Auto dealers are feeling the pressure from President Trump’s tariffs on imported vehicles and parts, leading to a significant decrease in vehicle supply. Pine Belt Subaru in New Jersey, for instance, typically receives 100 to 120 cars monthly but only received 18 this month, raising concerns as they approach the busy selling season from May to August. Dan Ariel, director of Pine Belt Auto Group, emphasized the necessity of inventory, stating that customer selection for specific cars or colors may become increasingly difficult.
Following the announcement of a 25% tariff on imported vehicles, consumer demand surged, pushing buyers to act rapidly due to anticipated inventory shortages. Additional tariffs on auto parts, implemented on May 3, further exacerbated costs for manufacturers, who are also facing pressure to adjust production strategies. As a result, dealers reported having only enough new cars for about 60 days, down from last year’s average of 80 to 85 days.
Major automakers, like General Motors and Ford, have adjusted their financial projections due to the impact of tariffs, citing potential losses of up to $5 billion and $2.5 billion, respectively. There’s uncertainty regarding whether manufacturers will raise prices in response to increased import costs. If they do, dealers may have to pass those costs onto consumers, potentially raising vehicle prices by as much as $12,000.
Despite this pressure, some automakers, including Stellantis and Hyundai, are holding off on price increases, offering promotions to sustain sales through June. Industry experts warn that unless supply catches up with demand, the market may soon see significant price hikes due to tariff effects and ongoing inventory challenges.
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