Jerry Chen, holding a license plate and a set of keys, entered the new Toyota Highlander his family decided to buy at the start of automatic tariffs by U.S. President Donald Trump.
Chen and his wife have two children, who bought the car from a Toyota dealership in Bloomsfield, a northern suburb of Detroit.
“I’m very excited,” Chen said in front of the driver’s seat.
CBC News traveled to Motel City in Michigan due to its massive automotive industry presence to see how consumers and dealers respond to tariffs. Detroit is also opposite Windsor, Ontario, and Canada’s major automotive industry players are home to giant plants such as Ford and Stelantis.
Chen admitted that the acquisition of the Highlanders who bought the family was earlier than originally planned.
“We’re a little worried about waiting for six months or a year and don’t know what will happen,” he said.
“I’ve actually been looking for about a month so I think the car itself is great, I’m going to buy a new car, and as all the taxes continue, I think now may be a good time to get a new car before the price goes up.”
He is not alone. Compared with the same period last year Cox Automobile and TD Economics Report.
The figures were announced in late March that his administration will impose a 25% tariff on imported vehicles that do not belong to the United Nations-Mexico Agreement (CUSMA) starting April 2 and a 25% tariff on certain auto parts starting May 3.
Car sales are “very good
Bob Page, owner of Toyota dealerships, who bought cars in the Chen family, said sales this year have increased by about 20% compared to the same period in previous years.
“Overall, our hash is very good. I’ve heard extra car purchases nationwide. Moving, people who want to do this for the next two or three months, we’re trying to do it now.”
Page also owns a Honda dealership about 16 kilometers from Toyota’s business.
Bloomsfield Honda, one of Page’s top salespeople, said in Sean Fathi that the business is good.
“As of mid-March tariffs … we have seen a huge increase in new car sales and many buyers,” Fathi said.
“So, the buyers who are now in the market are coming now from now on; buyers who are in the market this summer are coming now. People are worried about them [further tariffs] Will happen. ”
Fathi joked to CBC: “I’m going on vacation… Now I’m here, I kind of don’t want to go because it’s very busy, so I kind of don’t want to go.”
But Fathi knows that the sales boom may stop.
“I hope this doesn’t happen because, you know, why people should pay more just because they’re just because someone wants to impose tariffs on vehicles. It’s not fair.”
Cars affected by tariffs could increase by thousands of dollars
according to Anderson Economic GroupThe tariffs are expected to increase the price of U.S. vehicles by $2500 to $5,000, and add $20,000 to certain imported models, which cost Americans an estimated $30 billion in the first year.
Those CBC’s general sentiment talks about Trump’s grand plan to return as much production as possible to the United States, which people don’t object, but at the same time, they recognize that change does not happen overnight – at the same time, it could hurt the economy.
“I think there’s a reason he did this, and hopefully it all works out because, that’s not really happening. He said he’s going to do it, and then he doesn’t.”
“It’s annoying, but there’s a 90-day pause, and hopefully it helps,” he added. “I just don’t know what’s going on, tell you the truth. I mean, I vote for Trump, but I don’t know what’s going on.”
George Glassman, the owner of another dealer, also did not complain about the current sales growth, but was worried about the future.
“Worry, what does anxiety about tariffs mean or might mean, that would be a higher price. So if someone could buy a car or rent a car today, they could be sure to know how much the cost is, not on the road.”
Glassman is the second-generation owner of Family Car Park in the suburbs of Detroit, selling new and used cars. It comes with many foreign brands including Hyundai, Kia, Subaru, Genesis and Mitsubishi.
“Currently, customers buy vehicles in a considerable number of pallets, which are cars on the ground,” Glassman said.
In the second week of April, Glassman estimated that he had 60 days of duty-free vehicles on his lot.
“It will take several years”
according to Kelly Blue Bookthe average car brand product supply is 91 days, and the last 70 days. Automotive data providers also said national sales pace in March was more than 17% faster than in February.
Although tariffs are only on new cars, supply and demand determine the supply of used cars will decrease and therefore increase these vehicles as consumers compete to find affordable vehicles.
Watch | How the automotive industry copes with the trend of higher prices in Detroit:
Despite the uncertainty, Glassman is optimistic that tariff-related negotiations will produce results that he can live with.
“I don’t think anyone will necessarily imagine the scope of what’s going on right now. Having said that, I’m still optimistic that there will be negotiations going on. I think there will be taxes and a certain amount of additional costs in terms of the cost of the vehicle?”
Like everyone else, Glassman saw the big picture of Trump but realized how long it took to come true.
“I don’t think anyone would have questions about the idea, the goal is to produce more plants in the United States, but that’s not what we’re seeing in the near term. It’s going to take years. ”
Analysts say the three major automakers could suffer.
Jato Dynamics analyst Felipe Munoz criticized the numbers and argued Detroit’s three major automakers – General Motors, Ford and Stratlandis – are more exposed Compared with many foreign brands, tariffs.
“I’m going to say that it’s not easy for them, especially because some of the products they bring from these two countries (Canada and Mexico) are mainly quantity products, and it’s hard to move production of these cars in a few months. That won’t happen. At the same time, I think, they’re going to suffer,” Munoz told CBC News.
He said U.S. automakers have been able to produce cheaper cars in Canada and Mexico and sell them at competitive prices in the United States, “their competitive position over the years is now under threat.”
Munoz also said that while the new trade policy is designed to promote domestic automakers, they have a smaller global presence than some of their Japanese and European competitors and will therefore be affected.
At present, it is not clear whether the automotive industry will impose tariffs, but Trump did hint at a tariff.
April 14, He told reporters In the Oval Office, “I won’t change my mind, but I’m flexible” creates further uncertainty in an industry that has been whimsical by the president.
Until then, there seems to be speculation that it will continue to drive sales.
