Page 19 - BusinessWest May 26, 2025

Meanwhile, some manufacturers are price-protecting until the
end of May and June in some cases, which provides even more
incentive to buy now.
“If someone is in the market for a new car or coming up to be in
the market, this is the perfect time to purchase,” said Cosenzi, add-
ing that, while no one has a crystal ball and can say what the land-
scape will look like in six months or even six weeks, it is unlikely
that it will look as good as it does now for consumers.
So, for now, it is still business as usual, and more of it. The over-
riding question is for how long. And no one really knows.
There are too many variables, especially when it comes to the
impact on the thousands of parts that go into a vehicle, how many
times these parts cross boundaries, and, thus, how many times they
may be subject to a tariff.
“When you back it up and look into an industry like ours with a
truly global supply chain, it is nearly impossible right now to deter-
mine all of the impacts,” Sullivan said. “A car might be assembled
in Alabama, but there are parts from all over the world. And some
of those things start as a small part, get put into an assembly, they
cross the country border, get into the next stage of development
... some of these assemblies might cross a country border seven
times. So, if the tariffs become stackable, it would be devastating to
consumers.”
Which explains the surge in new-car and used-car buying in
March and April, but also the increases in leasing and service con-
tracts as consumers digest the news and look to beat some worst-
case scenarios with regard to both pricing and availability.
“With the tariffs, inventories will start to tighten, and consum-
ers want to get ahead of that,” Cosenzi said. “They don’t want to be
in a situation like the one they were in with COVID, where if they
wanted a car, they really had to sacrifice what they were looking for
in terms of color or trim.”
While this is certainly a good time to buy, and many consumers
are, Sullivan said Balise has been reluctant to encourage consum-
ers to buy now because of the high levels of uncertainty and the
pace at which the landscape is changing.
“Most industry analysts say the average car price could go up by
between $4,000 and $15,000 if all this comes to pass,” he noted.
“There will certainly be some cost increase, but I don’t think it will
be as severe as people fear at this point. But there is so much that
is not known.”
Dealers are already seeing swings in consumer activity, he went
on, adding that, while April was a very strong month for Balise, by
late April, as the headlines started to reflect a softening of tone on
tariffs, the pace of sales eased accordingly.
He drew some parallels to the early months of COVID, when
news of shortages of paper towels and toilet paper sent consumers
into stores for what amounted to panic buying.
It’s not quite like that with auto sales, but there was a similar
knee-jerk reaction, Sullivan said, adding that the frenzy, if it can be
called that, is already abating.
Bottom Line
Returning to his analogy with iPhones, Sullivan said it provides
some appropriate context for any conjecture on what might happen
next in his industry.
“You go to bed one night assuming that your iPhone is going
to cost $2,000, and the next morning, it’s still going to be $800 to
$900 for the top-end models that it was the day before,” he said,
adding that the same is likely — not definite, but likely — to be the
case with all those mid-sized SUVs on the market today.
But no one really knows.
So dealers have to be ready, willing, and able to adjust on the fly
and absorb whatever comes at them, Cosenzi said, adding that, over
the past several years, they’ve had plenty of practice at pivoting.
“This is a really challenging industry anyway, so dealers have to
be resilient to be able to be in this business,” she explained. “We
know how to pivot quickly and adjust to whatever the customers’
needs and demands are, and that’s what we’re doing in these unset-
tled times.”
That’s what’s needed when there are so many moving parts, liter-
ally and figuratively. BW
“Most industry
analysts say the
average car price
could go up by
between $4,000
and $15,000 if
all this comes to
pass. There will
certainly be some
cost increase, but
I don’t think it will
be as severe as
people fear at this
point. But there
is so much that is
not known.”
GET YOUR CAR
Road-Trip Ready!
Enjoy a cleaner car,
all summer long!
FlashCarWashes.com
STARTING AT JUST
$2499
/mo.
Business W est << AUTO SALES >>
MAY 26, 2025
19