Automobile workers at the SMYRNA vehicle assembly plant in Nissan in Tennessee on June 6, 2022. The factory employs more than 7,000 people and produces a variety of vehicles, including the EV Leaf and the Rogue multiser.
Michael Wayland / CNBC
Detroit – While the 25% prices of President Donald Trump on imported vehicles remain in force despite a decline this week on other samples at the bottom of the country, analysts expect massive global implications for the automotive industry due to policies.
They expect to see a drop in vehicle sales in millions, higher vehicle and used prices and an increase in costs of more than $ 100 billion for industry, according to Wall Street research reports and car analysts.
“What we see now is a structural change, motivated by politics, which is likely to be sustainable,” Felix Stellmaszek, the world chief of Boston Consulting Group, told CNBC. “This could well be the most consecutive year for the automotive industry in history – not only because of immediate costs of costs, but because it requires fundamental change in the way and construction of the industry.”
BCG expects the prices to add $ 110 billion to $ 160 billion on an annual industry cost execution rate, which could have an impact on 20% of new American vehicle market income, increasing production costs for American and non -American manufacturers.
The Center for Automotive Research, a non-profit reflection group based in Michigan, estimates that costs for car manufacturers in the United States will increase by $ 107.7 billion. This includes $ 41.9 billion for Detroit car manufacturers General Motors,, Ford engine and Chrysler Parent Stelllantis.
The two analyzes take into account the 25% tariffs on imported vehicles implemented by Trump on April 3 as well as future direct debits from the same amount on automotive parts that should start on May 3.
Automobile actions
Car manufacturers and suppliers may be able to support some of the cost increases, but they should also transmit them to American consumers, which could in turn lower sales, according to analysts.
“We believe that the prices such as proposed will increase the cost of import and manufacturing vehicles in the United States by at least one level of a thousand low to medium to an average figure, and we believe that it will be difficult for the automotive industry to transmit this completely, in particular with the demand for consumption consumption,” said Goldman Sachs analyst, Mark Delaney, in an investor note on Thursday.
Goldman Sachs assumes that net vehicle net prices in the United States will increase by $ 2,000 to $ 4,000 during the period from six to 12 months to better reflect tariff costs.
The car manufacturers responded to rates in various ways. Manufacturers who are mainly national, such as Ford and Stellantis, have announced temporary agreements for employees’ prices, while others, such as British automaker Jaguar Land Rover, have stopped American shipments. Hyundai Motor also said that it would not increase prices for at least two months to mitigate consumer concerns.
Consumers’ feeling was even worse than scheduled in April when the level of inflation planned has reached its highest level since 1981, a survey of Michigan University showed on Friday.
Sam Abuelsamid, vice-president of information from the automotive consulting company Telemetry, expects many car manufacturers to have at least one supply to about two months of vehicles not affected by the price they can sell before you need to increase prices due to prices.
Telemetry expects higher production costs, parts and other factors lead to more than 2 million less sold vehicles in the United States and Canada, which will have training on the wider economy.
“A reduction in sales of a few million dollars will have a broad economic impact,” said Abuelsamid. “This is motivated by higher prices, not only for vehicles, but in all areas … which will limit” people’s spending power “.
The affordability of new and used vehicles has been a problem for several years. On average, COX Automotive reports that new vehicles cost $ 50,000. This figure does not include the cost of financing such a vehicle, which has increased considerably in recent years in order to combat inflation.
According to COX, car loan rates remain nearly 9.64% for a new vehicle and almost 15% for a used car or truck.
“We expect to see the decrease in reduction, then accelerated price increases as the prices have passed and the offer is tightening, resulting in price increases on all types of new vehicles,” said the chief economist of Cox Automotive, Jonathan Smoke on Monday. “In the longer term, we expect production and sales to drop, the newly used prices to increase and some models to be eliminated.”
The expected price increases vary depending on the vehicle, but COX estimates an increase of $ 6,000 at the cost of imported vehicles due to the price of 25% on vehicles not assembled in the United States, as well as an increase of $ 3,600 to vehicles assembled in the United States due to the upcoming prices of 25% on the automotive parts. These are in addition to increases from $ 300 to $ 500 due to the prices announced above on steel and aluminum.