Big US auto makers report sales jump on pre-tariff demand
Several leading automakers including Detroit giants General Motors and Ford reported increased US car sales in the second quarter on Tuesday as consumers fast-forwarded purchases ahead of US tariffs. Sales were particularly brisk early in the quarter as expectations of US President Donald Trump's coming tariffs dominated the news.
Besides the US companies, Japanese automakers Toyota and Honda and South Korean brands Kia and Hyundai all reported increased sales compared with the 2024 stretch.
'They were able to capitalize on the tariff-induced fear and that drove sales, especially in the early part of the quarter,' said Garrett Nelson, equity analyst at CFRA Research.
While the auto industry has been near the center of Trump's efforts to reset global trade, consumers have yet to see significant price increases due to tariffs. That is because companies have relied on existing inventories that include vehicles imported before tariffs took effect. Prices are expected to rise more in the second half of 2025, but market demand and supply forces could constrain such hikes, analysts said.
GM notched a 7.3 percent rise in vehicle deliveries to 746,588 behind a continued solid performance in pickup trucks and SUVs, as well as good sales of models geared towards customers seeking affordable vehicles. These include the Chevrolet Equinox and Chevrolet Trax, a lower-priced vehicle imported from South Korea.
Ford, meanwhile, scored a 14.2 percent jump in sales to 612,095, reflecting the boon from a popular program that offered customers employee pricing on many models.
Most of Ford's leading vehicles saw higher sales, including the best-selling pickup F-series, as well as the Ford Explorer SUV.
While Ford had lower sales of its all-electric F-150 Lightning Truck and the Mustang Mach-E, it reported a jump in hybrid vehicle sales. Higher sales had been expected for both companies, but the increases were slightly more than projected by analysts at Edmunds.com.
At Toyota, sales jumped 7.2 percent to 666,470 autos, with double digit gains in several vehicles, including the Toyota Camry sedan and the Toyota Tacoma pickup truck.
Honda, Kia and Hyundai reported quarterly sales increases of between five and 10 percent.—AFP But Nissan reported a 6.5 percent drop in quarterly sales to 221,441, while Jeep-owner Stellantis was projected by Edmunds to have a 12.8 percent drop to just over 300,000 vehicles.
The United States imposed 25 percent tariffs on imported finished cars in early April.
The Trump administration also enacted a 25 percent tariff on imported auto parts in early May, although White House officials allowed a two-year grace period and stipulated that automakers would not face duplicative tariffs due to a 25 percent levy on imported steel and aluminum.
While retail car prices have not risen significantly, analysts at Cox Automotive last week pointed to a recent ebbing in dealer incentives as evidence of a somewhat tighter market.
Cox Automotive Chief Economist Jonathan Smoke has projected an eight percent rise in prices due to tariffs, adding that 'we don't think consumers or fleet buyers are able and willing to accept that added cost,' he said at a briefing last week.
Smoke predicted that uncertainty about the economy and whether the Federal Reserve will cut interest rates could lead many buyers to defer purchases.
Nelson said automakers have to be 'very careful' with price hikes.
