October 26, 2021

Time to buy?

Imposed tariffs not raising vehicle prices — yet

Joe McIntyre/staff photographer

Royal Auto Group sales representative Matt Johnson, left, hands the keys over to Gloria Wiley, of Marathon, prior to test-driving a Buick Encore in Cortlandville.

While the United States battles with neighboring and foreign countries about trade tariffs, local car, motorcycle and farm equipment dealers have yet to see a price increase. But they are mindful of the future.

Dealers say they are keeping an eye on what happens with the tariffs, as there are concerns of increased pricing and fewer sales.

“Manufacturers haven’t talked about it (the tariffs),” said Joe Reagan, owner of Royal Auto Group in Cortlandville. Prices for 2019 car models will be out soon, he said. Then he’ll have a better idea.

Earlier this month, President Donald Trump announced a 25 percent tariff on imported steel and 10 percent tariff on imported aluminum from Canada, Mexico and the European Union. In return, starting Sunday, Canada will impose a 25 percent tariff on shipments of U.S. steel and 10 percent on aluminum, according to CBS News.

Because of the increase in steel prices, Reagan said he is concerned car manufacturers won’t build as many cars as they used to, leaving him potentially with less inventory and higher priced cars.

The European Union also recently announced it would implement penalties on $3.2 billion worth of American products, including bourbon, orange juice, playing cards and Harley Davidson, according to the New York Times. Because of that, Harley Davidson announced this week it will move some of its motorcycle production to overseas plants to avoid the tariffs.

KTM, an Austrian motorcycle company sold at CNY Power Sports of Polkville, has talked about potentially increasing the prices of its bikes sold in the U.S., said Tim Law, a manager at the business. At the moment those are “just talks,” he said.

The tariffs haven’t caused any pricing issues for the business, yet. But with many of the other brands the business sells, like Honda and Kawasaki, built overseas, Law said there is always a concern in the back of his mind.

“It will be interesting to see what the next six months bring,” Law said.

In association with CNY Power Sports is CNY Farm Supply, which sells farm equipment. There hasn’t been any pricing issues with the farm equipment, either, Law said, but farm equipment sales are down anyway due to decreasing milk prices.

Jon Enright, branch manager for Empire Tractor of Cortland, sees the same thing. The talks of tariffs have not increased any equipment prices, but Enright said prices of larger tractors could increase 4 1/2 percent.

It is not a huge concern, though, because no one is buying those larger $400,000 to $500,000 tractors. With the milk prices down, farmers aren’t buying the big equipment, he said.

Steel price increases will affect everyone, Enright said. Whether it is car, motorcycle or farm equipment sales, dealers are keeping an eye on the trade war.