The auto industry is once again entering turbulent waters. With new tariffs on imported vehicles and parts, companies face rising production costs, supply chain disruptions, and perhaps most importantly — unpredictable consumer behavior. Will buyers pivot to used cars? Will leasing regain its appeal? Could this be the boost electric vehicles (EVs) have been waiting for?
These are not simple questions, and traditional forecasting often falls short in moments like these. That’s where war gaming — a strategic simulation technique — comes into play. Originally designed for military applications, war gaming has evolved into a powerful business tool, helping organizations navigate uncertainty, forecast market responses, and develop winning strategies.
Predicting Consumer Responses: Beyond Traditional Forecasts
When tariffs cause new car prices to spike, consumer reactions rarely follow a single predictable path. Some may seek affordable alternatives like used vehicles or certified pre-owned programs. Others might shift toward leasing to minimize upfront costs. For value-conscious buyers, EVs with lower lifetime ownership costs could now become attractive. Fleet operators, facing compressed margins, may reevaluate replacement cycles or pivot to subscription models.
But how will these dynamics play out under different scenarios?
War gaming allows companies to systematically explore how consumer segments might behave across a variety of conditions — rising interest rates, fluctuating battery prices, policy incentives, or even a surge in EV infrastructure investment. Participants step into the roles of competitors, regulators, and consumers themselves, stress-testing assumptions and revealing second-order effects that spreadsheet forecasts often miss.
For example, a war game might uncover that dealers anticipating used car demand may find inventories constrained if rental companies, also facing higher new car prices, hold onto their fleets longer. Or that leasing could grow only in certain income brackets, while middle-market buyers exit the new car market entirely. These insights can radically shift how automakers, suppliers, and retailers plan pricing, inventory, and marketing.
Strategic Planning for Businesses: Building Resilience with War Gaming
In the face of auto tariffs, war gaming helps executives move beyond reactive strategies and toward proactive scenario planning. Automakers, suppliers, and retailers can design simulations tailored to their business realities, exploring key questions like:
By running through different plausible futures — moderate tariffs vs. severe, short-term vs. prolonged disruptions — leadership teams can spot early warning signals and identify strategic levers. They may decide to stock more used vehicles, develop flexible financing offers, or accelerate EV marketing depending on how war game scenarios unfold.
Crucially, war gaming also surfaces internal misalignments. For example, sales teams may assume demand will hold steady, while supply chain managers anticipate severe volume drops. The simulation provides a safe space to debate these viewpoints and align around contingency plans.
Case Studies: War Gaming in Action
Several industries, including automotive, have already harnessed war gaming to navigate global trade disruptions successfully:
The Road Ahead
Auto tariffs are just the latest shock in a decade of disruptions — from pandemics and supply chain breakdowns to the EV transition and shifting consumer values. In this environment, the companies that thrive will be those that anticipate, not just react. War gaming offers a structured, dynamic, and often eye-opening approach to forecasting consumer responses and aligning teams around bold, but achievable, strategies.
By stepping into the future before it happens, businesses can shape it.