After negotiations, companies paying Trump’s car tariffs won’t also be charged for other levies

WASHINGTON – President Trump is expected to soften the impact of his automotive tariffs, preventing duties on foreign-made cars from stacking on top of other tariffs he has imposed and easing some levies on foreign parts used to manufacture cars in the U.S., according to people familiar with the matter.

You sell and deliver a new car to a customer. The customer trades a used car worth $18,000, promising he will bring you the title next week. Next week comes, and you do not receive the title. You finally discover the trade is co-owned by the customer’s brother who has no intention of signing the title.

Or, you sell and deliver a new car to a customer who trades in a vehicle with an $18,000 payoff and equity worth $18,000 and fails to disclose that a spouse is on the title. You pay off the trade and the title comes in with the name of the spouse on the title. You contact the customer about a signature on the title or a power of attorney. The customer promises something will happen next week. Next week comes, and the spouse does not appear. That drags on for several weeks, only for you to find the wife and husband are now separated and cannot agree on anything. The other spouse has no intention of signing the title or the power of attorney.

The result in each case is the same. You have a used car and the only thing you can do with it is store it. Your only choice is to sue the customer for the trade allowance. When you get a judgment months later, and you possibly collect the judgment amount months after that, your recovery after attorneys’ fees and costs is a fraction of what you have invested in the trade.

To make matters worse, if you sell the trade to a retail customer before you have clear title, and the other trade owner demands his or her vehicle back, the dealership may face claims by the other owner who says he or she did not authorize the transaction.

So what do you do to prevent these problems?

First, know who owns the vehicle being traded by the customer. The customer may not have the title, but the customer should have the owner’s card. What does that say about who owns the trade? If the customer does not carry the owner’s card in the vehicle, ask questions. If the trade is titled in a state where you have access through your computerized registration system, you can check to see who owns the car.

More importantly, why title the vehicle you sold to the customer before you have a valid trade title? Failing to provide a good title for the trade vehicle is a failure of consideration as if the down payment check bounced. Under your sale agreement, you probably have the right to claim the customer breached the contract by failing to provide the consideration upon which any financing was based, and this allows you to rescind the sale. Once you title the vehicle you sold, you lose your rights.

Situations where dealers are getting stuck with trades for which they do not have a good title because of circumstances described in this article are
becoming increasingly frequent. You must take action immediately to know you have a good title to a trade before completing a deal.

Visit DrivingYourSuccess.us for more information. This article is for information only and does not constitute legal advice.

The White House sought to give car companies a break on a hefty auto tariff enacted this month by offering a deduction for American-made parts.  

The problem is industry executives are puzzled over how to collect it. And that is in large part because it hinges on a simple yet loosely defined phrase they are struggling to interpret: “U.S. content.”

On Monday, Trump said he was considering some short-term tariff exemptions for car companies looking to relocate parts production to the U.S. from Canada and Mexico. He didn’t offer further specifics, only saying “they need a little bit of time because they’re going to make them here.” New tariffs specifically targeting auto parts go into effect May 3.

The lack of clarity on the U.S.-content provision has triggered frustration and confusion across the auto industry, which imports about 7.5 million vehicles into the U.S. each year. Automakers will need to trace the origin of a lot of components: Safavian noted that each vehicle typically has 20,000-30,000 parts.

On the line are billions of dollars in potential savings for General Motors, Toyota Motor and other auto manufacturers that are now paying the tariff on foreign-built vehicles, including those made in Mexico and Canada. The 90-day pause on reciprocal tariffs announced last week doesn’t apply to automotive goods.

Company executives say the U.S. content requirements are critical for shaping longer-term decisions, such as whether to raise prices or reroute production. A study published Thursday by the Center for Automotive Research, an Ann Arbor, Mich.-based nonprofit, said the auto-import tariffs could increase costs for automakers by more than $100 billion. 

Misinterpreting the rules carries some risk: The Trump administration has warned that any company found to have provided inaccurate information on their U.S. content levels could be subject to retroactive tariffs. 

“The carve-out for U.S. content was a bright spot in the [tariff] order,” said Mark Tallo, an attorney with Sandler, Travis & Rosenberg, who is advising vehicle manufacturers on compliance with the new tariff. But he added “the particular rules as to how this will be implemented are unknown.”

A White House spokesman said the Commerce Department was working on a process for automakers to seek approval and begin taking advantage of the U.S. content deduction. The administration is aiming to get the process in place as soon as possible, the spokesman said, but no timeline was available.

As of now, U.S. content is only vaguely described as the value of a car attributable to parts “wholly obtained, produced entirely or substantially transformed” in the country. Before a vehicle can be considered for a deduction, it must also meet the requirements of the current free-trade pact in North America, called the U.S.-Mexico-Canada Agreement, or USMCA.

