Nissan is urgently cutting costs on Mexico-made models like the Sentra and Kicks to offset 25% US tariffs that are making those vehicles difficult to sell. CEO Ivan Espinosa told Bloomberg Television that the duties are squeezing affordability in a market where new-car prices hover near record highs. The company is working aggressively to make its entry-level lineup more competitive, even as it shifts more production to the US.
Models built in Mexico accounted for over a third of Nissan's US sales last year, including the now-discontinued Versa—the last 2025 model sold for under $20,000. The tariffs add roughly $2,500 to $3,000 per vehicle on the Kicks and Sentra, eroding their value proposition. While Nissan has moved some output to reduce tariff exposure, it keeps these low-margin cars in Mexico to exploit lower labor costs.
Espinosa downplayed the impact of the yen's slide to 40-year lows, reaffirming a strategy to build more cars in the US. Nissan ended last year producing about 60% of its US-sold vehicles domestically, up from 45% at the start of 2025. The CEO also highlighted potential to deepen Nissan's partnership with China's Dongfeng, noting that Chinese automakers are setting future industry standards. What to watch next: Whether Nissan can sustain profitability on its Mexico-made models without raising prices, and how the US-Mexico-Canada trade talks resolve.
Key Takeaways
- Nissan is absorbing $2,500–$3,000 per vehicle in tariffs on Mexico-made models to keep entry-level cars affordable.
- Over a third of Nissan's US sales came from Mexican production last year, including the cheapest new car in America.
- The company is rapidly shifting production to the US, now making 60% of its US-sold vehicles locally.
- CEO Espinosa sees Chinese automakers as setting future industry standards, hinting at deeper collaboration with Dongfeng.
Insights & Analysis
- Nissan's cost-cutting on tariff-hit models signals a strategic bet that budget-conscious buyers will drive near-term demand, even as the company invests in US production for long-term resilience.
- The dual focus on US localization and Chinese partnerships suggests Nissan is hedging against both trade policy uncertainty and the technological disruption led by Chinese EV makers.