BUZZ-Tariffs will have 'unequivocally negative' impact on auto retail ecosystem, JPM says

Reuters
03-28
BUZZ-Tariffs will have 'unequivocally negative' impact on auto retail ecosystem, JPM says

** Tariffs on imported autos are "unequivocally negative" for the auto retail ecosystem, raising new car prices by $4,000 to $5,300, an increase of 9% to 12%, J.P.Morgan says

** U.S. President Donald Trump has said he will impose 25% tariffs on all vehicles and foreign-made auto parts imported into the country

** The brokerage says used-car dealers would benefit in the near-term from a surge in demand for nearly new vehicles, boosting their profits

** B2B and B2C marketplaces will face major challenges due to tariff-driven inventory and supply shortages - brokerage

** Franchise dealers' new-car sales profits will remain stable, but with lower margins as a percentage of selling price - JPM

** It expects the parts and services business to gain from higher prices and increased traffic as consumers keep their cars longer

** Shares of auto part retailers O'Reilly Automotive ORLY.O and AutoZone AZO.N rise as Wall Street bets on increased demand for DIY parts and components

** Brokerage says "tax deductible interest on auto loans could potentially provide modest affordability relief", but it will not be enough to offset pricing inflation pressures

(Reporting by Kamal Choudhury in Bengaluru)

((Kamal.Choudhury@thomsonreuters.com;))

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