Reason Behind Low Demand for American-Made Automobiles in Europe
The 'Chicken Tax', a 25% tariff imposed by U.S. President Lyndon Johnson in 1964, has played a significant role in shaping the automotive landscape, particularly in Europe. This tariff was initially applied to several European goods, including light trucks, as part of a trade dispute known as the 'Chicken War'.
In recent years, General Motors, with brands like Chevrolet and Cadillac, has been the American automobile brand selling the most vehicles in Europe, excluding BMW, Mercedes, and Volvo. However, the majority of these vehicles were not light trucks, a segment that has been largely dominated by Asian brands in the European sedan market.
Despite General Motors' success, only around 205,000 vehicles produced in the U.S. were imported into the European Union, the UK, and EFTA countries in 2019. Most of these were produced by BMW, Mercedes, and Volvo, with only about 12,000 units of vehicles produced by American brands making their way across the Atlantic. These were primarily lifestyle and luxury models such as the Jeep Wrangler and Ford Mustang.
The Ford F-150 truck, popular in the U.S., is rarely seen on European roads due to specialty importers and limited demand. American trucks, such as the Chevrolet Silverado, Ram Pickup, GMC Sierra, and off-road derivatives, are considered exotic in Europe due to their rarity.
One of the main reasons for this is fuel consumption. American cars are less fuel-efficient compared to European cars and are considered expensive by European consumers. Moreover, American trucks are too large and unwieldy for European roads, particularly medieval inner cities.
In an attempt to shake up the automotive industry, President Trump has considered abandoning the 'Chicken Tax'. However, it is improbable that U.S. manufacturers will abandon their focus on the domestic pickup and truck market. Over time, pickups and trucks have competed with and eventually replaced sedans and other more traditional passenger car models on the American market, a trend partially influenced by the 'Chicken Tax'.
It is also improbable that pickups and trucks will become big sellers in Europe. European cars are popular in the U.S., especially luxury models from German and Italian manufacturers, but there are very few European cars on European roads.
The 'Chicken Tax' has had a profound impact on the U.S. auto industry, decoupling its model policy from the rest of the world and leading to a focus on models tailored to domestic tastes. American manufacturers tend to focus on the North American market, where they can sell trucks with a high profit margin. The legacy of the 'Chicken Tax' continues to shape the automotive landscape, both in the U.S. and in Europe.
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