“Look-to-book” is a way dealers measure how well their listed prices line up with the market value guides. If it’s better, more shoppers are likely to notice and buy the cars.
A tariff is a tax on things brought into the country. If the government proposes new tariffs on car parts, it can make cars and repairs cost more because the imported parts get more expensive.
Nexperia is a company that makes computer chips for cars. The episode says it’s expanding in the U.S., which is important because chip shortages can force automakers to cut production.
Piston Automotive is a company that supplies parts for cars. The episode is talking about leadership changes there, which can matter because suppliers affect how parts get made and delivered.
USMCA is a trade agreement. “Rules of origin” are the checklist for proving where a car or parts were made—if it meets that checklist, it can avoid extra import taxes.
Polar Semiconductor is the company/location where the chips would be made. Where chips are manufactured can affect how fast enough chips are available for car production.
Transistors are tiny electronic switches inside chips. Cars use them to control and manage lots of systems, so shortages can slow down building new vehicles.
Piston Group is a supplier company in Michigan. The episode says it has a new CEO and mentions one of its divisions focused on thermal (heat-related) systems for cars.
Vinnie Johnson is the founder of the supplier mentioned in the episode. The host says he returned to lead the company as CEO after the previous CEO left.
“Bait and switch” means a seller lures you in with one offer, but then tries to get you to accept something else—often not as good. In car shopping, it can happen when the advertised price or financing terms don’t match what you’re offered in person.
Online reviews are what customers write after buying or dealing with a business. The point here is that review patterns can sometimes warn people about shady or problematic practices before official enforcement happens.
The FTC is a U.S. consumer-protection agency. “FTC letters” here means the agency warned certain dealerships that their advertising or sales practices might be against the rules.
Star ratings are the quick overall score people leave for a business. This story says you can’t rely on the stars alone—sometimes the detailed comments show problems that the score doesn’t.
The financing department is the dealership team that helps you get a loan or lease for the car. Here, the study says customers complained more about financing-related issues at certain dealerships.
Auto Drive America is mentioned as a group that released a report. In this segment, they’re basically warning that trade rules could make cheaper cars less available.
The chip shortage was when the computer chips cars need weren’t available in enough quantity. Automakers built the most profitable models first, so some other cars were harder to find and used-car prices went up.
The used market is where people buy and sell cars that have already been owned. If new cars are harder to get, more people shop used cars, and that can drive used prices up.
USMCA is a trade deal between the U.S., Mexico, and Canada. A “review” means the deal’s rules could change or be reworked, and that can change car prices and which cars automakers choose to sell here.
Tariffs are extra taxes on imported products. If cars or car parts get taxed, they can become more expensive to bring in, and that can reduce the number of cheaper cars available.
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Welcome to Daily Drive. For Thursday, June 4th, 2026, I'm Kellan Walker in Las Vegas. Today on
the show, the Trump administration's sweeping new tariff proposal has a carve-out for autos.
Dutch chipmaker Nexperia is coming to the U.S. amid a messy ownership battle, and former Honda
exec Mamadou Diallo quietly exits as Piston Automotive's CEO, and it's not clear why. Plus,
new vehicles are already out of reach for a lot of buyers. The trade policies being negotiated
right now could make that worse. Let's run through all the news you need to know to keep up in the
auto industry. The Trump administration's latest tariff proposal comes with a key carve-out for
the auto industry. Vehicles and parts already covered by existing auto tariffs would be exempt
from new proposed duties of 10 to 12.5 percent on 60 U.S. trading partners. That includes Canada,
Mexico, Japan, and the EU. Products compliant with USMCA rules of origin would also be exempt,
but Boston Consulting Group's Mark Gilbert warns that some automotive electronics, interior
materials, and sub-assemblies could still face new duties. The proposed tariffs could take effect
in July. Dutch chipmaker Nexperia is coming to the U.S. for the first time. It's got a deal to
produce automotive transistors at Minnesota-based Polar Semiconductor. The move comes as Nexperia
risk losing its China operations entirely. The Chinese owner Wingtec is demanding
more than a billion dollars in damages after the Dutch government suspended Wingtec's control
over the company last fall. Nexperia China has since declared independence, and chip supplies
to automakers worldwide are still strained. Nissan and Honda have already had to cut production
as a result. And Michigan-based supplier Piston Group has a new CEO. It's founder.
