Automakers are offering deals to anxious customers to capitalize on the rush of buying, and they are warning lawmakers that they will be forced to raise prices sharply if the tariffs remain in place for a long time.
Stellantis, the parent company of Chrysler, announced it will expand its employee discount program to the broader market on some new models, following a similar move by Ford Motor Co., which Reuters first reported on Wednesday.
Some automakers have responded to the hefty tariffs on Mexican and Canadian imports by shutting down operations there, leading to layoffs at U.S. factories that supply them through an interconnected network of North American production, others have added jobs to the United States to increase domestic production.
A temporary ray of optimism for dealers and automakers is the significant increase in car purchases by shoppers wary of the tariffs. March sales have surged as a result of this uncertainty, and automakers are now seeking to gain market share through a variety of incentives in the coming months.
General Motors and Toyota dealership sales rebounded at the end of March, recording an annual increase of about 15% in the first quarter. This was due to a rush to buy new vehicles, fearing higher prices after the announcement of import tariffs.
This week, Nissan announced it would reduce prices for the 2025 Rogue and 2025 Pathfinder “to increase affordability for customers facing a challenging vehicle buying market.”
Hyundai Motor Co. has committed to maintaining its advertised prices on its current models until June 2, allowing sufficient time to assess the situation before making any moves to increase prices or halt production.
General Motors announced that it has not changed its incentive offers for April and is studying the situation and monitoring the impact of the new tariffs.
While the short-term effects of the tariffs have boosted sales, U.S. automakers have warned lawmakers that they will be forced to raise prices significantly if the tariffs remain in place.
Senate Commerce Committee Chairman Ted Cruz said he spoke with one of the Detroit Three automakers, which warned of significant price increases for US vehicles starting around June as existing inventories run out.
Cruz said the major US automaker told him, “The impact of these tariffs will be on prices, with the average price of all their vehicles increasing by $4,500.” He added, “It’s not just foreign vehicle prices that will increase.”
A Stellantis spokesperson said in a statement, “This week, we launched a strong, ongoing incentive and marketing package for April, including an exciting and competitive enhancement that gives our customers the ‘American Choice’ between the Employee Price or current cash incentives.”
Stellantis’ program covers 2024 model year vehicles, including popular Jeep, Ram, and Dodge models, and the company said the program will run through the end of April.
While the increase in vehicle sales is a temporary boon for dealers and automakers, inventories will not last for months, and the import tariffs will impact prices and sales.
Several press and media reports have been published about the effects of the new customs duties. They have generally expressed concern about a significant increase in car prices, not only for imported vehicles but also for locally manufactured American vehicles.
The reactions are gradually escalating, foreshadowing a global crisis due to the US customs ban, initiated by Trump.
