Despite the fact that used vehicles make up three of four automotive sales in the United States, dealers would still love to push newer models on their customers. However, due to recent tariffs that have been put in place, auto sales are taking a significant hit.
According to Forbes, since tariffs are hitting auto dealers so hard, they are being forced to push buyers to consider used options instead.
A great deal of the steel produced in the world is used by the automotive industry, and global production of steel reached over 1,600 million tons in 2016. The tariffs made it 25% more expensive to buy foreign steel in hopes that it would boost business for American steel producers.
Across the U.S., car dealers are expecting much higher prices and lower sales thanks to President Donald Trump’s 25% tariff on all imported vehicles. A new survey by Cox Automotive found these dealers could still earn a profit, however, as long as they rely more on their used vehicle inventory. The survey of 1,164 car dealers took place between January 28 and February 8, right after the longest federal government shutdown in history ended. President Trump will have until May to decide whether or not to levy the vehicle tariffs.
Auto manufacturers and dealers alike are paying close attention and are preparing for either scenario. Approximately 11% of dealers who participated in the survey stated that the tariffs would make the auto market stronger — last fall that number was 24%.
Sadly, the National Automobile Dealers Association projects that the tariffs would cut 366,900 jobs.
“We see the threat of tariffs potentially creating a pull-ahead affect in the near term,” said Jonathan Smoke, chief economist at Cox Automotive.
In addition to looking to used vehicles in order to save some money, here are some interesting statistics about how consumers are shopping for cars in 2019:
- Car shoppers spend 59% of their time online researching.
- When researching online, 46% of vehicle shoppers utilize multiple devices.
- Whether online, in-person, privately, or at a dealership, nearly 40 million used cars exchange hands each year.
- Third-party sites are the most used sites for vehicle shopping, used by 78% of consumers.
- Among automotive Internet shoppers, 22% use a social media site as a source while shopping for a vehicle, up from 16% in 2015.
- 87% of Americans dislike something about car shopping at dealerships and 61% feel they’re taken advantage of while there.
- For car dealers, the biggest marketing priority by far is increasing lead volume and conversions.