For such a complex industry with manufacturing operations and supply chains that span borders, how the U.S. content definition is worded can leave much up to interpretation, analysts and industry groups say. There are many parts that cross the border multiple times as they are built into larger components and before they are installed into a finished vehicle.

Some car companies are more exposed than others to the tariffs, but nearly all brands import at least some models for sale in the U.S.

GM and Ram make their highly profitable pickup trucks in Mexico, while Toyota builds its popular RAV4 sport-utility vehicle in Canada.

The Chrysler brand sells only two models, and both are built in Windsor, Canada, across the river from Detroit. In response to the import tariffs, Chrysler parent Stellantis said in early April that it would put that factory on pause for two weeks because of the tariffs. 

VW has also said it plans to add an “import fee” to the sticker price of vehicles affected by the new import duties. With only one factory in the U.S., the German automaker imports many of its models, including from its factory in Puebla, Mexico.

“We don’t have clear guidance from the government on how to calculate U.S. content,” a VW spokesman said.

The potential savings generated by the deduction could be significant, analysts and executives say.

Take Toyota’s RAV4. The Canadian-built SUV has a starting price tag of about $30,000, meaning a 25 percent tariff would cost the company about $7,500 to import it to the U.S.

With about 60 percent of its content made in the U.S., a deduction would cut the tariff rate by almost half to about $3,000 a vehicle.

Spread over about 290,000 vehicles—the number of RAV4s Toyota imported last year to the U.S. from Canada—that could be a saving of roughly $1.3 billion a year.

The scramble to figure out what vehicles have U.S. content has also triggered much back and forth between the car companies and their parts suppliers, many of which are also trying to figure out how to navigate the new tariff rules.

While industry manufacturers typically know what is made in North America—information that is essential for meeting free-trade requirements—the task of trying to parse what is specifically U.S.-built is more of a challenge, said Safavian, of the auto-industry lobbying group. 

“Automakers don’t necessarily have insight into every component and part that goes into a vehicle, so they would need to get that information from the suppliers,” she said.

“There’s not just one supplier, there’s many layers of suppliers.”

Write to Ryan Felton at ryan.felton@wsj.com

The Transportation Safety Administration (TSA) will require passengers to present either a state issued REAL ID compliant driver’s license or state ID to board an airplane beginning May 7. A REAL ID also will be required to enter a military base as well as certain federal buildings.

Those who do not hold a compliant ID will be able to board flights by presenting either a U.S. Passport or passport card. Of course, passports are still required for international travel.

Upgrading to a REAL ID driver’s license or state-issued ID is voluntary, easy and requires only a few extra documents. Once the process is complete, one will always receive a compliant license or ID when renewing.

One must provide documentation proving their name and date of birth in addition to two additional documents proving their residential address. Those moving into Ohio from another state are required to provide documentation proving their social security number and must present their out-of-state driver’s license.

Acceptable documents needed to upgrade are:

Identity documents:

• Original or certified copy of a birth certificate
• Unexpired U.S. Passport

Residency documents (the most commonly used):

• Utility company bill (electric, telephone, water/sewer, cable, etc.) issued within the last one year.
• Credit card bill issued within one year
• Vehicle registration

See the links to each state’s website that follow for a more complete list of acceptable documents.

Social Security number documents required for persons moving into the state of Ohio:

• Social Security card
• W-2 or 1099 form (must include the full social security number)
• Current paycheck stub

If a name has changed due to adoption, marriage, divorce or for any other reason, additional documentation supporting the name change is required. Additional documentation may include, but is not limited to, a marriage license, court order or court decree.

Not sure if a current driver’s license or state ID is a REAL ID? The upper right-hand corners of compliant licenses and IDs display a star to the left of the Ohio logo.

There are a few subtle differences between each state’s execution of their respective Real ID programs, so visit the following websites for a complete information:

• Ohio – Ohio BMV
• Indiana – www.REALID.IN.gov
• Kentucky – drive.ky.gov | Real ID

Ohio residents can learn more about the REAL ID process by contacting our GCADA Downtown License Bureau by either calling (513) 721-3271 or visiting the office at 1015 Main St., and asking for either Chris, Judy or Crystal.

• The cost of auto repairs could rise by several hundred dollars, depending on the parts and if they are imported and subject to tariffs.
  
  
• Auto experts advise people to get car repair work done in the next month or so before parts inventory dries up and tariff prices kick in.
  
  
• Even insurance rates could be affected by higher costs as policies renew later in the year into next year.

Linda Cauley leaned back in the driver’s seat of her 2010 Chevrolet Colorado pickup that she drove to the Bloomfield Township library in late March. She waited for her nephew in the comfy, old vehicle she and her husband have put 150,000 miles on — with no plans of parting with it.

If you think that’s impressive, consider that her other vehicle — a 2014 Jeep Cherokee — has 260,000 miles on it.

Cauley, 68, said she and her husband will drive the old trucks until the vehicles die. The Waterford couple does not want to pay the steep price to buy a new or used car — especially now that prices are expected to climb even higher on 25 percent tariffs President Donald Trump put on imported autos and auto parts.

