Investment advisor sees 'pure chaos' in auto industry from tariffs

[BeyondGeography]

After speaking to auto industry experts from the U.S., Europe, and Asia, Wedbush Securities concluded President Trump’s 25% tariff on all cars and parts made outside the U.S. “would send the auto industry into pure chaos.” The move will raise the average price of cars between $5,000 on the low end and $10,000-$15,000 on the high end, the analyst tells investors in a research note.

Wedbush believes every auto maker in the world will have to raise prices selling into the U.S. while the supply chain logistics of the tariff announcement is “hard to even put our arms around at this moment.” A U.S. car with all U.S. parts made in the U.S. “is a fictional tale not even possible today,” according to the firm. Wedbush thinks it would take three years to move 10% of the auto supply chain to the U.S. and cost hundreds of billions “with much complexity and disruption.” It adds, “The concept of this auto tariff in our view would be a back breaker and Armageddon for the auto industry globally and throws the supply chain into pure panic mode.”

Wedbush believes the winner from these tariffs “is no one.” Even Tesla (TSLA) will; be hit and will be forced to raise prices, the analyst predicts. The news will continue to put “major pressure” on General Motors (GM) and other auto makers and suppliers until more clarity is learned from the White House, Wedbush says.

https://www.tipranks.com/news/the-fly/wedbush-sees-pure-chaos-in-auto-industry-from-tariffs

[Bernardo de La Paz]

1. Do not expect clarity from the clown car White House. 1) They are incompetent. 2) They like disruption. . . . nt

[BeyondGeography]

3. They're inflating prices in a market that was already on the verge of crashing

I watched this whole video but the first five minutes spells it out; MSRP’s up 42 percent since 2019, car insurance rates skyrocketing, tapped out consumers, inventory piling up on car lots, new vehicle deliveries being turned away, etc.

?si=yFq29Ve_KhhsgHiy

[sop]

2. 'Donald Trump's 25 Percent Tariffs Could Kill Off The Cheap Car'

"The full impact of the tariffs remains to be seen, but experts are warning that the fallout could hit cheaper cars much more severely, reports Bloomberg. Finding a cheap car is already a tough task, with average prices in America edging ever closer to $50,000. Picking a bargain could now get much harder with sub-$30,000 cars likely to feel the brunt of Trump's tariffs for several reasons:"

"The tariffs could disproportionately hit cheaper cars because many of the most affordable models sold here simply aren't made here. The least expensive offerings from General Motors, Ford, Kia and Hyundai are assembled outside the U.S. at plants in Canada and Mexico, which will fall foul to the new fees."

"The cost of these budget-friendly models made outside the U.S. could be set to rise by as much as $5,855 on average, Bloomberg adds, which could mean the difference between buying a new car and not for some shoppers. It's for this reason that Stellantis chairman John Elkann warned that the 'affordability of our products' and the current 'uncertainty' in the U.S. could hit demand across the country."

https://www.jalopnik.com/1821074/trump-25-percent-auto-tariffs-could-kill-cheap-cars/

[Old Crank]

6. Here is Europe there are a fair number of cars at or under the Euro 25K price point.

This year will see 6 all electric cars for that.
There are more gas versions also at that level.
But in the US you have to buy a monster SUV so car average costs are much higher.

[dutch777]

4. What every business and investor loves, uncertainty and market chaos. Go tube the economy Trump! Brilliant!

[Initech]

5. The plan is to take America's standing in the world down so Putin can continue his world domination quest.

[Old Crank]

7. Have to see if it is whole cars

or just finished cars or the tariff on every part that is made elsewhere.

If finished cars only perhaps makers can do what Ford did with their little Transit to avoid teh chicken tax.
A van made in Europe was hit with a large tariff, to offset the banning of US chlorine dipped chicken in the EU area.
But passenger vans were exempt from the tariff. FOrd installed a minimalist second row of seats and cheap carpet. Passenger van, no tariff. When the vehicles hit the US the extra seats and carpet were tossed and they were sold as work vans.

So perhaps the cheaper vehicles that are made in Mexico or Canada could come in and then the company installs a set of US made wheels and tires......

This is just stupidity on his part since he negotiated the deal. Who will trust the US again after this?

[Blue Ozarks]

8. Auto makers backed trump

No sympathy

[durablend]

11. Yea, it's what you (they) voted for

So what's the problem?

[IronLionZion]

9. Parts cross borders several times before final assembly

there are economies of scale for why plants specialize in certain parts instead of building everything needed in one plant.

[Autumn]

10. I don't care. Anybody who backed Trump and gets hurt I'm gonna enjoy their pain.