[Source/Observer Network, Pan Yushi; Editor/Gao Shen] Following the Trump administration's decision in early April to impose a 25% tariff on all imported cars, car consumers across the United States and beyond are becoming increasingly anxious and panicking. According to a Reuters report on April 5th, automakers are offering promotional discounts to nervous customers to cope with the short-term surge in demand and boost recent sales figures.

However, at the same time, automakers are warning the U.S. government: If the tariff persists long-term, they will have no choice but to significantly increase prices.

American Auto Dealers Wall Street Journal

Brief Joy

For automakers and dealers, due to the arrival of tariffs, some consumers who were originally cautious and观望 are now rushing to buy cars, which is one of the few highlights in the automotive market recently and has increased March sales.

According to The Wall Street Journal, Ford Motor Company and Stellantis Group stated that they would extend employee discounts to more users and models. Among them, Stellantis's plan covers 2024 models, including popular models such as Jeep and Dodge Ram. Stellantis said that the employee discount for more users will run from April 4th to April 30th.

Nissan also stated this week that it would lower the prices of the 2025 Rogue and Pathfinder to "enhance the affordability of customers facing car-buying challenges." Hyundai Motor also promised that it would maintain the current prices of its existing models until June 2nd. General Motors, on the other hand, said that as of April 4th, the company had not changed its April discount program.

Paul Zimmermann of the auto dealer group Matick said that the sales of its General Motors and Toyota dealers began to increase at the end of March; inquiries, foot traffic, and sales volumes have all risen over the past two weeks; the entire group saw a year-over-year growth of about 15% in the first quarter.

Long-term Concerns

Although the short-term impact of the tariff has boosted sales, automakers are still privately warning the U.S. government: If the tariff continues to exist, they will be forced to significantly raise prices.

Ted Cruz, chairman of the U.S. Senate Commerce Committee, mentioned in his podcast this week that he had communicated with one of the three major Detroit automakers. The latter warned that as existing vehicle inventory is depleted, American car prices will begin to rise sharply around June. Cruz did not reveal the name of the automaker but said that the automaker stated that the tariff would lead to an average price increase of $4,500 (approximately RMB 33,000) for vehicles, and it was not just foreign brands that would be affected.

According to Edmunds data, as of early April, the average inventory period for automakers at dealerships was 48 days. Ford brand averaged 64 days, above the industry average, comparable to Jeep of Stellantis; Chrysler's inventory period was 15 days, while Ram was 70 days, Nissan was 42 days, and Hyundai was 60 days.

Additionally, according to The Times, Jaguar Land Rover will suspend shipping British-made cars to the United States for a month due to tariff impacts. This has further exacerbated concerns about the British automotive industry. Data from the industry body SMMT shows that the United States is the second largest import region for British-made cars after the EU, accounting for nearly 20%. Jaguar Land Rover's annual sales reached 400,000 units, with one-fourth of the sales attributed to exports to the United States.

Nissan also stated that after the new tariff is imposed, it will not accept new orders for the Infiniti QX50 and QX55 manufactured in Mexico for the U.S. market. Although Nissan stated that the QX50 and QX55 are prepared for production and export to markets such as Mexico, Panama, the Middle East, and Canada, according to data from the Mexican National Institute of Statistics, these two models are only exported to the United States from Mexico.

Due to model iteration delays and a lack of hybrid models, Nissan has been struggling in the U.S. market recently. Furthermore, as Nissan built its factory in Mexico as early as 1966, it is the Japanese automaker that exports the most cars from Mexico to the U.S., making it particularly vulnerable to the new tariff since it exports the most cars from Mexico to the U.S. among Japanese automakers.

Nissan's predicament has led to three downward revisions of profit forecasts for the 2024 fiscal year and its debt was downgraded to "junk" status. Meanwhile, according to a report by the Nikkei on April 5th, under pressure from the tariff, Nissan is considering relocating some domestically produced cars exported to the U.S. to production in the U.S. As early as last summer, Nissan had planned to reduce production at its Fukuoka plant in western Japan and transfer part of the production of the Rogue to the U.S.

This article is an exclusive contribution by Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7490129350268879396/

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