“We’re lucky we’re not in debt,” Cauley said. “I’d prefer not to go in debt over a car. A new car payment could be $1,000 a month and we’re both retired and so we gotta look at that, especially … (that) they’re meddling in … Social Security.”

Experts have estimated that tariffs could add anywhere from $3,000 to $20,000 to the prices of new cars, depending on the make and model. But it isn’t just prices for new — and even used — vehicles that are expected to increase as automakers look to offset high tariffs on imported parts or the costs to import vehicles into the country. Experts also warn that the cost of auto repairs will likely rise too. That’s because many parts used in repairs come from other countries and will be subject to the tariffs.

Parts prices will put pressure on car insurance rates

“I anticipate (tariffs) are going to have a big effect on parts more than anything else,” said Skyler Chadwick, director of product consulting at Cox Automotive. “Anyone who walks into a parts department understands that it’s a United Nations. What I mean by that is that you can’t walk through a parts department without seeing stickers from Canada, Mexico … Parts is one of the most globalized areas of a dealership or the automotive industry, even when it comes to building an automobile.”

Those increased costs on parts will have another impact: auto insurance rates. Insurers will have to pay more for claims on collision repairs. They are likely to pass that extra cost on to consumers with higher premiums, experts said. But just how high remains to be seen.

“Tariffs on parts used to repair vehicles will filter down to insurance rates, but the biggest driver of rates are the costs of stolen cars — up more than 50 percent in the last five years — and of personal injury payments, not the cost of repair parts,” Erik Gordon, a business professor who specializes in the auto industry at University of Michigan’s Ross School of Business said. 

Gordon said it would be difficult to calculate how much rates could rise, but he does not see it to be substantial because it costs more to fix a person hurt in a collision than it costs to fix the car. 

“The cost of parts to a repair shop is a fraction of the bill to an insurance company because the repair cost also includes labor and overhead,” Gordon said.

A spokeswoman for the Insurance Information Institute sent the Free Press the following statement on behalf of the institute: “The tariffs announced last week, which will impact imported vehicles and auto parts, are expected to inflate the cost of new cars, repairs and used car values due to tight profit margins for manufacturers and the interconnected global supply chain. The tariffs could also lead to broader macroeconomic and geopolitical disruptions, potentially expanding the impact on U.S. property/casualty insurers. This could generate higher premiums for home insurance and business insurance. Some auto insurers have indicated the tariffs could lead to higher premiums by the end of 2025. For all consumers, auto rates would not change until their insurance policy is up for renewal. No premium changes will be implemented on existing policies.”

Just a few weeks’ supply of parts left

According to Cox, about 44 percent of automakers’ repair parts are imported, and aftermarket parts are mostly sourced from Taiwan. Once repair shops start to run low on those parts and they must be ordered from overseas, the parts will be subjected to tariffs. Repair shops will most likely pass the added costs on to consumers, Chadwick said.

Chadwick expects customers to see widespread cost hikes, which means that delaying maintenance now will lead to paying more later.  

“If I was a consumer, I would not be putting off my service and repairs. Let’s take brakes into consideration here. If I look at a brake job, on average we see between a $500 and $800 repair on each axle depending on your (automaker) and brand,” Chadwick said. “You could see essentially the cost going up between $150 to $200 in a price increase on those specific parts. Everybody’s going to be affected.”

Last week, Trump enacted the 25 percent tariffs he imposed on imported vehicles and parts, providing an exemption until May 3 for some parts that comply with the United States-Mexico-Canada Agreement. Tariffs are taxes importers pay when they bring goods over borders.

Many in the auto industry are still studying the exact application of the tariffs and how they will impact the industry, but Chadwick estimates that dealerships and independent shops have about a four- to six-week supply of parts in inventory. That means consumers would still get repairs at a standard rate before prices start rising, if they act within that time frame.

“You’re not going to see dealerships jumping to order a bunch of extra parts to make sure tariffs (on May 3) don’t implicate their service because that’s just straight cash, cash coming out of their own pockets to buy those parts and to keep them in inventory,” Chadwick said. “So they’re not going to do that today.”

‘Sitting on a gold mine’

Chadwick said many car dealerships are “sitting on a gold mine” in terms of the parts they have in stock and the ability to do repairs ahead of tariffs.

“You should be working on your efficiencies each day and to get your customers in today, not in May or a couple of weeks when those parts could be affecting that cost for those repairs,” Chadwick said. “How many times does a customer decline a repair and now they’re sitting at home and wondering, ‘Man, should I get this work done?’ Go get it done today because we could be having some different conversations in a couple of weeks.”

The leadership at LaFontaine Automotive Group is working to stay ahead of tariffs and it is trying to be transparent by actively marketing repair work to its customers.

