Auto dealers face uncertainty amid tariff shifts
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Veteran San Antonio auto group executive says the industry's new reality is the great unknown.
Economic instability has made it tough for the auto dealership industry to predict consumer demand with much certainty.
The White House's ever-shifting tariff policies have compounded the problem, making it tough even for established operators to know when and how to pivot.
'When tariffs were first announced, I had anticipated providing a list to the public of vehicles affected and those that were not. However, it didn't take long to find out that information would not be useful to anyone,' April Ancira, vice president and managing partner for the Ancira Auto Group, told me in an exclusive interview.
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Within days after President Donald Trump signed an executive order in early February to impose tariffs on imports from Canada, Mexico and China, the National Automobile Dealers Association warned of the potential impact.
'New-car affordability is a persistent challenge for consumers and dealers alike,' NADA President and CEO Mike Stanton said. 'Tariffs on U.S. trading partners, who are vital to our automotive supply chains, would make it harder for average Americans to afford the new vehicles of their choice. It is our hope that we can address many of our nation's challenges without the use of tariffs that would so significantly impact the U.S. auto industry, jobs and consumers.'
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Others in the industry, including the American International Automobile Dealers Association, have raised red flags in more recent days.
As of April 3, U.S. auto manufacturers were set to face a 25% tariff on imported passenger vehicles, light trucks and auto parts. Ancira said some automakers, including General Motors, had indicated they would eat the added costs as long as they could.
Since then, the Trump Administration has announced a 90-day pause on the rollout of those tariffs.
'The manufacturers are trying to wade through this but the uncertainty is what is making it difficult,' Ancira said, noting that auto dealers face a similar plight. 'We don't really have a new reality to settle into.'
Amid the uncertainties, some dealers are rethinking their inventory strategies, stocking up on new and used vehicles to meet heightened demand ahead of expected price increases. It's a bit of a gamble, though. If the tariffs are dropped, some dealers may have too much inventory on hand and will have to absorb higher interest fees.
'The most important thing for us right now is inventory management, which is no easy feat considering we are not 100% sure about what everyone's tariff exposure will be and for how long,' Ancira said.
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