Welcome to a special edition of Inside Automotive. Today’s guest is U.S. Sen. Bernie Moreno, former car dealer, who addresses mounting pressures facing the retail automotive industry. Dealers are contending with higher gas prices, persistent affordability challenges and increasing regulatory scrutiny, all compounded by uncertainty tied to the ongoing conflict in Iran.
Moreno said the geopolitical situation, while disruptive in the short term, is unlikely to have lasting economic consequences. He pointed to recent military developments and expressed confidence that hostilities will end soon, which he expects will stabilize global energy markets. Although the United States is a net exporter of oil, he notes that fuel prices remain tied to global supply dynamics, making dealers and consumers vulnerable to temporary price swings.
“The good news, I think this will be over very, very quickly.”
Beyond geopolitics, Moreno flagged a potential supply chain risk tied to memory chip shortages. Unlike the semiconductor constraints that disrupted production during the pandemic, this emerging issue is being driven by increased demand from artificial intelligence and large-scale data operations. He said policymakers are already engaging with industry leaders to prevent another major disruption to vehicle manufacturing.
On trade, Moreno described tariffs as “largely settled,” with automakers adjusting to a more predictable environment. He emphasized the need to renegotiate the U.S.-Mexico-Canada Agreement (USMCA0 to increase domestic production requirements, noting that some manufacturers have already expanded their U.S. manufacturing footprint in a short period.
Moreno also alluded that interest rates and financing remain central to affordability concerns. He indicated that upcoming changes in Federal Reserve leadership could lead to lower rates, which would ease pressure on both dealers and consumers. He also highlighted recent tax policy changes allowing interest deductibility and said expanding those benefits to vehicle leases remains a legislative priority.
Moreover, Moreno took a firm stance on trade with China, advocating for permanent restrictions on Chinese vehicle imports. He framed the issue as a long-term economic risk, arguing that protecting the U.S. auto market is essential to preserving a significant share of the nation’s economic output. He added that broader alignment with North American and European partners will be key to maintaining those protections.
On electrification, Moreno emphasized a market-driven approach. He said consumers should determine the mix of electric, hybrid and internal combustion vehicles based on their needs, rather than government mandates. While acknowledging growing interest in electrified vehicles, he stressed that a balanced product mix will better serve the market.
Regulatory oversight also remains a key concern, particularly as the Federal Trade Commission (FTC) increases scrutiny of dealership advertising practices. Moreno encouraged collaboration between regulators and industry groups to improve transparency and eliminate deceptive practices, noting that compliance will play a critical role in maintaining consumer trust.
Notably, affordability continues to be one of the industry’s most pressing challenges. Moreno said rising average transaction prices are partly driven by consumer demand for higher-end vehicles, but also pointed to regulatory costs and product complexity as contributing factors. He called for streamlined regulations and greater efficiency from automakers, including simplifying vehicle configurations to help reduce costs.
For dealers navigating the current environment, Moreno advised focusing on controllable factors such as internal culture, customer experience and disciplined asset management. He also emphasized that long-term success will depend on consistent execution and the ability to adapt to shifting economic and policy conditions.
