, South Korea and, fast, with Chinese cars.

Foreign car manufacturers have separate taxation rules to add Europe’s complications, and need to communicate in many different languages.

Mr. Palmer does not think “European customers have any special objection to American cars”, and Mr. Asmandi agrees. “I think European American brands like, but many other brands are available in Europe, so competition is fierce,” he says.

Mr. Trump’s ambition is to strengthen the American car industry, by bringing more production and innovation home. But Mr. Palmer insisted that a car trade war with Europe would not distribute it.

At least, they say, as tariffs “insulating beneficiaries from the free market, and it only makes them lazy, so they stop innovating and fail to remain competitive”.

“It’s not about business,” says Mr. Palmer. “It is about investment and cooperation.”