How a CDP can Help Your Dealership Navigate  the Effects of Automotive Tariffs

The April 2nd announcement of a 25% tariff on all imported passenger vehicles and auto parts is significant news for the automotive industry. While these tariffs were expected, the exact implications for auto manufacturers and dealers in the USA over the coming months remain uncertain.

The new tariffs will apply to all auto parts manufactured outside the United States, including engines, transmissions, electrical components, and more, as well as all imported passenger vehicles and light trucks. Nearly all American car manufacturers source parts from abroad, with the percentage of foreign-made components ranging from less than 25% to over 50%, varying by the model within each OEM.

While it’s challenging to predict the precise impact of these tariffs, several significant concerns have emerged, including the potential for rising vehicle prices, supply-chain disruptions, and low inventory levels that echo the not-so-distant COVID-19 pandemic. Dealerships are left navigating some uncertainty about the future of their businesses but there’s plenty of opportunity for car dealers to fortify their operations and stay ahead of the curve amid these changes.

Background on Automotive Tariffs

Tariff increases, whether they apply specifically to the automotive industry or to other sectors, fall under Section 232 of the Trade Expansion Act of 1962. This provision enables the government to investigate whether the importation of certain products, such as steel or automobiles, threatens U.S. capabilities in key industries. To bolster domestic production, the US government has implemented 25% tariffs on steel and aluminum.

After the initial tariff announcement on March 26, 2025, and the implementation of global reciprocal tariffs on April 2, 2025, the US government granted a 30-day exemption for automakers compliant with the United States-Mexico-Canada Agreement (USMCA). This brief reprieve gives OEMs and dealers a crucial month to continue manufacturing and sales without the added pressure of tariffs, allowing them to adapt strategies and plan for upcoming changes. The goal of this extension is to encourage automakers to begin shifting their production back to the United States, but whether that goal will be achieved remains to be seen.

Immediate Impacts of Tariffs on the Automotive Industry

With only a few weeks until the auto tariff takes effect, here’s a look at what we are already observing and can anticipate as immediate effects:

Cost Increases

• Each vehicle sold in the United States could see an additional cost of as much as $12,000. 
• Vehicle prices and parts remain approximately 20% higher compared to pre-pandemic levels. However, the industry has shown remarkable resilience and adaptability, with the new-car market growing in 2024.

Production and Shipment Halts

• Some automakers are taking significant steps, including temporarily pausing production or shipments. 
• Certain non-American manufacturers have halted their shipments to the US, leaving dealerships facing unexpected inventory shortages. 
• There has been a noticeable drop in “Days’ Supply” across multiple OEMs, likely stemming from a sudden surge in pre-tariff sales combined with fewer shipments. 

Consumer Sentiment

• There has been a surge in new car sales across the industry, as buyers rush to take advantage of pre-tariff pricing. Some OEMs have reported record traffic in the weeks following the initial tariff announcement in March. 
• Dealers have observed a 7-11% increase in year-over-year (YoY) website traffic in the week leading up to the tariff announcement. 

How a CDP Can Help Dealerships Weather the Tariff Storm

Like many previous challenges, dealers can leverage their first-party data to engage potential buyers and bolster sales to help navigate this storm. Customer Data Platforms (CDPs) can assist dealers in leveraging their existing shopper data to target the right customers with the right messaging, whether it involves OEM-specific deals within the 30-day exemption period for clarity or encouraging additional sales before that period ends.

Unified Customer View

CDPs consolidate your first- and third-party data from disparate sources, merging and cleansing all customer information with identity resolution technology to create singular entities for each shopper. With all of your shopper activity data in one place, you can easily identify who is actively in the market, enabling your sales team to focus their efforts effectively.

A unified customer view offers deep insight into dealership shoppers including their positions in the buying journey, their vehicle of interest, their equity state and more. AI automates the unification process, continuously integrating new shopper data. This comprehensive view becomes even more crucial when navigating the uncertainties brought on by new tariffs, allowing dealerships to understand how these changes may affect various customers. 

Segmentation and Targeting

The segmentation capabilities of the Customer Data Platform can help dealers create audiences and lists for hyper-targeted marketing and sales efforts. 

To identify key opportunities within your audience, use filters based on recent website visits, specific VDP visits, upcoming lease expirations, or positive equity. These indicators highlight high-value shoppers for your sales team to prioritize. By targeting these individuals with relevant offers, you can help mitigate the impact of tariffs and encourage purchases before prices rise. Offers could include:

• Lease incentives
• Limited-time financing deals
• Trade-in options
• Service packages on new cars

CDPs that leverage AI technology can further enhance this process by identifying users currently browsing your website without submitting a lead, as well as predicting who may start shopping soon based on lease endings or positive equity. With these insights, your dealership can proactively engage both current and potential shoppers, urging them to take advantage of favorable deals and counteract the potential price increases due to tariffs. 

Personal Communications

The power of a Customer Data Platform enables dealers to send targeted, personalized marketing messages to hyper-specific customer groups. Manually crafting personalized communications is often impractical for most dealerships, however, the AI technology within data activation solutions use CDP data to automatically personalize messaging using customer names, vehicles of interest, current financial status, and more, ensuring shoppers receive the information most likely to resonate.

By utilizing the dynamic shopper lists created in the CDP, dealers can harness this data through Fullpath Audience Activation to automate email and SMS campaigns, keeping relevant customers informed about pricing and inventory updates. 

For example, if production or shipment of specific models is on hold due to tariffs, you can promptly notify shoppers who have been browsing those vehicles online that they need to act quickly to secure their desired model while you still have stock. Similarly, if you have reduced pricing or new offers for a particular make or model as a result of the incoming tariff, you can communicate this to interested customers to encourage timely decisions. 

