TRAVERSE CITY, Mich. -- The Trump administration's proposed tariffs on imported vehicles could cut light-vehicle production by 1.4 million-2 million units and increase prices by up to nearly $6,000, estimates forecaster Michael Robinet, managing director of IHS Markit.
Although the proposals out of Washington are "a moving ball," Robinet told an audience at the CAR Management Briefing Seminars on Tuesday that sticker prices for domestically built vehicles could rise about $1,800, imported mass-market vehicle prices could jump $3,300, and imported luxury vehicle prices could surge $5,800.
Light-vehicle production could fall from around 17 million vehicles a year currently to around 15 million vehicles, he said.
"It's a tremendous impact and a substantial drag on our industry from a volume perspective," he said of the possible tariffs.
The threat comes as growth in U.S. new vehicle sales is starting to slow. Robinet said that IHS predicts U.S. new-vehicle sales will reach 17 million this year, down about 1.2 percent from a year ago. That number will fall to about 16.6 million vehicles in 2020, he predicted. But if the tariffs go into effect, he added, "all bets are off."
The forecasts are centered around the fact that automakers will hit a high-water mark of 40 new vehicle launches next year, Robinet said, and that the number will decline in 2020 and 2021.
Ford Motor Co., General Motors and Fiat Chrysler Automobiles will average 15 new-vehicle launches in 2025, down from an average of 23 in 2012, he said. The declines reflect decisions by both FCA and Ford to reduce their portfolios by cutting their sedan lines.
Robinet said that by 2020, the industry will introduce three crossovers/SUVs for every one sedan they bring out, double the ratio of five years ago.
But he noted that changing trade policies could cause automakers to place some production plans on hold.
"Anybody who is making major capital decisions based on what is happening right now — that may not be smart," he said.