Ford Warns of Price Increases on New Vehicles Due to Trump's Auto Tariffs, Discounts Available Until June 2

US • Business • 04/17 05:18
Ford Warns of Price Increases on New Vehicles Due to Trump's Auto Tariffs, Discounts Available Until June 2

Ford Motor Co. may increase prices on new vehicles starting with May production if U.S. auto tariffs, introduced by President Trump, remain. The 25% tariffs on imported vehicles and parts are driving potential cost increases. Ford will maintain current prices for vehicles in dealer inventory and for retail orders placed before June 2. The company is offering discounts through June 2 to counteract consumer concerns. The tariffs have created uncertainty in the auto industry, with potential cost increases of $108 billion by 2025, affecting consumer demand and dealership profitability.

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04/17 05:18

Ford Warns of Price Increases on New Vehicles Due to Trump's Auto Tariffs, Discounts Available Until June 2

Ford Motor Co. may increase prices on new vehicles starting with May production if U.S. auto tariffs, introduced by President Trump, remain. The 25% tariffs on imported vehicles and parts are driving potential cost increases. Ford will maintain current prices for vehicles in dealer inventory and for retail orders placed before June 2. The company is offering discounts through June 2 to counteract consumer concerns. The tariffs have created uncertainty in the auto industry, with potential cost increases of $108 billion by 2025, affecting consumer demand and dealership profitability.

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U.S. Vehicle Inventories Dwindle as Consumers Rush Purchases Before Tariff-Induced Price Hikes

U.S. vehicle inventories are rapidly decreasing as consumers buy new and used cars to avoid price hikes from new tariffs on imports. Cox Automotive reports new vehicle supply fell from 91 to 70 days, and used vehicle supply dropped to 39 days. This demand surge led to a 1.4% rise in March retail sales, with auto and parts dealers seeing a 5.3% increase. Automakers like Ford and Stellantis are offering incentives, while others delay shipments to avoid tariffs. The 25% tariffs, effective April 3, could reduce U.S. auto sales by 700,000 units this year.

Ford Prepares for Tariff-Driven Cost Pressures

In a memo reviewed by Reuters and Automotive News, Ford informed its dealer network that it anticipates the need to adjust vehicle pricing beginning with May production, should there be no material changes to the current tariff policy. The 25% tariffs on imported vehicles took effect on April 3, with an additional duty on auto parts expected to follow by early May.

“The tariff situation is dynamic,” wrote Andrew Frick, Ford’s vice president of sales, distribution, and trucks. “In the absence of material changes to the tariff policy as articulated to date, we anticipate the need to make vehicle pricing adjustments in the future, which is expected to happen with May production.”

Ford clarified that the price increases would not apply to vehicles already on dealer lots or to retail orders placed before June 2. The company is offering price protection for factory orders, ensuring customers receive the price at the time of order, even if the vehicle is delivered after the discount period ends.

Discounts Remain in Place Through Early June

To counteract consumer concerns and maintain sales momentum, Ford launched a promotional campaign titled “From America, For America,” offering employee-level pricing to the general public. These discounts, which can amount to thousands of dollars off the manufacturer’s suggested retail price (MSRP), are available through June 2.

“We will not increase the MSRP for any vehicle currently in inventory with our Ford and Lincoln dealers, and our employee pricing offer will remain in the market through June 2, 2025, as advertised,” Frick stated in the memo.

The company emphasized that customers have a wide selection of vehicles to choose from before any potential price changes take effect. If pricing adjustments are implemented for May production, customers are unlikely to see those increases reflected at dealerships until early July.

Tariffs Add Pressure Across the Auto Industry

President Trump’s 25% tariff on imported vehicles, along with the anticipated extension to foreign-made auto parts, has introduced significant uncertainty across the automotive sector. While Trump has suggested he may offer the industry “a little bit of time” to adjust, no formal policy changes have been announced.

An analysis by the Center for Automotive Research estimates that the tariffs could increase costs for U.S. automakers by approximately $108 billion in 2025. Despite this, Ford is considered relatively well-positioned to weather the impact, as it manufactures about 80% of the vehicles it sells in the U.S. domestically.

Still, the company, like others in the industry, is closely monitoring the evolving trade landscape. Automakers have warned lawmakers that prolonged tariffs could force them to implement significant price hikes, potentially affecting consumer demand and dealership profitability.

Consumer Behavior Shifts Ahead of Price Changes

The looming threat of higher vehicle prices has already influenced consumer behavior. According to Commerce Department data, retail sales at motor vehicle and parts dealers jumped 5.3% from February to March, as buyers rushed to secure vehicles before potential price increases.

Ford’s strategy of maintaining current pricing on existing inventory and offering deep discounts appears to be part of a broader industry effort to sustain sales during a period of heightened economic and policy uncertainty. Other automakers, including General Motors and Nissan, have also adjusted production strategies to mitigate the impact of tariffs, with some increasing U.S. output and others pausing shipments from overseas.

Ford’s Market Position and Investor Sentiment

Despite its proactive pricing strategy, Ford’s stock performance has reflected broader investor concerns. The company’s shares have declined more than 5% this year, and sentiment on platforms like Stocktwits turned “extremely bearish” following the tariff announcements. Message volume also dropped, indicating growing caution among retail investors.

Ford’s leadership has reiterated its commitment to transparency and customer value during this period. “Customers will have a lot of choices, and we have plenty of inventory to choose from through June 2,” a Ford spokesperson said. “We continue to evaluate the potential impact of tariff actions.”

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