Are you going to purchase at 25% price hike

[kamloops67]

No chance I'll be buying anything new , I love my 2001 short box step side
Reliable and inexpensive to maintain , insurance is MUCH less expensive as well
I could replace the engine and transmission for less than what they are offering for a rebate on a new shortbox

 

[Oldengineer]

I believe that the root cause of off-shore manufacturing of vehicles and components was UAW master agreement labor costs. The Big-3 was just not competitive when paying $1/minute for hand-eye coordination (fully fringed). The solution was to assemble vehicles and make parts that were easily shipped in places that had cheap labor.

Bringing the vehicles and components back to the US with attendant high labor cost AND, significant new plant investment, has to end up in a higher cost new vehicle……..PERIOD. Today's new vehicle costs are already out of reach for a lot of Americans. SO, who will be buying these new, higher priced cars going forward? A sharp sales drop will prompt layoffs in the auto industry.

I'm skeptical of the "short term pain for long term gain" narrative.

 

[Jon651]

Who amongst us is going to purchase a new vehicle when the prices jump by 25% or more due to the new tariff fees?

and why the hell does that mean used vehicles will also go up as they have no tariff fee?

Simple economics: Used vehicle prices will increase due to increasing demand as new vehicle sales fall.

Fortunately or unfortunately, the price increases on domestic autos are based on how many foreign-made parts are in them. If the entire vehicle is built outside the country then the increase will be the max 25%, otherwise the tariffs only affect those foreign-made parts in the domestically produced vehicle. Unfortunately, US-made vehicles have roughly 40% foreign-made parts, so you can still expect a hefty increase in the final price.

For a company like GM this presents a major problem for their biggest selling vehicle, the Silverado pickup. The Silverado is built both in Canada and the US so the Canadian-built trucks will see the full effect of the tariffs. What GM will undoubtedly do is average the price between the two to spread the increase out and prevent people from insisting on buying only the US-made version. You can expect to see this with other US manufacturers with both foreign and domestic production as well.

Thank heaven I bought my truck last year before this insanity started. Like it or not, the end purchaser always pays the added cost of tariffs.

 

[LVSteve]

Short term problem for long term gain. I can wait it out.

That's the key, it's a short term problem. I predict that not one new car or component factory will be built in the next four years. The industry will wait it out.

 

[gjgalligan]

I wish. A cutting edge, American made, V-8 powered, 1932 Ford coupe cost $450 new. That'd be about 10.5K in today's money. Show me something comparable, by any maker in today's market.

Today the cars have so many improvements & "extras" like AC, power windows, ect ect ect that the 32 coupe didn't have.

 

[Jon651]

I worry if I can find parts, as my very reliable Nissan is North American made, but who knows where the parts will come from. I drove Ford vehicles before 2010 when the last one needed replacement, and the Covid car shortages presented me with a Nissan, or take the bus.

Yet, my local mechanic was getting factory-approved Ford parts only made in Mexico, Brazil, and Canada, because they were old.

This tariff thing is not going to be easy to figure out.

Unfortunately, your very reliable Nissan is North American ASSEMBLED. The vast majority of the parts are foreign-made - around 61% according to Google. My Chevy Silverado (made in Michigan) has 38%.

 

[ladder13]

Under the wire buy

The smart one had been looking for a new SUV for the past 9 months or so, but life got in the way.

Recently she narrowed it down from a half dozen to a BMW X3 and Lexus RX. She wanted a hybrid. After a few test drives, quality comparison and much research the Lexus won out. BMW offered no hybrid.
Yeah, no BMW.

The dealer had a car that just started production last week, exactly as she wanted it. Being that it's in production, no tariff which played into it somewhat, as she wasn't buying any car with anything near 25% more.

No panoramic roof, just a regular moonroof. And it's a hybrid, regenerative, not plug in.
End of April delivery.

 

[taz666]

Tariffs = flypaper.

 

[Bald1]

I believe that the root cause of off-shore manufacturing of vehicles and components was UAW master agreement labor costs. The Big-3 was just not competitive when paying $1/minute for hand-eye coordination (fully fringed). The solution was to assemble vehicles and make parts that were easily shipped in places that had cheap labor.

Bringing the vehicles and components back to the US with attendant high labor cost AND, significant new plant investment, has to end up in a higher cost new vehicle……..PERIOD. Today's new vehicle costs are already out of reach for a lot of Americans. SO, who will be buying these new, higher priced cars going forward? A sharp sales drop will prompt layoffs in the auto industry.

I'm skeptical of the "short term pain for long term gain" narrative.

It's easy to blame the unions. It's always the unions. Trico products was a financially successful company. Forensic accountants proved this. Yet the closed shop in Buffalo NY and moved all 3 plants to Mexico thanks to NAFTA. How bout we blame corporate greed ? When is enough money enough ? As for UAW workers, shouldn't they be able to afford the vehicles they make ? And let's not word things to make it seem that their salaries are $60 hr or $2400 a week. Fully fringed????? They are not. In fact new hires barely make $20 hr to start.

