The Trump tariff wars have brought the relative cost of vehicle production in different countries into sharp focus. Now a new study by Oliver Wyman, a global management consulting business, has highlighted the impact of labour on car production costs.  

“Getting Under the Hood of Automotive Labor Cost Per Vehicle” is a new study that looks at 250 vehicle plants globally to see how much each is paying for labour costs per vehicle. 

The study finds that Germany has the highest labour cost per car at an average of $3,307, followed by the UK on $2,333. Italy follows next on $2,067 and then France on $1,569. Surprisingly, considering the tariff rhetoric, the USA is relatively competitive compared to the big European producers on $1,341 per car. 

Of the other major producers, Japan is on $768, South Korea $789 and China $597. The cheapest production locations were Mexico on $305, Romania on $273 and Morocco on just $106. 

The figures clearly show why many car makers are moving production to less expensive locations, such as Eastern Europe and Mexico. Renault has made very significant investments in Morocco in recent years and makes both Renault and Dacia vehicles there. Stellantis and the Volkswagen Group also have production sites in the North African country.