Autoworkers strike will hit consumers in the wallet

Prices of both new and used cars will be affected

A strike involving nearly 13,000 workers at the Big 3 U.S. auto companies – Ford, GM and Stellantis – has shaken the foundations of the American auto industry.

This labor action was taken by the United Auto Workers (UAW) union after failing to reach an agreement with the three auto giants before the expiration of their national contract.

Shawn Fain, president of the UAW, has called this event a "defining moment" for his generation.

Permanent challenge

Despite a slight improvement in the chip shortage crisis that previously affected the availability of new vehicles during the pandemic, car buyers continue to face significant challenges.

Inflation has had a direct impact on consumer budgets, while constantly rising interest rates have made it more expensive to obtain loans for vehicle purchases.

The cost of automobiles remains at high levels and the search for deals becomes increasingly difficult.

The potential impact of the strike

Prolonging this strike could further aggravate the situation. If it persists until the end of the month, average prices for new vehicles are expected to increase by approximately 2%. The reduced availability of cars at dealerships due to the strike represents a real risk of rising prices.

However, it should be noted that, despite this panorama, there are currently a greater number of cars in dealerships compared to the previous year.

Tesla and the implications of the strike

The strike could also have implications for electric car maker Tesla. Experts suggest that Tesla could benefit in the long term by strengthening its position in the market. However, in the short term, you may not see an immediate increase in sales as consumers may opt to purchase domestically-made vehicles rather than investing in a Tesla.

The uncertain future of the used vehicle market

Additionally, the strike is expected to have an impact on used car prices. If new vehicle prices rise, it is plausible that many consumers will turn to the used car market, potentially driving up vehicle prices. However, there is a limit to how much used car prices could increase.

Therefore, the strike carried out by auto workers in the United States could lead to an increase in car prices for consumers in the coming weeks.

If the availability of vehicles on the market decreases, the immediate and logical effect is a potential increase in average prices. Additionally, used car prices could also rise as consumers turn to this alternative.