 

[Bald1]

A tarrif is a tax implemented without representation....

Went over well a number of years back...

YMMV

Not really. The media would love you to believe that though. Do your homework. Look at the way the US is tariffed. Is that fair ? Look at how some markets are closed all together to US exports. There's more to it than the daily headlines on the networks.

 

[PatriotX]

I wonder what effect this will have on the vehicle extended warranty market?

 

[326MOD10]

Definitely not at this moment.

But, I will see after the recession if I have any money left in my 401K.

 

[Oldengineer]

The bottom line is that the auto industry has a serious math problem. Go figure……literally. This is not going to be solved overnight. A new plant is billions and years. So much for short term pain!

PS - I spent most of my adult life in the auto industry and retired as an Engineering Senior Leader. The industry has a major hole in it.

 

[greenwellg]

So the sky is falling because we are not going to let other countries drive us out of their markets with tariffs, like they have done to us ever since the end of WW2, when we spent $40 billion on the Marshall plan to resurrect their civilizations. Many times what WW2 cost us.

Balance of trade. We buy $3.5 trillion from them. They buy 250 billion from us. Our tariffs now will equal theirs. They will take an arse whipping and they deserve it.

I ship part X to the US and pay a 25% tariff. The vehicle is built then it is marked up and sold. The total price increase is only a fraction of the final RETAIL price. To state that the RETAIL price will rise 25 percent is ludicrous and a scare tactic. The auto market is collapsing right now. Raise the price 25% and the market will collapse again.

It's going to be painful to remove trillions of borrowed money from the US economy. The alternative is financial collapse and unimaginable financial difficulties, potentially the economic destruction of the US economy and possible much worse.

In the last 4 years I have watched inflation wipe out 20% of our net worth. Should we got to 1979 when it was 18% a year?

This is our last chance to get it right. If we fail our children will suffer forever.

 

[yaktamer]

As for UAW workers, shouldn't they be able to afford the vehicles they make ?

So, should everybody who works for Boeing be able to afford a 737?

 

[yaktamer]

I wonder what effect this will have on the vehicle extended warranty market?

I'll let you know in 15 minutes, when I'm expecting the daily call about my warranty being expired or about to.

 

[Oldengineer]

So the sky is falling because we are not going to let other countries drive us out of their markets with tariffs, like they have done to us ever since the end of WW2, when we spent $40 billion on the Marshall plan to resurrect their civilizations. Many times what WW2 cost us.

Balance of trade. We buy $3.5 trillion from them. They buy 250 billion from us. Our tariffs now will equal theirs. They will take an arse whipping and they deserve it.

I ship part X to the US and pay a 25% tariff. The vehicle is built then it is marked up and sold. The total price increase is only a fraction of the final RETAIL price. To state that the RETAIL price will rise 25 percent is ludicrous and a scare tactic. The auto market is collapsing right now. Raise the price 25% and the market will collapse again.

It's going to be painful to remove trillions of borrowed money from the US economy. The alternative is financial collapse and unimaginable financial difficulties, potentially the economic destruction of the US economy and possible much worse.

In the last 4 years I have watched inflation wipe out 20% of our net worth. Should we got to 1979 when it was 18% a year?

This is our last chance to get it right. If we fail our children will suffer forever.

So the trillions in borrowed debt requires repayment, or at least improvements in the ability to make the interest payment, which is approximately 20% of the budget. The fix: cut costs, raise revenue, and no new borrowing. Yes, we're cutting costs, but what about reducing revenue with tax cuts for the rich and increasing the debt ceiling to borrow more money? I'm confused. One element is not enough. Buy gold and cryptocurrency before my dollar denominated 401K disappears?

 

[rockquarry]

This won't last forever. The obsessors who need to buy a car right now will. Others will relax.

 

[Ματθιας]

So the trillions in borrowed debt requires repayment, or at least improvements in the ability to make the interest payment, which is approximately 20% of the budget. The fix: cut costs, raise revenue, and no new borrowing. Yes, we're cutting costs, but what about reducing revenue with tax cuts for the rich and increasing the debt ceiling to borrow more money? I'm confused. One element is not enough. Buy gold and cryptocurrency before my dollar denominated 401K disappears?

There's no way $37 Trillion is going to ever be repaid. That's not counting the hundreds of Trillions in unfunded liabilities. The .gov can tax EVERYONE @ 100% and it wouldn't make much of a dent.

BTW, if the .gov can simply create money out of thin air, why are we paying taxes?

 

[Denverd0n]

Trump raised tariffs in 2017 after he took office for the first time. Learn from history. The markets took a short-term hit, and then came back like gangbusters.

Yes, there is going to be some pain in the short-term. Long-term this is a good thing for the U.S. economy. Time to stop letting the rest of the world walk all over us!