President Donald Trump’s administration is laser-focused on trade with China, particularly by placing tariffs on hundreds of billions of dollars of Chinese-made goods. So while everyone’s looking there, cars are starting to be imported into the United States from India instead.
India is filling a void as a center for manufacturing cars, reports Automotive News, which says Mercedes-Benz will now import the GLC compact crossover from its plant in western India as soon as next month.
Mercedes isn’t the first automaker to lean on India as a passageway to bring cars into the U.S., as Ford last year began importing the EcoSport crossover from India, notes Automotive News. General Motors hasn’t indicated it would export vehicles to the U.S. from India, the news outlet says, but it “has converted its Indian automaking capacity to an export base.”
There’s a key reason for all this activity, and it has to do with the frosty trade relations between the U.S. and China. Per Automotive News:
The sudden appearance of vehicles from India comes as U.S.-Chinese trade relations roil over punitive tariffs on vehicles and auto parts. It also occurs as the Indian domestic market struggles and Indian factories are faced with overcapacity.
It all presents an opportunity for India to maintain a bigger presence in the global industry. With China ensnared by a tit-for-tat with Trump, India could prevail as a powerhouse—if the stars align and automakers take a cue from Ford and Mercedes to accelerate the growth of the industry in the country.
Now sure, the entire auto industry isn’t making a move to India, but the move here by Ford and Mercedes underscores just how silly Trump’s posture toward China is. Trump thinks he can flex at China, and then—voila—a trade war is won. It’s not that easy. Trump has proposed a (bad) 25 percent import tax on all cars, and that may or may not screw sales of most vehicles. But what if Trump only focuses on China, as he seems to be doing right now?
In that case, just move production to another country. In this case, India. But there’s no reason it couldn’t be Vietnam or Cambodia or Brazil or Namibia or a host of other countries with access to (relatively) cheap labor. A trade war like this isn’t easy to win simply because you’re fighting it not on one front, i.e., U.S. versus China, but on 205 fronts, because that’s how many countries there are. It’s insanity.
For Mercedes, the move makes sense right now because of the GLC’s demand, a spokesperson told Automotive News, and presumably also because that’s how global trade works. The GLC is the automaker’s top-selling vehicle right now.
“The SUV GLC is in great demand worldwide,” Mercedes spokesperson Rob Moran said. “Therefore, Mercedes-Benz uses the capacities of its global production network on four continents. This also includes the Mercedes-Benz plant in Pune.” (Mercedes didn’t immediately respond to a request for any additional comment.)
Moran said Mercedes plans to start delivering the GLC to the U.S. starting in October.