The dealership group, which has 43 stores in Michigan, is in “active communication” with all 28 brands it sells and with its parts distributors to assess and navigate any impacts from the tariffs, said spokesman Max Muncey. It is also being proactive with customers.

“We have reached out to guests who have visited for service within the last three months but declined recommended repairs,” Muncey said. “We are letting them know that we currently have their necessary parts in stock and can complete their service without added costs from potential tariff increases.”

The outreach has resulted in “an uptick in service work” across the dealerships, he said.

“Not only are more customers bringing their vehicles in for service, but we have also experienced increased demand for our mobile service vans, which go directly to guests to complete necessary repairs and maintenance at their convenience,” Muncey said.

Auto repair still cheaper than a new car

Also, LaFontaine Automotive Group is in a unique position to help mitigate supply challenges for others.

The company is a leader in wholesale parts. It operates LaFontaine Parts Distribution Centers in Livonia and Grand Rapids. The two locations total over 150,000 square feet of parts and stock nearly $25 million in parts inventory.

The centers supply parts for LaFontaine’s 43 dealerships, eight collision centers and more than 3,000 repair shop customers across Michigan and surrounding states, Muncey said. The extensive parts network keeps LaFontaine well-stocked with parts for repairs.

He also offered this bit of insight, which the Cauleys would appreciate.

“Even with a 25% tariff, the effect on individual repair costs is significantly lower than on the price of a full vehicle,” Muncey said. “The vast majority of commonly replaced parts — such as quick-service and consumable components — are typically less than $1,000, meaning the direct impact on these parts remains relatively contained.”

Chadwick said tariffs remain a bit of a “moving puzzle” because no one knows how long they will remain in place. But there is an expectation that many people will get a higher-than-usual tax return this year, which might inspire them to get their repairs done in the next couple of months.

Jamie L. LaReau is the senior autos writer who covers Ford Motor Co. for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @jlareauan.

Major auto-exporting nations are in crisis mode after President Trump announced new 25 percent tariffs on imported cars and auto parts, starting April 3, that will hit popular brands from Toyota to Porsche.

Nearly half of new passenger vehicles sold in the U.S. in 2024 were assembled outside the U.S., according to data from S&P Global Mobility. Most come from five nations: Mexico, Japan, South Korea, Canada and Germany.

Economic driver

Cars drive the economies of these nations and typically account for a big proportion of exports. 

U.S. auto tariffs could reduce economic growth in Japan by 0.2 percentage point, said Takahide Kiuchi, executive economist at Nomura Research Institute. If Japanese carmakers shift production to the U.S., they would maintain sales but “it would be a headwind for the Japanese economy,” he said.

The automotive industry is also a linchpin of the European economy, accounting for 7 percent of the European Union’s economic output. For Germany, auto exports to the U.S. account for close to half a percent of value added in the economy, according to Capital Economics.

The impact of tariffs would stretch deep into the German supply chain. Roughly a third of small and midsize automotive suppliers surveyed by the country’s automotive trade association last month expected to be directly affected by U.S. tariffs.

More than a dozen global automakers operate close to 40 plants in Mexico, including General Motors, Mercedes-Benz, BMW, Hyundai and Toyota. The country exported almost three million vehicles to the U.S. and supplied 40 percent of U.S. auto parts last year. Close to two million Mexicans work in the vehicle and auto-parts industries, with exports last year close to $200 billion.

Brian Kingston, the head of the Canadian Vehicle Manufacturers’ Association, said there has been more than $280 billion of investment in the North American auto industry since 2020, most of which was in the U.S. and all of which was done under the U.S.-Mexico-Canada Agreement that Trump signed in 2018. Canada’s auto sector employs more than 125,000 people and produced roughly 1.3 million cars last year, most of which were exported to the U.S.

Big exporters

The world’s biggest carmaker, Toyota, shows how the industry relies on exports to the U.S. American showrooms for Toyota feature Prius hybrids made in Japan, RAV4 sport-utility vehicles made in Canada and Tacoma pickups from Mexico. 

Last year, Toyota sold 2.3 million vehicles in the U.S. About a quarter of those vehicles came from Japan, and an additional quarter or so were shipped from Canada and Mexico. The remaining half were built in the U.S., a Toyota spokesman said.

Many non-U. S. automakers get a quarter or more of their sales in the U.S.

rump said he wanted the carmakers to move their production to the U.S. Hyundai said at the White House on Monday that it would invest an additional $21 billion in U.S.-based car manufacturing and supply chains for critical materials, including a $5.8 billion steel mill to be built in Louisiana.

German luxury brands Mercedes-Benz and BMW have developed manufacturing bases for sport-utility vehicles in the U.S. in recent decades, but they continue to ship sedans across the Atlantic as well as engines and transmissions for the SUVs.

All the vehicles sold in the U.S. by Audi and Porsche, both owned by Volkswagen, are imported. Honda’s exports to the U.S. include the made-in-Canada CR-V and Civic and Mexico-produced HR-V. Hyundai’s exports include the hybrid Tucson and Palisade SUV. 

