Lower thirds:

00:02 Report by Kerstin Schweizer
00:42 Tom Maoli, Celebrity Motor Car Company
01:14 Jürgen Mindel, Managing Director, German Association of the Automotive Industry
01:44 Franziska Palmas, Analyst, Capital Economics
02:20 Tom Maoli, Celebrity Motor Car Company
03:09 Tom Maoli, Celebrity Motor Car Company

Script:

German cars are number one in the US when it comes to luxury.
Many of them are manufactured in Europe or other countries and imported.
Donald Trump wants to put a stop to that.
Will tariffs spell the end of a German success story?

Text
This car dealer in New Jersey doesn't need many words to explain the success of German cars.

O-Ton: Tom Maoli, Celebrity Motor Car Company
"Well listen, our sales pitch for German cars is that they are the best cars on the road."

BMW is the best-selling brand in the American luxury segment and sales were up again last year. But then came the tariffs. It is already having an impact on business.

O-Ton: Tom Maoli, Celebrity Motor Car Company
"Last year was a much more robust year. This year we are down a little bit in sales. But I think the consumer right now is very worried. They are trying to figure out where prices are going with these tariffs."

Alarm bells are ringing for German car manufacturers. BMW, Mercedes, Volkswagen, Audi: profits have plummeted dramatically across the board in the second quarter. Not only because of the tariffs, but also because of them. Even though the tariffs have now been reduced from almost 30% to 15%, the situation remains difficult, according to a spokesperson from the German Association of the Automotive Industry.

O-Ton: Jürgen Mindel, Managing Director, German Association of the Automotive Industry.
"A 15% tariff on every exported vehicle will result in billions of dollars in additional costs for us when exporting vehicles to the United States."

The entire industry is geared toward exports.

Grafik 1
Three out of four cars manufactured in Germany are exported abroad.

Grafik 2
Most of these are in European Union countries. However, outside Europe, the US is the most important market. And one with growth potential. In contrast to Europe.
  
O-Ton: Franziska Palmas, Analyst, Capital Economics
The European car market has just been stagnant for now a long time. Sales have been very weak since 2018. And the prospects are quite bad because the population in Europe is shrinking.

The sale of luxury cars is particularly lucrative. This is another reason why the US is a very important market for German manufacturers.

So far, the tariffs have not made their full impact here. The cars currently available at US dealerships were imported into the country before the import duties were imposed. Nevertheless, BMWs at Tom Maoli’s dealership have already become more expensive.

O-Ton: Tom Maoli, Celebrity Motor Car Company
 
"We edged our prices based upon manufacturing increases. Right now the manufacturing is eating the cost increase. And that’s because they have inventory that’s already built. Once they’ve burned through that I suspect that they are ultimately going to start raising prices. And I think you might see a 10% increase across the board on all new vehicles."

Another 10% mark-up. That could put off many consumers.

Vox pops, männlich
"I probably would not buy one if it becomes too expensive."

"It is a great car, but it is a little pricy. I don’t know if I need to spend that."

At the car dealership, however, the mood remains positive. Tom Maoli believes that everything will settle down by next year. Until then, the trend will continue toward used cars.

O-Ton: Tom Maoli, Celebrity Motor Car Company

"What we are doing is stocking up on used cars because if the price of the new car goes up and the payment starts going up, consumers are going to start flocking to used cars. That’s what they do historically."  

People will always drive. And whether new or used — it doesn't matter to Tom Maoli’s business. German car manufacturers, however, will find it more difficult to adapt to the new market conditions.