Impact of tariffs on van prices

[afblangley]

The founder of Ready Set Van posted a video speculating on the potential impact that new tariffs might have on van prices. It is an interesting, apolitical video. It starts by walking through the history of tariffs and how each of the manufacturers responded in the past to the "chicken tax". It ends by discussing how they are now positioned to be impacted by the currently vaguely defined, new tariffs.

Takeaway: manufacturers have finally recovered from the covid induced supply chain constraints and there is an abundant supply of vans sitting on dealer lots. Prices on new and used vans are lower now than they may ever be.

 

[Juan Chacho]

Thanks for the TLDR. I bought used and am happy I bought when I did. Maybe I should do upgrades sooner than later.

 

[eDJ_]

I still have a lot of questions about what will "constitute" the definition of American Made/Made in America vehicles. If foreign countries build auto manufacturing plants in the USA and build vehicles here, will they have to produce all of their parts here too ? Then if they sell their vehicles at an inflated price (Such as $100K+ Mercedes to Professionals who could use the purchase as a deferred tax shelter/writeoff in 5 years...writing off 1/5 it's value each year and then sell it for most of it's value adjusted with inflation)

Few.....if any American made or Built in America vehicles are made of parts which are all produced in the USA.

This may become an interesting question for Accountants who seek to depreciate business equipment as "Capital Equipment".

No vehicles are 100% made in the United States, according to Cars.com. The percentage of American-made parts in a vehicle varies by model and manufacturer.

 

[maki2]

Too early to tell what the impact will be. Give it a few months and see what actually happens. Fuel prices will be rising as it is the tradition around Spring Vacation which is just a week away and again in May before Summer Vacation. This year people will be tending not to replace their still in good shape, useable vans due to concern about the current news. Businesses with fleets of vans or even small business owners usually change out their fleet vehicles at the end of the year for tax reduction purposes. That is one reason for a surplus of used vans in the winter. Spring is also not the most active season for sales as taxes are due. As you know many Nomads financially need to buy used vans versus new and many Nomads have fixed incomes so they tend to try to keep the vehicle running until they absolutely have to replace it. We are just a small segment of the market place for Van sales, especially new vehicles.

 

[Southbound]

In the N. Alabama area, a Toyota/Mazda plant makes the vehicles, and about 30 miles away is a Toyota engine plant.
So, @eDJ_, I think the ones coming out of the Toyota/Mazda plant would be considered American-made.
And in another area is a plant that makes Mercedes vans.

 

[bullfrog !]

In the N. Alabama area, a Toyota/Mazda plant makes the vehicles, and about 30 miles away is a Toyota engine plant.
So, @eDJ_, I think the ones coming out of the Toyota/Mazda plant would be considered American-made.
And in another area is a plant that makes Mercedes vans.

There would still be tariffs on the components they ship in if they come from Canada or Mexico. I saw a report that stated many components for a single vehicle can involve as many as 7 border crossings.

 

[eDJ_]

Before the late 70's Ohio had a rich industrial belt that I worked & traveled within. Most of the car parts I purchased then were still being made here in the USA. BUT........within a few years industries began moving their production to countries where labor was cheaper and liquidated their holdings in Ohio. Not only was it for cheaper labor but where other countries didn't mind their polluting the air, water, and soil as well. Car parts I purchased after that were mostly made in China.

In those times the Submarines built for the US Navy had much of their components made in Ohio. (you may have heard of "Ohio Class" Submarines ?)
But the Ohio Class has been phased out to build a new type that carries fewer missiles. The Columbia Class is designed for new construction techniques sourcing parts from 3000 suppliers around the USA. (more modern flexible manufacturing)

But in the age we are in now (not back when America was supposedly so great)
things are more diversified with mass transit and outsourcing to gain "catalog parts" so a facility can still perform within a niche and be viable. It may not need to have a production facility that covers sections of land......and be an island unto itself. We just don't do things like we did 100 years ago as we now use flexible manufacturing. (where you may have modular FMS productions operating as producers.................as in the example Southbound mentions with Toyota/Mazda) Automotive, Aerospace, Food Processing, Medical, and Electronics industries lend themselves to flexible manufacturing.

 

[maki2]

Car part manufacturing is not exclusive to China or Mexico. Even 7 years ago some parts I was getting for an older vehicle came from Vietnam. I know India and Pakistan also manufacture automotive and other components.