New Car Prices Also Rise
Ford to Raise Prices by Up to $2,000 for Three Models Produced in Mexico
Due to the impact of tariffs imposed by the Donald Trump administration, consumers in the United States have been accelerating their vehicle purchases, resulting in used car prices reaching their highest level in a year and a half.
On May 7 (local time), automotive market research firm Cox Automotive announced that the Manheim Used Vehicle Value Index, which is calculated based on wholesale auction results in the used car market, recorded 208.2 last month (with January 1997=100 as the baseline), marking a 4.9% increase compared to the same period last year. This is the highest figure in a year and a half, since October 2023, when car prices surged due to supply chain disruptions following the pandemic.
Analysts explain that expectations of rising car prices due to the Trump administration's tariffs on automobiles prompted consumers who were considering purchasing vehicles to accelerate their purchases, putting upward pressure on wholesale used car prices. Jeremy Robb, Director of Economics and Industry Insights at Cox Automotive, said, "Typically, the rebound in used car prices that occurs in spring ends around the second week of April, but this year, the upward trend in wholesale used car prices continued throughout April, and the increase was much stronger." He added, "We had anticipated a strong price increase due to the impact of tariffs, and that is exactly what happened."
The Trump administration implemented a 25% tariff on imported cars on April 3. Beginning May 3, a 25% tariff was also imposed on auto parts, including engines. However, reflecting industry backlash, the administration partially eased the tariff measures by exempting, for one year, parts accounting for up to 15% of the price of vehicles assembled in the United States from tariffs until April 30, 2026.
As a result of the Trump tariffs, the 'Big Three' U.S. automakers are also signaling price hikes for new vehicles. According to Reuters, Ford Motor Company has decided to raise prices on three models produced in Mexico. Ford recently notified U.S. dealerships that it will increase prices by up to $2,000, depending on the model, for the Mustang Mach-E electric SUV, the Maverick pickup truck, and the Bronco Sport.
Industry experts have pointed out that tariffs on foreign-made vehicles could lead to price increases not only for imported cars but also for U.S. brand vehicles. In addition to the direct price increase effect of tariffs, experts believe that U.S. manufacturers may raise the prices of domestically produced vehicles as well, taking into account higher prices for competing imported vehicles and rising parts costs.
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