Governments hit back

South Korea said it planned emergency support for the auto industry. Trade minister Ahn Duk-geun said the industry faced “considerable damage.” Japan said it would ask Trump for a tariff exemption, and Prime Minister Shigeru Ishiba said retaliation was an option.

In Brussels, European Commission President Ursula von der Leyen condemned the tariffs as “bad for businesses, worse for consumers,” while saying the EU would seek negotiated solutions.  

German Economy Minister Robert Habeck said the EU should respond decisively and “not give in to the U.S.”

In Mexico, the government plans to step up efforts to obtain preferential tariff treatment from the U.S., particularly in the automotive sector where both countries are highly integrated. “What we are looking for is that the products made in Mexico ultimately have a better price than any other country—such as Germany, Japan, South Korea—that also exports to the U.S.,” Economy Minister Marcelo Ebard said Thursday.

One Canadian government official said that Commerce Secretary Howard Lutnick reached out to Doug Ford, the leader of the province of Ontario, and suggested that Canada could get a break on the tariffs that Trump announced on Wednesday.

U.S. tariffs on goods from Canada and Mexico could be felt particularly acutely by automakers — and car buyers — because of the number of vehicles and parts that come into the United States every day as they head to market.

President Trump has threatened to put tariffs as high as 25 percent on goods from Canada and Mexico, the nation’s two closest trading partners. On Wednesday, he suspended that threat for cars for one month.

Even with the reprieve, he stressed that he expected automakers to, as Karoline Leavitt, the White House press secretary, said: “Get on it, start investing, start moving, shift production here to the United States of America, where they will pay no tariffs.”

zone was created in 1994, automakers have built supply chains that cross the borders.

Manufacturers achieve economies of scale by building engine and transmission plants that are large enough to supply a number of vehicle factories in North America. Similar thinking works for other parts, too — seats, instrument panels, electronics, axles.

“That harnesses the strength of each country, to the betterment of the companies and to the consumer,” said Sam Fiorani, a vice president at AutoForecast Solutions, a research firm. “Vehicles would be less affordable if all the parts had to be made in one country.”

Ultimately a vehicle is considered an import when it is shipped to the United States after undergoing final assembly in another country. But because of how complex supply chains have become, it is increasingly hard to say which vehicles are American-made and which are imported.

The 2024 Chevrolet Blazer, a popular sport utility vehicle made by General Motors, is assembled in a plant in Mexico using engines and transmissions that are produced in the United States.

Nissan makes its Altima sedan in Tennessee and Mississippi; the turbocharged version of the car has a two-liter engine that comes from Japan, and a transmission made in a factory in Canada.

Then there’s the Toyota RAV4. Most RAV4s sold in the United States are made in Canada. The Canadian-made models use engines and transmissions that are built in the United States and shipped north — before the completed vehicles are transported into the United States for sale.

The Trump administration has not yet elaborated on how tariffs would be applied to components like engines that were shipped across the border and then returned to the United States as part of completed vehicles.

While the RAV4 is technically imported from Canada, about 70 percent of the vehicle’s components — as measured by their value — come from the United States, according to the National Highway Traffic Safety Administration, which tracks the place or origin of parts that go into vehicles sold here.

The Nissan Rogue S.U.V. goes the other way. It qualifies as a domestically produced vehicle because it is assembled at Nissan’s plant in Smyrna, Tenn. But only 25 percent of its content originates in the United States. The 2024 version’s engine comes from Japan and its transmission from Mexico, according to data from the traffic safety agency.

The threat of tariffs has automakers fretting. “Let’s be real honest,” Ford Motor’s chief executive, Jim Farley, said at an investor conference in February. “Long term, a 25 percent tariff across the Mexico and Canada borders would blow a hole in the U.S. industry that we’ve never seen.”

The chairman of Stellantis, John Elkann, said recently that his company supported Mr. Trump’s desire to promote American manufacturing, but added that the company — whose brands include Chrysler and Jeep — felt that trade with Mexico and Canada should remain “tariff free.”

Over the last 20 years, the number of imported vehicles sold in the United States has remained relatively constant, with dips caused by the financial crisis of 2008-9 and the coronavirus pandemic. The largest source is Mexico, followed closely by Japan, South Korea and Canada.

During that time, the number of cars produced in the United States has fluctuated. Domestic production exceeded 12 million vehicles in 1999, but this figure plummeted during the recession. Since then, the industry showed a strong rebound as fuel prices stabilized and consumer confidence returned, though the production volumes never fully regained the numbers seen in the early 2000s.

For many consumers, where their car comes from isn’t much of a concern. Frank Krieber, a retired tech executive from Charlotte, N.C., bought a Chevrolet Tahoe a few months ago. He assumed it was an American vehicle — and indeed, it is assembled in Arlington, Texas. But slightly more than a third of its parts are made in the United States, and about the same amount come from Mexico, according to the National Highway Traffic Safety Administration.

