Just recently, we were talking about how BMW remained quite tight lipped about the whole Trump tariff issue and how the Bavarians have been typically diplomatic about the whole thing. And while that may work for the big German company, dealers can’t be so quiet and cool about everything. In a recent report published this week, dealers across the nation declared themselves worried about what these new tariffs would mean for their sales, when it comes to all German brands.
Speaking to Automotive News, Marc Cohen, the vice president of Priority 1 Automotive Group said “It’ll have one of the most negative effects on his presidency and anything good he’s done. It’s definitely got legs under it now, and it’ll be tragic.” He was joined by Frank Ursomarso, a BMW, Jaguar and Volvo dealer in Delaware, and chairman of Union Park Automotive Group who said “it’s a simple rule of economics — the higher the price, the lower the volume. If you raise the cost of the car to me, then you’re aggravating an already seriously difficult profit situation. I don’t think dealers can absorb much more.”
The tariff wouldn’t affect only the cars imported in the US but it would also affect the price of car parts brought into the US for manufacturing certain models as well. The biggest plant BMW has in the world right now is located in Spartanburg, South Carolina, specialized in making only SUVs and being responsible for about 450,000 units a year. BMW imports a number of components to make their cars there, from engines to certain electronics which are made in Europe and shipped over. The new tariffs would raise their prices by 25 percent, leading to a serious price hike overall.
Signs are definitely not looking good for the future but it still remains to be seen what Trump will decide regarding all this ordeal as no definitive decision was made yet. Chances are we’ll see the market shrinking in the near future if the tariffs get approved. “You’re already going to see prices going up incrementally as a result of the steel and aluminum tariffs in the auto sector,” said Cody Lusk, president of the American International Automobile Dealers Association.