Former Detroit Piston Vinnie Johnson has quietly retaken the top job following the
departure of Mamadou Diallo, who joined the company just two years ago. Diallo previously spent nearly
25 years at American Honda. The president of Piston's Detroit Thermal Systems Division
has also departed. It's not clear exactly when or why either left. Piston is one of the largest
black-owned suppliers in the country, pulling in more than 3000000000 dollars in annual revenue.
And those are today's headlines. You can find more details on all those stories at autonews.com.
Dealerships that were warned by the FTC about illegal advertising practices had twice as many
customer complaints about bait and switch and advertising behavior as the industry overall.
That's according to a new study by Widewale, suggesting online reviews can flag bad actors
before regulators do. Joining me now to talk about it is John Hutter, who covers retail FNI for us
at Automotive News. John, welcome back to Daily Drive. Good to be here. So John, what did Widewale
data reveal about where in the customer, okay, sorry, 321
So John, what did the Widewale data reveal about where in the customer experience these
complaints are showing up most? Yeah, it was interesting because the Dealerships,
Widewale looked at a group of the Dealerships that got the FTC letters and then they compared
them to basically everybody else in the industry. And they found that the Dealerships, their star
ratings were still pretty good. It's like 4.3 versus I think it was like 4.4, 4.5 for everybody else.
So you really don't get it from there. What you do find though is when you go into the actual
text of the reviews themselves, then you start finding trends where it's very clear that this
stuff is happening more frequently at the FTC stores than at just the rest of the industry.
So where this showed up was the complaints about the financing departments, the deals and advertising
and complaints about bait and switch behavior at the Dealerships all appeared twice as frequently
in the FTC pool of stores than it did in the rest of the industry. So that was pretty obvious.
It also showed up, they also found the FTC stores had more complaints about honesty in their reviews
and they had more complaints about professionalism in their reviews. So it showed up in various
things that Widewale analyzed. Now, what should Dealers who weren't warned by the FTC take away
from this study? Yeah, I think it's kind of what the point Widewale was making is you can't just
look at your overall review score. You've got to dig deeper and you can start finding red flags
there. And I think that's kind of the takeaway for Dealers, just because overall your aggregate
review is good, you can find red flags about your business if you actually read what consumers are
saying. Perfect. John Hutter, thank you so much for joining me. Thank you. Coming up, the average
new vehicle is closing in on 52 grand and the trade fight in Washington right now could make
affordable options even harder to find. We'll hear more about that next on Daily Drive.
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Welcome back to Daily Drive. I'm Kellan Walker. The formal USMCA review is set to start July first.
Ahead of the kickoff, a new white paper is sounding the alarm about what tighter trade rules could mean
for the most budget conscious car buyers. Auto's Drive America is a trade group representing
international automakers, including Toyota, Honda and Volkswagen. It wants the trilateral
trade agreement to stay mostly unchanged. John Irwin covers manufacturing for automotive news
and wrote about the Auto's Drive America report this week. He spoke with our own Jake Nier about
what it says and why higher tariffs are making the affordability crisis worse.
John Irwin, always great to have you here on Daily Drive.
Great to be here. All right. So why does the affordable end of the market usually take a
harder hit from tariffs than the rest of the market? Yeah, very basically it's in large part
because these less expensive vehicles are generally less profitable. They have lower margins. So
at the end of the day, if there are more costs, there's less of a cushion there for
these less expensive vehicles versus a highly profitable pickup or large SUV.
