Tariffs Disrupting Product Planning Across the Board
Manufacturers such as Ford, Kia, and Nissan are being forced to re-evaluate their product strategies. Many of their most affordable models—such as the Ford Maverick, Kia K4, and Nissan Versa—are produced in Mexico and are expected to be directly affected by new trade tariffs.
Ford recently revealed that the financial impact of the tariffs will cut $1.5 billion from its projected earnings before interest and taxes. The automaker openly admitted that providing accurate full-year guidance is nearly impossible under such volatile conditions.
In response, companies are making tough calls. For instance, Nissan is ramping up production in its massive Tennessee plant, but that doesn’t include its least expensive models built south of the border. Automakers are stuck in a dilemma: meet the demand for affordable cars while grappling with rising costs and limited manufacturing flexibility.
Entry-Level Models Face Extinction
One of the most pressing concerns is the viability of entry-level models. These cars operate on thin profit margins, leaving little room to absorb the additional costs imposed by tariffs. According to Ed Kim, President and Chief Analyst at AutoPacific, automakers had already pivoted away from the affordable car segment during the pandemic in favor of high-margin models.
That shift helped them weather the storm of supply chain disruptions, but it also caused new car prices to skyrocket—putting pressure on consumers. As of 2025, many manufacturers have yet to return to the affordable segment, even though demand is clearly still strong.
For example, Nissan’s Versa sedan experienced a 156% increase in year-over-year sales in Q1 2025. The automaker has slashed prices across its Rogue and Pathfinder lineups as well, aiming to maintain sales momentum. According to Nissan, U.S. dealerships currently have sufficient inventory that remains unaffected by the new tariffs—at least through June 2.
Meanwhile, Kia is riding the success of its K4 sedan, one of the few remaining new cars priced under $22,000. Despite being manufactured in Mexico, Kia has not compromised on features. The brand prides itself on delivering high-quality, feature-rich vehicles at accessible prices—a philosophy that is paying off as K4 sales continue to grow month over month.
A Shifting Market: The Used Car Ripple Effect
Should entry-level new cars disappear, many buyers will inevitably turn to the used car market. This shift could lead to increased demand—and higher prices—across the pre-owned vehicle segment. Kim warns that both new and used car shoppers may find affordable options increasingly scarce.
The impact could be most severe for models built outside the U.S., which is often the case for inexpensive cars like the Chevrolet Trax and Nissan Sentra. With their cost-effective overseas production lines under fire, automakers may opt to discontinue these vehicles entirely.
Automakers Are Adapting, But the Road Ahead Is Unclear
In the face of this uncertainty, automakers are pivoting not only in manufacturing and pricing but also in marketing. According to Allyson Witherspoon, Chief Marketing Officer at Nissan U.S., consumers are now more interested than ever in where their cars are made. This presents an opportunity for companies with U.S.-based manufacturing operations to capitalize on patriotic purchasing sentiments.
Nissan has been manufacturing vehicles in the U.S. since 1983, and Witherspoon emphasizes that this legacy matters now more than ever. Even before the tariffs were formally introduced, Nissan anticipated rising costs and began restructuring its vehicle pricing and packaging across all trim levels. This adaptability, honed during the pandemic, may give the company a critical edge.
Interestingly, the announcement of tariffs led to a significant spike in online traffic for Nissan, indicating that consumers are actively seeking information—and possibly inventory—before the full effects of the tariffs hit the market.
Final Thoughts: Buyers Should Act Fast—If They Can
While the long-term implications of the new tariffs are still unfolding, one thing is clear: buyers looking for affordable new cars may not have much time left. With entry-level models under threat and prices on the rise, today’s deals could become tomorrow’s missed opportunities.
At the same time, automakers are doing what they can to stay competitive—cutting prices where possible, refining their messaging, and banking on U.S. production facilities to weather the storm.
Still, if you’re in the market for a low-cost new vehicle, now might be the best time to act before these models vanish or become significantly more expensive.
