Double whammy for automakers: Tariffs hiking costs, economic uncertainty reducing new car buyers

The Wall Street Journal: 1 million new car buyers vanish as gas prices soar, inflation and interest rates remain high 

LANSING, Michigan — One million U.S. car buyers have been priced out of the new car market as car companies face hefty tariff costs and other pressure points, according to a new report from The Wall Street Journal.

Drivers have fewer affordable, lower-priced car options as most brands focus on higher-end vehicles and most automakers are paying billions of dollars on costs each year to cover tariffs, the newspaper reported.

The article also noted that Americans bought around 17 million new vehicles per year before 2020. This year, industry analysts expect sales of around 16 million.

“The economy is delivering a difficult one-two punch to Michigan automakers: Fewer new car buyers and higher costs,” said John Sellek, a spokesman for the Michigan Smart Trade Alliance. “It’s time for Congress to take action to help alleviate pressure on the auto industry, which is a vital part of Michigan’s economy, by taking up measures that would set smart and consistent trade policies.”

“It feels like automakers are constantly playing Whack-a-Mole as they continue to face rising costs and an uncertain economic outlook,” said Mark Fisk, a spokesman for MISTA. “Michigan’s economy relies on a healthy auto industry, which means we need an end to the current on-and-off tariff policies that make it difficult for Detroit automakers to compete and continues to drive up car prices for Michigan families.”