*

Volkswagen warns tariffs would hit US consumers, auto

industry

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Volkswagen says it is making $10 bln-plus investments in

US

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BMW says it exports more vehicles from US than it imports

there

(Adds VDA, BMW comments, context from paragraph 7)

By Victoria Waldersee and Christina Amann

BERLIN, Jan 21 (Reuters) - Volkswagen on

Tuesday warned against the "harmful economic impact" of tariffs

that U.S. President Donald Trump is proposing on imports from

Mexico, where Europe's top carmaker operates a major factory.

The comments by the German autos giant, already grappling

with high costs and cheap Chinese competition at home, reflect

major uncertainty following Trump's threat to possibly impose

duties of 25% on goods from Mexico.

While a firm decision has not been made, Trump said such

tariffs could become effective from Feb. 1.

"The Volkswagen Group is concerned about the harmful

economic impact that proposed tariffs by the U.S. administration

will have on American consumers and the international automotive

industry," a Volkswagen spokesperson said in an emailed

statement to Reuters.

"We value collaboration and open dialogue. The Volkswagen

Group looks forward to continuing its longstanding and

constructive partnership with the U.S. administration," the

spokesperson added.

Volkswagen shares were down 0.8%, as European rivals also

declined on the prospect of tariffs.

Volkswagen's Puebla auto factory is Mexico's largest and one

of the biggest in the Volkswagen Group, making nearly 350,000

cars in 2023, including the Jetta, Tiguan and Taos - all for

U.S. export.

Stifel analysts have reckoned that some 65% of the cars that

Volkswagen sells in the United States would no longer be

competitive if duties were added to Mexican imports.

In an effort to showcase its commitment to U.S. sites,

Volkswagen said it was making total investments of more than $10

billion in the country, roughly split between its Chattanooga

plant and a joint venture with Rivian.

"In the discussion with the new U.S. president, it is also

clear that economic strength is the best response to the latest

challenges," Hildegard Mueller, who leads the German car

sector's lobby group VDA, said on Tuesday.

Volkswagen has been in close contact with the Trump

administration over tariffs, according to two people familiar

with the matter.

Last week, BMW CEO Oliver Zipse was in South

Carolina, where the German automaker has a plant, and received

an award from the state's Republican governor for its

contribution to the economy.

"BMW assembles more vehicles in the U.S. than we sell in the

U.S. and exports more vehicles from the U.S. than we import into

the U.S.," it said, adding in 2023 it sold more than 396,000

vehicles there.