HEMPSTED, N.Y. — Consumers are threatening to overturn recent momentum in car sales by attacking gas with car purchases, avoiding the expected price rise from the Trump administration’s new tariffs.
Major automakers, including Detroit-based General Motors and South Korean Hyundai, reported robust double-digit US sales growth in the first quarter. Japanese brands Nissan, Toyota and Honda each reported more modest profits, while Jeep makers Stellantis and Ford saw a decline.
Last week, President Donald Trump announced that he was slapping all foreign vehicles at 25% tariffs from 12:10am on Thursday. Imported automobile parts will face the same tax by May 3rd. And on Wednesday afternoon he is set to open a vast new front in the ongoing trade war. It aims to be mutual tariffs that are potentially “all countries” and aim to level the trade barriers around the world.
Trump’s eye-opening news of import taxes piled up months before his car rates unfolded, sprinting through shoppers to the dealer lot before sticker prices rose.
Nadia Pierre Tousen was shaken by Millennium Honda in Hempstead, New York on Tuesday.
“That’s a good idea,” Pierre Toussaint said to buy now. “If you go down the line it becomes more expensive.”
The White House estimates that about half of the 16 million cars sold to Americans in 2024 have been imported, with the tariffs being applied to a wide range of vehicles. And even cars assembled in the US can face some sort of tariff considering the procurement of parts around the world.
Industry experts say no single vehicle is fully US-based with parts and assembly, except for sculptures and warnings from the administration. This means that all the cars out there have been outlined so far and could be vulnerable to price increases under the new policy.
“A US-made car with all US parts is a fictional story,” Wedbush Securities analyst Dan Ives told NBC News this week.
Cox Automotive predicts the end of the “Trump Bump” of car buying this spring, following the November election. “Concerns among consumers about tariffs and the future of the economy — new economic uncertainty — are hampering the market,” a Cox analyst wrote last week.
I’m a little worried that I’ll come tomorrow and don’t know what will happen.
Ravel Mezia, Millennium Honda General Manager in Hempstead, New York
Goldman Sachs estimates Trump’s 25% car rate could increase the cost of new foreign-made cars up to $15,000. A car made in the US with foreign parts could be hiked for up to $8,000 in price, the bank said.
Some automakers have already shown they are ready to raise the prices of cars they sell to dealers on Thursday.
In a memo sent last week, Hyundai President and CEO Randy Parker warned dealers that “current vehicle pricing is not guaranteed and could be subject to changes to wholesale units after April 2, 2025.”
“We understand that you may be worried about what this means to Hyundai and your dealer,” Parker said in a note obtained by NBC News. “We are assessing the situation quickly and communicate the changes needed to our pricing strategy.”
Auto dealers are often led by what the automaker charges, but they can price the vehicle in a lot, regardless of what they like.
Millennium Honda general manager Ravel Mejia said Tuesday morning he had not seen a notice from Honda due to price increases.
“But I expect everything that goes after the second round will be a bit higher when tariffs begin,” he said. Mejia currently expects to sell anything he has within a month and aims to pay more for his next freight.
“It’s a bit uncertain to come tomorrow and not know what will happen,” he said, adding that there are not many answers to customers who come across questions about the impact of tariffs.
If future car buyers acknowledge that the cost of a new car is high and raise the price of a cheaper used car, the used car price could also be a hit.
Floyd Wallace said he would have been waiting for another month or so, but due to customs duties, he decided to buy a second-hand 2019 Honda pilot at a dealership at Mejia now.
“After looking at it and looking at the prices, I seemed to be around the budget I set for myself,” Wallace said Tuesday. “So I’m going to do that and I won’t wait,” he said.
“I want to come in and leave before the storm actually falls,” he added.
Not everyone is worried. Michael Chen walked into the showroom and tried to make a deal for his leased Honda Civic and Honda prologue.
“Prices have not been raised in the car right now,” Chen said.