DETROIT – The prices of new and used vehicles in the United States are expected to increase this year in the middle of the 25% of automotive prices of President Donald Trump, according to a new analysis of industry experts at COX Automotive.
The automotive and consulting data company expects the samples to add thousands of dollars to the costs of new – imported and domestic cars and trucks – while increasing the prices of more than expected used cars. These price increases are expected despite a potential slowdown in sales compared to previous expectations, said the firm.
New expectations are involved while the automotive industry meets the 25% Trump prices on imported vehicles that came into force on Thursday, and before 25% additional direct debits that should be implemented by May 3.
“We expect to see the decrease in reduction, then accelerated price increases as the prices have passed and the offer is tightening, resulting in price increases on all types of new vehicles,” said the chief economist of Cox Automotive, Jonathan Smoke on Monday. “In the longer term, we plan that production sales drop, the newly used prices to increase and some models to be eliminated.”
Smoke has described the current automotive market as a “roller coaster walk”, while demand reflected and circulates according to the country’s regulatory environment as well as the economic uncertainty that has an impact on consumer purchases.
The car manufacturers responded to rates in various ways. Manufacturers who are mainly domestic, as Ford engine and Chrysler Parent StelllantisTemporary agreements for employee prices announced, while others, such as British automaker Jaguar Land Rover, have stopped American expeditions. Hyundai Motor also said that it would not increase prices for at least two months to mitigate consumer concerns.
With regard to new vehicles, COX estimates an increase of $ 6,000 at the cost of imported vehicles due to the price of 25% on vehicles not assembled in the United States, as well as an increase of $ 3,600 to vehicles assembled in the United States due to prices of 25% to come on car parts. These are in addition to increases from $ 300 to $ 500 due to the prices announced above on steel and aluminum.
Car manufacturers and suppliers may be able to support some of the cost increases, but they should also transmit them to American consumers, according to Wall Street analysts.
Although prices do not have directly on second -hand car sales, changes in new vehicles prices, production and demand affect the second -hand cars market, this is how the majority of Americans buy a vehicle.
COX Automotive expects the wholesale prices of used vehicles on its used vehicle value index of Manheim – which follows the prices of used vehicles sold to its large American auctions – now increases between 2.1% and 2.8% by the end of this year. This compared to a previous estimate of a relatively stable 1.4%.
The average registration price of a used vehicle was around $ 25,000 in mid-March, according to Cox, // Droit? // Before a significant increase in sales at the end of the month before the increase in potential prices due to prices.
Consumers’ retail prices traditionally follow changes in wholesale prices, but they have not dropped as quickly as wholesale prices in recent years.
“Expect to see a certain price volatility during the year,” said Jeremy Robb, principal director of economic information and industry, during the virtual event. He noted that the week after confirmation of the car rates, could end up being the peak of sales of this year.
The change in pricing of used vehicles should remain much less dramatic than the unprecedented increases that the automotive industry saw during the coronavirus pandemic, according to Cox. These increases were carried out by a robust demand from consumers, low interest rates and historically low availability in new vehicles due to parts of parts and distribution.
Ryan Rohrman, CEO of Rohrman Automotive Group, based in Indiana, described the current second -hand vehicle market for dealers as volatile, and even said that it was similar to the disturbances during the global health crisis.
“We see our number of cars wholesalely increase, but the problem is that we are not able to get as many cars on the side of the used car that we sell retail, then that pushes us to auction.
While car manufacturers should reduce production and some have decided to stop imports to the United States in the tariffs, actions should not be as radical as in the early 2020s due to other market conditions.
“This will reduce the demand for vehicles, and it is this request component which, I think, really prevents the cover from what we will probably see with the appreciation of the price of the used vehicle,” said Smoke.