“I don’t mind the Mexican content,” Mr. Krieber said. “If it was made in Mexico instead of Texas, I still would have bought it.”

A look at the long-term trend in OEM consolidation

By Glenn Mercer

Winter is the season of marriage proposals: in much of the world it’s the most popular time to pop the question.¹ And it seems now the entire global automotive industry has decided love is in the air, what with Honda and Nissan apparently headed to the altar². The usual rationale has been dusted off and revived: “We need more scale, to pay for [ fill in the blank ] EV / AV / mobility services / software / platforms / a bigger headquarters / banker fees…”

The track record of scale-seeking mergers is shaky at best: one could enumerate dozens of tie-ups that flopped. And evidence on scale economies in automotive is itself weak, such that the late lamented Sergio Marchionne was (possibly apocryphally) once quoted as saying that “The minimum economic scale of a car company is always 2 million units larger than the size of the company of whose CEO you asked the question!”

We’ll leave the pro and con M&A debate aside for now (though contact me if you want a look at my own research into the topic) but instead just present a possibly-relevant chart on: just how consolidated is the global OEM industry? Have we been marching our way to conglomerations which control ever-larger shares of the market?

Um, no.

The share of global light duty vehicle production controlled by the ten largest OEM groups has been gently drifting downwards. I was too lazy to go back and look before 2001, but I do have an old chart showing a figure of 82% for 1990, supporting my point further.

The shifts behind this result include among other factors the two big Americans of GM and Ford retreating back to their profitable home market, and Chinese entrants such as SAIC and BYD rapidly growing.

But the rationale, or lessons learned, from this chart are harder to parse. Are OEMs avoiding M&A because they feel they are already big enough to compete (that is, are returns to scale – beyond a certain point – just not as strong as we might have thought they were)? Or are they collectively being foolish about this and had better step up growth (organic or via merger) right away? Or do we think that even if the scale effects are there, they are just too hard to capture via M&A? (Again, let’s face it, a lot of tie-ups, maybe even most, have failed to deliver.³)

So I don’t know what to read into this curve: it could equally indicate we think M&A is not the answer… or, that a new M&A wave is long overdue. So as they say in the rom-com movies, as Honda and Nissan approach the altar: “Speak now or forever hold your peace.”⁴

---

(By the way, I acknowledge that the calculations underlying this line are fraught. In drawing this, one has to decide questions such as: do I include the truck divisions of OEMs? do I count sales or do I count production? was Mazda “part of” Ford back when, or should I count it separately? etc. We can argue these points, but the reason I went back so many years with the chart is to allow time for the puts and takes to somewhat average out and cancel each other out.)

1 As always, Car Charts eschews opinions for facts. See “Winter continues to be the most popular season for couples to get engaged, most notably in North America and Western Europe.” From the Global Wedding Report. You don’t get sources like these in other automotive publications, now do you?

2 If you think that is a strange pairing, well go back and reflect on the successive Chrysler weddings (not even counting AMC and Mitsubishi): DaimlerChrysler, CerberusChrysler, FiatChrysler (Fiat itself rebounding from a brief fling with GM), and now Stellantis. See the world’s expert on serial marriages, Zsa Zsa Gabor, who said “A girl must marry for love… and keep on marrying until she finds it.”

3 And M&A has working against it the need for fast action. More than one OEM executive who has been through the merger mill has told me it takes something like two years just for everyone to figure what they are doing, in the new combined entity (and for all the jockeying for the diminished number of C-suite spots to play out). If you have to move as fast as say, BYD, today, can you afford to divert all your managers into merger-integration work?

4 Naw. We’ll second-guess all this endlessly after the fact, regardless! Human nature dictates we’ll never “hold our peace.” So therefore I have a few comments to make about the Cleveland Browns Watson decision back in 2022…

CES 2025 showed an auto industry tiptoeing toward reinvention.

Automakers, suppliers and technology companies’ announcements centered on strategy and fulfilled promises, rather than splashy surprises. The convention also foreshadowed the industry’s concern over how the incoming Trump administration may upend policies and plans already in motion.

The new technologies are “not as bold and aggressive as they used to be in past years. You don’t see these over-the-top claims of where the innovation is going to be. It’s much more tangible,” said Marques McCammon, president of luxury vehicle startup Karma Automotive. “There’s a little bit of uncertainty in the industry.”

Big suppliers such as American Axle & Manufacturing generally know automakers’ product direction — and plan their own business based on expected orders. “But they’re obviously in flux” as the industry awaits regulatory changes, said Tony Pistagnesi, executive director of innovation and business development for the drivetrain supplier.

New regulation under the Trump administration will be “a big driver of the decisions that we’re going to have to make about vehicle architectures, and hybrids versus plug-in hybrids versus EVs,” Pistagnesi said. “I’m not saying we’re waiting around to see. We’re all moving ahead, but that’s going to be very impactful.”

