Franchised dealer sentiment surrounding tariffs was consistent with previous quarters, according to Jonathan Smoke, Cox chief economist, largely because of key events that occurred after the survey closed.
Cox Automotive began reporting survey results in the third quarter of 2017. Questions about tariffs have been a component of the survey for four consecutive quarters.
Just days after the second-quarter survey responses were collected, President Donald Trump's administration announced it would delay imposing tariffs on imported vehicles and parts from the European Union, Japan and other nations for 180 days to continue negotiations for trade accords.
Less than two weeks later, Trump posted on social media that he intends to implement a 5 percent tariff on all goods from Mexico. Such an import tax, which he said would be effective June 10, would affect billions of dollars worth of vehicles slated for U.S. dealerships, as well as the Mexican-made auto parts and materials upon which retailers rely.
Smoke said the auto retail industry's current climate closely mirrors the events of last summer, when looming tariffs boosted vehicle sales in the short-term as shoppers wary of limited supply and rising vehicle prices purchased their vehicle earlier than planned.
This year's concerns over tariffs are more complex, and as the Trump administration progresses toward trade deadlines without resolutions, the fear of implementation becomes more tangible.
"Instead of having less uncertainty, we're now seeing uncertainty as somewhat lingering over the market for the indefinite future, until we start to see progress with at least some of these deals," Smoke said.
Meanwhile, franchised dealers were satisfied with new- and used-vehicle inventory levels in the second quarter, though inventory metrics could shift rapidly as the year goes on, according to Smoke.
New-vehicle inventory is expanding faster than dealers can move the vehicles off their lots, according to the survey. The new-vehicle sales environment scored a 54 from dealers, down from 59 last year, but inventories scored a 64, rising from 61 a year earlier.