Tariffs hit the automotive industry and consequently the car rental industry: Higher prices and market pressure
The automotive industry in the USA, and globally, is entering a turbulent period. New tariffs imposed by Washington are already having a strong impact on manufacturers, distributors and end consumers. According to data from Cox Automotive, in the first seven months of 2025 alone, the cost of tariffs reached more than 25 billion dollars, what does average mean £2,500 of additional costs per vehicle.
Global supply chains under pressure
The automotive industry is one of the most globalised – almost half of the vehicles sold in the US are produced outside the country. This means that any changes in customs duties have an immediate impact on business models and profitability.
- From April 2025, the initial rate of 25% has been reduced to 10–15% for the United Kingdom, EU, Japan and South Korea.
- However, vehicles from Canada and Mexico still pay the full 25%, which completely overturned the previously favourable "build in Mexico" model.
- Even domestic production is not immune – steel, aluminium, copper and battery materials are becoming more expensive.
What is the cost for manufacturers?
Data from quarterly reports reveal immense pressure:
- General Motors$1.1 billion in additional costs in Q2, with a further impact of $4-5 billion expected by the end of the year.
- Ford: 800 million in Q2, with a projection of almost 3 billion by the end of 2025.
- Toyota, Nissan, Hyundai European manufacturers are recording similar trends.
The most affected segments are compact and subcompact SUVs, where the tariff adds on average £2,800–£3,000 per unit.
Sixt reports record revenue despite a volatile market
While car manufacturers feel the burden of tariffs, the story in the car rental sector seems a little different. German Sixt, one of Europe's biggest rent-a-car giants, has announced record results for the second quarter: revenue of almost €1.1 billion, which is an increase of 7.4% compared to last year.
The largest jump was recorded in Europe outside Germany (+13.71%), while in North America revenue grew by 4.81%, to 334.6 million euros. Sixt also increased the average fleet size to 197,800 vehicles, with a high share of premium models (54%). Net profit jumped to 78.4 million euros, from last year's 48.3 million.
These results show that, despite a volatile market and more expensive vehicles, demand for short-term rentals remains strong. For the tourism industry, this means that the car rental segment will continue to be a key pillar of the passenger experience, but also that the premium segment will gain an increasing share of the offering.
Conclusion: Expensive cars, more expensive journey
Tariffs are already changing the global automotive map – and thus indirectly affecting the tourism sector as well. Rent-a-car companies, fleet customers, and agencies offering fly&drive packages will have to factor in rising vehicle prices and reduced availability of certain models. However, Sixt's results show that the demand for mobility is not subsiding – on the contrary, travellers are willing to pay more for flexibility and quality. In the long term, the market is moving towards the premium segment, while the average consumer will find it increasingly difficult to obtain a new vehicle.
