Pre-tariff cars at US dealer lots a buffer against price hikes

By Nick Carey and Nora Eckert

LONDON/DETROIT (Reuters) - Automakers with plentifulness of cars connected trader tons person a clip vantage arsenic they hone their strategies for passing connected President Donald Trump's 25% tariffs, portion Toyota's thin inventories could unit it to hike lawsuit prices sooner.

Trump imposed 25% duties connected imports of overseas cars past week, which analysts accidental could adhd thousands of dollars to car prices, sending buyers scurrying into dealerships to effort to bushed the inflation.

As of March 17, Toyota had 32.7 days proviso of vehicles, according to automotive services supplier Cox Automotive, good beneath the manufacture mean of 89 days, and conscionable 20.9 days proviso of its fashionable RAV4 SUV.

Toyota said it does not program to rise U.S. prices for present and Cox enforcement expert Erin Keating said Toyota has told her it tin boost accumulation astatine its Kentucky plant.

"But they'll inactive beryllium susceptible due to the fact that of the sheer math," she said.

Pre-tariff cars person go a blistery commodity.

In North Haven, Connecticut, Bob Thomas Ford successful suburban Hamden has a billboard proclaiming: "100 pre-tariff Fords available!"

Ford had 103.4 days of proviso arsenic of mid-March, according to Cox, portion Hyundai had 107.4 days.

The contention is connected to get finished vehicles done U.S. ports earlier the duties instrumentality effect precocious connected April 3, qualifying them arsenic pre-tariff models and delaying terms spikes successful an uncertain economy.

A root astatine a large European carmaker, for instance, said it shipped arsenic galore high-end models arsenic imaginable crossed the Atlantic up of tariffs.

The Trump administration's 25% tariffs connected immoderate car parts - engines, transmissions, powertrain parts and electrical components - volition person a slower effect, with immoderate analysts estimating parts imported aft midnight connected April 3 volition extremity up successful finished vehicles starting mid-April.

Price hikes should travel soon after.

Auto expert Mel Yu said imported car parts relationship for betwixt 40% to 80% of U.S.-made cars and 20% to 40% of the retail price.

"No substance wherever they are made, car prices volition spell up," helium said. "The interaction of the parts tariffs volition beryllium beauteous quick."

Yu has been consulting for a fig of automakers successful ongoing talks with U.S. dealership groups connected spreading retired tariff costs, which should adhd betwixt 8% and 16% to the retail terms a car.

Those talks should spot dealers instrumentality a little upfront nett connected sales. In return, automakers volition little the income targets astatine which dealers marque lucrative bonuses, portion besides cutting involvement rates and extending financing terms, translating into an summation successful monthly payments for consumers of 5% to 7%, Yu said.