Obviously, it varies by model and by automaker and where exactly the vehicles built and everything,
the tariff burden, varies very much model to model. But generally speaking, that's what we're
looking at, where the margins just aren't quite there. In addition to that, only about three
in 10 of the affordable vehicles that are sold in the US are built here. It's according to a
new report by Auto's Drive America, which represents a lot of the international automakers in the US.
And basically what they found is that about 30% of those vehicles are made here, which means
obviously seven out of 10 are made abroad, whether that's in Mexico, Canada, Asia, Europe, imported
into the US. And obviously those 70% of those models are subject to higher tariffs than the US
made vehicles would be. Obviously the US ones are also subject to tariffs and the parts that
go into them are hit with duties and that sort of thing. But obviously if you're importing the
vehicle into the US, the vehicle itself is hit with the tariffs. So a lot of these vehicles
are built abroad, which means that those tariff bills are higher. So at the end of the day,
it's kind of a combination of those factors where if there's a pickup, for instance, or a
large SUV that's made in Mexico, there might be a big tariff hit there when you're importing it
into the US. But there's enough of a margin there where the automakers might be able to
absorb that pretty easily. Whereas a car that might be imported from Mexico, there might be a
less of a profit margin there, which will make it a little bit harder for them to absorb that
hit. So it's a little bit more of a challenge for the less expensive vehicles.
You mentioned the Autostrive America study. And a number jumped out to me in your article. And
that's the citation from Autostrive America that international automakers built nearly nine out
of 10 affordable vehicles made domestically. So I'm curious what that tells us about who's actually
carrying the affordable market right now. Yeah, I thought that was interesting.
I think it largely reflects kind of the strategies of the Detroit automakers,
especially Ford and Stellantis have taken, really emphasizing sales of pickups, large SUVs you've
seen in recent years pull back on sedan offerings and that sort of thing, which are generally
less expensive. And yeah, at the end of the day, that means a lot of the international automakers
are kind of dominating that market. To be fair, GM is in terms of total volume. If you were to rank
all the automakers in terms of vehicles that are sold, you know, $35,000 below GM ranks number two
in the US market. But most of those vehicles are built outside of the US. Whereas a lot of the ones
that are built here in the US, like you said, about 90% of them, according to the study,
are made by international automakers, which I thought was pretty interesting. It kind of
reflects, like I said, a lot of the strategies that the Detroit three have, and again, especially
Ford and Stellantis have adopted in recent years, really, like I said, leaning into those highly
profitable pickups and SUVs, but at the same time, kind of exiting a lot of these segments that
tend to be a little bit more affordable. And that's led in part to the average new vehicle
right now in the US, well, about $50,000 or not kind of pushing toward $52,000, it looks like.
In part, that's just because of changing consumer preferences, pickups and SUVs are
very much in demand and those cost more. But it's also in part a reflection of just fewer choices,
at least from some automakers in those segments. So it's very much a market that's dominated by
the international brands, not to say that there's no representation in there from
the Detroit three, but it's very much dominated at the moment by the international automakers.
You've been reporting a lot on the push for tighter rules of origin. This is something that
the White House is really pushing for. The Trump administration wants 82% North American content
with a US specific floor. So what happens to affordable vehicle production if that goes through?
Yeah, the devil will be in the details, obviously, we'll have to see kind of
what's counted, how things are counted, et cetera, to really get the real grasp of what
that would look like. But I think it's safe to say that this would be something that would cost
automakers billions of dollars to have to invest meet those targets,
which again would kind of eat into some of the margins that we're talking about, which again
are much smaller for a lot of these more affordable vehicles, generally speaking.
I was talking with Jennifer Sphabian, who's the CEO of AutoStrive America. This was one of the
points that they were making in their report is that with the USMCA when it went into effect in
2020, automakers have invested hundreds of billions of dollars, much of it in the US,
just to meet the newer standards that are in the USMCA currently,
much stricter rules of origin, labor requirements, that sort of thing that weren't in NAFTA.