Analytics and Forecasting

Utilizing advanced analytics offered within the CDP allows dealerships to assess the impact of tariffs on regional demand effectively. By analyzing historical sales data, consumer behavior, and market trends, dealerships can predict how changes in tariffs will influence buyer preferences and purchasing patterns in different regions. This insight empowers dealerships to optimize their inventory mix, ensuring they stock the right vehicles where possible to meet anticipated demand.

Practical CDP Audiences to Help Dealers Navigate New Tariffs 

To help dealers fully leverage their CDP to navigate these anticipated tariff-related challenges, consider utilizing the following CDP audiences to proactively mitigate expected inventory challenges: 

Equity Upsells

Build a list of customers who have positive or negative equity in a specific model you aim to boost in your inventory. By reaching out to these shoppers with attractive trade-in options, you can effectively increase your inventory for that particular model.

Service Lane Acquisition

Rather than employing the typical upselling strategy with service lane customers, shift your focus to vehicle acquisition. Utilize the CDP to identify customers with upcoming service appointments who may be open to selling their vehicles. This strategy can diversify your acquisition efforts and open the door to new inventory opportunities.

Inventory Browsers

Create an audience of shoppers who have recently viewed a VDP on your website for vehicles that may face supply issues due to the tariffs. Informing these shoppers that their desired vehicles are likely to be in short supply can encourage them to visit the dealership to make a purchase.

Immediate Actions Dealerships Can Take

Here are a few steps you can take today to minimize the impact on your car dealership where possible:

1. Activate Dealership Data With a CDP

If your dealership already has a CDP, ensure it is functioning optimally so you can fully leverage your customer data. Consider auditing your data sources to verify that all APIs and other connections are operational, providing real-time inventory, pricing, and customer updates.

Building tariff-related audiences takes minimal time, allowing you to precisely target your desired segments. With hyper-segmented audiences prepared, utilize your CDP to determine where to focus your marketing and sales efforts, capitalizing on data-driven insights into pricing, inventory, and sales trends at your dealership. If your CDP is integrated with an AI-powered email or SMS platform, crafting effective messages for these audiences can be done easily. 

2. Review Pricing Strategies

Whether your OEM or dealership decides to raise prices due to reduced competition and lower inventory, or to lower prices to stimulate sales during a cautious buying environment, it’s crucial to ensure that your pricing strategy is data-driven.

By utilizing the data from your CDP, you can review and refine your pricing strategies based on which VINs are most or least popular, current and anticipated inventory levels, and special offers for customers nearing lease expiration. The advantage of leveraging AI is that it can analyze this information for you, saving hours of manual analysis. Given that tariffs are still new and many factors remain uncertain, adopting a dynamic pricing approach with AI is a smart strategy.

3. Promote OEM Offers

At a time of potential major change in the industry, your OEM may be the one leading the way with pricing and inventory strategies. Make sure to highlight manufacturer incentives at your dealership, as these offerings are likely to provide the best options for your shoppers, potentially including special offers or deferred payments. Promoting these incentives can create a sense of urgency among customers, encouraging them to take advantage of favorable financing terms before any tariff-related price changes take effect. 

4. Leverage Fix Ops

Regardless of the impact of the tariffs, your dealership continues to operate, and your service lane is likely functioning mostly as usual. It’s essential not to overlook this aspect of your business, as service remains a constant necessity, irrespective of the tariffs’ effects on sales. To keep communication lines open with your customers, be proactive in your service messaging—sending appointment reminders and offering general advice. This approach will help maintain engagement and minimize the impact on that side of your business.

Additionally, if you have loyalty perks such as sales or service discounts, ensure your customers are aware of them. Highlighting the benefits of making a purchase now versus waiting could provide the incentive your dealership needs in these uncertain times.

5. Train Sales Teams

Shoppers are likely reaching out to dealerships with more questions than sales teams know how to answer. While some inquiries might catch your team off guard, it’s important to remember that the necessary answers do exist—even if that includes acknowledging, “We don’t have any answers right now.” To ensure your sales team provides the best customer experience possible, equip them with talking points on tariffs, insights driven from your CDP, and information about OEM programs. 

Providing your team with these resources will help build their confidence in conversations with shoppers, enabling them to address common concerns and questions effectively. It’s perfectly acceptable to be uncertain about what next month will bring; the key is to maintain a confident demeanor while clearly communicating what you do know. By preparing your sales team with pertinent information, you not only enhance customer trust but also position your dealership as a knowledgeable resource in these rapidly changing times.

Navigating the Impact of Tariffs on the Automotive Industry

The tariffs imposed on the automotive industry are shaking up costs and supply chains, presenting both challenges and opportunities. With the 25% tariff on imported automobiles and auto parts just weeks away, dealerships are faced with rising vehicle prices, potential inventory shortages, and increased operational challenges. While this might feel daunting, changes like these also push dealerships to rethink their strategies and sharpen their competitive edge in a rapidly evolving market.

In this landscape, a Customer Data Platform plays a crucial role in keeping dealerships agile and responsive. By providing valuable insights into customer behavior, inventory management, and market trends, a CDP allows dealerships to make informed decisions and adapt quickly to changes initiated by these tariffs. With hyper-targeted marketing capabilities and the ability to personalize communications, a CDP helps dealerships engage effectively with customers, reinforcing relationships even amid uncertainty. 

Fullpath’s CDP and AI activation solutions can help you stay ahead of your competition during this period and beyond. If you’re ready to turn tariff challenges into a competitive advantage, reach out to our team to discover firsthand how our solutions can elevate your dealership’s performance and resilience in the face of change.