The anticipation of looming tariffs in April led to a significant surge in car sales, akin to a ‘bank run’ at car dealerships. Consumers rushed to purchase vehicles before prices increased due to the announced tariffs. Year-over-year auto sales jumped significantly, with Toyota seeing an 8% increase, Ford up about 15%, Honda nearly 17%, Hyundai almost 19%, and Mazda climbing a full 21%. Subaru, however, experienced only a 0.3% increase.
Luxury brands also saw substantial gains, with Lincoln sales up 40%, Acura 33%, and Lexus nearly 24%. The seasonally adjusted, annualized sales rate for April was 17.3 million, slightly less than March’s 17.8 million but still the first back-to-back months exceeding 17 million since 2020.
Cox Automotive’s chief economist, Jonathan Smoke, attributed the sales surge to consumer fears of higher vehicle prices due to tariffs. This frenzy began in late March when Trump announced automotive tariffs and peaked in early April before tapering off. Smoke warned that the market may have hit a ceiling due to tight supply and higher prices.
Dealers may still offer good deals, especially with sales slowing in the latter half of April. Some automakers, like Hyundai, Mini, and Volkswagen, have announced price guarantees through the end of May to provide buyers with more certainty.
Inventory levels are expected to decline sharply, potentially reaching 2022 levels within the next few weeks. This scarcity will likely lead to further price increases.
— new from Jalopnik