They are in the USMCA and automakers spend a lot of money to try to get up to speed,
make sure that they're able to trade parts and vehicles tariff free under the USMCA. Now obviously
there's just new tariffs are in place on Canadian and Mexican goods and now there's kind of talk of
a revamped USMCA with higher standards. I think everyone expects if USMCA is renewed and it gets
through the review process that there will be higher North American rules of origin, what they
look like, we'll have to wait and see the whole negotiation process, see how that pans out. But
I think that's something the industry is expecting and it's going to again require
pretty significant investments, which is kind of the point is to drive investment in the US
and in North America to do more production here. But at the same time, it's a lot of costs. The
automakers spent billions of dollars on the previous USMCA standards, really high costs that
they haven't really made any returns on investment yet in a lot of cases and so to
more spending on top of that. Then you'd start looking at their lineups, maybe emphasizing
some of the more profitable vehicles and maybe at the expense of some of the less expensive ones
that don't have the margins. Something that automakers might have to look at is what Auto
Drive America is getting at. Because of any major changes, the USMCA put these less expensive
vehicles a little more on the chopping block maybe compared to pickups, SUVs and some of the more
profitable ones. You want to be making and selling what makes you money, right? I think that's
basically this is one of those things where if it doesn't make sense, then maybe the market shifts
more toward used vehicles or something like that. But I am curious, let's say the rules of origin
are adopted and implemented. Basically everything happens in a way that is not favorable to
affordable vehicles. What is the real threat that those models just simply go away?
Auto Drive America at least is certainly trying to get that message out there that right now
there are plenty of affordable vehicles still on the market despite the fact that the average
price of a new vehicle is over $50,000 and all of that. There are still models on the market,
but the fact that consumers are very much leaning into pickups and SUVs, that's where the demand
is and automakers are always going to chase demand and that might push people that maybe
can't afford those vehicles or just not for them out of the market if some of these more
affordable vehicles go away. We saw this during the chip shortage even where all of a sudden
automakers can't get chips and they have to prioritize which models that they want to build.
They all pretty much leaned into their most profitable and most popular vehicles, which
usually meant pickups, SUVs, which kept a lot of people out of the market, pushed a lot of people
into the used market that sent used prices rising. If at some point it becomes a factor for automakers,
they have to decide costs are so high that we have to decide which vehicles we want to keep
building, which ones maybe we don't, they're definitely going to go where the markets going,
go where the profits are. I think that this Auto Drive America report, they said this is
a critical moment for a lot of affordable vehicles in the market and this combination of tariffs
and USMCA review and the uncertainty there. If there isn't a solution found to keep
costs down, you're going to see more of these vehicles maybe going away or they're not going to
build quite as many or they might not import models into the US anymore because they might not be
profitable. I think it's a real possibility. I wouldn't say that these vehicles are all going
to completely go away overnight. It's not realistic. Automakers still want to sell vehicles and it's
a sizable portion of the market. Vehicles under $35,000 accounted for more than 5 million sales
in the US alone last year. That's a sizable market even as more people are going into the
pickup and SUV line, but that thing to the day, they'd have to choose between profits and maybe
building a vehicle that's not quite as profitable anymore. I think it's safe to say automakers
are generally going to choose the profits. It's an interesting moment right now for the auto industry
as they're planning out what production footprints look like, what their product portfolios look
like moving forward. It's an interesting moment, an inflection point for the industry and decisions
that are made today are going to have a pretty significant impact on what vehicle lineups look
like moving forward. We haven't really seen auto executives want to negotiate this out in the
public sphere, but I'm curious behind closed doors. We have heard groups like Autos Drive America and
others say publicly that they want USMCA essentially to stay as is. That would be a good outcome in
their minds. How much leverage does the broader auto industry have in these debates behind the
scenes? Are there levers to be pulled to negotiate something that maybe allows them to still provide
affordable vehicles while also making money and maybe giving the administration something that
it wants? Yeah, I think when you look at tariffs and how they've been implemented over the past
year, I think that sort of speaks to the influence that the auto industry has in the White House.
