U.S. tariffs would drive P.E.I. car prices up and supplies down, say auto sellers
'It might not be great for customers or businesses alike if this does happen'
Canada's automotive industry was given a month-long reprieve from U.S. President Donald Trump's tariffs on Wednesday afternoon, but some Prince Edward Islanders say they're concerned about what could happen if the levies return in 30 days' time.
At Centennial Nissan in Charlottetown, Trevor Leeco said he's watching on a day-to-day basis to see what will happen next.
"If this does happen, plants' closures would be imminent, price and inventory issues would arise probably in the next month or so," said Leeco, the general manager of the dealership.
That could spell trouble for the automotive industry overall, with prices going up and inventory levels going down, Leeco said.
"It might not be great for customers or businesses alike if this does happen."
New car prices could rise
Some customers have reached out with concerns about availability and prices, Leeco said, adding that some are rushing to buy or lease now, as opposed to in the summer time.
"Inventory levels are great right now, programs are good, and we can guarantee the prices at least for the next month," Leeco said. "Outside of that, it's kind of out of our control."
If tariffs did come into effect, Leeco said the prices of new cars could go up anywhere from $4,000 to $12,000.
Those increases wouldn't affect cars that are already in lots at dealerships on P.E.I., but they would apply to new inventory coming in.
"The turnaround time from the time we order a car to the time it lands here is two to three months," he said. "So by summer time, we could be looking at some very increased prices if this doesn't all blow over."
Used cars also affected
It's not just new cars that would be affected by automotive tariffs. The used-car market would also feel the impact, said Roger Long, owner of Long's Auto Centre in Charlottetown.
His company repairs and sells used Toyotas, but finding used cars becomes more difficult when there aren't as many new ones to let the owners of years-old models trade up.
"You try to buy every Toyota you can find, but if the new[-car] dealer has no new ones, then there's no supply of used ones," Long said.
"It'll be the same as the pandemic… supply and demand will decide," he said.
Sales could also suffer from the effect of tariffs on P.E.I.'s economy as a whole, Long said.
People could start hanging onto their old, paid-off cars because they don't know if their job might go sideways, he said.
"Consumer confidence is very important because if they think that they're going broke, they don't want to get in over their head."
What's next?
The North American auto industry is an integrated business involving three countries, said Long.
"You can't cut one out without the other two. If you cut out Canada or Mexico, then the Americans have no work, no cars," he said.
If Trump comes here, we have potatoes. We can throw them at him.— Roger Long
"The problem is that the people making decisions have no clue about the car business."
If it gets to a point where production grinds to a halt and there are no more cars in the lot, Long jokingly offered an alternative use for the space: "I guess we'll be playing street hockey."
As for the U.S. president, Long has a different plan.
"If Trump comes here, we have potatoes. We can throw them at him."
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With files from Steve Bruce