• Hyundai USA told dealers that wholesale vehicle prices are subject to change if the threatened U.S. tariffs take effect.
The U.S. administration threatened 25 percent tariffs on imported vehicles are set to take effect April 3rd, now fast approaching.
While much remains uncertain regarding the tariffs – what parts will be taxed, and even whether we’ll see yet another last-minute pullback – the industry is preparing for the worst.
The message sent by Hyundai to its American dealers says a lot about the prevailing climate. The Korean automaker warned dealers that it is evaluating its pricing strategy in light of the looming tariffs.
Hyundai and Genesis North America CEO Randy Parker informed dealers that “current vehicle prices are not guaranteed and may change for units wholesaled after April 2.”
Many if not most industry analysts predict a rise in prices, and soon. Some manufacturers have stocked up on parts in U.S. warehouses to last for two or three months, but many industry-watchers believe the added costs brought on by the tariffs could be passed on to consumers sooner than that.
Analysts also estimate the automotive industry could come to a standstill within a month, if the 25-percent tariffs are maintained.
Price increases on vehicles both imported… and domestic
The Cox Automotive firm estimates that 25-percent tariffs will increase the average price of a vehicle made in the U.S. by $3,000 USD, and that of one assembled in Canada or Mexico by $6,000 USD.
What’s more, the increase in costs will spread. A source preferring to remain anonymous told Auto123 that the cost increases caused by the tariffs will be passed on across a manufacturer's entire product range.
Parker also told dealers a basic fact that has been heard all over the place in the automotive sector in recent weeks and months: “Tariffs are not easy to apply.”
It’s worth keeping in mind as well that Hyundai is "fortunate" in that it doesn’t import vehicles from Canada and Mexico into the U.S., where it already has committed big investments, with more to come. The automaker recently announced $21 billion USD in funds to increase production, but also to improve activities related to parts, logistics, and steel, by increasing local manufacturing of parts and strengthening supply chains.