President-elect Donald Trump is expected to derail many of the carbon reduction policies and incentives that the Biden administration put in place, pushing much of the industry to reconsider EV plans.

Where once EVs were the highlight of the show, two weeks before Trump takes office, few were on display in the sprawling Las Vegas Convention Center for the roughly 140,000 showgoers.

Honda shared production plans for the EVs it announced at last year’s show, and Scout Motors, a Volkswagen Group-backed startup, showed the extended-range hybrid versions of its electric Traveler SUV and Terra pickup, rather than the battery-electric models.

“There’s a lot of stress on the investments made in electrified vehicles and now some of that is being returned to hybrid vehicles,” said Mark Wallace, CEO of battery supplier Clarios.

Tech giants shape the auto industry

Still, the excitement around the technology of tomorrow offered an optimistic backdrop to the policy uncertainty of today.

Legacy suppliers and automakers touted new partnerships with companies at the forefront of advanced technology and artificial intelligence, including Amazon Web Services, Nvidia and Qualcomm.

Qualcomm has typically focused on new products at CES, said Nakul Duggal, the supplier’s group manager for automotive, industrial and cloud businesses.

This year, the show was about “the amount of technology change that is happening around us, across the industry,” he said.

Qualcomm leaders believe, for the first time, that the auto industry is embracing technology change as efficiently as other industries are, he said.

Qualcomm showcased its tech prowess in demonstrations, “but more importantly, a lot of our partners are showcasing the same thing: Tier 1 partners, ecosystem partners, OEMs,” Duggal said.

“That doesn’t happen very often,” he said. “It’s true across Gen AI. It’s true across [advanced driver-assistance systems], automated driving, a lot of new experiences. That feels pretty good.”

At least 10 suppliers, vehicle technology providers, automakers and even a motorcycle brand announced partnerships with the chipmaker during the show.

Chipmakers have become the titans of the automotive side of CES in recent years. Nvidia CEO Jensen Huang’s keynote drew an enthusiastic crowd that lined up hours before he took the stage.

Nvidia’s automotive portfolio spans traditional automakers, EV makers, robotaxi businesses, truck manufacturers, top suppliers, sensor developers, factories and cloud computing.

“Each car company might work with us in a different way,” said Huang, but “we’re working with just about every major car company around the world.”

Huang predicted autonomous vehicles, powered by chips and AI, will be the first trillion-dollar robotics industry.

Nvidia intends to accelerate autonomous vehicle and humanoid robot development with its latest advancement.

Nvidia Cosmos, unveiled at CES, relies on AI underpinned by world foundation models that use text, image, video and movement to simulate virtual worlds. Developers can customize the models with data, such as video recordings of autonomous vehicle trips. Nvidia is trying to narrow the gap between simulations and real life, which will more quickly train autonomous vehicles for all driving scenarios.

Nvidia teased its new technology as robotaxi company Zoox, an Amazon subsidiary, tested its AVs along the Las Vegas Strip. Zoox plans to launch an autonomous ride-hailing service this year.

AI has enabled humanoid robots and autonomous driving “to come to life,” said Jeff Hamphill, chief technology officer for powertrain supplier Schaeffler in the Americas. “These things are really coming to pass now, and it’s just a tremendous opportunity for a lot of companies, and certainly for us.”

Despite the enthusiasm for self-driving technology, commercializing autonomous vehicles “remains pretty difficult and expensive,” said Jeremy Carlson, associate director at S&P Global Mobility. “There’s not necessarily an immediate return on any of that investment. It’s still a long runway for these companies.”

Chinese EV, tech competition

A couple of Chinese automakers — Zeekr and Great Wall — used CES as a venue to show new vehicles and technology.

“Zeekr is probably the star of the show in terms of the automotive section,” said Robby DeGraff, manager of product and consumer insights at AutoPacific. “There was so much interest and curiosity for the Zeekr brand.”

Zeekr, part of Geely Holding Group, displayed three electric models: The Mix van, which is also the Zeekr RT robotaxi used by Waymo; the 001 FR, a limited-edition, high-performance sedan; and the 009, a luxury multipurpose van.

The Zeekr press conference, in a relatively small room, was standing room only, and the reporters swamped the cars to take turns sitting inside after the company’s remarks, DeGraff said.

Great Wall Motor showed a three-row crossover and demonstrated gesture technology that allows passengers in the back seat to use their hands as a virtual mouse to control the infotainment screen.

“If I had to pick a word to describe the Chinese tech and the automotive products, it’s ‘humbling,’” DeGraff said.

Otherwise, automakers’ presence at CES was muted. Honda and Sony Honda Mobility shared details on previously announced vehicles, BMW showed a new panoramic infotainment system and Toyota focused on its Woven innovation hub. Exhibits from General Motors, Ford, Hyundai, Kia and other leading automakers were noticeably absent, but automaker representatives were in Las Vegas, said Neil Boehm, COO at vehicle mirror and technology supplier Gentex.

