Automakers seek ‘opportunity in the chaos’ of Trump’s tariffs

DETROIT — As President Donald Trump’s 25% tariffs on imported vehicles were set to take effect, executives at Ford Motor scrambled to figure out how to respond to the new levies.

While they and their industry counterparts are still trying to navigate the impacts, Ford decided to move quickly in one area by offering an employee pricing program — called “From America, For America” — for U.S. consumers.

Such programs have historically been controversial, as they sell vehicles close to or lower than invoice prices for dealers and eat away at already tight profit margins for the retailers. But Ford decided the time was right to launch the program to promote its U.S. operations — the largest among automakers — and assist sales amid consumer concerns and economic uncertainty due to Trump’s tariffs.

“We understand that these are uncertain times for many Americans. Whether it’s navigating the complexities of a changing economy or simply needing a reliable vehicle for your family, we want to help,” Ford said in a statement Thursday morning announcing the program. “We have the retail inventory to do this and a lot of choice for customers that need a vehicle.”

It’s an example of how some automakers are attempting to find “opportunity in the chaos” or trying to “capitalize on the moment” amid the tariffs, as several industry analysts told CNBC.

“I absolutely love it. I think it’s going to drive sales,” said Ford dealer Marc McEver, owner of Olathe Ford Lincoln near Kansas City, Kansas. “It’s really exciting to see Ford step up and take the lead on this program. I think it’s a great play. … It’s truly a real deal for the customer.”

Ford, which is helping retailers financially with the program, told dealers about it a day ahead of the tariffs taking effect Thursday. It publicly announced the new program — which runs through June 30 — hours after the levies began.

Heading into the tariffs, Ford also was largely viewed by Wall Street analysts as being one of the best-positioned automakers because of its large U.S. production footprint, specifically for trucks.

Ford’s stock fared better than its rivals this week, closing the week down by 1.4%. That compares with Chrysler parent Stellantis losing 14.2% and General Motors dropping 5.4% for the week.

Others are following Ford’s strategy, which also is assisted by vehicle prices and profits being higher since the Covid pandemic. Crosstown rival Stellantis on Friday announced a similar employee-pricing program, while Hyundai Motor said it would not raise prices for at least two months to ease consumer concerns.

“It makes sense that they would try to capitalize on the moment,” said Erin Keating, executive analyst at Cox Automotive.

Keating points out that with Ford and Stellantis — the latter of which is based in Europe but has major operations and brands in the U.S. — it’s a reminder to consumers that they’re “domestic” companies. The automakers also have inventory, including older models, that they need to sell to make way for newer vehicles.

“Making room for those new vehicles to come into the showroom and trying to maintain that market share makes a lot of sense,” Keating said. “Anyone who’s able to beat the price out there right now, with the level of demand, is going to be able to hold on to their market share longer than others, and perhaps capture something from those that aren’t willing to meet the customer where they are right now.”

Ford and Stellantis brands such as Ram Trucks and Jeep have among the highest days’ supply of vehicle inventories in the automotive industry, according to Cox Automotive.

The two companies also were among the only major automakers this week to report notable drops in first-quarter vehicle sales. Stellantis was off roughly 12%, while Ford was down 1.3% from a year earlier.

Cox reports the national days’ supply vehicle average was 89 days, while those brands were between 110 days and 130 days. The auto industry has historically considered a healthy days’ supply to be between 60 days to 80 days.

In light of the tariffs and fears for potential price increases, demand for vehicles has been high. Consumers flocked to dealer showrooms at the end of last month as Trump confirmed the tariffs would be coming, leading to significant sales gains for many automakers.

Cox Automotive estimated new-vehicle sales in March hit 1.59 million units sold, significantly exceeding its forecast and marking the best month for sales volume in four years.

“The last week, and including this past weekend, was by far the best weekend that I’ve seen in a very long time,” Hyundai Motor North America CEO Randy Parker said Tuesday during a media call. “I’ve been doing this now for a very, very long time. So, lots of people, I think, rushed in this weekend, especially, to try and beat the tariffs.”

Selling now because future sales aren’t guaranteed also could assist if there’s a U.S. recession. J.P. Morgan on Friday raised its odds for a U.S. and global recession from a 40% chance to 60% chance by the end of the year.

“Because the demand is there right now, it makes sense [to offer consumer incentives] because everyone’s saying, ‘Gotta go get it now,’ might as well go ahead and reap the benefits now in case we do go into a recession,” Keating said.