'Things have cooled off from where they were at the beginning of the quarter,' he said. 'Everything we're seeing suggests that consumers are still very price sensitive.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Qatar Tribune
12 hours ago
- Qatar Tribune
UN conference reaffirms fight against poverty
MadridcTypeface:> The global community has agreed on intensified efforts in combating poverty, in open contradiction to the position of US President Donald Trump. The US government is sceptical of multilateral cooperation and the UN's sustainable development goals. Consequently, the United States did not endorse the 'Seville Commitment,' which was adopted by 192 countries at the 4th International Conference on Financing for Development in the southern Spanish metropolis on Thursday. After the start of his second term, Trump had US aid cut by around 80%, which accounts for about a quarter of all global development aid. According to estimates by the United Nations, the funding gap has now grown to at least $4 trillion annually. This gap was not nearly closed at the conference in Seville, but according to financial expert Bodo Ellmers from the non-governmental organization Global Policy Forum Europe, this was not the primary goal. Instead, he said that structural reforms in areas such as tax cooperation, debt crisis management, or reform of international financial institutions should be agreed upon. Currently, 3.4 billion people live in countries that have to spend more on interest payments than what remains for education and health. This reform project was 'only moderately successful' in Seville, Ellmers criticized, saying there are hardly any concrete measures or specific quantitative or time targets included. Whether the funding gap will continue to grow depends on the concrete implementation of the agreements. German Development Minister Reem Alabali-Radovan nevertheless praised the agreement as a 'powerful boost for a fairer world.' 'Despite the difficult global situation, conflicts, and nationalist tendencies, almost all states are pulling together here,' she stressed. (DPA)
Qatar Tribune
12 hours ago
- Qatar Tribune
Rising United States debt, dollar's worst showing since 1973 stir concerns
Agencies The U.S. economy had a different start to the year. Halfway through, the impulsive policy of President Donald Trump is also not helping to preserve the so-called 'mighty' status of the dollar, which has seen the worst performance in over five decades. Since the return of Trump to the White House, uncertainty about Washington's financial policy has caused notable concern as the U.S. debt pile continues to rise. Analysts, meanwhile, say the president's 'One Big Beautiful Bill' could add extra pressure to it in the upcoming decade. Concerns over the health of the U.S. economy and growing debt have also been visible on financial markets as U.S. bond yields have climbed – an indication that investors are worried about the sustainability of the debt of the world's top economy. Those concerns have also affected the dollar, which, as the global reserve currency, has usually been seen as a safe haven currency. Foreigners have to purchase dollars if they want to buy U.S. bonds, which have also been seen as one of the safest assets in times of volatility. However, the dollar lost more than 10% during the first half of the year – its worst performance since 1973. On Thursday, it remained close to this week's 3.5-year lows, hours ahead of a key jobs report, and as a U.S.-Vietnam trade accord fanned expectations for other potential deals ahead of July 9 when U.S. tariffs take effect. Quickly changing dynamics related to tariffs, uncertainty and unpredictability when it comes to the next moves of Trump have dented investors' confidence in the world's largest economy. Recent reports, in contrast, revealed growing interest in Europe. Data from LSEG's Lipper Funds show that more than $100 billion has flowed into European equity funds so far this year – up threefold from the same period last year – while outflows from the U.S. more than doubled to nearly $87 billion. The euro, a common currency used in 20 EU countries, also strengthened compared to the greenback in the recent period.A common explanation for the weakening of the dollar versus a basket of currencies is the impact of Trump's tariffs on the U.S. economy in the long term, coupled with the expectations that it might no longer outperform other major economies. The U.S. Treasury raises funds by issuing three types of debt instruments: short-term bills, medium-term notes and long-term bonds. They carry a face value but are sold at a discount, with that price helping determine the yield, or rate of return, for investors. Higher yields indicate investors are demanding a higher rate of return to hold U.S. debt, which can be an indication of concern over whether they will eventually be repaid. The yields on 30-year U.S. bonds rose above the symbolic level of 5.0% in May, but have since retreated to around 4.8%. 'Most of the concerns stem from the 'One Big Beautiful Bill,' the law supported by the White House that includes measures to prolong tax cuts brought in by Donald Trump during his first term,' said Gregoire Kounowski, an investment advisor at asset manager Norman K. 'If the text remains unchanged, it would add $3 to $4 trillion to the U.S. debt,' he bill faces a final vote in the U.S. House of Representatives on Thursday after squeaking through the Senate on Tuesday. When Moody's cut the U.S.'s top triple-A credit rating in May, it cited rising levels of government debt and the impact of the interest costs on the U.S. budget.'It was a warning signal for markets and put the trajectory of U.S. debt in the center of concerns,' said Raphael Thuin, head of capital market strategy at Tikehau Capital. U.S. debt now totals more than $36.2 trillion, according to the U.S. Treasury, or 120% of annual economic output. Around $29 trillion of that is bonds that the Treasury sells on markets to investors: principally banks, pension funds and foreign governments. Foreign governments currently own $9 trillion in U.S. debt, with Japan, Britain and China the top holders. China had until March been either the top or the second-largest holder of U.S. government debt. Since the U.S.-China trade war in 2020 during Trump's first term in office, 'China has gotten rid of U.S. debt in favour of gold. It didn't sell its bonds, but it didn't replace those that matured,' said Aurelien Buffault, an asset manager at Delubac AM. The rest of the world buys U.S. debt as they want to hold a solid dollar-denominated size of the U.S. debt market also makes it attractive to investors. 'It is about 20% larger than the European sovereign debt market in terms of capitalization,' said Guy Stear, head of developed markets research at Amundi. That makes it easier to buy and sell U.S. debt quickly. U.S. debt has until recently also benefited from being considered a 'safe haven' investment, as the U.S. government was seen as a reliable borrower. However, since April, investors have started to pass over U.S. debt and the dollar when seeking safe haven assets, noted Stear. In the current environment, 'investors are looking for alternative safe havens, that is, a currency and assets that protect them when volatility and increased uncertainty,' said Imene Rahmouni-Rousseau, director general of market operations at the European Central Bank (ECB). 'It is precisely the euro and European government bonds that have played this role of protective shield,' and 'for the first time since the 2011 financial crisis, European financial markets are considered very attractive by investors' globally, she opined.