“They’re still out here looking for partnerships and suppliers to bring new technology because they know they have to change what they’re doing,” Boehm said.

Laurence Iliff, Jack Walsworth, Pete Bigelow, John Irwin, Molly Boigon and Richard Truett contributed to this report.

Demand for pickup trucks and hybrid vehicles helps automakers increase deliveries; challenges loom for 2025

The auto industry eked out a small increase in U.S. vehicle sales for 2024, helped by better availability on the new-car lot and a flurry of promotional deals in recent months. 

U.S. dealers sold 15.9 million vehicles last year, up 2.2 percent from 2023, according to an estimate Friday from research firm Wards Intelligence. A robust holiday selling season lifted the final tally, with December car sales growing 6 percent.

For 2025, analysts see another small rise in car sales, but also some potential trouble spots. New cars are still expensive, especially with interest on car loans pushing average monthly payments above $750. 

The electric-vehicle transition has been slower to materialize than many car executives expected. And President-elect Donald Trump’s proposal to place steep import tariffs on goods from Canada and Mexico could disrupt the industry and make the cheapest new cars significantly more expensive.

Here is a look at crucial aspects of the U.S. auto market heading into 2025:

More cars on the lot

Vehicle availability has continued to bounce back from pandemic-era lows, when supply-chain disruptions shrank the number of cars at U.S. dealerships to about one million in late 2021. Last month, that number had rebounded to about 2.7 million vehicles, according to research firm Wards Intelligence.

As production has recovered, automakers have been offering more promotions, such as cash-back deals and low-interest financing, to keep sales moving. Car buyers received on average about $3,400 in incentives last month, an increase of 25 percent from a year ago, according to J.D. Power data.

Car payments are still high

Even as new car prices have eased, car payments haven’t, primarily because of high interest rates. The average monthly payment on a new-car loan was $753 as of November, up from $738 a year earlier, according to car-shopping site Edmunds.

The Federal Reserve’s moves to trim short-term interest rates in late 2024 haven’t translated into much relief for vehicle shoppers, with interest rates on new-car loans hovering around 7 percent and rates for used cars around 11 percent according to Edmunds data.

Bright prospects for hybrids

Electric vehicles continue to increase as a share of the U.S. auto market, but conventional hybrids notched the biggest gains in 2024, according to Cox Automotive.

Hybrid versions of popular gas-powered models, such as the Toyota Camry and Honda Civic, use small batteries to improve the fuel economy on their gas engines. These cars don’t plug in or run on electricity alone, meaning consumers don’t have to change their driving habits.

Toyota Motor, the leader in hybrid vehicles, said U.S. sales of hybrids and EVs rose more than 50% last year, accounting for 43% of its total sales. 

David Christ, general manager of Toyota in North America, said hybrid versions of popular models, such as the RAV4 SUV, sell at a faster pace than their gas-powered counterparts, despite prices that are about $2,000 higher on average.

“It’s worth it to them to pay that additional price to get the hybrid,” Christ said in an interview Friday.

Winners and losers: Mazda and Honda gain; Jeep, Ram and Tesla retreat

Japanese automakers Mazda and Honda grabbed U.S. market share in 2024, based on preliminary figures from Cox.

Mazda’s sales climbed 16 percent, benefiting from a yearslong strategy to remodel its dealerships and move upmarket with pricier SUVs.

Rivian’s shares surged 24 percent on Friday after the electric-truck maker said it delivered 14,183 vehicles in the fourth quarter, above the 13,000 estimate of analysts polled by FactSet. For the year, the company’s 51,579 vehicles sold was in line with Wall Street’s forecasts.

Stellantis, the parent of Jeep and Ram, was the U.S. market’s underperformer in 2024, with sales sinking 15 percent. U.S. dealers have complained throughout the year that high prices on Jeep SUVs and Ram pickups chilled sales. Troubles in the U.S. market contributed to the departure last month of Stellantis Chief Executive Carlos Tavares.

Tesla, the leader in the U.S. electric-vehicle market, reported a global sales decline in 2024 after more than a decade of growth. The Texas-based company headed by Elon Musk doesn’t disclose country-specific sales, but Cox estimates its U.S. sales suffered a decline of about 6 percent in 2024. 

Car buyers are moving back toward leasing, with the share of sales completed through leases rising from 20 percent in 2023 to 24 percent last year, according to credit-reporting firm Experian.

Leasing offers consumers a new car at a lower monthly payment, making the option attractive given the effect of high interest rates on purchase loans.

Leases are on the rise partly because some electric vehicles qualify for federal incentives only through leases, helping drive the share of EV sales through leasing to 72 percent as of November, according to Edmunds.

Write to Christopher Otts at christopher.otts@wsj.com