By John Keilman
Off-road vehicle maker Polaris could face a huge bill if President Trump places 25% tariffs on goods coming from Mexico. Chief Executive Mike Speetzen told analysts he thinks the threat is meant to reopen trade negotiations.
The Minnesota-based company has a large manufacturing operation in Monterrey, Mexico, and many products made there are sent to U.S. dealers. Trump has said he will impose levies on Mexico and Canada as soon as Saturday, but Speetzen said he expects "a tempered approach" that will spur deal-making around the pact known as the U.S.-Mexico-Canada Agreement.
"Trump understands how the economics work," Speetzen said during a call discussing Polaris's fourth-quarter results. "The automotive, the appliance industry, agriculture, power sports obviously - everything has a heavy presence in Mexico."
Speetzen added that if Trump follows through with the heavy tariffs, Polaris is better positioned than some of its rivals, which have a larger reliance on factories in Mexico. Polaris has factories in the U.S. that could take in some of the work that it moves out of the country.
In other results from the company:
-- Weak demand dealt Polaris a tough 2024, with sales down 20% year over year to $7.2 billion. It does not expect to bounce back in 2025: The company forecast that annual sales could decline again by as much as 4%.
-- The company expects adjusted earnings per share of $1.10 this year, a 65% decline from 2024 and significantly less than Wall Street predicted. Polaris stock was down nearly 8% in afternoon trading.
-- Polaris's snowmobile business continues to be stricken by paltry snowfall. The company is trimming production of the vehicles.
-- Speetzen said he sees a bright spot in growing off-road vehicle ridership, which could lead to consumers replacing aging models over the next several years.
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(END) Dow Jones Newswires
January 28, 2025 14:18 ET (19:18 GMT)
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