Qatar Tribune
12 hours ago
- Qatar Tribune
Vietnam strikes US tariff deal, but risks Beijing backlash
Agencies Vietnam's newly announced trade deal with the U.S. averts the most punishing of President Donald Trump's 'reciprocal' levies, but analysts warned it could lead to a fresh standoff between Washington and Beijing. The Southeast Asian nation has the third-biggest trade surplus with the U.S. of any country after China and Mexico, and was targeted with one of the highest rates in the U.S. president's 'Liberation Day' tariff blitz on April 2. The deal announced Wednesday is the first full pact Trump has sealed with an Asian nation, and analysts say it may give a glimpse of the template Washington will use with other countries still scrambling for accords. The 46% tariff rate, which was due to take effect next week, has been averted, with Vietnam set to face a minimum 20% levy in return for opening its market to U.S. products, including cars. But a 40% tariff will hit goods passing through the country to circumvent steeper trade barriers – a practice called 'transshipping.' Washington has accused Hanoi of relabeling Chinese goods to skirt its tariffs, but raw materials from the world's number two economy are the lifeblood of Vietnam's manufacturing industries. 'From a global perspective, perhaps the most interesting point is that this deal again seems in large part to be about China,' said Capital Economics. It said the terms on transshipment 'will be seen as a provocation in Beijing, particularly if similar conditions are included in any other deals agreed over the coming days.' Shares in clothing companies and sports equipment manufacturers – which have a large footprint in Vietnam – rose on news of the deal in New York. But they later declined sharply as details were released. 'This is a much better outcome than a flat 46% tariff, but I wouldn't celebrate just yet,' said Hanoi-based Dan Martin of Asian business advisory firm Dezan Shira & Associates. 'Everything now depends on how the U.S. decides to interpret and enforce the idea of transshipment,' he added. 'If the U.S. takes a broader view and starts questioning products that use foreign parts, even when value is genuinely added in Vietnam, it could end up affecting a lot of companies that are playing by the rules.' Vietnam's government said in a statement late on Wednesday that under the deal, the country had promised 'preferential market access for U.S. goods, including large-engine cars.' But the statement gave scant detail about the transshipment arrangements in the deal, which Trump announced on his Truth Social platform. Bloomberg Economics forecast Vietnam could lose a quarter of its exports to the U.S. in the medium term, endangering more than 2% of its gross domestic product (GDP) as a result of the agreement. Uncertainty over how transshipping will be 'defined or enforced' is likely to have diplomatic repercussions, said Bloomberg Economics expert Rana Sajedi. 'The looming question now is how China will respond,' she said. 'Beijing has made clear that it would respond to deals that came at the expense of Chinese interests.' And on Thursday, China warned against trade deals that 'hurt third parties.' 'China has always advocated that all parties resolve economic and trade differences through equal dialogue and consultation,' Foreign Ministry spokesperson Mao Ning said. 'At the same time, relevant negotiations and agreements should not target or harm the interests of third parties,' she said. The U.S. deal with Vietnam comes less than a week before Trump's self-imposed July 9 deadline for steeper tariffs on U.S. trade partners to take effect if agreements are not reached. Trump's trade adviser Peter Navarro has called Vietnam a 'colony of China,' saying that one-third of Vietnamese products are, in fact, relabeled Chinese goods. Beijing's commerce ministry said on Thursday it had 'always firmly opposed' U.S. tariffs. 'China's position is consistent,' He Yongqian, spokesperson for China's Ministry of Commerce, told a briefing. 'We are happy to see all parties resolve economic and trade differences with the United States through equal consultations, but we firmly oppose any party reaching a deal at the expense of China's interests,' she said.
