Canadian car dealers know auto import tariffs will be bad for business, but recent data from Cox Automotive also shows the majority of new car dealers in the U.S. are worried that the proposed taxes will hurt their own profitability.
The information was pulled from a Q3 2018 Cox Automotive Dealer Sentiment Index (CADSI). The data indicates that 56 per cent of U.S. franchised dealers anticipate that any auto import tax would have a negative impact on their business. Of this group, 66 per cent believe the cost will trickle down to the consumer, who will face heftier prices on all new cars, “and not just imports,” as the market adjusts.
“Dealers continue to report strong market conditions in the third quarter, with few material changes in key performance indicators from the spring, when we reported record-high sentiment,” said Cox Automotive Chief Economist Jonathan Smoke. “While they are positive on today’s business, the new looming threat is the negative impact of proposed tariffs on imported autos and parts. And, for the first time, dealers indicate that limited inventory is the No. 1 obstacle holding back business.”
However, not all dealers believe the impact of auto import tariffs will negatively affect their business. Although minimal, 11 per cent of dealers in the U.S. see the taxes as having a positive affect on their business, while 38 per cent foresee the impact as being negative.
Fifty-one percent of dealers believe tariffs would have no impact at all.
To view the report, click here.
