Canadians eye new cars but say U.S. tariffs may price them out: KPMG Survey
According to a KPMG Survey, Canadians are interested in new cars but fear that US tariffs will make them unaffordable.The majority fear that if Canada’s auto sector is no longer protected by CUSMA, the cost of new cars will increase.
According to a recent KPMG survey, over half of Canadians anticipate purchasing a new car within five years, but many worry that U.S. tariffs will drive up prices beyond their means.
It revealed that, ahead of a planned review of the agreement, 72% of Canadians are worried that if Canada’s automobile industry loses protection under the Canada-U.S.-Mexico Agreement, new car costs will increase.
23% of respondents believe tariffs have already priced them out of the new car market, and 38% believe a further 10% to 15% price increase will have the same effect. More Canadians are paying attention to where their cars are manufactured as a result of tariff concerns; respondents stated that it is at least somewhat essential to them that cars are constructed in Canada.
As part of a planned review of the current free trade agreement, the Canadian government is anticipated to start official talks with the United States in January, creating uncertainty for the car industry, which is highly dependent on cross-border supply chains.
Future tariff decisions have a significant impact on Canada’s car industry’s prospects. Linda Hasenfratz, the executive chair of Linamar, has cautioned Ottawa to uphold the CUSMA trade agreement, stating that any attempt to levy duties on auto parts may “throw the industry to its knees.”
“Canadians looking for a new car are looking to the brands they trust at prices they can afford in models they want, and increasingly on where those vehicles are built,” stated Dave Power, partner and national automotive sector leader at KPMG in Canada, in response to the disruption caused by U.S. tariffs.
“It is not unexpected that Canadian consumers are most drawn to Toyota and Honda, which have a significant manufacturing base in Ontario,” he continued.
“At the same time, Canadians’ trust in the Detroit Three is beginning to diminish as they see a lack of commitment to maintaining jobs in Canada, driven by U.S. trade policy and pressure on corporate leadership to shift operations to the U.S.
“According to KPMG, most Canadians are in favor of lessening dependency on the United States while directing investment toward the production of essential minerals, automobile parts, defense, and batteries.
According to over half of Canadians (52%) who believe governments should prioritize EV leadership, the survey also highlights electric vehicles as a possible growth opportunity.
“Canada has a great chance to invest domestically and diversify into EV battery manufacture to protect jobs, attract investment, and establish long-term resilience with all the instability in the car business,” Power stated.
Using Sago’s Asking Canadians panel and its Methodify online research platform, KPMG conducted a poll of 2,000 Canadians between the ages of 18 and 85 between November 7 and November 17, 2025.
