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  • Drew Dowdell
    Drew Dowdell

    Tariff Tuesday - Sports Cars are Dead

      April 15th, traditionally Tax Day for those of us living in the United States, is the perfect day to kick off our new series, Tariff Tuesday.

    We picked April 15th because President Trump’s tariffs amount to one of the largest single increases in taxes on the American People in history. The tariffs which, if fully implemented, will raise $1.4 trillion in revenue, an increase per household of $1,900 to $7,600 per year. Trump's tariff policies change daily, sometimes hourly, so as always, this information is correct for at least 15 minutes after publication.

    Each Tuesday we will cover how these tariffs will impact the auto industry in specific ways and review the tariff news from the past week.

    Prediction: Affordable Sports Cars are Dead

    Sports cars, coupes, and convertibles, are already suffering from low sales as the market continues its shift towards SUV. Light and nimble, and full of fun, sports cars don’t fit into the aging American populace’s lifestyle.

    There have been no two-seaters built in the U.S. since the Pontiac Solstice and Saturn Sky went out of production in 2010.

    The Mazda Miata, Nissan Z, Subaru BRZ, Toyota 86 all have 1% domestic parts content, meaning that if the car is not yet in the country, there will be an additional 25% tax added to the price.   For the Mazda Miata, the lowest price of the group, that brings the base price from $29,530 to approximately $36,912, a more than $7,000 increase.  Mazda only sold 8,103 Miatas in 2024, already a decline of more than 1,000 units from 2023. Adding $7,000 to the price is not going to positively affect those sales numbers.

    The scene is similarly bleak for the other models mentioned.  The Toyota 86 / Subaru BRZ sell roughly 15,000 units a year combined, but will also see a $7,000+ price increase going forward. At roughly the same price point, Toyota sells 18,000 U.S.-built Toyota RAV-4s every 2 weeks.

    The Nissan Z, which struggled to grow last year, has finally gained momentum, catching up to the Miata in number, but with a $44,000 base price it could see a jump of $11,000, a tough pill to swallow for a car that is largely sold as a spare, fun car.

    Even the Ford Mustang with its 80% domestic parts content is not immune. Until the tariff drama started, the term “domestic content” included parts sourced from Canada and Mexico as part of the North American Free Trade Agreement. Even if all of the 80% domestic content is produced in the United States, the remaining content could see at least a $1600 increase in price. However, Ford doesn't fully break down which parts of the domestic content are actually built in Canada or Mexico, so additional costs could be imposed above the $1,600 increase.

    Ford Mustang sales cratered in Q4 of 2024, falling over 43% from the same quarter in 2023. For the full year 2024, Mustang sales fell 9% year over year and for the first time, the Mustang Mach-E EV crossover outsold its namesake. This happened all while the Mustang’s main competitors, the Chevrolet Camaro and Dodge Challenger, ended production and sales dwindled out.

    At the higher end of the market, Porsche and Lamborghini have warned that they will have to add massive price increase to their products to remain in the U.S. market.

    With sales already struggling for affordable sports cars, we think it is unlikely that many will survive, leaving only high-end sports cars available to consumers.


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    R.I.P. to the affordable sports car, but also to young people being able to afford an auto period! 😒 

    Tariffs led to the Great depression, now another less than intelligent person is destroying this country. Amazing how after 6 bankruptcies, people still felt #47 was a good choice to lead this great democracy. America is a Great Country, never fell down except in the dementia minds of the boomers who want to live in the 50's/60's again.

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    "affordable" sports cars were dead like 5-10 years ago. Once Camaro SSs and Mustang GTs couldn't be found for under 40k, Miatas crested 25k, BRZs surpassed 30k. A BRZ is already nearly 8k more than it was when it first came out. 

     

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    4 hours ago, ccap41 said:

    "affordable" sports cars were dead like 5-10 years ago. Once Camaro SSs and Mustang GTs couldn't be found for under 40k, Miatas crested 25k, BRZs surpassed 30k. A BRZ is already nearly 8k more than it was when it first came out. 

     

    While that’s true, that’s also true across the industry. So affordable is still relative to its non-sports-car showroom mates. 
     

