DEALERS CONFIDENT BUT PONDER 'DISASTER'

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Some dealers selling Japanese luxury imports are seeing increased traffic from tariff-conscious consumers, and while the dealers express confidence that the tariffs will never be implemented, they're unanimous on what the effect would be if they're wrong.

"If sanctions are imposed, we're not going to be selling these cars, it's that simple," said Jim Moyer, general manager at Fields Infiniti in Glenview, Ill. "It's just devastating."

Added Bobb Campbell, sales manager at Arlington Lexus in Palatine, Ill.: "If prices practically doubled, it would be a disaster. But I don't think it will happen, not the way it stands now."

"Disaster" doesn't seem to be an exaggeration, considering a tariff would be slapped on every model in the Lexus line.

An informal check of dealers by Advertising Age revealed that some had seen no increase in business, while others had noticed a rise.

"We certainly have seen an increase in purchases," Mr. Campbell said. "People who were thinking about buying are now making decisions real fast. We've already delivered cars to some of these people."

Tim Mattos, general manager, Marin (Calif.) Infiniti, said traffic and sales at his showroom were up 10% to 20% since the government made its announcement.

"People close to buying close [the deal]," he said. "More people come over the curb than have in the past."

"In the short term, we will see an increase because the cars currently on the ground in this country won't have these tariffs assessed," said Martin Bredemann, leasing and sales manager at Bredemann Lexus, Glenview. "So the short term will be better, but the long-term effects will hinder our efforts of getting the value message across to the consumer. This will be much more difficult."

If tariffs are imposed, "There is nothing that can be done at the dealer level to change the price," said Mr. Moyer, who would see tariffs applied to all but the entry-level Infiniti. "We wouldn't order any more shipments. Our whole line would really just be shut down. We've only been out for four years so we don't have the customer base that other manufacturers do."

Dealers aren't enthusiastic about using such ad tactics as selling value to help salvage sales if tariffs are imposed.

"At $36,000, [the Acura Legend] is a very good value. But at $70,000, it's out of the question. There's no way to promote value," said Larry Vannocker, general manager of Acura of Bellevue (Wash.).

"Would you pay $80,000 for a Legend? It's hopeless," added Michael Cho, general manager at Ron Tonkin Acura in Portland, Ore.

Lexus dealer Mr. Bredemann would rely on his cars' reputation: "We have established ourselves as a benchmark for quality in the industry, and we provide beyond one's expectations. We would continue to emphasize the quality of the Lexus, the safety features and the high level of good service if these tariffs are imposed."

Jim Ault, general manager at Lexus of Seattle, said the tariffs "would essentially put us out of the new-car business." The dealership would still carry the Lexus line but would completely cease all promotion because it would be just too hard of a sell. He would rely on manufacturer advertising.

Mr. Mattos isn't worried about ads yet. "At this point, I get lots of advertising from the news," he said. "The only message you want to get out there is where to go."

Who are the big winners if tariffs are imposed?

"The Europeans will make out on this one," Mr. Moyer said.

"People would end up buying European and German cars. Mercedes and BMW probably think they're in heaven right now," said Charles C. Piano Jr., executive manager at Infiniti of Orland Park (Ill.), who added, "Our cars will be virtually sale-proof."

Contributing to this story: Alice Z. Cuneo, Charles Waltner and Jo McIntyre.

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