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Cars and car parts are on the long list of goods that Donald Trump hit with tariffs this week.
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One dealer said he was bringing in extra vehicles and parts to get ahead of the duties.
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Customers bought cars ahead of the tariffs to secure cheaper prices, the dealer said.
This as-told-to essay is based on a conversation with Scott Kunes, COO of Kunes Auto Group, which operates about 30 auto dealerships in Illinois, Iowa, and Wisconsin. Kunes spoke to Business Insider on Wednesday, the day President Donald Trump announced new tariffs on various goods, including autos and auto parts. BI verified his identity and role at the business.
The interview has been edited for length and clarity.
This last week has actually been a really good week for the auto industry in general. The National Automobile Dealers Association put out an estimate that industry sales are up 14% month-over-month just in the last week as the tariffs came to fruition.
We did see a rush for people to purchase vehicles and get ahead of the tariff issue. We’re seeing that short-term sales bump but are also planning for the future.
Pre-pandemic, the standard for dealers was to have a 90-day supply of many cars. Then, we pushed for a 60-day-or-less supply depending on the manufacturer and the make and model.
Right now, we are trying to get as much supply as we possibly can — but not getting overextended.
Everybody looks at import manufacturers like Honda or Toyota and says, “Well, these are the ones that are going to get the tariffs put on them.” That’s not actually the case: Hyundai, for example, is in a terrific position, with a lot of its major models being manufactured here in the United States.
We’re definitely looking at our parts supply chain as well. We do a large wholesale business in parts, especially in the body business. Some of those things might be affected, like body panels. We’re just trying to make sure that we have the stock and can weather this as long as possible.
Obviously, the entire country experienced inflation over the past four years, but the auto industry experienced it quite a bit more.
But recently, consumers were starting to get a bit of a break with lower interest rates, prices coming down, manufacturers offering heavier incentives because demand was down, leasing coming back very strongly, and lower payment possibilities.
Now, we have another thing that jumps in and starts to get everybody scared again.
These tariffs are going to affect consumers in both the new and used markets.
I think a lot of dealers kind of figured out a playbook during the supply chain crisis during and after the pandemic. There was a pivot from new vehicles to used vehicles. We saw three-year-old vehicles transacting higher than what they were purchased.
