There is no doubt the tariffs that President Trump said he would impose on imported cars, trucks and auto parts next week will raise prices by thousands of dollars for consumers.
What is not clear is how soon those increases will kick in, how high they will go and which models will be affected the most.
The tariffs — 25 percent on imported vehicles and automotive parts — are supposed to take effect next Thursday. But many car dealers said they were putting aside the question of price increases for now to focus on ending March with a sales flourish in the month’s final weekend.
“I’m not really thinking about what to do about prices yet,” said Adam Silverleib, owner of a Honda store and a Volkswagen showroom in the suburbs south of Boston. “I’m trying to close out the month and move as many cars as I can.”
Mr. Silverleib also pointed out that Mr. Trump had announced tariffs before only to delay them just before they were to take effect. “We’ll see if anything transpires in the next 96 hours,” he said on Thursday.
Auto analysts estimate that the tariffs will add $4,000 or more to the prices of many new vehicles that are assembled outside the United States. For some high-end models, such as fully loaded pickup trucks, prices could rise $10,000 or more.
But the full impact on retail prices could take some time to become clear.
One variable is the administration’s decision to exclude from the tariffs the value of components made in the United States that are used in cars assembled abroad. That could be significant for some cars and trucks that are made in Canada or Mexico with engines, transmissions or other major components from places like Michigan and Ohio.
General Motors makes its Chevrolet Blazer in Mexico with American engines. Conversely, Ford Motor makes pickup trucks in U.S. plants with engines made in Windsor, Ontario. Under the executive order that Mr. Trump signed on Wednesday, the value of the G.M. engine has to be deducted before the tariff on Mexican-made Blazers is calculated. And Ford is supposed to pay a 25 percent tariff for every engine it brings in from Ontario.
“It all depends on where the vehicles come from, how many parts are imported and how long it takes the government figure out how many parts are going to be tariffed,” said Sam Fiorani, a vice president at AutoForecast Solutions, a research firm.
Automakers typically have enough vehicles in dealer stocks to last 60 or more days. Any imported vehicles currently in storage lots won’t be subject to the tariffs.
In the last several weeks, Ford has stockpiled Windsor-made engines in U.S. warehouses to build up a supply that were subjected to tariffs.
Most automakers are still trying to sort out exactly how to factor the tariffs into the prices they charge dealers. Some could increase prices only on imported models, or those that have many imported parts. Another option would be to raise prices moderately across all models, including those made domestically with domestic parts.
G.M., Ford and other automakers declined on Thursday to discuss their plans.
The competitive landscape could play a role in what course automakers choose. The Ford Escape, for example, is made in Louisville, Ky., and is not subject to tariffs. It competes with models that will be tariffed — such as the Toyota RAV4, which is assembled in Canada, and the Chevrolet Equinox, which is made in Mexico and Canada.
If Toyota and G.M. raise prices on the RAV4 and Equinox to cover the impact of the tariffs, they could lose customers to Ford.
Other automakers face different challenges. Volkswagen, for example, is set to introduce this spring a new version of its Tiguan sport utility vehicle, which is assembled in Mexico. Higher prices could dampen demand for the vehicle, leaving Volkswagen to reconsider pricing and manufacturing plans it developed over the past year.
Over time, the tariffs could have broader affects. In some cases, consumers could encounter shortages of certain vehicles. Mr. Fiorani said he would not be surprised if automakers reduced or even eliminated sales of some entry-level cars that generated modest profits for manufacturers and dealers.
Affordable models, like the Nissan Sentra, are assembled in Mexico, where workers make a lot less than their counterparts in the Midwest. Those low labor costs help make it possible for automakers to sell those cars in the United States for a profit.
“In most cases, the manufacturers of these models will be in positions where they will no longer be viable products,” Mr. Fiorani said.
The post Trump’s Auto Tariffs Will Raise Car Prices, but Details Are Murky appeared first on New York Times.
