Tariff Troubles Loom

Mitsubishi’s Tariff Dilemma

Ever since President Trump announced his plans to spike import tariffs, Mitsubishi finds itself facing some tough decisions. Unlike other Japanese carmakers, Mitsubishi doesn’t have any manufacturing plants in North America. This absence leaves the company particularly vulnerable to these tariffs, which could tack on around $344 million to their costs by the end of March 2026.

Mitigating Costs

In response to these challenges, Mitsubishi is crunching numbers to absorb about $140 million of the impact through various cost-cutting measures. Measures like scaling back on sales incentives and exploring the option of increasing vehicle prices could make up the difference. The uncertainty looms, but some speculate price hikes could mirror those seen by Ford, hiking the cost up to $2,000 on popular models.

Exploring Production Possibilities

Given these financial pressures, Mitsubishi is pondering a return to U.S. soil to produce vehicles locally. The plan might involve leveraging idle Nissan plants, thanks to Mitsubishi’s partnership with Nissan and Renault. Since Mitsubishi sold off their American plant in Illinois to Rivian back in 2015, this collaborative approach could eliminate the need to establish a new facility.

Strategic Alliances

CEO Takao Kato noted that returning to local production could be crucial looking forward. By tapping into Nissan’s resources, Mitsubishi aims to boost car production rates. Although specifics like which plant or which models remain under wraps, the move could enhance factory utilization while sidestepping heavy tariffs.

While Mitsubishi grapples with tariff-induced costs, the driving experience remains mostly unscathed. They offer vehicles that, though not as commonly seen as Toyotas or Hondas, still provide a comfortable ride. Compared to Toyota’s more mainstream appeal, Mitsubishi might be seen as unique. Models like the Outlander and Mirage might not lead the pack in speed or luxury, but they deliver a reliable and straightforward driving experience, keeping drivers satisfied without breaking the bank.