The Road Ahead

Dealers and automakers adapt to a changing market

By Paul Natinsky

The future for Michigan’s automakers and dealers is a lot like the state’s weather—unpredictable. And today’s economic policy environment is only adding to the uncertainty.

At the center of the debate are tariffs, a key flashpoint in U.S. economic policy. The goal is to protect American industry by making it harder for foreign companies to sell goods and services in the United States. The primary tool? Imposing steep tariffs on those imports.

It sounds simple enough. But in a global economy—where parts often cross international borders multiple times before a vehicle is fully assembled—the reality is far more complicated.

“We speak to the White House almost on a daily basis,” said Ford Motor Company Executive Chair Bill Ford, speaking at the Mackinac Policy Conference in May. “And I think…the hard part for a lot of people in Washington…regardless of party, is to understand that our lead times as an industrial manufacturer are longer than political lead times, and we can adapt to almost anything except uncertainty. And unfortunately, where we are right now is there’s nothing but uncertainty.”

Layers of Tariffs

Ford outlined four layers of tariffs currently impacting the auto industry: fentanyl tariffs, reciprocal tariffs, auto tariffs, and steel and aluminum tariffs.

“I think that proves the point that, unintentionally, there are so many layers to our industry, and we get hit with things people don’t always realize,” he said.

“And look, I completely agree with what the president wants to do, which is to have a strong American industrial base,” Ford continued. “We’re the most American company. We make 80% of our vehicles here. Most of our competitors make 50% or less, and it has cost us over the years. It’s about a $2,000 vehicle penalty versus our domestic competition, because we’ve chosen to be the most American. But I always felt that was the right thing to do, so I completely agree with the goal.

“The question is, getting there can’t go like this. There are just too many things that are tails on those decisions that have to be worked through. We live in a time of great uncertainty. And whether it’s, tariffs, obviously, things like access to rare earth, which go into so many industrial products, emission regulations… So, while we are very adaptable, we do have long lead times, and that sometimes is completely out of sync with the way Washington is.”

It’s not just the tariffs or the current administration, Ford added. The industry is forced to make sharp U-turns every time a new administration takes office, a challenge compounded by the see-saw nature of American politics, where Democrats and Republicans frequently succeed one another.

Closer to Home

Closer to home, those who sell cars are facing pressures of their own. Alex Kassab of Sesi Motors in Ann Arbor sells Lincolns, Volvos and Mazdas at his family-owned dealership, at a time when more dealerships are being acquired by private equity firms and corporate groups.

Kassab, 43, says his great-uncle founded the dealership in Ypsilanti in the 1940s, when the Lincoln brand was first introduced after World War II.

“It’s always been in my blood. It’s been my passion my whole life. Since I was very young, this is what I wanted to do,” he said.

Kassab noted that prices have ticked up slightly, but it’s still too early to determine the full impact tariffs may ultimately have on vehicle costs.

The Times, They Are Changing

In addition to fending off corporate dealership acquisitions, independent dealers like Sesi Motors are also facing competition from online sellers such as Carvana and Tesla, Kassab said. The solution, he believes, remains the same: personalized service and strong community relationships. Sesi focuses on building long-term connections with customers, hoping they will return to purchase multiple vehicles and rely on the dealership as a trusted source of advice.

While Sesi does offer online car-buying options, Kassab prefers getting customers into the showroom, where personal relationships can take root.

He also noted that many customers are trying to finalize purchases or leases before broader macroeconomic changes, such as interest rate shifts or potential tariff impacts, reach the retail level.

Another trend—or perhaps a counter-trend—Kassab is seeing is softer-than-expected demand for electric vehicles. He believes the industry may have gotten a bit ahead of itself on that front. Instead, he’s seeing growing interest in hybrid vehicles, which don’t require charging stations and still offer a gasoline-powered option.

As automakers work to stay ahead of a rapidly shifting political and economic landscape, and dealers like Kassab strive to keep their customer-first approach viable, one thing is certain: the future of Michigan’s auto industry won’t be boring.