Many U.S. auto dealers saw a mini buying boom at the end of March in anticipation of a 25% tariff on foreign made cars.
Now, car dealers are trying to figure out what this is going to look like for customers who walk into the showroom, said Rob Smith, President Of Montgomery County-based Fitzgerald Auto Mall.
News4 spoke to him by phone.
“Got about 15 different brands that we’ve got to keep track of,” Smith said. “Some of them have said they might just absorb it and reduce and not have any incentives, like rebates or special APR. Others have said, ‘We’re going to add a line to the sticker on the car. The MSRP will have another charge labeled the tariff charge.’”
The news has the industry spinning.
The Big Three Detroit automakers and others rely on an integrated supply chain that may see a vehicle criss cross borders with Mexico and Canada multiple times before its final assembly. It’s not clear if that vehicle would be subject to a tariff each time, which would increase costs substantially.
“Toyota has a very large presence in Kentucky, and Subaru has a large presence in Indiana and Hyundai has a big presence in Alabama, and so many of their vehicles are assembled here in the United States,” Smith said. “But that doesn’t mean all the components are made here, so many of the components themselves are sourced from overseas.”
The price of used cars are likely to jump, too as supplies of lightly used vehicles dwindle. Some say consumers looking for a deal may already be too late.
Even those who already own a car will be affected.
On May 3, a tariff on foreign car parts: including engines, transmissions and electrical components is scheduled to go into effect.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
