** Shares of U.S. auto dealerships fall after President Donald Trump on Wednesday unveiled a 25% tariff on imported cars and light trucks starting next week

** "Once the tariffs take hold, we would expect the initial action for OEMs to be to reduce production in Mexico/Canada and concurrently reduce incentives at the dealers," analysts at UBS said in a note

** "The high initial cost of the tariff seems likely to abate over time as the industry adjusts but also to never fully dissipate, implying some residual structural reduction in automaker, supplier, and dealer profitability, vehicle affordability, sales volume, and consumer well-being" - analysts at J.P. Morgan said in a note

** Sonic Automotive SAH.N down 5.3%, Autonation AN.N down 4.3%, Penske Automotive Group PAG.N down 4%, Lithia Motors LAD.N down 3.5%, Asbury Automotive Group ABG.N down 3.2% and Group 1 Auto GPI.N down 2.1%

** Including session's moves, the S&P 500 automotive retail sub-index .SPLRCAUTR up 16.8% YTD

(Reporting by Aatreyee Dasgupta)

((Aatreyee.Dasgupta@thomsonreuters.com))