Local car dealerships brace for uncertain future following retaliatory tariffs

As Canada’s 25 per cent retaliatory auto tariffs go into effect, local car dealerships are bracing for what the tariffs might mean for sales.

Experts have said the tariffs would cause car prices, both new and used, to rise.

Local industry members say “everything is really uncertain right now,” and that they won’t know exactly what the impacts will be until they happen.

Paul Maltby, the general sales manager at Mohawk Ford in Hamilton, said “‘concern’ is putting very very mildly.”

“I would say ‘terrifying’, maybe that’s too strong of a word, but there’s a huge concern about what that will look like to us, and helping out customers.”

With all the uncertainty hanging in the air right now, Maltby is certain customers and dealerships are on edge.

“Can they afford a car or not? Are they in a position where they will have to put off that purchase,” Maltby asks.

Donald Trump imposed 25 per cent tariffs last week on all vehicles not assembled in the U.S.

Canada’s 25 per cent retaliatory auto tariffs took effect Wednesday.

Both with the potential to raise the price of vehicles in the near future, makes it harder for people to buy a car and harder for dealerships to sell them.

Maltby says the future of car sales right now is uncertain, but one thing he did notice is that customers are trying to get ahead of tariff impacts on the price of cars – he says there was an uptick in sales in March, when usually that uptick is around April or May.

“People saying ‘hold on, I’m not sure, I was thinking about making a purchase in the summer…but I might as well do it now when I know what I’m dealing with’ as opposed to ‘is there going to be a tariff in the summer’,” Maltby said.

On the flip-side, Maltby says there has been a decrease in factory orders.

“We saw people say ‘okay, what have you got on the ground’ or ‘what could you get from one of your trading partners’, and we have quite an extensive group of trading partners – which is great, but at the same time there’s a limited inventory that all of us have on the ground at this point,” he explained.

The Canadian Automobile Dealers Association (CADA) says dealerships across the country are cornered, but there is a silver lining with the way Canada’s retaliatory tariffs are structured.

Individual auto-parts that are compliant with the Canada United States Mexico Agreement (CUSMA) are carved out from the tariffs.

Charles Bernard, lead economist with CADA said, “there will be a bit more nuance or measured, because the measures that were put in place by both governments are a bit more measured as well in a way which will allow manufacturers a bit more flexibility, whether it’s taking some of the cost, whether changing some of the allocation for the short term, or dealers trying to find way to make sure their product is more enticing for consumers.”

For now, Maltby says his dealership is remaining calm and taking things as they come.

“If this Bronco is going to be a few thousand dollars more a few months from now, we’ll have to deal with it,” he said. “If it’s going to be $20,000 more a few months from now we’ll have a bigger issue, and that will certainly impact our sales and sales results, but we’ll have to deal with it absolutely.”

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