President Donald Trump dashed the hopes of Larry Cloninger, the Salisbury owner of Toyota and Ford dealerships in North Carolina and South Carolina. He had hoped the president was just bluffing when he threatened last month to slap 25% tariffs on imported vehicles and some parts.
“I thought he was just threatening to try to get everybody to come to the table,” the 72-year-old owner of Cloninger Automotive Group said in an interview Thursday. “Because of these tariffs, we’re probably going to have some inflation because prices will go up and corporate America will start making less money and they’re going to lay off people.”
Gloomy scenarios from Trump’s sweeping tariffs are clobbering stocks and ricocheting across the airwaves, the halls of governments and workplaces around the globe. Amid the uncertainty, Cloninger said he’s telling his sales staff: “Don’t worry about something you can’t control. We have to do a better job with the people that will visit our business.”
The tariffs on U.S. auto imports took effect today, while an equivalent tariff will hit certain auto parts May 3, according to Trump’s plan.
Like dealers nationwide, Cloninger said he believes people rushing to buy vehicles before the start of tariffs gave his dealerships in Salisbury, Hickory, Morganton and Florence, South Carolina, a lift in the final days of March. He said he couldn’t predict how much prices may rise due to tariffs; however, he ventured that used car prices may jump more than prices for new models.
Due to tariffs, U.S. consumers may spend an additional $30 billion for vehicles in the next year, as Anderson Economic Group estimated earlier this week. Higher prices for vehicles may range from $2,500 for “the lowest-tariffed American cars” to as much as $20,000 for some imported models, it said.
“If you are in the market for a new car and you find one you like, my advice is to buy it right away,” AEG CEO Patrick Anderson said. “If you have a used car you rely upon, my advice is to make sure it is well maintained as you are likely to use it for a while longer than you had earlier planned.”
Cloninger said he’s hoping Trump may budge on the auto tariffs. “There’s going to be a lot of people who are going to wait and want to see what’s going to happen because of all this,” he said. “Right now, it’s just a guessing game.”
Cloninger Automotive belongs to the North Carolina Automobile Dealers Association. The Raleigh-based trade group declined to comment on the tariffs and referred Business North Carolina to the group’s national counterpart: the National Automobile Dealers Association.
In a statement last week, the Tyson, Virginia-based group said the tariffs on imported vehicles and some parts “could put the purchase of a new car out of reach for an increasing number of American consumers.”
Investors concerned about the likely falloff of vehicle sales punished the stocks of the nation’s publicly traded dealership groups, including Charlotte-based Sonic Automotive. Its shares tumbled more than 6%, comparable to declines by Autonation, Lithia Motors, Group 1 Automotive and Asbury Automotive Group.
Sonic operates more than 100 dealerships, selling 25 brands of new and used cars and trucks in 18 states. It didn’t respond to a request for comment about tariffs.
In its annual securities filing in February, the company listed tariffs as a potential risk to profits, explaining that its “business is dependent on global economies and supply chains that could be adversely affected by natural and man-made disasters.”
“A significant portion of our new vehicle business involves the sale of vehicles, parts or vehicles composed of parts that are manufactured outside the U.S.,” the filing said. As a result, import tariffs and other restrictions “may affect our operations and our ability to purchase imported vehicles and/or parts at reasonable prices, which may negatively affect affordability to consumers of certain new vehicles and reduce demand for certain vehicle makes and models.”
