In today’s episode of Inside Automotive, Lauren Fix, automotive expert and the founder of Car Coach Reports, joins Jim Fitzpatrick to discuss the current state of consumer sentiment as the automotive industry braces for the impact of President Trump’s 25% tariffs on imported vehicles and parts.
Fix discusses the confusion surrounding the 25% tariffs on imported vehicles and parts, noting that much of the information circulating in mainstream media is inaccurate. Consumers are understandably concerned, with many fearing that all vehicle prices will increase dramatically. She urges dealers to reassure their customers, emphasizing that prices on vehicles already in stock or pre-ordered won’t rise if the contracts are in place.
The tariffs will only affect cars with a higher percentage of foreign-made components, such as luxury brands like Ferrari, where prices may increase by around 10%. In contrast, vehicles manufactured in the U.S. or under the USMCA agreement will not see drastic price changes.
The misinformation in the media has triggered a barrage of panic-buying behavior. At the moment, there is a significant supply of vehicles, over three million, sitting on dealership lots. This is more than enough to meet customer demand without the impact of the tariffs. Fix compares the situation to the overreaction during ice storms, where people rush to buy necessities due to fear of being “stuck.”
It’s critical to alleviate consumer fears surrounding tariffs and to spread accuratr information. She advises dealers to use social media and local platforms such as radio and television to communicate with their local community, helping to dispel misinformation and minimize panic.
She also warns against dealerships raising prices artificially, as it can alienate customers. Fix recalls a local dealer who gained a loyal customer base by keeping prices steady during the pandemic and the chip shortage, reinforcing the importance of trust and honesty in customer relationships.
She also shares her optimistic view of the long-term benefits of the tariffs, believing that if successful, the strategy could bring manufacturing back to the U.S., boosting jobs and domestic production. She points out that some factories in the United States are currently operating at only 45-60% capacity. Ramping up production on U.S. soil would result in more jobs, a stronger economy, increased national security.
Drawing from historical examples, Fix underscores the economic revival of towns like West Point, Georgia, after the introduction of local manufacturing plants, and emphasizes that the goal is to re-establish American-made products, benefiting both workers and the economy.
“I would try to take down the fear factor. There's a lot of fear being put in people's minds, and it's not good for our business.” – Lauren Fix
