The Trump administration is investigating whether or not automotive and automotive part imports are a threat to national security. If the government determines they are, imported models and parts could be subject to a new 25% tariff.
This would drastically increase the costs of all automobiles including domestically produced models such as the Toyota Camry. Back in June, Toyota cautioned the changes could result in a price increase of approximately $1,800. Other models would be even worse off as reports have suggested the price of the Buick Envision could skyrocket by $8,000 due to increased tariffs on China.
Those numbers aren’t exactly pocket change and they will drastically impact consumers and automakers alike. We’ve already heard countless warnings from a number of companies and now we’re getting a glimpse at how consumers would respond.
Wards Auto reports Kelley Blue Book’s Rebecca Lindland used the CAR Management Briefing Seminars to reveal the results of a new survey conducted by their parent company Cox Automotive. As the executive analyst explained, the survey showed 30% of consumers would switch to another vehicle to avoid high costs associated with the tariffs.
While the tariffs are designed to boost sales of domestic brands, only 12% percent of respondents said they would switch from imported model to one made in the United States. Another 7% said they wouldn’t switch at all and would simply pay the higher costs.
More troubling, perhaps, is the statistic which shows 18% of consumers would stop looking for a new car and would instead shop for a certified used model. They wouldn’t be the only consumers leaving the new car market as 15% of respondents said they wouldn’t purchase a new vehicle until the tariffs were over.
Assuming these responses are representative of actual buying behavior, it means a large swatch of consumers would no longer be in the market for a new vehicle. This would likely cause further harm to the economy as slow sales could result in layoffs. The sudden spike in used car demand would also push prices higher, hurting consumers who were never in the market for a new car in the first place.
Read more: carscoops.com