Auto Dealerships NAICS 441110

May 7, 2025 - Ford Raises Prices and Halts Guidance Due to Tariffs

• Ford Motor Company became the first US carmaker to raise prices on new vehicles due to tariffs. A notice from Ford that was obtained by Reuters informed dealers that prices on several models including the Mustang Mach-E, Bronco, and Maverick have increased by $2,000 as of early May 2025. Ford had already halted its financial guidance for the entire year due to uncertainty surrounding the auto tariffs and said it expects to lose $2.5 billion because of the levies. The company might offset $1 billion of those costs by shipping vehicles from Mexico directly to Canada as a means to avoid the tariffs. General Motors also said it expects to lose $5 billion because of tariffs, and the wider auto industry has forecasted price increases of as much as 25%. S&P Global downgraded its yearly car sales guidance of 1.3 million units sold by about 700,000.
• The effects of tariffs on the automotive industry are beginning to be felt and the results will not be uniformly reflected across the industry, according to a survey by J.D. Power. The mix of foreign auto parts in a new vehicle are different across brands. Dealers will either have to absorb the costs or adjust their inventory away from foreign autos with tighter margins to brands with a strong US-based manufacturing footprint. J.D. Power expects to see price increases becoming readily apparent by the summer, with the average new car price by the end of 2025 estimated to increase by an average of 5%, or about $2,300. It also predicts new automotive retail sales will fall about 8%, or about 1.1 million units. J.D. Power expects the price volatility to stabilize by Q4 to a “new normal” with all the tariff-based sales adjustments.

• The Trump administration slapped 25% tariffs on all imported automobiles on April 2, claiming the levies will spur auto factory building in the US. The tariffs will apply to all imported passenger cars and light trucks. Certain auto parts will also be subjected to the levies such as engines, electrical components, and powertrain parts. This is in addition to reciprocal tariffs Trump also levied against specific countries that are key US partners in auto manufacturing. According to Cox Automotive, the tariffs will increase the price of imported passenger vehicles by an average of $6,000. In 2023, the US imported about $120 billion worth of automotive products from Mexico and Canada - roughly half of all US vehicle and parts imports. The move will likely spur retaliatory tariffs from other countries against the US, potentially driving auto prices even higher.
• US new light vehicle seasonally adjusted annualized sales (SAAR) rose 2.1% year over year in February 2025, totaling 16 million units, according to NADA Market Beat. The results were a dip from December 2024, which had the highest monthly SAAR in almost four years. Wards Auto estimates that auto sales in February will be about 1 million vehicles. Total fleet inventory of new light vehicles in the US, however, plummeted 16.3% year over year to 210,000 units. The drop in inventory is a result of the supply problems from on-again, off-again tariff threats against Mexico and Canada, key automobile and auto parts US trade partners. “American made” cars are loaded with Canadian and Mexican parts, and NADA Market Beat predicts that if Trump’s threatened tariffs go into effect, it will raise the average price of new vehicles.