Al Root

Amid tariff-induced turmoil, the theme of this year's New York Auto Show is "Stay in the Moment."

The 2025 New York Auto Show runs from April 18 to April 27 and is the 125th iteration of the event. Investors, analysts, car executives, industry participants and the press attend, either doling our or looking for tidbits about the industry, but New York show, or any auto show, is essentially a sales event. People go to check out what could be their next new ride.

Hundreds of thousands attend the New York show each year. More than 100,000 took part in a ride and drive in 2024. About 70% of attendees want to learn about new automotive technology, and 50% are actively looking for a new car.

This year there are new cars such as the 2026 Hyundai Palisade and the Lucid Group Gravity SUV, the electric vehicle startup's second model. Ford Motor has a big presence at the show. So does General Motors, with a lot of its space dedicated to EVs. Two-tone roofs seem to be a hot thing in styling.

Cars are cool, but this year is all about uncertainty from President Donald Trump's tariff policies. Imported vehicles are subject to a 25% tariff and imported auto parts are slated to face the same rate starting on May 3.

About half the new cars sold in the U.S. each year are imported, mainly from Mexico, Japan, South Korea, and Canada. Roughly half of the parts on many models are imported as well.

The tariffs have upended decades of standard practice, and capital spending, with Wall Street estimated anywhere from 20% to 80% of industry profits could be wiped out, depending on myriad factors including price increases, cost sharing, cost mitigation, and how tariffs end up being applied.

One automotive executive at the show characterized the current tariff policy as a disaster for the industry, adding there are already suppliers declaring "force majeure," a legal term used when a party to a contract can't meet its terms. It's more typical to hear the term when, say, a natural disaster destroys a facility. This time it's because of tariffs.

Suppliers can't afford to pay prices for their imported components and they aren't sure they can pass cost increases along to other tiers of the supply chain.

That's at the company level. At the consumer level the tariffs could create an affordability and valuation crisis, say Cars.com executives attending the show.

In the fourth quarter, almost 19% of buyers taking a loan to buy a car have a monthly payment in excess of $1,000, a record. That rate has been rising since the Covid pandemic, which raised the price of a new car by roughly $10,000 to $48,000. Tariffs could raise car prices by roughly $5,000, according to Wall Street estimates. Contributing factors behind that reasoning could include reduced purchase incentives, higher list prices, and lower demand -- which limit the ability to raise prices.

It will make finding a good deal harder. (Which isn't a bad thing for information providers who provide comparison tools, including Cars.com.) As for valuation, used-car prices track new car prices. Figuring out what a used car is worth isn't about to get any easier.

It's just a confusing time with outcomes skewed from disaster to not very good. Uncertainty is the reason Ford, GM, and Stellantis shares were down an average of 19% since the election, 11 percentage points worse than the S&P 500.

"We only focus on the now," says one product specialist at the show. "What's inventory now, talking to your dealership now. Conversations [will happen] down the road, but that's not now."

There's some wisdom in that view. Staying in the moment is sound advice. Maybe yoga can help investors stay present. They will need all the stress-management tools they can summon to deal with the coming months.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 18, 2025 09:41 ET (13:41 GMT)

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