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US Auto Sales Lose Steam After Tariff-Induced Shopping Spree
US Auto Sales Lose Steam After Tariff-Induced Shopping Spree

Yahoo

time01-07-2025

  • Automotive
  • Yahoo

US Auto Sales Lose Steam After Tariff-Induced Shopping Spree

(Bloomberg) — US auto sales are losing momentum after a springtime surge fueled by shoppers racing to buy cars before President Donald Trump's auto tariffs drove up prices. Struggling Downtowns Are Looking to Lure New Crowds Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares Sprawl Is Still Not the Answer Ford Motor Co.'s (F) second-quarter sales jumped 14.2%, helped by its employee-pricing-for-everyone discount program, though it saw the pace of growth moderate last month. Hyundai Motor Co. (HYMLF, HYMTF) said deliveries rose 10% in the second quarter, with a 3% gain in June after sales soared 19% in April. Affiliate Kia Corp.'s volume fell 3.2% last month, limiting its total second-quarter gain to 5%. Shoppers rushed to showrooms earlier this year as beating tariff-induced price increases became a motivation to buy, pushing up second-quarter sales an estimated 2.5% from the prior-year period, according to industry researcher J.D. Power. The annual automotive selling rate likely fell to 15 million in June — the slowest pace in the last 12 months — from 17.6 million in April as consumers grow cautious about big-ticket purchases over worries about the economy. With already high car prices expected to rise further as automakers manage billions of dollars in tariff costs, it may only get worse from here. 'The party is over,' Jonathan Smoke, chief economist for researcher Cox Automotive Inc., said in an interview. 'It's clearly slowing. It's because of affordability getting worse and forcing what we think will be production declines to keep supply in balance.' Smoke sees the annualized monthly rate of US auto sales sticking around 15 million in the second half of the year, down from 16.3 million in the first six months of 2025. Last year, Americans purchased roughly 16 million cars and light trucks. Toyota Motor Corp.'s (TM) sales were roughly flat in June after an 11% jump in May, as deliveries of its best-selling RAV4 compact SUV declined ahead of the release of an all-new version later this year. Sales have slowed at the Honda (HMC) dealership Peter Petito manages in Queens, New York, after an uptick of buyers that he likened to a run on grocery stores before a blizzard. It was like 'there's going to be a snowstorm and there's no milk, juice or bread,' Petito said. Car dealers polled recently by Cox reported that fears about the economy have become the No. 1 factor holding back their business, replacing high interest rates that had topped the previous two surveys earlier this year and late last year. 'People are having a lot of uncertainty,' Beau Boeckmann, president of Galpin Motors, a major Ford dealer in southern California, said in an interview. 'And during times of uncertainty, people put off a major purchase.' The high cost of cars remains an impediment. After declining for much of last year, auto prices are on the rise again. The average cost of a new car reached $48,799 in June, up 1% from a year ago and 28% higher than in 2019, according to Cox. That's pushing shoppers to stretch their budgets for a new set of wheels. Nearly one in five buyers — an all-time high — took on loans with monthly payments of $1,000 or more in the second quarter, according to automotive researcher Tariffs risk exacerbating that trend. Automakers have so far refrained from large, across the board price increases. Instead, they've pulled other levers such as cutting incentive spending, or raising the price of select models affected by tariffs. 'Given the impact of tariffs, prices are likely to start rising at a much faster rate,' Charlie Chesbrough, senior economist for Cox, told reporters last week. Average monthly car payments reached a record $747 in June, up $22 from a year ago, according to J.D. Power. That has more people stretching car loans to 84 months — 7 years — which accounted for 12% of all auto financing last month, up 3 percentage points from last year. The June slowdown was 'a hangover from some of the sales that were pulled ahead,' said Mark Wakefield, global auto market lead for consultant AlixPartners. The firm predicts automakers will pass along 80% of the cost of Trump's tariffs to consumers, driving up prices by nearly $2,000 per car. 'We don't see the full pass-through until the end of the year,' he said. —With assistance from Chester Dawson. (Updates with automaker results starting in the second paragraph.) America's Top Consumer-Sentiment Economist Is Worried How to Steal a House SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too China's Homegrown Jewelry Superstar Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate ©2025 Bloomberg L.P. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data

Car Sales Hit a Wall as Tariff-Induced Shopping Spree Subsides
Car Sales Hit a Wall as Tariff-Induced Shopping Spree Subsides

Bloomberg

time01-07-2025

  • Automotive
  • Bloomberg

Car Sales Hit a Wall as Tariff-Induced Shopping Spree Subsides

By , Jade Thomas, and Gabrielle Coppola Save The springtime surge in US auto sales landed with a thud last month, setting up a slowdown in the months ahead as carmakers digest President Donald Trump's tariffs on auto imports and consumers find fewer deals. Shoppers rushed to showrooms as beating tariff-induced price increases became a motivation to buy, pushing up second-quarter sales an estimated 2.5% from the prior-year period, according to industry researcher J.D. Power.

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