Donald Trump threatening tariffs on automakers has SiriusXM weighing possible impacts on signing up new car owners as satellite radio subscribers.
“Hard to say right now where that will land. The first two months were very strong, but again, with potential tariffs going in place, it could impact the new car side of the business,” SiriusXM CEO Jennifer Witz told the Morgan Stanley Technology, Media & Telecom Conference on Wednesday.
A one-month tariff exemption for U.S. automakers was announced on Wednesday. But Trump’s tariffs, and subsequent retaliatory measures from Canada and Mexico, will make new cars more expensive to buy, and that stands to impact SiriusXM.
Witz said the satellite radio giant expected at the beginning of the year “relatively stable” new car sales, but that was undercut by Trump earlier this week imposing 25 percent tariffs on Canada and Mexico, which are integral to the cross-border supply chain behind manufacturing new American cars.
Witz added the advertising business at SiriusXM faces no direct threat from the imposition of tariffs, but the company is weighing any impact from a weakened U.S. economy on consumer confidence and inflationary pressures. “It’s choppy. That’s the best expression,” she said of the U.S. advertising climate currently as it faces ongoing impacts from cross-border political and economic tensions.
“The first two months of the year were pretty stable, and now, over the last couple days, there’s a lot of uncertainty, stock market volatility, inflation or stagflation. Retail and CPG (consumer packaging products) are seeing some impacts,” Witz added.
“But again, we’ve got a lot of areas that we have more control over, where we can drive growth, while we manage through some of that instability,” she added. The tariffs war also comes as SiriusXM has begun to focus on in-car subscribers and has begun to pivot away from higher cost out-of-car streaming customers.
“We didn’t see the growth in streaming stand-alone subscriptions, and we’ve rationalized our marketing spend there,” Witz told the investors conference. The SiriusXM boss also talked about Howard Stern, who has talked about a possible retirement as his current contract with SiriusXM is set to expire at the end of 2025.
“Nothing specific to report today, but as always, we’re thrilled to have Howard on the platform. And we want to be able to work with him for along as he wants to be on air. He started in the early days of 2006 and he continues to provide a great listening experience for our customers, and he’s core to our programming offerings,” Witz reported.
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