    The Jeep Renegade was under $20k when released and by the time it was canceled was $30k

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    Tariffs will kill off the Japanese sports cars, and the Mitsubishi brand and probably Maserati, JLR, Alfa Romeo who are all struggling and might be gone in 5 years even without tariffs.  Which then, with less competition in the market, prices of everyone else will probably go up.

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    7 minutes ago, smk4565 said:

    Tariffs will kill off the Japanese sports cars, and the Mitsubishi brand and probably Maserati, JLR, Alfa Romeo who are all struggling and might be gone in 5 years even without tariffs.  Which then, with less competition in the market, prices of everyone else will probably go up.

    Agree that this whole Tariff mess will take out those that are already on deaths door. This I suspect could clean out a few of the early name plates. Sad that so many billions was wasted by an idiot CEO trying to rebuild a dead industry in Italy with trying to bring back poorly built name plates. Alfa Romeo, Maserati should have never been invested in. But that can now be said for more American name plates too. Time to let Chrysler die with dignity. In my humble opinion Buick other than China should just be put into the history books. GM = Entry level Chevrolet - Mid level GMC and luxury Cadillac.

    We still have an overabundance on name plates globally.

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    46 minutes ago, smk4565 said:

    Tariffs will kill off the Japanese sports cars, and the Mitsubishi brand and probably Maserati, JLR, Alfa Romeo who are all struggling and might be gone in 5 years even without tariffs.  Which then, with less competition in the market, prices of everyone else will probably go up.

    The tariffs definitely put Stellantis in a bit of a pickle.

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    2 hours ago, G. David Felt said:

    Agree that this whole Tariff mess will take out those that are already on deaths door. This I suspect could clean out a few of the early name plates. Sad that so many billions was wasted by an idiot CEO trying to rebuild a dead industry in Italy with trying to bring back poorly built name plates. Alfa Romeo, Maserati should have never been invested in. But that can now be said for more American name plates too. Time to let Chrysler die with dignity. In my humble opinion Buick other than China should just be put into the history books. GM = Entry level Chevrolet - Mid level GMC and luxury Cadillac.

    We still have an overabundance on name plates globally.

    There is over abundance for sure, especially when China has 100 EV car makers and eventually they will spread out past China.  

    Not only will the tariffs kill off some weak brands, but it is going to crush a lot of suppliers once the supply chains get all destroyed.  Not to mention dealerships that close up and job losses there.

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    Today's news covers that #47 has signed off on the GOP plan to push his 2017 Billionaire tax cuts through by bringing back the 40% tax bracket on Singled making over $650,000 or couples making over $750,000 taxing the millionaires to give the Billionaires a continued tax break.

    The reason for bringing this up is that a large number of Millionaires are owners of dealerships and already some are saying they could see closing dealerships, example Chrysler dealerships. On top of this is a number of recent videos talking about used autos not selling at auction and dealerships seeing a big decline in used auto sales. Much of this brought on by very crazy low lease rates on EVs, hybrids with ICE being the most expensive. 

    Now you have Tariffs, and the auto industry is a total mess. As such, I agree with folks here that we will see some name brands close, this tariff war is going to force companies to look and cut brands that are not profitable.

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    16 hours ago, Drew Dowdell said:

    While that’s true, that’s also true across the industry. So affordable is still relative to its non-sports-car showroom mates. 
     

    The Jeep Renegade was under $20k when released and by the time it was canceled was $30k

    Absolutely. 

    11 hours ago, G. David Felt said:

    The reason for bringing this up is that a large number of Millionaires are owners of dealerships and already some are saying they could see closing dealerships, example Chrysler dealerships.

    No real loss there though.. I feel like that's more of a Chrysler continuing to bring mediocre products to the table at prices similar to their competition issue. Haven't Stellantis' brands all done crap this year? 

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    29 minutes ago, ccap41 said:

    Absolutely. 

    No real loss there though.. I feel like that's more of a Chrysler continuing to bring mediocre products to the table at prices similar to their competition issue. Haven't Stellantis' brands all done crap this year? 

    Yes, Globally their family of Brands has seen double digit fall due to poor quality, old tech, etc. Will be interesting to see what brands they cut from the U.S. as I can see them closing the Chrysler lineup as well as Masarati and Alfa Romeo.

    Now that we have 245% tariff on all things Chinese, that is going to hurt the auto industry even more.

    https://www.newsweek.com/china-245-trump-tariff-2060295

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