IN THE WAKE OF TRUMP’S tariffs, consumers in the US are pulling back. CarMax, which operates around 250 dealerships nationwide and is the biggest seller of used cars in the US, said both sales and profits fell in the most recent quarter. The company said that customers with better credit profiles “seemed to be sitting on the sidelines.” To counteract the decline, Ford is offering lower interest rates to customers with the weakest acceptable credit histories, a risky strategy designed to move unsold F-150 pick-ups. Meanwhile, there has been a marked move away from EVs. Many brands offered hefty discounts to capitalise on the Federal tax credit of up to $US7500 which expired at the end of September. And Honda has announced plans to discontinue the electric Acura SUV after a single model year.

Part of the problem was the rush to buy new cars earlier in the year as consumers tried to pre-empt the new tariffs. Research company J D Power predicts a surge in EV sales of 28% in September (year on year) but the much larger market for hybrid and petrol vehicles is predicted to decline by 2.5%. Also having an impact is new vehicle prices increasing by up to 2.9% to an average $US45,795, and high interest rates.

The knock-on effects are significant too. Bosch, the German-based and world’s largest auto parts supplier has announced that it is cutting 13,000 jobs, or 3% of its total workforce.

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