If you go back to February, March, early April, when a lot of the tariffs of last year, when
tariffs were still being proposed and maybe not implemented yet, if you think back to the
tariffs on Canada and Mexico that were implemented in March, when they were first put in place,
there was no exception for USMCA compliant goods to be brought in tariff free. They were exempted
after that within a couple of days, and that was a large part because of lobbying that was done
by automakers, including the CEOs of a lot of these auto companies. It's clear that the White
House does listen to the automakers to some degree at least. It's clear that they want
tariffs, they want higher levels of US content, North American content, but
they have listened in the past to automakers. I think it's in part because the auto industry is
just massive in the US in terms of the number of jobs and the impact on the economy and everything
else. Automakers kind of have that leverage just knowing that these massive companies employ a lot
of people that have such an important impact on the economy. I'm sure that they're right now doing
kind of the same thing. They're kind of trying to lobby the White House, saying, hey, generally
speaking, automakers are on the same page as far as they want this to remain a trilateral agreement.
They don't want separate bilateral deals, which Trump and Jameson Greer, the US trade representative,
at least floated as possibilities instead of the trilateral agreement. They said,
trilateral is really important to North America and US competitiveness specifically.
And then, yeah, they're looking at, they want some form of tariff relief. I think everyone
expects that there won't be zero tariffs on goods under the new USMCA, assuming there is one, but
they are pushing for some form of tariff relief that at least puts North America at an advantage
relative to Europe, Japan, South Korea. And we'll see how successful they are in pushing for all of
that. Well, but I think we've seen in the past with tariffs that and how those have been implemented
that automakers have had some sway with the White House. We've seen that with some of the other
exemptions that they put into place for USMCA compliant parts, for instance, or some of the
refunds and that sort of thing. So I do think the automakers and suppliers have some sway here,
but obviously the USMCA, it covers all trade between Canada, US, and Mexico and all sorts
of different industries, and there are all sorts of competing interests, both in terms of businesses,
economics, politics. So there are a lot of voices in the room, but I do think the auto industry
will probably be among the loudest, but we'll see what that results in at the end.
If listeners of the pod are tired of hearing the word affordability in 2026, I hate to say it,
but it's not going anywhere anytime soon. It's going to be a big issue going forward,
and especially as USMCA talks kick off next month. John Irwin, thank you so much for joining us.
Thanks so much.
That's Daily Drive for today. I'm Kellan Walker. Thanks to automotive news journalists John Hutter,
John John, and Michael Martinez. You can get the latest news on USMCA trade negotiations,
dealership compliance, and everything happening in the auto industry at AutoNews.com. Come back
tomorrow for a conversation with Steve Kramer, vice president of product at PayneerMe, about why he
says auto loan payment portals need what he calls an abandoned cart strategy. If you go to Amazon,
you put something in your cart and then you leave, you know what happens, right? You get that email.
Hey, you put something in your cart. Did you forget about that? There's a reason they and
most major e-commerce vendors do that. It's because it warns us. We'd love to hear from you.
Let us know what you think of the show and the topics we cover today. Send us an email at Daily
Drive at AutoNews.com or leave us a voicemail at 313-444-2774. And if you enjoy the podcast,
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About this episode
Trade policy is taking center stage as the formal USMCA review is set to start July first, with warnings that tighter rules of origin and higher tariffs could worsen affordability for budget buyers. The show connects the risk to how less profitable, mostly imported affordable models have less margin to absorb price increases, and notes automakers are lobbying for tariff relief. Separately, Dutch chipmaker Nexperia is coming to the U.S., partnering to produce automotive transistors in Minnesota amid ongoing supply strain.
A new white paper warns that tariffs and renegotiations of the United States-Mexico-Canada Agreement could gut the supply of affordable vehicles in the U.S. A new study finds dealerships flagged by the Federal Trade Commission had twice the customer complaints about bait-and-switch behavior than the industry overall. Plus, Dutch chipmaker Nexperia is coming to the U.S. amid a messy ownership battle.
