For car dealers—tariffs add new variables to pricing, inventory planning

Car dealers are starting to weigh in heavily on the tariffs—with growing concerns ranging from pricing increases to inventory disruptions down the road.

For context: 25% tariffs on imports from Canada and Mexico are in effect. For China, the levies on imports are 20%. However—there are temporary exemptions. Tariffs on auto-related goods and goods complaint with the United States-Mexico-Canada Agreement (USMCA) trade agreement are paused until April.

The problem: Since being announced in February—tariff policy has undergone numerous revisions, making it difficult for automakers, suppliers, and car dealers to plan for the impact. 

What they’re saying: David Kelleher, a Stellantis dealer, told Fox Business (via Motor1) that the tariffs are “pretty radical.” 

• He explained that one of his customers who placed an order for a Ram truck (Stellantis owns Chrysler, Dodge, Jeep, and Ram) decided to cancel his order due to anticipated price increases. 

• "Nobody’s gonna buy the truck because it just had a $20,000 price increase," Kelleher said.

Between the lines: It’s not exactly clear how much prices could increase or when they could start rising. CDG News has seen estimates from Kelley Blue Book, Bank of America, The Anderson Economic Group and countless others ranging from $2,000 – $12,000. 

• But whatever the price increases may be, Steve Gates, owner of Toyota South in Kentucky, told WKYT, “We can’t work with a 25% tariff.”

• “This is a very small margin business. The manufacturers make a small percentage. Dealers make a small percentage,” he explained. “I think I slept about three weeks ago, maybe… We can survive this, and we can make it worthwhile for our guests; we just need to know what we’re working for, around, with.”

Yes, but until dealers get more clarity on what the short and long-term futures will likely be—some are taking a wait-and-see approach. 

• D.C.-area car dealer Jack Fitzgerald, owner of  Fitzgerald Auto Mall, told WTOP, “There are always unintended consequences, no matter what you do.”

• One of Fitzgerald’s more pressing concerns is the layoffs hitting the federal workforce in the region. 

Why it matters: It’s clear—tariffs add layers of uncertainty for dealers, automakers, and consumers alike. Beyond potential price increases, they complicate supply chain logistics, influence inventory allocations, and could alter sourcing strategies for manufacturers.

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